91% of Woodleigh condominum sold

91% of Woodleigh condominum sold

By Wong Siew Ying

SINGAPORE: Developer Frasers Centrepoint said on Tuesday that 91 per cent of its 8@Woodleigh residential project has been sold following a weekend preview.

The mass market development comprises 330 units, out of which 302 have been snapped up during the past four days.

Frasers said it will now release the remaining units for sale and there will be no public launch.

The 99-year leasehold property comprises a mix of two to four-room units and studio apartments. They were sold at an average price of S$790 per square foot.

Some 97 per cent of the buyers are Singaporeans, and over half of them are upgraders from public housing flats.

- CNA/yb

Source : Channel NewsAsia - 24 June 2009

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May CPI rises 0.8% on housing costs

May CPI rises 0.8% on housing costs

By TEH SHI NING

THE consumer price index (CPI) rose a seasonally adjusted 0.8 per cent in May from April, due to higher housing and transport and communications costs, the Department of Statistics (DOS) said yesterday.

Prices are trending upwards even though Singapore’s inflation rate - the year-on-year change in monthly CPI - was negative for a second month in May.

But the 0.3 per cent fall in May’s CPI from a year ago was smaller than the consensus expectation of a 0.9 per cent drop and April’s 0.7 per cent fall.

DOS said that the year-on-year decline was mainly due to lower costs of transport and communications, education and stationery and ‘recreation and others’, which offset increases in housing, food and healthcare costs.

The month-on-month increase in the CPI was largely due to a 2.9 per cent non-adjusted rise in housing costs, as rebates on service and conservancy charges were given in April but not May. Excluding accommodation costs, May’s CPI remained unchanged at April’s level.

More expensive cars and higher petrol prices raised the cost of transport and communications by 1.1 per cent in May.

Economists expect deflationary pressure to ease further in the coming months as the base effect of comparisons with last year’s high prices comes to a close, and because the upward trend in the CPI’s monthly change is likely to persist.

‘Given a faster-than-expected closing of the negative output gap, lagged effects of the weaker Sing dollar and higher commodity prices, year-on-year CPI inflation may trough earlier than expected,’ said Citi economists Kit Wei Zheng and Leon Hiew.

They have revised their 2009 CPI inflation forecast upwards, from minus one per cent to positive 0.2 per cent, as has Barclays Capital economist Leong Wai Ho, whose CPI forecast is now minus 0.3 per cent, up from minus one per cent previously.

‘The resurgence of inflation in coming months will increasingly favour strength in the Sing dollar,’ Mr Leong said.

Source : Business Times - 24 June 2009

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World Bank-Singapore Urban Hub launched

World Bank-Singapore Urban Hub launched

Its aim is to share ideas on making cities liveable

THE World Bank-Singapore Urban Hub was launched on the sidelines of Singapore International Water Week yesterday. Its aim is to use Singapore’s expertise in urban development and the World Bank’s knowledge and operational experience to benefit developing countries.

The launch of the hub comes after Singapore and the bank signed a memorandum of understanding last year to expand cooperation on urban development solutions.

Using Singapore as a test-bed, the hub will bring together Singapore’s public agencies, research institutes as well as private sector players to look into solutions for developing cities.

The hub will work with bodies such as International Enterprise Singapore, the Urban Redevelopment Authority, Public Utilities Board and Centre for Liveable Cities.

Finance Minister Tharman Shanmugaratnam said: ‘The Urban Hub is a major step forward in Singapore’s strategic partnership with the World Bank. It allows Singapore to share its experience on a whole set of issues to do with making cities liveable - from water and waste management, to land use planning and urban conservation. Meanwhile, James Adams, the World Bank’s vice-president for East Asia and the Pacific, said: ‘We will now be able to develop a centre of excellence in Singapore to more effectively leverage our global knowledge and Singapore’s recognised experience in urban management and finance to provide more timely advice and solutions to developing countries in Asia.’

Separately, Mr Adams also announced that the World Bank Office in Singapore will be led by Kamran M Khan from Aug 1.

Mr Khan, who is an American national, was most recently the bank’s infrastructure finance adviser for East Asia and the Pacific.

Source : Business Times - 24 June 2009

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Private equity players sniff for deals again

Private equity players sniff for deals again

This time they’re on the lookout for defensive sectors instead of riskier plays

By OH BOON PING

(SINGAPORE) After enduring some hard knocks, private equity (PE) players are on the hunt again. The difference is that now they have set their sights on defensive sectors, instead of the riskier and cyclical industries.

Hot spots: Healthcare and renewable energy. With valuations now at attractive levels, deals which were shelved earlier are being rekindled
For example, the Carlyle Group’s US$500 million Middle East and North African fund is seeking opportunities in healthcare and pharmaceuticals, while Altor Equity Partners recently took medical devices company Pulse Medtech private for US$200 million.

Also, US private equity firm Welsh, Carson, Anderson and Stowe closed its latest fund, which took out a majority stake in GeoDigm, a dental implants products supplier.

‘Private equity managers are still actively evaluating deals despite market constraints,’ said Ciro Ahmad at private bank RBS Coutts, which offers investment in private equity funds as part of its wealth management services.

According to Vijay Sambamurthi, whose law firm Lexygen has represented a number of private equity players in India, valuations are now down to attractive levels and interest in deals which were shelved earlier ‘is now being rekindled once again’.

In the second half of 2007, PE activity screeched to a halt, after liquidity dried up in the credit markets. The Singapore market, which earlier saw a number of tech companies taken private in the first half of FY07, now sees waning interest in its corporates.

Instead, industry observers see a marked shift in interest away from the information technology (IT) and business process outsourcing (BPO) segments towards healthcare and pharmaceuticals.

‘IT and BPO continue to be interesting, but they are just not as hot as before,’ said Mr Sambamurthi, adding that businesses in these segments have been hit by fluctuations seen in the foreign exchange market.

Instead, the corporate hunters favour the healthcare, drugs segments and even infrastructure sectors for their diversification benefits.

Also, Anil Ahuja, regional head of British private equity firm 3i, told BT that he expects increased investments not just in healthcare, but also in the financial services segment which is ‘undergoing tectonic transformation, with increased demand for intense governance, which PE provides’.

In 3i’s case, it recently pumped in some US$161 million in Krishnapatnam Port Company, and divested a 11.32 per cent stake in China’s hotpot restaurant chain, Little Sheep Group.

The other sectors that should attract more interest include education, professional services and even renewable energy. For example, Barings Private Equity recently spent US$100 million to buy a significant minority stake in architectural design services business RSP Design Consultants (India), while a fund led by Olympus Capital injected US$55 million into Orient Green Power, which is in the renewable energy business.

Across the region, China and India continue to attract strong interest from PE players following the robust volumes seen last year. In 2008, China showed an 85 per cent jump in its fund pool to just over US$38 billion, while India showed almost 62 per cent growth to nearly US$26 billion.

For the first four months of this year, both markets attracted a total of around US$7 billion worth of investments, while only US$260.2 million poured into Singapore over the same period.

On when the sector may see a return to the strong volumes in 2007, the industry watchers said that much depends on the financial conditions, and also the impact of new mark-to-market rules imposed on the private equity firms.

The ‘fair value’ accounting, which took effect in the United States last year, requires companies to value assets at current comparable prices. Given the volatility seen in the market, this means that the industry could see significant mark down on the value of their portfolios.

Mr Ahuja said that it is difficult to predict when the market will recover, but ‘what is certain is that the focus and models will change, including financing methods and compensation structures

‘There is no doubt that PE will remain an active form of investing given the value of active partnership and superior corporate governance.’

Indeed, others feel that the use of growth capital - equity investments in mature companies without a change of control of the business - will become more prevalent, especially when credit is scarce, while deal sizes should be a lot smaller compared with those seen in the last bull run.

‘I will be very surprised if I see a deal that is worth half a billion dollars or more,’ said Mr Sambamurthi. ‘There will be deals, but they are mainly in the range of US$25-50 million, and maybe a few worth between US$75 million to US$100 million.’

As valuations are poor, investment exits could slow in the near term, but this should not be of great concern to investors as private equity by definition is a long-term ‘buy and hold’ investment, said RBS Coutts.

Separately, 3i has reportedly pulled the plug on its Franklin Offshore stake sale, after bids for the stake came in below expectations.

Source : Business Times - 24 June 2009

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