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Saturday, April 28, 2012

UEM Land down on uncertainty over property market policies

PETALING JAYA: UEM Land Holdings Bhd’s share price has recently experienced a sudden drop of more than 10%, raising questions among analysts and investors as to what is in the offing for the company.

The property developer’s share price declined 24 sen to a low of RM1.98 on Monday and had been languishing at this level for the rest of the week. It perked one sen to close at RM2 yesterday with 2.15 million shares changing hands.

A local bank-backed research analyst said the company was still fundamentally strong, and noted that other property developers such as Mah Sing Group Bhd and Glomac Bhd had also suffered similar selldowns recently. “According to data provided by the company, UEM Land is still enjoying robust sales, with customers snapping up the company’s products,” he said.

He said the sell-down might also be caused by uncertainties surrounding property market policies, where the Government is said to be considering to raise the minimum floor prices of houses that foreigners are allowed to buy to RM1mil.

The sudden drop in price is not fundamentally driven as uncertainties are abound with investors preferring to stay on the sidelines with the looming general election just around the corner. “It is a high beta stock and it might just be a possibility that some funds are selling out to lock in profit,” he said.

Hong Leong Investment Bank Research said in a report that UEM Land would have the largest impact if the Government raised the minimum floor price for foreigner as its Puteri Harbour project has about 40% foreign buyers.

“The high-end water front properties there are already selling for far more than RM1mil,” it said.

By The Star

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