Property counters lead declines following ABSD hike; STI down 0.4%

THE Straits Times Index (STI) fell 0.4 per cent or 11.88 points to 3,282.03, as property counters experienced declines following the government’s property cooling measures overnight.

Across the broader market, losers beat gainers 295 to 269 after 1.4 billion securities worth S$1.2 billion changed hands.

Head of OCBC investment research Carmen Lee noted that while regional property markets have been adjusting to the rising interest rate environment, property prices in Singapore have “just been running up”.

Calling the government’s move to hike the Additional Buyer’s Stamp Duty (ABSD) “surprising”, she said that the team expects a negative “knee-jerk” reaction to share prices of developers with a material exposure to the Singapore residential sector.

“While valuations appear cheap, there could be an overhang affecting their near-term price performance, in our view,” she said.

Furthermore, she expects private residential property price growth to come in at between minus 3 per cent and 1 per cent. Private new home transaction volumes are expected to range between 6,000 and 6,800.

Still, Lee expects CapitaLand Investment to remain relatively unscathed, as it does not have a direct Singapore residential exposure post-restructuring.

Property developers City Developments and UOL led the STI’s decline. City Developments fell 5.6 per cent or S$0.41 to S$6.91, while UOL fell 4.7 per cent or S$0.34 to close at S$6.85.

Meanwhile, Singtel was at the top of the table, gaining 2 per cent or S$0.05 to S$2.54.

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The trio of banks were mixed. DBS rose 0.2 per cent or S$0.06 to S$32.76, while OCBC shed 0.2 per cent or S$0.03 to S$12.57 and UOB fell 0.5 per cent or S$0.15 to S$29.11.

Regional indices were also mixed. Japan’s Nikkei 225 index climbed 0.2 per cent, while both Hong Kong’s Hang Seng index and South Korea’s Kospi climbed 0.4 per cent.