Dubai financial crisis has affected our stock market on 30 November 2009. Counter related to Dubai project were affected. What is advise of OSK on the said counters. Read the article below;
Good time to buy shares of contractors: OSK
THE recent share price retracement of Malaysian contractors should provide a good chance to accumulate, said OSK Research.
OSK, in its research note, said it expected a continuous positive news flow fuelled by more domestic contract awards with the Low-Cost Carrier Terminal project the first to take off with the earthworks package awards.
"We see the recent share price pullback as an excellent opportunity to accumulate and will retain the 'Overweight' stance on the construction sector," it said.
OSK said share prices of Malaysian contractors had declined in the past week on interest rate increase and currency devaluation in Vietnam as well as the Dubai's debt issue.
It said among the counters affected were Gamuda Bhd, which fell by 9.7 per cent, IJM Corp Bhd (3 per cent), WCT Bhd (6.3 per cent) and Mudajaya Group Bhd (8.6 per cent).
OSK said the rate increase and currency devaluation were likely to weaken sentiment in the Vietnamese property market in the short term.
"However, we believe long-term prospects in the Vietnamese property market will remain positive, underpinned by the nation''s robust gross domestic product," OSK said.
It said the Dubai issue would not impact Malaysian contractors much given the minimal exposure, with only IJM undertaking a RM126 million contract for the Fortune Executive office towers.
"Meanwhile, WCT-Arabtec joint venture is undergoing arbitration, which is expected to be completed by end-2010, with Meydan LLC in Dubai for the Meydan Racecource termination," it said.
OSK said LCL, however, was highly exposed as it has 85 per cent of its orderbook exposed to Dubai. -- Bernama
