Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

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Thematic (Sector/Industry)

Singapore Real estate / Thematic (Sector/Industry)

In a surprising move, the Singapore government and regulator Monetary Authority of Singapore jointly announced adjustments to the restrictive measures on residential properties by reducing the Seller's Stamp Duties, or SSD, and relaxing the Total Debt Servicing Ratio, or TDSR. The changes are effective March 11, 2017. We see this announcement as a positive signal that the authorities are proactive in easing restrictive measures in a weak residential property market. However, the measures should have a limited impact on residential transaction volume, as the additional buyer stamp duties and loan/value limits remain in place.The Singapore developers have rallied strongly on the announcement, with narrow-moat-rated <a href="https://www.smartkarma.com/entities/55" target="_blank" data-smartkarma-citation="entities:55:1">Capitaland Ltd (CAPL SP)</a> appreciating as much as 6.8% on its opening price, while no-moat-rated <a href="https://www.smartkarma.com/entities/57" target="_blank" data-smartkarma-citation="entities:57:1">City Developments Ltd (CIT SP)</a> saw gains of 9.6%. The gains eased later in the day, with the developers closing 3.7% and 5.6% higher, respectively. Our fair value estimates of SGD 4 for CapitaLand and SGD 12 for City Development are unchanged. We reaffirm our 4-star rating on City Development, and we believe the developer remains undervalued, while we require a larger margin of safety before recommending CapitaLand, which is now trading at a 7% discount to our fair value estimate.Analyst: Michael Wu, CAIA

In a surprising move, the Singapore government and regulator Monetary Authority of Singapore jointly announced adjustments to the restrictive measures on residential properties by reducing the Seller's Stamp Duties, or SSD, and relaxing the Total Debt Servicing Ratio, or TDSR. The changes are effective March 11, 2017. We see this announcement as a positive signal that the authorities are proactive in easing restrictive measures in a weak residential property market. However, the measures should have a limited impact on residential transaction volume, as the additional buyer stamp duties and loan/value limits remain in place.The Singapore developers have rallied strongly on the announcement, with narrow-moat-rated Capitaland Ltd (CAPL SP) appreciating as much as 6.8% on its opening price, while no-moat-rated City Developments Ltd (CIT SP) saw gains of 9.6%. The gains eased later in the day, with the developers closing 3.7% and 5.6% higher, respectively. Our fair value estimates of SGD 4 for CapitaLand and SGD 12 for City Development are unchanged. We reaffirm our 4-star rating on City Development, and we believe the developer remains undervalued, while we require a larger margin of safety before recommending CapitaLand, which is now trading at a 7% discount to our fair value estimate.Analyst: Michael Wu, CAIA

Capitaland Integrated Commercial Trust (CICT SP)

Mapletree Pan Asia Commercial Trust (MCT SP)

Mapletree North Asia Commercial Trust (MAGIC SP)

Ying Li International Real Estate Ltd (YINGLI SP)

China Yuanbang Property Holdings (CYBP SP)

Luminor Financial Holdings Limited (STHL SP)

Lippo Malls Indonesia Retail Trust (LMRT SP)

Soilbuild Business Space REIT (SBREIT SP)

Emerging Towns & Cities Singapore (ETC SP)

Frasers Logistics & Commercial Trust (FLT SP)

Restrictive Measures on Residential Properties in Singapore Slightly Relaxed