Construction, property stocks rebound on news HSR project 'may come back'

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KUALA LUMPUR (July 19): Construction and property stocks have rebounded amid increasing likelihood that the Kuala Lumpur-Singapore High Speed Rail (HSR) project is only deferred and not cancelled.

Prime Minister Tun Dr Mahathir Mohamad was reported to have said that the project will have to be deferred because it will be difficult to reduce its price.

Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng said "rumour has it that the mega infrastructure projects may come back".

"It was said earlier that the projects have been deferred. This means, at any time, the projects can be reconvened. Hence, this would mean that these [construction and property] stocks would've been undervalued at their current level," said Wong.

At 4pm, the Bursa Malaysia Construction Index had the biggest gain among the local indices, rising 11.86 points or 5.69% to 220.15, while the Bursa Malaysia Properties Index grew 19.44 points or 1.88% to 1,035.50.

The FBM KLCI, on the other hand, was up 9.48 points or 0.54% at 1,762.55.

Among the construction counters, gainers included Mitrajaya Holdings Bhd, Ekovest Bhd and Ikhmas Jaya Group Bhd, while Iskandar Waterfront City Bhd (IWCity), Malton Bhd and Malaysian Resources Corp Bhd (MRCB) were among the top gainers among the property players.

Frank Lin, a dealer's representative at Hong Leong Investment Bank Bhd, said the two sectors are experiencing a rebound.

He said IWCity and Ekovest saw a huge rebound as they had been "hit most severely" amongst the players following the aborted deal on Bandar Malaysia.

Ekovest, IWCity and MRCB were the three top most actively traded counters on Bursa Malaysia.