Stubbornly high COE premiums to persist in 2H12
Good thing transport CPI is expected to ease in the near term.
According to CIMB, transport CPI is expected to rise at a slower pace from 2H12 although still-firm business & consumer confidence coupled with a lower COE supply could continue to prop up COE premiums.
"Similarly, accommodation costs are starting to stabilise at higher levels. While they could remain sticky due to full employment, we expect rental inflation to ease as physical completions hit the market in 2013. Overall CPI is expected to moderate to 4.5% in 2H12."