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Downside fairly limited for WCT, Gamuda

KUALA LUMPUR: CIMB Equities Research sees the downside as fairly limited for WCT and Gamuda following the fallout from the developments in Vietnam and Dubai last week, though WCT is involved in Abu Dhabi only.

The research house said although the developments there were negative surprises, their implications for WCT and Gamuda were unlikely to be substantial.

CIMB Research said for Gamuda, the devaluation of the Vietnamese currency, the dong, "has both a cost savings impact and a small reversal of profits for infrastructure works at Yenso Park".  It added the potential negative impact on property demand was likely to subside over time.

As for WCT, its exposure to the dong relates only to expenses of about RM1 million for its US$700 million Platinum Plaza project in Ho Chih Minh City.

"The good news is that both companies do not have exposure to Dubai. We maintain our forecasts and Outperform calls on WCT and Gamuda which are also our top picks for the sector," it said.

The research house said potential re-rating catalysts include subsiding fears over Vietnam and the Middle East, new contract wins, and progress of mega jobs. It also maintained its overweight on the construction sector.

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