Sarawak-related stocks on Bursa Malaysia are likely to be in the spotlight as the state braces for its 11th election.

Sarawak Chief Minister Adenan Satem hinted at holding the state election in March 2016 during New Year's Eve celebrations in Kuching.

AmInvestment Bank, in its sector report, said the ruling BN was expected to retain control of the now-expanded 82-seat assembly.

The current speculation is that the elections might be held the earliest in February and the latest by May. Within a grace period, it could also be held within 60 days after the expiry of the term on June 20, 2016.

"From early 2016, we expect Sarawak stocks to come under election-theme trading in the lead up to polls and here again, we highlight the recent developments as well the prospects of companies under our coverage," its analyst Thomas Soon said.

These included construction companies Cahya Mata Sarawak (CMS), Sarawak Cable Bhd, Hock Seng Lee (HSL), KKB Engineering and Naim Holdings, he said.

Soon said others included timber stocks Jaya Tiasa and Ta Ann, as well as Bintulu Port.

Sarawak recently tabled an election-driven state budget for 2016 of RM8.04 billion, up 26.5 percent year-on-year.

It included RM5.97 billion allocation for development - roads, supply of treated water and for the agriculture sector.

Specifically, rural development will receive an allocation of RM2.65 billion, up 13 percent from 2015.

The state has reserves totalling RM27 billion.

Apart from the state budget, Sarawak is also expected to benefit hugely from the construction of the federal-funded RM27 billion Pan-Borneo Highway.

The 1,090km Sarawak section, to be built at a cost of about RM15 billion, would be implemented through the project delivery partner, Lebuhraya Borneo Utara Sdn Bhd, and is expected to be completed by early 2023.

"We understand that a total of 10 packages would be rolled out in phases. As of the latest, we understand that between 12 and 15 consortia involving local and those from the peninsular have been pre-qualified," AmInvestment Bank said.

The Sarawak government requires local entities to have a 70 percent equity lead in each of the consortia, with partners from the peninsular.

The construction of the highway started last March, with the initial package involving a 43km route, with a total contract value of RM638 million.

The second package involves a 33km route, launched on Sept 1 at a contract value of RM580 million.

"We believe the other packages will be rolled out starting January. The highway is expected to spur developments within and outside of the Sarawak Corridor of Renewable Energy.

"With that, CMS, HSL, KKB and Naim are all expected to be potential direct and indirect beneficiaries of the Pan Borneo Highway project," it said.

For the non-construction-related companies, AmInvestment Bank said, stocks in focus would be in the timber sector such as Jaya Tiasa Holdings Bhd and Ta Ann Holdings Bhd.

- Bernama