In search of a silver lining
Cheah Chor Sooi | 02 Nov 2018 00:30
Construction counters on Bursa Malaysia are expected to remain below the radar of investors in the immediate to medium-term with imminent slowdown in project offerings and a series of cost revisions involving mega infrastructure projects.
With few positives to reap from Budget 2019, the KL Construction (KLCon) index is currently hovering near its 165-point low. This is almost half of its 2018 peak of 327.23 points on Jan 25. KLCon had plunged almost 42% from 281.13 on the eve of the 14th General Election to close at 163.34 as of Oct 30.
Having consolidated around the 275-point range, the index began a steep descent soon after GE14 on May 9. Uncertainties soon flared over cancellations, renegotiations and price revisions of several mega infrastructure projects.
The index attempted a recovery from mid-July to end-August, only to drift further southward with escalating uncertainties over both on-going and soon-to-commence projects.
On Oct 10, the KLCon index dipped to an all-time low of 162.91 in tandem with the 39-point or 2.2% drop of the FBM KLCI on concerns over the introduction of new inheritance and capital gains taxes to shore up the country’s finances.
Download and read more in the latest issue of Focus Malaysia here: