SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

China Everbright Environment / Equity Bottom-Up

<ul><li>CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth.</li><li>CEWL maintained cash and cash equivalents of HK$1.85 billion as of 31 December 2024, ensuring strong liquidity.</li><li>CEWL's EBITDA fell by 11% to HK$2.20 billion in FY2024 due to one-time events and exchange rate fluctuations.</li></ul>

CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth.CEWL maintained cash and cash equivalents of HK$1.85 billion as of 31 December 2024, ensuring strong liquidity.CEWL's EBITDA fell by 11% to HK$2.20 billion in FY2024 due to one-time events and exchange rate fluctuations.

10 in 10 with China Everbright Water - Embracing Internationalisation for stable growth

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<li>
Preliminary Feb ’22 private home sales -27.2% MoM and -24.0% YoY primarily due to lack of major new launches, CNY and declining inventory of unsold new homes. Full February month data to be released in the middle of March.  
</li>
	<li>
Commentary from Singapore developers during recently concluded earnings season pointed to positive home sales in 2021, with some moderation in residential sales post cooling measures in Dec ’21.  
</li>
	<li>The trio of City Dev, UOL Group and Frasers Property averaged 4.7% declines (vs. -7.2% for the STI) since the start of the geopolitical situation. Sector P/B is at -1 S.D. below the historical mean.</li>
</ul>
 

Preliminary February private home sales declined. Developers interest continue for suburbs land sites 
According to caveats lodged with Urban Redevelopment Authority (URA), preliminary new private home sales sold by developers in February was at 490 units (excl. executive condominiums/EC), declining 27.2% MoM and 24.0% YoY. Analysts suggested the lack of major new launches, CNY, and declining inventory of unsold new homes were main reasons for the decline. Full data from URA will be released in the middle of March. 
Separately, URA also announced the close of tender for two leasehold residential sites – Dairy Farm Walk and Bukit Batok West Avenue 8. Dairy Farm Walk saw 7 bids from developers with Sim Lian Group submitting the highest bid of S$347 million (or S$980 per plot ratio). Separately, the EC site at Bukit Batok West Avenue 8 saw 9 bids with the top bid coming from Qingjian Realty and Santarli Construction at S$266 million (or. S$662 per plot ratio), a record for an EC site. According to analysts, the tenders reflect developers’ interest for suburbs land sites. Earnings update commentaries on Singapore residential market from largest listed developers 
City Developments (C09)

<ul>
<li>Singapore property sales momentum resilient in 2021 driven by sustained pent-up demand from seek for better homes and low interest rate environment</li>
	<li>Group and JV associates achieved highest annual property sales in history (2,185 units at S$4.3 billion total sales value)</li>
	<li>Construction activities in most project sites gradually improved thanks to more migrant workers being brought in</li>
	<li>Still sees healthy sales post implementation of property cooling measures but some homebuyers may take longer to assess situation before commitment of purchase</li>
	<li>With limited supply of new units in the market, expects buying interest to remain</li>
</ul>
 UOL Group (U14)

<ul>
<li>Property development saw the biggest revenue increase of 67% to S$1.6 billion on higher progressive revenue recognition from Venue South Residence, The Tre Ver, Clavon and The Watergardens at Canberra in Singapore and revenue recognition from sales of units at The Sky Residences in London</li>
	<li>Achieved healthy residential sales with 799 units booked in Singapore with value of c. S$1.53 billion (+30.8% YoY)</li>
	<li>Set of property cooling measures announced in December had a dampening effect on the residential market but do not expect a sharp price correction</li>
	<li>Sales of new private homes may moderate on back of cooling measures and limited pipeline of launches 
	 </li>
</ul>
Frasers Property (TQ5)

<ul>
<li>Steady progress for current residential projects in Singapore with over 600 cumulative total units sold at 1Q FY22 (Dec quarter)</li>
	<li>Property cooling measures imposed may result in knee-jerk reaction and some easing of residential transactions</li>
	<li>Planning in progress for Bedok Point as provisional permission granted by URA for proposed redevelopment into a residential development with commercial units on the ground floor 
	 </li>
</ul>
Sector P/B valuation below -1 S.D. below historical mean 
As articulated in <a href="https://www.sgx.com/research-education/market-updates/20220221-sg-real-estate-sector-valuation-below-historical-mean">SG Real Estate Sector Valuation Below Historical Mean Amidst Resilient Private Home Sales</a>, Singapore real estate sector P/B is currently at -1 S.D. below the historical mean (see chart below).
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 <img src='https://api2.sgx.com/sites/default/files/2022-03/Capture_18.PNG' alt='iEdge SG Real Estate Developers & Operators P/B Below -1 S.D. Below The Mean' />
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 <div class='content-caption'>iEdge SG Real Estate Developers & Operators P/B Below -1 S.D. Below The Mean</div>
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<html><body>Note: Hongkong Land (H78) is the largest weighted stock in the index. Singapore office and retail represented c. 18.9% of the group's completed investment properties (by land area) as of end December 2021</body></html>





Preliminary Feb ’22 private home sales -27.2% MoM and -24.0% YoY primarily due to lack of major new launches, CNY and declining inventory of unsold new homes. Full February month data to be released in the middle of March.  

	
Commentary from Singapore developers during recently concluded earnings season pointed to positive home sales in 2021, with some moderation in residential sales post cooling measures in Dec ’21.  

	The trio of City Dev, UOL Group and Frasers Property averaged 4.7% declines (vs. -7.2% for the STI) since the start of the geopolitical situation. Sector P/B is at -1 S.D. below the historical mean.

 

Preliminary February private home sales declined. Developers interest continue for suburbs land sites  
According to caveats lodged with Urban Redevelopment Authority (URA), preliminary new private home sales sold by developers in February was at 490 units (excl. executive condominiums/EC), declining 27.2% MoM and 24.0% YoY. Analysts suggested the lack of major new launches, CNY, and declining inventory of unsold new homes were main reasons for the decline. Full data from URA will be released in the middle of March.  
Separately, URA also announced the close of tender for two leasehold residential sites – Dairy Farm Walk and Bukit Batok West Avenue 8. Dairy Farm Walk saw 7 bids from developers with Sim Lian Group submitting the highest bid of S$347 million (or S$980 per plot ratio). Separately, the EC site at Bukit Batok West Avenue 8 saw 9 bids with the top bid coming from Qingjian Realty and Santarli Construction at S$266 million (or. S$662 per plot ratio), a record for an EC site. According to analysts, the tenders reflect developers’ interest for suburbs land sites.  Earnings update commentaries on Singapore residential market from largest listed developers  
City Developments (C09)


Singapore property sales momentum resilient in 2021 driven by sustained pent-up demand from seek for better homes and low interest rate environment
	Group and JV associates achieved highest annual property sales in history (2,185 units at S$4.3 billion total sales value)
	Construction activities in most project sites gradually improved thanks to more migrant workers being brought in
	Still sees healthy sales post implementation of property cooling measures but some homebuyers may take longer to assess situation before commitment of purchase
	With limited supply of new units in the market, expects buying interest to remain

 UOL Group (U14)


Property development saw the biggest revenue increase of 67% to S$1.6 billion on higher progressive revenue recognition from Venue South Residence, The Tre Ver, Clavon and The Watergardens at Canberra in Singapore and revenue recognition from sales of units at The Sky Residences in London
	Achieved healthy residential sales with 799 units booked in Singapore with value of c. S$1.53 billion (+30.8% YoY)
	Set of property cooling measures announced in December had a dampening effect on the residential market but do not expect a sharp price correction
	Sales of new private homes may moderate on back of cooling measures and limited pipeline of launches 
	 

Frasers Property (TQ5)


Steady progress for current residential projects in Singapore with over 600 cumulative total units sold at 1Q FY22 (Dec quarter)
	Property cooling measures imposed may result in knee-jerk reaction and some easing of residential transactions
	Planning in progress for Bedok Point as provisional permission granted by URA for proposed redevelopment into a residential development with commercial units on the ground floor 
	 

Sector P/B valuation below -1 S.D. below historical mean  
As articulated in SG Real Estate Sector Valuation Below Historical Mean Amidst Resilient Private Home Sales, Singapore real estate sector P/B is currently at -1 S.D. below the historical mean (see chart below).



      
    
    iEdge SG Real Estate Developers & Operators P/B Below -1 S.D. Below The Mean

Note: Hongkong Land (H78) is the largest weighted stock in the index. Singapore office and retail represented c. 18.9% of the group's completed investment properties (by land area) as of end December 2021


SG Real Estate Sector Update: Private Home Sales & Earnings Commentaries 

Hong Kong

China Everbright International Limited provides environmental protection project management and consultancy services. The Company's operations are broken up into environmental energy, environmental water, environmental construction and environmental technology.

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China Everbright Environment (257 HK)

10 in 10 with China Everbright Water - Embracing Internationalisation for stable growth

CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth. CEWL maintained cash and cash equivalents of...

Singapore Exchange Ltd (SGX)

SG Real Estate Sector Update: Private Home Sales & Earnings Commentaries

Preliminary Feb ’22 private home sales -27.2% MoM and -24.0% YoY primarily due to lack of major new launches, CNY and declining inventory of...

Singapore Exchange Ltd (SGX)

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