THE numbers speak for themselves. Most banks, especially those with a strong retail banking orientation, see property loans as an important part of their loan portfolio.
As at end-June 2010, property loans accounted for 37% of the total banking sector loan portfolio. This is from an estimated 17.5% level in the beginning of 1997.
However, some banks such as Public Bank Bhd (PBB), Hong Leong Bank Bhd (HLB) and Alliance Financial Group Bhd (AFG) have a much higher exposure to the property sector, with property loans accounting for about half of their total loan portfolio.
Within the property loans segment, residential property loans remain the main focus for the banks as a result of the perceived low risk of the residential property segment.
- Created on Sunday, 03 October 2010 16:19
|Extract from The Star (02/10/10) |
EXUBERANCE is often an indicator of an unsustainable pattern, be it for equities, collectibles or real estate. A rumbustious atmosphere in any asset class, more often than not, eventually leads to a deflation, which can be painful to swallow for its participants.
The two asset classes that have seen their fair share of bubbles are stocks and property, fueled by euphoric expectations of higher profits and easy credit. The banking sector has always been in the forefront of such situations.
Prior to the 1997/98 financial crisis, banks had lent most of their money to businesses while a lot of cash was also diverted for the purchase of shares.
Then, household debt was much lower as a percentage to gross domestic product (GDP) than it is today and residential loans accounted for about 16% of total loans.
- Created on Sunday, 03 October 2010 16:00
KUALA TERENGGANU -- Kuala Terengganu will be given a facelift in line with the town being the state capital, said Menteri Besar Datuk Seri Ahmad Said.
He said it would involve developing the area in Kuala Terengganu and that the state government had paid deposit of RM66 million to the Land Office for land acquisition process.
The government had acquired land at Ladang Tok Pelam and the next area would be at Kampung Ladang to Kampung Tanjung Astaka, he told reporters here.
He said work to build shops, housing and other facilities to turn Kuala Terengganu into a coastal city would begin next year.
- Created on Sunday, 03 October 2010 15:20
Boustead Holdings Bhd (Sept 30, RM4.91)
Initiate coverage with buy call at RM4.45 with target price of RM6.60: We initiate coverage of Boustead with a “buy” rating and RM6.60 target price based on 20% discount to sum-of-parts (SOP) value. Our core investment thesis is three-fold:
1) More proactive management. Major shareholder, LTAT, is looking to raise Boustead’s free float by cutting its 60% stake to 50% by end-2010. It also recently bought 86.1% of Pharmaniaga Bhd, a government healthcare service provider, which would allow for vertical integration within the group and aid in the 55% EPS growth for FY2011F. We think the market has not priced in the significant earnings accretion. On the cards is also the potential sale of its Indonesian plantation estates (about 18,000ha) that are capping its current blended FFB yield at 16.7 tonnes per hectare.
2) GLC-property proxy. Its property arm is due for a major transformation as LTAT is currently finalizing two lucrative government land deals — (i) 60 acres of Jalan Cochrane land and (ii) the 245-acre Batu Cantonment army base in Jalan Ipoh, both in Kuala Lumpur. Both developments will have a MRT station. We estimate these projects could add RM2.05 per share, raising our SOP value to RM10.35. This excludes more recently the rights to claim highly valuable land in Penang. Execution risk is minimal premised on its highly successful development in Mutiara Damansara.
3) Surge in contracts for BHIC. BHIC is expected to capitalize on the next batch of six out of 27 patrol vessels from the Royal Malaysian Navy. If the initial six vessels were a benchmark, this contract could be worth at least RM6.7 billion, almost triple its RM2.5 billion order book value. Our new order win assumptions are conservative at RM800 million per year for FY2010 to FY2012F.
- Created on Sunday, 03 October 2010 15:10
The Selangor government will get a new developer to take over the abandoned Bandar Alam Perdana project in Ijok, said state Housing, Building Management and Squatters Committee chairman Iskandar Abdul Samad.
One of the land buyers, Tee Hoi Eng, said he had intended to build a bungalow on a piece of land he bought in 2002.
But, to his dismay, he found out later that the status of the land was agriculture and was eventually confiscated by the Kuala Selangor Land Office due to unsettled land tax and violation of terms.
In a summary of the project provided by the Kuala Selangor District Council, the developer was to provide the infrastructure and utilities while the land buyers had to submit their building plans.
- Created on Saturday, 02 October 2010 16:41
KUALA LUMPUR: Property developer Glomac Bhd’s upcoming projects worth an estimated gross development value (GDV) of RM3 billion will keep the company busy for the next five years.
“Next year we are looking at 16 projects. As you know, these projects come in phases, so the launches from the various stages of our townships will have a collective GDV close to RM1 billion. The remaining will come from our residential and commercial properties,” said Glomac’s group managing director and chief executive Datuk FD Iskandar Mansor after the company’s AGM.
As at the end of Glomac’s first quarter ended July 31, the company’s unbilled sales stood at RM585 million, which is at a record high.
FD Iskandar added that Glomac was still on the lookout for additional land bank to add to its existing 1,000 acres, focusing on Greater Kuala Lumpur. Glomac’s most recent purchase was seven acres of freehold land adjacent to Glomac Cyberjaya for RM27.4 million.
- Created on Saturday, 02 October 2010 16:32
PORT DICKSON -- Some 1,049 problematic housing developers have been blacklisted by the Housing and Local Government Ministry.
Housing and Local Government Minister Datuk Chor Chee Heung said 3,782 board members had also been blacklisted.
He said the ministry would tighten conditions for housing developer licenses to avoid projects from being abandoned.
"The ministry will be more cautious in the issuance of housing developer licenses. Many people still want to become housing developers despite the high price of land and houses," he said at the relaunch of Taman Anggerik housing project in Teluk Kemang near here Friday.
- Created on Saturday, 02 October 2010 16:27
KUALA LUMPUR -- Brem Holdings Bhd aims to make RM50 million to RM60 million profit from its Prima Pelangi project in Segambut in two years, said its Executive Director Low U Hwa.
He said the company expects the project to contribute RM200 million in gross development value.
He said Brem planned to launch the second phase of the 300 condominium units in Prima Pelangi and semi-detached housing project in Bukit Subang.
Brem also intends to acquire more land around Klang Valley, he said.
- Created on Saturday, 02 October 2010 16:23
|Extract from The Star (01/10/10) |
THE I&P Group’s latest housing project is the Phase 3P3 double-storey semi-detached “Ilmu 1”, built around the theme of tropical contemporary design, was launched recently.
During a Hari Raya carnival in Alam Sari, Bangi, visitors were able to view the newly completed show unit.
The Alam Sari “Neighborhood of Academia” is a 175ha freehold township located in Bangi with other prominent landmarks like the Universiti Kebangsaan Malaysia (UKM), German-Malaysian Institute (GMI) and the Malaysian Nuclear Agency.
Zaini Yusoff, general manager (Central Region 3, Group Strategy and Planning), said Alam Sari was first launched in November 2007 and since then it had received good response from the public.
- Created on Saturday, 02 October 2010 16:14
|Extract from The Star (01/10/10) |
THE promise of waking up every morning to fresh breeze and cool green viewed from the many glass windows and doors, is one of the key selling points of Bayu Kemensah, a gated and guarded residential project in Kemensah Heights, Ampang.
In fact, the home designs by developers Delta Elegance Sdn Bhd emphasizes on living in a serene environment that is free from most noises as well.
“We use double-glazed tempered glass for our windows and doors thus buffering out outside sounds,” director Yu Chee Sing said, adding that they also have a central vacuum system that has the advantage of lessening vacuum noise in the house as the machine is placed outside.
“Here we place emphasis on workmanship and natural lighting as well which is why we use things like floors made of thick single piece woods and place plenty of windows,” Yu said.
- Created on Saturday, 02 October 2010 15:56