Malaysia Stocks to Rally 50% on Growing Capex - CNBC

Malaysia Stocks to Rally 50% on Growing Capex - CNBC

Malaysia grabbed headlines late last week when it announced an oil and gas project worth $20 billion in the southern state of Johor. State-run oil major Petronas[PNAGF Unavailable () ] will build an integrated refinery and petrochemical complex and raise the country's total refining capacity to almost 1 million barrels per day.

AFP | Getty Images Malaysia wants to attract $444 billion in investments over the next 10 years.

Analysts say growing capital expenditure projects such as this will help the country’s stock market extend its bull run for another two years and gain another 50 percent.

Malaysian stocks have rebounded strongly from the financial crisis; the Kuala Lumpur Composite Index is up more than 80 percent from its lows in December 2008.

But that’s still short of the impressive gains posted by Southeast Asian peers such as Thailand and Indonesia, which are up about 160 percent and 200 percent respectively.

Still, analysts are optimistic that Malaysia’s ambitious economic plan will act as a catalyst for more gains in Malaysian equities.

Malaysia aims to attract over $444 billion in investments over next 10 years, to help kick start a new capex cycle.

Of this, 8 percent will be from government spending, 92 percent from private investment.

This, says Claire Chin, Head of Malaysia Research of CLSA, will be achieved via large scale infrastructure investments in Kuala Lumpur and the Iskandar project in Southern Malaysia, as well as oil and gas investments by Petronas..........

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