Research firms: NCER has little impact on stock market
Posted on | August 2, 2007
By THE EDGE
THE Northern Corridor Economic Region (NCER) will have muted impact on the stock market, as the blueprint development for the four northern states has been widely publicised, some research firms said.
Nevertheless, they said, Penang would play the most crucial part in the NCER, with over RM25 billion of projects already lined up.
“The (NCER) impact is likely to be muted for two reasons,” Citigroup analyst Wai Kee Choong said in a research note dated July 31. “The NCER blueprint has been widely publicised, thus it is already been reflected in the market”.
Wai also noted that the NCER socioeconomic blueprint was aimed at bringing in long-term benefits to the country and the stock market. Hence, one should not expect immediate benefits.
Potential beneficiaries, according to Wai, include E&O Property Development, Mah Sing and SP Setia, which all own land in Penang and will be positioned to benefit from the property up-cycle.
Aseambankers Malaysia Bhd, meanwhile, said many of the estimated more than RM25 billion of projects could be developed within the timeframe of the Ninth Malaysia Plan.
It said clear beneficiaries from these projects for now would be Equine Capital, Malaysian Resources Corp Bhd and UEM Builders.
“Equine Capital is a clear beneficiary of the Penang Global City Centre, while MRCB has been named to take on the integrated transport hub project,” the firm said.
Alliance Research Sdn Bhd said to date, RM7.7 billion infrastructure projects in Penang had been announced.
They included the RM3 billion second Penang bridge, RM1.6 billion Penang monorail, RM1.1 billion Penang Outer Ring Road and the estimated RM2 billion Butterworth Integrated Transport Terminal.
Alliance Research has maintained its “overweight” call on the construction sector and rated a “buy” on Gamuda, MTD ACPI and TSR Capital.
The firm said while construction may be the obvious winner, the building materials sector was also a proxy to the NCER.
Alliance Research’s buy call in the building materials sector is Hiap Tech Venture, a manufacturer of bare steel pipes, structural hollow sections and related products.
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