We have revised down our forecasts for this quarter in light of worse than expected gross fixed capitalformation and real capital investment growth figures. In 2008, real capital investment growth was just1.1%, compared with an earlier estimate of 5.4%. This exacerbates our earlier-expressed fears thatpromised government investment in infrastructure is often failing to materialise (in part due to thegovernment's funding constraints). We now believe that the real value of Malaysia's construction sectorwill decline by 3.6% in 2009, compared with our earlier 2009 forecast of a relatively shallow decline of-1.4%. Furthermore, we are now more bearish about the prospects for 2010 than we were during our lastupdate. We now predict that the sector will register real growth of just 0.4% next calendar year, comparedwith our earlier forecast of 2.1%. Thereafter, we anticipate only very modest real sector growth in 2011and 2012 of 1.2% and 1.8% respectively.
The principal news in Malaysia’s infrastructure sector in the last quarter is concerning Malaysia's largestpower producer, Tenaga Nasional Berhad (TNB), which is aiming to raise ringgit-denominated loansfor funding its US$2bn undersea electricity transmission line (May 2009). The submarine transmissionline will transfer power from Sarawak on Borneo to the peninsula. The project includes installation of a730km high-voltage direct current transmission network. It also includes laying of a 670km underseacable for the 2,400MW Bakun hydro-electric dam.
This quarter we introduce a profile for IJM Corp. The company, which has interests across a wide rangeof infrastructure-related sectors and geographic regions, maintained a profit in the last 12-month reportingperiod. Several factors offer support, including exposure to India’s market, where we anticipatemoderately strong economic growth in 2009, in contrast to recessions in many other countries (includingMalaysia).
(0 items)
