Gamuda surges to 7-month high

(Bloomberg) – GAMUDA Bhd, Malaysia’s second-biggest builder, jumped to a seven-month high after Credit Suisse Group said the company is seeking a government contract to upgrade the rail lines in Kuala Lumpur and surrounding areas.

Shares of the company surged 3.8 per cent to RM2.44, the highest level since September 12.

Vincent Lim, a Gamuda spokesman, said he was unable to confirm the contents of the Credit Suisse report.

Gamuda is “aggressively pursuing public sector projects to capitalise on the government’s pump-priming initiatives,” Danny Goh, an analyst at Credit Suisse, said in a report today. It is “well positioned to secure the expansion of the Klang Valley light-rail transit network.”

Winning the contract, which may involve the construction of 70-80km (44-50 miles) of new lines, may boost Gamuda’s order book by as much as RM7 billion (US$2 billion), the report said.

Malaysia last month unveiled a RM60 billion stimulus package to shield the economy from falling foreign investment amid the global recession.

The government has allocated about RM35 billion on public transport development over the next five years, Goh said.