KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Gamuda Hits Record High, Driven by A$1.6 Billion Australian Contract and Construction Sector Optimism
Shares in Gamuda Bhd (KL) surged to a new record high on Thursday, fueled by news of its joint venture (JV) in Australia securing a A$1.6 billion (RM5 billion) contract and renewed interest in construction stocks on Bursa Malaysia.
Key Highlights:
Stock Performance:
- Gamuda's share price increased by as much as 2.91% to an intraday high of RM8.49, closing 0.36% higher at RM8.28, the highest closing price since its 1992 listing.
- The company is valued at RM22.96 billion, with its share price soaring 42% over the past two months.
- At its current market capitalization, Gamuda is the 21st largest company on Bursa Malaysia and a potential FBM KLCI constituent.
Sector Performance:
- The Bursa Malaysia Construction Index, tracking 49 stocks, rose 0.36% to 316.83 points, its highest since February 2018, gaining over 65% year-to-date.
Recent Achievements:
- Gamuda's JV with French rail engineer Alstom SA secured a contract to upgrade and automate signalling and train control systems in Perth’s suburban rail networks.
- Gamuda holds a 46% stake in the JV, expected to generate up to A$737 million (approximately RM2.3 billion) over 10 years from the project.
Analysts' Views:
- Positive Sentiment:
- Majority of analysts tracking Gamuda are bullish, with 17 "buy" calls out of 20 research houses. The consensus 12-month target price is RM7.73.
- MIDF Research's Royce Tan noted that Gamuda’s current price has surpassed most target prices, driven by its strong order book of RM26.5 billion, expected to grow further with new contracts.
- RHB Investment Bank's Adam Mohamed Rahim, with a target price of RM9.68, anticipates continued rally, especially with potential new data centre jobs.
- Skeptical Sentiment:
- An unnamed analyst argued that Gamuda's valuations are "totally irrational," citing the long implementation period and lower margins of the Australian project compared to typical Malaysian jobs.
Future Prospects:
- Gamuda is positioned to benefit from the government's roll-out of major infrastructure projects and new data centre investments.
- Its IBS factories in Banting and Sepang can support around two to three data centre jobs with a cumulative capacity of up to 200MW.
Conclusion: Gamuda’s recent successes and robust market performance reflect investor optimism in the construction sector and the company’s strategic growth plans, despite some concerns over project margins and long-term earnings.
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