Gamuda - A laggard among our top picks (CIMB)

After sinking 62% in 2008, Gamuda’s share price has been relatively flat this year, lagging behind IJM Corp (IJM MK, Trading Buy), which has risen by 32% since the start of the year. We rate IJM and Gamuda our top picks in the construction sector because established contractors with proven track records should be major beneficiaries of pump-priming in 2009. Gamuda is trading at a huge discount of 61% to its RNAV compared with 39% for IJM. The stock could see contract wins in the form of flood mitigation and railway-related jobs which are its niches.