SHARES of Keppel Land have been under pressure this week, as the property developer faces headwinds in both its domestic and overseas markets.
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Keppel Land has about US$7 billion (S$9.66 billion) worth of projects in Vietnam, a larger exposure than those of rival developers such as CapitaLand, GuocoLand and Allgreen Properties.
This could 'affect the affordability of the local buyers', said CIMB-GK in a report yesterday. 'We see capital values falling below our base-case assumptions of US$2,000 to US$2,500 per sq m.'
The brokerage suggested Keppel Land's stock could have been oversold. It maintained its 'outperform' call but slashed its target price from $7.73 to $6.68 after reducing earnings estimates on lower contributions from Vietnam.
Keppel Land is down 13 cents, or 4.66 per cent, this week and off 29.3 per cent this year compared to a 13.5 per cent decline in the benchmark Straits Times Index.
On the home front, Keppel Land and other developers are facing the challenge of a deteriorating property market, particularly in a high-end sector facing price weaknesses.
Analysts point to a lack of transactions, low take-up rates and delay in launches by developers.
High-end properties are at a 'greater risk to further price corrections, as there is still a substantial pipeline of projects waiting to be launched', said OCBC Investment Research in a report on Thursday.
'We remain cautious over developers that have large land-bank exposure in the high-end market, like CapitaLand and Keppel Land.'
OCBC is reviewing its calls on Keppel Land, as well as CapitaLand and City Developments, among others, and has a 'neutral' view on the Singapore residential property sector.
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