MBSB IB remains bullish on property sector amid OPR cut, Johor catalysts
In a note today, the investment bank said the recent overnight policy rate (OPR) cut will boost buying sentiment for properties.
'Hence, we maintain our positive stance on the sector, with Mah Sing Group Bhd, UOA Development Bhd and Matrix Concepts Holdings Bhd as our top picks.
'We like Mah Sing as its strategy of selling affordable residential property will sustain its new sales growth while the recent OPR cut will increase affordability among buyers, specifically first-time home buyers,' it added.
MBSB IB said it also favours UOA Development for its decent dividend yield of 5.6 per cent, compared to the compressed Malaysian Government Securities (MGS) yield of 3.4 per cent and average real estate investment trust (REIT) yield of 4.4 per cent.
'Besides, UOA's recent maiden venture into the Johor property market will support new sales growth in the future.
'Meanwhile, we see a strong catalyst from MVV City to Matrix Concepts, which will provide an earnings catalyst on top of the stable contribution from Bandar Sri Sendayan. Besides, the dividend yield of Matrix Concepts is attractive at an estimated six per cent,' it added. - Bernama
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
a day ago
- The Star
Deposit costs to buoy Affin Bank
HLIB Research said Affin's loan pipeline remains robust at about RM9bil. PETALING JAYA: Affin Bank Bhd 's net interest income (NIM) is expected to remain resilient in the lender's upcoming second quarter (2Q25) earnings announcement, analysts say. Affin's NIM is expected to be underpinned by a solid loan base, said Hong Leong Investment Bank Research (HLIB Research). Despite some churn, the research house said Affin's loan pipeline remains robust at about RM9bil. 'Concurrently, 2Q25 NIM is expected to remain stable sequentially as proactive cost of funds optimisation efforts are set to largely offset any asset yield pressure from loan competition. 'Meanwhile, with the yields for 10-year Malaysian Government Securities currently still below 3.5%, there's significant room for Affin to capitalise on favourable trading opportunities,' HLIB Research said in a report. HLIB Research also expects the bank's gross credit cost to remain stable, supported by steady asset quality. Additionally, improved recovery momentum should help keep net credit costs within single digits for this financial year (FY25). 'We maintain our 'buy' rating on Affin, with an unchanged target price of RM3, implying a 0.60 time FY26 price-to-book value. 'We believe the bank is on the cusp of a notable enhancement in profitability, primarily driven by a fundamental shift in its funding mix, alongside a robust loan pipeline and enhanced operational efficiencies, which are set to drive return on equity.' The research house said while sector-wide asset yields have gradually declined, Affin's primary challenge and significant opportunity lie in managing its cost of deposits. It said liquidity following the cut in the Statutory Reserve Requirement could partially offset the impact of the recent 25 basis points (bps) cut in the overnight policy rate (OPR) . Deposit competition is easing and Affin is expected to benefit from an increase in low-cost current account and savings account deposits, driven by inflows from Sarawak, the bank's major shareholder. This is estimated at around RM130mil per month by 3Q25. According to HLIB Research, this allows the bank to shift from costly promotional rates for deposits to lower-cost payroll-based accounts, helping build a more stable and cheaper funding base. 'Interestingly, our tracker on retail fixed deposit (FD) promotional rates showed that after the 25bps OPR cut on July 9, Affin aggressively slashed its FD promotional rates by between 35bps and 50bps, whereas peers only cut up to 25bps. 'This steeper reduction suggests a deliberate strategy, likely driven by the anticipation of cheaper funding sources coming online, which enables Affin to reduce reliance on higher-cost deposits,' the research house said.
Barnama
a day ago
- Barnama
Research Firms Lower Inflation Forecasts To 1.5-1.8 Pct In 2025
BUSINESS KUALA LUMPUR, July 22 (Bernama) -- Research firms have revised their forecasts for Malaysia's headline inflation in 2025, lowering it to 1.5 per cent to 1.8 per cent. MBSB Investment Bank Bhd has adjusted its 2025 inflation projection to 1.8 per cent, considering the sustained moderate inflation reading and weaker cost pressures in recent months as well as the delay in the RON95 subsidy adjustments, which may lead to a more gradual pickup in inflation than initially forecast. 'We adjust our inflation forecast lower in light of the latest policy developments,' it said. Citing Communications Minister Datuk Fahmi Fadzil, it said there is a slight delay in the implementation of targeted subsidies for RON95 petrol which stems from the necessity for a comprehensive review and meticulous fine-tuning of the policy mechanism to ensure the rollout will not adversely affect the public. 'Overall, we project that higher price pressures will predominantly be driven by supply-side factors, particularly those arising from the expanded sales and service tax (SST) implementation. 'Complementing this, additional demand-side pressures could also grow following the recent Overnight Policy Rate (OPR) adjustment, which may encourage larger consumer expenditures on the back of resilient labour market conditions, with healthy employment and wage growth,' it added. It said that despite the potential rise in demand, MBSB Investment Bank expects the OPR will be kept at 2.75 per cent for the rest of year as overall inflation remains under control. Meanwhile, OCBC senior ASEAN economist Lavanya Venkateswaran said the outlook for headline consumer price index (CPI) remains relatively subdued for the remainder of the year. 'We are reducing our 2025 CPI forecast to 1.5 per cent year-on-year (y-o-y) from 2.0 per cent previously based on low inflation of 1.4 per cent in the first half of 2025 (1H 2025) and reduced prospects of RON95 rationalisation.
New Straits Times
3 days ago
- New Straits Times
Status quo of low OPR until June 2026: Expert
KUALA LUMPUR: The current low interest rate environment, following Bank Negara Malaysia's move to cut the Overnight Policy Rate (OPR) by 25 basis points, may remain at least until the first half of next year, an expert said. CIMB Bank Bhd chief investment office Ng Boon Hoa said Bank Negara appears to be taking a cautious approach in supporting the nation's economic growth. This is particularly in light of the risks from a potential global slowdown and the uncertainty surrounding Malaysia's yet-to-be-finalised tariff negotiations, he added. "We expect Bank Negara to maintain the current interest rate at 2.75 per cent at least until mid-2026. "It is rather difficult to make precise projections for 2027 and beyond, as external factors are constantly changing," he said during the presentation of CIMB's Asean Market Outlook in conjunction with the bank's Asean media day here today. According to Ng, the recent rate cut was a preemptive measure to absorb near-term uncertainties in economic growth. "If the current rate successfully spurs growth, Bank Negara is likely to remain comfortable with this level. Rate hikes would only be considered if there is significant strengthening in growth, possibly in 2027 or 2028, and even then, likely only once or twice," he said. Commenting on foreign fund flows, Ng said the domestic bond market is currently benefiting from these inflows, which in turn enhances liquidity in the financial system and supports lower borrowing costs. However, he cautioned that excessive inflows could risk contributing to inflationary pressures over the longer term and would require close monitoring by the monetary authorities. "Foreign funds can flow in and out quickly. We need to be cautious. The ringgit has shown some strengthening thanks to these inflows, but currency movements can change abruptly," he said. He pointed to the one per cent depreciation of the ringgit against the US dollar over the 20-day period since the end of June as an example of the uncertainties facing the local market.
