KUALA LUMPUR (April 11): RHB Investment Bank Bhd said the property sector should generally benefit from the re-opening of the economy and international borders.

In a note Monday (April 11), the research house said it sees some potential trading opportunities as sector valuations are undemanding, at 64% discount to RNAV.

“Recent news flow on the construction sector and green light for the Mass Rapid Transit 3 may potentially have a positive spillover on the sector.

“We are, however, cautious on developers’ earnings prospects, given the stubbornly high construction costs, from the spike in the prices of various commodities.

The research house said developers have generally set a lower sales target this year (circa -10% y-o-y) after recording strong property sales in 2021.

“Last year, aggregate property sales grew around 40% y-o-y despite the rolling lockdowns in June-Aug 2021.

“In our view, 2022’s more conservative sales targets are probably due to the absence of the Home Ownership Campaign (HOC), expectations for an interest rate hike in 2H22, and rising inflationary pressure.

“Our preferred picks are Matrix Concepts Bhd, Sime Darby Property Bhd and IOI Properties Group Bhd,” it said.

Source: EdgeProp,  April 11, 2022