DAILY MARKET UPDATES 4th November 2008

Property firms reach out with online portalsWith more than 2,500 developments online, every condominium and apartment in Singapore is featured. VirtualHomes touted to be Singapore's most comprehensive condominium search. ERA also announced this week that it will work together with local search engine rednano.sg to give homebuyers more relevant information to help them choose the right agent and the right property for their needs.- The Business Times, P29
Resorts World's West Zone likely to open laterResorts World Sentosa (RWS) is in talks with government agencies including the STB, URA and Ministry of Trade and Industry to start work on the project's West Zone when its Central and East Zones are under way. RWS intends to 'soft launch' Universal Studios Singapore & four hotels in the Central Zone by the first quarter of 2010, including 21 theme park attractions & 1,400 hotel rooms. Even if the West Zone is not completed by 2010, the government has said that the casino license can be awarded when at 50 per cent of the investment capital has been spent and 50 per cent of the overall gross floor area has been built. - The Business Times, P10(also see The Straits Times, B3, “Sentosa IR 60% ready by 2010”)
New expressway may cost up to $5b THE new Marina Coastal Expressway, which will link the new downtown to the western and north-eastern suburbs, is busting its budget in a big way. With four out of six major contracts awarded, expenditure on the 5km-long underground and undersea road has already hit $3.1 billion - $600 million more than its $2.5 billion estimated price tag. LTA has attributed the cost overrun to a general spike in construction cost, and also to poor soil conditions that required strong temporary walls to prevent accidents. Another expensive road to come is the 21km-long, $8 billion North-South Expressway to link Thomson to the city. To be completed in 2020, it is now expected to cost $381 million per km. The LTA declined to reveal the revised cost of the project, saying that doing so could influence bids for the remaining contracts. - The Straits Times, B4
Take-up of JTC factory space fallsThe level of space terminated by companies in the third quarter rose 26 per cent to 30,300 sq m. These companies, mostly from the service, precision engineering and electronics sectors pulled out citing operational consolidation as a key reason. JTC's stock of ready-built factories is now somewhat smaller after it sold $1.7 billion worth of high-rise ready-built properties to Mapletree Investments, reducing its portfolio from 4.45 million sq m to 3.4 million sq m. While industrial rents and prices will show a rise for 08, next year they may fall by 7 to 12 per cent, and 10 to 15 per cent respectively. - The Straits Times, B20
Singapore consortium wins Brunei hub project Surbana International Consultants and Global Maritime & Port Services have been appointed consultants for the detailed master plan and consultancy services to turn Brunei's Pulau Muara Besar into a port-based trading and industrial area. The Surbana consortium clinched the deal in an international tender conducted by the Brunei Economic Development Board. This phase of the works is scheduled to be completed by the end of next year. - The Straits Times, B17
Govts act to breathe life into economiesYesterday, South Korea said it would spend 14 trillion won (S$16.4 billion) on infrastructure development and tax benefits next year to stimulate economic activity. The Bank of England is facing strident calls to slash its benchmark rate to 3.5 per cent. The European Central Bank, which sets interest rates for the 15 euro-zone economies - is expected to cut rates by half a percentage point to 3.25 per cent. Governments are hoping that boosting public spending on infrastructure projects such as roads and utilities will create jobs in sectors such as construction, while tax breaks and cash handouts for businesses and individuals will encourage them to spend more on goods and services, keeping companies in business.- The Business Times, P1(also see The Straits Times, A7, “S Korea plans $16.6b stimulus”)
European property derivative trades in Q3 down 38%
The total volume of European property derivative trades fell 38 per cent quarter-on-quarter to £1.15 billion (S$2.7 billion) in three months to Sept 30 as the global financial maelstrom curbed growth in the infant market. Despite a slowdown in the number of deals, the total notional value of UK trades completed in 2008 so far is still some way ahead of the £5.6 billion of trades seen by the end of the third quarter 2007. Some £1.03 billion of UK commercial property derivative trades were completed in the third quarter, bringing the notional value of deals struck to £6.1 billion over the year to date.
- The Business Times, P29
Key China project for M'sian firmsA flagship venture for an environmentally friendly project in China to be developed by Malaysian companies is being hatched by the Malaysia-China Business Council. A task force under former Malaysian ambassador to China, Abdul Majid Khan, has been given six months to look into its viability. The project will include environmentally friendly features for tourism, property development or factories, using more natural resources. - The Business Times, P29
India PM reassures business leaders of continued growth
The prime minister said that the government would take all steps necessary to ensure that a 'severe and prolonged' global financial crisis does not derail India's growth and urged leading industrialists not to make sweeping layoffs. The Reserve Bank of India has in recent weeks cut the key lending rate, the repurchase rate, from 9 per cent to 7.5 per cent and slashed the cash reserve ratio - the amount of money commercial banks must keep on hand - from 9 per cent to 5.5 per cent. Economic growth dropped to 7.9 per cent in the April-June quarter from 9.2 per cent in the same period last year. The Reserve Bank of India recently downgraded its growth forecast to 7.5-8 per cent for the year.
- The Business Times, P16(also see The Straits Times, A7, “Indian PM asks firms to avoid job cuts”)
UK's Hammerson delays retail projects
Property group Hammerson has put two of its biggest retail projects on hold. Hammerson's £800 million (S$1.88 billion) Eastgate Quarter development in Leeds, northern England was due to open in 2012. But the development has been delayed for an unspecified period said the report. Hammerson is also unlikely to proceed with its £600 million Sevenstone shopping development in Sheffield, northern England before next summer
- The Business Times, P29
DBS launches credit card aimed at SME bossesCalled the DBS World Business Card, it gives SME bosses unlimited free access to more than 300 airport lounges globally - even if they are flying economy. The credit limit can be a flexible fraction of the full credit line that DBS extends to the company. According to DBS, it is the only corporate card that offers card insurance of up to $10,000 in the event that it is lost or stolen. Card holders can also enjoy complimentary medical emergency assistance when they are overseas. - The Business Times, P9
Australian Reits look to equity to pare down gearingReits such as Mirvac Group, Dexus Property Group and ING Industrial Fund are likely to tap equity markets, with even Westfield Group tipped to sell new shares. The dozen or so Reits could raise up to A$5.5 billion (S$5.4 billion) over the next year, Merrill Lynch said. They would join GPT Group, Goodman Group, Stockland and others, who jointly raised A$3.2 billion last month. Australia's listed property sector has more than halved in value this year, outpacing a 36 per cent drop in the benchmark S&P/ASX 200 index. The Reit sector delivered a compound annual return of 17 per cent in the 10 years to end-2007. Equity raising by Australian Reits comes even as some global trusts have cut back their share offerings, while others have relied on expensive debt to fund capital needs.
- The Business Times, P31
Q3 house prices fall 1.8% Down UnderAn index measuring the weighted average of prices for established houses in the nation's eight capital cities dropped 1.8 per cent from the June quarter, when it declined a revised 0.2 per cent, the Australian Bureau of Statistics said. The second quarter of falling house prices will give central bank Governor Glenn Steven's scope to add to last month's one percentage point reduction in the benchmark lending rate, the biggest cut since a recession in 1992. Mr Stevens and his Reserve Bank of Australia board will reduce the overnight cash rate target by half a point to 5.5 per cent tomorrow, according to 13 of 14 economists surveyed by Bloomberg.- The Business Times, P31
Top banks avoid taking govt fundsBarclays and Commerzbank highlighted the choice facing banks last Friday as the British bank raised about US$12 billion from investors in Abu Dhabi, Qatar and elsewhere while the German bank mulled taking state funds, according to sources. Shares in both were hit. Commerzbank shed 6 per cent on heightened worries about its capital cushion, while Barclays fell 13 per cent on concern it is paying more than rivals to get its cash. Pressure is on banks to rebuild capital after billions of dollars lost on structured credit assets and to build up bigger capital cushions in the face of impending global recession. - The Business Times, P18
US construction outlays fall 0.3% in SeptThe 0.3 per cent decrease followed a revised 0.3 per cent rise in August that initially was reported as unchanged, the Commerce Department said. Private residential projects declined 1.3 per cent in September, while federal spending had the biggest drop since February 07. Economists forecast construction spending would fall 0.8 per cent for the month, according to the median of 54 projections in a Bloomberg News survey. Estimates ranged from drops of 1.5 per cent to 0.2 per cent. Cutbacks in homebuilding have subtracted from economic growth since the first quarter of 2006 and contributed to last quarter's contraction. Residential construction detracted 0.7 percentage point from growth in the third quarter of this year, after subtracting more than 0.5 percentage point from April through June.- The Business Times, P17