EARLIER this year, several research houses issued reports on listed premium property developer SC Global, warning that the company faced ’severe solvency risks’.
One house, in March, downgraded SC Global’s price target to 30 cents. Another, in May, slapped SC Global with a target price of 28 cents, citing potentially huge write-downs amid an impending depression. Just months earlier, that analyst had a price target of $3.80 on the stock.
A third research house, in October 2008, wrote down 70 per cent of SC Global’s value to arrive at a target price of 38 cents. Just two months earlier, the very same research house had SC Global’s stock price target at $1.25, down from $1.60 a few months earlier.
Today, all three brokerages have target prices ranging from $1.63 to $1.95 per share. And further re-ratings could be in the works.
The wild gyrations in forecasts are, to say the least, breath-taking. More surprising are the sudden and dramatic reversals in view of the last two months.
Part of this was due to the easing in credit markets. Also, property values have risen some 20 per cent from their bottom as demand recovered. And despite recent government measures to cool the mass market, prices remain steady. Continue reading
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