Monday, July 25, 2011

SP Setia slips below RM4

KUALA LUMPUR: Shares of SP SETIA BHD [] fell below RM4 in late afternoon on Monday, July 25 as sentiment was dampened by the weak broader market and key regional bourses but volume was not very heavy.

At 2.57pm , it was down 14 sen to RM3.93 with 244,500 shares done.

The FBM KLCI lost 3.93 points to 1,561.13. Turnover was 506.14 million shares valued at RM663.32 million. Losers swarmed gainers 460 to 160 while 254 stocks were unchanged.

Kumpulan Wang Persaraan (Diperbadankan) has emerged as a substantial shareholder in SP Setia with a 5.01%.

A filing with Bursa Malaysia showed it acquired one million shares in the open market on July 19, increasing its total shareholding in the property developer to 89.04 million shares

Last Thursday, July 21, Amresearch reaffirmed its Overweight stance, and BUY ratings on S P Setia, IJM Land and Ivory PROPERTIES [].

'From the fundamental standpoint, we are unmoved by the recent sentiment-driven sell-down in property equities, triggered by market talk of potential policy tightening on residential demand. In any case, we believe that property equities have surely priced-in the policy risks by now,' it said.

AmResearch said the earnings delivery was intact as developers ' SP Setia and IJM Land ' were sitting on record unbilled sales of RM3.5 billion and RM1 billion to RM1.5 billion, respectively.

'We believe that properties equities are cheap from both the earnings and assets perspectives. One negative though is the market risk in the near term: we expect the KLCI to move sideways with consensus earnings expectations bottoming out in 3Q11.

'This should pave the way for the next leg up in early 4Q11 when we expect the KLCI to end the year at around 1,650 ' with property equities leading the upturn as we approach the tender for the Sungai Buloh land in 1H2012,' it said.

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