EY Walks Away From Auditing Mainland Developer and More Asia Real Estate Headlines

In today’s roundup of regional news headlines, mainland developer DaFa announces the resignation of its auditor, and HSBC’s CEO offers an upbeat take on China’s beleaguered property sector.

EY Resigns as DaFa Auditor Over 2022 Results Dispute

Ernst & Young has resigned as auditor of China’s DaFa Properties Group, according to an announcement by the Hong Kong-listed developer on Monday, as many of the country’s builders continue to struggle with mandatory financial reporting.

In the statement, DaFA said the Big Four firm was off the job from 17 February after the company and its auditor were unable to reach a consensus on the audit fee and timetable for declaring its 2022 results. DaFa said it would announce a new auditor in the future. Read more>>

HSBC CEO: China Property Market Outlook on the Mend

HSBC group CEO Noel Quinn said the outlook for China’s troubled property sector had improved in January, despite the lender booking higher charges in the fourth quarter related to its exposure to the country’s commercial real estate sector.

“The sentiment in the fourth quarter was more negative than the sentiment that emerged in January,” Quinn told Reuters, adding that there were positive developments both on the demand side and the supply side linked to big policy measures. Read more>>

China’s State-Owned Firms Are Sitting Out the Property Rescue

When China’s private real estate developers started sliding into distress more than a year ago, the government encouraged state-owned property companies to step in and take over their ailing peers’ projects and assets.

That call has gone largely unheeded — a big reason why the country’s housing market remains in the doldrums. Read more>>

China Central Bank Asks Banks to Slow Down Lending: Sources

China’s central bank has told some banks to slow the pace of lending to contain risks after new bank loans jumped to a record in January, three bankers with knowledge of the matter said.

The People’s Bank of China sent the informal instructions, or the so-called “window guidance”, earlier this month to some lenders that asked them to issue loans “under an appropriate growth rate”, the bankers said. Read more>>

Goldman Sachs Downgrades CDL to ‘Sell’ and UOL to ‘Neutral’

Goldman Sachs analysts Xuan Tan and John Tsang have issued a downgrade on Singapore-listed City Developments Ltd and UOL after a further round of cooling measures announced in this year’s budget.

During his speech on 14 February, Finance Minister Lawrence Wong announced a round of demand-side cooling measures, which include additional tiers of buyer’s stamp duty rates for properties valued at S$1.5 million ($1.1 million) or more. Read more>>

Frasers Property’s Weak Share Price Could Require Urgent Action

Frasers Property has started the year off by showing, once again, that it is a good REIT sponsor. But its minority shareholders may now want the group to turn its attention to the value of FPL’s shares.

On 6 February, Frasers Centrepoint Trust and sponsor FPL completed the joint purchase of a 50 percent stake in Nex. FCT and FPL hold effective interests of 25.5 and 24.5 percent, respectively, in Nex. Read more>>

Singapore’s Soaring Expat Rents Mar Bid to Oust Hong Kong as Finance Hub

Two years ago, Lauren arrived in Singapore from Hong Kong wanting more living space for her growing family. Now, they intend to move back. The reason: a 61 percent increase in the rent on their four-bedroom flat and the high and rising cost of living.

A British mother of three whose husband works in finance, Lauren, who did not want to use her full name, said her experience of Asia’s two rival financial centres has been an eye opener. “Everyone thinks Hong Kong is the most expensive city,” she said. Read more>>

OKP Generates Higher Revenue but Reports Loss as Higher Costs Bite

OKP Holdings reported higher revenue for the second half of 2022, but because of higher admin and finance costs, the Singapore-listed developer incurred a net loss of S$2.2 million (now $1.6 million).

Revenue for the six months to December 2022 was S$64.1 million, up 42.4 percent, bringing full-year revenue to S$11.6 million, up 30.7 percent from 2021. Read more>>

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