SECTOR UPDATE
URA DATA FOR AUGUST 2012 
Developers sold 1,421 new residential sales (excluding ECs) in August 2012. It was a sharp drop of 27% MoM and we attribute it to the e'ects of the 'hungry ghost' month where homebuyers generally held back major purchases. We noted that developers' launches had also slowed 37% to 1,118 units in tandem with the above. For 8MCY12, total sales tally was 15,605 units, 87% of our full year estimate for 2012F.

Unlike previous months, sales composition though weighed towards mass market residences declined substantially. Excluding ECs, 59% of total sales came from Outside Central Region (OCR), down 19% MoM, a second consecutive month of decline. We believed that as the price gap between mass market homes and properties closer to town narrows, switching to the latter has caught on. There are also indications that foreign buyers have started buying again as the e'ects of 10% additional buyer stamp duty (ABSD) is waning. Sales in Rest of Central Region (RCR) surged to 26% (9% in Jul 2012) whilst Core Central Region (CCR) continued gathering traction at 15% (13% previously and the fourth consecutive month of increase).

Comparing MoM ASP of sizable projects, price movement seem to border on the downside. Of the random list of twenty'nine notable projects, only fourteen experienced price hike MoM over July 2012. Despite the seemingly robust sales 'gures over the past eight months, there may be signs that developers are trimming prices to move inventory particularly last month. It may be in anticipation of a slower 'hungry ghost' month but on a positive note, indications have pointed to further government measures being held back unless mass market prices start spiraling out of control again. A gradual pace of increase will be bene'cial to all parties, in our opinion.

Amidst our coverage, we believe that the latest quantitative easing measures by the U.S. Fed may trigger hot money in'ows seeking alternative investments. Even though it is early days but there are signs of core central properties stirring to life. We advise investors to consider SC Global (S$1.98, BUY)  for its stock of luxurious high'end units, SingLand (S$9.71, BUY)  for its foray into mid'tier homes and also CityDev (S$14.06, BUY)'s hotel operations to bene't from the upcoming Formula One event in September.

NEWS BUZZ
SembCorp Marine (S$5.10) 
Buys UK 'rm for ''2.5m  
SembCorp Marine has made a foray into the UK market by buying o'shore engineering 'rm SLP Engineering for ''2.5mil (S$4.96mil) and will be renamed Sembmarine SLP. It added that the acquisition is not expected to have a material impact on its NTA and EPS for its 'nancial year ending Dec 31, 2012. Sembcorp Marine said the purchase will be funded through SMOE's internal funds. Sembmarine SLP will be held by a newly incorporated company, Sembmarine North Sea, which will be 70% owned by SMOE and 30% owned by eight members of SLP's management. Under the deal, SMOE will pay ''2.5mil for both the shares and settlement of the intercompany loans of SLP. SLP has about ''0.7mil in NTA.

ComfortDelGro Corporation (S$1.66) 
Buys out car rental business
ComfortDelGro Corporation, through 80% owned subsidiary Nanning Comfort Transportation, has acquired a 10% interest in Nanning ComfortDelGro Rent'A'Car (Nanning CDG RAC) for half a million yuan (S$96,389).

Nanning CDG RAC is a car rental and leasing business set up by ComfortDelGro in January 2008. Together with the transfer of its existing 90% interest in Nanning CDG RAC to Nanning Comfort Transportation based on its NAV, Nanning CDG RAC is now a wholly'owned subsidiary of Nanning Comfort Transportation. Consequently, ComfortDelGro's interest in Nanning CDG RAC becomes 80%.

Courage Marine (S$0.061) 
Taking stake in Santarli Realty
Courage Marine Group has resumed its plans, is seeking another lifeline by diversifying its business by buying a 10% stake in Santarli Realty a''er failing to participate in the joint venture in August, when SGX turned down its request for a waiver of shareholder approval.

The total commitment of the investment, an estimated $17.75mil, over Courage Marine's market capitalisation on the SGX was 21.1% on July 13, and 27.04% as at Sept 14, exceeding the 20% mark to be classi'ed as a major transaction, thus requiring shareholder approval. A special general meeting will be convened to obtain approval from the shareholders.
Source: The Business Times

Source: AmFraser