News Highlights Monday 24 March 2008

CapitaLand issues active after weak home sales data
With Singapore’s residential market cooling off, investors are looking at developers with a diversified business portfolio, such as CapitaLand. Its diversified portfolio and increasing presence in emerging markets can more than compensate for the slowdown in Singapore’s property market. Last month, CapitaLand announced its net profit for last year grew nearly 3 times to $2.76 billion.

- The Straits Times, H21



Singapore interest rates likely to fall further
Singaporeans can expect cheaper mortgages but lower savings and fixed deposit rates in the months to come. This is after the move by the US Fed to slash a key US interest rate last week. A Citigroup economist lowered his forecast for the Sibor, estimating it would fall to as low as 0.75% by the end of the third quarter, down from an earlier estimate of 1%. Banks recently embarked on a mortgage loan war, and with Sibor-linked home loan package rates likely to head south, it could be a good time to refinance mortgage loans. But there is also the possibility that savings and fixed deposit rates could slump as interest rates go down.
- The Straits Times, H22
S’pore housing sector quiet on US sub-prime concerns
DBS Group research rated the local residential market as neutral as developers and buyers wait on the sidelines due to US subprime uncertainty. DBS said that, while the waiting game may last for another quarter, they maintain their neutral stance because overall Singapore economy fundamentals remain healthy in the medium term.
- The Straits Times, H19
Kuwaiti firm still in talks over mega deal
Kuwait Finance House (KFH) is still in talks over the purchase of Guocoland’s 97 units of Goodwood Residence. The option to purchase lapsed on March 10. The parties were in talk “with a grant of fresh option”. KFH said it was upbeat about Singapore, given the Republic’s status as a financial hub, the integrated resorts, and the introduction of events such as Formula One. It added that the current cautious sentiment will abate in due time and Singapore will remain an investment destination for international real estate investors.
- The Straits Times, H21
Business confidence takes a dive
Business confidence in Singapore has slumped to its lowest level since end-2004 according to the latest business climate survey by The Business Times (BT) and SIM University (UniSIM). The survey showed that the business prospects net balance – the difference between the percentage of optimistic and pessimistic companies – fell to 20 per cent from 39 per cent in the third quarter last year. The overall poor sentiment was partly balanced by healthy orders and new business numbers. Among sectors, financial and business services were the star performer for the quarter. Firms in the construction sector were the most confident of business prospects for the next 6 months.
- The Business Times, P1
K-Reit feeling effects of financial crunch
K-Reit Asia is finding it tough to raise up to S$700 million in a rights issue, in part to repay some of the S$942 million bridging loan it took from Keppel Corp when it purchased one third of One Raffles Quay last year. Keppel Corp and sponsor Keppel Land who together own 72.7 per cent of K-Reit have both given irrevocable undertakings to take up their respective allocations of the rights units, also making applications for excess rights units that are not subscribed which will underwrite the fundraising exercise. If the minority shareholders choose not to take up their rights units, KepCorp and KepLand are ready to step in though it would mean that K-Reit could suffer from poor liquidity and low trading volumes in the future.
- The Business Times, P5
Singapore draws $3b of manufacturing investments
In the first few months of 2008, Singapore has already attracted more than S$3 billion of manufacturing investments. These include Oerlikon Solar, Nestle Oil, Pfizer, Ubisoft, SAESL, Rolls-Royce, ST, Nelco, Qiagen, Lanxess, Oce, Norsun, and P&G. The investments are capital, knowledge and innovation-intensive, all playing to Singapore’s strengths and reflecting the country’s growing competitive advantage. In total, the investments will create 1,500 new skilled or specialist jobs. Singapore’s excellent infrastructure and logistics, the availability of talent and skills such as precision engineering, and the strength of industry clusters, have been critical in attracting the new investments. EDB is mounting a new initiative called ‘Future Singapore’ to build activity within selected business themes where Singapore wants good solutions. These themes include urban solutions, wellness, ageing, and healthcare and lifestyle products.
- The Business Times, P2