Long-awaited policy tweaks to fuel Singapore’s equity market in 2016: Credit Suisse

The ball is in the government’s court.

A wave of policy changes will likely drive a price rally among property and transport stocks in 2016, according to a report by Credit Suisse.

Residential developers will benefit from an expected easing of property cooling measures, which will unleash pent-up demand and catalyse share prices.

“Within the property sector, we believe the time is ripe for an easing of some of the measures, given that specific policy intent of these measures has been achieved: (1) speculative activities have fallen, (2) foreign demand has been curbed, and (3) income growth has now outpaced home prices,” Credit Suisse said.

Meanwhile public transport operators will gain as new financing models take effect. The government bus contracting model is on track to start in 3Q16, and a new rail financing framework can’t be far behind.

“We expect continued emphasis on improving rail reliability, with a potential transition to a similar asset-light model for rail. This will be like the rail financing framework for the Downtown Line operated by ComfortDelgro, where the operating assets are owned directly by the Land Transport Authority (LTA),” said the report. 

“With a lack of macro drivers, we expect government measures in the telco, property and land transport sectors to be key share price drivers in 2016,” the report highlighted.