DAILY MARKET UPDATES 1st August 2008

Job market turns less rosy
Singaporeans seeking jobs in the months ahead face the prospect of a slowing labour market due to the shrinking pool of new jobs in manufacturing and services sectors. However, the construction sector show that employment increased by 22,100 jobs in the second quarter this year. This is double the 10,900 new construction jobs added in the same quarter last year. New jobs rose by 70,600, which it notes is 'slightly lower' than the 73,200 in the first three months of this year. Analysts see this shift as signalling a possible slowdown in jobs, with employers now more cautious about hiring. Employment rate is 2.3% in June after climbing from 1.7% in December and 2% in March. Though the GMP Group felt that joblessness will be less of an issue in a year or more if Singaporeans can 'change their mindset' when they need to be open to working in service-oriented jobs when the integrated resorts open. The less-rosy job market is linked to Singapore's slowing economy. Latest official figures show it grew at just 1.9% year-on-year in the second quarter. This is well down from the first-quarter expansion of 6.9%.

- The Straits Times, P1




Building boom set to create record number of jobs
Analysts said the number of jobs created this year could hit a record high. CIMB-GK Research foresees the economy creating around 280,000 jobs this year, beating last year's record 236,600. Latest figures from the Manpower Ministry show construction adding 36,600 jobs in the first half of this year, more than double that a year ago. But foreigners took up 3 in 5 construction jobs as locals tend to shun this sector. In manufacturing and service sectors, the figures are not as bright as the employers are cautious about businesss prospects and hiring for the second half of this year. Analysts attribute this to uncertainty about the global economy. Higher inflation also deters them from hiring and adding to labour cost. In a Singapore Manufacturers' Federation survey, 8 in 10 expect business to drop this quarter, and about as many expect no change in employment levels. Their businesses include electronics, and metal and machinery. On services, recruiting firms say hiring in banking and finance has dropped by some 30% this year. Many are set to scale back expansion plans this quarter, a report by recruitment firm Hudson found.

- The Straits Times, H2 (See attached “Jobs created in major sectors”)



Few businesses see outlook in improving
According to survey by the Department of Statistics, 87% of local manufacturers said the outlook for the rest of the year will not improve from the previous quarter, when industrial output contracted 5.6%. The service sector was more optimistic, with 24% expecting an improvement, up 1 percentage point from three months ago. But there were also more pessimists – 22% of respondents, up from 20% previously. Sentiment in the service sector was weakest among real estate firms, where just 10% see conditions improving while 27% fear things will get worse. Three months ago, the industry was much more optimistic with 25% expecting better times and 16% harder times. 28% of chemical manufacturers anticipate their situation to turn south compared with 15% three months ago. Electronics sector showed marginal improvement, from 20% to 14% while the pharmaceutical sector fell to zero from 56%. In the finance sector, more banks foresee conditions improving, a trend also shared with stockbrokers.

- The Straits Times, H34




CapitaLand quarterly profits seen sharply lower
CapitaLand reported sharply lower quarterly profits as home sales slowed. It is expected to post a 64% in full-year to December 2008 earnings to S$1.02 billion from S$2.8 billion last year, according to analysts polled by Reuters Estimates. Its 2007 results had been boosted by US$1.1 billion in one-off revaluation gains. On the other hand, City Developments is expecting to post a 1.8% rise in full-year 2008 earnings to S$738 million, with earnings supported by demand for its mass market residential projects launched earlier this year.

- The Business Times, P6



Developers report drop in revenue
Allgreen Properties posted a 39.1% drop in revenue to $74.1 million for the three months to June 30. Net profit fell 36.5 per cent to $17.2 million. Meanwhile, MCL Land's revenue plunged in the second quarter to US$353,000 (S$482,000), from US$133.5 million last year. But the group's net profit rose 45 per cent in the quarter to US$3.2 million, thanks to a write-back. MCL Land expects the completion of Mera Springs and The Esta in the second half to boost its overall performance.

- The Straits Times, H35 (Also See The Business Times, P7-Allgreen Q2 profit falls 36.5% as revenue slumps)


PropNex takes new measures to raise benchmark for agents
PropNex has unveiled a range of initiatives aimed at improving the quality of its agents. Agents will be properly insured to proficiency tests covering subject like ethics and HDB regulations. PropNex said the new benchmark could result in 500 below-par agents being sacked by the end of the year. The Institute of Estate Agents (IEA) launched a new practising certificate for members last year. The IEA represents about 1,600 agents and aims to act for the entire industry eventually. There is also a three-year-old Singapore Accredited Estate Agencies scheme, which conducts the original Common Examination for House Agents (Ceha). ERA Realty and HSR Property Group say they already have in place high standards for their agents. ERA has about 2,800 agents, all of whom must go through a training regime. It also terminates about 500 inactive agents a year. Neither ERA nor HSR requires agents to have indemnity insurance.

- The Straits Times, H34



PropNex expands into auction, management
PropNex is adding auction and management consultancy services to its repertoire in a bid to diversify its revenue stream. PropNex's auction division will conduct its first auction in September. The firm will focus on private homes and commercial properties. It will also start providing management services. Some properties in PropNex's portfolio include The Ladyhill and 1 Moulmein Rise.

- The Business Times, P12

ST Index change 2,929.65 (+4.15)
SIBOR (3 mths): 1.12500 (S$)
SWAP (3 mths): 1.04108 (S$)