SG Market: Spore shares are likely to slip as sentiment will be hurt by latest govt measures to stabilize the property market. While harsher than the previous 3 rounds, we do not expect these new curbs to have a significant impact on property prices given the apparent lack of speculative activity, high level of liquidity & foreign interest.
However, expect a knee-jerk reaction to hit property & bank stocks as the set of measure are likely to slow down property transactions & banks' loan growth. Expect the developers to come under pressure on the open, particularly City Dev given its relative exposure to residential sector. Support for City Dev tipped at Dec low of $12.12.
Allgreen (support: $1.14) & Wing Tai (support $1.63) are also highly sensitive to housing prices but the stocks are already trading at steep discounts to valuation. Prefer the more commercial players such as Capitaland, Keppel Land, OUE & Reits. Locals bank stocks may also not be spared given their reliance on home loans for 25-30% of their loan portfolio. Support for STI should hold at 3200, representing 20 & 50-day MAs.
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