Ongoing dev’t programmes to spur robust growth in Sarawak
AmInvestment Bank also highlighted that the ongoing development programmes have spurred robust growth in the construction segment.
The research firm noted that public listed companies such as CMS and HSL will be the main beneficiaries.
The vibrant catalysts that will boost the construction segment in Sarawak are better connectivity, SCORE and the digital economy.
Under better connectivity, AmInvestment said that the ongoing construction of the Pan Borneo Highway from Teluk Melano (south) all the way to Pujut (north) is progressing well, with experts reckoning that the current progress is approximately seven per cent completion.
“Proposed plan to build LRT from Kuching connecting Samarahan and Serian.
“In addition, the state plans to build a bus rail transit ( BRT) from Kuching that connects to other major towns. These will spur the local economy and attract investment into the state particularly Kuching,” it added.
As for SCORE, AmInvestment Bank noted that the state government plans to build power plants, expected to be completed by 2025, which will provide up to approximately 8,180MW electricity capacity.
The research firm noted that these additional plants will continue to supply electricity demand across the state particularly in Samalaju where the heavy and energy extensive plants are located.
“The five growth nodes’ lack good road connectivity,” it said. “Hence, ongoing road construction across all these nodes is important for better accessibility.”
Lastly, AmInvestment Bank highlighted that the state government has allocated RM1 billion of investment to make Sarawak a digital hub in East Malaysia.
“The emergence of a digital economy will boost the state’s ability to attract investment globally,” the research firm opined.
Overall, AmInvestment Bank maintained ‘overweight’ on this sector in Sarawak with ‘buy’ recommendations on CMS and HSL.
“We believe such extensive development will be favourable to the state’s construction sector,” it said.