KUALA LUMPUR: Malaysia is anticipated to see a surge in sizable public infrastructure projects in the current quarter (Q4 2024), pushing the total value of contracts for the year above RM50 billion—the highest since 2016.
Hong Leong Investment Bank Bhd (HLIB Research) said in a note that domestic contract awards in the first nine months of this year stood at RM31.9 billion, 88
per cent more than the same period last year.
The firm said that it continues to foresee the rolling out of fairly large public infrastructure projects, particularly in Sabah, Sarawak, and Penang, in Q4 2024.
"Infrastructure projects that could deliver contracts in 4Q are remaining 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.
Job flows aside, HLIB said sector sentiment could also be lifted by developments on the Johor light rail transit and the Kuala Lumpur-Singapore high-speed rail (HSR).
The 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 firm said.
HLIB Research maintains an "Overweight" stance on the construction sector, with top picks including Gamuda Berhad and Sunway Construction.