Gaining traction
Highlights:

• Outperform: We are recommending Outperform with the target price of RM3.10 ascribing forward PE of 15X against EPS of 20.7sen. We are convinced of the turnaround in their construction activities following the implementation of government projects in 2HCY10.

WCT BHD

• Belated re-rating of property stocks in Malaysia. Thus far this year, property equities have underperformed the rising market despite physical transaction volumes rising with consistently strong pricing trends. YTD, sector stalwarts – SP Setia and IJM Land, have underperformed the market by 1% and 6.9%, respectively.

Earlier this week, Vietnam’s central bank announced that it would devalue the average Dong/US dollar interbank exchange rate by 2.1%. Latest round of increase is the third time in nine months that the Vietnamese Government has devalued its currency. As such, the official lower limit for the Dong is now pegged at 19,500 against the Greenback effective

HONG KONG: Measures by the government and banks will lead to a slowing of sales transactions in the short-term, but luxury residential property prices are predicted to increase over the next 12 months, according to Colliers International Hong Kong Residential Snapshot statement on Friday, Aug 20.

WCT
Broadly in Line

WCT posted earnings of RM69m (-15.4% y-o-y) for 1HFY10 which were within our expectations but below consensus. In the Middle East, WCT came close to securing 2 jobs but has reverted to its clients to renegotiate as material prices have gone up.

NEW YORK: A New York judge has put on hold a foreclosure auction for equity in Manhattan's giant Stuyvesant Town and Peter Cooper Village apartment complexes, a victory for senior lenders owed nearly US$3.7 billion (RM11.62 billion) after the property's owner defaulted.

HONG KONG: As property prices keep rising, debate is heating up on whether restrictions should be imposed on outside investors buying flats in Hong Kong.

Research shows more than a third of new luxury apartments sold in the first half of the year were bought by the Chinese — up from about a fifth last year.

KUALA LUMPUR: YTL Corporation Bhd's net profit for the fourth quarter ended June 30, 2010 surged to RM118.25 million from RM47.32 million a year ago on the back of a 30.4% jump in revenue to RM4.62 billion.

Earnings per share was 6.59 sen.

KUALA LUMPUR: More than half of the Asia Pacific region office rental markets stabilised or grew during the second quarter of 2010, according to CB Richard Ellis’s (CBRE) quarterly Global Office Rental Cycle report released on Thursday, August 19.