Singapore MM Lee says growth tied to stability of govts, human capital investments

Singapore MM Lee says growth tied to stability of govts, human capital investments

By Imelda Saad/Anya Ardayeva,

SINGAPORE: Western-style liberal democracy is not a prerequisite for growth; instead what is needed is stability of governments, Minister Mentor Lee Kuan Yew said at the Skolkovo International Advisory Board Meeting in Moscow on Wednesday.

Citing a report by the World Bank, Mr Lee said countries with different systems - from single-party governments to multi-party democracies - can achieve sustained growth, but this must come with stability.

Rapid growth over a long period, he noted, also requires an effective government and strong leadership.

Even more vital, said Mr Lee, is for a country to develop its people and institutions.

Pointing to Singapore’s experience, Mr Lee said without natural resources, the country is forced to innovate, think and plan.

To leverage on human capital, the minister mentor said it is important to invest in education and public health.

Leaders should also attract good people to join the government, based on a system of meritocracy, he added.

Speaking to reporters after attending the Skolkovo International Advisory Board meeting, Mr Lee said Singapore is keen to participate in the management of Russia’s airport infrastructure.

He disclosed that Changi Airport International is currently in advanced negotiations to manage St Petersburg’s Pulkovo Airport and airports in the south, including Sochi.

As for Singapore’s policy when it comes to investing its reserves, Mr Lee said the country has minimal investments in emerging markets at this point in time.

“No, I’m not considering investing in sovereign wealth funds in Russia or emerging markets. We have to take a very conservative approach to our hard-earned savings and therefore we go into mature markets where the returns are not so good, but the certainty of the returns and value of your capital will never be in doubt,” he said. - CNA/ac/de

Source : Channel NewsAsia - 05 jun 2008

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JTC to plant more trees in Tuas to help companies cut energy costs

JTC to plant more trees in Tuas to help companies cut energy costs

By Valarie Tan,

SINGAPORE: JTC Corporation will plant more trees in Tuas to help companies there cut energy costs, the company revealed at its tree-planting event at the Tuas Biomedical Park on Wednesday.

It said a joint study with the National University of Singapore showed that areas with more greenery experience cooler temperatures.

Shade from trees and rooftop greenery can bring down temperatures in buildings by nearly five degrees, which suggests that well-shaded buildings could see energy savings of more than 25 per cent.

JTC is now looking at planting trees at strategic locations in Tuas View as a pilot project. - CNA/ac

Source : Channel NewsAsia - 05 jun 2008

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4 Singapore sites relaunched for collective sale at lower prices

4 Singapore sites relaunched for collective sale at lower prices 

PropNex hopes 30% cut in asking price will attract buyers, as demand is ’still there’

By Joyce Teo, Property Correspondent 
ANOTHER TRY: Cavenagh Gardens and Seletar Gardens are among the four sites PropNex is hoping to sell this time at prices markedly discounted from last year.
 
A BOLD property firm is defying market trends with a renewed bid to sell four housing sites en bloc, even though the market appears dead for now.
PropNex Realty admits its move is ‘contrarian’ but hopes a hefty asking price cut of up to 30 per cent will attract buyers.

Even then, developers may not bite, given market uncertainties, property consultants say.

Some other sites were relaunched for collective sale this year, but none was sold. Any bids that did emerge were below the owners’ expectations.

PropNex is relaunching four sites: Cavenagh Gardens in Cavenagh Road, Novena Hill in the Novena area, Seletar Gardens along Yio Chu Kang Road and Hong Thye in Geylang.

‘We are trying to take a contrarian view,’ said the firm’s head of investment sales and commercial department, Mr Charles Chua. ‘We believe the demand is still there. Someone has to take the lead and kick-start the market.’

The four estates were first launched for sale around September and October last year. Their owners had since lowered their expectations, but not their reserve prices. This was the minimum sale price fixed when the owners first agreed to a collective sale.

In the case of the 130,000 sq ft Cavenagh Gardens, the asking price is now $450 million to $455 million, well down from $619 million in October.

Mr Chua hopes the prospect of combining the freehold site with an adjoining piece of state land will be an added attraction.

That will lower the price to as little as $1,481 per sq ft per plot ratio (psf ppr). Last year, the price was $2,308 psf ppr, excluding the state land. A developer could then sell the new units at about $2,200 psf, said Mr Chua.

Seletar Gardens is also heavily discounted now. The asking price is $50 million to $55 million from $75 million last year.

The asking price at Novena Hill is now at $42 million to $45 million, down from up to $60 million last year.

And the price tag on the Geylang plot has had about $3 million lopped off and is now going for up to $13 million.

However, even if the sellers have lowered their pricing expectations, there are other issues to consider, observers say.

‘It depends on how reasonable the seller’s price is. It is quite meaningless to lower just the asking prices and not the reserve,’ said a market observer. ‘If developers were interested in buying below the asking prices, they would already have asked for it.’

Most developers already have some projects on their books, so they may not be keen, said Mr Colin Tan, Chesterton International’s head of research and consultancy.

‘The issue is the construction bottleneck,’ he said. ‘For new sites, they have to consider rising construction costs, in addition to the risk of a declining market.’

Mr Karamjit Singh, the managing director of Credo Real Estate, which has handled a significant amount of collective sales, said developers would need a greater profit margin in the event selling prices soften even further.
 

 
Source : Straits Times - 05 jun 2008

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Vietnam may be heading towards financial crisis

Vietnam may be heading towards financial crisis 

Inflation, trade deficit, banking blow-up threaten what was recently hailed the darling of investors

By Bryan Lee, Economics Correspondent & Roger Mitton, Vietnam Correspondent 
 
FEARS are rising that Vietnam may be headed for a financial meltdown after a rapid reversal of its economic fortunes.
A heady mix of runaway inflation, a ballooning trade deficit and a possible banking sector blow-up is sparking a growing cacophony of warnings by economists.

They say Vietnam, recently the darling of international investors as an emerging ‘tiger’ economy, is at risk of a severe crisis, as overheating symptoms emerge similar to those seen before Thailand’s 1997 crash.

Many predict a steep fall in the country’s currency - the dong - is all but inevitable. Some say external help, possibly from the International Monetary Fund (IMF), may be needed to restore economic confidence.

Until recent gravely worrying economic data began to emerge, Vietnam had enjoyed a dream run of a decade of sizzling economic growth of about 8 per cent a year.

As the ostensibly communist state turned well and truly capitalist, Vietnam’s young consumers embraced a ’spend now, pay later’ philosophy and clambered for the latest Piaggio motorbike, Nokia cellphone and designer clothes. It was hard to blame them, since the government set an example by spending as if there were no tomorrow.

Naturally, inflation started to rise, and last November it moved into double digits.

At the time, the government insisted that everything was under control, and that it would soon tame inflation while still achieving a high growth rate of around 8 per cent to 9 per cent.

But recent data has confirmed the worst.

Sentiment over Vietnam soured dramatically last week when official data showed inflation last month hit 25 per cent. Data also showed the trade deficit for the first five months of this year hit US$11.1 billion (S$15.14 billion), close to the US$12.4 billion for all of last year. This triggered worries that the country could run out of foreign reserves to defend its own currency’s value.

‘The situation is desperate and not sustainable. It will break, and we are warning investors to be cautious,’ said Dr Chua Hak Bin, the chief Asian strategist for Deutsche Bank’s private banking arm. ‘A sharp devaluation in the Vietnamese dong looks imminent in the coming months, possibly in the magnitude of 20 per cent to 30 per cent,’ he said.

Critics blame government failures.

Dr Nguyen Quang A, the director of Hanoi’s Institute of Development Studies said last month: ‘The main reason for the economic downturn is the government’s poor and uncoordinated economic policies.’

Other experts say, however, the economy can avert a hard landing if the authorities make the right decisions soon.

The good news is Vietnam’s woes are likely to have limited spillover to the region as its problems are unique, economists say.

Singapore companies with big investments in Vietnam are stoical. A spokesman for Sembcorp Industries, which has invested in a power plant and several industrial parks, said its businesses were ‘underpinned by long-term contracts, which give us sustainable earnings in US dollars’.

Still, confidence has largely evaporated from the domestic business sector. No one wants to buy shares in the nation’s blue-chip companies, even at giveaway prices.

Credit rating agencies have cut their credit outlook for Vietnam to negative. And foreign investors are now taking their money elsewhere, depriving Vietnam of a key support for its growth and import appetite.

All of this points to a dong depreciation, say experts, which will correct the currency’s overvaluation and help rebuild investor confidence in the country.

Fortis Bank economist Joseph Tan believes the banking sector, which faces a potential onslaught of bad loans made during exuberant times. needs attention. ‘To fix this, the state bank needs to borrow money, maybe from the IMF, to back up the local banks and instill confidence in the sector.’

 
Source : Straits Times - 05 jun 2008

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Rental flats: Singpore HDB to weed out errant tenants

Rental flats: Singpore HDB to weed out errant tenants 

It will conduct more checks to identify those who sublet subsidised flats illegally

By Jessica Cheam 
 
THE Housing and Development Board (HDB) is clamping down harder on the abuse of its heavily subsidised rental flats.
Enforcement blitzes to identify illegally rented flats will be stepped up and they will be extended across a wider area of the country, said the HDB yesterday.

Its response comes amid growing disquiet on several fronts about the abuse of subsidised rental housing.

MPs, residents of rental blocks and eligible Singaporeans who feel they have been left in the queue while foreign workers snap up cheap flats have all called for action.

The Straits Times reported last week that an increasing number of tenants have been illegally subletting HDB flats to cash in on the demand for low-priced accommodation. The flats are often leased to workers from Malaysia, China and India who are either in the dark about rules or just want the cheapest rental option.

Some MPs told The Straits Times that residents had alerted them to the illegal rentals and demanded more enforcement.

‘There should be more thorough checks,’ said Aljunied GRC MP Cynthia Phua. ‘Subsidised housing should be given to deserving families. People who do not need it should let it go.’

HDB rental flats have soared in demand over the past year, with the waiting list up by at least 30 per cent in recent months. There are about 4,000 applicants in the queue with a waiting time of 15 months - double the wait in 2006.

Ms Lee Bee Wah, an Ang Mo Kio GRC MP, frequently gets appeals from Singaporeans who are eligible for rental flats but have been stuck in the queue for several months.

The issues concerning rental flats have been raised in Parliament before. National Development Minister Mah Bow Tan said in a February session that HDB will increase its supply of 42,000 flats by 20 per cent. It is also reviewing its eligibility scheme.

He also said then that enforcement will be carried out to ‘weed out those who do not need or have abused the privilege of a rental flat’.

HDB has stepped up enforcement efforts and extended blitzes to areas such as Jalan Minyak, Telok Blangah, Jalan Bukit Merah, Kallang- Whampoa, Mei Ling Street and Clementi this year. These are on top of annual inspections ‘to ensure the tenancy of the flat is in order’.

Tenants illegally renting out their home can lose the flat and face a five-year ban from renting or buying HDB property.

As of April, HDB had recovered 131 flats since 2005.

An MP for Pasir Ris-Punggol GRC, Mr Teo Ser Luck, said the community could also be roped in to help. ‘There is a greater demand for rental flats and we need everyone’s help to highlight errant cases,’ he said.

HDB said that about 30 per cent of the cases of illegal renting uncovered stemmed from residents’ feedback.

North West District Mayor Teo Ho Pin, who is also MP for Bukit Panjang, said the problem goes beyond housing demand and touches on the lack of cheap, adequate housing for foreign workers.

‘We need to quickly provide solutions to house the foreign workers,’ said Dr Teo, so as not to crowd out needy Singaporeans.

Retiree Amy Tan Ai Bee, 75, is one such Singaporean. She has spent 14 months in the queue: ‘I think it’s really unfair that I waited for such a long time, yet there are people who are renting their flats out for a profit. I hope this can be addressed soon.’

Source : Straits Times - 05 jun 2008

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Higher rents lift Europe’s property mkt

Singapore Four en bloc sites back on market with lower tags

Singapore Four en bloc sites back on market with lower tags

Cavenagh Gardens, Novena Hill, Seletar Garden, Hong Thye offered in Q4 2007
By EMILYN YAP
FOUR collective sale sites are back on the market, with price expectations much lower than when they were offered in Q4 last year. Cavenagh Gardens, Novena Hill, Seletar Garden and Hong Thye are for sale after attracting weak bids the last time round.
 
Seletar Garden: The mixed-development site could fetch $50-$55 million or $488 to $537 psf ppr. The expected price was $70-$75 million last September. Three parcels of adjoining state land could also be alienated 
The freehold Cavenagh Gardens near the Istana could fetch $450-$455 million or $1,671 to $1,689 per sq ft per plot ratio (psf ppr). This is 27 per cent lower than the expected price of $619 million or $2,308 psf ppr last October.

The buyer may be able to alienate adjoining parcels of state land for a further $10 million. If approved, the combined site would have a potential gross floor area (GFA) of 310,649 sq ft, bringing the price down to $1,481 to $1,497 psf ppr.

The site could yield 155 units with an expected breakeven cost of $1,915 psf and an expected selling price of $2,200 psf.

If the authorities allow redevelopment with a plot ratio equivalent to the development baseline of 3.24, the site’s potential GFA could increase to 479,287 sq ft.

Riding on the back of redevelopment plans for Paya Lebar Central under Draft Master Plan 2008, Hong Thye at Lorong 39 Geylang is also up for sale again. The freehold site could fetch $12-$13 million, which translates to $359 to $385 psf ppr including an estimated $1.9 million development charge (DC).

With a potential GFA of 38,702 sq ft, the site could house 40 units with an expected breakeven cost of $709 to $735 psf, and an expected selling price of $780 to $809 psf.

Last October, the site was up for sale at $15-$17 million or $438 to $489 psf ppr including DC.

The expected price for a freehold residential site at Novena Hill is $42-$45 million or $1,170 to $1,254 psf ppr. The site, with a potential GFA of 35,885 sq ft, could yield 40 boutique apartments. The site was up for sale last October at $56-$60 million.

The last site, Seletar Garden in Yio Chu Kang Road, is an estate in perpetuity. Located near the Seletar Aerospace Park, the mixed-development site could fetch $50-$55 million or $488 to $537 psf ppr. The expected price was $70-$75 million last September.

There is also the possibility of alienating three parcels of adjoining state land at an estimated additional cost of $7.9 million. The combined site would have a potential GFA of 132,219 sq ft, lowering the price to $438 to $476 psf ppr.

Propnex is marketing the four sites. According to its head of investment sales Charles Chua, although the property market is relatively quiet, ‘we do believe that there are pockets of pent-up demand’.

 
Source : Business Times - 05 jun 2008

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Singapore COE premiums fall across the board

Singapore COE premiums fall across the board
COE premiums in all five categories fell yesterday as some buyers held back after the previous tender’s sharp increases.
Category A, for cars below 1,600cc, shed $1,111 to $14,590, while Cat B, for cars above 1,600cc, slumped $2,473 to $14,640. Cat E, the open category, slipped $399 to $16,301.

Elsewhere, Cat C, for commercial vehicles, eased $1,255 to $13,501, while Cat D, for motorcycles, was just $26 lower at $1,083.

Two weeks ago, the bidding exercise for certificates of entitlement saw a big rise for passenger car categories, the small car Cat A premium rose especially sharply - spiking almost $4,700.

But because most distributors increased their sticker prices by less than half that amount, ‘prices remained attractive enough for some shoppers’, said the manager of a popular Japanese dealership.

‘Cat A sales have been slower in the past two weeks. But for popular models like Honda Jazz and Toyota Corolla Altis, bookings remained steady,’ he said.

Despite higher fuel and food prices, ‘people are still buying cars, except that they are now looking for cars with good fuel economy’.

 
 
After yesterday’s COE results, the manager believes there will be price cuts, with Cat A cars likely to be $1,000 cheaper and Cat B cars $2,000 less.

As a result, he expects buyers to return. ‘I think the showrooms should be busier this weekend,’ he said.

 
Source : Business Times - 05 jun 2008

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Singapore Hotels need long-term plan for F1 packages: study

Singapore Hotels need long-term plan for F1 packages: study

By NISHA RAMCHANDANI

HOTELS need to have in place a long-term pricing strategy when it comes to room rates and hospitality packages for the Formula One race to ensure that visitors keep coming back for subsequent races.
Integrated Decisions and Systems International Inc (IDeaS), which provides revenue optimisation software to the hospitality industry, released a study conducted last September which examined two Grand Prix weekends in Shanghai, Kuala Lumpur (KL) and Melbourne.

While both occupancy and daily room rates saw an increase on average, both Shanghai and KL did not achieve full occupancy. Instead, hotels in the two cities saw occupancies of 87 per cent and 85 per cent respectively on Saturday night of the race weekend.

This could be due to weaker demand from F1 fans than anticipated, coupled with insufficient bookings from base business such as groups and air crew, the study said. A mix of customer base - both leisure and base bookings - would be ideal to maximise revenue.

Average daily rate for hotel rooms should be 55-60 per cent higher during the race weekend compared with surrounding weeks, while revenue per available room (RevPAR) generally registers an 80-90 per cent jump, the study recommends.

For Singapore, reasonable prices could prove an added incentive for visitors, should the novelty of a night race lose some of its shine over the next few years.

 
 
However, cancellations also reached a high as people might be inclined to shop around, said IDeaS’ director of services, Klaus Kohlmayr, who suggested that in addition to deposits or cancellation charges, hotels should consider overbooking their rooms. Describing overselling as a ‘manageable risk’, he pointed out that cancellation was averaging 60 per cent higher during the race period in the three markets analysed.

A review of the booking curves for Shanghai and KL also revealed that bookings began to flow in much closer to the actual date, with the majority of demand occurring about two to three months before the race itself and over 50 per cent of individual reservations taking place within a month of arrival.

 
Source : Business Times - 05 jun 2008

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S’pore safe place to do business: study

S’pore safe place to do business: study

Republic ranked together with Japan, Germany & Australia
By IAN POH

SINGAPORE is a very safe place to do business, according to findings from French credit insurance firm Coface’s Business Climate@ratings.
The study, released yesterday, provides two ratings for 150 countries - a rating on risks inherent in the business climate, and a more holistic rating that takes into account the business climate, economic and financial prospects and company payment behaviour.

Singapore’s ratings of A1 in both areas signify the lowest category of risk on a scale with seven levels in increasing order, numerically up to A4 and then alphabetically up to D.

This places Singapore in the top band, which includes Germany, Australia and Japan.

The purpose of the ratings is to assess the overall quality of a country’s business environment - whether financial information there is available and reliable, whether the institutional framework is favourable to inter-company transactions and whether the legal system provides fair and efficient creditor protection.

The business climate rating mainly comprises business data compiled by Coface on the quality of information available on companies and the legal protection given to creditors.

 
 
This rating is supplemented by an assessment of institutional framework quality, which reflects the quality of institutions whose strengths and weaknesses can affect companies.

The parameters considered include such standards as public service effectiveness (government, education, health, infrastructure), regulatory quality, rule of law and extent of corruption. They are based on data from external sources.

These are: a government effectiveness indicator maintained by the World Bank Institute, based on the quality of public services provided and civil service efficiency; the Human Development Index, created by the United Nations to rank the quality of life in countries; and an infrastructure quality index (energy, transport, telecommunications) published by the World Economic Forum.

Not all countries received the same business climate and overall ratings, owing to imbalances in levels of financial information, creditor protection and the institutional environment.

For 39 countries including China and India, or 26 per cent of the 150 countries, the business climate was rated lower than the country’s overall risk level.

For 17 countries including Turkey and Israel, or 11 per cent, the business climate was rated higher.

 
Source : Business Times - 05 jun 2008

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