Hong Leong Investment Bank identified top construction stocks as it maintains its "overweight" stand on the construction sector.
Among its top picks were Sunway Bhd, Gamuda Bhd, Mudajaya Corp Bhd and Malaysian Resources Corporation Bhd, with the selection criteria revolving around liquidity, outstanding order book/unbilled property sales and Beta to capture the rebound in the market.
"Since our upgrade on Gamuda and initiation on MRCB, both stocks have seen their existing target price breached, from RM3.81 to RM4.41 and RM2.22 to RM2.64, respectively.
"We believe that the share prices of construction companies tend to race ahead of their fundamentals, on the back of positive newsflow and return of risk appetite," HLIB said.
In a research note Wednesday, HLIB said more Economic Transformation Programme projects should materialise this year, to mitigate slowing economic growth.
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