Property stocks on downward slope

[More to fall]

Property stocks on downward slope   05 Oct 08 4:53 pm
Published October 4, 2008

Property stocks on downward slope

Stock prices will continue to fall as home prices continue to decline for the rest of this year and in 2009, analysts say. By Uma Shankari


PROPERTY stocks took a beating yesterday following news that private home prices fell for the first time in 41/2 years, officially marking the end of the boom. And the worst is not over yet - the share prices of Singapore- listed developers can be expected to continue to slide, analysts say.

The FTSE Real Estate Index shed 10.9 points, or 2.4 per cent, yesterday to close at a 52-week low of 451.7. The index has lost 48.5 per cent since the start of the year. In contrast, the Straits Times Index has lost 33.7 per cent so far in 2008.

Singapore's three biggest developers by market capitalisation all saw their stock prices fall yesterday. CapitaLand dropped 10 cents to close at $2.94, City Developments shed 36 cents to end at $8.01 and Keppel Land declined 14 cents to $2.61.

But property stocks have not bottomed out, analysts reckon. 'We are not there yet,' said DMG & Partners analyst Brandon Lee. 'A lot of the news has been factored in (into the share prices), but we still have some way to go.'

CIMB analyst Donald Chua agrees. 'We are not really seeing the full impact yet and it's a bit too early to call the bottom.' But property stocks are looking cheaper and more attractive than two or three years ago, he said.

The latest quarterly flash estimate released by the Urban Redevelopment Authority showed the overall price index for private residential property fell 1.8 per cent in the third quarter, after a marginal 0.2 per cent rise in Q2.

The market had been expecting physical property prices to fall since the start of this year, though it took the index three quarters to get there. 'The index decrease was expected and anticipated by the market, especially as many commentaries have evoked anecdotal evidence based on selected transactions in certain projects to comment that prices have already fallen by up to double- digit percentages,' said DBS Vickers analyst Adrian Chua.

But that did not stop investors selling down developer stocks yesterday in response to the latest negative news.

Stock prices will continue to fall as home prices continue to decline for the rest of this year and in 2009, analysts say. 'Overall, we are predicting further mid single-digit price declines for Q4 2008, before dropping 3-5 per cent on a year-to-date comparison,' said DMG's Mr Lee.

'With macro-economic growth not expected to recover in the near term, we believe the price correction would continue through 2009, falling between 8-15 per cent, with the CCR (core central region) bearing the brunt of the decline.'

DBS Vickers' Mr Chua also expects single-digit price drops for private homes for the whole of 2008 and believes the price downtrend should continue into 2009. High-end properties should bear the brunt of any price falls, while the mass-market segment should be relatively resilient, he said.

Investors are now holding off buying homes in anticipation of prices falling further, and the poor demand is affecting market sentiment on property counters.

Merrill Lynch analysts wrote in a report: 'We expect the price index to turn more negative in the upcoming quarters given weakening market conditions.'

There is also the risk that tighter credit could lead to higher interest rates, which would increase the cost of holding on to properties and potentially lead to a larger number of 'fire sales' as more projects approach completion and property investors start to do their sums. Some buyers could be waiting to snap up distressed assets on the secondary market, contributing to lower sales for developers.

All these mean that developers are selling very few private homes. For example, only about 60 were sold in the primary market in the first two weeks of September, said DMG's Mr Lee.

Home prices need to fall further before demand could go in the opposite direction, and property counters recover.

[ALLO]

hello we hv too many so-called expert celebral advices, a dime a dozen experts on the loose all over, so better use your good old common sense judgement and chances are you wont go wrong. all the brainy big huge brains cud not handle the current financial crisis and collapse, thats good enough evidence of the idiocy in circulation. property prices are sliding in other countries lah but not in singapore. last 2 months i hv been criss-crossing the length and breadth of singapore looking for good pickings and found none. either it is slightly cheaper but in lousy locations but all good located prperties, the ones that will definately appreciate in time to come, are not budging, not lowering their prices lah. so thats it.

[to : ALLO]

yes too many experts. BUT your above post also suggest you fall in that same category. .. you charlatan .

[ALLO]

typical example of the arrogant asshole.

yes too many experts. BUT your above post also suggest you fall in that same category. .. you charlatan .

[to Allo]

Please learn to write before coming to this board.  It's rude to post here in telegram style.

[Bears will learn soon]

hello we hv too many so-called expert celebral advices, a dime a dozen experts on the loose all over, so better use your good old common sense judgement and chances are you wont go wrong. all the brainy big huge brains cud not handle the current financial crisis and collapse, thats good enough evidence of the idiocy in circulation. property prices are sliding in other countries lah but not in singapore. last 2 months i hv been criss-crossing the length and breadth of singapore looking for good pickings and found none. either it is slightly cheaper but in lousy locations but all good located prperties, the ones that will definately appreciate in time to come, are not budging, not lowering their prices lah. so thats it.

Yes the bears are all busy celebrating reading what the journalists and analysts are saying. They should actually start looking for a propety now and then realise what rubbish is being written about the property market. There are going to be many dissapointed bears soon. The property market is generally in very strong hands right now unlike in 1997.

[failures]

Tantallon Said to Have Closed Asia Hedge Fund as Stocks Tumble
 
Capital, founded by Merrill Lynch & Co. former head of sales Nicholas Harbinson, closed one of its hedge funds after the Singapore-based firm had its worst performance because of bad bets on Asian stocks, three people familiar with the matter said.

[the next threat]

Deflation May be Next Threat

6 October 2008

WASHINGTON - As countries around the world fight the worst financial crisis since the 1930s, one danger is looming larger by the day: deflation.

With asset markets tumbling, commodity prices plunging the most in 50 years and banks keeping a tighter grip on credit, the ingredients for a sustained period of falling prices are coalescing, Bloomberg News reported on Monday.

While inflation is still a concern for many policy makers only months after oil and food prices peaked, the risk is their patchwork of rescue and stimulus packages will fail, and prices will start to fall throughout the broader economy.

‘The ghost of deflation could be dragged out of the closet again in coming months,’ says Mr Joerg Kraemer, chief economist at Commerzbank AG in London.

A global recession is already looking more likely, with the credit freeze stirring memories of Japan’s decade-long struggle with deflation in the 1990s. So European Central Bank President Jean-Claude Trichet and Bank of England Governor Mervyn King may be forced to follow Bernanke, whose Fed has chopped its benchmark rate by 3.25 percentage points since August 2007 to 2 per cent - its most aggressive round of easing in two decades.

According to Bloomberg, the deflation scenario might go like this: Banks worldwide, stung by $588 billion (S$815.3 billion) in writedowns related to toxic assets - especially mortgage-related securities - will further reduce the flow of credit, strangling growth. That will push house prices lower, forcing additional losses and making banks even more reluctant to lend.

[Very small]

Tantallon Said to Have Closed Asia Hedge Fund as Stocks Tumble
 
Capital, founded by Merrill Lynch & Co. former head of sales Nicholas Harbinson, closed one of its hedge funds after the Singapore-based firm had its worst performance because of bad bets on Asian stocks, three people familiar with the matter said.

It was a avery small fund. Hold your excitement. Are you desperate? Yes I  know the property market is hardly falling

[Kubes.SG]

Its really hard to tell if the statements being made by the "bulls" are caused by:

o  utter stupidity
o  reality distortion
o  gross dishonesty
o  insight and vision beyond normal comprehension

I think it is all but the last one.

[some concerns]

Nicholas Bibby, an economist in the Singapore office of Barclays Capital, said that falling share prices showed that many investors were still worried that banking difficulties might spread even after the passage of the financial bailout plan in Washington. “It’s a fear of contagion,” he said, while adding that Asian banks were better positioned than most to withstand the current problems because the region’s high savings rate tends to mean that Asian banks are net lenders in international money markets.

Concerns about Asian exports have also been rising for months, because the region’s high savings rate means that its spending on consumption is weak and it remains heavily dependent on overseas demand.

[Too late]

Nicholas Bibby, an economist in the Singapore office of Barclays Capital, said that falling share prices showed that many investors were still worried that banking difficulties might spread even after the passage of the financial bailout plan in Washington. “It’s a fear of contagion,” he said, while adding that Asian banks were better positioned than most to withstand the current problems because the region’s high savings rate tends to mean that Asian banks are net lenders in international money markets.

Concerns about Asian exports have also been rising for months, because the region’s high savings rate means that its spending on consumption is weak and it remains heavily dependent on overseas demand.

Wake up wake up. Australia just cut their insterest rates by 1% and the rest of the world will be doing so very soon. STI is shooting up right now.

[1234]

Nicholas Bibby, an economist in the Singapore office of Barclays Capital, said that falling share prices showed that many investors were still worried that banking difficulties might spread even after the passage of the financial bailout plan in Washington. “It’s a fear of contagion,” he said, while adding that Asian banks were better positioned than most to withstand the current problems because the region’s high savings rate tends to mean that Asian banks are net lenders in international money markets.

Concerns about Asian exports have also been rising for months, because the region’s high savings rate means that its spending on consumption is weak and it remains heavily dependent on overseas demand.

Wake up wake up. Australia just cut their insterest rates by 1% and the rest of the world will be doing so very soon. STI is shooting up right now.

- Singapore shares <.FTSTI>
reversed early losses and was up 2 percent around midday led by
financials after Australia''s central bank cut the country''s
interest rate by a bigger-than-expected 100 basis points.
Singapore''s top lender DBS Bank gained 2 percent,
while rival OCBC was 3.6 percent higher.
Bourse operator Singapore Exchange was also up 2.4
percent, while Singapore Telecommunications rose 3.3
percent tomake up for some of Monday''s losses.
Around 0403 GMT, the benchmark Straits Times Index <.FTSTI>
was up 2.27 percent at 2217.59.

[BoardAdmin2]

When Sydney sniff's Singapore sneezes? 

[ALLO]

who are you to say what constitutes rudeness and what doesnt. you are the typical example of alot of things that have gone wrong. your false sense of self-importance, your arrogance, your "inferior" superiority complex, non-acceptance of your negative attributes i can imagine and of course not realising that you are one, these are the strains/breed that sat on those high chairs that are causing this current collosal collapse. if you are not willing to hear what others say, then save your smart comments for your infant please.   



quote author=to Allo link=topic=46954.msg1433271#msg1433271 date=1223349622]
Please learn to write before coming to this board.  It's rude to post here in telegram style.
[/quote]