Property Sector

Below is the research report from HDBS:

􀂾 Demand to pick up. We notice the recent trend and incentives by the government is changing the property industry structurally and expect long-term positives occurring in the sector, especially the high-end segment.

􀂾 Untapped foreign market. The lifting of RPGT, easing of foreign ownership and speedy delivery systems are in our view, important and liberal measures taken by the government to improve the attractiveness to the largely untapped foreign demand. The government has a target of at least RM20b foreign ownership by 2010. Early signals such as appreciation in prime land prices, increase in selling prices of high-end properties and high pre-sold sales indicate that our properties, especially the
luxury segment, are due for re-rating.

􀂾 Maintain Overweight. Financially strong developers with strong branding and properties skewed to mid-high end are set to benefit. YTL Land (YTLL MK, PT RM3.30) and Sunrise (Sun MK,PT RM4.90) are our picks for the sector to ride on the property
upcycle.