Singapore aiming to be natural resources hub

Singapore aiming to be natural resources hub

By SIOW LI SEN

COMMODITIES exchanges can help Singapore develop into a vibrant centre for natural resources, given the island’s location in the region, said the Economic Development Board.
Last year a new EDB unit, the New Business Group, was formed to spot future trends and their business potential. This unit has identified several trends, such as natural resources.

An EDB spokesman said it had developed a Natural Resources Strategy early this year which encompasses mining, minerals, agriculture, aquaculture, plantation and forestry.

‘Singapore is strategically located in the midst of the fast growing Asia Pacific region which is now the world’s biggest markets for hard and soft commodities,’ said the spokesman.

He was replying to a query on the wooing of commodities exchanges to set up in Singapore.

Financial Technologies (India) Ltd, according to reports, is expected to start a new commodity exchange in Singapore soon.

‘Singapore could function as a nerve centre that fulfils global market demand for natural resources and create technologies to ensure global resource sustainability,’ said the EDB spokesman.

 
 
‘The commodities exchanges are a vital part of the market mechanism, introduce vibrancy and fits well into Singapore’s business, legal and financial infrastructure,’ he said.

Financial Technologies, which is in the business of setting up exchanges, is also the founder of Multi Commodity Exchange of India (MCX), the leading commodity exchange in India.

Financial Technologies and PTC financial services, a wholly owned subsidiary of PTC India Ltd, are the promoters of Indian Energy Exchange Ltd, India’s first-ever power exchange which began operations yesterday.

Meanwhile, MCX chief executive Joseph Massey has clarified that MCX has no plans to start a new exchange in Singapore.

Sources say MCX could be involved with the new commodity exchange, called the Singapore Mercantile Exchange (SMX), through cooperative arrangements.

‘At the appropriate time, I will comment,’ said Mr Massey when asked about MCX’s potential involvement with the SMX.
 

 
Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Thakral seeks up to $99m for rest of Singapore Sovereign units

Thakral seeks up to $99m for rest of Singapore Sovereign units

By KALPANA RASHIWALA

THAKRAL Land is selling the remaining 17 apartments it owns at The Sovereign, a freehold condo in Meyer Road that it developed more than a decade ago.
 
En bloc potential: The 15-year-old property is built up to 1.8 plot ratio, lower than the maximum 2.8 allowed currently 
Based on asking prices of $1,300-1,500 psf for lower-floor units and $1,800-2,500 psf for upper floor units, the total price works out to between $75 million and $99 million

Thakral is open to selling the units individually or to a single party. Market watchers reckon a bulk buyer who takes the whole 17 apartments would get some discount.

All the units are leased or about to be leased. Based on current monthly rents of $3.20 to $4.50 psf, the net yield works out to around 2.5 per cent, says Jones Lang LaSalle’s Singapore and South-east Asia managing director Chris Fossick, whose firm is sole marketing agent for the 17 apartments, each of which has four bedrooms.

A party that buys all 17 units may also hold the key to a potential collective sale of the condo, which has a total of 87 units. The 17 units that Thakral is offering represent 19 per cent of share value and about 26 per cent of the total sq ft area.

There is redevelopment potential as the site’s current Masterplan plot ratio - ratio of maximum potential gross floor area to land area - is 2.8, which is higher than the 1.8 plot ratio tapped by the existing property.

The unutilised plot ratio may be tapped by building an additional block or tearing down the existing project and redeveloping the 143,918 sq ft site into a brand new condo.

The 30-storey Sovereign, at 99 Meyer Road, received its Temporary Occupation Permit in 1993.

It is next to a 115,300 sq ft plot of land at 97 Meyer Road sold by Della Suantio Lee last year to Hong Leong Group for around $200 million. The price worked out to around $760 psf of potential gross floor area, including development charges (DC), according to an earlier report.

Dr Lee is the wife of Lee Foundation chairman Lee Seng Gee.

 
Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Wealth management in Asia still dogged by talent dearth

Wealth management in Asia still dogged by talent dearth

But HSBC private banking head sees a ‘good long-term future’ in the region
By CONRAD TAN
THE lack of talented staff is still the biggest challenge for banks seeking to expand their wealth management business in Asia, the head of private banking at HSBC said yesterday.
 
Mr Meares: HSBC is turning more towards grooming its own private bankers from within 
As stiff competition for experienced wealth managers drives up pay and rich clients become more discerning, HSBC is turning more towards grooming its own private bankers from within, said Chris Meares, chief executive officer of HSBC Private Bank - HSBC’s international private banking arm - and head of private banking within the wider HSBC group.

‘The biggest challenge for private banking in Asia is probably a lack of talent,’ he said. Asia makes up about 25-30 per cent of HSBC’s private banking business.

Mr Meares, who is based at the bank’s headquarters in London, was speaking to reporters on a visit to Singapore.

Meanwhile, rich individuals in Asia are also taking a bigger interest in philanthropy, said Monica Wong, chief executive of HSBC’s private banking business in Asia, who was also at the briefing.

Relative to the amount of wealth in the region, Asia still does not have enough private bankers, said Ms Wong, who is based in Hong Kong.

Last year, private banking contributed US$1.5 billion in pre-tax profit to the HSBC group, up 24 per cent from 2006.

Total assets under management, including trustee assets, which are held by the bank on behalf of its clients’ beneficiaries, rose 21 per cent to US$494 billion, according to the bank’s latest annual report.

Mr Meares said that competition for bankers ‘tends to go in cycles’ - in the past few years, the market for wealth managers in Asia has been ‘extremely hot’. ‘We started doing more of growing our own because the price just gets too high and the costs go up.’

Also, ‘clients are becoming more discerning’. ‘They won’t always change banks every time their banker moves.’

But although hiring experienced wealth managers ‘isn’t a guaranteed way of taking business’, it does save the bank the time needed to train them, he said. ‘It’s quite a sophisticated, complex business now - the range of products and services that you’re expected to know is big.’

Despite the keen competition, ‘we see a good long-term future’ in countries in Asia and Latin America, he said.

The number of rich people is growing most rapidly in Asia’s economic powerhouses of China and India, as well as other fast-emerging economies in Latin America and the Middle East, according to the latest World Wealth Report published by Merrill Lynch and Capgemini this week.

Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Singapore SPH’s Paragon valued at $2b

SPH’s Paragon valued at $2b

By NISHA RAMCHANDANI

SINGAPORE Press Holdings’ Paragon shopping centre in Orchard Road is now worth $2 billion, about 10 per cent up from its valuation of $1.82 billion a year ago.
 
The Paragon: Undergoing a makeover as part of a continuous effort to enhance the retail environment and shopping experience for customers 
The higher valuation came amid higher rents and continued strong demand.

‘Rents are firm, increasing as of last June. Occupancy is at 100 per cent,’ said Lydia Sng, executive director of valuations for property consultancy Knight Frank, which carried out the latest valuation yesterday. The earlier valuation of $1.82 billion on June 28, 2007, was also done by Knight Frank.

The Paragon is undergoing a $45 million makeover to update its facade and increase retail space. The renovation is slated for completion in October.

SPH said earlier that the makeover was part of a continuous effort to enhance the retail environment and shopping experience for Paragon customers.

In addition, the commercial space above its retail podium will be expanded - at a cost of $37 million, including the payment of land premium. This is scheduled to be completed by end-2008.

The total cost of the facade makeover and the addition of commercial space is $82 million.

Paragon remains open and operates as it normally does during the renovation period.

SPH will be releasing its financial results for the third quarter ended May 31, 2008, on July 11.

Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

CAPITACOMMERCIAL Trust CCT expects financing to get more expensive

CAPITACOMMERCIAL Trust CCT expects financing to get more expensive
 

CAPITACOMMERCIAL Trust (CCT) expects financing to become more expensive after it raised US$1.2 billion to fund an acquisition of an office tower this year.
The manager of about three million square feet of commercial space in Singapore agreed in March to buy a 23-storey office block known as 1 George Street in Singapore’s business district for $1.17 billion. The trust said it will fund the acquisition with debt such as convertible bonds and medium-term notes.

‘We raised the debt at the right time before the increase in rates, but going forward, we see that as a greater challenge,’ chief executive officer Lynette Leong said at a real estate conference in Singapore this week.

CapitaCommercial Trust’s shares have fallen 21 per cent this year on concern that borrowing costs for the trust may rise, prompting Citigroup to downgrade the stock earlier this month.

Asia’s real estate funding costs are likely to remain high over the next 12 months after rising as much as 700 basis points in the past year, Sameer Nayar, head of real estate finance at Credit Suisse Group, said this week.

CapitaCommercial said in April it plans to sell $280 million of bonds, with an option to raise another $90 million. It also issued $150 million of medium term notes and took on loans for the acquisition. — Bloomberg

 
Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Singapore SingTel raises stake in Globe to 47.34%

Singapore SingTel raises stake in Globe to 47.34%

By SIOW LI SEN

SINGAPORE Telecom is raising its stake in associate Globe Telecom to 47.34 per cent from 44.47 per cent.
 
Mobile telco: SingTel’s acquisition strategy is to raise stakes in associates or invest in new markets in Asia 
In a statement yesterday, SingTel said that it will pay Ayala Corporation 4,598 million pesos ($140 million), or 1,210 pesos per share, for 3.8 million shares in Globe, the second largest telco in the Philippines.

According to Bloomberg, Ayala owned 33.3 per cent of Globe before the deal.

SingTel said that the price was arrived at on a willing-seller willing-buyer basis, taking into account projected future cash flows, comparables and the prevailing market price.

On Thursday, the closing price of Globe on the Philippine Stock Exchange was 1,185 pesos.

SingTel bought its initial 44.47 per cent stake in Globe in 1993 for $882 million.

‘This transaction is in keeping with our strategy to increase our holdings in our regional associates when the conditions are right,’ said SingTel spokesman Chia Boon Chong.

SingTel has said that its acquisition strategy is to raise stakes in associates or invest in new markets, focusing on Asia.

In September last year, SingTel spent $1.17 billion on a 30 per cent stake in Warid Telecom, Pakistan’s fourth-largest mobile operator, with 14 million customers.

For SingTel’s financial year ended March 31, 2008, Globe’s pre-tax profit contribution to the group was up 9.4 per cent to $317 million, benefiting from 8 per cent appreciation of the peso.

For the first quarter of 2008, Globe reported core net income of 3.5 billion pesos, down 4 per cent as customers cut spending while struggling to cope with rising food and fuel prices.

Globe president Gerardo Ablaza said in April that sales were weakening and it would be difficult to match last year’s double-digit growth rate.

The Philippines’ economic growth is expected to ease from last year’s 31-year high of 7.3 per cent as a possible recession in the US, its main trading partner, hits exports and as rising inflation crimps consumer spending.

The World Bank expects growth in the Philippines to slow to 5.9 per cent this year.

But the economic slowdown has not dampened new cellphone subscriptions. Globe’s mobile subscribers rose 26 per cent to 21.3 million from a year ago.

Globe has 38 per cent of the Philippine mobile industry, against rival PLDT’s 55 per cent.

Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Fund managers see a sluggish second half: poll

Fund managers see a sluggish second half: poll

But they still see opportunities in commodities and infrastructure
By LYNETTE KHOO

FUND managers’ sentiment on the economy and the equities market has taken a turn for the worse over the course of six months.
They now expect economic growth to be sluggish at least for the second half of this year and possibly next year, a poll of 15 fund managers by OCBC Bank’s wealth management unit shows.

Most of these fund managers reckon the US sub-prime crisis has not completely blown over and that its economic impact will be felt in the coming months.

In the survey, Aberdeen Asset Management said the economic effects of the credit crisis have yet to be fully felt, and it believes the US economic slowdown is firmly entrenched because of the housing and credit problems.

‘House prices in the US are likely to fall further, and we may see more writedowns from financial institutions on mortgage-backed securities that use owner-occupied homes as collateral,’ Aberdeen said in the poll.

Prudential Asset Management (Singapore) noted that while the sub-prime crisis has seen its worst, problems still lurk with other forms of securitised debts such as those related to credit cards.

Some fund managers are also concerned about the impact that inflation will have on economic growth and corporate margins, the poll shows. They cited inflation, cost pressures and the volatility in commodity markets as key risks to investments over the next 12 months.

Future growth will hinge largely on measures taken by central banks to tackle higher inflation, said DBS Asset Management. ‘The harder the line taken in terms of raising interest rates to combat the situation, the worse the final outcome for growth becomes.’

According to Schroder Investment Management, ‘the risk of earnings disappointments and downgrades are real’. Lion Global Investors said ‘downward revisions to earnings are likely to continue’.

In the light of these concerns, fund managers who were mostly positive on equities six months ago have turned more cautious. Allianz Global Investors, for instance, favours short-term money market instruments and cash.

But fund managers still see investment opportunities arising in selected areas, including commodities, precious metals and infrastructure.

In the poll, DWS Investments said it favours investments in soft and hard commodities, including gold and precious metals which it reckons will do well in an inflationary environment.

Barclays Capital is cautiously bullish about sectors like energy and basic resources which have positive industry fundamentals. It also finds the valuation of US and European equities inexpensive.

Lion Global Investors, however, said it favours equities over bonds in the longer term as the valuations of equities are relatively more attractive.

 
Source : Business Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

What determines market value of Singapore property

What determines market value of Singapore property 

I REFER to Mr Patrick Tan’s letter, ‘Valuation the culprit in artificially inflating HDB flat prices’ (June 17).
The market value of a property is the estimated amount for which it should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing where both parties acted knowledgably, prudently and without compulsion. It is not a situation of a willing buyer and an unwilling seller where the terms of purchase are favourable to the buyer. Nor is it a situation of an unwilling buyer and a willing seller where the terms of sale are favourable to the seller.

The transacted prices of comparable properties are generally the best evidence of the market value for standard properties like HDB flats. In the case of HDB flats, cash top-up is part of the price of the property sold and the transaction price is therefore a legitimate piece of evidence to rely on when valuing a property. The valuer’s job is to interpret the market, not make the market. The market is the final arbiter of what is an appropriate valuation. It is neutral as to affordability issues. The market itself will eventually adjust downwards if buyers deem the cash top-up excessive and refrain from transacting.

Valuers have to examine the micro and macro factors of the particular segment of the real estate market, together with the economy sentiment. Such factors will include demand and supply of the various micro residential markets, and legislation and policies pertaining to the particular real estate segment.

Factors affecting the private and the HDB residential market may be slightly different, and thus the property market cycle of each real estate segment is never identical.

This also accounts for the difference in values of a property in different timeframes and different values for similar properties in different locations.

Janet Han (Ms)
Secretariat
Singapore Institute of Surveyors and Valuers
 

Source : Straits Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Fund managers expect sluggish growth this year

Fund managers expect sluggish growth this year 

By Nicholas Fang 
STILL A WORRYING ISSUE: One major concern among fund management firms is the possibility that the full impact of the United States sub-prime mortgage crisis has yet to be felt. — PHOTO: REUTERS
 
CONCERNS over inflation and a possible continuing fallout from the United States sub-prime crisis have made fund managers in Singapore pessimistic about economic growth this year.
A poll of 15 fund managers by OCBC Bank’s wealth management unit exposed fears that the slowdown could even stretch into next year.

OCBC said in a statement yesterday that its recent Fund Poll showed fund managers as being guarded about the economic outlook.

They were also expecting growth to be sluggish, at least for the rest of the year - and possibly next year.

Among the major concerns expressed by fund management firms such as Aberdeen Asset Management and Henderson Global Investors was the possibility that the full impact of the US sub-prime crisis had yet to be felt.

Henderson said the risk of a ’serious seizure’ to the global financial system might have passed, but the full impact of the crisis on economic activity had yet to be felt.

‘Banks in the US and Europe have tightened credit conditions aggressively, and the lower credit availability will hold back economic activity,’ the survey quoted Henderson as saying.

Aberdeen echoed this sentiment. It pointed to continued housing and credit problems as a likely reason why the US economic slowdown was so firmly entrenched.

‘House prices in the US are likely to fall further, and we may see more write-

downs from financial institutions on mortgage-backed securities that use owner-occupied homes as collateral,’ it said.

The US sub-prime fallout aside, the other major concern raised in the survey was the spectre of global inflation.

DBS Asset Management said: ‘A key determinant of future growth will revolve around the approach that major central banks will take to tackle the higher inflation rates.

‘The harder the line taken in terms of raising interest rates to combat the situation, the worse the final outcome for growth becomes.’

Despite the gloomy outlook, the fund managers polled believed that selective investment opportunities still existed.

Lion Global Investors said: ‘We like investment themes in Asian infrastructure and large cap, high-quality companies in Asia with a greater domestic focus, as we believe that the region’s relative structural fundamental strengths remain intact.’

Other attractive investment sectors included commodities, both hard and soft, which would do well in inflationary environments, as well as energy and basic resources that had positive industry fundamentals, according to the survey.
 
Source : Straits Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com

Here’s your chance to ‘poke’ the Singapore Govt

Here’s your chance to ‘poke’ the Singapore Govt 

Feedback unit Reach sets up Facebook profile in bid to engage S’pore netizens

By Li Xueying 
WELCOME TO FACEBOOK!: Prime Minister Lee Hsien Loong and DrAmy Khor (left) check out the Government’s new Reach Facebook profile at the HDB Hub in Toa Payoh. — ST PHOTO: DESMOND WEE
 
YOU can now poke, suckerpunch, and send a tulip - or perhaps a Venus Flytrap if you prefer - to the Government.
For it is now on Facebook. To be precise, its feedback arm, Reach, has created a profile on the popular social networking website.

Prime Minister Lee Hsien Loong yesterday viewed it at the launch of Reach’s roving interactive exhibition at the HDB Hub in Toa Payoh.

Putting on his spectacles, PM Lee confirmed four friend requests (adding to the existing 281), checked out photos of Reach events and typed a message on the wall of one of its friends.

‘Welcome to Facebook! Glad to have you as a friend. Please tell your friends too,’ he typed, signing off as ‘LHL (for Reach)’.

The profile was created two weeks ago and was made public to all yesterday. It can be found by searching for ‘Reach Singapore’.

Reach chairman Amy Khor said it was a necessary platform to engage netizens.

‘Singaporeans are increasingly comfortable with the new media. So to engage them on this platform is not just something logical but vital,’ she said, noting that Facebook was one of the top 12 search hits for Singaporeans last year.

At the same time, the nature of Facebook means there is a ‘multiplier effect’ as friends of friends can be linked.

They will be able to give their responses to poll questions, such as what they think of the Budget, the National Day Rally or simply the latest policy announcement.

The Facebook effort is the latest in the arsenal that Reach is building to engage Singaporeans as it tries to combat the perception that the Government does not listen enough when it formulates policies.

For those who are less Internet-savvy, a roving exhibition was launched yesterday. It will tour community centres in the heartland and educational institutes islandwide.

It addresses questions like ‘Does Reach edit my feedback?’ The reply: ‘Feedback is not edited to retain the original sentiment and nuance.’

At the event, PM Lee also suggested that Reach start an online live screen showing the latest feedback.

Dr Khor, who is also Senior Parliamentary Secretary in the Ministry of the Environment and Water Resources, later said Reach will look at posting a summary of the top three issues each month either on its website or on its Facebook profile.

Giving an update on Reach’s progress since she took over in 2006 and revamped the former Feedback Unit with efforts like a blog, Dr Khor said results have been ‘encouraging’.

In the past year alone, input increased by 40 per cent while the number of members jumped 70 per cent to 8,500.

Marketing executive Rita Ong, 37, who has a Facebook account, said such new efforts will appeal to younger Singaporeans. ‘As they spend so much time surfing the Net, giving their feedback is now just a matter of clicks.’
 

Source : Straits Times  - 28 Jun 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985
mindy@mindyyong.com