Permanent Race Track To Be Built At Changi

Source : The Business Times, October 27, 2007

THE government said yesterday it will develop motorsports here by working with the private sector to build a permanent race track on a 20-hectare site at Changi and putting together a comprehensive plan.

'Motorsports is an activity that has great potential for Singapore,' said Minister for Community Development, Youth and Sports Vivian Balakrishnan.

It is being recognised first as a sport in its own right and second as an industry that Singapore wants to promote, he said.

The Economic Development Board has realised that there is business potential and is part of the team working on the development project.

Emphasising that it is still at a preliminary stage, Dr Balakrishnan said: 'We are now signalling to the private sector, local and international, that Singapore is interested in the development of a permanent motor sports track.

'We want them to get in touch with the Sports Council and start the dialogue with us over the next few months as we refine the detailed specifications of the tender that we will call.'

The Singapore Sports Council will lead a multi-agency team which will market the project locally and internationally.

The seafront view and longish sides of the 30-year tenure site, which could yield a track 2.8-3.5km long with possibly one of the longest straights in Asia, would be unique selling points. The track should be able to seat at least 15,000 spectators and would be a Grade 2 FIA-approved track circuit that could host any type of motor race except Formula 1.

There would also be a Grade 1 karting track - the only such track in South- east Asia.

Promoters bidding for the track will have to bring in at least three international races and two national series a year, as well as other motor sports events and exhibitions. In addition, a motor racing and advanced driving school must be part of the facilities.

A request for proposal is expected to go out in May next year. The tender process will likely take six to nine months and the track is expected to be completed by end-2010 or early 2011.

MAS Proposes Changes To Liquid Asset Requirements For Banks

Source : The Business Times, October 27, 2007

They can hold a broader range of assets as buffer against sudden drain











THE Monetary Authority of Singapore (MAS) has published a consultation paper on proposed changes to the cash and liquid asset minimum requirements for banks here.

Under the proposed changes, banks will be allowed to hold a broader range of assets as part of their buffer against a sudden drain on their liquidity.

Related Link - http://tinyurl.com/ytos6h
MAS' consultation paper

The risk posed to the banking system due to a lack of liquidity has been amply demonstrated in recent weeks, after the financial market turmoil triggered by problems in the US mortgage market eventually led to a bank run on UK mortgage lender Northern Rock.

Some commentators have even argued that central banks have in recent times placed too much emphasis on monitoring banks' credit risk exposures, while neglecting to assess their vulnerability to liquidity risk.

To ensure that banks here are able to react quickly to liquidity stress situations, the process for drawing down their liquid reserves with the central bank has also been streamlined, said MAS yesterday.

If the proposed changes are approved, the range of instruments eligible as liquid assets will be expanded to include Singdollar debt securities and sukuk - Islamic bonds - with a sufficiently high credit rating, or those issued by statutory boards here.

The current MAS rules define liquid assets eligible for inclusion in the buffer in much narrower terms, restricting banks mainly to holding cash and Singapore government bonds to meet the regulatory requirements. Corporate debt securities - even top rated ones - are excluded.

The proposed changes are expected to give banks 'greater flexibility in managing their liquid assets portfolio', said MAS in a statement.

With the new rules, any Singdollar debt securities with a total issue size of at least $200 million rated as investment grade or higher by international ratings agencies Moody's, Fitch and Standard & Poor's will qualify as liquid assets. Higher values will be assigned to debt with better credit ratings.

MAS said that it 'may consider including securities rated by other agencies where appropriate in future'. The central bank consulted the industry last year on the proposed changes to its liquidity risk supervision framework and it has included some of the industry responses it received in the consultation paper released yesterday.

Several respondents argued that some undrawn commitments such as credit facilities offered by banks should be excluded from the liability base used in computing how much they need to hold in liquid assets.

MAS said that its 'guiding principle is to include items that the bank is committed to and which would pose liquidity risk to the bank should the customer utilise or call upon the commitment'. These would include the unused portion of guarantees, stand-by credit facilities or stand-by letters of credit, it said.

But MAS said that it would allow banks to exclude such commitments from their liability base 'provided the bank has the contractual unconditional right to refuse drawdown'.

Comments on the proposals should be submitted to MAS by Nov 26.

DBS Q3 Net Profit Beats Forecasts

Source : The Business Times, October 27, 2007

11% rise to $610m despite CDO-linked allowances and loss and TMB impairment

DBS Group Holdings beat analysts' expectations with a third-quarter net profit of $610 million, 11 per cent higher than the previous year's corresponding quarter's $552 million.

Mr Tai: Said that the search for his successor is continuing and refused to comment on whether ex-SingTel chief Lee Hsien Yang would be chosen

This was despite the group's allowances and mark-to-market loss relating to collateralised debt obligations (CDOs) and an impairment charge for its stake in Thailand's TMB Bank.

The Q3 net profit compared favourably with an average forecast of $481 million from five analysts polled by Reuters.

DBS said that although none of its $2.36 billion of CDOs as at Sept 30 has defaulted, it has set aside allowances of $70 million for the $275 million of collateralised debt obligations (CDOs) that had some exposure to US sub-prime assets. This comprised $43 million in specific and general allowances charged to the profit and loss account and $27 million marked against existing cumulative general allowances. There was also a mark-to-market loss of $42 million charged to net trading income relating to CDOs held by Red Orchid Secured Assets (Rosa), a fully-consolidated conduit managed by DBS.

A separate impairment charge of $38 million was taken for DBS's 16 per cent stake in Thailand's TMB Bank. This further impairment charge - which came after another charge in the previous quarter - was to reflect a further reduction in TMB's market valuation. DBS reiterated that it will not inject new funds into TMB Bank, unless it can get sufficient management control to effect business and operational changes.

Without the $38 million impairment charge, DBS's net profit attributable to shareholders would have been $648 million, a year-on-year rise of 17 per cent.

'The global credit squeeze caused by the US sub-prime mortgage-related concerns affected DBS's result in two areas, structured credit and credit trading activities, as well as CDO-related charges,' outgoing chief executive Jackson Tai said, adding: 'We have prudently set aside reserves even though there have been no credit defaults in any of our CDO holdings.'

He took pains to emphasise that the bank's $275 million of CDOs that had some exposure to the US sub-prime mortgage compose less than 0.12 per cent of its total assets and the overall $2.36 billion exposure to CDOs is about 1 per cent of the total assets.

For the first nine months of the year, net profit after one-time items was $1.79 billion, a year-on-year rise of 7 per cent. Excluding one-time items, net profit came in at $1.93 billion, up 19 per cent.

Net interest income - or profit from loans and also the bank's core business - grew 15 per cent from a year ago to $1.05 billion, marking the 11th consecutive quarter of growth. Customer loans hit a record $104.7 billion, up 23 per cent from a year ago, led by corporate and SME loans in Singapore and Hong Kong. Singapore housing loans also continued to grow strongly, the bank said.

Net interest margins - the difference between what the bank earns on loans and pays on deposits - dropped from the previous quarter to 2.14 per cent as interest spreads in Hong Kong and Singapore fell.

Looking ahead, chief financial officer Jeanette Wong said: 'I'm not surprised we will face pressures on our net interest margins, since prime Hibor spreads have been narrow and Singapore interest rates are trending down, so we might face margin pressures going into the fourth quarter.'

On the non-interest income front, the bank achieved record fee income on the back of more fees from stockbroking, investment banking, loan syndication and wealth management.

Net fee income increased 38 per cent from a year ago to a record $403 million. However, trading income recorded a net loss of $47 million compared with a net trading income of $100 million in the previous quarter. Wider credit spreads for trading securities and credit-linked derivatives were blamed for the negative trading income.

Expenses climbed 12 per cent from a year ago due to higher staff and IT costs, but the bank's cost-income ratio improved to 42 per cent from 44 per cent a year ago.

A quarterly dividend of 20 cents per share was declared.

On the issue of his successor, Mr Tai said: 'I don't have an update for you, I can assure you the process (of searching for a successor) continues and there are many good candidates.' Mr Tai leaves the bank at the end of this year after five years as CEO, and said that he will be returning to New York.

Responding to a question on whether former SingTel chief Lee Hsien Yang would succeed him as CEO, he said: 'I cannot comment on a specific individual.'

Shares of DBS ended 70 cents or 3.3 per cent higher at $22 yesterday.

Singapore's two other local banks - United Overseas Bank and Oversea-Chinese Banking Corp - are due to report their results on Oct 30 and Nov 6 respectively.

Related Link -

http://tinyurl.com/22dpla
DBS Group's news release

http://tinyurl.com/2bexwe
Performance summary

http://tinyurl.com/2eoepq
Presentation slides

新加坡私宅与办公楼零售商店租金第三季都大幅上涨

《联合早报》Oct 27, 2007

第三季的私宅、办公楼和零售商店租金都大幅度上涨。分析师相信，在供不应求下，整体房地产价格和租金在接下来一年里还会持续高涨。　　

市区重建局(URA)昨天公布的第三季完整房地产数据显示，私宅租金在第三季里上升11.4％，较上一季的10.4％增长来得高。私宅整体租金在今年首九个月飙升了32.2％，其中由滨海湾、圣淘沙和第9、10、11邮区组成的核心中央区，私宅租金价格涨幅最为显著，第三季里取得12.2％的增长。
　　
其他中央地区(包括实龙岗、大巴窑、芽笼、东海岸、中峇鲁、红山、巴西班让、金文泰等)以及岛国外围的公寓与共管公寓则紧跟在后，租金在过去三个月分别取得11.9％和11.8％的增长。

第一太平戴维斯(Savills)行销与业务开发主管邱瑞荣指出，这主要是因为集体出售业主在迁离住宅之后选择租房子，我国蓬勃发展的金融业，吸引了越来越多海外专才前来也刺激了出租私宅的需求。

他说：“从其他中央地区的价格涨幅从第二季的10％，在第三季跃升到11.9％，可见原本居住在核心中央区的集体出售业主已开始下迁(downgrade)至市区边缘的地区。此外，美国房屋次贷危机虽然影响了欧美金融界，但银行都因此把焦点转到亚洲，把更多人手调派到新加坡的区域总部，刺激出租私宅的需求大增。”

政府明年推出更多地段出售

市建局表示，截至第三季，约有6万5406个新私宅正在兴建或获得建筑批准。今年下半年的售地计划(GLS)中的地段，若成功售出可兴建另外约8000个单位。如果有必要，政府将在明年上半年的售地计划中推出更多地段。　　
除了售地计划外，市建局也指出，私人发展商申请在私有地段，或集体出售的私有地段上发展新私宅项目也将在未来几年里增加供应。

另外，办公楼吃紧在情况下使租金被推高，在过去三个月里上涨14.8％，相比之下，第二季的涨幅为11％。今年首九个月，我国办公楼租金已飙涨了40.7％。市建局的数据显示，位于市区核心及乌节路 (Category 1)的中数（median）月租达每平方英尺10.95元，较第二季的9.50元高了15％。其他地区(Category 2)的办公楼月租则为每平方英尺5.14元，也较上季的4.48元增加了15％。


市建局表示，截至第三季，将有61万2000平方公尺的办公楼楼面将在今年第四季和2010年之间建成。整体上，目前在政府及私有地段上，可兴建的办公楼楼面约140万平方公尺。此外，政府也将在明年上半年的售地计划中推出更多地段。
　　
除了办公楼之外，市建局也说，截至9月份，将有37万7000平方公尺的商业园楼面将在2010年之前陆续登场。商业园办公楼面将能作为一些企业后勤的办公地点。

卓登国际(Chesterton International)研究部主管陈瑞谨认为，尽管政府自今年2月开始出租纯粹作办公用途的国有房地产，供私人企业投标作办公用途，同时推出短期办公楼(transitional office)地段，但由于这些地段都需要时间装修和兴建，因此远水救不了近火。

邱瑞荣则指出，国有房地产和短期办公楼只能满足不需要中央商业区办公楼的中小型企业，正在扩充本地和亚洲业务的大型跨国企业和金融机构将继续增加对中央商业区办公楼的需要，加深供不应求的情况，推使租金持续高涨，直到滨海湾金融中心(MBFC)落成后才会有改善。

唯有工业厂房租金涨幅放缓

在经济繁荣下，零售商店的租金在第三季里的增长步伐也较第二季快，涨幅达8.1％，比第二季的7.1％高。
　　
过去三个月里，唯一增长放慢的房地产为工业厂房，租金涨幅从第二季的8％，放缓至3.1％。不过，今年以来，多用途厂房的租金的售价和租金分别上涨了15.8％和22.8％。

Holland Hills Mansion - Court Rejects Plea Against Strata Board Decision On En Bloc Sale

Source : The Straits Times, Oct 27, 2007

THE High Court yesterday dismissed an appeal by a minority shareholder against a Strata Titles Board decision approving the en bloc sale of Holland Hills Mansion.

The dissenting owner, Dynamic Investments, had wanted the distribution of the $292 million sale proceeds to be based solely on floor area, or it would stand to lose about $2.4 million.

The 118-unit property on Holland Road had been sold en bloc to developer Calne Pte Ltd, a subsidiary of MCL Land, in November last year.

It is understood that the industry practice is to distribute the proceeds among the owners based on what was decided by them and the project consultants.

In this case, it had been proposed to share the proceeds by the 50:50 method, which is 50 per cent based on the share value and 50 per cent based on the floor area.

But Dynamic, which owned the largest unit on the block, had wanted the share of proceeds to be determined solely by floor area.

The 642 sq m penthouse it owned had a share value of six while the smallest unit, measuring about 57 sq m, had a share value of three.

The Strata Titles Board, in its decision in July, had acknowledged that the objector would have been paid more had the area method been used, but held that the method chosen was ‘not made in bad faith’.

Dynamic, through lawyers from Drew & Napier, had argued, among other things, that the Strata Titles Board had erred in law as the sale was not made in good faith given the distribution method adopted.

But Senior Counsel Deborah Barker argued this was a question of fact, not a point of law, and only issues concerning points of law could be brought up for appeal.

Together with lawyers Chia Ho Choon and Spring Tan from KhattarWong, she represented the majority owners.

Justice Andrew Ang agreed and accepted that the Strata Titles Board decision to approve the sale was made in good faith.

Dynamic’s lawyer Lawrence Tan said yesterday that he was reviewing the decision with his client and the instructing solicitor Clarence Tan from UniLegal before deciding whether a further appeal would be filed.