Property

Property: CIMB has Property report. Highlight the 3-mth SIBOR, now at a record low, has little room to fall further and believe signs are that US will start raising I/R this yr. Note that much of buying in past two yrs was in mass-mid-tier segment, a mkt driven by cheap borrowing. Believe an inevitable rise in I/R will lead to price correction, through the impact on debt-servicing ability and lower rental carry…..

House maintain U/W on residential developers with CityDev and All Green. Note that share prices have recovered from their lows after the Japan crisis and now is a good time to take profit. Bright spot will be rising foreign demand and the return of the ultra-rich who may be less sensitive to I/R movements. Wingtai is house most fav residential ppty pick, noting that grp has lagged the sector and at 0.7x P/BV (37% discount to RNAV), presents good value.