Singapore: Property Shares Are Riding High

A good week for property shares

After setting a new five-year high on Wednesday, Singapore stocks retreated on Friday, with the Straits Times Index (SGX: ^STI) losing 0.22% on Friday. The index advanced 0.39% on the week; meanwhile, elsewhere in Asia:


Weekly Gain

Price-to-Earnings (Feb. 15)*

Nikkei 225



Hang Seng Index (INDEX: ^HIS)



Shanghai Stock Exchange Composite Index


24.0 [Feb. 8]

BSE Sensex



*Normalized earnings per share. Source: S&P Capital IQ  

Winners : Property developer CapitaLand (SGX: C31) and its real estate investment arm CapitaMall Trust (SGX: C38U) both outperformed the broad market this week, gaining 1.3% and 2.3%, respectively. According to data from the Urban Redevelopment Authority, sales of new homes rose to 2,013 in January, a 43% increase relative to December. The sharp uptick in sales occurred despite the government introducing new measures to cool the property market on January 11 – the seventh round of such measures. A survey carried out by and released on February 4th showed two-thirds of Singaporeans are confident their property will keep its value this year and a majority (55%) are unconcerned by fears of a real estate bubble.

Loser: Olam International (SGX: o32) continues to struggle – it was the second-worst performer in the index this week, with a 2.5%. The commodity trader also jotted up the second-worst performing Straits Times Index component last year, losing 27%; it’s also been in the crosshairs of short-seller Carson Block since on Nov. 19.

Follow-up: Last week, I mentioned that Singapore Exchange was in talks to acquire an interest in LCH.Clearnet. This week, more news on the Asian stock exchange front, as Multi Commodity Exchange, India’s largest commodity exchange, announced it will launch MCX-SX, an equities and derivatives exchange, to challenge the Bombay Stock Exchange and the National Stock Exchange. More competition in this arena is no bad thing; it’s onward and upward for Asian capital markets!

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This article was written by Alex Dumortier; you can follow him @longrunreturns .  Alex Dumortier is a contributor.

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