The Bursa Malaysia Construction Index is a benchmark that tracks the performance of companies listed on Bursa Malaysia operating in the construction and infrastructure sectors. This index encompasses firms involved in building, engineering, project management, and other related services. It provides investors with a view of the Malaysian construction industry, capturing the companies that are essential to urban development and large-scale infrastructure projects.
Kuala Lumpur Stock Exchange (KLSE) Price & Chart
Index Comparison
Bursa Malaysia Construction Index Performance
After an extremely positive 2023 and 2024, the index has dipped in 2025. According to a report from The Edge Malaysia, there was an increased volume of sell orders, which they believe suggests the decline was likely due to foreign fund managers locking in gains from the recent strong rally in the sector.
| Period | Performance (as of February 2025) |
|---|---|
| 1-Year Performance | +31.16% |
Bursa Malaysia Construction Index Top 5 Companies
The index is reviewed quarterly in March, June, September, and December.
| Company | Market Cap |
|---|---|
| Gamuda BHD | MYR 25.42 Billion |
| IJM Corporation | MYR 8.17 Billion |
| Sunway Construction Group | MYR 5.40 Billion |
| Kerjaya Prospec | MYR 2.71 Billion |
| WCE Holdings | MYR 2.61 Billion |
Malaysia Construction Stocks Forecast
The Bull Argument: As mentioned previously, the index has experienced a recent dip. However, in the Edge Malaysia article released on February 17, 2025, it is noted that some dealers and analysts are urging investors to buy into the dip. They cite Danny Wong, who manages assets worth more than MYR 5 billion, as the chief executive officer of Areca Capital, who states: “Long-term investors should turn a short-term sentiment-driven correction into bargain hunting opportunity.” He reportedly added that investors should be selective and stick to fundamentally strong construction companies that have strong order books. They should also be less affected by short-term market volatility.
From a more general perspective, advocates for the construction sector in Malaysia may look at the sustained momentum in government infrastructure spending and private development projects as bullish factors. In addition, increasing urbanisation, particularly in Malaysia’s secondary cities, is expected to drive demand for new housing, commercial spaces, and public infrastructure.
The Bear Argument: On the other hand, the construction industry can be vulnerable to cyclical downturns. The rising costs of raw materials and labour, along with potential delays in major projects, could dampen profit margins. Moreover, any tightening of fiscal policies or disruptions in funding may slow down new project initiations, leading to subdued performance in the short term. Regulatory changes and environmental compliance requirements also pose ongoing challenges.
For example, The Edge article notes that the recent surge in Malaysian construction stocks was a result of investors scrambling for exposure to the data centres around the country due to the AI rise. With foreign investors having been the largest buyers of shares of Malaysian construction stocks, it made the sector highly vulnerable to sudden reversals. With the recent tariffs and restrictions on Chinese AI chips by the US, some analysts believe the concerns triggered the decline in Malaysian construction stocks.
Our View: Overall, the Construction sector in Malaysia provides a targeted opportunity to invest in one of Malaysia’s most critical sectors. While the industry is subject to cyclical risks, regulatory concerns, and cost pressures, its long-term fundamentals are supported by continuous urbanisation and infrastructure development initiatives.
Who Should Invest in Malaysian Construction Stocks
While the options for Malaysian construction stock ETFs are limited, investors may want to look at the iShares MSCI Malaysia ETF. It holds 8.86% of industrial stocks. Overall, the sector is particularly well-suited for:
- Growth Investors: Those looking to capitalise on infrastructure and urban development trends in Malaysia.
- Defensive Investors: While more cyclical than traditional defensive sectors, established construction companies can offer stable dividends and robust cash flows, providing some stability.
- Long-Term Investors: Given the ongoing demand for new infrastructure and development projects, the index offers potential for long-term capital appreciation.
Regional Investors: Individuals looking to gain exposure to Malaysia’s dynamic construction industry as part of a diversified portfolio.
