With as much as 200 billion ringgit ($68.92 billion) of building jobs in play, Danny Wong Teck Meng says no investor can afford to ignore Malaysian construction stocks.
The fund manager whose Areca EquityTrust Fund beat 98% of peers over the past three years with a 13% return, has been buying builders as the government accelerates infrastructure spending across Malaysia. The latest hotspot is Sarawak on Borneo island where a 28.9 billion ringgit, 1,796-kilometre toll-free highway linking the state and Sabah is being built before a crucial state election in May.
"The construction industry will be very exciting as these jobs are expected to be awarded in the next two years. There could be as much as 200 billion ringgit of jobs out there," said Wong, the chief executive officer of Areca Capital Sdn Bhd, who correctly predicted this year's slump in technology shares and a rebound in energy companies.
"We can't ignore them. Sarawak stocks are in focus because of the Pan Borneo highway and also the election, where there are bound to be goodies."
Construction companies are trading at the highest level relative to the Malaysian equity benchmark in four years as a building boom takes hold. With an estimated 136 billion ringgit of jobs in the pipeline in 2016 alone, a CIMB Group Holdings Bhd report predicts more gains as share prices haven't fully priced in the earnings potential.
The awards bonanza from rail to roads also comes amid an "election play" on some contractors as Prime Minister Najib Razak's ruling Barisan Nasional coalition bids to retain Sarawak - a state held since 1963 - in polls May 7.
The Bursa Malaysia Construction Index has risen 21 per cent from an August low and is priced at 1.2 times net assets, near the most expensive level in almost a year. It's up 3.2% in 2016, beating the FTSE Bursa Malaysia KLCI Index that's fallen 0.6%.
The biggest gainers in the building gauge this year are Ekovest Bhd and Kimlun Corp which have jumped at least 28%. The building gauge rose 0.1% on Thursday, its second day of increases.
Areca's Wong owns shares of Gamuda Bhd, the biggest builder by market value, Sunway Construction Bhd, Mitrajaya Holdings Bhd and Econpile Holdings Bhd.
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The fund manager whose Areca EquityTrust Fund beat 98% of peers over the past three years with a 13% return, has been buying builders as the government accelerates infrastructure spending across Malaysia. The latest hotspot is Sarawak on Borneo island where a 28.9 billion ringgit, 1,796-kilometre toll-free highway linking the state and Sabah is being built before a crucial state election in May.
"The construction industry will be very exciting as these jobs are expected to be awarded in the next two years. There could be as much as 200 billion ringgit of jobs out there," said Wong, the chief executive officer of Areca Capital Sdn Bhd, who correctly predicted this year's slump in technology shares and a rebound in energy companies.
"We can't ignore them. Sarawak stocks are in focus because of the Pan Borneo highway and also the election, where there are bound to be goodies."
Construction companies are trading at the highest level relative to the Malaysian equity benchmark in four years as a building boom takes hold. With an estimated 136 billion ringgit of jobs in the pipeline in 2016 alone, a CIMB Group Holdings Bhd report predicts more gains as share prices haven't fully priced in the earnings potential.
The awards bonanza from rail to roads also comes amid an "election play" on some contractors as Prime Minister Najib Razak's ruling Barisan Nasional coalition bids to retain Sarawak - a state held since 1963 - in polls May 7.
The Bursa Malaysia Construction Index has risen 21 per cent from an August low and is priced at 1.2 times net assets, near the most expensive level in almost a year. It's up 3.2% in 2016, beating the FTSE Bursa Malaysia KLCI Index that's fallen 0.6%.
The biggest gainers in the building gauge this year are Ekovest Bhd and Kimlun Corp which have jumped at least 28%. The building gauge rose 0.1% on Thursday, its second day of increases.
Areca's Wong owns shares of Gamuda Bhd, the biggest builder by market value, Sunway Construction Bhd, Mitrajaya Holdings Bhd and Econpile Holdings Bhd.
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