Maybank ATR Kim Eng (ATRKE) has maintained an overweight rating on the property sector after the Bangko Sentral ng Pilipinas (BSP) brushed aside concerns of a real estate bubble.
"We think the latest statements by Governor Tetangco should help alleviate concerns not only about a property bubble but also that the central bank is acting to slow property lending..." Maybank ATRKE said in a research note.
Maybank ATRKE was referring to the recent remarks made by BSP Governor Amando Tetangco that there was no clear evidence of a bubble in the real estate sector, although prices or valuations in some segments have risen too fast.
"This confirms our view that last week's revised credit risk rules are neutral for the property sector as it introduces no new regulations for property lending," it added.
In recent days, the central bank unveiled a string of measures aimed at strengthening the local financial system, including capping the maximum loan value for mortgages at 60 percent. Previously, only universal and commercial banks were required to observe this cap, whereas other lenders could lend as much as 80 percent, thus requiring the borrower to put in the remaining 20 percent as equity.
Maybank ATRKE's top picks in the sector are Ayala Land Inc for its “brisk execution in residential sales and recurring income build-up," SM Prime Holdings Inc for its "leadership in retail and opportunistic stance on residential real estate,” and Megaworld Corp for its “top position in office space development and bigger land bank."
Maybank ATRKE also picked Filinvest Land Inc because its "price multiples have not yet caught up with more aggressive plans to build up its recurring revenue base."
"Share prices of these companies have only slightly recovered after the selloff with the confusion on [real estate mortgage] collateral value and [loan-to-value] ratio limit. We continue to view this as an opportunity to accumulate," it added.
- Interaksyon
