MBSB IB Positive On Construction Sector On Resilient Demand, Stronger Project Execution

KUALA LUMPUR, April 8 (Bernama) -- MBSB Investment Bank Bhd (MBSB IB) has maintained a positive stance on the construction sector, backed by resilient private sector demand and stronger public project execution.

In its research note, MBSB IB said that despite rising construction costs due to inflation, the impact on sector earnings is expected to remain manageable, particularly for larger contractors with stronger contractual protections and a more favourable project mix. 

Data centre (DC)demand also remains structurally strong, with contractors continuing to secure hyperscale mandates as part of Southeast Asia’s ongoing digital infrastructure boom, supported by robust leasing demand, cost competitiveness, and long-term client partnerships. 

The bank said it expects earnings visibility to strengthen into calendar year 2026, supported by active industrial job flows and the multi-year public infrastructure roadmap under the 13th Malaysia Plan (13MP).

This includes large-scale public transport infrastructure expansion, flood mitigation, and the projected RM430 billion federal development allocation, complemented by RM120 billion in government-linked investment companies (GLIC) funding and RM61 billion in public-private partnership (PPP) and private capital.

The investment bank's top picks for the construction sector, all with a 'buy' call, are Gamuda, with a target price (TP) of RM5.60, Sunway Construction Group (TP: RM7.30), IJM Corporation (TP: RM3.10) and Malayan Cement (TP: RM10.00). 

-- BERNAMA