Excerpts from UOB Kay Hian report
Strong 2015 election mandate could pave way for regulatory changes. Regulatory changes could also be in the pipeline following the strong general election win in 2015. 
Le Nouvel Ardmore (on Ardmore Road, Singapore) is Wing Tai’s trophy development in collaboration with Jean Nouvel, globally renowned architect and winner of the Pritzker Architecture Prize 2008 and Wolf Prize in Arts 2005. Photo: Company.This could pave the way for potential changes in the regulatory framework for selected sectors including property development and land transport. For the property sector, we believe the authorities may review and relax selected residential property cooling measures.
Based on our estimates, physical property prices could decline by up to 15% in 2Q16 (from the peak in 2013) and this could be a catalyst for selected cooling measures, such as additional buyer's stamp duty (ABSD), to be reviewed in 2H16.
| Stock | Recent price | Target price |
| CityDev | $7.53 | $10.75 |
| Wing Tai | $1.705 | $2.50 |
| ComfortDelGro | $3.02 | $3.30 |
| SMRT | $1.455 | $1.46 |
Having said that, we think some measures, such as total debt service ratio (TDSR), would be a permanent measure, which is a prudent move.
Developers would benefit and the stocks we favour include City Developments (CDL) and Wing Tai Holdings (Wing Tai), both for their significant exposure to the Singapore residential segment compared with more geographically-diversified developers (such as CapitaLand).
Another sector is land transport. Following the restructuring of the bus segment, we think the rail financing framework would be reviewed in the near term.
SMRT Corporation (SMRT) would be a beneficiary since ComfortDelGro Corporation’s (CD) rail assets are already under the revised asset-light framework. However, we continue to prefer CD over SMRT due to the former’s earnings diversification, strong financials and track record.
Full report here.
