FW: AmBank Research - Property: Key takeaways from Star Property Forum 2018 NEUTRAL, 11 Jun 2018

 

 

SECTOR FOCUS OF THE DAY

Property: Key takeaways from Star Property Forum 2018                              NEUTRAL

 

We recently attended the Star Property Forum 2018 with the theme The Real Estate Market Post GE14.

 

The key takeaways from the forum are: (1) Although the MRT 3 cancellation will affect certain locations in Kuala Lumpur, these areas are mostly matured townships and the impact will not be too significant; (2) The government's decision to scrap the high-speed rail (HSR) will have a negative impact to developers who have invested on projects that were supposed to be close to the stations such as Bandar Malaysia, Putrajaya, Melaka, and Iskandar Puteri; (3) The change in the government has created some short-term uncertainties but we believe the current uncertainty is only temporary; (4) The abolishment of GST will have some positive impact on the property sector as it will improve buyers' sentiment in the current property market down-cycle.

 

We maintain NEUTRAL on the property sector as various headwinds remain including: (1) the generally still elevated home prices; (2) the low loan-to-value (LTV) or financing margin offered by banks; (3) rising interest rates (with OPR expected to rise to 3.5% in 2019 from 3.25% currently); (4) the weak job security in selected industries such as finance, media and oil & gas; and (5) house buyers' inability to qualify for a home mortgage due to their already high debt service ratios (DSR).

 

Others:

Dialog Group: Slight boost from additional Tanjung Langsat stake              BUY

 

 

QUICK TAKES

Felda Global: Takeover target?                                                                                  HOLD

Plantation Sector: News flow for week 4 – 8 June                                             NEUTRAL

 

RETAIL RESEARCH

Stocks On Radar: IOI Properties, Superlon, Salutica, Wellcall Holdings      

 

ECONOMIC HIGHLIGHTS

US: Balance sheet reduction may end earlier

 

NEWS HIGHLIGHTS

Takaful Malaysia: Set for double-digit growth

Bumi Armada: Eyes prudent growth

CAB Cakaran: Plans to boost its overseas revenue

Red Sena: Weakness presents buying opportunity

 

 

 

DISCLAIMER:

The information and opinions in this report are prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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