Source : The Business Times, November 11, 2008
(WELLINGTON) New Zealand house prices fell sharply in the year to October, reflecting an economy in recession and caution in the market, government agency Quotable Value (QV) said yesterday. QV's residential house price index fell 6.8 per cent in the month from a year earlier, its fourth monthly decline in a row, after a 5.8 per cent drop in September and a 4.5 per cent fall in August.
Sales volumes were unusually low, reflecting widespread caution in the market, said QV's Blue Hancock. 'Many buyers and sellers are waiting to see any impact from the financial crisis, dropping interest rates and the election before committing to property transactions,' Mr Hancock said in a statement.
New Zealand held its general election on Saturday, although the outcome is seen as having little impact on the broader economy and markets. The housing market, once a key inflationary concern for the Reserve Bank of New Zealand, has been falling steadily through this year in the face of high borrowing costs and as surging food and oil prices crimp consumers' spending power. The RBNZ has cut its official cash rate by a total of 175 basis points to 6.5 per cent since July as the New Zealand economy entered its first recession in a decade in the first half of the year.
The latest Reuters poll has 14 of 16 economists expecting a cut of 50 basis points at the next meeting on Dec 4, with interest rates picked to be 5 per cent by the middle of 2009.
QV said that house prices in Auckland, the biggest population and commercial centre, fell 7.7 per cent from a year ago compared with a 7 per cent drop in September, while the capital, Wellington, fell 6.1 per cent after a 5.4 per cent drop the month before. The average sale price for New Zealand houses was virtually unchanged at NZ$379,290 (S$339,00).
The monthly residential price report is based on sale prices of properties over the past three months compared with sales over the corresponding three-month period a year earlier.
The data is not seasonally adjusted. -- Reuters
Tuesday, November 11, 2008
Dubai Property Exec Upbeat About Sector
Source : The Business Times, November 11, 2008
(DUBAI) A top Dubai property development executive said on Sunday that the emirate's booming real estate sector would maintain growth despite the global crisis as demand continued to outstrip supply.
'Domestic demand for real estate continues to outstrip supply, and it will be so for several years,' Mohammed Alabbar, chairman of real estate giant Emaar, told participants at a World Economic Forum meeting in Dubai.
'This demand is real, and there is a positive shift now towards an end-user market,' he said, in an apparent reference to a reported exit by speculators from the sector which saw a significant overheating in past years.
Mr Alabbar shrugged off claims that Dubai's thriving economy was poised to slow down due to a drop in real estate, stressing that the city's economy has other driving sectors.
'For several analysts, the 'Dubai Inc' story is tied in to its real estate sector. They miss the mountain for the hill,' he said. 'The Dubai economy is driven by traditional sectors such as re-exports and trading; tourism and retail; transportation and logistics; manufacturing; the free zones and the business hubs for IT, media, financial services, education and health care,' he argued.
He claimed the impressive growth in real estate was 'Dubai's answer to the demand created by these traditional sectors'. -- AFP
(DUBAI) A top Dubai property development executive said on Sunday that the emirate's booming real estate sector would maintain growth despite the global crisis as demand continued to outstrip supply.
'Domestic demand for real estate continues to outstrip supply, and it will be so for several years,' Mohammed Alabbar, chairman of real estate giant Emaar, told participants at a World Economic Forum meeting in Dubai.
'This demand is real, and there is a positive shift now towards an end-user market,' he said, in an apparent reference to a reported exit by speculators from the sector which saw a significant overheating in past years.
Mr Alabbar shrugged off claims that Dubai's thriving economy was poised to slow down due to a drop in real estate, stressing that the city's economy has other driving sectors.
'For several analysts, the 'Dubai Inc' story is tied in to its real estate sector. They miss the mountain for the hill,' he said. 'The Dubai economy is driven by traditional sectors such as re-exports and trading; tourism and retail; transportation and logistics; manufacturing; the free zones and the business hubs for IT, media, financial services, education and health care,' he argued.
He claimed the impressive growth in real estate was 'Dubai's answer to the demand created by these traditional sectors'. -- AFP
Buyers Snap Up KL's The Binjai
Source : The Business Times, November 11, 2008
UNHINDERED views of the iconic Petronas Twin Towers, 20 hectares of park land at your doorstep for leisurely daily walks, plus conveniences a stone's throw away. That in a nutshell is the essence of The Binjai On The Park, Malaysia's premier development in the Kuala Lumpur City Centre (KLCC).
In just two months, nearly a third of the 171 units have been snapped up - its average cost of RM3,000 per sq ft (S$1,258) is apparently not a deterrent to those wanting a piece of what is arguably the country's most desired residential address. At current prices, it is certainly the most expensive.
So appealing is the proposition of a freehold residential address - the only such one in the KLCC precinct, which incidentally has its own exclusive postcode - that 51 individuals have put down a deposit.
The moneyed buyers are 'a good mix of businessmen, professionals, entrepreneurs, old money as well as new money', revealed Hashim Wahir, chief executive of Layar Intan, the developer of The Binjai, and KLCC Property Holdings during a recent media tour of the top-end real estate many have heard of, but not too many have had the privilege to view.
Although the spectre of a global melt-down in stock markets and a worldwide recession could prove a damper for really big-ticket items, Mr Hashim maintains The Binjai's 20 per cent premium to other similar developments is not unreasonable. In any event, 'time for us is not a factor', he declared alluding to the company's considerable holding power.
Layar Intan is a subsidiary of KLCC Holdings, which is in turn the parent company of Bursa Malaysia-listed KLCC Property Holdings. KLCC Property is the real estate arm of national oil company Petronas.
Both the parent and listed companies have what financial analysts describe as a 'virtual monopoly' on the existing commercial properties surrounding the KLCC precinct. These include two of its most well known, the Petronas Twin Towers and the shopping mall Suria KLCC.
Although one thousand odd people have registered their interest in The Binjai, its starting price of RM6 million obviously positions the development for a different class of owners. Prospective buyers are by-invitation only and vetted, and Mr Hashim makes it clear he would rather have purchasers 'wanting to buy for home-stay'.
A third of those who have bought units are foreign, mostly expatriates who live in Malaysia or who often travel to the country. For foreign buyers whose currencies dwarf the local ringgit, the value proposition is undeniable.
UNHINDERED views of the iconic Petronas Twin Towers, 20 hectares of park land at your doorstep for leisurely daily walks, plus conveniences a stone's throw away. That in a nutshell is the essence of The Binjai On The Park, Malaysia's premier development in the Kuala Lumpur City Centre (KLCC).
In just two months, nearly a third of the 171 units have been snapped up - its average cost of RM3,000 per sq ft (S$1,258) is apparently not a deterrent to those wanting a piece of what is arguably the country's most desired residential address. At current prices, it is certainly the most expensive.
So appealing is the proposition of a freehold residential address - the only such one in the KLCC precinct, which incidentally has its own exclusive postcode - that 51 individuals have put down a deposit.
The moneyed buyers are 'a good mix of businessmen, professionals, entrepreneurs, old money as well as new money', revealed Hashim Wahir, chief executive of Layar Intan, the developer of The Binjai, and KLCC Property Holdings during a recent media tour of the top-end real estate many have heard of, but not too many have had the privilege to view.
Although the spectre of a global melt-down in stock markets and a worldwide recession could prove a damper for really big-ticket items, Mr Hashim maintains The Binjai's 20 per cent premium to other similar developments is not unreasonable. In any event, 'time for us is not a factor', he declared alluding to the company's considerable holding power.
Layar Intan is a subsidiary of KLCC Holdings, which is in turn the parent company of Bursa Malaysia-listed KLCC Property Holdings. KLCC Property is the real estate arm of national oil company Petronas.
Both the parent and listed companies have what financial analysts describe as a 'virtual monopoly' on the existing commercial properties surrounding the KLCC precinct. These include two of its most well known, the Petronas Twin Towers and the shopping mall Suria KLCC.
Although one thousand odd people have registered their interest in The Binjai, its starting price of RM6 million obviously positions the development for a different class of owners. Prospective buyers are by-invitation only and vetted, and Mr Hashim makes it clear he would rather have purchasers 'wanting to buy for home-stay'.
A third of those who have bought units are foreign, mostly expatriates who live in Malaysia or who often travel to the country. For foreign buyers whose currencies dwarf the local ringgit, the value proposition is undeniable.
Approvals For Aussie Home Loans Fall For 8th Month
Source : The Business Times, November 11, 2008
House buyers scrap spending plans as economy slows, banks tighten loans
(SYDNEY) Australian home-loan approvals fell in September for an eighth month as tighter lending standards and slowing economic growth prompted house buyers to scrap spending plans.
Reversing the slide: An index measuring the weighted average price for homes in the nation's eight capital cities fell 1.8% in Q3 from the previous three months. Still, demand for home loans may rebound in coming months as lenders pass on the interest-rate cuts on to consumers
The number of loans granted to build or buy homes and apartments declined 2.7 per cent to 47,435 from August, when they slid a revised 2.1 per cent, the statistics bureau said in Sydney yesterday. The median estimate of 18 economists surveyed by Bloomberg News was for a 2.8 per cent drop.
A weakening housing market is among reasons the central bank cut its 2008 and 2009 growth forecasts yesterday and signalled it's prepared to add to the most aggressive interest-rate cuts in 17 years.
House prices fell in the third quarter by the most since 1978 and the building industry shrank in October for an eighth month, reports showed last week.
'We don't think falling interest rates will start to help these housing statistics until after Christmas,' said Brian Redican, a senior economist at Macquarie Group Ltd in Sydney. 'Consumer confidence has fallen so much that people aren't thinking about expanding into the housing market.'
The Australian dollar fell to 68.66 US cents at 12.54 pm in Sydney from 68.95 cents just before the report was released. The two-year government bond yield rose 2 basis points to 3.87 per cent. A basis point is 0.01 percentage point.
The Reserve Bank of Australia yesterday lowered its 2008 expansion forecast to 1.5 per cent from 2 per cent and said it had been forced to make 'unusually large' reductions in the overnight cash rate target in October and November because renewed global turmoil raised the risk growth will stall.
The government last week said the economy will expand 2 per cent in the 12 months through June 2009, the slowest pace in eight years, as fallout from the global financial crisis prompts companies such as Qantas Airways to fire workers and drive up unemployment.
Consumer confidence plunged last month by the most in more than two years, triggering the biggest drop in retail sales since April 2005.
To help reverse the slide in domestic demand, governor Glenn Stevens cut the overnight cash rate target by three quarters of a percentage point last week, adding to a one percentage point reduction in October and a quarter-point easing in September.
'The board will be seeking to strike the appropriate balance between avoiding an unduly sharp weakening in demand and the need for inflation to fall back' within its target range of 2 per cent to 3 per cent 'over a reasonable period,' yesterday's quarterly monetary policy statement said.
Mr Stevens will cut the rate by another half point to 4.75 per cent next month, according to 12 of 19 economists surveyed by Bloomberg News on Nov 7. Five expect a quarter-point reduction, one tipped a three-quarter point move and one forecasts a one percentage point adjustment.
Credit provided by banks and financial institutions to home buyers rose 9.2 per cent in the 12 months through September, the smallest increase since October 1983, Reserve Bank figures published on Oct 31 showed.
An index measuring the weighted average price for established homes in the nation's eight capital cities dropped 1.8 per cent in the third quarter from the previous three months, the Bureau of Statistics said on Nov 3.
Still, demand for home-loans may rebound in coming months as the central bank's interest-rate cuts are passed on to consumers by lenders.
The Reserve Bank's reductions since Sept 2 have cut repayments on an average home loan of A$300,000 (S$309,300) by about A$400 a month.
The government is also trying to spur house building by tripling a grant to first-time buyers of new homes to A$21,000.
The total value of lending fell 1.6 per cent to A$17.2 billion in September, yesterday's report showed.
Lending to owner-occupiers declined 1.9 per cent, while the value of lending to investors who plan to rent or resell homes, slipped 1.1 per cent. -- Bloomberg
House buyers scrap spending plans as economy slows, banks tighten loans
(SYDNEY) Australian home-loan approvals fell in September for an eighth month as tighter lending standards and slowing economic growth prompted house buyers to scrap spending plans.
Reversing the slide: An index measuring the weighted average price for homes in the nation's eight capital cities fell 1.8% in Q3 from the previous three months. Still, demand for home loans may rebound in coming months as lenders pass on the interest-rate cuts on to consumersThe number of loans granted to build or buy homes and apartments declined 2.7 per cent to 47,435 from August, when they slid a revised 2.1 per cent, the statistics bureau said in Sydney yesterday. The median estimate of 18 economists surveyed by Bloomberg News was for a 2.8 per cent drop.
A weakening housing market is among reasons the central bank cut its 2008 and 2009 growth forecasts yesterday and signalled it's prepared to add to the most aggressive interest-rate cuts in 17 years.
House prices fell in the third quarter by the most since 1978 and the building industry shrank in October for an eighth month, reports showed last week.
'We don't think falling interest rates will start to help these housing statistics until after Christmas,' said Brian Redican, a senior economist at Macquarie Group Ltd in Sydney. 'Consumer confidence has fallen so much that people aren't thinking about expanding into the housing market.'
The Australian dollar fell to 68.66 US cents at 12.54 pm in Sydney from 68.95 cents just before the report was released. The two-year government bond yield rose 2 basis points to 3.87 per cent. A basis point is 0.01 percentage point.
The Reserve Bank of Australia yesterday lowered its 2008 expansion forecast to 1.5 per cent from 2 per cent and said it had been forced to make 'unusually large' reductions in the overnight cash rate target in October and November because renewed global turmoil raised the risk growth will stall.
The government last week said the economy will expand 2 per cent in the 12 months through June 2009, the slowest pace in eight years, as fallout from the global financial crisis prompts companies such as Qantas Airways to fire workers and drive up unemployment.
Consumer confidence plunged last month by the most in more than two years, triggering the biggest drop in retail sales since April 2005.
To help reverse the slide in domestic demand, governor Glenn Stevens cut the overnight cash rate target by three quarters of a percentage point last week, adding to a one percentage point reduction in October and a quarter-point easing in September.
'The board will be seeking to strike the appropriate balance between avoiding an unduly sharp weakening in demand and the need for inflation to fall back' within its target range of 2 per cent to 3 per cent 'over a reasonable period,' yesterday's quarterly monetary policy statement said.
Mr Stevens will cut the rate by another half point to 4.75 per cent next month, according to 12 of 19 economists surveyed by Bloomberg News on Nov 7. Five expect a quarter-point reduction, one tipped a three-quarter point move and one forecasts a one percentage point adjustment.
Credit provided by banks and financial institutions to home buyers rose 9.2 per cent in the 12 months through September, the smallest increase since October 1983, Reserve Bank figures published on Oct 31 showed.
An index measuring the weighted average price for established homes in the nation's eight capital cities dropped 1.8 per cent in the third quarter from the previous three months, the Bureau of Statistics said on Nov 3.
Still, demand for home-loans may rebound in coming months as the central bank's interest-rate cuts are passed on to consumers by lenders.
The Reserve Bank's reductions since Sept 2 have cut repayments on an average home loan of A$300,000 (S$309,300) by about A$400 a month.
The government is also trying to spur house building by tripling a grant to first-time buyers of new homes to A$21,000.
The total value of lending fell 1.6 per cent to A$17.2 billion in September, yesterday's report showed.
Lending to owner-occupiers declined 1.9 per cent, while the value of lending to investors who plan to rent or resell homes, slipped 1.1 per cent. -- Bloomberg
No Indication Of Default From Las Vegas Sands, Says DBS Group
Source : Channel NewsAsia, 07 November 2008
US gaming firm Las Vegas Sands intends to finish a casino project it is building in Singapore and there are no indications it will default on loans, lender DBS Group said on Friday.
An artist's impression of Marina Bay integrated resort in Singapore
DBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.
"All signals I'm getting from the management of Las Vegas Sands is that they intend to finish the project and move on," DBS chief executive Richard Stanley said at a news conference on the bank's third-quarter earnings.
"I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands... There's been no default, there's been no indication of default," he said, adding there was no need to provide for loan provisions.
"As of now, all the equity commitments have been made, the project is proceeding in pace."
Stanley's comments followed a filing by Las Vegas Sands on Thursday with the US Securities and Exchange Commission in which it sounded out a warning about its financial situation.
In the filing, the gaming giant said it may have to stop or ease up the pace of its global projects should it fail to secure the necessary funding or obtain favourable credit terms.
"If the company is not able to obtain the requisite financing or the terms are not as favourable as it anticipates, the company may be required to slow or suspend its global development activities... until such financing or other sources of funds become available," Las Vegas Sands said.
"These factors raise a substantial doubt about our ability to continue as a going concern." It said Las Vegas Sands' projects in Macau's Cotai Strip will be among those affected.
The company, headed by billionaire gaming tycoon Sheldon Adelson, operates the Sands Macao and The Venetian Macao Resort Hotel in Macau.
Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.
Citi's head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected, given the current market conditions.
According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.
The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project. - AFP/CNA/ir/so
US gaming firm Las Vegas Sands intends to finish a casino project it is building in Singapore and there are no indications it will default on loans, lender DBS Group said on Friday.
An artist's impression of Marina Bay integrated resort in SingaporeDBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.
"All signals I'm getting from the management of Las Vegas Sands is that they intend to finish the project and move on," DBS chief executive Richard Stanley said at a news conference on the bank's third-quarter earnings.
"I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands... There's been no default, there's been no indication of default," he said, adding there was no need to provide for loan provisions.
"As of now, all the equity commitments have been made, the project is proceeding in pace."
Stanley's comments followed a filing by Las Vegas Sands on Thursday with the US Securities and Exchange Commission in which it sounded out a warning about its financial situation.
In the filing, the gaming giant said it may have to stop or ease up the pace of its global projects should it fail to secure the necessary funding or obtain favourable credit terms.
"If the company is not able to obtain the requisite financing or the terms are not as favourable as it anticipates, the company may be required to slow or suspend its global development activities... until such financing or other sources of funds become available," Las Vegas Sands said.
"These factors raise a substantial doubt about our ability to continue as a going concern." It said Las Vegas Sands' projects in Macau's Cotai Strip will be among those affected.
The company, headed by billionaire gaming tycoon Sheldon Adelson, operates the Sands Macao and The Venetian Macao Resort Hotel in Macau.
Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.
Citi's head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected, given the current market conditions.
According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.
The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project. - AFP/CNA/ir/so
Las Vegas Sands Reaffirms Commitment To Marina Bay Sands Project
Source : Channel NewsAsia, 07 November 2008
Las Vegas Sands said it is committed to completing the development of the Marina Bay Sands integrated resort in Singapore.
Artist's impression of Marina Bay Sands IR
Concerns had been raised about the company's ability to finish the US$4 billion development after news broke out that it was struggling with a shortage of cash.
In a statement on Friday, Sands said it met with the Singapore government this week and gave the assurance that it will see the Marina Bay Sands project through.
It said the meeting covered a range of subjects, such as the pace of construction of the hotel towers in the resort and the strong response to the marketing efforts by Marina Bay Sands and the Singapore Tourism Board to bring more conventions, exhibitions, and corporate meetings to Singapore.
Sands also said it has complied with regulatory requirements that will allow it to have up to 1,000 gaming tables in the resort's casino – up from the original figure of 600 tables.
The company said it has received more than 10,000 responses from Singapore job-seekers to its joint recruitment initiative with the National Trades Union Congress' (NTUC) Employment and Employability Institute and the Singapore Workforce Development Agency.
Sand's statement came as banks which had provided loans for the project said all signs showed that it is on track. DBS said it has not had any indication that work on the project is faltering.
DBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.
"All signals I'm getting from the management of Las Vegas Sands is that they intend to finish the project and move on," DBS chief executive Richard Stanley said at a news conference on the bank's third-quarter earnings.
"I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands... There's been no default, there's been no indication of default," he said, adding there was no need to provide for loan provisions.
"As of now, all the equity commitments have been made, the project is proceeding in pace."
Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.
Citi's head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected given the current market conditions.
According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.
The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project. - CNA/so
Las Vegas Sands said it is committed to completing the development of the Marina Bay Sands integrated resort in Singapore.
Artist's impression of Marina Bay Sands IRConcerns had been raised about the company's ability to finish the US$4 billion development after news broke out that it was struggling with a shortage of cash.
In a statement on Friday, Sands said it met with the Singapore government this week and gave the assurance that it will see the Marina Bay Sands project through.
It said the meeting covered a range of subjects, such as the pace of construction of the hotel towers in the resort and the strong response to the marketing efforts by Marina Bay Sands and the Singapore Tourism Board to bring more conventions, exhibitions, and corporate meetings to Singapore.
Sands also said it has complied with regulatory requirements that will allow it to have up to 1,000 gaming tables in the resort's casino – up from the original figure of 600 tables.
The company said it has received more than 10,000 responses from Singapore job-seekers to its joint recruitment initiative with the National Trades Union Congress' (NTUC) Employment and Employability Institute and the Singapore Workforce Development Agency.
Sand's statement came as banks which had provided loans for the project said all signs showed that it is on track. DBS said it has not had any indication that work on the project is faltering.
DBS is one of 40 banks that formed a syndicate to fund the Marina Bay Sands casino development, which is estimated to cost more than four billion US dollars.
"All signals I'm getting from the management of Las Vegas Sands is that they intend to finish the project and move on," DBS chief executive Richard Stanley said at a news conference on the bank's third-quarter earnings.
"I have to accept what they say and I have seen in recent days a strong commitment to the project from Las Vegas Sands... There's been no default, there's been no indication of default," he said, adding there was no need to provide for loan provisions.
"As of now, all the equity commitments have been made, the project is proceeding in pace."
Citi Singapore, which is also providing loans for the project, said the long-term viability of Marina Bay Sands has not changed.
Citi's head of corporate banking, Silas Lee, said the fundamentals of the project still stand although short-term uncertainty is expected given the current market conditions.
According to reports, Sands held talks this week with the Singapore government over the Marina Bay project.
The Singapore Tourism Board said last month that it was in talks with Marina Bay Sands to facilitate the successful completion of the project. - CNA/so
Las Vegas Sands Secures US$2b Capital Funding, Remains Committed To S'pore Project
Source : Channel NewsAsia, 11 November 2008
Las Vegas Sands said Tuesday it has secured over US$2 billion in capital funding commitments to avoid violating loan agreements.
President and Chief Operating Officer William Weidner said in a conference call that Sands expects to close the transaction by the end of the week.
He continued to say that however, there will be some changes to Sands' overseas resort developments.
It will stop construction work at two sites in Macau's Cotai Strip pending project financing arrangements.
Mr Weidner said Sands hopes to have an agreement with a major Chinese bank within the next three to six months.
Sands will also suspend the building of its St Regis Residence luxury-condominium project in Las Vegas indefinitely.
The operator said it expects to save US$1.8 billion by delaying and curbing plans for those projects.
But Sands said it remains committed to its Marina Bay Sands project in Singapore, and expects to open the resort by late 2009 according to plan.
Sands said it expects a significant return on capital from the Marina Bay Sands resort project.
It assured that the current capital market conditions will not significantly impact the integrated resort development in Singapore.
Sands also released its third quarter financial results overnight.
It narrowed its net loss to US$32.2 million, compared with US$48.5 million a year ago.
Sands said this is due to increases in operating income and an income tax gain.
Revenue increased by two-thirds to US$1.1 billion. - CNA/yb
Las Vegas Sands said Tuesday it has secured over US$2 billion in capital funding commitments to avoid violating loan agreements.
President and Chief Operating Officer William Weidner said in a conference call that Sands expects to close the transaction by the end of the week.
He continued to say that however, there will be some changes to Sands' overseas resort developments. It will stop construction work at two sites in Macau's Cotai Strip pending project financing arrangements.
Mr Weidner said Sands hopes to have an agreement with a major Chinese bank within the next three to six months.
Sands will also suspend the building of its St Regis Residence luxury-condominium project in Las Vegas indefinitely.
The operator said it expects to save US$1.8 billion by delaying and curbing plans for those projects.
But Sands said it remains committed to its Marina Bay Sands project in Singapore, and expects to open the resort by late 2009 according to plan.
Sands said it expects a significant return on capital from the Marina Bay Sands resort project.
It assured that the current capital market conditions will not significantly impact the integrated resort development in Singapore.
Sands also released its third quarter financial results overnight.
It narrowed its net loss to US$32.2 million, compared with US$48.5 million a year ago.
Sands said this is due to increases in operating income and an income tax gain.
Revenue increased by two-thirds to US$1.1 billion. - CNA/yb
No Takers For Condo Site
Source : The Straits Times, Nov 11, 2008
A TENDER for an executive condominium (EC) site in Punggol closed on Tuesday with no bids received.
Property consultants said it was due to still-high construction costs and a lacklustre property market which is expected to trend lower.
This is the fourth EC site the Government has put on the market this year and the only one it kept for confirmed sale for the rest of this year.
The 242,159 sq ft EC site can accomodate a development of about 16 storeys with about 600 units. It is a 99-year leasehold site at the junction of Punggol Field and Punggol Road and near the Punggol MRT stat
ECs are subject to to a household income ceiling of $10,000.
A TENDER for an executive condominium (EC) site in Punggol closed on Tuesday with no bids received.
Property consultants said it was due to still-high construction costs and a lacklustre property market which is expected to trend lower.
This is the fourth EC site the Government has put on the market this year and the only one it kept for confirmed sale for the rest of this year.
The 242,159 sq ft EC site can accomodate a development of about 16 storeys with about 600 units. It is a 99-year leasehold site at the junction of Punggol Field and Punggol Road and near the Punggol MRT stat
ECs are subject to to a household income ceiling of $10,000.
Asia Faces Sharp Slowdown
Source : The Straits Times, Nov 11, 2008
ASIA is staring at a much sharper economic slowdown next year than earlier anticipated because of a deepening global recession, US bank Morgan Stanley said on Tuesday.
The region is now expected to grow by 5.5 per cent in 2009 instead of a previously forecast 6.4 per cent, said Mr Chetan Ahya, a Morgan Stanley economist for South-east Asia and India. -- PHOTO: ASSOCIATED PRESS
The region is now expected to grow by 5.5 per cent in 2009 instead of a previously forecast 6.4 per cent, said Mr Chetan Ahya, a Morgan Stanley economist for South-east Asia and India.
Australia, South Korea, India and Indonesia will be vulnerable to financial contagion because of large current account deficits, while export-dependent countries will also suffer, he said at a news conference.
While downside risks could further drag the forecast growth rate to below 5.0 per cent, it is unlikely to drop near the 2.4 per cent expansion rate seen during the Asian financial crisis in 1997 and 1998, he said.
'The risk right now is it could dip below 5.0 percent,' but not close to the levels of a decade ago, he said.
Mr Ahya added that in 1997 and 1998 the gross domestic product (GDP) of five key Asian economies contracted between 4.0 and 13 per cent, a situation which is unlikely during the current turmoil.
Mr Ahya said the US economy is likely to shrink by 1.3 per cent next year and the European economy should contract by 0.6 per cent, more drastic than earlier projections.
Because of this, 'Asia is unlikely to emerge unscathed in an environment where the global economy is likely to see a deeper recession', Morgan Stanley the bank said in a report.
It said the region's economies will start a 'tepid' rebound in 2010.
The bank projects Asian economies outside Japan to grow by 6.9 per cent in 2010, faster than the forecast global growth rate of 3.6 per cent, but lower than the expected 7.6 per cent expansion in 2008.
'We're not looking for the same kind of (high-growth) environment to come back soon. In that sense, we're looking for the duration of this global risk aversion to be longer than what we had all expected,' Mr Ahya said. -- AFP
ASIA is staring at a much sharper economic slowdown next year than earlier anticipated because of a deepening global recession, US bank Morgan Stanley said on Tuesday.
The region is now expected to grow by 5.5 per cent in 2009 instead of a previously forecast 6.4 per cent, said Mr Chetan Ahya, a Morgan Stanley economist for South-east Asia and India. -- PHOTO: ASSOCIATED PRESSThe region is now expected to grow by 5.5 per cent in 2009 instead of a previously forecast 6.4 per cent, said Mr Chetan Ahya, a Morgan Stanley economist for South-east Asia and India.
Australia, South Korea, India and Indonesia will be vulnerable to financial contagion because of large current account deficits, while export-dependent countries will also suffer, he said at a news conference.
While downside risks could further drag the forecast growth rate to below 5.0 per cent, it is unlikely to drop near the 2.4 per cent expansion rate seen during the Asian financial crisis in 1997 and 1998, he said.
'The risk right now is it could dip below 5.0 percent,' but not close to the levels of a decade ago, he said.
Mr Ahya added that in 1997 and 1998 the gross domestic product (GDP) of five key Asian economies contracted between 4.0 and 13 per cent, a situation which is unlikely during the current turmoil.
Mr Ahya said the US economy is likely to shrink by 1.3 per cent next year and the European economy should contract by 0.6 per cent, more drastic than earlier projections.
Because of this, 'Asia is unlikely to emerge unscathed in an environment where the global economy is likely to see a deeper recession', Morgan Stanley the bank said in a report.
It said the region's economies will start a 'tepid' rebound in 2010.
The bank projects Asian economies outside Japan to grow by 6.9 per cent in 2010, faster than the forecast global growth rate of 3.6 per cent, but lower than the expected 7.6 per cent expansion in 2008.
'We're not looking for the same kind of (high-growth) environment to come back soon. In that sense, we're looking for the duration of this global risk aversion to be longer than what we had all expected,' Mr Ahya said. -- AFP
Marina IR Is 'No. 1' Priority
Source : The Straits Times, Nov 11, 2008
THE Marina Bay integrated resort remains the 'No 1' priority for Las Vegas Sands even as the casino operator suspends projects in its Macau headquarters and scales back on a development in Pennsylvania, its top suits promised.
Sands president and chief operating officer William Weidner said the Singapore IR is not only 'a very important project' which offers 'terrific returns on investment', but it is also 'probably the most important project' in their portfolio. -- PHOTO: LAS VEGAS SANDS
Sands president and chief operating officer William Weidner said the Singapore IR is not only 'a very important project' which offers 'terrific returns on investment', but it is also 'probably the most important project' in their portfolio.
In a conference call early on Tuesday, the embattered company also said it is raising US$2.14 billion in capital, including new funding from its billionaire chief executive, Sheldon Adelson.
Mr Adelson said: 'As part of my visit to Singapore last week, I assured the government we were very committed to the success of Marina Bay Sands and would have the funding necessary to complete this development. That is exactly where we stand today.'
However, Sands' promise to open the entire IR at the end of next year will not be fulfilled. When it opens its doors end next year, two of three hotel towers, a portion of the retail mall, most of the convention space and the casino will be ready. The other facilities like the remaining hotel block and sky park will open in 2010.
The listed company posted a worse-than-expected net loss of US$32.2 million, or 9 cents a share, for the third quarter that ended Sept 30.
A year ago, it posted a loss of US$48.5 million, or 14 cents a share, due to expenses in preparation to open new casinos in Macau and Las Vegas.
Revenue rose 67 per cent to US$1.11 billion, from US$661 million a year earlier. Adjusted earnings were 2 cents per share, down from 12 cents per share last year.
Mr Adelson said the capital raise will 'put to rest' any speculation that the company is in danger of going belly-up.
It expects to release details of a US$2 billion bond sale soon. It will also save US$1.8 million by halting construction and 'indefinitely' delaying its US$600 million condominium project on the Las Vegas Strip, pushing back development of part of its US$12 billion project in Macau and curbing plans for its Bethlehem casino by delaying the accompanying hotel and retail openings.
Mr Weidner said the current capital market conditions will not impact the Singapore development since the S$5.44 billion credit facility had been secured earlier in the year.
To date, he said the company has invested US$1.81 billion in construction costs, including land price, in the Marina Bay project to date, of which an approximate US$616 million was in equity.
And the current estimated cost to complete the project is about US$2.7 billion,which the company expects to fund 75 to 80 per cent through the credit facility, of which about US$2 billion is available. The company is also expected to invest an additonal $500 million in equity for the project through to the targeted opening in late next year.
Mr Weidner called the Singapore project one of its 'crown jewels' because of the low tax rates, high number of visitor days, and its benefit in operating in a dualpoly. The Singapore casino, which wil have 1,000 gaming tables, is expected to add an annual operating profit of US$1.26 billion by 2012.
Sands declined to comment on a staggered opening for the Marina Bay IR.
Marina Bay Sands general manager George Tanasijevich would only say: 'The majority of our integrated resort will be opened on Day 1; we are in discussions with the Singapore Government on a suitable timetable for the rest of the attractions.'
THE Marina Bay integrated resort remains the 'No 1' priority for Las Vegas Sands even as the casino operator suspends projects in its Macau headquarters and scales back on a development in Pennsylvania, its top suits promised.
Sands president and chief operating officer William Weidner said the Singapore IR is not only 'a very important project' which offers 'terrific returns on investment', but it is also 'probably the most important project' in their portfolio. -- PHOTO: LAS VEGAS SANDSSands president and chief operating officer William Weidner said the Singapore IR is not only 'a very important project' which offers 'terrific returns on investment', but it is also 'probably the most important project' in their portfolio.
In a conference call early on Tuesday, the embattered company also said it is raising US$2.14 billion in capital, including new funding from its billionaire chief executive, Sheldon Adelson.
Mr Adelson said: 'As part of my visit to Singapore last week, I assured the government we were very committed to the success of Marina Bay Sands and would have the funding necessary to complete this development. That is exactly where we stand today.'
However, Sands' promise to open the entire IR at the end of next year will not be fulfilled. When it opens its doors end next year, two of three hotel towers, a portion of the retail mall, most of the convention space and the casino will be ready. The other facilities like the remaining hotel block and sky park will open in 2010.
The listed company posted a worse-than-expected net loss of US$32.2 million, or 9 cents a share, for the third quarter that ended Sept 30.
A year ago, it posted a loss of US$48.5 million, or 14 cents a share, due to expenses in preparation to open new casinos in Macau and Las Vegas.
Revenue rose 67 per cent to US$1.11 billion, from US$661 million a year earlier. Adjusted earnings were 2 cents per share, down from 12 cents per share last year.
Mr Adelson said the capital raise will 'put to rest' any speculation that the company is in danger of going belly-up.
It expects to release details of a US$2 billion bond sale soon. It will also save US$1.8 million by halting construction and 'indefinitely' delaying its US$600 million condominium project on the Las Vegas Strip, pushing back development of part of its US$12 billion project in Macau and curbing plans for its Bethlehem casino by delaying the accompanying hotel and retail openings.
Mr Weidner said the current capital market conditions will not impact the Singapore development since the S$5.44 billion credit facility had been secured earlier in the year.
To date, he said the company has invested US$1.81 billion in construction costs, including land price, in the Marina Bay project to date, of which an approximate US$616 million was in equity.
And the current estimated cost to complete the project is about US$2.7 billion,which the company expects to fund 75 to 80 per cent through the credit facility, of which about US$2 billion is available. The company is also expected to invest an additonal $500 million in equity for the project through to the targeted opening in late next year.
Mr Weidner called the Singapore project one of its 'crown jewels' because of the low tax rates, high number of visitor days, and its benefit in operating in a dualpoly. The Singapore casino, which wil have 1,000 gaming tables, is expected to add an annual operating profit of US$1.26 billion by 2012.
Sands declined to comment on a staggered opening for the Marina Bay IR.
Marina Bay Sands general manager George Tanasijevich would only say: 'The majority of our integrated resort will be opened on Day 1; we are in discussions with the Singapore Government on a suitable timetable for the rest of the attractions.'
S'pore's Growth To Fall 2%
Source : The Straits Times, Nov 11, 2008
MORGAN Stanley has slashed its forecast for Singapore's growth next year on the back of a worse-than-expected global slowdown.
It now expects the economy to shrink by 2 per cent next year, after tipping a 0.2 per cent expansion previously. -- PHOTO: REUTERS
It now expects the economy to shrink by 2 per cent next year, after tipping a 0.2 per cent expansion previously.
This is the most bearish forecast so far.
Citigroup's Kit Wei Zheng is the only other economist who has predicted an economic contraction next year, with a forecast of -1.2 per cent growth.
Singapore's full-year economic growth has not dipped below zero since the dot-com bust in 2001, when it shrank 2.4 per cent.
'The global recession is likely to be deeper than expected' and Asia will probably not emerge unscathed, said Morgan Stanley's managing director and India and Asean economist Chetan Ahya.
He expects India, Korea, Indonesia and Australia to be the worst-hit countries in the region, because they have seen strong credit growth in recent years and are running current account deficits. The sudden liquidity crunch has led to a sharp decline in capital inflows and caused a spike in the cost of capital.
Countries that are likely to pull through most strongly in the coming recession include Malaysia, China and Taiwan, he said.
The bank has also cut its forecast for global growth next year to 1.7 per cent, from an earlier estimate of 2.5 per cent.
MORGAN Stanley has slashed its forecast for Singapore's growth next year on the back of a worse-than-expected global slowdown.
It now expects the economy to shrink by 2 per cent next year, after tipping a 0.2 per cent expansion previously. -- PHOTO: REUTERSIt now expects the economy to shrink by 2 per cent next year, after tipping a 0.2 per cent expansion previously.
This is the most bearish forecast so far.
Citigroup's Kit Wei Zheng is the only other economist who has predicted an economic contraction next year, with a forecast of -1.2 per cent growth.
Singapore's full-year economic growth has not dipped below zero since the dot-com bust in 2001, when it shrank 2.4 per cent.
'The global recession is likely to be deeper than expected' and Asia will probably not emerge unscathed, said Morgan Stanley's managing director and India and Asean economist Chetan Ahya.
He expects India, Korea, Indonesia and Australia to be the worst-hit countries in the region, because they have seen strong credit growth in recent years and are running current account deficits. The sudden liquidity crunch has led to a sharp decline in capital inflows and caused a spike in the cost of capital.
Countries that are likely to pull through most strongly in the coming recession include Malaysia, China and Taiwan, he said.
The bank has also cut its forecast for global growth next year to 1.7 per cent, from an earlier estimate of 2.5 per cent.
Govt 'May Take Stake In Marina IR'
Source : The Straits Times, Nov 11, 2008
Venture with CapLand if Las Vegas Sands goes bankrupt: Report
THE Singapore Government may form a venture with CapitaLand to take over one of the country's two integrated resorts if Las Vegas Sands fails to stave off loan defaults, CIMB-GK Research said yesterday.
Las Vegas Sands, the gaming concern that said last week it may default on debt and face bankruptcy, has reiterated its commitment to the US$4 billion (S$6 billion) Singapore venture.
The company has drawn down at least $2 billion from a $5 billion credit facility by several banks for the project.
'If Las Vegas Sands cannot cough up its share of equity, the Singapore Government is likely to step in,' Mr Donald Chua, a Singapore-based analyst at CIMB-GK, wrote in a report.
'A viable option could be a 49:51 joint venture between the Government and CapitaLand, with CapitaLand taking a controlling stake.'
Las Vegas Sands was one of two gaming companies that won the right to build casinos in Singapore after the city state lifted a four-decade ban on them in 2005, to diversify the economy and create jobs.
The company said last week it faces 'substantial doubt' about its ability to survive and may be short of cash for US$16 billion of projects in Asia.
In an e-mail statement yesterday, it declined to comment on its earnings announcement.
CapitaLand said in an e-mail that it has not held any discussions with the Las Vegas-based company, adding that it is seeking investments in the 'continuing global recessionary environment'.
'Potential opportunities will be carefully explored and evaluated, ensuring that an acquisition is made only at the right time, right price and when target returns are met given the current difficult economic operating environment,' CapitaLand said.
The Singapore Tourism Board said in an e-mail response to Bloomberg queries yesterday that it remains 'in dialogue' with Marina Bay Sands and will 'work closely' with the company to complete the project.
Minister Mentor Lee Kuan Yew has said Las Vegas Sands' development will go on, even though it is 'under pressure' as the company had taken on big debts while expanding to places like Macau.
As Beijing has restricted the number of Chinese travellers who are allowed to go to Macau, this has caused Las Vegas Sands' share price to decline, MM Lee said.
'But in Singapore, that project will go on because we are not depending on China and Chinese workers coming in from the rest of China to visit our integrated resorts.'
CapitaLand formed a partnership with MGM Mirage in 2005 to bid for the project that Las Vegas Sands won.
It also teamed up with Bahamas- based Kerzner International to submit a failed bid for a second integrated resort on Sentosa island.
The developer also invested in an entertainment project in Macau last year, giving it a foothold in the world's biggest casino market by gaming revenue.
Mr Liew Mun Leong, CapitaLand's chief executive officer, said last month the developer's cash position stood at $4.2 billion, enabling it to seek opportunities for acquisitions.
Participation in the integrated resort, as well as possible provisions for the value of its land holdings amid a slump in prices, will raise CapitaLand's net gearing, or debt-to-equity ratio, to more than the company's target of 0.8 times, CIMB-GK's Mr Chua wrote in his report.
'While it is currently well-capitalised, we believe the sheer size of the Marina integrated resort project could pose substantial funding strains.'
CapitaLand shares yesterday rose seven cents, or 2.2 per cent, to $3.24. It has dropped 48 per cent this year, against a 45 per cent retreat in the benchmark Straits Times Index.
Still, taking a stake in the Marina Bay integrated resort could boost the company's net asset values and earnings outlook, Mr Chua wrote.
'If the funding hurdle can be crossed through different schemes of arrangement, we believe a possible participation in an integrated resort could spell exciting long-term values for the group,' he added.
Venture with CapLand if Las Vegas Sands goes bankrupt: Report
THE Singapore Government may form a venture with CapitaLand to take over one of the country's two integrated resorts if Las Vegas Sands fails to stave off loan defaults, CIMB-GK Research said yesterday.
Las Vegas Sands, the gaming concern that said last week it may default on debt and face bankruptcy, has reiterated its commitment to the US$4 billion (S$6 billion) Singapore venture.
The company has drawn down at least $2 billion from a $5 billion credit facility by several banks for the project.
'If Las Vegas Sands cannot cough up its share of equity, the Singapore Government is likely to step in,' Mr Donald Chua, a Singapore-based analyst at CIMB-GK, wrote in a report.
'A viable option could be a 49:51 joint venture between the Government and CapitaLand, with CapitaLand taking a controlling stake.'
Las Vegas Sands was one of two gaming companies that won the right to build casinos in Singapore after the city state lifted a four-decade ban on them in 2005, to diversify the economy and create jobs.
The company said last week it faces 'substantial doubt' about its ability to survive and may be short of cash for US$16 billion of projects in Asia.
In an e-mail statement yesterday, it declined to comment on its earnings announcement.
CapitaLand said in an e-mail that it has not held any discussions with the Las Vegas-based company, adding that it is seeking investments in the 'continuing global recessionary environment'.
'Potential opportunities will be carefully explored and evaluated, ensuring that an acquisition is made only at the right time, right price and when target returns are met given the current difficult economic operating environment,' CapitaLand said.
The Singapore Tourism Board said in an e-mail response to Bloomberg queries yesterday that it remains 'in dialogue' with Marina Bay Sands and will 'work closely' with the company to complete the project.
Minister Mentor Lee Kuan Yew has said Las Vegas Sands' development will go on, even though it is 'under pressure' as the company had taken on big debts while expanding to places like Macau.
As Beijing has restricted the number of Chinese travellers who are allowed to go to Macau, this has caused Las Vegas Sands' share price to decline, MM Lee said.
'But in Singapore, that project will go on because we are not depending on China and Chinese workers coming in from the rest of China to visit our integrated resorts.'
CapitaLand formed a partnership with MGM Mirage in 2005 to bid for the project that Las Vegas Sands won.
It also teamed up with Bahamas- based Kerzner International to submit a failed bid for a second integrated resort on Sentosa island.
The developer also invested in an entertainment project in Macau last year, giving it a foothold in the world's biggest casino market by gaming revenue.
Mr Liew Mun Leong, CapitaLand's chief executive officer, said last month the developer's cash position stood at $4.2 billion, enabling it to seek opportunities for acquisitions.
Participation in the integrated resort, as well as possible provisions for the value of its land holdings amid a slump in prices, will raise CapitaLand's net gearing, or debt-to-equity ratio, to more than the company's target of 0.8 times, CIMB-GK's Mr Chua wrote in his report.
'While it is currently well-capitalised, we believe the sheer size of the Marina integrated resort project could pose substantial funding strains.'
CapitaLand shares yesterday rose seven cents, or 2.2 per cent, to $3.24. It has dropped 48 per cent this year, against a 45 per cent retreat in the benchmark Straits Times Index.
Still, taking a stake in the Marina Bay integrated resort could boost the company's net asset values and earnings outlook, Mr Chua wrote.
'If the funding hurdle can be crossed through different schemes of arrangement, we believe a possible participation in an integrated resort could spell exciting long-term values for the group,' he added.
CapitaLand May Take Over Singapore Casino, CIMB Says (Update1)
Source : Bloomberg.com, November 10, 2008
Link- http://tinyurl.com/3sfwdo
Nov. 10 (Bloomberg) -- Singapore's government may form a venture with CapitaLand Ltd. to take over one of the island's two casino-resorts if Las Vegas Sands Corp. fails to stave off loan defaults, CIMB-GK Research Pte said.
Las Vegas Sands, the gaming company that said last week it may default on debt and face bankruptcy, reiterated on Nov. 8 that it's committed to the $4 billion Singapore resort. The company has drawn down at least S$2 billion ($1.3 billion) from a S$5 billion credit facility by several banks for the project.
``If Las Vegas Sands cannot cough up its share of equity, the Singapore government is likely to step in,'' Donald Chua, a Singapore-based analyst at CIMB-GK, wrote in a report today. ``A viable option could be a 49:51 joint venture between the government and CapitaLand, with CapitaLand taking a controlling stake in the project.''
Las Vegas Sands was one of two gaming companies that won the right to build resorts in Singapore after the city-state lifted a four-decade ban on casinos in 2005 to diversify the economy and create jobs. The company said last week it faces ``substantial doubt'' about its ability to survive and may be short of cash for $16 billion of projects in Asia.
Las Vegas Sands said in an e-mailed statement today it declined to comment on its earnings announcement. CapitaLand said in an e-mail it hasn't held any discussions with the Las Vegas- based company, adding that it's seeking investments in the ``continuing global recessionary environment.''
`Carefully Explored'
``Potential opportunities will be carefully explored and evaluated, ensuring that an acquisition is made only at the right time, right price and when target returns are met given the current difficult economic operating environment,'' CapitaLand said in the statement.
The Singapore Tourism Board said in an e-mailed response to Bloomberg queries today it remains ``in dialogue'' with Marina Bay Sands and will ``work closely'' with the company to complete the project. Singapore's Minister Mentor Lee Kuan Yew said Las Vegas Sands's development will go on even as the project comes ``under pressure,'' the Business Times reported today.
CapitaLand, Southeast Asia's largest developer, formed a partnership with MGM Mirage in 2005 to bid for the project that Las Vegas Sands won. It also teamed up with Bahamas-based Kerzner International Ltd. to submit a failed bid for a second gaming resort on Sentosa island. The developer also invested in an entertainment project in Macau last year, giving it a foothold in the world's biggest casino market by gaming revenue.
Holding Cash
Liew Mun Leong, CapitaLand's chief executive officer, said on Oct. 31 the developer's cash position stood at S$4.2 billion, enabling it to seek opportunities for acquisitions. The developer also said that third-quarter profit fell 26 percent as slowing economic growth hurt demand for homes in Singapore, China and Australia.
Participation in the gaming resort, as well as possible provisions for the value of its land holdings amid a slump in prices, will raise CapitaLand's net gearing, or debt-to-equity ratio, to more than the company's target of 0.8 times, CIMB-GK's Chua wrote in the report.
``While it is currently well-capitalized, we believe the sheer size of the Marina integrated resort project could pose substantial funding strains,'' the analyst said.
CapitaLand rose 7 cents, or 2.2 percent, to S$3.24 at the close in Singapore. The stock has dropped 48 percent this year, compared with a 45 percent retreat in the benchmark Straits Times Index.
Still, taking a stake in the Marina Bay gaming resort could boost the company's net asset values and earnings outlook, Chua said in the report. The regulated gambling market in the Asia- Pacific region is expected to expand 15.7 percent a year to $30.3 billion in 2011, PricewaterhouseCoopers LLP has estimated.
``If the funding hurdle can be crossed through different schemes of arrangement, we believe a possible participation in an integrated resort could spell exciting long-term values for the group,'' Chua wrote.
Link- http://tinyurl.com/3sfwdo
Nov. 10 (Bloomberg) -- Singapore's government may form a venture with CapitaLand Ltd. to take over one of the island's two casino-resorts if Las Vegas Sands Corp. fails to stave off loan defaults, CIMB-GK Research Pte said.
Las Vegas Sands, the gaming company that said last week it may default on debt and face bankruptcy, reiterated on Nov. 8 that it's committed to the $4 billion Singapore resort. The company has drawn down at least S$2 billion ($1.3 billion) from a S$5 billion credit facility by several banks for the project.
``If Las Vegas Sands cannot cough up its share of equity, the Singapore government is likely to step in,'' Donald Chua, a Singapore-based analyst at CIMB-GK, wrote in a report today. ``A viable option could be a 49:51 joint venture between the government and CapitaLand, with CapitaLand taking a controlling stake in the project.''
Las Vegas Sands was one of two gaming companies that won the right to build resorts in Singapore after the city-state lifted a four-decade ban on casinos in 2005 to diversify the economy and create jobs. The company said last week it faces ``substantial doubt'' about its ability to survive and may be short of cash for $16 billion of projects in Asia.
Las Vegas Sands said in an e-mailed statement today it declined to comment on its earnings announcement. CapitaLand said in an e-mail it hasn't held any discussions with the Las Vegas- based company, adding that it's seeking investments in the ``continuing global recessionary environment.''
`Carefully Explored'
``Potential opportunities will be carefully explored and evaluated, ensuring that an acquisition is made only at the right time, right price and when target returns are met given the current difficult economic operating environment,'' CapitaLand said in the statement.
The Singapore Tourism Board said in an e-mailed response to Bloomberg queries today it remains ``in dialogue'' with Marina Bay Sands and will ``work closely'' with the company to complete the project. Singapore's Minister Mentor Lee Kuan Yew said Las Vegas Sands's development will go on even as the project comes ``under pressure,'' the Business Times reported today.
CapitaLand, Southeast Asia's largest developer, formed a partnership with MGM Mirage in 2005 to bid for the project that Las Vegas Sands won. It also teamed up with Bahamas-based Kerzner International Ltd. to submit a failed bid for a second gaming resort on Sentosa island. The developer also invested in an entertainment project in Macau last year, giving it a foothold in the world's biggest casino market by gaming revenue.
Holding Cash
Liew Mun Leong, CapitaLand's chief executive officer, said on Oct. 31 the developer's cash position stood at S$4.2 billion, enabling it to seek opportunities for acquisitions. The developer also said that third-quarter profit fell 26 percent as slowing economic growth hurt demand for homes in Singapore, China and Australia.
Participation in the gaming resort, as well as possible provisions for the value of its land holdings amid a slump in prices, will raise CapitaLand's net gearing, or debt-to-equity ratio, to more than the company's target of 0.8 times, CIMB-GK's Chua wrote in the report.
``While it is currently well-capitalized, we believe the sheer size of the Marina integrated resort project could pose substantial funding strains,'' the analyst said.
CapitaLand rose 7 cents, or 2.2 percent, to S$3.24 at the close in Singapore. The stock has dropped 48 percent this year, compared with a 45 percent retreat in the benchmark Straits Times Index.
Still, taking a stake in the Marina Bay gaming resort could boost the company's net asset values and earnings outlook, Chua said in the report. The regulated gambling market in the Asia- Pacific region is expected to expand 15.7 percent a year to $30.3 billion in 2011, PricewaterhouseCoopers LLP has estimated.
``If the funding hurdle can be crossed through different schemes of arrangement, we believe a possible participation in an integrated resort could spell exciting long-term values for the group,'' Chua wrote.
Analysts Keen To Cast CapitaLand As White Knight
Source : The Business Times, November 11, 2008
There is also talk that Temasek could take stake
CapitaLand is trying hard to play down expectations but in the eyes of some analysts, it has emerged as the frontrunner in the race to become Las Vegas Sands' (LVS) white knight. The fact that CapitaLand had participated in the Request for Proposal for both integrated resort (IR) sites here is fanning such talk further.
A report by CIMB yesterday pointed out that few casino operators will have the 'financial muscle' to participate in the project, given that it expects the capital expenditure to be around $6.8 billion to $7 billion. 'If this is the case, we estimate that any new equity partner - including CapitaLand - would need to set aside $1.3 billion to $1.5 billion of development funds while taking on the $5.44 billion of debt that has been arranged with banks,' CIMB added.
As at Q308, CapitaLand has a net gearing ratio of 0.5 and a cash balance of $4.2 billion. It also has a dedicated integrated, leisure, entertainment and conventions business arm.
Given the size of the development, CIMB said that it believes that a viable option could be a 49:51 joint venture between the government and CapitaLand, with the latter taking a controlling stake.
However, CIMB also added that the sheer size of the project could be a 'strain' even for CapitaLand.
Talk is also that Temasek, representing the government, could take stake. While there is no evidence of this, Bloomberg reported that according to JPMorgan Chase data, five-year credit-default swaps on Temasek, which manages about US$130 billion, advanced 15 basis points to 113 last Friday. Bloomberg said that the price, which climbs as perceptions of credit quality deteriorate, is equivalent to US$113,000 annually to protect US$10 million of bonds.
CapitaLand has denied taking an equity stake. 'CapitaLand wishes to clarify that no discussion has transpired between itself and Sands,' it said in a statement released yesterday.
But CapitaLand added that 'in the present continuing global recessionary environment, (CapitaLand) is strategically watching the situation and studying opportunities related to distressed companies or assets, in Singapore and other core markets, that will have a strategic fit with its core business areas'.
Back in 2006, when the MGM-CapitaLand consortium lost the bid for the IR, CapitaLand chief executive Liew Mun Leong described the race as the 'mother of all competition' and the consortium's defeat as 'grossly disappointing and painful'.
He admitted that the company had made a 'killer mistake' in its bid with MGM Mirage - failing to give a higher priority to MICE (meetings, incentives, conventions and exhibitions), focusing instead on entertainment, retail, and food and beverage.
Still, what MGM Mirage chief Terrence Lanni said then seems to have come to pass. He said that of the four contenders, his company and CapitaLand would prove the least risky, owing to the depth of their experience and abilities.
'When you're going to do something like this and you're trying something new, you want to get rid of all the imponderables that you possibly can. I think there's less risk with us.'
Talk of LVS possibly filing for Chapter 11 bankruptcy protection reached fever pitch last week when it said in a filing with the US Securities and Exchange Commission that it did not expect to comply with its maximum leverage ratio convenant for the fourth quarter and possibly even for the following quarters.
If LVS does default, its lenders could bring financing maturity dates forward.
According to CIMB, Singapore banks UOB, DBS and OCBC remain most exposed to mortgage-backed securities (MBS), totalling over $2.2 billion. Citigroup, Maybank and Standard Chartered have credit exposures of $262 million each while Sumitomo Mitsui and RBS are $240 million and $226 million exposed, respectively. Goldman Sachs, Lehman Brothers and Calyon have exposures of $160 million each and Merrill Lynch and Bank of Nova Scotia have exposures of $100 million and $93 million each, respectively.
To comply with the maximum leverage ratio convenant, LVS will need to reduce spending, obtain additional financing or increase adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) at its Las Vegas properties which can be achieved by contributing up to $50 million of capital from cash for the quarter.
Genting International's Resorts World Sentosa (RWS) will not have these problems. CIMB said that parent Genting Group's subsidiary Resorts World has net cash in excess of US$1.2 billion. CIMB said that Genting International has also fully contributed the entire $2 billion equity portion of the project and the $4.3 billion syndicated loan is in place.
There is also talk that Temasek could take stake
CapitaLand is trying hard to play down expectations but in the eyes of some analysts, it has emerged as the frontrunner in the race to become Las Vegas Sands' (LVS) white knight. The fact that CapitaLand had participated in the Request for Proposal for both integrated resort (IR) sites here is fanning such talk further.
A report by CIMB yesterday pointed out that few casino operators will have the 'financial muscle' to participate in the project, given that it expects the capital expenditure to be around $6.8 billion to $7 billion. 'If this is the case, we estimate that any new equity partner - including CapitaLand - would need to set aside $1.3 billion to $1.5 billion of development funds while taking on the $5.44 billion of debt that has been arranged with banks,' CIMB added.
As at Q308, CapitaLand has a net gearing ratio of 0.5 and a cash balance of $4.2 billion. It also has a dedicated integrated, leisure, entertainment and conventions business arm.
Given the size of the development, CIMB said that it believes that a viable option could be a 49:51 joint venture between the government and CapitaLand, with the latter taking a controlling stake.
However, CIMB also added that the sheer size of the project could be a 'strain' even for CapitaLand.
Talk is also that Temasek, representing the government, could take stake. While there is no evidence of this, Bloomberg reported that according to JPMorgan Chase data, five-year credit-default swaps on Temasek, which manages about US$130 billion, advanced 15 basis points to 113 last Friday. Bloomberg said that the price, which climbs as perceptions of credit quality deteriorate, is equivalent to US$113,000 annually to protect US$10 million of bonds.
CapitaLand has denied taking an equity stake. 'CapitaLand wishes to clarify that no discussion has transpired between itself and Sands,' it said in a statement released yesterday.
But CapitaLand added that 'in the present continuing global recessionary environment, (CapitaLand) is strategically watching the situation and studying opportunities related to distressed companies or assets, in Singapore and other core markets, that will have a strategic fit with its core business areas'.
Back in 2006, when the MGM-CapitaLand consortium lost the bid for the IR, CapitaLand chief executive Liew Mun Leong described the race as the 'mother of all competition' and the consortium's defeat as 'grossly disappointing and painful'.
He admitted that the company had made a 'killer mistake' in its bid with MGM Mirage - failing to give a higher priority to MICE (meetings, incentives, conventions and exhibitions), focusing instead on entertainment, retail, and food and beverage.
Still, what MGM Mirage chief Terrence Lanni said then seems to have come to pass. He said that of the four contenders, his company and CapitaLand would prove the least risky, owing to the depth of their experience and abilities.
'When you're going to do something like this and you're trying something new, you want to get rid of all the imponderables that you possibly can. I think there's less risk with us.'
Talk of LVS possibly filing for Chapter 11 bankruptcy protection reached fever pitch last week when it said in a filing with the US Securities and Exchange Commission that it did not expect to comply with its maximum leverage ratio convenant for the fourth quarter and possibly even for the following quarters.
If LVS does default, its lenders could bring financing maturity dates forward.
According to CIMB, Singapore banks UOB, DBS and OCBC remain most exposed to mortgage-backed securities (MBS), totalling over $2.2 billion. Citigroup, Maybank and Standard Chartered have credit exposures of $262 million each while Sumitomo Mitsui and RBS are $240 million and $226 million exposed, respectively. Goldman Sachs, Lehman Brothers and Calyon have exposures of $160 million each and Merrill Lynch and Bank of Nova Scotia have exposures of $100 million and $93 million each, respectively.
To comply with the maximum leverage ratio convenant, LVS will need to reduce spending, obtain additional financing or increase adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) at its Las Vegas properties which can be achieved by contributing up to $50 million of capital from cash for the quarter.
Genting International's Resorts World Sentosa (RWS) will not have these problems. CIMB said that parent Genting Group's subsidiary Resorts World has net cash in excess of US$1.2 billion. CIMB said that Genting International has also fully contributed the entire $2 billion equity portion of the project and the $4.3 billion syndicated loan is in place.
Demand For And Prices Of Public Housing Flats Expected To Stay Resilient
Source : Channel NewsAsia, 10 November 2008
The demand for and prices of public housing flats are expected to remain fairly resilient despite the economic downturn. Market watchers said this applies to both resale and new units.
HDB flats (file picture)
Close to 9,000 people have visited the Natura Loft showflat since it was launched for sale on October 31.
Its developer, Qingjian Realty, has already received 500 applications, mostly for four-room units there. But only 480 units are being offered, and these are going for between S$450 and S$570 per square foot.
Sales will close on November 15 and Qingjian expects demand for the new flats to be robust. Natura Loft is the Housing and Development Board's fourth condo-style public housing project.
Similarly, interest for public resale flats has not slowed. Property agents said the number of viewings for resale units jumped by 15 per cent in the last six weeks.
Eric Cheng, executive director, HSR Property Consultants, said: "I did an interview with one of the consumers, they were sharing with me that 'In today's market, I don't know how long my job will last, so to safeguard, I would rather go for subsidised (a) house, that is HDB, because how low could HDB go, HDB houses always will have a valuation to support the base value of the units'."
Market watchers expect prices of resale flats to grow by about 4 per cent in the fourth quarter, slightly slower than the third quarter - which saw a 4.2 per cent growth.
ERA real estate agency projects price growth in the HDB resale flats segment to be at between 15 and 17 per cent for the whole of 2008. And it also said it is going to be a buyer's market for now, due to the challenging economic conditions.
Eugene Lim, associate director, ERA Asia Pacific, said: "Most of the buyers will start their negotiations at below valuation... by and large, most of the deals are pretty realistic nowadays, and cash over valuation very rarely will be more than S$40,000 to S$50,000. ... the days of S$100,000 or S$120,000 cash over valuation... are over."
Market players said the outlook for Singapore's property sector may be hazy in the short term, but the prospects still look bright beyond 2010. They said that is because Singapore has plans in place that will help to create jobs and boost the economy. - CNA/ms
The demand for and prices of public housing flats are expected to remain fairly resilient despite the economic downturn. Market watchers said this applies to both resale and new units.
HDB flats (file picture)Close to 9,000 people have visited the Natura Loft showflat since it was launched for sale on October 31.
Its developer, Qingjian Realty, has already received 500 applications, mostly for four-room units there. But only 480 units are being offered, and these are going for between S$450 and S$570 per square foot.
Sales will close on November 15 and Qingjian expects demand for the new flats to be robust. Natura Loft is the Housing and Development Board's fourth condo-style public housing project.
Similarly, interest for public resale flats has not slowed. Property agents said the number of viewings for resale units jumped by 15 per cent in the last six weeks.
Eric Cheng, executive director, HSR Property Consultants, said: "I did an interview with one of the consumers, they were sharing with me that 'In today's market, I don't know how long my job will last, so to safeguard, I would rather go for subsidised (a) house, that is HDB, because how low could HDB go, HDB houses always will have a valuation to support the base value of the units'."
Market watchers expect prices of resale flats to grow by about 4 per cent in the fourth quarter, slightly slower than the third quarter - which saw a 4.2 per cent growth.
ERA real estate agency projects price growth in the HDB resale flats segment to be at between 15 and 17 per cent for the whole of 2008. And it also said it is going to be a buyer's market for now, due to the challenging economic conditions.
Eugene Lim, associate director, ERA Asia Pacific, said: "Most of the buyers will start their negotiations at below valuation... by and large, most of the deals are pretty realistic nowadays, and cash over valuation very rarely will be more than S$40,000 to S$50,000. ... the days of S$100,000 or S$120,000 cash over valuation... are over."
Market players said the outlook for Singapore's property sector may be hazy in the short term, but the prospects still look bright beyond 2010. They said that is because Singapore has plans in place that will help to create jobs and boost the economy. - CNA/ms
Price Fall 'Unlikely To Dent Economy'
Source : The Straits Times, Nov 11, 2008
Sector's downturn manageable, says Citibank report
PRIVATE home prices are on a downslide, but their decline is unlikely to have a major impact on the economy, according to a new report by Citibank.
More than 80 per cent of Singaporeans live in public housing anyway, which is still on a price uptrend, it said. HDB resale prices rose 4.2 per cent in the third quarter, while prices of apartments, condominium units and landed homes fell 2.4 per cent. This was the first decline in four years.
Even private home dwellers who see their property values dip are unlikely to cut back on spending, said the bank. Real estate wealth here is illiquid compared to other countries - meaning it cannot be easily converted to cash - so a fall in home values will have little effect on how much consumers spend.
Citibank economist Kit Wei Zheng estimated that a drop of 15 per cent in the prices of private homes could knock 0.4 to 0.6 percentage point off economic growth.
This would be due largely to lower construction investments as developers delay projects to wait out the downturn, rather than because home owners feel poorer and spend less, he said.
While 'not negligible', the effect of falling private home prices on the economy is 'not particularly large'.
'A housing downturn confined to the private residential segment should be manageable,' said Mr Kit, adding that a slump in exports and financial services would have a more significant drag on Singapore's economy, currently in a technical recession after two straight quarters of negative growth.
Singaporean home owners are often described as 'asset rich, cash poor', because they cannot or are unwilling to unlock the value of their property, Mr Kit noted. If they could do so, they would be able to turn the value of their homes into cash for spending.
Unlike in bigger countries, Singapore has no 'cheap' suburbs where people can buy a similar or even better house and sell their existing one in the city for capital gains, he said.
Singaporeans also tend to have a 'psychological reluctance' to realise the value of their property by downgrading to a smaller, cheaper home.
In countries like the United States, financial instruments such as reverse mortgages allow home owners to get cash for their homes even while they are living in them, added Mr Kit.
With real estate here so illiquid, home prices are not directly related to consumption spending. In fact, the Citibank report says this relationship could be reversed in Singapore: Lower home prices could mean that aspiring home buyers have more money to spend.
Of course, a property downturn also means fewer home sales, which would hit economic growth more than a fall in home prices, Mr Kit said.
A drop in property transactions would eventually lead to a decline in business services, among other things.
Sector's downturn manageable, says Citibank report
PRIVATE home prices are on a downslide, but their decline is unlikely to have a major impact on the economy, according to a new report by Citibank.
More than 80 per cent of Singaporeans live in public housing anyway, which is still on a price uptrend, it said. HDB resale prices rose 4.2 per cent in the third quarter, while prices of apartments, condominium units and landed homes fell 2.4 per cent. This was the first decline in four years.
Even private home dwellers who see their property values dip are unlikely to cut back on spending, said the bank. Real estate wealth here is illiquid compared to other countries - meaning it cannot be easily converted to cash - so a fall in home values will have little effect on how much consumers spend.
Citibank economist Kit Wei Zheng estimated that a drop of 15 per cent in the prices of private homes could knock 0.4 to 0.6 percentage point off economic growth.
This would be due largely to lower construction investments as developers delay projects to wait out the downturn, rather than because home owners feel poorer and spend less, he said.
While 'not negligible', the effect of falling private home prices on the economy is 'not particularly large'.
'A housing downturn confined to the private residential segment should be manageable,' said Mr Kit, adding that a slump in exports and financial services would have a more significant drag on Singapore's economy, currently in a technical recession after two straight quarters of negative growth.
Singaporean home owners are often described as 'asset rich, cash poor', because they cannot or are unwilling to unlock the value of their property, Mr Kit noted. If they could do so, they would be able to turn the value of their homes into cash for spending.
Unlike in bigger countries, Singapore has no 'cheap' suburbs where people can buy a similar or even better house and sell their existing one in the city for capital gains, he said.
Singaporeans also tend to have a 'psychological reluctance' to realise the value of their property by downgrading to a smaller, cheaper home.
In countries like the United States, financial instruments such as reverse mortgages allow home owners to get cash for their homes even while they are living in them, added Mr Kit.
With real estate here so illiquid, home prices are not directly related to consumption spending. In fact, the Citibank report says this relationship could be reversed in Singapore: Lower home prices could mean that aspiring home buyers have more money to spend.
Of course, a property downturn also means fewer home sales, which would hit economic growth more than a fall in home prices, Mr Kit said.
A drop in property transactions would eventually lead to a decline in business services, among other things.
Falling Home Prices May Cut GDP Growth
Source : The Business Times, November 11, 2008
However, analysts continue to see strong demand for HDB flats
A 10-15 per cent fall in overall housing prices could shave 0.4 to 0.6 of a percentage point off annual GDP growth due to lower construction investments alone, according to Citigroup.
Using information from four previous studies, Citi analyst Kit Wei Zheng concluded that a 10-15 per cent fall in home prices means that overall construction investments - which make up 11 per cent of GDP - could fall by between 16 and 24 per cent from baseline after a period of five years, or roughly 3-5 per cent per year.
This would reduce GDP growth by about 0.4-0.6 percentage point each year.
'This impact, while not negligible, is not regarded as a catastrophic outcome, and probably pales in magnitude to the export and manufacturing downturn,' said Mr Kit.
Similarly, OCBC economist Selena Ling thinks a fall in private home prices - and subsequent fall in residential construction demand - will not have too large an impact on GDP. 'There will definitely be some impact,' she said.
'But right now, the construction industry is driven more by commercial and industrial projects. Private residential projects make up just one part of construction demand.'
CIMB-GK economist Song Seng Wun said: 'Some of the slack in private residential construction activity could be taken up by an increase in public sector demand.'
Private residential construction investments account for about one-fifth of total contracts awarded, and contributed around 13 percentage points to the overall 64.7 per cent growth in contracts awarded in the first three quarters of this year.
In contrast, public construction projects, including HDB projects, comprised 34 per cent of total contracts awarded and contributed 33 percentage points to growth in contracts awarded. They accounted for more than 50 per cent of overall growth.
Looking ahead, Citigroup property analyst Wendy Koh expects a further 25 per cent decline in the high-end residential segment. Prices in the mid-market could fall another 15 per cent, while the mass market could start to see a decline of 5-10 per cent.
The direct impact of falling private housing prices on private consumption spending - and therefore GDP - is also likely to be small, Citigroup said. For one, as housing assets are mostly illiquid in Singapore, wealth effects are largely absent.
Lower private home prices may in fact increase household discretionary incomes for spending on other items.
In addition, less than 20 per cent of Singapore's population lives in private housing and therefore public house prices are probably more relevant for consumption, Mr Kit said.
'Public residential construction demand has actually surged, given that public housing demand has remained robust so far,' he said.
'Nonetheless, we cannot rule out a fall in public residential construction demand going forward, if HDB prices start to plateau as well.'
Demand for HDB flats remains strong and prices are still on the uptrend. But a slowdown is expected, which could lead to lower public residential construction demand and have its own impact on GDP, analysts said.
However, analysts continue to see strong demand for HDB flats
A 10-15 per cent fall in overall housing prices could shave 0.4 to 0.6 of a percentage point off annual GDP growth due to lower construction investments alone, according to Citigroup.
Using information from four previous studies, Citi analyst Kit Wei Zheng concluded that a 10-15 per cent fall in home prices means that overall construction investments - which make up 11 per cent of GDP - could fall by between 16 and 24 per cent from baseline after a period of five years, or roughly 3-5 per cent per year.
This would reduce GDP growth by about 0.4-0.6 percentage point each year.
'This impact, while not negligible, is not regarded as a catastrophic outcome, and probably pales in magnitude to the export and manufacturing downturn,' said Mr Kit.
Similarly, OCBC economist Selena Ling thinks a fall in private home prices - and subsequent fall in residential construction demand - will not have too large an impact on GDP. 'There will definitely be some impact,' she said.
'But right now, the construction industry is driven more by commercial and industrial projects. Private residential projects make up just one part of construction demand.'
CIMB-GK economist Song Seng Wun said: 'Some of the slack in private residential construction activity could be taken up by an increase in public sector demand.'
Private residential construction investments account for about one-fifth of total contracts awarded, and contributed around 13 percentage points to the overall 64.7 per cent growth in contracts awarded in the first three quarters of this year.
In contrast, public construction projects, including HDB projects, comprised 34 per cent of total contracts awarded and contributed 33 percentage points to growth in contracts awarded. They accounted for more than 50 per cent of overall growth.
Looking ahead, Citigroup property analyst Wendy Koh expects a further 25 per cent decline in the high-end residential segment. Prices in the mid-market could fall another 15 per cent, while the mass market could start to see a decline of 5-10 per cent.
The direct impact of falling private housing prices on private consumption spending - and therefore GDP - is also likely to be small, Citigroup said. For one, as housing assets are mostly illiquid in Singapore, wealth effects are largely absent.
Lower private home prices may in fact increase household discretionary incomes for spending on other items.
In addition, less than 20 per cent of Singapore's population lives in private housing and therefore public house prices are probably more relevant for consumption, Mr Kit said.
'Public residential construction demand has actually surged, given that public housing demand has remained robust so far,' he said.
'Nonetheless, we cannot rule out a fall in public residential construction demand going forward, if HDB prices start to plateau as well.'
Demand for HDB flats remains strong and prices are still on the uptrend. But a slowdown is expected, which could lead to lower public residential construction demand and have its own impact on GDP, analysts said.
Sands Holds Macau Project
Source : The Straits Times, Nov 11, 2008
# To suspend Macau construction
# Posts net loss of US$32.2 million
# 14 US cent loss a year ago
# Expects to announce US$2 billion bond sale
LOS ANGELES - CASINO operator Las Vegas Sands, which warned last week it was in danger of violating loan agreements, said on Monday it would suspend construction in Macau as it copes with a lack of financing options.
Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income. -- PHOTO: REUTERS
Sands also reported a narrower third-quarter net loss and said it expects to shortly release details of a US$2 billion (S$3 billion) bond sale.
'We have elected to significantly slow the pace of our development activities on the Cotai Strip (in Macau)... as we focus our current efforts on maximising our cash flow and our returns on invested capital from our existing properties in Macau,' Chief Operating Officer William Weidner said in a statement.
Majority-owner Chairman and Chief Executive Sheldon Adelson, speaking on a conference call, said the Macau government may act to help find financing for the projects.
The company also said it would suspend work on the St Regis luxury-condominium project in Las Vegas and would focus on the casino components at its Bethlehem, Pennsylvania development.
It still expects the Marina Bay Sands project in Singapore to open next year.
The Las Vegas-based company posted a net loss of US$32.2 million (S$48.2 million), or 9 US cents a share, compared with a net loss of US$48.5 million, or 14 US cents a share, in the year-earlier quarter.
Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income.
After adjusting for one-time items, Sands said it earned 2 US cents a share in the quarter, well short of the 11 US cents a share expected by analysts, as compiled by Reuters Estimates.
The company said net revenue rose 67 per cent to US$1.11 billion, close to the US$1.16 billion expected by analysts.
Sagging US consumer spending power has hurt business in Las Vegas, where Sands operates the Palazzo and Venetian resorts, as well as the Sands Expo and Convention Centre.
The company operates two casinos in Macau, where officials have recently restricted travel from mainland China, and has several more projects underway there as well as in Singapore and Bethlehem, Pennsylvania.
The company said in its US Securities and Exchange filing on Monday that if it is unable to raise additional capital in the near term, it would need to consider further suspending portions, if not all, of its remaining global development projects.
The casino operator has also filed a shelf registration with regulators that would allow it to sell securities.
Shares of Sands, which have plummeted from a 52-week high of US$122,96, closed on Monday at US$8.00 on the Nasdaq only to fall in after hours trade to US$7.45. -- REUTERS
CapitaLand not in talks with Sands
PROPERTY developer CapitaLand said on Monday it has not held any talks with Las Vegas Sands over its Singapore casino-resort project, but will explore opportunities to invest in distressed assets.
The statement came after brokerage firm CIMB said in a report on Monday that CapitaLand, Southeast Asia's biggest property firm, and the Singapore government may take over the casino-resort if Las Vegas Sands fails to avert loan defaults.
Local newspapers have reported that Las Vegas Sands had held talks with the Singapore government about the project, which is targeted to open at the end of 2009.
'CapitaLand wishes to clarify that no discussion has transpired between itself and Sands,' it said in a statement.
'In the present continuing global recessionary environment, it is strategically watching the situation and studying opportunities related to distressed companies or assets, in Singapore and other core markets,' CapitaLand said.
CapitaLand is 40 per cent owned by Singapore sovereign wealth fund Temasek Holdings.
Last week Las Vegas Sands affirmed its commitment to the Marina Bay project in Singapore as investors became concerned about its fate after the casino operator's auditor said there are doubts about the company's ability to continue as a going concern -- THOMSON REUTERS
# To suspend Macau construction
# Posts net loss of US$32.2 million
# 14 US cent loss a year ago
# Expects to announce US$2 billion bond sale
LOS ANGELES - CASINO operator Las Vegas Sands, which warned last week it was in danger of violating loan agreements, said on Monday it would suspend construction in Macau as it copes with a lack of financing options.
Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income. -- PHOTO: REUTERSSands also reported a narrower third-quarter net loss and said it expects to shortly release details of a US$2 billion (S$3 billion) bond sale.
'We have elected to significantly slow the pace of our development activities on the Cotai Strip (in Macau)... as we focus our current efforts on maximising our cash flow and our returns on invested capital from our existing properties in Macau,' Chief Operating Officer William Weidner said in a statement.
Majority-owner Chairman and Chief Executive Sheldon Adelson, speaking on a conference call, said the Macau government may act to help find financing for the projects.
The company also said it would suspend work on the St Regis luxury-condominium project in Las Vegas and would focus on the casino components at its Bethlehem, Pennsylvania development.
It still expects the Marina Bay Sands project in Singapore to open next year.
The Las Vegas-based company posted a net loss of US$32.2 million (S$48.2 million), or 9 US cents a share, compared with a net loss of US$48.5 million, or 14 US cents a share, in the year-earlier quarter.
Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income.
After adjusting for one-time items, Sands said it earned 2 US cents a share in the quarter, well short of the 11 US cents a share expected by analysts, as compiled by Reuters Estimates.
The company said net revenue rose 67 per cent to US$1.11 billion, close to the US$1.16 billion expected by analysts.
Sagging US consumer spending power has hurt business in Las Vegas, where Sands operates the Palazzo and Venetian resorts, as well as the Sands Expo and Convention Centre.
The company operates two casinos in Macau, where officials have recently restricted travel from mainland China, and has several more projects underway there as well as in Singapore and Bethlehem, Pennsylvania.
The company said in its US Securities and Exchange filing on Monday that if it is unable to raise additional capital in the near term, it would need to consider further suspending portions, if not all, of its remaining global development projects.
The casino operator has also filed a shelf registration with regulators that would allow it to sell securities.
Shares of Sands, which have plummeted from a 52-week high of US$122,96, closed on Monday at US$8.00 on the Nasdaq only to fall in after hours trade to US$7.45. -- REUTERS
CapitaLand not in talks with Sands
PROPERTY developer CapitaLand said on Monday it has not held any talks with Las Vegas Sands over its Singapore casino-resort project, but will explore opportunities to invest in distressed assets.
The statement came after brokerage firm CIMB said in a report on Monday that CapitaLand, Southeast Asia's biggest property firm, and the Singapore government may take over the casino-resort if Las Vegas Sands fails to avert loan defaults.
Local newspapers have reported that Las Vegas Sands had held talks with the Singapore government about the project, which is targeted to open at the end of 2009.
'CapitaLand wishes to clarify that no discussion has transpired between itself and Sands,' it said in a statement.
'In the present continuing global recessionary environment, it is strategically watching the situation and studying opportunities related to distressed companies or assets, in Singapore and other core markets,' CapitaLand said.
CapitaLand is 40 per cent owned by Singapore sovereign wealth fund Temasek Holdings.
Last week Las Vegas Sands affirmed its commitment to the Marina Bay project in Singapore as investors became concerned about its fate after the casino operator's auditor said there are doubts about the company's ability to continue as a going concern -- THOMSON REUTERS
US In 'Serious Recession'
Source : The Straits Times, Nov 11, 2008
Survey of economists sees US facing long, deep recession.
WASHINGTON - THE US economy is entering 'the steep part' of what could be the worst recession since World War II, said a member of the panel that gauges American recessions and expansions.
'There's a chance it'll be the worst post-war recession,' Mr Jeffrey Frankel said. -- PHOTO: THOMSON REUTERS
Mr Jeffrey Frankel, part of the business cycle dating committee at the Cambridge, Massachusetts-based National Bureau of Economic Research (NBER), said in a Bloomberg Television interview on Monday: 'We're in for a pretty serious recession.'
'There's a chance it'll be the worst post-war recession,' he said.
In October, the US lost 240,000 jobs in the 10th straight monthly decline. The unemployment rate jumped to 6.5 per cent, the highest since 1994, the Labour Department said last week. Bloomberg reported that national and regional manufacturing and industrial production shrank to recessionary levels in October.
Fellow NBER committee members Martin Feldstein, a Harvard University professor, and head of the eight-member panel Stanford University economist Robert Hall, have said the US is in a recession.
Professor Hall said in an interview last week that the committee needs more data on gross domestic product before making a recession call.
The US economy shrank at a 0.3 per cent annual rate last quarter, the most since the 2001 downturn, advance Commerce Department figures showed on Oct 30. The department will publish a revised estimate on Nov 25, with a third revision coming in December. The fourth-quarter GDP release is scheduled for late January.
'We're just going into the steep part of it now,' Mr Frankel said. 'We're a little puzzled whether to say that it started last December, because that's when employment peaked, or whether it started in, let's say, October, because that's when the economy really went into a nosedive.'
The NBER panel defines a recession as a 'significant' decrease in activity over a sustained period of time. The decline would be visible in GDP, payrolls, production, sales and incomes, according to the group.
Survey of economists sees US facing long, deep recession.
WASHINGTON - THE US economy is entering 'the steep part' of what could be the worst recession since World War II, said a member of the panel that gauges American recessions and expansions.
'There's a chance it'll be the worst post-war recession,' Mr Jeffrey Frankel said. -- PHOTO: THOMSON REUTERSMr Jeffrey Frankel, part of the business cycle dating committee at the Cambridge, Massachusetts-based National Bureau of Economic Research (NBER), said in a Bloomberg Television interview on Monday: 'We're in for a pretty serious recession.'
'There's a chance it'll be the worst post-war recession,' he said.
In October, the US lost 240,000 jobs in the 10th straight monthly decline. The unemployment rate jumped to 6.5 per cent, the highest since 1994, the Labour Department said last week. Bloomberg reported that national and regional manufacturing and industrial production shrank to recessionary levels in October.
Fellow NBER committee members Martin Feldstein, a Harvard University professor, and head of the eight-member panel Stanford University economist Robert Hall, have said the US is in a recession.
Professor Hall said in an interview last week that the committee needs more data on gross domestic product before making a recession call.
The US economy shrank at a 0.3 per cent annual rate last quarter, the most since the 2001 downturn, advance Commerce Department figures showed on Oct 30. The department will publish a revised estimate on Nov 25, with a third revision coming in December. The fourth-quarter GDP release is scheduled for late January.
'We're just going into the steep part of it now,' Mr Frankel said. 'We're a little puzzled whether to say that it started last December, because that's when employment peaked, or whether it started in, let's say, October, because that's when the economy really went into a nosedive.'
The NBER panel defines a recession as a 'significant' decrease in activity over a sustained period of time. The decline would be visible in GDP, payrolls, production, sales and incomes, according to the group.