Source : The Business Times, June 12, 2008
CAPITALAND won the Singapore Environmental Achievement Award while Grand Hyatt took home a merit prize at the second Singapore Green Summit yesterday.
The Summit, said to be the 'Oscars for the environment', is organised by the Singapore Environment Council. The award recognises overall environmental and social responsibilities in an organisation and is the most prestigious green gong in Singapore.
This year saw a new category which recognises SMEs that have gone green.
Richard Hale, a board director at CapitaLand, said that it was not enough for companies to be 'an acceptably pale, commercial green'. He said that his company's winning of the award validated its efforts, including its comprehensive green strategy, energy saving efforts and outreach programmes.
John Beveridge, manager of the Grand Hyatt Singapore, said that the award 'will act as a motivator to help us focus on making even more of a positive impact on the environment'. The hotel was lauded for a $3.5 million efficient cooling system and its efforts to reduce energy consumption.
Marc-Plan, an offshore and shipbuilding company, got the inaugural Efficiently Developing Growing Enterprise (Edge) award. The offshore and shipbuilding company was praised for its waste-cutting and energy efficiency strategies.
The SEC-Senoko Power Green Innovation Awards was won by Microwave Packaging, which designs food containers. Senoko Power was the main sponsor of the event.
The second Singapore Green Summit was meant to bring all environmental awards under one roof. But differences over timing and a re-alignment of its corporate objectives meant that last year's partner, the Association of Chartered Certified Accountants, went it alone this year and presented its part of the awards on environmental and social reporting at a conference last week.
The guest of honour at yesterday's ceremony was Minister for National Development Mah Bow Tan.
Thursday, June 12, 2008
Financial Crisis In The West Is Not Over Yet
Source : The Business Times, June 12, 2008
It's necessary to dig deep into the data to determine what exactly is going on
IN RECENT years the world economy has boomed. Now we are seeing a slowdown. This slowdown is centred on the United States but its impact will be seen around the globe. Even though there is a need to be cautious about immediate economic prospects, there are many reasons to be positive about longer-term prospects.
Look closer: The Bank of England said in a report that markets may be overstating losses leading the FT to report that the Bank believed the credit crunch was history. But a second look shows it was focusing on the sub-prime market, which was factoring in a default rate of 38%, implying that 76% of lenders would lose half of their money.
The world economy - but in particular in the West - is in a financial crisis. Every financial crisis is different. The outcome depends on a number of factors: the economic fundamentals, the policy response and confidence. Of these, the hardest to predict is confidence. In recent weeks there has been a return of confidence to many parts of the financial sector. In turn, this had led many asset markets to stabilise, and has even led the market to believe that the next move in US interest rates is up.
I would warn against believing that the present financial crisis is over. Indeed, why should one believe those financial firms that are now telling us the credit crunch is over, when only a few weeks ago some of those firms did not know the value of the positions that they themselves were holding!
I would like to believe that this is the end of the credit crunch, but I do not think it is. To use a Churchilian phrase, we believe that we are at the end of the beginning, not at the beginning of the end. Or, to put it another way, we believe that we have finished the first phase of the crisis, and now we are about to enter the second phase.
The first phase since last August has witnessed a period of intense financial stress. The second phase will be how this feeds into the wider economy. And in particular, there will be a focus on how the US is affected and on how any problems in the US impact the rest of the world.
One way to picture this is that a race is on, with policy-makers and central bankers trying to stabilise the financial sector before economic problems hit. In my view, policy-makers will fail on both counts. They will not be able to prevent a downturn and, despite recent policy actions, parts of the financial sector in the West may be too fragile to cope.
The economic downturn will see defaults rise, bad loans increase and the price of assets change. Financial firms in the West are likely to see a further deterioration in asset quality if the economic outlook deteriorates, and if property prices fall.
There will be a negative wealth effect. There will be a negative credit effect. Any deterioration in the economic outlook could expose more skeletons in some parts of the financial sector, with concerns having been expressed about areas as diverse as US commercial real estate, monoline insurers, US government-sponsored agencies and the credit default swap market.
Policy-makers need to help minimise any of the spillover from the financial sector into the economy, but they also can't overlook the enduring aspects that led to this crisis and that contributed to financial instability. For us here, the questions to ask are what are the immediate consequences and what are the longer-term lessons?
Here I will focus on the lessons for the financial sector. There is deleveraging. Parts of the securitisation market have effectively closed. And within the financial sector, we have moved from one extreme to the other.
Whereas in recent years markets were not pricing for risk - or perhaps one should say participants in the market were not pricing for risk - now we are seeing in many Western markets, particularly in the US and UK, not only higher pricing for risk but also a reduction in the quantity of risk that is being taken.
This will lead to a reduction in lending. In recent months we have witnessed a host of banks facing liquidity constraints and then capital constraints, prompting them to sell assets and to shrink their balance sheets.
At the beginning of May, the Bank of England released its impressive half-yearly Financial Stability Report. Looking at the global situation, the Bank of England said that markets may be overstating losses that will be seen. This led the Financial Times to proclaim in its front-page headline that the Bank of England believed the credit crunch was over.
Nothing of the sort! The Bank was focusing on the sub-prime market, which was factoring in a default rate of 38 per cent, which would imply that 76 per cent of lenders would lose half of their money. Whilst it is possible that the particular sub-prime market may be too pessimistic, it would be wrong in my opinion to imply anything for other financial markets.
This downturn is already more complex, more nuanced and it is necessary to dig deep into the data to determine what exactly is going on. In short, it depends on where you sit and on what you do. Different businesses, different people will be impacted in different ways.
The Bank of England, in that report, also said that there are large discounts in the market for illiquidity and for uncertainty. That is certainly right. And for banks there has to be a genuine fear that continued liquidity constraints could lead to capital problems. I would suggest that central banks are providing more liquidity not only to address immediate issues but also in the hope that this will prompt banks to increase their transparency regarding writedowns and to raise more capital.
Further consolidation is inevitable within the banking sector. The fact that earlier this year some Western banks had to turn to sovereign wealth funds (SWFs) for an injection of capital is as clear a sign as one needs of how the balance of power is shifting.
The injection of capital by SWFs prevented at that time a consolidation of the banking sector. SWFs have rightly been seen as the new power brokers, alongside private equity and hedge funds.
But they also highlight the growing importance of sovereign players, seen also in rising foreign exchange reserves, and also likely to be seen in the greater role of governments in markets. Indeed the latest crisis in food prices has already led to some calls for markets in staple foods to be closed, to discourage speculation.
Whether that happens or not, I think in coming years we may see more government-to-government barter transactions, particularly in the areas of commodities.
The writer is the chief economist and group head of Global Research, Standard Chartered Bank, London
It's necessary to dig deep into the data to determine what exactly is going on
IN RECENT years the world economy has boomed. Now we are seeing a slowdown. This slowdown is centred on the United States but its impact will be seen around the globe. Even though there is a need to be cautious about immediate economic prospects, there are many reasons to be positive about longer-term prospects.
Look closer: The Bank of England said in a report that markets may be overstating losses leading the FT to report that the Bank believed the credit crunch was history. But a second look shows it was focusing on the sub-prime market, which was factoring in a default rate of 38%, implying that 76% of lenders would lose half of their money.The world economy - but in particular in the West - is in a financial crisis. Every financial crisis is different. The outcome depends on a number of factors: the economic fundamentals, the policy response and confidence. Of these, the hardest to predict is confidence. In recent weeks there has been a return of confidence to many parts of the financial sector. In turn, this had led many asset markets to stabilise, and has even led the market to believe that the next move in US interest rates is up.
I would warn against believing that the present financial crisis is over. Indeed, why should one believe those financial firms that are now telling us the credit crunch is over, when only a few weeks ago some of those firms did not know the value of the positions that they themselves were holding!
I would like to believe that this is the end of the credit crunch, but I do not think it is. To use a Churchilian phrase, we believe that we are at the end of the beginning, not at the beginning of the end. Or, to put it another way, we believe that we have finished the first phase of the crisis, and now we are about to enter the second phase.
The first phase since last August has witnessed a period of intense financial stress. The second phase will be how this feeds into the wider economy. And in particular, there will be a focus on how the US is affected and on how any problems in the US impact the rest of the world.
One way to picture this is that a race is on, with policy-makers and central bankers trying to stabilise the financial sector before economic problems hit. In my view, policy-makers will fail on both counts. They will not be able to prevent a downturn and, despite recent policy actions, parts of the financial sector in the West may be too fragile to cope.
The economic downturn will see defaults rise, bad loans increase and the price of assets change. Financial firms in the West are likely to see a further deterioration in asset quality if the economic outlook deteriorates, and if property prices fall.
There will be a negative wealth effect. There will be a negative credit effect. Any deterioration in the economic outlook could expose more skeletons in some parts of the financial sector, with concerns having been expressed about areas as diverse as US commercial real estate, monoline insurers, US government-sponsored agencies and the credit default swap market.
Policy-makers need to help minimise any of the spillover from the financial sector into the economy, but they also can't overlook the enduring aspects that led to this crisis and that contributed to financial instability. For us here, the questions to ask are what are the immediate consequences and what are the longer-term lessons?
Here I will focus on the lessons for the financial sector. There is deleveraging. Parts of the securitisation market have effectively closed. And within the financial sector, we have moved from one extreme to the other.
Whereas in recent years markets were not pricing for risk - or perhaps one should say participants in the market were not pricing for risk - now we are seeing in many Western markets, particularly in the US and UK, not only higher pricing for risk but also a reduction in the quantity of risk that is being taken.
This will lead to a reduction in lending. In recent months we have witnessed a host of banks facing liquidity constraints and then capital constraints, prompting them to sell assets and to shrink their balance sheets.
At the beginning of May, the Bank of England released its impressive half-yearly Financial Stability Report. Looking at the global situation, the Bank of England said that markets may be overstating losses that will be seen. This led the Financial Times to proclaim in its front-page headline that the Bank of England believed the credit crunch was over.
Nothing of the sort! The Bank was focusing on the sub-prime market, which was factoring in a default rate of 38 per cent, which would imply that 76 per cent of lenders would lose half of their money. Whilst it is possible that the particular sub-prime market may be too pessimistic, it would be wrong in my opinion to imply anything for other financial markets.
This downturn is already more complex, more nuanced and it is necessary to dig deep into the data to determine what exactly is going on. In short, it depends on where you sit and on what you do. Different businesses, different people will be impacted in different ways.
The Bank of England, in that report, also said that there are large discounts in the market for illiquidity and for uncertainty. That is certainly right. And for banks there has to be a genuine fear that continued liquidity constraints could lead to capital problems. I would suggest that central banks are providing more liquidity not only to address immediate issues but also in the hope that this will prompt banks to increase their transparency regarding writedowns and to raise more capital.
Further consolidation is inevitable within the banking sector. The fact that earlier this year some Western banks had to turn to sovereign wealth funds (SWFs) for an injection of capital is as clear a sign as one needs of how the balance of power is shifting.
The injection of capital by SWFs prevented at that time a consolidation of the banking sector. SWFs have rightly been seen as the new power brokers, alongside private equity and hedge funds.
But they also highlight the growing importance of sovereign players, seen also in rising foreign exchange reserves, and also likely to be seen in the greater role of governments in markets. Indeed the latest crisis in food prices has already led to some calls for markets in staple foods to be closed, to discourage speculation.
Whether that happens or not, I think in coming years we may see more government-to-government barter transactions, particularly in the areas of commodities.
The writer is the chief economist and group head of Global Research, Standard Chartered Bank, London
UK Commercial Property Rents Fall In May
Source : The Business Times, June 12, 2008
(LONDON) Commercial property rents in the UK fell for the first time since 2003 in May, confirming analysts' fears and adding a fresh dimension to the country's property slump, data from CB Richard Ellis Group Inc showed on Tuesday.
Worse still for investors banking on a quick end to the market's slide, the data showed an acceleration for the first time this year in the monthly rate of decline in capital values.
Commercial property valuations, on average, have fallen by more than a sixth since the UK market peaked last August on the back of a sizzling multi-year bull run. Capital values fell by a further one per cent in May, after having slipped by 0.7 per cent in April, and are now 6.2 per cent lower than at the beginning of the year, CB Richard Ellis said.
Central London's crane-peppered office building market was under notable pressure - as financial sector job losses mounted at the same time as new buildings were completed - with rents sliding 1.3 per cent in the period, the property services firm said. -- Reuters
(LONDON) Commercial property rents in the UK fell for the first time since 2003 in May, confirming analysts' fears and adding a fresh dimension to the country's property slump, data from CB Richard Ellis Group Inc showed on Tuesday.
Worse still for investors banking on a quick end to the market's slide, the data showed an acceleration for the first time this year in the monthly rate of decline in capital values.
Commercial property valuations, on average, have fallen by more than a sixth since the UK market peaked last August on the back of a sizzling multi-year bull run. Capital values fell by a further one per cent in May, after having slipped by 0.7 per cent in April, and are now 6.2 per cent lower than at the beginning of the year, CB Richard Ellis said.
Central London's crane-peppered office building market was under notable pressure - as financial sector job losses mounted at the same time as new buildings were completed - with rents sliding 1.3 per cent in the period, the property services firm said. -- Reuters
NZ Home Sales In May At 16-Year Low
Source : The Business Times, June 12, 2008
(WELLINGTON) New Zealand home sales slumped 53 per cent to a 16-year low last month, reinforcing speculation that the central bank will cut interest rates from a record high.
The number of houses sold dropped to 4,373 last month from 9,285 a year ago, the Real Estate Institute of New Zealand Inc said in a report to Bloomberg News yesterday. That's the fewest since December 1991.
A cooling property market adds to signs that the economy is slowing as retail spending drops, employers cut workers and construction declines.
Reserve Bank governor Alan Bollard kept the official cash rate at 8.25 per cent last week, and said that he was likely to lower borrowing costs this year as moderating domestic demand helps ease inflation pressures.
'The pace and depth of the current housing and economic correction suggest to us the central bank should have been easing already,' said Shamubeel Eaqub, an economist at Goldman Sachs JBWere Ltd in Auckland.
'The outlook for the residential property sector remains challenging.'
The Reserve Bank forecasts that the economy would grow 1.2 per cent this year, which would be the slowest pace in a decade.
Thirteen of 15 economists surveyed by Bloomberg News expect Mr Bollard to cut interest rates in the third quarter. Two forecast a reduction in the fourth quarter.
New Zealand's currency touched a 20-week low of 75.03 New Zealand cents yesterday. The five-year bond yield was unchanged at 6.52 per cent.
Demand for housing is slowing after immigration fell to a six-year low and investors reduce buying on expectations of falling prices and weaker rental returns, Goldman's Mr Eaqub said.
The median house price slipped 1.4 per cent from a year ago to NZ$345,000 (S$357,700), the Real Estate Institute said yesterday.
Prices were unchanged from April. Mr Bollard said last week that house prices would fall over the next three years.
Adding to signs of a cooling economy, retail sales fell 1.2 per cent in the first quarter. Construction and the number of people employed also declined in the first three months of 2008.
The median time it took to sell a house increased to 49 days, the second longest on record, from 44 days in April, yesterday's report showed. Days-to-sell reached 50 in February.
The growing amount of time needed for sales suggests that prices should fall further to clear a large stock of unsold residences, said Goldman's Mr Eaqub. -- Bloomberg
(WELLINGTON) New Zealand home sales slumped 53 per cent to a 16-year low last month, reinforcing speculation that the central bank will cut interest rates from a record high.
The number of houses sold dropped to 4,373 last month from 9,285 a year ago, the Real Estate Institute of New Zealand Inc said in a report to Bloomberg News yesterday. That's the fewest since December 1991.
A cooling property market adds to signs that the economy is slowing as retail spending drops, employers cut workers and construction declines.
Reserve Bank governor Alan Bollard kept the official cash rate at 8.25 per cent last week, and said that he was likely to lower borrowing costs this year as moderating domestic demand helps ease inflation pressures.
'The pace and depth of the current housing and economic correction suggest to us the central bank should have been easing already,' said Shamubeel Eaqub, an economist at Goldman Sachs JBWere Ltd in Auckland.
'The outlook for the residential property sector remains challenging.'
The Reserve Bank forecasts that the economy would grow 1.2 per cent this year, which would be the slowest pace in a decade.
Thirteen of 15 economists surveyed by Bloomberg News expect Mr Bollard to cut interest rates in the third quarter. Two forecast a reduction in the fourth quarter.
New Zealand's currency touched a 20-week low of 75.03 New Zealand cents yesterday. The five-year bond yield was unchanged at 6.52 per cent.
Demand for housing is slowing after immigration fell to a six-year low and investors reduce buying on expectations of falling prices and weaker rental returns, Goldman's Mr Eaqub said.
The median house price slipped 1.4 per cent from a year ago to NZ$345,000 (S$357,700), the Real Estate Institute said yesterday.
Prices were unchanged from April. Mr Bollard said last week that house prices would fall over the next three years.
Adding to signs of a cooling economy, retail sales fell 1.2 per cent in the first quarter. Construction and the number of people employed also declined in the first three months of 2008.
The median time it took to sell a house increased to 49 days, the second longest on record, from 44 days in April, yesterday's report showed. Days-to-sell reached 50 in February.
The growing amount of time needed for sales suggests that prices should fall further to clear a large stock of unsold residences, said Goldman's Mr Eaqub. -- Bloomberg
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