New malls opening at Orchard Road to rejuvenate area

New malls opening at Orchard Road to rejuvenate area

By Ng Baoying,

SINGAPORE: Singapore’s prime shopping belt Orchard Road is set for a revival, with three new malls to be launched by the end of the year and two refurbished fronts. The malls include Orchard Central and 313@Somerset, and the new fronts are at Mandarin Gallery and Park Hotel Orchard.

That amounts to about 1.8 million square feet of new retail space, bringing the total space available at Orchard Road to eight million square feet.

Beyond the malls, plans are underway for large-scale themed events for the street throughout the year.

Chairman of Orchard Road Business Association, Sng Ngoi May, said: “Orchard Road Business Association sees 2009 as a year that we will remember as a milestone in the modern Orchard Road. After a lapse of 15 years, we are going to see three completely new malls coming on stream.

“The plan started earlier, with the makeover of the street by the government, (who) spent about S$40 million. (The makeover resulted) in wider pedestrian walkway, a retiled pedestrian walkway, urban green rooms and state-of-the-art lighting, plus something not so obvious – they have also provided the infrastructure where we can tap electricity on the street.”

The walk down Orchard Road is set to get even more exciting, going by the government’s development plans. Shoppers will have choices galore when it comes to large-scale themed events that take place throughout the year.

Group director of urban planning and design at Urban Redevelopment Authority, Fun Siew Leng, said: “The next stage really is not to put in more hardware, but to put in more software aspects. How can we make Orchard Road full of activities that are exciting and to continue to attract new visitors?

“The Singapore Tourism Board will be taking the lead. The agency will champion to promote, market, and have a coordinated calendar of events to continue to keep Orchard Road exciting for people. So you can look forward to more coordinated themed events.

“They will have four main themes, for example (there will be) one based on lifestyle, (one on) fashion, one on the Singapore Grand Prix, and another on the Christmas light-up. Then they will build along these themes and have other side events to pull together to make all these events bigger.”

The Orchard Road Business Association said the first event may be rolled out as early as next year.

Sng said: “With all these developments, we see Orchard Road as offering more than just shopping. On the street, we want to continue to offer something that is visually pleasing to the eye, like art installations, and the urban green rooms - you can have performances in the urban green rooms, and retailers can also use the urban green rooms for display of merchandise. And (there will also be) other street activities like buskers, good quality buskers.”

While most of the key changes will be found in the core region of Orchard Road, the fringes will undergo some development too.

Fun said: “There is also a park which we are developing at the open space on top of Dhoby Gaut MRT. This is a project we initiated to create more public space for people to use.

“The land on top of the MRT station is not being sold for some time to come. And instead of just leaving it vacant, we thought it will be good if we can make it into an open space for the time being and allow people to enjoy it, to use it.”

Orchard Road has not seen a new mall in more than a decade, so there is clearly much anticipation about the new additions to the street. The first to open its doors will be Orchard Central in July.

- CNA/yt
Source : Channel NewsAsia - 12 June 2009

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When partitioning of apartments is illegal

When partitioning of apartments is illegal

AN URBAN Redevelopment Authority (URA) spokesman said adding partitions inside homes for family use is not illegal but letting out the partitioned units to multiple tenants, so that it becomes a dormitory, hostel or boarding house, is.
‘Residences with such unauthorised uses cause disamenity and inconvenience to residents and pose public safety concerns,’ said its spokesman. For instance, People’s Park Centre resident Don Kok, 30, said some owners partition their kitchens to rent out, blocking off the common rubbish chute.

URA said unauthorised additions and alterations to apartments must be demolished and its use reverted to being a single dwelling.

The Singapore Civil Defence Force (SCDF) also acts against such illegal partitioning.

It issued 527 notices last year and 264 notices between January and April for unauthorised conversions to workers’ quarters. Partitioning a dorm could compromise fire safety and it requires SCDF approval.

Source : Straits Times - 12 June 2009

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Residents can soon gauge town councils

Residents can soon gauge town councils

Information on how well the councils are run will be made available

By Aaron Low

FROM next year, HDB residents can find out how well their town councils are performing.
A report card on the 16 town councils will be produced by the Government, which is suggesting that they be assessed in three areas: Cleanliness of the estate, maintenance of facilities and financial management.

This move by the Ministry of National Development (MND), which oversees public housing in Singapore, is to give residents more information on the work of the councils.

But before the assessment is carried out, the public will be consulted on what else should be on the list of criteria, the MND said in a statement yesterday.

Following people’s feedback, its initial list may be altered or added to.

The public consultation exercises will be held in the next few months.

These include three meetings with residents and town council staff, tapping expert views from industry professionals such as property consultants and an online survey.

The list of criteria will be finalised by end-September.

With it, the Housing Board (HDB) and MND will assess the town councils and announce the results of their evaluation next year in the Town Council Management Report (TCMR).

The report’s aim is to better inform residents about their councils so that they can play a part in shaping their housing estates, said Senior Minister of State for National Development Grace Fu.

But to compare them may not be appropriate, she added, as the town councils run estates of different ages or with different types of flats.

So, she said, ‘for the TCMR, we will look at the bread-and-butter functions that underpin all town councils, such as cleanliness and maintenance’.

The need to evaluate town councils was raised last year when it was revealed in Parliament that several People’s Action Party town councils had lost a total of $16 million because of investments in toxic products linked to the failed Lehman Brothers investment bank.

It led to calls for greater transparency in how town councils are run.

Town councils were set up islandwide in 1989, partly to devolve estate management from the HDB to the local authorities, and to give residents a greater say in how their surroundings should turn out.

The councils manage 900,000 flats.

Of the 16 councils, 14 are run by the PAP, and the remaining two by the opposition. Hougang is in the hands of the Worker’s Party, while Potong Pasir is run by the Singapore People’s Party.

Yesterday, town council chairmen welcomed the assessment move, saying it will help them improve. The chairman of Ang Mo Kio-Yio Chu Kang Town Council, Mr Inderjit Singh, said the three broad areas identified by MND are key to what residents demand of town councils.

Residents are especially concerned with the cleanliness of common areas and functioning of amenities such as lifts, he said.

‘For financial management, I suppose they would look at whether we have enough in the bank to meet the long-term needs of our estate like lift replacement,’ said Mr Singh.

Jurong Town Council chairman Halimah Yacob said she already tracked her council’s performance in areas such as cleanliness of the estate.

But Jalan Besar Town Council chairman Denise Phua hopes the exercise will not turn into another ‘Singapore-style ranking system’.

She said: ‘It is a good idea, but I hope people won’t go into overkill and work just to get as high a score as possible.

‘It should be about how effective we are, and not just how efficient we are, in terms of numbers and ranking.’

Residents such as Mr Ian Tan, 32, are looking forward to the evaluation. The sales executive, who lives in Bukit Batok, wants to see more transparency in the way funds are managed.

‘I want to see how they justify service and conservancy charges and how well their investments are performing compared to other town councils,’ he said.

Source : Straits Times - 12 June 2009

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Warning of threats to global economy

Warning of threats to global economy

Nations’ home-bias lending moves risk destabilising world

(BEIJING) World financial leaders meeting in Beijing yesterday endorsed the prospect of global economic recovery accelerating into next year - but warned that it could still be derailed by a series of threats that lie ahead. They also noted that while global capital flows into Asian and other emerging economies are set to recover, the spread of ‘financial protectionism’ threatens to undermine these too.

‘The global economy is still in a fragile condition and rarely have policy makers had to confront so many great challenges on the economic and financial front as they do today,’ said Citibank chairman and president William Rhodes at a meeting of the Institute of International Finance (IIF), of which he is first vice-chairman.

This was echoed by Deutsche Bank chairman and chief executive Josef Ackermann, who spoke of ‘daunting challenges ahead’.

The biggest will be to ‘restore confidence, strengthen our institutions and ensure that they contribute effectively to the creation of new jobs’, said Mr Ackermann who is also chairman of the IIF.

Warning that ‘testing times lie ahead’, Mr Rhodes cited ‘rising unemployment, increasing numbers of corporate bankruptcies, mounting consumer credit card defaults and continuing serious weakness in the housing market,’ as just some of the continuing obstacles to recovery.

‘Every national government must be vigilant to secure economic recovery’, said the Citibank chairman, adding that ‘no effort should be spared to secure a standstill and then a rolling back of protectionism - in trade, investment and finance’.

In a paper released at yesterday’s meeting, the IIF - which represents more than 360 of the world’s leading financial institutions - warned that actions by many governments to force banks and others that have received official assistance to lend at home rather than overseas is threatening the global financial system with disintegration.

Underlining this threat, Mr Ackermann noted that ‘a number of measures taken by national governments to stabilise their domestic financial institutions have had the unintended consequence of strengthening a home bias, which can undermine efforts to stabilise the global economy’.

Despite this, the IIF is projecting that overall capital flows to emerging market economies will recover in 2010 to US$373 billion, from the US$141 billion to which they are forecast to slump this year.

The projected recovery is mainly due to a recovery of banking and bond market flows after a dramatic collapse in the wake of the global financial crisis.

‘Emerging Asia is leading the global recovery’ with regard to capital flows, the IIF said.

After slumping from US$260 billion to under US$60 billion between 2007 an 2008, private capital flows into emerging Asia should recover to US$88 billion this year and reach US$120 billion in 2010. This mainly reflects the recovery in Asian stock markets.

But while Asian equity markets have shown strong recovery, the region still faces huge demand for refinancing of corporate debt, to the tune of more than US$600 billion in 2009 and rising to near US$900 billion by 2012, the IIF said.

This major debt burden can be financed smoothly only as long as capital market conditions continue to improve, IIF senior director Hung Tran told The Business Times.

Meanwhile, huge fiscal stimulus by the US and other advanced economy governments is adding to public debt burdens and threatening to push up long-term interest rates.

This threat could crystalise before long unless governments devise effective exit strategies from their debt positions and as private investment recovers, said IIF managing director Charles Dallara.
Source : Business Times - 12 June 2009

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Global system needs global currency: Volcker

Global system needs global currency: Volcker

He questions if US$ as an international currency is in US’s long-term interests

By ANTHONY ROWLEY
IN BEIJING

SPEAKING in Beijing’s Great Hall of the People, former US Federal Reserve chairman Paul Volcker last night acknowledged the legitimacy of China’s concerns over the dollar and questioned whether it was in the long-run interests of the United States to continue providing an international currency.

Mr Volcker: I think it should be clearly understood that the central responsibility of the United States is to maintain both the purchasing power of the dollar at home and in international markets, and a strong and open financial system
The ‘ultimate logic of a globalised financial system is, to me, a global currency’, said Mr Volcker, now head of President Barrack Obama’s Economic Recovery Advisory Board, in a speech to senior Chinese and other bankers from around the world.

His comments seem bound to open up a controversial debate on the future of the dollar as a global currency. Us Treasury Secretary Timothy Geithner has been criticised recently for also appearing sympathetic to China’s concerns on this issue.

Mr Volcker also suggested during his speech as guest of the Institute of International Finance at its Beijing meeting that ‘the sudden and unsettling drop’ in global economic activity is slowing. But he warned that ‘prospects for a really strong recovery, typical of most recessions seems unlikely’.

Instead, ‘a long slog with continuing high levels of unemployment seems to be in store’. he said. ‘For most of the developed world, sources of strong, spontaneous growth are hard to envisage. In the US, as elsewhere, even modest growth remains dependent on strong fiscal and monetary stimulus.’

Likewise, although ‘a healing process in financial markets seems to be underway, the global financial system remains in intensive care’, said the monetary world veteran. The best that can be said is that the system is ‘out of the emergency room’, he added.

On the dollar issue, Mr Volcker noted that ‘Chinese officials have recently raised questions about the implications for China and others that are holding so many dollars’.

‘I think it is reasonable to ask whether it is in the long-run interests of the United States itself to provide what is essentially a public good - an international currency - in amounts so large as to raise questions about its ultimate stability.’

However, he added: ‘The fact is that there are no practical alternatives for today or for many tomorrows to the US dollar as an international currency.

‘I think it should be clearly understood that the central responsibility of the United States - in its own interest, in China’s interest, and in the world’s interest - is to maintain both the purchasing power of the dollar at home and in international markets, and a strong and open financial system.’

He acknowledged that ‘the present state of world affairs has made clear that our international monetary arrangements have not provided a needed element of discipline for either surplus or deficit countries’.

‘Deep and ultimately destabilising imbalances have been prolonged, specifically the growing and seemingly irresistible current imbalances between China and much of the rest of Asia and the US. These have for years been covered by flows of foreign official and privately held dollars back to the US.

‘Indirectly, those flows have to some degree helped fuel the mortgage market and the housing bubble that touched off the financial collapse.’

Touching on the financial crisis, Mr Volcker warned that ‘moral hazard’ is in danger of becoming embedded as a result of official bailouts of financial institutions and because of the ‘too big to fail’ ethos that pervades official attitudes towards mounting rescues of such institutions.

‘We can, and we should, take steps to limit the need and possibility of official bailouts.’

He also called for accounting reforms and questioned the wisdom of attempts to enforce strict mark to market accounting for financial institutions.

Source : Business Times - 12 June 2009

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High-end properties feel the buzz too

High-end properties feel the buzz too

Prices breach $3,000 psf, speculators on the prowl; analysts advise restraint

By KALPANA RASHIWALA

(SINGAPORE) The high-end property market is starting to soak up the sunshine again.

The Orchard Residences: The luxury project has seen a few units transacted at over $3,000 psf since May
Developers of some luxury residential projects have reported a slight pick-up in sales since May. The Orchard Residences, The Hamilton Scotts and Boulevard Vue have seen units sold at above $2,500 psf; in the case of The Orchard Residences, there have been a few units transacted at more than $3,000 psf.

In the secondary market, a unit at Ardmore Park is said to have changed hands for around $2,500 psf recently.

Prices have also breached the $2,000 psf mark again for The Sail @ Marina Bay, where transacted prices are said to have appreciated by $100 psf a week in the past three weeks.

The speculators are back, too. ‘We hear of people trading options again in some secondary market projects like The Sail and Rivergate. That is, someone buys a unit and before the two-week option exercise period is over, sells it to another person,’ a market watcher said.

‘We would rather the market exercise some restraint… Given the recession, can we support such a sharp V-shaped recovery in property prices?’

- DTZ executive director Ong Choon Fah

In the primary market, five units have been sold at The Orchard Residences in the past few weeks. A spokeswoman for Orchard Turn Developments, which is building the 99-year leasehold condo, confirmed this when contacted by BT. ‘We’ve recently sold units at prices ranging from $2,700 psf for a 10th floor unit to $3,300 psf for an apartment on level 33. We’ve seen interest from both locals and foreigners at prices similar to what we sold when we first began to sell around March/April 2007,’ she said.

A stone’s throw away at Cuscaden Walk, Far East Organization sold an apartment last month at Boulevard Vue for $2,600 psf or nearly $12 million. The eighth-floor unit was acquired by a Singapore permanent resident on normal progress payment scheme. Far East’s chief operating officer of property sales Chia Boon Kuah told BT the unit would have been priced around $3,800 psf in first-half last year when the group first started selling the posh 33-storey freehold project.

Added Mr Chia: ‘We’re seeing more inquiries across the full range of our products, including landed homes, over the past few weeks. In terms of volume of transactions, we’re now seeing 3-5 times the level in the December/January period. So in a typical week - without new launches - we’re now selling about 40 units compared with 10 in December/January,’ he added.

This weekend, Far East is launching its ad campaign for Miro, comprising freehold loft units at Lincoln Road. Prices range from $1,400 to $1,600 psf. The group has also been selling Dalla Vale, a freehold cluster semi-detached and bungalow project at Springleaf Avenue priced from $650 psf.

At Scotts Road, Hayden Properties this week sold a 2,756 sq ft apartment at Hamilton Scotts for $2,600 psf or about $7 million to a Singaporean buyer on normal progress payment terms. The price is about 20 per cent lower than the $3,200 psf the unit would have cost in August last year, when Hayden sold the initial five units in the project, says the company’s director Leny Suparman.

‘We started getting more inquiries from April and therefore we were more inclined to revise our prices. Buyers have become more confident about the market lately because of the stockmarket rally and positive news from all fronts. People don’t want to miss out on good opportunities,’ she added.

In the secondary market too, a couple of two-bedroom units at The Sail @ Marina Bay were transacted recently at above $2,000 psf. A bay-facing unit above the 50th level fetched $2,400 psf while another unit slightly above the 15th level sold for $2,200 psf. Also, a one-bedder on the 20th floor changed hands at $1,700 psf.

Knight Frank director Nicholas Mak pointed out that the last time the market saw transactions above $3,000 psf was late last year. ‘Across Asia, the stockmarket rally has improved investors’ confidence and this has spilled over to the property market. However, there are factors that could potentially cut away the legs of this rally. Falling rents is one of them.’

DTZ executive director Ong Choon Fah noted that the latest price gains come after substantial declines. By Q1 this year, luxury home prices had fallen about 30-40 per cent from the 2007 peak levels.

‘Many perceive the worst is over and the downside risk is manageable. There’s also been a subtle change in attitude towards real estate. People now realise that property is more lasting. At least you can live in it, hold it out for the long term and pass it to your children; it won’t vanish, unlike some financial products,’ Mrs Ong said.

‘However, we would rather the market exercise some restraint. At the end of the day, any sustainable recovery will have to be supported by fundamentals. The leasing market is still going through a challenging period. Given the recession, can we support such a sharp V-shaped recovery in property prices?’ she asked.

Source : Business Times - 12 June 2009

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Did Fed put a gun to BOA chief’s head?

Did Fed put a gun to BOA chief’s head?

Takeover of Merrill Lynch was forced upon the bank, Republicans say

(WASHINGTON) Merrill Lynch was bought before it went under, but the fallout now threatens to tarnish Federal Reserve chairman Ben Bernanke and then-Treasury secretary Henry Paulson.

The charge? That the Fed threatened to force the ouster of Bank of America (BOA) chief executive Kenneth Lewis if he did not follow through with plans to buy Merrill Lynch.

House Republican staffers, preparing for a hearing on the issue, also said there was evidence the government tried to restrict information related to the merger from being made public. This, despite the fact that Merrill was in a financial mess and went on to report a loss of US$15.8 billion in the fourth quarter.

However, none of the documents showed that the government explicitly instructed Bank of America to hide Merrill Lynch’s losses from shareholders, Republicans said.

The House Oversight and Government Reform Committee is investigating claims that top government officials, including Mr Paulson and Mr Bernanke, urged Mr Lewis to go through with the acquisition and not disclose to shareholders details of Merrill Lynch’s deteriorating financial state.

Mr Bernanke and Mr Paulson will be asked to testify before Congress on their role in Bank of America’s acquisition of Merrill Lynch, Edolphus Towns, the Democratic chairman of the key House panel, said.

‘We will be looking for some answers to puzzling questions,’ said Mr Towns.

‘Did Paulson and Bernanke abuse their authority by ordering Lewis to go through with the Merrill acquisition, or did Lewis threaten to back out in order to squeeze more money out of the federal government?’ Mr Towns asked.

Mr Lewis, the sole witness at the hearing, had told New York state investigators in February that the two had pressured him in December to go through with the deal.

He said the Federal Reserve threatened to remove top executives at his bank if it reneged on its promise to acquire Merrill Lynch, despite Merrill Lynch’s crumbling financial state.

‘But it was in the context of them thinking it was in the best interests of Bank of America and the financial system,’ he said.

‘The threat was not what gave me concern. What gave me concern was that they would make that threat to a bank in good standing,’ Mr Lewis added.

Bank of America has received US$45 billion from the government’s US$700 billion Troubled Asset Relief Program (TARP). As part of that money, the bank received US$20 billion in January after Mr Lewis requested it to help offset mounting losses at Merrill Lynch.

According to an internal memo prepared by the committee’s Republican staff, Mr Paulson and Mr Bernanke ‘put a gun to the head’ of Mr Lewis and Bank of America’s board of directors to force the merger even though Mr Lewis ‘felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal’.

As proof, Republicans cite several documents including an e-mail by an employee at the Richmond Federal Reserve who said Mr Bernanke had made it clear that if Bank of America backed out and needed financial assistance, ‘management is gone’.

Just a few weeks after the deal was completed, Bank of America’s fourth-quarter earnings report showed the hit taken by its balance sheet because of the Merrill Lynch transaction, which made Mr Lewis the target of shareholder anger.

In January, Bank of America reported a US$2.39 billion fourth- quarter loss, and Merrill Lynch disclosed a loss of more than US$15 billion.

‘Shareholders should have known that the government was trying to purposefully have Bank of America shareholders absorb the losses for the take-over,’ said Tim Yeager, an associate professor of finance at the University of Arkansas. — AP, Reuters Bloomberg

Source : Business Times - 12 June 2009

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Trade stirs to life again, but it’s back to basics

Trade stirs to life again, but it’s back to basics

Traders tap LCs again, avoid complex hedges; volumes pick up, fees moderate

By SIOW LI SEN

(SINGAPORE) Singapore traders are buying and selling again and funding costs have returned to more normal levels, although the recovery is not across the board, bankers say.

According to global payments platform Swift, February-to-April trade volume out of Singapore declined 3-5 per cent - a vast improvement from January’s plunge of 23 per cent.

Demand from China, especially for essentials like food, has picked up.

In addition, some Singapore exporters have used the financial crisis as an opportunity to venture into new markets in Africa and Latin America.

This is a far cry from the dark days of the last quarter of 2008, when there was widespread panic of defaults and counterparty risk was so high that trade almost came to a standstill. Those who still had orders to fill had to accept outrageous prices quoted by banks.

But in recent months, trade in non-discretionary items such as food - from wheat to rice to palm oil to sugar - has really picked up, Sumit Aggarwal, head of trade at Standard Chartered Bank Singapore, told BT.

Textile trade has also picked up, he said.

‘We believe it’s not merely restocking. There’s a return of trade activity and the beginning of a recovery in trade flows. We have very strong trade flows.’

Stanchart Singapore’s trade volumes have increased almost 40 per cent from a year ago, as it remained opened for business throughout the crisis and took market share, Mr Aggarwal said. ‘It’s a validation of our strategy to remain open to clients . . . and offer them trade finance lines.’

Chow Theng Kai, OCBC Bank’s vice-president for group transaction banking, said last year’s unprecedented financial crisis led to a collapse in global demand and tightening of credit. ‘However, over the past two months, we have seen a moderate pick-up in trade activity due to China’s increased demand for commodities.’

Jonathan Speight, head of trade and supply chain for HSBC in Singapore, said the bank sees ’some indication of increased demand for trade finance in certain pockets and sectors, such as the palm oil industry and the chemicals industry, for instance’.

Bankers say traders are focused on basic funding - and are staying away from complex structures such as hedging of foreign exchange.

‘We are also seeing companies going back to basics in their international trade, but with a better appreciation of the risks involved and having built the ability to manage risk, particularly counterparty risk, more effectively over the past 12 months,’ Mr Speight said.

Fees have moderated in line with more normal conditions.

OCBC’s Mr Chow said letter of credit (LC) confirmation fees were priced much higher during the financial crisis due to higher counterparty risks and higher funding costs.

‘However, as signs of the crisis tapering off emerged in the last two months, we have seen credit appetite for trade assets slowly returning to the market and prices beginning to ease’.

But risks remain, and companies which used to deal through open accounts - bypassing banks - are now turning to LCs.

‘In the current economic environment, companies are turning to traditional trade finance instruments, such as LCs, that offer a more secure payment mode while enabling them to pass the risks on to the banks,’ said So Lay Hua, group head of transaction banking at United Overseas Bank.

Ms So said the standard fees for LCs remain unchanged.

‘In general, the market is cautious about taking additional risk and this is seen across the entire supply chain with buyers, suppliers and banks,’ he said. ‘Banks will continue to exercise vigilance in extending credit facilities.’

Stanchart’s Mr Aggarwal highlighted ’smart’ Singapore traders who are venturing into new markets.

‘We have facilitated a number of Singapore clients who chose this market to open new business in Africa and Latin America,’ he said. They are selling goods ranging from textiles to food, telephone equipment - and even publishing.

Stanchart’s help to clients essentially doubles their capital so they can trade more, he said. ‘We buy over their receivables, give them cash and, with that, they can go and do additional business.’

With Stanchart financing the trade, traders don’t have to mortgage their factories, homes or even their jewellery to get funding from banks, he said. ‘This helps them compete with cheaper Indian and Chinese rivals.’

A trade finance loan, typically for 90 days, is normally regarded as a low-risk (since banks own the goods), high-margin business for lenders.

Source : Business Times - 12 June 2009

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