DAILY MARKET UPDATES 09th October 2008

S'pore is 'fifth most competitive economy'
Singapore has climbed two notches to fifth place in the World Economic Forum's latest global competitiveness index. It has the best ranking of all economies in terms of public trust of politicians, wastefulness of government spending, burden of government regulation and transparency of government policymaking. It was also ranked among the top two countries for the efficiency of all of its markets - goods, labour and financial - ensuring proper allocation of these factors to their best use, the survey said. The annual survey, showed that the next most competitive Asian economy - Japan - had dropped to ninth from eighth spot. Hong Kong improved one place to 11th. Economies were assessed according to 12 'pillars' of competitiveness, ranging from infrastructure and macroeconomic stability, to business sophistication and innovation.
- The Straits Times, B20
Office capital values down 2-3% in Q3
OFFICE capital values fell 2-3 per cent quarter on quarter in the third quarter of this year in areas such as Marina Centre and Anson Road/Tanjong Pagar as demand softened, according to a report by DTZ. It also points out that some redevelopment projects in the pipeline, such as International Factors Building, Robinson Tower and Marina House, have been deferred and the space put back in the market for leasing. Average office rents peaked in Q3, with no rental growth during the quarter. Although most landlords are maintaining their asking prices, they are now more flexible with lease packaging, resulting in lower effective rents. Many tenants continue to relocate to cheaper decentralised offices and converted state properties, while those that qualify for hi-tech industrial and business parks are relocating there. As a result, the island-wide average office occupancy rate eased 0.6 of a percentage point quarter on quarter to 96.3 per cent in Q3. On the other hand, demand for industrial space, particularly in business parks, remained healthy. Business park occupancy averaged 92.5 per cent in Q3, up 2 percentage points from Q2.
- The Business Times, P16
Banyan Tree hopeful of villas launch
The villas to be launched at the weekend cost from US$600,000 to US$4 million. People who buy at the launch will get a 3 per cent discount, up from 2 per cent given last year. The company sold 44 Banyan Tree Residences in the first half of this year, compared with seven in 2007. It started marketing the villas in February 2007 and last year sold 120 villas worth a total of $132 million, most of them in the last five months. Prices have appreciated 31-51 per cent this year. The largest groups of buyers are Singaporeans and Hongkongers, and are a mix of lawyers, bankers and business people. Banyan Tree's business is seasonal, with the high season being the first and fourth quarters. One third of villa buyers are hotel guests and another third are referred by existing owners. Since Banyan Tree began advertising it has received more inquiries than usual, about 10-15 a day.
- The Business Times, P10
(See also, The Straits Times, B19 - “Banyan Tree’s Villa Sale Still on”)
Keppel Land, CBRE win Euromoney awards
Euromoney, a publication of international finance, polled its readers - in more than 160 countries - on the leading real estate advisers, developers and investors on a global, regional and individual country basis. Keppel Land won Best Office/Business Developer and Best Mixed-Use Developer in Singapore and Vietnam. It also won Best Retail/Shopping Developer in Vietnam. CB Richard Ellis Singapore won Best Overall Adviser of the Year, Best Agency and Letting, Best Corporate Real Estate Services, Best Property Management, Best Research, Best Transaction Execution and Best Valuation in Singapore.
- The Business Times, P16
NUS 3 places up in world uni rankings
THE National University of Singapore has moved up three notches to 30th place in this year's Times Higher Education - Quacquarelli Symonds World University Rankings. It also kept its spot as the fourth best Asian university in the newly released rankings. Harvard and Yale retained their first and second spots this year, while Cambridge and Oxford, which tied at second place with Yale last year, slipped to third and fourth places respectively.
- The Business Times, P16
(See also, The Straits Times, B6 – “NUS up NTU Down in Varsity rankings”
UniSIM degree proves a career booster: poll
The first such employment survey, conducted by the Nielsen Company from April to June this year via telephone and online questionnaires, polled 1,002 graduates - about a third of the total number that have earned their degree from UniSIM over the past five years. Chief among the findings was that one in two respondents received a pay rise after graduation. Of these, the average rise was about 15 per cent, while nearly one in five had a salary jump of more than 30 per cent. Those who changed jobs saw an average 21 per cent increase.
- The Business Times, P17
STI sinks to new 3-year low after Japan's plunge
STI had been savaged to its lowest close since April 2005. It sank as much as 6.7 per cent during the day as investors rushed for the exit, before ending 143.94 points, or 6.6 per cent, lower at 2,033.61. International Monetary Fund said the world's major banks may need US$675 billion (S$989 billion) in fresh capital over the next several years to recover from the credit crisis. Property plays were not spared the financial carnage either. CapitaLand shed 13 cents to $2.44, City Developments fell 78 cents to $6.70 and Keppel Land was down 31 cents at $1.94.
- The Straits Times, B15
(See also, The Business Times, P12 – “STI Hammered to a 45 month low”)
IMF rules out Great Depression; world economy to grow 3%
The global economy should grow by 3 per cent this year, with continuing expansion in China and other emerging markets offsetting zero or negative growth in advanced countries, IMF economic counsellor Olivier Blanchard said. The 3 per cent growth is 'on the borderline of recession' and things could turn out much worse if coordinated monetary and fiscal actions are not taken by leading economic powers, he added. He described the 50 basis point coordinated interest rate cut announced yesterday by major central banks as a 'step in the right direction', but emphasised that more needs to be done on the monetary front.
- The Business Times, P5
(See also, The Straits Times, A6 - “IMF sees major economic downturn”)
Ascott tapping Bahrain's growing market
Ascott had first ventured into Dubai in the Middle East in April 2006. A year later, it expanded into Bahrain. It operates a 118-unit serviced residence there. In the middle of this year, the company also moved into Doha, Qatar. All three properties in the Middle East are managed for third-party owners. In Bahrain, its serviced residence currently has an occupancy of over 80 per cent. 'Ascott will continue to look for new opportunities to expand our presence in Bahrain as part of our overall growth strategy in the Gulf region,' Mr Chong Kee Hiong says.
- The Business Times, P15
Sembawang finds the going good in UAE and Bahrain
Sembawang has teamed up with GP Zachariades - a prominent local contractor - to win a bid to build 325 high-end luxurious villas in Bahrain. This is part of an upmarket residential community project named Riffa Views, next to a golf club. The development will have 970 villas with access to a golf course, hotel, country club, health club, shopping centre and an international school. Sembawang's project is 'the largest single package in the development' and will cost about 45 million Bahraini dinar (S$175 million) to build.
- The Business Times, P15
No sub-prime mess with Islamic banking
Islamic banking bans speculation and risk-taking, which are at the root of the financial troubles we are now seeing in the US and Europe. Options and futures as well as forward exchange transactions are non-existent in Islamic banks. So are debts in the guise of investment products. Islamic banking is better known for not paying interest. Over the past decades, transactions and liquidity in the Islamic banking system have grown exponentially. Today, Islamic banking handles an estimated US$750 billion worth of assets globally. And this is growing at 20 per cent yearly. Singapore is already gearing up to offer more products and services that adhere to Islamic law, as part of efforts to tap into the industry.
- The Business Times, P15
IB Asia eyes Gulf's financial sector
The Islamic Bank of Asia (IB Asia) is DBS Bank's vehicle into the world of Islamic banking in the Middle East and Asia. DBS, which pumped US$250 million into the joint venture, has a 60 per cent stake in IB Asia. Headquartered in Singapore, IB Asia's chairman is Abdulla Hasan Saif, economic affairs adviser to Bahrain's prime minister. IB Asia opened a representative office in May 2008, boasting more licensed financial institutions than anywhere else in the Gulf. Bahrain will also help IB Asia build momentum in its wealth management business because it is close to the wealth hubs in the Middle East, he says.
- The Business Times, P15
Dubai developers, lenders may merge as growth slows
Dubai property developers and lenders may seek mergers as credit tightens and home price growth slows, said Zahed Chowdhury, head of Middle East research at Deutsche Bank. Deyaar Development PJSC, a state-owned real estate company based in Dubai, may take advantage of falling asset prices to make acquisitions in the region. Amlak Finance PJSC and Tamweel PJSC, the biggest mortgage lenders in the United Arab Emirates (UAE), are in talks that may lead to a merger, according to a statement on Oct 4. Both are based in Dubai, one of seven sheikhdoms that make up the UAE.
- The Business Times, P35
Growth in Dubai house prices slows to 16% in Q2
Dubai house prices rose 16 per cent in the second quarter from the previous three months, as prices neared as much as people are prepared to pay, Colliers CRE plc said. House prices increased an annual 76 per cent in the second quarter. The average price per square foot for all types of Dubai homes was 1,833 dirhams (S$732). Property prices will be flat through 2010 after they quadrupled over the past five years, Colliers said on Oct 5. Dubai apartment prices increased an annual 83 per cent in the second quarter, while villas increased 73 per cent, Colliers said. Townhouses as a sub-category demonstrated the slowest increase with a 38 per cent gain.
- The Business Times, P35
Strategic hub of the Middle East
IE Singapore, has identified some specific projects Singapore companies can explore in Bahrain. Among them: the US$3 billion Durrat Al-Bahrain, the country's largest planned luxury residential, commercial and resort development; the US$3 billion and 45-km long Bahrain-Qatar Friendship Bridge; and the US$2.6 billion North Bahrain New Towns; and the US$1.5 billion Bahrain Bay, a residential and retail development. Bahrain is promoting itself as a high-class tourism and lifestyle destination, Singapore hospitality companies' interest in Bahrain is 'growing fast'. Banyan Tree has set up shop there. Frasers Hospitality will also soon have a presence in the country. Singapore's Raffles City will be making its mark in Bahrain in 2010. Raffles City Bahrain is an integrated development comprising three residential towers, landscaped sky villas, high-end retail, exquisite food & beverage facilities and 5-star serviced residences. '.
- The Business Times, P14
Yen effect batters A$ below Sing $
By Asian close, the Australian dollar traded at a six-year low of 96.17 Singapore cents. The New Zealand dollar also fell 6 per cent in Singapore dollar terms, sliding to 86.76 Singapore cents by yesterday evening - another six-year low. The yen surged strongly as Japanese investors unloaded their overseas investments in a hurry - with Japan's Nikkei stock index falling more than 9 per cent yesterday. This forced the US dollar sharply back below 100 yen for the first time in six months. The Japanese currency jumped more than 2 per cent to finish the day at a three-year high of S$1.4884 per 100 yen. Versus the yen, the Aussie and Kiwi plunged to finish the day more than 12 and 9 per cent weaker respectively.
- The Business Times, P1
UK throws £500b life-line to leading banks
British government has thrown a £500 billion (S$1.3 trillion) life-line to leading UK banks. In tandem with the US and European nations, UK interest rates were slashed by half a percentage point to 4.5 per cent. The government will spend up to £50 billion on buying preference shares in the banks in order to boost their capital. Half is available immediately, while a further £25 billion can be used if necessary. The government will also make £250 billion available to underwrite the banks' medium-term debts in an attempt to prevent a potentially dangerous funding gap in the next few years. Bank of England (BOE) will inject a further £200 billion into the money markets under its Special Liquidity Scheme. This enables distressed banks to swap risky mortgage securities for Treasury bonds.
- The Business Times, P2
(See also, The Straits Times, A6 – “Europe Battles to Prop up Banks”)
Europe's economy shrinks 0.2%
Gross domestic product (GDP) fell 0.2 per cent from the previous quarter, the EU statistics office said. Corporate investment dropped one per cent and household spending declined 0.2 per cent. The decline in company investment was less than the 1.2 per cent drop initially estimated. Construction fell 1.8 per cent, less than the 2.2 per cent estimate. Construction surged 2.6 per cent in the first quarter, when mild weather prompted companies to bring forward building projects. Exports fell 0.2 per cent, also less than estimated, while imports declined by 0.5 per cent, compared with 0.4 per cent reported on Sept 3.
- The Business Times, P19
India ready to pump more cash into markets
India's main BSE share index fell more than 8 per cent at one stage to its lowest in two years, but recouped partly towards the close. Foreign funds have pulled out a net US$9.9 billion from Indian shares this year, after ploughing in a record US$17.4 billion last year. The government has eased rules for foreign borrowings by companies, while the capital market regulator relaxed rules for indirect investments by foreign institutions in stocks.
- The Business Times, P22