After crossing new milestones over the past 6-9 months, the construction sector should at least sustain the pace in 2H11 and 2012 as tenders and awards for ETP projects are expected to start coming through. Newsflow in 2H11 will be better than in 1H11 as execution of key projects such as the KVMRT, Klang River rehabilitation, highways and other projects under the ETP and 10MP should get underway. This supports our OVERWEIGHT on the sector, with IJM Corp and WCTs as our top picks. We also upgrade MRCB from Trading Buy to Outperform given its direct exposure to the MRT and Klang River rehab projects. For potential plays on the RM20bn MRT SBK line, we introduce our Top 20 selection for main contract and subcontract packages based on relevant skill sets and expertise.
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