Tuesday, August 7, 2007

OCBC And UOB Lift The Lid On Their Exposure To CDOs

Source : The Business Times, August 7, 2007

It is small and not likely to affect earnings, banks say

With fears swirling around the US sub-prime market, OCBC Bank and United Overseas Bank yesterday stepped in to provide more details of their exposure to collateralised debt obligations (CDOs).

Both banks said that their exposure was relatively small and was not expected to have a material impact on their earnings or capital. The asset management arms of both banks had dabbled more aggressively in CDOs, but this was done so on behalf of global investors, who alone bore the risks linked to these investments.

Despite assertions that the local banks were on sound footing, they did not emerge unscathed in yesterday's market rout. Shares of DBS Group Holdings fell $1 or 4.6 per cent to $20.90, UOB fell 6.2 per cent or $1.30 to $19.70, and OCBC was down 5.2 per cent or 45 cents to $8.25.

OCBC said the bank has US$430 million or $650 million invested in collateralised debt obligations (CDOs) representing 4.2 per cent of shareholders' equity and just 0.4 per cent of its total assets of $157 billion.

'Overall, OCBC group does not expect its CDO exposure to have a material impact on its earnings or capital,' the bank said.

Providing details for the first time of the group's exposure to CDOs since turmoil in the global credit market began some two weeks ago, OCBC also said that it is the policyholders of the four CDO-related funds sold by its insurance unit Great Eastern Holdings (GEH) and investors of CDO-related funds managed by its Lion Capital fund management arm who reap the returns and bear the investment risks.

CDO values have been tumbling as fear of a global credit crunch spreads.

Of OCBC's US$430 million exposure to CDOs, US$181 million is invested in asset-backed securities, including a portion of US sub-prime mortgages and the balance in corporate CDOs.

To-date there have been no ratings downgrades on any portion of the portfolio, it said.

Under accounting treatment, mark-to-market changes in the bank's CDO portfolio are reflected in 'fair value reserves' under the group's shareholders' equity.

Should there be any impairment to the portfolio, specific allowance will be made which will be recognised in the income statement. The bank does not expect this to impact on its earnings.

Meanwhile, GEH has invested $177 million in CDOs, of which $28 million are exposed to asset-backed securities which include US sub-prime mortgages, OCBC said.

GEH has four funds of $100 million each which are invested in CDO-related products and it is the policyholders who bear investment returns and risks, it said.

Lion Capital manages CDO funds amounting to $5.7 billion on behalf of institutional investors who alone bear the risks for these investments, it said.

'Lion Capital does not assume any liability in the event of occurrence of loss or default or write-down in market valuation,' said OCBC.

While there has been some mark to market volatility, none of the bank's deals has experienced any loss, it said.

'Under the current uncertain market conditions, the bank continues to monitor the portfolio closely but has no intention to liquidate any of its CDOs,' OCBC said.

UOB said its total exposure to CDOs was insignificant, with less than $400 million or 2.3 per cent of shareholders' equity or 0.24 per cent of its total assets of $166.7 billion.

Most of the CDO investments are backed by investment grade corporate credits, said UOB.

Out of this, $91 million are asset-backed securities CDOs. UOB's indirect exposure to US sub-prime from the underlying securities is small; the bank has no direct exposure to the US sub-prime market, it said.

UOB Asset Management (UOBAM) has no exposure in terms of investments in CDOs, UOB said.

UOBAM manages some $12 billion of CDOs for global investors who bear the investment risks.

UOB will provide more details today at its second quarter results briefing.

Matthew Wilson, Morgan Stanley analyst, said the prospect of credit rating downgrades is behind nervous shareholders' selldown of bank stocks.

'The risk remains that rating agencies may de-rate these securities given the state of US credit markets,' said Mr Wilson.

He said that some people think that 'held-to-maturity' accounting will mitigate the losses.

'We do not think so; it is perception only,' he added.

Tracy Yu, Citigroup banking analyst said the sell-off of Asian financial stocks was 'overdone, unless there is a broad re-pricing of CDO risk and credit spreads that results in significant loss for even the highest grade investments.'

Singapore Population Unlikely To Touch 6.5m: MM

Source : The Business Times, August 7, 2007

He said that while S'pore wants to grow, 5.5m is more probable to reach

The figure of 6.5 million - used for planning purposes - has been doing the rounds for some time now, but Minister Mentor Lee Kuan Yew indicated yesterday that Singapore was unlikely to touch that population level.

Every country wants to grow, said Mr Lee, in the midst of dialogue sessions jointly organised by the Economic Development Board and The Straits Times. That includes Singapore. 'We say we want a population of 6.5 million, which I don't think we can reach. Probably 5.5 million.

'But Hong Kong says it wants 10 million. Why? So it can grow. The world is already bursting at its seams, and you keep on growing. The more you need, the more the pressure to grow.'

After about an hour spent on discussing Singapore's early history, the nation's founding leaders, and the nature of leadership, Mr Lee took a question from an audience member - a teacher at the National Institute of Education - who asked what factors might keep Asia from entering its golden age and cast it back to the 'dark ages'.

'Nobody can predict what the world will be like in 15, let alone a hundred years, because the changes that have been set into motion are already changing the balance between what the planet can bear and what humans want,' Mr Lee said.

Global warming will be a serious issue, and the question is whether 'we have the wisdom and ability to prevent this degradation of the environment', he said.

'I have very serious reservations. I don't see any government telling its people to consume less - less photographs, less travel, less food and more vegetables . . . that's not the way the world is going.'

Mr Lee said Singapore is well-positioned for the next ten years, barring a major fall-out between China and the US over Taiwan, or over tariff or other protectionist issues, which might curb trade between the two countries.

Singapore's imports and exports are three-and -a-half times that of the gross domestic product - second only to Hong Kong - so a disruption of trade would severely impact the economy, said Mr Lee.

Mr Lee also took a hypothetical question of whether, if he was a successful lawyer in his 30s here today, would he give up that career to serve in politics.

It depends on my life before 30, he said. If I was brought up poor and achieved an education thanks to a government scholarship, I would probably feel a 'moral obligation' to keep the system going, said Mr Lee. But the answer would be different if he came from a well-off family. 'I'd hesitate. What for? If someone else can do it, let him do it.'

It is a problem the current leadership faces in attracting talent, said Mr Lee, who shared that one of his grandsons (not the current prime minister's son), though a top student, chose not to take up a scholarship as he did not want to be tied by a six-year bond.

And not everyone was a born leader, said Mr Lee, who recounted what he had learnt about sheepdogs in Australia. A shepherd had told him that it was critical to see if the dog was up to the job. 'If the dog does not have a pair of eyes that can look at a sheep and scare the sheep into doing this, don't try.'

Different This Time? Be Very Afraid...

Source : The Business Times, August 7, 2007

Real culprit is complacency fed by a 4-year liquidity-driven bull market

ACCORDING to conventional wisdom, the source of the problem in stock markets all over the world is the rapid deterioration in the US credit market caused by the sub-prime mortgage crisis.

If one were to trace this back even further to divine the 'real' cause, fingers could be pointed at a crashing US property market and high interest rates which have triggered massive defaults on those mortgages which in turn then caused the present crisis.

These are undoubtedly symptomatic factors that have contributed to the current turmoil in financial markets. The real culprit, however, is something far more insidious.

It is complacency, born from a four-year liquidity-driven bull market which had investors believing that 'this time is different'; complacency bred on an uncommon conditioning to believe that all corrections would be short-lived because, well, because 'this time is different'.

Thus far, it appears that most observers are holding on to this view, the consensus outlook being that although the market may undergo more short-term pain in the next few weeks, its strong fundamentals should eventually prevail.

In its Aug 3 Global Investment Strategy for example, Canadian research house BCA Research summarised this view when it said that although the damage from the sub-prime fallout will persist for a while because problems are more pervasive than first believed, it does not believe the recent selloff signals the beginning of a bear market.

'There is plenty of growth outside of the US economy: economic news from China and the rest of Asia has been very strong . . . suffice to say that the world economy is still in a low-inflation boom, driven by an enormous supply-side expansion', it said.

It all sounds very appealing - in cliched broker jargon, the present mini-crash qualifies as a 'much-needed correction' for an 'overbought' market that might even present 'bargain-hunting' opportunities.

Once 'overbought' becomes 'oversold' and once the market has 'digested' the bad news, it should easily be able to resume its uptrend.

To be honest, such a happy scenario is entirely possible. The problem, however, is that 'this time is different' can cut both ways. Over the past 15 months global markets have been rocked as violently as they are now on three occasions - in May last year when US Federal Reserve chief Ben Bernanke unwittingly stoked inflation/interest rate fears, in February this year when China crashed 9 per cent in one day and in April when China again crashed on fears of the unwinding of the yen 'carry trade'.

In each instance prices recovered quickly, thus enhancing the complacency and conditioning referred to earlier. So it's no surprise that the prognosis for the present crisis is the same as before - a brief period of pain before the bull run resumes.

But surely the spreading rot from the sub-prime crisis suggests the rather inconvenient truth that this time really is different because it is the crucial financial sector which is under threat, and that it would be too simplistic to expect a swift return to the heady days of May and June when stocks regularly rose to all-time highs?

US broker Morgan Stanley is possibly the only big name so far to share this view. In its Aug 5 assessment of the exposure Singapore banks have to the US mortgage fiasco, it hit the nail on the head when it wrote 'the market has for some time exhibited excessive optimism, driven by liquidity rather than fundamentals and hence has been willing to extrapolate the positive and ignore the negative'.

The truth is that no one knows yet the full extent financial stocks everywhere are exposed to the US sub-prime market's problems and it may take several weeks or maybe months before all the rot is uncovered. And if the financial sector is undermined, so is the entire market.

Until then investors will remain nervous while hoping for salvation from the US Fed in the shape of interest rate cuts (the futures market is now pricing in at least two rate cuts over the next 12 months).

However, buying heavily into 'this time is different' too soon would be a dangerously risky proposition because ironically, this time round, it is not the reasons to buy which are different but the reason to sell.

Buyers Sue Horizon Towers Sellers For $800m To $1b

Source : The Business Times, August 7, 2007

The Horizon Towers saga has taken a new twist, with the thwarted buyers of the Leonie Hill property moving to claim up to $1 billion from the sellers.

Horizon Towers: The buyers of the property served notice on the sellers that they are in breach of contract

After the Strata Titles Board (STB) threw out an application for a collective sale order on Friday last week, the buyers of the Leonie Hill development served notice on the sellers yesterday that they are in breach of contract.

Technically, each of the owners of the 173 units who signed off on the deal to sell Horizon Towers en bloc in February is now personally liable for up to $5.78 million.

The move also puts the position of the minorities - the owners of the 37 units who opposed the en bloc sale - in doubt. While they are not being sued, the development means they are now no longer assured of keeping their homes.

Things appeared to be going their way when STB ruled on Friday that the collective sale could not go through because certain legal requirements had not been complied with.

It is believed that insufficient notices were posted and some documents were not filed.

STB's decision effectively killed the en bloc sale as it stood because it meant the issue could not be resolved to meet the Aug 11 sale deadline.

Minorities cheered the outcome - but now the tide could be turning the other way.

Allen & Gledhill (A&G), acting for the buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - has sent a letter to Tan Rajah & Cheah, representing the sellers.

A&G alleges the sellers are 'in clear breach of their obligation...to file a proper application to the STB which complied with the requirements of the Act'.

It wants the sellers to extend the deadline for the completion of the sale by four months and file a fresh application to STB for a collective sale order, or appeal to the High Court to reconsider STB's decision.

'Our client's current estimation is that its loss, if the contract is terminated, is in the region of $800 million to $1 billion,' A&G said.

The buyers agreed to pay $500 million for Horizon Towers' two 99-year leasehold blocks.

The sellers now have until tomorrow to respond.

Some 84 per cent of Horizon Towers owners backed the collective sale - more than the 80 per cent requirement - but STB's approval was still needed for the deal to go through.

Costlier For Expats To Live Here Now: Survey

Source : The Business Times, August 7, 2007

This is largely due to weaker currencies and lower inflation in other Asian cities

IT is getting more expensive for expatriates to live in Singapore, with differences in cost of living between it and other regional capitals like Hong Kong becoming narrower, according to the latest survey carried out by global HR management firm ECA International.

From 20 per cent lower than Hong Kong five years ago, living costs for expatriates in Singapore are now just 10 per cent lower. In a similar comparison with Taipei, Singapore is only 8 per cent cheaper, compared with 16 per cent in 2003.

ECA believes that a large part of this effect is due to weaker currencies and lower inflation in a number of historically more expensive locations such as Hong Kong and Taipei.

An appreciation of about 2.5 per cent of the Singapore dollar against the US dollar in recent times, compared with a depreciation of the Japanese yen and Hong Kong dollar of about 4 per cent and 0.5 per cent respectively against the US dollar, is a major catalyst for Singapore's diminishing competitive edge, according to Lee Quane, general manager of ECA International Hong Kong.

The ECA survey, held twice yearly on living costs, compares a basket of 125 consumer goods and services commonly purchased by expatriates in over 300 locations worldwide. Goods and services are also given equal weights according to differing consumption patterns in various locations.

Singapore has retained its position as the ninth most expensive city in Asia for expatriates. The only other cities to experience higher rises in living costs in the Asian top 10 were Beijing and Shanghai.

'While such increases are unlikely to deter companies from relocating staff to Singapore, the cost advantages that Singapore previously enjoyed over its competitors are starting to be eroded,' said Mr Quane.

Mr Quane also added that the recent hike in Goods and Services Tax (GST) is also expected to have a relatively large impact on living costs and the regional gap is expected to narrow in the future.

In a recent separate survey on accommodation costs in cities around the world, ECA also found that the cost of renting an apartment in Singapore has increased by more than 10 per cent on average in the last six months.

Mr Quane warned that when coupled with relatively higher increases in living costs, a double effect will be created for multinational companies (MNCs) providing for expatriates working in Singapore. However, as long as salaries in Singapore continue to outpace these increases in costs of living, added Mr Quane, MNCs will not actively seek to relocate their businesses away from Singapore.

He also noted that once this is not the case, the country faces the threat of MNCs moving to relatively cheaper regional hubs.

Seoul remained as the most expensive location in Asia for expatriates, followed by Tokyo and Yokohama. Living costs for expatriates in Singapore are about 61 per cent cheaper than the Korean capital, a level that has not changed significantly since the last time the survey was done.

Bangalore was the cheapest location in Asia for expatriates, where living costs were roughly only 60 per the cost of equivalent goods and services in Singapore.

4 Great Eastern funds Have CDO Exposure

Source : The Business Times, August 7, 2007

But GE says all GreatLink Choice funds performing with no losses

GREAT Eastern Holdings (GEH) - a subsidiary of OCBC Bank - said four of its funds have exposure to collaterised debt obligations (CDOs).

But it said 'policyholders should not be overly alarmed by the volatility in monthly prices'.

In an e-mail response to BT, GEH said that the four funds - GreatLink Choice Sept 2010, GreatLink Choice Oct 2010, GreatLink Choice Aug 2013 and GreatLink Choice Dec 2013 - are invested in CDO-related products.

It said GreatLink Choice will continue to pay the annual coupon as well as the 100 per cent principal at maturity as projected if the default losses stay within the subordination levels throughout the policy term.

The insurer added that there has not been any noticeable increase in redemptions. 'Our life planners have been able to assure policyholders that the quality and S&P ratings of the four tranches remain unchanged and there has been zero default with slightly higher subordination levels.'

The S&P ratings for GreatLink Choice Sept 2010 and GreatLink Choice Oct 2010 remain unchanged at AA-, and ratings for GreatLink Choice Aug 2013 as well as GreatLink Choice Dec 2013 have also remained unchanged at AA, said GE. 'All GreatLink Choice funds are performing; none are exposed to US sub-prime mortgages, and there are no losses, defaults or re-rating for the positions thus far,' said the insurer. Lion Capital Management - the collateral manager for these portfolios - actively rebalances all the CDO portfolios to maintain or improve subordination ratios and rating stability, it added.

OCBC said in a statement yesterday that the investment returns and risks of the funds are borne by policyholders.

Releasing its Q2 results yesterday, GEH said profits surged 54 per cent for the second quarter on the back of growth from its core insurance operations and investment profits.

Net profit for the second quarter ended June 30 grew to $143.4 million, from $93.3 million for the corresponding period last year. This was achieved on an 18 per cent rise in turnover to about $2.43 billion.

For the half year, the insurer recorded a 47 per cent rise in net profit to $277.9 million, while turnover rose 18 per cent to $4.52 billion.

Gross premiums rose 15 per cent to $1.49 billion for the quarter, from the strong showing in its life insurance operations.

'Excluding the second quarter of 2004 when we realised the one-off investment profit of $71 million from the disposal of our investment in OCBC shares, this quarter with $143.4 million profit is the best quarter to-date,' said director and group chief executive Tan Beng Lee.

Profit from life insurance operations rose 94 per cent year on year for Q2 to $123.1 million. Most of the increase came from the non-participating fund which saw a profit of $89.7 million, up from $22.7 million a year ago, as investments performed strongly.

Fees and other income grew 36 per cent to $23.5 million for Q2, due largely to an increase in assets under management. This was contributed by asset management subsidiaries Lion Capital Management and Lion Fairfield Capital Management, as well as Alpha Financial Advisers.

Mr Tan noted: 'Overall, the economic outlook remains positive. However, earnings from the group's insurance operations and investments will continue to be sensitive to changes in interest rates and volatility in the commodity and equity markets.'

He added that the group will continue to intensify efforts to expand its operations in Malaysia, China and Indonesia, and to prepare for an operating licence in Vietnam, with building up a talent pool being an important factor for the success of its operations.

'The acceleration of activities in the regional markets is expected to increase management expenses,' he said.

The Rochester Averages $1,300 PSF

Source : The Business Times, August 7, 2007

All 366 units sold at $900 to $1,600 psf in benchmark price for District 5

UNITED Engineers has achieved an average price of $1,300 per square foot (psf) after discounts for The Rochester, a 99-year leasehold condo in the one-north precinct.

Designer home: The Rochester is designed by Paul Noritaka Tange of Tange Associates and developed by a wholly owned subsidiary of UE

The price - a new benchmark for District 5 - easily exceeds the $900 psf average achieved earlier this year for One North Residences just a stone's throw away.

Sales of The Rochester began on July 16 and all 366 units have been snapped up at prices ranging from $900 to $1,600 psf.

UE staff bought about 13 per cent of the units and foreigners, excluding permanent residents, about 10 per cent.

Foreigners - including Koreans, Japanese and Britons - bought seven of the nine penthouses. The average price per penthouse was about $6 million.

The units were sold through an expression-of-interest exercise.

'We are extremely pleased to have set a new benchmark of $1,300 psf in average price for private property in District 5,' said UE Group's managing director and chief executive, Jackson Yap.

The Rochester, designed by Paul Noritaka Tange of Tange Associates, is being developed by a wholly owned subsidiary of UE.

The last time the group sold a private residential development in Singapore was more than a decade ago - UE Square at River Valley Road.

In two or three months, UE hopes to launch a boutique condo at Balmoral Crescent, in a joint venture with Kajima Overseas Asia.

This freehold development, designed by award-winning SCDA Architects, will comprise about 40 large apartments.

The current target price is $2,500 psf on average but this will be finalised closer to the launch, a UE spokesman said.

The condo will be developed on the former Balmoral View site that Kajima and UE bought in August last year for $52 million or $733 psf of potential gross floor area including an estimated $7.9 million development charge.

The 51,080 sq ft freehold site is zoned for residential use with a 1.6 plot ratio and a 12-storey height limit.

Airport Hotel To Target MICE Visitors

Source : The Business Times, August 7, 2007

Crowne Plaza Changi to open next April, expects 65-75% occupancy

AIRPORT hotels normally cater to transit and transient travellers, but the upcoming Crowne Plaza Changi Airport is casting its net wider. The US$60 million hotel plans to aggressively target the corporate and meetings incentives, conventions & exhibitions (MICE) traveller segments.

Touch down: The 320-room Crowne Plaza Changi will be linked to Terminal 3's arrival hall. Mr Winterton (above) expects average room rate to be over $200

The 320-room hotel at Terminal 3 will start operations in April 2008, said Mark Winterton, the hotel's newly-appointed general manager. Crowne Plaza is one of the brands managed by UK hospitality group InterContinental Hotels.

'Our key markets will be the MICE, corporate and leisure travellers,' Mr Winterton told BT in an interview. 'But just by the nature of the location, we will also pick up the transit business.'

He does not see the location as being a hindrance to drawing MICE travellers. The hotel itself has facilities to host events for up to 250 people in its ballroom.

Mr Winterton said that the average room rate at the four-star Crowne Plaza will be 'over $200'. He predicts that the hotel will see an occupancy rate of 65-75 per cent next year - and it will only get better.

The hotel has already started marketing itself as a location for MICE events abroad, and so far, the response has been 'very good', Mr Winterton said.

In 2008, nearly 45 per cent of the hotel's guests are likely to be corporate and MICE visitors, he said. Another 15 per cent of the guests are expected to be drawn from the transit crowd. The rest will be made up of leisure travellers, among others.

The hotel, which was designed by local architecture firm Woha Designs, is conceptualised as a uniquely Singaporean - tropical and Asian - environment.

The hotel's interior will use open walkways and outdoor gardens to create what it says will be a 'balmy tropical ambience'.

The reception and lobby area on the first floor will be linked to Terminal 3's arrival hall. Guests will also be able to conveniently reach Terminals 1 and 2 through a 'people mover' system that will link all three passenger terminals.

DBS Asset Management's CDOs Have No Subprime Exposure

Source : The Business Times, August 7, 2007

SINGAPORE - DBS Group Holdings, South-east Asia's largest lender, said on Tuesday that the collateralised debt obligations (CDOs) of its asset management arm have no exposure to subprime mortgage loans.

DBS said in a statement that DBS Asset Management manages two CDO portfolios with underlying assets totaling US$1.03 billion.

'Neither CDO has underlying assets with exposure to US subprime mortgages,' the bank said. -- REUTERS

UOB's Q2 Profit Rises 32% On Loan Growth

Source : The Business Times, August 7, 2007

Singapore's second-biggest lender, United Overseas Bank, posted a 32 per cent rise in quarterly profit, excluding exceptional gains, on Tuesday as a construction and property boom fuelled strong loan growth.

The bank reported net profit of $585 million (US$386 million) for the April-June period, up from $443 million, excluding exceptional items, a year ago and better than an average forecast of $528 million by four analysts polled by Reuters.

Last month, DBS Group Holdings, South-east Asia's biggest lender, reported a 21 per cent jump in quarterly net profit excluding one-offs, beating market expectations, due to higher loan income and strong fees.

Oversea-Chinese Banking Corporation, the smallest of Singapore's banks, will report its earnings on Wednesday.

UOB, controlled by its chairman Wee Cho Yaw and his family, has benefited from rising loans to construction firms and mortgages on the back of a booming Singapore property market. -- REUTERS

Building Block For Community

Source : The Straits Times, Tue, Aug 07, 2007

OWNERSHIP. That's the difference between merely a collection of people living together and a community. Of course, we don't mean 'ownership' in the literal sense. Instead, a more important aspect of this involves people caring for the physical environment of their neighbourhoods and about the ties of friendship, creating organic communities. And the most important communities in Singapore are those found in Housing Board estates, where the majority of people dwell and play out the drama of their lives. This makes the HDB an important guardian of Singapore's well-being. And it has done a remarkable job. It is hard to think of housing estates anywhere of the scale here which have become so much a part of community life. But communities, by their nature, are not static. They grow and develop as society changes. For this reason, it is to be welcomed how the HDB has expanded ownership in the figurative sense to continue the evolution of communities on its estates.

After a consultation exercise with residents, the HDB plans to tweak how it runs and plans estates. Some suggestions will be tested out in pilot projects, and others adopted immediately. Perhaps two of the most significant changes are those involving households affected by the Selective En-bloc Redevelopment Scheme and newly weds hoping to buy popular flats closer to parents. For the former group, the HDB now offers more flexibility for households that want to pick new flats together, providing greater scope for maintaining ties. As for the latter, refinements to the priority scheme are soon to come. Young couples just starting out in the working world tend not to have as much time for sinking in fresh roots or for mixing with new neighbours. So giving them a greater chance to stay in the neighbourhoods they grew up in reinforces old connections and nurtures bonds across generations.

One of the strengths of the HDB is that it is not just a developer, but one that has pursued the idea that good housing is more than just about bricks and mortar. Who would have thought that void decks could play such an important social role? Indeed, anecdotal evidence suggests that flat dwellers know their neighbours and interact more greatly than residents in landed-property estates. Some of this is because of the nature of apartment life. But there are enough blighted housing complexes around the world to show that healthy communities are not a given in blocks of flats. Clearly, the HDB has done something right. And by encouraging engagement by residents, it will certainly anchor even more firmly the virtues of community.

Mitre Hotel Site, Iconic Building Up For Sale

Source : The Straits Times , Tue, Aug 07, 2007

AN ARCHITECTURAL icon and a site that housed a dingy hotel once famous for its bargain-priced beer were put up for sale yesterday.

The more prominent of the two is Pearl Bank Apartments, which was in the news with architects lamenting its impending demise given its status as a key piece of local design.

But most owners of the 37-year-old building in Outram Road want to sell and cash in on the booming property market.

The building is on a conveniently located 99-year leasehold site expected to fetch at least $750 million, said Knight Frank, which is handling its collective sale.

The land price works out to $1,445 per sq ft of potential gross floor area, including an estimated $137 million to top up the lease. This assumes the site can be fully developed to a gross floor area of about 56,999 sq m.

The tender for Pearl Bank, which has 280 apartments and eight commercial units, closes on Sept 18.

In Killiney Road, the site housing the Mitre Hotel built in the 1870s and a small two-storey adjacent building was finally put up for sale after a court ruling gave the go-ahead in April.

The dilapidated building had been left

untouched for years because its owners - the Chiam family - were caught in a lengthy legal battle over its sale.

The hotel, which started in 1948, ceased operations when its licence was not renewed in 2002. It continued to operate its bar and regulars used to gather around the crumbling furniture to take advantage of its cheap beer.

But Mr Chiam Heng Hsien, who owns 10 per cent of the property, had resisted his cousins' attempts to sell the plot for the past 10 years until the court ruled against him.

It seems the timing for the sale has never been better, though it is subject to a valuation being done and the sale price exceeding it.

Property experts, pointing to the way nearby sites have rocketed in value recently, reckon the Mitre plot could fetch $200 million or more.

This works out to at least $1,800 per sq ft of potential gross floor area, with one expert tipping a price of up to $2,000 psf of potential gross floor area.

The freehold site, which is close to Oxley Rise, has an allowable building height of up to 10 storeys. and could be built up to a gross floor area of 111,922 sq ft.

The development charge for intensifying the land use will be be about $700,000 or more, depending on the rates revision on Sept 1.

Jones Lang LaSalle, which is marketing the site, says its tender closes on Sept 12.

URA Puts Up Residential Site For Public Tender

Source : AsiaOne News, Tue, Aug 07, 2007

The Urban Redevelopment Authority (URA) today put up a residential site at Simon Road for sale by public tender.

This Land Parcel is one of the 10 confirmed list sites under the Government Land Sales Programme for the second half of 2007 as announced by the Ministry of National Development on June 14.

The land sales for the second half year comprises sites that can potentially yield about 8,000 units of private residential units, of which about 3,000 of these units will be generated from sites on the confirmed list. The rest of the units will come from sites on the reserve list.

The Simon Road site, with an area of about 1.76 ha and a maximum permissible gross floor area of 61,719 sqm, is zoned for residential development.

This Land Parcel is located at the doorstep of Kovan MRT Station, offering residents the convenience of an efficient and affordable public transportation to all parts of Singapore. It is also well connected to the rest of the island by major roads and expressways such as
Tampines Expressway and Central Expressway.

Convenient retail and dining facilities are available in the immediate neighbourhood in developments such as Heartland Mall Kovan
and Kovan City.

The tender will close at 12 noon on Oct 2, and selection of the successful tenderer will be based on the tendered
land price only.

More details on the Land Parcel are available on URA website at

Singapore's United Overseas Bank Reports Quarterly Net Profit Of US$386 Millions

Source : AsiaOne News, Wed, Aug 7, 2007

Singapore's United Overseas Bank Ltd. Tuesday reported a second-quarter net profit of 585 million Singapore dollars (US$386 million; €279 million), down 48 percent from the same period a year.

The bank said the drop in profit was due to a one-time gain in the previous quarter of S$689 million (US$454 million; €329 million).

The gain gave Singapore's second-largest banking group by assets a net profit of S$1.13 billion (US$745 million; €539 million) in the second quarter of last year. Net profit in the second quarter last year excluding the one-time gain was S$443 million (US$292 million; €211 million).

This year's result was higher than the average estimate of S$528 million (US$348 million; €252 million) by six analysts polled by Dow Jones Newswires.

The company posted total income of S$1.3 billion (US$858 million; €621 million) for the quarter, up 32 percent from S$981 million.

Net interest income rose 13 percent to S$761 million (US$502 million; €364 million) from a year ago.

Non-interest income increased 73 percent to S$536 million (US$354 million; €256 million).

Help Pouring In For Residents Affected By Bukit Merah Blast

Source : Channel NewsAsia, 07 August 2007

Eight households affected by the explosion at a Bukit Merah flat, have been given the option to stay in their relocated flats for the long term.

The Housing and Development Board (HDB) has also promised to keep the rents at the same level as that of their previous flats.

The gas explosion last week caused the death of 73-year-old Chan Fook Seng and reduced several rental flats at Block 105 of Bukit Merah to a pile of rubble.

But help has been pouring in for affected residents.

Associate Professor Koo Tsai Kee, MP of Tanjong Pagar GRC, said: "The CDC welfare fund has provided them with immediate relief of S$100 NTUC FairPrice vouchers and S$100 cash. We will follow up with more."

Grassroots organisations are also providing basic household items to help residents ease the transition to a new life, following a traumatic experience.

One of the affected residents, Poon Shu Min, said: "I don't want to go back, as long as I'm comfortable here. Moving is too troublesome."

"During the blast, the wall collapsed and trapped an old woman. Mr Chan has also passed away. There are awful memories there," another resident, See Chai Meng, said.

Some residents have moved to other flats in the same building, while others have relocated to the next block.

HDB said it would let affected residents decide if they want to return to their units after repairs are completed in a few months.- CNA/so

UOB's Q2 Profit Up 32% On Loan Growth

Source : Channel NewsAsia, 07 August 2007

Singapore's United Overseas Bank (UOB) has reported a 32% rise in its second-quarter profit, excluding exceptional gains, as a construction and property boom fuelled strong loan growth.

UOB posted a net profit of S$585m for the April-June period, up from S$443m, excluding exceptional items, a year ago.

UOB is Singapore's second-biggest lender, after DBS Group Holdings whose Q2 net profit jumped 21%, excluding one-offs, due to higher loan income and strong fees.

Oversea-Chinese Banking Corporation (OCBC), the smallest of Singapore's three banks, will report its earnings on Wednesday. - CNA/ir

Where Are Our Strata Titles?

Source : The New Paper, August 07, 2007

THEY bought their terrace houses In Johor, Malaysia almost seven years ago, but have yet to receive the title deeds.

-- Picture: MOHD ISHAK

The hold-up has left some Singaporeans unhappy and jittery over their properties across the Causeway.

One of them, Terence (not his real name, which he declined to give), paid RM339,000 ($148,900) for a 3-bedroom terrace house at Garden Court in 2000 but said he has yet to receive the title deed.

Garden Court is a housing development within the Leisure Farm Resort Residences in Johor developed by Mulpha International Berhad.

The 731 ha estate is about a half hour's drive from the Tuas Second Link and has 82 units sharing facilities like a gym and swimming pool.

Half the residents there are Singaporeans and other foreigners.

The development is like a condominium, and each owner is supposed to receive a strata title as proof of property ownership.

But Terence and others living in Garden Court are yet to receive theirs.

He and his wife live in a four-room HDB flat here, but use their Garden Court house up to five times a week to get together with his Malaysian in-laws.

He said: 'If I don't have the strata title, I don't feel like I own the place at all.'

Another Garden Court resident, John (not his real name), faces the same problem.

He bought a two-bedroom apartment there two years ago for RM371,000.

He said: 'Without the strata title, I may lose my house if another developer takes over the land and decides to sell it.'

John lives in Garden Court with his family most of the time, though he owns a five-room HDB flat here.

Problems with strata titles form the most common complaint received by Malaysia's National House Buyers Association in 2005.

Three out of 10 complaints involved strata titles.

The second most common complaint - two of out 10 - are about management and maintenance.


Terence said he understands that before they receive their strata titles, residents can sell their properties, subject to the developer's approval.

A spokesman for Leisure Farm, however, said this was not correct. (See report below).

Without strata titles, residents also cannot form management committees to look after their property.

Now, the developer manages Garden Court - an unfavourable arrangement, said Terence.

He explained: 'The management is slow to respond to complaints.

'For example, when the swimming pool pump broke down in 2002, it took six months after the first complaint was made to get it fixed.

'It still broke down after that.

'Also, new gym equipment was given only a year after residents complained about the equipment being too old.'

Leisure Farm said Garden Court owners can expect to get their strata titles in half a year's time.

But Terence appears to have had enough of the place.

He said: 'When I bought the house, I didn't see it as an investment at all.

'The house was bought to make it convenient for my family and my in-laws to meet.

'But now, after all the trouble I've gone through to get information from the developer, I feel like selling the house.'

Developer: 'Deeds Will Come In Six Months'

A SPOKESMAN for Leisure Farm said Garden Court residents can expect to get their strata titles in about half a year's time from now.

He added that:

Residents do not need the developer's consent to sell their houses.

Mulpha International will arrange for a meeting with residents to form a joint management body by this year or early next year.

Leisure Farm has an 'open communication approach with the owners' on issues like audit of accounts.

Accounts are audited annually and are prepared for inspection by the owners.

There is a maintenance team that ensures 'regular upgrading of the infrastructure' and 'pest control and landscaping works are implemented to ensure residents' safety'.

Iconic PearlBank Up For En Bloc Sale

Source : TODAY, Tuesday, August 7, 2007

Knight Frank is inviting offers for the collective sale of Pearlbank Apartments, near Pearl’s Hill City Park. The iconic 37-storey, 99-year leasehold development consists of 280 apartments and eight commercial units.

The 7,653-sq-m site is designated for a residential development with a plot ratio of 7.2. The baseline gross floor area is a little under 57,000 sq m, translating to a plot ratio of 7.447.

It is estimated that the property can command at least $750 million, excluding the lease-upgrading premium estimated at $137 million. This translates to a land price of around $1,445 per square foot per plot ratio. Knight Frank believes that about 500 apartments averaging 1,200 sq ft each can be built on the site.

The tender closes on Sept 18 at 3pm. — JOSEPH YADAO

Jurong East Congestion: JTC Studying Ways To Improve Situation

Source : TODAY, Tuesday, August 7, 2007

Letter from KELLY WEE,Director, Communications Department, JTC Corporation

WE WOULD like to thank Ms Trina Foo for the feedback in her letter, “The rush, the crush ... nobody seems to care” (July 27).

We share her concerns for the safety of the commuters and are reviewing the traffic congestion issue at the Jurong East MRT station pick-up point together with the relevant authorities to look into ways to improve the situation.

As Ms Foo has rightly pointed out, the peak morning hour traffic congestion in the area has been exacerbated of late especially by heavy showers in the morning. JTC has worked with its private bus operator to increase its fleet of buses from four to five during the morning peak hours between 7.30am and 9.30am recently.

While the arrangement with the bus operator is to get the bus to arrive at the pick-up point at three-minute intervals, we hope to seek Ms Foo’s understanding that due to unforeseen traffic build-up in the area, especially during wet weather conditions, it can be quite challenging for the bus drivers to do so.

We would like to assure Ms Foo that JTC is committed to providing a good service to its tenants and invite her to contact us either at our JTC Contact Centre Hotline (1800-568-7000) or via email at askjtc@jtc.gov.sg to further discuss her feedback.

Bukit Merah Blast - ‘We Won’t Move Back’

Source : TODAY, Tuesday, August 7, 2007

APPROACHING the place he once called home with trepidation, Mr Suherwan Jasmani (picture) stooped as dangling wires obstructed his way into the flat.

The safety supervisor, 27, was rendered homeless when a blast ripped through his 73-year-old neighbour’s one-room rental flat at Jalan Bukit Merah last Friday, damaging
everything within a 20-m radius.

The unit’s occupant, Mr Chan Fook Seng, died in hospital on Saturday night. Another victim, Madam Chan Soo Ngan, 79, is still in intensive care.

Eight of the affected households have been relocated to units in the same area.

Residents have been given a choice to stay in their new homes permanently, or move back to their old flats once repairs are done. Most have opted for their new units.

Said Mr Suherwan, who is staying at his parents’ place with his wife: “She is still traumatised by the incident. I don’t think we’d want to move back here because I don’t want my wife to be reminded of the experience.”

According to Minister of State for Defence Koo Tsai Kee, the area’s MP, two more families not directly affected have also asked to be relocated, and their appeal is under consideration.

Said Prof Koo, after paying his respects at Mr Chan’s wake: “The residents have been provided with $200 in cash and vouchers so far. We will follow up with more. The important thing is to give them enough help to start their new lives.”

Residents will also be given $30 worth of food rations, furniture and clothing, and food vouchers by charitable organisations.


SCDF The blast was not caused by a faulty gas canister, said the Singapore Civil Defence Force (SCDF), because the cylinder was intact when officers found it.

Although the cause is still under investigation, early evidence indicates a leakage in one of the connection points linking the canister to the stove.

The SCDF said owners could prevent gas leaks by conducting regular checks on their gas canisters. One way is to apply soapy water to connections such as gas tubings. If bubbles start to form, it is time to change the connections.

Where Has The $4.77m Gone?

Source : TODAY, Tuesday, August 7, 2007

Arcade manager missing after allegedly producing false invoices, vouchers

HE was tasked to render building management services to the 19-storey Arcade complex at Raffles Place.

But for 11 years, former complex manager Wilson Loh Wan Wah allegedly produced false invoices and payment vouchers — inducing the building’s management corporation to make out 102 cheques, amounting to $4.77 million, to his business.

Now, Mr Loh is missing, along with the sum which he allegedly pocketed, according to court documents.

The Arcade (picture) management corporation has filed a civil suit against Mr Loh’s former employers — DTZ Debenham Tie Leung South-East Asia and DTZ Debenham Tie Leung Property Management Services — arguing that they had failed to fulfil their duties in managing the building’s monies and accounts. The Arcade’s management is represented by lawyers Latiff Ibrahim and Lynette Chew of Harry Elias Partnership in the suit.

The Arcade management said in the court documents engaging DTZ’s managing agent had implied that the company would “exercise reasonable skill and care expected of a reasonably competent managing agent”. This agent would also “act in good faith and in the interest” of The Arcade.

But Mr Loh — in his late 30s — apparently did not. A statement of claim filed by The Arcade in the High Court on June 15 this year showed that on Oct 4, 2005, DTZ convened an urgent meeting with The Arcade after a cheque for the sum of $524,000 paid to a sub-contractor was not honoured by a bank. DTZ could not contact Mr Loh and files, documents and a computer hard disk from his workstation at The Arcade were also found to be missing.

Irregularities in The Arcade’s accounts were discovered. Mr Loh had shown a set of 2003 accounts that showed a balance of $2.7 million in the management fund, while an audited version showed a balance of just $45,000.

Further investigations later revealed Mr Loh had produced false invoices and payment vouchers purporting to various sums due to Wilkins Enterprise, a business he had set up. Mr Loh would allegedly present these invoices to The Arcade’s management council members and “induce” them to sign cheques for payments to Wilkins, according to the court documents.

The largest cheque issued was in July 17, 1995, when a sum of $163,838 was paid to Wilkins. To allegedly cover up the fraud, in some cases, Mr Loh would name other parties who had business dealings with The Arcade as the cheques’ payees. He had also apparently produced eight sets of fraudulent accounts from 1997 to 2004 and presented them to The Arcade.

Mr Loh was engaged by DTZ Leung from April 1991 to Feb 6, 2005. In a statement to TODAY, DTZ said it had no further comments on the suit — adding that DTZ is also an aggrieved party and the matter was the subject of legal proceedings.

But DTZ said it had “acted promptly” when the matter was discovered on Oct 3, 2005. Besides explaining the situation to all proprietors at The Arcade, DTZ also made available an emergency fund of $100,000 to ensure The Arcade remained operational.

DTZ said it reported the disappearance of Mr Loh to the police in October 2005. Mr Loh was declared a bankrupt on Feb 23.

The Arcade is seeking the $4.77 million, interest on the sum and costs.

Wet Markets Are Here To Stay

Source : The Stratits Times, August 7, 2007 Tuesday

Wet markets are remembered as social hubs for many older Singaporeans living in HDB heartlands.

As shoppers picked up their daily necessities, they mingled with their neighbours and shared the latest gossip. Wet markets were a place where community was established.

On the other hand, young Singaporeans prefer shopping at supermarkets where they can find everything under one roof, in a clean, comfortable environment.

Looking ahead, HDB plans to build more wet markets in the future to enrich community life.

Related Video Link - http://tinyurl.com/2ardpp [The Straits Times Video News]

The Arcade Goes To Court To Recover Missing $4.8m

Source : The Straits Times, Aug 7, 2007

Building's manager has vanished and is said to have pocketed the money By K.C. Vijayan, Law Correspondent.

FOR more than 11 years, the manager of The Arcade received cheques to the tune of nearly $5 million. That sum, said to have gone to his own company, is now missing.

Missing too, since October 2005, is Mr Wilson Loh, building services manager of the 20-storey office-cum-commercial complex in Raffles Place.

It is believed $4.76 million disappeared as a result of 102 cheques made out to Mr Loh's own private firm, Wilkins Enterprise, for goods and services that were not delivered.

The alleged fraud was spread over 11 years, from 1994 to 2005.

Now, The Arcade's management corporation is taking the present managing agent - DTZ Debenham Tie Leung (SEA), and its subsidiary - to court to recover its missing $4.76 million. A High Court pre-trial conference on the civil suit is due to be held next week.

Mr Loh became building supervisor in 1991, when DTZ Leung Pte Ltd was The Arcade's managing agent until March 1997. He kept his job when in April 1997, a subsidiary - DTZ Debenham Tie Leung Property Management Services - took over as managing agent.

It was DTZ that discovered Mr Loh's alleged misdeeds on Oct 3, 2005, after a cheque bounced.

By then, Mr Loh had gone missing.

DTZ contacted the police. It also sent a notice to all subsidiary proprietors explaining the situation and assuring them The Arcade would continue to run as before.

In a statement yesterday, it said it had then provided an emergency float of $100,000 to ensure services could continue.

As building supervisor, Mr Loh handled all administration work involving building maintenance. He dealt with contractors and made recommendations for payment.

He also produced monthly account statements for The Arcade's managing council and annual audits.

The warning bells first sounded in September 2005, when a cheque for some $524,000 from The Arcade to its engineering sub-contractor bounced. A computer hard disk from Mr Loh's Arcade office was later found to be missing. So were some files.

It is believed there were two sets of accounts, at least from 1997 to 2004. The second fraudulent set, purported audited, and shown to The Arcade's management in 2004, had a sum of $2.75 million. In fact, only $45,305 was left by then, according to court documents filed.

Police have also been investigating the alleged frauds. Police spokesman Mohamed Razif confirmed a report had been received but deemed it 'inappropriate to comment as investigations are ongoing'.

DTZ, through its lawyers from Allen & Gledhill, disputes The Arcade's claims. It is expected to argue that as Mr Loh reported to the chairman and council members of The Arcade's management council, they had full control and supervision over him.

The Arcade, through its lawyers from Harry Elias Partnership, is expected to argue that Mr Loh lied to The Arcade's management to induce it to make out cheques payable to his firm, Wilkins Enterprise.

The Arcade is also seeking damages for expenses incurred in redressing the loss, including legal costs, engaging forensic audit consultants to uncover the alleged frauds, and having to seek a loan to fund its operations after the $4.76 million loss.

Wilkins Enterprise, which operated from International Plaza in Anson Road, is now defunct. Mr Loh was made a bankrupt in February.

A DTZ statement said it could not comment further on the case as it is now the subject of legal proceedings.

It said: 'We understand that the loss arising from the case, if any, will be covered by insurance. Our operations will not be affected in any way.'