WTO gives Singapore excellent reviews

WTO gives Singapore excellent reviews 
 
SINGAPORE’S economy is still one of the most open and competitive in the world, the World Trade Organisation (WTO) has said.
At the same time, despite its high degree of openness, the economy’s flexibility has enabled it to adjust to external shocks, by lifting productivity and competitiveness.

But Singapore still faces long-term challenges, such as the risk of external shocks and an ageing population.

These comments were made by the WTO as Singapore undergoes its 5th WTO Trade Policy Review. The report praised Singapore for its strong record of economic growth, job creation and low inflation from 2004 to 2007, which is the period under review.

Mr Ravi Menon, the second Permanent Secretary of the Ministry of Trade and Industry, who is leading the Singapore delegation to Geneva, said that the nation has seized the opportunities offered by globalisation and liberalisation.

Singapore also has had to cope with challenges such as competition from low-cost producers and rising wage inequality between skilled and less skilled workers.

A total of 20 WTO members commended Singapore for its open and competitive economy as well as its commitment to globalisation through actively participating in the Doha round of global trade negotiations.

The review ends tomorrow.

Source : Straits Times - 15 July 2008

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Outlook bright for S’pore economy? Yes, but…

Outlook bright for S’pore economy? Yes, but… 

Analysts share MM Lee’s upbeat forecast but fear inflation and global slowdown would be spoilers

By Bryan Lee, Economics Correspondent 
CITY BUZZ: Models promoting the Singapore Grand Prix during the Indonesia International Motor Show in Jakarta last week. Efforts to make Singapore the ‘in’ place fore foreign talent are paying off, with massive investments in the services and construction sectors. — PHOTO: AP
 
SINGAPORE’S transformation into an international cosmopolitan city will help keep the economy buzzing in the medium to long term.

But analysts, while generally backing Minister Mentor Lee Kuan Yew’s bullish view of the economy, warned that the good times may be some time coming.

They said rising inflation and slowing global growth were casting a shadow over the immediate outlook.

Mr Lee said last Friday that the next five to 10 years will be the most promising in Singapore’s history, adding that gross domestic product (GDP) growth could reach 7 to 8 per cent in years when the world was not in recession.

His optimism stemmed from efforts to make Singapore a vibrant city where talented people from around the world would want to live.

It is a campaign that is already luring massive investments in buildings and services that the influx of ‘foreign talent’ will need.

‘I share Mr Lee’s optimism that for the medium to long term, Singapore’s economic outlook is bright,’ said Action Economics economist David Cohen.

‘The economy is an attractive location for international businesses looking to establish operations in the region and as the region paces global economic growth, Singapore should be able to ride that wave.’

Economists said efforts to restructure the economy are starting to pay off, pointing to how resilience in the services and construction sectors is helping to shield Singapore from the ongoing turmoil in the world economy.

Key to these is the opening up of borders to foreign talent. The influx of foreigners working and living here will lead to investments in services to cater to their needs, they said.

This would help build up the domestic economy and wean Singapore off its heavy dependence on external demand.

‘It’s very healthy to step back to look at the forest, rather than the short-term cycles,’ said Barclays Capital economist Leong Wai Ho.

‘With talent now coming here from every corner of the earth, there’s going to be a bigger diversity of needs and wants for restaurants, shops and other services.’

He reckoned that Mr Lee’s longer-term GDP estimate is reasonable, noting that the economy grew 7.7 per cent last year, and that even after a strong 2006.

Other analysts were more circumspect, including Dr Chua Hak Bin of Deutsche Bank’s private banking arm, who said ‘7 to 8 per cent is a bit high for me’.

‘Last year’s GDP growth was on a cyclical high. Over the next decade, an average of 5 per cent would be a decent achievement,’ he said.

He warned that while the current slowdown is cyclical, it may be some time before things return to normal, noting that similar crises in Japan and Scandinavia have lasted several years.

‘Global conditions are not going to be as conducive as they were in the last five years. We’re not just facing a credit crunch but stagflation risks from higher oil prices.’

Citigroup economist Kit Wei Zheng said Singapore’s restructuring can reduce ‘cyclical pain’ but cannot completely offset it.

‘A lot of the optimism over the remaking of Singapore is overdone and overplayed.

‘The fundamental paradigm for Singapore and Asia is that their fortunes still depend in a large extent on the global economy.’
 

Source : Straits Times - 15 July 2008

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Singapore Condo sales at showflats tapering off

Singapore Condo sales at showflats tapering off

One developer blames Livia’s pricing for ’spoiling’ other projects’ sales
By KALPANA RASHIWALA
WHILE City Developments managed to sell 96 units last week at its Livia condo at Pasir Ris, developers of most other projects suffered rapidly declining sales at their showflats.
 
Woodsville 28: When Frasers Centrepoint previews its project this weekend, the stakes for nearby Kovan Residences are expected to go up 
At least one developer blamed Livia’s attractive pricing - $650 psf on average - for ’spoiling’ sales of other projects, while others said a tapering off was to be expected given negative news flows from overseas on the state of the financial and stock markets.

Developers and property agents generally reported still strong turnouts at showflats last weekend, although take-up slowed.

Sim Lian sold 19 units last week at its Clover By The Park condo in Bishan, less than the 59-unit sales it achieved in the preceding week. To date, Sim Lian has sold 273 of the total 616 units in the project. ‘That’s almost 45 per cent of a large project in just three weeks; that’s quite an achievement given current market sentiment,’ Sim Lian Group executive director Diana Kuik said when approached by BT.

The 99-year leasehold project’s average price remains at $750 psf.

 
‘Crowds were generally still very good at showflats last weekend, though take-up has slowed. In any development, demand for 30-40 per cent of units comes from the surrounding population catchment. Usually that’s the case, good or bad times.’
 
- A veteran property consultant 
 
 
 
 
Sim Lian also sold a unit at The Amery, a freehold project in the Telok Kurau area, last week - again a less sparkling performance than the four units it sold a week earlier.

Next to Geylang River, NTUC Choice Homes and Ho Bee found buyers for another nine units at Dakota Residences last weekend. This brings total sales to 170 units in the 99-year project, which has an average price of about $980 psf.

Over in the Kovan MRT Station vicinity, the developer of Kovan Residences sold about 20 units last week, bringing total sales to over 100 units since the 99-year project was previewed at a private party on June 28. The average price is somewhere in the $870-900 psf range. Nearby, MCL Land sold another three units at its D-Pavilion, a freehold project priced at $900 psf on average last week. This was a slower sales rate than initial sales of 10 units the preceding weekend.

The stakes will go up for these two developers when Frasers Centrepoint previews this weekend its Woodsville 28 near Potong Pasir MRT Station - which is three MRT stops closer to town than Kovan MRT Station.

The 110-unit condo will have an average price of $880 psf. The 99-year leasehold development comprises two 17-storey blocks.

‘The two- and three-bedder units, with respective average sizes of 883 sq ft and 1,195 sq ft, are about 5 to 6 per cent smaller than conventional units as we’ve adjusted our sizes to fit the profile of the market we’re targeting - those just starting their families or young couples who want to stay near the city and even retirees.

‘Two-bedroom apartments start at $700,000 and three-bedders from just over $1 million,’ says Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong.

CDL’s spokeswoman said Livia saw strong take-up of various unit types last week, especially two- and three-bedders. ‘The four-bedroom apartments were purchased either for owner occupation or rental potential in view of United World College’s East Campus coming up in the vicinity.

‘The project’s average price remains $650 psf, with prices for certain unit types and facing being upped by 1-3 per cent for the latest release of 120 units last weekend,’ she added.

The 96 units sold at Livia last week contrasted with sales of 160 units in the preceding week when CDL previewed the 99-year leasehold project, resulting in total sales of 256 units. So far, 320 of the condo’s total 724 units have been released.

A veteran property consultant said: ‘Crowds were generally still very good at showflats last weekend, though take-up has slowed. In any development, demand for 30-40 per cent of units comes from the surrounding population catchment. Usually that’s the case, good or bad times.

‘Once sales in a project launch hits a certain percentage from this catchment demand, developers have to attract people from other parts of Singapore. That’s a tougher job, with a lot more convincing to be done compared with selling to people who already know the area.’

Another problem is that buyers are unsure of the property market’s direction. ‘Even when there are attractively priced projects, potential buyers worry if property prices will go down further. They also ask themselves whether they really need to upgrade; they worry about the economy and their jobs. The bad news coming out from financial institutions in the US is a big concern,’ a property agent said.

On a more positive note, Sim Lian’s Ms Kuik said: ‘If you have a good product in a location where there’s a pool of buyers and if your pricing is reasonable, there will be take-up.’

Source : Business Times - 15 July 2008

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Singapore should rely more on home market

Singapore ’should rely more on home market’

WTO sees domestic consumption as a source of growth
By CHUANG PECK MING

(SINGAPORE) Singapore, heavily dependent on trade, must turn more to its home market for economic growth in the longer run, according to the World Trade Organization (WTO).
‘Singapore needs to rely more on domestic consumption as a source of growth,’ the WTO says in its latest review of the country’s trade policy. ‘This would help balance fluctuations in external demand and thus reduce its vulnerability to external shocks, which Singapore has tried to mitigate by diversification across markets and sectors.’

The WTO report released yesterday in Geneva also says that the recent move to strengthen the Singapore dollar in an attempt to ease inflationary pressures could dent the country’s competitive edge in the short term, unless it reverses the recent fall in productivity.

While a stronger Singapore currency may well also attract more overseas funds as the country beefs up its role as a leading global hub for private banking, the report says Singapore’s growth as a regional financial centre - a sign of its closer links with the rest of the region - has increased the country’s exposure to other risks. These risks include interruptions in the regional production chain, financial weaknesses in regional economies and economic or political instability in countries where Singapore has made significant investments.

 
The four-yearly report for Singapore is part of the WTO’s efforts to promote trade liberalisation through greater transparency of its members’ trade and economy-related policies.

The report says Singapore’s economy in terms of global trade and foreign investments remains ‘one of the most open, and thus competitive’, in the world.

‘With a few exceptions, tariffs are zero, total merchandise trade is nearly four times GDP and inflows of foreign direct investment are substantial, accounting for the equivalent of one-sixth of GDP in 2007.’

The economy’s openness leaves Singapore vulnerable to periodic external shocks, but the report says its flexibility has enabled Singapore to adjust fast to these shocks ‘by constantly improving productivity and thus international competitiveness, which in turn contributes to economic growth and higher living standards’.

Following the passing of an economy-wide competition law which put in place a Competition Commission in 2005, the report says Singapore’s ‘institutional transparency has been enhanced in significant ways’. It notes that since 2004, Temasek Holdings’ consolidated group financial statements are published yearly on the company’s website.

The report says government-linked companies (GLCs), largely enterprises Temasek has a stake in, are still pervasive in the economy but they now seem to operate more on a commercial basis and less as a strategic tool of industrial policy.

‘During the period under review, the trend towards GLCs operating increasingly on the same basis as private companies has been reinforced by further divestments by Temasek, by enhanced corporate governance regulation (which has imposed more stringent disciplines for listed GLCs), and by the enactment of an economy-wide competition law, which applies in principle to all enterprises, including GLCs,’ the report says.

Source : Business Times - 15 July 2008

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