PROPERTY shares enjoyed a rebound yesterday, helping the market stage its biggest single-day gain in about two weeks.
The benchmark Straits Times Index (STI) surged 47.84 points, or 2.12 per cent, to 2,307.61 - its highest close in five days. Regional markets were less upbeat, with Hong Kong's Hang Seng
Index up a mere 0.39 per cent and Japan's Nikkei 225 stock average down 1.38 per cent, notching its seventh straight loss. Shanghai and Taiwan stocks closed above 1 per cent.
It has been a nerve-wracking week for local property shares. They dived on Wednesday, as investors overreacted to news that the Government was considering a change in the income tax policy for individuals selling real estate.
Cooler heads prevailed yesterday, sending City Developments up 43 cents, or 5.46 per cent, to $8.31, and CapitaLand up 12 cents, or 3.55 per cent, to $3.50, with 42.2 million shares changing hands.
Keppel Land gained eight cents, or 3.85 per cent, to $2.16, while Ho Bee surged three cents, or 4.11 per cent, to 76 cents.
'We expect the tax change to have minimal impact on prices and take-up of owner-occupied mass projects,' said DMG analyst Brandon Lee. 'With the Marina Bay integrated resort's opening targeted in early 2010, stocks and physical prices should resume their upward trend following this short-term blip, which represents a good entry point.'
UBS said property stocks were 'unfairly penalised' in the sell-off, as the market had misinterpreted the Government's tax proposals as attempting to introduce new laws when it only intended to provide more clarity on the existing tax law.
Solid gains from SingTel contributed to the strong finish. The telco single-handedly lifted the STI by 10.5 points. It rose 11 cents, or 3.59 per cent, to $3.17, its highest close in more than nine months, with a hefty 43.1 million shares traded.
SingTel's share price performance is 'expected to remain firm', as it will be paying out dividends at the end of next month, said Mr Najeeb Jarhom, AMFraser Securities' senior vice-president of research.
Singapore Airlines had a good day as well: It was up 22 cents at $13.04. It had a bonus for investors as well: It will be giving shares of its subsidiary, Singapore Airport Terminal Services, in addition to dividends.
Ezra Holdings soared 10 cents, or 9.01 per cent, to $1.21 after third-quarter results beat analysts' expectations. It reported an 8 per cent rise in net profit to US$18.8 million (S$27.5 million) from the same period a year ago, while revenue was up 9 per cent at US$59.9 million.
Chartered Semiconductor Manufacturing lost three cents at $1.95. Citigroup reiterated its 'sell' rating on the stock, saying the company's losses could deepen in expectation of a sharp correction in the semiconductor industry in the fourth quarter this year or first quarter next year.
In such a scenario, the firm's 'losses would deepen and price appreciation would be further capped', said Citigroup analyst Horng Han Low.
While the market looked robust, overall participation remained muted, with just 1.28 billion shares worth $1.28 billion changing hands.
Source: Straits Times, 10 July 2009