Singapore LTA to cut road tax by 15% for most vehicles from July 1

Singapore LTA to cut road tax by 15% for most vehicles from July 1

By Hiroshi Limmell,
SINGAPORE: The Land Transport Authority (LTA) will reduce road tax for most vehicles from 1 July. In a statement, the LTA said road tax for cars, motorcycles, taxis and commercial vehicles will fall by 15 per cent.

Electric and hybrid cars will also see a 15 per cent decline in road tax rates.

And it’s also good news for Euro-IV diesel car owners. In February this year, LTA said the special tax for Euro-IV cars will be revised downwards. From July onwards, LTA will be reducing the special tax for Euro-IV engines, which is paid on top of the normal road tax for these vehicles.

Currently, the special tax is priced at four times the normal tax of a similar capacity petrol car.

The new rates will be lower. For example, the 6-months special tax for a 1.6 litre Euro-IV diesel car will be cut from the current S$1,488 to S$1,000. Ownvers will also have a reduced normal tax rate to pay for these vehicles, from the existing S$437 to S$372.

LTA said the revision is due to a reduction in carbon emissions by the diesel cars.

 
Source : Channel NewsAsia - 06 jun 2008

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Little choice but to offer less choice sites - Singapore

Little choice but to offer less choice sites - Singapore

Developers fear oversupply; the govt must offer some sites but may not waste prime sites
By KALPANA RASHIWALA

THE six-monthly Government Land Sales (GLS) programme announcement is just around the corner, and property industry players are once again voicing the familiar calls for the government to reduce its quantum of land sales, and to halt sales through the confirmed list - except for strategic reasons - and to instead offer sites only through the reserve list.
 
 
The players wanted this even when the market was buoyant. Given the subdued conditions now, they may have a stronger case for moderating the GLS programme in the second half of 2008.

But numbers alone won’t do. The focus must also be on the quality of sites on offer. The 99-year leasehold private residential sites offered by the state in H1 2008 yielded a mixed bag of results. Some have attracted numerous bids at high prices while others did not. In one case, the bids were too low for the government to make an award.

In other words, certain sites are in demand, others are not.

What kind of sites does the market want now?

 
Clearly, more waterfront housing sites will be welcome - a point catered for in the draft Master Plan 2008 revealed last month.
 
 
 
 
 
 
There is enough supply of high-end private residential sites, so the government need not bother about supplying land in the prime districts.

As for the mid and mass markets, the locations in demand are near MRT stations, and/or with water views, in close proximity to major shopping centres, good schools and other amenities.

A site’s location could decide whether it’s likely to be sold under current cautious market conditions. A tender that closed in March for a condo site facing West Coast Park and overlooking the sea drew a dozen bids. In contrast, there were only two bids for a landed housing plot at Jurong West and the Government decided against awarding it.

These days, developers will only be drawn to land parcels with strong selling points.

Clearly, more waterfront housing sites will be welcome - a point catered for in the draft Master Plan 2008 revealed last month.

And given the rising private transportation costs, homes near MRT stations will probably command an even bigger premium than they do today.

Unattractive sites may attract bids that are too low for the Ministry of National Development to make an award. This could affect the already-fragile sentiment in the residential market. So the MND should focus on choice plots in its H2 2008 list, the argument would go.

CBRE’s update of the MND’s H1 2008 programme shows that five private residential sites have been sold so far through the confirmed list. These are in various choice locations outside the city - near Khatib MRT Station fronting Lower Seletar Reservoir, at Lorong 2/3 in Toa Payoh near Braddell MRT Station, at West Coast Crescent overlooking the sea, in Choa Chu Kang, close to Lot 1 Shoppers’ Mall and the MRT station, and Phase 2 of Sembawang Greenvale near the sea.

Developers have yet to make a single successful application for reserve list private housing sites in the H1 2008 slate - with the sentiment being weak and the reserve plots generally not boasting choice locations.

While the government launches plots under the confirmed list for tender according to a prestated schedule regardless of market demand, it releases reserve list sites only if there is a successful application by a developer who undertakes to bid at a minimum price acceptable to the state.

So will the MND release the sort of sites the developers want? As a seasoned market player puts it: ‘They’re very practical people. When the market sentiment is weak, why give away their good sites at subdued prices?’

Instead, the MND may offer more run-of-the mill sites. Such plots may draw poor interest, and this could affect sentiment. However, developers may still like the end result: not much new land actually being sold by the state.

Put simply, the outcome developers desire - of having less state land being sold - may be effected if the government offers a slate of mostly not-so-desirable plots.

The current weak demand makes it clear there’s no housing shortage in Singapore.

A moderation of land supply sold by the government would lend some support to the market. Another benefit if the government ends up selling less land is that it will provide some relief to the overheated construction sector.

On the other hand, the government may not be able to accede to developers’ calls not to sell land in H2 2008 through the confirmed list - as official data have so far not shown any decline in private home prices, despite thin sales volumes.

The government also has to balance the need to provide stability to home prices with the aspirations of Singaporeans who have yet to buy private homes.

The MND will likely be prudent and moderate the GLS programme for H2 2008. A shorter list of sites in both confirmed and reserve lists, with stronger emphasis on less choice locations, could do the trick.

Source : Business Times - 06 jun 2008

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Airlines start exiting routes to cut losses - Singapore

Airlines start exiting routes to cut losses - Singapore

Qantas cuts capacity on Asian routes; SIA studies its options
By VEN SREENIVASAN

(SINGAPORE) Faced with the prospect of plunging earnings amid soaring fuel prices and flattish revenue growth, many airlines are cutting capacity and exiting routes.
 
Mr Dixon: The rising cost of fuel has changed the way Qantas will have to do business over the next two years 
Qantas is just the latest to join a growing line of carriers which are exiting routes, sizing down capacity or just parking planes as oil stays stubbornly above the US$125 per barrel level, and threatens to rise even further.

Just a week after it announced cuts on its domestic and trans-Tasman services, the Australian carrier has cut capacity on its Japan and South-east Asia routes, including some services launched barely a year ago.

Qantas CEO Geoff Dixon said the rising cost of fuel has changed the way the Qantas Group will have to do business over the next two years, adding that the routes being cut had been tough for some years.

‘At current fuel prices, the group would lose more than A$100 million operating to Japan under our existing schedule,’ he said.

 
‘At current fuel prices, the group would lose more than A$100 million operating to Japan under our existing schedule.’
 
- Qantas CEO Geoff Dixon 
 
 
 
 
The move includes replacing some of its bigger aircraft with A330s currently in subsidiary Jetstar’s fleet, and the budget carrier pulling out of several recently launched Cairns-Osaka-Nagoya and Sydney- Kuala Lumpur routes.

Qantas’s move comes on the heels of similar measures by other carriers around the world.

Korean Air, American Airlines, US Airways and Delta have already started paring capacity on selected routes in response to soaring fuel prices which are eating heavily into their bottom line. Air New Zealand wants to park some planes, and is cutting capacity on its Auckland-London Heathrow route. And Korea’s Asiana this week cut six routes to China and is reducing services to other destinations.

All eyes are now on other Asian carriers, including Malaysia’s two carriers - budget player AirAsia and state-owned Malaysia Airlines (MAS) - which are engaged in a cut-throat ticket price battle on their domestic front. But it is their international routes which could see the biggest impact. AirAsia has recently ventured into long-haul budget flights, with services to Australia already started up and others to Europe on the cards. Meanwhile, MAS has already embarked on a sharp cost-cutting programme which could include major capacity revamps as it struggles to remain in the black after several years of losses.

Meanwhile, Thai, Indonesia’s Garuda and Philippine Airlines are staring at massive losses as the fuel price soars past US$170 per barrel (after processing, jet kerosene costs about US$40 pbl more than crude oil).

Singapore Airlines (SIA) said it has been doing regular six-monthly capacity reviews, but added that the high fuel cost environment had made the exercise even more critical.

‘Singapore Airlines is not immune to the threat posed by high jet fuel prices,’ said spokesman Stephen Forshaw. ‘It highlights the need to continue our focus on cost discipline, and being nimble in managing capacity. Going forward, we will manage capacity deployment carefully, but also seek to ensure we can meet areas of demand which are still present in our markets.’

The airline recently pulled out of its lossmaking Taipei-Los Angeles and Bangkok-Osaka routes, but added capacity to China, India, Vietnam, Australia, Zurich, Paris, London and Moscow. It also plans to replace its ageing B747-400s with more fuel-efficient A380s and B787s.

But did SIA miscalculate in introducing its all-business class non- stop services to New York and Los Angeles at a time when the inevitable spike in ticket prices could further impact travel demand?

‘The loads in the first couple of weeks on the all-business class A340-500 services to New York and back have been very impressive,’ Mr Forshaw said. ‘Most flights have had loads close to full since they started operating.’

But he added that SIA was not taking the softening economy in the US lightly, and was monitoring the situation carefully.

A record 24 airlines have collapsed worldwide in the last six months, including European all-business class carriers Silverjet and EOS and Hong Kong-based Oasis.

Source : Business Times - 06 jun 2008

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Spooked investors snap up Singapore govt bonds

Spooked investors snap up Singapore govt bonds

Demand grows with inflation threat; bond yields climb sharply
By SIOW LI SEN

(SINGAPORE) Singapore government bonds are in demand as prices continue to fall due to inflation fears, and investors seek a flight to quality.

 
Analysts say inflation, the predominant worry of Asian countries, has spooked investors who see a second financial crisis brewing.

Prices of the 10-year Singapore Government Securities (SGS) bond yesterday fell for the fourth consecutive day while yields jumped 16 basis points to 3.60, near a two-year high. Yield for the two-year SGS bond gained a faster 18 basis points to 1.15 per cent.

‘It’s a big move, and it’s not to do with fresh domestic data. Today’s market attention is on Malaysia . . . there’s spillover to Singapore,’ said Selena Ling, OCBC Bank economist. She sees the 10-year bond yield reaching 4 per cent by year-end - levels last seen in November 2003, when it was 4.1 per cent.

Ms Ling said the sell-off is due to people seeing the region as one entity and with US interest rates under pressure after hawkish remarks by US Federal Reserve chairman Ben Bernanke.

‘In general, one of the key reasons is that the quality of the SGS is fairly high. It’s a flight to quality. In this region, SGS is a very good bet,’ said Alvin Liew, Standard Chartered Bank economist.

Average daily turnover of Singapore Government Securities (SGS) totalled $4.1 billion in the last week of May, according to the Monetary Authority of Singapore (MAS).

Since January, SGS average daily turnover has ranged between $2 billion and $4.7 billion. In the similar period last year, it was mainly between $1 billion and $2.5 billion.

Prices of Singapore government bonds have been falling and their yield prices rise as fixed income markets price in global inflationary pressures.

The 10-yield SGS yield could reach 3.9 per cent by year-end, said Jens Lauschke, DBS fixed income analyst. On the higher volumes, Mr Lauschke said: ‘I’m not surprised that some people are seeing value at these levels.’

Bond prices fall as yields rise. The 10-year SGS yesterday fell further to $103.43, its fourth day of decline. The high this year of $113.15 was on March 17.

As inflation worries accelerate, SGS bonds are expected to continue to be an asset in demand as prices fall further and yields gain.

‘We have a Sing dollar appreciation policy . . . so anything denominated in Sing dollar, it is expected to be worth more,’ said Mr Liew.

Inflation fears have taken on fresh meaning as the headline consumer price index rose a record 25 per cent year-on-year in Vietnam, it overshot market expectations to climb 10.38 per cent in Indonesia following fuel price hikes last month, and Malaysia’s petrol prices were hiked 41 per cent this week, said Ms Ling.

The Sing dollar has risen 5.2 per cent against the US currency this year, making it the second-best performer among the 10 most active currencies in Asia outside Japan, according to Bloomberg.

The peso has lost 5.5 per cent against the US dollar this year, trailing behind the South Korean won’s 10 per cent decline and the Indian rupee’s 8 per cent drop.

It’s been particularly severe in Vietnam, which is battling 25 per cent inflation. Morgan Stanley recently said Vietnam was heading for a ‘currency crisis’, similar to that of Thailand’s baht in 1997 because the current account deficit, projected to widen to 7.5 per cent this year, was ‘unsustainably large’.

But Chua Hak Bin, chief Asian strategist, Deutsche Bank Private Wealth Management, is not an SGS fan.

‘In the fixed income space, we like investment- grade bonds including financials,’ he said. ‘Current interest rate spreads are wide and imply a far greater probability of default that historical norms suggest. We expect these spreads to narrow.’

As for currencies, he is positive on the US dollar. ‘We expect the US dollar to recover against the euro to 1.45 in 12 months’ time. Economic data out of the euro zone is starting to surprise on the downside. US economic data, on the other hand, has been better than expected, with markets having priced in a worst-case scenario.’

 
Source : Business Times - 06 jun 2008

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Time-wasters steer clear of Singapore BTO projects

Time-wasters steer clear of Singapore BTO projects 

HDB’s two new projects still oversubscribed but at half the level seen before change of rules

By Jessica Cheam 
 
IT LOOKS like the time-wasters have got the message after the Housing Board tightened rules for flat applications.
The launch of 1,485 premium flats in Punggol and Sengkang closed on Wednesday with 4,050 applications - still oversubscribed but at about half the level seen before the new rules kicked in.

Some sales launches had become free-for-alls, with thousands of people who had no real intention of buying still lodging applications just to keep options open.

This was evident in the actual take-up rate for flats, which was sharply lower than the number of applicants.

Apart from creating an administrative headache for the HDB, such frivolous applicants also meant deserving buyers were pushed further back in the queue.

Now, a first-timer who twice rejects an offer to buy a flat at a build-to-order (BTO) or balloting sales exercise will lose his first-timer priorities for a year.

In other words, he will be sent to the back of the queue with the second-timers.

The shake-up has certainly made first-time buyers like Ms Lynne Huang, a 25-year-old teacher, more cautious.

‘The new rule is quite harsh, so home buyers like me really have to think twice before applying for any project,’ she said.

‘If I apply, it’s likely that I will buy a unit unless it’s on a very low floor.’

The amended regulations have raised fears that buyers offered leftover flats would be penalised, but the HDB has said it could be flexible if applicants at the back of the queue have good reasons for rejecting available homes.

HDB’s new rules had their first try-out in two new projects - Compassvale Pearl in Sengkang and Punggol Sapphire (below).

They were offered under the BTO system where flats are built once a certain level of demand is reached.

Compassvale Pearl received 977 applications for the 420 flats on offer, and Punggol Sapphire attracted 3,073 bids for 1,065 flats.

That put the ratio of applications to flats at 2.3 in Compassvale Pearl and 2.9 in Punggol Sapphire - roughly half the figure for projects launched earlier this year.

Applications for the Punggol Spring sale in February and Jade Spring @ Yishun Phase 2 in March were about five times the number of flats offered - or five would-be buyers for every home.

Punggol Spring received 2,765 applications for 494 flats, and Jade Spring @ Yishun Phase2 had 2,828 bidders for 576 flats, the HDB told The Straits Times.

Housing experts had anticipated the dip in applications following the rule change, but they still expect the take-up rate to remain strong due to real demand in the market.

PropNex chief executive Mohamed Ismail said buyers are now showing discretion in their applications.

‘But I think the more interesting thing to watch is the actual take-up rate, if demand continues to meet the supply,’ he said.

Mr Colin Tan, head of research and consultancy at Chesterton International, believes there is ‘a lot of pent-up demand’ in the market and it was likely the HDB could even see higher take-up rates from more serious buyers.

In the second half of last year, buyers took up about 54 to 72 per cent of flats in new HDB projects in Punggol, Sengkang and Bukit Panjang.

Unsold stock has reached an all-time low of 1,200 flats - a stark contrast to the 25,000 unsold flats at its peak.

HDB is ramping up supply to about 8,400 units this year - 40 per cent more than last year’s new supply.

Source : Straits Times - 06 jun 2008

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‘Too much, too sudden’ - Malaysia

‘Too much, too sudden’  - Malaysia
Businesses warn of trickle-down effect on prices of goods, services
By Hazlin Hassan, Malaysia Correspondent 
STREET PROTEST: Malaysia’s opposition was quick to seize on the fuel price hikes, with street protests like this one in Kuala Lumpur. De facto opposition leader Anwar Ibrahim slammed the increases and there were promises of more protests.
 
KUALA LUMPUR - MALAYSIA’S overnight increases in petrol and diesel prices yesterday triggered widespread criticism by businesses, the opposition and ordinary people.
They called for a review of the steep hikes - 41 per cent for petrol and 63 per cent for diesel - announced on Wednesday and implemented yesterday.

The Associated Chinese Chambers of Commerce and Industry of Malaysia said the increase was simply too much, too soon for many manufacturers, and wished the government had raised prices gradually.

Malaysia’s new fuel prices are still among the lowest in Asia, but the increases sparked immediate talk of a trickle-down effect on goods and services.

Among the first to warn that they may have to charge more were Cameron Highlands vegetable farmers who send their produce by lorry to other parts of the country and Singapore.

Lorry companies transporting farm produce said they will have to raise rates by about 35 per cent.

Bus operators moaned that they will be hard hit, but the government responded swiftly, reminding public transport operators that they are unaffected by the price hikes.

Entrepreneurial and Cooperatives Development Minister Noh Omar said public transport vehicles, including taxis, will get discount cards to buy diesel at RM1.43 per litre, instead of the new price of RM2.58.

‘There is absolutely no reason for public transport operators to increase their fares,’ he told reporters.

The fuel price hike is expected to push inflation to a 10-year high of 4.2 per cent this year, central bank chief Zeti Akhtar Aziz said yesterday. It was just 2 per cent last year.

Stocks tumbled 2.4 per cent yesterday while the ringgit sank. Government bonds plunged on expectations that the central bank would raise interest rates to curb inflation, although the bank insisted there was no need to do so yet.

But some institutions said inflation could go up as much as 8 per cent as electricity tariffs are also going up sharply.

Consumer groups yesterday urged people to spend wisely.

The Malaysian Muslim Consumers Association encouraged people to be thrifty, but the Consumer Association of Penang said the government should lead by example and cut down on expenses and waste.

There was also some support for the government’s tough move to reduce subsidies and raise fuel prices.

‘It’s a short-term pain, but a long-term gain, in terms of better economic stability and reducing imbalances,’ said economist Yeah Kim Leng.

‘No doubt the 40 per cent increase is the biggest jump in history…but if it is properly channelled for development projects and for the improvement of public transportation, the public will be able to support it,’ he said.

 
The changes
PETROL
Before: RM1.92 (80 Singapore cents) per litre

Now: RM2.70 (S$1.13) - up 41 per cent
DIESEL
Before: RM1.58 per litre

Now: RM2.58 - up 63 per cent
ELECTRICITY TARIFFS

 
Source : Straits Times - 06 jun 2008

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Euro 2008: It’s a tougher ball game

Euro 2008: It’s a tougher ball game 

By Wang Meng Meng 
FOOTBALL FEVER: Holland supporters at Vino Vino Wine Bar, which will show the highly-anticipated European Championship on a giant screen and expects a substantial audience of football fans. — ST PHOTO: ALBERT SIM
 
HALF a world away, 16 European nations are gearing up to slug it out in the Alps for continental soccer supremacy.
And here in Singapore, Euro 2008 fever is building up.

Take Mr Charles Stephan, for example.

The Dutchman will be rooting for his country from Mohamed Sultan Road, where he runs the Vino Vino wine bar.

Holland had rotten luck in the European Championship draw, landing in the proverbial ‘Group of Death’ alongside world champion Italy, talented France and dark horse Romania.

But Mr Stephan aims to bring the matches to life through two 42cm LCD television sets and a giant screen throughout the three-week tournament.

‘I already have a group of Dutchmen who are regular patrons,’ he said.

‘We’ve also had a small group of French and Italian expatriates coming to watch the pre-tournament friendlies. Now, all we need is to find some Romanians.’

To add to the atmosphere, he will be dishing out his popular traditional Dutch bitter ballen - spicy meatballs served with mustard.

He added: ‘With the matches kicking-off at 12am and 2.45am Singapore time, free coffee will be served to keep our customers awake, or in case the match gets boring!’

StarHub, which has exclusive broadcast rights for the 31 matches, will telecast four free to air - the opening, the two semi-finals and the June 30 final.

The football extravaganza will feature the cream of not just European football but world football.

Missing the action this time is England, knocked out in the earlier round.

Said England die-hard fan Kevin Ang: ‘The appeal of Euro is that with 16 teams instead of 32 at the World Cup, the quality of the teams is automatically strengthened. We have the defensive Italians, the ultra-defensive Greeks and the gung-ho but self-destructive Dutch.

‘Pity England isn’t around, but then again, I don’t think it’d stand a chance given the field.’

Coaches and players, and not just Europeans, view the Euro as more appealing than the World Cup, not least because they believe it is the more difficult to win.

Consider this: The 18 World Cups have produced only seven winners, with five teams winning multiple times.

At the 12 European Championships, the trophy has been lifted by nine different countries, with only France and Germany winning more than once.

Brazilian soccer legend Pele has said: ‘In the World Cup, you always have four or five inexperienced teams, but not so in the European Championship. The level of teams at the Euros is very balanced and all teams are well-prepared, so it’s a difficult tournament.’

Agreeing, Italian midfielder Gennaro Gattuso has said: ‘There are no easy opponents at the European Championship. All of the teams play at an extremely high level and every single game is like a cup final.’

He should know, having won the World Cup with Italy two years ago.

The European championship does not have the Latin flavour of Brazil and Argentina, ranked No. 1 and No. 2 in Fifa’s world rankings.

But the other eight in Fifa’s Top 10 have all qualified for Euro 2008 - Italy, Spain, Germany, the Czech Republic, France, Greece, Portugal and Holland.

The remaining finalists this year are Switzerland, Turkey, Austria, Croatia, Poland, Romania, Russia and Sweden.

Fans can expect teams that are evenly matched in terms of experience, tactical sophistication and technical quality, replete with polished players who are stars in the world’s most celebrated leagues.

Singapore national coach Raddy Avramovic, who played for the former Yugoslavia, said: ‘In the European Championship, the teams know each other well. You’ll see real tactical football, although that may not always be very interesting for the fans.’

The Euro is also quicker-paced, packing more matches into less time than other tournaments. For example, if Cristiano Ronaldo is to fire Portugal to the final, he will have to play six matches in less than 23 days - a match every 3.7 days.

Such a level of intensity demands more than personal fitness and mental resilience, it requires a powerful bench.

As Gattuso explained: ‘It’s vital to have a large, high-quality squad that can withstand the psychological pressures of competing for a title that calls for six top performances in 23 days. It’s all or nothing even in the group stages.’

His team’s journey this month reflects the challenge that is the European Championship.

Italy’s path to the World Cup title two years ago started with the team dominating a group comprising the Czech Republic, Ghana and relative lightweight USA, before it faced Australia and the Ukraine.

In this Euro, Italy must first come up on top of Holland, Romania and France in Group C.

Then they will face either of two teams from the quartet of star-studded Spain, defending champion Greece, Guus Hiddink’s Russia and well-organised Sweden.

It’s serious competition, every step of the way.

Source : Straits Times - 06 jun 2008

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