Christmas gift to the Malaysian property market when he revealed
yesterday that the real property gain tax (RPGT) of 5% will only apply to property sold within 5 years of the date of purchase. This will provide a much needed relief to the property sector as it sends an affirmative signal that the government will adopt an
accommodative stance to support growth in the property sector.
With the relaxation of the RPGT regime, we believe buying interest
to pick up pace especially among upgraders who have to sell their
existing properties first. As such, we affirm our overweight call on the property sector. Top picks are Sunway City and SP Setia.
Maintain OVERWEIGHT
We have upgraded the property sector earlier this month from neutral to overweight due to the convergence of sustained property demand, despite the RPGT, and recent price correction affecting property stocks which led us to believe that the property sector will be an outperformer going into 2010.
We believe developers with residential properties catering to middle to upper-middle class such as Sunway City and SP Setia to benefit from strong demand and hence, rate these two as our top picks for the sector.
Among non-rated property stocks, we also like IJM Land and Mah Sing.
source : ecmlibra
