Singapore Property Stocks Hammered



Posted by Ed 8 mths ago
Singapore’s renewed clampdown on speculative property demand sent real estate stocks reeling on Friday, as analysts predicted the end of a nascent home price rebound and the deflation of a buoyant market for collective sales.

The tightened rules, rolled out a day after the central bank noted “euphoria” in the property market, sharply increase buyers’ stamp duties for entities such as developers. Singapore’s benchmark Straits Times Index dropped as much as 2.5 percent Friday as property developers and banks led declines, with City Developments Ltd. and UOL Group Ltd. sliding more than 16 percent each.

As major property markets from New York to Sydney show signs of cooling, Singapore and Hong Kong prices are on a tear, causing unease among local policy makers. In Singapore, a sudden rebound in speculative demand, stoked by record land bids and redevelopment deals, threatened to undo years of carefully implemented curbs that had given the city-state an edge over Hong Kong in quality of living.


OffThePeak 8 mths ago
FTSE Straits Times Index / SG:STI ... All Data :

Singapore’s Stock Market Correction is Here: What Investors Should Do Now

Chin Hui Leong
Motley Fool6 July 2018

Shares of property developers fell sharply after the Singapore government announced new measures to cool down a heated property market.

The new set of rules include higher stamp duties and tighter requirements around the loan-to-value limits on residential property purchases. Before the implementation, the Monetary Authority of Singapore (MAS) had warned of “euphoria” and “excessive exuberance” in the property market.

As of 10:45 am today, shares of City Developments Limited (SGX: C09) and UOL Group Limited (SGX: U14) had fallen 15.8% and 12.5%, respectively. CapitaLand Limited‘s (SGX: C31) shares also dived 4.1%. Singapore’s banks, which provide housing loans, were not spared either. DBS Group Holdings Ltd (SGX: D05) fell almost 3% while its peers Oversea-Chinese Banking Corporation Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11) dropped 2.6% and 3.3%, respectively.

As a whole, the Straits Times Index (SGX: ^STI) fell by over 2%, pushing Singapore’s stock market deeper into a market correction.

We Meet Again, Market Correction

A correction is often defined as a fall of 10% or more.

As it stands, Singapore’s stock market is down 12.4% from its high. The sharp decline sounds like a horrible thing to happen, but it also quite a common occurrence in the Singapore stock market. The diagram below shows the maximum decline from peak-to-trough for the Straits Times Index for each year between 1993 and 2016, a period of 24 years.

Here are some odds to chew on: Of the 24-year period above, all but three years saw a 10% decline or more. To simplify, nine out of every 10 years saw a more than 10% fall from peak-to-trough. That’s a high probability.

With that in mind, I would argue that investors should get comfortable with market corrections as it is likely to happen again in the future.

However, what should investors do in response?

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