Good news for those who has some spare cash and wants to buy stocks instead of property. After meeting with about 20 fund managers and analysts, CIMB Equities Research said, “Most funds still underweight property stocks in their portfolios but we sensed that sentiment on the sector had improved compared with during our roadshow in late March 2016, when there were grave concerns about the perceived oversupply of properties and the decline in housing affordability for the general public.” In brief, property stocks receive very low interest thus far and thus may potentially be rebounding.
CIMB Research shared that some of the fund managers and analysts even believed that the worst may have passed. It expected developers to launch more mass market properties in the coming months. (In brief, affordable ones which majority of every buyer can afford and thus have interest in) It also said that for the property developers under their coverage, they are sticking to their launch dates. (Of course, this would show confidence level of the said developers which is certainly a good news to hear). If we do read of strong take-ups, then this would boost the investor sentiment further. In this case, the property stocks.
These are the few developers that CIMB is recommending. They offer decent dividend yields and strong management and has potential share price upside once recovery in demand for physical properties becomes certain. These stocks include LBS Bina, Mah Sing, and UOA Dev. Their top pick is however Eco World because the stock offers the highest share price upside as it is the most leveraged, financially and operationally. So, ready to buy some of these stocks and then wait for the potential re-rating of property stocks in H2 2016? Well, CIMB Research did provide this downside risk to their call; a sudden economic shock. In other words, they are not expecting this. Happy believing and buying if you like property stocks.
written on 30 July 2016
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