DAILY MARKET UPDATES 18th October 2008

PM: Govt R&D on track
Prime Minister Lee Hsien Loong said that Singapore had gone into recession and the country could expect slower growth next year. Mr Lee, however, noted that the government's R&D programme, which takes a longer term perspective, will proceed. He said that the government has made major investments in R&D to foster Singapore's economic growth and long-term competitiveness. Last year, 2.6 per cent of GDP (gross domestic product) was spent on R&D expenditure, putting Singapore on track to achieving the target of 3 per cent by 2010.
-The Business Times, P5
(also see The Straits Times, B1, “R&D spending reaches record high”)
Over 2,000 homes for Q4 launch?
Developers, looking to clear their stockpiles of unsold homes before the economy takes a turn for the worse, could launch more mid-range and high-end projects before the end of the year. For projects that have already been launched, developers have already started to cut prices. Data by CBRE shows that some 34 properties with a total of 2,012 units may be launched before 2008 draws to a close. Of these, some 10 projects with a total of 1,104 units are in the core central region (CCR), while another 13 projects with some 718 units are in the rest of central region (RCR). Some developers are accepting lower prices. Far East Organization sold eight units in Floridian in September. But the sales came as the median transacted prices fell 16.8 per cent from $1,735 psf in January to $1,443 psf in September. Some units at Madison Residences along Bukit Timah Road were sold at median prices of $1,801 psf - 10 per cent lower than a year ago. Viva in Thomson Road and Park Infinia in Wee Nam Road achieved $1,555 psf and $1,501 psf - about 5 per cent less than comparable projects early this year, CBRE noted. The increase in new launches and weak take-up rate in September saw the number of launched but unsold properties increase by 10.1 per cent month-on-month to 3,903 units. The mass market is likely to get support from HDB upgraders since the HDB resale market is strong. One potential source of buyers is those with gains from collective sales who have yet to find suitable homes, said Colliers.
- The Business Times, P36 (attached - "18 Oct - Likely launches in Q408")
Sept exports' 5.7% fall outperforms expectations
In a fifth straight month of decline, non-oil domestic exports (NODX), the primary barometer of export performance, fell 5.7 per cent in September amid a broad-based fall in overseas shipments. The market consensus was looking at a near-10 per cent fall, following August's 13.9 per cent plunge. But NODX have now fallen 4.5 per cent for the year to September - and look set to bust the official forecast of a 2 to 4 per cent contraction for 2008.
-The Business Times, P5
(also see The Straits Times, C16, “S’pore exports fall for 5th straight month”)
Dicing with a downturn
Singapore's two integrated resorts (IRs) were primed to bring in $2.7 billion each - 0.8 per cent in all - as value-add contribution to Singapore's gross domestic product. Between them, they were expected to add 50,000 jobs to the economy by 2015. Resorts World is sticking to its forecast of 15 million visits in the first year. Marina Bay Sands, too, is sticking to its forecast that it will turn a profit the minute it opens. That, however, may be easier said than done. The Singapore Tourism Board itself is not confident of achieving this year's target of 10.8 million visitors. Analysts have cut back their projections on how much the IRs here will contribute to GDP, to between 0.3 per cent and 0.5 per cent during 2010-2015.
- The Business Times, P1
Asian banks: Sound but weak links exist
While banks around the region look relatively strong compared to the United States and Europe, weak links still exist in markets such as South Korea and Vietnam, say analysts. Having cleaned up their balance sheets after the Asian financial crisis, most Asian banks are entering the current credit crisis with relatively strong capital bases to weather the turbulence. Singapore banks are required by regulators to maintain a minimum statutory liquidity ratio at about 17 per cent. DBS Bank, United Overseas Bank and OCBC are viewed as safe - thanks to their 'strong diversified funding base' and implicit Government support, say analysts.
- The Straits Times, A18
STI hits lowest level in 4 years
The market swung by 113 points before closing below 1,900 and a third straight day in the red. The deteriorating sentiment eventually left the STI off 72.69 points, or 3.73 per cent, at 1,878.51 - its lowest in about four years. The benchmark is down 3.58 per cent for the week. Among the blue chips, CapitaLand was the single developer to advance, closing five cents, or 1.79 per cent, higher at $2.85. Its boost came after announcing that apartment sales in Bahrain and Abu Dhabi had reached $1 billion since June.
- The Straits Times, C21
China well-placed to ride out the storm
China's leaders believe the Chinese economic system can weather the storm. They have mapped out a strategy involving flexible macro-economic policies, boosting domestic demand and keeping the financial sector and capital market stable. The country's exposure to the ongoing crisis is limited, given the closed nature of its financial sector. China's prudent macro-economic management has ensured that the economy is healthy and can withstand an onslaught. With domestic savings of 15 trillion yuan (S$3.3 trillion), and foreign reserves of US$1.8 trillion, China has no liquidity problem.
- The Straits Times, A2
Seoul moving to calm markets
Yesterday, the won staged a partial comeback to close at 1,310 won to the US dollar, following its largest daily plunge in 11 years. The won, which has fallen by about 30 per cent against the greenback this year, is Asia's worst performer. The plunge is being caused by Seoul's widening current account deficit due to the rising costs and overseas debt. Another reason is the exit of foreign investors from the stock market, which has caused Korean financial institutions to suffer a US dollar shortage. The Finance Ministry, together with the central bank and the financial regulatory agency, are due to announce measures aimed at dealing with market turbulence.
- The Straits Times, A17
Newly profligate Indians cut back on spending
The Indian stock market has plummeted. Property prices have begun to drop, as interest rates rise and developers face an acute capital crunch. Indian consumers are buying fewer cars, the ultimate symbol of success for many. They are even becoming cautious about buying gold in the days leading up to the gift-giving season of Diwali.
- The Business Times, P20
US housing starts dive 6.3% to new low
Construction starts on United States homes fell to a new 17½-year low last month as builders scaled back amid a worsening housing slump. The Commerce Department reported that starts on new homes fell 6.3 per cent to a seasonally adjusted annual rate of 817,000 units, their slowest pace since January 1991. Last month, new applications for building permits fell 8.3 per cent to an annual rate of 786,000. The rate of new permits last month was 38.4 per cent below that of September 2007, while total housing starts for the month showed a 31.1 per cent year-on-year drop.
- The Straits Times, C19
GuocoLand in the red over forex paper losses
GuocoLand Ltd has reported a net loss of $2.8 million for the first quarter ended Sept 30, compared with a net profit of $27.7 million a year ago. It attributed this mainly to unrealised mark-to-market foreign exchange loss of $19.2 million arising from the revaluation of US$300 million in bank loans as the US dollar appreciated against the Singapore dollar. GuocoLand launched three developments in Singapore - Le Crescendo, The Quartz and The View @ Meyer. As at Oct 16, it said that it had achieved sales of 93 per cent for Le Crescendo, 91 per cent for The View @ Meyer and 68 per cent for The Quartz. In addition, Goodwood Residence is 17 per cent sold.
- The Business Times, P11
City View at Boon Keng
- 99-year leasehold upon TOP
- New showflat
- Sales subject to HDB eligibility conditions
- Public housing development with 714 units under HDB “Design, Build and Sell” scheme
- Built in kitchen, wardrobes, air-conditioning system
- Eligible applicants can enjoy perks like CPF housing grants, no resale levy for 2nd time homebuyers, deferred payment scheme
- Available units: 4-BR ($532,000-$571,900), 5-BR ($539,200-$671,000)
- Option fee of 5% of purchase price payable by cash/cheque upon booking
- Expected TOP: 5 June 2011
- Developer: Hoi Hup Sunway Development
- Marketing agent: HSR
- The Straits Times, A28, advertisement
Livia
- “With land costing easily between $250 & $350psf coupled with high construction costs, developers’ break-event cost is at least $700psf. Livia’s average price of $650psf is definitely a steal.” – Jack Chua, ERA President & Peter Ow, Knight Frank Executive Director.
- 99-years leasehold condo (from 7 Jan 2008)
- Located just 8 minutes from Pasir Ris MRT
- Action Zone: ‘Xtreme Swing’, ‘Rocky Climb’, basketball half-court
- Located just off Pasir Ris Drive 1
- Surrounded by prestigious schools such as Singapore’s forth upcoming university at Upper Changi Road East and upcoming United World College
- 3-, 4-BR apartments and penthouses from $628 psf ($797,000)
- Expected TOP: 31 Dec 2011
- Developer: Hong Realty
- Marketing agents: ERA, Knight Frank
- The Straits Times, B5 - advertisement
Sandy Island
- 18 villas designed by celebrated Italian architect, Claudio Silvestrin with multi-award winning Australian landscape designer, Jamie Durie
- Southern precinct of Sentosa Cove
- Private berth
- 99-year leasehold from 13 June 2007
- Expected TOP: 28 Feb 2012
- Average sizes: 7,500 to 9,200 sq ft
- 3 villas sold - highest price at $2,100 psf
- Prices from $13.9 million
- Developer: YTL
- Marketing agent: Savills
- The Straits Times, C5 - advertisement