PhillipCapital analyst Terence Chua has turned “neutral” on First Sponsor Group, downgrading from his previous “accumulate” recommendation due to the slower economic growth seen in China.
The group’s property development (PD) and property financing (PF) market will be impacted by the slowing property market in the country, as well as the recent loosening of its monetary policy.
“Falling property prices in China have resulted in a slowdown in demand. Unsold housing stock in China’s 100 biggest cities reached a five-year high in November 2021. Some developers have also resorted to lowering prices to clear inventory, adding to the downward pressure in the property sector,” writes Chua in his Feb 25 report.