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Mah Sing has RM3b projects in the pipeline

Mah Sing's group MD says there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing Group Bhd (8583), Malaysia's fifth largest property developer by revenue, is ready to roll out RM3 billion worth of new launches this year on positive domestic economic outlook.

Group chief executive and managing director Tan Sri Leong Hoy Kum said he was bullish on sales moving fast paced as ripple effects from recent government initiatives will bring more to buy properties.

Speaking to Business Times, Leong said initiatives under the Economic Transformation Programme and 10th Malaysia Plan should boost property demand with expected increase in job creation, urbanisation, the standards of living and income level.

He expects wealth creation from the local stock market to also have an impact on the property sector as gains are invested in physical properties.
"The property market has done well in 2010 and we are confident that the momentum is sustainable into 2011 as the current buying pattern is backed by fundamentals of the economy and purchasers," Leong said.

Leong feels there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing's new launches will comprise a mix of landed residential, niche size serviced residences, shop offices, retail units, small office/home office and industrial.

Leong said projects featuring lifestyle elements and community living with facilities like a clubhouse and pool will continue to do well.

To meet the demand in this segment, Mah Sing will offer Garden Residence in Cyberjaya, Kinrara Residence in Puchong, One Legenda and Hijauan Residence in Cheras, and Legenda@Southbay on Penang island.

These projects will feature superlink homes, semi-detached homes and bungalows.

Mah Sing will also offer smaller units for serviced residences and condominiums in the second half of this year to provide easier entry for investors, leading to higher take-up rates. Here, it will roll out M-City@Jalan Ampang, Leong said.

The company will also launch Icon Residence and Ferringhi Residence in Penang, and Austin Suites in Johor Baru, Johor.

For commercial projects, Mah Sing intends to launch Star Avenue in Damansara, and Icon City in Petaling Jaya in the first half of this year.

Meanwhile, the third industrial project under the iParc series, iParc3@Bukit Jelutong, will be launched by mid-year.

Leong said in line with the company's strategy of a fast turnaround, it will preview these new projects soon, while scouting for prime land.

"Although our landbank is enough to sustain us for the next seven years, we are looking for sizeable pieces of land and we have the balance sheet to fund the acquisition," he said.

Mah Sing, which has a cash pile of RM233 million, made 10 land transactions involving 118ha for RM756 million last year.

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Impact of SRR hike is minimal

Tags: AmResearch | Banking | Brokers Call

Written by Financial Daily

Monday, 14 February 2011 11:43

Banking sector Maintain overweight: In the recent monetary policy statement, Bank Negara Malaysia (BNM) said the large and volatile shift in global liquidity is leading to a build-up of liquidity in the domestic financial system. While the liquidity has been manageable, going forward, additional policy tools, such as the statutory reserve requirement (SRR) and macroprudential lending measures, may be considered to avoid the risks of macroeconomic and financial imbalances. BNM had lowered the SRR by three percentage points (ppt) since the start of the global financial crisis in 2008. This brought the SRR to a historical low of 1% currently from 4% in November 2008. We have done a sensitivity analysis to gauge the impact on banks’ earnings, assuming the SRR rate is increased by 1%. We estimate possible downgrades to banks’ net earnings ranging between 0.3% and 2.2%. The ones which may be affected the most would be EON Capital Bhd (EONCap) (-2.2%), Alliance Financial Group Bhd (AFG) (-2.1%), Malayan Banking Bhd (Maybank) (-2.1%) and Public Bank Bhd (PBB) (-1.4%). For EONCap and AFG, it would be due to the small earnings base, while for Maybank and PBB, it would be due to the large deposit base (PBB’s local market share of deposit is estimated to be the highest at 14.6% while Maybank’s is the second highest at 14.0%). We estimate every 1ppt increase in SRR rate would reduce the amount available for lending by RM7.65 billion, just for the eight banks alone. However, we believe this is representative of the bulk of the banking system, as the local market share of these eight banks is estimated at 67.8% for deposits and 75.2% for loans. Thus, we would conclude that a reduction in liquidity of RM7.65 billion for the eight local banks is not expected to have a major impact on the system liquidity of RM255 billion currently, or the overall lending ability of the banking system. To sum up, we expect minimal changes to our banks’ net earnings arising from the possible rise in the SRR. We will be building in an SRR hike of 1ppt to 2% from our current assumption of 1% when we review our earnings estimates in the upcoming results. Further, based on the current loan-to-deposit ratio and the liquidity in the banking system, we conclude that an SRR hike is not expected to affect current liquidity or the lending ability of the banking system. Banks’ share prices have taken a beating last week, which we believe to be in line with the generally weaker regional market. However, we remain positive about the banking sector. We believe a stronger top line growth in terms of loans growth and non-interest income arising from sustained capital market activities from a successful execution of the Economic Transformation Programme is not yet fully reflected. Our buys are CIMB, Maybank, Hong Leong Bank Bhd and RHB Capital Bhd. — AmResearch, Feb 11