Singapore October new home sales dive 70% on-month

Singapore October new home sales dive 70% on-month

SINGAPORE: New home sales in Singapore dived 70 per cent in October compared to September as home buying sentiment continued to sour.

According to Urban Redevelopment Authority’s (URA) data, developers sold 112 new and uncompleted private residential homes last month, versus the 380 units sold in September.

They launched just 159 units for sale, compared to nearly 767 in September.

The most expensive unit sold was at the Orchard Scotts development at Anthony Road, which went for S$2,407 per square foot.

- CNA/yb

Source : Channel NewsAsia - 17 Nov 2008

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Singapore Marina Bay Sands a good fit for Tote Board

Singapore Marina Bay Sands a good fit for Tote Board

By Conrad Raj,
 
SINGAPORE - It is right that the Singapore Government not bail out Las Vegas Sands’ integrated resort project on Marina Bay.

After all, why should taxpayers’ money be used to bail out a huge gamble by Sheldon Adelson, who was once the richest man in Las Vegas?

According to Senior Minister of State for Trade and Industry S Iswaran, there’s been no request for a Government bailout from Marina Bay Sands, nor does the Government intend to give one.

Sands, whose shares have seen 95 per cent of their value wiped out from their peak, is facing a huge credit crunch. As a result, it will not be able to complete the entire project as scheduled by the end of next year. Instead, it will open the IR in two phases - Phase One at the end of next year and Phase Two the following year.

Mr Iswaran noted that the Singapore Tourism Board had not decided if the casino operator would be penalised for changes to the development agreement.

“Their proposal was to complete the whole project by 2009. If there’s a variation to that, we need to look at that and see whether there are legitimate reasons for it,” he said.

But is this really the right time to talk about penalties for delays to the project?

Mr Adelson needs to borrow billions to stave off bankruptcy and to help keep his US$4-billion (S$6-billion) project here alive. Such talk about penalties only goes to make already nervous bankers even more cautious about funding the project.

Although Sands has said that its S$5.44-billion credit facility to support the Marina Bay development was in place, there is nothing to prevent its financiers from pulling their lines. The parent company, as at September 30, had total outstanding debts of US$10.35 billion, largely the result of an overambitious expansion plan which not only included Singapore, but also extension of its facilities in Macau and Las Vegas.

But there is also nothing to prevent others in the private sector, including Government-linked companies, from bailing out the Marina Bay project or even Sands itself - if it makes commercial sense.

While CapitaLand, the country’s largest property developer, has denied being in talks with Sands, it also noted in a recent statement to the press that, “In the present continuing global recessionary environment, CapitaLand is strategically watching the situation, studying opportunities related to distressed companies or assets, in Singapore and other core markets, that will have strategic fit with our core business areas”.

It went on to add that “potential opportunities will be carefully explored and evaluated, ensuring that an acquisition is made only at the right time, right price and when target returns are met given the current difficult economic operating environment”.

Having lost out on its original bids for the two casino licences, that opportunity for distressed assets could now present itself if Sands is unable to obtain adequate funding from elsewhere. As at the end of its third quarter, CapitaLand had a net gearing ratio of 0.5 and a cash balance of S$4.2 billion. The Temasek-linked company need not take over the whole project but could invest in a significant, perhaps even in a controlling, stake in Sands Marina Bay.

The other potential white knight for Sands could be the Singapore Totalisator Board, which in April this year re-branded itself as the Tote Board.

The Board is already the country’s leading gambling institution and runs the Singapore Turf Club through its agent and wholly-owned subsidiary, Singapore Pools, which runs the 4D, Toto, Singapore Sweep and football betting outlets on the island.

While it says that as a rule it will not fund commercial projects for the purpose of profit-making and debt or loan repayments, there is nothing in the rules that says it cannot take a stake in such projects.

An integrated resort like the Marina Bay Sands would be an almost perfect fit for the Board itself or any of its two main subsidiaries. It’s a gamble that is perhaps worth taking. - TODAY/fa

 
Source :  Channel NewsAsia  - 17 Nov 2008

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CPF Board to continue to pay 2.5% yearly interest rate for Singapore ordinary account savings

CPF Board to continue to pay 2.5% yearly interest rate for Singapore ordinary account savings

By Hetty Musfirah Abdul Khamid,

SINGAPORE: Central Provident Fund (CPF) members will continue to receive a 2.5 per cent yearly interest payout for savings in their ordinary account, beginning next year till end of March 2009.

This means, the concessionary interest rate for HDB mortgage loans which is pegged at 0.1 percentage point above the CPF interest rate remains unchanged at 2.6 per cent per annum for the same period.

The CPF interest rate is higher than the computed rate of 0.74 per cent, derived from the major local banks’ interest rates for a three month period beginning August 1 this year.

The higher rate of 2.50 per cent will be paid as the CPF Act provides for a minimum CPF interest rate of 2.50 per cent per annum.

Members will also receive an extra one per cent interest payout on their first S$60,000 combined balances, with up to S$20,000 from the Ordinary Account.

And the amount is expected to enhance the member’s retirement savings as it will to go his Special and Retirement Account.

The CPF interest rate is reviewed on a quarterly basis.

The interest rate for Special, Medisave and Retirement accounts or SMRA for January to March 2009, will be announced next month after the average yield of the 10-year Singapore Government Security is computed.

The prevailing rate is four per cent.

And to help members adjust to this floating rate, the four per cent rate will be maintained in the first two years.

- CNA/yb

Source :  Channel NewsAsia  - 17 Nov 2008

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Singapore MAS tells financial institutions to review sales and marketing procedures

Singapore MAS tells financial institutions to review sales and marketing procedures

By Dominique Loh,
  
SINGAPORE: The Monetary Authority of Singapore (MAS) has instructed the CEOs of all financial institutions to conduct a thorough review of their sales and marketing processes for structured products.

Giving an update in Parliament on MAS’ investigation into alleged mis-selling by financial institutions on Monday, Finance Minister Tharman Shanmugaratnam said the financial regulator is handling all investors’ complaints with full urgency.

But he stressed there’s a need to ensure a fair and independent resolution without being overly legalistic or politicising the process.

Mr Tharman said: “Our sympathies are with investors. How do we go about ensuring that the investors interest are met is the issue at hand. For many of them it’s actually very sad this happened, but how do we go about ensuring their interests are met?

“If we either politicise the process or take an overly legalistic approach as opposed to this case-by-case evaluation in the financial institutions and FIDREC, there’s less likelihood that we get a fair outcome for investors.” - CNA/vm

Source :  Channel NewsAsia  - 17 Nov 2008

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Singapore PM Lee says two-party political model cannot work in Singapore

Singapore PM Lee says two-party political model cannot work in Singapore

By S Ramesh,

 
SINGAPORE: Prime Minister Lee Hsien Loong has said a two-party political model cannot work in Singapore.

Mr Lee, who is also the ruling People’s Action Party’s Secretary General, added that change must take place not between parties but within the PAP.

Addressing the party’s activists on Sunday, Mr Lee explained why tackling the economic crisis needs both a policy and political response.

He said: “We cannot sail through this storm on autopilot. The government has to lead, watch the changing environment, implement the policies needed, mobilise Singaporeans and mount a national response to get us through. It’s the party’s business to provide this leadership for Singapore.”

He added that the country is much better off with one dominant party, as long as the PAP provides clean and good government, and the lives of Singaporeans improve.

Mr Lee said: “If the party doesn’t work, if something goes wrong with the party, you can be sure new parties will come, new contests will come. People will spring up to take on the government in no time at all.

“But it is not our job to build up the opposition or split the party into two, because it is hard enough to find one team to look after the country. How can we find two?”

Mr Lee said that as a small country, Singapore depends critically on an outstanding team of leaders to make up for the many limitations.

Hence, the country cannot afford to compromise the quality of the nation’s leadership.

Mr Lee said that at every general election, the party brings in 20 or more new MPs and ministers.

The progress of leadership renewal in the PAP determines whether Singapore will continue enjoying stability and good government in the long term, he said.

- CNA/ir

Source :  Channel NewsAsia  - 17 Nov 2008

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Singapore Joo Chiat hotels: No more hourly rates

Joo Chiat hotels: No more hourly rates 

New ruling from Jan 1 is aimed at cracking down on sleaze in the area 

By Joyce Teo 

FROM Jan 1 next year, all hotels in the Joo Chiat Road area will be banned from offering hourly rates in a bid to crack down on sleaze in the heritage area.
The ruling requires hotel operators to let rooms at full-day rates. It will apply to the nine hotels there now and any new hotels opened in the area.

The Joo Chiat area boasts several Peranakan restaurants, many conserved shophouses and a notorious 50m stretch of Joo Chiat Road noted for prostitution.

Residents and legitimate businesses have long complained of vice in the area.

A ‘Save Joo Chiat’ group was formed by local residents in 2004 to preserve the area’s heritage. They had been alarmed at the sudden proliferation of bars and the large number of scantily-clad women wandering into their estates in the evenings.

The Hotels Licensing Board (HLB), which is imposing the full-day rate condition, said the affected hotels were informed about the condition in mid-July.

‘The big objective is to see how we can improve the appeal of Joo Chiat,’ said a member of the board, Ms Caroline Leong, who is also the Singapore Tourism Board’s director of travel and hospitality.

‘On STB’s front, it will be to allow more tourists to visit the area.’

It is not the first time that HLB has imposed restrictions of this type. On Jan 1, 1998, it banned more than 50 hotels in the Geylang red-light area from letting out rooms for less than a day.

However, that ban was lifted just three months later. Geylang hotel operators suffered a 50 per cent slump in business after the ban.

When it was lifted, they attributed the slump to ‘bad times’ as the tourism industry had been battered by the Asian financial crisis.

All hotels affected by the latest ban are budget hotels. At Hotel 81-Sakura, for instance, rates start at $30 for the first two hours, and $79 for a full day.

Of the nine affected hotels, six are under the Hotel 81 group. Five are under the Hotel 81 brand along with New Changi Hotel. The others are Joo Chiat Hotel, Gateway Hotel and The Fragrance Hotel.

Seven of the nine affected hotels are on Joo Chiat Road. One Hotel 81 outlet is on Onan Road and the New Changi Hotel is on Changi Road.

A Hotel 81 director acknowledged that the firm had been informed of the new rule but did not want to comment further.

Another affected hotel operator, who declined to be named, said that business would be only slightly affected by the new ruling as they had switched from being a transit hotel to a tourist hotel a few years ago.

‘Save Joo Chiat’ spokesman Colin Chee said the ban is ‘wonderful news’.

‘We cannot stop prostitution but at least we make it less convenient for them. It is one step towards making the area more conducive for residents and tourists,’ he said.

Currently, Joo Chiat ranks too low on tourists’ itineraries for any visitorship data to be captured.

But STB feels the area has a lot of appeal, with its rich cultural heritage, and wants to promote the Peranakan experience for tourists.

Joo Chiat was gazetted as a conservation area in 1993 as the Government wanted to retain the heritage and architecture of key buildings in this area.

STB’s Ms Leong said she and the other authorities involved had visited Joo Chiat to get a better feel for the issues there.

While the condition was imposed to enhance Joo Chiat’s appeal, it would also address the vice situation there, she said. ‘This area is not among the top visiting spots in Singapore, which is a shame.’

Mr Chee said the ‘Save Joo Chiat’ group had written to publisher Lonely Planet after they realised that the guidebook had lumped Joo Chiat in with Geylang, saying it was a red-light district.

Earlier this year, the group hosted a trip by a Lonely Planet writer, who will be devoting pages originally meant for Chinatown in next year’s edition to Joo Chiat, he said. ‘We communicated this to the authorities.’

But a key issue is whether the enforcement of the new condition will be effective, he noted.

‘I think the decision on daily rates is a good one but enforcement will be difficult and there will be widespread lapses,’ said a businessman in Joo Chiat who declined to be named.

‘Joo Chiat’s proximity to Geylang hotels and boarding houses will still mean that the man can pick up in Joo Chiat but go to Geylang to complete the transaction.’

Ms Leong said HLB will monitor the situation. ‘If hotels go against the restriction, HLB can revoke their licence.’

Source : Straits Times - 17 Nov 2008

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Wall St strains to break ‘vicious cycle’- New York

Wall St strains to break ‘vicious cycle’- New York

A tough week lies ahead as profit- taking wipes out each bout of gains
By ANDREW MARKS
NEW YORK CORRESPONDENT
AFTER another week of steep losses, high volatility and two separate dashed hopes for a turnaround on the same day, it is fair to say that the mood on Wall Street heading into the coming week is defeatist.
‘You look at what’s come this past week, and especially at the disheartening way we finished up,’ Cantor Fitzgerald chief investment strategist Marc Pado, said shortly after the closing bell on the New York Stock Exchange last Friday, referring to the abrupt reversal US equities staged late in the trading day after the major stock indexes had slowly clawed their way into positive territory following a negative opening.

‘And with several important economic reports coming out this week, which are likely to reinforce the very negative mood, it’s very difficult to generate any optimism that we’re close to turning this thing around any time soon,’ he said.

Indeed, while the latest moves by the US Treasury Department to thaw frozen credit markets and prop up faltering lenders are aimed at reassuring investors, the problem for the markets now appears to be the fact that the worst fears for the economy are being realised.

‘It’s one thing to discount for a global recession and a severe economic contraction in the US, but it’s another thing altogether when we’re confronted with evidence that our worst fears are being realised for the economy and it could get even worse,’ said Steven Mitchell, a portfolio manager at J.P. Stewart.

 
 
Even the technology sector, one of the last redoubts of earnings strength - aside from energy - is showing the strains of worldwide economic contraction, as Intel warned investors it was drastically reducing revenue forecasts and Sun Microsystems announced plans to cut up to 6,000 jobs, in the wake of a US$1.7 billion loss last quarter.

Friday’s remarks by Federal Reserve chairman Ben Bernanke at a bankers’ conference only served to reinforce the view of Wall Street investors and economists that the economy is in dire straits. The American economy, he said ‘is under severe strain’.

Mr Bernanke’s speech also signalled that the Fed’s policy-making committee is likely to lower rates again at the Federal Open Market Committee’s final meeting of the year, on Dec 16. The Fed’s key rate is now at one per cent.

On Friday, it was clear that bear continued to reign supreme on Wall Street. A day after the stock market staged a huge snapback rally, closing more than 6 per cent higher after the Standard & Poor’s 500 sank below it’s Oct 10 lows in intra-day trading, Wall Street was unable to build on the gains, thanks to a massive sell-off in the final minutes of trading that wiped out most of Thursday’s gains.

The Dow Jones Industrial Average closed down 337.94 points, or 3.8 per cent, to 8,497.31. The broader Standard & Poor’s 500-stock index was 38 points lower, or 4.1 per cent, to 873.29. The Nasdaq fell 79.85 points, or 5 per cent, to 1,516.85.

‘We’re in a vicious cycle right now,’ said Mr Pado. ‘The market can’t sustain any short-term gains because so many institutional investors, from mutual funds to hedge funds, are primed to take profits off the table as soon as they get them because they’re afraid stocks will sink again.’

For the week, the Dow declined 5 per cent while the S&P 500 fell 6.7 per cent.

Carter Worth, chief market technician at Oppenheimer, reiterated his forecast that stocks have bottomed and will rise into the year-end even after Friday’s losses, and with a slew of potentially bad economic news waiting for investors this week.

‘The bad news isn’t affecting the market the way it was just a few weeks ago. We’re down at the point now where the values are holding up against the risks. Once we get past the forced liquidations by hedge funds and mutual funds in the next couple of weeks, we should be up by 15 per cent to 20 per cent into year-end,’ he said.

But in the coming week there is likely to be bad news aplenty coming from the economic data. Today will be industrial production and capacity utilisation figures for October, and the release of a November manufacturing report from the New York region, the Empire State Index.

Tomorrow, the October producer price index will be released, to be followed by the consumer price index on Wednesday. Normally, investors focus on those two reports for their inflationary implications. But these are not normal times, and now the big question is whether deflation has struck the economy. Also on Wednesday, data on housing starts for October will be released, along with the minutes of the Fed’s last meeting.

On the positive side, third-quarter earnings season is nearly over, with the S&P 500 on track for an 18.4 per cent decline from last year’s numbers, and there are only a few names left to haunt investors’ sleep with their doleful earnings and downcast guidance for the next quarter, including retailers Target, Gap and Home Depot, and PC maker Dell.

Stocks could also get a boost if the US Congress shows signs of being able to push through a stimulus package before the end of the year, or if it moves to support a government bailout for car makers GM, Ford and Chrysler.

 
Source : Business Times - 17 Nov 2008

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January Budget to arrest economic slide

January Budget to arrest economic slide

PM Lee says growth may be negative next year but help at hand; easier credit for SMBs and jobs SPUR
By AMIT ROY CHOUDHURY

(SINGAPORE) Growth next year could slide into negative territory, so the government is keen to put its cushions and boosters in place as quickly as possible. This includes advancing the 2009 Budget by one month to January.
 
PM Lee: Addressing a PAP party conference yesterday, he said ‘we are already in recession and we expect a U-shaped recovery with a fat U. At the same time, we must be ready for more surprises.’ 
This radical step was announced yesterday by Prime Minister Lee Hsien Loong while addressing a PAP (People’s Action Party) party conference at the Toa Payoh Sports Hall. Advancing the Budget would enable the government to implement its counter-measures against the crisis as quickly as possible, he said.

The proposed January 2009 Budget will include measures to support growth and jobs, strengthen business competitiveness and stimulate domestic demand, said Mr Lee. The aim is not just to help Singaporeans tide over the present downturn but also to help build up strength for the future.

The prime minister, who is also the PAP secretary-general, noted that small and medium-sized businesses (SMBs) are in dire need of financial help. ‘Many of these companies are basically sound.’

However, since banks are being more careful with loans in the current climate, these companies are finding it harder to secure financing.

To help them, the government will enhance government financing schemes to ensure their continued access to credit. An announcement on this is expected this week.

PM Lee also noted that Singapore has built up the infrastructure for continuing education and training systems as well as job matching. ‘Even for those who are still in jobs, we have to train them because if companies have excess workers, it is better for us to train and upgrade them rather than retrench them and leave them on the streets.’

He added that more details of a Skills Programme for Upgrading and Resilience (SPUR) will be announced this week.

Noting that next year’s growth could be negative, Mr Lee said: ‘Let us prepare for the worst while hoping for the best.’

Singapore, with its open economy - its trade is 3.5 times its GDP - is bound to be affected by the downturn. ‘We are already in recession and we expect a ‘U-shaped’ recovery with a fat ‘U’. At the same time, we must be ready for more surprises,’ the PM said.

He reckoned that the recession would last a year but beyond that there could be several years of slow growth before things get back on track.

Still, the Republic is in a strong position to weather the storm. ‘Major projects are coming in, creating new jobs even in the downturn. The integrated resorts (IRs) are starting to recruit and there are likely to be 20,000 direct new jobs, and many plants are being set up in Singapore.’

He added that no one was thinking about testing the Singapore dollar, due to its inherent strength. ‘Our finances are in good shape, so your CPF (Central Provident Fund) savings are safe,’ he added.

PM Lee added that one piece of good news was that inflation has moderated due to food and energy prices falling globally.

He noted that this quarter electricity prices jumped due to high oil prices. ‘However, we are confident that electricity prices will fall in the next adjustment in January next year, below where it was before October this year, if we are lucky.’

The crisis also underlined the need for good leadership.

‘We cannot sail through this storm on autopilot. The government has to lead, watch the changing environment, implement the policies which are needed, mobilise Singaporeans and mount a national response to get us through,’ Mr Lee said.

He added that the two-party political model cannot work in Singapore.

‘Change must take place, not between parties but with the PAP changing itself to stay in step with the times and ahead of events.

‘As long as the PAP provides clean and good government, and the lives of Singaporeans improve, the country is much better off with one dominant party,’ Mr Lee said.

He noted that if ever the PAP became ineffective or corrupt, not only one alternative party but many opposition parties would spring up to take on the government.

PM Lee noted that as a small country, Singapore depends critically on an outstanding team of leaders to make up for ‘our many limitations’.

‘We cannot afford to compromise the quality of our leadership,’ he added.

The PM noted that there would be other storms and upheavals from time to time.

‘Even in a prospering Asia, Singapore will face competition and challenges. The PAP must continue to produce a leadership team which can anticipate difficulties and develop timely and effective responses.’

 
Source : Business Times - 17 Nov 2008

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