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Hong Leong downgrades property sector

The Malaysian Insider
Hong Leong downgrades property sector - Hong Leong - Malaysia

KUALA LUMPUR, Oct 29 – Hong Leong Investment Bank downgraded Malaysia’s property sector companies to ‘neutral’ from ‘overweight’, saying an increase in property gains tax is expected to weigh on an already slowing market.

“The most direct and negative impact will be a slowdown in transactions in the secondary market,” the bank said in a research note today.

Property gains tax will rise by five percentage points across the board in 2013 as the government tries to rein in speculation.

“With the latest round of Real Property Gains Tax hike, we now expect the sector to be headed for a slowdown in terms of launches, sales and transactions,” the bank said.

Hong Leong said it expects the affordable segment of the market to perform better than the mid-to-higher end segment and Mah Sing Group and Glomac should be more adaptable to the shift in market conditions.


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