DAILY MARKET UPDATES 08th October 2008

Tuas Power fires up green drive for new buildings
Tuas Power has embarked on a green initiative that aims to help new building owners achieve higher environmental standards through a service, called 'Green Consultancy'. Tuas Power will foot up to 80 per cent of the consultancy costs in the form of rebates in electricity bills. Tuas Power's green-consultancy arm helped their first customer; Tokio Marine, redevelop their 18-storey headquarters on McCallum St. The building has been awarded a Gold-plus rating from the BCA. The firm expects energy savings of 830,000 kwh and 5,400 cu m of water a year for its 150,000-sq ft premises - an annual savings of $170,000. It will also enjoy energy monitoring and management services from Tuas Power's appointed energy services company, G-Energy Global, to ensure the building's performance is up to scratch.
- The Straits Times, B23
Kallang Pudding site gets one bid
Bidding closed yesterday with a single $10.8 million bid from Orion-Four Development. Based on the site area of 61,819 square feet and a plot ratio of 2.5, the bid translates to a unit land price $69.88 per sq ft per plot ratio (psf ppr) - the same as a committed bid received by URA in August. Dominic Peters, director of industrial services at Savills Singapore, said he is surprised that just one bid came, especially as the site seems well located. He said, the bid; if awarded, will be a unit land price of $69.88 psf ppr, about 20 per cent lower than the $85 psf ppr paid for an industrial site in Ubi Avenue 4 this month by Sim Lian Land. 'There could be some concern that there may be an over-supply of industrial space in that vicinity.', he added.
- The Business Times, P11
Bigger heart centre in the works
The National Heart Centre, is about to get a new $165 million home by 2012. Tenders have been called for a building three times its current size, a stone's throw away from its present premises in Outram. Like all newer hospitals, the building has to be energy-efficient, given the rising cost of electricity. The ministry had put several planned projects - amounting to $2 billion over the next eight years - on hold because of the construction crunch.
- The Straits Times, B4
(See attached, “New Heart Centre”)
Legends Fort Canning to undergo $70m revamp
The Legends Fort Canning Park will get a luxury boutique hotel and a new members' block as part of a $70 million revamp. The hotel will have 82 rooms and suites on the second and third floors of the building. The ground floor will house new food and beverage outlets managed by the GGR Garibaldi Group of restaurants. Italian, Japanese and modern Asian restaurants are in the plans. The hotel will cater not only to business and leisure travellers, but also to club members at preferential rates. 'We are comfortable that we can achieve a 70-80 per cent occupancy rate,' said club CEO Mr Oh. Club members can also look forward to a new three-storey glass building with a gym and spa and swimming pools. Renovation starts on Oct 15 and the club will reopen on April 1 next year.
- The Business Times, P11
Prime non-landed home prices fall 4.2% in Q3
Prime freehold non-landed resale residential units saw a 4.2 per cent quarter-on-quarter drop in prices. Outside the prime districts, freehold non-landed resale residential units reflected an increase of 1.3 per cent. DTZ highlighted that landed housing was the only segment that held firm since prices stabilised in Q2 2008, due to demand from owner occupiers and reduced supply. The URA flash estimates for Q3 2008 reflected smaller declines. Prices of non-landed private housing in the Core Central and Rest of Central regions slid 2 per cent and 2.1 per cent respectively. Those in the Outside Central Region increased 0.1 per cent. DTZ pointed out: 'Like in 1998 and 2002, there will be a higher proportion of buyers with HDB addresses as the price gap between HDB resale flats and private residential properties narrows.' Launches also fell in the private residential market, said DTZ. New launches in Q3 2008 generally involved small boutique projects and developers sold only 320 units in August, about a third of the 901 in July.
- The Business Times, P11
Aussie rate cut gives STI needed boost
Expectations were met first up yesterday morning, when the index dipped 39 points to 2,128.96 as soon as trading started, following the footsteps of the Japanese market, which sank 556 points to 9,916.21 in the first half-hour of trade. The markets later reversed their downward slide on the stunning 100-basis-point interest rate cut by Australia's central bank - its largest since 1992. It all helped blue chips, of which 17 in the STI ended in positive territory.
- The Straits Times, B17
Slowdown will affect earnings in 2010: Tat Hong
Crane rental firm Tat Hong said turmoil in the global economy will hurt earnings in 2010, but that existing leasing agreements will help it meet this fiscal year's profit forecast. The firm, which rents cranes in South-east Asia and Australia, will achieve its three-year target of growing net profit by an average of 30 per cent a year to hit $96 million in the financial year ending March 2009, he said. Mr Ng said demand for cranes will continue to be strong in the resources and infrastructure sectors, picking up the slack from slowing residential construction. In South-east Asia, Mr Ng said that resources projects in Indonesia will also boost demand for building equipment.
- The Business Times, P10
Replace G-7, says World Bank chief
The Group of Seven rich nations is no longer effective and should be replaced by a steering group that includes emerging economic powers like China, India and Brazil. 'We need a better group for a different time. The new multilateralism, suiting our times, will need to be a flexible network, not a fixed nor unitary system. It needs to maximise the strengths of interconnecting and overlapping actors and institutions, public and private.', said Mr Zoellick, World Bank president. He added that the steering group should include finance ministers from China, India, Brazil, South Africa, Saudi Arabia and Russia. It should not, however, be limited to any set number of countries but should be flexible and evolve with the times. For the reforms, he envisions to replace the G-7, the group would bring together over 70 per cent of the world's gross domestic product; 56 per cent of the world population; 62 per cent of global energy production; the world's major carbon emitters; big donor countries; and the main players in global capital, commodity, and exchange rate markets.
- The Business Times, P12
Our economy is steady: Japan
The Nikkei stock index fell through the psychologically important 10,000 mark to reach 9,916.21 and rebounded to close at 10,155.90, 50 per cent off its recent peak in July 2007. The plunge followed the sharp fall overnight in New York, where the Dow Jones Industrial Average closed below 10,000. But economic and fiscal policy minister Kaoru Yosano told reporters: 'The Japanese economy is going through global financial turmoil, but it is fundamentally firm and healthy.' The government is trying to enact an extra budget to implement measures to prevent the economy sliding into recession and is likely to enhance those measures, given the deepening global crisis.
- The Straits Times, B19
BOJ holds rates steady; cool on coordinated cuts
The head of Japan's central bank said yesterday that while global financial turmoil is intensifying, each country should manage monetary policy independently, seeming to counter speculation for coordinated rate cuts by major economies. The central bank left its key interest rate unchanged at 0.5 per cent for the 20th straight month, citing a 'sluggish' economy along with high inflation rates. The decision followed news that Australia's central bank cut its official interest rate by a bigger-than-expected one percentage point to 6 per cent, a move that lifted Australian stocks and some other regional markets on hopes that other central banks would follow suit.
- The Business Times, P12
RBS worries dampen Aussie rate-cut cheer
Royal Bank of Scotland (RBS), Deutsche Bank and Barclays saw their shares falling by nearly 40 per cent yesterday. RBS shares sank as low as 90 pence in morning trade. The stock later pulled back to 105 pence. Things begun promisingly with Australia's central bank slashing its interest rate to 6 per cent. Speculation followed that other countries will follow Australia's example with concerted action. According to Bloomberg, two dozen central banks around the world are scheduled to meet this month while markets are also looking anxiously at the meeting of G-7 finance ministers and central bankers on Friday. The Bank of England holds its policy meeting later this week, while European Union finance ministers agreed on one coordinated measure - to raise the minimum guarantee on household bank deposits to 50,000 euros (S$99,850) across the 27-nation EU from 20,000 euros currently.
- The Business Times, P2
(See also, The Straits Times, A4 – “Jittery Traders spooked by RBS Plunge”)
UK banks suffer wild swings on talks with govt
Britain will hold more talks with banks this week over a possible multi-billion pound injection of public funds, industry sources said, as the credit crisis tightened its grip on Europe's main financial centre. The next round of talks will focus on what form of equity the government would get for any injection of taxpayer's money. According to a BBC report, RBS, Lloyds and Barclays estimated that they may need £15 billion pounds; (S$38.5 billion) each to help them get through the crisis. JP Morgan analysts calculated last week that major British banks had a total capital shortfall of £46 billion pounds, using the Basel II capital adequacy standard.
- The Business Times, P4
Jakarta ups rates to slow inflation, lift rupiah
Bank Indonesia governor Boediono and his seven colleagues raised the BI Rate to 9.5 per cent yesterday, from 9.25 per cent. A benchmark rate of 9.5 per cent would be 'adequate' for keeping price gains between 6.5 per cent and 7.5 per cent next year, deputy governor Hartadi Sarwono said. 'The move to increase the rate is consistent with our monetary-policy strategy,' Mr Boediono said. 'The policy to stabilise the rupiah is directed towards avoiding excessive fluctuation.'
- The Business Times, P13

­ ST Index change 2,177.55 (+9.23)
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