DAILY MARKET UPDATES 27th October 2008

Set to roll
Traveling by train will be much faster when a section of the Circle Line opens in the middle of next year, a year earlier than scheduled. Stage 3 of the new line has 5 stations – Marymount, Bishan Interchange, Lorong Chuan, Serangoon Interchange, Bartley station. The other stages are scheduled to start from 2010 onwards. When fully open, the Circle Line will intersect all the MRT lines running into the city. The Circle Line is 33km in total, has 29 stations, 6 interchanges and will be completed in 5 stages.
- The Straits Times, B2
Minibonds case to be handled fairly, says PM
Singaporeans aggrieved by their investment in Lehman Minibonds and DBS High Notes 5 will have their complaints handled 'fairly and properly', Prime Minister Lee Hsien Loong assured. He added that the banks do realise that it is in their interest to resolve the matter quickly and not let it drag on, as they have what they call reputational risk. The Prime Minister stressed the notion of fairness repeatedly and added that instances of mis-selling would be investigated.
- The Straits Times, A3
How MAS works to ensure stability
As a regulator and central bank, the Monetary Authority of Singapore (MAS) has to be both watchdog for the financial industry and watchtower for the larger economy. At a time when the world is swept by a financial and economic crisis of unprecedented scale and speed, it is a role that calls for careful thought and deliberate action. Our foremost priorities are monetary stability, financial soundness and market conduct and the stability of the entire system, said MAS managing director Heng Swee Keat.
- The Sunday Times, P4, 26 October
MAS reviews fair dealing guidelines
The Monetary Authority of Singapore (MAS) is reviewing proposed guidelines on 'fair dealing' in the finance sector, a set of practices that addresses the hot-button issues of mis-selling, proper advice and the alignment of bankers' remuneration structures with customers' best interests. Based on MAS's proposed guidelines, there are five fair dealing outcomes:
§ That consumers have confidence that financial institutions put their interests first;
§ That institutions offer products and services that are suitable for the target customers;
§ Institutions must appoint 'competent' representatives to provide advice;
§ Consumers must receive clear, timely and relevant information;
§ Complaints must be handled promptly and consistently.
- The Business Times, P7
Jurong Lake will be developed sensitively
In realising our vision for Jurong Lake District as a unique lakeside destination for business and leisure, we are working to ensure that any new developments around Jurong Lake will not seriously affect the natural ecosystem and water quality. As part of the Active, Beautiful, Clean Waters (ABC Waters) project for Jurong Lake, PUB is carrying out dredging works to deepen the lake. The dredging works have stirred up sediment and caused the water to turn muddy. This is temporary and we will remain sensitive to the environmental impact of such works. Under the ABC Waters programme, a waterfront promenade, water feature deck and boardwalks will allow people to get closer to water. When completed, the ABC Waters project will not only enhance the aesthetics of Jurong lake, but also allow water-based activities such as kayaking to be conducted in the main water body.
- Tan Nguan Sen, Director, Catchment and Waterways, PUB
- The Straits Times, A20 – ST Forum
Luxury condo prices come off their peaks
Prices for some luxury and high-end projects launched in 2006 and 2007 have come off their peaks by up to about 26 per cent. Data compiled by DTZ shows that at selected high-profile upmarket properties launched in 2006 and 2007, prices started dipping in the third quarter of 2007 and are now between some 4 to 26 per cent off their highs. Knight Frank's data show that prices of luxury apartments in Districts 9, 10 and 11 have fallen by 12-13 per cent since the start of the year. Savills in-house price index, which tracks luxury and 'super-luxury' projects, fell 10 per cent from January to July this year. Official numbers show that residential prices in the upmarket core central region started to fall in the third quarter of 2008, and has to date registered a 2.7 per cent drop. These numbers take into account all property transactions. Despite the price correction, property firms say that most units in high-end projects are still being transacted at prices higher than their launch prices. Savills believes that prices at projects that will soon receive their temporary occupation permits (TOPs) could go even lower as speculators who bought homes under the deferred payment scheme (DPS) could sell as TOP approaches. Knight Frank sees downward pressure (on prices) across the board in the next six to nine months.
- The Business Times, P1
(see attached “27 Oct – Prices for projects launched in 2006 & 2007”)
S'pore SMBs to spend US$4.1m on conferencing solutions
Small and medium-sized businesses (SMBs) in Singapore are set to spend about US$4.1 million on conferencing solutions in Singapore, up 4 per cent over 2007, according to the latest study by Access Markets International (AMI) Partners Inc. This spending is expected to climb to US$4.7 million by 2012, up from US$3.9 million in 2006, giving a compound annual growth rate (CAGR) of 3.4 per cent between 2006 and 2012.
- The Business Times, P27
More red ink likely this week
Market players are bracing themselves for a further sell-down, given the likelihood of a further weakening in corporate earnings and poor economic data from the United States. The local benchmark Straits Times Index (STI) hit a five-year low as it fell 278.23 points, or 14.8 per cent, for the week. Last Friday alone, it plunged 8.3 per cent to end at 1,600.28 points. Weighing on the index were plummeting bank and property counters, which were hit by concerns that demand would slow for loans and property. In the United States, the Dow Jones Industrial Average ended 3.59 per cent down last Friday at 8,378.95 points. There could be some reprieve as governments and central banks continue to take action to lend some calm to the markets.
- The Straits Times, B20
Malaysia's key sectors show signs of slowdown
At numerous condominium projects around the Mont Kiara suburb of Kuala Lumpur, construction workers plod round the clock to complete apartment blocks. Property developers in this popular neighbourhood are worried, though, that sales are starting to slow. Signs of a wider slowdown are already emerging in the Malaysian economy, private economists say. Last week, the central bank kept the benchmark interest rate unchanged at 3.5per cent, but indicated it was ready to act swiftly if called upon. The country's robust manufacturing sector is being hit by weaker export growth, while the softening in commodity prices has crimped incomes and resulted in less consumer spending.
- The Straits Times, A6
Singapore's trade deficit with US persists
Singapore continued to suffer a trade deficit with the United States in both goods and services. But while the trade gap in services narrowed last year, the trade balance in goods has widened. US trade surplus with Singapore in goods in the first eight months of this year exceeded that for the whole of 2007 - US$9.49 billion against US$7.89 billion (not seasonally adjusted), according to the Foreign Trade Division of the US Census Bureau. That puts Singapore among the top 10 countries with the largest trade deficits in goods with the US.
- The Business Times, P8
Some Fortis expats ordered home on gardening leave
A handful of Fortis expatriates in Singapore were suddenly told to pack their bags two weeks ago and leave for Amsterdam, following the nationalisation of the financial services company. For legal and compliance issues, these expats had to go on gardening leave immediately, another explained. They still have valid employment contracts, it's like a repatriation. Fortis Singapore employs about 300 people and none of the local employees have been affected by the break-up.
- The Business Times, P8
Q3 earnings hit, with net profits down 6.3%
One week into the third quarter earnings season, the 25 listed companies that have posted results collectively made $617.2 million in net profit, down 6.3 per cent over the same period last year. All but one recorded profits, although six had lower net income this quarter, compared to a year ago. Two reversed losses, while 16 announced higher profits. Trusts and Reits reported largely positive results, reinforcing their reputation as defensive plays.
- The Business Times, P5
Singapore has a lot to offer China: PM Lee
So long as Singapore continues to have a model that is successful, the country would continue to remain relevant to other countries, including powerhouses like China, said PM Lee. What Singapore could offer were interesting models or schemes that China could examine and implement for their citizens.
- The Business Times, P3
Surbana's Xi'an township to go on sale soon
Real estate consultant and developer Surbana Corporation will see the first batch of 1,000 units of its $345-million residential township in Xi'an go on sale. Surbana and Hong Kong-based Henderson Land are joint partners for the project. Called La Botanica, the township sits on a 133-hectare plot of land. Most of the 1,000 units in the initial phase are two-bedroom ones that go for 350,000 yuan each, and three-bedroom homes priced between 450,000 and 500,000 yuan each. When fully developed over the next 10 years, the township will provide an estimated 30,000 apartments aimed at the mid to high-end range of the market, housing 100,000 people in total.
- The Business Times, P3
Yen soars to 13-year peak, other Asian units fall
The yen soared to 13-year highs against the dollar last week on fears of a global recession which led investors to seek refuge. The Japanese currency was 95.14-17 against the dollar in Tokyo on late Friday. The sharp rise in the yen contributed to a major sell-off on the Tokyo stock market which plunged 9.60 per cent to a five-year low on Friday. The rupiah ended trading at 10,200 to the dollar, compared to 9,855 the week before. The won weakened to 1,422.0 won to the dollar last Friday, compared with 1,334.0 won a week earlier. The US dollar was trading at S$1.5074 on Friday from S$1.4765 the week before.
- The Business Times, P4