DAILY MARKET UPDATES 1st October 2008

Even pricey flats in great demand
The 50-storey Pinnacle@Duxton in Tanjong Pagar has attracted 1,467 applications for the 428 four- and five-roomers on offer - that is about 3.5 hopefuls for each unit. Cheaper homes in less central areas were in even more demand, with applications streaming in at a rate of 20 per new flat in some districts. HDB's balloting exercise attracted 4,463 applications for 992 flats on sale in Ang Mo Kio, Queenstown, Jurong West, Kallang/ Whampoa and Tanjong Pagar. The 111 five-roomers at the Pinnacle start at $545,000 and hit $645,800 for a 49th storey unit - the most expensive new HDB flats - yet there were still 372 applicants. Demand for those flats paled in comparison with the 762 applications for just 39 four-room flats in Kallang/Whampoa, priced at between $364,000 and $435,000. Five-room flats in Jurong were about 11 times oversubscribed - 335 applications for the 30 flats.
- The Straits Times, B3, 30th September
Asset growth of rich to slow down
The financial crisis will dent asset growth among the Asia-Pacific region's well-heeled this year and next, but their wealth will start expanding again and hit US$13.9 trillion (S$19.9 trillion) by 2012, predicted Merrill Lynch and Capgemini. Singaporeans are third richest in Asia with an average net worth of US$4.9 million. The report found that Singaporeans put a third of their portfolios last year in equities and a third in cash and fixed income. One quarter went to real estate with the rest in alternative investments like structured products, hedge funds and currency. In the longer term, the region's wealth will continue to expand at 7.9 per cent annually - higher than the 7.7 per cent global rate. Singapore's millionaires club last year grew by about 15.3 per cent to 77,000. This is 1.7 per cent of the population and puts Singapore joint seventh globally in terms of growth in numbers of such wealthy individuals. The total wealth of these well-heeled Singapore residents grew by 18.4 per cent to US$380 billion last year. The number of emerging high net worth individuals - they have US$750,000 to US$1 million in investible assets - in Singapore grew 15 per cent to 24,000 last year. Their combined wealth was US$20 billion. The ultra rich segment - with investible assets of at least US$30 million - rose 17 per cent to 1,000 with total wealth of US$159 billion. Across Asia-Pacific, the number of ultra-rich individuals jumped 16.4 per cent to 20,400 last year.
- The Straits Times, B24
Ubi plot gets $85 ppr bid
URA has received a top bid of $26.3 million from Sim Lian Land for an industrial site at Ubi Avenue 4. This works out to about $85 psf ppr. CBRE said Sim Lian's bid is only marginally lower than the price paid for a 60-year leasehold site at Ubi Avenue 4/Ubi Road 2 which Sim Lian-linked 3 Link Development paid $89 psf ppr for that site in April 2008. Sim Lian said that a seven or eight-storey flatted factory will be built on the site at Ubi Avenue 4/Ubi Road 2. Breakeven cost for a similar project at the subject site is expected to be about $300 psf.
-The Business Times, P7
Hope flickers as US seeks to revive bailout
Stocks worldwide plunged yesterday and then clawed their way back after US lawmakers stunned investors by rejecting a US$700 billion rescue plan to save the financial sector. If the rescue plan fails, it could accelerate the downward spiral in global financial markets, said Citigroup. If so, Singapore would likely suffer a more prolonged and severe slump in exports than expected, as well as damage to domestic demand and the local property sector. The Straits Times Index ended just 0.1 per cent down after falling 5.1 per cent earlier. The Singapore interbank offered rate or Sibor for overnight US dollar loans more than doubled to 6.25 per cent from 2.67 per cent on Monday - the biggest one-day jump on record.
-The Business Times, P1
Money market rates fall on cash injection
Singapore’s money market rates fell yesterday after the central bank injected funds to ease credit strains caused by the global financial turmoil. One-month interbank market rates fell to 1.85per cent yesterday from 2.06per cent on Monday, and retreated from a nine-month high at 2.275per cent hit last Friday. Singapore's overnight rates fell to 0.875per cent yesterday from 2.125per cent on Monday. Singapore's foreign exchange reserves fell by US$4.86billion (S$7 billion) in August to US$170.1billion. The Singdollar fell to 1.4345 against the greenback yesterday, down some 6per cent from its record high of 1.3453 hit on July15.
-The Straits Times, B21
4 burning questions
It is unlikely for banks here to fail as the Monetary Authority of Singapore requires them to comply with requirements on capital adequacy, asset maintenance, liquidity and limits on credit and investment exposures. Having cash is the safest, said dollarDex. That means putting it into fixed deposits or buying into Singapore government bonds. Loan growth has remained quite robust with double-digit growth, but banks are now going to be more cautious with who they will lend to, said DBS. The one-month Sibor hit 2.275 per cent last Friday but fell to 1.85 per cent yesterday. OCBC said with the recent increase in short-term market rates, customers who have taken up loans that are tied to these rates are likely to be impacted by higher loan repayments. For new homeowners, United Overseas Bank advised them to opt for fixed-rate packages when taking out loans.
-The Straits Times, A8
China may ease lending curbs instead of cutting rates
China may ease limits on mortgages and business loans instead of lowering interest rates, as a global slowdown threatens to pull economic growth below 9 per cent, according to an adviser at People's Bank of China. China cut borrowing costs for the first time in six years on Sept 15 and lowered the amount of reserves that smaller banks must set aside. The central bank reduced the one-year lending rate to 7.20 per cent from 7.47 per cent, and lowered the reserve-requirement ratio for smaller banks to 16.5 per cent from 17.5 per cent.
- The Business Times, P10
Rupee seen hitting 5-year low as trade deficit rises
India's rupee may continue Monday's drop to a five-year low as the trade deficit swells and overseas investors dump local shares. The rupee touched 47.115 per US dollar on Monday, the lowest level since June 3, 2003. Imports exceeded exports by US$10.8 billion in July, the most ever. Overseas investors sold US$9.2 billion more Indian shares than they bought this year.
- The Business Times, P10
Rates for overnight dollar loans soar
The cost of borrowing overnight dollars on global money markets soared yesterday despite central banks pumping billions into the banking system. The London interbank offered rate (Libor) for overnight dollars jumped by a record 430 basis points to 6.87 per cent, the highest in at least 71/2 years. The Libor interbank cost of borrowing dollars for three months was almost a fifth of a point higher at 4.05 per cent yesterday. The central banks of Japan, Australia, Britain and the euro zone injected liquidity into their banking systems yesterday to help banks meet funding obligations.
- The Business Times, P3
Japan's jobless rate rises, industrial output plunges
Tokyo's stock market slumped to a three-year low after US lawmakers voted to reject a US$700 billion bailout for Wall Street. Japan's industrial output fell 3.5 per cent in August, the sharpest fall since January 2001. The seasonally adjusted jobless rate rose to 4.2 per cent in August, its highest since June 2006. Overall household spending fell 4.0 per cent in August from a year earlier. Data showed that Japan's housing starts rose a more-than-expected 53.6 per cent in August from a year earlier. However, the rise was a reaction to plunges in the latter half of last year following the introduction of tighter building rules.
- The Business Times, P8

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