Shares of SP Setia, Malaysia’s largest developer, surged 12 per cent to close at RM3.54, the most since September 7, 1998, capping a 27 per cent rise in April. Sunway City Bhd jumped 5 per cent to RM2.11, adding to a 42 per cent monthly advance.
Loans approved for buying Malaysian residential property surged 49 per cent in March from a month earlier, the second monthly gain, adding to signs the industry may be rebounding.
The Kuala Lumpur Property Index of 87 stocks jumped 23 per cent this month, outpacing the benchmark Composite Index’s 14 per cent gain, and making it the best performing industry group on the stock exchange.
The industry is “showing signs of resiliency” and “incentives to buy property are more compelling now as the average lending rate is at a new low of 5.16 per cent,” ECM Libra Capital Sdn Bhd said in a report today. The “risk-reward trade-off is favourable now as opportunities for significant absolute gains are aplenty when stocks trade back up.”
Malaysia’s central bank said yesterday the domestic economy is likely to improve in the second half as the world economy stabilises. It refrained from lowering its benchmark interest rate yesterday, pausing after three consecutive cuts amid signs the worst may be over for Asia’s exporters.
Prime Minister Datuk Seri Najib Razak has unveiled two stimulus plans to bolster an economy he said may contract as much as 1 per cent this year.
By Bloomberg
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