DAILY MARKET UPDATES 3rd September 2008

Property buyers defy Hungry Ghost taboo at auction market
The highest sale value for auctions so far this year was registered in August – during the Hungry Ghost Festival. According to Colliers, 12 properties and sites out of 66 put up for auction were sold, fetching $22.75 million. This surpassed the next-highest auction sale value of $11.35 million in June this year and the $9.56 million during the Hungry Ghost Festival last year. It confirms that buyers will defy traditional taboos and will commit to a purchase so long as the price and location - among other factors - are right, said Colliers. 61% or $13.81 million came from the sale of four residential in-fill sites at a Singapore Land Authority auction. From January to August this year, properties sold at auctions totalled $70.79 million. In the same period last year, total sale value was more than four times higher at $329.18 million. Sales are taking longer to materialise in the auction market, said Knight Frank. Residential property sales in the auction market have been slow and some potential buyers may be waiting for more re-possessed property to come along, which may happen beginning next year as new developments receive their TOPs, said DTZ. Commercial and industrial properties sold at auctions during August this year fetched more value than residential properties. During market downturns, investors tend to shift their focus to non-residential properties, said Colliers.
- The Business Times, P10
Asians want to bet more on property
Mass affluent and high net worth individuals in Singapore would like to invest more into property, a survey by Barclays Wealth found. Those surveyed also indicate that in a time of increased economic volatility they would like to raise their allocations into cash, and take on more risk. The survey, done together with the Economic Intelligence, was conducted between March and April this year. Sentiment here on property, however, has dampened this year. Roughly 2,300 investors were polled, with investable assets of between £500,000 and over £30 million. On property, 57% of those in China indicated they want to raise allocations, compared to 48% in India and 45% of Singaporeans. Barclays Wealth head of behavioural finance says a drop in property prices may not dampen desire by very much. Data seems to suggest that Asian investors treat volatility opportunistically, rather than cautiously. This may be because investors see the current downturn as a dip in an upward trend for Asia and the emerging markets. Another factor that may favour risk taking is that many in Asia are entrepreneurial, first or second generation wealth owners.
- The Business Times, P38
S'poreans more open to risk-taking: Survey
Wealthy Singaporeans are more likely to brave volatile stock markets and invest in riskier assets compared with investors in the West, according to a survey conducted by Barclays Wealth and the Economist Intelligence Unit (EIU). 39% of Singaporean respondents are likely to raise the level of risk in their portfolios. This compared with 29% in Britain, 36% in the United States and 34% in Hong Kong. But high net worth Singaporeans are still not as willing to take risks like people in emerging markets such as China and India, where 4 in 10 are opportunistic in the current environment.
- The Straits Times, B25
Singapore ranked top global city for meetings
Singapore was ranked the world's top international meeting city in 2007 by the Union of International Associations (UIA), climbing from third spot in the 2006 rankings. Singapore was also ranked Asia's top city for meetings for the 25th consecutive year and Asia's top country for meetings. In 2007, business travel and MICE visitors accounted for more than $5 billion or 40% of total tourism receipts. The Senior Minister of State for Trade and Industry cautioned that Singapore's business travel and MICE industry would face some short-term challenges due to the uncertain global economy and financial markets. But one initiative supporting the growth of the industry is the upgrading of the facilities at the Singapore Expo.
- The Straits Times, P10
Lotus India aims to triple assets in two years
Lotus India Asset Management, part owned by Singapore sovereign wealth fund Temasek Holdings, plans to triple its assets to US$6 billion in two years. Lotus India will offer new funds, including those investing in real estate. 8% of the 7.35 trillion rupees (S$237.14 billion) in Indian household savings were invested in mutual funds, according to the Reserve Bank of India. India's economic growth slowed to 7.9% in the three months to June 30 from a year earlier, and from 8.8% in the previous quarter. Inflation has almost tripled this year to 12.4%.
- The Business Times, P14
Japan to raise 100b yen from SWFs
Japan plans to raise as much as 100 billion yen (S$1.3 billion) from sovereign wealth funds (SWFs) in oil-producing nations to boost foreign investment. Japan plans to draw investments to the nation's 'leading technologies' such as health care, alternative energy, education, and construction of railways and highways.
- The Business Times, P15
Brown unveils housing market support plan
British Prime Minister Gordon Brown unveiled plans to boost the country's slumping housing market. House prices in Britain are falling and home repossession orders in England and Wales have risen to their highest level since the early 1990s. The government said the housing package would help families struggling with mortgage payments avoid losing their homes and bring forward funding for new social housing from existing budgets. The government and property developers also plan to offer five-year interest-free loans for some first-time buyers. A government source said those measures would cost about £1 billion (S$2.6 billion).
- The Business Times, P11
Chip Eng Seng wins third HDB job this year
Construction and property group Chip Eng Seng won a $156 million design and build contract for Housing and Development Board flats at Punggol West - its third HDB contract this year. The contract involves the design and construction of residential buildings with parking and community facilities. Preparation, design and obtaining approvals will take 7 months. Construction phase is expected to take 30 months. Chip Eng Seng is undertaking two other HDB projects - one at Sembawang and the other called Pinnacle@Duxton.
- The Business Times, P9
China economy sound but faces risks: FX chief
China's economy is in good shape and the objectives of steady growth, improved economic structure and increased efficiency have largely been achieved, said the head of China's State Administration of Foreign Exchange. But uncertainties of international and domestic environments add risk to economic and financial development in China. The Consumer Price Index has eased for three months in a row to an annual increase of 6.3% in July. The National Bureau of Statistics said that China's consumer inflation is set to ease further in coming months.
- The Business Times, P13
Chinese firms' profit growth slumps in H1
Profit growth slumped at China's publicly traded companies in the first half after raw material costs rose and government measures to tame inflation curbed economic expansion. Net income at 863 companies listed in Shanghai and 488 on the Shenzhen bourse rose on average by 16% in the H1 of 2008. That compares with earnings growth of 69% for Shanghai and 99% for Shenzhen in the first half of 2007. First-half net income grew 47% for the 268 companies that are listed on the Shenzhen exchange's board for small and medium-size enterprises.
- The Business Times, P13

­ ST Index change 2,758.94 (+45.15)
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