Interest rates are also expected to stay flat or decline next year, as reported by The Edge Singapore.
For developers, profitability and interest coverage are expected to improve if interest rates and costs fall. However, the OCBC report noted that the future of their credit metrics will depend on their willingness to leverage their balance sheets.Bloomberg reported that Hongkong Land may or may not sell MCL Land at a premium to its book value of S$1.1 billion.
OCBC Credit Research pointed out that Hongkong Land’s net asset value has steadily declined over the past five years, falling from US$16.30 in 2018 to US$14.49 at the end of 2023.As of June 30, Hongkong Land’s assets in Investment Properties and Development Properties stood at US$31.7 billion and US$9.6 billion , respectively.
While negative divergences have appeared between the STI and its short-term Relative Strength Index , this is not a concern as the RSI hasn’t dropped below support.