Welcome to this week’s edition of top stock market highlights.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, released an encouraging business update for the third quarter of 2024 (3Q 2024).
The blue-chip property group and its joint venture (JV) associates sold 321 units with a total sales value of S$611.1 million for its Singapore property development division.
The sales volume and value were much higher than the prior year’s 183 units worth S$325 million.
The higher sales were driven mainly by the launch of the 276-unit freehold property Kassia of which 179 units (65%) have been sold.
For the first nine months of this year, CDL’s total sales amounted to 905 units with a total value of S$1.8 billion, higher than the previous year’s 691 units worth S$1.4 billion.
The property giant’s other launches have also sold well.
To date, Tembusu Grand has sold 581 units or 91% of the development while The Myst has sold 297 out of 483 units (73%).
October saw the launch of the 348-unit Norwood Grand in Woodlands which has sold 84% of its units at an average selling price of S$2,067 per square foot (psf).
For November, CDL launched the luxury 366-unit Union Square Residences at Havelock Road at an average selling price of S$3,200 psf.
This development saw 95 units (26%) sold to date.
The group plans to launch its JV project The Orie in 1Q 2025 at Lorong One Toa Payoh.
This development will offer 777 units and is just a five-minute walk from the Braddell MRT station.
Donald Trump’s tariffs
Just weeks after being elected as America’s new President-Elect, Donald Trump has threatened to impose hefty tariffs after he takes office.
He proposed a 25% tariff on imports from Canada and Mexico along with an additional 10% tariff on Chinese goods until the country clamps down on drugs such as Fentanyl and deals with migrants crossing the border.
Naturally, Mexican President Claudia Sheinbaum was not pleased and threatened to retaliate by raising tariffs, too.
She warned that such tariffs could result in 400,000 job losses and also drive prices up for US consumers, reigniting the debate over whether inflation has truly been brought under control.
The US is the main destination for vehicles manufactured in Mexico, with close to 79% of them crossing the border.
These tariffs will flow through the supply chain and result in average new-car prices rising by about US$3,000, further fuelling price hikes on automobiles that many Americans are already struggling to afford.
Shares of General Motors (NYSE: GM) plunged by 9% on the news, while shares of Ford Motor (NYSE: F) and Stellantis (BIT: STLAM) also fell.
These three companies are very sensitive to tariffs imposed on Canada and Mexico because of imports.
Stellantis imports around 40% of the vehicles sold in the US while GM and Ford import approximately 30% and 25%, respectively.
Trump is making good on his campaign promises to utilise tariffs to bring more factories and jobs back to the US.
However, in the short-term, these tariffs will not have any impact on supply chains as companies need time to shift their production bases.
Analysts are also wary as they do not know the extent to which Trump will move in relation to the imposition of tariffs.
Singapore household debt
Household debt is on the rise but the Monetary Authority of Singapore (MAS) reported that wages and financial assets grew at a faster pace.
Outstanding home loans grew 1.6% year on year for 3Q 2024, with new loans offset by borrowers who paid down existing loans.
In contrast, households’ financial assets increased by 8% year on year.
Stress tests done on borrowers showed that they could tolerate higher mortgage rates even if these rates rose to 5.5% coupled with a 10% pay cut.
90% of borrowers now bear higher post-pandemic interest rates on their mortgages but there is unlikely to be another huge jump.
Hence, the impact of these higher rates is likely already absorbed by these borrowers, reducing the risk of problem payments and default.
Meanwhile, net wealth for Singaporean households grew 9% year on year to almost S$3 trillion for 3Q 2024.
Of this wealth, liquid assets such as cash and deposits made up around a fifth of total assets.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
