KUALA LUMPUR,. Property-related counters on Bursa Malaysia saw a mixed-performance this morning, despite the sector being dubbed the biggest winner of the 2019 Budget.
The sector saw various measures introduced in the budget to boost the industry, including specific allocations for supply, financing of first-time purchases of affordable housing, stamp duty exemptions and property crowdfunding, to help the industry clear the supply overhang.
As at 11.32am, Mah Sing Group Bhd (Mah Sing) gained two sen to RM1.02 with 1.09 million shares traded, UEM Sunrise Bhd (UEMS) added one sen to 71 sen with 321,100 shares traded and UOA Development Bhd (UOADev) rose four sen to RM2.02 with 36,400 shares changing hands.
IOI Properties Group Bhd (IOIPG) slipped one sen to RM1.35 with 356,400 shares traded and SPSetia lost one sen to RM2.10.
Meanwhile, Sunway Bhd (Sunway) and Sime Darby Property Bhd (SimeProp) were flat at RM1.43 and RM1.00, with 164,500 and 1.88 million shares traded respectively
In a research note today, Kenanga Research said the 2019 Budget announcement related to property could boost sentiment for the sector in the near-term.
It believed that with property valuations dropping to historical trough levels and given clarity from the budget, the bashed-down big property players were worth a relook for rebound plays.
“This is due to the following factors, namely relatively better earnings sustainability and less margin risks due to overseas drivers or land sales, dividend yields which are at a premium to sizeable mortgage real estate investment trusts and a historical low forward price-to-earnings ratio/ price-to-book value levels, which means most of the earnings risks have been priced-in.
“We upgraded our call to ‘outperform’ from ‘market perform’ for IOIPG, UEMS, Sunway, Mah Sing, UOADev and Simeprop, while maintaining ‘outperform’ for S P Setia Bhd,” Kenanga said.
The research house also said it anticipated more details from the new upcoming National Affordable Housing Policy and clarity on property crowdfunding schemes.
“We reiterate a ‘neutral’ call on developers, as it will take a while for valuations to properly recover to historical mean levels, although they are currently at very low levels, which may be capped by the risk of margin compressions,” Kenanga added. — Bernama