Stimulus package saved 1m US jobs

Stimulus package saved 1m US jobs

It has boosted output and will save or create 3.5 million jobs by end-2010, says govt adviser

Job-seekers lining up to gather information about a prospective employer at at Washington hotel last month. The White House expects unemployment in the US to peak around 10 per cent by the beginning of next year, after hitting 9.7 per cent last month.

WASHINGTON: The economic stimulus package US President Barack Obama rushed through Congress during his first days in office is rapidly pumping energy into the country’s once-moribund economy, and has already created or preserved more than a million jobs, says his chief economic adviser.

In her first official assessment of the US$787billion (S$1.1trillion) stimulus, Ms Christina Romer, chairman of the President’s Council of Economic Advisers, concluded that the package of tax cuts and government spending - the largest dose of economic medicine in United States history - had poured about US$150billion into the economy since its passage in February, boosting overall economic output by about 2.3 percentage points during the quarter that ended in June.

Countries around the world that had larger stimulus packages fared better economically than those with smaller ones, the report also concluded.

Ms Romer told reporters the package was on track to save or create 3.5million US jobs by the end of next year. She said the White House expected unemployment in the country to peak at around 10per cent by the beginning of next year. Unemployment came in at 9.7per cent last month.

Even with the stimulus package, the US economy contracted at a 1per cent annual rate in the second quarter after a steep 6.4per cent collapse in the first quarter of this year.

While the economy remains in recession and has shed more than three million jobs since stimulus cash began flowing, the downturn would have been more severe and the number of jobs lost far greater without the stimulus, Ms Romer said.

As spending continues to ramp up next year, the power of the package should grow stronger, she said, though she declined to rule out the possibility that additional government action may be needed.

Republican lawmakers, who voted unanimously against the stimulus package, quickly dismissed Ms Romer’s assessment and accused the White House of whipping up a self-serving estimate of saved jobs that can never be substantiated or disproved.

‘Despite skyrocketing unemployment rates and millions of lost jobs, the administration can use these models time and again to avoid accountability. By creating the immeasurable metric of ‘jobs created or saved’, the administration can make job claims month after month that fly in the face of economic reality,’ said Republican Representative Darrell Issa.

Ms Romer cited an array of independent estimates that back up the administration’s claims. For example, Mr Mark Zandi, chief economist for Moody’s Economy.com, projects that the stimulus will have created about one million jobs by the end of this month, while the non-partisan Congressional Budget Office projects that the number could be as high as 1.5million.

Two other independent forecasters, Macroeconomic Advisers and IHS Global Insight, come in much lower, projecting around 650,000 jobs saved or created so far.

Speaking separately, Treasury Secretary Timothy Geithner said on Thursday that the US banking system had regained enough health to begin removing the government’s backstops.

‘We must begin winding down some of the extraordinary support we put in place for the financial system,’ he told the congressional panel that oversees the financial bailout programme.

Citing a steady revival in financial markets and in the economy, Mr Geithner said banks and corporations were increasingly able to raise capital from private investors.

Treasury officials said they expected banks and other financial institutions to repay an additional US$50billion that they borrowed from the government, on top of US$70billion already repaid, over the next 12 to 18 months.

WASHINGTON POST, REUTERS, NEW YORK TIMES

Source : Straits Times - 12 September 2009

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Rising property prices to get airing in the House

Rising property prices to get airing in the House

By Jeremy Au Yong, Political Correspondent

THE red-hot property market in Singapore will come under scrutiny on Monday when Parliament sits.

At least two MPs - Madam Ho Geok Choo (West Coast GRC) and Ms Jessica Tan (East Coast GRC) - have put in questions on the impact of rising property prices.

Madam Ho is worried that the buying frenzy could result in a property bubble.

She told The Straits Times yesterday: ‘If you look at what is happening in Singapore today, everybody is happily going shopping for property. Nobody seems to have concerns that there might be a risk in just going forward like that. It’s very much like what happened in the United States before the sub-prime crisis.’

Ms Tan is concerned about how the price spike may affect affordability. With HDB prices also rising, many have asked if the income ceiling for government housing grants could be raised. Now, any household earning more than $8,000 a month does not qualify for a grant when buying a resale flat.

Ms Tan is bringing up the issue in Parliament, asking when the income ceiling was last reviewed.

The property boom, coming amid a global economic crisis, has caught the eye of many, including those in the Government.

National Development Minister Mah Bow Tan had said in July that signs of speculation were reappearing. He stressed that the Government would monitor the situation closely.

Property aside, a wide range of domestic issues will also be discussed in the House, from the Formula One race in the last weekend of this month to hotels that provide rooms at hourly rates.

Nominated MP Calvin Cheng wants to know if the period the roads are closed for the race could be shortened. In Monaco, roads are closed for only a few hours before each session, he added.

Mr Christopher de Souza (Holland-Bukit Timah GRC) wants to know if the Government would consider tightening the rules for hourly rated hotels.

He sees a worrying trend of such hotels - which typically attract activities such as prostitution - creeping out of the red- light districts.

He told The Straits Times: ‘I have been getting feedback from constituents who are seeing an increase in vice activities beyond the conventional boundaries of Geylang. One way to address this is to clamp down on hourly rated hotels.’

He is raising it as ‘a possible solution and would like to see what the Government has to say’.

On Monday, three Bills tabled during the last sitting will also be debated - the Private Education Bill, the Copyright (Amendment) Bill and the Casino Control (Amendment) Bill.

The Private Education Bill seeks to tighten controls on private educational institutions. Several have closed, leaving thousands of students stranded, with many unable to recover their fees.

The casino Bill will impose stiffer penalties on those giving incorrect tax returns on gaming revenue, while the copyright Bill will widen the scope of the Copyright Tribunal for resolving rows between owners and users of copyrighted material.

Source : Straits Times - 12 September 2009

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Ex-Taiwan leader Chen gets life term

Ex-Taiwan leader Chen gets life term

He and his wife are found guilty of graft and money laundering

By Ho Ai Li , Taiwan Correspondent

TAIPEI: Former Taiwanese leader Chen Shui-bian was sentenced to life imprisonment and fined yesterday for corruption and money laundering, the first ex-president found guilty of crime.

In the heavily barricaded Taipei District Court, Judge Tsai Shou-hsun also sentenced Chen’s wife, Wu Shu-chen, to life imprisonment and imposed a stiffer fine for similar crimes.

The couple were found guilty of lining their pockets with some NT$500 million (S$21.9 million) in bribes and government funds.

Among other things, they were found guilty of influencing the awarding of a building contract and a government land deal for money.

Aside from the life terms, Chen was fined NT$200 million and his wife, NT$300 million. Both were not in court, and will appeal against the verdict.

Their son Chih-chung and daughter-in-law Huang Jui-ching were also found guilty of money laundering - he was sentenced to 21/2 years’ jail while she received a suspended term of 20 months.

Eight others, including former aides to Chen, were also found guilty for their roles in the corruption case and received jail terms lasting three months to 20 years.

The Chens’ former cashier was let off for cooperating with the authorities.

In a 37-page summary of the judgment which ran to more than 1,000 pages, a three-judge panel saved its harshest comments for Chen, whom they described as a former lawyer, lawmaker, someone ‘held up as a symbol of justice’ and a two-term president.

‘But with this act, Chen has mixed personal with public interest and violated the law despite knowing it,’ the judges said.

‘He has not only gone against his conscience as a man of law, but also betrayed people’s trust and expectations.’

Yesterday’s guilty verdict marked a sad end for Chen, 58, an ex-chairman of the Democratic Progressive Party (DPP) who made history when he was elected president in 2000, ending the Kuo- mintang’s long hold on power. He was re-elected in 2004.

Prosecutors found that the former first family laundered their money through overseas accounts and paper companies in places from Singapore to Hong Kong and the Cayman Islands.

While few were surprised that Chen and his wife were found guilty, given that Wu had been convicted of perjury in connection with the case, some had expected lighter sentences.

‘If the judges mete out a stiff sentence, it may spark a backlash among Chen supporters,’ political analyst Shih Cheng-feng of the National Dong Hwa University said before the sentencing.

He also noted that Chen had sounded resigned to being jailed in recent days to gain public sympathy and also to avoid crossing the judges.

Outside the court yesterday, about 200 Chen supporters shouted: ‘Ah-bian is not guilty!’ They jostled with policemen wielding plastic shields and rods.

DPP chairman Tsai Ing-wen, speaking to reporters, expressed regret at the heavy sentences meted out to Chen and his family. She pointed to the continued detention of Chen for nearly nine months, but also said that he should shoulder ‘political responsibility’ for wiring government funds overseas.

Chen’s office repeated claims of political persecution, saying that there was not enough evidence to convict the former president.

It also said the heavy jail terms that Chen’s aides Ma Yung-cheng and Lin Te-hsun received - 20 years and 16 years respectively - proved that there was a political agenda against Chen and those linked to him.

Ma and Lin were sentenced for their roles in misappropriating ’special expenses’ funds for the ex-president, but Chen’s office said in a statement that both men had not pocketed a cent.

After the sentencing, questions remained over whether Chen’s wheelchair-bound wife would go to jail, given her poor health. It would also be months before an appeal is heard in a High Court, local newspapers noted.

Professor Chen Fang-ming, a Taiwan literature expert from the National Chengchi University, said that Chen’s worst crime was not graft but how he made the Taiwanese lose their faith in fairness and justice by his lack of contrition and denials of guilt.

‘All our values have been twisted and distorted,’ he said.

‘We are still in a wasteland and whether we can get out of it remains a question.’

Source : Straits Times - 12 September 2009

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Profitability of IRs in doubt: Citi analyst

Profitability of IRs in doubt: Citi analyst
To achieve US$1.56 billion in revenue each, both will have to attract a combined total of 31 million visitors annually

By ARTHUR SIM

CAN the integrated resorts count on Singaporeans to gamble enough to make them profitable? Citi has doubts.

UNDER QUESTION
The $100 entrance fee is a sticking point as it could prevent both casinos from developing strong, recurring local mass market clients
In a report on the prospects of Las Vegas Sands (LVS), which owns Marina Bay Sands (MBS) here, Citi said that assuming MBS contributes 20 per cent of LVS’s total Ebitdar in its first full year, every eligible Singaporean will have to go to the casino five times a year and spend more then the average visitor to Macau.

Every visitor to Singapore will also have to visit once a year.

‘We liken the current sentiment towards the integrated resort to the Macau gaming boom in 2006/07 and urge investors to not be left holding this parcel when the music stops,’ added Citi analyst Anil Daswani.

Mr Daswani acknowledges that his forecast of 20 per cent Ebitdar from LVS’s Singapore operations is about 30 per cent below consensus. But he also added: ‘If current market estimates are believed, then the Marina Bay Sands will be the most profitable casino in the world in its first full year of operations despite Singapore being a fledgling gaming market.’

Singapore is an untested market as far as gaming goes. Whether Singapore leans towards the Las Vegas model (which counts on non-gaming revenue) or the Macau model (which relies on VIP gamers), will have a significant impact on revenue generators here, and ultimately, the success of the IRs.

Forecasts for gaming revenue at the IRs so far range between US$1-2 billion in the first year.

Based on Citi’s analysis, to achieve US$1.56 billion in revenue each, both IRs will have to attract a combined total of 31 million visitors annually.

This implies that 3.2 million eligible Singaporeans (over 21 years) will have to visit either casino a total of five times. An additional 1.4 million visitors from Johor will have to visit either casino twice a year and 12.2 million tourists will have gone at least once with everybody betting and losing at least US$100.

However, there are downside risks to this projection.

Citi highlights that the US$100 discretionary spending is almost twice that typically spent at Genting Malaysia’s casino (US$53) and higher than the average spending at LVS’s Venetian Macau (US$84). ‘This does not include the additional $100 entry levy that each Singaporean must pay when they enter the casino,’ added Mr Daswani.

He also said that while the market is expecting Singapore IRs to achieve Net Wins Per Table in line with those achieved in Macau, ‘we cannot justify these assumptions just as we cannot believe that Singapore in its first full year of operations will equate to 30-40 per cent of the market size of Macau in terms of gaming revenue or 70 per cent plus of the entire Las Vegas Strip’.

It is not just gaming that is at risk. Citi estimates that room rates at MBS will be around US$143 with occupancy at 78 per cent. However, it noted that there will be 18 per cent of new hotel room supply added to Singapore’s total hotel room supply next year.

But its the $100 entrance fee that is a sticking point as it could prevent both casinos from developing strong and recurring local mass market customers. ‘In Melbourne and Macau, a key dynamic of each market is that the local Australians and Chinese dominate their respective mass market division at the casinos. If Singapore wants more mass market type casinos to succeed, they will have to successfully attract the locals to gamble regularly,’ said Mr Daswani.

At MBS, Citi expects 51 per cent of total gaming revenue to come from the mass market vs 42 per cent at Venetian Macau.

While Citi has focused on many downside risks, others have been more optimistic.

In a report last month, CIMB estimated that Singapore could have a casino market worth $5.1 billion.

Accepting that predicting market size is ’still hazy’, CIMB nevertheless used a ratio of casino revenues-to-legal gambling market in Malaysia to gauge the relative market size of the casino market versus the non-casino gambling market. Applying this ratio to Singapore, and cognisant that this could underestimate the viable casino market, CIMB found that in 2008, Singapore’s tax authorities collected $1.78 billion of taxes from gaming activities. Assuming a 20 per cent tax rate, the legal gaming market in Singapore is estimated to be about $8.9 billion, it said.

CIMB also pointed out that a recent study estimated that 58 per cent of the population in Singapore are gamblers and each gambled up to almost $3,300 per person. ‘These data points support our estimation of a $9 billion gaming market size to tap’, it concluded.

Source : Business Times - 12 September 2009

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Mapletree plans Singapore Reit

Mapletree plans Singapore Reit

(Singapore)

One of the properties that the proposed Mapletree Commercial Trust would comprise is VivoCity, Singapore’s largest mall
MAPLETREE Investments, the property unit of Singapore’s Temasek Holdings, is poised to list a real estate investment trust (Reit) in Singapore that could hold up to S$4 billion in assets, a top executive said.

CEO Hiew Yoon Khong said yesterday the listing of the Reit would take place when stock-market conditions improved.

‘The management team is ready, and the filing process is really a two-month job,’ Mr Hiew told Reuters in an interview. ‘We were actually preparing for the IPO 16 to 18 months ago but the market turned.’

He said Mapletree planned to launch a Vietnam property fund and an Asian industrial property fund in the next 12 months and hopes to raise between US$500 million and US$1 billion for each.

Mr Hiew, who is also senior managing director (special projects) at Temasek, said Mapletree’s strategy going forward is to become ‘a real estate capital management type of business’, managing listed and unlisted funds for outside investors. He said over the next three to five years, Mapletree hoped to grow its property assets to at least S$20 billion.

Mapletree currently owns or manages nearly S$12 billion in real estate assets in several Asian countries, including China, Vietnam and Malaysia.

Its listed property funds include Lippo-Mapletree Indonesia Retail Trust, which owns malls in Indonesia, and Mapletree Logistics Trust, which invests in warehouses and distribution centres across Asia.

Mr Hiew said the proposed Mapletree Commercial Trust that the firm will list in Singapore would comprise VivoCity, Singapore’s largest mall, as well as nearby properties to the west of the central business district.

These include PSA Building, which houses the country’s port operator, and St James Power Station, a popular nightspot.

Mapletree will likely launch the initial public offering when yields on Reits fall closer to 5 per cent - which is around the historical level - from around 8 per cent currently, he said.

Turning to the property funds in Mapletree’s pipeline, Mr Hiew said the Vietnam fund would invest mostly in office, retail and residential properties.

The industrial fund would likely be pan-Asian, although Mapletree may organise it into sub-funds that focused on investments in Japan, China and other parts of the region.

Mr Hiew said he was confident Mapletree’s various property funds would achieve their target returns, which range from 12 per cent for a Singapore industrial fund to 18-22 per cent for the India-China fund. ‘It’s still in the early stage but so far on track. There’s nothing in the numbers to make us panic.’ - Reuters

Source : Business Times - 12 September 2009

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