KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB Research) anticipates more sizable public infrastructure projects take-off in the fourth quarter (4Q) of this year to lift the value of contracts in 2024 above RM50 billion, highest since 2016.
The research firm said the domestic contract awards in the first nine month of this year stood at RM31.9 billion, 88 per cent higher than the same period last year.
Going into the final quarter, HLIB said that it continues to foresee rolling out of fairly large public infrastructure projects, particularly in Sabah, Sarawak and Penang.
"Infrastructure projects that could deliver contracts in 4Q are Sabah hydro, Pan-Borneo Highway Sabah Phase 1B, Sabah-Sarawak Link Road Phase 2, Penang LRT, water and Penang airport, among others."Additionally, we anticipate stronger flows from the data centre space after a temporary lull in the third quarter – some contractors could see their data centre pipeline materialising in 4Q," it said in a research note.
Job flows aside, HLIB said sector sentiment could also be lifted by developments on Johor LRT and Kuala Lumpur-Singapore high speed rail (HSR).
According to the firm, Johor LRT is a critical dispersal system for the Johor Bahru-Singapore Rapid Transit System (RTS) and efforts to revitalise Johor will require high capacity connectivity infrastructure for the greater Johor Bahru area.
The research firm mantains "overweight" stance on construction sector, with Gamuda and Sunway Connstruction as top picks.