On 16th November 2009, on the Edge Financial Daily, AmResearch sees RM62b projects to be rolled out
- AmResearch sees RM62b projects to be rolled out
Written by Joseph Chin
Monday, 16 November 2009 13:34
KUALA LUMPUR: AmResearch is maintaining its Overweight call on the CONSTRUCTION [] sector, where order book visibility should improve in the coming months as it expects up to RM62 billion worth of select cornerstone projects to be rolled-out over the next six to 12 months.
It said on Monday, Nov 16 its top picks for the construction sector are WCT, IJM and Gamuda. It also prefered steel to cement stocks for exposure to the building materials theme - another key beneficiary of a re-acceleration of infrastructure spending. It continued to like steel maker ANN JOO RESOURCES BHD [].
The pre-qualification tenders for the proposed Klang Valley Light Rail Transit (LRT) extension works were unveiled on Nov 3. Tenders are for facilities packages, which are is the main civil and infrastructure works, and other sub-packages.
Submission for prequalification bids will be opened until Dec 16 although tenders for the systems and rolling stock portion - which includes mechanical & electrical (M&E) - have yet to be called for.
The Edge Weekly reported the scope of works for the facilities package include guideway structures, actual stations and the park & ride buildings. Tt added that the main civil works programme could be broken down into six main packages. This includes the actual bricks-and-mortar structure for the tracks as well as LRT stations.
AmResearch said earlier reports stated the Klang Valley LRT extension works were expected to cost an initial RM7 billion. The project entailled construction of additional tracks linking both the Kelana Jaya (17km) as well as Ampang (17.7km)lines to Putra Heights along the southern tip of Klang Valley.
"Based on our channel checks, most big construction outfits in Malaysia have submitted bids for the civil works part of this massive project. But we our unclear as to how the work packages would be carved out - e.g. vertically or geographically spread," it said.
AmResearch said going by operating track record, it believed both IJM Corp Bhd (IJM) and GAMUDA BHD [] (Gamuda) are frontrunners for the LRT jobs. However, it did not discount possibility of a consortium being formed to facilitate entry of other local players at subcontractor level, which may include WCT BHD [] (WCT) and Loh & Loh Bhd.
As for the M&E portion, it said that the scope for local participation appears limited due to the high-level of technical expertise required to build and commission LRT systems.
62 Billion worth of projects.
Today, 8th December 2009, on the same business editorial, AmResearch sees RM67.1b worth of job awards.
- AmResearch sees RM67.1b worth of job awards
Written by Financial Daily
Tuesday, 08 December 2009 11:15
KUALA LUMPUR: About RM61.7 billion worth of infrastructure projects could be awarded over the next six to 12 months, AmResearch Sdn Bhd said.
The research house said yesterday that the largest chunk of the projects would be the RM30 billion light rail transit (LRT) extension in the Klang Valley.
They are for the extension of the Ampang/Kelana Jaya line and new Cheras-Kota Damansara line. The companies expected to be in the running for the civil works are the UEM Group, MMC CORPORATION BHD [], GAMUDA BHD [], IJM Corp Bhd, WCT BHD [] and MALAYSIAN RESOURCES CORP []oration Bhd.
The second largest project will be the RM14 billion undersea transmission cable from Bakun dam in Sarawak to the peninsula. The project will be awarded by the federal government and the potential contractors are MRCB and foreign entities.
AmResearch said another project expected to be awarded in the period is the RM5 billion Gemas-Johor Bahru double-tracking project initiated by the federal government. The potential contractor would be Global Rail Sdn Bhd and China Infraglobe Consortium.
The other projects are the tunnelling works for the RM1.3 billion Pahang-Selangor raw water transfer, which are likely to be undertaken by members of the Shimizu-Nishimatsu-UEM-IJM consortium.
Also in the pipeline is the RM4.5 billion Langat 2 Water Supply Scheme, where the water transfer project is expected to be undertaken by Gamuda Bhd and Loh & Loh Bhd. The piping is likely to be undertaken by JAKS Resources Bhd.
“We continue to remain overweight on the steel sector as an anchor reflationary theme. Unlike cement, prices of steel are at the early stages of a cyclical upswing.
“Furthermore, earnings of local steel companies should gain traction as domestic steel demand supplants exports moving into 2010. Within the sector, we continue to like ANN JOO RESOURCES BHD [] for leverage to rising steel prices,” it said.
AmResearch cited a news report that BHP Billiton had inked an agreement with Rio Tinto to set up a US$116 billion (RM394.4 billion) joint venture that will combine their Western Australian iron ore operations.
“We understand that a BHP-Rio Tinto marriage in Australia will result in savings on capital and operational costs worth at least US$10 billion a year,” said the research house.
The mining giants each operate extensive rail and port facilities in Western Australia, particularly in the resource-rich Pilbara region.
Both parties expect the deal to be consummated within the second half of next year. Such a move will likely solidify the bargaining leverage of two of the world’s top three global iron ore producers.
By merging their resources in Australia, both BHP and Rio Tinto would have a combined iron ore production of 350 million tonnes. If BHP’s expansion plans remain on track, this would rise to 375 million tonnes next year.
AmResearch said this could have a significant impact on the bargaining leverage of steel millers all around the world, including Malaysia.
Select local players that purchase iron ore as part of their feedstock include Perwaja Holdings — the steel-making arm of the Kinsteel Group — and the Lion Group.
Meanwhile, the research house gathered that Ann Joo Resources Bhd was looking to secure future supply of iron ore ahead of the rollout of its new blast furnace by July 2010.
This article appeared in The Edge Financial Daily, December 8, 2009.
How now my dearest moo moo cow?
I do wonder how many days there are between 16th November 2009 and 8th December 2009 (LOL! It's no trick question and this ain't no contest either. And just in case, you need to count with the fingers, that's 21 days. :P)???
The number of jobs expected have jumped from 62 Billion to 67.1 Billion.
That's an increase of 5.1 billion in 21 days.
LOL!
I wonder if the next 21 days, will we see more jobs expectations from AmResearch?
ps: since they so bull, you think I should buy all them stocks mentioned? :p2
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