Stocks soar as officials confirm gov’t rescue plan-NEW YORK

Stocks soar as officials confirm gov’t rescue plan-NEW YORK

By Tim Paradis, AP Business Writer

Wall Street extends big rally on bank rescue hopes, temporary ban on short sales of financials

NEW YORK (AP) — Wall Street extended a huge rally Friday as investors stormed back into the market, relieved that the government plans to rescue banks from billions of dollars in bad debt. The Dow Jones industrials rose more than 375 points, giving them a massive gain of more than 785 points over two days, and Treasurys fell as money flowed into equities.

A new ban on short selling, or placing bets that a stock will fall, was likely adding to the market’s gains. And Friday was a quarterly “quadruple witching” day, which marks the simultaneous expiration of options contracts, an event that often adds to volatility.

“A big chunk of this is scaring all the shorts to cover their bets,” said Joe Battipaglia, market strategist at Stifel, Nicolaus & Co.

Treasury Secretary Henry Paulson, speaking about the rescue plan said a bold approach is needed to remove troubled assets from the books of financial firms. He offered few details, but said he would work on it through the weekend with congressional leaders.

A plan to help the banking industry could help alleviate the uncertainty that has been sending the markets into tumult over the past week. Lending has grinded to a virtual standstill in the wake of this week’s bankruptcy of Lehman Brothers Holdings Inc. and the bailout of teetering insurer American International Group Inc.

The government took other steps Friday to restore stability to the financial system. The Federal Reserve said it will expand its emergency lending and let commercial banks finance purchases of asset-backed paper from money market funds. The Fed will also buy short-term debt obligations issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

And to help calm investors’ anxieties, the Treasury Department has decided to use a Depression-era fund to provide guarantees for U.S. money market mutual funds. Money market mutual funds are typically considered safe, but many investors have been fleeing them due to worries about the funds’ exposure to souring corporate debt.

To help limit the freefall in financial stocks, the Securities and Exchange Commission on Friday enacted a temporary ban on the short-selling of nearly 800 financial stocks. Short-selling is the common practice of betting against a stock by borrowing shares and then selling them in the open market. A short-seller’s hope is the stock will fall; if it does, the stock can be bought back at the lower price. Those cheaper shares can be returned to the lender, allowing the investor to pocket the profits.

Wall Street observers have disagreed over the extent to which pressure from all those bets that a stock will fall shaped investor sentiment and strangled some financial stocks, like those of Lehman Brothers last week. Some say the fundamental problems with the financial stocks warranted the pessimism while others say the short selling was a death knell for some financial names.

“The federal government has been petitioned by Wall Street to take evasive action in the money markets, the stock and bond markets, to avoid a complete meltdown of the credit system,” said Battipaglia. “Once the credit system melts down, the economy falls. We can hand-ring about if this is the proper thing for the government to do, or if Wall Street pulled the panic button too soon, but that’s something for the historians to sort out.”

In late morning trading, the Dow rose 375.35, or 3.41 percent, to 11,395.04.

Broader stock indicators also surged. The Standard & Poor’s 500 index rose 42.22, or 3.50 percent, to 1,248.73, and the Nasdaq composite index rose 62.67, or 2.85 percent, to 2,261.77.

Treasury prices dropped as investors poured money back into stocks. The yield on the 3-month Treasury bill — a safe investment to which investors have rushed this week — rose to 0.80 percent from 0.07 percent late Thursday. Yields move opposite from price. The yield on the benchmark 10-year Treasury note shot up to 3.77 percent from 3.53 percent late Thursday.

“Everything they had done had been a Band-Aid approach, at the margins,” said Jay Mueller, economist at Strong Capital Management. “Now we’re dealing with the root problem.”

On Thursday, the Fed and other major central banks around the world joined forces to inject as much as $180 billion into global money markets in an attempt to keep the credit crisis from worsening. But with worries swirling about the financial health of such major companies as thrift bank Washington Mutual Inc. and investment bank Morgan Stanley, the cash infusion was not enough to alleviate the tension on Wall Street.

An afternoon report, however, that the government was in the midst of crafting a plan to assume banks’ bad debt led to a late-day surge in stocks. The Dow rose 410.03, or 3.86 percent, its biggest percentage point gain since October 2002.

“If a solid plan is put in place, it’s definitely going to be a positive in easing the pain,” said Stephen Carl, principal and head of equity trading at The Williams Capital Group. He added, though, that “it depends on how it’s structured.”

Wall Street’s whipsaw week saw a massive loss Monday, a rebound on Tuesday, another drop Wednesday, and the rally on Thursday.

The dollar rose against most other major currencies in Friday trading. Gold prices fell. Light, sweet crude for October delivery rose $1.44 to $99.32 a barrel on the New York Mercantile Exchange.

Advancing issues outnumbered decliners by about 8 to 1 on the New York Stock Exchange, where volume came to an enormous 1.38 billion shares.

The Russell 2000 index of smaller companies rose 23.51, or 3.25 percent, to 747.32.

Overseas stock markets soared. Japan’s Nikkei stock average jumped 3.8 percent, and Hong Kong’s Hang Seng index surged 9.61 percent. In Europe, Britain’s FTSE 100 surged 7.88 percent, Germany’s DAX index jumped 4.90 percent, and France’s CAC-40 rose 7.95 percent.

Source : AP - 19 Sept 2008

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Sales of investment property stagnating

Sales of investment property stagnating

By Michelle Tay

SALES of investment property are in the doldrums with the global financial mayhem and credit crisis slowing buying interest so far this quarter.
Nearly all sectors have been ‘relatively quiet’ apart from the hospitality industry, which has ‘remained healthy’, said a CB Richard Ellis (CBRE) report yesterday.

CBRE said a total of $3.17 billion worth of investment transactions have been recorded so far this quarter - the period actually runs until Sept 30 - down from $4.86 billion in the April-June quarter.

The figure is also a fraction of the $16.51 billion recorded in the third quarter last year, and likely to mark the fourth consecutive quarter that investment transactions have dropped.

Total investment sales for 2008 so far have totalled $17.12 billion.

CBRE’s director of investment properties, Mr Jeremy Lake, said this year will likely round up at about $18 billion, a third of 2007’s bumper $54.02 billion.

‘If you look at the freak year of 2007, yes, it is a huge drop. But if you look back to 2004, it’s still the third highest result of the last five years,’ said Mr Lake.

The second highest total for investment sales occurred in 2006 when transactions hit $28.38 billion.

CBRE’s report said the latest results are because tighter credit measures have brought about a temporary halt to major investment decisions as investors take stock of the local property market.

Mr Lake also said the spectacular failure of two large US banks this week will ‘compound the slowdown that is evident in the statistics’ and ‘exacerbate the uncertain outlook’.

CBRE defines investment sales as real estate sales with a value of at least $5 million. It includes private and government sales, buildings and land, strata and en bloc, as well as the change of ownership of real estate via share sales.

The report said the industrial sector has accounted for 61 per cent of sales so far in this quarter. Retail investment sales contributed the least, just $215.04 million, or 7 per cent, of sales.

CBRE blamed rising construction costs, higher interest rates and tighter lending measures for the inactivity.

It added that investors are expected to ’stay on the sidelines’ in view of the cautious market conditions.

Source : Straits Times - 19 Sept 2008

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New CPF rule for Singapore home sellers aged 55 and above

New CPF rule for Singapore home sellers aged 55 and above

It will address shortfalls in their Minimum Sum to build up retirement funds

By Fiona Chan, Property Reporter

A LITTLE-KNOWN rule change will kick in next year regarding how much money property owners must return to their Central Provident Fund (CPF) accounts when they sell their homes.
The new rule, which will address shortfalls in an individual’s Minimum Sum, is aimed at helping CPF members build up their retirement funds.

Currently, home owners aged 55 and above do not have to refund their CPF accounts when they sell their properties, unless they have pledged their homes to meet their Minimum Sum requirement. In that case, they will pay back to the CPF the amount they have pledged their home for - with interest.

But from Jan 1, all home sellers over 55 who use CPF funds to pay for their properties will have to pay back this money - plus interest - up to their Minimum Sum requirement.

If they have withdrawn less CPF money than the shortfall in their Minimum Sum, they will need to refund only what they have withdrawn, including interest, currently at 2.5 per cent a year. They do not need to make up for the rest of the shortfall in cash.

Home sellers who do not receive enough from the property sale to refund the Minimum Sum deficiency will not be required to top up the shortfall, as long as the property is sold at market value.

To see how the rule change works, consider the case of Mr Tan, a 58-year-old home owner whose Minimum Sum requirement is $90,000.

He has only $30,000 in his retirement account, so his shortfall is $60,000. To help make up for this difference, he has pledged his property for $45,000.

If Mr Tan sells his property this year, he will pay back to the CPF what he has pledged the property for, plus interest, which works out to, say, $51,000.

But if he sells his property next year under the new rule, he will have to pay back the amount he has withdrawn, capped at his Minimum Sum deficiency - that is, $60,000.

This rule change, which was first announced during the Budget debate last year, will not affect those under the age of 55, or who turned 55 before July 1, 1995.

While home sellers under 55 have to refund any CPF money used to buy their properties, this rule has not been enforced uniformly for those above 55, said Manpower Minister Ng Eng Hen last year.

‘Specifically, we have only recovered the property pledge from them and not the shortfalls for the cash portion of the Minimum Sum,’ said Dr Ng when he introduced the rule change in March last year.

The Minimum Sum that applies to any individual CPF member depends on the year he or she turns 55. Those turning 55 between July 1 this year and June 30 next year will have a Minimum Sum of $106,000, for instance.

Generally, the impact of this rule change is likely to be small, said Mr Christopher Tan, chief executive of independent private wealth firm Providend.

‘To begin with, most people would have pledged their house as part of the Minimum Sum because they want to take out more money at 55,’ he said.

‘When they sell their house, they would have to put back that money anyway. With the new rule, you refund your CPF account only up to the Minimum Sum, which is, in all likelihood, less than what you withdrew from the CPF to pay for it.’

LIMITED IMPACT
With the new rule, you only refund your CPF account up to the Minimum Sum, which is, in all likelihood, less than what you withdrew from the CPF to pay for it.’

Mr Christopher Tan, chief executive of independent private wealth firm Providend, saying the impact of the rule is likely to be small

Source : Straits Times - 19 Sept 2008

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Singapore AIA puts out ads to reassure policyholders

Singapore AIA puts out ads to reassure policyholders

Fewer than 2,600 policies surrendered; penalty waived for reinstating policies

By Lorna Tan, Finance Correspondent

INSURER AIA Singapore went into damage control mode on two fronts yesterday after two days of near-mayhem at its service centre.
It took out full page advertisements in local newspapers reiterating that it could meet all policyholder obligations.

And it has agreed to waive the usual penalties for reinstatement of policies if customers cash out but later change their minds.

It also announced last evening that its executive vice-president and general manager, Mr Mark O’Dell, has resigned with immediate effect.

Fewer than 2,600 plans have been terminated over the past two days, despite thousands of worried policyholders flocking to its offices, apparently keen to cash out.

The insurer said in a statement yesterday that less than 0.1 per cent of total policies in force were surrendered. AIA has 2.6 million policies in total.

The new scheme - called the policy conservation programme - applies to whole life and endowment policies. Policyholders who surrender their policies this week - Sept 15 to Sept 19 - can reinstate their plans without penalties. They will also not have to submit evidence of insurability such as health reports.

Written requests for reinstatement must be received by AIA within 14 days of the date of surrender.

‘These policies will be reinstated in full as if they had never been surrendered. No interest will be charged on back premium and/or cash value returned to AIA,’ said the insurer.

‘Any dividends will be re-deposited into the policyholder’s account and interest will continue to be accrued from the date of reinstatement.’

The Monetary Authority of Singapore (MAS) welcomed the AIA move. It also reiterated that AIA has sufficient assets in its insurance funds to meet its liabilities to policyholders and urged customers not to act rashly.

Mr Low Kwok Mun, MAS’ executive director (insurance supervision), said: ‘Policyholders should not act hastily to terminate their insurance policies as they may suffer losses from the premature termination and lose the insurance protection they may need.’

The Life Insurance Association (LIA) urged members yesterday not to take this opportunity to poach AIA customers.

‘The LIA takes very seriously any attempt by distributors to target AIA policyholders and advise them to surrender or replace their policies,’ it stated.

‘[We] would remind customers that life insurance products are designed for certain durations, and that therefore there are significant disadvantages if they are terminated early.’

The efforts to ease concerns seem to have had an effect with only a small queue of customers lining up at AIA’s offices yesterday.

The firm has also devised a more effective crowd control measure. They limited the number of policyholders who would be attended to at the Finlayson Green service centre to 500 yesterday.

By contrast it handed out about 1,000 queue numbers on Wednesday, which kept service staff flat out until 12.30am.

‘We can’t handle so many customers. We need our rest so we can continue to work the next day,’ a tired AIA staff told The Straits Times yesterday.

AIA was prepared to give out 400 queue numbers in advance for today’s appointments. By 2pm, 200 queue numbers were snapped up.

Policyholder Ms Soh, 50, was disappointed to be given a number and told to return at 11am today. She wanted to surrender two policies, one a 21-year endowment plan.

AIA staff will be contacting policyholders who surrendered their whole life and endowment plans during the week to ask if they wish to reinstate their policies. Policyholders can also call its hotline 6248 8355.

Source : Straits Times - 19 Sept 2008

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Central bank funds cheer markets

Central bank funds cheer markets

Losses pared after blitz to inject billions of dollars into the system
By Alvin Foo, Markets Correspondent

A COORDINATED blitz by key central banks to inject billions of dollars into the global financial system has helped calm some of the worst carnage seen on Asian stock markets in the current crisis.
Last night, the move also boosted Wall Street after a disastrous 4 per cent plunge the previous night.

THE GREAT BANK FIRE SALES
The Dow Jones Industrial Average jumped as much as 214 points, or 2 per cent, to 10,823.72 in early trade, joining key European bourses which also rallied.

Earlier, across Asia, bourses yesterday endured a white-knuckle, roller-coaster ride as panicked investors initially fled stocks seeking ultra-safe investments.

One of the most popular safe havens, gold, posted its biggest US dollar gain ever on Wednesday - up 11 per cent to US$870 an ounce.

Analysts said this flight to safety was the most dramatic seen since World War II, causing many credit markets to stop functioning normally, and the cost of borrowing to soar for many companies.

Fear and panic were so dominant that investors snapped up three-month Treasury bills offering negligible returns.

As credit dried up even more dramatically, the rate at which banks charge each other for overnight loans hit 6.4 per cent at one point - about treble its usual level.

By lunch-time some Asian markets had plunged to multi-year lows.

Then came a united effort by the central banks to pump massive funds into bone-dry money markets. This helped fuel a strong recovery as major Asian markets recovered most of their heavy losses.

‘We went from extreme gloom to relief, then mild ecstasy in a few hours,’ said a local remiser. ‘Investors suddenly realised that the authorities can’t afford to let Wall Street crash any further.’

The US Federal Reserve said it will make available US$180 billion (S$258 billion) in extra funds to be pumped into money markets. The European Central Bank (ECB) and the Bank of England will each offer up to US$40 billion in overnight funds.

In a joint statement, the ECB, and central banks of Japan, England, Canada and Switzerland pledged to ‘continue to work closely together and take appropriate steps to address the ongoing pressures’.

Barclays Capital’s European economist Julian Callow told The Financial Times: ‘The timing, so early in the trading day, shows both the severity of the strains in the interbank market, and the authorities’ determination to resuscitate orderly functioning of the money markets.’

At home, the Monetary Authority of Singapore said it was ready to pump in funds if necessary.

US dollar borrowing rates here had been elevated due to the money market turmoil, but ‘appear to have eased’ after the central banks’ efforts, it said.

An MAS spokesman said Sing dollar interest rates were ‘orderly’ during this time, with sufficient liquidity. She added: ‘The MAS has been in close contact with other major central banks, and stands ready to inject additional liquidity as the situation may warrant.’

But many investors are still betting US government bailouts and mega-mergers will prove insufficient to calm the markets. Gold is seen as a key indicator.

‘For as long as people are worried about banks, people will buy gold,’ National Australia Bank analyst Gerard Burg told Reuters.

One of the triggers for the early mayhem on Asian markets was Wall Street’s overnight slump, which saw US stocks sinking to their lowest close since November 2005. The Dow plunged nearly 450 points on Wednesday to 10,609.66.

Market players said short sellers were largely to blame for the panic selling, which drove two of Wall Street’s remaining investment banks Goldman Sachs and Morgan Stanley shares to their steepest one-day declines.

Morgan Stanley’s chief executive John Mack pulled no punches in a staff memo: ‘We’re in the midst of a market controlled by fear and rumours, and short sellers are driving our stock down.’

But US securities regulators have tightened rules on these traders, who profit from stock declines.

More than US$3.6 trillion has been wiped off the value of global equities this week in the wake of US investment bank Lehman Brothers’ bankruptcy filing and insurance giant AIG’s near-collapse.

Last night, US President George W. Bush said he was concerned about the financial markets and that his administration was working to strengthen them. They were his first public comments since the AIG rescue.

In Asia, the day’s plunge and recovery was best seen in Hong Kong, where the Hang Seng Index had collapsed 7.4 per cent at the mid-day break before closing a mere 0.03 per cent down at 17,632.46.

At home, the Straits Times Index sank 109 points, or 4.5 per cent, at the interval - bound for its lowest close since July 2006 - before closing just 0.08 points down at 2,419.21.

Given this week’s meltdown, some analysts finally feel the worst may be over in terms of stock market slumps.

Mr Jan Lambregts, the Hong-Kong based head of Asia research at Rabobank International, said: ‘ It’s one of the darkest periods for equities, but we’ve past the mid-point of the crisis.’

But others remain bearish.

‘There could be more skeletons in the closet,’ said a local stock market dealer.

Source : Straits Times - 19 Sept 2008

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Lloyds buys LONDON HBOS for £12.2 billion

Lloyds buys LONDON HBOS for £12.2 billion

40,000 jobs could be cut, hundreds of branches closed

(LONDON) British bank Lloyds TSB yesterday agreed to buy rival HBOS for £12.2 billion (S$31.3 billion) as the raging global financial storm claimed another victim.

It’s a deal: Lloyds TSB chairman Victor Blank (right) and HBOS chief executive officer Andy Hornby leaving the Lloyds headquarters in London yesterday
Shares at Lloyds fell 4.7 per cent on the London Stock Exchange (LSE) to 266.75 pence in mid-afternoon trading yesterday. HBOS’ shares shot up 40 per cent to 205 pence in reaction to the takeover bid pitched at 232 pence per share and aimed at creating Britain’s third-largest bank behind Royal Bank of Scotland and HSBC in first place.

‘Lloyds TSB and HBOS announce that they have reached agreement on the terms of a recommended acquisition by Lloyds TSB of HBOS,’ the pair said in a statement.

Analysts estimated that up to 40,000 jobs could be lost from the banks’ combined 145,000 staff following the deal and that hundreds of branches could close. HBOS has 1,100 on Britain’s high streets and Lloyds TSB 1,900.

Business Secretary John Hutton is effectively extending Britain’s Enterprise Act to ensure that the deal goes through ‘on public interest grounds’, his department said in a statement shortly after the deal.

The landmark all-share merger, effectively a rescue plan for Britain’s biggest mortgage lender, comes after HBOS shares plummeted in recent trading following days of global stock market chaos and economic gloom.

Lloyds TSB shareholders would own 56 per cent of the issued share capital under the acquisition and existing HBOS shareholders 44 per cent.

HBOS, or Halifax Bank of Scotland, is the latest global bank to fall foul of the ongoing credit crunch following the collapse of US group Lehman Brothers, the sale of Merill Lynch and the rescue of insurer AIG earlier this week.

‘This is the right transaction for HBOS and its shareholders,’ said HBOS chairman Dennis Stevenson in the release.

‘Against the backdrop of the very high levels of volatility our industry is experiencing, the combined group will be one of the strongest players in the UK financial services sector.’

Analysts and regulators expressed hope that the rescue takeover deal would draw a line under persistent questions about the funding of HBOS that have dogged the group’s share price in recent days and weeks.

HBOS and Lloyds TSB together hold nearly a third of Britain’s savings and mortgage market, but competition watchdogs will not block the deal as it was backed by the government.

The deal was expected to be completed towards the end of the year or in early 2009. HBOS shareholders will receive 0.83 Lloyds TSB shares for every HBOS share.

Lloyds CEO Eric Daniels will remain as chief executive and Victor Blank will stay as chairman. — AFP, Reuters

Source : Business Times - 19 Sept 2008

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Slide in Singapore property investment deals continues in Q3

Slide in Singapore property investment deals continues in Q3

Global financial instability, stock market volatility hit sentiment: CBRE

By EMILYN YAP

PROPERTY investment sales continue to soften in Q3 2008 and global financial instability could keep investors out of the market, said a CB Richard Ellis (CBRE) report.

According to latest figures from CBRE Research, property investment transactions in Q3 (up to Sept 18) reached $3.17 billion. This is a 35 per cent drop from $4.86 billion in Q2 and a 65 per cent slide from $9.09 billion in Q1 this year. On a quarterly basis, property investment sales last peaked in Q3 2007 at $16.51 billion.

‘The lingering worldwide impact of the US-spawned credit crisis has compounded financial instability in most global economies, compelling many regional investors to adopt a cautionary attitude,’ said CBRE’s report.

Many are holding back on major investment decisions as credit conditions tighten, and stock market volatility has also hit investor sentiments, it said.

Driving property investment sales in Q3 was the industrial sector, which accounted for 61 per cent or $1.92 billion of transaction value. However, most of the sector’s contribution came from a single $1.71 billion deal, in which JTC Corporation divested its industrial property portfolio to Mapletree Industrial Trust.

The residential sector was the next largest contributor, registering 26 per cent or $807.79 million of property investment sales in Q3. There was only one successful collective-sale deal in the period, where an unnamed developer bought Ruby Apartments for $11 million.

‘Developers’ ability to acquire sites was dampened by rising construction costs, rising interest rates and tighter lending measures,’ said the report. Investment activity in the retail and office sectors was also quiet in Q3, with transaction values of $215.04 million and $142.84 million respectively.

While the hospitality sector accounted for just $100 million of property investment sales, CBRE noted that the limited supply of hotel rooms today would attract greater investor interest in the medium term.

Property investment sales chalked up in the year to date stood at $17.12 billion, with 65 per cent coming from the residential and office sectors. While this is some distance from the $54.02 billion achieved for the whole of 2007, it has already exceeded the $14.66 billion in 2005.

‘Looking ahead, investors are expected to stay on the sidelines in view of the cautious market conditions that are likely to prevail until the end of the year,’ said the CBRE report. Nevertheless, it noted that demand for quality assets as a hedge against inflation may provide some support for investment activity the rest of the year.

Source : Business Times - 19 Sept 2008

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Singapore AIA loses its boss amid the storm

Singapore AIA loses its boss amid the storm

Mark O’Dell quits; rivals said to be eyeing AIG’s assets worldwide

By GENEVIEVE CUA

(SINGAPORE) Amid the drama surrounding its US parent, AIA Singapore yesterday announced the shock departure of its executive vice-president and general manager Mark O’Dell, who is understood to be joining another insurance firm.

Mr O’Dell: His decision to leave is not related to the recent developments at AIG but a personal decision that he has been planning for some time
AIA’s US parent AIG Inc was extended a lifeline by the Federal Reserve, a loan of US$85 billion for a 24-month term. In return, the Fed will own 79.9 per cent of the ailing insurance giant. But it is clear that AIG must sell assets to repay the loan.

News articles yesterday speculated that European insurers are hoping to snap up AIG’s assets in Europe and Asia. Hong Kong’s AIA has denied a report of a management buyout. AIA Singapore was not specifically mentioned though it remains in the same boat as its siblings.

David Havens, credit analyst at UBS AG, told Bloomberg that AIG has ‘the best Asian insurance franchise in life and general insurance of any Western company’. Companies named as possible buyers of AIG assets include Prudential, Munich Re and Allianz SE.

AIG has been hit by US$18 billion in losses arising from guarantees on mortgage derivatives. Ratings downgrades exacerbated its liquidity crunch, forcing it to raise another US$14.5 billion which it did not have.

On Mr O’Dell’s departure, Mark Wilson, AIA president and regional president of AIG Life Companies (Asia-Pacific), said in a statement last night that Mr O’Dell has taken leave of absence with immediate effect.

‘(Mr O’Dell’s) decision to leave the company is in no way related to the recent developments at AIG. It is a personal decision that he has been planning for some time,’ he said.

Kenneth Juneau, executive vice-president and senior regional life executive of AIA’s regional office, will take over Mr O’Dell’s portfolio in the interim ‘until a statement is made on the new general manager for AIA Singapore’. Mr Juneau is an AIA veteran with more than 30 years’ experience in the insurance industry.

Meanwhile, the company yesterday also said that it has rolled out a ‘policy conservation programme’ to enable those who had cancelled policies in the last couple of days to reinstate them at no cost or penalty.

Some 0.1 per cent of policies were cancelled in the last couple of days by policyholders worried about the possibility of insolvency. With over two million in-force policies, this works out to about 2,000 cancellations.

In the last couple of days since news broke of AIG’s troubles, hundreds of policyholders had thronged AIA’s office to cancel policies or to get more information.

The reinstatement programme will apply to whole life and endowment plans surrendered between Sept 15 and 19. While there will be no penalties, policyholders will need to submit evidence of insurability. Written requests for reinstatement must be received by AIA within 14 days of the date of surrender.

The policies will be reinstated in full, with no interest charged on the back premiums and cash values returned. Any dividends will be re-deposited into the policyholder’s account and interest will continue to accrue from the date of reinstatement.

Mr Wilson said: ‘We have received feedback that many of our customers are now more reassured of AIA Singapore’s financial position and would like to continue to enjoy the insurance protection and accumulated savings that their policies offer.’

The Monetary Authority of Singapore (MAS) said: ‘We are satisfied with the ability of the company to carry on business as usual and to meet new demands even when there are any changes in management.’ It also said that it welcomes AIA’s policy reinstatement programme and reiterated that the firm has sufficient assets to meet its liabilities to policyholders.

‘Policyholders should not act hastily to terminate their insurance policies as they may suffer losses . . . and lose the insurance protection they may need,’ said MAS executive director (insurance supervision) Low Kwok Mun.

The Life Insurance Association (LIA) also said that AIA policyholders ‘have no cause for concern with regards to their policies’. It said that policyholders should refrain from hastily cashing in their policies ‘based on unfounded fears regarding the financial health of its US based parent’.

It also warned against any poaching of AIA clients by other insurers, adding: ‘The LIA takes very seriously any attempt by distributors to target AIA policyholders and advise them to surrender or replace their policies.’

Mr O’Dell was LIA president. The deputy president is Darren Thomson, Manulife chief executive.

Source : Business Times - 19 Sept 2008

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Malaysia Anwar calls for emergency no-confidence vote on PM

Malaysia Anwar calls for emergency no-confidence vote on PM

KUALA LUMPUR - Malaysia’s opposition leader Anwar Ibrahim Thursday called for an emergency session of parliament to hold a no-confidence vote against the prime minister.

Anwar promised to use the special sitting to prove his claim he has the support of enough government defectors to topple Prime Minister Abdullah Ahmad Badawi’s Barisan Nasional ruling coalition.

“Today, the Pakatan Rakyat (opposition alliance) leaders have submitted a letter to the PM requesting him to call an emergency session of parliament to deliberate a motion of censure against the leadership of Abdullah Ahmad Badawi,” he said.

Anwar said he would name the defectors at the session, which he hoped would be held no later than September 23. The next parliament session is only due to begin on October 13.

“Convene an emergency session and you will see in parliament,” he said, adding that “it is critical for the prime minister to respond.”

“We face a major economic crisis. It is pertinent that they think of the nation and not the interest of themselves.”

Anwar needs the support of 30 government lawmakers to take control of the 222-seat parliament.

He stepped up the pressure on Abdullah a day after the small National Front party on Borneo island quit the ruling coalition, and the prime minister indicated he may step down earlier than planned.

Abdullah is facing dissent from his own United Malays National Organisation (UMNO) to quit after the ruling coalition was hammered in the March 8 polls.

His popularity on the streets is at an all-time low amid high inflation.

Anwar said he may seek a meeting with the king to stake his claim if Abdullah failed to convene the emergency session.

“I am not discounting the possibility,” he said.

Anwar also said there was no reason for the government to detain him under the tough Internal Security Act (ISA), which allows indefinite detention without trial.

“There is no reason why I should be arrested under the ISA. This is clearly not an option for any responsible leadership. This (Abdullah’s government) is now a minority government. The majority of MPs are with the opposition alliance,” he said.

Anwar called Monday for a meeting with Abdullah to arrange a smooth transition of power, but the premier refused and demanded he release the names of the defectors.

Abdullah then delivered a warning to Anwar, a former deputy premier who was sacked and jailed a decade ago, accusing him of “lying to the public and confusing the people.”

“He has become a threat to the economy and national security,” he said. This is a serious allegation in Malaysia, where the government can use internal security laws to detain its opponents without trial.

Last Friday police arrested an opposition MP, a blogger and a journalist under the security law citing security concerns.

Teresa Kok, from the Democratic Action Party (DAP), a member of the opposition alliance, was arrested along with Malaysia’s top blogger Raja Petra Kamaruddin.

A journalist for a Chinese-language newspaper was also arrested after reporting on racist comments made by a ruling party member, but was quickly released after an uproar including from within the government. - AFP/vm

Source : Channel NewsAsia - 19 Sept 2008

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99% of S’pore F1 tickets sold

99% of S’pore F1 tickets sold

By Patwant Singh,

SINGAPORE: Organisers on Thursday said that 99 per cent of the Singapore Formula One (F1) tickets have been sold, and are confident that the remaining few hundred will be snapped up over the next few days.

Just a week to go before the world’s first night race kicks off on September 26, organisers are putting the final touches to the track and its surrounding areas.

The final piece for the lighting system next to the paddock was put in place on Tuesday, and the lights will have to be tested for 100 hours.

But they will only be illuminated in the daytime so that the test does not spoil the surprise for visitors during the actual event.

Said Valerio Maioli, a lighting expert: “At the end of this weekend, many visitors will arrive, many journalists will arrive, and I wish (this) will be a surprise for them.”

The Singapore lighting system has a new feature called ‘effects lighting’.

Cylindrical lights mounted on top of the pylons can create a running lights effect, or even be synchronised with the ‘digi flags’ during the race.

Other areas receiving final touches are the 160 corporate hospitality suites and the pit building, which will house the Paddock Club, where the VIPs will be.

The more aesthetically appealing ‘Tech Pro’ barriers, instead of tyres, will also be used for the Singapore race.

Other safety features are concrete safety barriers and debris fencing along the entire length of the five kilometre track.

More grand stand seats are also being installed around the circuit.

In case it rains, the organisers will have ponchos available for sale at S$2 each. The ponchos come with a pair of ear plugs, and proceeds of the sale will go to charity.

Singapore GP said all the works are expected to be completed by this weekend, just as the main teams are arriving.

- AFP/yb

Source : Channel NewsAsia - 19 Sept 2008

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mindy@mindyyong.com ( email me )