Sunday, October 11, 2009

Taking a closer look at property sector

(Click on chart if you want to take a look at gems)

In the early bull run, property sector normally assumes some leadership role. Where are we now? It has taken me almost the whole day to put togother the information in a table. If you take a close look at it, you will notice a few things:-

1. I've taken the pains to add up all market cap of the properties counters listed in the Star paper. The number came in about RM 39B. The whole sector is smaller than just one stock like CIMB(44B) or Maybank(47B) or slightly bigger than Public Bank (37B) as at Oct 7, 2009.

2. Only about 18 stocks with market cap above $500M, which contributed to about 72% of the whole sector market cap. There are way too many properties counters listed in our Bursa - Geez - 88 of them. The rest of 70 counters only account for 10B+.

3. 16/18(88.9%) stocks retreated after they hit 52 week high. You may noticed that sector leaders like SP Setia, UEM Land went into correction mode since June 09. They have not gone into bear market territory yet.

4. Most of the followers went into corrections mood too sometime in mid-Aug.

5. There are last few laggards begin to catch up, hitting 52 week high last week.

6. It will be critical to watch leaders closely to determine whether rally in this sector has rolled over.

7. Valuation wise, PBV has more or less revert back to last 2 years valuation except some are selling to deep discount like BJAsset, BRDB and SPB.

8. Looking at RNAV or GDV is a little bit tricky because it has a lot of subjectivity into it. Big assumptions are are billing timing, assigning the value of land or properties and etc, which are unrealized yet.

9. In other words, RNAV has element of "mood" into it, if I feel optimistic, then I can assign much higher price per square foot. Tebrau for example, some are speculating land in IDR can shoot up to RM 110 psf, based on the landbank of 1,012 acre, Tebrau's RNAV will jump to RM 7. Even you apply 30% discount to it, UOB KayHian argued you should pay RM 5 for the stock(damn Singaporeans). I will ask UOB to be cautious because it is highly speculative.

10. Those black cells in the table signify I'm refused to put RNAV based what analysts think or people have yet to figure out its worth.

It's 1.30 am now, got to go to bed. Won't be posting till next Tuesday. Take care.

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