Ong Beng Seng and family buy condo block

Ong Beng Seng and family buy condo block
They pay over $200m for 180 units at Costa del Sol in Bayshore area
By KALPANA RASHIWALA
HOTEL Properties managing director Ong Beng Seng and his family members have bought an entire block of 180 apartments at Costa del Sol on Bayshore Road, for about $200.77 million or $820 per square foot, BT understands.
Tall order: The sale of the final block in the 906-unit condo concludes a 10-year episode for Japura Development
The units were sold by the 99-year leasehold project’s developer, Japura Development Pte Ltd, a unit of Hong Kong tycoon Li Ka-shing’s Cheung Kong Holdings. The 906-unit condo is now fully sold, concluding a 10-year episode for Japura. It bought the site for the condo in early 1997.

The shareholders in the entities that bought Costa del Sol’s final block are said to include Mr Ong, his wife Christina, her brother David Fu and his wife. Mr Ong’s brother, Beng Huat, also has a small stake.

The deal is said to have been driven by Mr Fu. All the 180 units in Block 70 boast unobstructed views of East Coast Park and the sea. They were sold for between $700 psf and $950 psf. The 180 apartments have a combined floor area of nearly 245,000 sq ft.

‘The apartments are leased, which means the Ongs and Fus can enjoy immediate rental return on their investment; plus they can look forward to reaping capital appreciation in the not-too-distant future as this segment of the market has not gone up much,’ said a seasoned market watcher.

Going by two recent deals in two other blocks in the development - $844 psf for a low-floor apartment and $1,108 psf for a higher-floor unit - the Ong/Fu consortium seems to be already in the money on its investment. The sale of the 180 apartments means that Japura has now fully sold the 906-unit condo, seven long years after it began marketing the project in May 2000. Japura’s initial average price was $765 psf but by February 2005, it had trimmed this to $650 psf for a relaunch of about 600 available units then. The project, comprising seven 30-storey blocks, received Temporary Occupation Permit between 2003 and 2004.

Japura paid $683 million or $456 psf of potential gross floor area for the 427,300 sq ft site in January 1997, before the Asian financial crisis hit. Its bid was considered aggressive then, at least 30 per cent above market expectations. The second highest bid in that tender was $351 psf per plot ratio, made by a joint venture between Pidemco Land (now part of CapitaLand) and Malayan Credit (now known as MCL Land).
Source :  Business Times - 11 Aug 2007

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Hong Leong sells about 60 units of Aalto

Hong Leong sells about 60 units of Aalto
HONG Leong Group is said to have sold close to 60 units at its freehold Aalto condo on the former Eastern Mansion site on Meyer Road.
The project is priced at around $1,950 per square foot (psf) on average, and so far the development has been marketed mostly overseas - in Indonesia and Hong Kong. Former apartment owners of Eastern Mansion have also bought some units in Aalto, which will have 196 apartments in two 27-storey blocks.

So far, slightly more than 100 units have been released, according to industry sources. The 60 or so units sold vary widely in pricing, from around $1,400 psf to $2,200 psf. Market watchers note the pricing is broadly in line with that of CapitaLand’s The Seafront On Meyer launched earlier this year.

Caveats have ben lodged for CapitaLand’s condo at prices ranging from $1,190-1,950 psf, although industry sources say some units have lately been transacted at above $2,000 psf. Aalto has three and four-bedroom apartments.

Hong Leong is also expected to develop another condo along Meyer Road, on a site it bought earlier this year from Della Suantio Lee, wife of Lee Seng Gee of the Lee Foundation. The group bought Eastern Mansion in a collective sale and an adjoining site at a combined unit land price of about $410 psf per plot ratio in 2005.

Source :  Business Times - 11 Aug 2007

Bank stocks take another hit as US sub-prime woes continue

Bank stocks take another hit as US sub-prime woes continue
STI falls as much as 3.8% before closing 1.6% down
By CONRAD TAN
REPORTER
SUB-PRIME woes continued to roil the stock market here yesterday, after sharp falls on Wall Street on Thursday.
The Straits Times Index (STI) ended 53.99 points or 1.6 per cent lower at 3,359.18, after plunging as much as 3.8 per cent during the morning trading session.

Over the week, the index was down 2.2 per cent, as the steep fall on Monday was softened by an equally sharp rebound on Wednesday, just before the National Day holiday.

Inevitably, banks featured strongly in yesterday’s trading, amid continued worries over financial institutions’ exposures to rising defaults and delays on payments by high-risk homeowners in the United States through their holdings of securities backed by these payments. Together, the fall in the banks’ share prices dragged the index down by a total of 21.25 points or more than one-third of the STI’s fall from Wednesday’s close.

Shares in DBS Group fell the most among its peers, ending 2.8 per cent lower at $21.20.

United Overseas Bank closed 1.9 per cent lower at $20.80, while OCBC fell 1.7 per cent to $8.55.

Not all were convinced that the recent fall in the banks’ share prices was justified, particularly given the banks’ strong second-quarter earnings.

A report issued by DBS Vickers yesterday said: ‘We advise to accumulate OCBC shares amidst the current share price weakness.’

A fall in the share price of oil rig-builder Keppel Corp also weighed the STI down. KepCorp’s shares declined 4.5 per cent to $12.70, pulling the STI lower by 9.56 points.

Of the STI’s 49 members, just six stocks rose, while 41 fell. Two stayed unchanged.

The biggest percentage loser among the blue chips was Chinese meat producer People’s Food, which fell 11.5 per cent to $1.54.

Other stocks that recorded large percentage declines yesterday were shipping group Neptune Orient Lines (NOL) and water treatment firm Hyflux.

NOL shares fell 8.1 per cent to $4.64, while Hyflux shares closed 6.1 per cent lower at $2.93.

But the index received support from a handful of heavyweight counters, including SingTel, which rose 1.8 per cent to $3.46.

Singapore Technologies Engineering also defied the rest of the market, rising 0.5 per cent to $3.72.

On Wednesday, the group posted a 12 per cent increase in second-quarter net profit to $122.8 million, compared to a year ago.

In the broader market, falling counters outnumbered gainers 502-79, excluding warrants and bonds, demonstrating the extent of the underlying weakness.

Total trading volume, including warrants and bonds, came to 2.27 billion units worth $2.95 billion.

The most heavily traded counter was Ban Joo & Co, which rose 5.1 per cent to 20.5 cents after the company said on Thursday that it had agreed to buy a Chinese Internet-based television channel operator as part of its plan to expand its business in China.

Source :  Business Times - 11 Aug 2007

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MTI credits diversification for strong Q2 GDP growth

MTI credits diversification for strong Q2 GDP growth
Gains in biomedical and transport engineering more than make up for slack in electronics
By ANNA TEO
(SINGAPORE) Despite risks on the horizon, the Ministry of Trade and Industry is confident that the Singapore economy’s strong first-half momentum - notably the robust 8.6 per cent second-quarter pace - will see it through the year.
The 8.6 per cent GDP growth - 0.4 of a point better than the advance estimate and 0.6 of a point higher than the market consensus - amounts to a blistering 14.4 per cent pace in seasonally adjusted, annualised terms. It is the fastest rate in eight quarters.

At a media briefing yesterday, MTI second permanent secretary Ravi Menon told ‘the story behind the numbers’ - how Q2’s broad-based growth reflects a well-diversified economy - and fielded questions about the impact of the US sub-prime woes.

Both financial services and construction clocked up double-digit growth in Q2 (the building sector’s 17.6 per cent rate is almost a decade-high), while manufacturing recorded healthy expansion despite an electronics downturn.

‘One of the most exciting things about the current GDP cycle is how well the economy has done despite the slump in electronics,’ said Mr Menon. ‘Ten to 15 years ago, this would not have been imaginable.’

Now, strong growth in the biomedical and transport engineering industries has more than made up for the slack in electronics.

Financial services is seeing growth across credit-related and wealth advisory services, and construction growth is strong not only in the residential market but also the commercial and industrial segments.

‘This broad-based growth momentum across the major sectors and within the sectors is one of the reasons for our higher (GDP) forecast of 7-8 per cent for this year,’ Mr Menon said.
The driving factors behind the higher forecast are diverse, he pointed out.

First, strong global demand for biomedical, aerospace and marine industry products, ‘all not highly correlated with one another’.

Second, robust regional demand for financial services. And third, a buoyant domestic property market fuelling the construction sector.

‘With greater diversification, the economy is becoming more resilient and less volatile in the face of industry-specific shocks,’ Mr Menon said.

In any case, the official growth forecast does take into account the key growth risks - namely negative shocks from the US housing market and an oil supply crunch. ‘The situation in the US credit market remains the most significant risk on the horizon,’ Mr Menon said.

A general risk aversion could spread to other financial markets, and if that translates into increased volatility, consumption and investment growth could be hit globally, he said. So far, this scenario has not played out.

‘Our sense is that if the situation worsens, it’ll be some time before it creeps into the real economy,’ he said. So, going just by the first-half momentum, 7-8 per cent growth for Singapore looks to be in the bag.

As HSBC economist Robert Prior-Wandesforde notes, even if GDP growth were flat in second-half 2007, the full-year average pace would still come to 6.9 per cent. An 8 per cent quarter-on-quarter pace annualised rise in Q3 and Q4 would produce 8.5 per cent for the year - well above the official forecast.

While HSBC is staying with its 8 per cent forecast for 2007 and 2008 pending ‘further clarity on the fallout from the US sub-prime crisis’, the risks, ‘at least for this year, are once again on the upside’, said Mr Prior Wandesforde.

Another economist, CIMB-GK Securities’ Song Seng Wun, is also keeping his 7.5 per cent growth forecast for the year despite the risks. ‘As long as we continue to see job and income growth, there should be sustained growth in domestic demand,’ he said.

Indeed, private consumption finally perked up in Q2, growing 5.8 per cent, while investment surged by 26 per cent.

And the leading indicators bode well: The composite leading index rose 3.4 per cent in Q2 from Q1, and 8 per cent year-on-year.
Source :  Business Times - 11 Aug 2007

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Horizon Towers sellers in meetings as deadline looms

Horizon Towers sellers in meetings as deadline looms
They will have to decide by today whether to bow to thwarted buyers’ demands, or face being sued by them
By Joyce Teo, Property Correspondent
MONEY TUSSLE: The amount the buyers want to claim from each seller works out to as much as $5.78 million per unit on average. It is way above the $2.3 million that each of the 199 apartment units would have received from the $500 million sale, or the $4 million or more that each of the 11 penthouses would have received. — ST FILE PHOTO

ANOTHER day, another set of meetings with lawyers, with no end in sight for the sellers of Horizon Towers but time is fast running out.
The deadline for the aborted sale is today, which means the sellers must decide on a course of action in the face of a $1 billion lawsuit from the intended buyers. But no decision has been made, despite lengthy meetings that went on long into the night.

The Horizon Towers collective sale debacle began last Friday when the Strata Titles Board (STB) halted its sale application on technical grounds. The buyers want the sellers to extend the deadline for four months from today and then file a new sale application with the authorities or appeal to the High Court to reconsider STB’s decision. But that could mean selling the Leonie Hill estate at the $500 million price inked in February.

Prices have rocketed since then and the sellers are not keen to extend the deadline just to see their homes sold at what most now feel are bargain basement prices.

The intended buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - have threatened to sue the sellers for alleged breach of the contract inked in February.

They also told the owners of 173 units who voted for the sale that they could be sued for lost profits of between $800 million and $1 billion. This works out to as much as $5.78 million per unit on average.

‘It’s quite shocking that they would take such a drastic step,’ said a 27-year-old resident. ‘We are just a bunch of innocent people who had the intention of going through with the sale.

Mr Victor Ow, 53, agreed: ‘Even though we signed the contract at a lower price, we were prepared to honour it until the STB’s decision.’

The amount the buyers want to claim from each seller is way above the $2.3 million that each of the 199 units would have received from the $500 million sale. Each of the 11 penthouses would have pocketed $4 million or more. Horizon Towers has a 99-year lease.

‘Whether the sellers are liable, that is arguable,’ said a legal industry observer. ‘Potentially, the people who may be liable will be the marketing agent, sales committee and the lawyer, depending on the latter’s scope of instruction.

Horizon Towers’ marketing agent, First Tree Properties, took on the job without seeking a commission from the sellers, whom it was representing. In an unusual move, it was instead going to take a cut from the buyers.

But a typical collective sale agreement would have a provision that appoints the marketing agent and another authorising the sales committee to act on the sellers’ behalf.

Source :  Straits Times - 11 Aug 2007

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73 schools to hold ballot on Monday

73 schools to hold ballot on Monday
West Grove Pri will have to turn away almost 200 kids in current Phase 2C
By Ho Ai Li
THE luck of the draw will decide who gets a place at two out of five primary schools in the fifth stage of the Primary 1 registration exercise.
On Monday, balloting will be held at 73 schools during Phase 2C of the registration. This is for children with no ties to the school, or who have been unsuccessful in earlier stages.

Competition is stiff at brand-name schools like Rosyth and Raffles Girls’, as well as popular schools in new towns like Mee Toh in Punggol and Nan Chiau in Sengkang.

But the school which is set to disappoint the most children - almost 200 - is West Grove Primary in Jurong West. Some 316 applicants living within a 1km radius of the school have registered for 125 places.

West Grove began life only in 2001 but has become so popular that it routinely turns away more than 100 applicants each year. This year, competition is even keener as it is taking in one class fewer.

Another school set to break hearts is Canberra Primary in Sembawang, which will have to turn away 129 children.

A total of 225 applicants, all living within 1km of the school, have put their names down for 96 places.

The school’s operations manager, Mr Thanni Malai, 57, said that the balloting situation ‘was more or less the same’ as last year. ‘It’s still within the 1km range,’ he said.

Some brand-name schools have only two or three dozen places left for Phase 2C of the registration.

Anglo-Chinese School (Primary) has only 22 places left, as most of its 240 vacancies had been taken up in earlier phases. At Catholic High (Primary), only 31 out of its 210 places are left. Both will be balloting on Monday.

Although Beacon Primary is taking in its first batch of pupils, the Bukit Panjang school has filled nearly all of its eight Primary 1 classes.

The school’s popularity appears to stem from the fact that it is one of five FutureSchools, which will be using technology to try out new ways of learning.

Singapore citizens or permanent residents (PRs) unsuccessful in this phase can register during Phase 2C Supplementary. They can do so on Aug 20. Results for this phase will be out on Aug 23.

Those who are not citizens or PRs can register for Primary 1 during the last phase, or Phase 3, held on Aug 30.
Source :  Straits Times - 11 Aug 2007

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Watch out Google, here comes SPH Search

Watch out Google, here comes SPH Search
By Gabriel Chen
TOAST TO NEW SET-UP: Celebrating the official opening of SPH Search’s office are (from left) Mr Joseph Lee, CEO of 701Search; Mr Leslie Fong, SPH’s executive vice-president of marketing and chairman of 701Search; Mr Alan Chan, CEO of SPH; Ms Chua, SPH Search’s chairman; and Mr Jansen, CEO of SPH Search. — ST PHOTO: CHEW SENG KIM

A NEW online search engine being developed by Singapore Press Holdings (SPH) aims to be the first port of call for people anywhere in the world who want content about Singapore.
SPH will launch the service next year, which aims to supplant the big names of Google and Yahoo as the prime tool to source local information.

Mr Paul Jansen, chief executive of SPH Search, the unit running the service, said yesterday: ‘When you go to websites like Google, they give you millions of results but in today’s society, you don’t have time. If you’re looking for information that is not on Singapore, you can use any search engine. But when you’re searching for something on Singapore, there is no search engine that will be as relevant as ours.’

Mr Jansen, who was speaking at the opening of the unit’s Toa Payoh office, said the search engine will be free and in English but other languages may be used in the future, depending on the response.

He also gave updates on SPH Search’s other business - directory services, which will provide a ‘comprehensive database’ of local information.

The directories will pull together all SPH’s databases, drawing on ‘enormous pieces of information’ including those gleaned from people who buy its newspapers or magazines, such as e-mail addresses.

Such information will be made available only if users have consented to it being shared, Mr Jansen said.

SPH Search began a nation-wide data collection exercise last month. Information is being compiled from newspapers and magazines, people who have taken part in SPH contests, firms that have provided data and website subscribers.

SPH Search chairman Elsie Chua said a Singapore-based Web index will let users search ‘very localised content’. She added: ‘We will want to make sure such content is accurate, updated and relevant for Singaporeans to use.’

SPH Search, which also unveiled its corporate logo yesterday, is a joint venture between SPH and Norwegian media group Schibstead.

Occupying the same premises will be 701Search, another joint venture that will identify potential investment in online classified advertisements, search and directories across South-east Asia and Greater China.

Source :  Straits Times - 11 Aug 2007

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S’pore sticks to growth forecast of 7%-8%

S’pore sticks to growth forecast of 7%-8%

DESPITE the market turmoil, Singapore is sticking to the recent upgrade of its official economic growth forecast of between 7 per cent and 8 per cent this year. The full-year growth upgrade from the previous 5-7 per cent issued on Wednesday stays, said Mr Ravi Menon, second permanent secretary of the Ministry of Trade and Industry.
‘The situation in the US credit market remains the most significant risk on the horizon,’ said Mr Menon. ‘Today, it is largely within the credit markets. The concern is that a general risk aversion will spread to other financial markets, and that translates to increased volatility, then it could be transmitted into a slowdown in consumption and investment growth globally.’

It is still not clear this process will take place, he added. Even if the credit market troubles worsen, it will take ’some time’ before filtering to the real economy.

The key reason for the upgrade in the official forecast is that the latest growth figures - a strong 8.6 per cent in the second quarter - show Singapore diversifying into several ‘engines’ and becoming less vulnerable to slumps in any one sector. Also, ‘underlying fundamentals in economies of major industrial nations remain strong’.

‘So at least for the second half of this year, the momentum should carry us through,’ Mr Menon said.

Source :  Straits Times - 11 Aug 2007

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Asian stock markets savaged in panic selling

Asian stock markets savaged in panic selling
Central banks in Japan, Europe and US inject funds into markets to avert credit squeeze
By Goh Eng Yeow, Markets Correspondent
PANIC selling sent Asian markets plummeting yesterday and forced central banks from Frankfurt to Sydney to pump billions of dollars into money markets to head off a credit squeeze.
The dominoes started falling on Thursday when European bourses plunged. Wall Street then played its hand, crashing 387 points, its second biggest one-day plunge this year.

And last night, the fallout continued for a second day, with London’s FTSE-100 Index and Paris’s CAC-40 Index both falling about 5 per cent the past two days.

South Korea was the worst performer in Asia. Its Kospi Index fell 4.2 per cent, while Japan’s Nikkei-225 Index dropped 2.37 per cent. Hong Kong’s Hang Seng Index was down 2.88 per cent after a typhoon warning forced the market to close an hour early.

Singapore looked to be following regional bourses deep into the red early on, but the Straits Times Index (STI) rallied in the last two hours of trading to close down just 53.99 points at 3,359.18, after dropping 115 points at one stage.

Central banks responded to the air of panic by injecting extra cash in a bid to calm nerves and stabilise banking systems which have become so risk averse, international banks have virtually stopped lending.

The European Central Bank (ECB) pumped in a further 61 billion euros (S$127 billion) to follow its 95 billion euros injection on Thursday. The US Fed followed with a US$24 billion (S$37 billion) infusion on Thursday, and another US$19 billion yesterday. The Bank of Japan injected 1 trillion yen (S$13 billion).

The STI’s surprising let-off looked more like a miracle with every passing hour as the casualties mounted - and fears took hold that the woes in the United States mortgage market had become everyone’s nightmare.

‘This is no longer a US crisis any more. I told my clients to cash out their shares and park the money in government bonds,’ said the marketing head of one European private bank based here.

Other were more optimistic, maintaining that the fallout would be confined to the financial markets.

CIMB-GK research head Song Seng Wun said: ‘This is really a crisis of confidence. It is still too early to tell whether this crisis now unfolding in the financial markets will spread to the real economy.’

Investors have been caught out by the speed with which the contagion has spread through financial markets.

It started as a problem in the credit markets two weeks ago, with international banks failing to offload debts related to big business deals.

But that has snowballed into a global crisis engulfing equities, currencies and commodity markets.

The spark for this latest selldown came on Thursday when France’s largest-listed bank, BNP Paribas, suspended three hedge funds with exposure to US mortgages.

Wall Street and European bourses crashed, prompting the ECB intervention.

Unsurprisingly, financial stocks were among the worst hit. Singapore’s DBS Group Holdings was down 2.8 per cent, giant Australian merchant bank Macquarie fell 7 per cent, while Tokyo-listed investment bank Nomura dropped 4.8 per cent.

Commodities futures on base metals and gold also fell sharply due to a growing global aversion to risk.

While financial markets are clearly under stress, analysts stressed that there are still few signs that central bankers see any significant fallout from what has happened.

Morgan Stanley analyst Gerard Minack noted that ‘the growth momentum (among companies) seems high outside the US’.

‘My view remains that there will be one more rally in equities and that, while difficult to pick the trough in the current turmoil, there will be a buying opportunity.’

Source :  Straits Times - 11 Aug 2007

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US stocks tumble as BNP freezes sub-prime funds

US stocks tumble as BNP freezes sub-prime funds 

NEW YORK - UNITED States stocks tumbled yesterday after France’s largest listed bank, BNP Paribas, froze funds linked to the American sub-prime market, prompting a global sell-off in shares.
European banks spooked by mounting credit losses scrambled for cash and sent overnight borrowing costs to six-year highs.

The European Central Bank tried to calm markets by pumping a record 94.8 billion euros (S$197.5 billion) in overnight funds into the money market.

European shares declined, with the FTSEurofirst 300 index down 1.45 per cent to 1,531.88 points.

In the US, the Dow Jones industrial average fell 150.55 points, or 1.1 per cent, to 13,507.31.

The Standard & Poor’s 500 Index was down 17.79 points, or 1.19 per cent, to 1,479.70.

The Nasdaq Composite Index fell 6.27 points, or 0.24 per cent, to 2,606.71.

Financial shares were among the biggest losers, with Lehman Brothers shares down 4.2 per cent to US$62.08 (S$93.90), and Merrill Lynch down 3.5 per cent to US$75.44.

The stock decline reversed a three-day streak of gains as fears mounted that the impact of the US housing slump may be spreading.

Tumbling stock markets also took a toll on commodities.

Gold futures for December delivery fell 1.8 per cent to US$673.8 on concerns that credit market turmoil might prompt funds to sell holdings of gold.

US light sweet crude oil fell 84 US cents, or 1.16 per cent, to US$71.31 per barrel.
Source :  Straits Times - 10 Aug 2007