Keppel Land - Analyst Report - Residual Income Valuation

1. Industry & frugal Characteristics Keppel Land is basically in the business of airplane propeller trading and holding blood management. As of 2004, 90% of Keppel Lands r as yetue comes from property trading and investment. We by and by part categorise these activities at a lower place the real kingdom industry. The biggest job with the Real landed estate industry is that it is extremely uncertain. billet prices are extremely fickle and have no specialized pattern. This is mainly due to 2 fundamental issues: * accepted aver accounting practices * The time meantime between engage betoken and actual supply It is these factors which create the property bubble . * Time dispose between Demand range and Actual Supply Property development has a cycle of 2-3 years. Owing to much(prenominal) a huge lag in time, it is possible that even the pick out for the particular properties to change. Thus, it is possible for 10% add-on in pick out to produce a 50% increase in supply. It has happened in Singapore as sanitary when the property measures reached their lift in 1997 only to fall by 40% in 2004. * Current Bank Accounting Practices Consumers unceasingly depend on banks to pay their property purchases. Banks, on the other hand fund these purchases as an increase in their value also actor an increase of the banks assets.

However, it must be notable that a banks willingness in contribute is directly proportional to the thriftiness of the country. In measure of recession, banks get lending sharply because property prices are expiration eat affecting their balance sheets drastically. When this happens, hardly a(prenominal) people can unfold to buy property, thus be a immense worry to the real estate industry. Now, the demand for property is primarily control by population fruit and a go economy. tribe growth in a country only when federal agency more demand for housing. Keppel... If you destiny to get a near essay, order it on our website: Ordercustompaper.com

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