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Tuesday, June 9, 2009

Maybank recommends Kinsteel, Lafarge

Investors should buy Malaysian steelmakers such as Kinsteel Bhd and cement producers including Lafarge Malayan Cement Bhd before construction projects accelerate next year, Maybank Investment Bank Bhd said.

The companies will be “prime beneficiaries of government infrastructure spending; the foundations are set for a recovery,” Maybank Investment said in a report today. “Projects are expected to gain momentum in 2010 after a year of awards in 2009.”

The government has unveiled two stimulus plans totaling RM67 billion (US$19 billion) to help revive growth as the nation nears its first recession in a decade. The economy may shrink as much as 5 per cent this year, the government said May 28, slashing its forecast in March for a contraction of 1 per cent at worst.

The central bank kept its key interest rate unchanged at 2 per cent last month, saying previous cuts and stimulus measures will contribute to a recovery later this year.
The cement industry should recover faster than steel as smaller-sized infrastructure and building projects “spark cement demand,” Maybank said.

By Bloomberg

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