The Singaporean Government’s plans to offset unwarranted speculation in the property market brought the momentum of investors to an abrupt halt on Monday. The said counter measures also caused the Straits Times Index (STI) to slide.
During the week’s first trading session, the market opened lethargically as it seemed to follow suit after Wall Street closed poorly last Friday. The market managed to recover by late morning but Minister of National Development Mah Bow Tan’s statement at lunchtime regarding measures to restrain brewing property assumptions hit sentiments significantly.
Minister Mah said the scheme wherein developers absorb interest fees for customers will be terminated. He also added that the list of land sales will be re-started, which means a steady supply of sites and a relief to the pressure on the prices of properties.
The Minister’s lunchtime announcement sent the market to its lowest level of the day at 2,631.48 points, approximately half an hour prior to the closing of trading session. The market rallied albeit only slightly as it inched up to 2,639.74 points. Monday’s closing level was 1.54 percent or 41.29 points lower than last Friday’s close, and the lowest since 4 September 2009. Among STI’s 30 component stocks, 3 were unchanged, 3 were gainers, and 24 were losers.
Neptune Orient Lines Limited (NOL) increased ¢3 to $1.90, Jardine Matheson rose by US$1.80 to US$31.80, whilst Jardine Strategic went up US¢4 to US$17.30. The property counters of STI were down for the day.
City Developments (CDL) dropped by 7.6 percent or ¢84 to $10.24 on a share volume of 6.33 million. CapitaLand slipped by 3.9 percent or ¢15 to close at $3.72. Fraser & Neave lost ¢3 to close at $3.98 on a share volume of 1.42 million.
The FTSE ST Real Estate Index dropped 20.75 points and closed at 587.14 whilst the FTSE ST Real Estate Holding and Development Index slipped by 28.88 points to close at 620.76.
Among non-STI property counters, Ho Bee was one the worst hit firms with regard to percentage losses as it dropped by 10.3 percent and closed at $1.39. GuocoLand lost 8.2 percent to close at $2.24, and Keppel Land was slid by 6 percent to close at $2.66.
The weakness of the property counter was ascribed to the Singaporean Government’s new measures to dampen speculations as well as consequential apprehensions regarding the effect on the property market sector.
Kevin Scully, the Executive Chairman at NRA Capital, said that the market might have overreacted to the Government’s announcement. He also said that some might have seen it as a chance to make profit as the prices of property stock rose significantly.