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Editorial Desk
Editorial Desk | 12 October 2012
By: Xavier Lim
Articles (51) Profile

Property stocks plunged immediately after the Singapore government introduced fresh mortgage curbs to try and cool the upward spiral in property prices that have been boosted by low interest rates, low unemployment and an immigration-driven population.

In a press release, Chairman of Monetary Authority of Singapore (MAS), Tharman Shanmugaratnam, said that MAS is concerned that prices in both the HDB resale market and private residential property continued to rise in 2Q12 and 3Q12 despite the last few rounds of property measures. He expressed that the government will do whatever they can to stabilise the property market in order not to create a property bubble. MAS also warned that borrowers could find themselves financially overstretched when the interest rates rise eventually. This will hurt borrowers and lenders, which could destabilise the local financial system.

Following this latest cooling measures that aimed to bring down property buyers’ purchasing power driven by longer loan tenures and historically low interest rates, is it still worth putting our money into property stocks? Will the measures reduce buyers’ affordability, and hence cooling the property market? Find out more in our ‘In Focus’ section on page 56 to hear what analysts had to say.

Meanwhile, the International Monetary Fund (IMF) cut its global growth forecast and warned things could get much worse if the Eurozone crisis persists. The IMF slashed its growth forecast to 3.3 percent from its July estimate of 3.5 percent for 2012, while lowering the growth projection for next year to 3.6 percent. Turn to page 12 for more details.

Gracing our cover story for this issue, we do a third review of our SI portfolio. Given the impending ‘fiscal cliff’ in the US and ongoing sovereign debt crisis in Europe, we are of the view that the risk-reward ratio remains firmly in favour of more downside. Hence, we took a decision by readjusting our SI portfolio towards stable stocks that provide consistent dividends. Flip no more to page 7 to read about it.

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

Please click here for more information about this author.

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