Downside risk for CapitaLand's China sales: OCBC

OCBC sees heightened downside risk for CapitaLand's (C31.SG) Chinese residential rental and sales.

Manufacturing data and a lack of interbank liquidity "point to increasing macro uncertainties as authorities attempt to engineer a more sustainable albeit slower tempo of growth," the house says in a research note.

Rising interest rates alone are unlikely to cause prices to fall, but would likely affect primary sales volumes, the house says.

It cuts its fair value estimate to S$3.77 but keeps a Buy call; the shares are "likely oversold at this juncture at a 45% discount to RNAV."

It notes CapitaLand's strong balance sheet ($5.4 billion cash, 44% net gearing) which would buttress its businesses through any headwind. The stock is recently up 1% at $3.01.