No reprieve for Bursa construction stocks as Malaysia imposes movement control order

KUALA LUMPUR (March 19): Bursa Malaysia’s construction index, which tracks share prices of builders listed on the exchange, settled down 13.45 points or 10.53% at 114.33 at the bourse’s 12:30pm break amid broader market sell-off on persistent concerns over the economic impact of the global COVID-19 outbreak, which has led to movement restrictions in several countries. 

In Malaysia, the government has imposed a 14-day movement control order (MCO) from yesterday (March 18) until March 31 to curb the spread of the virus. Today, CGS-CIMB Securities Sdn Bhd analyst Sharizan Rosely wrote in a note that construction industry players are now concurring with market talk that construction work will be halted in line with the MCO.

"A two-week stop-work order on all construction works nationwide (under the MCO) is likely to be effected and commence on March 18. This will be negative for property developers and pure contractors,” Sharizan said.

At Bursa today, the construction index was the second largest percentage decliner during the exchange’s afternoon break after the energy index’s 10.59% drop. The FBM KLCI settled down 29.73 points or 2.4% at 1,209.28. 

Among construction stocks, Mudajaya Group Bhd settled down four sen or 21.05% at 15 sen, WCT Holdings Bhd fell 5.5 sen or 18.33% to 24.5 sen while IJM Corp Bhd dropped 23 sen or 16.43% to RM1.17.

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