Boston, MA -- (SBWIRE) -- 12/05/2012 -- BMI View: Although we had expected construction activity in Malaysia to recover in 2012, the sector's stellar performance in Q212 has exceeded our expectations, prompting us to revise up our full-year real growth forecast for 2012 to 11.5% (from a previous forecast of 6.2%). Looking ahead, we remain relatively bullish about the Malaysian construction sector over the coming quarters, but believe that it is unlikely for construction activity to grow at the blistering pace seen in H112. This outlook is because headwinds from a weakening global economy are already dampening demand for residential and nonresidential buildings.

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Key developments that will impact growth:

- In August 2012, Malaysia-based gaming conglomerate Genting, one of the five initial independent power producers in Malaysia, has announced that it is selling its domestic power assets to Malaysia's sovereign wealth fund 1Malaysia Development (1MDB) for approximately MYR2.3bn (US$737mn). According to Genting, its indirect wholly owned subsidiary Genting Power will sell its entire 97.7% shareholding interest to 1MDB. Mastika Lagenda owns Genting's domestic power assets, which primarily consists of the 720MW Kuala Langat gasfired power plant in Selangor, Peninsular Malaysia. The share sale was due to be completed by the end of August 2012.
- In August 2012, Mass Rapid Transit Corporation (MRT Corp), the state-owned entity in charge of the US$11.5bn 156km Greater Kuala Lumpur (KL) MRT project, announced that the first line of the MRT project, the 51km Sungai Buloh-Kajang Blue line, is on schedule to start construction. According to MRT Corp, the Sungai Buloh-Kajang Blue line has moved from the preparatory work to active construction phase at 11 sites along its alignment. The first and second phase of the urban railway line - the Sungai Buloh to Semantan section and the Semantan to Kajang section - are expected to be operational by December 2016 and July 2017, respectively.
- In June 2012, Malaysia's Land Public Transport Commission and Singapore's Land Transport Authority awarded US engineering firm AECOM Technology a contract for the design and engineering study of the proposed RTS Link. Under the US$42mn contract, the company is to undertake an architectural and engineering study for the project, which is due to involve an investment of around MYR30bn (US$9.7bn).

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