Low COE premium has not sparked buying interest, but motor stocks tell a different story.

COE premiums for cars here remain uncharacteristically low after the latest bidding exercise yesterday. Even though the big car premium went up after a surprise plunge in the previous tender, it still stayed well south of $1,000.

This suggested that the lack of buying interest despite almost record low COE premium. Should the situation persist, there could be adverse impact on some of the listed distributors here. Specifically, we believe the impact could be felt more on those distributing "bread and butter" range of Cat A cars (those below 1,600cc), which saw COE premium plugging $1,673 to $1,020.

Tan Chong International (distributes Nissan in Singapore), Jardine Cycle & Carriage (Mercedes, Mitsubishi, Kia and Citroen) and WBL Corp (Jaguar and Volvo) are among the listed distributors in Singapore. However, JC&C and WBL are relatively insulated as both have pretty diversified international businesses outside the Singapore car distribution segment.

Technically, this is where conventions are broken and things are looking counter-intuitive again.