DAILY MARKET UPDATES 17th November 2008

January Budget to arrest economic slide
The government is advancing the 2009 Budget by one month to January. Advancing the Budget would enable the government to implement its counter-measures against the crisis as quickly as possible. The proposed January 2009 Budget will include measures to support growth and jobs, strengthen business competitiveness and stimulate domestic demand. The government will enhance government financing schemes to ensure small and medium-sized businesses’ continued access to credit. An announcement on this is expected this week. More details of a scheme to help retrenched workers reskill for new jobs - Skills Programme for Upgrading and Resilience - will also be announced this week. PM Lee said that Singapore is still in a strong position to weather the storm. One piece of good news was that inflation has moderated.
- The Business Times, P1
(also see The Straits Times, A1 “Govt help for workers, companies 'this week'”)
Credit Suisse's mega IT hub rises in S'pore
Undeterred by the global financial crisis, Credit Suisse is driving ahead with plans to open its biggest Asia Pacific data centre in Singapore next May. The 40,000 square foot Serangoon facility will also rank as one of the company's largest in the world, and is a 'significant milestone in Credit Suisse's IT strategy. 'This facility is further evidence of Credit Suisse's endorsement of Singapore as a key IT hub for the region,' said Credit Suisse. The building is due for completion next month and be ready for operation in May 2009. The capital investment on this project, which will be named the Credit Suisse APAC Regional Data Centre, is in the region of 'tens of millions of dollars'.
- The Business Times, P1
Correction and clarification
There were some errors in our report, River Valley condo Luma relaunches with prices halved (BT, Nov 14). The condominium is located at River Valley Grove and not St Thomas Walk. The number of units sold earlier was not 10, but six. The developer, Novelty Group, purchased the site for around $27 million ($450 psf ppr) and not $76 million, as reported. This brings down its breakeven price to a fairly low level, making it possible for the developer to offer some discounts if it decides to do so, while still keeping the project profitable. Other projects in the area have also been strategically lowering their prices. In that sense, the lower prices could simply be a reflection of weaker market conditions and not of the developer.
- The Business Times, P2
Getting 3G network in MRT tunnels
Commuters in underground MRT trains will soon be able to enjoy smoother chats and faster surfing speeds with the telcos upgrading their underground mobile networks to support 3G. The high-speed third-generation (3G) cellular networks will be available at all the 16 train stations on the North-East Line (NEL). The NEL project, which costs somewhere in the region of $4 million, is slated to finish by next month. Similar upgrading work has also started in SMRT train tunnels. In Singapore, 3G networks already cover over 99 per cent of the island.
- The Straits Times, A7
Tax environment too complex for many firms
A survey shows that Singaporean corporates are beginning to feel the heat from an increasingly complex tax environment and their tax departments are coping with inadequate resources for tax compliance. 78 per cent of organisations surveyed in the latest Singapore Tax Survey 2008 agree that tax matters should be visible at the board level. Conducted by KPMG Tax Services, the survey also shows that 62 per cent of all respondents agree that a clear and well-documented tax policy is important to their organisation. 69 per cent of organisations surveyed expressed moderate to great concern with the increasing volume and complexity of GST issues.
- The Business Times, P10
Investments to be speeded up in China
Chinese cities and provinces have said they would speed up investment plans to support the package announced on Nov 9 to counter the global downturn and is focused on infrastructure building. Much of the spending on the stimulus package, valued by the government at 4 trillion yuan through 2010, is expected to come from state-owned companies. Shanghai would accelerate urban infrastructure construction amounting to 500 billion yuan through 2010, while Beijing would spend 90 billion yuan to complete the construction of three subway lines in the next two years.
- The Straits Times, A17
Asia set for more wild swings
The Dow Jones Industrial Average's 3.82 per cent plunge last Friday will mean more downside for Asian bourses, as United States stocks sank nearly 5 per cent for the week. Markets experts in the US are beginning to talk more about the stock market finally hitting a 'bottom', thus allowing a fresh recovery phase to begin. Last week, the STI closed at 1,759.14 - down 104.35 points, or 5.6 per cent, for the week.
- The Business Times, B16
Short-term US$ deposits getting...
The greenback's rapid climb is taking a big toll on the interest earned by US-denominated deposits here. A check of banks' websites last Friday shows many, including the local lenders, are paying close to nothing for short- term US-denominated time deposits. Last Friday, the Singapore dollar weakened to $1.5148 against the US dollar. Some economists think the Singdollar's sharp fall against the US dollar will continue for at least the next six months.
- The Business Times, P10
Saudi Arabia unveils US$400b development plan
Saudi Arabia, which unveiled plans to launch a US$400 billion development programme, has ample funds for more investment spending over the next few years despite global financial turmoil, a central banker said. Saudi Arabia has cut interest rates, lowered bank reserve requirements, guaranteed bank deposits and poured billions in long-term deposits into the banking system.
- The Business Times, P21
Japan seems to have avoided recession in Q3
Japan probably avoided a recession in the third quarter of this year, but looks set to shrink in 2009, analysts predict. Gross domestic product figures due today are expected to show tepid growth of 0.1 per cent in the three months to September, after a contraction of 0.7 per cent the previous quarter, according to market forecasts. Morgan Stanley analysts expect Japan's economy to contract 1.1 per cent next year, with a recovery unlikely until Q1 2010.
- The Business Times, P17
Home loans harder to get as prices fall
Banks are still dishing out home loans but are much more selective these days, mortgage consultants said. Banks can grant only up to 90 per cent of the purchase price or valuation, whichever is lower. So if the sale price of a property exceeds the valuation - which is determined by an independent professional - the buyer will have to make up the shortfall. Amid poor demand and falling prices, banks are sticking to lower property valuations in anticipation of further price falls. HSBC said that customers can still obtain home loans of up to 90 per cent valuation or purchase price if their financial profile can support it and their application meets the bank's criteria. Investors will find it tougher to get a bigger loan these days. Banks used to offer more than 85 per cent financing for investment properties but all of them, except DBS Bank, no longer do so.
- The Sunday Times, P27 – 16 November
G-20 leaders warm up to big push for recovery
Under pressure to produce a battle plan to retard a global slowdown, the leaders of the world's top 20 economies are coalescing around a handful of ideas. Tighter patrolling of the world's 30 biggest banks and financial institutions, an early warning system to guard against a financial tsunami and more firepower for the International Monetary Fund (IMF) are some of them. A fourth ingredient - large amounts of public spending to revive flaccid economies - seemed to be also finding appreciation. Latest figures showed the euro zone had slipped into a recession. The scenario confirmed expectations that the only source of growth for the world, at least in the first half of next year, will be the developing economies.
- The Sunday Times, P1 – 16 November