KULALA LUMPUR: RHB Research Institute is downgrading its recommendation for the CONSTRUCTION [] sector to Neutral from Outperform, prompted by the downgrade in its recommendation for Gamuda to Market Perform from Trading Buy.
The research house said on Friday, March 11 that it also believed that construction stocks are already showing the symptoms of 'news flow fatigue' and the next round of re-rating will not take place until the market is more sure about the exact timing of the 'first oil' from the key public infrastructure jobs, particularly, the MRT project.
'Not helping either, is the increased earnings risk in terms of higher input costs and hence lower margins against a backdrop of the surging crude oil prices on the back of the unrest in North Africa and Middle East,' it said.
The research house said on Friday, March 11 that it also believed that construction stocks are already showing the symptoms of 'news flow fatigue' and the next round of re-rating will not take place until the market is more sure about the exact timing of the 'first oil' from the key public infrastructure jobs, particularly, the MRT project.
'Not helping either, is the increased earnings risk in terms of higher input costs and hence lower margins against a backdrop of the surging crude oil prices on the back of the unrest in North Africa and Middle East,' it said.
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