GAMUDA Bhd shares steadied to a 31-month high of RM3.84 at yesterday’s close on hopes the construction and engineering firm, along with its partner MMC Corp Bhd, would be able to secure at least part of the proposed project to build a mass rapid transit (MRT) system in Kuala Lumpur.
Gamuda is expected to release its last quarterly results by the end of this month. Consensus estimate put the group’s full year ended July 31, 2010 earnings at just below 15 sen a share. The stock has already jumped 49% so far this year, outpacing the benchmark FTSE Bursa Malaysia KL Composite Index by a wide margin.
It is not cheap to buy Gamuda at this level, but market is already looking beyond this year and a potentially favourable outcome from the upcoming MRT project.
Analysts said increasing newsflow on the MRT project would continue to keep Gamuda and joint proposer MMC high on investors’ radar screen.
Analysts said the proposed RM47bil MRT project “is very high on the commitment scale as a catalytic project with named investors.’’
At this juncture, it remains unclear what roles Gamuda and MMC will play in this massive project.
Analysts said the two companies, which had work together on the SMART tunnel project in Sungai Besi, stood a good chance of securing the tunneling portion of the project, estimated at RM13bil.
HwangDBS Vickers Research said earlier this week Gamuda’s order-book could double and that MMC’s could triple if they get the MRT job.
By IZWAN IDRIS
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