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

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For the 5 trading sessions that spanned May 6 to 12, the Straits Times Index (STI) declined 5.3 per cent, with the FTSE China A50 Index declining 3.4 per cent, the Hang Seng Index falling 6.1 per cent and the FTSE Bursa Malaysia KLCI dipping 2.6 per cent. 

Overall, institutions were net sellers of Singapore stocks over the 5 sessions with S$145 million of net outflow, following S$67 million of net inflow for the preceding 5 sessions. 
DBS Group Holdings, UOB, Singapore Airlines, Yangzijiang Financial Holdings and Thai Beverage led the net institutional outflows for the 5 sessions through to May 12. Meanwhile, Singapore Telecommunications, OCBC, CapitaLand Investment, Venture Corporation and ST Engineering led the net institutional inflows for the 5 sessions. Overall, the net institutional inflows into Singapore stocks in the 2022 year to May 12 totalled S$307 million. Share buybacks

There were 15 primary-listed stocks conducting share buybacks over the 5 sessions ended May 12, with a total consideration of S$122.8 million, significantly higher than the S$44.5 million for the preceding 5 sessions.

CapitaLand Investment bought back 10 million shares at an average price of S$3.79 per share.

This represented 0.19 per cent of its issued shares (excluding treasury shares), with the buyback conducted in the session immediately after the leading global real estate investment manager provided a March quarter business update. 
For the quarter, CapitaLand Investment reported Q1 FY22 revenue increased 16 per cent year on year to S$598 million on growth in the fund management and lodging management segments, in addition to disciplined capital management. Director and substantial shareholder transactions 
The 5 trading sessions saw over 100 changes to director interests and substantial shareholdings filed for more than 40 primary-listed stocks. This included 21 company director acquisitions with no disposals filed, while substantial shareholders filed 12 acquisitions and 2 disposals. UOL Group 
Between May 10 and 11, Wee Investments acquired 500,000 shares of the company at an average price of S$6.99 per share. This took the total interest of UOL Group chairman Wee Cho Yaw in the company from 38.24 per cent to 38.29 per cent. The preceding acquisitions by Wee Investments were on Mar 8 with 899,200 shares acquired at S$6.80 per share, and Mar 7 with 964,000 shares acquired at S$6.85 per share.  
At the annual general meeting held on Apr 27, UOL Group’s CEO Liam Wee Sin maintained that with Singapore decisively moving from the pandemic to the endemic stage, he was cautiously optimistic that the company would emerge stronger from the pandemic with the opening of borders. He added that Singapore’s reconnection with the world would help to restore consumer confidence and give a much-needed boost to the businesses, in particular, the tourism/hospitality sector.  Liam also maintained that the company would continue to pursue asset enhancement initiatives for its investment portfolio while leveraging on its domain knowledge to deliver strong product offerings for residential projects. Challenger Technologies 
Between May 6 and 9, Challenger Technologies executive director and CEO Loo Leong Thye increased his deemed interest in the company, with his spouse Ong Sock Hwee acquiring 863,200 shares. The shares were acquired for a consideration of S$485,811 at an average price of 56.3 cents per share. This increased Loo’s total interest in Challenger Technologies from 47.11 per cent to 47.32 per cent 
Loo is responsible for the overall management of the group. He also charts the corporate directions, strategies and policies and grew the business operations of the group in 1982 from a sole proprietorship, to its present scale. Last year the group incorporated a few subsidiaries under its wholly-owned Challenge Ventures. At the beginning of 2022, 2 of these subsidiaries turned operational. Kingdom Technologies, a builder of customised personal computers, sells its products exclusively online under the Kingdom brand name. The second subsidiary is ITEZ.SG, is an online platform that offers affordable IT equipment rental on a subscription format. Bonvests Holdings 
Between May 6 and 10, Bonvests Holdings executive chairman and managing director Henry Ngo acquired 167,200 shares of the company for a consideration of S$158,340, at an average price of 94.7 cents per share. The acquisition was made though Allsland, which is wholly owned by Ngo and increased his total interest in Bonvests Holdings from 83.73 per cent to 83.77 per cent. His preceding acquisitions were between Mar 7 and 8, with 40,700 shares acquired at 92.0 cents per share. 
Ngo is the founder of Bonvests and responsible for mapping out the corporate and growth strategy of the group, with Bonvests establishing itself as an experienced player in the property leasing and management industry for more than 30 years. The group’s revenue increased by 11.5 per cent to S$134.4 million in 2021 from S$120.6 million in 2020, mainly due to higher revenue from the hotel division. Tai Sin Electric 
Between May 4 and 10, Tai Sin Electric executive director and CEO Bernard Lim Boon Hock’s deemed interest increased in the company by 500,000 shares at 39.0 cents per share. This was due to acquisitions made by both his spouse and daughter. With a consideration of S$195,000 the acquisitions took his total interest in the company from 17.38 per cent to 17.49 per cent. This followed his acquisition of 115,300 shares in his own name at 39.0 cents per share on Mar 23. Lim has gradually increased his total interest in Tai Sin Electric from 14.82 per cent at the end of 2019 and he has been an executive director of the company since September 1997.   iFAST Corporation 
On May 11, iFAST Corporation independent director Kok Chee Wai acquired 20,000 shares of the company at S$4.69 per share. With a consideration of S$93,795, this increased his deemed interest in the wealth management Fintech platform from 0.51 per cent to 0.52 per cent. Kok has been a partner in Allen &amp; Gledhill LLP since 1998, where he is currently the co-head of the firm’s financial services department, regional energy, infrastructure &amp; projects practice, and banking &amp; finance practice. He has broad and deep experience in domestic and international financing, and general banking and finance practice includes acting for lenders and major corporates on domestic and cross-border syndicated loans, structured and acquisition financing and debt restructuring. JB Foods 
On May 9, JB Foods executive director and CEO Tey How Keong acquired 97,000 shares of the company for a consideration of S$48,015. At 49.5 cents per share, this increased his total interest in JB Foods from 46.81 per cent to 46.84 per cent. This followed his acquisitions of 82,000 shares at 49.0 cents per share on Apr 29, 29,600 shares at 47.3 cents per share on Mar 23 and 400,000 shares at 52.0 cents per share on Dec 27. JB Foods core business is in the production and sale of cocoa ingredient products, with Tey responsible for the overall strategic, management and business development of the group. He has over 25 years of experience in the cocoa business. Q&amp;M Dental Group (Singapore) 
On May 12, Q &amp; M Dental Group (Singapore) independent non-executive director Harry Ng Weng Sui acquired 70,000 shares of the company for a consideration of S$34,500, at 49.3 cents per share. This increased his total interest in the private dental healthcare group from 0.04 per cent to 0.05 per cent. Similarly, on May 14, 2021, Ng acquired 60,000 shares of the company, at 63.0 cents per share. Lendlease Global Commercial REIT 
On May 6, Lendlease Global Commercial Trust Management independent non-executive director Simon John Perrott acquired 30,800 units of Lendlease Global Commercial Reit for a consideration of S$24,640. At 80.0 cents per unit, this took his direct interest to 114,650 units. Perrott was previously the chairman of CIMB Bank Australia from 2012 to 2014 and the chairman of RBS Australia from 2009 to 2012. From 2002 to 2009, he held various roles in ABN AMRO Bank where his last held role was co-head of banking. 
In April, Lendlease Global Commercial Trust Management completed the acquisition of a 100 per cent direct interest in Jem, with the manager maintaining that the enlarged portfolio with high-quality tenants such as the Ministry of National Development, IKEA and NTUC FairPrice Extra provides strong and stable cashflow for unitholders. Oxley Holdings 
Between May 9 and 10, Oxley Holdings executive director and deputy CEO Eric Low See Ching acquired 100,000 shares of the company at an average price of 17.8 cents per share. With a consideration of S$17,750, this increased his direct interest in Oxley Holdings from 28.12 per cent to 28.13 per cent. Low is responsible for the operation of the group including sales and marketing, project development, business development and financial management. Low also assists the CEO in charting and executing the strategic plans for the group. Inside Insights is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/hong-fok-continues-buybacks-as-joint-ceo-raises-stake-0"> </a><a href="https://www.businesstimes.com.sg/companies-markets/cli-leads-buyback-tally-wee-investments-ups-uol-stake">read</a><a href="https://www.businesstimes.com.sg/companies-markets/wilmar-leads-buyback-tally-yzjfh-directors-acquire-shares"> </a>the original version.
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    Share buyback


For the 5 trading sessions that spanned May 6 to 12, the Straits Times Index (STI) declined 5.3 per cent, with the FTSE China A50 Index declining 3.4 per cent, the Hang Seng Index falling 6.1 per cent and the FTSE Bursa Malaysia KLCI dipping 2.6 per cent. 

Overall, institutions were net sellers of Singapore stocks over the 5 sessions with S$145 million of net outflow, following S$67 million of net inflow for the preceding 5 sessions.  
DBS Group Holdings, UOB, Singapore Airlines, Yangzijiang Financial Holdings and Thai Beverage led the net institutional outflows for the 5 sessions through to May 12. Meanwhile, Singapore Telecommunications, OCBC, CapitaLand Investment, Venture Corporation and ST Engineering led the net institutional inflows for the 5 sessions. Overall, the net institutional inflows into Singapore stocks in the 2022 year to May 12 totalled S$307 million.  Share buybacks

There were 15 primary-listed stocks conducting share buybacks over the 5 sessions ended May 12, with a total consideration of S$122.8 million, significantly higher than the S$44.5 million for the preceding 5 sessions.

CapitaLand Investment bought back 10 million shares at an average price of S$3.79 per share.

This represented 0.19 per cent of its issued shares (excluding treasury shares), with the buyback conducted in the session immediately after the leading global real estate investment manager provided a March quarter business update.  
For the quarter, CapitaLand Investment reported Q1 FY22 revenue increased 16 per cent year on year to S$598 million on growth in the fund management and lodging management segments, in addition to disciplined capital management.  Director and substantial shareholder transactions  
The 5 trading sessions saw over 100 changes to director interests and substantial shareholdings filed for more than 40 primary-listed stocks. This included 21 company director acquisitions with no disposals filed, while substantial shareholders filed 12 acquisitions and 2 disposals.  UOL Group  
Between May 10 and 11, Wee Investments acquired 500,000 shares of the company at an average price of S$6.99 per share. This took the total interest of UOL Group chairman Wee Cho Yaw in the company from 38.24 per cent to 38.29 per cent. The preceding acquisitions by Wee Investments were on Mar 8 with 899,200 shares acquired at S$6.80 per share, and Mar 7 with 964,000 shares acquired at S$6.85 per share.   
At the annual general meeting held on Apr 27, UOL Group’s CEO Liam Wee Sin maintained that with Singapore decisively moving from the pandemic to the endemic stage, he was cautiously optimistic that the company would emerge stronger from the pandemic with the opening of borders. He added that Singapore’s reconnection with the world would help to restore consumer confidence and give a much-needed boost to the businesses, in particular, the tourism/hospitality sector.  Liam also maintained that the company would continue to pursue asset enhancement initiatives for its investment portfolio while leveraging on its domain knowledge to deliver strong product offerings for residential projects.  Challenger Technologies  
Between May 6 and 9, Challenger Technologies executive director and CEO Loo Leong Thye increased his deemed interest in the company, with his spouse Ong Sock Hwee acquiring 863,200 shares. The shares were acquired for a consideration of S$485,811 at an average price of 56.3 cents per share. This increased Loo’s total interest in Challenger Technologies from 47.11 per cent to 47.32 per cent  
Loo is responsible for the overall management of the group. He also charts the corporate directions, strategies and policies and grew the business operations of the group in 1982 from a sole proprietorship, to its present scale. Last year the group incorporated a few subsidiaries under its wholly-owned Challenge Ventures. At the beginning of 2022, 2 of these subsidiaries turned operational. Kingdom Technologies, a builder of customised personal computers, sells its products exclusively online under the Kingdom brand name. The second subsidiary is ITEZ.SG, is an online platform that offers affordable IT equipment rental on a subscription format.  Bonvests Holdings  
Between May 6 and 10, Bonvests Holdings executive chairman and managing director Henry Ngo acquired 167,200 shares of the company for a consideration of S$158,340, at an average price of 94.7 cents per share. The acquisition was made though Allsland, which is wholly owned by Ngo and increased his total interest in Bonvests Holdings from 83.73 per cent to 83.77 per cent. His preceding acquisitions were between Mar 7 and 8, with 40,700 shares acquired at 92.0 cents per share.  
Ngo is the founder of Bonvests and responsible for mapping out the corporate and growth strategy of the group, with Bonvests establishing itself as an experienced player in the property leasing and management industry for more than 30 years. The group’s revenue increased by 11.5 per cent to S$134.4 million in 2021 from S$120.6 million in 2020, mainly due to higher revenue from the hotel division.  Tai Sin Electric  
Between May 4 and 10, Tai Sin Electric executive director and CEO Bernard Lim Boon Hock’s deemed interest increased in the company by 500,000 shares at 39.0 cents per share. This was due to acquisitions made by both his spouse and daughter. With a consideration of S$195,000 the acquisitions took his total interest in the company from 17.38 per cent to 17.49 per cent. This followed his acquisition of 115,300 shares in his own name at 39.0 cents per share on Mar 23. Lim has gradually increased his total interest in Tai Sin Electric from 14.82 per cent at the end of 2019 and he has been an executive director of the company since September 1997.    iFAST Corporation  
On May 11, iFAST Corporation independent director Kok Chee Wai acquired 20,000 shares of the company at S$4.69 per share. With a consideration of S$93,795, this increased his deemed interest in the wealth management Fintech platform from 0.51 per cent to 0.52 per cent. Kok has been a partner in Allen &amp; Gledhill LLP since 1998, where he is currently the co-head of the firm’s financial services department, regional energy, infrastructure &amp; projects practice, and banking &amp; finance practice. He has broad and deep experience in domestic and international financing, and general banking and finance practice includes acting for lenders and major corporates on domestic and cross-border syndicated loans, structured and acquisition financing and debt restructuring.  JB Foods  
On May 9, JB Foods executive director and CEO Tey How Keong acquired 97,000 shares of the company for a consideration of S$48,015. At 49.5 cents per share, this increased his total interest in JB Foods from 46.81 per cent to 46.84 per cent. This followed his acquisitions of 82,000 shares at 49.0 cents per share on Apr 29, 29,600 shares at 47.3 cents per share on Mar 23 and 400,000 shares at 52.0 cents per share on Dec 27. JB Foods core business is in the production and sale of cocoa ingredient products, with Tey responsible for the overall strategic, management and business development of the group. He has over 25 years of experience in the cocoa business.  Q&amp;M Dental Group (Singapore)  
On May 12, Q &amp; M Dental Group (Singapore) independent non-executive director Harry Ng Weng Sui acquired 70,000 shares of the company for a consideration of S$34,500, at 49.3 cents per share. This increased his total interest in the private dental healthcare group from 0.04 per cent to 0.05 per cent. Similarly, on May 14, 2021, Ng acquired 60,000 shares of the company, at 63.0 cents per share.  Lendlease Global Commercial REIT  
On May 6, Lendlease Global Commercial Trust Management independent non-executive director Simon John Perrott acquired 30,800 units of Lendlease Global Commercial Reit for a consideration of S$24,640. At 80.0 cents per unit, this took his direct interest to 114,650 units. Perrott was previously the chairman of CIMB Bank Australia from 2012 to 2014 and the chairman of RBS Australia from 2009 to 2012. From 2002 to 2009, he held various roles in ABN AMRO Bank where his last held role was co-head of banking.  
In April, Lendlease Global Commercial Trust Management completed the acquisition of a 100 per cent direct interest in Jem, with the manager maintaining that the enlarged portfolio with high-quality tenants such as the Ministry of National Development, IKEA and NTUC FairPrice Extra provides strong and stable cashflow for unitholders.  Oxley Holdings  
Between May 9 and 10, Oxley Holdings executive director and deputy CEO Eric Low See Ching acquired 100,000 shares of the company at an average price of 17.8 cents per share. With a consideration of S$17,750, this increased his direct interest in Oxley Holdings from 28.12 per cent to 28.13 per cent. Low is responsible for the operation of the group including sales and marketing, project development, business development and financial management. Low also assists the CEO in charting and executing the strategic plans for the group.  Inside Insights is a weekly column on The Business Times, read the original version.



CLI leads buyback tally, Wee Investments ups UOL stake

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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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 <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 

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li><a href="https://www.smartkarma.com/entities/uol-group-ltd" target="_blank" data-smartkarma-citation="entities:142" rel="noopener">UOL Group (UOL SP)</a> plans to launch Ang Mo Kio Avenue 1 in Jun22</li><li><a href="https://www.smartkarma.com/entities/mandarin-oriental-intl-ltd" target="_blank" data-smartkarma-citation="entities:4773" rel="noopener">Mandarin Oriental Intl (MAND SP)</a> narrows FY21 loss to US$141.4m; 1H22 remains in red despite global travel improvements</li><li>Rising interest in Shophouses and boutique commercial spaces along East Coast Road</li></ul>

UOL Group (UOL SP) plans to launch Ang Mo Kio Avenue 1 in Jun22Mandarin Oriental Intl (MAND SP) narrows FY21 loss to US$141.4m; 1H22 remains in red despite global travel improvementsRising interest in Shophouses and boutique commercial spaces along East Coast Road

ASEAN Builder's Scoop (4Mar21) - UOL Launching AMK Ave 1 in Jun22

<ul><li><a href="https://www.smartkarma.com/entities/uol-group-ltd" target="_blank" data-smartkarma-citation="entities:142" rel="noopener">UOL Group (UOL SP)</a> 2H21 PATMI +126% YoY; Stronger contributions from property development and hotel properties</li><li><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> acquires South Korean Logistic at 4.0% NPI yield; Expected to be DPU accretive</li><li><a href="https://www.smartkarma.com/entities/yanlord-land-group-ltd" target="_blank" data-smartkarma-citation="entities:14152" rel="noopener">Yanlord Land (YLLG SP)</a> 2H21 net profit fell 13% YoY; Declared S$0.068/share divvy (~5.6% yield)</li></ul>

UOL Group (UOL SP) 2H21 PATMI +126% YoY; Stronger contributions from property development and hotel propertiesMapletree Logistics Trust (MLT SP) acquires South Korean Logistic at 4.0% NPI yield; Expected to be DPU accretiveYanlord Land (YLLG SP) 2H21 net profit fell 13% YoY; Declared S$0.068/share divvy (~5.6% yield)

ASEAN Builder's Scoop (1Mar22) - UOL Stronger Contributions from Prop Dev't and Hotels

Bukit Sembawang Estates / Equity Bottom-Up

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January ’22 private home sales +3.5% MoM and was highest level of Jan month sales since 2014 (with exception of 2021). This built on the record 2021 sales, which was the highest in 8 years. 
	 </li>
	<li>
While the sector has posted c. 3% YTD and rallied c. 29% off the lows seen in March ’20 (start of COVID-19 pandemic), it is still c . 23% below the last peak seen in 2018. Sector’s P/B are currently -1 S.D. below the historical mean. 
	 </li>
	<li>The most actively traded real estate stocks with Singapore property exposure average YTD total return is relatively flattish, as compared to the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. 7 of the 10 stocks with are currently trading below their 5-year historical average P/B ratios.</li>
</ul>
 

Jan ’22 Private Home Sales +3.5%and Above Historical Jan Month Sales in 2014-2020 
According to data from Urban Redevelopment Authority (URA), Singapore saw sale of 673 new private homes excl. executive condominiums (ECs) (+3.5% MoM, -58.8% YoY) in Jan ’22 and represented the highest level of Jan sales in 2014-2020. Private homes sales in the month was largely in the Rest of Central Region (RCR) and Outside Central Region (OCR). New private home sales in 2021 was at over 13,000 units and represented the highest number since 2013. Prices in 2021 posted a 10.6% YoY gain, which was the highest since 2010. 
To recap, on 15 December, the Government announced a package of measures to cool the private homes and HDB resale markets where additional buyer’s stamp duty (ABSD) rates were raised and total debt servicing ratio (TDSR) threshold and HDB LTV limit for loans were tightened. 
In the recently announced Budget 2022, residential properties marginal property tax rates will be raised in two steps starting with the tax payable in 2023. The rates from 2024 are:

<ul>
<li>
Non-owner-occupied residential properties (inc. investment properties) will see property tax rates increased to 12-36% (vs. current 10-20%).</li>
	<li>Concurrently, property tax rates for owner-occupied homes for portion of annual value in excess of S$30,000 will also be raised to a range of 6-32% (vs. 4-16% currently).</li>
</ul>
 Real Estate Developers &amp; Operators Sector +3% YTD but still 23% Below 2018 Peak 
Looking at the sector performance, the iEdge SG Real Estate Developers &amp; Operators Index has posted c. 3% price gains in the YTD, and c. +29% off the lows in March ’20 (at the start of the COVID-19 pandemic). The index is still c. 23% below the last peak seen in 2018. 
The iEdge SG Real Estate Developers &amp; Operators Index is a free-float, market capitalization-weighted index that measures the performance of listed real estate developers and operators in Singapore.
</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-02/Capture%201_2.PNG' alt='iEdge SG Real Estate Developers' />
 </figure>
 <div class='content-caption'>iEdge SG Real Estate Developers</div>
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<html><body>Sector P/B Trading -1 S.D. Below Mean 
The sector’s P/B ratio is at 0.44x (vs. historical mean of 0.59x) and also -1 S.D. below the historical mean. This is close to the level last seen during the start of the pandemic in March ’20, where there was a broad-based market correction and well below the levels see in 2017.</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-02/Capture_14.PNG' alt='iEdge SG Real Estate Developers' />
 </figure>
 <div class='content-caption'>iEdge SG Real Estate Developers</div>
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<html><body>
Most Actively-Traded SGX Stocks with Singapore Real Estate Exposure 
The top actively traded SGX listed stocks with Singapore real estate exposure posted a YTD total returns of -0.4%, which compares with the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. City Developments will report its FY21 results before the open on 25 Feb, UOL will report its CY21 results on 28 Feb, and Ho Bee Land will report after the 28 Feb close.  
These names have an average dividend yield of 2.7% with an average 0.6x P/B ratio. Of the 10 names with 5-year trading history, 7 of them currently have P/B ratios that are below 5-year P/B averages.

<table class="table table-striped"><tbody>
<tr>
<td>
			Stock Name 
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			5Y Avg. P/B
			</td>
			<td>
			P/B
			</td>
			<td>
			Div Yield (%)
			</td>
			<td>
			2022 YTD Total Return 

			%
			</td>
		</tr>
<tr>
<td>
			City Developments
			</td>
			<td>
			C09
			</td>
			<td>
			6,657
			</td>
			<td>
			0.9
			</td>
			<td>
			0.8
			</td>
			<td>
			1.1
			</td>
			<td>
			7.8
			</td>
		</tr>
<tr>
<td>
			UOL Group
			</td>
			<td>
			U14
			</td>
			<td>
			6,164
			</td>
			<td>
			0.7
			</td>
			<td>
			0.6
			</td>
			<td>
			2.1
			</td>
			<td>
			3.0
			</td>
		</tr>
<tr>
<td>
			Frasers Property
			</td>
			<td>
			TQ5
			</td>
			<td>
			4,358
			</td>
			<td>
			0.6
			</td>
			<td>
			0.5
			</td>
			<td>
			1.8
			</td>
			<td>
			-0.9
			</td>
		</tr>
<tr>
<td>
			Ho Bee Land
			</td>
			<td>
			H13
			</td>
			<td>
			1,892
			</td>
			<td>
			0.5
			</td>
			<td>
			0.5
			</td>
			<td>
			3.5
			</td>
			<td>
			2.2
			</td>
		</tr>
<tr>
<td>
			GuocoLand
			</td>
			<td>
			F17
			</td>
			<td>
			1,810
			</td>
			<td>
			0.5
			</td>
			<td>
			0.4
			</td>
			<td>
			4.0
			</td>
			<td>
			1.3
			</td>
		</tr>
<tr>
<td>
			Wing Tai Holdings
			</td>
			<td>
			W05
			</td>
			<td>
			1,367
			</td>
			<td>
			0.4
			</td>
			<td>
			0.4
			</td>
			<td>
			1.7
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			Bukit Sembawang
			</td>
			<td>
			B61
			</td>
			<td>
			1,292
			</td>
			<td>
			1.0
			</td>
			<td>
			0.9
			</td>
			<td>
			0.8
			</td>
			<td>
			-0.4
			</td>
		</tr>
<tr>
<td>
			OUE
			</td>
			<td>
			LJ3
			</td>
			<td>
			1,150
			</td>
			<td>
			0.4
			</td>
			<td>
			0.3
			</td>
			<td>
			1.5
			</td>
			<td>
			-2.9
			</td>
		</tr>
<tr>
<td>
			Oxley Holdings
			</td>
			<td>
			5UX
			</td>
			<td>
			759
			</td>
			<td>
			1.1
			</td>
			<td>
			0.8
			</td>
			<td>
			1.4
			</td>
			<td>
			-4.8
			</td>
		</tr>
<tr>
<td>
			PropNex
			</td>
			<td>
			OYY
			</td>
			<td>
			629
			</td>
			<td>
			N.A.
			</td>
			<td>
			6.6
			</td>
			<td>
			5.6
			</td>
			<td>
			0.6
			</td>
		</tr>
<tr>
<td>
			Tuan Sing Holdings
			</td>
			<td>
			T24
			</td>
			<td>
			547
			</td>
			<td>
			0.4
			</td>
			<td>
			0.4
			</td>
			<td>
			1.3
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			APAC Realty
			</td>
			<td>
			CLN
			</td>
			<td>
			229
			</td>
			<td>
			N.A.
			</td>
			<td>
			1.4
			</td>
			<td>
			8.1
			</td>
			<td>
			-10.4
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			                          2.7
			</td>
			<td>
			-0.4
			</td>
		</tr>
</tbody></table>
 Source: SGX, Refinitiv, Bloomberg (Data as of 18 February 2022).
</body></html>





January ’22 private home sales +3.5% MoM and was highest level of Jan month sales since 2014 (with exception of 2021). This built on the record 2021 sales, which was the highest in 8 years. 
	 
	
While the sector has posted c. 3% YTD and rallied c. 29% off the lows seen in March ’20 (start of COVID-19 pandemic), it is still c . 23% below the last peak seen in 2018. Sector’s P/B are currently -1 S.D. below the historical mean. 
	 
	The most actively traded real estate stocks with Singapore property exposure average YTD total return is relatively flattish, as compared to the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. 7 of the 10 stocks with are currently trading below their 5-year historical average P/B ratios.

 

Jan ’22 Private Home Sales +3.5%and Above Historical Jan Month Sales in 2014-2020  
According to data from Urban Redevelopment Authority (URA), Singapore saw sale of 673 new private homes excl. executive condominiums (ECs) (+3.5% MoM, -58.8% YoY) in Jan ’22 and represented the highest level of Jan sales in 2014-2020. Private homes sales in the month was largely in the Rest of Central Region (RCR) and Outside Central Region (OCR). New private home sales in 2021 was at over 13,000 units and represented the highest number since 2013. Prices in 2021 posted a 10.6% YoY gain, which was the highest since 2010.  
To recap, on 15 December, the Government announced a package of measures to cool the private homes and HDB resale markets where additional buyer’s stamp duty (ABSD) rates were raised and total debt servicing ratio (TDSR) threshold and HDB LTV limit for loans were tightened.  
In the recently announced Budget 2022, residential properties marginal property tax rates will be raised in two steps starting with the tax payable in 2023. The rates from 2024 are:



Non-owner-occupied residential properties (inc. investment properties) will see property tax rates increased to 12-36% (vs. current 10-20%).
	Concurrently, property tax rates for owner-occupied homes for portion of annual value in excess of S$30,000 will also be raised to a range of 6-32% (vs. 4-16% currently).

  Real Estate Developers &amp; Operators Sector +3% YTD but still 23% Below 2018 Peak  
Looking at the sector performance, the iEdge SG Real Estate Developers &amp; Operators Index has posted c. 3% price gains in the YTD, and c. +29% off the lows in March ’20 (at the start of the COVID-19 pandemic). The index is still c. 23% below the last peak seen in 2018.  
The iEdge SG Real Estate Developers &amp; Operators Index is a free-float, market capitalization-weighted index that measures the performance of listed real estate developers and operators in Singapore.



      
    
    iEdge SG Real Estate Developers

Sector P/B Trading -1 S.D. Below Mean  
The sector’s P/B ratio is at 0.44x (vs. historical mean of 0.59x) and also -1 S.D. below the historical mean. This is close to the level last seen during the start of the pandemic in March ’20, where there was a broad-based market correction and well below the levels see in 2017.


      
    
    iEdge SG Real Estate Developers


Most Actively-Traded SGX Stocks with Singapore Real Estate Exposure  
The top actively traded SGX listed stocks with Singapore real estate exposure posted a YTD total returns of -0.4%, which compares with the STI’s +10%. City Developments (+7.8%), UOL (+3.0%), and Ho Bee Land (+2.2%) posted the highest YTD total returns amongst this group. City Developments will report its FY21 results before the open on 25 Feb, UOL will report its CY21 results on 28 Feb, and Ho Bee Land will report after the 28 Feb close.   
These names have an average dividend yield of 2.7% with an average 0.6x P/B ratio. Of the 10 names with 5-year trading history, 7 of them currently have P/B ratios that are below 5-year P/B averages.




			Stock Name 
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			5Y Avg. P/B
			
			
			P/B
			
			
			Div Yield (%)
			
			
			2022 YTD Total Return 

			%
			
		


			City Developments
			
			
			C09
			
			
			6,657
			
			
			0.9
			
			
			0.8
			
			
			1.1
			
			
			7.8
			
		


			UOL Group
			
			
			U14
			
			
			6,164
			
			
			0.7
			
			
			0.6
			
			
			2.1
			
			
			3.0
			
		


			Frasers Property
			
			
			TQ5
			
			
			4,358
			
			
			0.6
			
			
			0.5
			
			
			1.8
			
			
			-0.9
			
		


			Ho Bee Land
			
			
			H13
			
			
			1,892
			
			
			0.5
			
			
			0.5
			
			
			3.5
			
			
			2.2
			
		


			GuocoLand
			
			
			F17
			
			
			1,810
			
			
			0.5
			
			
			0.4
			
			
			4.0
			
			
			1.3
			
		


			Wing Tai Holdings
			
			
			W05
			
			
			1,367
			
			
			0.4
			
			
			0.4
			
			
			1.7
			
			
			0.0
			
		


			Bukit Sembawang
			
			
			B61
			
			
			1,292
			
			
			1.0
			
			
			0.9
			
			
			0.8
			
			
			-0.4
			
		


			OUE
			
			
			LJ3
			
			
			1,150
			
			
			0.4
			
			
			0.3
			
			
			1.5
			
			
			-2.9
			
		


			Oxley Holdings
			
			
			5UX
			
			
			759
			
			
			1.1
			
			
			0.8
			
			
			1.4
			
			
			-4.8
			
		


			PropNex
			
			
			OYY
			
			
			629
			
			
			N.A.
			
			
			6.6
			
			
			5.6
			
			
			0.6
			
		


			Tuan Sing Holdings
			
			
			T24
			
			
			547
			
			
			0.4
			
			
			0.4
			
			
			1.3
			
			
			0.0
			
		


			APAC Realty
			
			
			CLN
			
			
			229
			
			
			N.A.
			
			
			1.4
			
			
			8.1
			
			
			-10.4
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			 
			
			
			                          2.7
			
			
			-0.4
			
		

 Source: SGX, Refinitiv, Bloomberg (Data as of 18 February 2022).



SG Real Estate Sector Valuation Below Historical Mean Amidst Resilient Private Home Sales

Singapore

UOL Group Limited is a property company. The Company has a diversified portfolio of development and investment properties, hotels, and serviced suites. UOL Group, through its subsidiary owns a portfolio of commercial assets and hotels. UOL Group operates in Asia, Oceania, and North America.

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UOL Group (UOL SP)

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January ’22 private home sales +3.5% MoM and was highest level of Jan month sales since 2014 (with exception of 2021). This built on the record...

Singapore Exchange Ltd (SGX)

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