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Thursday, 5 July 2018

Singapore Property Stocks: 5 July 2018, Thursday, 8.45pm Singapore Time

Just 10 hours ago, I publicly revealed in a funds flow (cards counting) revelation that based on my own comprehensive funds flow model, Singapore Property Stocks  had been on intense Outflow in Dominant Order Flow for the past 6 months. 

Just some 10 hours later,  out came this news:

The main headlines read:
"The government announced it would raise Additional Buyer Stamp Duty (ABSD) rates and tighten Loan-to-Value (LTV) limits on residential property purchases in an effort to cool the property market and keep price increases in line with economic fundamentals"

In private messages with a professional from the property market sector some time ago, I even told the professional the below observation based on market funds flow:

I told the professional that property stocks' funds flow suddenly derailed 6 months ago -- to a sudden change to very intense Dominant Order Outflow (Oxley stocks the exception). 

Today the reason for that is known now: raising of Additional Buyer Stamp Duty (ABSD) the real reason. 

And it may also be the reason why Bank Stocks were on temporary short term Outflow in Dominant Order Flow -- and ONLY recently. Banks' earnings come from a large myriad of sources, and property market is one source, enough to blip them a little during the cooling exercise but not derail them, which is why they are last to react but does not break their long term uptrend. On the other hand, the developers, especially those which had spent high amount of monies to bid for land and for en bloc bids, they are in for some tough time ahead now. 

It is why so far, I had avoided analysing property stocks as far as I could, doing some analysis only for Guocoland, and only because it is diverse in many countries and technicals looked good. Interest rates and cooling measures are always a sword hanging from just above: Rewards are there, sword (risk) is also there.

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