SINGAPORE: City Developments (CityDev), Southeast Asia's second-largest property developer, reported a 17% rise quarterly earnings and said it does not expect Singapore to introduce more measures to curb housing prices in the wake of worries over the global economy.

In the last week, stock markets around the world have see-sawed as investors were spooked by a downgrade of the US credit rating and grew increasingly nervous over the solvency of some European banks.

"I don't believe (the government) will come out with new measures to destabilize the market, especially after S&P re-rated the US credit rating, the world is suddenly more uncertain now," said Kwek Leng Beng, executive chairman of CityDev.

Governments across Asia, including China and Singapore, have introduced several rounds of policy measures aimed at stemming speculative demand for residential properties and keeping mass market housing affordable.

Although some slowdown in the private residential property market is expected, CityDev said that recent volatility and uncertainty in the equity markets, together with high liquidity and a low interest rate environment, will help to support demand for properties.

"These factors continue to encourage buying of real estate assets, which still remain a relatively stable and reliable instrument for investment. This will help to limit the fall in property prices, even if some oversupply prevails," the company said.

CityDev, which owns 54% of London-listed hotel group Millenium & Copthorne , said second quarter net profit rose to S$220.9 million (RM547.29 million) from S$188.9 million a year ago, helped by contributions from its hotel operations and rental properties.

However, RBS said CityDev's results for the first half of the year were disappointing, mainly due to the residential sector.

"We expect slower developer sales going forward as buyers adopt a wait and see attitude in view of the current global uncertainty," RBS said in a report. The bank has a hold rating on the stock with a target price of S$11.70.

At 0111 GMT, shares of CityDev were 2.5% higher at S$10.15, compared to the benchmark stocks index's 1.3% gain.

It declared a special interim ordinary dividend of 5 Singapore cents per ordinary share on Friday.

Larger rival CapitaLand reported a 27% rise in second quarter net profit excluding revaluations and impairments to S$171.3 million. — Reuters

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