Property Weekly Review: 5th – 11th January 2009

January 14, 2009 at 3:34 am Leave a comment

• Property sector outperformed market
The property sector has outperformed the KLCI last week, led by a 12.7% gain in property sector bellwether, SP Setia. On notable shareholding filings, Permodalan Nasional Bhd acquired another 0.09m shares in SP Setia while Dato’ Dr. Yu Kuan Chon added another 0.55m shares in YNH Property.
• Downgrade SP Setia to sell
The price movement of SP Setia surprised us as nothing has changed fundamentally since we initiated coverage in Nov 2008. This led to our recommendation last week to take profit on SP Setia as share price has overrun its fundamentals. We also recommended investors to switch to Sunrise for a pure property exposure at undemanding valuation while more risk-averse investors should look at Sunway City due to its more stable property investment earnings.
• In the news
Nothing much happened in the property sector last week. Notable news includes Bank Rakyat building its new headquarters along Jalan Travers which will add another 1.8m square feet of office space when completed in 2011. There was still news on expansion activities as Mutiara Goodyear acquired a 3.52ha land in Bukit Gambir, Penang for RM15.01m while Tan Sri Quek Leng Chan has reportedly acquired a 3% stake in InterContinental Hotels Group Plc for £51m.
• Maintain NEUTRAL
Although property stocks have corrected significantly in recent weeks, there is still lack of near-term catalyst. Property buyers are on the sidelines while developers are cautious in launching new projects. As such, we maintain our neutral call and favour stocks such as Sunway City which has more stable property investment earnings.

Share price performance

The property sector has outperformed the KLCI last week, led by a 12.7% gain in property sector bellwether SP Setia. The price movement of SP Setia surprised us as nothing has changed fundamentally since we initiated coverage in Nov 2008. This led to our recommendation last week to take profit on SP Setia as share price has overrun its fundamental. We also recommended investors to switch to Sunrise for a pure property exposure at undemanding valuation while more risk-adverse investors should look at Sunway City due to its more stable property investment earnings. On notable shareholding filings, Permodalan Nasional Bhd acquired another 0.09m shares in SP Setia while Dato’ Dr. Yu Kuan Chon added another 0.55m shares in YNH Property.

Notable property news
– Bank Kerjasama Rakyat Malaysia Bhd’s is building a new RM460m headquarters, called the Bank Rakyat Twin Towers, to improve the bank’s efficiency when completed in 2011. The Bank Rakyat Twin Towers, one of 32 storeys and the other 38 storeys, will be built on a 3.78-acre piece of land located at Jalan Travers, Kuala Lumpur. According to the bank’s group managing director, Datuk Kamaruzaman Che Mat, the bank had a good deal when it bought the land for RM43m in 2006. At that time, the conservative market price was about RM65m. The construction cost of the twin towers, with a builtup area of 1.8m square feet, was estimated at RM460m, he said.
– Affin-I Goodyear Sdn Bhd (AIGyr), a Mutiara Goodyear Development Bhd (MGD MK, not rated) unit, has signed a sale and purchase agreement with Affin Islamic Bank Bhd for the acquisition of 3.52ha in Bukit Gambir, Penang, for RM15.01m. AIGyr is a joint venture between Mutiara Goodyear and Affin Islamic Bank Bhd.

– Tan Sri Quek Leng Chan has reportedly taken a 3% stake in InterContinental Hotels Group Plc. Quek made the investment, worth £51m (US$74m), through his Hong Leong Group Malaysia.

Entry filed under: Business, Finance, Stock Market. Tags: , , , , , , , , , , , , , , , , , , , , , , , .

Oil & Gas Weekly Review: 5th – 11th January 2009 Plantations Weekly Review: 5th – 11th January 2009

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed



%d bloggers like this: