DBS group research has upgraded its calls on developers in the high-end segment of the market, including Wheelock (TP: $1.98), Ho Bee (TP: $1.64) and SC Global (TP: $1.69).
The positive outlook on the high-end segment is buoyed by various factors, including the likelihood of having higher transaction volumes of over $2,000 per sq ft in the third quarter of 2009and policies of the government that focus more on the mass-market instead of high-end, thereby controlling the policy risk for the latter.
Other factors include the launching of the Integrated Resorts early next year that is anticipated to be positive since this segment has the most demand from local and foreign buyers; recent status of Singapore high-end that looks relatively cheaper to the high-end of Hong Kong, the same valuation gap scenario that the group observed before the 2007 high-end run, with Singapore high-end as a potential beneficiary to the demands of the Chinese, and the segment is not sensitive to an expected growth in interest rates.