Property market recovery in H2 may drive up stock prices

Property market is not really ‘moving’ and this has affected many property counters. Many people are scared of stocks too:  Is stock market scary for many? It does seem so These days, many of the counters have been forgotten. The issue is simple. If the developers are not selling well, their profits would certainly be affected and when this happens, it should cap any stock price upside possibility. If we thinking about property stocks to buy instead of properties, we may want to listen to what CIMB Research is saying in a local media report today.

EcoworldCIMB Research said its top pick is Eco World Development Group Bhd. Other counters it likes include UOA Development due to prospects of higher sales, LBS Bina Group Bhd for attractive dividend yield and stronger earnings. From Penang, there’s Eastern & Oriental Bhd for its Seri Tanjung Pinang (STP2) reclamation project which should re-rate its share price. On an overall basis, CIMB Research is maintaining an “overweight”call on the local property sector because, “not as dire as initially thought.”

After its meeting with analysts and fund managers, it said that property sector’s fundamentals are better than its initial perception. It said that the sector’s valuation is cheap as per majority of all the investors but currently, everyone is staying on the sidelines without any visible near-term catalysts for property sales. In brief, it meant that should the situation turns better, the property stocks may rise again. It said, “A turning point in property sales, in our view, would be a stronger driver of share prices than full-year sales performance.” Some notes worth reading and understanding: Good notes for stock investing from an investment guru

For investors, it may be good to pay attention to all the launchings. Drop by and look at the sentiment. Most of the time, whatever we feel during the launching may be reflected in the results within the next few quarters. In other words, we can buy the counters earlier and keep for the potential upside. Stocks investment requires some efforts too. For property developers, it’s possible to know if they are doing well or not versus many other businesses. Happy investing.

written on 19 Apr 2016

Next suggested article: Stock down? Stock up!

 

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