SINGAPORE: Singapore's property cooling measures could deter investors from residential property and into stocks, according to investment experts.

The latest measures imposed an additional 10% stamp duty on foreigners buying private homes, a move that could affect demand and investment strategies, said DBS Group Research.

“Owner-occupier buyers are likely to hold back in anticipation of a dip in prices,” said the research house, which expected home prices to retrace by 5% this year - a muted impact due to the low interest rate environment.

Potential buyers already appear to be adopting a wait-and-see attitude, suggesting they may place their cash into stocks instead.

Lorraine Tan, director of Asia equity research at Standard and Poor's, told The Straits Times: “The property curbs limit the speculative element in investing in properties. When you don't have that and there is expectation that prices could come down, it's going to affect buying. As equities are more liquid, the money will get channelled into equities.”

Colin Tan, head of research and consultancy at Chesterton Suntec International, agrees: “Most people who have held back buying properties could invest in the stock market. There are lots of funds swirling around from one asset class into another.”

Not all concur. Teoh Kok Lin, managing director of Singular Asset Management, which manages funds in Kuala Lumpur and Singapore, said the stamp duty affected foreign buyers most but “these purchasers are likely, if they choose, to channel their cash to property markets in other countries.”

Just what effect the cooling measures might have on the share market was also a hot topic among most investors at a recent roadshow by CIMB Singapore, held in Asia and the United States.

“That was the question investors asked. My view is that there are other factors that drive stock market liquidity,” said CIMB Singapore research head Kenneth Ng.

He pointed out that retail participation in the stock market tapered off in 2010 and last year.

That coincided with the opening years of the two casinos and very strong transaction volumes in the property sector.

A resolution to the financial turmoil in the eurozone this year could spur more interest in shares, he noted. “That might be a good reason for market interest to come back and stock market volumes to rise.”

Tan of Standard and Poor's said confidence needed to improve significantly before shares would go up.

That appears to have happened already somewhat. The benchmark Straits Times Index has gained 10.2% this year to 2,916.26 points.

“The risk appetite has definitely come back a bit. But the eurozone debt issue is still a dampener.

“And global growth as well as Asia's is slowing. Those are two big issues that will continue to drive interest in equities,” said Tan.

Many potential property investors may be moving into shares while they wait and see how the cooling measures play out on prices.

There has been much talk since the Dec 8 stamp duty came into effect that prices would fall, but Tan of Chesterton Suntec is not convinced.

“There's too much liquidity in the market and borrowing costs are low. I don't think property prices are coming down soon, not even in a slow growth environment,” he said.

The Watertown project in Punggol has achieved strong sales since its preview on Jan 18.

OSK-DMG Research attributes the robust showing to the penchant among Singapore property buyers for mixed developments. But the research house expects primary transaction volume to fall by 20% year-on-year this year.

By The Straits Times

KUALA LUMPUR: Sentoria Group Bhd, en route for listing on Bursa Malaysia Securities Bhd in the first quarter of this year, plans to invest RM48 million from internally-generated funds to develop a safari park.

Joint managing director, Datuk Gan Kim Leong, said the 35.28-hectare Bukit Gambang Safari Park in Bukit Gambang Resort City (BGRC) would commence operations by year-end.

"We are optimistic the safari park will follow the success of our first theme park," he said at the launch of the group's initial public offering (IPO) prospectus here today.

Gan said the company's first park, Bukit Gambang Water Park, has received over a million visitors since BGRC's opening in July 2009. "The addition of the second theme park would stake our place as an up-and-coming leisure and hospitality destination for visitors in Malaysia and the region," he said.

Sentoria is the developer and operator of BGRC in Kuantan, Pahang one of the largest integrated resort cities in Malaysia with 218.8ha.

The group has also carved out a niche in developing affordable housing primarily in Kuantan, Pahang.

Among its ongoing projects are Arabian Bay Resort, safari park and Taman Indera Sempurna 2.

Gan said the IPO would raise RM51.6 million in proceeds, of which RM27.7 million would be used for working capital.

He said RM11.2 million would be used to repay bank borrowings, RM9 million for purchase of property, plant and equipment and RM3.7 million to defray listing expenses.

The IPO entails a public issue of 60 million new ordinary shares and an offer for sale of 40 million promoters' shares at 87 sen apiece.

By Bernama

More visibility: Sentoria joint MD Datuk Jimmy Chan (left) and Gan at the launch of the company’s prospectus. Gan says a listing on the stock market would make it easier for the company to attract potential investors and business partners.

KUALA LUMPUR: Property developer, and leisure and hospitality company Sentoria Group Bhd, which aims to raise RM51.6mil from its initial public offering (IPO), intends to invest the bulk of the proceeds on a second theme park in its Bukit Gambang Resort City (BGRC) in Kuantan, Pahang.

Sentoria joint managing director Datuk Gan Kim Leong said that the company had allocated a capital expenditure (capex) of RM48mil for a Safari Park, which would boost the number of visitors to BGRC.

“The park will open in stages from the end of this year,” he said at the launch of the company's prospectus yesterday.

Sentoria public and investor relations head Nasiruddin Nasrun said he was optimistic the Safari Park, spanning 35.7ha in Gambang's secondary jungle, would follow the success of the company's first theme park, known as Bukit Gambang Water Park, which had already attracted more than one million visitors since BGRC's opening in July 2009. Sentoria is the developer and operator of BGRC.

According to Gan, the hospitality business contributed about 30% to Sentoria's total earnings, with the balance 70% coming from its property development division.

Nasiruddin said the company expected to grow the contribution from the hospitality business to 50% by the time BGRC was completely developed in 2018.

“But we do expect to reach 50% much earlier, perhaps in the next couple of years,” he said.

Gan said a listing on the stock market would enable the company to create more visibility and make it easier to attract potential investors and business partners.

He also said it was timely to float the company despite the current global economic uncertainties. “We cannot foresee if the global economy will be good or bad, so any time is the best time,” Gan said.

Nasiruddin added that Sentoria was no stranger to an “economic downturn”.

“We embarked on BGRC during the global financial crisis in 2007 and 2008. So, we are no stranger to economic downturns,” he said.

Apart from the capex, the balance IPO proceeds will be used to repay bank borrowings and defray listing expenses.

En route to a listing on the Main Market of Bursa Malaysia by the first quarter of this year, Sentoria's IPO entails a public issue of 60 million new shares and an offer for sale of 40 million promoters' shares.

Of the 60 million public shares, 20 million are allocated for public balloting and 10 million for eligible directors, employees and business associates of the group at a price of 85 sen each. About 30 million shares will be allocated for private placement at 87 sen apiece.

The 40 million promoters' shares allocated for bumiputra investors are priced at 87 sen each.

AmInvesment Bank Bhd is the principal adviser, managing underwriter and joint placement agent for the IPO, while Kenanga Investment Bank Bhd is the joint placement agent.

By The Star

Tebrau Teguh Bhd has been appointed the developer for 167.13 hectares of land in Mukim Pantai Timur, Johor, which will complement Petronas' US$20 billion refinery and petrochemicals integrated development (Rapid).

The company said the land would be developed into a comprehensive mixed development which would complement the Rapid project.

The company is currently negotiating the technical, financial and legal aspects of the appointment with the Johor State Government's
Economic Planning Unit, it said in a filing to Bursa Malaysia.

The project is expected to contribute positively to the company's future earnings and net tangible assets.

By Bernama