Property counters lead declines following ABSD hike; STI down 0.4%

SINGAPORE – Developer shares took a hit on Thursday and helped send the local bourse south after the surprise announcement overnight of

tough new property cooling measures.

The aftermath left the Straits Times Index (STI) down 0.4 per cent or 11.88 points to 3,282.03, with losers beating gainers 295 to 269 across the wider market on trade of 1.4 billion shares worth $1.2 billion.

OCBC investment research head Carmen Lee noted that while regional property markets have been adjusting to rising interest rates, home prices in Singapore have “just been running up”.

Ms Lee called the new cooling measures “surprising”, adding that her team expects a knee-jerk reaction to the shares of developers with a material exposure to the Singapore residential sector.

“While valuations appear cheap, there could be an overhang affecting their near-term price performance, in our view,” she noted.

Ms Lee expects private residential property price growth to come in at between minus 3 per cent and 1 per cent in 2023, with new home transaction volumes expected to range between 6,000 and 6,800.

Still, she believes property giant CapitaLand Investment will remain relatively unscathed, as it does not have a direct Singapore residential exposure now that it has restructured.

City Developments Limited (CDL) and UOL led the STI’s decline. CDL fell 5.6 per cent to $6.91, while UOL slid 4.7 per cent to close at $6.85.

Singtel was at the top of the STI table, gaining 2 per cent to $2.54.

The banks were mixed: DBS rose 0.2 per cent to $32.76, while OCBC shed 0.2 per cent to $12.57, and UOB fell 0.5 per cent to $29.11.

Key regional indexes were mostly in the black despite a choppy session on Wall Street overnight. Japan’s Nikkei 225 index rose 0.2 per cent. Hong Kong’s Hang Seng and the Kospi in Seoul both added 0.4 per cent.

The Australian market slipped 0.3 per cent to hit a two-week low on concerns over the US banking sector. THE BUSINESS TIMES