KUALA LUMPUR, July 18 — MIDF Research has maintained a 'neutral' call on the property sector with a positive bias.
In its sector update today, the research house said the rebound in loan applications and loans approved data for property purchases in May 2023 is slightly positive to the property sector, as it signals demand for property remains supported while the new property sales outlook for developers is expected to be better.
Total loans approved for the purchase of property jumped by 18 per cent month-on-month (m-o-m) in May 2023, reversing a decline of 17 per cent m-o-m in April 2023.
The higher approved loan in May 2023 was mainly underpinned by the higher loan applications in May 2023, which was partially cushioned by a lower percentage of total approved loan over the total applied loan of 44.8 per cent in May 2023 (April 2023: 46.7 per cent).
“Besides, Bank Negara Malaysia which maintained the Overnight Policy Rate (OPR) at three per cent in July 2023 is also positive on the property sector as buying sentiment is expected to remain healthy without a hike in OPR,” said MIDF Research.
Its top picks for the sector are Mah Sing Group and Glomac Bhd, which are given 'buy' calls with a target price of 78 sen and 43 sen, respectively.
“We like Mah Sing Group due to its strategy of focusing on building affordable homes. Besides, its recent active land banking exercise should support new sales and earnings growth in the near term,” it said.
For Glomac, the research house sees a better earnings outlook in the financial year ending Dec 31, 2024 (FY2024), which would be driven by higher progress billing.
“Besides, new sales prospect is better for FY2024 due to launches of a key project in Puchong and projects at its townships,” it added.
— Bernama
