Asian prime office prices may fall 10%

Asian prime office prices may fall 10%

(SINGAPORE) Asian real estate prices may fall further and prime office values decline 10 per cent before year’s end, Singapore-based property investor Pacific Star Group said.

‘Most markets are peaking over the next 12 months, or even trending downwards,’ said Frank Vaessen, president of fund management at Pacific Star, which manages US$3 billion of assets globally. ‘Broadly speaking, the bottom could come sometime in late 2009 or early 2010.’ Faltering economic growth and the global credit contraction may ease demand for office and retail space in Asia. Rising inflation and falling equity markets may also dampen sales of homes in the region.

The price declines will bring valuations to a more ‘normal’ level after markets rose rapidly the past year, Mr Vaessen said yesterday.

Japan and South Korea’s office markets are expected to have the best performance in Asia as they benefit from a supply shortage, Mr Vaessen said. Both markets are set to offer property investors returns of as much as 13 per cent over the next five to seven years, he said.

Retail space in Beijing and Shanghai may also offer higher investment returns, Mr Vaessen said. Investors should stay away from Vietnam, Thailand and Malaysia, he added, citing Vietnam’s accelerating inflation and volatile currency and political instability in Thailand and Malaysia. — Bloomberg

Source : Straits Times - 07 Aug 2008

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New Yahoo election tally shows big protest vote - SAN FRANCISCO

New Yahoo election tally shows big protest vote - SAN FRANCISCO

SAN FRANCISCO - YAHOO has released a recount of the vote for its board that revealed a strong protest vote against five of nine directors, including chief executive Jerry Yang.
The Internet company said revised vote tallies showed 33.7 per cent of votes withheld for Mr Yang, also the company’s co-founder, or more than twice the opposition to his reappointment to the board in the first count.

Mr Yang has been under pressure for months over failed attempts by Microsoft to buy Yahoo and over questions about his leadership, but early results from last Friday’s shareholder vote suggested the tide was turning in his favour.

The initial tally showed 85 per cent of votes going to him.

The stunning new twist in the Yahoo saga came after one of its largest and most critical shareholders, Capital Research Global Investors, called for a probe of the shareholder vote upon finding discrepancies in the results.

Analysts were split on whether the recount, while potentially emboldening for critics, was a symbolic embarrassment to the leadership or a new threat to its power.

‘That’s a big negative vote against the Yahoo board, but it doesn’t change anything,’ RBC Capital Markets analyst Ross Sandler said. ‘It is a statement that they shouldn’t be under any illusion that their support is broad.’

‘The recount somewhat lowers the credibility of the management team,’ Sanford C.Bernstein analyst Jeffrey Lindsay said. ‘Assuming this was all a mistake, it is particularly unfortunate: Management doesn’t have the mandate they appeared to have had’ coming out of the annual meeting, he added.

Yahoo said it had been informed by the company’s inspector of elections that Broadridge Financial Solutions, a proxy voting intermediary for major investors, had made significant errors in reporting votes at its annual shareholder meeting.

Three other directors, including chairman Roy Bostock, also received strong protest votes of between 32 and 40 per cent. The three are members of Yahoo’s compensation committee and have borne the brunt of criticism over the company’s refusal to do more to link executive pay to performance.

A fifth director - Mr Gary Wilson, former chairman of Northwest Airlines - had 28 per cent of votes on his re-election withheld.

The remaining four directors each won more than 90 per cent of votes in favour of their re-election.

RBC’s Mr Sandler said the investor saga was likely to drag on for the next few quarters until the company concluded its previously announced partnership with Google, reached a deal with Microsoft, or sold one of its Asian properties to help the company remain independent.

REUTERS

Source : Straits Times - 07 Aug 2008

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Anwar to be charged today - Malaysia

Anwar to be charged today  - Malaysia

He is served notice to appear in court, as poll is set for Aug 26

By Carolyn Hong, Malaysia Bureau Chief 

IN KUALA LUMPUR - THE suspense is over, be prepared for the drama.

Malaysian police yesterday said de facto opposition leader Anwar Ibrahim will be charged with sodomy, just hours after the Election Commission (EC) set Aug 26 as the date for a by-election through which he hopes to return to Parliament.

Shortly after the EC set the date for polls in Permatang Pauh, police went to Datuk Seri Anwar’s house to serve a notice on him to appear in the Kuala Lumpur Sessions Court today.

Deputy police chief Ismail Omar said in a statement that the Attorney-General’s Office had decided to charge Mr Anwar after police ‘completed their investigation into a criminal sex case involving intercourse against the laws of nature’.

Tan Sri Ismail urged Anwar supporters not to undermine public order when he appears in court today at 10am.

A 23-year-old former aide to the opposition leader, Mr Saiful Bukhari Azlan, lodged a report in late June alleging that he had been sexually assaulted by Mr Anwar in an upscale condominium in Kuala Lumpur.

The former deputy premier has denounced the allegation as a conspiracy to derail his plan to topple the government through defections from Barisan Nasional ranks following his return to Parliament.

Yesterday, for the first time, he blamed Prime Minister Abdullah Badawi personally for the decision to prosecute him.

‘This trial is a way out for a man under siege to deflect attention away from his troubles. I hold the Prime Minister responsible for bringing damage to this nation with this sham trial,’ he told reporters.

Datuk Seri Abdullah later told reporters that police were not ’so stupid’ as to charge the opposition leader if there was no evidence.

Mr Anwar insisted that he would still run in the by-election called after his wife Wan Azizah Ismail resigned last week from the Penang seat which she held for two terms after her husband was sacked from office in 1998.

He was subsequently arrested, tried and convicted of sodomy and corruption. The sodomy conviction was later overturned on appeal.

Mr Anwar had been MP for Permatang Pauh since 1982 but lost the seat as a result of his conviction. His disqualification from entering Parliament lapsed in April.

The latest charge will not affect his candidacy as only those with convictions are barred from standing. However, if he is later convicted, he will lose the seat.

The Election Commission fixed Aug 16 as nomination day, and Aug 26 for polling.

Most analysts believe that Mr Anwar will romp home with a strong victory, especially if he is denied bail and has to campaign from behind bars for a constituency regarded as a family stronghold. His vote majority may even soar above the 13,000 garnered by his wife in the March polls, as public sympathy is on his side.

Two surveys in the last one month have shown that the overwhelming majority of Malaysians believe the accusation against him to be politically motivated.

Mr Anwar could be damaged if the government is able to effectively counter the perception of a political conspiracy, but this would be extremely difficult given the sentiment on the ground.

The government has already been criticised for setting polling day on a Tuesday, with critics charging that this would result in a lower voter turnout.

The BN will benefit from a lower turnout as those working in urban centres in other parts of the country - usually opposition voters - may not return to vote.
 
Source : Straits Times - 07 Aug 2008

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Yahoo team re-elected after getting an earful -CALIFORNIA

Yahoo team re-elected after getting an earful -CALIFORNIA

Shareholders back board after blasting executives over failed takeover talks with Microsoft

SAN JOSE (CALIFORNIA) - YAHOO executives were resoundingly re-elected last Friday after being berated by shareholders over failed takeover talks with Microsoft.
Yahoo chief executive Jerry Yang got 85.4 per cent of the votes cast by shareholders while board chairman Roy Bostock got the support of 79.5 per cent of the shareholders. The weakest support was shown for incumbent Arthur Kern, who won 77.9 per cent of the votes.

‘It does look like they have support of the shareholders again but at the end of the day, they have to focus on the company goals and execute,’ said analyst Rob Enderle of Enderle Group in Silicon Valley.

The votes were tallied after Mr Yang and Mr Bostock, two key players in drama-filled negotiations with Microsoft, faced approximately 150 shareholders in a hotel ballroom in downtown San Jose, California.

Voices of support and criticism rose from the gathering, with one shareholder calling for Mr Bostock to resign and another praising Yahoo for saving the firm from ‘over-the-hill green-tentacled octopus’ Microsoft.

‘I think you overpaid on compensation; I think you overplayed your hand with Microsoft, and I think you overstayed your welcome after last year’s vote and should do the honourable thing and step down from this board,’ stockholder Eric Jackson of Ironfire Capital said.

Mr Bostock responded with a ‘No’. He added: ‘The board controlled the process of dealing with Microsoft right from the beginning.

‘We called the shots and were deeply involved in every step.’

Mr Bostock said the Yahoo board never resisted Microsoft’s proposal to buy Yahoo and that it was the US software giant that capriciously walked away from negotiations.

Microsoft walked away from negotiations on May 3 after Yahoo rejected an offer it raised from US$31 to US$33 per share, which amounted to US$47.5 billion (S$65 billion).

‘Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts,’ Microsoft said of the Yahoo presentation.

Yahoo executives promised that the struggling Internet pioneer remained on course throughout the Microsoft drama and is poised for more profitable days ahead.

‘We’ve been rewiring the company,’ Mr Yang told stockholders that had been plied with coffee, pastries, juice and fresh fruit. ‘This is a very global business and Yahoo is very well-positioned.’

Yahoo avoided an ugly showdown with corporate raider Carl Icahn, whose campaign to overthrow the board was ended by a truce that gains him three seats.

AGENCE FRANCE-PRESSE

Source : Straits Times - 04 Aug 2008

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Blasts spark fears other Indian cities may be next

Blasts spark fears other Indian cities may be next

Analysts link blasts in Ahmedabad, Bangalore to India’s ties with US

By Ravi Velloor, India Bureau Chief

NEW DELHI - MUMBAI police yesterday scoured the city and raided a house for clues to the terrorist attacks on Ahmedabad and Bangalore that took place over consecutive days.
On Saturday, Ahmedabad in the west was hit by 16 bombs. At least 45 people have died and doctors were treating another 161.

Analysts say the attacks are a warning that India’s economic centres will be targeted if it plans to increase its presence in Afghanistan.

Minutes before Saturday’s blasts, a little-known group called Indian Mujahideen e-mailed news companies claiming responsibility for what was to come.

Officials speculated that the group was actually the banned Students Islamic Movement of India using a guise, or a unit of the Pakistan-based Lashkar-e-Toiba.

In a 14-page document attached to the mail, it said the Ahmedabad blasts were an ‘opening launch… an answer to the tyranny and oppression of Hindus’.

Ahmedabad, the largest city of Gujarat state, is the scene of deadly riots in 2002 in which 2,500 people died, most of them Muslims killed by rampaging Hindu mobs.

Police yesterday raided a house in Mumbai believed to have the computer from where the e-mail originated, and rounded up 30 people.

The Ahmedabad attack came a day after two people died when eight low-intensity bombs went off in the technology hub of Bangalore, the capital of Karnataka state.

The attacks are read here as a warning not just to Hindu nationalists who govern these areas but also the Congress-led Indian government.

The message is that its economy, now expanding at an annual rate of about 9 per cent, will be targeted if it escalates its strategic presence in Afghanistan, analysts say.

India’s rising embrace of the US and Israel pushes it to the frontline of potential attacks by Al-Qaeda, Taleban and other radical groups that base their vengeance on a flawed interpretation of Islam.

This month’s political developments in India, including the government’s decision to push forward on a civilian nuclear deal with the US, has highlighted New Delhi’s growing strategic links with the US. Leftist parties, opposed to the deal, say the nuclear deal is a precursor to drawing India closer to the US.

India also has close intelligence and defence ties with Israel, which has emerged as the country’s second-biggest supplier of weaponry after Russia. For weeks, intelligence analysts have speculated that militants may target the Israeli embassy in New Delhi.

More than 180 people have died in India in terrorist attacks in the past year.

Analysts here note that Ahmedabad and Bangalore are in states ruled by the Hindu nationalist Bharatiya Janata Party (BJP) and have significant Muslim populations. Those behind the attacks were hoping to cause communal discord, they said.

‘We believe there is more to it,’ said a senior intelligence official in New Delhi.

‘Bangalore is India’s software and services hub. Ahmedabad is the administrative headquarters of India’s most industrially dynamic state, Gujarat. It is a warning that they have the capability and will to kill our remarkable economic growth.’

The attacks come weeks after the Indian embassy in Kabul was targeted by a suicide bomber.

The senior intelligence official said special vigilance was now being maintained over Gurgaon, Chandigarh and Chennai, all outsourcing centres, the mainstay of India’s booming services sector.

Source : Straits Times - 28 July 2008

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Johor’s Horizon Hills attracts foreign buyers - Malaysia

Johor’s Horizon Hills attracts foreign buyers- Malaysia

60% of buyers are from overseas; more than half of whom are Singaporeans
By EMILYN YAP

WITH a golf course set within a residential township, the resort-style Horizon Hills in South Johor is attracting considerable overseas interest - more than 60 per cent of buyers in launched precincts are foreigners.

 
Home is a golf retreat: Mr Chow (above) says that Horizon Hills offers a resort lifestyle and investment value which have attracted the attention of foreigners who are working in Johor Baru and Singapore 
Here in town yesterday to promote the project, Malaysian developer Gamuda Land also noted that Singaporeans make up more than half of the foreign buyers. The rest come from countries as far as Sri Lanka, the United Kingdom, South Africa, the US, Japan and India.

Horizon Hills is located in Nusajaya, a flagship zone within South Johor’s Iskandar Malaysia, which is slated to become southern peninsular Malaysia’s economic corridor. Spanning 1,200 acres, the township comprises 13 precincts with bungalows, semi-detached, cluster and terrace homes.

Two precincts - The Gateway and The Golf - were launched last year. Ninety per cent of The Gateway’s more than 400 residential units were taken up.

A 200-acre 18-hole designer golf course and a club house are also integral parts of Horizon Hills. Costing RM30 million (S$12.5 million) and RM50 million respectively, the golf course and club house were completed this month.

Bungalows with golf course frontage went for RM2 million on average, while semi-detached units cost around RM900,000.

‘The homes in Horizon Hills are very affordable,’ said Gamuda Land’s managing director Chow Chee Wah. ‘The resort lifestyle and investment value which Horizon Hills offer have attracted the attention of foreigners who are working in Johor Baru and Singapore.’

Home prices in Horizon Hill have risen by about 15-20 per cent in the last one and a half years, Mr Chow pointed out. The uptrend is likely to continue as construction costs in Malaysia increase. Costs have swelled by some 35 per cent in Malaysia in the past year, he said.

Managing director of Savills Singapore Michael Ng also expected to see land prices in the area rise due to development and growing foreign investment in Iskandar Malaysia. Savills Singapore is the marketing agent for Horizon Hills in the region.

Source : Business Times - 22 July 2008

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CapitaLand sets up $1.4b Raffles City China Fund

CapitaLand sets up $1.4b Raffles City China Fund

Fund will invest in prime mixed-use commercial assets in key gateway cities

By EMILYN YAP

CAPITALAND has set up a $1.4 billion Raffles City China Fund (RCCF) to invest in prime mixed-use commercial properties in key Chinese gateway cities.

Raffles City Shanghai: The new fund - RCCF - will purchase CapitaLand’s 55.9% stake in the project which opened in 2003. It will also buy 100% of the Raffles City projects in Beijing, Chengdu and Hangzhou
The fund’s seed assets will be the property group’s Raffles City-branded developments in China.

RCCF is CapitaLand’s first integrated development private equity fund in China, and is also the largest originated and managed by the group to date.

CapitaLand has subscribed for a 50 per cent sponsor stake in RCCF. Leading financial institutions and pension funds from Asia, Europe and North America took up the remaining interest. RCCF has the option of a final closing by end-December and could grow to $1.8 billion.

CapitaLand may reduce its stake in the fund to 45 per cent if there is strong investor demand for the option.

Through its indirect wholly owned subsidiary RCCF Management, CapitaLand will also undertake the role of fund manager and manage RCCF-owned properties.

The fund will purchase CapitaLand’s 55.9 per cent stake in Raffles City Shanghai, which opened its doors in November 2003. It will also purchase 100 per cent of Raffles City Beijing, Raffles City Chengdu and Raffles City Hangzhou.

The three are under various stages of development and will be ready between 2009 and 2012.

‘Currently, the assets are valued at a total of about US$2 billion (about S$2.7 billion) comprising CapitaLand’s stake in Raffles City Shanghai and the three Raffles City projects on a completed basis,’ said CapitaLand.

Funds raised will be substantially invested with the acquisition of these four assets.

‘The strong investor response to the fund is an endorsement of our expertise and delivery track record in the entire real estate value chain,’ said CapitaLand’s president and CEO Liew Mun Leong.

‘The successful close of the fund is a boost for our expansion plans for Raffles City to achieve the eventual goal of 10 such iconic developments globally.’

RCCF is CapitaLand’s eighth real estate private equity fund in China.

‘We will continue to develop unique real estate products to cater to an increasingly sophisticated consumer market and establish new real estate funds for investors who share our confidence in China’s growth,’ said Lim Ming Yan, CEO of CapitaLand China Holdings Group and CapitaLand Financial Limited (China Development).

Co-head of Asian real estate research at UBS, Alastair Gillespie, sees benefits for CapitaLand in setting up RCCF. Not only would the fund free up capital for the property group to pursue new opportunities in China, it would boost market confidence in the company’s ability to grow its fund management business.

CapitaLand shares fell six cents to close at $5.54 yesterday.

Source : Business Times - 17 July 2008

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Anwar arrested - Malaysia

Anwar arrested - Malaysia

Policemen in balaclavas haul him away for questioning on sex-attack allegation

By Carolyn Hong & Hazlin Hassan

DRAMATIC ARREST: Mr Anwar had been told to report to the police by 2pm yesterday, but he was arrested near his home an hour ahead of the deadline. — PHOTO: WWW.NANYANG.COM

IN KUALA LUMPUR - OPPOSITION leader Anwar Ibrahim was arrested in a dramatic fashion yesterday by policemen who stopped his car and hauled him out over allegations that he sexually attacked a male aide.
A dozen police cars and about 20 policemen sporting balaclavas blocked the road leading to his Bukit Segambut home at about 1pm and stopped his car 800m from his house.

His lawyer, Mr Sankara Nair, was quoted on the Malaysiakini website describing the police swoop: ‘I was in the car with him when he was arrested. We were surrounded. Their exact words were: ‘You are under arrest’.’

Datuk Seri Anwar, 60, was not handcuffed, but he was bundled into a white four-wheel-drive vehicle with dark-tinted windows and taken to police headquarters, escorted by a convoy of patrol cars.

His lawyers were not allowed to accompany him, but it is believed that one of them was allowed to be with him later.

The opposition leader was arrested while returning home from the administrative capital of Putrajaya after spending the morning at the Anti-Corruption Agency headquarters.

He had been questioned about his allegations that the police chief and Attorney-General had fabricated evidence in his 1999 trial on sodomy charges. His conviction then was later overturned.

Yesterday’s drama was an uncanny repeat of 1998 when Mr Anwar was nabbed.

One of his lawyers, Mr William Leong, said he believed Mr Anwar would be charged with sodomising his former aide, Mr Saiful Bukhari Azlan, 23.

‘I would expect them to charge him, because they have gone to extraordinary lengths,’ said Mr Leong.

Mr Anwar was arrested an hour ahead of the 2pm deadline for him to see the police to give a statement in the investigation into Mr Saiful’s report that he had been sexually attacked.

Federal Criminal Investigation Department director Bakri Zinin told The Star newspaper that the police decided to act because they did not think he would show up, as he had failed to keep an appointment on Monday.

He said Mr Anwar should have gone directly from the anti-graft agency to the police HQ.

‘However, we were informed that after he left the ACA headquarters in Putrajaya, he had changed his route and was heading back to his house in Segambut,’ he said. ‘He was arrested as we had reason to believe he was not going to show up.’

Mr Nair, however, said that Mr Anwar’s team had told the police several minutes before the arrest that he would report on time.

‘If Anwar had not shown up at 2pm, I would understand the need to arrest. The police have breached the trust and confidence we once had,’ he said.

‘There was a lot of fear and intimidation. It was absolutely unnecessary.’

CID chief Bakri said Mr Anwar was allowed to meet his lawyer and family, and gave an assurance that he would be safe in custody.

In 1998, Mr Anwar was badly beaten by then police chief Rahim Noor, emerging with a black eye.

His wife Wan Azizah Ismail said: ‘It’s a feeling of deja vu with what happened 10 years ago.’

Unlike that time, when street demonstrations broke out, the reaction was muted yesterday as opposition leaders urged supporters to stay calm.

Last night Mr Anwar was taken to the Kuala Lumpur Hospital for a DNA sample to be taken, but one of his lawyers said he had been advised against providing a sample.

Home Minister Syed Hamid Albar said late last night that the opposition leader was likely to spend the night in detention.

He said that Mr Anwar faced a serious allegation and the police had to investigate fully.

‘We will make sure that no one is above the law,’ he said.

Source : Straits Times - 17 July 2008

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Facing a financing void? Call Warren Buffett

Facing a financing void? Call Warren Buffett 
BUYING SPREE: Mr Buffett has announced at least 28 purchases for Berkshire in the past two years. 
 
NEW YORK - IT’S Mr Warren Buffett to the rescue.
The multi-billionaire investor’s Berkshire Hathaway has helped finance a second take-

over in the past three months, as tightening credit leads the world’s biggest banks to retreat from backing deals.

Mr Buffett, who has announced at least 28 purchases for Berkshire in the past two years, committed US$3 billion (S$4.08 billion) on Thursday to Dow Chemical’s US$18.8 billion purchase of Rohm and Haas.

In April, he put up US$6.5 billion to assist Mars’ takeover of Wm Wrigley Jr Co.

‘The word is clearly out on Wall Street that if you want capital, Warren’s someone to speak with,’ said Mr Tom Russo, a partner in Gardner Russo & Gardner.

Mr Buffett, 77, is funnelling some of Berkshire’s US$35 billion into a financing void after US$408 billion in losses on United States sub-prime mortgages prompted banks to hoard capital and slow lending.

He built Berkshire over four decades from a failing maker of men’s suit linings into a US$185 billion investment company. It has been buying up dozens of businesses that sell products from lollipops to manufactured homes and corporate jet leases.

BLOOMBERG NEWS

Source : Straits Times - 12 July 2008

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Morgan sees higher Asean-4 GDP growth

Morgan sees higher Asean-4 GDP growth

FOR all the concerns about rising inflation, the major Asean economies will likely deliver higher-than-expected growth in 2008, say Morgan Stanley Asia’s economists. But the outlook for the region in 2009 looks ‘challenging’.
The investment bank has actually raised - if marginally - its forecast of 2008 GDP growth for the Asean-4 region (Singapore, Malaysia, Thailand and Indonesia) to 5.6 per cent, from an earlier estimate of 5.5 per cent.

A stronger-than-expected global growth backdrop and a relatively slow monetary policy response to emerging inflation risks have resulted in the region’s 2008 first-half growth being mostly higher than it had earlier forecast, Morgan Stanley says in a report this week.

While it has kept intact its recently upgraded GDP growth projections for Malaysia (5.7 per cent) and Thailand (5.6 per cent), it has now jacked up the forecast for Indonesia to 6 per cent (up half a point) and slashed Singapore’s to 4.3 per cent, from 5.1 per cent previously, following the poor Q2 numbers just released.

But the Asean economies will ‘face headwinds’ next year as higher inflation cuts into purchasing power and capital investment decisions, domestic demand weakens from policy tightening, and export markets soften, it says. There’re also ‘idiosyncratic risks’ in the form of political uncertainty in some countries, it notes. As such, it has cut its 2009 GDP growth forecast for the region by close to one point, to 5.1 per cent.

 
 
From an earlier estimate of 6.1 per cent, Morgan Stanley now sees the Singapore economy growing just 4 per cent in 2009.

According to the bank, Singapore will, compared with its Asean neighbours, face the ‘maximum adverse knock-on effects’ of a global slowdown as its growth strategy has been fully centred on catering to global demand. In 2009, with the property market softening, support from construction will wane at a time when external conditions weaken further, it notes.

But, as the only country in the region with a ’stable and predictable’ political climate, Singapore faces ‘the least uncertainty in terms of what could go wrong relative to market expectations’.

Region-wide, Morgan Stanley sees upside risks to inflation if the global slowdown does not quite ease the commodity demand-supply mismatch. This, in turn, could spell more monetary tightening - which, in the face of further weakening of global demand, would exacerbate growth risks.

Voicing similar views, HSBC Global Research also says that its 2008 growth forecasts for Asia are ‘largely intact’ even after jacking up markedly the inflation estimates, as it believes that the region’s economic fundamentals are generally sound.

But if the US economy slides into a deep recession, and/or if the Asian financial sector suffers a credit crunch, and commodity prices fail to stabilise, the inflation and growth outlook in 2009 will be ‘more severe’.

Source : Business Times - 12 July 2008

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US Treasury jumps in to calm markets - WASHINGTON

US Treasury jumps in to calm markets - WASHINGTON

Paulson plays down talk of plans to take over two cornerstones of the US housing market

(WASHINGTON) Treasury Secretary Henry Paulson, seeking to calm nervous investors about the financial state of Fannie Mae and Freddie Mac, said yesterday that the government’s primary policy focus currently is to leave the congressionally created mortgage giants intact.
 
Mr Paulson: Maintaining dialogue with regulators and the companies 
‘Today, our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission,’ Mr Paulson said.

The financial health of the two companies is of critical concern to Washington policymakers because of the crucial role they play in the housing market.

The pair hold or guarantee around US$5 trillion worth of mortgages, roughly half of the US$9.5 trillion debt of the United States.

The fear is that a failure of one or both would wreak havoc on the nation’s financial system and the broader economy as well.

Mr Paulson’s comments came amid reports that the government was considering a plan to take over one or both companies and place them in a conservatorship.

Under a 1992 law, Fannie or Freddie could be put into conservatorship if their top regulator found that either one is ‘critically undercapitalised’. A conservator would have sweeping powers to overhaul them, but would not have the authority to close them.

A government rescue of Fannie and Freddie would mark the second time that Washington has had to step in to support the financial system since mounting defaults in the US sub-prime mortgage industry grew into a global credit crisis in August 2007.

In March, the Federal Reserve backed a plan for JPMorgan Chase & Co to buy beleaguered investment bank Bear Stearns.

Shares of the companies’ stocks have plunged in recent days, with Freddie’s down sharply on Friday as fear intensified. Investors are increasingly worried that the companies would suffer more losses as housing prices keep falling and foreclosures keep rising.

They are also worried that the companies would have to raise a lot more money to cover those losses. By law, the companies are required to hold only a fraction of what is mandated for commercial banks as a financial cushion against risk.

The Treasury chief said that his department was ‘maintaining a dialogue with regulators and with the companies’. The companies’ main regulator will continue to work with the Fannie Mae and Freddie Mac ‘as they take the steps necessary to allow them to continue to perform their important mission’, said Mr Paulson.

Congress created the companies to provide a steady stream of money for home mortgages. Although the government doesn’t guarantee Fannie’s and Freddie’s debts, most investors believe that the government would come to their rescue if the companies fell into dire straits.

This ‘implicit’ guarantee allows them to borrow money at lower interest rates than other financial companies.

Citigroup Inc, however, is keeping its ‘buy’ rating on the two largest buyers of US home loans. It says that the sell-off in the shares of the two companies isn’t based on fundamentals.

Before noon, shares of the two companies were the worst percentage decliners and most actively traded by volume on the New York Stock Exchange, with Freddie down 37 per cent at US$5.03 and Fannie down 33 per cent to US$8.74.

On Wall Street, the Dow Jones industrial average slid 205.66 points, or 1.83 per cent, to 11,023.36. The Standard & Poor’s 500 Index slumped 22.36 points, or 1.78 per cent, to 1,231.03. The Nasdaq Composite Index tumbled 35.80 points, or 1.59 per cent, to 2,222.05.

Citigroup analyst Bradley Ball said that he doesn’t expect ‘nationalisation’ of Fannie and Freddie. Freddie is also committed to raising US$5.5 billion in capital, he wrote in a note to clients.

Mr Ball said that Freddie management said at a meeting yesterday that there was no ’significant change’ in its financial condition during the second quarter. — AP, Bloomberg, Reuters

 
Source : Business Times - 12 July 2008

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Abdullah: Baton will pass to Najib by mid-2010

Abdullah: Baton will pass to Najib by mid-2010
Announcement eases political uncertainty since March elections
(KUALA LUMPUR) Malaysia’s prime minister yesterday announced that he will retire and hand over power to his deputy by mid-2010, easing the political uncertainty gripping the country since March general elections.
 
Leadership transition: Mr Najib (right) has pledged his support for Mr Abdullah (left) and urged the party to re-elect the premier in leadership elections in December 
The announcement by Prime Minister Abdullah Ahmad Badawi is likely to reduce pressure on him from dissidents in the ruling United Malays National Organisation (Umno) party who have been clamouring for his resignation. It will also put to rest questions of an unexpected and early challenge for the top post by Deputy Prime Minister Najib Razak.

Mr Abdullah said that he would hand over the post of party president to Mr Najib ‘by the middle of 2010′. Traditionally, the party president becomes prime minister.

‘I won’t lead the party and the National Front in the next general elections,’ he said, adding that he felt a bit sad as well as a ’sense of achievement’. ‘Najib also needs time to prepare himself for the next general election in 2013 or 2012,’ he said.

A two-year grooming period is expected to give Mr Najib enough time to consolidate his position in the party at a time when he is locked in an outlandish battle over alleged sexual misconduct with Opposition leader Anwar Ibrahim, who is threatening to bring down the government with parliamentary defections by mid-September.

Mr Najib, who turns 55 later this month and who was elected to Parliament at the age of 22, is regarded as political blue blood - he is the son of Abdul Razak, Malaysia’s second prime minister, and the nephew of the third, Hussein Onn.

Mr Najib’s cousin is Malaysia’s education minister while his younger brother, Nazir Razak, runs Malaysia’s second largest lender, Bumiputra-Commerce Holdings Bhd.

Zainon Ahmad, political editor with a Malaysian newspaper, said that Mr Najib was expected to allow market forces to have a freer hand in Malaysia’s economy.

‘He is a more liberal person if left on his own,’ Mr Zainon said. ‘He’ll be more egalitarian in his views of the economy. He’ll be more committed towards pulling away from the New Economic Policy (NEP).’

Malaysia launched the NEP, an affirmative action in favour of the majority ethnic Malays, following deadly racial riots in 1969.

The ruling National Front coalition, dominated by Umno, has a slim 30-seat majority in the 222-member Parliament, the result of its massive setback in the March 8 general elections.

‘Today is the start of the process of an organised leadership transition. I’m touched by (Mr Abdullah’s) willingness to let go of his position. It is not an easy thing to do. But he is willing to do so to respect public wishes,’ Mr Najib said.

Mr Najib pledged his support for Mr Abdullah and urged the party to accept his decision and re-elect the premier in leadership elections in December where disgruntled Umno elements had been expected to vent their feelings.

Even as Umno tries to get its act together, the country’s Opposition yesterday filed a motion in Parliament to discuss a loss of confidence in Mr Abdullah and his Cabinet.

The People’s Alliance, led by parliamentary opposition leader Wan Azizah Ismail, said that it submitted the ‘urgent’ motion following a surge in fuel and food prices in the country.

If it is allowed by the Parliament speaker, the debate may be held on July 14, Ms Wan Azizah said. — AP, Bloomberg, AFP

Source : Business Times - 11 July 2008

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Anwar, Najib clash over murder cover-up claim -KUALA LUMPUR

Anwar, Najib clash over murder cover-up claim -KUALA LUMPUR
 
By Leslie Lopez, South-east Asia Correspondent 

KUALA LUMPUR - A HIGH-STAKES confrontation between Malaysia’s Deputy Prime Minister Najib Abdul Razak and opposition leader Anwar Ibrahim took a dramatic turn yesterday with both trading accusations over an alleged cover-up in the murder trial of a Mongolian woman.
The day of attacks and denials began just before noon when Datuk Seri Anwar produced a key witness in the murder of Altantuya Shaariibuu who alleged that the police omitted vital information he provided in the case.

This included a damning claim by him that Datuk Seri Najib knew the dead woman and had sex with her.

Later in the evening, Mr Najib lashed back, insisting that a statutory declaration filed by the witness was a ‘terrible lie, a malicious fabrication’ to damage him.

It was, he said, a ‘desperate attempt’ by Mr Anwar to divert attention away from a police investigation against the former deputy premier that he had sodomised his former personal assistant.

‘I want to state in the strongest terms that I never met or knew this Mongolian woman,’ Mr Najib said, adding that he has refrained from commenting on the allegations because the trial, now in recess, was ongoing.
The claims by Mr Balasubramaniam Perumal, who was present at Mr Anwar’s press conference, were in the statutory declaration, or sworn statement, he had filed. In it, he alleged that vital information he gave interrogators was suppressed during the murder trial.

Abdul Razak Baginda, a former political adviser to the Deputy Premier, is being tried with two others over the murder of the Mongolian woman.

He had hired Mr Balasubramaniam, a private investigator, just around the time of the murder in October 2006. The PI was at first arrested for the murder but later released. He is a declared supporter of Hindraf, a group fighting for Indian rights whose leaders are behind bars.

His declaration also stated that Abdul Razak showed him a text message reply Mr Najib sent to him after the political adviser was arrested. Mr Najib allegedly messaged Abdul Razak: ‘I am seeing the IGP (Inspector-General of Police) at 11am today…matter will be solved…be cool.’

Mr Anwar, whose opposition alliance made big gains in the March 8 general election, said yesterday that Mr Najib had feared that he would use the murder case to trigger his downfall.

Mr Anwar has claimed that his alliance will take over the government soon because of defections of elected lawmakers to the opposition.

But he faced a setback last week when police said they were investigating allegations that he had sodomised a male personal assistant, a claim he has dismissed as ’sheer fabrication’ and an attempt by those linked to Mr Najib to short-circuit his takeover bid.

In recent weeks, Mr Najib, who is also Defence Minister, has been forced to fend off allegations that his wife and two others he knew were involved in the murder and were at the crime scene.

The face-off between the two politicians took another sensational turn when Mr Najib yesterday admitted that he had met Mr Anwar’s accuser, Mr Saiful Bukhari Azlan, days before he lodged his police report.

‘He had come to see me and he was traumatised. He said he needed help,’ said Mr Najib, who insisted that he never directed Mr Saiful to do anything, including filing the police report.

Asked whether he believed Mr Saiful, he said: ‘I wouldn’t dare say…I thought he looked genuine… he was afraid. His hands were cold.’

The day ended with Prime Minister Abdullah Badawi trying to quash widespread rumours about the government imposing emergency rule.

‘The government is stable…Everything is under control,’ he said.
 

Source : Straits Times - 04 July 2008

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Anwar hits back with allegations against Najib - Malaysia

Anwar hits back with allegations against Najib - Malaysia

Private eye alleges link between DPM and dead model; Najib denies it
By S JAYASANKARAN
IN KUALA LUMPUR
EXPLOSIVE revelations emerged yesterday in Kuala Lumpur after a private investigator hired by a man charged over the bloody murder of a Mongolian model drew links between the accused man, Deputy Prime Minister Najib Razak and the murder victim.
 
Mr Najib: Dismissing allegations against him as lies, he says he had ‘never, ever met’ the murdered model 
The allegations surfaced at a news conference called by de facto opposition leader Anwar Ibrahim, who himself faces possible charges of sodomy alleged by one of his aides. Mr Najib later denied the allegations, calling them a ploy on Mr Anwar’s part.

Abdul Razak Baginda, a close aide of Mr Najib, and two policemen from the elite Special Action Squad are being tried for the October 2006 slaying of Altantuya Shaariibuu, who apparently had an affair with Abdul Razak. She was shot in the head and her body was then blown up with plastic explosives in a clearing near Shah Alam, outside Kuala Lumpur.

The case, which has been going on for a year, is heading for some sort of conclusion as the prosecution recently rested its case and the judge is set to rule on whether the three accused should enter their defence. But the statutory declaration by P Balasubramaniam, a policeman-turned private detective, implies that evidence he gave voluntarily has been suppressed by police - and prosecutors - to protect Mr Najib, who has repeatedly denied even meeting Ms Altantuya.

‘It would appear that the investigation and proceedings in court seem to be following a pre-arranged script for a pre-arranged outcome,’ Mr Anwar told reporters.

According to the declaration, Mr Balasubramaniam said he was hired by Abdul Razak to protect him from Ms Altantuya, who was allegedly harassing him for unpaid debts. The Mongolian allegedly told the private detective Abdul Razak owed her US$500,000 for ‘assisting’ him on a submarine deal in Paris.

In the declaration, the private detective implies that Abdul Razak was originally evasive when questioned, but finally admitted that he had been introduced to the Mongolian by Mr Najib at a diamond exhibition in Singapore. The nature of the relationship between Mr Najib and the model - according to what Abdul Razak told the private detective - is also detailed in the declaration, but Mr Anwar yesterday dismissed it as ‘their business’.

A month after the Mongolian disappeared, the private detective said he was arrested on suspicion of murder, during which he told his questioners everything that transpired between him and Abdul Razak, but ‘those details were omitted from the final statement’.

On the day Abdul Razak was arrested, according to the declaration, he showed Mr Balasubramaniam and Abdul Razak’s lawyer a mobile phone text from Mr Najib that said: ‘I am seeing IGP (inspector-general of police) at 11am today . . . matter will be solved . . . be cool.’

The private detective said he was prepared to answer all such questions during the trial but that no one - from either side - asked. He told reporters he was coming forward now as the prosecution had closed its case without mentioning this evidence and that others may have been involved in the matter.

Mr Anwar noted that both the defence and the prosecution teams were changed just before the trial, the latter at the last minute.

At a news conference at Parliament House late yesterday, Mr Najib dismissed the allegations as ‘lies’ reiterating that he had ‘never, ever met’ Ms Altantuya. He also said the episode was ‘a ploy’ by Mr Anwar to divert attention away from his own problems.

Even so, Mr Balasubramaniam’s allegations will have to be investigated because they are in a sworn statement, implying that if he is lying he could face perjury charges.

Last night, in a surprise revelation to the sodomy allegations against Mr Anwar, Mr Najib admitted meeting the young man who accused Mr Anwar before he filed the police report.

‘He came to see me, complaining that he was sodomised by Mr Anwar Ibrahim. I wasn’t even sure if it was true or not,’ Mr Najib said. ‘I suppose he needed help, and he knew one of my officers. That’s all. He looked like he was in fear.’

Source : Business Times - 04 July 2008

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Royal Caribbean sees cruise terminal investment as positive

Royal Caribbean sees cruise terminal investment as positive
It is a major reason why the company is deploying a vessel in Asia-Pac year-round
By VINCENT WEE

SINGAPORE’S investment in a new cruise terminal sends a ‘positive signal’ and is a major reason why Royal Caribbean Cruises is deploying a vessel year-round.
 
Legend of the Seas: The 1,800 passenger, 70,000 ton vessel will be based in the Asia-Pacific region all year from November 2009 
The 1,800 passenger, 70,000 ton Legend of the Seas will be based in the Asia-Pacific region all year from November 2009, Royal Caribbean International president and CEO Adam Goldstein said yesterday.

‘The positive response to our first season with Rhapsody of the Seas has been very encouraging and we are delighted to offer year-round choices to holidaymakers in the region,’ he said at an event to mark the first anniversary of the company’s regional headquarters here.

According to the company’s Asia-Pacific managing director Rama Rebbapragada, last year’s Asian cruise programme was fully booked, with more than 30,000 passengers.

That represented 111 per cent growth from the previous year and resulted in a 66 per cent increase in revenue.

Royal Caribbean is optimistic about the coming season. Mr Rebbapragada expected 66 per cent growth in passenger numbers and an 89 per cent rise in revenue, despite Legend of the Seas having a smaller capacity.

There will be more cruises during a longer season with 16 sailings, up from nine previously.

Although Legend of the Seas is smaller than its predecessor, the 2,000 passenger Rhapsody of the Seas, it is from the same Vision class of ships in Royal Caribbean’s fleet and has similar facilities.

More importantly, its dimensions allow it to fit under the Sentosa cable car and berth at the Singapore Cruise Centre as well as at Shanghai’s new cruise terminal on the north Bund.

Royal Caribbean’s year-round programme will enable departures from a wider range of ports besides Singapore, such as Shanghai, Hong Kong, Yokohama and Busan.

Home-porting a ship in Singapore and beginning the introductory season from here helped the cruise line assess demand and open up some of these new ports, Mr Rebbapragada said.

For example, about 25 per cent of the space on the initial cruise to Busan last year was reserved for Koreans and was fully booked. This gave Royal Caribbean the confidence to initiate the new destination.

Another good sign is an increasing number of customers from Singapore and fly-cruise guests from China, India, Australia, Indonesia and even as far away as North America.

About 30 per cent of bookings last year were by Singaporeans and as many as 10 per cent came from North America, Mr Rebbapragada said.

Mr Goldstein said that it is encouraging that cities such as Singapore are investing in cruise infrastructure and building for the future to accommodate the new Genesis-class ships that Royal Caribbean is building.

‘There is a momentum in favour of infrastructure development that had not been seen before,’ he said.

Source : Business Times - 03 July 2008

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