KUALA LUMPUR: ECM Libra Research expects growth momentum of property loans to taper off going forward, in view of the rising global uncertainties, peaking property cycle and potential policy tightening.

In its research note on Monday, Oct 3, it said although it expects Bank Negara Malaysia (BNM) to keep the overnight policy rate (OPR) rate at 3.0% for the rest of 2011,  it does not discount the possibility of BNM raising Statutory Reserve Requirement (SRR) further in the near term.

It also expects BNM to impose additional macroprudential lending measures to dampen the inflationary pressure and the loan growth momentum going forward.

“Furthermore, the implementation of affordable housing scheme by the Government could tamper the speculative demand in the housing market,” it said.

Commenting on the lending indicators for August, which were released last Friday, it said they were showing mixed results with month-on-month growth rate of loan applications dropped by -6.7% to RM60.4 billion (July: RM65.3 billion), while loan approvals and disbursements edged up by 7.6% and 8.8% to RM34.7 billion (July 11: RM32.2 billion) and RM69.7 billion (July 11: RM64.1 billion), respectively.

“Nonetheless, we believe that the slowdown in loan applications provides a clear leading indicator that loans growth momentum is tapering off. Outstanding loans rose by 1.2% on-month to RM960.9 billion, and YTD annualised growth inched up to 13.2% (July 11: 12.9%),” it said.

ECM Libra Research said property loans remained the key growth driver, accounting for 40.7% of the YTD credit expansion, followed by working capital loans at 22.9%.

In the longer term, it expected business loans to pick up some of the slack caused by the anticipated slowdown in property loans, supported by the implementation of Economic Transformation Programme projects, although it only expects its effect to be apparent in the 1H2012.