AGREED!

For money to be of value, it has to be finite/ limited. For nobody to lose money is impossible. Now with the PR1MA "incentive", more people who couldn't get on the market is now able - NOT through affordability, but by more LEVERAGING. Nice! The current answer to many social/ economic ill is to delay for some one else to figure it out, and meanwhile, dig a bigger hole.

Upside priced in for most property developers

Tags: Eastern & Oriental Bhd , Hunza Properties , IJM Land Bhd , Kenanga Investment Bank , KSL , Kuala Lumpur Property Index , Mah Sing Group , Paramount Corp Bhd , RHB Research Institute , S P Setia Bhd , YNH Property Bhd


By Chong Jin Hun of theedgeproperty.com
Tuesday, 05 July 2011 12:08

KUALA LUMPUR: Two research houses have turned cautious on the local property sector which has enjoyed a good run-up for almost two years.

RHB Research Institute and Kenanga Investment Bank have cut the sector to "neutral" from "overweight" in the past week, reminding clients that history show a property upcycle normally lasts for only two years.

"We believe now is appropriate to be watchful on property stocks as well as the sector outlook as we are now almost two years into the upcycle," RHB wrote in a note on Monday, July 4. "If what we project is true — that the property upcycle will gradually come off in 2012, though the physical market is likely to remain strong until year-end — current valuations appear to be on the high side, as property stocks typically price in six to nine months ahead."

The anticipated softening next year, RHB said, could be triggered by concerns over higher risk profile due to liquidity-driven massive credit growth; further monetary and regulatory tightening measures; rising inflation; and negative sentiment from regional property sector downgrades.

In a note dated June 30, Kenanga said that smaller developers under its coverage like Hunza Properties and Eastern & Oriental Bhd have showed a decline in sales year-to-date, though the bigger boys — S P Setia, IJM Land and Mah Sing Group — are still targeting strong sales growth of between 15% and 35% this year.

"We wonder if we will see new highs post-2011," Kenanga said.

RHB also has reservations on developers embarking on aggressive landbank expansion. "Land prices are getting more expensive now, and the window to launch and rapidly sell property products is getting shorter. The resulting impact will be slower landbank turnaround time and higher holding costs," RHB said.

Moreover, expectations of higher interest rates and more stringent policies for the sector would likely dampen demand and limit developers' ability to raise selling prices.

That, in turn, could result in a price war as players undercut each other to unload their inventory, RHB said.

"In a worse case scenario, take-up rate could take longer to achieve a satisfactory level," it said, cutting target prices for most property counters under its coverage. S P Setia's fair value was reduced to RM4.67 from RM4.88 previously, while Mah Sing is now deemed fairly valued at RM2.90, down from RM3.15 before. RHB has also slashed its target price for YNH Property Bhd to RM2.14 from RM2.31 and for Paramount Corp Bhd to RM2.23 from RM2.41. For the sector, RHB only retained an "outperform" for IJM Land and KSL, valuing them at RM3.28 and RM2.40 respectively.

Kenanga, on the other hand, told clients it will maintain an "outperform" on S P Setia and Mah Sing "for one more quarter" on expectations of significant news flow. Its target prices, however, had been lowered to RM4.68 (from RM4.93) for S P Setia and to RM2.87 (from RM3.13) for Mah Sing.

It also reckon there's limited upside for the Kuala Lumpur Property Index as the gauge was trading at a price-to-book value of about 0.86 times, higher than the five year average of 0.77 times.

http://www.theedgeproperty.com/news-a-view...developers.html

The Star Online > Business
Published: Tuesday July 5, 2011 MYT 2:28:00 PM
Updated: Tuesday July 5, 2011 MYT 3:02:06 PM

Govt to remove foreign restrictions on healthcare, education and legal sectors

KUALA LUMPUR: Malaysia will liberalise the top services sector namely healthcare, education and business services in phases, among others, by removing restrictions to foreign equity participation.

The phased liberalisation will be based on its current and potential contribution to the Gross National Income (GNI).

The liberalisation comes under the International Standards and Liberalisation Strategic Reform Initiatives (SRIs), which is among the six SRIs announced here today.

Currently, the services sector contributed about 57 per cent to Malaysia's economy compared with between 70 per cent and 80 per cent for developed countries.

The following are the recommendations for the three sectors to be implemented in phases:

For Healthcare:

*Remove restrictions to foreign equity participation in the setting up of specialised private hospitals with a minimum number of beds.

*Relaxing entry restrictions for foreign specialists such as doctors and dentists. For Education:

*Gradual relaxation of foreign equity restrictions in international schools while maintaning guidelines to ensure quality and standard of education institutions.

*Extending teaching permits' validity up to five years. For Business Services (Professional Services) *Remove equity restrictions for accounting, legal and engineering services.

*Relaxing entry conditions for foreign lawyers, engineers and architects to work in Malaysia. The government will also work towards improving the quality of Malaysia's goods and services as well as improve access to international markets. - BERNAMA

Related Stories:
Govt earmarks 33 companies for divestment
Six SRIs, Public Finance to create RM13bil fiscal space
The mystique of national transformation
Govt announces 6 initiatives to boost Malaysia's global competitiveness



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© 1995-2011 Star Publications (Malaysia) Bhd (Co No 10894-D)
http://biz.thestar.com.my/services/printer...sp&sec=business

This post has been edited by kh8668: Jul 5 2011, 10:51 PM

In that case, I choose to be the losing party as long as the whole country economy remains intact and people dun have to go the street to protest.....

will the relaxation of work permits bring in more expatriates and increase demand for klcc condo?

more competitive environment for these services.....mean you have to be more powerful compared to others....kekekeke

it will be the era 1 job 1,000 applicants.

Ya, hope that the government knows what they are doing and not digging our own grave.

It's recorded in the book ,"The world is flat" that American outsource too much jobs to the outside world that it affected the locals.

This post has been edited by GangHo: Jul 5 2011, 07:23 PM

From the basis of the article, it is a big fat NO! Expatriates are not dependent on the ease of receiving a work permit. Unless domestic helper is considered an expatriate?!

in the last 10 years, expat = mainly domestic helpers, constr and plantations workers.
plus some info tech, special projects on 3-4k rental budgets.
plus some gweilos on their own looking for cheap rentals like 4-5k for furnished bungalow.
15-50k rental budget expat an extinct species.
think more mysians on 10-15k rental budget in jakarta now.
20-30k in shanghai, plenty.

This post has been edited by AVFAN: Jul 5 2011, 08:33 PM

360K annual rental? Plenty some more........ Wow!

the best brains have left since there's nothing much to do here except debate whether props prices will rise or fall!
seriously, if you have the right skills, not hard to find a job there. easily 5 times yr current salary.

the average rental in sh for msian expatriate is about usd4-5k, =12-15k MYR. (much higher if u stay in bungalo) I lived in shimao riviera b4 and it is simialr to most high end klcc condo. fyi, most of the apt in sh are without club house and swim pools and the rental is lower (about usd1k to 3k)

yes, the salary in sh is at least 5 times more..

Seems like interest rate going to rise again in short term. China increase its interest rate has somehow put pressure on BNM to do the same. BNM is mimicking China's moves nowadays anyway.

http://www.theedgemalaysia.com/business/18...ing-growth.html

http://www.theedgemalaysia.com/business/18...-economist.html

http://biz.thestar.com.my/news/story.asp?f...85&sec=business

When the above happens, property prices will start to stagnant or slow in rising in the near term. The last round of interest rate increase has not really dampen property dampen property transaction in popular areas so BNM might feel safe to increase another 0.25%.

haih... increase .25% to blr.. makes me have to pay RM80 more each month.. dam..

haha....u oni pay extra RM80/month....somebody outside needed extra RM8000/month...

lol.. tat one is over goreng..

Heard on BFM today, yeap, likelihood is that the BLR will be increased again. Announcement by end of today from BNM. Let's wait and see if it is true. If it is true, it is going to slow down the demand for properties.

we will know by 6pm today. get ready to pay more int for loans, eat less...

normally.. interest rate will increase rite ? i mean FD
BLR stay too low zo.. sure it will go up haaaaaaaaaih

hmmmm....What if bank counter that with better package? BLR - 2.5 or more ....

wa wa.. if got that counter good leh..keep on counter.. after 3 years.. BLR - 4.0.. then i can do refinance liao