Corporate exercises, thematic drivers fuel interest in Malaysia’s property stocks — Maybank IB

• In a research note today, the investment bank highlighted that property stocks with strong track records, solid fundamentals, and visible pipelines or corporate exercises over the medium term will be of particular interest.

KUALA LUMPUR (Sept 12): Corporate exercises and thematic drivers are expected to sustain interest in Malaysia’s property stocks, according to Maybank Investment Bank Bhd (Maybank IB).

The key thematic drivers include the Johor-Singapore Special Economic Zone (JS-SEZ), data centre investments, and the Kuala Lumpur-Singapore high-speed rail (HSR).

In a research note today, the investment bank highlighted that property stocks with strong track records, solid fundamentals, and visible pipelines or corporate exercises over the medium term will be of particular interest.

Consequently, the bank retains a ‘positive’ outlook on the property sector.

"Looking ahead, many of the thematic drivers in the sector have been in play for a while, with no new themes emerging at present.

"Hence, we advise investors to shift their focus from potential news-driven developments to companies with solid fundamentals, a proven track record of execution, and those capable of unlocking land value or synergies through land sales or corporate exercises,” it said.

Maybank IB also recommends that investors be selective with the JS-SEZ theme, concentrating on companies with strong execution capabilities and solid fundamentals that can enhance shareholder value in the medium term.

"The JS-SEZ ‘location’ is likely to encompass a larger area, as mentioned in an earlier press article.  "This could dilute the positive impact on developers and level the playing field for all landowners; thus, strong track records and capable management are crucial for maintaining competitiveness,” it noted.

It also mentioned that the JS-SEZ policy details have been postponed to November 2024 from the original timeline of September 2024.

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