Construction outlook seen challenging
PETALING JAYA: The competition for construction project tenders is set to intensify following recent cancellations and postponements of mega projects in the country.
TA Securities said contractors might have to sacrifice some margins to secure new projects as they compete for a smaller pie in the market.
“With prices of key construction materials such as cement and steel bars at depressed levels, in the event of an imbalance in the demand and supply of these construction materials that lead to price escalations, it could pose a risk of margin contraction to their existing jobs in hand,” the brokerage said in a report yesterday.
The research house is maintaining an “underweight” call on the construction sector. “We maintain our underweight call on the construction sector as we think valuations have run ahead of its fundamental after the recent rally in share prices.
...
The content is a snapshot from Publisher. Refer to the original content for accurate info. Contact us for any changes.
Related Stocks
Comments