Move over tech. Here come Southeast Asia’s builders

SINGAPORE (Dec 7): With at least US$323 billion in infrastructure spending in the pipeline in Southeast Asia and potentially more expected over the next few years, 2018 could well shape up as the year of builders’ stocks from Indonesia to the Philippines that have been the laggards in a broader market rally this year.

Governments are boosting spending on everything from airports to high-speed rails and ports to increase connectivity and boost economic growth in what promises to be a boon for the region’s construction companies. In one of the more ambitious programs in the region, Philippine President Rodrigo Duterte has earmarked an unprecedented US$180 billion for infrastructure to keep driving one of the world’s best-performing economies over coming years. Malaysia and Thailand are also ramping up allocations to public works ahead of general elections in 2018.

“Infrastructure has been under invested whether it’s clear water, clean air, energy, roads, ports, railways, education, health care -- so there are tons of opportunities,” said Ashish Goyal, head of emerging markets equities at NN Investment Partners (S) Ltd., which manages US$288 billion in assets. The firm owns stakes in Indonesian construction stocks, he said, adding that investors should watch for the pace of execution in the various countries.

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