Property stocks Malaysia at 7-month low. What’s UP?

If you love commercial property but does not have a couple of hundred thousand ringgit for the downpayment, you can also choose to buy REITs instead.  Real Estate Investment Trusts (REIT) allow us exposure into the commercial property world at a very small investment. The returns are not necessarily low either. It should be better than your current FD and hey, you are indirectly the owner of some magnificent looking office towers or malls. Alternatively, if you love some developments which are over RM1 million and you do not have the money to buy those, how about buying the developer which is developing instead? The stocks of your favourite property developers. Their stocks, in terms of prices may NOT be doing well currently. There’s an article about how low these stocks are trading currently in asia.nikkei.com

In brief, the report says that the Bursa Malaysia Property Index is at its lowest point since March 2017. (7-month low) It quoted some top fund official experts saying that a rebound is likely due to value-buying. Besides that, recent sales activities has shown some signs of recovery too. Affin Hwang Asset Management’s head of equity strategy Gan Eng Peng said, “Malaysia’s property sector is poised to rebound after a four-year softening cycle, helped by strong demand and improving bank approval rates.” Besides that, the Malaysian property market could also take the cue from a recovering Singapore property market. Gan added, “Singapore’s government announced some easing on property market measures earlier this year and there’s speculation we might follow. Perhaps some initiatives may be announced in the budget next week.” Potentially, large-cap stocks with both construction and property divisions are preferred. Especially those able to capture upcoming infrastructure contract awards.

Let’s get exposed to the property market somehow. Haha. I still think buying a property gives me the most satisfaction. Somehow, the emotional attachment is way better than owning some e-paper (I mean stocks). Haha. However, I think it’s much wiser to look at it from an investment point of view instead. We could always be exposed to the property market and we do not need lots of money to do so. Buying REITS or the stocks itself would enable us to profit from whatever successes they have. Love a particular developer? As long as they are a listen entity, own a piece of them and drop by during their annual general meeting for a cup of tea and listen to the management. If they are impressive, buy more. If they are not, switching to another property stock is extremely easy to do. Happy investing.

written on 23 Oct 2017

Next suggested article: Global property bubble about to pop? Pop means kaboom.

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