Property stocks may be regaining their lustre as sales showed a pickup in the second quarter (2Q) of the year, fuelling hopes developers could make a turnaround in earnings faster than expected.
According to ECM Libra Research, the KLCI property index had gained 4.9% in June, with all property stocks under its coverage in positive territory.
In a recent note, HwangDBS Vickers Research said signs showed the return of demand for high-end properties, with project launches in Kuala Lumpur and Penang having been well received.
“Developers are more confident now to resume launches, which should lead to faster earnings recovery. Selling prices may soon be raised and incentives gradually pulled back, resulting in margin expansion for developers,” the research house said.
It said of recent launches by developers including DNP Bhd, IJM Land, E&O and S P Setia, between 60% and 100% of each project had been taken up.
On another note, the research house said the government’s recent liberalisation measures should boost both foreign and local demand for Malaysian properties.
Its top picks are S P Setia and E&O, with a target price of RM5 and RM1.50, respectively.
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