What every investor needs to know about the Singapore parliamentary debates

70 MPs gave their thoughts about what’s needed but DMG OSK’s Terence Wong has two important ideas for the investors.

Mr Wong singled out thoughts from PM Lee and MND Khaw as he gives investors a hint on how they can make profits in Singapore.

Here’s more from DMG:

PM Lee: 3% annual growth is good. Following decades of growing at breakneck speed, PM Lee Hsien Loong said that looking ahead, achieving 3% growth for the next ten years would represent a ‘good decade’ in a changing global environment. This is no big secret, given that we are a maturing economy and growing at the pace of the past is simply unrealistic. One sector that is likely to outperform would be the construction sector.

This seems counter intuitive, given that construction typically tracks the economic growth of Singapore. However, this relationship is likely to be broken given the strong construction flows, particularly from the government sector. Major jobs include multi-billion dollar projects involving the MRT, Singapore Sports Hub, North-South Expressway and HDB. I continue to like the construction sector, and favour main contractor Lian Beng (BUY, S$0.71) and road specialist OKP (BUY, TP S$0.80).

MND Khaw: Cooling measures are here to stay for now. In his first parliamentary outing as the Minister of Education, Khaw Boon Wan – who used to helm the Health Ministry – said that it is not time yet to remove property cooling measures. This is unsurprising, given that a total of 2,064 units (+25.8% MoM) were transacted in the month of September. The sales volume was mainly driven by 81% of total units sold in the Outside Central Region (OCR).

The firm transaction volume in the mass market is in line with our view. We attribute the near term firm prices in the residential segment on the back of low interest rates, positive carry and underlying demand for housing. On the supply end, we believe that the government will continue to release land to meet private housing demand.

It recentlymannounced the release of four sites yielding about 1,900 units on top of the 13,825 units already pushed out through the Government Land Sales (GLS) this year. Of the four sites, a residential site at Alexandra Road is launched for sale through the confirmed list which is a prime site in close proximity to the Redhill MRT, potentially yielding 545 units.

The other three sites are expected to yield 35 landed homes in Bukit Panjang, 540 units in Punggol and 770 EC units (reserve list) in Seng Kang. We have a NEUTRAL on the property sector, though value is emerging in the likes of CapitaLand (BUY, TP S$3.52), Keppel Land (BUY, S$4.91) and Wing Tai (BUY, S$1.98).

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