Singapore MM Lee believes property values will continue to rise in long term

Singapore MM Lee believes property values will continue to rise in long term

By Pearl Forss,

SINGAPORE: VIPs including Minister Mentor Lee Kuan Yew had the chance to tour The Pinnacle@Duxton on Sunday, and they were impressed by what they saw.

All seven blocks at The Pinnacle are linked by sky-bridges.

On the top-most 50th storey is a sky garden with breathtaking views of the cityscape. HDB names it “The Contemplative Zone”.

On the 26th storey, there is an 800-metre long jogging track as well as fitness centres.

The Pinnacle has the highest HDB blocks in Singapore. Prices are similarly high for late buyers.

When it went on sale in 2004, 4-room flats cost $288,400 to $392,100 and 5-roomers cost $343,100 to $451,100.

428 units were offered for sale in September 2008, and this time 4-room flats cost $450,000 to $550,000 while 5-room flats cost $550,000 to over $600,000.

The Pinnacle has 1,848 units in total.

HDB says the flats still cost less than what nearby flats are fetching on the resale market.

5-room flats in the vicinity cost $593,000 to $670,000.

Minister Mentor Lee said property values are bound to go up in the long run because the government is continuously building more infrastructure and attracting higher-value investments that provide higher wages to employees.

- CNA/ir

 
Source : Channel NewsAsia  - 10 Nov 2008

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Resorts World at Singapore Sentosa starts hiring for Universal Studios

Resorts World at Singapore Sentosa starts hiring for Universal Studios

By May Wong,

SINGAPORE: Resorts World at Sentosa wants to hire 2,300 people for its theme park operations by the second quarter of next year.

Its assistant vice-president for Communications, Robin Goh said the company has started to fill 300 managerial and supervisory positions for the Universal Studio operations here.

The integrated resort will send 100 of them to the Universal Studios in Orlando, US for some four months of training.

Mr Goh said some of the 200 managers will spend about two weeks there.

He said this will cost Resorts World at Sentosa about S$5 million. This is part of the company’s training budget.

This news comes less than a month since Marina Bay Sands Resort announced its massive recruitment drive.

Resorts World at Sentosa confirms its on track to open in early 2010.

Mr Goh said the integrated resort will also keep its promise of offering 10,000 jobs where Singaporeans will get priority in the hiring.

Of the 10,000 jobs, 30 per cent or 3,000 jobs will go to the Universal Studios operations here.

In addition, Resorts World is also working with four polytechnics - Temasek, Ngee Ann, Nanyang and Singapore Polytechnics.

They’re planning to send about 100 of the poly students to the Universal Studios in Orlando for internships starting next year. They’ll spend about four months there.

When the students return home, they may get a job at the Universal Studios in Singapore. - CNA/vm

 
Source : Channel NewsAsia  - 10 Nov 2008

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Some investors went in with eyes open:Singapore MM Lee

Some investors went in with eyes open:Singapore MM Lee

On the global crisis, he says Singapore’s reserves can see the country through without going broke

By JAMIE LEE

SOME investors who are now seeking compensation from the soured Lehman Minibond purchases went in ‘with their eyes open’, Minister Mentor Lee Kuan Yew said yesterday.

In his constituency: MM Lee visiting the site of Pinnacle@Duxton and attending the Tanjong Pagar GRC Tree Planting Day yesterday
‘The MAS (Monetary Authority of Singapore) has told the banks if there’s any mis-selling, you’ve got to put things right,’ said MM Lee, after touring the site of the 50-storey Pinnacle@Duxton in Tanjong Pagar.

‘But many went in with their eyes open. They are not old, they are not uneducated. Now they say, ‘Please include me too’. Well, that’s hard lines and you’ve got to go according to what is fair.’

Read the small print, he urged investors.

‘Higher returns means higher risk,’ said MM Lee, who is also chairman of Government of Singapore Investment Corporation.

‘So when somebody tells you, you get 11/2 per cent from the bank, I give you 5 per cent, read the small print carefully because how can they pay you 5 per cent unless they are in dire need of the money?

‘And if they are in dire need of the money, would you want to buy what they sell you?’

He added that according to the law, such cases are closed but banks are making the effort because they need to claim their goodwill and their reputation.

‘On that message, I’ll leave you to ponder about your next purchase.’

MM Lee noted earlier that the government would need to make ‘a realistic estimate’ of how the country can afford additional electricity and workfare rebates over the next four months prior to next year’s Budget.

‘We cannot restore to people what they were enjoying before the worldwide crash. But we will make sure that nobody falls below the poverty line.

‘We all have to accept some sacrifices and cutbacks. Everyone has to put up with some austerity until the economy turns around when the world economy picks up.’

No one can predict how long or deep this downturn will be, said MM Lee. ‘Recovery will come when the property market in America reaches bottom and begins to rise. That may not be for many months or even years.’

Singapore’s reserves, he said, can see us through this crisis without going broke, although we have no natural resources.

He also said Singapore has learnt from the Asian financial crisis by not allowing a speculative rise in residential property prices. ‘Few citizens have bought homes that they cannot afford to service their instalments on their mortgages,’ he said, adding that while pricey condominiums and office properties have declined in prices, prices of HDB flats have gone down only slightly.

‘It is because there is real demand from our own citizens, especially new citizens. And permanent residents are buying used HDB flats in the open market. These have kept our HDB flat prices up.’

Source : Business Times - 10 Nov 2008

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Better to miss out on the best if it helps avoid the worst

Better to miss out on the best if it helps avoid the worst

By R SIVANITHY
SENIOR CORRESPONDENT

FEAR manifests itself in the stock market in two and only two ways. First is fear of losing money, which emerges when prices are plummeting and all mayhem is breaking loose, as was the case for most of last month. This stage is characterised by plenty of hand- wringing as investors agonise over whether to sell, or cut losses, or pay up their margin calls or, in the case of die-hard believers, to try and ride out the plunges and hope that one day they’ll be in the black again.

Second is fear of losing the chance to make money, which occurs when a sudden rebound occurs and the majority are caught unprepared. The hand-wringing is then complemented by kicking oneself - sometimes with both feet - for not having had the courage to have bought earlier.

Since the Straits Times Index has now bounced almost 20 per cent from its intraday low of 1,500 a couple of weeks ago, there must be plenty of self-inflicted kicking going on, which together with equal doses of hand- wringing, is followed by the inevitable, gnawing question: should I take the plunge or risk being left out?

The mistake investors make when fear of losing out takes hold is to rely on most recent memory, say the two to three weeks just passed, and extrapolate this to the next most immediate period. It doesn’t work that way at all - in this environment, patience is a virtue because it’s much wiser to miss out on the best if it helps you avoid the worst.

First, volatility is still way too high, with 5-10 per cent intraday swings now commonplace. This is one legacy of the Greenspan/Bernanke/Bush administration, which failed to detect the widening fissures in the US property and banking markets and kept marvelling at just how strong its economy and banking system were even when the cracks appeared.

Second is that the worst of the economic crunch has yet to be seen. US unemployment can rise as high as 8 per cent - unheard of in the modern era - and nobody knows with even the slightest clarity when things will improve. As research outfit Ideaglobal said over the weekend on asking whether it’s time to call a recession: ‘Old wisdom has it that if it looks like a duck and quacks like a duck, chances are it’s a duck.’

Third is the problem of how to shake off the present recession and inevitable depression to follow. There is no guarantee that the standard policy responses of cutting interest rates to zero to try and engineer positive inflation and generous tax cuts to stoke consumer spending and demand will work - Japan has tried everything but has been mired in a deflationary environment for almost 20 years with nothing seeming to work.

Interestingly, Federal Reserve chairman Ben Bernanke six years ago delivered a speech that dealt with deflation, in which he said prevention is better than cure because of the difficulties associated with the cure. It’s also worth noting that he said there was no imminent threat of deflation at the time because the US economy was so strong and the banking system was so robust and well-regulated. It’ll certainly be interesting to see if he lives up to his preferred prescription at that time of resorting to the printing press and flooding the market with US dollars to combat deflation. In the worst-case scenario, all he may be doing is following in the footsteps of his predecessor Alan Greenspan - as one commentator noted about the hoped-for bailouts: ‘Let’s start another cycle of easy credit, leading to leverage, no regulation, opaque self-serving instruments of mass financial destruction, leading to another bubble, leads fat cats to whine, brings a federal bailout and lets the cycle repeat itself.’

As for the local market, its fortunes will continue to be dictated by expectations of how Wall Street might perform later each day - Friday’s bounce in the Straits Times Index despite a huge US loss on Thursday confirms that programme trades buy stocks here first before the US.

However, Wall Street’s rise on Friday was most likely due to short-covering after a 10 per cent collapse on Wednesday and Thursday and is very likely to fizzle out soon. The upshot of all this is that patience is a virtue and that it’s better to miss out now than regret being hasty later.

Source : Business Times - 10 Nov 2008

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Traders are in for another roller-coaster ride

Traders are in for another roller-coaster ride

By ANDREW MARKS
NEW YORK CORRESPONDENT

IF investors were hoping that the tentative return to function - if not full health - of the credit markets would signal a bottom for the bear market and bring some much-needed stability to the US stock market, they found that they were sorely mistaken last week.

Although some of the record-high volatility that has plagued the markets the past two months receded as the commercial paper market - which businesses tap for the shortest of short-term loans to fund day-to-day cashflow needs - has thawed, the dark clouds of uncertainty and fear remained firmly in place, and forecasts call for more stormy trading sessions ahead.

Stock market strategists warned, in fact, that the coming weeks will likely remain highly volatile and the major US market indexes will again threaten to break into ever lower territory as the extent of the damage to the economy here and abroad unfolds.

‘All that’s really happened at this point in the stock market is that we’ve traded one set of concerns for another,’ said Hugh Johnson, chief investment strategist at Johnson Illington Advisors. ‘The actual fear that the credit crisis might cause an outright collapse of the global financial system has receded markedly since the massive government interventions to recapitalise the major banks, and that’s been a big relief, obviously.’

But he observed: ‘Now, we’re just starting to see the first concrete signs of the terrible damage that the financial crisis has wrought on the economy, and the market is reacting strongly to the indications that show we’re in for a very difficult time here.’

Difficult indeed. The release of the October jobs report last Friday stunned Wall Street by coming in significantly weaker than economists’ already glum expectations. They showed a labour market already in trouble, and with job cuts spreading throughout almost all sectors of the economy, they were a sign that the unemployment rate is likely to rise well above the 6.5 per cent rate that it recorded last week, its highest reading since March of 1994.

‘The biggest problem for stock market investors that the ugly data we received last week poses is not how bad a situation we’re in, but how much worse it’s going to get,’ said money manager Paul Krieg, who runs a large cap domestic equity fund for Seville Investments.

He was referring to both the jobs report and glum data on the services and manufacturing sector, and a horrible retail sales report boding ill for the holiday shopping season, also released last week.

‘The problem is nobody really knows, and when you’ve got that kind of uncertainty looking three to six months out, on top of having a credit market that’s still unhealthy and a long list of major companies, like GM and Chrysler, that are still in danger of going under, the only people willing to dip their toes in the water right now are short-term trading-oriented investors, who pull their money out as quickly as they put it in,’ said Mr Krieg, who added that he is keeping a very high proportion of his fund’s money in short-term debt and cash, where it has been for the last few months.

‘I see nothing on the horizon that would convince me we’re going to emerge from a bear market anytime soon,’ he said.

Even the solid bounce-back that stocks enjoyed last Friday following two awful days of selling did little to encourage Wall Street traders.

‘Today’s action was just one in response to an oversold condition after a 10 per cent drop in just two days,’ said Mr Krieg, referring to the biggest two-day sell off in the history of the Dow Jones Industrial average that occurred last Wednesday and Thursday. ‘It’s hardly as though we got any good news.’

In fact, the bluechip index rose 248.10 points, or 2.9 per cent, to close at 8,943.89, even as the jobs report showing 240,000 new layoffs came out and GM announced a US$2.5 billion loss for the third quarter and said that it may have to halt assembly lines to deal with a cash shortfall. The Standard & Poor’s 500 index also gained 2.9 per cent, while the Nasdaq added 2.4 per cent.

For the week, all three major market indexes lost just about 4 per cent.

The coming week is unlikely to be as difficult to bear, with a light schedule of economic data, and the disastrous third-quarter earnings season limping to a close. But investors will be on the lookout for new indications of how president-elect Barack Obama intends to address the severe economic downturn.

Last Friday, following a meeting with economic advisers including former Fed chief Paul Volcker and former Treasury secretary Lawrence Summers, Mr Obama promised that ‘immediately after I become president, I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families and restore growth and prosperity’.

Mr Summers and Mr Volcker are among the reported favourites for roles high up in Mr Obama’s administration, as is Timothy Geithner, current president of the New York Fed. Appointments of any of those three would be welcomed by Wall Street, as would concrete signs of the economic stimulus plan that Mr Obama is reportedly discussing with congressional leaders and President George W Bush.

Although few companies are left to report earnings in a season that has seen a 14 per cent profit contraction thus far, several major retailers - a sector expected to bear a significant brunt of the impact of the recession - will report earnings, including Wal-Mart Stores Inc, Starbucks, Nordstrom and Penney. Beleaguered insurer AIG is also expected to report today, as is Microsoft tomorrow.

Source : Business Times - 10 Nov 2008

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Singapore Marina IR will go on: MM Lee

Singapore Marina IR will go on: MM Lee

By JAMIE LEE

(SINGAPORE) The US$4.5 billion Marina Bay Sands integrated resort project in Singapore will go on, said Minister Mentor Lee Kuan Yew.

This comes on the back of growing concerns that the casino project could be in jeopardy after the parent company said last week it was looking at a capital raising.

‘The Sands integrated resort is under pressure,’ MM Lee told Tanjong Pagar residents at a community event yesterday, adding that the company was highly-leveraged as it expanded to places such as Macau.

The Chinese have now restricted the number of people who can go to Macau and this has caused the company’s share price to decline, he said.

‘But in Singapore, that project will go on because we are not depending on China and Chinese workers coming in from the rest of China to visit our integrated resorts.’

Las Vegas Sands chairman Sheldon Adelson had told the local media last week that he felt the need to ‘personally reaffirm our commitment to the success of Marina Bay Sands’.

Mr Adelson - who injected US$475 million of his own money into the company recently - also revealed that he had met with Singapore government officials on a range of subjects such as the pace of construction and marketing efforts with the Singapore Tourism Board.

The Marina Bay resort is expected to hire some 10,000 workers before it begins operations next year. The three local banks’ exposure to the project is said to be around $2.2 billion.

Source : Business Times - 10 Nov 2008

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