Investors might also have been persuaded by a new housing withdrawal scheme from the Employees Provident Fund, Penang's plans to sell prime land, and the fact that they have not caught up with the broader market's rise.
A look at the 10 most active stocks yesterday showed that half were property developers like Talam Corp Bhd, Eastern & Oriental Bhd (E&O), Equine Capital Bhd, Malton Bhd and Land & General Bhd.
Stocks of E&O rose 2.5 per cent to RM1.21 yesterday, driven mainly by speculation of a possible privatisation. However, it told Bursa Malaysia that it was not aware of any such plan.
Shares of Malton Bhd, which aims to raise its sales from RM550 million in 2011 to RM800 million in 2013, rose 5 per cent to 52.5 sen.
"I think this is just a knee-jerk reaction to the EPF scheme. The market has been pretty dead for some time. I think investors are just looking at some (themes) to buy," Kenanga Investment Bank Bhd research head Yeonzon Yeow said.
The Kuala Lumpur Property Index has gained 3.46 per cent to 860.57 points over the past six days, outperfoming the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index, which has risen 1.3 per cent to 1,363.6 points.
Both indices ended yesterday at their highest this year. Other analysts, however, were less convinced.
"I think it's more of a rotational play rather than being driven by changes in fundamentals, especially if you look at those heavily traded penny property stocks.
"Although property stocks in general have been underperforming the benchmark index in the first half and are still trading at undemanding valuations, the sharp gains seen in some counters over the past two weeks may not be sustainable," ECM Libra Investment Bank Bhd research head Bernard Ching said.
