Singapore home prices set to extend drop, Keppel Land says: Update

Home prices in Singapore will probably extend declines as the government sticks with curbs, according to Keppel Land, signaling further losses for Asia’s second-most expensive housing market.

“Home prices are expected to continue to moderate,” Chief Executive Officer Ang Wee Gee said at a results briefing yesterday. “Singapore is unlikely to relax property-cooling measures in the short term.”

Residential values in the city-state slid for a third quarter in the three months to June to post the longest losing streak in five years after the government introduced loan measures last June, widening a campaign that began in 2009 to curb speculation. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on July 4 that a further correction in the Singapore property market would not be unexpected. Keppel Land stock closed yesterday at the highest in almost two months.

“I don’t see the government relaxing the curbs for a year,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. “Developers that have deep pockets may not be under tremendous pressure to cut prices.”

The index tracking 49 property companies in the island- state decline 0.3% in Singapore trading as of 11:38 a.m. local time, the first drop in eight days. Keppel Land stock rose 0.6% to $3.53, heading for the highest close since April 21.

CHALLENGING PERIOD

Singapore’s home sales by volume fell 68% in June from May as developers marketed fewer projects. The government began introducing the housing-market curbs in 2009, with some of the strictest measures implemented in 2013, including a cap on debt at 60% of a borrower’s income, higher stamp duties on home purchases and an increase in real-estate taxes.

“We don’t see a major correction in the residential property market in Singapore,” said Ang after the company reported second-quarter profit rose 12% to $107.2 million. The first six months have been challenging as the enforcement of cooling measures in Singapore and in China continued to damp the market, said Ang.

Keppel Land’s revenue declined 7.8% to $304.6 million in the three months to June, according to a statement. The developer sold 98 homes in Singapore in the first six months of the year.

An index tracking private-residential prices retreated 1.1% to 209.3 points in the three months to June, following a 1.3% decline in the previous three months, according to preliminary data released by the Urban Redevelopment Authority on July 1.

Keppel Land shares gained 5.1% this year compared with the 8% advance in the Straits Times Real Estate Index. The stock ended at $3.51 yesterday, the highest close since May 26.

Singapore home prices set to extend declines, Keppel Land says

Home prices in Singapore will probably extend declines as the government sticks with curbs, according to Keppel Land, signaling further losses for Asia’s second-most expensive housing market.

“Home prices are expected to continue to moderate,” Chief Executive Officer Ang Wee Gee said at a results briefing yesterday. “Singapore is unlikely to relax property-cooling measures in the short term.”

Residential values in the city-state slid for a third quarter in the three months to June to post the longest losing streak in five years after the government introduced loan measures last June, widening a campaign that began in 2009 to curb speculation. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on July 4 that a further correction in the Singapore property market would not be unexpected. Keppel Land stock closed yesterday at the highest in almost two months.

“I don’t see the government relaxing the curbs for a year,” said Nicholas Mak, an executive director at SLP International Property Consultants in Singapore. “Developers that have deep pockets may not be under tremendous pressure to cut prices.”

Singapore’s home sales by volume fell 68% in June from May as developers marketed fewer projects. The government began introducing the housing-market curbs in 2009, with some of the strictest measures implemented in 2013, including a cap on debt at 60% of a borrower’s income, higher stamp duties on home purchases and an increase in real-estate taxes.

CHALLENGING PERIOD

“We don’t see a major correction in the residential property market in Singapore,” said Ang after the company reported second-quarter profit rose 12% to $107.2 million. The first six months have been challenging as the enforcement of cooling measures in Singapore and in China continued to damp the market, said Ang.

Keppel Land’s revenue declined 7.8% to $304.6 million in the three months to June, according to a statement. The developer sold 98 homes in Singapore in the first six months of the year.

An index tracking private-residential prices retreated 1.1% to 209.3 points in the three months to June, following a 1.3% decline in the previous three months, according to preliminary data released by the Urban Redevelopment Authority on July 1.

Keppel Land shares gained 5.1% this year compared with the 8% advance in the Straits Times Real Estate Index. The stock ended at $3.51 yesterday, the highest close since May 26.

July 24: Cambridge REIT, CRCT, Pteris Global, Tiger Air

The Straits Times Index (STI) on Wednesday ended 23.79 points higher or +0.72% to 3340.70, taking the year-to-date performance to +5.55%. The top active stocks were DBS (+1.70%), Global Logistic (+2.21%), UOB (+1.31%), Wilmar Intl (+0.62%), Spackman (+2.15%). Here are some stocks and factors to watch this Thursday morning:

Cambridge Industrial Trust has announced a distribution per unit (DPU) of 1.251 cents for its second quarter ended 30 June 2014 (2Q2014). This is higher than the DPU of 1.240 cents paid out a year ago.

CapitaRetail China Trust (CRCT), announced a distribution per unit (DPU) for 2Q 2014 was 2.59 cents, an increase of 8.8% from the 2.38 cents for the corresponding period a year ago.

Lian Beng Group, the construction company cum developer, said it achieved record revenue and net profit of $753.9 million and $127 million respectively for its financial year ended 31 May 2014 (FY2014).

Ascendas REIT has announced a distribution per unit of 3.64 cents for the first quarter of this year. This is 2.5% higher than a year back.

Tiger Airways Holdings said on Thursday its first-quarter net loss reached $65.2 million from $32.8 million a year earlier, hurt by one-time costs related to the shutting down of its Indonesian venture.

Keppel Land said it posted a 12.3% rise in earnings for the 2Q ended June compared to a year ago. Net profit for 2Q came in at $107 million led by steady overseas sales offsetting a weaker Singapore residential market.

Shareholders of loss-making Pteris Global has voted in favour of a reverse takeover (RTO) deal that will see China International Marine Containers (CIMC) gain a controlling interest in Pteris.

Apr 16: Keppel Land, Qian Hu

Singapore stocks closed higher on Tuesday after a rally on Wall Street in response to upbeat US economic data. The benchmark ST Index added 31.49 points, or 0.98%, to finish at 3,246.32 on turnover of $1.77 billion.Here are some stocks that could move the market this Wednesday morning:

Keppel Land's net profit for the first quarter ended March 31 slipped 9.2% to $87.7 million, dragged down by lower contributions from associates and jointly controlled entities and the absence of a tax writeback.

Ornamental fish seller Qian Hu said net profit for its first quarter ended March 31, 2014 was up 86% at $115,000 from a year ago. Revenue was up 2.4% at $20.7 million due to continued recovery in dragon fish.

Keppel Telecommunications and Transportation posted a 2.9% increase in net profit to $15.4 million for the first quarter ended March 31, 2014, after the market closed on Tuesday. Revenue was $48.7 million, up 21.6% from the same period a year ago.