TA raises Glomac’s target price

TA Research raised the target price of Glomac Bhd to RM1.10 per share from RM1.08 as it viewed positively the property developer’s move to expand its landbank in Sepang, the southern part of Selangor state.

“Given the rising property prices and land scarcity in the first tier locations in the Klang Valley, we expect property demand to be decentralized from the first tier locations to areas like Cyberjaya, Kajang, Puchong and Seri Kembangan,” TA said in a research note on Monday.

Glomac announced on Friday it was buying a piece of agricultural land in Sepang measuring 191.75 acres for RM66.8 million. It said it intended to develop the land into a mixed residential property.

Maintaining a "buy" on Glomac, TA said it raised the property developer’s financial year ending April 30, 2014 (FY2014) earnings by 2.9 percent, as it expected the progress billing from the project to begin in that financial period.

By 10.38am, Glomac shares were down 1.78 percent, in line with the Malaysian benchmark stock index’s 1 percent fall.

By Reuters