Sunday, August 19, 2007

Turbulence In Financial Markets Will Affect Asia In Next 3 To 6 Months: PM Lee

Source : Channel NewsAsia, 19 August 2007

SINGAPORE : The external environment is favourable, and there is optimism all over Asia.

However the recent turbulence in global financial markets may affect economies in the US, Europe and also Asia in the next three to six months.

But the fundamentals for the region remain strong.

Prime Minister Lee Hsien Loong said this on Sunday in his National Day Rally speech.

Mr Lee also said ASEAN countries are benefiting from a strong Asia and high energy prices.

Singapore has taken over ASEAN Chairmanship and the focus would be on making the grouping stronger and more integrated.

This is so that ASEAN can keep pace with China and India and not be left behind.

On Singapore's bilateral ties with its closest neighbours, Malaysia and Indonesia, Mr Lee told his audience that they are good, with Singapore cooperating with both countries in many areas on a win-win basis.

There are however some outstanding issues with both countries, and Singapore will deal with them in the broader context of its overall relationship.

Mr Lee noted that Singaporeans are all over the world and that's the way to thrive in a globalised world.

At the same time, there is a need to secure the home base so as to create the conditions for Singapore to grow and give every citizen a stake in the country's success.

This would mean adapting and changing again and again as the world around Singapore changes.

For this, the government is implemented changes to make the economy vibrant and competitive like developing the integrated resorts and remaking the city.

It has also introduced changes to strengthen social cohesion so that the country's citizens are not divided between races and religions, rich and poor or losers and winners.

Mr Lee said that's the way to sustain Singapore's exceptional performance - by tackling difficult problems that came its way and move forward as a nation. - CNA/ch

Asia Stocks: Bounce Seen After Fed Move

Source : The Straits Times, Sunday, Aug 19, 2007

HONG KONG/SINGAPORE - BATTERED Asian stock markets are set for a bounce after the Federal Reserve cut its discount rate on Friday to calm anxious investors, triggering a rally in US and European shares.

The Fed cut the rate it charges on loans to commercial banks by half a point, citing the adverse impact of deteriorating market conditions and tighter credit on economic growth.

The surprise move came too late for Asian markets to react, but the region's US-listed stocks tracked Wall Street's broad gains with the Bank of New York's Asian index surging 2.7 per cent.

Among the top gainers were Taiwan's chip maker TSMC , up 6.5 per cent, and India's ICICI Bank which soared almost 13 per cent.

But Asian markets are likely to remain nervous in days ahead after a vicious sell-off over the past week pushed regional markets to multi-month lows with investors and analysts bracing for more trouble that could require further central bank action.

'I don't think we've solved all the credit market problems with this move from the Fed today,' said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

In a reminder there could be more bad news to come, Sentinel, a cash management firm serving the US futures industry whose decision to freeze client accounts roiled markets last week, filed for bankruptcy protection late on Friday.

Growing fears that a global credit squeeze could choke economic growth have sent jittery investors fleeing from risky trades and into safe-haven assets such as government bonds of developed countries.

The surge in the yen has also fuelled fears that the once trendy carry trade will continue to be unwound. In a carry trade, investors borrow a low interest-rate currency, such as the yen, to buy higher-yielding but riskier assets.

More choppy action ahead

Any sign that global markets were steadying would help Asian stocks regain ground, but there is more choppy action ahead, analysts said.

'There's probably further to go. We're getting to the point now where it's going to be difficult to differentiate trend from volatility. Volatility has returned dramatically,' said Mark Konyn, chief executive for Asia Pacific of Allianz's RCM asset management unit.

'One of the effects of this contagion, and it is contagion of sentiment, is that the selling is sometimes indiscriminate. It's across the board and as a result it's difficult to find pockets of diversification.' MSCI's measure of Asia Pacific stocks excluding Japan lost nearly 10 per cent on the week, its biggest weekly decline since January 1998, when the market tumbled 12.4 per cent. -- REUTERS

Fed Action Raises Hopes Of More Relief

Source : The Straits Times, Sunday, Aug 19, 2007

More interest rate cuts are expected to help banks deal with the spreading global crisis

WASHINGTON - A DRAMATIC cut in the Federal Reserve's discount rate sent stocks soaring on Friday, but the spreading global credit crisis means the Fed will almost certainly have to do more.

A cut in the more important federal funds rate is expected to follow in short order as the central bank battles to keep the economy out of recession.

Some economists think the Fed could engineer more interest rate reductions at each of its three remaining meetings this year, the first of which will be held on Sept 18.

Friday's move by Federal Reserve chairman Ben Bernanke will give banks access to sorely needed funds by cutting the discount by a half-point to 5.75 per cent. That is the interest rate the Fed charges banks for direct loans.

The Fed's action is being seen as a way to prod banks to step up their short-term lending in the face of near paralysis in many debt markets.

The credit crisis began with rising defaults on sub-prime mortgages, loans made to borrowers with weak credit.

Cutting the discount rate will not have an impact on consumer interest rates in the way that cutting the federal funds rate can achieve in triggering an immediate drop in banks' prime lending rate, the benchmark for millions of consumer and business loans.

However, Friday's move will allow banks to deal with the severe credit crunch by making it easier for them to make loans to businesses.

It marked the Fed's first change in rates between regularly scheduled meetings since Sept 17, 2001, when the central bank was struggling to get financial markets back into operation after the terrorist attacks on the World Trade Center.

But observers believe that even more important than what the Fed did on Friday was what it said.

In a brief statement, Mr Bernanke and his colleagues on the Federal Open Market Committee said they judged that 'the downside risks to growth have increased appreciably' and they were 'prepared to act as needed to mitigate the adverse effects on the economy arising from disruptions in financial markets'.

That statement was seen as a clear signal that the Fed had moved its 'bias' - which signals the next direction for interest rates - from seeing inflation as the biggest economic threat to concern about weak growth.

Fed worries about inflation mean possible interest rate increases, while worries about growth mean possible rate cuts.

The new wording marked a significant shift from just 10 days ago.

'The Fed was behind the curve in dealing with this crisis before today. Now they are even with the curve,' said Mr David Jones, chief economist at DMJ Advisers, an economic consulting firm.

'They now have a better chance of mitigating the damage from an all-out global credit crisis.'

Following the Fed's decision, Japanese papers reported yesterday that Japan is now unlikely to raise interest rates at a policy board meeting this week.

Although many Bank of Japan policy board members are showing signs that they will watch moves in financial markets right up until the BOJ Aug 22-23 policy meeting, the central bank seems likely to hold off from raising rates at that time, the Nikkei business daily said.

Meanwhile, in another development, Sentinel Management Group Inc, a cash management firm serving the US futures industry whose decision to freeze client accounts on Tuesday helped roil global financial markets, filed for Chapter 11 bankruptcy protection late on Friday.-AP, Reuters

Latitude @ Jalan Mutiara

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A coveted premium address

Latitude is located in one of the city’s most exclusive residential enclave - District 10 at Jalan Mutiara off River Valley Road. Its luxurious apartments are within the neighbourhood of Orchard Road’s finest dining, shopping and entertainment venues while the Central Business District is also less than 10 minutes drive away.

Location : Jalan Mutiara (District 10)

Map Source :

Tenure : Freehold
Expected TOP Date : 2011
Site Area : 125,000sqft
Total Units : 127 in one 22-storey tower and two 23-storey towers

Unit Types:
2BR ~ 1,324sqft
3BR ~ 1,615 & 1,927sqft
4BR ~ 2,680sqft
Penthouse ~ 5,317sqft

-Feature Pond
-Swimming Pool
-Children’s Pool
-Children’s Playground
-Tennis Court
-Fitness Area
-BBQ Area
-Reflecting Pool

Where true luxury is leisure

Latitude offers you a myriad of leisure opportunities that help you rejuvenate and revive your senses.

Inspired by the fluidity of organic forms and shapes, the landscape invites you to come in and relax within its continuous, smooth flowing design. Whether it’s the well-equipped gym, tennis court or steam room, you will find yourself spoilt for choice for your workout of the day, just as you will find the temptation of the crystal clear waters of the 50-metre swimming pool or the Jacuzzi, truly hard to resist.

Can Flat Buyer Force Us To Sell After We Quit Deal?

Source : The Straits Times, Sunday, 19 Aug 2007

Q. MY BROTHER and mother jointly sold their four-room Housing Board (HDB) flat. But my brother, who has a low IQ, backed out and refused to proceed with the HDB sale procedure on the first appointment. The HDB then postponed the appointment date by a month.

But my brother is still refusing to sell the flat. The buyer has engaged a lawyer and a summons has been issued to my brother, with a copy sent to me.

Could you please advise me on the following:

a) What are the consequences if we do not sell the flat?

b) Can a lawyer be engaged to protect my brother’s interests?

c) Can the buyer ‘force sell’ the flat?

Here is a brief history of my brother. He was admitted to Singapore General Hospital for depression in January this year after he was cheated of all his POSB savings by a close colleague last year. He has not worked since then. My mother has no savings.

A I ASSUME that your mother and brother (’the sellers’) had granted an Option to Purchase to the buyer who has duly exercised the Option. Once the Option is exercised by the buyer, it becomes an agreement that is binding on both the sellers and the buyer. Your brother will not be able to back out of the terms of the Option on the account of his low IQ unless the following factors can be shown:

Your brother was of unsound mind at the time of signing the Option to Purchase, to such an extent that he was incapable of understanding what he was doing when he signed the Option; and

The buyer knew or ought reasonably to have known of his disability.

If these two factors can be proved, then your brother may avoid the agreement. Otherwise, the sellers are legally obliged to proceed with the sale according to the terms of the Option.

The Option would contain a term that subjects the sale to the conditions of the Law Society Conditions of Sale 1999.

One of the conditions provides that if the sellers fail and/or refuse to proceed with the sale, then the buyer can elect either to obtain a court order to force the sellers to complete the sale or to obtain an order against the sellers for an award of damages in favour of the buyer.

If the buyer elects to claim damages, the measure of damages payable by the sellers to him will be assessed by the court. This will comprise mainly the difference between the market value of the flat and the sale price as agreed in the Option, usually calculated at the date when the buyer elects to seek the remedy of damages.
Hence, the sellers are well advised to attend the appointment at HDB. They should immediately inform the buyer of their intention to do so. This will render the writ of summons issued by the buyer premature and redundant. The sellers should certainly engage a lawyer to protect their interests.

In view of their lack of income and savings, they may wish to apply for legal aid at the Legal Aid Bureau at 45 Maxwell Road, #08-12, The URA Centre, East Wing, Singapore 069118. If they qualify for legal aid, the Legal Aid Bureau will assign lawyers to represent them. You may wish to visit their website at

Lie Chin ChinManaging DirectorCharacterist LLC(incorporating Lie Kee Pong Partnership)

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Making Sense Of URA Data

Source : The Straits Times, Sunday, 19 Aug 2007

The Government releases a wealth of housing information every quarter, including price data for private property. In particular, its quarterly price index is widely used as a price gauge. It has added to the information trove in recent months with all the figures avaliable online at

Joyce Teo and Rachel Chang navigate some of the key data

Price index for private homes

What it is

This shows the overall price movements of all types of private homes.

It is based on caveats lodged and captures only the purchase price of the property, excluding other fees such as stamp duties or commission.

Collective sales are excluded because these are usually done at prices higher than individual deals.

Buyers typically lodge a caveat to protect their interests on a property after they have exercised an option to buy or have signed a sale and purchase agreement. The table below shows that prices of private homes rose 8.3 per cent in the second quarter, compared with a rise of 4.8 per cent in the first quarter.

Why it is important

This tracks the price movement of private properties over time, providing a quick, overall idea of market performance. It is widely used by property industry professionals as an indication of how the market is performing in terms of prices.

Price index of non-landed homes by region and completion status

What it is

This is an index that shows you the price movements of homes located in different areas.

The core central region comprises postal districts 9, 10, 11, downtown core and Sentosa.

The central region comprises 22 areas, including downtown core, Orchard, Newton, River Valley, Bishan, Bukit Timah and Toa Payoh.

Outside the central region refers to other areas in Singapore, such as Pasir Ris and Jurong. The table also shows the price index for properties that are completed versus those being built.

Why it is important

It gives a more accurate picture of the market, as location is a key factor in property prices.

For instance, homes in prime areas such as Orchard Road have typically attracted stronger investor demand and, hence, more significant price increases.

The prime districts are where most luxury developments can be found. Singapore buyers usually prefer brand new homes and tend to pay a premium for them.

Uncompleted homes also attract speculators or investors hoping for quick price appreciations.

Residential rental index

What it is

It shows the rental price movements of private homes and is compiled by the Inland Revenue Authority of Singapore.

The URA has also made available additional rental data that includes the median rentals of individual projects, if there had been at least 10 deals done in the quarter.

Why it is important

The index gives an idea of how the private rental market is performing.

Number of sub-sales done

What it is

This table shows the number of sub-sale units sold in a quarter, based on caveats lodged. Sub-sales refer to the quick resale of uncompleted homes.

In the second quarter, there were 1,254 sub-sales, which made up 9.7 per cent of total sales. The URA also provides data on sub-sales done in the core central region, rest of the central region and outside the central region.

Why it is important

Sub-sales are a proxy of speculative activity. The table indicates how widespread speculation is.

At the property peak in the second quarter of 1996, when speculation was rife, sub-sales formed about 28 per cent of all private home deals.

That prompted the Government to introduce a package of anti-speculation measures that brought down the market.

Number of new homes sold

What it is

This shows how many units of new homes, be it completed or not, were sold in a quarter.

Figures are compiled from option data given by developers via a quarterly survey. This data refers to the option a developer gives to a buyer when the latter pays a booking fee to buy a property.

The buyer then has to exercise the option - this is where he signs the sale and purchase agreement - if he decides to buy the property.

The table below shows that sales volume has risen dramatically this year. The data by areas shows the sales done in the different market sectors.

Why it is important

Sales figures indicate demand. For instance, the second quarter’s record take-up rate of 5,129 completed and uncompleted units reflects the strong confidence in the residential market.

The table also shows which market segment has done better in a given quarter.

For example, in the first quarter of this year, the market continued to be led by the high-end segment. Sales increased in the core central region as developers unveiled luxury projects at record high prices.

The contrast to the second quarter of the year can be seen as more sales were done in places outside the central region. This underlines the notion that the mass market sector has recovered.

Number of homes to be completed in the coming years

What it is

This table shows the supply coming on stream in the next few years and includes developments that are already under construction, as well as those with written or provisional permission to build.

The ‘others’ category refers to planned projects that have yet to get written or provisional permission, and can be ignored. These projects are not included because they have not been firmed up yet, and there is a high likelihood of changes made by developers at a later stage.

Why it is important

The data gives you an idea of how many homes will be completed each year.

It allows for a clearer picture of the market.

Currently, there is a short-term supply crunch in the residential market, which has helped increase rentals.

The Government has said there are enough homes to cater to demand over the next three to five years.