Weakening global outlook. Global macroeconomic dynamics have
deteriorated rapidly in the last couple of months. Credit markets have
tightened, economic growth has eased, and consumer confidence has
turned wary. Above all, cooling property markets around the world signal a
slowdown in furniture purchases in future, since property sales is a direct
stimulant to furniture expenditure.

Property markets are slowing down. The US and UK were the first to
fall victims to slower home sales as a result of the subprime crisis and
credit crunch, and according to recent news reports, the slowdown has hit
China, possibly marking the end of its property boom. Between Jan – Aug,
volume of homes sold plunged by 55.5% in Beijing, 38.5% in Shanghai
and 32.5% in Zhejiang. Property developers have resorted to slashing prices
in a bid to keep sales afloat.

Trimming OCBC bk projections in light of macro headwinds. OCBC bk have trimmed their revenue and earnings projections by 6% - 27% on the muted outlook. OCBC bk fair value estimates have been cut to reflect the reductions in earnings estimates and heightened risk aversion since their last update.

They maintain a BUY rating on Cacola Furniture Int’l Ltd with a lower
fair value estimate of S$0.26 (previously S$0.63) as the stock has been
beaten down and is trading below its cash value, but reduce their ratings on
Koda Ltd and Man Wah Holdings Ltd to HOLD with fair value estimates
of S$0.185 (previously S$0.285) and S$0.175 (previously S$0.51),
respectively.