DAILY MARKET UPDATES 10th November 2008

Crisis relief with next Budget Businesses and households affected by the economic downturn have been promised special attention from the Government in next year's Budget to help them get through tough times. Another key consideration will be to use the Budget to support economic growth and job creation. Finance Minister Tharman Shanmugaratnam said that because the downturn is unlikely to be short-lived, the Government's Budget initiatives will be aimed at providing help over a few years, rather than providing 'a quick stimulus' to the economy.The Straits Times, A1(See also, The Business Times, P1- “ Tharman to turn spotlight on business in upcoming Budget”)
Home developers may put launches on hold
The market is unlikely to see major residential property launches for the rest of the year. Because buyers are staying away, developers continue to hold back their launches until they see an appropriate time. Demand for new homes slowed this year, with third-quarter sales at just 1,603 units. The bulk of the launches are likely to be in the mass market segment since they are targeted at owner-occupiers and upgraders. It will be supported by the HDB resale market, where prices rose 4.2 per cent in the third quarter. The good news for developers is that construction costs are expected to come down next year. Looking ahead, there is a strong pipeline of residential developments ready for launch, according to data from the URA
The Sunday Times, P28
A chunk of CapitaLand assets may be up for grabsCapitaLand is understood to be looking to sell its portfolio of four industrial properties in Singapore. The assets are said to be worth more than $300 million and comprise Kallang Bahru Complex and the adjoining Kallang Avenue Industrial Centre, Corporation Place in Jurong, and Technopark@Chai Chee. CapitaLand's plan to divest the portfolio reflects its recent strategy of exiting the industrial/logistics arena and focusing on its core strengths in commercial, residential and serviced residences. CapitaLand reported a 25.6 per cent year-on-year drop in third-quarter net earnings to $419.4 million, on weaker home sales. However, the group reported stronger rentals from investment properties and higher fee-based income from Reits and funds under management.
The Business Times, P1
Marina IR will go on: MM LeeThe US$4.5 billion Marina Bay Sands integrated resort project in Singapore will go on, said MM Lee. This comes on the back of growing concerns that the casino project could be in jeopardy after the parent company said last week it was looking at a capital raising. The Marina Bay resort is expected to hire some 10,000 workers before it begins operations next year. The three local banks' exposure to the project is said to be around $2.2 billion.The Business Times, P1
Developers may not green and bear itGreen development in the building space is likely to take a backseat among some organisations given the economic slowdown because the benefits are not tangible in the short-term. This is despite it being the 'most ideal time' to invest in green technology because of the cost efficiency that could come as a result. The Green Mark Scheme by Singapore's Building and Construction Authority (BCA) has gained traction among local developers recently. Major Singapore property players have applied for Green Mark certification for regional projects in Thailand, Vietnam, China and Malaysia. Many property players are also looking to rate their buildings according to the US rating system known as LEED (leadership in energy and environmental design).The Business Times, P9
Bleak prospects for local banks DBS, UOB and OCBC all disappointed in the third quarter, reporting net earnings that were way below market expectations. The banks' weaker earnings can be generally narrowed down to two key factors- non-interest income, which includes commissions and fees on investment, and the huge charges the banks took for loans, debt and other securities. A major drag on banks' outlook is the quality of their loans, there might be more bankruptcies, corporate failures and increasing unemployment. The Straits Times, B22
China weighs in with massive US$586b boostChina announced a US$586 billion stimulus package yesterday in its biggest move to stop the global financial crisis from hitting its economy. Some of the money will come from the private sector. Economic growth slowed to 9 per cent in the 3rd quarter, the lowest level in 5 years and a sharp decline from 2007’s 11.9 per cent. Money will be poured into new railways, roads and airports. Spending on health and education will be increased, as well as on environmental protection and high technology. Credit limits for commercial banks will also be removed to channel more lending to priority projects and rural development. Reform of the value-added tax system will cut taxes by 120 billion yuan for enterprises.The Business Times, P2(Also see, The Straits Times, A1- “China announces $877b package to stimulate its economy”)
BRIC nations plan moves to fight crisisBrazil, Russia, India and China, the so-called BRIC nations, plan coordinated measures to increase trade and capital flows between their economies. The nations’ ministers are meeting amid evidence that the financial crisis pushing the world's biggest industrialised economies into recession is dragging down growth in Asia and Latin America. The IMF is forecasting that Britain, Japan and the Euro region will all contract next year - their first simultaneous recessions since WW II. Calls from the IMF and British PM Gordon Brown for coordinated fiscal stimulus will probably fail to win backing from the group because some countries are concerned about increasing public spending. The Straits Times, A20