Singapore acts to cool property market speculation

Singapore acts to cool property market speculation

Singapore: Measures to pre-empt any speculative bubble from forming in the private property market have been outlined in Parliament by the National Development Minister.

Mr Mah Bow Tan said one of the steps to “temper the exuberance” of the market will be the immediate withdrawal of the interest absorption scheme and interest-only loans being offered for purchases of uncompleted property developments.

He told Parliament that both schemes could encourage speculation in a buoyant market as they lower instalment payments in the initial years.

Pointing out that property purchases are a major long-term financial commitment, the national development minister said the removal of the interest absorption scheme and interest-only loans will help make home buyers make careful decisions.

The immediate withdrawal of the interest absorption scheme will only affect new projects and not those which had been offering the scheme until the announcement on Monday.

As for interest-only loans, these will be disallowed with immediate effect.

The House was also told that the Government Land Sales (GLS) programme will be reinstated in early 2010 with the number of confirmed sites to be firmed up at a later stage.

The number of reserve sites in the GLS programme will also be replenished, Mr Mah said, so that the public can be sure of a steady supply of private housing.

The minister also told Parliament that assistance measures outlined in the Budget earlier to stabilise the property market will not be extended given the change in the market conditions.

- CNA/sf

Source : Channel NewsAsia - 14 September 2009

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HDB caters to 8 out of 10 S’poreans to suit different budgets & needs

HDB caters to 8 out of 10 S’poreans to suit different budgets & needs

By S.Ramesh

SINGAPORE: The topic of the affordability of HDB flats was raised in Parliament on Monday during question time. In his reply, National Development Minister Mah Bow Tan has again emphasised that they remained affordable.

He explained the public housing body caters to eight out of ten Singaporeans earning from S$1,500 a month to S$8,000 a month with different types of flats, needs and tastes.

And the HDB is putting up Executive Condominium sites for sale in the confirmed list next year to offer more housing choices for the higher income group.

However, Members of Parliament said the affordability of HDB flats is an issue of concern among their residents.

Jessica Tan, GPC Chair, Finance and Trade and Industry and MP for East Coast GRC, said: “We know resale flats are rising in prices. How can HDB help to ensure that it stays affordable especially for the young couples who are looking to own their first flats.”

Mr Mah explained that affordability is about the price of the flat and the income levels of the families concerned. Also the type of flat they can buy would depend on ability to service the loan.

Mr Mah said: “HDB has a flat for every budget. At every income level, there are flats available, there is a choice whether it is new or resale, whether it is in the mature estate or non-mature estate.

“But there must be trade offs. The trade off is if you want to be in a mature estate, you have to look for a smaller flat. Therefore, when we say that HDB flats are affordable, we are not talking in abstract, we are talking in real terms.”

MPs added that another area of concern is the cash over valuation for flats.

Dr Lim Wee Kiak, GPC Chair, Transport and MP for Sembawang GRC, said: “The question is that ‘is the cash over valuation system still the best system that we have or can we think of alternative to this cash over valuation system?’ Many people are CPF rich but cash poor when they want to buy a flat.”

Mr Mah explained that cash over valuation was not unique to HDB flats, but part and parcel of today’s property transactions - whether private or public.

He said: “Buyers can choose not to pay a cash over valuation. And in fact, the latest data shows that almost one third of transactions today are transacted at or below the valuation. So cash over valuation is not a forgone conclusion. It’s not evident for all transactions.”

Mr Mah’s advice to flat buyers is not to simply cough up the Cash Over Valuation when asked for by sellers or agents, but shop around and get the best deal for their preferred flat. - CNA/vm

Source : Channel NewsAsia - 14 September 2009

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SM Goh says prospect for world economy will be one of slow recovery

SM Goh says prospect for world economy will be one of slow recovery

By S Ramesh

SINGAPORE : Singapore’s Senior Minister Goh Chok Tong has said the prospect for the world’s economy will be one of slow recovery.

But countries should also watch out for the danger of inflation in their use of stimulus packages.

In an interview with Xinhua news agency during his recent visit to China, Mr Goh said some people felt that there is still a danger of another dip. That is because the financial problems of some banks and some countries are not over yet.

But he added that his own view is that economies of countries affected are more likely to be crawling forward.

Mr Goh said: “So we are recovering from the stimulus package. But unlike a ball that has fallen from a height, the person does not bounce back; whereas a ball, if it drops from a very high position, is going to bounce up.”

In the interview, the senior minister said that China could also stimulate domestic demand to support its own growth.

Mr Goh added that he liked the emphasis given by China’s Premier Wen Jiabao on spending on the medical sector, as that meant looking after the people and making sure that their medical needs in the longer term would be taken care of.

Also important is the the emphasis on education - investing in people as they can become much more productive and more skilled for the next phase of economic growth.

Senior Minister Goh went on to explain that the United States would still be the largest market. But the US consumer will in future begin to put more emphasis on saving, which will mean less demand for goods.

Mr Goh added that China was in a position to make up for this fall in demand in the US, as China could take the lead in creating some power for growth in Asia, which will then benefit the world. - CNA/ms

Source : Channel NewsAsia - 14 September 2009

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Marina Bay Sands not decided on charging visitors to SkyPark

Marina Bay Sands not decided on charging visitors to SkyPark

By S Ramesh

SINGAPORE: The Marina Bay Sands SkyPark will start taking shape in about two weeks’ time when work to lift some 7,000 tonnes of the steel superstructure begins.

However, the organisation said Monday it has yet to decide if it will be imposing ticket charges for the public to visit the SkyPark when it is due to open in the second half of next year.

It will take three months to lift the superstructure 200 metres up in the air onto the 55-storey hotel towers.

Marina Bay Sands will be using a technology called the strand jacking operations to lift the steel structure in 14 parts.

Each lifting operation is expected to take 24 hours.

But before the lifting, the bridge and the cantilever elements of the SkyPark are pre-assembled on the ground, rather than having to be built in the air.

The SkyPark is also subject to winds at the top of the Towers and the team has done tunnel testing for wind pressure in order to design the facade and structure to deal with expected wind forces.

When the SkyPark is completed it will feature the world’s largest public cantilever, landscaped gardens, restaurants and an infinity swimming pool.

The entire SkyPark can host up to 3,900 people.

It will also be home to some 250 trees and 650 plants.

- CNA/yb

Source : Channel NewsAsia - 14 September 2009

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Prime Orchard road rent continue to fall but post healthy pre-commitment levels

Prime Orchard road rent continue to fall but post healthy pre-commitment levels

By Jonathan Peeris

Property consultancy CB Richard Ellis said Monday Prime Orchard Road rents averaged S$32.90 per square foot in the third quarter, down three per cent from the second quarter.

For the full year, CBRE said it expects Orchard Road rents to fall between 10 and 12 per cent, and further decline is not expected to exceed five per cent next year.

This means the eventual rental trough should not be less than the S$30 per square foot per month level.

The last time Prime Orchard Road rents fell below S$30 per square foot per month was from 1998 to mid 2000, when the effects of the Asian Financial Crisis were most felt.

However, CBRE said leasing activities for new Orchard Road space have stabilised and pre-commitment tenancies remain strong.

Mandarin Gallery is almost 100 per cent occupied ahead of its pre-Christmas opening.

Knightsbridge announced that it is 50 per cent pre-committed and expects the remaining leases to be finalised by the third quarter of this year.

TripleOne Somerset is 60 per cent pre-let while across the street, 313@Somerset announced that it is 90 per cent leased ahead of its late-November opening.

- CNA/yb

Source : Channel NewsAsia - 14 September 2009

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Revival in merger and acquisitions market

Revival in merger and acquisitions market

Flurry of big deals in usually quiet time may mean worst is over

By Gabriel Chen

THE mergers and acquisitions (M&A) market is stirring back to life across the world, with a flurry of multibillion-dollar deals announced in the last two weeks or so.

The Chartered Semiconductor Manufacturing buyout announced here earlier last week is just one of the ‘big number’ deals that have emerged in what is usually a quiet time for the M&A sector.

Investment bankers say the heightened activity following the traditionally dormant June to August period suggests that the worst for the sector may be over.

The biggest deal has been Kraft’s hostile US$16.7 billion (S$23.8 billion) bid for Cadbury, which the confectionary firm rebuffed. Reports have suggested that Kraft could sweeten the offer.

Another big deal is a Malaysian-Indian consortium’s bid of about US$14 billion for a 46 per cent stake in Kuwait’s Zain telecom.

Closer to home, Abu Dhabi’s ATIC has agreed to buy Chartered Semiconductor in a deal worth $5.6 billion - the biggest M&A involving a Singapore company since 2001, when United Overseas Bank acquired Overseas Union Bank.

Local bankers tip that large Singapore corporates will soon start launching billion-dollar takeover bids.

‘I would say they’re now beginning to look (for potential acquisitions),’ said Morgan Stanley’s chairman for South-east Asia, Mr Ronald Ong.

‘From our discussions with our clients, they’re on the look-out as valuations are getting challenging. And yes, we’re getting more mandates now from financial institutions, resources, consumer-type companies.’

Morgan Stanley advised Chartered on the ATIC deal.

A mandate is when a client formally hires a bank as an adviser to a deal. It may also involve an underwriting role.

Mr Sutha Kandiah, UBS’ joint head of investment banking for Singapore and Malaysia, said its business volumes have picked up substantially as confidence returns to the market.

‘Some of the initial public offerings that we have, or equity offerings we have sort of put on ice, are being re-kicked off and volumes have picked up materially,’ he said.

Private equity deals are also trickling in with firms flush with cash eager to exploit attractive opportunities.

‘We’re involved in more active discussions,’ said Mr Mark Pawley, chief executive of private equity firm Oxley Capital.

‘A lot of deals that have been going on for the last six to 12 months are getting to a point where transactions might happen.’

Deal activity - a lagging indicator of economic recovery - is coming back at a time when many countries, including Singapore, have emerged from their worst recession in decades.

Many of the deals are strategic, for instance, involving firms entering new markets or expanding their business lines.

‘There were more distressed situations last year - a different type of M&A,’ said Nomura’s joint head of investment banking for South-east Asia, Mr Patrick Lee. ‘In this market, you’ll see more normal type of M&A deals, where deals are more strategic in nature.’

Bankers and lawyers say that buyers have the firepower to finance their deals, thanks partly to record levels of capital markets activity such as rights issues and share placements during the first six months of the year.

‘On a quarter-on-quarter basis, there have been more mandates and more parties willing to talk to get M&A transactions done,’ said Mr Ng Wai King, Wong Partnership LLP’s head of corporate/M&A practice.

Deutsche Bank’s head of South-east Asia banking, Mr Sandeep Pahwa, said that Singapore M&A activity has picked up and is expected to further increase, particularly due to continued strong cross-border interest, especially from Chinese state-owned enterprises and Middle Eastern buyers.

‘We expect to see significant capital raising in the fourth quarter through at least the middle of next year, which is the cornerstone for acquisition activity,’ Mr Pahwa said.

While the conditions fostering deal making have improved, activity remains far below its high of a few years ago.

Thomson Reuters data shows that at least US$1.32 trillion worth of deals have been announced this year - down 37 per cent from the same point last year and more than 50 per cent lower than 2007.

Source : Straits Times - 14 September 2009

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Obama fights back amid health-reform protests

Obama fights back amid health-reform protests

He pledges at rally to go ahead even as tens of thousands denounce his plans in Washington

Thousands of demonstrators gathering on Saturday at the plaza near Capitol Hill in Washington to protest against President Barack Obama?s fiscal and economic policies, including the administration’s plans to overhaul the health-care system. — PHOTO: REUTERS

WASHINGTON: President Barack Obama assailed critics and said the United States was closer than ever to a health-care overhaul, even as protesters descended on the nation’s capital and denounced his proposed plan as ’socialism’.

Speaking at a rally in Minneapolis, in the state of Minnesota, on Saturday, Mr Obama sought to grab the megaphone from opponents of his chief domestic priority as it reaches the endgame.

‘I will not accept the status quo. Not this time. Not now,’ the President told some 15,000 spirited supporters.

While he was away, tens of thousands of protesters with signs saying ‘Obama = Socialism’ and ‘Keep Government Out of Health Care’ marched to protest against government spending and the rising budget deficit.

The protesters, many of whom had come from other states, swarmed Capitol Hill, where the US legislature sits, for hours.

Yesterday, the White House said that anger at how much has been spent propping up the US economy will not persuade Mr Obama to retreat from the reform plan.

The President, over the past week, entered what he and his advisers hope will be the final phase of their push to win congressional passage of a health-care overhaul.

He is stepping up his drive amid stiff opposition from Republicans and hesitation from some Democrats over the cost of his plan, estimated at US$900 billion (S$1.3 trillion) over a decade.

At the rally, on TV, and on his weekend radio and Internet address, Mr Obama has sought to both energise his supporters and make people with insurance coverage care about his proposal.

‘This is when the special interests and the insurance companies and folks who think, you know, this is a good way to bring Obama down, this is when they are going to fight with everything they have got,’ Mr Obama said at the Minneapolis rally.

The rally came just days after he addressed a joint session of Congress on Wednesday in which he urged Democrats and Republicans to come together.

In Minneapolis, Mr Obama said his plan incorporates ideas from those on both sides, and he promised to continue to seek common ground. But he warned that he would not waste time with those who have decided ‘that it is better politics to kill this plan than improve it’.

The United States is the only developed country without a universal programme of health-care coverage, leaving almost 50 million without insurance. While many are unhappy with the current system, attempts to change it have been politically explosive.

Mr Obama hopes to extend coverage and rein in health-care costs that account for about one-sixth of the US economy.

In his Sept 9 speech to Congress, Mr Obama endorsed taxing insurers on some medical plans. He also indicated flexibility on his proposal to create a government-run health insurance plan for those without coverage and small businesses, a point he repeated on Saturday at the rally.

He cited a new Treasury Department analysis that found that nearly half of all Americans under age 65 go without health coverage at some point in a 10-year period. The study tracked the insurance status of a sample of people from 1997 to 2006.

‘In other words, it can happen to anyone,’ Mr Obama said.

In an interview with the CBS news show 60 Minutes which aired last night, Mr Obama said he is focused on overhauling health care the right way.

‘I have no interest in having a Bill get passed that fails,’ he said. ‘I intend to be president for a while, and once this Bill passes, I own it.’

And if it does not work, he said: ‘I am the one who is going to be held responsible. So I have every incentive to get this right.’

ASSOCIATED PRESS, BLOOMBERG, AGENCE FRANCE-PRESSE

Source : Straits Times - 14 September 2009

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Asia’s finance sector seen leading jobs recovery

Asia’s finance sector seen leading jobs recovery

Marked turnaround in China, strength also evident in Singapore: analyst

(HONG KONG) Financial institutions are leading a recovery in the Asian jobs market as the region emerges from recession more forcefully than expected, analysts say.

Hiring again: A recent Hong Kong survey showed that finance sector firms planning to increase staff in Q4 marginally exceeded those planning more downsizing
While overall unemployment is still rising a year after the collapse of investment bank Lehman Brothers, economists say it is the finance sector which is bucking the trend.

‘I’d be as bullish as to say we are in a recovery,’ said Mike Game, the CEO of Hong Kong-based recruitment firm Hudson’s Asia operation. ‘We have seen quite a marked turnaround in activity in China in particular. We are also seeing strength in Singapore.’

Lehman Brothers filed for bankruptcy protection on Sept 15, 2008, as it buckled under the weight of the collapse in US sub-prime mortgages, in a scandal that became emblematic of the worldwide financial crisis.

‘What happened during the downturn was that a lot of firms couldn’t be seen to not lay people off but a lot were reluctant to let people go,’ said Matthew Hoyle, founder of Matthew Hoyle Financial Markets, a specialist headhunter for the banking and hedge fund industries, based in Hong Kong.

‘Now those birds are coming home to roost and there has been a complete reversal in the hiring market. We are now seeing people who were laid off coming back and demanding signing-on fees.’

Mr Hoyle said business had tripled since the height of the downturn, adding: ‘It wasn’t entirely unexpected but I couldn’t have imagined in my wildest dreams it would be this intense.’

Official government statistics in Hong Kong back up Mr Hoyle’s optimism.

Although the latest available finance sector employment figures show a 0.6 per cent drop in the first quarter of 2009 from the same period a year earlier, they are up on the last quarter of 2008 by 0.4 per cent - equivalent to nearly 700 jobs.

Analysts say the financial institutions stopped hiring altogether in the final three months of last year, before beginning to replace key positions at the start of this year and then taking on staff to meet growing demand in the second quarter.

One trader of a blue chip financial institution in Hong Kong, who asked not to be named, told AFP he had managed to find work with a new firm after being made redundant in the downturn.

‘Even though I’ve been in my new job for about three months, I had two headhunters call up out of the blue in the last two days with multiple roles for derivatives traders at bulge bracket US banks,’ he said.

‘And a number of other jobs on the go are typically smaller banks and brokerages, picking their moment to get into markets they had previously missed the bus on and lift some modestly priced experience to set up new operations.’

HSBC is recruiting more than 100 staff members in Hong Kong, The New York Times reported at the start of September, while in mainland China it plans to add 1,000 employees this year, and a similar number next year.

Most of the jobs that are coming back are replacements of previously cut positions, not new jobs, market experts say. But Ian Strutton, director of Manpower Professional Hong Kong, said 20 per cent were new positions.

‘Generally it is accepted that when a recession comes it is the financial services that are first to react and cut investment, and when the economy starts to recover they are the first to start reinvesting, and they do it quickly,’ he said.

A recent survey of 815 Hong Kong employers published by recruitment agency Manpower showed that there were marginally more finance sector companies planning to increase staff in the fourth quarter than there were firms planning more downsizing.

‘We see an emerging demand from corporate banking, showing a gradual improvement in job opportunities, especially wealth management,’ said Lancy Chui, general manager of Manpower Hong Kong and Macau.

In China, one recruitment company said the outlook for the Chinese financial services sector was positive as the world’s third largest economy was recovering and investor confidence had improved.

Demand for people with finance industry experience had increased in the past two months, Thomas Zhou, partner at Dacare Consulting in Beijing, told AFP. ‘Market sentiment in China has picked up since the stock market started to go up. There’s been a lot of (recruitment) activity,’ he said. — AFP

Source : Business Times - 14 September 2009

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SM Goh expresses caution about global recovery

SM Goh expresses caution about global recovery

He likens current state to a man who has survived a fall from great height

By LEE U-WEN

(SINGAPORE) ‘Slow recovery and crawling forward’ for the next several quarters - and if luck goes astray, maybe for many more years. That is the prognosis for the global economy according to Senior Minister Goh Chok Tong, in an interview with the Xinhua news agency last week.

Mr Goh: The worst is behind us; the stimulus package is like medication
The interview was conducted during his five-day official visit to China, which ended on Saturday.

Mr Goh likened the current state of the global economy to a man who has fallen from a great height.

‘Many of his bones have been broken and his body is bruised, but he has survived,’ he said, in China’s port city of Dalian last Thursday.

‘The worst is behind us. The stimulus package is like medication, so we are recovering from the stimulus package. But unlike a ball that has fallen from a great height, the person doesn’t bounce back. Whereas a ball, if it drops from a very high position, is going to bounce up.’

Mr Goh, who is also chairman of the Monetary Authority of Singapore, echoed the views of economists, who have warned of the dangers of another dip in the economy as the financial woes of some banks and countries are not over yet.

‘There is a possibility that we may see another dip. But my own view is, I think we are more likely to be crawling forward.’

Some countries have expressed recently that the ‘green economy’ - the proliferation of an array of new, environmentally friendly technologies - could be key to reviving world economic growth, but Mr Goh was less sanguine. While he agreed that the green economy was important in the longer term to achieve sustainable development, it could not be used as a tool to combat the current crisis, which was triggered mainly by the property bust in the United States last year.

To help jump-start the world economy, Mr Goh supported the policy of stimulating economies, but cautioned about the need to watch out for inflation.

He noted that there was a lot of scope for additional stimulus in China, because of its infrastructure needs and its ability to boost domestic demand.

However, he added that it was important for China to stimulate its domestic demand in the appropriate way - ‘not in a way that will lead to a bubble in property prices or to inflation’.

Mr Goh pointed out that China could no longer depend as much as before on an export-led strategy, given that the US would still remain the largest market in the world.

‘The US would still be buying, but the US consumer will in future, I believe, begin to put more emphasis on saving,’ he said. ‘They have been spending so much, suddenly they discovered that the country is in deficit, they themselves are in deficit with no savings and negative equity. So for a few years, I think the US will move into a saving mode, which means less demand for our goods.’

Mr Goh praised China’s growth rate of 7.1 per cent in the first half of this year, given that many other major economies such as the US and Japan have shrunk.

He expressed confidence that China could achieve its 8 per cent target for the year as a whole, because the country still managed to expand despite the financial crisis.

‘To get 8 per cent, China should be able to do around 9-10 per cent in the second half. Maybe if you average it out, you will get 8 per cent growth. I think China can achieve it,’ he said.

Source : Business Times - 14 September 2009

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