AmResearch said from an equity market perspective, the expected construction kicker was conspicuously absent.

In a report issued on March 11, it said the lack of news on the funding for high-impact infrastructure projects might cast further uncertainty over orderbook replenishment for select construction companies namely: IJM Corp, Gamuda and MMC Corp.

“Nonetheless, the mini budget may benefit UEM because of Khazanah’s planned RM1.7 billion investment this year to build infrastructure, hotels and theme parks in Iskandar Malaysia.

“Also Malaysia Airports Holdings Bhd may get a kick from the Government’s move to build a new LCCT terminal at Kuala Lumpur International Airport costing some RM2 billion,” it said.

On the government’s plans to upgrade the traffic infrastructure around KL Sentral (developed by MRCB), the Tanjung Agas industrial park and the biotechnology cluster in Iskandar Malaysia, the research house said a spending breakdown was not available at this juncture.

“Reaction from equity market likely muted; fair value (for the KLCI) retained at 800 for 2009. We are retaining our year-end fair value of 800 for the market,” it said.

AmResearch said the Mini Budget was not likely to trigger a re-pricing of growth expectations anytime soon given elevated aversion to risk. In addition, recent fiscal stimulus in other Asian countries has not stemmed the decline in regional equity markets with the exception of China.

“The mini budget would, however, mitigate some concern over a deepening of an impending recession further out.

“Given near term macro headwinds, we continue to advocate stock picking based on balance sheet strength and good corporate governance namely: IOI Corp, KLK, MISC, Telekom Malaysia, KFC, YTL Power and Resorts World,” it said.