Compiled by Andrea Soh
PROPERTY | OVERWEIGHT
CIMB Research, Dec 13
We did checks across nine collective sale projects to determine the underlying strength of residential replacement demand as well as the wealth creation effect from the unlocking of capital.
The findings showed that replacement appetite would help to underpin demand in the coming year, in addition to organic household formation and upgrade appetite.
We estimate private home demand to reach 11,000-12,000 next year against the potential launch of 10,000 units. We project private home prices to rise by up to 5 per cent next year.
The anticipated high take-up rate should continue to propel property stocks to outperformance, in our view.
The office sub-sector continues to show the most supportive supply/demand dynamics for a rental recovery.
The hotel industry was in the doldrums over the past three years due to an overhang from incoming supply.
With new hotel room additions projected to average 1.7 per cent next year and our expectation of tourist arrivals growing 3 per cent per annum, we see room for upside surprise in the hotel sector, with a more meaningful rate uplift towards 2H18.
We maintain overweight on developers, neutral on Reits.
Our preferred picks are UOL (add, TP: $9.62), CDL (add, TP: $13.15), FCT (add, TP: $2.38), FLT (add, TP: $1.20) and FEHT (hold, TP: $0.69).
OCBC Investment Research, Dec 13
Global equities had a good year with gains in all the key indices.
The clear winners were the Internet and technology companies as well as financial institutions.
In Singapore, the STI performed well too and is up 20 per cent YTD.
Banks did well as most recorded across the board growth, and this led to a 30 per cent gain for the financial index.
Buoyed by the active transactions in the collective sales market, the Singapore Real Estate Index also did well, up 28 per cent for the year, while the Reit index is up 19 per cent for the year.
While valuations have moved up this year, earnings have correspondingly shown good growth. Going into next year, we do not expect a repeat of this year's stellar gains, but upside remains.
For Singapore stocks, our picks are CapitaLand (TP: $4.13), City Developments (TP: $13.50), DBS (TP: $27.40), Frasers Centrepoint Trust (TP: $2.40), Frasers Logistics & Industrial Trust (TP: $1.25), Keppel Corp (TP: $8.41), Mapletree Greater China Commercial Trust (TP: $1.28), Sembcorp Industries (TP: $3.59), Singtel (TP: $4.19), UOL (TP: $9.70), Venture Corp (TP: $23), Wheelock Properties (TP: $2.29) and Wing Tai (TP: $2.77).
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.