Buffett rebuffs advances from distressed financial firms

Buffett rebuffs advances from distressed financial firms

Says so far he’s seen no deal that would make him salivate
(NEW YORK) Billionaire Warren Buffett, the chairman of Berkshire Hathaway Inc, has said that he rebuffed US financial firms that approached him recently about buying stakes in their companies.

‘People know our phone number, and we haven’t seen anything we wanted to move on. That doesn’t mean we won’t in the next six months.’

- Mr Buffett

‘We’ve seen some deals as you can imagine in this period’, when banks and securities firms have been hit by sub-prime mortgage losses, Mr Buffett, based in Omaha, Nebraska, said on Wednesday in an interview on CNBC.

‘So far, we have not seen a deal that causes me to start salivating,’ he said. He did not say which firms approached him.

Merrill Lynch & Co, Citigroup Inc, Morgan Stanley and Bear Stearns Cos moved to shore up capital in the past three months as the value of mortgage- related assets plummeted. The New York-based firms struck agreements to obtain a total of US$18.5 billion from state-owned companies in Singapore, China and Abu Dhabi.

Mr Buffett on Oct 18 denied a New York Times report that he might buy as much as 20 per cent of Bear Stearns.

Mr Buffett, 77, has invested in Wall Street before. He injected US$700 million into Salomon Inc in 1987 to help the firm head off a takeover attempt by financier Ronald Perelman.

‘People know our phone number, and we haven’t seen anything we wanted to move on,’ he said on Wednesday. ‘That doesn’t mean we won’t in the next six months.’

Mr Buffett said that because of credit market turmoil, it is ‘certainly possible the big banks are not going to hit their highs on earnings for a few years’.

Merrill Lynch, the third-largest US securities firm, said on Dec 24 that it would receive a cash infusion of as much as US$6.2 billion from Singapore investment company Temasek Holdings Pte and mutual fund manager Davis Selected Advisors LP.

Merrill, which posted a US$2.2 billion third- quarter loss on US$8.4 billion of writedowns, may be forced to take another US$8.6 billion charge next month, according to David Trone, an analyst at Fox-Pitt Kelton Cochrane Caronia Waller. Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News.

Citigroup said on Nov 27 that Abu Dhabi’s sovereign wealth fund would invest US$7.5 billion, after the biggest US bank estimated at least US$9 billion of fourth-quarter writedowns. State-controlled China Investment Corp is injecting US$5 billion into Morgan Stanley after the second-biggest US securities firm wrote down US$9.4 billion of mortgage-related debt.

Bear Stearns, the fifth-largest, struck an agreement in October with China’s government- controlled Citic Securities Co for a US$1 billion cross-investment. The company announced a US$1.9 billion writedown on Dec 20. — Bloomberg

Source : Business Times - 28 Dec 2007

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Singapore Property sales under the hammer hit high notes

Singapore Property sales under the hammer hit high notes

Auctions dominated by owners seeking good deals - not bank foreclosure
By KALPANA RASHIWALA
(SINGAPORE) The value of properties sold at auctions in 2007 was the highest in eight years - and the second best showing ever. But property consultants reckon that this is about as good as things will get for now. Next year could see a slowdown led by the high-end residential sector, a star performer this year.

Colliers said that the value of properties sold at auctions conducted by private auction houses in 2007 reached $407.4 million, up 28.2 per cent from last year and just a tad shy of the $409.5 million achieved in 1999, when the market was recovering after the Asian Financial Crisis. Similarly, Knight Frank’s research showed the value of properties transacted at auctions rose 32 per cent to $422 million this year.

‘The big difference between 1999 and 2007 was that the record auction sales in 1999 was dominated by mortgagee sales as valuations had fallen a fair bit from the high in 1996 and this drew buyers. Whereas this year, auction sales were predominantly by property owners themselves who took advantage of the auction method to extract the best price, after two years of steep price appreciation,’ observes Colliers’ deputy managing director and auctioneer Grace Ng.

She expects the value of properties sold at auctions to fall by about 25 per cent to $300 million in 2008 as fewer high-end homes as well as fewer older apartments with en bloc potential may be put under the hammer. Ms Ng also expects the number of properties transacted at auctions to fall to about 160-170 next year from 204 this year.

Knight Frank’s executive director (auctions) Mary Sai too predicts a ‘cautious buying mood’ at auctions next year, citing stock market uncertainty and ‘exceptionally high price expectations from some owners’.
‘Amidst the property boom this year, more owners turned to auction to attempt to achieve the best price for their properties.’

- Grace Ng,
Colliers

But assuming that the economy remains in fine fettle, Ms Sai expects strong demand for properties in mass-market developments, especially those near MRT stations or good schools. Auctions will also be a popular hunting ground for those who’ve sold their homes in collective sale and are looking for replacement properties within a short span of time, Ms Sai reckons.

The increase in value of properties transacted at auctions this year was achieved despite a drop in the total number of properties put up for auction, from 2,018 last year to 1,456 this year, going by Colliers’ figures.

The drop was due to a 54.4 per cent decline in the number of properties put under the hammer by mortgagees/banks in cases where borrowers defaulted on their property loan repayments.

The value of mortgagee properties sold at auctions this year fell 24.2 per cent to $143 million, while the value of properties sold by property owners themselves through auction nearly doubled to $265 million in 2007. Colliers attributed the nosedive in mortgagee sales to a vibrant economy and high employment situation which resulted in a lower (mortgage) default rate.

And even in instances where borrowers were facing difficulty servicing their property loans, the robust property market enabled them to sell their properties in the open market - instead of waiting for bank foreclosure.

On the other hand, 810 properties were put up for auction this year by their owners - up 35 per cent from last year and the highest in 10 years, according to Colliers.

This reflects the continuing trend of auction losing its stigma among property sellers, market watchers say. ‘Amidst the property boom this year, more owners turned to auction to attempt to achieve the best price for their properties,’ Ms Ng said.

There was a strong deceleration of auction sales in second-half 2007 - as the mood in auction halls became more subdued amidst US sub-prime mortgage woes, stock market turmoil, as well as stricter collective sales rules, hikes in development charges and withdrawal of the deferred payment scheme. After seeing 131 properties changing hands for $263 million in H1 2007, the market slowed to just 73 deals worth $144 million in H2, based on Colliers’ analysis.

The strong full-year auction sales in 2007 was buoyed by the vibrant residential market in the first half of this year, when sales were dominated by high- end residential condominiums and old apartments with potential for collective sale. The year also saw keen interest in shops/shophouse properties amidst the office supply crunch, as well as development sites put up for auction.

The value of non-landed residential properties sold at auction more than doubled to $109.5 million this year, from $41.5 million in 2006 - helped by the sale of 12 apartments at Tuan Sing’s Botanika development at Napier Road, which fetched a total $52.92 million. The value of shops/shophouses sold at auctions jumped 172 per cent, to slightly over $78 million this year, from only $28.9 million in 2006.

Source : Business Times - 28 Dec 2007

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CDL, Metro and Isetan yet to use up tax credits - Singapore

CDL, Metro and Isetan yet to use up tax credits - Singapore

Shareholders could miss out on these refunds as Dec 31 deadline draws near

By Gabriel Chen
CUT-OFF DATE SOON: Retail groups Metro and Isetan look likely to let their remaining Section 44 tax credits expire by the year-end. — ST PHOTOS: LAU FOOK KONG
IT LOOKS as though time has run out for City Developments (CDL) shareholders hoping that the cash-rich property developer would dish out some goodies ahead of a Dec 31 deadline.
These goodies are Section 44 tax credits - a hangover from the previous tax system - which give some shareholders a tax refund via dividends paid by companies using the accumulated credits.

CDL distributed some of its tax credits via a 50 cents per share special cash dividend three years ago, but industry watchers believe it is still sitting on a few hundred million dollars in unused Section 44 tax credits.

These credits allow investors whose tax rate is lower than the corporate tax rate to get a refund on the tax if their personal tax rate is below the corporate rate.

The refund is the difference between the individual’s tax rate and the corporate income tax rate, which is currently 18 per cent.

Companies had been given five years’ notice back on Jan 1, 2003 to use up their Section 44 tax credits as part of a transition to a new tax system.

It is not mandatory for listed companies to disclose their Section 44 credits but the Securities Investors Association of Singapore (Sias) has encouraged firms to include them in annual reports.

‘Companies must not miss the deadline unless they have very good reasons for doing so,’ Sias president David Gerald told The Straits Times.

CDL declined to comment on queries on the tax credit issue.

Two other companies, Metro Holdings and Isetan Singapore, also appear likely to let their remaining Section 44 tax credits expire by the year-end.

‘Those who have not used their credits, it is too late to do anything anyway. Different companies have different reasons for not utilising their tax credits,’ said Mr Owi Kek Hean, the head of tax services at KPMG Singapore.

Metro said in a statement to the Singapore Exchange that it is letting the rest of its Section 44 tax credits - about $8.2 million worth - expire because of ‘business, financial and accounting constraints’.

Isetan Singapore said earlier that it had not fully paid out its tax credits, as its largest shareholder, Isetan Tokyo, probably did not wish to bear the Japanese tax burden arising from any big dividend payout related to the disposal of the tax credits.

In January, more than 200 disgruntled Isetan shareholders turned up at a meeting to vent their frustrations over the issue at the retail group’s directors.

While Isetan announced in February that it was paying out a gross dividend of $1.50 per share to its shareholders, there is still much more in the coffers, given the estimated $60 million worth of tax credits it had around the end of last year, say shareholders.

Analysts said it would not be fair to fault all companies, as some of the smaller ones may have held off because they are reluctant to drain their cash reserves through a dividend payout.

‘If companies are willing to take on debt for the cash, that would be detrimental to shareholders too, right?’ asked DMG & Partners’ head of research, Mr Terence Wong.

Still, the bonus for shareholders in terms of tax credit payouts is nearly over, marking the end of an era of sorts.

‘It will sway me towards more equities that have cash-growth potential rather than those that are dividend-paying,’ said retail investor Peter Ang.

The 32-year-old consultant, who received nearly $100 in tax credits last year, holds stocks such as Singapore Press Holdings, OCBC Bank and Fraser & Neave.

Source : Straits Times - 28 Dec 2007

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Singapore Home auction sales at eight-year high

Singapore Home auction sales at eight-year high

A WHOPPING $407 million worth of properties was auctioned off this year - the highest figure in eight years.
This was just shy of the $409 million worth of sales in 1999, figures from Colliers International show.

This year’s strong showing came despite an unexpected fall in the number of properties put up for auction. The total was 1,294 properties, down from 1,814 properties in 2006, said Knight Frank.

‘If not for the sub-prime crisis, which hit the market from August, more properties would have been put up for auction and more sales would have been done,’ said Knight Frank’s executive director (auctions), Ms Mary Sai.

The number of properties put up for auction by owners reached a 10-year high of 810. The value of the properties sold shot up to $264.7 million from $129.5 million last year.

Colliers International’s deputy managing director and auctioneer, Ms Grace Ng, said this year’s strong sales were due to the ‘extremely vibrant’ residential market in the first half of the year.

Sales were largely dominated by high-end residential condominiums and old apartments with potential for going en bloc, she added.

This year, the number of mortgagee’s sales fell by 56 per cent. It was a different story in 1999, when the auction market was dominated by mortgagee sales.

Source : Straits Times - 28 Dec 2007

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Singapore Residential site in Alexandra Road attracts strong bids

Singapore Residential site in Alexandra Road attracts strong bids

Wing Tai teams up with Greatearth Construction for $288m top offer

By Tan Hui Yee, Housing Correspondent

A RESIDENTIAL plot in Alexandra Road has attracted a bullish top bid of $288.4 million despite recent talk of a cooling market.
Developer Wing Tai Land teamed up with building company Greatearth Construction to submit the top bid for the plum site near Redhill MRT Station and just outside the Central Business District.

The bid works out to $639 per sq ft (psf) per plot ratio (ppr), which broadly refers to the amount of floor space.

The site - which is likely to feature a mid-market condominium - has a gross floor area of 451,428 sq ft, which consultants estimate will yield about 400 homes in blocks of up to 40 storeys high.

At the close of the tender yesterday, the 0.86ha, 99-year leasehold site had attracted five other bids from big players including Frasers Centrepoint, GuocoLand and Billion Rise - believed to be linked to Hong Kong giant Cheung Kong Holdings.

A joint bid was made by Sunny Vista Developments and TID. The second-highest bid of $271.6 million, or $602 psf ppr, came from a relative unknown - Lafe Development, a unit of listed manufacturer Lafe Technology. The tender will be awarded later.
In November 2005, an adjacent residential plot - where The Metropolitan is being built - fetched $350 psf ppr.

Property consultants said the strong response to this latest tender bodes well for the market. Knight Frank’s head of consultancy and research, Mr Nicholas Mak, said: ‘It gives a certain indication of how developers feel about the market in the coming 12 months or so. They expect current prices to continue to grow, especially in the mid-tier segment.’

Sluggish results for recent land sales had fuelled talk that developers were turning cautious because of the United States sub-prime crisis.

Two residential plots in Enggor Street in Tanjong Pagar recently drew no more than three bids and lower-than-expected prices, while another in Marina View attracted just two interested parties. In Tampines, a transitional office site drew only one offer.

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, said: ‘It’s a good closing to the year. It means the year didn’t end on a whimper.’

Both Mr Ku and Mr Mak felt the Wing Tai-Greatearth team had been able to pip the rest of the field because they could rein in building costs with the latter aboard.

Surging construction costs had recently forced the Government to delay at least $2 billion worth of public sector projects to ease the pressure on building resources.

CB Richard Ellis’ director of research, Mr Leonard Tay, expects the Alexandra project to benefit from ‘potentially strong demand’ from residents living in older private homes on the city fringes, especially those who have just sold their homes collectively.

‘There might also be some potential for upgraders from the HDB estates in the vicinity, as HDB flats in the Bukit Merah and Queenstown areas typically sell for among the highest prices in the HDB resale market,’ he added.

In the July to September period, five-room flats in Queenstown were going for a median price of $603,000.

Mr Tay and Mr Ku both estimated a breakeven price of about $1,000 psf for the future condo on the Alexandra plot, which would mean the future units could sell for $1,100 psf to $1,200 psf.

Mr Mak put his estimate of the breakeven cost at $1,020 to $1,100, which could mean a three-bedroom unit would go for $1.5 million.
Source : Straits Times - 28 Dec 2007

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Singapore MRT drama: Girl’s leg stuck

Singapore MRT drama: Girl’s leg stuck

WESTBOUND train services were disrupted for about 20 minutes yesterday afternoon after a teenage girl’s left leg was trapped in the platform gap at Bugis MRT station.
The incident happened at about 4.55pm. The left leg of 15-year-old Teo Boon Hwee was caught from the knee down and stuck in the gap.

As a result, the train service between Aljunied and Outram Park stations was delayed before resuming at about 5.15pm.

Officers from the Singapore Civil Defence Force were called to the rescue and freed the student’s leg with hydraulic tools.

She suffered bruises and was conscious when taken to the Singapore General Hospital.
Source : Straits Times - 28 Dec 2007

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A peek into a Singapore School of the Future

A peek into a Singapore School of the Future

Beacon Primary opens door to pioneer batch; it boasts a media hub, video-conferencing rooms

By Ho Ai Li
A TASTE OF TECHNOLOGY: The 240 Primary 1 pupils and their parents get a taste of some of Beacon Primary’s high-tech facilities on orientation day. — ST PHOTO: NG SOR LUAN

DISAPPEAR down a blue hole. Re-appear in a vessel swimming with red and white blood cells. Or go through another portal and re-emerge in a garden.
That visually dazzling ‘welcome’ was part of the virtual world Beacon Primary showed to clearly impressed parents on its orientation for them yesterday. The school, in Bukit Panjang, is new but it has more applicants than places.

Beacon is a ‘Future School’, one of five chosen to adopt technology to spearhead innovation in teaching and learning.

The others are Canberra Primary, Jurong Secondary, Crescent Girls’ School and Hwa Chong Institution.

‘We are not a technology school which teaches technology. We are harnessing the possibilities of technology into our programme,’ Beacon’s principal, Ms Lim Boon Cheng, told the parents of its pioneer batch of 240 Primary 1 pupils yesterday.

Beacon’s brave new world includes a 3D learning environment which lets pupils take on personas in different scenarios.

Wireless access to the Internet and tablet personal computers for pupils are also on the cards next year.

While other schools have computer labs and libraries, it has a ‘media hub’ the size of nine classrooms.

Here, pupils can visit the brick- and-mortar library or log on to online information sources. They can also record performances in a studio and retreat into rooms called ‘pods’ to view their work.

The school’s interior is designed to be as flexible as possible. Desks come in various geometrical shapes and can be pulled apart or put together, depending on the activity.

Unusual too are two classrooms fitted with glass walls on the ground floor. Called the ‘Inno-Demo Space’, these can be used for video-conferences, as well as class observations. Lessons can also be recorded for research purposes.

In fact, the school takes research so seriously that it has a head of research: Mr Tay Lee Yong, 40, a former River Valley Primary teacher who has a master’s in instructional design and technology.

For a start, the school plans to conduct research on how learning spaces affect the way pupils learn.

Ms Lim assured parents that their children will not be white mice in a lab. ‘Please do not worry. Whatever we are doing is based on learning theories,’ she said.

Sales engineer Kenny Chew, 43, who enrolled eldest son Samuel in Beacon, was happy with what he saw. ‘I can see the emphasis on independent learning,’ he said.

Source : Straits Times - 28 Dec 2007

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Singapore Condo funds gone, manager missing too

Singapore Condo funds gone, manager missing too

At least $200,000 said to be missing from accounts of four condos

By Khushwant Singh

A CONDO manager missing since the middle of last year is expected to be the focus of a heated annual general meeting tomorrow.
About a dozen residents of the Adis Villas condominium want its management committee to explain how about $104,000 was allegedly siphoned off from the condo’s sinking fund between 2004 and last year.

The 24-unit condo is on Adis Road, near Mount Sophia. Two other condos in the area - Sophia Apartments and Mount Sophia Apartments - were also managed by the missing woman.

A fourth condo, Pelikat Mansions in Hougang, was also managed by her. All four have reported discrepancies in their accounts.

At least $200,000 is said to be missing from the accounts of the four condos.

The missing manager is identified as Ms Amutha Perumal in a circular to Adis Villas residents.

Said one Adis Villas resident, Mrs Kwee Lian Kofod, 78: ‘In 2000, several residents warned the committee that its accounts and funds were not properly managed but we received no response.

‘Now, they want us to write off a sizeable sum just like that.’

Ms Amutha went missing around the time Adis Villas’ management committee chairman Wong Kian Keong filed a police report in May last year.

Apart from Adis Villas’ woes, $20,000 is missing from the accounts of Sophia Apartments, which was demolished last year after a collective sale.

It is not known how much Mount Sophia Apartments - which has been sold en bloc and is now nearly vacant - and Pelikat Mansions lost.

Adis Villas has also been sold en bloc.

Mrs Kofod said that residents at Adis Villas voted for the collective sale as they were fed up with the poor state of the condo.

They are also perplexed that another $60,000 in residents’ contributions to the fund cannot be accounted for.

The management committee wants the residents to consider writing this off too but some residents are demanding that the committee produce bank statements from 2003 onwards.

The residents have to move out by July. Because of this, Mrs Kofod is worried that tomorrow’s meeting will be the last. She said: ‘I hope we get some answers.’

When contacted, Mr Wong said that the issue of the missing funds is in the hands of the police.

He added that the details about the residents’ contributions can be traced, but that it would take time.

Source : Straits Times - 28 Dec 2007

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GST credits: Sign up by Monday - S’pore

GST credits: Sign up by Monday - S’pore

ABOUT 87,000 Singaporeans have four days left to sign up for their GST credits. Those who fail to do so by Monday will not receive this year’s payout.
But they can still get future payouts if they sign up after the new year, said the Finance Ministry in a statement yesterday.

This can be done in one of two ways:
Register online at www.gstoffset.gov.sg, using the personal identification number (PIN) that the Central Provident Fund (CPF) Board sent last month to those who had yet to sign up.

Complete relevant forms available at community clubs and community development councils, SingPost offices and CPF service centres.
The payout is part of a $4 billion package to offset the hike in the goods and services tax (GST) from 5 to 7 per cent in July.

Some 2.3 million people are eligible. The amount they get depends on two factors: assessable income (wages plus income from other sources) and the annual value of the recipient’s home.

The GST credits are given to all adult Singaporeans in the form of a cash payout ranging from $100 to $1,000, with more going to the poor.

Those who are 55 and older are also eligible for a Senior Citizens’ Bonus, if they have an assessable income of $100,000 or less a year. They will receive $200 to $1,000, depending on age and income.

Over 674,000 Singaporeans are eligible for this. Two-thirds of the bonus is in cash and the rest is credited into their Medisave accounts.

The GST credits and the Senior Citizens’ Bonus will be paid over four years till 2010, but Singaporeans need to sign up for them just once.

So far, 96 per cent of those eligible - or more than 2.2 million - have signed up for their GST credits. Around 94 per cent - or about 633,000 - have done so for their Senior Citizens’ Bonus.

In its statement, the Finance Ministry also thanked the grassroots leaders who have helped needy and elderly Singaporeans register for the payouts.
Source : Straits Times - 28 Dec 2007

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53,000 samples in DNA database - Singapore

53,000 samples in DNA database - Singapore

THE DNA database for criminals, costing $4.2 million, was set up in 2004 and now contains the generic fingerprints of more than 53,000 criminals.
A single flake of dandruff or a drop of sweat left at a crime scene is all that the Singapore police need to nail a wrongdoer.

Studies in Britain show that the country’s DNA bank has increased the chances of a case being solved by 24 to 40 per cent.

Scientists say it is extremely difficult to erase these telltale bits of genetic information.

Even washed clothing can retain enough blood and semen stains for forensic officers to identify who they belong to.

The samples for Singapore’s database are collected by police officers trained to gather such data, and then recorded and analysed by the Health Sciences Authority. These are, in turn, used to check for matches with evidence collected at crime scenes.

A person found guilty of refusing to give a body sample without a reasonable excuse, or of obstructing the process of getting that sample, faces a maximum penalty of a month in prison and a $1,000 fine.

A person who has been arrested for a crime but who is eventually not charged with it, or who is found not to have been involved in it, will have his DNA sample removed from the database.

Source : Straits Times - 28 Dec 2007

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