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| The Group manages its finance
cost by maintaining a prudent mix
of fixed and floating rate borrowings.
As at 31 December 2006, the fixed
rate borrowings constituted 74%
of the portfolio and the balance 26%
were on floating rate basis. As finance
cost formed an integral component of
the Group’s operating costs, a higher
percentage in fixed rate funding would
offer protection against an unexpected
rise in interest rates. On balance,
to capitalise on the low interest rate
environment, a certain portion of the loan
portfolio was maintained on floating rate
basis. The Group was able to maintain a
flexible profile and whenever there were
divestment proceeds or sales proceeds
from fast track residential sales, it could
promptly utilise the proceeds to repay
its floating rate loans. In managing the
interest rate profile, the Group takes
into account the interest rate outlook
on various currencies of loans, holding
period of its investment portfolio, timing
of planned divestments and operating
cashflow generated from progress
payment collections from its
residential receivables. |
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