News Highlights !!!

DAILY MARKET UPDATES 10th October 2008

2008-11-18T04:03:00.001+08:00

Shares rebound on Asian rate cuts
Stocks in parts of Asia rebounded yesterday, after central banks in the region cut interest rates. Hong Kong, China, South Korea and Taiwan reduced official lending rates to bring down borrowing costs for banks and other businesses. The Straits Times Index was the biggest gainer in the region, ending 3.4 per cent higher. China's central bank cut interest rates by 0.27 percentage point late on Wednesday, and reduced the proportion of deposits that banks have to hold in reserve by half a percentage point, making it easier for banks to lend money. In South Korea, the Kospi index finished 0.6 per cent higher, after the central bank reduced its benchmark interest rate to 5 per cent from 5.25 per cent. The overnight Singapore interbank offered rate or Sibor for US-dollar loans rose to 4.75 per cent from 4.36 per cent on Wednesday.
- The Business Times, P1
(also see The Straits Times, P1, “Rate cuts fait to bring Asia-wide rally”)
Short term crisis, long-term perspective
Labour chiefs yesterday urged companies not to react too hasty to the current financial turmoil but to take a long-term view of their businesses. Mr Heng Chee How, the deputy chief of Singapore's labour movement, called on them to seize opportunities to grow, to keep costs down, and to keep worker morale up. Paying attention to longer-term imperatives meant continuing with existing drives to improve productivity, train and upgrade workers, and re-hire older ones, among others.
- The Straits Times, A1
S'pore banks 'as close to being safe as possible'
Singapore's banks here are well regulated. Market watchers pointed out that the Monetary Authority of Singapore's (MAS) rules demanding that banks here retain plenty of capital - expressed as the capital adequacy ratio (CAR) - are among the toughest in the world. Kim Eng Securities analyst said that the market selldown will affect bank shares, but there is no real loss of confidence in them. That's because the banks are backed by very strong asset quality, and their CAR is maintained at levels that are way above the regulatory requirement.
- The Straits Times, A4
Region's banks strong, say Asean ministers
Ministers from the Association of South-east Asian Nations (Asean) said the bloc's economic fundamentals remain sound even though GDP growth might not match last year's 6.7 per cent. Ministers said banks in the region should be able to withstand the financial turmoil. They said the region's banks have no shortage of capital, do not carry large debt loads, and have limited exposure to the sort of toxic mortgage loans and other bad assets that have brought down banks in the US and Europe.
- The Business Times, P4
IMF pledges to aid any country that needs help
The International Monetary Fund (IMF) is ready to help any country that needs backing to get through the global financial crisis. IMF has activated emergency procedures to get financial and other resources flowing to countries in need of balance of payments or other assistance. The IMF's lending to countries in need has fallen to almost nil in recent years, and thus it has plenty of available resources. IMF said that advanced economies will have zero growth this year and said projected 3 per cent global growth will all come from emerging economies. But modest recovery should be possible on a global basis from mid-2009.
- The Business Times, P25
Economists look into '09 and stare into more gloom
Expect the global downturn to hit Singapore hard, as GDP growth in Q4 and 2009 weakens, economists said at a Singapore Business Federation seminar. CIMB-GK economist’s base case forecast for GDP growth is 2.5 per cent for this year, and 0 to 2 per cent for 2009. But he added that Singapore's relatively strong corporate sector, the government's fiscal surplus and consumers who are not heavily in debt are favourable in these trying times. While job creation will slow, employment is unlikely to fall sharply with the integrated resorts contributing jobs, and the relative resilience of the construction sector cushioning recessionary effects.
- The Business Times, P2
(also see The Straits Times, B33, “Global crisis may hit S'pore economy hard”)
Q3 property investment sales plunge 79% to $1.1b
Investment sales in the third quarter totalled just $1.1 billion, a 79 per cent slide from the second quarter, according to DTZ. And most deals in Q3 were small, at less than $100 million each, due to credit tightening. Investment activity is expected to stay low for at least the rest of this year. But DTZ said that assets are now priced more realistically and there are funds looking for opportunistic purchases, in particular distress sales. Deals are likely to be small and mostly from private equity. In Q3, Kuwait Finance House acquired 36 apartments at Goodwood Residences for about $2,800 psf. CBRE said that rents for factories and warehouses edged up or stayed flat in Q3. Monthly rent for high-tech space increased 9.5 per cent from Q2 to $3.45 psf in Q3. The average monthly rent for factory space rose 3.2 per cent from Q2 to $1.60 psf for ground-floor units and 3.8 per cent to $1.35 psf for upper-floor units. CBRE said high-tech and business park space is expected to continue on a moderate upward trend.
- The Business Times, P17
2 flyovers for CTE to ease congestion
2 flyovers will be built along the most congested stretches of the Central Expressway (CTE). They will be up by 2011. One will allow northbound motorists exiting the Pan-Island Expressway to continue their journey on the CTE without competing with those using the Braddell exit on the CTE, said the Land Transport Authority (LTA). The other new flyover will offer city-bound motorists headed for the exit to Changi and Serangoon an uninterrupted drive. The flyovers are part of a major CTE-widening project, which includes widening works between Ang Mo Kio avenues 1 and 3. This started in June and will be completed some time next year at a cost of about $17 million. When it is all done by 2011, 7.5km of the CTE from Bukit Timah to Yio Chu Kang will have four lanes in each direction, up from mostly three today. The expansion is expected to reduce travel time by 15 per cent in either direction.
- The Straits Times, B4
IPS to operate from Bukit Timah campus
One of Singapore's leading think-tanks is poised to complete a merger with the National University of Singapore's (NUS) public policy school. The Institute of Policy Studies (IPS), whose members include Ambassador-at-large Tommy Koh, will begin operating from the university's Bukit Timah campus on Monday. It was previously located near Pasir Panjang.
- The Straits Times, B13
Hotel site draws just one bidder
Tender for a hotel site on Kallang Road has attracted just one bidder, who has lodged the minimum price allowed under the process. Tenders typically attract prices above the minimum bid but on this occasion Citywide Land's $51 million offer was right at the limit for the plot next to Lavender MRT station. The 99-year leasehold site is on the reserve list. The bid was right on the money at $249.6 per square foot per plot ratio for the 4,219 sq m site. The site has a maximum allowed gross floor area of 18,986 sq m, which could accommodate a hotel of up to 25 storeys.
- The Straits Times, B33
Japan mulls over 2nd stimulus package
Japanese Prime Minister sought new ways to stimulate the economy, as a 14.5 per cent dive in machinery orders provided further evidence that the global financial crisis is pushing Japan into a recession. The fall in machinery orders was four times as big as the market expected, and the third monthly fall in a row. Tokyo has prepared an US$18 billion stimulus package. The Nikkei stock average fell to its lowest close in more than five years yesterday. The Bank of Japan says its interest rates, at 0.5 percent, do not need to be cut.
- The Business Times, P19
India watching global crisis, will act swiftly if needed
India is watching the global financial crisis and will react to the needs of the market and take steps to pump in cash if required, its finance minister said. The statement was the latest attempt to calm rattled markets, with the benchmark share index down 44 per cent this year and the rupee at its weakest in six years. India’s finance minister said that growth in the current financial year would be close to 8 per cent and 9 percent in the next year. Private economists forecast expansion will slow to about 7.5 per cent this year from 9 per cent last year. Growth in the June quarter slipped to an annual 7.9 per cent, the slowest in 31/2 years.
- The Business Times, P19
SWFs may eye assets from West
Sovereign wealth funds could pick up some assets from the West over the medium term, said the head of global private banking at Standard Chartered. He added that the private banking space continues to grow. Citi Singapore country officer said that he expects staff levels to go up as more employees in London and New York are likely to move to Singapore.
- The Business Times, P16
Efforts to engage investors pay off
CapitaLand received a merit award for corporate governance at this year's SIAS Investors' Choice Awards and came away tops in the property category for most transparent company. For corporate governance, companies were assessed against a checklist developed from the Singapore Code of Corporate Governance, and they scored extra points if they took the initiative to implement best international practices.
- The Business Times, P6 – “SIAS Investors’ Choice Awards 2008” supplement
Going beyond the Code
At this year's SIAS Investors' Choice Awards, Keppel Corp won the Most Transparent Company Award in the multi-industry/conglomerates category for the sixth year in a row. It also won the coveted Golden Circle Award for most transparent company. It came second in the Singapore Corporate Governance Awards category for mainboard-listed companies. Last year, it was first. The company has stayed in the top three every year since the award was launched in 2003.
- The Business Times, P10 – “SIAS Investors’ Choice Awards 2008” supplement

DAILY MARKET UPDATES 11TH October 2008

2008-11-18T04:02:00.000+08:00

S'pore is 4th cheapest place to raise expat kids
Singapore emerged fourth cheapest for expatriates to raise their children, after Spain, India and China, in a survey by HSBC Bank International of 870 expatriate parents across 14 places. In the poll, the cost of raising a child included - but was not restricted to - the cost of education. Almost four in 10 of those in Singapore who were polled said it was cheaper raising junior here than in their home countries. Another 25 per cent said the cost was about the same. The survey also asked these expatriate parents to rate the countries they are living in, in areas such as the amount of time their children spend studying and being outdoors, and whether they think their children will remain in their adopted country upon growing up. Using these criteria, Singapore came out tops in Asia and fifth on the list of 14 places for expatriates to raise children.
- The Straits Times, B7
Indian meet draws 700
An annual Global Indian Diaspora Conference yesterday drew some 700 delegates from 20 countries. There are now 200,000 Indian expatriates in Singapore - one of the largest communities here. The two countries signed a Comprehensive Economic Cooperation Agreement in 2005. Since then, bilateral trade has boomed, hitting $24 billion last year. Singapore is now India's second largest investor. The diaspora conference is an opportunity for overseas Indians - some 30 million in all - to network and find ways to cooperate. This year's meeting was jointly organised by the Singapore Indian Chamber of Commerce and Industry, India's Ministry of Overseas Indian Affairs and the Confederation of Indian Industry.
- The Straits Times, B2
Singapore well placed as India's gateway to East Asia
Singapore’s strategic location and connectivity to key regional markets such as China and Vietnam makes it a gateway for India as well as a valuable partner. Singapore is well placed within the region and can be India's springboard to East Asia and beyond, said Senior Minister Goh Chok Tong. One of the earliest significant economic projects between India and a foreign country post-economic liberalisation was the Singapore-built Bangalore IT park.
- The Business Times, P17
Free weekly for Indians hits right note
TABLA!, the new English-language weekly aimed at the Indian community, drummed up mostly positive reviews with its maiden issue yesterday. Indian expatriates felt the paper was a good source of homeland news, while some Singapore and permanent resident Indians enjoyed the showbiz news. The paper is distributed free every Friday, but readers who want it delivered to their doorstep pay $28 a year. About 40,000 copies of the paper, published by the Tamil Murasu daily, were distributed yesterday at more than 100 locations, including banks and malls. The online version of the newspaper, which will be uploaded at noon on Fridays, can be found at www.tabla.com.sg.
- The Straits Times, B8
HDB offers 683 new flats
The Housing Board (HDB) yesterday launched 683 flats in Punggol, Sengkang, Jurong West and other estates in its half-yearly sale of units which were not taken up in previous launches. By 5pm, its website showed 2,626 applications for the flats, which range from three-room premium to executive units. The biggest share of 288 flats is in Sengkang, while 153 are in Punggol, 77 are in Jurong West and the remainder are in various estates. This year, the HDB also plans to launch another 8,400 units under the build-to-order scheme. Prices for units launched yesterday range from $160,000 for a four-room flat in Woodlands, to $565,000 for a five-room flat in Bukit Merah.
- The Straits Times, B6
S'pore slips into recession, risks skewed on downside
Early estimates produced by the Ministry of Trade and Industry (MTI) show a broad-based sharp slowdown, with the economy contracting not only sequentially, but in year-on-year terms too. MTI expects the economy to grow around 3 per cent in 2008, down from its August forecast of 4-5 per cent. Based on July and August data, GDP fell 6.3 per cent in Q3 from Q2 in adjusted, annualised terms. Coming after a 5.7 per cent decline in the preceding quarter, this spells a technical recession. GDP has also fallen from a year ago in Q3, by 0.5 per cent. There have been months of sluggish manufacturing output due to pharmaceutical peculiarities. The precision engineering and chemicals clusters have also slowed. MAS sees services industries such as the transport-hub and tourism being hit by the global downturn. Market economists had pared their forecasts of 2008 GDP growth and some now cite the risks of the growth falling below 3 per cent. MAS sees Singapore's headline inflation rate falling to 2.5-3.5 per cent in 2009, from 6-7 per cent this year.
- The Business Times, P3
(also see The Straits Times, A1, “Economy slips into technical recession”)
STI falls below 2,000 as global stocks dive
Global stock markets dissolved into chaos yesterday, following on another precipitous late sell-off on Wall Street. For the first time in almost five years, the Straits Times Index (STI) fell below 2,000 points. In Asia, Singapore and Hong Kong fell about 7 per cent each, while Tokyo plunged 9.6 per cent. Jakarta remained closed for a third day. European markets were in equally dire straits. London, Paris and Frankfurt fell 10 per cent each. Crude oil prices sank US$6 to a 12-month low of US$80.59 a barrel, while copper and nickel fell 9 per cent each. The three-month US dollar London Interbank Offered Rate (Libor) gained 0.07 percentage point to 4.82 per cent.
- The Straits Times, A1
(also see The Business Times, P5, “Europe, Asia shares sharply down”)
Prepare for a tough ride: PM Lee
Prime Minister Lee Hsien Loong told Singaporeans to prepare for a rough ride at least over the next year, and quite possibly longer. While Asian banks have been spared the woes of their US and European peers, stock markets everywhere have been battered in the fallout. Singapore shares tumbled 7 per cent yesterday. Senior Minister Goh Chok Tong said that the US is one of the biggest exports markets for Asia and Asia and Singapore will be impacted. PM Lee said that the problems facing financial institutions in the US and Europe are complex and grave, and will not be solved within a few months. But the momentum from projects Singapore has secured will help see it through the financial storm, he said.
- The Business Times, P2
MAS shifts monetary policy to neutral
The Monetary Authority of Singapore (MAS) shifted to a neutral exchange rate policy stance yesterday for the first time since April 2004. The neutral policy stance means the MAS will be targeting zero per cent appreciation instead of modest and gradual appreciation of the currency. This means that although the dollar may rise or fall against other currencies, its value will remain roughly stable in relation to a trade-weighted average of a group of currencies. The move will help to boost the competitiveness of Singapore's exports by making them cheaper overseas, or at least stop them from getting more expensive.
- The Straits Times, A4
(also see The Business Times, P6, “MAS moves to neutral; US$ may head higher”)face
Confidence will come back to markets, says DBS CEO
Confidence will return to financial markets and the current crisis is likely to benefit Asia in the long run, DBS said. But DBS Group chief executive Richard Stanley admitted that he has no idea how long it will take for markets to calm down. He added that the fundamentals are good, especially here in Asia and the banking sector in Singapore is very strong. The crisis will accelerate that process of shifting economic power and wealth to Asia.
- The Business Times, P17
Battered commodities, cheaper produce?
Global commodities have taken a beating as investment funds flee volatile markets and slowing economic growth worldwide dampens the demand for raw materials. The Reuters-Jefferies Commodity Research Bureau Index, which tracks a basket of 19 commodities, has fallen more than 34 per cent from its peak in July. Commodities across the board - not just food, but also metals such as platinum and copper - have also fallen, the exception being gold. Singapore Food Manufacturers' Association said palm oil prices had dropped from the $1,000 per tonne level to about $500 to $600.
- The Straits Times, A14
Bet on S-Reits in uncertain times
Singapore-listed real estate investment trusts, or S-Reits, are back in favour with analysts. S-Reits are being hailed as a source of stable, visible and recurrent income in uncertain times - and seem to be better bets than developer stocks. Reits here have been affected by tightening credit markets and higher interest rates, which have resulted in higher borrowing costs. But JPMorgan analysts say the Reit model is not broken. Analysts also feel S-Reits look attractive given their current yields and the steep discounts to book they are trading at.
- The Business Times, P36
To school, to school... if only it were in Singapore.
Across Myanmar, especially in Yangon and Mandalay, middle class parents are working and saving to send their children to a better education and future in Singapore. Those with some savings or assets are scrambling to trade them in, so they can enrol their young ones in expensive international schools and tuition centres offering the Singapore curriculum. Many are professionals: engineers and architects, or merchants running small businesses. They tend to be graduates of local universities who have lost faith in Myanmar's education system. To parents with the means to send their children abroad, Singapore has emerged as the No. 1 study destination. No official figures are available on how many Myanmar students head to Singapore every year, but rough estimates are around 1,000 a year. About half enrol in secondary schools, polytechnics and universities. Currently, there are about 7,000 Myanmar youth enrolled in public and private schools in Singapore. Singapore Tourism Board reports that Singapore's private schools hold at least one to two seminars or information sessions every week in Myanmar.
- The Straits Times, D2
South Korea scrambles to defend its markets
South Korea scrambled to prop up its tumbling markets with the finance minister set to plead with US bankers to keep credit lines open for local banks. It also called on East Asian countries to expand a proposed US$80 billion currency swap deal to shelter their economies from the financial storm. The won slumped as much as 5 per cent in early trading and the main stock market index dropped 9 per cent.
- The Business Times, P6
India cuts reserve ratio, cancels bond auction
India’s central bank slashed its cash reserve requirement yesterday to free up some US$12 billion in funds and ease a cash squeeze that drove overnight rates to a 19-month high and forced the government to cancel a bond auction. The Reserve Bank of India (RBI) cut the reserve ratio by 1.5 percentage points to 7.5 per cent, increasing the scope of the 50 basis point easing announced earlier this week.
- The Business Times, P20
Concourse Skyline
- 99-year leasehold from 13 March 2008
- 360 units
- 40 storeys
- Linked to the proposed Nicoll Highway MRT Station via a covered walkway
- 300 Beach Road
- Expected TOP: 31 December 2013
- Developer: Hong Fok Land Ltd
- Marketing agents: CBRE, DTZ
- The Straits Times, A6, advertisement
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, A20, 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
- Average: $670 psf, from $628 psf ($797,000)
- Expected TOP: 31 Dec 2011
- Developer: Hong Realty
- Marketing agents: ERA, Knight Frank
- The Straits Times, B3 - advertisement
Kovan Residences
- 99-years w.e.f. 31 Dec 2007
- Near Kovan MRT station. 13 minutes to the city
- 2, 3, 4-bedroom apartments, single-level or duplex penthouses with private pools or Jacuzzis
- $800-950 psf
- Expected TOP: 30 April 2010
- Joint developers: Centurion and Lian Beng Group
- Marketing agent: DTZ
-The Straits Times, B4 - advertisement
Oasis Garden
- Freehold
- Deferred payment available
- Easy access to Marina Bay via new KPE
- Minutes walk from Tai Seng/Bartley MRT station (Circle Line partial opening mid 2009)
- Balinese landscape garden
- Expected TOP: 15 May 2012
- Showflat at 135 Joo Seng Road #07-03
- Developer: Kheng Leong Co
- Marketing agent: DTZ
-The Straits Times, B6 - advertisement

DAILY MARKET UPDATES 14th October 2008

2008-11-18T04:01:00.000+08:00

Stocks rebound as Europe gets to heart of the problem
Shares in Asia got an early boost as European governments reached an agreement to guarantee hundreds of billions of dollars in new debt issuance by banks until end-2009 and inject cash directly into banks in need of capital. The Bank of England, European Central Bank and Swiss National Bank said they would offer unlimited amounts of short-term US-dollar funding, in a further attempt to ease interbank strains and lower borrowing costs. Australia and New Zealand said they would guarantee all bank deposits, while Indonesia raised the limit on the amount of deposits guaranteed to 2 billion rupiah (S$304,000) from 100 million rupiah previously.
- The Business Times, P2 (also see The Straits Times, A1, “Europe acts, markets cheers”)
STI soars 6.6% on Asian rebound
The Straits Times Index (STI) ended 128.02 points or 6.6 per cent higher at 2,076.35, after swinging in a 160-point range throughout the day. Commodity-related and property stocks were the biggest gainers in percentage terms among the blue chips here. CapitaMall Trust jumped 14.7 per cent to $1.95. Yanlord Land gained 11.8 per cent to 90 cents. Keppel Land and City Developments rose 11.7 per cent and 11.1 per cent to finish at $2.01 and $7.20 respectively. OCBC Investment Research analyst said that volatility in the share price of developers is expected to persist with the weakening economic outlook and property market.
- The Business Times, P8
(also see The Straits Times, B15, “STI enjoys largest gain since 1999”)
Financial system stable: MAS
The Monetary Authority of Singapore (MAS) stressed yesterday that Singapore's financial system 'remains stable and robust'. MAS will take any necessary measures to safeguard the stability of Singapore's financial system and stands prepared to inject additional liquidity as required. In Singapore, the MAS said that banks, finance companies and insurance companies are required to have assets exceeding their liabilities by an appropriate margin. They are also required to abide by stringent regulations on capital, asset quality and risk concentration, and to put in place sound risk management systems and processes. The domestic Singapore dollar money and foreign exchange market have generally been calm and banks have been able to obtain funding in the interbank market, said the MAS.
- The Business Times, P16
US 'will bounce back and we'll survive'
Government of Singapore Investment Corporation (GIC) executive director Tony Tan told them the US would eventually bounce back and 'we will survive'. He said that the US will remain a resilient and well diversified economy. The problems will be overcome at some stage, the only thing we do not know is at which stage and how much damage will be done to the economies, institutions, consumers and householders before these issues are resolved. The markets will still go on and the economies will manage, he added.
- The Straits Times, A7
S'pore needs to be positioned to rebound
Economic conditions will be tough but Singapore must not lose track of the longer-term issues that affect the economy's competitiveness. Trade and Industry Minister Lim Hng Kiang said 'the global economy will eventually recover and we have to be positioned to bounce back. He added that the Government would have to strike a balance between regulating energy production and boosting economic growth.
- The Straits Times, B18
Property can still bruise Asia's banks, economy
Asian banks have largely escaped the worst of the global debt crisis but housing market downturns still threaten to pile up bad loans and slow the region's economy. Asian banks tend to limit loans to 70 per cent of home prices, compared to between 80 per cent and full value in the West. With half the wealth of Malaysia, Singapore, South Korea and India tied to property, the potential impact on banks and economies is wide. Hong Kong and Singapore home prices are widely tipped to fall 15 per cent next year as job cuts hit Asia's main financial centres. In South Korea, unsold homes are at a record high, prices are falling and small construction firms are vulnerable. India's property boom fizzled into a price drop of a third this year in some cities. The biggest risk of property loan defaults is in China. Developers are slashing prices to stem a sales slump, and dragging the whole market.
- The Business Times, P35
Robust demand for recent HDB launches
Demand has been hot for two recent launches from the Housing Board, with over 10 times more applicants than flats available. An offering of 150 smaller flats - studios to three-roomers - was swamped with 2,426 applications in the space of just a week. The sale of three-room premium, four-room and bigger flats achieved an extraordinary response: 7,036 applications have been submitted for 683 units. The launch of the smaller units featured three-roomers, two-roomers and studios in estates across the island. There were 582 applications for studios and 1,844 for two- and three-roomers combined in the offer from Oct 2 to 8. Studio prices range from $62,900 to $116,400. A two-roomer goes for $74,000 to $106,300, while a three-room flat goes for $134,500 to $275,200. Four-roomers at the Pinnacle@Duxton are priced from $457,000 to $555,000 and attracted 2,291 applicants; 825 people applied to buy five-room units at the same development priced from $545,000 to $646,000.
- The Straits Times, B7
Former school site up for tender in Bukit Timah
A plot of land in Upper Bukit Timah that can be used for commercial purposes or as a foreign system school will go up for tender tomorrow. The built-up site on Jalan Seh Chuan was occupied by the Jurong Garden School, and Seh Chuan High School before that. It is close to the Canadian International School, the German European School Singapore and the Beauty World Shopping Centre. It has an area of 3,464 sq m - about half the size of a football field. The building on it has a gross floor area of 4,221 sq m. Tenancy is for an initial period of three years with a renewal option for two further three-year terms.
- The Straits Times, B7
Hotel 81 developer to start new brand at Kallang Road site
Hotel 81-linked Citywide Land has been awarded a hotel site at Kallang/Jellicoe roads and has a new brand in the works to be completed in two-and-a-half to three years. The new hotel at Kallang/Jellicoe roads is in the 'development stage' and will be a three-and-a-half to four-star tourist class establishment. URA closed the tender for the site with one bid of $51 million from Citywide Land. Based on the site of 45,415 sq ft and a maximum permissible gross floor area of 204,363 sq ft, the unit land price works out to $249.56 psf ppr. Based on the bid price of $51 million and a projected yield of 8 per cent, Cushman & Wakefield reckons room rates could be in the vicinity of $100-$120 a night.
- The Business Times, P34
S'pore slips on Monocle ranking
Singapore now ranks 22nd on Monocle magazine's World's Top 25 Most Liveable Cities list, down from 17th position a year ago. Monocle is a global affairs, business, culture and design magazine set up by Tyler Brule, formerly editor of lifestyle magazine Wallpaper*. While Singapore scores high in some aspects of liveability, including the efficiency of Changi Airport, Mr Brule said that its 2008 ranking suffered from 'tolerance issues'. While Mr Brule did not elaborate on the 'tolerance issues', he said that communities need to be able to 'breathe' and ‘take the good with the bad'. Monocle's ranking goes beyond the usual metrics that only look at factors such as housing costs and the availability of schools. It also looks at softer issues such as the quality of new architecture; the ease of setting up a business and even the number of cinema screens per city.
- The Business Times, P16
Macquarie targets Asia's ultra-rich
Australia’s Macquarie Group said that its recently set-up Asian private banking unit will focus only on the very rich and that it will hire another 30 to 35 client advisers in the next three to five years. The unit, which now has five client or investment advisers in Singapore, plans to hire three more advisers by next March and another eight people the following year. Each adviser will deal with 20 to 25 clients and help manage about US$1 billion (S$1.5 billion) to US$1.5 billion in clients' money. The Singapore unit will focus only on ultra-high-net-worth individuals in Asia with assets of more than US$30 million.
- The Straits Times, B16
Soon: Better early warning system
The Government is planning a multimillion-dollar upgrade of a high-tech early warning system designed to help spot crises such as the current global financial meltdown. Known as a risk assessment and horizon scanning (Rahs) system, it is designed to ferret out information about impending wars, epidemics, financial meltdowns and other geo-political issues from information sources including newspapers, online forums and blogs. Sophisticated artificial intelligence programs then distil the data to see if it is important and if the issue is gaining momentum.
- The Straits Times, B5
CapitaLand and units raised $5b this year
CapitaLand and its various listed entities have raised more than $5 billion of debt year-to-date. The developer added that it has good access to capital markets. In July, the company secured a $2 billion development loan for its upcoming Farrer Road condo. CapitaLand shares have lost 56.5 per cent so far this year. In H1, the developer had a net debt of $8.2 billion. Cash reserves stood at $3.4 billion. CapitaLand announced that its serviced residence unit The Ascott Group has acquired a historic building in Paris for 21.5 million euros (S$42.9 million). Ascott currently has a portfolio of 5,620 units in 49 properties in Europe.
- The Business Times, P5
Making of a modern city-sate
Perhaps the URA's proudest achievement is that it has been able to take what is by any definition a tiny space - Singapore has a limited land area of only about 700 sq km - and optimise it to not only support sustainable economic growth but also provide a quality living environment. Take for example Marina Bay. The waterfront area on the southern part of Singapore is being transformed into a world-class financial hub with an integrated live, work and play environment. In facilitating the property sector, the URA introduced innovative approaches in its sale of sites. For example, an Option Scheme allows a large site to be purchased in phases to mitigate developers' risk. To achieve quality development, the URA also introduced a 'two envelope system' where both price and concept are considered before the government decides to award a site.
- The Business Times, P4, “Business Excellence” supplement
BCA's Green Mark debuts in M'sia, set to go beyond
As Singapore continues to shape an eco-friendly habitat by getting developers to embrace the Green Mark, this green building yardstick is starting to find its mark beyond these shores. The Green Mark scheme - a four-tier green building benchmark developed by the Building and Construction Authority (BCA) - made its debut in Malaysia last month, and looks set to move into regional countries such as Indonesia, Thailand, Vietnam and China.
- The Business Times, P17
Further losses ahead: Bankers
Emerging markets will face more gloom after suffering their worst quarterly loss in history as the global financial crisis starts to bite into their high growth economies, private bankers in Asia warned. They said emerging markets are most vulnerable to prolonged pessimism because investors have likely already cut exposure to more liquid markets. Emerging market equity funds saw more than US$30 billion (S$44 billion) in outflows in the first nine months of the year, according to Morgan Stanley. Corporate failures are likely to rise across Asia as the global financial crisis and its impact on access to credit, drive weaker firms to insolvency, said Citibank.
- The Straits Times, B16
Jakarta raises bank deposit guarantee
Indonesia raised its guarantee on bank deposits to head off a run on lenders and eased central bank rules so as to provide more liquidity. The latest measures provided support for the stock market, which reopened yesterday after a three-day trading halt. The Jakarta Composite Index added 10.2 points, or 0.7 per cent, to close at 1,461.87, after falling as much as 6.4 per cent earlier. Indonesia's move to guarantee up to two billion rupiah (S$303,700) in bank deposits is up from 100 million rupiah previously.
- The Business Times, P20
Indian shares rebound, 7.6% rise biggest in 4 yrs
Indian shares rose 7.6 per cent yesterday, their biggest rise in more than four years as the government sought to reassure investors it was working to shield India from the global crisis. The gains were led by a surge in ICICI Bank and helped by rallies in overseas markets after policymakers around the world took steps to rescue banks and prevent the global economy from sinking into recession. The 30-share BSE index ended up 7.64 per cent, or 804.38 points, at 11,332.23.
- The Business Times, P22
Johnny Depp's pied-a-terre won't save Paris from property slump
Paris has avoided price declines that hammered property markets in capitals such as London, which had a 9.4 per cent drop this year, thanks to fewer available apartments and demand for pieds-a-terre, lodgings used only for part of the time. Apartments go for as much as 11,010 euros a square metre. Now, tougher lending criteria and higher interest rates may start eating into the city's property prices, economists say. Growth in property loans slowed at the end of the second quarter to 8.9 per cent from 11 per cent a year ago, according to the Paris-based French Banking Federation. The average interest rate for property loans increased to 5.5 per cent in the second quarter, from 4.8 per cent in the same period a year before, the Banking Federation said. The volume of apartments sold fell 20 per cent in the year to May.
- The Business Times, P35

DAILY MARKET UPDATES 15th October 2008

2008-11-18T04:00:00.002+08:00

Stocks rally again as disaster scenario fades
Stocks in Asia and Europe surged yesterday, extending a worldwide share rally into a second day on hopes that financial disaster had been averted. But economists here warned that while governments in the US and Europe may have stopped a collapse of the global financial system by taking control of large parts of the financial sector, the outlook for the broader economy remains bleak. The Straits Times Index (STI) ended 2.5 per cent higher. In Asia and Europe, interbank lending rates fell for a second day, a sign that some trust may finally be returning to money markets that are crucial to the normal functioning of the banking system.
- The Business Times, P4
US buys stakes in 9 banks, stems panic
The United States Treasury Department, in its boldest move yet to shore up embattled banks, and prevent the collapse of the credit markets and the US economy, is set to undertake steps to invest up to US$250 billion in 9 banks, and to guarantee new debt issued by banks for the next three years. The nine banks are: Citigroup, JPMorgan Chase and Wells Fargo - US$25 billion apiece; Bank of America and Merrill Lynch - US$12.5 billion each; Goldman Sachs and Morgan Stanley - US$10 billion apiece; and Bank of New York and State Street Bank each received US$2-3 billion. This is the US government's latest effort to stabilise the financial system, ensure the solvency of major US banks and get them lending to one another and businesses again.
- The Business Times, P1
MAS move to secure deposits could be on the cards
The Monetary Authority of Singapore (MAS) said that it will ensure local banks are 'not disadvantaged', adding that it is studying measures other countries have taken to shore up confidence in their financial systems. Its statement came after Hong Kong guaranteed all bank deposits until 2010, a move that has put pressure on Singapore's authorities to follow suit. All savings in a full bank in Singapore are insured for up to $20,000 under the Deposit Insurance Scheme of the Singapore Deposit Insurance Corporation.
- The Straits Times, A1
S'pore tops Asian assignment poll
Singapore is the top choice in Asia for companies which are considering sending employees on overseas assignments. These are among the findings of PricewaterhouseCoopers (PwC) International Assignment Services, in its first survey focused on understanding international mobility trends and challenges of Singapore-based companies. Singapore was the choice of 70 per cent of those surveyed, when asked to indicate their top three host assignment locations in Asia. The finding was testament to Singapore's strong drive in this area, through the use of government initiatives such as the Personal Employment Pass, and competitive personal tax rates.
- The Straits Times, B18
Singapore firms ahead in keeping foreign talent on local terms: PwC
Singapore-based firms find it easiest to keep foreign talent here on local terms compared with other Asian countries, a survey by PricewaterhouseCoopers (PwC) showed. With the expected economic slowdown, many companies also anticipate that foreign talents are now likely to take up 'local- plus' terms - which are less attractive than expatriate terms - as the job market could come under threat. PwC interviewed human resource professionals of 105 Singapore-based companies between March and July this year. Some 79 per cent of these firms said they considered Singapore the easiest place to localise foreign talent. PwC defined localisation as changing an expatriate remuneration package to one that is similar for a local hire. This is known sometimes as 'local-plus' terms and could mean removing benefits for education and housing that expatriates receive.
- The Business Times, P11
Only one bid received for transitional office site
The tender for a transitional office site in Mohamed Sultan Road has closed with only one bid of $4.65 million, from RSP Architects Planners and Engineers. Based on the 66,482 sq ft site and maximum permissible gross floor area (GFA) of 99,727.5 sq ft, the bid equates to a unit land price of $46.67 psf ppr. Knight Frank said this is the second-lowest bid received for such a site. Cushman & Wakefield expected bids to be at least half of those for two transitional office sites around Newton MRT, which were awarded at $242.50 and $226 psf ppr. RSP's present office is in Scotts Road. It would likely build an office for its own use on the Mohamed Sultan site, said Knight Frank.
- The Business Times, P11
Good news for consumers: Food prices dropping
Global prices of wheat, oil, sugar and other essentials started falling in June; their trickle-down effects will be felt by shoppers in the next few weeks. Importers and analysts say the prices are off their peaks for good and stability has returned to the market. Prices are slated to fall further before levelling out, though they are unlikely to be as low as a year or two ago. The devaluation of the Singapore dollar against the US dollar also means prices may not fall by that much or rapidly.
- The Straits Times, B1
Brokers’ Take: Office Sector – DBS Group Research
Prospects for the office market have turned more cautious, due to the global financial turmoil and weakening economic outlook. While current rents are holding up amid tight physical supply and low locked-in leases provide room for positive rental reversion over the next 12 months, slowing demand and increasing supply are likely to drag on occupancies, putting downward pressure on topline growth. DBS’s call on the sector remains 'cautious'.
- The Business Times, P6
Seletar air hub to be developed as planned
The development of Seletar Aerospace Park will proceed as planned despite the challenges facing the aviation industry. This is because Singapore is confident of the long-term prospects of the aerospace sector. Work has already started on Phase I of the project to transform Seletar Airport and its surroundings into a 300-ha aerospace hub. The development will be completed by 2018.
- The Straits Times, B19
More S'pore firms default on payments
Singapore firms are increasingly defaulting on payments - including bank loans - making them seem high-risk to lenders tight on credit. Credit rating agency Dun and Bradstreet (Singapore) said more businesses are falling behind in making payments. Apart from construction, more local businesses in other sectors will fall into the high-risk pocket this year and next. Based on monthly payment data collected from an average of 4,000 to 5,000 firms based here, D&B says 22.2 per cent of them have a high risk of not meeting payments this year, up from 19.77 per cent last year. The riskiest industry appears to be retail, where D&B predicts that more than half of retail firms here may not meet their payments come 2009. Banks and analysts confirmed that borrowing costs for companies have gone up in recent weeks.
- The Straits Times, A7
Investor sentiment falls in Q3 over credit crisis: ING
Investor sentiment in Singapore has taken a hit following the crisis in the credit markets, says ING. ING’s quarterly Investor Dashboard Sentiment Index shows that for Singapore, the third-quarter indicator slumped 21 per cent quarter-on-quarter to 71 points - a sign of poorer investor confidence here. On a year-on-year basis, the Q3 drop was more pronounced - a fall of 49.6 per cent to 71 points. Some 40 per cent of Asian investors say that their personal financial status deteriorated in Q3 - up from 28 per cent in Q2. About 35 per cent of the respondents expect the situation in US to worsen this quarter, while 72 per cent believe that they will continue to be affected by the slowing economy in Q4. Investors in China, Hong Kong, Korea and Singapore appear to be most sensitive to the global impact of the credit crunch, compared with the rest of Asia. 87 per cent of Singapore investors believe that they will continue to be impacted by the sub-prime crisis in Q4 2008. 48 per cent of Asian investors (ex-Japan) view low-risk investments as favourable compared with 30 per cent for medium-risk investments and 24 per cent for high-risk investments. Investors are also continuing to hold on to cash while moving away from investments in local stocks and global resources.
- The Business Times, P9
Citigroup sees 1.2% economic contraction for next year
Citigroup expects the Singapore economy to contract 1.2 per cent next year - the only key Asian economy it sees shrinking in 2009. Expectations of a more severe recession in the US prompted the bank to make further cuts to its Asian GDP forecasts for 2009. Citigroup's chief Asia economist in Hong Kong, cut Singapore's 2009 GDP growth forecast from plus-2.5 per cent to minus-1.2 per cent. Citigroup has kept its 2009 CPI growth forecast for Singapore at 2 per cent. Citigroup now expects the Asia-Pacific region as a whole to grow 6.3 per cent next year, down from its previous estimate of 7.2 per cent. Citigroup also reckons Asian currencies are likely to remain weak in the near term.
- The Business Times, P10
OCBC banks on continued China growth
OCBC Bank will continue to invest in China, despite the current financial market turmoil. The bank now has a presence in seven cities. It plans to expand its current 10 outlets - including sub-branches - to 12 to 15 over the next few years. It aims to focus on two main areas - expanding its retail banking segment aimed at the mass affluent, as well as growing its corporate banking business, which is targeting mid-size as well as larger Chinese companies.
- The Business Times, P8
DBS venture in India to shut branches, slash jobs
DBS Group's joint venture in India, Cholamandalam DBS Finance, will close more than a quarter of its branches because of a sharp slowdown in demand. Chola DBS would shut 75 of its 260 branches and lay off up to 200 of its 1,800 staff. The company would try to offer jobs elsewhere in the group to the 200 staff at the branches to be shut. DBS bought a 37.48 per cent stake in Chola DBS in 2005. DBS plans to have 10 branches and some 500 staff in India by year-end as India remains an important market in DBS's regional expansion strategy.
- The Business Times, P8
Mapletree invests in Viet business park
Mapletree Investments has inked an agreement to develop a US$400 million integrated business park in Vietnam's Binh Duong province. Construction of the 75-hectare Mapletree Business City is expected to start next year and development will take place in phases. The real estate group is also the developer of the Mapletree Logistics Park in Binh Duong, a US$110 million 68-hectare park within the Vietnam Singapore Industrial Park II (VSIP II).
- The Business Times, P9
China's forex reserves rise to US$1.9 trillion: highest in the world
China's foreign-exchange reserves rose to a world record US$1.906 trillion, helping to strengthen the nation's finances. Currency holdings rose 32.9 per cent at the end of September from a year earlier. The increase of about US$97 billion over the quarter was down from a US$126.6 billion gain in the previous three months. China has cut interest rates twice in the past month to stimulate growth. China’s economy can still expand 10 per cent this year and 9 per cent in 2009, central bank deputy governor said.
- The Business Times, P16
India helps mutual funds with liquidity injection
India pumped liquidity into the markets and announced measures aimed at helping the country's US$106 billion mutual funds industry. In addition to injecting 628 billion rupees (S$19.1 billion) through its daily overnight money market operations, the central bank conducted a special 15-day repo auction to meet the liquidity needs of mutual funds.
- The Business Times, P16
China's interbank funding rates fall
China's shortest-term interbank funding rates fell and smaller banks and foreign institutions found it easier to borrow money yesterday as jitters over the global financial crisis eased. The weighted average seven-day bond repurchase rate, a key funding rate, fell sharply to 3.1536 per cent, its lowest level since late September.
- The Business Times, P16

DAILY MARKET UPDATES 16th October 2008

2008-11-18T04:00:00.001+08:00

YTL launches Sandy Island villas on Sentosa Cove
Ultra-high net worth individuals with at least $13.9 million to spare will now have a new piece of luxury to own - a Sandy Island villa on Sentosa Cove - after Malaysia's YTL Group launched its 18 waterfront villas here yesterday. Three villas have been sold, and the highest price registered stands at $2,100 psf. The 99-year leasehold properties have built-up areas ranging from 7,500 to 9,200 sq ft. According to Savills, there remain cash-rich individuals who have not been affected by the financial turmoil. Apart from locals, overseas individuals have also shown interest in the villas. The financial turmoil has caused some investors to feel more secure parking their wealth in properties instead of banks. YTL said that Singapore is an address that cannot be ignored and the Chinese, Indians and Southeast Asians would love to invest in a place like Singapore.
- The Business Times, P30
YTL launches posh villas in Sentosa Cove
YTL Corp is launching the sale of its 18 posh houses in Sentosa Cove. The Sandy Island villas all have five bedrooms and boast master suites that occupy the entire second floor as well as a swimming pool, private berth for a 12-metre boat, basement garages big enough for two luxury cars and passenger lifts. They are designed by Italian architect Claudio Silvestrin, acclaimed for such commissions as the 26 Giorgio Armani flagship stores. Prices start at $13.9 million and go up to $26 million. This works out at $2,000 to $2,600 per square foot. It has already sold three of the 18 houses at prices ranging from $13.9 million to $18 million to a good mix of local and foreign buyers.
- The Straits Times, B19
Banks sound, system working well: Tharman
Finance Minister Tharman Shanmugaratnam said that the Government has been vigilant in making sure that Singapore's financial system continues to work well. As long as it continues to function in an orderly manner, the economy can go through the crisis 'without too much damage'. Banks here are sound because they have not faced the two big problems hitting others worldwide: a lack of capital and a lack of liquidity stemming from frozen wholesale funding markets, said Mr Tharman. Banks in Singapore tend to lend money from the deposits they collect instead of relying on borrowings from other institutions, or wholesale funds, which could leave the banks in a liquidity crisis.
- The Straits Times, A1
70% of Danga Island Villas snapped up
Nearly 70 per cent of the luxury waterfront villas on Danga Island, located within Iskandar Malaysia, have been taken up by buyers from all over the world even though the project will only be launched in November. The Danga Island Villas managed to secure RM230 million (S$105 million) sales at the Cityscape international property show in Dubai last week. The 152 villas, which come complete with private berths for yachts, are priced between RM4 million and RM15 million each. Of the 70 per cent Danga Island Villas units sold to date, Mr Lim said 27 per cent of the buyers were Johoreans, 28 per cent from those living in Kuala Lumpur and Penang and 6 per cent from Sabah and Sarawak. Buyers from Middle East countries, India, Pakistan, Canada and Spain accounted for 38 per cent, 5 per cent from Singapore and 2 per cent from Hong Kong.
- The Business Times, P30
Parkway Centre for sale for about $1,000 psf ppr
Parkway Centre, which is controlled by Hong Kong-listed Far East Holdings International, has been put up for sale with an indicative price of about $160 million. This works out to about $1,000 per square foot per plot ratio, around 15 per cent higher than the $865 psf ppr for Katong Mall, which was sold in July. Jones Lang LaSalle (JLL) is marketing the site. The 99-year leasehold Parkway Centre has three retail shop units and 107 office units. JLL said that the retail rental is $25-30 psf per month and the office rental, $4-5 psf per month. The 18,665 sq ft site is zoned for commercial use and has a gross plot ratio of up to 3.2. Based on the Written Permission dated Nov 21, 1985, it has the potential to be redeveloped into an office-cum-retail development with a gross floor area of up to 157,625 sq ft.
- The Business Times, P31
Flood of new homes but Sept sales up just 18%
Developers quadrupled the number of new homes for sale last month, but units sold rose only 18 per cent from August. The number of units sold recovered slightly to 376 last month from 320 in August. A total of 767 new units were put up for sale - including 258 in the core central region (CCR) where sentiment is weakest. The region accounted for 34 per cent of units launched last month but only 19 per cent of sales. Last month also saw prices ease slightly in areas such as Bukit Timah and Newton. CBRE said that some units at Madison Residences and Floridian along Bukit Timah Road were sold at median prices of $1,801 psf and $1,443 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. But many developers are holding prices firm. There is still no broad-based decline in home prices based on the September sales, said CBRE. Sales volume last month was driven mostly by new launches such as Concourse Skyline (68 units sold), The Peak At Balmeg (47), Traselveo (41), Viva (19) and Mulberry Tree (13). Most of the units launched and sold were in the rest of central region (RCR). Analysts said that buyers are looking at mid-range private properties and mass-market homes. The RCR, where most mid-tier private homes are located, accounted for 48 per cent of launches and 60 per cent of sales last month. Colliers expects prices of high-end and luxury homes to slide by up to 5 per cent in Q4, prices of mid-tier homes to fall up to 3 per cent and prices of mass-market homes to hold firm or weaken less than 2 per cent in Q4.
- The Business Times, P3
Private home sales set to stay subdued
Developers sold 376 private homes last month, up from 325 in August but down from 902 in July, according to URA. This puts private home sales in the first three quarters at 3,890 units, compared with 14,811 units for last year. CBRE expects a further fall in overall home prices of 2-4 per cent in the last quarter. Colliers said supply will weigh on prices as the stock of unsold units is accumulating as sales fail to keep pace with launches. There was a take-up rate of 31 per cent last month with an estimated 234 out of 767 launched units sold. There were no sales above $4,000 psf, compared with three in the previous quarter. Mid-tier projects saw the most sales last month. Out of the 100 launched units, 68 units at the 360-unit Concourse Skyline were sold at prices ranging from $1,272 psf to $1,871 psf. Buyers picked up 47 out of 90 launched units at the 180-unit The Peak @ Balmeg, paying between $854 psf to $1,147 psf for the project. At Tresalveo, buyers bought 41 out of 60 launched units of the 176-unit development near Jalan Pemimpin for $902 psf - $1,045 psf. Other new releases include Far East's 99-year leasehold condo in Marine Parade called Silversea, where 11 units were sold at a median price of $1,400 psf. Support from HDB upgraders will still be evident since the HDB resale market is going strong, said CBRE. Other potential buyers would prefer to wait.
- The Straits Times, B19
UK fund house sets up shop here
British fund house Threadneedle has opened an office in Singapore and registered 40 funds here. The financial market maelstrom has not deterred the London-based fund manager, which handles over US$110 billion (S$162 billion) of assets, from its expansion drive in Asia, where many of its clients are based. Threadneedle, one of Europe's largest asset managers, currently manages US$6 billion of assets from Asian clients, and is looking to use the region's two private banking hubs - Singapore and Hong Kong - to expand its distribution of funds. Threadneedle has not been hit by many investor redemptions as the majority of its investors are institutions that are better able to sit out the roller-coaster ride in stock markets. Private banking clients are also starting to look at emerging markets funds, noted Threadneedle.
- The Straits Times, B17
S-E Asia to set up multi-billion dollar fund
South-east Asian nations, backed by Japan, South Korea, China and the World Bank, joined in the global financial rescue effort yesterday, agreeing to create a multi-billion-dollar fund to buy bad debt and help banks. The South-east Asian fund plan, due to be set up with a US$10 billion World Bank backing, suggested the region's officials did not want to take any chances.
- The Business Times, P2
US$2.4 billion project hits funding snag
A planned US$2.4 billion petrochemical investment on Jurong Island - Jurong Aromatics Corporation (JAC) - had earlier indicated that it would start construction of its aromatics complex by year-end. But given the current economic and financial climate across the world, some delays are expected for the conclusion of the project financing. JAC's latest financing hitch means that construction of the aromatics complex will now have been delayed by a year at least. Construction here of two other giant petrochemical complexes of Shell (US$3 billion) and ExxonMobil (US$5 billion-plus) remains on track but sources said there are minor hitches to other projects there. The announced mega oil/ chemicals projects here - including the $700 billion first phase of Jurong Rock Cavern for underground oil storage - have not been adversely hit by the global downturn so far.
- The Business Times, P1
Global slump fears begin to take hold
A global recession, perhaps the deepest one in decades, may be unavoidable. Those fears were fanned when a top US central banker said that the United States 'appears to be in a recession'. There are also growing fears that Japan and much of Europe are heading for a spell of economic stagnation or recession. Only a handful of countries, including New Zealand, Ireland and Singapore, have so far officially slipped into recession. Singapore stocks fell 3.24 per cent, Seoul slid 2.0 per cent and London closed down 7.2 per cent.
- The Straits Times, P1
Exuberance over, markets retreat to red
After two days of cheering government measures to pump liquidity into credit markets, the reality of a global recession is now setting in. The most obvious evidence is the slashing of earnings expectations for companies as slower growth looms. No industry seems immune from the downturn. On Wall Street, the Dow Jones Industrial Average retreated by 0.8 per cent after Monday's record gains while the Nasdaq Composite Index, which tracks technology stocks, fell by 3.5 per cent. Locally, blue chips buckled under profit-taking, driving down the benchmark Straits Times Index (STI) by 68.92 points or 3.24 per cent to close at 2,059.39.
- The Straits Times, B17
UK housing prices may decline further
UK house prices may fall another 15 per cent by the end of 2009 as values slide back to 2003 levels. The slump will leave five million properties, or 24 per cent of the private-housing market, with a lower value than the purchase price, Knight Frank LLP said. Average prices won't recover to last year's peak until 2015. Lenders approved 32,000 loans for house purchases in August, the least since comparable data began nine years ago, the Bank of England said. The revival in prices will be led by luxury properties in central London, where values may get back to last year's peak by 2012. Development land values may slump 15 per cent next year after plunging 33 per cent from their peak already, said Knight Frank.
- The Business Times, P29
UK commercial property returns fall
Commercial property returns in the UK fell in the 12 months to Sept 30 at the fastest rate in at least 21 years as price declines accelerated. The annualised loss on investments in offices, shops and warehouses was 18 per cent. September's 2.4 per cent loss was the worst monthly return this year. Rents and capital values dropped after banks granted fewer loans to investors as the subprime mortgages market collapsed. Demand for commercial real estate was also crimped by job cuts in the financial-services industry.
- The Business Times, P29
Sands may spin Macau retail into property fund
Las Vegas Sands Corp might spin off billions of dollars of Macau retail assets into a property fund. The company, which runs the giant Venetian Macao casino and is building more hotels and casinos in the territory, floated the idea of selling its shops into a listed property trust a couple of years ago. But with stock markets tanking in the last year, hitting real estate investment trusts (Reits) hard, Las Vegas Sands is now considering packaging the property into a fund for institutional investors.
- The Business Times, P29
Retail sales hold up in Aug, but is expected to slow
Singapore’s retail sales continued to hold up in August, but is expected to ease due to the economic slowdown and tightening credit conditions. Nominal retail sales went up 4.2 per cent in August, largely due to higher prices. Excluding the price effect, the volume of retail sales remained unchanged. The only two categories that saw contraction in sales were motor vehicles and recreational goods.
- The Business Times, P10
(also see The Straits Times, B20, “Retail spending down for 3rd straight quarter”)
Employers reducing hiring in Q4; but few retrenching: survey
The financial crisis may be forcing many employers to scale back on recruitment plans, but only a handful of them plan to lay off staff in the forth quarter. Among 800 top employment decision makers polled here by leading executive recruitment firm Hudson, 37 per cent in key business sectors forecast increased hiring in Q4 2008, down from 43 per cent in Q3 and 57 per cent year-on-year. The majority - 59 per cent - said that hiring will remain steady, while just 4 per cent expect headcount to be cut. But the survey was conducted before the latest events in global financial markets, which may have affected the results. Manufacturing was the only sector to record a rise in hiring expectations overall. In the banking and financial services sector, 34 per cent of respondents plan to increase hiring, down from 43 per cent in Q3. 64 per cent of respondents expect their company's performance to be 'good' next year. Singapore has the second-highest proportion of respondents reporting higher stress levels.
- The Business Times, P9
RBI reduces cash reserve ratio, will provide funds for banks
India cut the amount of deposits lenders need to set aside as reserves and said that it will provide funds for banks to tackle a global credit crunch that threatens to plunge the world into a recession. The Reserve Bank of India (RBI) reduced its cash reserve ratio to 6.5 per cent from 7.5 per cent, the second cut in a week. The move will add 400 billion rupees (S$12.2 billion) into the financial system.
- The Business Times, P13
Seoul says economy slowing; won takes a beating
South Korea's finance minister offered a grim assessment of the economy yesterday, saying it would struggle to grow 4 per cent this year in the face of the global financial crisis. The currency fell 2.4 per cent against the US dollar yesterday.
- The Business Times, P11

DAILY MARKET UPDATES 18th October 2008

2008-11-18T03:58:00.002+08:00

Bank deposits get govt seal of guarantee
The Singapore government will, with immediate effect, guarantee all Singapore dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks. The guarantee would be in place until Dec 31, 2010, and will be backed by $150 billion of government reserves. The government's guarantee will cover deposits in any currency held in savings accounts, fixed deposits, current accounts and under the Supplementary Retirement Scheme. But it does not include any structured deposit and any deposit which is pledged, charged or secured as collateral. It will also be extended to deposits placed with credit cooperatives registered with the Registry of Cooperative Societies. Currently, there are 41 credit co-ops with more than 200,000 members. Also covered are all depositors, big and small, corporate and individual, including those under the current Deposit Insurance Scheme administered by the Singapore Deposit Insurance Corporation, which will now enjoy protection on the full amount of their deposits.
-The Business Times, P1
OCBC: S'pore economy least risky
Singapore has been rated the best-equipped of more than 50 economies worldwide to overcome a serious economic crisis in an OCBC report. The report looked at risk levels and awarded Singapore full marks for its long-term economic fundamentals. Assessed according to seven indicators of economic health, the Republic received a point in every category to top the list as the least risky of 50 economies and the Euro-zone. The broad categories used to track a country's economic health are the ability of a country to cushion itself in a downturn, its level of leverage or debt, and its debt to income level. Countries with large savings rather than debt, access to usable reserves and which run a fiscal surplus generally fared better on the list. OCBC economists said that Singapore passed all the indicators that are deemed important in determining the medium- to long-term economic fundamentals.
-The Straits Times, B23
Serviced office centre opens at One Fullerton
The Regus Group, the world's largest provider of serviced offices, opened a centre in One Fullerton yesterday, confident that demand will stay high despite the financial crisis. Regus has been on an aggressive expansion drive in the Asia-Pacific and aims to open more facilities in the region. Regus One Fullerton, which occupies 20,623 sq ft, has 327 fully furnished workstations. Rates at the One Fullerton centre start from $9,000 a month for a 16 sq m office, which can fit three workstations. There is an opening promotion rate of just over $6,000 a month for the same space. Recent CBRE data shows that office rents have stabilised, with Grade A levels unchanged in the third quarter at $18.80 psf per month while prime rents were stable at $16.10.
-The Straits Times, B11
A black mood seizes markets worldwide
Stocks in Asia went into free-fall yesterday as gloom replaced hope and more banks in Europe turned to governments for funding. UBS received nearly US$60 billion in support from the Swiss government, while Credit Suisse raised 10 billion francs (S$12.9 billion) from other investors including Qatar's sovereign wealth fund. Japan's Nikkei-225 index was the biggest loser in the region yesterday, plummeting 11.4 per cent by the end of trading. The Straits Times Index finished 108.19 points, or 5.25 per cent, lower at 1,951.20. Interbank lending rates in most major economies in Asia and Europe fell for the fourth straight day, a reassuring sign that the trillions of dollars committed by governments to support the banking system is restoring confidence among financial institutions.
- The Business Times, P2
No Asian fund, says World Bank
The World Bank said it does not anticipate the setting up of a special fund for Asia, even as it stands ready to help the region deal with the challenges arising from the current financial turmoil. The Washington-based lender issued the statement in a clarification of remarks by Philippine President Gloria Arroyo which suggested that an Asian bailout fund with an initial US$10 billion (S$14.7 billion) was in the works. The bank said it stood ready to help East Asian countries deal with the turmoil and was prepared to raise lending, take equity stakes in companies and help in safety net programmes.
- The Straits Times, A6
Brokers’ take: Property Sector – OCBC
Launches and transaction volume of non-landed properties (NLPs) recovered month-on-month (m-o-m) in September. The recovery in transaction volume was pale in comparison to the increase in new launches, up by 24 per cent m-o-m to 365 units. Transactions in the Rest of Central (RCR) region was the most active in September, driven by new launches. New launches in the Core Central Region (CCR) jumped almost five-fold m-o-m in September to 240 units. With an uncertain economic outlook, the increase in launches of CCR properties could be an attempt by developers to clear stocks in the CCR in anticipation of further weakness in the property market. For some older projects, developers had started to cut prices to move their unsold inventories. Floridian had seen its median transacted price fall 16.8 per cent from $1,735 psf in January to $1,443 psf in September, leading to eight units sold in September, after registering no sales since February. 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 m-o-m to 3,903 units. Coupled with the weak macro-outlook and tighter credit condition, OCBC expects more developers are likely to follow suit with price-cutting.
- The Business Times, P6
CapitaLand's Gulf sales hit $1b
Sales for CapitaLand's Middle-Eastern residential ventures have crossed the $1 billion mark as 849 residential units have been booked. At the time, 96 units of the integrated development at Raffles City Bahrain - comprising three residential towers with 641 apartments, sky villas, retail, food and beverage facilities and five-star serviced residences - were snapped up. Sales have now hit 115 units at an average price of about $6,627 per sq m. This is a 29.6 per cent premium over the prices of other quality residential apartments in Bahrain. In Abu Dhabi, CapitaLand has Rihan Heights, part of an integrated development called Arzanah. It will comprise five residential towers, leisure and sports facilities and retail space. CapitaLand said that 85 per cent - or 734 out of 868 - of Rihan Heights' residential units have been booked since the launch last month. The average sale price achieved ranged from $9,717 to $10,514 per sq m. Raffles City Bahrain is expected to be ready in the fourth quarter of 2010, while Rihan Heights is slated for completion in early 2011.
The Straits Times, B23
Falling rents may take shine off S-Reits
Singapore-listed real estate investment trusts, or S-Reits, are finding favour with analysts. UOB Kay Hian upgraded the S-Reit sector from market weight to overweight due to the attractive yield spread. Some Reits are seen to be sources of stable, visible and recurrent income in uncertain times. But rents will fall and office trusts will be among the first to be hit. The upheaval in the banking system means that financial institutions are unlikely to continue with expansion plans. Other businesses will have reduced access to bank credit and scale back expansion plans. With a reduced appetite for space and new office supply coming onstream in 2010, landlords are losing their bargaining power and rents will fall. Kim Eng Research expects prime Grade A office rents to fall by up to 15 per cent by the end of 2009.
- The Business Times, P10
Asia better prepared since '97 crisis: economists
Rreforms launched amid the 1997-1998 Asian economic downturn have put Asia in good shape to weather the crisis now gripping global markets, economists said. In contrast to 1997, most Asian economies would ride out the current storm with relative ease. But countries which export heavily to the United States and Europe, such as Singapore, the Philippines and Hong Kong, may be exceptions.
- The Business Times, P20
14,400 franchising jobs by 2013
The franchise industry here is on a roll and is projected to create 14,400 jobs by 2013, estimated the Franchising and Licensing Association (FLA). Deputy Speaker of Parliament Ms Indranee Rajah said that last year, Singapore's 30,000 franchisees brought in near US$3.8 billion (S$5.6 billion) in revenue. She added that Singapore’s strategic location, extensive air and sea networks, state of the art business banking, telecommunications and logistics infrastructure allow business to expand into the booming Asia markets.
- The Straits Times, B27
STALLED: Property sales in China
The 'wait and see' behaviour of would-be buyers has stalled China's property market, raising fears of collapsing prices and a real estate meltdown similar to the one that put the United States in recession. Housing sales in major Chinese cities last month were down 64 per cent year on year, with prices falling by 4 per cent from August, according to Goldman Sachs. The house price index for 70 major cities rose 7 per cent in July from a year earlier, the lowest increase yet this year. When adjusted for inflation, house prices rose by a mere 0.7 per cent over the same period. Some developers had begun to offer rebates of up to 10 per cent. Some 17 municipal governments had tried to boost sales by introducing measures like lower transaction levies, direct subsidies and tax incentives. In Shanghai, the authorities raised the ceiling on mortgage lending to households by 20 per cent to as much as 600,000 yuan (S$130,000). The Nanjing city government is offering a subsidy of 0.5 to 1 per cent of the purchase price to house buyers. In Hangzhou, the municipal government rolled out a package of 24 measures, including subsidies for property transaction taxes.
- The Straits Times, B27
STALLED: Mega projects in Malaysia
The Malaysian government will review and shelve some projects, including those in the economic corridors, in view of the economic slowdown. The five economic corridors were all launched with the aim of accelerating growth and wooing foreign investments. The Prime Minister assured investors that only government projects would be affected and not those financed by private companies.
- The Straits Times, B27
Chinese chamber members feel pinch of credit crisis, high costs
Singaporean businesses are feeling the pressure to reduce business costs more than ever, according to a survey of Singapore Chinese Chamber of Commerce and Industry (SCCCI) members. A majority of 89 per cent also felt that this is not a short-term crisis and is unlikely to be resolved within six months. Up to 80 per cent felt that the current crisis is more severe than the Asian financial crisis, and some 73 per cent felt there would be a financial impact on their business. But most respondents felt that their headcount would not be affected. SCCCI said the respondents represent a 'broad spectrum of members from various industries. The survey was conducted between Sept 25 and 30.
- The Business Times, P12
Managers pessimistic in Oct survey
A survey of fund managers reported pessimism in terms of the extent of cash overweights and equity underweights. Merrill Lynch said that its October fund manager survey is one of the most pessimistic. Institutional fund managers believe that the world is in recession; that monetary policy is too restrictive; and that companies should use what cash flow they have to rebuild balance sheets. Fund managers have lost faith in global growth, commodities, China's economy and emerging markets.
- The Business Times, P8
India funds sell 77b rupees of debt as investors pull out cash
Indian mutual funds have sold a net 77.2 billion rupees (S$2.3 billion) of debt this month, the most this year, to meet redemptions from investors worried by the impact of the global credit crisis and a slowing domestic economy. Funds pulled out 32.1 billion rupees from bonds on Oct 14, the highest this month, the Securities & Exchange Board of India (Sebi) said. Mutual funds had placed a net 646.2 billion rupees in bonds in the January- September period. Foreign funds, who bought a record US$17.2 billion of equities last year, have pulled out US$11 billion since January, triggering a 46 per cent slide in the benchmark stock index and driving the rupee to a near record low.
- The Business Times, P17
China's small banks face tough times
Concerns are growing that the country's banks may be ill-equipped to handle a drop in the Chinese economy. Corporate collapses and defaults, together with a tightening interbank lending market, show that China's banks are hardly in the clear when it comes to the global turbulence. Some of the country's financial groups have the benefit of government ownership and relatively small exposure to the West's sub-prime mortgage mess. The main concern is focused on smaller commercial banks, whose regional concentration makes it harder to withstand a downturn than the larger, more diverse state-run banks.
- The Business Times, P8

DAILY MARKET UPDATES 18th October 2008

2008-11-18T03:58:00.001+08:00

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

DAILY MARKET UPDATES 27th October 2008

2008-11-18T03:57:00.001+08:00

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

DAILY MARKET UPDATES 29th October 2008

2008-11-18T03:55:00.000+08:00

Natura Loft to be launched on Friday
Chinese firm QingJian Realty is launching Singapore's fourth condo-style public housing project on Friday. Natura Loft at Bishan, a project under the Housing Board's Design, Build and Sell Scheme (DBSS), will feature three 40-storey blocks of 160 four-room units and 320 five-roomers. The four-room units of about 95 sq m each are priced from $465,000 to $586,000 while the five-roomers of 120 sq m will go from $600,000 to $739,000. That works out to $450 to $570 psf. QingJian Realty's move reflects the relative strength of the HDB market amid a downturn in the property market here. Flat prices at Natura Loft are a notch higher than HDB's third DBSS project, Park Central at Ang Mo Kio. This was priced between $400,000 and $500,000 each for four-roomers, and $600,000 and $670,000 for five-roomers.
- The Straits Times, B22
S'pore ranked 7th among top global cities
Singapore has been ranked seventh on a list of 60 cities compiled by Foreign Policy magazine, consultancy AT Kearney and The Chicago Council on Global Affairs based on five factors - business activity, human capital, information exchange, cultural experience and political engagement. Singapore is cited for its financial links and recognised as a regional gateway - an efficient economic powerhouse with incentives for businesses and easy access to natural resources of its region. It is a magnet for smart, well-trained people worldwide and it often reinvents itself to stay competitive. Singapore ranked sixth for business activity, seventh for human capital, 15th for information exchange - how well news and information is dispersed - and 16th for political engagement.
- The Business Times, P10
(see also The Straits Times, B2, Singapore ranks 7th in the world”)
YTL snaps up interest in Macquarie Reit for $285m
Malaysian conglomerate YTL Corp took over the Macquarie Group's entire interest in Singapore-listed Macquarie Prime Reit in a deal worth $285 million. Noting that the deal provides a 2009 yield of about 9.4 per cent, YTL said it offers very compelling returns and illustrates his optimism about the Singapore property space. The Reit currently has stakes in Wisma Atria and Ngee Ann City along Orchard Road. YTL is separately developing two luxury villas on Sentosa Island (one of them is Sandy Villas which sold 3 units) and last year bought the prime Westwood Apartments site at Orchard Boulevard for $435 million ($2,525 psfppr). Macquarie Prime will be rebranded Starhill Global Reit and will be YTL's main vehicle for strategically acquiring yield accretive prime retail space in Asia and the West. YTL is very confident that Singapore will pull through this turbulence and come out ahead of the crisis.
- The Business Times, P2
(also see The Straits Times, B24, “YTL buys stake in Macquarie Prime Reit”)
Inflation to fall to 2.5-3.5% in 2009
In its latest Macroeconomic Review, MAS predicts a fall in CPI inflation to 2.5-3.5 per cent in 2009. And it expects underlying inflation - which excludes accommodation and private road transport costs - to be around 2 per cent. Prices of big-ticket items are likely to ease quickest on the back of weak consumer sentiment. Retail sales volume fell 1.5 per cent year-on-year from June to August, due to cautious local spending and lower demand from tourists. For local businesses, slower growth will mean an easing of cost increases next year - the pace of wage rises will moderate and rents will gradually ease.
- The Business Times, P2
(also see The Straits Times, A3, “Inflation to ease next year”)
Hang Seng leads regional rally
Asian stocks rebounded yesterday, with Hong Kong's Hang Seng Index leading a broad regional rally that also saw steep gains in Tokyo and Seoul. The Hang Seng Index was up more than 14 per cent, adding 1,580.45 points as investors plunged back in, judging that valuations were low enough to limit risks on the downside. Singapore's Straits Times Index closed 66.21 points, or 4.14 per cent, higher at 1,666.49. South Korea's Kospi index added 5.6 per cent while the Nikkei ended 459.02 points up at 7621.92, a 6.41 per cent gain. But market players cautioned that the rally came after days of steep falls and should not be taken to mean a broader regional trend.
- The Straits Times, B17
(also see The Business Times, P1 “Lone rangers surge, drag stock indices up”)
US$125b Treasury bailout set to kick in
The US government has cleared the way to ship out US$125 billion this week to the country's largest banks. Not only is the money ready to be sent to nine major financial institutions, but the government is reaching preliminary agreements with a group of more than a dozen major regional banks, who will share a part of an additional US$125 billion that the government hopes to pump into the banking system. Before the end of the year, Treasury Secretary intends to spend US$250 billion of the US$700 billion bailout package buying ownership stakes in US banks. Another US$100 billion is earmarked to be spent buying troubled assets from banks as another way to spur banks to resume lending.
- The Business Times, H36
Brokers’ Take: Property Sector – OCBC Investment Research
The URA residential property price index fell 2.4 per cent to 173.3 in Q3 2008. The decline in prices was widespread across all regions in Singapore, with properties in the Core Central Region (CCR) the worst hit. New sale transaction volume remained firm in Q3, driven by sales in the Outside Central Region (OCR). Subsale and resale volumes tapered off in Q3. It is expected that 10,007 private residential units under construction are slated for TOP in 2009, higher than the expected 9,911 units for 2008. HDB resale price index grew by 4.2 per cent q-o-q, and the increase was backed by a 4.5 per cent q-o-q increase in transaction volume and a slight q-o-q increase in the median subletting rents. OCBC expects a further drop in demand for private properties. The sustainability of mass-market property demand from HDB upgraders could be in question as there is greater caution exercised by HDB upgraders, evident from the closing gap between HDB resale and OCR property prices. Physical completion of private properties is expected to remain high in 2009 and with the increasing number of launched but unsold units, the total supply of private properties could remain high.
- The Business Times, P6
Property auctions see few takers
Properties for auction are being left on the shelf as buyers hold out for further drops. 198 properties were put on the block by the five main auction houses from July to September this year, according to Knight Frank. Just 14 of these properties were sold. In October, there have been no takers at the two auctions held so far. Buyers are not biting because they are waiting for prices to fall, even though asking prices have come down as much as 20 per cent in some cases. Demand from investors is weak, but there is still some interest in value buys and properties that are well located and priced right, as investors are very price-sensitive, said Colliers. Demand from owner-occupiers is slightly better. Colliers says that it is seeing good interest in mass-market private homes from upgraders and for landed properties.
- The Business Times, P10
Stung on Wall St, Asian SWFs eye home turf
Asian sovereign wealth funds (SWFs) may become more visible shoring up markets closer to home as emerging economies look to steer around the damaging effects of global market turmoil. Wealth funds from Singapore, China and South Korea may instead look to invest in more defensive sectors such as Asian utilities and infrastructure firms, while keeping an eye on distressed property and financial assets in Western markets.
- The Business Times, P19
STB working hand-in-hand with Marina Bay Sands
The Singapore Tourism Board said it is working closely with Marina Bay Sands to ensure success of its integrated resort project, amid concerns over the financial position of parent company Las Vegas Sands (LVS). The LVS share price went into free fall on rumours the company is having trouble refinancing debt amid poorer outlook on the casino business in the US. Bankers and analysts say the Singapore government is not likely to allow the project to fail, even if Marina Bay Sands is forced to default on loans. The three local banks are financing $2.2 billion of the $5.44 billion project, according to sources.
- The Business Times, P4
Brokerages act to help 'vulnerable' investors
Sixstock brokerages last night unveiled compensation plans for 'vulnerable' investors burnt by toxic products linked to the collapsed United States investment bank Lehman Brothers. The six are: CIMB-GK Securities, DMG & Partners, Kim Eng, OCBC Securities, Phillip Securities and UOB Kay Hian. The buy-back will cover Lehman Minibonds and Merrill Lynch Jubilee Series 3 LinkEarner Notes. Vulnerable investors are defined as over 62 years, less educated and with little investing experience.
- The Straits Times, A4
India tops Asia-Pac political risk survey
India, Malaysia and Thailand face the highest political and social risk among Asia-Pacific countries in 2009, mainly because of internal instability, the Hong Kong- based Political & Economic Risk Consultancy (Perc) said in a report. The consultancy assessed 16 countries on factors such as the risk of disruptive political change, the threat posed by social activism and vulnerability to policy changes by other governments. Japan, Hong Kong, Singapore and Australia were ranked most stable and low in political risk for 2009.
- The Business Times, P14
(also see The Straits Times, A4, “Singapore most politically and socially stable in region”)
Economy to stay weak next year
Singapore’s slowing economy is likely to remain weak next year as the financial crisis hits home, said the Monetary Authority of Singapore (MAS). The economy, already in a technical recession, will see further decline expected to spread to almost all sectors, from manufacturing to tourism. The official growth forecast for this year has already been scaled down to about 3 per cent. Most economists expect expansion of between 0 and 1.5 per cent with a moderate recovery in the second half of next year. The crisis has battered consumer sentiment and affected the financial services, retail sector, property and real estate services. Cautious investors are choosing to put their money in safe assets or hoard cash, weakening the local wealth management industry. But the MAS believes that the domestic fund management industry has underlying strength. One spot of relief is that the pharmaceuticals sector may offer some cushion next year when two new facilities open. Another sector bucking the trend is construction, which will likely ride out 2009 well as backlogged projects awarded from previous quarters get under way. Large-scale projects like the integrated resorts and the Marina Bay financial centre will also keep the industry busy through 2010.
- The Straits Times, A1
(also see The Business Times, P1, “Ripples from crisis will be far-reaching: MAS”)
Unemployment likely to rise
Job losses are looming, with manufacturing and financial services companies expected to be among the first to cut staff. This means unemployment is likely to rise over the next few quarters, while salaries will grow at a much slower pace, said MAS. The jobless rate for the third quarter is expected to be higher than the 2.3 per cent seen in the second quarter.
- The Straits Times, A1
Zero payout for most High Notes 5 investors
Investors of DBS High Notes 5 who were not mis-sold the product will get nothing back as the unwinding process has turned up zero proceeds. The majority of High Notes 5 investors will not be receiving anything back, said a DBS spokeswoman. For investors deemed vulnerable and those who were mis-sold, their compensation is not affected by the total loss as DBS said its compensation in Singapore and Hong Kong could touch $70-$80 million.
- The Business Times, P3
NUS business exec MBA course in world's top 30 list
NUS Business School's Asia-Pacific Executive Master of Business Administration (Apex) programme has been ranked 20th in the world in the Financial Times EMBA 2008 survey. This is the third time the programme has made the top 30. It was 29th in 2006 and 30th in 2005. The Apex programme was also listed among the world's top 10 in specific categories. It was ranked sixth for 'International Students' and seventh for 'International Course Experience'. The programme was ranked ninth for 'Work Experience', which measures the experience of participants. Participants in the 17-month programme are senior executives from different countries.
- The Business Times, P10
New Jurong Port terminal a boost for lighter operators
Singapore’s lighter and ship-chandling operators now have bigger and better facilities to work from with the opening of the new Penjuru Terminal at Jurong Port. The opening of the new purpose-built terminal with 150 metres of berth space and 10,000 sq m of land area was a significant milestone for the operators. Currently, 11 out of about 20 lighter operators in Singapore operate from Penjuru Terminal.
- The Business Times, P10
SMEs feel pinch of electricity price hike
As many as 20 small and medium-sized enterprises (SMEs) which rely heavily on electricity say they have have been hit hard, about three weeks after Singapore Power increased its electricity tariffs by about 22 per cent. 12 of the 20 firms are thinking of passing costs on to customers. The Association of Small and Medium Enterprises, said SMEs have fewer resources than big corporations to perform energy audits, and less wiggle room to cut electricity use.
- The Straits Times, B11
Stanchart lays off senior staff
Standard Chartered (Stanchart) sacked several staff members from the group's consumer banking division last week. Senior people in Hong Kong and Taiwan were affected by the bank's 'restructuring exercise' but most of the 35 job cuts were made here. Sources say the restructuring exercise includes areas such as wholesale banking, but is particularly 'prevalent' at the group consumer bank. Sources say the lender is merely exercising caution and laying off senior staff to cut costs. But another reason has to do with the change in senior management. A Stanchart spokesman said that despite the financial turmoil, the bank is in great shape.
- The Straits Times, B23

DAILY MARKET UPDATES 30th October 2008

2008-11-18T03:54:00.000+08:00

German fund pays $63m for building
A German fund manager has just finalised the $63 million purchase of an industrial building in Changi Business Park - Applied Materials Building. Hamburg-based Union Investment Real Estate Asia Pacific made the deal as part of its strategy to diversify its portfolio in Singapore. Colliers International brokered the acquisition. There were other bidders for the property but Union Investment's offer was the most attractive. Union Investment bought the 198,000 sq ft property from Applied Materials SEA. The building, with a 30-year plus 30-year leasehold tenure, will be placed in the firm's Unilmmo Global fund. For the next 18 months, Union Investment will lease the building back to Applied Materials. The building has six other tenants, including the Discovery Channel. Average rents are around $2.20 to $2.80 psf - below Changi Business Park's rents of $4 to $4.50 psf. Union Investment also owns VisionCrest Commercial and The House of Tan Yeok Nee in Orchard Road. It bought both for a total of $260 million. The fund is still looking for more properties but is more cautious now.
- The Straits Times, B21
(also see The Business Times, P30, “Union Investment buys $63m building”)
2 trusts ride out storms in third quarter
Two key property trusts - CDL Hospitality Trusts and MP Reit - put up favourable third-quarter results. CDL Hospitality Trusts reported that distribution per stapled security for the third quarter was 2.93 cents, up 24 per cent from the same period last year. Gross revenue grew 21 per cent to $29.09 million, while net property income rose 20.7 per cent to $27.28 million. Macquarie Prime (MP) Reit said it has achieved a distribution per unit for the third quarter of 1.78 cents, up 15.6 per cent from 1.54 cents last year. Gross revenue rose 24.8 per cent to $32.6 million, due to higher rental renewal rates, new leases and revenue from overseas properties. Net property income rose 21.7 per cent to $23.6 million. Average rental renewal rates for MP Reit's office space in Ngee Ann City and Wisma Atria grew 138 per cent.
-The Straits Times, B6
New serviced homes brand for Frasers Hospitality soon
Frasers Hospitality is looking to start a new serviced residence brand and will announce this soon. In times of a slowing economy, business actually picks up for serviced residences because MNCs start to look for more flexible housing packages for their staff. Already, he says that Frasers Hospitality has seen its long term stay business in Singapore (averaging about six months) increase from about 50 per cent previously to about 65 per cent in 2008 to date. When the brand is launched sometime next year, rooms are expected to be smaller. Frasers Centrepoint is considering turning unsold properties such as Martin Place Residences into high-end serviced apartments. As at September, Frasers Centrepoint was reported to have launched and sold about 30 units at its 302-unit Martin Place Residences, with apartments going for about $1,800 psf on average.
-The Business Times, P9
Prospects for region remain bright
Singapore companies, which have been pouring billions of dollars in investments into South-east Asia, should not be distracted by the financial crisis or slowdown as the region's fundamentals will continue to present opportunities for growth, according International Enterprise Singapore. The spread of urbanisation across South-east Asia is likely to continue to stimulate demand for infrastructure and property development. The projection is that by 2025, over half - 57 per cent - of the region's population of 578 million currently will be urbanised, up from 46 per cent now.
-The Business Times, P18
Marina IR not likely to open fully in end-'09
The integrated resort (IR) at Marina Bay is unlikely to be fully open at the end of next year, sources have said. Foundation works was delayed by three to four months, and then a shortage of labour and the rising cost of building materials also created setbacks. Sources confirm that it is 'several months' behind schedule and that, even if the physical structure can be ready by then, it will be 'impossible' for all its facilities to be fully operational. The free-fall in the stock value of the resort's parent company Las Vegas Sands Corp has also raised questions about the fate of the US$4.5 billion (S$6.7 billion) project here.
- The Straits Times, A1
Sentosa IR to delay parts of project
Four hotels, Universal Studios and the casino of the Sentosa integrated resort are set to open as scheduled in the first quarter of 2010. But sources told The Straits Times that Resorts World at Sentosa is negotiating with the Government to defer the opening of the remaining facilities in the $6 billion resort. The setback has arisen out of a pressing need to find storage space for the equipment for the 14 attractions in the Universal Studios theme park. To create space on-site, the resort has had to turn one of its venues into a store and, while the venue is used this way, construction has to be put on the backburner. The project is 'on track' for a 'soft opening' in 2010.
- The Straits Times, A4
China, Korea face housing market bust
China and South Korea have moved to prop up their frazzled housing markets but probably need to do more to avoid major price slides. A share price collapse this week for Chinese property developers suggests that many investors believe a housing market bust is on the cards, despite a policy U-turn. Last week Beijing unveiled cuts in taxes, mortgages and down payments on homes to breathe life into a property industry that accounts for about 10 per cent of GDP. In South Korea, where around half the country's personal wealth is tied up in property, the government pledged five trillion won (S$5.3 billion) last week to buy unsold homes and land from developers to prevent mass bankruptcies in the industry. An interest rate cut of 75 basis points followed on Monday as policy makers tried to keep the global financial storm at bay.
- The Business Times, P28
What MAS has done and is considering
Under our regulatory regime for the sale of investment products, financial institutions and their representatives have to fully comply with MAS' requirements. Given current market conditions, we have instructed the chief executive officers of all financial institutions to conduct a thorough review of their processes and procedures for their sales and marketing activities. If financial institutions fall short of the required standards, MAS will take appropriate action. MAS has announced that we are conducting formal inquiries into potential breaches of the law, inadequate internal controls by financial institutions that sold structured products linked to Lehman Brothers, and poor sales practices by their representatives.
- Angelina Fernandez (Ms), Director (Communications), MAS
- The Straits Times, A25 – ST Forum
Global credit crunch squeezes Jones Lang LaSalle earnings
Jones Lang LaSalle’s third quarter profit dropped as the worldwide credit shortage curtailed property purchases and added severance costs as the company fired employees. Net income declined to US$15 million from US$46.5 million a year earlier. Investment in UK shops, offices and warehouses has declined, down 17 per cent in Q3 as potential buyers found it more difficult to borrow money, Jones Lang said.
- The Business Times, P30
Asia shrugs off Wall St rally
A surge of nearly 900 points (10.9 percent) on Wall Street on Tuesday, and the second-largest point gain on record, failed to ignite bourses in Asia yesterday. They gave up early gains to close mostly flat as fears over a global economic slowdown continued to leave investors cautious, even as governments signalled they were going to cut interest rates to boost their economies. The only Asian market that performed well was Tokyo, where the benchmark Nikkei 225 index soared 7.74 per cent. Singapore was up 0.28 per cent yesterday.
- The Straits Times, A1
Credit crunch takes toll on smaller firms
Credit woes and corporate governance issues appear to be on the rise among small and mid-cap companies, as the financial upheaval continues. Analyst at DMG & Partners said that at times like these, the banks are quite cautious and may cut back on lending to small companies even if they are fundamentally sound. Head of OCBC Investment Research said that firms that are highly geared or have near term refinancing obligations are under pressure to secure credit lines and face higher interest costs. For the small-cap firms, these are viewed as being more vulnerable operationally.
- The Business Times, P2
Japan ready to calm markets, ease yen rise
Japan Prime Minister Taro Aso is expected to unveil today emergency measures that Japanese authorities are deploying to fight the global financial and economic crisis. This will almost certainly be followed tomorrow by a cut in the Bank of Japan's (BOJ) policy lending rate - the first in seven years - coupled, possibly, with foreign exchange market intervention. Tokyo's Nikkei 225 stock average rebounded 7.7 per cent or 589.98 points yesterday to 8,211.90 in expectation of an interest rate cut and the government's package of emergency measures. The package of measures are expected to centre on restoring stability to Japan's financial markets and institutions, however, with macro-economic supports in the form of tax cuts and public spending on infrastructure and other big-ticket government projects.
- The Business Times, P1
Singapore firms are zen over the yen
The latest currency to bring mayhem to the markets is the Japanese yen, which scored a 13-year high of 90.87 yen to the US dollar last week amid the unwinding of yen 'carry trades'. But the latest surge in the yen is likely to have a smaller impact on Singapore businesses, given the limited exposure that companies here have in the Japanese market. The big victims are the Japanese car importers, who say they are reeling from higher import costs.
- The Straits Times, A30
China gears up for potential net capital outflows
The State Administration of Foreign Exchange will tighten checks on cross-border capital flows through the services trade and cash transfers by individuals in and out of the country. China approved new foreign-exchange management rules in August, allowing the government to take necessary safeguarding and control measures to cope with an imbalance in international payments or economic crises. The nation is at risk of 'massive outflows' of capital if expectations for the yuan appreciation turn around. Growth in China's capital and financial account surplus slowed by 20 per cent in the first half of the year to US$71.9 billion from a year earlier.
- The Straits Times, A33
Jakarta's rupiah defence 'not enough'
Indonesia's latest moves to defend the plunging rupiah may not be enough to help boost the local currency's value, analysts say. The measures include government bond buyback plans and the requirement that all state-owned companies place US-dollar funds at home. The rupiah has plunged by more than 10 per cent against the greenback in the past week as overseas investors dumped emerging-market assets amid global liquidity crisis worries. The Jakarta Composite Index has plunged 61 per cent after touching a record high in January. Indonesian government bonds have dropped 17 per cent, according to HSBC Holdings, in the worst showing among 10 Asian nations. Overseas holdings of Indonesian bonds have declined 11 per cent to 94.91 trillion rupiah (S$13.3 billion) from a record in August.
- The Straits Times, B20
Lenders slap tight curbs on credit cards, credit lines
(Washington) After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both. The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of unprecedented losses. Lenders wrote off an estimated US$21 billion in bad credit card loans in the first half of 2008 as more borrowers defaulted on their payments. Currently, the total losses amount to 5.5 per cent of credit card debt outstanding, and could surpass the 7.9 per cent level reached after the technology bubble burst in 2001.
- The Business Times,P17
More layoffs in coming months
Announcements about job cuts are coming thick and fast as the financial crisis hits the real economy worldwide. Motorola said that it planned to cut thousands of jobs. Credit Suisse announced its plans to cut 500 jobs in its securities unit and some support functions. Whirlpool is eliminating about 5,000 jobs this year and next. It did not comment on the possibility of local layoffs. British energy giant BP, fresh from unveiling an 83 per cent jump in third-quarter net profits, said it is planning to cut more jobs than previously announced.
- The Straits Times, A7
Andrews Terrace
- New launch
- Waterfront living at 53 Andrews Terrace (Wak Hassan Drive)
- From $288 psf onwards
- 99-years leasehold w.e.f. 28 January 2008
- Expected TOP: 31 Mar 2009
- 14 units, 3-storey terrace houses with attics, private elevator, car porch, balcony and roof terrace
- Choice unit with private swimming pool
- Close proximity to Orchird Country Club, SAF Yacht Club, Sembawang Golf Course.
- Minutes away from Sembawang Park, Sembawang Beach
- Near choice schools and shopping-cum-entertainment hotspots like Northpoint, Sun Plaza, etc
- Developer: Fragrance Homes
- Marketing agnet: L2 Group
- The Business Times, P28 - Advertisement

DAILY MARKET UPDATES 31st October 2008

2008-11-18T03:53:00.000+08:00

Boon Lay MRT extension (BLE) to open on Feb28
The BLE will help reduce travel time by 15 minutes by offering direct access to the MRT system instead of requiring bus transfers at Boon Lay station. It will also reduce the current high utilisation rate of Boon Lay bus interchange and Boon Lay MRT station. LTA has tightened the train passenger load indicator from 1,700 to 1,600 passengers per train, placing a limit on the number of passengers each train can carry. A new indicator - train headway - has been imposed to ensure that the intervals between trains during the peak periods do not exceed stipulated standards. The availability targets of key equipment such as lifts and escalators will be raised to minimise downtime. The 3.8km extension will benefit residents in Jurong West Town and those working in Jurong Industrial Estate. It has two stations - Pioneer Station at Jurong West St 63, and Joo Koon Station at Joo Koon Circle.
- The Business Times, P12
SPIO to be one-stop portal for state tenders: SLA
From tomorrow, state tenders will be launched only on its State Property Online Information (SPIO) portal - www.SPIO.sla.gov.sg - previously posted on the Government Electronic Business Portal (GeBIZ) and SPIO. Users can now follow the stages of the state tender, download all tender documents and check what properties are up for tender. They can also check when tenders open and close, the bids for each property, and the tender results and final award. A new archival feature of past tender information allows users to do market comparisons. The enhanced SPIO also includes better categorisation of information through building types. The public can also view and rent properties for residential use through SLA's open bidding system.
- The Business Times, P12
ST Index posts biggest jump in years
The Straits Times Index (STI) posted its biggest single-day surge in years, closing 130.7 points, or 7.82 per cent, up at 1,801.91. Hong Kong's Hang Seng closed up 12.8 per cent, while Seoul's Kospi closed 11.95 per cent up. Japan's Nikkei closed 9.96 per cent higher. Rate cuts by central banks were the spur, generating a surge in confidence among investors that Wall Street's negative showing failed to dent. Hours after the US Federal Reserve met market expectations by slashing its main policy rate to 1 per cent, China, Hong Kong and Taiwan followed suit. The Fed also announced it would pump US$30 billion (S$45 billion) each into the central banks of four emerging economies, including Singapore.
- The Straits Times, B23
High Court wants STB to hear Regent Court sale appeal
The Regent Court collective sale may yet happen: the High Court has thrown the case back to the Strata Titles Board (STB) to continue its hearing for the sale application. Regent Development agreed to buy Regent Court in April last year for $34 million. There were several objectors, with one claiming a financial loss of $93,935.75. Last December, the STB threw out the estate's sale application.
- The Straits Times, B25
IMF opens purse without strings attached
In the space of five days, the IMF has approved some US$35 billion in emergency loans to three countries - Iceland, Ukraine and Hungary - and several others, including Pakistan and Belarus, have asked it for help. And on Wednesday, the IMF said that it would extend up to US$100 billion more in short-term loans to developing countries that have been hit hard by the financial crisis but are sound economically, with no conditions attached. With the new facility, qualifying countries can borrow up to five times their quota - the amount each country contributes to the IMF - for three months.
- The Business Times, P2
(also see The Straits Times, B27, “IMF to the rescue”)
ST Index posts biggest jump in years
The Straits Times Index (STI) posted its biggest single-day surge in years, closing 130.7 points, or 7.82 per cent, up at 1,801.91. Hong Kong's Hang Seng closed up 12.8 per cent, while Seoul's Kospi closed 11.95 per cent up. Japan's Nikkei closed 9.96 per cent higher. Rate cuts by central banks were the spur, generating a surge in confidence among investors that Wall Street's negative showing failed to dent. Hours after the US Federal Reserve met market expectations by slashing its main policy rate to 1 per cent, China, Hong Kong and Taiwan followed suit. The Fed also announced it would pump US$30 billion (S$45 billion) each into the central banks of four emerging economies, including Singapore.
- The Straits Times, B23
(also see The Straits Times, B28, “Asian bourses make record gains”)
Relief worldwide as galloping yen stumbles
Asian currencies rallied yesterday on news of more rate cuts overnight, but the biggest relief came from the cut that Tokyo is expected to unveil today. The possibility that Japan will trim its already low 0.5 per cent interest rate halted the relentless march of the yen. The yen slipped between 13 and 19 per cent versus currencies like the euro, pound and Australian dollar from its recent highs. Currencies that had suffered the worst effects of carry trade reversals over the past week recovered sharply versus the Japanese unit in Asian trading yesterday. Versus the Singapore dollar, the Japanese unit also fell as much as 11 per cent from last week's S$1.6645 highs per 100 yen and finished the day above S$1.49.
- The Business Times, P1
Japan's package to dodge perfect storm
Japan's Prime Minister Taro Aso unveiled a five trillion yen (US$51 billion or S$74.8 billion) package of emergency measures to cushion Japanese institutions against shockwaves from the global financial crisis, bolster the Tokyo stock market and ease the pain of households. The latest package includes two trillion yen in the form of novel cash payouts to families. These are intended to stimulate consumption faster than tax cuts. Under the package, it will also expand tax relief on housing loans and cut highway tolls. There will also be cuts in corporate taxes for small businesses and expanded government guarantees on loans to small firms to help fund-raising. Tokyo stock prices soared, buoyed by expectations that the Bank of Japan's Policy Board will cut the central bank's policy lending rate and take other steps to ease monetary policy. Stock markets also rallied elsewhere in Asia, buoyed by hopes that monetary easing and large fiscal stimulus packages can stave off a severe global recession.
- The Business Times, P4
(also see The Straits Times, A11, “Japan’s big helping hand for families”)
New Orchard mall 60% leased ahead of opening
Orchard Central, the first of three new malls springing up in Orchard Road, is already 60 per cent leased five months ahead of its opening. Orchard Central, which has 12 floors and two basements, is expected to open in April, ahead of the other two malls. Far East is working hard to set the mall apart. It aims to open till 11pm daily and its rooftop garden and a covered walkway will be open to the public 24 hours. The mall even has a four-storey-high rock-climbing wall aimed at attracting its target group of shoppers aged 21 to 35. The mall's new F&B tenants also include a restaurant brand from Shanxi, China, and a Japanese brand. Rents at the mall remain in the range of $20 to $70 per sq ft, though they may soften a little. Data from the URA shows that shop rents dipped 0.6 per cent islandwide in the third quarter, reversing growth of 5.2 per cent in the second quarter. Retail sales volume fell 1.5 per cent year-on-year from June to August, due to cautious local spending and lower demand from tourists, the Monetary Authority of Singapore said.
- The Straits Times, A11
Siemens unveils corporate tech centre here
German technology firm Siemens has set up its first corporate technology (CT) centre in South-east Asia to do basic research, with the aim of sharpening competitiveness of its business units in the region. The centre, housed at the PUB Water Hub in Toh Guan Road East, will provide R&D and consulting services, as well as handle global patent management. Siemens also signed a pact with the German Institute of Science and Technology (GIST) to set up joint R&D projects here.
- The Business Times, P11
Italian envoy eyes stronger research links
Ambassador Umberto Vattani, head of the Italian Trade Commission said that Singapore and Italy have successfully expanded from a manufacturing base to services and research. He also called Singapore a 'formidable state' because it is active in many fields despite its small population. Although Singapore started off with manufacturing, it has developed in the areas of services and research as well, he said. Trade between Singapore and Italy reached $4.4 billion in the nine months to Sept 30, up 4.7 per cent from the $4.2 billion last year. He said that the Republic can become a hub for medical care as the talent and structure are already present. The Italian Embassy said there are about 1,000 Italians in Singapore, employed in different sectors. He feels that Singapore bears many similarities to 12th-century Venice - the city state that became an influential global trading centre. Singapore is an example, in the third millennium, of how a city state can be a great power.
- The Straits Times, B26
Singapore adopts fair value rule
Singapore has adopted recent amendments from a global accounting body aimed at giving companies more flexibility to cushion the impact of the financial turmoil. These changes deal with fair value or mark-to-market accounting rule. The Accounting Standards Council (ASC) said the amendments are appropriate for Singapore firms. They can be applied from July 1.
- The Straits Times, B26
Las Vegas Sands shares soar 80% after S'pore talks
Las Vegas Sands Corp shares soared a record 80 per cent in New York trading on Wednesday after the Singapore Government said it was in talks with the casino company to help complete a US$4 billion (S$5.9 billion) casino project in the city state. The talks with Singapore follow the casino operator's hiring of an investment bank last week to raise more capital. Shares of Las Vegas Sands rose US$3.96 to US$8.91 in New York Stock Exchange composite trading on Wednesday.
- The Straits Times, A11
Wing Tai Q1 gain falls 47%; revenue up 34%
Wing Tai Holdings said that its first-quarter profit fell 47 per cent to $32.6 million - from $61.8 million a year ago - as it saw lower profit contributions from associated and joint-venture companies. Earnings per share fell to 4.13 cents, from 8.58 cents for the corresponding three months in 2007. For the first quarter ended Sept 30, 2008, revenue climbed 34 per cent to $134.3 million, from $100.2 million in the previous corresponding period. Revenue for the current period came largely from the units sold in Helios Residences and The Riverine by the Park in Singapore, and Sering Ukay in Malaysia. Wing Tai shares gained 5 cents to close at 60 cents yesterday. The stock has lost 77.8 per cent so far this year.
- The Business Times, P8
Reit sponsors and their lucrative exit strategies
The difference between the Frasers and Macquarie-YTL deal is that in the latter, had an implication of a proposal to acquire 100 per cent of the Reit's units could be forthcoming. A statement between February and October to the effect that no offer for 100 per cent of the units was likely and that Macquarie was now looking to sell its own stake could have avoided this mix-up. There also appears to be a flaw in Singapore's Reit structure, which allows sponsors to charge high management fees for running the Reit and then obtain superior terms should they decide to exit their investments.
- The Business Times, P5
New brands at Orchard Central
Spanish brand Desigual's flagship store in Singapore will take up 3,369 square feet of space at the mall amongst other well-known labels like Tyan and Levi's Dockers. Also, a wide choice of new dining options including the first Ootoya branch in S’pore, known for its healthy, affordable cuisine. New to the food scene here is Duo Le Restaurant, a luxury restaurant chain from Shaanxi province in China, opening a 2,700 sq ft eatery. Far East is looking mainly for mid-range tenants because the mall is aimed at young working professionals. Orchard Central will also offer its adventure-seeking patrons a chance to climb and rappel off Singapore's first and only five- storey Ferrata Wall located inside the mall. Rents at the mall range from $20 per sq ft per month (psf pm) to more than $70 psf pm. Orchard Central will open in the first quarter of 2009.
- The Business Times, P12
Lean season for tourism
Singapore’s tourism scene continued its downward spiral last month - the fourth straight month. In fact, September was the worst month this year in terms of tourist arrivals: There were just 739,000 visitors, down 4.1 per cent from the same period last year. Average hotel room occupancy plunged to the lowest in two years, closing at 73 per cent, down 11.6 percentage points. The Singapore Tourism Board (STB) said it may not meet the $15.5 billion target it set for tourist spending. The STB attributed Singapore's decline to the 'challenging global economic environment and outlook for the tourism sector'.
- The Straits Times, A1
(also see The Business Times, P12, “Visitor arrivals fall a 4th straight month in Sept”)
Singapore sets up currency swap line with US Fed
Singapore has set up a deal with the United States Federal Reserve that will ensure banks here have sufficient access to US dollars if they need them. The Monetary Authority of Singapore said it has joined the central banks of Brazil, Mexico and Korea in establishing temporary swap lines with the Fed, which will provide US$30 billion (S$44 billion) of greenback liquidity in each country. The move is aimed at improving liquidity in global financial markets and easing potential difficulties in obtaining US dollars. The swap line, available until April 30 next year, is simply a 'precautionary measure' for now.
- The Straits Times, A8
It's official: US economy shrank in 3rd quarter
The US economy shrank at a 0.3 per cent annual rate in the third quarter, its sharpest contraction in seven years as consumers cut spending and businesses reduced investment in the face of rising fears that recession was setting in. It was slightly less than the 0.5per cent rate of reduction that Wall Street economists had forecast. Consumer spending fell at a 3.1 per cent rate in the third quarter. Disposable personal income dropped at an 8.7 per cent rate in the third quarter after rising 11.9 per cent in the second quarter. Businesses cut investments at a 1 per cent rate after boosting them 2.5 per cent in the second quarter. Prices were still rising relatively strongly in the third quarter, with the personal consumption expenditures index up at a 5.4 per cent annual rate.
- The Straits Times, A8
Fewer job ads in Q3 as firms cut back on hiring
The global banking crisis caused many companies in Asia's financial centres of Singapore and Hong Kong to cut back on their hiring efforts, said international recruitment firm Robert Walters, which released the third-quarter results of its Asia Job Index yesterday. In Singapore, the number of job advertisements fell for the second consecutive quarter, declining 10.2 per cent to 192,985 in July-to-September compared with 215,000 in the second quarter. But the survey found that demand for candidates in the IT, shipping, manufacturing and consumer products line has increased, as Singapore continues to become the regional centre for multinational banks and a hub for the IT sector.
- The Straits Times, P1
China, India will play major roles in next decade: Patten
Fast-developing China and India will continue to be key global players, but it is important not to assume that their economies will grow exponentially, said Mr Chris Patten, the last colonial governor of Hong Kong. For China, the issues include the widening gap between urban and rural income and standards of living, as well as the impact of climate change. In India, the challenges he identified include the need to improve its poor infrastructure and introduce labour reforms to provide enough jobs for its booming population.
- The Straits Times, A21
3 factors in South Korea's success
Senior Minister Goh Chok Tong spelt out the lessons that South Korea's success over the past decades. The three key ingredients for its success are exports, human capital and investments in infrastructure.
- The Straits Times, A21
Reservior in the City
The Marina Barrage keeps seawater out of Marina Bay and allows a freshwater reservoir to be formed in the city. PM Lee opens it this evening and, from tomorrow, Singaporean can enjoy a new place to dine beside the sea and take in the cityscape.
- The Straits Times, B4
Natura Loft
- Designer built DBSS project
- 3 towering blocks of 40 storeys each
- Bishan St 24
- 99-year leasehold
- Expected TOP: 31 Dec 2011
Eligible applicants can enjoy perks like:
- CPF housing grants
- No resale levy for 2nd time homebuyers
- Priority scheme like Married Child Priority Scheme (MCPS) and Third Child Priority Scheme (TCPS)
- Developer: Qingjian Realty
- Marketing agent: SLP International Property Consultants
- The Straits Times, A21 - advertisement

DAILY MARKET UPDATES 1st November 2008

2008-11-18T03:52:00.000+08:00

Dining room with a difference – Orchard Scotts
AS if the designer fittings in all of its 206 apartments weren't enough for its residents, Orchard:Scotts also places a dining room at its guests' disposal that can be booked for private events. You get the idea that this is quite a different breed when you step inside and clap eyes on the cordon bleu coffee machine built into the sleek wooden cabinets and the 52-inch LCD TV embedded in a wall of granite. Says Chng Kiong Huat, director for development and projects at Far East Organization, which owns the property: 'Rather than simply putting in a list of 'required facilities' by rote, we took pains to look at the composition of targeted buyers, and to create amenities that would suit them and help them live life to the fullest.' The inclusion of the 16-seater dining room, he adds, is aimed at giving residents the opportunity of holding 'that wonderful private party in their own home'. In addition to the full range of kitchen equipment, cutlery and crockery, the room is fitted with an ice-making machine as well as an in-house cellar. With bookings nearly every day since the condominium was launched a year ago, the facility seems to be spot-on when it comes to what residents want.
- The Business Times, L2
Govt suspends sale of state land
Government Land Sales (GLS) from the Confirmed List of state sites have been suspended for the first half of next year. The remaining sites on the Confirmed List will be transferred to the Reserve List. And a ban on converting office space in the central area to other uses, such as housing, will be lifted. The Ministry of National Development (MND) said Singapore's fundamentals remain sound but the global downturn has affected the outlook for the island's economy and property market. Steps have been taken 'to allow the market to better respond to the current dynamic economic conditions', MND said. The news was met with jubilation in property circles. Simon Cheong, president of the Real Estate Developers Association of Singapore (Redas), said the move is 'timely' and shows the government is 'sensitive to the health of the market'. Of the seven sites on the Confirmed List, three have been launched for tender but the tenders have yet to close. Only the tender for an Executive Condominium site will proceed. The lifting of the ban on the conversion of offices in the central area to other uses could add more supply. But Cushman & Wakefield thinks this will allow developers to adapt to market changes.
-The Business Times, P36
(also see The Straits Times, C20, “Govt stops outright land sales”)
Grabbing opportunities in uncertain times
Demonstrating that he hasn't lost his penchant for spotting a good bargain during a major economic upheaval, group managing director Francis Yeoh Sock Ping said YTL had shelled out $285 million for 26 per cent of Macquarie Prime Reit (MP Reit) and a half-share of the holding company that manages it. Its MP Reit purchase is less than the $435 million the company paid towards the end of last year for the 30-year-old Westwood Apartments on Orchard Boulevard - the $2,525 psf ppr mark established in an uncertain property market raising eyebrows. YTL is expected to step up its overseas forays and add to existing assets in Australia, the UK - and now Singapore.
-The Business Times, P14
First city reservoir opens
A dream 20 years in the making unfolds today with the opening of the Marina Barrage to the public. This dam has created Marina Reservoir, the 15th reservoir here and the first one in the heart of the city. This reservoir and two other new ones will raise the portion of the country's land area used for water catchment from half to two-thirds. Prime Minister Lee Hsien Loong, who officially opened the facility at sundown yesterday, hailed it as an engineering feat. He also noted that, increasing the nation's water supply aside, the barrage will also control floods and become a key venue for activities by and on the water. The barrage and park, together with the Marina Sands integrated resort and the new Marina downtown area, 'will add to the vibrancy and attractiveness of the city', said Mr Lee.
-The Straits Times, A3
Kolam Ayer waterfront project refreshes community spirit
A year ago, the Kallang River beside Kolam Ayer was a big, dirty storm drain. Today, lush flora line the waterway, a spice garden sends its fragrance through the air, and a graceful floating platform on the river bank draws nearby residents. They are giving two thumbs up to the $2.5 million makeover of the 200m stretch. Since its opening in March, it has been a centre of activity for residents. Community participation has gone up by about 30 per cent, compared to before the revamp. The waterfront was given a overhaul last year under the Active, Beautiful, Clean Waterways programme spearheaded by national water agency PUB.
- The Straits Times, D10
3-day surge fizzles out as caution reigns
After Thursday's history-making surge on the Singapore bourse, a letdown yesterday was almost inevitable. Local investors decided to take profit at the end of the week rather than hold open positions in these highly uncertain times. The local stock market ended its three-day winning streak after a morning rally fizzled out. After powering ahead by 7.8 per cent on Thursday, the market struggled to stay in positive territory as investors ran out of reasons to hold on to gains. The STI eventually closed 7.71 points, or 0.43 per cent, lower at 1,794.2, dragged down mainly by profit-taking on the banks. For the week, the benchmark posted gains of 12.12 per cent.
- The Straits Times, C27
CapitaLand's Q3 profit falls 25.6% on shrinking home sales
CapitaLand’s net profit for its third quarter ended Sept 30, 2008 fell 25.6 per cent to $419.4 million, from $563.9 million a year ago as home sales fell. Revenue in Q3 2008 fell to $597.2 million, down 33.3 per cent from $895.8 million in Q3 2007. Turnover was hit by lower sales revenue from development projects in core markets. But the decline was mitigated by stronger rentals from investment properties and higher fee-based income from real estate investment trusts (Reits) and funds under management. So far this year, CapitaLand's Singapore residential unit has contributed the most to revenue. But buying sentiment is expected to remain cautious in Q4 2008, the developer said. CapitaLand may progressively release units at The Wharf Residence and Latitude condominiums for sale in Q4 2008. Its development at the former Farrer Court site is also expected to be launch-ready in 2009.
-The Business Times, P6
(also see The Straits Times, C21, “CapitaLand poised to seize opportunities in downturn”)
SM says misled buyers will get fair deal
Senior Minister Goh Chok Tong had words of reassurance for investors in Singapore who felt misled into buying structured financial products. The Monetary Authority of Singapore (MAS) will ensure that the financial institutions which sold products such as DBS High Notes and Lehman Minibonds provide recourse to aggrieved investors, he said. About 2,400 investors - about a quarter of the estimated 10,000 people who bought the now worthless products - have lodged formal complaints with the financial institutions (FIs) which made the sales. MAS requires the FIs to acknowledge receipt of a complaint within two working days, arrange for an interview within two weeks and provide a resolution within four weeks.
-The Straits Times, A14
Black October
October's massive sell-offs saw $123.5 billion slashed off Singapore's stock market capitalisation as global jitters persisted and recession fears came true. The gloom will hover for some time as market observers say the worst is yet to come. The combined value of the 781 companies on the SGX stood at a three-year low of $391.5 billion yesterday evening, 24 per cent lower than the $514.9 billion recorded end-September. Thus far this year, Singapore's stock market has shed over $200 billion, or 35 per cent of its capitalisation. Straits Times Index ended yesterday at 1794.20 points, 23.94 per cent down from the 2358.91 points recorded after September's last trading session.
-The Business Times, P1
Sentiment for overall outlook tanks in EDB poll of 400
Sentiment has tanked, pretty much across the board among manufacturers, and most in the services. Only those in the catering business are highly upbeat about the six months to March - in anticipation of festive feasting. The Economic Development Board's poll of almost 400 manufacturers about a month ago found a weighted 10 per cent looking to better business conditions in the coming six months, against a weighted 28 per cent who aren't half as sanguine. This gives a 'net weighted' negative balance of 18 per cent on the overall outlook. Most pessimistic appear to be manufacturers from the chemicals industry, followed by those in precision engineering and biomedical clusters. The majority of services firms, however - especially those in real estate, financial services and logistics services - are not expecting a business boom any time soon.
-The Business Times, P16
(also see The Straits Times, C22, “Businesses see bleaker outlook”)
Fewer jobs added as outlook darkens
Although the unemployment rate held steady at 2.2 per cent, manufacturing, services and construction sectors added 20 per cent fewer jobs in the last quarter. 57,800 jobs were added here in the three months that ended on Sept30 this year. This was down from 71,400 jobs added in the previous quarter, and slightly less than the 58,600 jobs added in the third quarter of last year. The export-driven manufacturing sector felt the effects most. It added 4,900 jobs in Q3 - half the number of the previous quarter. Some 1,500 of the 2,000 workers laid off in the third quarter were also from manufacturing. Official forecasts and analysts expect the ranks of the unemployed to swell in the next few quarters.
-The Straits Times, A9
(Also see The Business Times, P16, “Unemployment rate holds steady amid signs of worsening crisis”)
MNCs cutting Singapore staff
Up to 750 staff here are said to have been laid off by IM Flash Technologies, a joint venture between Intel and Micron Technology. Plans for a wafer fabrication plant which was to have been operated by IM Flash have been postponed indefinitely. As a result, most of the 750 staff, mostly non-Singaporeans, are reported to have been retrenched. American Express announced plans to cut 7,000 jobs or 10 per cent of its global workforce as part of a plan to save US$1.8 billion. Motorola also announced on Thursday that the handset maker would trim 3,000 jobs or nearly 5 per cent of its global staff.
- The Straits Times, A8
AIA Singapore lays off 20 employees
Insurer AIA Singapore laid off about 20 employees from two of its divisions on Thursday. Sources said that the cuts are unlikely to be the last among the 800-strong workforce. AIA said the job cuts affected fewer than 20 staff and the exercise was a result of a review of ongoing business strategy. The aim is to transform itself into a 'more nimble, efficient and growth-oriented company for the long term'.
- The Straits Times, A8
Indian firms set to cut one in four jobs
Indian companies are set to fire more than 25 per cent of their work force over the next 10 days, the Associated Chambers of Commerce and Industry (Assocham) said. India's so-called 'organised sector' employs some 40 million people, and it was not made clear if the lobby group meant that a quarter of them would be jobless. Its statement said the steel, cement, information technology-enabled services, financial and brokerage services, construction, real estate and aviation sectors would resort to retrenchment.
- The Straits Times, A13
Phase2 financing remains a concern: REC
Norway's Renewable Energy Corporation (REC) - which has started building in Singapore what will be the world's largest solar cell manufacturing complex - is watching closely the gathering dark clouds from the financial crisis. Addressing media queries after the construction launch of its S$3 billion phase-1 plant in Tuas yesterday, REC's president and CEO said that REC has a lot of long-term, fixed contracts through 2011-2012 and that its current S$15 billion order backlog has given it robustness and provided a buffer. But given the global credit crunch, REC is concerned about financing for the second phase of the Singapore investment. Construction of the phase-1 plant, scheduled to start up in the first quarter of 2010, is well underway.
- The Business Times, P13
a-iTrust expanding tech park in Chennai
ASCENDAS India Trust (a-iTrust) is embarking on a $62.7 million expansion of its IT park in Chennai to meet demand for business space in the Indian city. Construction at the International Tech Park Chennai (ITPC) will begin this month and could be completed in early 2010, adding 802,000 sq ft of new business space. a-iTrust expects the expansion to be yield accretive for unitholders. According to the trust, even though marketing has not begun, there are already indications of interest for 30 per cent of the new space from existing clients looking to grow their operations.
- The Business Times, P13
Crisis halves wealth of China's richest
The credit crunch and financial crisis have more than halved the combined wealth of China's richest people, Forbes magazine said as it released its annual Chinese billionaires list. The net worth of mainland China's 40 richest people fell 57 per cent to US$52 billion (S$77 billion) from US$120 billion, Forbes Asia said. Shanghai-based tycoon Liu Yongxin, who amassed US$3 billion from animal feed and aluminium production, topped the list of the richest 400 in China in a sign that traditional industries such as agriculture are becoming more attractive than retail and property development. More than 30 per cent of developers listed in the top 400 last year disappeared from this year's roster. The mainland property market is in a prolonged decline as the global credit crisis, domestic austerity measures and a sliding stock market batter the previously high-flying sector.
- The Straits Times, C1
First China centre for S'pore studies
China’s first centre for Singapore studies will open in Shenzhen University in Guangdong province today. The new centre is headed by Shenzhen University professor Lu Yuanli, who said growing interest in Singapore's system of governance among Chinese students and academics has prompted the setting up of our centre. To mark the opening, the university is hosting a two-day international conference on 'Singapore's experience and China's 30th year of reforms' today and tomorrow. Seven speakers from Singapore will present papers, together with 30 others from China and Hong Kong.
- The Straits Times, B4
Japan disappoints with grudging cut
The Bank of Japan's policy board lowered its policy lending rate by 200 basis points to 0.3 per cent. The yen resumed its rise and Tokyo stocks fell again as markets signalled apparent disappointment with the move. Tokyo's benchmark Nikkei 225 stock average fell by 5 per cent or 452.78 points to 8,576.98 yesterday while the yen rose to 97.38 yen after falling to 99.13 yen on Thursday.Central banks in the Eurozone, Britain and Australia are all expected to cut rates further next week
- The Business Times, P4
(also see The Straits Times, C24, “BOJ cuts rates for first time in 7 years”)
Palm Galleria
- Freehold
- 3-BR units from $809,000 ($723psf)
- Interest absorption scheme
- 5% down payment
- Lorong K Telok Kurau
- Attractive commission for agents
- Developer: World Class Land
- Marketing agent: L2 Group
- The Straits Times, A8 – advertisements
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, A24 - advertisement
Clover by the Park
- 99 years, Foreigners Eligible
- Bishan St 21-25
- 616 units
- 3, 4 Bedroom & Penthouse
- Avergage $750 psf
- Full condominium facilities available
- 50m lap pool
- Low maintenance fee
- Near Bishan Park, Bishan Sports Hall, Bishan Active Sports Hub
- Within 1km to Catholic High School, near reputed schools such as Ai Tong Primary Sch, Raffles Institution and Raffles Junior College
- Expected TOP: 31 Dec 2015
- Developer: Sim Lian Group Limited
-The Straits Times, A26 – advertisement
The Lucent
- Freehold
- 5-seater family whirlpool at balcony, steambath, private swimming pool and sundeck at rooftop for selected units
- Ceiling height of 3.3m
- 1 to 4-BR apartments and penthouses with private pools
- Special launch packages and interest absorption scheme for limited period
- Lorong N Telok Kurau
- Developer: Roxy Land
- Marketing agent: HSR
- Expected TOP: 31 Dec 2012
- The Straits Times, A36 – advertisements
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-$568,800), 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, C5, 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
- Developer: YTL
- Marketing agent: Savills
- Average sizes: 7,500 to 9,200 sq ft
- 3 villas sold - highest price at $2,100 psf
- Prices from $13.9 million
- The Straits Times, C9 - advertisement
Teresa Villas
- Freehold cluster bungalows
- 8 bungalows from 5565 sqft with private pool or Jacuzzi on hilltop
- Bukit Teresa Rd
- At the centre of the Sentosa and Marina Bay Sands IR
- Bejeweled in designere fittings & tasteful furnishings by Duravit, Damixa & Bosch
- Prices from $450 psf
- Developer: Aston Holdings & DB2 Development
- Marketing agent: Huttons
- Expected TOP: 30 Dec 2011
- The Straits Times, C13 – advertisements
The Verte
- Freehold apartment
- 35 apartment units, 1 townhouse
- Duplex penthouses – roof terraces and private Jacuzzis
- Townhouse – 3-storey with 4 bedrooms, private lap pool, personal car park, dual view of pool and park views
- Lorong H Telok Kurau
- Set against 100,000 sq ft of greenery
- Outdoor decks, private plunge pools
- 5 min walk to Kembangan MRT
- Top schools nearby – CHIJ Katong Pri, CHIJ Katong Convent
- Nearby attractions – East Coast Park, Katong Park, golf clubs such as Tanah Merah Country Club
- Expected TOP: 31 Jan 2012
- Developer: Roxy Homes
- Marketing agents: Savills
- The Straits Times, D12- advertorial

DAILY MARKET UPDATES 3rd November 2008

2008-11-18T03:51:00.000+08:00

YTL sparks hope in dreary property sector
YTL Corp inked a $285 million agreement to take a stake in Macquarie Prime Reit as well as the manager of the Reit (real estate investment trust). This was the first bit of positive news the property sector had heard for a long time. Macquarie Prime has stakes in Wisma Atria and Ngee Ann City - key landmarks along Orchard Road. It paid 82 cents apiece for the units, a very attractive discount of 49 per cent to the Reit's net asset value. For the brave, the weak equity and credit markets are a chance to buy in at much lower levels than at the start of the year. Hopefully, he is right about Singapore's structural transformation - that the country is moving into the league of global cities.
- The Straits Times, B16
Firms find business prospects best in China, Singapore
China and Singapore hold the best business prospects for local and foreign firms here in the next six months, according to the latest BT-UniSIM business climate survey. Of the 154 firms polled, close to three quarters of them have business dealings overseas. Of these, about 22 per cent cited China and 21 per cent picked Singapore as most promising in their line of business. Singapore's business prospects appear rosier to small or local firms, and particularly those from the construction, and financial and business services sectors.
- The Business Times, P2
Days of sky-high HDB rents numbered: Analysts
Rents of HDB flats, which have been climbing steadily, largely on demand from foreigners squeezed out of the private homes market, are up only slightly in the third quarter. But property experts say HDB rents have likely peaked. They will hold steady for the next several months before they begin to crack from the pressure of falling rents in the private homes market. Rents for HDB flats have shown smaller increases in the third quarter. Median rents for five-room flats have risen by $100 every quarter this year to $2,000 in the third. Median rents for three-room flats remained unchanged at $1,500 in Q3 while median rents for four-room flats showed a smaller $50 rise to $1,800, from $1,750 in Q2 and $1,600 in the first. Private home rents are expected to continue dropping given the weaker economic outlook, particularly as supply is expected to rise next year when more developments are completed, experts say. HSR says HDB rents are likely to stay stable for the next few months until the gap between private home rents and HDB rents starts to narrow. There are now 21,400 HDB flats approved for subletting, up from 20,200 in the second quarter. But HDB subletting deals fell 4 per cent to 3,960 cases in Q3.
- The Straits Times, B20
All systems go for key manufacturing projects
As three major manufacturing projects testify, key planned investments are going through, for now. The announcements over the course of last week that these three projects were on track were welcomed with cautious optimism by government officials and analysts. Last Thursday, oil and gas services giant Halliburton opened a US$50 million (S$74 million) plant in Jurong which will employ about 400 people when it becomes fully operational at the end of next year. Last Friday, Renewable Energy Corporation (REC) broke ground on the first of two phases of its estimated $6.3 billion complex at Tuas South. The Norwegian energy giant plans to continue rolling out the project at the current speed. The facility is on target to begin operations in early 2010 and will reach full production capacity by 2012. REC expects to employ 1,300 people at the plant. Last Wednesday, Geocycle Singapore opened a US$6 million plant which will recycle used copper slag to make concrete.
- The Straits Times, B18
Qualcomm adds test centre to S'pore ops
Qualcomm has doubled its local workforce with the opening of a new facility to provide round-the-clock testing of its cellular chipsets. The Singapore centre is the firm's flagship test operation outside its home base in San Diego and will be responsible for tasks such as design verification and failure analysis. The latest move is Qualcomm's third major investment in Singapore in the last decade.
- The Business Times, P31
Diversified, yet recession looms
For years, Singapore has been diversifying its economy to protect itself against the vagaries of the business cycle. Yet Singapore was one of the first countries in this region to fall into a technical recession. Firstly, Singapore's domestic market is small, so there are limits to how truly diversified the economy can be. Secondly, while Singapore is not alone in being an open economy, it differs from some others in who it exports to. So while we may have diversified our industries, these continue to be heavily reliant on economies such as those in the European Union and the United States.
- The Straits Times, A2
Surprise RBI move to boost growth, liquidity
India's central bank unexpectedly cut its key lending rate for the second time in two weeks on Saturday and took other steps to spur growth and counter fallout from the global financial crisis. The Reserve Bank of India (RBI) reduced its key short-term lending rate, the repo, by 50 basis points to ease a credit crunch. The repo is the rate at which it lends funds to commercial banks. As part of a three-pronged move, the bank also cut the amount commercial banks must keep in reserve, easing the cash reserve ratio to 5.5 per cent from 6.5 per cent - pumping billions of dollars into the financial system. It also cut the statutory reserve ratio to 24 per cent from 25 per cent to boost liquidity.
- The Business Times, P19
China, India will reshape world: Murdoch
Media tycoon Rupert Murdoch says the ongoing metamorphosis of China and India from historic backwaters into economic powers will reshape the world in the next few decades. The News Corp chief gave an upbeat assessment of the future and made a vigorous case for free markets despite troubled economic times. The rise of their economies is creating a new middle class that would be 3 billion-strong within 30 years and is setting a new benchmark for global competitiveness, he said.
- The Business Times, P13
All indicators down: BT-UniSIM survey
Key indicators of a business activity survey have fallen to their lowest readings in five years, with the sentiment measure down to nearly a seven-year low. The findings from the latest BT-UniSIM business climate survey - which have been found to correlate closely with Singapore's economic performance over the poll's near 13-year history - point to possibly a 1.2 per cent gross domestic product (GDP) contraction in Q4. Conducted in the first two weeks of October, the quarterly survey of 154 local and foreign companies found that all four indicators - sales, profits, new business orders and business prospects - worsened across the board in Q3 2008. Foreign firms, which produced the poorest readings in the Q2 survey, did not fare much worse on profits and new orders in Q3. But they were the most pessimistic group for a third consecutive quarter.
- The Business Times, P10
World recession will hit China's economy badly
A global recession will have a huge impact on China's economy while currency volatility is expected to add further pressure on the country's banks. Figures out on Saturday showed that China's factory output contracted sharply last month. The purchasing managers' index fell to 44.6 per cent, the lowest since its inception in January 2005. A reading below 50 indicates a contraction, while one above 50 suggests an expansion. China's economy slowed to 9 per cent growth in the third quarter, down from 11.9 per cent last year.
- The Business Times, P10
More market turbulence ahead
Investors, who have endured turbulent market conditions for more than a month, can expect more of the same this week. The upside for the local stock market may be limited, given that the outlook remains weak for the global economy and for the financial performance of Singapore companies. Investors are also likely to remain cautious ahead of the release of earnings of key local companies and United States economic data. The benchmark Straits Times Index (STI) was up 12.12 per cent last week at 1,794.2, but losses in the previous weeks dragged the index down 23.94 per cent for the month.
- The Business Times, P10
Just how safe is your job?
The five riskiest sectors:
- Banking and finance: Considering the root of this crisis was in the banking and finance sector, its employees face the biggest risk of layoffs as the industry consolidates.
- Tourism and services: Visitor arrivals have suffered four months of decline, so tourism will also be hit as regional travellers forgo holidays here.
- Luxury and retail: Consumers are likely to cut back on luxury goods.
- Manufacturing: Singapore's manufacturing production numbers have been sliding because of weakening demand for exports.
- Transport and aviation: As consumers adopt a more conservative outlook and tighten their belts, demand for transport services such as taxis and flights is likely to be affected.
Five low-risk sectors:
- Law: Analysts see a shift in terms of skill sets required, with a stronger call for insolvency and bankruptcy lawyers.
-Accountancy: Demand remains healthy for accountants, and those skilled in tax restructuring and managing distressed assets.
- Public sector: The public service sector has always been a 'relatively stable sector' and remains the largest employer in Singapore.
Health care: Health care is generally regarded as recession-proof, although this depends on the nature of the service provided.
Energy: Countries will still need energy to run, so jobs related to oil and gas, and alternative, renewable energy are likely to remain relatively stable.
- The Straits Times, B19

DAILY MARKET UPDATES 17th November 2008

2008-11-18T03:48:00.000+08:00

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

DAILY MARKET UPDATES 4th November 2008

2008-11-18T03:47:00.001+08:00

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

DAILY MARKET UPDATES 5th November 2008

2008-11-18T03:46:00.000+08:00

Fewer cluster homes may be built From 3 Feb 09, developers will be permitted to build fewer but larger strata landed units than under current laws. The cap will be based on a minimum plot size per unit similar to that imposed for conventional landed homes. URA is reinstating an old rule early 09, expected to leave developers less inclined to build the homes. The main reason is that developers tended to cram as many homes onto a plot as possible, leading to congestion and deterioration of the environment. Strata landed homes cost 10 to 20 per cent less than conventional landed homes but the gap will close under the new guidelines.
- The Straits Times, B28
KL unveils $3b plan to jumpstart economy Malaysia's government announced a RM7 billion (S$2.93 billion) stimulus package yesterday. The 2009 growth forecast had dropped to 3.5 per cent from 5.4 per cent, while the projected budget deficit was 4.8 per cent of GDP, up from 3.6 per cent. The RM7 billion reaped from savings on reduced oil subsidies would be spent on 'high-impact' projects like low-cost housing, public transport, public facilities, and housing for the police force and military. As part of a move to boost foreign investment, foreigners who want to buy commercial real estate worth RM500,000 or more would no longer need the approval of the Foreign Investment Committee.
- The Straits Times, A1
(Also see, The Business Times, P1, “M’sia pads up Budget as chill wind blows”)
New Citi overdraft ties global mortgagesThe new global home financing solution allows high net worth clients to consolidate mortgage financing on residential properties here and abroad into one overdraft that they can use at their convenience. Some 40 per cent of Citi Singapore's affluent client base would be interested in properties overseas. The overdraft facility can be used for a range of investments including stocks, bonds and properties. For a start, the product will apply to properties in six markets - Singapore, Hong Kong, Malaysia, Australia, Canada and the UK. The line of credit is offered in a range of currencies, comprising the Singapore dollar, US dollar, Australian dollar, Hong Kong dollar, euro, Japanese yen, sterling and Swiss franc.- The Business Times, P15(Also see, The Straits Times, B27, “Citi launches special home loan for rich”)
S'pore could draw more green energy projects
Singapore could attract more mega investments to develop new alternative and renewable energy ideas and technologies for the world. Finland's Neste Oil, which is starting up a S$1.2 billion second-generation biodiesel plant here in 2011 - the largest in the world - is eyeing that option. Vesta Technology R&D, opened its S$500 million Asian headquarters in Singapore on Monday. The Singapore government has allocated funding to facilitate this, including developing a Cleantech Park at Jalan Bahar 'which will allow test-bedding of products and solutions for the Tropics, including ideas that are replicable for global markets.
- The Business Times, P14
(Also see, The Straits Times, B7, “Business park just for green companies soon”)
Indian developers woo buyers with free cars, gold, holidays
Indian builders are offering free cars and gold to kickstart demand. The gifts range from Toyota four-wheel drives to gold coins and foreign vacations. India's housing market was worth US$12 billion in 2005 and had been forecast to grow to US$90 billion by 2015. The crisis has deepened this year by 20 per cent. Hindustan Construction Company, one of India's largest builders, has put on hold three planned townships in the hope interest rates will dip again, bringing down mortgage rates.
- The Business Times, P21
Long-term planning key for transport systemTransport solutions for Singapore have to be economically, socially and environmentally sustainable and long-term planning is key. The other three principles are that a world-class transport system needs to be founded on sound, market-oriented economic solutions; constant innovation in anticipation of and in response to changing solutions; and the need to engage and consult all the people involved. As Singapore has limited land space - 12 per cent is allocated for roads compared with 15 per cent for housing - the increase in travel demand must be met largely by public transport and the system has to cater to the diverse needs of the population.- The Business Times, P1(also see The Business Times, P1, “Transport key to cities' growth: minister”)
Taiwan and China ink four deals
Taiwan and China yesterday inked four pacts, including an agreement to launch daily passenger flights and shorten flight routes. Both sides also gave the green light for direct postal, as well as air and sea cargo services and agreed to notify each other promptly of food safety issues. The increased links are expected to boost the flow of people and goods between the two sides and could bring estimated savings of at least NT$5.5 billion (S$245 million) a year for businesses and travellers.
- The Straits Times, A12
Poly, ITE lecturers may get less leave
Lecturers at polytechnics and the Institute of Technical Education (ITE) will soon be given a choice: money or vacation. Poly lecturers can choose to take a 14-day cut in annual leave while getting a roughly 6 per cent pay raise and a bonus, or staying on the current scheme which gives them a 42-day vacation. It was designed in part to make teaching more appealing and to stem the flow of lecturers from polytechnics, which lose about 6 per cent of their teachers every year. To attract new staff, starting salaries will also go up by 5 or 6 per cent.
- The Straits Times, B10
Autodesk opens R&D centre at Fusionopolis
Autodesk announced the opening of its 5,000 square metre R&D centre in Fusionopolis and declared it will acquire more office space when the next phase is ready by 2010. By then, Autodesk's Singapore operations will be consolidated in just Fusionpolis. Autodesk's Ngee Ann City office will remain as its sales office and serve as its Asia-Pacific and South-east Asia headquarters. The company employs around 400 workers locally and 7,500 worldwide, of which 2,500 are R&D staff.
- The Business Times, P14
(also see The Straits Times, B26, “Autodesk opens new R&D hub”)
S'pore firms eye Taiwan tourists amid slump
STB took the chance at Taipei’s four-day International Travel Fair - Asia's largest travel exhibition which ended recently - to promote the 'Uniquely Singapore' experience. It tied up with
five local agencies to push packages for travellers shopping for bargain deals. STB's selling points for November and December are 'A Sweet Christmas in Singapore', 'ZoukOut 2008' and 'Marina Bay Singapore Countdown 2009'. In addition, STB, Singapore Airlines was also trying to reach out to Taiwanese travellers with its A380 packages at the travel exhibition. Statistics from Cross-Strait Tourism Association show that the number of China's outbound tourists grew 18.6 per cent to 40.9 million last year, and would increase to 50 million in 2010. Total figure could reach 100 million by 2020, making it the world's fourth-largest outbound tourist country.
- The Business Times, P21
Dubai Mall opens but shoppers may not open purses
Dubai Mall is open for business but the success of the US$20 billion (S$30 billion) project is far from assured. The mall, opened yesterday and is one of the world's largest with 1,200 shops, four times as many as London's new Westfield centre but it will be hard for the owner to meet its target of 30 million visitors in the first year. Tourism has been a major factor in Dubai's economic growth and there are plans to more than double the number of tourists to 15 million by 2015.
- The Straits Times, A21

DAILY MARKET UPDATES 6th November 2008

2008-11-18T03:45:00.001+08:00

Property ventures: Popular has to watch its booksPopular's fundraising attempt at this juncture is likely to fuel speculation about its ability to support its property investments. The company has put up more than $71 million in four land purchases so far. Popular has two construction projects eating into its resources - One Robin and 18 Shelford. With cash and fixed deposits amounting to $45.3 million as at July 31, the group is more than able to settle the $13.7 million debt due within a year or on demand. Its net gearing ratio also rests at a comfortable 0.14 times.- The Business Times, P8
Credit checks cut risks if deferred payments returnDevelopers lauded the swiftness of the government action that will hopefully stem the poor sentiment in the property market when Ministry of National Development announced that it was suspending sales of state land through the confirmed list till June next year. Some developers were also hopeful that the government will reintroduce the Deferred Payment Scheme (DPS), which was scrapped in October last year to deter speculation. To cut this risk of fuelling speculation, the DPS could be reincarnated but with modifications, suggests Savills' Mr Ku.
- The Business Times, P4
Prime office rents falling amid turmoilAfter rising steeply for several years, prime office rents are on the way down as landlords move to retain good tenants in uncertain economic times. They fell 5 per cent last month and could fall another 10 to 20 per cent over the next six months, according to consultancy Cushman & Wakefield. But the fall in net effective prime office rents was even more pronounced last month as landlords became more flexible in negotiating rents. Supply-wise, there are more choices now than just a few months ago, but the bulk of the fresh office space supply will come onstream from 2010. So, while the downward slide in office rents is expected to continue, the speed should slow temporarily till nearer to 2010.- The Straits Times, B18
Racial barrier falls as change comes to America
With 349 electoral votes against Senator McCain's 173, the Democrat defeated Republican and Barack Obama will be sworn in on Jan 20 next year as the 44th US president - and the first African-American one.
- The Business Times, P1
(Also see, The Straits Times, A8, “Economy top on Americans' minds”)
Jakarta property sector expects slowdownIndonesia's property business in Jakarta and surrounding areas will see a slowdown next year due to increases in interest rates, inflation, prices of materials and rental costs, quoted by The Jakarta Post. High interest rates, inflation and prices of materials had discouraged developers from continuing their projects. Indonesian central bank's interest rate currently stands at 9.5 per cent, with accumulative inflation already hitting double digits in the first 10 months of 2008.- The Business Times, P31
LTA partners tech firms to realise its visionSix research collaborators - the EDB, IDA, Cisco, IBM Singapore, ST Electronics and 3M Tech - inked a memorandum of collaboration with LTA. Dubbed Singapore Urban Transport Solution, $54 billion worth of projects to improve Singapore's land transport network are expected to be completed in the next 10 to 15 years. LTA's new research initiative, part of its Land Transport Masterplan, will tap a $50 million fund set up in March by LTA to promote innovation. Funding will also come from EDB and IDA. LTA said its initiative will kick off with four research clusters, namely, traffic optimisation, transport telematics, integrated user experience, and environment and energy.- The Business Times, P24
UK Reit investors brace for new write-downs
Few expect an end to the savage asset markdowns, slim dividends and profit cuts seen in the past 18 months, as dark economic portents accelerate the repricing of UK real estate. Britain's largest shopping mall owner Liberty International reveals third-quarter figures on Wednesday, one day before the Bank of England is expected to slash the UK base borrowing rate for the second consecutive month. Both Liberty and retail rival Hammerson may be forced to concede softer letting terms - or risk a glut of defaults next year, Nomura analysts said. In August, Liberty had already upped provisions for tenant failures. According to JPMorgan, the EPRA Europe index posted its worst ever monthly performance in October, slumping 21.5 per cent - almost double the second worst month in June 2008, when European property stocks dived 12.2 per cent.
- The Business Times, P32
Clean energy: Global tab may be $67 trillion
Closer to US$45 trillion (S$67 trillion) will need to be spent over the next 40 years to set up infrastructure to produce this renewable energy - and this sum does not include funds needed for research. Several economic reports - including Britain's Stern Review and an upcoming report by Australian economist Ross Garnaut - agree that as much as 20 per cent of global gross domestic product could be jeopardised if the world's environmental problems are left unchecked. At the moment, renewable energy is being produced only in megawatt units, but the planet needs to start thinking about generating it in gigawatts - each 1,000 times a megawatt - to scale back the dependence on fossil fuels.
- The Straits Times, B7
Property slump hits NY commercial market
New York City commercial real estate transactions plunged 61 per cent this year through October as the global credit crisis roiled lending and sidelined buyers. About US$17 billion of transactions have closed so far and the market is headed for its worst year since 2004. Sellers have made 237 deals of US$5 million or more, a four-year low in a market that posted a record US$51 billion in sales last year. The 14-member Bloomberg Office Reit Index lost 43 per cent in the 12 months through October, led by Maguire Properties Inc and SL Green Realty Corp, which together control almost 50 million square feet of office space in the Los Angeles and New York metropolitan areas. Office property loans fell 65 per cent, retail property loans fell 63 per cent and industrial property loans slid 57 per cent.- The Business Times, P30
ERP trial for Britain
British drivers could find themselves paying around 80 pence (S$1.88) per km for the privilege of using the country's most congested roads. The government has confirmed that it is recruiting hundreds of drivers to test the satellite-based scheme. The onboard unit could also be used to automatically deduct congestion charges and bridge and motorway tolls from users' accounts, and might eventually be used to collect payment for the use of every road a driver takes. Like Singapore's electronic road pricing (ERP) charges, the price of using a particular road is likely to vary according to the time of day, as well as the direction of travel and the scale of congestion.
- The Straits Times, A20
D.10 The Fernhill
- 1 Fernhill Rd
- 25 units, exclusive development
- Off Orange Grove / Stevens Rd
- Views towards White House Pk
- Proximity to Shangri-La Hotel
- Private lift access / basement car park
- Facilities include swimming pool & gym
- Freehold / Foreigners eligible
- TOP approx : March 2009
- Remaining 20 units for sale, ENBLOC basis only
- 2 bdrms, 1066 sq ft / 3 bdrms, 1,572 sq ft / 4 bdrms, 1,819 sq ft
- Units with private enclosed space & Penthouses also available
- Advert, The Business Times, P31

DAILY MARKET UPDATES 7th November 2008

2008-11-18T03:44:00.000+08:00

Las Vegas Sands in perilPWC LLP said in the filing that Las Vegas Sands expects it will not be in compliance with its maximum leverage ratio covenant for the quarter ending Dec 31, 2008 and at subsequent quarters. The auditor said that non-compliance would result in defaults which raises substantial doubt about the company's ability to continue as a going concern. The company said in a filing that it is working with a financial adviser on a capital-raising programme but that no assurances can be given that the programme will be successful. - The Business Times, P1(See also, The Straits Times, B22 – “Las Vegas Sands shares fall 31% on funding woes”)
NEA puts up $22m grant for energy-saving projectsNEA launched a grant yesterday that would co-fund up to half of the cost of energy-saving equipment or technology, or $2 million per project, which ever is lower. The National Environment Agency (NEA) launched a grant yesterday that would co-fund up to half of the cost of energy-saving equipment or technology, or $2 million per project, which ever is lower. NEA has received 119 applications to co-fund energy appraisals that would save 339.2GWh or $29.8 million of energy per year. Just 16 companies have implemented projects, for a total energy savings of 80.2GWh or $4.83 million annually.- The Business Times, P8
(See also, The Straits Times, B12 – “$22m carrot for firms to setup energy efficiency”)
JLL reorganises to help clients battle credit crisisThe firm plans to reassign 30 senior managers and hundreds of staff to help clients consolidate office space, renegotiate or sell loans, sell distressed properties and value illiquid real estate-related securities. Revenue from arranging property sales and financing in the Americas dropped 42 per cent in the first nine months of this year at Jones Lang, the No 2 broker by market value. The company will focus on banks and insurance companies, offering what it calls 'value recovery services.'.- The Business Times, P14
Next Budget to help drive growth S’poreans can expect an expansionary Budget next year, with measures to create jobs, generate growth and cushion them from the worst effects of an economic slowdown, said SM Goh Chok Tong yesterday. He did not give details on the likely steps to be taken, but economists interviewed last night believe these could include cost-cutting measures for businesses, and tax rebates or cash handouts for families. - The Straits Times, A3
Mah: No delay to HDB, govt building projects Public housing and government building projects will not be delayed on account of the economic downturn, said Mah Bow Tan. On other building projects, he said: 'Other government projects...infrastructure projects, MRT projects, road-building, schools, all those things we felt are urgent and necessary - for example, retrofitting Nanyang Technological University for the Youth Olympic Games - all are on track. It's something we need to do.'
- The Straits Times, B12(See also, The Business Times – “Govt to watch market before deciding : Mah”)
KL luxury condo sector in for tough timesMore than 5,000 high-end units are expected to come onstream in Klang Valley alone by the end of 08, followed by a similar number in 09. As a result, rental yields, which now average 5-6 per cent gross in the KL city area and about one percentage point more in the Mont Kiara area, are expected to be severely depressed by the end of next year. Property consultants say that a slowdown in launches and softer demand is to be expected, given fears of lower economic growth of 3-plus per cent next year, down from 5-plus this year. Capital appreciation in Kuala Lumpur has also been decent on average, plus incoming housing supply is 'still manageable'.- The Business Times, P11
UK surprises with 1.5-point rate cutThe Bank of England made a 1.5 percentage point cut in interest rates yesterday to just 3 per cent, their lowest level in more than half a century, as it seeks to prevent Britain from sliding into a deep recession. Two-year bond yields fell to a record low below 2.5 per cent. The Swiss National Bank and European Central Bank (ECB) also cut interest rates yesterday. The move took the ECB's and Swiss National Bank's benchmark rate to 3.25 per cent and 2 per cent respectively. House prices started sliding a year ago as the supply of new mortgages has all but dried up in the wake of the credit crunch. - The Straits Times, B33(See also, The Business Times, P33 - “Bank of England, ECB slash interest rates”)
IMF warning: world economy slowing quicklyIMF forecasts that world growth will fall to 3.75 per cent this year from 5 per cent in 2007 and will drop to 'just over 2 per cent' in 2009. The IMF says that its new forecasts are based on current policies. Global action to support financial markets and provide further fiscal stimulus and monetary easing can help limit the decline in growth. China is forecast to grow 9.7 per cent this year but the IMF predicts this to fall to 8.5 per cent in 2009, which is significantly below China's own current official forecast. Growth in the five biggest Asean economies is forecast to fall to 4.2 per cent in 2009. India's growth is put at 6.3 per cent in 2009.
- The Business Times, P3
India's credit growth unlikely to slow in H2The nation's biggest bank will cut its lending rate by 0.75 percentage point effective Nov 10. India has said that it will make sure that loans are available to companies as turmoil in the global financial markets leads to a credit freeze. India's state-run banks were facing increased credit demands as other loan sources had dried up. The Reserve Bank of India cut the amount lenders must set aside as reserves to 5.5 per cent from 6.5 per cent on Nov 1, and reduced the amount that lenders are required to keep in government bonds to 24 per cent from 25 per cent and lowered the repurchase rate to 7.5 per cent from 8 per cent. The central bank deployed all three of its main tools to boost growth for the first time in more than a decade.- The Business Times, P13

DAILY MARKET UPDATES 8th November 2008

2008-11-18T03:42:00.002+08:00

Sands gives reassurance on Marina Bay IR Mr Sheldon Adelson, chairman and chief executive officer of Las Vegas Sands, personally reaffirmed their commitment to the success of Marina Bay Sands. About half of the $5.4 billion credit facility for Marina Bay Sands has already been drawn upon. Singapore's banks, OCBC, UOB and DBS, which have significant exposure as lead arrangers for the project, remain optimistic.- The Straits Times, A1 (See also, The Business Times, P3 – “Casino boss turns tables his way”) Ubin, the clean-energy island Energy Market Authority (EMA) yesterday announced plans to embark on a project to turn Pulau Ubin into a model 'green island' powered entirely by clean and renewable energy. The study, slated for completion in May, will look at how much energy is needed by residents on the 10 sq km island, and the most cost-effective combination of renewable energy technologies that can be used. The Ubin project is the latest in a series of programmes to transform Singapore into a global centre for clean R&D.-The Straits Times, A8 (See also, The Business Times, P5 - “Ubin to host testing site for 'green' energy”) Iras told to relook property tax rules The Court has ruled that sinking fund contributions should form part of the calculation of how much tax is due on a property - but only if the fund has been used that year for repairs or maintenance on the estate. The change, if and when implemented, could affect unit-owners under the 3,000-odd management corporations that run strata-titled properties, including condominiums. For now, sinking fund contributions have been factored every year into the overall value of a property. -The Straits Times, B10 Soitec opens $700m wafer plant Soitec opened a $700 million plant in Pasir Ris yesterday, the 2.7ha facility is Soitec's first outside France and will serve as the company's hub for Asia. It will also be Singapore's first plant producing silicon-on-insulator (SOI) - a new silicon generation that boosts chip speed by 30 per cent while slashing energy consumption by half. Its output hit $36 billion last year - accounting for 52 per cent of Singapore's total electronics output. -The Straits Times, C27 Bourbon opens S'pore marine training centre Marine service provider Bourbon Offshore Asia yesterday launched its first training centre in Singapore amid plans to expand its footprint in Asia. Estimated to be YEN $3 million (S$5.7 million), it has a high-tech simulator designed to give seamen practical training in anchor-handling operations. The Singapore-based firm, part of Bourbon Offshore Division headquartered in France, plans to increase its headcount here from 400 to 1,600 over the next two years. It plans to invest YEN $1.7 billion over the next five years to expand its fleet of offshore vessels and other services.
- The Straits Times, C28
DBS chops 900 jobs DBS Group will slash 900 jobs or 6 per cent of its work force by the end of the month. 'Cuts will be 'across the board' and will include junior and senior staff in all parts of the group - 'across all business units and functions and at all levels of the organisation' - Chief executive Richard Stanley.
- The Business Times, P1(See also, The Straits Times, A1 – “Dbs to cut 900 jobs”
SMRT unveils $12m train information system SMRT Corp will spend $12 million over the next two years fitting a dynamic route map and information system on its trains so travellers can better track their journey. The STARiS system is similar to others in HK and Japan but has an additional feature - it tells passengers which side of the train to exit from. The new system comprises dynamic route maps and display screens that show multi-language transcripts of audio announcements, so passengers can receive the information visually. Each train carriage will be fitted with eight dynamic route maps above the doors, while four ceiling-mounted display screens will be positioned along the centre of each carriage.
-The Business Times, P17
Mulberry Tree- 167 Moulmein Road- 32 exclusive freehold retro-style boutique apartments- Approximately 200m walk from Novena MRT- Minutes away from renowned schools, MRT, major expressways & shopping centres- An array of recreational facilities including swimming pool, jacuzzi, gymnasium & BBQ area- Freehold- Foreigners eligible- Developer: Bravo Building Construction Pte Ltd- Sole Marketing Agent: Huttons- Zero instalment till TOP- Price from $668k- Expected date of TOP: June 2012- Expected date of legal completion: June 2014Ad, The Straits Times, A12
Teresa Villas- No 1 & 3 Bukit Teresa Road- Prices from $450 psf- No installment till TOP- Freehold premier cluster bungalows- 8 Luxurious bungalows from 5565 sq ft with private pool or Jacuzzi on a hilltop- Located at the centre of Sentosa & Marina Bay Sands Integrated Resorts- In the vicinity of Orchard Road, Vivocity, Financial Hub, popular schools & eateries- Convenient access anywhere with AYE, ECP, CTE & the Harbourfront MRT station nearby- Close to Mount Faber, Southern Ridges & famous clubs for leisurely pursuits- Bejeweled in designer fittings & tasteful furnishings by Duravit, Damixa & Bosch- Developer: Royal Oak Development Pte Ltd- Expected date of TOP: 30 December 2011- Expected date of legal completion: 30 December 2014- Marketing Agent: HuttonsAd, The Straits Times, A26

The Lucent- Located at Lorong N Telok Kurau- Freehold 1 to 4 bedroom apartments & penthouses with private pool available- 5-seater family whirlpool on your balcony- Steam bath in your master bedroom- Private swimming pool & sundeck on your rooftop/ porch- Regally-appointed interiors with unparalleled ceiling height of up to 3.3m- Elegant communal recreational area with pools, gym, BBQ area & playground- Idyllic environment near East Coast Park & Siglap Centre- Within 1km from well-known schools (Tao Nan Sch, CHIJ & Victoria JC)- Developer: Roxy Land Pte Ltd- Marketing Agent: HSR- Expected date of TOP: 31 December 2012- Expected date of legal completion: 31 December 2015Ad, The Straits Times, B12

D’chateau @ Shelford- 25 Shelford Road
- Deferred payment scheme: 5% upon booking, 15% within 8 weeks. No further payment till TOP- A lifestyle living in prominent Bukit Timah enclave- 2 blocks of luxurious 5-storey apartments comprising 31 lavishly designed units including penthouses with roof gardens- Exquisitely created 2, 3 and 3+1 apartments & penthouses- A collection of lifestyle facilities from a lap pool, gymnasium, to Jacuzzi & BBQ area- Just minutes away from Orchard Road, exciting shopping avenues & recreational destinations- Developer: East Coast Properties Pte Ltd- Sole Marketing Agent: DTZ- Expected date of TOP: 30 June 2012- Expected date of legal completion: 30 June 2015Ad, The Straits Times, C5
Palm Galleria- An intimate sanctuary nestled at Telok Kurau- A freehold development of 40 units- Foreigners eligible, 5% downpayment- Exclusive 3-bedroom units from $890k ($723 psf)- Interest absorption Scheme available- Within 1 km of Tao Nan School- Developer: World Class Land Pte Ltd- Marketing Agent: L2 Group- Expected date of TOP: 31 Oct 2010- Expected date of legal completion: 31 October 2012Ad, The Straits Times, C9
City View @ Boon Keng- A public housing development with 714 units under HDB’s DBSS- Hot water provision in all bathrooms- Built-in kitchen cabinets with cooker hood & hob- Built-in wardrobes in all bedrooms- Air-conditioning system in living/dining area & all bedrooms- Proximity card access security system at ground floor lift lobbies
- Eligible applicants can enjoy CPF housing grants, no resale levy for 2nd time homebuyers, deferred payment scheme- Available units: 4-room from $532,000-$568,800, 3-room from $539,000-$671,100- Option fee of 5% of Purchase Price payable by Cash/Cheque upon booking- Developer: Hoi Hup Sunway Development Pte Ltd- Agent: HSR- Tenure: 99 years upon TOP- Expected date of TOP: 5th June 2011- Expected date of legal completion: 5th June 2014Ad, The Straits Times, C14
Watten Residences- 59 units Freehold Strata Bungalows, Semi-D, Terraces- Private lifts & pool access- Prime Bukit Timah Location near schools, Botanics & MRT- Location: 20 Watten Rise- 2 x 60m pool with Jacuzzi- Water recycling system- Solar heating- Gym, BBQ
- Developer: Simefield Pte Ltd - Expected date of TOP: 31 December 2012- Expected date of legal completion: 31 December 2015Ad, The Straits Times, C22
Natura Loft- DBSS project with 3 towering blocks of 40 storeys each, comprising 480 units of 4-room and 5-room luxurious public housing flats.- CPF housing grants, no resale levy for 2nd time homebuyers/
- Priority Schemes like Married Child Priority Scheme & 3rd Child Priority Scheme- For sale via ballot- Location: Bishan St 24- Developer: Qingjian Realty Pte Ltd- Agent: SLP International- Tenure: 99 years upon TOP- Expected date of TOP: 31 December 2011- Expected date of legal completion: 31 December 2014

DAILY MARKET UPDATES 10th November 2008

2008-11-18T03:42:00.001+08:00

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

DAILY MARKET UPDATES 15th November 2008

2008-11-18T03:41:00.001+08:00

Shrinking demand hits India exports This week, snap figures for last month's exports indicated that shipments have contracted 15 per cent from a year earlier. Should oil products exports be taken out of the basket, the shrinkage will be 20 per cent. The Indian government is holding on to projections that the US$1.2 trillion (S$1.82 trillion) economy will expand at least 7 per cent in the coming fiscal year, but private sector economists are far less sanguine. By far the biggest threat to livelihoods may be in India's vast textile industry, the second-largest source of employment after agriculture.
- The Straits Times, A12
Asia key to solving crisis: ExpertsAsia has a vital role to play in helping lift the world out the global slowdown, according to the Asian Economic Panel. Major regional economies should have a coordinated policy framework in place by this weekend's meeting of the Group of 20 economies in Washington, where the United States and Europe are expected to offer different proposals for sweeping reforms of the global financial system. The three major Asian central banks should provide large credit swap lines between themselves to expand the current swap lines the US has already extended to South Korea to supplement its shrinking foreign exchange reserves. The three countries should also announce joint fiscal expansion but with measures appropriate to their individual situations.- The Straits Times, C21
Strong property, F&B sectors boost profit Net profit rose 15.1 per cent to $436 million for the year ended Sept 30 while profit after tax hit a record of $568 million - up 14 per cent from last year. Revenue was up 4.7 per cent to $4.95 billion. Good performances in the food and beverage, investment property and Reit segments underpinned the result but this was partially offset by a fall in revenue from development property and the printing and publishing unit. The firm is delaying launching two projects, at Lakeside Drive and Sirat Road, that had been scheduled for next month. Excluding translation differences and an impairment charge of $19.1 million from a writedown on an investment in Kingway Brewery Holdings, profit before interest and taxation actually grew 25 per cent. - The Straits Times, C23
Wheelock takes $85m impairment loss on SC Global Wheelock Properties' losing bet on SC Global Developments has left the firm with an impairment loss of $85 million. It bought a 10 per cent stake in SC Global in June last year at $6 per share or $112.1 million then, and purchased more on the open market this year. The share price of SC Global, which has since done a two-for-one stock split, closed one cent down at 57 cents yesterday. Wheelock's share of SC Global is now 16.05 per cent. Revenue rose 21 per cent to $229.53 million, as the firm commenced recognition of the sold units in Scotts Square. It was partially offset by lower revenue recognition from earlier projects like The Sea View and lower dividend income from Hotel Properties and SC Global. Looking ahead, the group aims to launch the 30-unit Orchard View for sale next year.- The Straits Times, C23
UIC's 3rd-quarter profit soars 90%United Industrial Corp (UIC) yesterday posted a staggering increase in net profit of 90 per cent to $48.3 million for its third quarter ended Sept 30. Revenue was also up by 56 per cent to $212.2 million. Subsidiary Singapore Land also posted positive results, with net profit up by 32 per cent to $39.8 million and revenue rising 25 per cent to $89.7 million. The bright results were due to higher property sales and rental income and increased revenue from Pan Pacific Singapore hotel operations. In spite of the positive results, however, UIC expects the office and retail rental market as well as the residential property market to be weak, in view of the current global financial turmoil and economic downturn.
- The Straits Times, C24
(See also, The Business Times, P10, “SingLand, UIC report higher Q3 net, bucking industry trend”)
Writedown math may sully developers' booksSmaller home developers have already started cutting prices and this will raise the pressure on other listed property groups to make writedowns. This will whittle bottom lines, which have already started to shrink during the latest quarterly reporting season. Developers who snapped up land at the market peak in 2007 and early 2008 will face much greater pressure for writedowns than those who bought in the early stages of 2005. Evidence of office rents slipping has also begun to emerge. Potential investors also demand higher yields on office acquisitions today than 12 months ago. These two factors point to lower office valuations. Downward revaluations of investment properties like office blocks would hit developers' bottom lines under Financial Reporting Standard 40 for most property groups.- The Business Times, P2
Ex-CEO of CapitaMall Trust Mgmt joins DLFPUA Seck Guan, the high-profile former CEO of CapitaMall Trust Management, is joining Indian real estate giant DLF to head its international operations. One of Mr Pua's key tasks at DLF will be to lend his mall and asset management expertise to boost the performance of the group's retail property portfolio. DLF has more than two dozen malls. Mr Pua is also expected to lead DLF's expansion outside India, probably starting with China and South-east Asia. Once equity market conditions improve, DLF could still launch an office Reit in Singapore.- The Business Times, P17
Citigroup to cut 10,000 jobs: reportCitigroup Inc is cutting at least 10,000 jobs in its investment bank and other divisions throughout the world, the Wall Street Journal said. This is even as it was reported yesterday that Citigroup Inc CEO Vikram Pandit and three deputies bought a total of 1.3 million shares in the US bank on Thursday in a show of confidence after the stock fell below US$9 for the first time in 12 years.- The Business Times, P21

Rosewood Suites
- Within convenient walking distance of Causeway Point & Woodlands MRT
- Luxurious condominium facilities: 3-storey clubhouse, full gym, 50m lap pool, Jacuzzi, waterjet play area
- Near schools (including American School), shopping malls, parks & amenities
- Easy SLE access
- 2 bedroom from $435,000, 3 bedroom from $635,000
- Interest absorption scheme available
- Located at Rosewood Drive
- Developer: EL Development
- Marketing agents: HSR and Propnex
- Tenure: 99 years
- Expected TOP: 31 Dec 2012
- Expected date of legal completion: 31 Dec 2015
Ad, The Straits Times, C6
Teresa Villas- No 1 & 3 Bukit Teresa Road- Prices from $450 psf- No installment till TOP- Freehold premier cluster bungalows- 8 Luxurious bungalows from 5565 sq ft with private pool or Jacuzzi on a hilltop- Located at the centre of Sentosa & Marina Bay Sands Integrated Resorts- In the vicinity of Orchard Road, Vivocity, Financial Hub, popular schools & eateries- Convenient access anywhere with AYE, ECP, CTE & the Harbourfront MRT station nearby- Close to Mount Faber, Southern Ridges & famous clubs for leisurely pursuits- Bejeweled in designer fittings & tasteful furnishings by Duravit, Damixa & Bosch- Developer: Royal Oak Development Pte Ltd- Expected date of TOP: 30 December 2011- Expected date of legal completion: 30 December 2014- Marketing Agent: HuttonsAd, The Straits Times, A8

The Lucent- Located at Lorong N Telok Kurau-From $880 psf- Freehold 1 to 4 bedroom apartments & penthouses with private pool available- 5-seater family whirlpool on your balcony- Steam bath in your master bedroom- Private swimming pool & sundeck on your rooftop/ porch- Regally-appointed interiors with unparalleled ceiling height of up to 3.3m- Elegant communal recreational area with pools, gym, BBQ area & playground- Idyllic environment near East Coast Park & Siglap Centre- Within 1km from well-known schools (Tao Nan Sch, CHIJ & Victoria JC)- Developer: Roxy Land Pte Ltd- Marketing Agent: HSR- Expected date of TOP: 31 December 2012- Expected date of legal completion: 31 December 2015Ad, The Straits Times, A14
The Verte - Freehold apartment - From $800 psf - 35 apartment units, 1 townhouse - Duplex penthouses – roof terraces and private Jacuzzis - Townhouse – 3-storey with 4 bedrooms, private lap pool, personal car park, dual view of pool and park views - Lorong H Telok Kurau - Set against 100,000 sq ft of greenery - Outdoor decks, private plunge pools - 5 min walk to Kembangan MRT - Top schools nearby – CHIJ Katong Pri, CHIJ Katong Convent - Nearby attractions – East Coast Park, Katong Park, golf clubs such as Tanah Merah Country Club - Expected TOP: 31 Jan 2012 - Developer: Roxy Homes - Marketing agents: Savills The Straits Times, A15, 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, A27, 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 - Developer: YTL - Marketing agent: Savills - Average sizes: 7,500 to 9,200 sq ft - 3 villas sold - highest price at $2,100 psf - Prices from $13.9 million The Straits Times, B9, Advertisement
The Quartz Compassvale Pre-TOP Special New Release, New Showflat TOP 2nd Quarter 2009 3 Mins to Buangkok MRt 24 Hrs amenities Full Condo facilities Compass Point & shopping malls Good schools Great value for money Developer : Guocoland Group Marketing Agents : CBRE & ERA Tenure : 99 yrs from 15 April 2005 Expected date of Legal Completion : 30 June 2013 The Straits Times, C39, Advertisement

DAILY MARKET UPDATES 26th August 2008

2008-11-18T03:38:00.001+08:00

Sharp fall in property prices unlikely
According to DTZ’s latest research report, Singapore’s property market presents plenty of buying opportunities for institutional investors. While the growth in prices may slow, there is unlikely to be a repricing. The Government's measures to boost Singapore's population could prop up demand for property and support prices. Sellers have become more realistic and lowered their expectations and more investors are coming back to look at properties that may have previously been overpriced but are now open to negotiation. 12% of the people intend to sell their properties in Singapore soon, while fewer than 5% plan to buy properties here. Growth funds and some opportunistic investors are pulling out of Singapore market, at a time when owners - including banks, foreign firms and opportunistic funds - are becoming more willing to sell. There is an increasing number of buying opportunities in gateway markets such as Singapore, Hong Kong and Tokyo. Interest in Singapore properties remains high, however, especially in the logistics and industrial market but the residential sector is likely to turn in a weak performance in the investment market this year. While repricing is not an apparent risk in Singapore's property market, the Asia-Pacific region is facing an average repricing of 25 to 100 basis points, or 0.25% to 1%.
- The Straits Times, B21 (See attached graph “26 Aug DTZ Report.jpg”)
Property subsales – who wins and who loses
An analysis of caveats by Savillis Singapore shows that 97% of those who have sold private apts and condos in the subsale market in the first 7 months of this year have made profits. Average gain per unit came to $417,563 or 36.5%. On average, those who bought their units in 2004 and sold them this year made the biggest gain, averaging nearly $692,000. The smallest gain of $175,600 was by those who bought units this year. The profit and loss does not take into account stamp duty and other expenses. Citylights (63), Varsity Park Condo (47) and The Sail @ Marina (45) had the most subsale. Savillis expects subsales to maintain at current levels of about 150 units a month.
- The Business Times, P1 (See attached “26 Aug propertysubsales.jpg”)
Subsale property gains top out at $4.2m
The biggest profit in absolute dollar terms from a subsale deal in the first 7 months was $4.2 million, reaped for a 22nd-floor unit at The Grange. Purchase price paid to the developer was $6.2 million in Sep 2005. On the average, The Grange has the most profitable subsale deals this year with 13 units sold, generating an average profit of slightly over $2 million per unit, 52% on percentage term. Biggest loss was $463,400 for a penthouse unit at The Cosmopolitan, which was sold for $2.3 million, against the $2.8 million purchase price in July 07. Analysts note that given the current market sentiment, profits from subsales can be expected to shrink in the days ahead, or there may be even more loss cases, particularly for those who bought at the peak of the market in 1H 2007. Demand for rental properties should increase by early 2009 as the Marina Bay Sands resort boosts its employment drive. A developer commented that with the diversification of different sellers, with varying financial strengths and abilities to hold, and similarly, of buyers is a very good sign for the market.
- The Business Times, P2 (See “26 Aug Chart toppers.jpg”)
S’pore among top private equity markets in SEA
South-East Asia is emerging as an attractive investment destination for private equity and Singapore offers numerous opportunities in the high-tech manufacturing, oil engineering, healthcare and digital media industries, according to a Deloitte Consulting study. The report, Hidden Treasures – Private equity Business in Asean, named Vietnam, Singapore and Malaysia as the region’s most active private equity markets in the last 18 months. Figures from Asia Private Equity Research show that investments reached US$7.3 billion for 1007 and H1 2008.
- The Business Times, P9
US hospital bed-maker opens R&D centre in Yishun
US-based Hill-Rom, one of the world's largest makers of hospital beds has opened a research and development (R&D) facility in Singapore, its first in Asia-Pacific. It plans to invest S$20 million to S$30 million in the 11,000 sq ft facility in Yishun over the next 5 years and will lift its current staff of 17 engineers to a head count of about 60. The centre already has 'four to five active projects' focused on developing electronic components and embedded software in hospital beds which cost ranges from S$30,000 to S$100,000. Hill-Rom, which employs 6,500 people around the world, has an innovation centre in Indiana, where it is based, and two R&D sites in France.
- The Straits Times, B21
Lian Beng wins coveted Ritz-Carlton Residences job
Lian Beng Group has won a $99.5 million contract to build the Ritz-Carlton Residences. The firm has set up a new unit, Millennium International Builders, which will build the project and focus on expanding into the luxury property market. The 32-storey project, which offers 3- and 4-bedroom units and 2 penthouses, has already sold some units - at more than $5,000 psf last year. Construction will begin this quarter and due for completion by end of 2010.
- The Straits Times, B20
$500m makeover for T1
27-year-old Changi Airport will be having a $500 million makeover which will be completed in 2011. It will add another 18,000 sq m of floor space and gird the facility. Takenaka Corporation will be doing the upgrading. T1's new look will have higher ceilings and glass walls to give arriving passengers a view of the landscaping outside. 15 more shops and food and beverage outlets will be added, the departure and seating areas for waiting passengers will be enlarged and the public viewing gallery will be designed for better views of the departure hall and runways. CAAS said the renovation will be done in phases and at night, or during off-peak periods to avoid inconveniencing passengers and the airlines.
- The Straits Times, B3
UAE mortgage market seen growing 220% in next 3 years
The mortgage market of UAE is projected to grow 220% to 64 million dirhams (S$24.7billion) in the next 3 years (Gulf News). The UAE is viewed by global investors as the best market for capital gains growth, and has been identified as the only Gulf country to witness an increase in consumer confidence for the 2nd half of this year. This can be attributed to the UAE’s move to allow foreigners to invest in local property.
- The Straits Times, P30
Vendors drop prices of Asia-Pac commercial properties
Commercial properties in the Asia-Pacific region have been priced down by 25-100 basis points in the past 3-4 months, said DTZ. The repricing has been greater in some markets such as Tokyo and Australian cities. In Singapore, it is hard to pin a number to the drop due to low number of transactions. But some sellers have marked down their assets about 10%. Singapore is one of the “gateway cities’ that international investors will look at when increasing their exposure in Asia-Pacific region.
- The Business Times, P30 (See attached “26 Aug – Diverging sentiment.jpg”)

DAILY MARKET UPDATES 09th October 2008

2008-11-18T03:34:00.001+08:00

S'pore is 'fifth most competitive economy'
Singapore has climbed two notches to fifth place in the World Economic Forum's latest global competitiveness index. It has the best ranking of all economies in terms of public trust of politicians, wastefulness of government spending, burden of government regulation and transparency of government policymaking. It was also ranked among the top two countries for the efficiency of all of its markets - goods, labour and financial - ensuring proper allocation of these factors to their best use, the survey said. The annual survey, showed that the next most competitive Asian economy - Japan - had dropped to ninth from eighth spot. Hong Kong improved one place to 11th. Economies were assessed according to 12 'pillars' of competitiveness, ranging from infrastructure and macroeconomic stability, to business sophistication and innovation.
- The Straits Times, B20
Office capital values down 2-3% in Q3
OFFICE capital values fell 2-3 per cent quarter on quarter in the third quarter of this year in areas such as Marina Centre and Anson Road/Tanjong Pagar as demand softened, according to a report by DTZ. It also points out that some redevelopment projects in the pipeline, such as International Factors Building, Robinson Tower and Marina House, have been deferred and the space put back in the market for leasing. Average office rents peaked in Q3, with no rental growth during the quarter. Although most landlords are maintaining their asking prices, they are now more flexible with lease packaging, resulting in lower effective rents. Many tenants continue to relocate to cheaper decentralised offices and converted state properties, while those that qualify for hi-tech industrial and business parks are relocating there. As a result, the island-wide average office occupancy rate eased 0.6 of a percentage point quarter on quarter to 96.3 per cent in Q3. On the other hand, demand for industrial space, particularly in business parks, remained healthy. Business park occupancy averaged 92.5 per cent in Q3, up 2 percentage points from Q2.
- The Business Times, P16
Banyan Tree hopeful of villas launch
The villas to be launched at the weekend cost from US$600,000 to US$4 million. People who buy at the launch will get a 3 per cent discount, up from 2 per cent given last year. The company sold 44 Banyan Tree Residences in the first half of this year, compared with seven in 2007. It started marketing the villas in February 2007 and last year sold 120 villas worth a total of $132 million, most of them in the last five months. Prices have appreciated 31-51 per cent this year. The largest groups of buyers are Singaporeans and Hongkongers, and are a mix of lawyers, bankers and business people. Banyan Tree's business is seasonal, with the high season being the first and fourth quarters. One third of villa buyers are hotel guests and another third are referred by existing owners. Since Banyan Tree began advertising it has received more inquiries than usual, about 10-15 a day.
- The Business Times, P10
(See also, The Straits Times, B19 - “Banyan Tree’s Villa Sale Still on”)
Keppel Land, CBRE win Euromoney awards
Euromoney, a publication of international finance, polled its readers - in more than 160 countries - on the leading real estate advisers, developers and investors on a global, regional and individual country basis. Keppel Land won Best Office/Business Developer and Best Mixed-Use Developer in Singapore and Vietnam. It also won Best Retail/Shopping Developer in Vietnam. CB Richard Ellis Singapore won Best Overall Adviser of the Year, Best Agency and Letting, Best Corporate Real Estate Services, Best Property Management, Best Research, Best Transaction Execution and Best Valuation in Singapore.
- The Business Times, P16
NUS 3 places up in world uni rankings
THE National University of Singapore has moved up three notches to 30th place in this year's Times Higher Education - Quacquarelli Symonds World University Rankings. It also kept its spot as the fourth best Asian university in the newly released rankings. Harvard and Yale retained their first and second spots this year, while Cambridge and Oxford, which tied at second place with Yale last year, slipped to third and fourth places respectively.
- The Business Times, P16
(See also, The Straits Times, B6 – “NUS up NTU Down in Varsity rankings”
UniSIM degree proves a career booster: poll
The first such employment survey, conducted by the Nielsen Company from April to June this year via telephone and online questionnaires, polled 1,002 graduates - about a third of the total number that have earned their degree from UniSIM over the past five years. Chief among the findings was that one in two respondents received a pay rise after graduation. Of these, the average rise was about 15 per cent, while nearly one in five had a salary jump of more than 30 per cent. Those who changed jobs saw an average 21 per cent increase.
- The Business Times, P17
STI sinks to new 3-year low after Japan's plunge
STI had been savaged to its lowest close since April 2005. It sank as much as 6.7 per cent during the day as investors rushed for the exit, before ending 143.94 points, or 6.6 per cent, lower at 2,033.61. International Monetary Fund said the world's major banks may need US$675 billion (S$989 billion) in fresh capital over the next several years to recover from the credit crisis. Property plays were not spared the financial carnage either. CapitaLand shed 13 cents to $2.44, City Developments fell 78 cents to $6.70 and Keppel Land was down 31 cents at $1.94.
- The Straits Times, B15
(See also, The Business Times, P12 – “STI Hammered to a 45 month low”)
IMF rules out Great Depression; world economy to grow 3%
The global economy should grow by 3 per cent this year, with continuing expansion in China and other emerging markets offsetting zero or negative growth in advanced countries, IMF economic counsellor Olivier Blanchard said. The 3 per cent growth is 'on the borderline of recession' and things could turn out much worse if coordinated monetary and fiscal actions are not taken by leading economic powers, he added. He described the 50 basis point coordinated interest rate cut announced yesterday by major central banks as a 'step in the right direction', but emphasised that more needs to be done on the monetary front.
- The Business Times, P5
(See also, The Straits Times, A6 - “IMF sees major economic downturn”)
Ascott tapping Bahrain's growing market
Ascott had first ventured into Dubai in the Middle East in April 2006. A year later, it expanded into Bahrain. It operates a 118-unit serviced residence there. In the middle of this year, the company also moved into Doha, Qatar. All three properties in the Middle East are managed for third-party owners. In Bahrain, its serviced residence currently has an occupancy of over 80 per cent. 'Ascott will continue to look for new opportunities to expand our presence in Bahrain as part of our overall growth strategy in the Gulf region,' Mr Chong Kee Hiong says.
- The Business Times, P15
Sembawang finds the going good in UAE and Bahrain
Sembawang has teamed up with GP Zachariades - a prominent local contractor - to win a bid to build 325 high-end luxurious villas in Bahrain. This is part of an upmarket residential community project named Riffa Views, next to a golf club. The development will have 970 villas with access to a golf course, hotel, country club, health club, shopping centre and an international school. Sembawang's project is 'the largest single package in the development' and will cost about 45 million Bahraini dinar (S$175 million) to build.
- The Business Times, P15
No sub-prime mess with Islamic banking
Islamic banking bans speculation and risk-taking, which are at the root of the financial troubles we are now seeing in the US and Europe. Options and futures as well as forward exchange transactions are non-existent in Islamic banks. So are debts in the guise of investment products. Islamic banking is better known for not paying interest. Over the past decades, transactions and liquidity in the Islamic banking system have grown exponentially. Today, Islamic banking handles an estimated US$750 billion worth of assets globally. And this is growing at 20 per cent yearly. Singapore is already gearing up to offer more products and services that adhere to Islamic law, as part of efforts to tap into the industry.
- The Business Times, P15
IB Asia eyes Gulf's financial sector
The Islamic Bank of Asia (IB Asia) is DBS Bank's vehicle into the world of Islamic banking in the Middle East and Asia. DBS, which pumped US$250 million into the joint venture, has a 60 per cent stake in IB Asia. Headquartered in Singapore, IB Asia's chairman is Abdulla Hasan Saif, economic affairs adviser to Bahrain's prime minister. IB Asia opened a representative office in May 2008, boasting more licensed financial institutions than anywhere else in the Gulf. Bahrain will also help IB Asia build momentum in its wealth management business because it is close to the wealth hubs in the Middle East, he says.
- The Business Times, P15
Dubai developers, lenders may merge as growth slows
Dubai property developers and lenders may seek mergers as credit tightens and home price growth slows, said Zahed Chowdhury, head of Middle East research at Deutsche Bank. Deyaar Development PJSC, a state-owned real estate company based in Dubai, may take advantage of falling asset prices to make acquisitions in the region. Amlak Finance PJSC and Tamweel PJSC, the biggest mortgage lenders in the United Arab Emirates (UAE), are in talks that may lead to a merger, according to a statement on Oct 4. Both are based in Dubai, one of seven sheikhdoms that make up the UAE.
- The Business Times, P35
Growth in Dubai house prices slows to 16% in Q2
Dubai house prices rose 16 per cent in the second quarter from the previous three months, as prices neared as much as people are prepared to pay, Colliers CRE plc said. House prices increased an annual 76 per cent in the second quarter. The average price per square foot for all types of Dubai homes was 1,833 dirhams (S$732). Property prices will be flat through 2010 after they quadrupled over the past five years, Colliers said on Oct 5. Dubai apartment prices increased an annual 83 per cent in the second quarter, while villas increased 73 per cent, Colliers said. Townhouses as a sub-category demonstrated the slowest increase with a 38 per cent gain.
- The Business Times, P35
Strategic hub of the Middle East
IE Singapore, has identified some specific projects Singapore companies can explore in Bahrain. Among them: the US$3 billion Durrat Al-Bahrain, the country's largest planned luxury residential, commercial and resort development; the US$3 billion and 45-km long Bahrain-Qatar Friendship Bridge; and the US$2.6 billion North Bahrain New Towns; and the US$1.5 billion Bahrain Bay, a residential and retail development. Bahrain is promoting itself as a high-class tourism and lifestyle destination, Singapore hospitality companies' interest in Bahrain is 'growing fast'. Banyan Tree has set up shop there. Frasers Hospitality will also soon have a presence in the country. Singapore's Raffles City will be making its mark in Bahrain in 2010. Raffles City Bahrain is an integrated development comprising three residential towers, landscaped sky villas, high-end retail, exquisite food & beverage facilities and 5-star serviced residences. '.
- The Business Times, P14
Yen effect batters A$ below Sing $
By Asian close, the Australian dollar traded at a six-year low of 96.17 Singapore cents. The New Zealand dollar also fell 6 per cent in Singapore dollar terms, sliding to 86.76 Singapore cents by yesterday evening - another six-year low. The yen surged strongly as Japanese investors unloaded their overseas investments in a hurry - with Japan's Nikkei stock index falling more than 9 per cent yesterday. This forced the US dollar sharply back below 100 yen for the first time in six months. The Japanese currency jumped more than 2 per cent to finish the day at a three-year high of S$1.4884 per 100 yen. Versus the yen, the Aussie and Kiwi plunged to finish the day more than 12 and 9 per cent weaker respectively.
- The Business Times, P1
UK throws £500b life-line to leading banks
British government has thrown a £500 billion (S$1.3 trillion) life-line to leading UK banks. In tandem with the US and European nations, UK interest rates were slashed by half a percentage point to 4.5 per cent. The government will spend up to £50 billion on buying preference shares in the banks in order to boost their capital. Half is available immediately, while a further £25 billion can be used if necessary. The government will also make £250 billion available to underwrite the banks' medium-term debts in an attempt to prevent a potentially dangerous funding gap in the next few years. Bank of England (BOE) will inject a further £200 billion into the money markets under its Special Liquidity Scheme. This enables distressed banks to swap risky mortgage securities for Treasury bonds.
- The Business Times, P2
(See also, The Straits Times, A6 – “Europe Battles to Prop up Banks”)
Europe's economy shrinks 0.2%
Gross domestic product (GDP) fell 0.2 per cent from the previous quarter, the EU statistics office said. Corporate investment dropped one per cent and household spending declined 0.2 per cent. The decline in company investment was less than the 1.2 per cent drop initially estimated. Construction fell 1.8 per cent, less than the 2.2 per cent estimate. Construction surged 2.6 per cent in the first quarter, when mild weather prompted companies to bring forward building projects. Exports fell 0.2 per cent, also less than estimated, while imports declined by 0.5 per cent, compared with 0.4 per cent reported on Sept 3.
- The Business Times, P19
India ready to pump more cash into markets
India's main BSE share index fell more than 8 per cent at one stage to its lowest in two years, but recouped partly towards the close. Foreign funds have pulled out a net US$9.9 billion from Indian shares this year, after ploughing in a record US$17.4 billion last year. The government has eased rules for foreign borrowings by companies, while the capital market regulator relaxed rules for indirect investments by foreign institutions in stocks.
- The Business Times, P22

DAILY MARKET UPDATES 13th October 2008

2008-11-18T03:30:00.001+08:00

Sports Hub completion date: 2012
The deepening financial crisis and rising building costs have combined to set Singapore's biggest sports project back two years in completion. One of the final obstacles before the contract could be inked between the SSC and SSHC was securing and finalising loans from financial institutions. Also contributing to the delay is a worldwide increase in the cost of construction materials, which some market experts say has risen by up to 35per cent in the last year. It is almost certain to translate into a surge in the $1.2billion construction cost of the project.
- The Sunday Times, 12 Oct, P4
Financial slowdown may ease construction costs
Mr Simon Lee, executive director of the Singapore Contractors Association, said the downturn will most likely stabilise the cost of construction materials. Last year, the Government announced the delay of $4.7 billion worth of public sector projects to ease pressure on construction demand; projects include a new hospital in Jurong and a complex that will house the Communicable Disease Centre. Other projects, like Resorts World in Sentosa, are still going ahead as scheduled. The BCA spokesman said it expects total public construction demand to reach between $10.5 billion and $13.5 billion this year as the Government is proceeding with essential infrastructure projects such as the Marina Coastal Expressway, MRT Downtown Line and Gardens by the Bay.
- The Sunday Times, 12 Oct, P13
S'pore in 'better shape' to face crisis
Mr S. Iswaran said that measures put in place after 1997 Asian financial crisis will help S'pore fare better now. Last Friday, figures from the Ministry of Trade and Industry (MTI) indicated that the economy shrank in the third quarter, declining by 0.5 per cent from a year ago. The local economy has contracted quarter-on-quarter in three of the last four quarters, making this the first technical recession in Singapore since 2002. MTI also lowered its forecast for full-year growth to 'around 3 per cent', down from 4 to 5 per cent.
- The Sunday Times, 12 Oct, P8
Hello S'pore, you'll soon go 3-D on Google
Last week, cars were taking pictures of landmarks, hotels and stores for Google Street View, a three-dimensional application that combines thousands of photos to create a panoramic view of a city; part of a project to put Singapore on the virtual map. The program promises to offer netizens a 360-degree, ground-level perspective of Singapore. Tools will let users tilt, zoom in and move along the streets in any direction and scheduled to be finished in a few months. Singapore will be the fifth country after the United States, Australia, Japan and France to be featured on Street View. Google said the program would also allow tourists to preview restaurants, hotels, tourist attractions and public events before arriving. They declined to reveal which areas of the island will be covered. The Government is developing a similar virtual 3-D model of Singapore called Co-Space, but Google's would be the first based on photo imagery.
- The Straits Times, B2
Always eating on the job
Far East Food Concepts (part of Far East Organization), Chia Boon Pin lives to track down the best restaurants and dishes to develop into dining concepts for the shopping malls developed by his company. 'My job is to find the best cuisines - from hawker food to fine cuisine - and position them accordingly to fit the intended concept of our malls,' says Mr Chia, who is well known in Singapore's dining circles as a foodie par excellence. His current fixation is Mediterranean food which is the theme chosen for Far East's latest mall, Orchard Central.
- The Business Times, B19
More small supermarts sprouting in the heartland
Over the past year, about 100 stores have been added to the heartland's roughly 1,000 outlets now. PSC, which also runs veteran heartland player, iEcon, opened 10 new outlets last year, adding to its stable of about 90. The chain, formerly known as Econ minimart, was set up in 1982 when a group of provision shop owners grouped together to bulk purchase. It franchises all its stores to individuals and families giving them the authority to switch prices at will for most of their products, apart from essential items like bread, milk and rice. The stores are a hit with heartlanders because some essentials are cheaper than in the big chains.
- The Straits Times, B1
Triple whammy hits Orchard Road retailers
A Straits Times survey of 62 tenants in six malls along the street's main shopping belt found that more than half are suffering as receipts have dropped. Businesses from restaurants and cafes to fashion retailers and salons say takings have tailed off by about 10 to 30 per cent. Orchard Road Business Association (Orba) secretariat Mr Stephen Goh said while malls have been cagey about revealing figures on customer traffic and sales, carpark revenue has fallen 10 to 15 per cent, suggesting fewer shoppers are driving into the area. The fall-off in spending also parallels a slowdown in tourism figures. STB announced earlier that it was likely to miss its target for visitor arrivals this year, the first time that has happened since the Sars outbreak five years ago.
- The Straits Times, A6
STI sheds half its value in a year
STI comprising 30 blue-chip component stocks has lost almost half its market value from a year ago, when the measure hit a high of 3,831.19 last Oct 11. Since then, the STI has shed 49.15 per cent. This means that easily $250 billion has been wiped off the benchmark, whose market value now stands at $263.7 billion. Out of the 30 blue-chip stocks, 18 have lost half or more of their value since the heady high of last October. The two biggest decliners are the China plays listed in Singapore, the so-called S-chips - shipbuilder Cosco Corp and property developer Yanlord Land, which have lost over 84 per cent and 79 per cent in value, respectively.
- The Straits Times, B22
S'pore banks in sound shape: MAS MD
MAS managing director Heng Swee Keat cited a number of reasons for this optimism. First, Singapore has no sub-prime mortgages that originated here, which means that banks and insurance companies have limited exposures to such assets or to the banks that have failed. Second, MAS has been conservative in its approach to how it supervises financial institutions. 'Their assets must exceed liabilities by a good margin, and we require them to hold sufficient capital. Financial institutions here, both local and foreign, have invested resources in risk management,' he said. Lastly, unlike banks elsewhere that face liquidity problems, depositors and investors here maintain a high level of confidence in Singapore's banks, especially as the MAS is also very strict about the spreading of rumours.
- The Business Times, P1
S'pore pledges support for SWF guidelines
International Working Group of Sovereign Wealth Funds (IWG), set guidelines - called the Generally Accepted Principles and Practices (GAPP) – which will help government-owned wealth funds and the countries that accept their investments operate on an even playing field. IWG, which represents SWFs with total assets worth an estimated US$2.3 trillion, said that the framework would bring about greater levels of public disclosure to dispel mistrust surrounding such funds, even as more of them are called on to help rescue ailing global markets. The IWG made public the set of 24 voluntary principles in a 59-page report on its website, and also announced it had formed a committee to explore the creation of a permanent international sovereign wealth fund body.
The full list of principles can be found at www.iwg-swf.org/pubs/gapplist.htm.
- The Business Times, P3
(See also, The Straits Times, A3 – “SWFs lay out code of conduct”)
Aussie dollar slide hits Singaporean companies
The slide of the Australian dollar will hit Singapore companies with Aussie exposure, including Singapore Telecommunications Ltd. Other companies with Australian dollar exposure include transport operator ComfortDelGro, Singapore Power, property company CapitaLand, crane operator Tat Hong and systems integrator CSE Global. One unit of the Australian currency traded at 98 Singapore cents by Asian close on Friday, compared with $1.35 on July 11 last year.
- The Business Times, P2
Key industry Q3 earnings at risk: analysts
Third-quarter earnings numbers will focus on key sectors such as the banks, the property players, and the oil-and-gas industry. Singapore banks hold quality assets compared to other banks across the region, one analyst from a foreign brokerage told BT. With the recent property boom, the proportion of bank loans to the property and construction sector had jumped to a peak of 18.1 per cent in June 2008 before retreating to 17.9 per cent in August, said an OCBC research report dated October 10. Reits could be under pressure with their larger gearing, analysts said.
- The Business Times, P1
World races to contain contagion
15 leaders of the countries which use the euro as a common currency in Paris, draft plans included guaranteeing loans between banks and pumping fresh capital into struggling institutions. While Britain is not part of the eurozone, Mr Brown was invited because of plans to adopt an approach similar to the £50 billion (S$126 billion) bailout plan for British banks announced last week. That plan sees the government guaranteeing inter-bank lending and buying stakes in banks. French Cabinet will hold a special session today to approve a Bill offering state guarantees and recapitalisation to banks in trouble. Germany is also expected to unveil a bank bailout package. British banks were in talks with the government and regulators yesterday to determine how much capital each needed from the £50 billion offered by the government last week.
- The Straits Times, A1
(See also, The Business Times, P20 – “Euro leaders seek common crisis response”)
G-7's action plan faces market verdict
IMF chief confirmed that the credit squeeze is spreading to emerging market economies, forcing them to turn to the IMF for emergency balance of payments financing. This came after the Fund's International Monetary and Finance Committee (IMFC) warned of possible 'spillover effects' on emerging economies from the financial crisis. IMFC said at the weekend that 'many emerging market economies which have implemented sound policies in recent years' may experience spillover effects from the financial crisis. The global financial environment, including elevated food and fuel prices, adds to the challenges for emerging markets and developing countries to preserve macroeconomic stability, sustain growth and make progress on poverty reduction.
- The Business Times, P1
UK banks set to unveil bailout plans
Banks are in talks with the government and regulators to determine how much capital each needs from £50 billion (S$126.4 billion) offered by Britain on Wednesday. An announcement is expected before market opens today, said the source. The Sunday Times said Royal Bank of Scotland (RBS), HBOS, Lloyds TSB and Barclays could ask for a combined £35 billion lifeline. Resulting in the government becoming the biggest shareholder - and even a majority investor - in RBS and HBOS. The scale of the cash required by each will depend on estimates of more losses from their exposure to sub-prime mortgages and other financial instruments.
- The Business Times, P20
Abu Dhabi plans to be region's media hub
Abu Dhabi yesterday unveiled plans for a new media zone, those behind the zone - named 'twofour54' after the geographical coordinates of Abu Dhabi - envisage tie-ups with dozens of media companies to produce content for the Arab world, meaning more newspapers, magazines, movies, documentaries, books, dictionaries and online content, among others. A temporary media park with about 200 staff will be launched next year, but a media zone spread over a 200,000-sq m waterfront site will take shape in five years' time. National Geographic said it was signing up with a local company to produce 10 to 15 films on the region in the next five years. Yesterday, television network CNN said Abu Dhabi would be its fourth global hub after Atlanta, London and Hong Kong.
- The Straits Times, A17
Saudi govt sees indirect impact from global crisis
Mohammed al-Jasser, the Saudi central bank vice-governor, said on Wednesday there was no need to provide emergency funds to banks in the world's largest oil exporter as the financial sector faced no shortage in liquidity. Six Saudi banks launched a concerted effort to restore confidence on Tuesday, saying they had no direct exposure to toxic mortgages as shares plunged on fears about the impact of the global financial crisis. But Saudi Arabia's main stock index fell again on Saturday to close at its lowest level since July 2004.
- The Business Times, P9
China to ensure growth will be 'fast and stable'
'Despite the negative shocks of the financial crisis, China will accelerate transformation of the growth model, promote domestic demand - especially household consumption - and maintain fast and stable growth,' central bank deputy governor Yi Gang said. China's economy, grew 10.1 per cent in second quarter from a year earlier. Policy makers have shifted focus from taming inflation to sustaining economic expansion as slower growth in exports and food prices threaten corporate profits, jobs and social stability in the world's most populous nation. Exports rose 21.1 per cent in August from a year earlier, after climbing 26.9 per cent in July. Industrial production climbed 12.8 per cent, the slowest pace in six years.
- The Business Times, P9
(See also, The Straits Times, A8 – “China ‘to double rural income by 2020’”)
S Korean banks' FX problems easing
South Korean Finance Minister Kang Man Soo said the won was expected to stabilise from today and mentioned that a local private economic institute had said the currency's 'balanced level' was 1,002 per dollar, which is 23.5 per cent higher than Friday's domestic close, according to Newsis, a local news agency. 'Foreign currency debts stood at around US$200 billion and roll over ratio of the debts recovered to 100 per cent last week. The ratio fell to 70 per cent when the situation was really bad,' he said. He repeated that the country could manage the recent financial turmoil well, given the size of its foreign exchange reserves and foreign currency debt structures.
- The Business Times, P9
Japan's small firms feel pinch of financial crisis
In August, Japan's core machinery orders, which are a leading gauge for capital spending, slid 14.5 per cent, four times the expected contraction. Meanwhile, bankruptcies have been escalating among the small businesses amid the global credit crunch. Corporate bankruptcies jumped 34.5 per cent in September month-on-month from a year earlier to 1,408 cases, up for the fourth straight month, hitting transportation, construction and property firms, a research firm said last week. Japan's Nikkei share average plunged 9.6 per cent on Friday for its biggest drop since the 1987 stock crash, wiping out US$202 billion in market value.
- The Business Times, P9
India mutual funds turn to central bank for short-term cash
India's mutual funds have asked the central bank to lend them short-term cash via a repurchase facility after the global financial crisis virtually paralysed the country's money markets, fund executives said. Reserve Bank of India (RBI) is considering the proposal to let mutual funds deposit some of the short-term bank debt they hold with the central bank in exchange for cash. Central bank lowered the proportion of deposits banks must keep in their vaults by 150 basis points from Saturday, adding 600 billion rupees (S$18.5 billion) to the amount of cash available for lending. Central bank data shows that outstanding certificates of deposits (CDs) at the end of August totalled 1.71 trillion rupees, up nearly 40 per cent from the start of the year.
- The Business Times, P12
RBI may delay opening of banking sector
RBI is slated to review its policy on foreign banks in April 2009, which now could be delayed. RBI had stated ealier, 'The second phase will commence in April 2009 after a review of the experience gained and after due consultation with all the stakeholders in the banking sector.' The review would examine issues concerning extension of national treatment to wholly-owned subsidiary, dilution of stake and permitting mergers/acquisitions of any private sector banks in India by a foreign bank in the second phase, RBI had said. India has committed 12 branches of foreign banks in a From 2003 to October 2007, the central bank gave approval to about 75 new foreign bank branches.
- The Business Times, P12
Communist Party approves key land reforms
China's ruling Communist Party approved a major economic reform plan yesterday that will allow farmers to trade and mortgage their land rights and bolster the nation's food security. The move is part of a wider package of reforms aimed at reducing a gaping rural-urban income gap that has expanded during 30 years of capitalist market policies. The package was approved at an annual meeting here chaired by President Hu Jintao of up to 500 members of the party's central and disciplinary committees and other key officials, the official Xinhua news agency said. It calls for a doubling of China's per-capital rural income of 4,140 yuan (S$898) by 2020, Xinhua said, without giving further details.
- The Business Times, P14

DAILY MARKET UPDATES 20th October 2008

2008-11-18T03:29:00.000+08:00

Parkway Centre up for sale
Parkway Centre, one of the few developments up for collective sale in recent months amidst the financial crisis. Sole marketing agent JLL said the owners of the 99-year leasehold block in Marine Parade expect a price of around $160 million - $1,000 per sq ft per plot ratio, representing a premium of 40 to 50 per cent over an individual sale. The buyer could build an all-retail project or an office-cum-retail complex of 157,625 sq ft of gross floor area, subject to approval. The 13-storey building, with 72 years left on its lease, has 110 units, of which three are shops and the rest offices. A firm linked to Hong Kong-listed Far East Holdings International, which developed the former Tang Dynasty City in Jurong, owns 40 per cent of the building. The sale tender closes Nov 19 08.
- The Straits Times, B17
Earnings spotlight on Reits, Keppel
Reits, make up nearly one-third of the 16 companies that are set to release their results for third quarter reporting with office trust K-Reit Asia’s results due out later today, followed by CapitaMall Trust tomorrow, Ascott Residence Trust and Mapletree Logistics Trust on Wednesday and CapitaCommercial Trust on Thursday. In the last few weeks, they have regained the lost favour with market watchers pointing to their falling prices and rising yields as the key selling point. Against growing economic uncertainty, analysts say that Reits have an advantage over property developers as they are still expected to derive stable, visible and recurring income. However, falling rentals, will take some shine off the sector. Meanwhile, debt refinancing remains a key issue with nearly $4 billion worth of Singapore Reit debt expiring next year.
- The Business Times, P5
Property firms may feel squeeze as banks turn coy
According to the OCBC, the proportion of bank loans to the sector has been reduced to 17.9 per cent in August, down from 18.1 per cent in June. Financial data on over 30 developers from DMG & Partners Securities shows net gearing levels from a range of negative 0.1x to 3.2x. Expressing net debt as a proportion of shareholders' equity, the higher the net gearing ratio, the more debt a firm has comparatively. Highly-geared companies may face more covenants from banks, or get charged higher interest rates. Another critical indicator is the size of short-term debt and the amount of cash available to cover it. Some property developers have more breathing space when it comes to short-term loans. A third factor to look at is the amount of proceeds going to developers in the near future. The OCBC report also noted, with strong property sales in 2007 and progressive recognition of profits from sold projects, 'developers are financially stronger to weather the storm'. DMG & Partners' list also highlights a trend: smaller property developers are more likely to have higher net gearing ratios. This ratio is just around 0.5 for bigger players such as Keppel Land and City Developments. For CapitaLand, net gearing is 0.43x if capital from recent property divestments is included in the end-June results. Smaller companies holding more development properties would hence benefit less from rising markets, because these sites can be reported only at the lower figure of cost or net realisable value.
- The Business Times, P2
(See attached, “Developer Ratios”)
Finding your dream condo online with Virtualhomes
House hunting has become easier with the launch of Virtualhomes, a new search engine for local condominium developments. Jointly developed by ST701 and Knight Frank, it plays host to information on more than 2,500 properties and even includes analytical functions to allow users to get information on surrounding amenities such as schools, shopping malls and transport networks. Surfers can also get virtual walkthroughs of the units before they make an actual visit. For more information – www.virtualhomes.sg
- The Business Times, P31
Elderly, retrenched, jobless? Marina IR wants you
The integrated resort started hiring of rank-and-file operations staff such as housekeepers, security guards, waiters, technicians and cleaners. With the resort opening at the end of next year with 10,000 workers of all levels on its payroll, this round of recruitment of operations staff alone represents the first time an employer here has hired on this scale. To prepare them for jobs in the field, Marina Bay Sands is partnering the WDA and the NTUC Employment and Employability Institute (e2i). WDA and e2i will run outreach programmes with briefings on the jobs available to the target audience. Even those who eventually do not make the cut for a job at Marina Bay Sands will be helped in hunting for jobs elsewhere in other tourism or service companies. The aim, said Mr Zee, is to train as many Singaporeans as possible to take advantage of the 60,000 job openings that are expected in the tourism sector. To this end, e2i and WDA will tap the $360 million kitty under the Tourism Talent (TOTAL) Plan launched a year ago to prepare Singaporeans to meet job requirements.
- The Straits Times, A1
S'pore companies in top value creating firms list
Singapore Exchange-listed companies have shown up on the radar as among top value creators in South-east Asia. Twenty-one of them made the league table of the top 50 South-east Asian companies for total shareholder return (TSR) over the past five years, driven by capital gains and cashflow yields. The Boston Consulting Group ranked 184 companies listed on the primary exchanges of Singapore, Indonesia, Malaysia and Thailand. Sixty-one such companies are listed in Singapore, 55 in Malaysia, 35 in Indonesia and 33 in Thailand. On average, a Singapore-listed company had a TSR of 36 per cent over the past five years, versus the global average of 17 per cent for the top 650 companies in the world and the South-east Asian average of 32 per cent. Blue chips like Singapore Exchange (SGX), Singapore Petroleum Co (SPC), SembCorp Industries, Keppel Corporation, Jardine Cycle and Carriage and CapitaLand earned spots in the top 50.
- The Business Times, P8
World summit to fix financial system
British Prime Minister is proposing radical changes to the global capitalist system, including a cross-border mechanism to monitor the world's 30 biggest financial institutions. Mr Bush said that any plan to rethink financial mechanisms should 'preserve the foundations of democratic capitalism' and include 'a commitment to free markets, free enterprise and free trade'. President Sarkozy, said hedge funds and tax havens cannot continue to operate as they have in the past; financial institutions cannot continue without supervisory control. South Korea joined worldwide efforts to shore up banks and markets, pledging US$130 billion. In the Middle East, the United Arab Emirates was reported to be planning to inject 70 billion dirhams (S$28 billion) into long-term bank deposits. In Britain, Finance Minister said the government would have to borrow more to fund public spending to generate growth and employment. Dutch financial group ING is in talks with the Dutch government about a state-backed cash injection estimated to be worth up to ¥9 billion (S$17.9 billion). Governments around the world have so far pledged about US$3.2 trillion in schemes that guarantee bank deposits, bank-to-bank lending, and taking stakes in banks to shore up their capital.
- The Straits Times, B17
China budget hotels: The inn thing?
The U-Inn Hotels chain, is opening its first budget hotel here before the end of the year. Some 30 more are coming up. Operators are already registering higher than usual fourth-quarter bookings and are aggressively opening more rooms across the country. GreenTree Inns, a major player in the sector with 113 hotels operational, plans to add 40 more by the end of the year. And even when they do, the inns - typically charging about 180 yuan (S$39) per night - are looking to profit from it, picking up bargain properties for development and welcoming weary business travellers on tighter budgets. 92 per cent of budget hotel guests here are Chinese and the bulk of them are lower to middle management executives on work trips. From 166 hotels in 2004, there were as many as 2,000 by the end of last year. The increase between 2006 and last year was 125 per cent. Most of these budget hotels, especially those belonging to major chains, offer clean rooms, clean sheets, en-suite shower facilities and very often, free broadband connection. Last year, Chinese tourists generated US$781.9 billion (S$1.155 trillion), nearly 20 times compared to 2000.
- The Straits Times, A8
S Korea guaranteeing banks' foreign debts
The government said that it will provide up to US$100 billion to secure banks' maturing foreign currency debt for three years on loans taken out from today until June 30 next year. The government and the Bank of Korea will also provide additional liquidity equivalent to US$30 billion to the banking sector by utilising foreign exchange reserves. South Korean banks' foreign debt reaching maturity at the end of June 2009 is estimated at about US$80 billion, the statement said.
- The Business Times, P2
Indian hotels start feeling the pinch
According to HVS International, a global hospitality consulting firm, almost all the major Indian hotel markets - Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore - have witnessed a sharp fall in occupancies with Delhi registering an 8 per cent dip during the April-September period this year over the same period last year. Though tariffs have not yet been slashed - as most hotels are still assessing the inflationary market - they are offering corporate discounts and better deals to keep the clients hooked. In some cases, corporate discounts are as high as 40 to 50 per cent. Indian hotels command top dollar rates and are one of the most highly-priced in the world. For instance, a standard five-star hotel room in any of the Indian metros cost in the range of 14,000 to 17,000 rupees (S$425-515). Compare this to Singapore, Thailand or Malaysia, where a similar room can be had for around 10,000-12,000 rupees.
- The Business Times, P20

DAILY MARKET UPDATES 21st October 2008

2008-11-18T03:27:00.001+08:00

DAILY MARKET UPDATES
21st October 2008

$150b unlikely to be tapped
Minister of Trade and Industry, Mr Lim said that the blanket guarantee released by MAS for all the bank deposits of individuals and corporates here until the end of 2010 was necessary to keep local banks competitive and to prevent a flight of deposits overseas. This amounts to about $700 billion in Singapore dollar and foreign currency deposits in banks, finance companies and merchant banks. Bank guarantees given earlier by regional governments such as Australia and Hong Kong had 'set off a dynamic' that put pressure on other economies to do the same or else risk disadvantaging their own financial institutions, he said. 'If Singapore had not introduced a similar guarantee, there was a real risk that depositors would have shifted some of their deposits out of Singapore banks, to banks in other jurisdictions which guarantee deposits,' Mr Lim added.
- The Straits Times, A1
(See also, The Business Times, P4 – “Enough muscle to defend Sing MAS”)
3rd ERP gantry on PIE to kick in
The gantry along the expressway near the Eunos exit will charge $2 between 7am and 7.30am, and $1 between 7.30am and 8am. One of six congested stretches of road identified but the only one with a gantry to go 'live', because the LTA has noted in its that motorists' average speeds there have fallen below 45kmh. Of the remaining five 'problem' locations, traffic speeds at four - Commonwealth Avenue, Jalan Bukit Merah, Alexandra Road and the west-bound Ayer Rajah Expressway - have improved, so ERP charges will be held off next month. At the fifth location, Geylang Road, the LTA will look into changing the physical infrastructure of the area, such as widening the roads there, to improve traffic conditions. The LTA has also decided to raise ERP rates by 50 cents between 6.30pm and 7.30pm at two locations - on the east-bound East Coast Parkway (ECP) at Marina South and on the slip road to the ECP from Ophir Road. This will bring the ERP charges at these two points from $1 to $1.50 on Nov 3. Charges at all other gantries remain unchanged.
- The Straits Times, B4
SMRT to roll out 112 more train trips each week
The fourth increase in number of trips made by SMRT will bring the total number of weekly trips added in eight months to 895, translating to an 11 per cent increase in trips. The extra weekly train trips starting on Friday will be made on weekdays, shortening waits by up to two minutes and making commutes more comfortable. In the mornings, more train trips will be made on the westbound, southbound and eastbound services; in the evenings, additional trips will head east and north to the suburbs. After 9pm, north, east and westbound services will also go up in number.
- The Straits Times, B4
Travel with LTA website
LTA has launched a new website that will let commuters do everything from surveying bus schedules to navigating the island's streets with an interactive map. The portal, www.publictransport.sg, is especially geared towards new arrivals to Singapore and infrequent public transport users. Visitors can browse through travel information and navigate with the help of an interactive map that features bus and train stations. Or simply key in their destination and let a journey planner make suggestions. Resident users can locate Park & Ride carparks, access information on premium bus services and compare fares. The site offers news on public transport promotions and initiatives as well. Meanwhile, commuters can also tap into a new SMS alert featuring bus arrival times for both public transport operators. The pilot project will be available for 166 bus stops along the western academic belt. The area covers the NUS, Singapore Polytechnic, the Institute of Technical Education's Clementi campus, Jurong JC, as well as secondary and primary schools. Commuters can get real-time bus arrival information by sending an SMS to 77722 with the five-digit bus stop code located on the bus stop pole. Normal charges apply for the SMS request. The information sent will be free during the six-month trial period.
- The Straits Times, B4
3,500 vying for positions at Marina Bay Sands
The resort's website received almost 1,000 applications, while 700 others applied via SMS text messages. Another 200 hopefuls walked into an NTUC employment office at Redhill Road. Marina Bay Sands has become the first employer here to woo traditionally overlooked groups like seniors, housewives and the jobless. Resort officials say finding the 10,000 workers will be no mean feat. The challenge is expected to get tougher when Singapore's second integrated resort, on Sentosa, begins hiring. Scheduled to open in 2010, it will also need 10,000 workers to staff a casino and theme park, among other things.
- The Straits Times, A10
STI gains 3.2% after three days of losses
Stock markets across Asia shrugged off last Friday's losses as investors temporarily shifted their attention from global recession worries to a further easing of interbank lending rates - a key indicator of the state of credit markets. Another boon was a move by South Korea to inject liquidity into its financial system, following similar moves in the United States and Europe. Seoul guaranteed US$100 billion (S$147.8 billion) of lenders' foreign currency debts and provided US$30 billion to banks. Leading the gains were blue chip banking and property stocks which had buckled under selling pressure in recent days. Most second-line indexes also mirrored gains on the STI. Banking stocks United Overseas Bank (UOB) and OCBC were among the best performers. However, general investor sentiment was still very cautious.
- The Straits Times, B17
Billions more for schools, roads and health care
Extra funds worth more than 2 per cent of Singapore's gross domestic product (GDP) will soon be available for government spending each year. The change, arising from a proposed amendment to the Constitution on spending of investment returns on reserves, will enable government income to keep pace with expenditure. Based on last year's GDP of $243 billion, the new rule could add at least $4.86 billion to beef up the annual Budget. The 2007 hike in the GST to 7 per cent adds 0.8 per cent of GDP a year to revenues. Firstly, investments in schools, worker training, research and development, as well as the flexibility to cut income taxes if needed, to keep the economy competitive. Secondly, improvements to the transport network, housing estates and leisure areas to keep Singapore a top-quality home. Thirdly, higher social spending as the population ages and the income gap between rich and poor widens. Now, the Government can spend up to half of the net investment income on the reserves, from interest and dividends paid out each year. The new spending rule sets the cap at 50 per cent of net investment returns (NIR), which include capital gains, that is, the change in the value of investments as prices rise.
- The Straits Times, B6
(See also, The Business Times, P1 – “Govt acts to cope with major spending ahead”)
Dirty power? Senoko gets top green award
It earned the accolade by burning natural gas instead of oil to produce electricity for the country's grid. The switch, made in 2004, means it belches 2.5 million tonnes less carbon into the air every year, about the same as taking all Singapore vehicles off the road for a year. The other two winners are Alexandra Hospital and the South West Community Development Council. Launched in 2006, the award goes to three recipients every year - individuals, organisations or companies which have made green contributions and built an excellent track record.
- The Straits Times, B1
(See also, The Business Times, P12 – “Going green reaps rewards for Alexandra Hospital”)
Unemployment rate this year will be higher
Trade and Industry Minister said that unemployment rate this year will be higher than last year's 2.1 per cent as employers 'exercise more caution in their hiring. However, inflation has peaked and is expected to 'revert to the more normal 2 to 3 per cent' over the next 15 months. The Government will also be watching the construction sector closely for the right time to resume public sector infrastructure projects that have been put on hold, and so offset a possible decline in private sector construction demand. Overall, the construction sector is estimated by his ministry to grow by 7.8 per cent in the third quarter of this year, compared to 18 per cent in the first half of the year. A total of 144,600 jobs were added in the first half of the year, a slight rise over the same period last year, although 'moderation in employment growth is expected in the second half of 2008 through to 2009', said Mr Lim.
- The Straits Times, A8
Singaporeans 'not grabbing' Johor land
Domestic Trade and Consumer Affairs Minister and Johor Baru MP Shahrir Abdul Samad said Singaporeans have been buying property in Johor since colonial times, and it was untrue to say that Johor Malays would become landless because of this. 'These people talk about the purported grabbing of land in Iskandar Malaysia by Singaporeans, and how it will drive the landless Malays to live in the jungle,' said Datuk Shahrir. 'They never highlight actual facts and figures to support their claims. The people of Johor, especially those in Johor Baru, should prosper with the Iskandar Malaysia project and not listen to outsiders out to undermine it, he said.
- The Straits Times, A14
DBS now smallest of three local banks
Falling share prices last week have wiped an astonishing $2.76 billion off DBS' market value yesterday. A rise of 28 cents in OCBC's stock to $6.38 gave it a market value of $19.95 billion while DBS' market cap sat at $19.83 billion after its shares gained just four cents to $13.04. United Overseas Bank (UOB) remains the most valuable of the three local banks. Its market capitalisation rose to $23.77 billion, after its shares rose 84 cents to $15.60 yesterday. Traders noted that DBS appeared to have suffered greater collateral damage from the sell-off, compared to UOB and OCBC.
- The Straits Times, B18
OCBC seeks bigger slice of regional corporate pie
OCBC saw higher corporate loans growth in the first nine months this year but expects volumes growth to fall, said Mr Tsien, head of OCBC global corporate bank. Real estate loans growth has weakened, while exporters of consumer goods have also been hit by the slowdown. OCBC continues to see the Singapore market as the largest contributor to its corporate banking earnings growth, but expects its business in Greater China to have the fastest growth. The bank has followed its corporate customers from Singapore, Malaysia, Taiwan and Hong Kong to China, where it has built up a business serving these clients as well as their suppliers and wholesalers, said Mr Tsien.
- The Straits Times, B21
(See also, The Business Times, P6 – “Corporate loan growth likely to slow: OCBC”)
Merrill chief expects thousands of job cuts
Merrill Lynch chief executive officer John Thain said he expects 'thousands' of job losses from the bank's US$50 billion (S$74 billion) takeover by Bank of America. Most of the cuts will fall in information technology, operations and finance. Jobs will not be eliminated in the fixed income and commodities divisions, he said. 'We haven't mapped it out in terms of actual number of people, but we are committed to saving US$7 billion across the combined platforms, and that will be a challenge,' he said. 'Between our two companies it will be clearly thousands of jobs.'
- The Straits Times, A11
Rattled contractors give projects a miss
Many contractors are refusing to tender for new jobs as they fear their projected profits could dissolve into losses if the prices of raw materials keep climbing. According to data from BCA noted that cement, steel bars, granite, concreting sand and ready mixed concrete have in some cases doubled over the past two years. The government is likely to respond to the slowdown in demand from the private sector by restarting some of the $4.7 billion worth public sector projects it put off, CIMB’s Mr Song & Citigroup’s Mr Kit said.
- The Straits Times, A11
Lehman US$3.4b property fund looks for sponsor
US$3.4 billion LBREP III fund raised at the end of last year is rim by bank staff who want to find a new partner to take Lehman’s US$780 million stake said Keith Greengrove a managing director for private equity at Lehman Brothers. ALAM which is 24.5 per cent owned by the Lehman fund hopes to raise up to US$750 million for Chinese property over the next three years said Mr Greengrove, ALAM’s deputy chairman. Property fund managers are eager to invest in Asia now because they believe that developers especially in China and India will offer plum deals because they are starved of funding. Merrill Lynch unveiled a US$2.6 billion Asia property fund last week. LaSalle Investment Management raised a US$3.9 billion fund in
August and Citigroup is raising a similar multibillion fund for the region.
- The Business Times, P37
India, Vietnam cut rates
India, Asia's third biggest economy after Japan and China, unexpectedly cut rates by an aggressive full percentage point, as did Vietnam. Both central banks judged that the risks to growth outweighed the pressure from inflation. Inflation in Vietnam has been running at about 28 per cent, which has forced its central bank to keep rates high in an effort to control prices by making credit expensive. At 13 per cent after yesterday's cut, Vietnam's interest rates are still the highest in Asia. India's inflation has persisted in double-digits, although there is some indication that this may be starting to ease.
- The Straits Times, A5
(See also, The Business Times, P17, “India cuts key rate for first time since 2004”)
Sept gross mortgage lending in UK down 10%
Gross mortgage lending fell 10 per cent in September to the lowest level for any month since
January 2005 hit by weak demand and the global financial crisis Britain’s Council of Mortgage
Lenders said yesterday. Banks and building societies loaned S$45 5 billion in September down 42 per cent from the same month last year. It was the lowest gross landing Figure for
September since 2001 the council said.
- The Business Times, P36
London home buyers hold out
Residential property prices in London probably will fall about 14 per cent this year with the biggest declines in homes costing about 1 million or more Knight Frank LLP estimates. In 2009 houses and apartments will lose another 11 per cent of their value according to Knight Frank, Europe’s biggest closely held property broker by revenue. Lenders now won’t issue a mortgage of more than 79 per cent of the value of the property compared with 90 per cent a year ago according to personal finance website Moneyfacts. The number of available mortgages has sunk to 3,123 from 15,599 at the peak of the market in July 2007.
- The Business Times, P36
China wants to stabilise property market
More than a dozen cities including Shanghai, Hangzhou and Nanjing rolled out new measures to encourage house purchases such as offering cash subsidies for home-buyers and lowering taxes and fees for developers. A State Council meeting led by Premier Wen Jiabao on Friday concluded that China should build more affordable housing and reduce taxes on residential
property transactions, state media reported. Real estate investment, the second largest contributor to the country’s urban fixed assets investment dropped in recent months due to sluggish sales falling property prices and developers funding difficulties.
- The Business Times, P36
China’s Q3 growth slows to 9%
China’s economic growth rate slipped into single digits in the third quarter for the first time in at least four years under the impact of the global credit crisis and weakness in the domestic property sector. Annual GDP growth slowed more sharply than expected to 9.0 per cent from 10.1 per cent in the second quarter the National Bureau of Statistics NBS said yesterday. Industrial production slowed to 11.4 per cent in the year to September, the lowest rate since 2002 suggesting that the economy was losing momentum as the quarter went on. However, the pace of retail sales and fixed asset investment growth both accelerated last month beating forecasts and providing reassurance to policy makers counting on domestic demand to take up the slack from ebbing exports.
- The Business Times, P2
China’s GDP can grow 8% over 10 years
China’s economy will continue to grow very strongly throughout the current global downturn and should be able to manage 8 per cent average annual expansion over the next 10 years
World Bank chief economist Justin Yifu Lin predicted yesterday in Tokyo. Mr Lin s forecast was for 9-10 per cent this year and 8-9 per cent in 2009. It is well within China’s capacity to maintain growth at high levels in the face of an expected slowdown in exports by using its huge reserves to finance spending on infrastructure and on education. While exports will slow imports will also fall and the net impact on GDP growth will be muted, he said. Meanwhile Chinese domestic investment can continue growing at 10-15 per cent annually and domestic consumption by 7-8 per cent.
- The Business Times, P2
LaSalle eyes plum Asia deals from troubled landlords
LaSalle Investment Management is keen to snap up property bargains in Japan, China and Australia and is also drawing more investors looking for stable long term returns in the region an executive said yesterday. The property fund unit of JLL unveiled a US$3 billion Asia opportunity fund in August which will be boosted by borrowing to US$12 billion of spending power. The fund hopes to pick up buildings on the cheap as landlords who borrowed heavily are squeezed by a clampdown on bank lending, said David Edwards Asia Pacific director for LaSalle Investment Management. Meanwhile LaSalle’s opportunity fund is keen to buy warehouse and logistics buildings especially in Japan. The logistics market has got many years of growth Mr Edwards said. Some markets are seeing short term oversupply and Osaka is one. But the Tokyo bay is still in good shape, he added. In China, assets are likely to spring
up as developers have been squeezed by a clampdown on bank lending and other government austerity measures aimed at stamping out property speculation.
- The Business Times, P37
K-Reit income jumps 180.7% on new assets
K-REIT Asia, Keppel Land’s listed office trust yesterday reported a 180.7 per cent increase in
third quarter distributable income as contributions flowed in from new acquisition, One Raffles Quay (ORQ). Distributable in come hit 15.2 million up from 5.4 million a year ago. Net property income for the three months ended Sept 30 2008 rose 27.2 per cent to 9.5 million from 7.5 million in Q3 2007. K-Reit reiterated that it has no debt refinancing requirements until 2011.
- The Business Times, P9
Tokyo should help Reits in Japan to merge Mitsubishi UBS
Japanese Reits corporations that pool investor funds to buy and manage property are under pressure after the global credit crunch led to a series of failures in the property industry. The Tokyo Stock Exchange Reit Index reached an all time low of 711.30 on Oct 10 compared with
1.000 at its April 2003 inception. The index rose 5.9 per cent to 828.24 in Tokyo yesterday. BOJ governor Masaaki Shirakawa said yesterday that the bankruptcies in the industry are making it more expensive for some companies to borrow money. The central bank needs to carefully watch the increase in credit costs on the back of a rise in bankruptcies in the construction and real estate sector Mr Shirakawa said at a quarterly meeting of its branch managers in Tokyo.
- The Business Times, P37
Berjaya Land confident of target
Berjaya Land Bhd expects to sell over RM300 million (S$126 million) worth of properties in its financial year ending, April 2009. The company inked a RM150 million deal with Hanju Savanna (M) Sdn Bhd yesterday and already sold closed to RM200 million worth of properties. It will launch three new developments soon, namely, Berjaya Park in Shah Alam, Taman Semutih high-end bungalows and a condominium in Bukit Jalil and recently received approval of four overseas projects in Vietnam worth over US$2 billion.
- The Business Times, P36

DAILY MARKET UPDATES 22nd October 2008

2008-11-18T03:24:00.000+08:00

Property sub-sales net $95m profits
Ninety-six per cent of owners who resold an uncompleted home between July and last month pocketed profits from the deals, according to data by Savills Singapore. 12 sub-sale transactions out of the 306 that Savills analysed in the quarter incurred a loss, amounting to just under $1 million. The rest made a total of $95.1 million in gains, Savills said. Profitable sub-sellers made an average of $323,420 in the third quarter, but this skewed upwards by a single $6.7 million profit deal from the sale of a 63rd-storey penthouse at The Sail @ Marina Bay. Excluding this sale, the average gain was $301,784 - almost 40 per cent lower than the average gain in the first half of the year - average profit for each seller of about 30 per cent over the purchase price. The biggest profits of more than $1 million each were units at The Sail @ Marina Bay, St Regis Residences and Cairnhill Residences. Sub-sellers who had bought their units at the peak, between June and September 07, bled the most. The Sail @ Marina Bay had the largest number of sub-sales in the quarter - 19 - with each deal netting its an average profit of $1.1 million and one loss, of $62,890, for a second-floor unit. Other projects with more than 10 sub-sales included Parc Emily in Dhoby Ghaut, Park Infinia at Wee Nam, Riveredge in Tanjong Rhu and The Esta in Marine Parade.
- The Straits Times, B26
(See attached – “Property Profits”)
CapitaMall (CMT) halts plans to overhaul 3 big malls
The redevelopment of three projects had yet to start when plans were announced. Jurong Entertainment Centre, set for a 62 per cent boost in gross floor area. Funan DigitaLife Mall, a purely retail property, was to be converted into a retail-cum-office complex. Tampines Mall purely retail was to see the creation of about 95,000 sq ft of office space. Yet, outlook for CMT remains positive with a total of $68.4 million set aside for capital expenditure. The increase in Sembawang Shopping Centre’s value after improvement is expected to be $31 million. The Reit also announced its distribution per unit (DPU) for the third quarter was 14.48 cents, 7.3 per cent higher than the DPU last year - 13.49 cents. CMT's portfolio occupancy rate in 08 to date was 99.7 per cent, 99.6 per cent in 31 Dec 07, 99.5 per cent in 2006 and 99.7 per cent in 2005. Third-quarter shopper traffic reported11.8 per cent higher than in the same period 07.
- The Straits Times, B20
(See also, The Business Times, P8 – “CMT puts works at three malls on hold”)
'Low' bid for Mohamed Sultan office site rejected
RSP Architects Planners & Engineers offered the only bid for the 6,176 sq m site at $4.65 million. With a15-year lease, the site is aimed at easing the office supply squeeze. At just $46.67 per sq ft of gross floor area, the bid fell far short of market expectations of $10 million to $18 million. URA earlier this year rejected the only bid - of $7.8 million or $38.35 per sq ft of gross floor area - for a transitional office site in Aljunied Road for the same reason. Confirmed list sites go up for tender on scheduled dates, regardless of developer interest. Another transitional office site - in Mountbatten Road - on the confirmed list was launched last month with the tender to close on Nov 18. Whether the URA will put out more transitional sites in the future will depend on the response to the recent tenders.
- The Straits Times, B24
(See also, The Business Times, P10 – “URA rejects sole bid for Mohd Sultan office site”)
First Reit's Q3 income up 12% to $5m
First Reit yesterday reported net distributable income of $5.3 million for the third quarter ended Sept 30, 2008 - 12.4 per cent more than a year ago. This was driven by a 7.4 per cent year-on-year hike in gross revenue to $7.6 million in Q308. Higher rentals from four Indonesian properties acquired in 2006 and rentals from another four local properties bought last year contributed to the revenue increase. First Reit's portfolio comprises eight properties in Singapore and Indonesia. Looking ahead, First Reit said that it will focus on improving the income-generating capacity of its existing healthcare properties. It will enhance assets and work with tenants to continually upgrade healthcare services. The trust's unit price ended 1.5 cents higher yesterday at 41.5 cents.
- The Business Times, P8
(See also, The Straits Times, B19 – “First Reit’s glowing results a healthy sign”)
Lower profits for property developers expected
Last Friday, GuocoLand, reported a net loss of $2.8 million for its first quarter ended Sept 30, compared with a net profit of $27.7 million a year earlier. Keppel Land will report its earnings today. The chief concern now is that tighter credit and declining capital values in all sectors may force companies to write down their assets and make provisions for land acquired at high prices. All developers except City Developments, which reflects investment properties at cost, also face the risk of revaluation losses against investment properties, analysts have said.
- The Business Times, P8
Construction demand set to fall: Mah
'While the domestic construction demand this year is estimated to reach between $27 billion and $32 billion, it is expected to decline as we go forward.', Mr Mah said. In view of the expected economic downturn, there have been suggestions that the government should inject some $4.7 billion worth of public projects that had been deferred earlier to ease demand. Such measures have been adopted in previous economic crises. Mr Mah called on builders to exercise greater prudence in managing their financial resources and watch out against over-extending themselves on business risks. They should also redouble their efforts to improve their productivity and upgrade their capabilities, so as to be better placed to leapfrog competitors and exploit future growth opportunities. A greater emphasis on manpower development is needed, he said.
- The Business Times, P10
(See also, The Straits Times, B24 – “Construction sector in for tough times”)
Property and bank stocks hit by sell-off
STI gained as much as 86 points in morning trade, but dipped in the afternoon, mirroring movements in the Hong Kong market. Property developers lost ground after Deutsche Bank slashed their target prices by more than half. City Developments lost 23 cents to $7.05 after the brokerage downgraded the stock to a 'hold' and lowered its target price to $7.15. CapitaLand fell seven cents to $3.06 after it slashed the firm's target price to $2.33 from $5.90. Foreign funds continued to trickle out of the local market. In the week ended Oct15, US$32.1million (S$47.5million) was pulled out of Singapore equities. Over the past four weeks, the total withdrawals amounted to US$136.5million, according to data from EFPFR Global. Trading volume on the local bourse yesterday was 1.2billion shares worth $1.1billion.
- The Straits Times, B19
Credit agencies turn glum on 2 Reits
Credit rating agencies have turned more pessimistic on two real estate investment trusts (Reits) in Singapore: Frasers Commercial Trust (FCT) and MacarthurCook Industrial Reit (MI-Reit). Standard & Poor's (S&P) Ratings Services yesterday changed its CreditWatch status on BB-rated FCT from positive to developing. Revision arose from concerns over FCT's debt of $70 million, which will be due on Nov 22. S&P expects FCT to have firm committed refinancing arrangements ready by Oct 31. Otherwise, FCT's rating may be placed on CreditWatch negative or lowered. Separately, Moody's Investors Service yesterday placed MI-Reit's Baa3 corporate family rating on review for a possible downgrade. The trust has 91 per cent of its total debt or $201 million falling due next April, which is not covered by available committed facilities.
- The Business Times, P5
Travel industry still upbeat amid turmoil
Mr Raimund Hosch, head of Messe Berlin, said the global financial meltdown means travel will decline, but added that the industry had weathered similar storms, such as those which occurred after the Sars outbreak in Asia and the Sept11, 2001 terrorist attacks in the United States. The inaugural ITB Asia trade event starts today at Suntec Singapore. A key indicator is the level of interest in the three-day ITB Asia, which will see 651 exhibitors from 58 countries showing what they have to offer to 5,000 buyers from various companies and organisations. About 70per cent of hotels and tourism companies buying booths are from the region. In fact, interest is so keen that companies are already queueing to take part in next year's event, said Mr Hosch. ITB Asia will run till Friday.
- The Straits Times, B3
Cheaper power in January?
S. Iswaran said yesterday that despite the 21 per cent hike in this quarter's tariffs, households are paying less for electricity under the current pricing policy than if another formula had been used. He linked it to a three-month time lag in the current formula, which pegs tariffs to the price of fuel oil for delivery in three months' time. He added that the EMA ensures Singapore Power earns a rate of return that is reasonable by international standards. He also expects Temasek Holdings' sale of its power companies to add competition, keep a lid on electricity prices and promote innovation. Two were sold this year, one to a China company and the other to a Japanese-French consortium.
- The Straits Times, B11
Spending rules to force discipline in time to come
PM Lee told Parliament that a constitutional amendment to tap more of the gains from Singapore's reserves was not timed for the looming downturn. The new spending framework would allow the government to use half the net investment returns from the GIC and the MAS. Capital gains or losses will now be included in a computation of expected real returns. This will be based on a long-term investment horizon, with estimates to be reviewed yearly. He compared the situation to Australia, where a series of spending promises by both the government and the opposition party in the most recent general election resulted in packages worth over A$50 billion. Norway, too, has found it difficult to resist spending from its massive reserves, Mr Lee said. 'Therefore we need to put in place a system that will subject the government to tight fiscal discipline regardless of which party is in power,' he said.
- The Business Times, P2
Help for S'poreans to cope with downturn
PM Lee said the Government is preparing measures to help cut business costs, lighten households' burden, especially the low-income, and help workers cope with the downturn. He did not elaborate on what form the measures will take. Mr Lee warned the next one or two years will be difficult but he is confident Singapore can deal with the fallout on the economy brought on by the global financial crisis. Also, he does not foresee the need to draw on past reserves in this recession, barring 'exceptional contingencies'. Now, it can spend up to 50 per cent of net investment income (NII) from the reserves, interest and dividends. With the change, it can spend up to 50 per cent of net investment returns (NIR) - long-term expected real returns that include capital gains. With the new rule, total returns from the reserves will form 3 per cent to 3.5 per cent of Gross Domestic Product, which was $243 billion last year. This yields $7.3 billion to $8.5 billion, or one-fifth of total revenue.
- The Straits Times, A1
Local banks get reprieve from auditor rule
Banks can now reappoint the same audit firm beyond five years to have some degree of audit continuity. Currently, DBS, UOB and OCBC Bank are not allowed to appoint the same audit firm for more than five consecutive years, except with the approval of MAS. Temporarily suspending the requirement for the three local banks to change their audit firms after five years will minimise the disruption that could arise when appointing a new audit firm. UOB will benefit immediately from the suspension as current auditor Ernst & Young is in its fifth year. DBS's auditor PwC took over only a year ago while KPMG has been auditing OCBC since 2006. MAS said to avoid concentration risk, no single audit firm would be allowed to undertake the audit of all the local banks at any one time.
- The Business Times, P1
Move afoot to help SMEs get loans easily
The plan, through Spring Singapore, will make credit more freely available to SMEs by bearing a bigger share of the risk of default on loans. Interest rates on these loans are also likely to be lower than the current 6.25 per cent offered by banks. Apart from financial assistance, Lawrence Leow, president of ASME also said that relevant government agencies could help by keeping business costs down. 'Many SMEs are worried that rentals will keep going up,' he added. Currently, there are about 130,000 SMEs that give jobs to 60 per cent of Singapore's 2.75 million-strong workforce.
- The Business Times, P1
S'pore's future is in intellectual capitalism
Through building a strong foundation in education, physicist and author Michio Kaku foresees that Singapore will be able to benefit in the transition from commodity capitalism - underlined by food produce and natural resources - to intellectual capitalism. Already, its students regularly beat Americans in mathematics and science. And the republic is looking at emerging technologies - nanotechnology, biotechnology, artificial intelligence - which he predicts will be key to the future economy. While Singapore stands in good stead to ride the next technology wave, it lacks originality. If it wants to compete on the same level as the US, it will need to breed a pool of people who are highly imaginative and nourish them, he said.
- The Business Times, P12
Fewer bankrupts - but things may change soon
MinLaw says there were 290 petitions for bankruptcies in September, bringing the total petitions to 2,314 for the first nine months of the year, down from the 2,514 cases seen a year ago. However, a month-on-month comparison indicates that bankruptcy figures have started rising. September's individual bankruptcy petitions rose 21 per cent over August, which recorded 240 petitions, while the number of bankruptcy orders was 206, up slightly from 205 orders a month ago. Meanwhile, the number of bankrupts continues to climb, with a total of 26,677 undischarged bankrupts as at the end of September. In terms of corporate insolvencies, the number of companies wound up in the first nine months was 92 - up from 89 in the year-ago period. There were 17 petitions in September, while nine firms were wound up, compared with 11 in the previous month.
- The Business Times, P2
Changi handles fewer passengers
The airport handled fewer passengers in September, compared to 07. A total of 2.89 million passengers went through Changi, a 0.4 per cent year-on-year dip, the for first time traffic volumes slipped since February 2004 said a Civil Aviation Authority of Singapore spokesman. Like Changi, SIA too recorded a year-on-year dip - the first such slide in three years - from 1.539 million passengers to 1.514 million. June was down 4.1 per cent over last year, July dipped 3.8 per cent and August, the steepest at 7.7 per cent. In Asia, Hong Kong seems to be the worst hit with traffic last month down 4.7 per cent compared to 07. Frankfurt Airport has also recorded a fall in traffic while in India, Bangalore's five-month-old airport is scaling back on future expansion plans in the face of a traffic decline.
- The Straits Times, A6
At least 20 Merrill staff here let go
About 10 members of the equity team were axed on Monday - about 25 per cent of the unit's workforce. Sources say that around the same number from the fixed income desk and several from the energy trading team were told to leave yesterday. The axe has also fallen on Singaporeans based in Merrill's HK office. At UBS Singapore, two employees from commodities have been asked to go, while the investment banking team has seen reductions, sources say.
- The Straits Times, A9
Global unemployment set to rise to 210m
At least 20 million people will lose their jobs between now and the end of next year, the UN labour agency said. World unemployment will rise to 210 million people by the end of next year, its highest rate in the past decade, officials of the International Labour Organisation (ILO) said on Monday. ILO director-general Juan Somavia said global leaders need to focus on the impact of the crisis on individuals. He said measures should be taken to provide unemployment compensation and other social protection.
- The Straits Times, A9
New tax-haven blacklist soon
French Budget Minister Eric Woerth said that the 17 governments at the Paris meeting agreed to task the Organisation for Economic Cooperation and Development (OECD) with drafting a new expanded blacklist of countries that fail to cooperate on tax evasion and transparency. OECD will have until mid-2009 to draft the new list and a conference will take place in Berlin in May or June to decide on further steps. OECD lists 38 countries that have adopted tight banking secrecy laws and are tax-free, or have very low taxation. But only three of those - Andorra, Liechtenstein and Monaco - are on the OECD blacklist for refusing to share any information on their finance sectors. Some financial centres in Asia may find themselves on the list while others that were taken off a few years ago may once again be singled out for failing to follow through on pledges of more transparency, said the official.
- The Business Times, P23
Small firms in Asia may face big debt problems
Exporters, and property, shipping and retail companies could be hit because they racked up debt and expanded aggressively in the boom times, leaving them ill-equipped for the bust being seen across Asia, analysts said. Slowing economies are crimping cash flow and profits in the region. At the same time, access to capital has been severely constrained as the global financial crisis sparks widespread risk aversion, choking off lending for smaller companies which are in most need of funds.
- The Business Times, P23
Australia won't guarantee deposits in foreign banks
Australia has ruled out extending a government guarantee to deposits held at foreign investment banks,including JPMorgan Chase and UBS, and the banks say that the exclusion is harming their ability to source funds. The rate that banks charge each other for three-month loans rose to 5.87 per cent, the highest since Oct 15. The difference between that rate and the overnight indexed swap rate, a measure of funding availability, rose the most since Oct 10 to 76.25 basis points at 10.25 am in Sydney.
- The Business Times, P23
Japan ready to help big banks recapitalize
Japan has said it will pump money into its banking system to prevent failures and keep credit flowing, especially to small and medium-size firms that form the backbone of Japanese industry. But analysts say Japan's banking system has not been hit as hard by the credit crisis as those elsewhere and there is no credit crunch in Japan, contrasting the situation with that in South Korea, Hong Kong and Australia. Japan has a strong domestic deposit base, they say. Nevertheless, the authorities fear credit could dry up in the currently stressed financial environment - especially that provided by regional banks to the small and medium-size enterprises that account for most output and employment in the manufacturing and service sectors. This week, both the Japanese government and the Bank of Japan have downgraded their view of the nation's immediate economic outlook.
- The Business Times, P4
China drafts plans to stimulate growth
As part of the new policy, the State Council announced that it would increase export tax rebates for everything from labour-intensive products like garments and textiles to high-value products like mechanical and electrical products. Banks will be encouraged to lend more money to small and medium-size enterprises and support programmes will be drafted to help farmers, the government said. Government agencies will also spend more to rebuild earthquake-damaged areas of south-western China, to improve transportation links and other infrastructure and to improve the social welfare system, the Xinhua news agency said.
- The Business Times, P14
(See also, The Straits Times, A10 – “Beijing takes steps to keep economy growing at a good pace”)
Jitters in the region as China reports slowdown
While 9 per cent growth is still very healthy, that trend is bad news for a host of Asian countries, many of which have seen China climb to be their No. 1 export market. In Japan, economists worry that Japanese capital investments will be affected by the drop in exports to China, as a result of global economic slowdown. A drop in demand has already hit commodity prices, causing a sharp slide in share prices of Australia's biggest mining companies, BHP Billiton and Rio Tinto. Even Australian wool farmers are affected. About 65 per cent of Australia's wool is sold to China, with about a third of that re-exported as textile products. Likewise with other mineral-exporting nations such as Indonesia and India. The drop in iron-ore demand from China has left some 30 million tonnes of the commodity stuck in Indian ports. China accounts for eighty per cent of Indian iron-ore exports. At some point, all of Asia will be hurt by a China slowdown. But Beijing is also taking counter-measures to limit the damage to the economy and prop up spending.
- The Straits Times, A10

DAILY MARKET UPDATES 23rd October 2008

2008-11-18T03:22:00.001+08:00

West Coast Plaza 70% leased ahead of launch
West Coast Plaza, which underwent a $26m makeover by Far East Organization is close to 70% leased ahead of its soft launch on Nov 15. $1.6m is committed to advertising and promotion programmes for the mall till Jan 09. Rentals at the mall, with a net lettable area of 160,000 sq ft will range from $7 to almost $30 psf per month. 31 per cent of its three floors of retail space are for F&B outlets. The proportion of retail space typically allocated to eateries across Far East’s malls has grown from 20 to 25% previously to 38 and 35% now. Refurbished to feature an alfresco dining area, the visitors it aims to draw are students and work professionals from educational and research institutions nearby and families from private residences in the area. Positioned as a “mid-market surburban mall”, West Coast Plaza’s anchor tenant will be Cold Storage supermarket.
- The Business Times, P33
(See also, The Straits Times, B8 – “Ginza Plaza gets $26m makeover”)
Park’s Clarke Quay hotel to open in March
The company has spent S$130 - $150m developing the 336-room hotel and will position it as a four-star business establishment. Its proximity to Clarke Quay will make it attractive to free and independent travelers. They have plans to acquire 10-12 more hotels in the next few years, mainly in the Asia-Pacific region, said Park director. They also announced yesterday that it has acquired a third hotel in China – Grand Park Xian – as well as its first in Japan.
- The Business Times, P33
Sime Darby Prop to boost portfolio through selective purchases
Sime Darby Property Berhad (SDP), a unit of Malaysian conglomerate Sime Darby, is looking to grow their portfolio in Singapore through selective buys. They are looking at all sectors for acquisitions. At the moment, they hold two sites, a small site in Orchard and another in Tanjong Rhu. A warehouse is on the latter which SDP intends to redevelop into a residential site in a few years. SDP manages $470m of property assets locally which accounts for 15% of their bottom line. Malaysia, SDP’s largest market accounts for 80%.
- The Business Times, P33
‘Buy property stocks now, reap fruits later’ : Wheelock CEO
David Lawrence’s advice is investors looking for value is to buy property counters at the moment, because they are cheap and will give good returns over the next couple of years. He acknowledged that it will be a tough couple of hears for the local property market but he adds that Singapore is going to be the big beneficiary of this credit crunch because there aren’t many places like this left to go. 'The indirect market - which is property counters - is completely out of line with the physical market. So the real value at the moment - and it won't be there for long - is the indirect market. Some of these shares have come down so much.
Other plus point, interest rates are low and there is huge liquidity in the system, he adds.
- The Business Times, P34
Three property, infrastructure funds alley fears
Facing a possible rating downgrade by Moody's Investors Service, MacarthurCook Industrial Reit (MI-Reit) reassured investors that it is 'advanced in negotiations' to refinance a $220 million facility maturing in April 2009. MacarthurCook Property Securities Fund announced their priority is to further reduce debt and prudently manage its underlying portfolios. One strategy is to cut its weightings on unlisted property and use those funds to reduce debt. A third fund, the Macquarie International Infrastructure Fund Limited (MIIF), said yesterday that it has no bilateral dealings with known troubled financial institutions. According to the fund, borrowings held by its underlying businesses have remaining maturities of three to 14 years, and most of its interest exposures are also hedged for the medium to long term.
- The Business Times, P8
KepLand Q3 profit falls
Keppel Land has reported a net profit of $46.17 million for the third quarter, a fall of 43.6 per cent from a net profit of $81.84 million a year ago. Revenue for the quarter was $185.79 million, down 51.4 per cent from $381.97 million a year ago. Earnings from overseas were about 50 per cent of its attributable profit compared with 29.6 per cent for Q3 2007. In China, it expects to launch 2,796 residential units for sale in 2009 and 5,654 units the following year. For Vietnam, Thailand, India, Indonesia, Middle East and the Philippines combined, it is aiming to launch 2,799 units in 2009 and 3,663 units the following year. In Singapore, the launch of the 221-unit Marina Bay Suites has been postponed to 2009.
- The Business Times, P4
(See also, The Straits Times, B18 – “KepLand gains down 43.6%”)
Ascott Reit's DPU up 31% in Q3
ASCOTT Residence Trust (ART) achieved a unitholders' distribution of $15.86 million for the third quarter ended Sept 30, a 32 per cent increase year-on-year. Distribution per unit (DPU) for the quarter is 2.61 cents, a 31 per cent increase from a year earlier. The trust's average cost of debt was 3.3 per cent, and its interest cover a healthy 5.1 times. Ascott Residence Trust Management Ltd said that more than 70 per cent of ART's debt is on a fixed-rate basis, as it has consistently taken a conservative approach to capital management. Some $84.6 million or 15 per cent of total debt is due for refinancing in the current Q4. The trust said it has sufficient cash and bank facilities to meet these refinancing needs. More than 80 per cent of total debt is not due for refinancing until 2011 and beyond.
- The Business Times, P8
I-Bhd and CapitaLand venture to build mall in limbo
I-Bhd had revealed the company was negotiating with a number of foreign institutional investors with a view to establishing a 70:30 joint venture (JV) to build the shopping complex component - the second phase component - of i-City. A 29-hectare intelligent township in Shah Alam, i-City's total GDV is estimated at RM2 billion (S$840 million). Saudi Al Rajhi Bank acquired 36 of the 44 units of three- and five-storey office suites to be built in the first phase, for an en bloc price of RM95 million, or RM457 per square foot - said then to be a new pricing benchmark for Shah Alam. CapitaLand was said to own 70 per cent of the proposed JV firm, which would buy a 6 ha plot for the 800,000-odd sq ft mall and manage the centre upon its completion. The company may have also looked at another retail mall in Shah Alam: the 1.23 million sq ft mall which Singapore-based Lend Lease Asian Retail Investment Fund 2 acquired a half share in with a unit of Malaysian-listed SP Setia and plans to build at an estimated GDV of RM750 million.
- The Business Times, P15
Old checkpoint may stay open
The old Woodlands Checkpoint, opened in March to ease Causeway congestion, looks set to stay open permanently. Plans are afoot to open lanes during peak hours by the end of the year for motorcyclists, in addition to those now used by buses and trucks, traveling to and from Malaysia. It is not known if there are plans for the reopened old checkpoint to have lanes for cars. The current checkpoint is operating beyond its capacity of 35.2million vehicles a year – dealing with about 37.8 million vehicles passing through last year. The Immigration and Checkpoints Authority has also called for tenders to construct new offices and to refurbish the current premises.
- The Straits Times, B5
DBS will pay up to $80m to investors
DBS will pay $70million to $80 million to customers in Singapore and Hong Kong who bought its Lehman Brothers-related structured products. Only some investors will get all their money back, while others will get a partial payment or none. For Singapore and Hong Kong as a whole, 4,700 customers invested a total of $360 million in Lehman-related notes. In Singapore, 1400 customers invested a total of $103 million in High Notes 5. Maybank and Hong Leong have also announced action to help investors stuck with Lehman-linked products. Hong Leong Finance would buy back Minibond notes from customers with only primary school education and who are 62 years or older at the time of the investment. The settlement amount will be the original investment made, minus interest. Maybank promised full compensation to some ‘deserving cases’ of Minibond investors.
- The Straits Times, A8
(See also, The Business Times, P1 – “Hope flickers for victims of Lehman-linked notes”)
Crisis drives Asians to travel closer to home
The global financial crisis has driven Asian travellers to cut back on long-distance trips. Instead, travellers are heading to destinations closer to home like India or South-east Asia. The regional travel bug was why event organiser Messe Berlin decided to start a trade show in Singapore. Over 70 per cent of ITB's 651 exhibitors and 5,000 visitors hail from Asia. STB said that while the next two years could be rougher than normal, Singapore should not have trouble remaking itself into an exciting destination with a slew of new attractions. The convention and business meeting industry has remained resilient in the face of the economic downturn. Last year, the sector earned a record $5 billion in tourism spending, up from the $4 billion in 2006. The Republic hosts some 6,000 business events on average a year and, even with the downturn, it is still working hard to seek new international events.
- The Straits Times, B9
(See also, The Business Times, P10 – “Tourism impetus to return in 2 years: STB”)
FTA ‘show China is willing to open up’
The China-Singapore free trade agreement (FTA) is a sign of China’s commitment to greater openness with its partners despite the current difficulties in global trade talks, said Prime Minister Lee Hsien Loong. China and Asean aim to wrap up their FTA negotiations by 2010, a move that would, on paper, create a zero-tariff market of 1.7 billion people. PM Lee will witness the signing of the China-Singapore FTA today. Asked what the Asian economies should do in the face of a global slowdown, Mr Lee said the best option for the moment was to keep economies moving by increasing investment where appropriate, and encourage domestic consumption as a buffer against the slide in exports.
- The Straits Times, A12
High-flying bankers told to cut back
Banks are going through expenses and travel bills as the recession starts, revenues fall. At Credit Suisse, bankers must book the least expensive standard rooms at hotels and the lowest airfare through a designated travel agency. All Credit Suisse staff, including managers are told to use alternatives to travel, such telephone or video/Web conferencing. HSBC Holdings' Asia unit has asked its Hong Kong department heads and branch managers to cut travel expenses by 15-20 per cent next year. The three Singapore banks - DBS, United Overseas Bank and OCBC Bank - said that they have not introduced new cost-cutting measures but have stringent processes to ensure that only authentic claims are reimbursed.
- The Business Times, P3
Tough balance between growth, foreign talent
Countries in need of foreign manpower must manage the political friction that can arise from the presence of large numbers of foreign workers, according to Mr Goh. They must therefore continue to enjoy benefits which foreigners do not - significant subsidies for public housing, education and health, and various top-ups from government budget surpluses. Welcoming foreigners remains one of two key planks of Singapore's strategy to build human capital and talent - and human capital is even more critical in these uncertain times. The other plank is to develop Singaporeans to their fullest potential, Mr Goh said. Singapore's talent strategy is simple, the real challenge is in its execution - and there are three thrusts to it: heavy investment in developing Singaporeans, from the young to adults; building Singapore into a distinctive global city to attract and retain talent; and making Singapore 'cool and funky' for creative and entrepreneurial types to live in, he said.
- The Business Times, P3
(See also, The Straits Times, B4 – “Doors open to foreigners : SM”)
World growth to recover in 2011: UBS
UBS sees US economic growth slowing sharply from a projected 1.4 per cent this year to 0.3 per cent next year and sees Asia leading globally with a projected 7.3 per cent GDP growth next year (down from 9.3 per cent last year) and 6.1 per cent next year. 'UBS forecasts economic growth in 58 countries and regions around the world; we're forecasting slowing growth in 58 countries and regions next year,' he said. 'Everybody is going to suffer; this is a synchronised global slowdown. But the damage will be limited in those countries that have the ability to stimulate domestic demand.' - UBS deputy head of global economics Paul Donovan.
- The Business Times, P11
Fed offers another lifeline but markets keep sinking
US Treasury Department announced that the Federal Reserve will be making a massive US$540 billion capital injection into a crucial financial market, the latest in a series of Fed actions designed to shore up the short-term debt market. Under the programme, called the Money Market Investor Funding Facility, the Fed will provide the US$540 billion in funding to be used in an effort - this time controlled by the private sector - to purchase assets from US money market mutual funds. 'By facilitating the sales of money market instruments in the secondary market, the facility should improve the liquidity position of money market investors, thus increasing their ability to meet any further redemption requests and their willingness to invest in money market instruments. Improved money market conditions will enhance the ability of banks and other financial intermediaries to accommodate the credit needs of businesses and households,' a Fed statement said.
- The Business Times, P2
Real economies will feel the pain in Asia: PM Lee
While countries are taking individual action, they must coordinate their efforts to keep one another in the loop and 'better understand' the different lines of thinking. This will ensure that whatever one country does will not complicate matters for others, Mr Lee said in his five day visit to Beijing. He believes the overall impact of the US election on Asia will be 'indirect' because Asian banks are sound and property woes have not been as widespread. However, real economies in Asia will be affected because when developed nations go into recession, others invariably feel the effects, he said. The best solution is for each country to keep its economy moving, increase investment where feasible and gradually raise the proportion of consumption, particularly in countries like China where this has been on the low side. '(The FTA) is a signal of the good bilateral relations between our two countries,' he said. 'The volume of trade has been growing, but with an FTA we can cement this and grow it even faster.', Mr Lee said.
- The Business Times, P2
(See also, The Straits Times, A7 - “Asian stocks hit by economic worries”)
US$ hits S$1.50, pound gets pounded
The Singapore dollar recorded a fresh 2008 low of S$1.4995 per US dollar yesterday, the local unit was also able to chalk up fresh 2008 highs versus even faster-falling currencies like the pound and euro yesterday - which ended the day at S$2.4546 and S$1.9338 respectively. In Asian trading, the pound fell as much as 5 per cent from Tuesday's Asian close to hit a fresh five-year low of US$1.62, before recovering to close the day at US$1.64. In the process, the UK currency also nosedived to eight-year lows of S$2.4290 and 160.90 yen - the latter a slide of 28 per cent since the end of 2007. The euro, meanwhile, was forced well below US$1.30, and at one point found itself the best part of 10 yen weaker than its Tuesday highs - at its worst yen lows in more than four years - before regaining some composure by the Asian close.
- The Business Times, P1
China makes it easier for first-home buyers
China's Ministry of Finance yesterday announced a series of policy changes that will make it easier for people to buy their first homes. The move comes just days after China said that annual economic growth slowed sharply to 9 per cent in the third quarter compared with 10.1 per cent in the second quarter. From Nov 1, the property deed tax will decline to 1 per cent from 1.5 per cent for people buying their first home if it is smaller than 90 sq m. For those buying their first home, regardless of the size, the downpayment requirement will be lowered to 20 per cent from 30 per cent, and banks will be allowed to charge as little as 70 per cent of benchmark lending rates for such mortgages. It also removed the 0.05 per cent stamp tax and land value-added tax for home purchases. The government is focusing its efforts to revive the property sector on enabling poorer people to buy homes. The government may launch a 1 trillion yuan (S$219 billion) fund to build houses for poorer citizens. China's urban property prices rose 3.5 per cent in September from a year earlier, down from an annual increase of 5.3 per cent in August.
- The Straits Times, B20

DAILY MARKET UPDATES 24th October 2008

2008-11-18T03:18:00.000+08:00

Convenient chutes promote recycling
Called the Recyclable Intermediate Chute Holding (Rich) system, it was developed by SembEnviro and installed next to the existing rubbish chute on every floor of the Block 297C Choa Chu Kang Ave 2 in December 2006. Within the first seven months, the participation rate of households in recycling increased to 93 per cent in July 07, from 67 per cent at the start. The scheme also resulted in an average of 850kg of recyclables collected a month - eight times that collected from any other HDB block. National Environment Agency said HDB would be providing separate chutes for recyclables in the Eco-Precinct of Treelodge@Punggol and Fernvale Vista in Sengkang. Separate chutes for recyclables will also be installed at the first two projects under the new generation public housing in the regenerated Dawson estate.
- The Straits Times, B1

Shop owners fight sale of Katong Mall
18 shop owners in Katong Mall have filed objections to a $219 million collective sale of the East Coast Road complex. Property group Tuan Sing Holdings bought the mall, which has 256 units, in June. The shop owners are saying that proper procedures were not followed and the deal was conducted in bad faith. Key among their concerns is that the two companies that owned 72 per cent of the mall, Golden Cape Investments and Megaton Investments, are wholly owned by buyer Tuan Sing Holdings. Store owners also complained the sales committee did not have the 80 per cent majority needed to approve the deal by Oct 4 last year. Ms Stella Hoh, a local director at Jones Lang LaSalle, which handled the sale, said proper procedures were followed. STB said the collective sale is scheduled to undergo mediation beginning on Nov 10.
- The Straits Times, B2

Time for rooftop revolution?
Mr Inglin, chairman of the clean energy committee of the Sustainable Energy Association of S’pore, said aiming to put solar panels on all rooftops here was unrealistic, but 70 per cent was achievable. Doing this, he said, would generate 11,550 gigawatt hours of power - enough for the needs of 2.8 million people. The prohibitive cost of solar panels - from $100,000 to a few million dollars, depending on the scale and technology used - has put some developers off investing in them. CDL has incorporated solar-powered eco-roofs into many of its award-winning projects, such as Oceanfront @ Sentosa Cove, City Square Mall and Republic Plaza. CDL said it sets aside up to 5 per cent of a development's construction cost for green design and features. Private developers may also apply for a government grant of up to $1 million per project to defray the cost of their investments in solar energy features by at least a third. The $20 million in grants which the Government is making available could spur up to 100 solar projects across the island in two years. ST Kinetics has tied up with S’pore Polytechnic to develop low-cost solar cells priced within the budget of individual home owners.
- The Straits Times, B22 & 23

$5.5m high-tech surgery training centre opens
The centre - built with funds from a $7 million donation by the Estate of Tan Sri Khoo Teck Puat, the late philanthropist - is based at the National University Hospital. Trainees can learn surgical procedures ranging from simple hernia repairs to highly complex brain tumour removals. The centre has attracted 1,000 local and international surgeons since its soft opening earlier this year.
- The Straits Times, B8

High praise for gardens in the sky
36-storey Newton Suites is a wall covered in Trumpet vine, at 100m, is the tallest in Singapore. The condominium, where units fetch over $1million, is filled with communal gardens and naturally lit common areas. Created by the NParks and the Singapore Institute of Architects, the Greenery Awards are meant to encourage builders to incorporate more plant life into their designs. The push is a relatively new one, as designers and officials look towards adding a touch of nature to Singapore's monoliths of steel and glass. Along with Woha, three other companies received awards yesterday. DP Architects won for its rooftop garden at VivoCity, DCA Architects was honoured for its outdoor terraces at One George Street and Eco-id was recognised for its work at the Naumi Hotel, which features a steel mesh, draped over its exterior, laced with climbing plants.
- The Straits Times, B16

(See also, The Business Times, P10 – “4 Buildings win Green award”)
A new skyline for The Concourse
Part of The Concourse at Beach Road is being demolished to make way for a new development called The Concourse Skyline. The 360-unit residential tower is designed by Sydney-based architect Philip Cox. The new 99-year leasehold property is currently open for previews to buyers. The demolition of the former retail and serviced apartment block is scheduled to be completed in the first quarter of next year.
- The Straits Times, B14

Optical equipment firm unveils $40m plant
QIOPTIQ Singapore, the local unit of a global optical equipment company, has unveiled a new $40 million manufacturing plant in Tractor Road in Jurong. The 200,000 sq ft factory was officially opened yesterday. In the commercial sector, it produces optical applications for medical, instrumentation, scanning, life sciences and projection use. Qioptiq has 800 employees at its new premises here.
- The Straits Times, B36

Prime retail rents to slip 5-15%: Knight Frank
Retail landlords are headed for a tough time as consumer spending weakens amid the economic downturn and with 3.4 million sq ft of new retail space scheduled for completion next year, property consultants say. Knight Frank's head of retail Sherene Sng predicts that average rents for prime retail space in Orchard Road and at suburban malls could slip 5-15 per cent in 2009. It now expects Orchard Road rents to edge up 2-3 per cent in 2008, lower than a 3-5 per cent increase it predicted earlier this year. CBRE is maintaining its 3-5 per cent increase forecast for prime suburban mall rents in 2008, due to the captive market of HDB heartland shoppers these malls can count on, as well as limited new supply of retail space in the suburbs. Ms Sng says the big factor affecting retail rents next year will be not so much the completion of 3 million-plus sq ft of new space but a slowdown in sales as people tighten their belts and cut spending due to the economic downturn.
- The Business Times, P9

Keppel Corp's earnings up 10% to $273m
Revenue was up 24 per cent at $3.22billion for the three months ended Sept30, with higher revenues from all divisions except the property unit. The group's profit contribution from its property division fell $43 million, or 27 per cent, from the previous year to $116 million, due to lower profit from Reflections at Keppel Bay and Keppel Land. But the progressive recognition of revenue and profit of homes sold in the past two years should provide a good base for the property division until confidence returns to the market, it said. The group's gearing is just 3 per cent.
- The Straits Times, B35

(See also, The Business Times, P5 – “Keppel profit rises 10.2% in Q3”)
Frasers Centrepoint Trust's Q4 DPU up 23%
FRASERS Centrepoint Trust (FCT) has announced distribution per unit (DPU) of 2.05 cents for its fourth quarter ended Sept 30, a 23 per cent increase from Q4 last year. Strong performance by Causeway Point and the reinvigorated Anchorpoint continued to drive gross revenue and net property income growth, according to FCT. Q4 leases at Causeway Point were renewed at 15 per cent above preceding rates, reflecting strong demand and tight supply situation in the suburban retail sector. Anchorpoint's Q4 2008 gross revenue more than tripled to $2.4 million from the year earlier. Rents increased more than 40 per cent as the mall reverted to full occupancy after the completion of enhancement work. Q4 gross revenue grew 11 per cent to $22.1 million, while net property income increased 10 per cent to $14.1 million. FY2008 gross revenue and net property income were both up 9 per cent to $84.7 million and $56.6 million respectively. Overall portfolio occupancy declined to 87.7 per cent.
- The Business Times, P7

CCT Q3 distributable income rises 46.1%
CAPITACOMMERCIAL Trust has reported distributable income of $43.2 million for the third quarter ended Sept 30, up 46.1 per cent from $29.6 million a year earlier and 3.8 per cent above the Reit manager's forecast. The strong result was attributed to higher gross rental income from CCT's portfolio and income from 1 George Street from July 11. Q3 net income from 1 George Street was $11.09 million. The trust's DPU of 3.1 cents for Q3 is 44.9 per cent more than in Q3 2007 and 4 per cent above forecast. Its gearing ratio rose to 36.3 per cent in Q3, from 29.1 per cent previously. Total debt increased to $2.54 billion, from $1.83 billion. CCT said its office properties are likely to perform well for the rest of the year as it expects positive rental reversions for leases expiring in the current Q4 and expects rental declines to be mitigated by low new office supply for the rest of 2008 and in 2009.
- The Business Times, P7

Zero tariffs for most items as S'pore and China ink FTA
The FTA - which will come into force on Jan 1 next year and is China's first bilateral pact with another Asian country - will see Singapore removing all tariffs from all products imported from China. Also significant is the move to soon allow certain professionals such as auditors, accountants and architects from both sides greater flexibility to work in either country. The FTA will see about 95 per cent of Singapore's exports to China - worth over $18 billion and including chocolate, instant coffee, ornamental fish and stainless steel - enjoying zero-tariff status by January 2010. For a start, more than 85 per cent of Singapore's exports will be at zero-tariff from next January, with an additional 10 per cent becoming duty-free the following year. There is, however, a list of 260 products from Singapore that will remain excluded from tariff-free access to China, such as pepper, rice, sugar, tobacco and crude palm oil.
- The Business Times, P1

Inflation climbs to 6.7%
Inflation, tracked through the consumer price index (CPI), was fuelled by the rising cost of food, housing and electricity. According to the Department of Statistics (DOS), housing costs shot up 14.6 per cent year-on-year because of higher accommodation costs and electricity tariffs. Food prices were up 8.2 per cent year-on-year. The sharpest rises were in prices for poultry, seafood, cooking oil, fresh vegetables, rice and milk products. According to the DOS, month-on-month, the rise in inflation was not as sharp because increases in food, housing and recreation prices had been offset by drops in the cost of education and stationery, transport and communication. The cost of education and stationery fell by 2.3 per cent on a month-on-month basis as charges at childcare centres and tuition fees at overseas universities had dropped. Falls in petrol and car prices cut the cost of transport and communication by 0.5 per cent month-on-month.
- The Straits Times, B37

PSD studying civil service pay revision
The Public Service Division (PSD) is still studying whether to revise civil service pay. Private sector salary data is still being compiled, PSD said yesterday. 'Given the recent turmoil in the financial markets and revised economic forecasts, PSD will need some time to study the data and salary trends before coming to a decision.' PSD said a significant part of a senior civil servant's pay is structured as a GDP bonus, linked to the economic growth rate. If the rate falls, the bonus will fall too, which will cut the annual salaries of top brass. The civil service lifted its salary scales in two phases last year in response to tight labour markets. The original target was a further increase in salaries at the top of the scale at the end of this year.
- The Business Times, P10

(See also, The Straits Times, B14 – “Senior civil servants’ pay to fall”)
Building leaders in Asia poses challenges
'Large Asian companies are still mainly family-owned or state-owned and this is a reason why 'building effective corporate leaders and CEOs in Asia is really a challenge', said CEO of CapitaLand. As he explained, succession in family-owned businesses is often determined by kinship and not just competence. And for state-owned enterprises, some CEOs and senior management previously from the public service may need time to develop business leadership. In addition, many traditions continue to shape the Asian business environment. Some practices, such as seniority-based promotions in Japan, can impede talent development, he said. But in CapitaLand, leadership and talent management is key, emphasised Mr Liew. Of the 20 CEOs and C-suite executives in the group, 18 are internally groomed, he said.
- The Business Times, P10

Local banks hit hard by falling share prices
DBS Group Holdings shares yesterday fell 62 cents or 5.3 per cent to $10.98, their lowest in five years. UOB shares yesterday shed 72 cents or 5 per cent to $13.80, while OCBC fell 41 cents or 6.9 per cent to $5.49. Third-quarter results will be released next week, starting with UOB on 31 Oct, OCBC on Nov 5 and DBS Nov 7.
- The Straits Times, A4

Two new directors for OCBC
OCBC BANK has appointed two new non-executive directors to its board with effect from Nov 1. They are Mrs Fang Ai Lian, chairman of OCBC's insurance subsidiary Great Eastern Holdings, and Mr Colm McCarthy, a retired veteran banker formerly with Bank of America.
- The Straits Times, B35

GIC RE to up stake in troubled Australian property group
The Government of Singapore Investment Corporation (GIC), through its real estate arm, will invest up to A$700 million (S$705 million) in Australian property trust GPT Group. GPT Group, one of Australia's largest and most established diversified listed property groups had been been hit hard by the current global financial crisis due to foreign currency exposure and the recent decline of the Australian dollar. GIC RE already has a 2.2 per cent shareholding in GPT Group. GPT Group, which has seen its share price fall over 70 per cent this year, released a statement saying that it is making an entitlement offer to raise a minimum of A$1.3 billion. It added that GIC RE would take up its pro rata entitlement as well as be issued with A$250 million in perpetual, exchangeable securities and agreed to sub-underwrite 504 million securities of the retail entitlement offer. GPT Group will place additional securities to GIC RE such that GIC RE receives a minimum of 250 million securities through its sub-underwriting of the retail entitlement offer.
- The Business Times, P2

Pay gap widens in richest nations
Two reports released this week on the urban environment covering global cities found growing economic inequality in rich countries, jeopardising the often-held dream of social mobility. One report, by United Nations (UN)-Habitat, ranked Asian cities among the most equal in terms of income, but put US cities among the most unequal in the world. It ranked New York, for instance, the ninth most unequal in the world, and showed that Atlanta, New Orleans, Washington, and Miami had similar inequality levels to those of Nairobi in Kenya and Abidjan in Ivory Coast. Beijing topped the list as the most egalitarian city, just ahead of Jakarta and Phnom Penh. Hong Kong was the most unequal city in Asia. Europe was also found to be generally more egalitarian than other continents. The report also noted that economic liberalisation and globalisation had resulted in rising inequality in such countries as India, and asserted that trade liberalisation did not bring about the expected benefits.
- The Business Times, P2

Goldman Sachs to axe 10% of workforce
Goldman Sachs Group Inc is cutting about 10 per cent of its workforce, or about 3,260 jobs, amid the ongoing downturn in the credit and lending markets, a source said yesterday. Goldman's workforce was at record high levels at the end of the third quarter, will be pared back close to 2006 and 2007 levels. No additional cuts are planned, the source said. The job cuts are a direct result of the current economic environment and significantly lower levels of business activity, they added. With the new status, Goldman Sachs will likely face increased regulatory scrutiny, which could force it to scale back some of more leveraged and aggressive business units.
- The Business Times, P4

Barclays launches govt-backed bonds
Barclays on Wednesday attracted solid demand for its first-of-its-kind sale of debt which carries a government guarantee under a programme put in place last week as part of a broader bank rescue plan. The issue is expected to pave the way for other banks in the UK and on Wall Street to use the Triple-A rated guarantees of their governments to raise capital and unlock frozen credit markets. Barclays sold three billion euros (S$5.8 billion) of three-year bonds priced at midswaps plus 25 basis points, similar to agency debt and in line with earlier guidance. The offer attracted more than four billion euros of orders from investors, according to IFR Markets, a service of Thomson Reuters. Barclays Capital was sole bookrunner on the deal, backed up by joint leads HSBC, Lloyds, RBS, Santander and Standard Chartered.
- The Business Times, P4

Foreigners first to be laid off in Japan
Foreigners are among the first labourers in Japan to lose their jobs as the global financial crisis eats into demand for cars, trucks and motorcycles, government officials say. The government does not track the number of jobless foreigners, but local officials, workers and employment agencies tell of hundreds of workers were let go by companies linked to top-flight producers - Toyota, Honda, Yamaha. The Labour and Health Ministry said the numbers of foreigners showing up at government-run job centres in affected regions have doubled to some 1,500 a month as of August, while Japanese job seekers have remained constant. And those centres handle only a small fraction of the foreign work force, officials say.
- The Straits Times, A13

KL to cut back on foreign workers
Malaysia wants to reduce the number of foreign workers by 400,000 people annually between this year and 2010, said Deputy PM Najib Razak. There are 2.1 million registered foreign workers and a total of 10.9 million people in the Malaysian workforce, according to government data. The amount of cash sent home by migrant workers is expected to rise to RM18.1 billion this year. Mr Najib said the government does not plan to impose a levy or tax on the money transferred out. He said foreign workers had contributed to Malaysia's economic development, especially in the manufacturing and plantation sectors. He noted the benefits of using these workers should be viewed in terms of their contribution to gross domestic product (GDP) growth. Every 1 percentage point rise in their number would mean a 0.19 point rise in GDP.
- The Straits Times, A22

India and Japan ink security pact
The agreement will cover 'information exchange and policy coordination on regional affairs in the Asia-Pacific region and on long-term strategic and global issues', defence dialogue and cooperation, military-to-military exchanges, policing the Indian Ocean, and the fight against terrorism and transnational crimes. Japan has similar agreements with only the United States and Australia, and the pact with India is seen by some analysts as part of a new Asian security architecture focused on the four players. The two prime ministers have also agreed to push for an early conclusion to a proposed bilateral comprehensive economic partnership agreement. Japan has also agreed to commit 450billion yen (S$7billion) for a dedicated rail freight corridor linking New Delhi and Mumbai - the largest-ever loan by Japan for any overseas infrastructure project.
- The Straits Times, A17

China takes steps to boost property sector
The moves to help home buyers comes after a Cabinet meeting last week which resolved to take steps to lift the slowing sector and head off a market crash after recent data showed a drop in China's property prices. Stamp tax on property purchases and value-added tax of land on property sales will be lifted from Nov 1, said the Finance Ministry. The People's Bank of China said minimum deposits for first-time home buyers would be slashed from Oct 27, a news agency said. Interest rates on mortgages for first-time home buyers would be cut by 27 basis points to boost domestic consumption, it added. Real estate prices in 70 major Chinese cities fell 0.1 per cent in August from July, the first month-on- month price decline since China began releasing the data in July 2005. Investment in the real estate sector accounts for more than 20 per cent of the country's urban fixed-asset investment.
- The Business Times, P13

Indian central bank raises cap on overseas borrowing
India's central bank raised the ceiling on overseas borrowing by domestic firms to US$500 million from US$100 million, a move aimed at boosting capital inflows and shoring up the rupee. A central bank statement said companies can use the new facility without its approval for rupee or foreign currency spending. The changes will take effect immediately. It also scrapped a rule that required loans above US$100 million for infrastructure spending to have a minimum maturity of seven years. The central bank unexpectedly cut its main lending rate by a full percentage point this week. That followed a reduction in banks' cash reserve requirements by 250 basis points to 6.5 per cent to ease cash squeeze in the banking system.
- The Business Times, P13

Monetary authority curbs rise in 'safe haven' HK$
The central bank, the Hong Kong Monetary Authority (HKMA), injected HK$3.877 billion (S$758 million) into the market yesterday afternoon as the HK dollar was trading at around 7.7540 per US dollar. The currency is pegged to the US dollar at 7.8, but can trade between 7.85 and 7.75. HKMA is obliged to keep the currency in that range under an arrangement known as the convertibility undertaking. Yesterday, the daily one-month Hong Kong interbank offered rate (Hibor) was fixed higher for the first time in a week at 2.92571 per cent.
- The Business Times, P16

DAILY MARKET UPDATES 25th October 2008

2008-11-18T03:11:00.000+08:00

URA figures ease fears of housing glut URA had lowered its forecast of home completions for 2010 and beyond for a 2nd quarter. It now expects only 8,538 homes to be ready in 2010 - down substantially from the 11,788 homes that it had forecast in Q2. In all, its forecast for the number of uncompleted homes in the pipeline dropped to 67,463 units in the third quarter, from 71,643 units in the second and 74,208 units in the first. Number of private homes expected to be completed: 2008: 2,440, 2009: 10,033, 2010: 8,538, 2011: 16,145, 2012: 16,742, 2012: 13,565, Total 67,463.
For more details: http://www.ura.gov.sg/pr/text/2008/pr08-107.html - The Straits Times, C23 (See also, The Business Times, P4 – “URA date shows more completions put on hold”)
S'pore lauded as slum-free city S’pore is the only city in the world without slums, a new report by the United Nations Habitat has found. In Asia, where half the population lives in cities, a third live in slums, the bi-annual State of the World's Cities 2008/2009 report said. These were defined as areas where there was overcrowding, a lack of safe drinking water, sanitation, durable housing materials and rights over tenure. The director of UN Habitat's monitoring and research division said the achievement was one that should be studied and, if possible, replicated in other cities.
- The Straits Times, B4 (See also, The Business Times, P15 – “UN lauds S’pore urban devt”)
CapitaLand to hold back on investing till crisis abates CapitaLand will hold back on investments until the global credit crisis shows signs of bottoming, CEO Liew Mun Leong said. They are evaluating opportunities to invest about $4 billion and will wait for signs that the rout in financial markets is nearing an end, he added. The developer has invested about half of the $9 billion it earned from asset sales over the last two years. Losses this year have erased almost $10billion from the company's market value. 'Just because we have cash doesn't mean we will spend it,' Mr Liew said. 'There's no harm in conserving cash until the situation is clearer.'
- The Straits Times, C26
Storm over Sands in US hits local IR lenders In August, Marina Bay Sands said it was on schedule to open in December 2009 and about 40 per cent of the construction had been completed. And even if the parent company decides to sell the project to another outfit, there will be bidders aplenty, one banker said. 'People will compete to be here. The biggest driver of casinos is competition, the biggest fear is competition,' he added. STB had projected 17 million tourist arrivals by 2015, although there is now doubt if those numbers are achievable. This year's target of 10.8 million visitors may not be met because Singapore visitor arrivals are down. According to data from the board, June was down 4.1 per cent over last year, July dipped 3.8 per cent and August posted the steepest fall at 7.7 per cent.
- The Business Times, P3
Sands mogul seeks $3b Casino mogul Sheldon Adelson has said he is seeking to raise US$2 billion (S$3 billion) in debt financing from Asian banks to complete work on expansion projects planned by Las Vegas Sands Corp in Macau. The Cotai Strip project in Macau, due to be completed in 2011, is to include retail malls plus hotels that will be operated by some of the biggest names in hospitality, such as Sheraton, St Regis, Hilton, Conrad, Shangri-La and Traders. He disputed reports that Las Vegas Sands, which operates the Venetian and Palazzo resorts in Las Vegas and the Sands Macao and Venetian Macao in the Chinese city, had abandoned plans to secure funding or was having trouble getting banks to agree to terms.
- The Straits Times, A18
Credit cards can be used for ERP Effective next month, for a monthly subscription of $2.50, ERP payments can be charged to any Visa or MasterCard, just like for other purchases. Motorists who do this will therefore not need to slot the CashCard into the in-vehicle unit (IU). The IU, however, will stay put to 'communicate' with the gantry on the details of the charge so the credit card can be billed. To apply for the credit card-linked payment service, motorists have to register at both these sites from Nov 5 : www.onemotoring.com.sg & www.motorpay.com.sg
- The Straits Times, B2
Private property prices, rents fall URA's data showed that developers sold 1,558 private homes in Q3, up 2.2 per cent from 1,525 units in Q2. The 3,845 private homes developers sold in the first nine months of this year are about a quarter of the 14,811 units they sold for the whole of last year. The number of private-home subsales islandwide fell 10.8 per cent quarter on quarter to 462 in Q3. n the Core Central Region, subsales made up 24.1 per cent of total transactions in Q3, an increase from a 22 per cent share in Q3. The rising subsale share in the region was on the back of a 29 per cent drop in developer sales in Q3. Meanwhile, URA's Q3 price indices for non-landed private homes fell 2.7 per cent quarter on quarter in Core Central Region, 2.4 per cent in Rest of Central Region and 1.5 per cent in Outside Central Region (OCR). The official price indices for office and shop space declined 3.9 per cent and 0.3 per cent respectively in Q3. The all-industrial property price index rose 0.9 per cent. The public housing market continued to buzz, with Housing & Development Board's resale flat price index rising 4.2 per cent quarter on quarter in Q3.
-The Business Times, P4 (See attached, “Property Price Index”) (See also, The Straits Times, A1 & A4 - “Private home prices & rents down”)
Private property prices seen falling 5-6% in '09-10 NUS economist Tilak Abeysinghe's forecasts see the domestic economy growing 3 per cent in 2009 - and one percentage point higher and lower under the best and worst-case scenarios. In all three scenarios, his simulations result in 5-6 per cent price falls a year in 2009 and 2010. Only in the optimistic outlook is there a projected 1.4 per cent rebound in 2011. Already, the latest official figures show a 2.4 per cent dip in private housing prices in the third quarter from Q2 - the first decline since the property market bottomed out in 2004. The affordability index for private property owners in the medium income group averaged 1.2 over the period 1980-2007. This implies that if the household bought a property that cost $1 million, it would be left with $200,000 of income over its lifetime. For high-income households, the index is a stronger 2.1 over the period 1980-2007. That's still well below the index for HDB households - which ranges from three for the low-income group to 9.4 for the richest.
- The Business Times, P16
HDB prices up as demand rises Figures released yesterday by the HDB and URA show HDB's resale price index rose 4.2 per cent in the third quarter. This means that in the first nine months of 2008, HDB resale prices climbed 12.4 per cent. The number of transactions also increased in Q3 to 8,110, from 7,760 in Q2. In contrast, private mass-market properties put up a decidedly lacklustre showing in Q3. Prices of non-landed properties in the outside central region - where most mass-market private homes are located - fell 1.5 per cent. More people are also eligible to buy HDB flats now. Statistics show the number of Singapore citizens and PRs is set to hit a record this year. In the first half of 2008, there were 34,800 new PRs and 9,600 new citizens, up from 28,500 new PRs and 7,300 new citizens in H1 last year.
- The Business Times, P36 (See attached, "HDB prices")
MM sees 3-5% Asia growth as world recovers Driven by China and India, Asia will still see annual growth of 3-5 per cent as the world economy recovers in the next three to five years, says Minister Mentor Lee Kuan Yew. Employers should use the down-time to build up the skills and knowledge of their workers for the upturn in the economy, he said. The government will push on with the continuing education and training of workers, Mr Lee said. He also said that in a globalised world of greater mobility and competition, the ability to attract and retain talent is the key to economic success. Singapore has won and lost talent, but its important that it 'wins more than it loses', he said. 'Without foreign talent, Singapore would not be where it is today.'
- The Business Times, P14 (See also, The Straits Times, A3 – “Recovery in 3 to 5 years?”)
Asia to pool US$80b to protect currencies Thirteen Asian countries yesterday agreed to pool about US$80 billion (S$120.7 billion) in foreign exchange reserves by next June to better protect their currencies against the growing economic uncertainty. China, Japan, and South Korea would provide about 80 per cent of the funds, with Asean countries contributing the rest. The Asian financial crisis prompted Asean, China, Japan, and South Korea to establish a regional financing arrangement called the 'Chiang Mai Initiative' in May 2000. This scheme allowed a country facing a foreign exchange crisis to swap its currency for those of its neighbours.
- The Straits Times, A12 (See also, The Business Times, P5 – “US$80b Asian currency swap scheme soon”)
Markets sink One of the worst-hit bourses on a panic-fuelled day was South Korea's Kospi index, which dropped 10.6 per cent to its lowest closing level since 2005 - ending its worst week in two decades. Japan's Nikkei-225 index, dropped 9.6 per cent to its lowest finish in more than five years. The biggest loser was India, whose stock index plummeted 11 per cent in its biggest drop in 16 years. Hong Kong's Hang Seng Index and Singapore's STI both dived 8.3 per cent. Australian stocks slid a relatively modest 2.6 per cent. Wall Street's 2 per cent gain overnight was largely ignored in the region. In Singapore, investors dumped bank and property plays en masse, as the STI closed down 14.8 per cent for the week. Property counters were hit after quarterly data showed private home prices slumped for the first time since 2004.
- The Straits Times, A1 (See also, The Business Times, P1 – “Dynamics of a financial tsunami”)
Central banks urged to calm forex markets The IMF is hurrying to approve by early next month a package that would allow certain emerging market economies exchange local currencies for US dollars to ease short-term credit strains, officials familiar with the plans said late on Thursday. The so-called liquidity swap facility would be available to a group of pre-selected 'top tier' emerging market countries - those that are well-run but may be having difficulties obtaining credit, the officials told Reuters. Leaders from the Group of 20 top economies, including G-7 and leading emerging economy governments, are scheduled to meet in Washington on Nov 15 to discuss a response to the global economic and financial crisis.
- The Straits Times, A8
Crisis a danger to even big emerging nations S.Korea and emerging nations South Africa, Hungary, Poland, Turkey, Mexico, Colombia have lost more than 25 per cent of their currency value. Unlike Iceland or Hungary, S.Korea is a major industrial power; its US$960 billion economy was the 13th-largest in the world last year. But its stock markets and currency have dropped more than 30 per cent, with concern now over its banks. If pushed, it could use its foreign currency reserves of US$240 billion to repay all the cash its banks have borrowed from abroad - about US$235 billion - leavinig it with nothing in the reserves. 'Our foreign currency reserves are more than sufficient now,' said governor of the Financial Supervisory Service Korea. 'But if (this) continues for two or three years, we may (need) other plans.'
- The Straits Times, A15
Jakarta agrees to bail out Dutch bank Indonesia's Parliament yesterday gave the green light to the central bank to bail out its Dutch subsidiary Indonesische Overzeese Bank NV (Indover), a move that could cost it 546 million euros (S$1 billion). Earlier this month, it asked the World Bank for a standby loan of US$1.9 billion (S$2.8 billion). It has also downgraded its growth forecast to between 5.5 per cent and 6 per cent from an earlier estimate of 6.3 per cent. On Oct 6, Indover defaulted on a US$92 million loan, prompting the Dutch central bank to declare that Indover was a 'bank in emergency'. It also appointed administrators to manage it. A week later, Indover administrators asked Bank Indonesia for 250 million euros in emergency funds. But the Indonesian central bank - under a new law passed in 2004 - can help out only banks based in Indonesia. Hence it sought lawmakers' approval for an exception to be made.
- The Straits Times, A3
China mends ties with Germany At the present time, the overall development of Chinese-German relations is good and the two sides are maintaining close high-level contact,' state-run CCTV quoted Mr Hu as telling Dr Merkel on the sidelines of the Asia-Europe Meeting (Asem) which brings together more than 40 nations. 'China considers Germany to be an important cooperation partner.' State-run Xinhua news agency reported both sides also 'sent a strong signal to further boost bilateral ties'. China and Germany regard each other as very important partners in dealing with the financial crisis and in economic affairs,' said a German government spokesman.
- The Straits Times, C7
Sandy Island - 99 yrs - Sentosa Cove, Southern Precint - 18 Villas are individually designed by Italian architect Claudio Silvestrin, while the works the landscape is designed by Australian landscape designer Jamie Durie.
- Built-up areas range from 7,500 to 9,200 sq ft, land between 7,000 to 10,000 sq ft - 5 Bedrooms with ensuite bathrooms - Passenger lift connecting all flrs - Foreigners eligible - Private Berths - Expected TOP: May 2010 - Developer: YTL -The Business Times, P2 - advertisement
Riz Haven - 946 yrs lease from 1938, foreigners eligible - 33 units - From $587 psf onwards, $378,165 per unit onwards - Easy accessibility to Downtown East, White Sands, beach - Complemented with lifestyle facilities that include swimming pool & gym - Sophisticated finishes & fittings in 1+1, 2+1, 3+1 bedroom apartments & 2+1, 3+1 & 4+1 bedroom penthouses with roof terrace
- Near United World College & S’pore’s fourth university at Upper Changi Rd East - Interest Absorption Scheme available - Expected TOP: 31 May 2010 - Developer: Tras Development Pte Ltd -The Straits Times, C22 - advertisement

The Lucent - 5 seater whirlpool on balcony *selected units only - Steam bath in Master bedroom *selected units only - Private swimming pool and sundeck on rooftop/porch *selected units only - Regally-appointed interiors with unparalleled ceiling height of up to 3.3m - Elegant communal recreational area with pools, gym, BBQ area & playground - Idyllic environment near East Coast Park & Siglap Centre - Within 1 km from well-known schools (Tao Nan Sch, CHIJ & Victoria JC) - Freehold - 1-4 bdrm apartments & penthouses with private pools available - Special launch packages & interest absorption scheme available - Expected TOP: 31 Dec 2012 - Developer: Roxy Land Pte. Ltd. - Marketing agents: HSR - The Straits Times, A35 - advertisement

DAILY MARKET UPDATES 28th October 2008

2008-11-18T03:06:00.001+08:00

S'pore River light-up gets glowing feedback
Completed in August, the multi-coloured lights festooning the bridges, underpasses and trees on the river and its banks are part of an ongoing project by the STB to beautify the river. The works are also aimed at turning a tourist spot with patchy success into a bigger draw for visitors. Boat Quay and Clarke Quay attracted only 7 per cent of visitors in 2006, dismal against Orchard Road's 73 per cent. Visitor numbers at the two quays went up marginally last year to 8 per cent. The STB is now moving into the second and final phase of the project, when it will bring similar lighting improvements to the stretch from Robertson Quay to Kim Seng Bridge. This phase is expected to be completed in March.
- The Straits Times, B5

Hotel business still healthy but economic cloud dims outlook
Singapore's rapid increase in average room rates (ARR) over the last few years may have priced itself out of the market, noted Citigroup economist Kit Wei Zheng. In a research note dated Oct 17, DBS Group Research noted that RevPAR (revenue per available room) in August was down 10 per cent from April's peak of $210, but that FY08 RevPAR should finish off with a 20 per cent rise year on year, on the back of a stronger first six months. For FY09, DBS Research is predicting RevPAR to worsen, chalking up a 15 per cent year-on-year fall, before strengthening 3 per cent in 2010. Tourist arrivals contracted 4.1 per cent in June, a further 3.8 per cent in July and then as much as 7.7 per cent in August.
- The Business Times, P3

Australian school to expand again
Barely three months after the Australian International School opened an extension for its preschoolers, it is making plans to expand with a new wing to house senior students. The $33 million project at its Lorong Chuan campus will create space to take in another 600 senior students when it is ready by April 2010. The new wing will add at least 50 places to each level in the secondary school, enabling the school to take up to 200 children per level from Year 7 to Year 12. 'The average stay has gone up from an average of 21/2 years to about four years. People have a longer term view on what it means to work offshore now, plus there are good educational choices for high levels available in Singapore,' Principal Bond said. The school, which now has about 2,150 students, will see another 200 joiners come January. It expects to reach its capacity of 3,000 in the next five years.
- The Straits Times, B3

Murkier outlook for construction sector
Steel rebar prices have dropped from $1,700 a tonne in July to about $1,300 a tonne recently. Manpower and other costs relating to contract requirements remain high. But rental prices of equipment such as cranes could soften next year after suppliers finish recovering their capital cost. The latest forecast for Singapore's construction demand this year is at a whopping $30 billion, above an earlier forecast of up to $27 billion and last year's $24.5 billion.
- The Straits Times, B18

US moving firm eyes inroads into Singapore
At present, Two Men and a Truck has more than 200 franchise locations - in the US, Canada, UK and Ireland. The company is also seeking master licensees in Brazil, Chile, Australia, New Zealand, and Malaysia. 'We're looking at markets with a growing middle class who are more likely to move and pay to move,' Mrs Bergeron told BT. For now, it is aiming at English-speaking markets to facilitate the training and marketing support that franchisees are offered. For her company, this means only roping in 'Movers who Care'. That tag- line, adopted to differentiate it from copycat companies, reflects how its customer service includes pre- move planning, independent feedback gathering and little extras like a box of games to occupy children during family moves.
- The Business Times, P8

Book values offer no support for stocks
The plunge in investors' risk appetites has led to a massive sell-down in stocks and driven a number of counters below their book values. The worst-hit counters include those from the technology and property sectors. As for real estate plays, the main concern is that tighter credit and declining capital values in all sectors may force firms to write down their assets and make provisions for land acquired at high prices.
- The Business Times, P1

World markets slump as Nikkei hits 26-year low
Tokyo's Nikkei 225 index closed down 6.4 per cent to 7,162.90 - the lowest since October 1982 - with exporters such as Toyota Motor Corp and Sony Corp hit hard. The losses came despite a report that the government was considering massive capital injection into struggling banks in a bid to calm financial markets. Even Japanese banks that have avoided the worst of the losses that are weighing on their Western counterparts are now struggling as the value of their stock portfolios is hammered. Mitsubishi UFJ Financial Group, one of Japan's largest lenders, it would seek to replenish its capital, raising billions of dollars by selling new shares.
- The Business Times, P1

G-7's warning fails to halt yen's surge
G-7 finance ministers and central bank governors yesterday took the unusual step of singling out the yen in an emergency statement in which they warned about the dangers of wild swings in exchange rates. Japanese Prime Minister Taro Aso instructed ministers yesterday to consider emergency measures to stabilise the Tokyo stock market, including possible government purchases of shares and relaxing rules on recapitalisation of banks. Three major banks are seeking to raise cash to offset stockmarket losses, Japanese media reported. The government has already announced a plan to make up to 2 trillion yen (S$32.5 billion) of public funds available to banks, but this is aimed mainly at regional banks.
- The Business Times, P2

(See also, The Straits Times, A1 – “Stock jitters spark Asian fall”)
This may be worse than 1998 Asian crisis, warn economists
OCBC economist Selena Ling is expecting private consumption, which grew 10.5 per cent in 2007, to ease to 3.3 per cent growth in 2008 and 1.5 per cent in 2009. Higher refinancing costs and declining home values are also putting home owners at risk of negative equity when the value of their property is less than the loan taken to finance it - a plight that home owners landed in the years after the Asian crisis. Economists reckon that the impact on Singapore this time will depend on the severity of slowdown in other Asian countries like China and India, and the policy responses from governments to assuage the downturn.
- The Business Times, P3

S Korea’s record rate cut fails to impress
South Korea yesterday cut interest rates by a record 75 basis points and pledged more spending and tax cuts next year to try to keep the global financial storm at bay but the measures failed to convince investors. The rate cut comes on top of measures this month aimed at protecting the economy from the global crisis, including a US$135 billion government rescue package to underpin banks that are struggling to secure funds and a construction sector confronted with a slowdown in activity. President Lee Myung- bak tried to encourage a sense of hope. He told parliament in a budget speech that the government would spend more next year and cut taxes. It stood ready to inject liquidity into the financial system until markets calm, he said.
- The Business Times, P4

MM marvels at China's rapid growth
Minister Mentor Lee Kuan Yew yesterday described China as an 'unusual country', for its phenomenal growth in the past three decades. Mr Lee was the guest of honour at the inauguration ceremony of Raffles City here, which is owned and managed by government-linked company CapitaLand. Mr Lim Ming Yan, chief executive officer of CapitaLand China, said that he remained confident about the projects in China despite the economic downturn. 'Our strategy is a long-term one. Even if there are movements in the market in the short term, we continue to look far ahead,' he said. 'Our projects are all very well funded, with excellent locations which are very hard to replace.' Raffles City in Beijing is located at the Dongzhimen MRT station, which has a direct express line to the airport. The complex, which includes a shopping mall, residences and offices, is slated for a soft opening in the second quarter of next year.
- The Straits Times, A11

China property stocks slide despite aid
Chinese property stocks plunged to near all-time lows yesterday, with Guangzhou R&F sliding 25 per cent and China Overseas Land down 13 per cent, despite government steps unveiled last week to prop up the housing market. Official data released last week showed new home prices fell an average of 0.3 per cent in September from the previous month, but prices in the southern cities of Shenzhen and Guangzhou slid 5.6 per cent and 1.4 per cent respectively. Roughly 10 per cent of China's gross domestic product is directly affected by the real estate sector.
- The Business Times, P27

Tokyo residential property set for full-blown decline
Tokyo residential property prices may be poised for a major decline because of excess housing supply and flagging demand, said Minoru Mori, chairman of Japan's biggest privately held developer. 'We foresee full-blown drops in residential property prices,' Mori Building Co's chairman said in an Oct 25 interview in Shanghai. Condo supply in Tokyo fell 24 per cent for the first six months of the year from the same period a year earlier. The number of new condos put up for sale in Tokyo, which stayed above 80,000 units since 1999, fell to 69,194 units in 2007 because sales declined and inventories rose. Commercial real estate is holding up better than residential property, said Mr Mori.
- The Business Times, B27

UK house prices fall 7.3% y-o-y in October
English and Welsh house prices fell by 7.3 per cent in the year to October, with the pace of decline accelerating to take prices back to their lowest since March 2006, property consultancy Hometrack said yesterday. Average house prices fell by 1.3 per cent to £163,200 in Hometrack's October survey, faster than the one per cent drop recorded in September. Forecasters from London's Centre for Economics and Business Research predicted in a separate report yesterday that British house prices would fall by 25 per cent from their peak in the third quarter of 2007 to a likely trough at the end of 2009. This would take property prices to below 2004 levels. Homes took an average of 11.9 weeks to sell, up from 11.5 weeks in September, and buyers paid just 89 per cent of sellers' asking prices, down from 90 per cent last month.
- The Business Times, P27

German business confidence falls to five-year low in October
German business confidence fell to the lowest level in more than five years this month as the deepening financial crisis dimmed the outlook for economic growth. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, fell to 90.2 from 92.9 in September. Economists expected a drop to 91, the median of 23 forecasts in a Bloomberg News survey showed.
- The Business Times, P13

MUFG to raise US$10.6b via new shares
Mitsubishi UFJ said in statements filed with the Tokyo Stock Exchange that it planned to raise up to 990 billion yen (S$16.1 billion), with up to 600 billion of that in common stock and 390 billion in preferred shares. The preferred shares will not be convertible to common stock, MUFG said. The terms of the common stock issuance have yet to be determined, as do the recipients of the preferred shares, the bank said. Mitsubishi UFJ rivals Mizuho Financial Group, Japan's second-largest bank, and third-ranked Sumitomo Mitsui Financial Group, are both looking to raise as much as 500 billion yen, newspapers reported yesterday. Both lenders said in statements that they had made no decisions regarding their capital plans.
- The Business Times, P16

DAILY MARKET UPDATES 11th November 2008

2008-11-18T03:04:00.000+08:00

Sibor falls to 4-year low Sibor has fallen 0.89 per cent - its lowest level since mid-2004. This is good news for many home owners, who are set to enjoy lower mortgage rates. Rates on other consumer loans may also fall. But the outlook is not so good for investors holding fixed deposits - as their interest rates are likely to fall as well. And businesses big and small will not necessarily get a flow-on benefit of lower borrowing costs. The Straits Times, B24(See attached, “Sibor”)
(See also, The Business Times, P1- “Interest rates fall to five-year low”)

Punggol EC site fails to draw any bidNo bid was received for an executive condominium housing site. The 242,159 sq ft site is the fourth EC site the government put on the market this year. The 99-year leasehold site at the junction of Punggol Field and Punggol Road was launched for sale by the HDB on Sept 17.
The Business Times, P11

(See also, The Straits Times, B22 – “No takers for Punggol EC site”)
Sands skimps on Macau, bets on S'pore
Las Vegas Sands expects to invest an additional US$500 million in equity in Marina Bay Sands through the targeted opening of the property in late 2009. It is in the process of raising approximately US$2 billion in capital. It affirmed that its S$5.44 billion credit facility to support the development of Marina Bay Sands in Singapore is in place.The Business Times, P1(See also, The Straits Times, A7- “Marina Bay IR is Sand’s top priority”)
Economy to shrink 2% next year: Morgan Stanley Morgan Stanley has dropped its projection for global growth - from 2.5 per cent to 1.7 per cent - and lowered growth forecasts for several countries. The report predicts that S’pore’s economy may shrink 2 per cent next year.
The Straits Times, A23(See also, The Business Times, P10 – “

Economic downturn crimps medical tourismThe number of foreign patients at Parkway Holdings hospitals dipped 5-7 per cent in the latest quarter - a sign that the medical tourism sector is ailing amid the economic downturn. The drop reported by the biggest private healthcare operator here has raised doubts of whether Singapore can reach its target of one million medical tourists a year by 2012. The decline is seen among Indonesian patients, but this is cushioned by more patients from markets such as Vietnam, Bangladesh and the Middle East.The Business Times, P11

IE S'pore, Ningbo government sign collaboration pactIE Singapore said that the MOU is timely, as 7.7 square kilometres of Ningbo's Meishan Island was recently designated one of China's seven bonded free trade port zones. Apart from joint investment in logistic projects, IE Singapore and Ningbo's government will also explore the possibility of a Singapore-themed logistics park within the zone. Other proposed areas for collaboration include the shipping and port sector, urban planning, the development of e-commerce business services, logistics and supply chain management, as well as people-to-people exchanges. The Business Times, P11
China's inflation cools to 17-month lowIn China, consumer prices rose 4 per cent in October from a year earlier, the statistics bureau said, after gaining 4.6 per cent in September. Food rose 8.5 per cent, the smallest increase since May 2007. Inflation has halved from February's 12-year high and the government has switched from efforts to cool the economy to unveiling a 4 trillion yuan (S$878 billion) package to prop up growth. The Business Times, P14

DAILY MARKET UPDATES 13th November 2008

2008-11-18T03:02:00.000+08:00

Govt won’t bail out if IR goes bustPutting an end to speculation about a Government-backed rescue, S. Iswaran said: 'There was no request for a Government bailout for Marina Bay Sands and neither does the Government intend to do one. 'I think it has always been a commercial project and the solutions to the challenges posed by the current economic environment and financial market situation really lie in the commercial sector as well.' Asked if there could be a role for a Government-linked company, he said these were commercial enterprises and would have to make their own decisions on whether an investment makes sense. The Straits Times, A1(See also, The Business Times, P3- “No govt plan to fund Marina IR: Iswaran”)

SC Global's earnings up, Allgreen's profit down SC Global's focus on high-end homes paid off with net profit up 121 per cent to $9.6 million, revenue, however, fell 15 per cent to $25.5 million. It sold 33 out of 91 at Martin No. 38 in the quarter at an average price of $2,133 psf, total sales of $85m. It has no plans to release more units. Meanwhile, Allgreen Properties saw net profit fall 10.9 per cent to $31.19m and revenue slip 8.15 per cent to $113.4m. Allgreen’s residential projects were hit by weak sentiment of the sub-prime and inflation, revenue from investment property rose due to higher rents from offices, serviced apartments and shops.The Straits Times, C21(See also, The Business Times, P6 – “SC Global's Q3 net income up 121%”)(See also, The Business Times, P6 – “Allgreen Q3 net falls 10.9% to $31m as global credit crisis starts to bite”)

CBRE dives 23% on switch in funding planCBRE Group Inc fell the most in four years after abandoning plans to raise up to US$400 million in a private offering and saying it will instead sell shares to the public. The broker said in its regulatory filings that it may use proceeds from the sale to repay debt, make acquisitions, add to working capital or for capital expenditures and investments. The Business Times, P29

S'pore Grand Prix, circuit roar off with top awardS’pore Grand Prix was lauded for its revolutionary lighting and its track in the heart of the city, at the third Professional Motor Sport World Awards held in Cologne, Germany. It beat other short-listed candidates such as the European Grand Prix venue at Valencia and a new state-of-the-art motor racing facility in Sweden to clinch the award. SGP holds the rights to stage the Singapore Grand Prix for four more years. Next year's race is slated for Sept 25-27. The Business Times, P3
NTU starts $10m fund to support entrepreneurship and innovationThe fund will be used to support four key areas of the Master of Science in Technopreneurship and Innovation Programme (MSc TIP). Resources will also be made available for the development of a new paradigm to address the complex issues confronting entrepreneurship and innovation. The programme is conducted in four countries - Singapore, the United States, Malaysia and China.
The Business Times, P9(See also, The Straits Times, C4 – “$5m gift to help NTU groom entrepreneurs”)

Poly's new centre sets up solar test Ngee Ann Poly has been fitted with some 100 solar panels of various forms and sizes to identify which type works best in the tropics. These panels are part of a new million-dollar solar technology centre at the school's campus in Clementi Road which opened yesterday. The centre, partly funded by EDB, came under a $17 million programme to encourage research into technology that taps into renewable resources like the sun, wind and water. The drive has already attracted at least four big-name global players in the solar energy field. The Straits Times, C14

World Bank pushes for concerted govt spendingThe bank will expand financial aid to developing countries by up to US$100 billion over the next three years through loans to governments, trade-finance guarantees and funding for social protection programmes for the poor. It has dropped its forecasts for economic expansion in developing countries next year to 4.5 per cent from 6.4 per cent, and warned that global economic growth will slow to a crawl as rich countries slip into recession. The Business Times, P2

KL tweaks long-standing 30% bumi equity ruleThe government yesterday relaxed the 30 per cent bumiputra equity ownership for companies wanting to be listed but have yet to fulfill the quota. This will take effect immediately to ensure that the Malaysian capital investment market stays progressive and competitive. The Business Times, P1
India, South Korea seal free trade pactThe India-South Korea agreement will abolish duty barriers for 90 per cent of goods traded between the two countries, amounting to US$11.2 billion worth of bilateral commerce, the report said. A recent study by the state-run Korea Institute for International Economic Policy has said that the pact could boost two-way annual trade by as much as a third.The Business Times, P13

Stanchart buys office space in MumbaiStandard Chartered it acquired 147,000 square feet of office space in Mumbai's emerging business district of Bandra-Kurla as it seeks to grow in Asia's third-biggest economy. The London-based bank declined to disclose the price. It may have paid about 7.5 billion rupees (S$230 million) for the space in a new building, the Economic Times reported. The Business Times, P28

Land Securities shelving demerger plan amid turmoilLand Securities said that adverse market conditions had forced it to abandon plans to split its London property, UK retail and real estate outsourcing units into distinct businesses, although a sale of outsourcing arm Trillium was still being evaluated. The Business Times, P28

Germany's Hypo seeks more rescue fundHypo Real Estate Holding AG said it will seek additional rescue funds after a bigger-than- estimated third-quarter loss on goodwill writedowns for Depfa Bank plc. They took charges of about 100 million euros 'in view of the deterioration of the real estate markets. The German lender also said that negotiations for the 50 billion-euro loan facility, partially guaranteed by the German government, have been completed. The funds will be made available starting Nov 13.The Business Times, P29

Chinese banks may lend over 520b yuan in Q4Chinese banks are expected to hand out more than 520 billion yuan (S$114.7 billion) in new loans in the fourth quarter. China's total new yuan loans for the year will exceed four trillion yuan, the Shanghai Securities News quoted. New yuan lending in the January-September period totalled 3.48 trillion yuan, up 3.6 per cent from 3.36 trillion yuan during the same period last year. The Business Times, P14

China retail sales rise 22% to hit 1t yuan in OctoberChina's retail sales rose 22 per cent, close to the fastest pace in nine years, signalling that domestic demand may help the fourth-biggest economy through the financial crisis. Sales climbed to 1.008 trillion yuan (S$222 billion) last month, the statistics bureau said, after gaining 23.2 per cent in September from a year earlier.The Business Times, P14

DAILY MARKET UPDATES 14th November 2008

2008-11-18T02:57:00.001+08:00

River Valley condo Luma relaunches with prices halvedPrices have been slashed by half at Luma, a 75-unit freehold luxury condominium at River Valley Grove. Relaunching this weekend, units at Luma are offered at $1,450 per square foot, down almost 50 per cent from $2,800 psf when it was first launched last year. About 10 units had been sold, mainly in Dubai and Hong Kong. SISV-Realink data shows two units on the 25th floor changed hands at $2,837 psf and $2,586 psf in April this year. These prices were already much lower than those for two units on the 20th and 26th floors, which went for $3,349 psf and $3,291 psf in August last year. The Business Times, P1

CDL defers South Beach construction, bets on costs easing CDL posted an 11 per cent year-on-year drop in third quarter net earnings to $150.8 million and has deferred construction of its South Beach project until construction costs fall to more attractive levels. The group also announced it is delaying launching new residential projects due to the subdued property market and global economic uncertainty. Nevertheless, it has proceeded with the construction for The Arte at Thomson and The Quayside Collection at Sentosa Cove, 'both of which were secured at relatively low land and construction costs'. The Business Times, P3(See attached – “Q3 Property Grp Results”)
New HDB BTO prices defy gloomHDB has launched the 750-unit Punggol Arcadia with five-room flats going for as much as $356,000 to $416,000. This represents an increase of between 7 and 8 per cent compared to the neighbouring Punggol Sapphire, which HDB launched six months ago. Both Punggol Arcadia and Punggol Sapphire are sold under HDB's BTO and are about equal distance to Punggol MRT/LRT station. Four-room flats at Punggol Arcadia are priced at between $269,000 and $327,000.The Business Times, P3
Higher-end HDB market may be cooling With one day left to the closing of applications, Natura Loft at Bishan has drawn about 600 applications for 480 flats. This is in stark contrast to the overwhelming demand for the previous three projects sold under the HDB's design, build and sell scheme (DBSS). The first project, Premiere @ Tampines, was a big hit, with 6,000 applications for 616 homes; City View @ Boon Keng had 3,500 buyers vying for 714 flats; while the third project, Park Central at Ang Mo Kio, drew 2,300 bids for 578 units. The Straits Times, C18
Ho Bee reports 52% drop in Q3 earningsHo Bee Investment’s third-quarter net profit fell 52.3 per cent to $18.7 million, from $39.3 million a year ago, as the developer saw lower revenue contributions from its property development projects. Revenue fell 59.4 per cent to $52.5 million, from $129.6 million in Q3 2007. The decline in turnover was mainly due to the deferment of revenue recognition from units sold under the deferred payment scheme, which are now in various stages. The bulk of revenue will only be recognised once the TOPs are obtained. However, the expected completion of five residential projects by the first half of 2009 - The Coast, Paradise Island, Orange Grove Residences, Vertis and Quinterra - will make a significant contribution to the company's revenue and earnings in the 2009 financial year.
The Business Times, P5
Banyan Tree posts $4.9m Q3 loss, hit by Thai turmoilResort operator Banyan Tree Holdings posted a net loss of $4.88 million for the third quarter ended Sept 30. Revenue from hotel investment dropped 13 per cent to $37.4 million. At $8.7 million, property sales were also lower than Q307's $16.3 million while hotel management revenue decreased by $0.4 million to $4.3 million. The Business Times, P8
Marina Bay Sands may open in phasesLas Vegas Sands this week raised about US$1 billion to shore up its finances and said it would halt or delay projects in Macau and the United States to conserve cash. Marina Bay Sands 'had earlier committed to completing the integrated resort in a single phase by end-2009; however, it recently submitted a proposal for a progressive opening from end-2009 onwards', the Singapore Tourism Board (STB) said. 'STB is considering the proposal.' The board also said Las Vegas Sands will invest about US$500 million in additional equity to ensure the Singapore project is completed. The Business Times, P10
Festive deals to tempt touristsSTB has conceded it would fall short of its tourist-arrival and spending targets this year as a result of the global downturn, but it is nonetheless mounting an additional 'push' for this period. STB unveiled activities built around the Christmas light-up of the Marina Bay. The aim is to get both downtown shopping belt stretching from Orchard Road to tourists and Singaporeans to spend, despite the downturn.The Straits Times, C8
MDIS aims for more schools in AsiaMDIS has opened its first overseas campus in Tashkent and is looking to expand further both locally and abroad. It is planning to open four more campuses in China, India, Malaysia and Vietnam so that its students can have a truly global education, spending a term on each campus. The Straits Times, C14
Classes start next month at Curtin Uni
Curtin University of Technology will start classes at a newly consolidated campus in Singapore next month. It plans to broaden its course offerings from business to health sciences and humanities by next year. The school has 800 students doing degrees with its three Singapore-based partners. By the end of next year, the number is expected to grow to 1,500.The Straits Times, C15
G-20 must back dollar-based system: JapanMr Aso will also formally pledge US$100 billion of Japan's foreign exchange reserves as a loan to the International Monetary Fund (IMF) as an 'interim measure' during negotiations on beefing up its resources to deal with the current crisis. He will also urge an 'early' increase in the capital of the Asian Development Bank to enable to it to cope with demands from crisis-hit Asian economies. The Business Times, P11
India's inflation drops to six-month lowIndian inflation dropped sharply to its lowest in nearly six months in early November as prices of metals and fuels fell, and analysts said the unexpectedly low figure gave the central bank room to cut rates. India's wholesale price index, rose 8.98 per cent in the 12 months to Nov 1, well below forecasts for a rise of 10.37 per cent, data showed yesterday. Economists and policy makers expect growth to slow to 7 per cent in the current fiscal year to March, from the close to 9 per cent seen in the previous three years.The Business Times, P13

DAILY MARKET UPDATES 30th September 2008

2008-10-08T21:28:00.000+08:00

Short-term interest rate spikes
Short-term interest spikes spell bad news for some home buyers but better news for those with cash in bank deposits. Local banks have tightened their credit to each other and to corporate clients, making money harder to borrow. The three-month Singapore Interbank Offered Rate (Sibor) has jumped in response, up by 100 basis points in just a month to 2 per cent. The one-year Sibor rate has also been rising, though not as fast as its shorter variant. It moved from 1.75 per cent last month to about 1.875 per cent now. The rising Sibor has also meant higher deposit rates for some savers. Standard Chartered expects the three-month Sibor to decline early next year to just below 1 per cent and remain around that level for most of next year.
- The Straits Times, B20
Thomson collective sale back on track after SLA appeal
The collective sale of five small estates in Thomson Road is back on track after getting stalled two months ago. An appeal by buyers Mergui Development has been granted by the Singapore Land Authority (SLA), to reduce the price of a 1,000 sq m section of a road needed for redeveloping the project. Developer KSH Holdings, the parent company of a firm in the Mergui Development consortium, said that the SLA had cut the land premium payable from $16.74 million to $8.37 million. Owners at the five estates - Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui - were said to be considering walking away with the 10 per cent deposit of $12 million because buyers had failed to complete the sale. Both sides have agreed on a deadline extension until November, but this involved paying a further $3 million deposit to the 88 sellers. The strip of land is needed so the five estates near Rangoon and Moulmein roads can be combined and developed into one project. This will give a land area of 74,355 sq ft and a gross floor area of 208,196 sq ft. It will allow a high-rise block with about 140 luxury flats each measuring 1,250 sq ft on average.
- The Straits Times, B19
Brokers’ take: Office Reits – Credit Suisse
The focus of the office sector has always been on supply, but actual demand is hurting (H1 2008: 0.24 million sq ft versus consensus' 1.2 million-1.5 million sq ft per annum), and the US economic woes could strain it further. Factoring in a revised GDP growth forecast of 2.8-3 per cent for 2009-10, expected demand of 0.4-0.7 million sq ft is at recession lows, and results in a demand-supply disparity high of 3.3 million sq ft for 2010 (expected). Credit Suisse believes construction delays and committed supply will provide little relief. Credit Suisse expects rentals to peak earlier in 2008, and fall 50 per cent to $9.18 psf per month in 2011, prompted by a peak vacancy rate of 16.5 per cent in 2010.
- The Business Times, P6
(also see The Straits Times, B16, “S’pore in for biggest office space excess in 20 years”)
UK August mortgage approvals fall to lowest since 1999
UK mortgage approvals slid in August to the lowest since at least 1999 as the global credit squeeze prompted banks and building societies to curtail credit. Lenders approved 32,000 loans for house purchases, down from 33,000 in July, the lowest since comparable data began nine years ago. The value of those loans fell to £143 million (S$370 million), the lowest since April 1993. The worst house-price slump in at least a quarter century and a tightening global credit squeeze threaten to push the economy into its first recession since 1991. UK house prices fell by an annual 6.2 per cent in September.
- The Business Times, P30
CapitaLand chiefs defend strategy
Amidst downgrades by analysts and a slump in the company's share price, CapitaLand's top brass have defended the group's strategy. Asian real estate markets have started to tank but CapitaLand maintains that Asian economies and real estate will outperform western economies, citing strong demand fundamentals. In the Asian context, the buying power and source of funds through capital markets or other sources is still not as seriously affected as in USA. The Arabs also have money. CapitaLand said German core funds and North European funds have also raised their allocation for Asian real estate over the years.
- The Business Times, P32
Europe scrambles to fight financial fires
Central banks in Asia and Europe pumped in huge amounts of liquidity into their financial systems yesterday to persuade financiers to lend to each other. The MSCI All-Country World Index of 48 nations lost as much as 4.4 per cent, the steepest plunge since the Asian financial crisis 11 years ago. The FTSEurofirst 300 index of leading European shares ended unofficially down 4.95 per cent at 1,050.12 points - its lowest since January 2005. The benchmark index also notched up its biggest one-day percentage fall since Jan 21 this year. News of the takeover of the US Wachovia Corp's bank operations by Citigroup and the part nationalisation of two major European banks battered banking stocks.
- The Business Times, P1
Japanese banks warned about overseas buys
Bank of Japan urged Japanese banks and financial institutions to be careful as they look to acquire assets overseas in the wake of a financial turmoil that has driven prices down sharply. His comments came amid claims that some Japanese companies are overpaying for acquisitions in their eagerness to diversify away from dependence upon their sluggish domestic economy.
- The Business Times, P20
US investment income here rises 24%
Income from US investments here jumped 24.3 per cent from 2006 to a whopping US$18.32 billion last year, giving a 22 per cent (income divided by investments) rate of return. This was the highest return in four years and better than the 15.4 per cent average for US investments in the Asia-Pacific region as a whole. US investments in Singapore rose 5.3 per cent to US$82.62 billion last year.
- The Business Times, P10
India, S-E Asia seen slowing
South-east Asian economies will probably expand 5.4 per cent this year, down from a previous estimate of 5.6 per cent, Morgan Stanley economists said. Growth may cool to 4.1 per cent next year, less than an earlier prediction of 5.1 per cent. Asian policymakers are predicting a slowdown in their economies as demand from the US, Europe and Japan weaken. Singapore will probably slip into a recession this quarter for the first time since 2002, DBS and United Overseas Bank said. Morgan Stanley cut its forecast for India's economic growth next year to 6.4 per cent from 6.9 per cent, saying that the credit squeeze would crimp consumption and business spending. In South-east Asia, capital inflows are slowing, commodity exports are easing and domestic demand is faltering, Morgan Stanley said. Singapore's property projects have cooled, and Thailand and Malaysia lack the political stability to spur economic growth.
- The Business Times, P17
Raffles Edu to invest in new Tianjin college
Raffles Education Corporation plans to invest three million yuan (S$628,000) in a new college in Tianjin over the next five years. The new school - a collaboration with its Tianjin University of Commerce Boustead College in China - will offer advanced diplomas in fashion design, interior design, visual communication, and multimedia design, among others. The first intake is expected in January 2009.
- The Business Times, P7
India to overshoot borrowing target by almost one-fifth
India will overshoot its borrowing target this fiscal year by almost a fifth as the government spends more to win voters before elections. Asia's third-largest economy will sell more bonds and bills than planned to honour commitments to pay higher salaries, guarantee new jobs, write off farm loans and subsidise energy costs, according to a Bloomberg News survey of 10 traders and economists.
- The Business Times, P19

¯ ST Index change 2,361.34 (-50.12)
SIBOR (3 mths): 2.00000 (S$)
SWAP (3 mths): 1.93791 (S$)

DAILY MARKET UPDATES 9th September 2008

2008-10-08T21:27:00.000+08:00

Size up home supply again
Last year, the Government announced the huge number of new homes in the supply pipline, to help keep soaring home prices in check. However the property market now is not as feverish as it was last year. Developers have adjusted to the cooling market sentiment by putting off sales. The Government should also adapt its calculation of supply figures to reflect these new conditions. The massive supply figure is now acting as a drag on the negative sentiment. A more accurate reflection of impending supply is to focus on units that have already begun to be built, as opposed to those still on the drawing board. Given the construction crunch and delayed launches, that would more than halve the supply figure. According to URA in July, the total supply of homes in the pipeline has jumped to 67,569. But a closer look at the data shows that construction has started on only 31,176 of these units. Figures under construction tend to stay more stable from quarter to quarter, unlike the total supply number. Apart from this, URA should also divulge how many units have had their scheduled completion dates pushed back, and to which years. This would throw light on the extent of delays in project completions, something the overall supply figure alone cannot communicate. Another useful measure would be to break down expected supply by location, completion year and construction status. The URA only provides the number of unsold units in each of three broad districts: the core central region, city-fringe areas and suburban locations. CBRE has already flagged a possible glut in the prime districts and in the East Coast, which have turned into major building sites after developers snapped up land there in the last two years. The problem is that CBRE's supply figures do not gel with the URA's. But unless the Government releases more relevant information - and property developers cooperate to boost transparency - the question of supply overhang will continue to hang over the market for some time.
- The Straits Times, P2
30 units sold at Martin No. 38
All 30 private preview units at SC Global's Martin No. 38 have been sold at better-than-expected prices. The company had said it was expecting around $2,000psf for the project but sales came in at $1,881 psf to $2,494 psf, or an average of $2,130 psf. That would make the flats around $2 million to $3.8 million. The developer sold about a third of the total 91 units, with about 60% to overseas buyers. The developer says there is no need for an official launch as it has sold out its preview units and has yet to decide on the launch of the second phase. A market watcher said there has been little change in prices of some other developments in the area, with a few even falling. Deals in the Robertson Quay area have been done at $1,130 to $1,840 psf this year although some Rivergate units sold for over $2,000 psf last year. A market watcher noted that high pricing works in a bullish market but in the weak market prevailing now, sales are likely to slow after the first 20 or 30 per cent is sold.
- The Straits Times, B19
OG buys Orchard serviced apartments from Ascott
OG has bought a block of serviced residences (88 units) that form part of its Orchard Point store for $100 million in cash from The Ascott Group. Ascott will continue to manage the residences for 15 years, with an option to renew the contract for another 10 years. The deal yields Ascott a gross gain of $43 million and works out to a price of about $1,530psf for the property, which has about 74 years left on its lease. Generally, property experts viewed the purchase favourably for OG. Serviced apartments are zoned for residential use, not hotel use, which could make it easier to convert.
- The Straits Times, B19
New UWC campus in Tampines hit by delay
Only part of the new UWC campus at Tampines is slated to open in 2010 as contractors would not be able to complete them on time as there are too many projects on hand. So the plan to take in 1,150 students from K1 through to Grade 11 on its 5.5ha Tampines Street 73 campus by August 2010 has been shelved. The campus will open in phases. Only the infant school for pupils from K1 to Grade 1, where the demand is greatest, will open in August 2010. Until then, the school's week-old interim campus in Ang Mo Kio will continue operating. Despite offering over 500 more places in both its campuses this year, UWC's waiting list has grown by 300 students since last year to 2,300. Recognising the increase in demand for places in international schools, the Government has stepped in to offer more land sites for up to four schools.
- The Straits Times, A8
Still hiring, but with far more caution
According to latest poll by US-nased Manpower (employment services firm), Singapore's job market in the final three months of the year is tipped to soften somewhat as the outlook for the economy grows dimmer. But compared with 32 other countries, Singapore - along with India and Taiwan - still offers job seekers the best employment prospects. India polled the highest net employment outlook for Q4: 43%. Singapore has the second highest (25%), followed by Taiwan (23 per cent). With the exception of the transportation & utilities sector, all other sectors in Singapore expect to increase headcount in Q4.
- The Business Times, P2
Asia toasts Fannie Mae, Freddie Mac bailout
Stock markets around the world rallied yesterday, following the US government's weekend bailout of Fannie Mae and Freddie Mac. Across most of Asia, stocks surged at the start of trading. In Singapore, the Straits Times Index jumped 4.8% - the biggest percentage gain since Aug 20, 2007. Stocks outside the financial sector were also boasted, including major exporters. Investors speculated that the latest bailout would help the broader US economy, supporting demand for commodities and imports.
- The Business Times, P1 (Also see The Straits Times, P1, Also see attached “9Sep_On The Rebound.jpg”)
50% of retail space leased at Fusionpolis
More than 50% of retail space at Fusionpolis has been taken up. The upcoming research and development (R&D) hotspot, comprising two towers and a podium in phase one, has around 183,000 sq ft of retail space. Tenants included Cold Storage and Fitness First. Rents for the retail space range from $4.50 to $12 psf, depending on how the units are used. Larger units also enjoy a lower psf rent. Frasers Hospitality will also be launching its brand of serviced apartments in Fusionopolis, comprising 50 work loft units. Phases 2A and 2B of the Fusionopolis are likely to be completed by 2010.
- The Business Times, P30
Singapore office occupancy costs 7th highest worldwide : survey
Grade A office space in Singapore was the 7th most expensive in the world, according to study by Colliers International. The average annual Grade A office gross rent here was US$125.06 ( SGD$179.297). Cities that were dearer included Hong Kong (US$213.68), London's West End (US$207.42) and Moscow (US$167.29). Singapore was the third most expensive location in the Asia-Pacific region, after Hong Kong and Tokyo. In terms of vacancy rates, Singapore at 7.5% in June 2008 ranked 13th in the Asia-Pacific, below the likes of Perth (0.3 per cent), Seoul (0.7 per cent) and Brisbane (1.2 per cent). Office investment held up in the Asia-Pacific but was down in Europe and North America.
- The Business Times, P30
Ramp-up warehouses offer more in rental returns
According to Colliers International, ramp-up warehouse facilities offer better investment returns as rents in Penjuru and Changi go for $1.30-$1.50 and $1.70-$1.80 psf per month respectively. Multi-storey warehouse facilities with cargo lifts (upper floors) in the same vicinity go for $1.00-$1.20 and $1.40-$1.60 respectively. Direct vehicular access to every floor in a ramp-up warehouse development effectively makes every floor comparable to a ground floor level unit. In a conventional multi- storey warehouse, upper- floor units command lower rents than ground-floor units because users have to load and unload by cargo lift. The rent differential can range from $0.20 to $0.50 psf per month depending on location.
- The Business Times, B30
Surge in Japan real estate companies filing for bankruptcy
The number of Japanese real estate companies filing for bankruptcy protection surged 23.5% in August from last year as banks choke off loans to the industry. The number of developers filing for bankruptcy protection reached 42 last month. Liabilities at failed real estate companies more than doubled from July to 438.97 billion yen (S$5.8 billion). Banks cut lending as growth in Japan's property market slowed and the collapse of the sub-prime market in the US kept potential buyers from making acquisitions. Japanese developers are also being squeezed by higher prices for steel and other raw materials used in construction, and by the government's revisions to building-approval regulations last June.
- The Business Times, P30

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DAILY MARKET UPDATES 5th September 2008

2008-10-08T21:26:00.000+08:00

CCT signs up leases for 77,900 sq ft in 2 office towers
CapitaCommercial Trust (CCT) says 77,900 sq ft of office space at Capital Tower and One George Street has been renewed or newly committed for between two and three years. Three companies account for the leases - JPMorgan Chase & Co, BHP Billiton and Shinhan Bank. Rents are in line with rates achieved at comparable Grade A office buildings - $16 to $20 psf pm. CapitaLand will lease 1,313.2 sq ft of office space at Capital Tower for three years for a sum of $449,125.92. The monthly rent works out to about $9.50 psf pm. BHP Billiton is also leasing about 150,000 sq ft at Tower 2 of the Marina Bay Financial Centre, slated for completion in Q2 2010. At One George Street, South Korean bank Shinhan Bank has taken space to grow its business in Singapore.
- The Business Times, P4 –
(also see The Straits Times, B - “CCT inks top-rate leases at two prime office buildings”
Private banks want slice of NRI action
Private bankers have set their eyes on the rising wealth of non-resident Indians (NRIs) whose businesses are usually closely tied to the booming Indian economy. Some banks, such as Barclays Wealth, are looking to expand their team of relationship managers working on this segment as they expect the NRI slice of their private banking pie to grow quickly. The growth in the assets under management in the NRI segment has been rapid, with SG Private Banking projecting a steady growth of 35-40% in Asia. Barclays Wealth is making sure that its team consists of bankers who are familiar with specific geographies and languages to better tap the different markets. Both SG Private Banking and Barclays Wealth have designated Singapore as a hub for their NRI business. SG Private Banking is also one of the sponsors for a business-focused conference for NRIs here on Oct 9 to 11.
- The Business Times, P2
Three MI-Reit properties gain $1.3m in revaluation
Three properties under MacarthurCook Industrial Reit (MI-Reit) have gained $1.3 million in value from a year ago. MI-Reit's manager, MacarthurCook Investment Managers (Asia) Ltd, released new independent valuations for seven industrial properties. The value of four other properties remained unchanged from the previous year. The seven properties were valued at $227.6 million as at Sept 1. MI-Reit expects the demand for industrial properties in Singapore and in the Asian region to remain healthy on the back of strong prospects for Asia.
- The Business Times, P5
Commercial spending here up 35% in 2007
Commercial spending in Singapore jumped 35% to US$371.58 billion last year, from US$275.2 billion the year before - the third fastest growth in the Asia-Pacific after Myanmar at 41% and Hong Kong at 36%. The five Asia-Pacific countries with the biggest commercial spending were Japan, China, India, South Korea and Australia. For Asia-Pacific as a whole, commercial spending grew 13% to US$18.9 trillion last year, Visa's Commercial Consumption Expenditure (CCE) index shows. To calculate the index, Visa takes into account business-to-business purchases of goods and services required for production, government spending, wholesale and retail purchases of final products and some private fixed investment.
- The Business Times, P8
S'pore, China reach free trade accord
Singapore has become the first Asian country to conclude a bilateral Free Trade Agreement (FTA) with China, a move that will boost economic and trade ties between the two countries even further. The Singapore-China FTA will cover a range of areas including trade in goods and services, movement of people, investment, customs procedures, technical barriers to trade, and economic cooperation. Deputy Prime Minister Wong Kan Seng said that the pact will result in liberalisation, the lowering of tariffs for many goods, services, investments, and so on. For Singapore businesses, there will be better access to the Chinese market.
- The Straits Times, A1
Indian Chamber opens office in Delhi
The Singapore Indian Chamber of Commerce & Industry (SICCI) is setting up a new office in New Delhi, to help identify potential business opportunities in the country. SICCI has more than 760 members, of which half are from small and medium-sized enterprises. Another aim is to help local businessmen understand Indian society better, culturally. Other business associations like the Singapore Chinese Chamber of Commerce and Industry (SCCCI) are also welcome to make use of the SICCI's contacts in India.
- The Straits Times, B34
Orchard Central duplexes split up
Orchard Central mall will no longer house two-storey shops, or duplexes, on its ground floor as had been announced. The three duplexes planned for level 1 have been split into single-storey units and leased to retailers wanting smaller premises. Industry watchers said demand for the higher-rent duplex stores is likely to have waned due to the economic slowdown. The 14-storey mall is slated to open early next year. Far East said that there is more demand for single-floor units, and that the key level 1 shops facing Orchard Road have been snapped up.
- The Straits Times, B36
ECB, Bank of England hold rates steady
The European Central Bank and the Bank of England both held interest rates steady, reinforcing the view of investors that the global rates cycle has peak ed as growth risks start to outweigh inflation worries. The ECB kept its benchmark interest rate at 4.25% and the BoE held steady at 5%.
- The Business Times, P14
Bank Indonesia remains cautious
Indonesia's central bank increased its benchmark interest rate for a fifth straight month by a quarter point to 9.25%. Consumer prices in Indonesia rose 11.85% in August from a year earlier, after increasing 11.9% in July. Indonesia's US$365 billion economy expanded 6.4% in Q2 from a year earlier, after growing 6.3% in Q1.
- The Business Times, P10
Defections forcing UK to review tax overhaul
A proposed overhaul of Britain's corporate tax regime has triggered defections to more business-friendly countries, adding to the woes of a Treasury facing declining corporate receipts amid an economic downturn. Uncertainty over corporate tax has forced many businesses to consider their options and mull an overseas move. Critics of the UK's corporate tax system see a regime which has fallen behind Europe and Asia, which have taken bold steps to make their countries more attractive to international businesses. The Confederation of British Industry said that the UK corporate tax system is unsustainable in the long run.
- The Business Times, P14

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