IGB Corp, Malaysia's biggest owner of commercial properties, rose the most in more than two weeks in the local bourse after Citigroup Inc said investors should buy shares of asset-owners instead of developers.
Shares of IGB jumped 5 per cent to close at RM1.25, the most since February 24. It's the best performer on the benchmark Composite Index, which climbed 0.6 per cent.
KLCC Property Holdings Bhd, owner of the Petronas Twin Towers in Kuala Lumpur, rose 2.8 per cent, the most in a week.
"We prefer companies with grade-A office exposure and property investment activities, versus developers," Citigroup said in a report yesterday. IGB and KLCC are its "top picks", it said.
Property asset owners with long-term leases have more "defensive" earnings that will better shield them from the slumping economy compared with developers such as SP Setia Bhd which will be hurt by dwindling home sales, HwangDBS Vickers Research Sdn Bhd said in a note to clients yesterday.
Malaysian Deputy Prime Minister and Finance Minister Datuk Seri Najib Razak this week warned that the Southeast Asian nation's economy may shrink this year for the first time in a decade and announced a RM60 billion stimulus plan.
IGB shares also climbed after the Employees Provident Fund, Malaysia's biggest pension fund, bought 1.2 million shares in the company, lifting its stake to 8.1 per cent, a stock exchange filing showed on Thursday.
SP Setia, Malaysia's largest property developer, dropped 3.1 per cent to RM3.08, the lowest level since December 26.
By Bloomberg
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