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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 2007, the fixed rate borrowings
constituted 75% of the portfolio and the balance
25% 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 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
a 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 periods of its investment portfolio,
timing of planned divestments and operating cashflow generated from progress payment collections
from its residential receivables. |
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