Singapore

COEs end mostly higher after 3-week break but weakness expected ahead

Certificates of entitlement (COEs) ended mostly higher after a longer three-week break between the latest tender yesterday and the previous one on May 19.

The COE for cars up to 1,600cc and 130bhp closed at $48,510, up from $41,801.

For cars above 1,600cc or 130bhp, the COE finished at $60,109, up from $58,089.

Open COE, which can be used for any vehicle type except motorcycles but ends up being used mostly for bigger cars, ended at $61,112, down from $62,000.

Commercial vehicle COE finished at $37,002, down from $41,701. The motorcycle premium closed at $8,703, up from $8,701.

COE tenders are usually two weeks apart. But occasionally, there are three-week gaps because of the changing number of weeks in a month.

A longer break gives motor dealers more time to collect orders. More orders in hand usually translate to a higher number of bids as well as more competitive bids.

Mr Nicholas Wong, general manager of Honda agent Kah Motor, said there is also a rush now by dealers to register cars before new emission tax surcharges kick in next month, and a more stringent emission standard is rolled out in September.

The July surcharge will make many continental cars pricier by around $10,000, while the September measure is likely to see several models - including Japanese cars - being phased out of the market.

Other dealers said BMW is back to aggressive sales promotions ahead of its financial year end, hence contributing to the price spikes in the latest tender.

Market observers, however, pointed out that the Open COE had ended lower, which is a reflection of weaker sentiment ahead.

This means premiums are more likely to fall in the coming tenders than they are to rise. - THE STRAITS TIMES

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