Monday, August 20, 2007

Property Players Laud New Scheme To Monetise Flats For Elderly

Source : Channel NewsAsia, 20 August 2007

SINGAPORE: Property industry players said a new initiative to help older Singaporeans monetise their flats is expected to be popular because it is a viable alternative to the reverse mortgage scheme.

The new initiative, announced by Prime Minister Lee Hsien Loong during his National Day Rally speech, is targeted at those aged 62 and above, living in two or three-room flats, and who have only made use of the government's housing subsidy once.

The Housing and Development Board (HDB) will shorten the lease of their flat to 30 years and pay them the value of the lease foregone in cash, through an upfront lump sum and monthly payments for the rest of their lives.

They can also stay in their own flats for the remaining 30 years.

Property industry players said this move would help many older flat owners derive income from their most valuable assets – their homes.

Mohamed Ismail, CEO of PropNex, said: "This scheme really helps people to unlock and monetise their assets. A lot of Singaporeans are asset rich and some of them may have challenges as far as their cash situation is concerned. And currently, there are not many solutions available."

Under current schemes, these home owners are allowed to sublet their units, but this would entail a loss of privacy.

A reverse mortgage scheme for HDB flats – introduced in March last year – also drew little interest, with just ten people signing up so far.

Assistant Vice President of ERA Realty, Eugene Lim, said: "Previously, the government was trying to implement reverse mortgage, but this was not very well-received especially by the senior citizens.

"Number one, they found it difficult to understand, and number two, they didn't have a very good feeling about mortgaging their house which is already paid for."

Property watchers said the new scheme could potentially boost demand for three-room flats, which are comparatively scarce in the HDB resale market.

"Three-room flats provide a very basic, essential need. And with these things in place, I do think – depending on the outcome of the package – three-rooms will be in better demand," said Mr Mohamed Ismail.

The government is also studying other arrangements should a flat owner outlive the 30-year lease period. - CNA/so

More Consultations With Residents For New Housing Programmes

Source : Channel NewsAsia, 20 August 2007

SINGAPORE: The new public housing renewal programmes announced by Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday night will result in more consultations with residents, said Minister of State for National Development Grace Fu.

Speaking to reporters after the Rally, Ms Fu stressed that sand and granite supply would not be an issue when the plans are being realised.

This is because the Housing and Development Board (HDB) will focus on ways to reduce the use of sand.

Ms Fu said: "The Home Improvement Programme (HIP) project is going to benefit many more households and that, basically, has increased the challenges for MND (Ministry of National Development).

"So besides the Lift Upgrading Programme which we have to finish by 2014, we have to start on the HIP, which is going to spread over all parts of the island. In addition to that, the challenge PM has given us is to build a new generation of housing

Punggol 21 + Town Centre with Al-Fresco Dinning

"Punggol is an excellent example of what a new town is going to look like; Dawson Estate is a rejuvenation of an old town and that is going to set a new standard of public housing."

Punggol 21 + Promenade for Recreation

Two Members of Parliament for Pasir Ris-Punggol GRC also welcomed the plans for Punggol 21+.

Punggol 21 + Flats will offer Water Views

Defence Minister Teo Chee Hean said, "Residents in Punggol will be delighted at these plans – very exciting plans coming up. It is really made possible with the new technology that we have with water. It will make life in Punggol very interesting and exciting for the current and new residents."

Parliamentary Secretary for Community Development, Youth and Sports Teo Ser Luck added: "There was quite an amount of consultation and quite a number of feedback taken into consideration. Minister of State Grace Fu has also gone down to the heartlands and created a community forum, and inputs (from there) contributed to these plans.

"Many years ago, this type of city and this type of town would not have been possible. Right now, these are the inputs from the citizens themselves... and we are fulfilling that vision, we are giving them more say in what is at stake for them." - CNA/so

Residents In Dawson Estate Looking Forward To New Facilities

Source : Channel NewsAsia, 20 August 2007

New Development in Queenstown such as market will retain character of old estate

SINGAPORE: Many residents at Dawson estate in Queenstown are thrilled at the prospect of living in a revamped township.

Prime Minister Lee Hsien Loong, in his National Day Rally speech on Sunday, revealed that the sleepy neighbourhood will be given a new lease of life.

He said that there is enough space to build some 10,000 HDB and private flats there.

The estate will also have new facilities and entertainment options.

For businessman Eric Toh, he hopes a rejuvenated Dawson estate will bring him more customers.

The owner of E.S. Electromart Superstore says his business has been manageable in the past three years, but he hopes to expand his customer base, 80 percent of which comes from the Dawson area.

"Business will be better, if they make transportation more convenient.....more people will come," says Mr Toh.

For resident Annie Yeo, she hopes re-development means more convenience.

Annie, who has been doing much of her shopping outside Dawson estate, said she likes the idea of having bigger shopping malls nearby.

She also hopes a revamped Dawson area will help to push up the price of her flat.

Other residents say they like the idea of having more greenery in the estate.

"When we moved here, we missed the Clementi.....My husband like to jog at the park," says Jiennywati Nitisastro, who last stayed at Clementi.

Though many residents are excited about the future developments in Dawson estate, some hope that the tranquillity there will not be disturbed.

The two MPs in charge of the area say there will be feedback sessions for residents to have a say on what to be included in the upgrading project.

They add that planners need to be careful so as to avoid duplication.

"There have been other developments in regions like Buona Vista and Holland Village. They also serve different purposes and different activities are there. They have to take into consideration whether there could be an oversupply of such retail and commercial activities," says Baey Yam Keng, an MP for Tanjong Pagar GRC.

"PM gave the big picture and as it is with details, sometimes there can be confusion. So when the details are released, it is important for grassroots leaders and the MPs to meet with the elderly and explain to them so that they know what are being provided for them," says Indranee Rajah, an MP for Tanjong Pagar GRC.

The HDB is also expected to conduct road shows on its upgrading plans around Singapore. - CNA/ir

CPF Stretched To Provide Cover For Ageing Population

Source : The Business Times, August 20, 2007

Higher returns, later drawdown age will make retirement savings last longer

THE guaranteed interest rate under the CPF scheme will rise by one percentage point for amounts up to $60,000, in an effort by the government to make retirement savings last longer.

A secure retirement: Deferring the drawdown by a year will earn the account more interest, and make it last two more years till 82

In addition, the age at which drawdowns on the Minimum Sum can begin will be raised progressively so that the savings can stretch further.

The government will also legislate the re-employment of workers, to take effect from 2012. Initially companies will be required to re-employ workers up to age 65, and later up to 67.

For the CPF scheme, some form of annuity will be made compulsory for those below 50, said Prime Minister Lee Hsien Loong yesterday at his National Day rally speech.

Mr Lee said the CPF Board will pay one percentage point more on the first $20,000 of Ordinary Account balances, and on up to $60,000 on a member's combined accounts comprising the OA, Special, Medical and Retirement Accounts.

'When CPF started, life expectancy was 60, 61. Now it's 80 years old. So we need to make three changes: Firstly, improve the returns on the CPF savings; secondly, draw down the CPF savings later so that they will last longer; and thirdly, to cover the risk of living longer than expected.' - Mr Lee on the need to bring the CPF system up to date

'You cannot just suka-suka write any number; must be properly justified and must pass muster and inspection by the Elected President, which is the way we have done it.' - Mr Lee on the $700 million cost for the one-point CPF interest hike

'When people give me free things, I don't accept. Why, when I can afford to pay? But if they say, OK, you are a friend, we give you a discount, then I think 'OK, friends can accept kindness'.' - Mr Lee, quoting nanogenarian Lee Siew Lan

Mr Lee said: 'I think we must improve the returns on the CPF. And I think our main focus is to help the lower and middle income groups.' Half of active CPF accounts have less than $45,000. These are members who are working and contributing to their accounts.

With $45,000, Mr Lee said: '... you are not poor but I would not think it is wise to strongly encourage you to go and play the stock market. Why? First, you don't have enough savings. Secondly, you may not have the expertise. Thirdly, you should not expose yourself to excessive risks...'

The CPF Board will be taking the route of enhancing the existing risk-free framework. More than half of the active members will get one per cent more on all their balances.

The $60,000 of funds can still be used for housing and medical expenses. But it cannot be invested through the CPF Investment Scheme.

This is expected to cheer the majority of members, who appear to prefer the safety of the guarantee. Private sector investment fund managers and insurers, however, may be disappointed as a higher guaranteed rate raises the risk-free bar which their funds have to beat, even if it applies only to up to $60,000 of funds.

Investor education efforts to date have set out to encourage individuals to step out of the comfort zone of a guaranteed rate.

The concern has been that a relatively low guaranteed rate of 2.5 per cent may not keep pace with inflation or cover the risk of a shortfall in funds.

As at March 31 this year, a total of $25.9 billion OA funds, and $5.7 billion of SA funds were invested in a mixture of stocks, funds and insurance policies. There is still another $57 billion of OA funds and $23.8 billion of SA funds that are uninvested.

For amounts in excess of $60,000, members are still free to invest through CPFIS.

Mr Lee said a percentage point more in the annual interest rate will make a big difference. A young man who starts work at 21 earning $1,700 a month, and buys a four-room HDB flat, will earn about $20,000 more in interest by the age of 55.

The hike will cost the government $700 million initially. The cost will rise as members save more in the CPF. The cost, said Mr Lee, is equal to the entire government grant to the HDB every year of $750 million.

There will be no change to the concessionary HDB loan rate formula.

On drawdowns, members are currently required to set aside the Minimum Sum at the age of 55. This is drawn upon from the age of 62 in monthly payments. But if the account is drawn upon too early, a retiree may outlive his savings. Based on the current scheme earning 4 per cent in interest, the annual income from the Minimum Sum lasts 20 years, after which the account is depleted.

Deferring the drawdown by a year will earn the account more interest, and make it last two more years till 82. But more people will live past 82, in particular women, said Mr Lee.

As the government legislates re-employment until 65, the drawdown age must be raised progressively as well.

In 2012, the year when re-employment of workers will be required, the drawdown will begin to rise, and will reach 65 by 2018. Members who are currently 58 or older will not be affected. For those 53 and younger, the drawdown age will go up to 65.

Mr Lee said the move may not be popular. 'But we have no choice. People are living longer, we have to work longer, and we've got to start drawing on the reserves later. Therefore we have to start moving now.'

For older workers in their 50s who are affected by a later drawdown age, a one-off bonus interest will be paid to their Retirement Accounts. A bonus will also be paid to those who voluntarily defer their drawdowns, even if they are currently 58 and older.

Annuities are a solution to the need for an income in retirement, said Mr Lee. But few people opt to convert the Minimum Sum into an annuity as Singaporeans do not understand annuities.

D9,10,11 Rental Listings As At 20th Aug 2007

PM Moves To Tackle Income Gap

Source : The Business Times, August 20, 2007

CPF returns to be increased, retirement pushed back, flats monetised for older owners as govt widens security net

AS the forces of globalisation widen the income gaps worldwide, Prime Minister Lee Hsien Loong unveiled a comprehensive strategy to make sure that the poor in Singapore - who are also likely to be elderly - have enough savings to fall back on.

The most eye-catching of these moves involves a hike of one percentage point on the first $20,000 in the Ordinary Account of the Central Provident Fund - and on up to $60,000 in the combined CPF accounts - as the government seeks to provide a bigger nest-egg for old age.

But no less significant are moves that will ensure that Singaporeans, who are living longer, also retire later and that HDB flats provide not just shelter but also a stream of income as citizens age.

Another key area that will underpin the government's strategy is education. A fourth publicly-funded university will be built as Singapore tries to raise the qualifications and earning power of the next generation of workers.

'Somebody did a study in Singapore and we found that for every year longer you go to school, you can expect your wages to go up by 14 per cent,' said Mr Lee in his National Day Rally speech last night.

His point: The payoff on education is going up and it is the best way to level up the society and reduce income gap.

Currently, 23 per cent of each cohort goes to a publicly-funded university. 'We aim to raise this now to 30 per cent of the cohort ... by 2015,' said Mr Lee. This would mean an additional 2,400 university places for students as well as a new university, with its own unique character and strengths, to take its place alongside NUS, NTU and SMU.

But while waiting for these payoffs down the road, Mr Lee addressed the most pressing issue facing Singapore today - its rapidly ageing population.

Not only are Singaporeans making fewer babies, they are also living longer, with the risk that they will run out of money in their later years. Mr Lee recounted the case of a 72-year-old who retired at 55 and then ruefully told labour chief Lim Swee Say: 'I didn't know I was going to live so long.'

The government will pass a law under which, from 2012, workers reaching the retirement age of 62 will be offered re-employment till 65 and eventually till 67.

The revision in CPF returns is also significant. It means that more than half of the CPF active members - those still contributing to the fund - and mostly those in the lower and middle income group will enjoy the higher return on all their CPF balances.

CPF members can still use the $60,000 - on which they will get higher returns - for housing and medical care but not for investments because, as Mr Lee said: 'This is long-term money and you leave it with us and we will treat it like retirement funds and we will give you the highest interest rate'.

Beyond $60,000, the status quo stays. 'If you have more than 60k, you should be able to look after yourself,' Mr Lee said.

As retirement is pushed back, the drawdown age (DDA) of the CPF Minimum Sum will be delayed until 65 from the current mark of 62.

But the DDA will be raised progressively over a number of years, starting in 2012 when the re-employment legislation is introduced.

To encourage the re-employment of older workers, Mr Lee said the government will double the grant - to $200 monthly or 20 per cent of salary - to workers aged 60 under the Workfare Income Supplement.

Upgrading and renewing housing estates is another major front the government is working on for a more even distribution in income. Mr Lee said it will raise the CPF housing grant introduced last year for the lower income group, from $20,000 to $30,000. This will cover about half of all Singapore households.

To make it easier for the lower income group to monetise their flats, HDB will buy back from older owners - those aged 62 and above - their 2-3 room flats at the tail end of the lease and leave them with a shorter lease of 30 years on the same flat.

Improvements will be continued to be made to new and old housing estates, but the upgrading programme itself will be fine-tuned to combine more precincts for upgrading and to home in more on practical improvements within individual flats.

HSBC Says In Talk To Buy S Korea's KEB

Source : The Business Times, August 20, 2007

SEOUL/HONG KONG - HSBC Holdings Plc said on Monday it was in talks to buy a majority stake in Korea Exchange Bank (KEB), valued at US$4.5 billion and held by Lone Star, sending shares of Korea's fifth-largest lender higher.

The sale process has dragged on amid a protracted legal dispute between Dallas-based private equity fund Lone Star, which holds 51 per cent of KEB, and South Korean authorities.

The legal disputes forced Lone Star to cancel a US$7.3 billion deal last year to sell KEB to Kookmin Bank, South Korea's top lender.

Singapore's DBS had held talks with Lone Star for a possible purchase but ended negotiations, hinting at legal issues.

KEB and Lone Star declined to comment.

Foreign banks keen to enter the Korea may find that acquisitions might be the only option left to them, given the South Korean government's reluctance to allow new entrants into the crowded banking sector.

Citigroup and Standard Chartered became major players through acquisitions of domestic rivals, which HSBC had also attempted to buy.

South Korean prosecutors say a former government official colluded with a lawyer hired by Lone Star and KEB's chief executive to inflate KEB's losses, allowing Lone Star to buy it for around US$900 million less than it was worth.

An official of the regulatory Financial Supervisory Commission told Reuters it would wait for a final court ruling before giving the nod to any possible KEB sale. -- REUTERS

Govt To Focus On Housing Policy: PM Lee

Source : The Straits Times, Aug 19, 2007

PRIME Minister Lee Hsien Loong has announced a slew of measures to make it more affordable for Singaporeans to own a flat, especially for the lower-income group.

Speaking at the National Day Rally, Mr Lee said besides CPF, housing is another major policy that can help 'narrow the income gap'.

So to better help the lower-income buy HDB flats, the Government will up the Central Provident Fund (CPF) Housing Grant introduced last year to $30,000, from the current $20,000. This is a 30 per cent subsidy for a three-room flat worth $120,000.

On top of this, the household income ceiling will be raised from $3,000 to $4,000 to cover about half the households in Singapore.

The Ministry of National Development (MND) is also looking into ways to make it easier to monetise the Housing Development Board (HDB) flats, particularly two and three-room units.

Mr Lee said the HDB will introduce a new scheme for those aged 62 and above, to buy back the tail end of their lease to leave flat owners with a shorter, 30 year lease on the same flat. The payout will be given in two parts - a lump sum upfront and monthly payments in the form of an annuity.

Upgrading homes

Moving on to new developments, Punggol 21 that was started in 1998 will be the 'face of new Singapore'.

PM Lee said that the project was slowed down due to the financial crisis and now that demand is back, the plan has been upgraded to Punggol 21-Plus.

Features include damming the river mouths of Sungei Punggol and Sungei Serangoon to create two reservoirs to be linked by a waterway.

By the end of the year, residents will also get a new sports and recreation centre that will have four swimming pools, an indoor sports hall and a football field.

On old and middle-aged estates

PM Lee also touched on the renewal of old and middle-aged estates.

He said the Government is redeveloping selected sites within the old estates. One of them is the Dawson Estate in Queenstown.

For the middle-aged estates, the government will roll out the Neighbourhood Renewal Programme (NRP) to replace the current Interim Upgrading Programme (IUP) for individual precints.

The NRP will combine two or more precints to deliver better upgrading plans and facilities.

For individual flats, the current Main Upgrading Programme (MUP) will be replaced with a new Home Improvement Programme (HIP), for practical improvements within the flats.

For flats built up to 1980, 100,000 have already benefited from MUP. Another 100,000 will get to gain from the HIP.

The HIP and NRP will be extended to flats built from 1981 to 1986.

Related Video Link :
Boosting Home Ownership Assets

Prime Minister Lee Hsien Loong has unveiled plans to make it more afforable to own a flat, especially for the lower-income group and elderly.

They include - upping the CPF housing grant and the household income ceiling and making it easier for the low-income to monetise their homes.

The aim - to narrow the widening income gap and help Singaporeans to build a nest-egg for old age.

Yishun and Tampines will pilot the HIP.

As for those living in private estates, PM Lee said they will not be left out. Schemes like the Estate Upgrading Programme (EUP) will be revamped and the estates will be given Community Improvement Project Committee (CPIC) funds just like the HDB estates.

CPF Changes To Help S'poreans Build Healthy Nest Egg: PM Lee

Source : The Straits Times, Aug 19, 2007

PRIME Minister Lee Hsien Loong has announced a raft of measures aimed at bridging the widening income gap among Singaporeans.

Addressing some 1,700 people at the annual National Day Rally held at the University Cultural Centre, Mr Lee noted that the 'gap is widening between the best and the rest'.

He added income gap is also linked to the ageing population and many of the poor are likely to be elderly.

To widen the social security net, Mr Lee said the CPF system has to be adjusted and brought up to date.

Improving CPF

The first strategy is to improve CPF returns.

The CPF Board will pay a higher interest of one percentage point more on the first $20,000 in the Ordinary Account (OA) and up to a total of $60,000 on combined Accounts.

The status quo will remain for CPF balances beyond $60,000.

Currently, CPF pays interest of 2.5 per cent for the OA and 4.0 per cent for Special, Medisave and Retirement Accounts.

Mr Lee said the one per cent more in interest, will 'make a big difference'.

'A young man who starts work today at 21, earns $1,700 per month, and buys a four-room HDB flat, will earn about $20,000 more interest at age 55,' he said.

That's one-quarter more interest than before he pointed out.

The initiative will cost the Government $700 million a year initially. The amount will grow in future as members save more in their CPF.

Related Video Link -
CPF Changes For A Healthy Nest Egg

Prime Minister Lee Hsien Loong has announced a raft of measures aimed at bridging the widening income gap among Singaporeans

Key to the changes - the CPF system - which will be tweaked to ensure Singaporeans have enough retirement funds even as they live longer.

Imelda Saad has more from the Prime Minister's National Day Rally.

Delaying drawdown

On the flip side, Singaporeans will have to wait longer to draw down their CPF savings upon retirement.

Currently, members can draw down from their Minimum Sum and collect monthly payments from age 62.

But Mr Lee noted that even with higher interest, the money will run out if the draw down is too early.

To make CPF savings last longer, the Draw-Down Age (DDA) for the Minimum Sum will be raised from 62 to 65 over a six year period, between 2012 and 2018.

The timing coincides with the legislation to offer retirees the option to continue working till age 65.

Impact on age groups

Mr Lee said those 58 years old and above will not be affected by the change to the DDA.

The DDA will go up a little for those slightly younger.

The DDA will go up to 65 for those 53 years old and below.

To ease the impact on older workers, the Government will pay a one-off bonus interest, called a Deferment Bonus, to the CPF Retirement accounts of members in their 50s.

A Voluntary Deferment Bonus will be paid to those who voluntarily defer their DDA, even if they are 58 years old and above.

Compulsory annuities

To ensure Singaporeans have enough retirement funds should they live after their Minimum Sum runs out at age 85, Mr Lee said 'some form of annuity' will be made 'compulsory for CPF members'.

This will affect those currently below the age of 50.

Mr Lee said the Government will study the issue, consult the industry and educate CPF members before working out a detailed scheme.

Further details of the CPF changes will be released when Manpower Minister Ng Eng Hen addresses Parliament in September.

Incentivising S'poreans to work longer

The Prime Minister also spoke at length on the issue of the ageing population.

Signalling the Government's strong push to get people working, Mr Lee said higher tiers of Workfare will be introduced for older workers aged above 55, with up to double the payout for younger workers.

For example, a worker aged 60 earning $1,000 currently gets $100 a month from Workfare Income Supplement (WIS), or 10 per cent of his/her salary.

This amount will double to $200 a month or 20 per cent of the salary, under the revised scheme.

Mr Lee said the change will give workers more take-home pay and more CPF.

By 2012, employers will be required - under a new law - to offer re-employment to workers who reach the retirement age of 62.

Asian Shares Rally After Fed's Rate Cut, STI Soars 6.12% At Close

Source : The Straits Times, Aug 20, 2007

ASIAN stocks jumped on Monday, surging after the US Federal Reserve slashed a key US bank discount rate, with Singapore's Straits Times Index surging 6.12 per cent at close.

Singapore share prices soared on Monday, mirroring sharp gains in regional bourses, dealers said. The Straits Timex Index closed 191.67 points higher at 3,322.38.

To help counter the credit market turmoil, the US central bank cut its discount rate by a half-percentage point to 5.75 per cent on Friday in a surprise move that sparked a rebound on Wall Street. It left its benchmark federal funds rate steady at 5.25 per cent.

The Fed also said 'downside risks to growth have increased appreciably,' dropping its views about inflation being a major concern and signalling a willingness to take more dramatic action to cushion the economy from tightening credit.

'With the Fed now pulling out all stops in order to head off a credit crunch, it's looking increasingly likely that we have seen the bottom in share markets,' said Shane Oliver, head of investment strategy at AMP Capital Investors in Australia.

'More importantly the panic selling in various markets over the last week is indicative of the sort of wash out often seen at or around market bottoms.'

Stocks rose the most in more than eight years after the Prime Minister raised the country's economic growth target.

Mr Lee Hsien Loong said on Sunday night that he expected the Republic's annual growth to increase as much as six per cent in the next five to 10 years. That's higher than the previous range of three to five per cent set in 2003.

At 2.30 pm, the Straits Times Index rose 5.3 per cent after Wall Street's rebound on Friday, in line with rallies in Asian markets.

The index was up 166.73 points at 3,297.44, with banks leading gains.

Malaysian share prices closed closed 4.4 per cent higher in line with regional bourses, dealers said.

The Kuala Lumpur Composite Index (KLCI) closed up 51.84 points at 1,243.39.

Hong Kong share prices soared 5.9 per cent Monday, alongside a massive regional rebound and enjoying the market's single biggest one-day points gain since 1998, dealers said.

They said the boost also came after China said it would allow individual investors to buy shares on the city's market for the first time.

The Hang Seng Index closed up 1,208.50 points at 21,595.63, off a low of 20,901.64 and a high of 21,608.34. Turnover was 105.33 billion Hong Kong dollars (S$20.6 billion).

Chinese share prices surged 5.33 per cent to a record closing high Monday, amid a rally on global markets following the sell-off triggered by the US credit crunch, dealers said.

The benchmark Shanghai Composite Index, which covers both A and B shares listed on the Shanghai Stock Exchange, closed up 248.28 points or 5.33 perc ent to 4904.86 on turnover of 145.31 billion yuan (S$29.22 billion).

The Nikkei share average rallied to book its biggest one-day percentage gain in 13 months on Monday, rebounding from a plunge last week as the Federal Reserve's move to cut its discount rate eased fears about credit concerns and prompted buying across the board.

The Nikkei rose 458.80 points, or 3.00 per cent, logging its biggest percentage rise since July 2006, to 15,732.48.

The benchmark recouped some of its 5.4 per cent slide on Friday, which ended a week in which it lost 9 per cent, its biggest weekly drop in seven years.

The Topix was up 2.92 per cent, or 43.18 points, at 1,523.57, regaining some of the 9.4 per cent it lost last week, which was its biggest one-week fall since September 1990.

Shares closed 5.7 per cent on Monday, their biggest gain in over five years.

The Korea Exchange suspended some programme trading for the third time this year, following a surge in futures prices.

Programme trading refers to automatic computer-generated trades based on predetermined criteria, including the difference between futures prices and underlying shares.

The suspension lasted for five minutes from 10:14 am. (9.14 am Singapore time).

The benchmark Korea Composite Stock Price Index (Kospi) was 93.20 points higher at 1,731.27, its biggest one-day percentage gain since surging 7.6 per cent on Feb 14, 2002.

Taiwan shares ended up 5.26 per cent on Monday, marking their biggest percentage gain in at least three years, led by heavyweights such as TSMC and Cathay Financial, after a surprise Fed rate cut sparked a US market rally.

The main Taiex shares index, which hit a three-month low in the previous session amid a global sell-off, rose 425.31 points to 8,515.60. Despite the gain, the index is still down about 13 per cent from a more than seven-year closing high reached on July 24. -- AFP, REUTERS

S'pore Economy Growth Estimate Raised To 4%-6%

Source : The Straits Times, Aug 20, 2007

The new estimate of growth potential is based on labour force growth of 1.5 to 2.5 per cent and productivity increase of 2.5 to 3.5 per cent. -- ST PHOTO: MALCOLM MCLEOD

SINGAPORE'S economy has the potential to grow by an average of four to six per cent per annum over the next five to 10 years, said the Ministry of Trade and Industry, in raising its earlier estimate.

The rise in potential growth reflects the effects of economic reforms over the last five years, said MTI in a statement on Monday.

These reforms have enabled actual growth to average 6.1 per cent per annum, exceeding the three to five per cent medium-term potential estimated by the Economic Review Committee (ERC) in February 2003, it said.

The new estimate of growth potential is based on labour force growth of 1.5 to 2.5 per cent and productivity increase of 2.5 to 3.5 per cent.

This is higher than the ERC's projected labour force growth of one to two per cent and productivity increase of two to three per cent, said MTI.

Higher productivity
'The economy's diversification into higher value-added industries and influx of new capital investments will increase productivity growth,' said MTI.

Economic restructuring in an increasingly competitive environment has also helped to enhance efficiency.

New high growth sectors like biomedical manufacturing and wealth management and rejuvenated traditional sectors like marine engineering and tourism have also made the economy more resilient and less vulnerable to sector-specific shocks.

Higher labour force growth
Healthy economic conditions and increased labour market flexibility have helped to increase the labour force participation rates of women and older workers.

In 2006, 65 per cent of the resident working-age population were economically active, up from the 64.1 per cent in 1996. Higher inflows of expatriate talent have also contributed to the underlying increase in labour force growth.

Favourable environment
The external environment over the next 5 years is expected to be favourable, increasing the likelihood that Singapore's growth potential is realised.

'While the US, EU and Japan will continue to be important external drivers of demand, the rise of China and India will provide additional boost to growth. ,' said MTI.

Also, the South-east Aian countries have recovered from the Asian financial crisis and are returning to a path of growth and stability.

If these conditions remain favourable, Singapore should be able to achieve a growth rate at the upper end of the four to six per cent range over the next 5 years,' said MTI.

TBWA Creative Agency For Resorts World

Source : The Straits Times, Aug 20, 2007

RESORTS World at Sentosa (RWS) has announced TBWA will be the creative agency in charge of advertising for the $5.2 billion development set to open in 2010.

TBWA was chosen from a shortlist of five ad agencies to take charge of Resorts World.

At the moment, TBWA is responsible for several other big accounts in Singapore, namely Singapore Airlines and Standard Chartered Bank.

Resorts World plans to spend at least $70 million on both local and international advertising campaigns over the next three years.

RWS plans to market the resort as a destination where families can spend days visiting attractions such as South Asia's first Universal Studios and the world's largest oceanarium.

Related Video Link :
First SIA, now Resorts World - TBWA snares another crown

One of two Integrated Resorts to be ready in Singapore by 2010, Resorts World at Sentosa today unveiled its marketing plans with the announcement of its creative agency - TBWA, the same brains behind Singapore Airlines' new advertising campaign.

The agency will now also train its firepower to make Resorts World the top family holiday destination in the region.

The resort will be marketed overseas in the Asean region, China and India.

RWS will work closely with Singapore Tourism Board to penetrate emerging markets such as Russia, Eastern Europe and the Middle East.

Online, digital channels will play a key role in penetrating overseas markets.

TBWA will spend the next six months to a year planning its marketing strategy.

Tougher Action By Fed Possible

Source : The Straits Times, Aug 20, 2007

Central bank may have to cut key fed funds rate if fallout from sub-prime crisis worsens

FEDERAL Reserve chairman Ben Bernanke could be forced to cut the central bank's key lending rate within days, if last Friday's rally on Wall Street fails to stop the fallout from the sub-prime crisis.

Analysts say the Fed's surprise move to slash the discount rate - the interest rate charged on its loans to commercial banks - is welcome, but it is no panacea for the fundamental problems US markets are facing.

Investors are still hankering for a cut in the more important federal funds rate that would lower borrowing costs on everything from school loans to mortgages, and help the broader economy.

Mr Craig Alexander, chief economist at TD Bank Financial Group, believes a cut in the fed funds rate, which affects the broader economy, is just around the corner.

'The discount rate reduction is telling, as it strongly signals to markets that the Fed is prepared to ease monetary policy if the credit crunch does not dissipate soon,' he said.

Economists said the accompanying Fed statement reveals a seismic shift in the bank's risk hierarchy that puts economic growth above inflation.

'It is ...opening the door to a cut in the target federal funds rate,' wrote analysts at Global Insight, betting on a half-point cut to 4.75 per cent at the next scheduled Fed policy-setting meeting on Sept 18. Other analysts say they expect only a quarter-point reduction.

But there are some who predict that the central bank will leave its key rate unchanged.

By Sept 18, 'financial conditions may have normalised to such an extent that the Fed can hold monetary policy steady', said Mr John Lonski of Moody's Investors Service, although he said the prospects are slim.

Meanwhile, stock markets could see fresh turbulence because the extent of the credit crisis remains unclear.

Hedge funds and investment banks are still wrestling with credit problems spawned by distressed sub-prime mortgage loans. The housing market still looks gloomy.

Wall Street observers say there is still plenty of risk out there and that the aftershocks from the failure of billions of dollars in sub-prime loans have yet to be felt. - AGENCE FRANCE-PRESSE, ASSOCIATED PRESS

Rising Worries Over Credit Fallout's Effect On Growth

Source : The Straits Times, Mon, Aug 20, 2007

CONCERNS are growing that the current liquidity crunch hammering the world's stock markets may spill over into the 'real economy' - our factories, our shops and our businesses.

The mood is in stark contrast to the frothy optimism engendered by the economy's strong 8.6 per cent growth in the second quarter.

Local economists may not be cutting economic growth forecasts just yet but they are on high alert for any sign that the ongoing financial turmoil is hurting consumer spending and business investment.

So far, experts reckon that the Singapore economy can still hit the recently raised official economic growth target of between 7 per cent and 8 per cent - if markets stabilise within the next two months.

Otherwise, growth might slow to between 5 per cent and 6 per cent, according to one economist's projections of a 'realistic bad case scenario'.

'The most likely scenario for Singapore is that we will be at the top of the official forecast range,' said Action Economics economist David Cohen. 'There's no reason why it has to spiral into a financial crisis,' he said.

Pointing to the last stock correction in March, he said there were worries then that the selldown would spiral out of control and feed back into the real economy.

'But things just calmed down as people looked around and appreciated that the global economy was pretty strong, as were corporate earnings.'

Still, Mr Cohen admitted that he is a little less bullish than a few weeks ago, when strong second-quarter economic data saw economists racing to bump up their forecasts for the year.

CIMB-GK economist Song Seng Wun said that there have been no signs so far that consumer spending has been affected by the 'wobble' in the financial markets.

He pointed to the recently launched Soleil @ Sinaran condominium in Novena which has been 'keenly bid' for.

'The stock market has been doing so well in the past few years so that even if it falters, the local market is still up for the year,' he said.

However, it will be a different story if financial markets continue to head south.

'If the turmoil continues for more than two months, then the real economy will be hit,' said Mr Song. 'The impact could be felt in the early part of the fourth quarter.'

Citigroup economist Chua Hak Bin said electronic exports, financial services and property are the three most vulnerable sectors here.

Financial services, which have been a key growth driver, may slow to 10 per cent growth, from 17 per cent, as companies pull back on initial public offerings and other capital market activity, he said.

He added that there are signs that deals are being postponed, while the fast- growing hedge fund sector may slow if hit hard by the financial fallout.

Electronic exports will suffer if stock market losses and falling home prices cause American consumers to tighten their purse strings, while rising borrowing costs for companies may stifle business investment across the world.

Singapore's booming luxury property market is also a likely victim as foreign investors have been a key source of demand in the sector, said Dr Chua.

The combination of these could shave 1 to 2 percentage points off economic growth, but the construction and pharmaceutical industries should prove resilient, he said.

Bonus For Those Who Wait To Tap Minimum Sum

Source : The Straits Times, Mon, Aug 20, 2007

THE Government will sweeten the wait for older workers who delay drawing down the Minimum Sum in their CPF account.

Those in their 50s will get a 'D-bonus', a one-off Deferment Bonus interest, to be paid into their CPF Retirement Account.

A smaller 'V-bonus' or Voluntary Deferment Bonus will also be given to those aged 58 and older who are unaffected by the changes, but voluntarily delay drawing down their Minimum Sum.

Details of the bonuses will be announced later, said Prime Minister Lee Hsien Loong, who announced changes to the draw-down age for the Minimum Sum.

The raising of the draw- down age, now at 62, will be done from 2012. It will go up gradually to reach age 65 by 2018.

By making people wait longer, the Government hopes Singaporeans - who will live and work longer - will have enough retirement savings to last them through their golden years.

This idea of raising the draw-down age for the Minimum Sum was first mooted by Minister Lim Boon Heng, who oversees ageing issues, as a way to encourage older folk to work longer.

Mr Lee knows it is not a popular move, citing a recent Straits Times survey which found that four in five people opposed it.

'But we have no choice. People are living longer, we have to work longer, and we've got to start drawing on the reserves later. Therefore we have to start moving now,' he said.

People can withdraw a portion of their CPF account at age 55, but must leave aside the Minimum Sum which is now $99,600. They will then get a monthly payout from their Minimum Sum over a 20-year period, from age 62.

This means the Minimum Sum will last till a person turns 82. 'But many will live beyond,' he said, especially women as their life expectancy is longer than men's.

To prevent the Minimum Sum running out too quickly, the solution is to defer the draw-down age to 65.

'If the draw-down age is 65 and you draw it down over 20 years, 65 plus 20 means it will last till you are 85 years old, which I think is better.'

Some workers may worry they will be left in the lurch - with neither a job on retiring at 62 nor CPF savings. But the CPF change is timed to go hand in hand with the new re-employment law in 2012. The law will get employers to re-employ workers after retirement but not necessarily in the same job or at the same pay.

Hence, the CPF Minimum Sum draw-down age must be raised to match the rising retirement age, said Mr Lee.

Labour economist Shandre Thangavelu agreed: 'We're living longer, so it makes sense to push the draw-down age to 65. But the key point is also to make sure people can work longer. The re-employment law has an important role to play.'

Mr Lee cautioned that even with the new, higher CPF interest rate, 'if we start drawing down on CPF too early, the money will run out too soon'.

Mr Lee worked out the sums. If one defers the draw-down by one year, the extra interest earned will make the money last two years longer.

Security officer Mohamad Noh Tahir, 57, has no issue with the new draw-down age. 'But I must still be working. If I'm not working, there may be a problem.'

But not all workers are happy. Sales executive Angie Tan, 49, said: 'I'm very much against it because it means we've got no control over our own CPF savings. I want to draw down earlier.'

Singapore PM: US Consumption Decline Could Hurt Asian Growth

Source : AsiaOne News, 19 Aug 2007

Singapore PM: US consumption decline could hurt Asian growth

SINGAPORE (AP) -- Singapore's prime minister said Sunday economic growth in Asian countries, including Singapore, could suffer if the recent crisis in western financial markets cuts consumer demand in the U.S.

"In recent weeks, you will have seen turbulence in the financial markets globally and this may affect the U.S. and the European economies, and in that case, it will also affect Asia over the next 3 to 6 months," Lee Hsien Loong said in his annual National Day Rally speech to Singaporeans.

Lee added, however, that even if Asia is affected, the region's fundamentals remain strong. He ruled out the possibility of an Asian financial crisis brewing in the region.

"This is not a financial crisis in Asia. This is a crisis in the advanced countries which has affected us. I believe the mid- to long-term prospects are very good," he said.

Stock markets across Asia tumbled in recent weeks, spooked by a credit crunch and sub-prime woes in the U.S. and European markets. But Friday after Asian markets had closed, the U.S. Federal Reserve cut its key discount rate a half percentage point to 5.75 percent - a move that quelled investor worries for the time being. The move sent major European stock indexes higher, with Britain's FTSE rising 3.5 percent to 6,064.20.

The Dow Jones industrial average then surged 233.30, or 1.82 percent, to close at 13,079.08 Friday.

Monday in Asia, stock markets in Japan, Hong Kong, South Korea and Taiwan have followed and are on the rise.

Singapore's benchmark Straits Times Index is up 4.5 percent from Friday at 3,271.29 in late morning trade. Friday the index fell as much as 6 percent in intraday trade before ending marginally down by 0.7 percent.

Prior to the Fed's move Friday, analysts had said Asian stock markets were largely driven by panic selling because of the liquidity crisis in western markets.

Last week, Singapore's Ministry of Trade and Industry said the island-state's gross domestic product grew 14.4 percent from the first quarter on a seasonally adjusted annualized basis.

The government also raised its forecast GDP growth to between 7-8 percent, up from an earlier estimate of 5-7 percent.

Lee said his government is looking to grow the economy 4-6 percent on a sustained basis over the next five to 10 years, up from a previous target of 3-5 percent.

Lee also said Singapore will raise its retirement age for workers from 62 to 65 beginning in 2012, and to 67 later.

Asian Markets Rebound After US Rate Cut

Source : AsiaOne News, Aug 20, 2007

TOKYO (AP) -- Asian markets rebounded Monday, taking their cue from Wall Street's recovery late last week after the Federal Reserve cut a key interest rate.

The Tokyo benchmark index jumped 3 percent after ending last week with its biggest point drop in more than seven years.

The Nikkei 225 closed the day up 458.80 points, at 15,732.48 points on the Tokyo Stock Exchange, recouping about half of the 5.42 percent nose-dive racked up Friday - its largest single-day point loss since April 2000.

Australia's benchmark had its biggest one-day gain in almost a decade Monday as the benchmark S&P/ASX 200 surged 4.6 percent, or 261.6 points, to close the day at its peak of 5,932.6 points.

Other regional markets also recovered, as the Fed's move was viewed as a sign the U.S. is taking the recent market volatility seriously.

Benchmarks bounced back 2.3 percent in New Zealand, 5.7 percent in South Korea and 5.3 percent in Taiwan.

Analysts said it's too early to call whether the worst is over. Stock markets around the world have been on a skid since the U.S. subprime mortgage mess surfaced last month and spread.

A decision Friday by the Federal Reserve to cut its discount rate to 5.75 percent from 6.25 is helping calm some of the jitters. On Wall Street, stocks soared, and the Dow closed 1.82 percent higher at 13,079.08. Key indexes also rose in the U.K., France and Germany.

Michael Kurtz, a strategist at Bear Stearns Asia Ltd., said Asian economies are so dependent on the health of the American economy these days, any sign of danger in the U.S. economy is likely to rattle regional markets.

"Although Asian institutions appear in aggregate to have minimal direct exposure to U.S. subprime credit instruments, we think the region does remain hostage to any potential U.S. real-sector downside should U.S. mortgage problems magnify," he said in a report.

One remaining uncertainty is how widespread the damage from U.S. dubious lending is in Asia. It's not clear, for one thing, how exposed some hedge funds might be to such risky investments.

Even if regional financial organizations aren't directly exposed, indirect fallout could last for weeks, including market nervousness, economists say.

Japanese shares have taken an extra beating from the weakening dollar that has followed the subprime mortgage crisis. Many top Japanese companies are exporters that had been receiving a critical lift from a weak yen.

The dollar was trading at 114.66 yen midafternoon in Tokyo, up from 114 yen late Friday in New York.

Among recovering export Tokyo issues were Toyota Motor Corp., which rose 4.2 percent, Canon, which climbed 7.6 percent and Sony Corp., gaining 3.2 percent.

HSBC In Talks To Buy Majority Stake In South Korean Bank

Source : Channel NewsAsia, 20 August 2007

HONG KONG: Global banking giant HSBC said Monday it was in talks to buy a majority stake in Korea Exchange Bank (KEB) from the US private equity fund Lone Star.

In a short statement to the Hong Kong stock exchange, HSBC said it was "in discussions about the possible acquisition of a majority stake" in KEB, South Korea's sixth largest bank, from the US private equity fund.

The move comes after HSBC executives said the bank would look to boost growth by acquisitions across Asia, when they unveiled record first half profits at the end of last month.

KEB said earlier this month its first-half earnings dropped 44.5 per cent from the previous year. The previous high figures were due to a one-off boost in profits from the sale of stakes in two companies.

Lone Star bought 50.5 per cent of KEB for some 1.5 billion US dollars in 2003 and later increased its stake to 64.6 per cent.

Last November Lone Star had to withdraw from a 7.4 billion US dollar deal to sell its entire stake in KEB to top lender Kookmin Bank after a series of investigations. - AFP/ac

Conditions Favourable For Singapore To Surge Ahead: PM Lee

Source : Channel NewsAsia, 19 August 2007

SINGAPORE : Prime Minister Lee Hsien Loong said on Sunday conditions are favourable for the next few years for Singapore to surge ahead.

Speaking at the National Day Rally, he noted that challenges such as improving the CPF scheme and ensuring that Singaporeans work longer are tough.

But the government has worked out solutions for each of them.

Mr Lee said the strength of the nation also lies in its people.

And the secret of Singapore's success comes from its citizens working together as a cohesive society for the good of the country.

Mr Lee said: "After SARS, estimated Singapore's sustainable growth was at 3 to 5 percent. MTI has reviewed this in the light of last few years and raised the growth estimate to 4 to 6 percent for the next 5 to 10 years. At our stage of development, this is an ambitious target. But we can do it provided we continue to adapt, stay open and ride the wave.

"Whatever the challenges, we will tackle them one by one and sail through. Over the next decade, we have a unique opportunity to transform Singapore. Together, let us make this truly a City of Possibilities and a home for all of us." - CNA/ch

Asian Stocks Rally After Fed Cheers Global Markets

Source : Channel NewsAsia, 20 August 2007

TOKYO - Asian stock markets roared back on Monday as investors jumped on board a global rally sparked by the US central bank's boldest move yet to try to ease credit fears.

Across the region shares shot higher on hopes that the worst of the recent market rout might be over after the Federal Reserve cut the lending rate it charges commercial banks in an effort to ward off a credit crunch.

Tokyo closed up 3.0 percent with its biggest single-day points rise since June 2006, recouping more than half of Friday's 5.42 percent plunge. Shanghai leapt 5.33 percent to a record closing high.

But markets remained nervous about possible further bad news on the fallout from rising delinquencies in US sub-prime mortgages to risky borrowers, with some analysts warning there could be more losses ahead.

"What happened in the markets last week was of cataclysmic proportions," said Mark Cutis, chief investment officer at Japan's Shinsei Bank.

He said that, although Japanese equities looked cheap, last week's sell-off was only "a prelude to what's going to happen."

"We're expecting to see a much more vicious sell-off in October," he added, predicting that the Fed would probably cut its main interest rate in response.

Investors, however, appeared optimistic, chasing shares higher across Asia,
eager not to miss a recovery after recent heavy losses.

Seoul closed up 5.7 percent and Sydney jumped 4.6 percent, while Hong Kong was 3.6 percent higher in late trade. Singapore rallied 5.0 percent and Mumbai firmed 2.6 percent.

"While the US credit market crisis may not disappear overnight, the Fed's decision ... has demonstrated their will to act and help reduce the uncertainty and volatility in the event that credit markets deteriorate further," DBS Vickers Securities of Singapore wrote in a note to clients.

"This should calm equity markets and end the indiscriminate selling," it said.

Tokyo also gained a boost from the yen's retreat, which soothed investor fears about exporter earnings, dealers said.

The dollar traded at 114.67 yen in Tokyo morning trade, up from the mid-112 yen range when the Tokyo stock market closed on Friday.

Despite the rebound, analysts warned stocks could struggle to sustain their upward momentum.

"Share prices are likely to be slow to resume their upward trend," said Ryuta Otsuka, a strategist at Toyo Securities.

"There are things investors need to assess carefully, such as the prospects for the US economy and the impact on Japanese companies' earnings of the credit market problems," he said.

Elsewhere in the region, Jakarta jumped by more than 6.0 percent in late deals, Bangkok rose 3.2 percent, Kuala Lumpur gained 3.5 percent and Wellington closed up 2.26 percent. Manila was shut for a national holiday.

US and European stocks soared Friday after the US Federal Reserve slashed the discount rate to try to calm the recent storm on world financial markets sparked by fears of a credit crunch from the sub-prime mortgage problems.

The central bank cut the rate it charges commercial banks to 5.75 percent, saying that it wanted to restore order in financial markets that were hit by "increased uncertainty."

The move raised expectations that the Fed may also lower its key federal funds rate -- the overnight rate banks charge each other -- which has been left unchanged at 5.25 percent since June 2006.

Japan's central bank said Monday that it would inject a further 1.0 trillion yen (8.7 billion dollars) into the banking system as part of ongoing efforts to restore calm to financial markets.

Japanese investors are now waiting nervously for an interest rate decision from the bank on Thursday, although expectations of a rate rise have faded following recent market turmoil.

"The market widely expects that the Bank of Japan will not raise interest rate this week. It will be a surprise if the central bank raises rates and it could weigh down on share prices," said Otsuka at Toyo Securities. - AFP/ac/ir

Nest-Egg For Elderly, Low-Income Owners

Source : TODAY, Monday, August 20, 2007

Not only will they get extra help to buy their first homes, lower-income Singaporeans will, in a possibly unprecedented public housing scheme, be allowed to unlock the value of their flats as hard cash in their old age. What's more, they can do so without having to move out.

Changes to home ownership schemes, long seen as a keystone of socio-economic policy, were announced by Mr Lee Hsien Loong as part of a wider plan to narrow the income gap and ensure Singaporeans a nest-egg.

The Housing and Development Board (HDB) will launch a scheme to help those aged 62 years and above living in two and three-room flats, and who have had just one bite of the housing-subsidy cherry.

The HDB will buy back the tail end of their flat's lease, assuming the lease period is more than 30 years.

So, if an elderly flat-owner has 50 years left in his lease, he can sell off 20 years to the HDB and stay on in the same flat for 30 years.

He will receive payouts in two parts: A lump sum upfront and monthly payments for the rest of his life.

The Ministry of National Development is looking at alternative arrangements in the event that a flat-owner outlives the 30-year lease period.

PropNex CEO Mohamed Ismail called the scheme "significant", citing how ageing flat-owners, because of their familiarity with the existing neighbourhood, often find it difficult to move out and downgrade, say, to a studio flat.

Low-income home-buyers feeling sidelined by a bullish property market will also get help owning their first homes.

An additional CPF housing grant introduced last year for low-income citizen households will be increased to a cap of $30,000, up from a $20,000 cap.

The household income ceiling will also be raised by $1,000 to $4,000 — enlarging the pool of applicants to about half of all households in Singapore.

Mr Lee stressed that home ownership is the "best form of social welfare for citizens because it gives every Singaporean a stake in Singapore's success".

Waterfront ‘Buzz’ For Punggol In Revamped Plans

Source : The Business Times, 20 Aug 2007

Also in the works: expanded upgrading programme for HDB and private estates

PRIME Minister Lee Hsien Loong yesterday unveiled the new face of heartland living in Singapore which will be represented by Punggol 21+ - the revamped vision of Punggol 21.

Punggol 21+: New housing will be built along both sides of the waterway, and a town centre will be built on the waterfront with malls and al fresco dining. The coastline will be developed for activities like canoeing and kayaking, and a new promenade will offer a scenic jog or cycle.

This will be a modern waterfront lifestyle with lots of greenery, said Mr Lee during his National Day Rally speech.

To accomplish this, the river mouths of Sungei Punggol and Sungei Serangoon will be dammed up and a waterway will be built to link the two freshwater lakes that would be created.

New housing will be built along both sides of the waterway, and a town centre will be built on the waterfront. There will be malls, retail outlets, and even al fresco dining by the water, said Mr Lee.

This will offer heartlanders a Marina Bay-type of waterfront living.

A view from one of the proposed flats facing the waterway will be ‘blue and green in lots of places because we will have trees, plants, shrubbery by the water, on top of carparks, on top of buildings, make it cool, make it eco-friendly, green’, said Mr Lee.

The coastline in Punggol 21+ will also be developed to allow water activities such as canoeing and kayaking. The new coastal promenade will offer residents a scenic route to jog or cycle.

The earlier blueprint for Punggol estate - Punggol 21 - was started in 1998 but work on it slowed as a result of the financial crisis. But now is the time to get things back on track - and on a new track at that, said Mr Lee.

Punggol 21+ will represent the ‘face of the new Singapore - a city with fun and buzz’.

‘But even with the fun and buzz, we retain our present image - clean, green, safe island. This is Singapore. And it’s quite important that we keep that brand recognition even as we acquire new attributes and new lifestyles,’ said Mr Lee.

Older estates will not be forgotten and several enhancements to various housing upgrading programmes were announced by Mr Lee yesterday.

These will benefit not only HDB dwellers, but those who live in private estates as well.

Currently, private estates are eligible for grants under the Estate Upgrading Programme (EUP) for major upgrading purposes.

‘But even then private estates sometimes still feel like they are step-children - neglected,’ noted Mr Lee.

He said that the government has accepted the recommendations made by a committee formed to look into this. The committee was chaired by Minister of State for Finance and Transport Lim Hwee Hua.

The recommendations include a revamp of the EUP to bring together and coordinate all the works done under the programme and an extension of the Community Improvement Project Committee (CIPC) funds to private estates to carry out smaller scale - but more timely - enhancements.

The CIPC funds are currently only available to HDB housing estates.

As for HDB estates, selected sites within old estates are being redeveloped. But in estates where a large piece of land can be cleared, HDB will do more to transform the whole area, said Mr Lee.

This has already started in Dawson estate in Queenstown where a Selective En-bloc Redevelopment Scheme (Sers) project - Forfar Heights - has been completed.

About 10,000 new HDB and private flats will be built in three HDB precincts and the precincts will be integrated with a new linear park to be built on top of the Alexandra Canal.

Middle-aged estates will also be given a new boost with new upgrading programmes to replace existing ones.

The Interim Upgrading Programme (IUP) - which was for individual precincts - will be replaced by the Neighbourhood Renewal Programme (NRP) which will combine two or more precincts so that more and better facilities can be built.

This means that in addition to standard items such as BBQ pits and community gardens, non-standard items like street soccer courts and skating parks can be introduced as well, said Mr Lee.

For individual flats, the existing Main Upgrading Programme (MUP) will be replaced by the new Home Improvement Programme (HIP) which will make possible practical improvements within the flat such as the fixing of spalling concrete on ceilings and the upgrading of toilets.

These new programmes are being introduced in response to feedback from residents, said Mr Lee.

About 100,000 flats - half of those built up till 1980 - have benefitted under the MUP. The HIP will benefit the remaining half.

In addition, the HIP will be extended to flats built between 1981 and 1986, which will cover another 200,000 flats, one quarter of the total flats here.

All these flats will also be eligible for the NRP.

In fact, the NRP will be extended to even younger flats - those built between 1987 and 1989, which means another 60,000 flats will enjoy improvements.

The effects of all these, will be that nearly all the estates in Singapore will enjoy some form of upgrading or enhancement, said Mr Lee.

The new look of public housing will be one of a first-class living environment with greenery and water, where communities are brought closer together.

‘No other city in the world can do this - public housing that is attractive, that is affordable, that’s appealing, that gives a quality home for every citizen and gives you an asset that can appreciate in value and also help to provide for your old age. But in Singapore we can do it, provided we make the effort and work hard together,’ said Mr Lee.

Economic Growth Still Intact Despite Market Jitters: PM Lee

Source : The Business Times, 20 Aug 2007

DESPITE the recent market jitters that may affect Asia in the short term, Singapore’s underlying growth potential in the long run stays intact in the 4-6 per cent range, said Prime Minister Lee Hsien Loong yesterday.

‘After Sars, we estimated Singapore’s sustainable growth at 3-5 per cent,’ Mr Lee revealed at the close of his National Day Rally speech. ‘We were a little bit conservative but we thought it was realistic.

‘In the light of the last few years, MTI (Ministry of Trade and Industry) has reviewed these numbers and we’ve concluded that we should go for a higher target. So we are raising our growth estimate to 4-6 per cent for the next five to 10 years.’

Despite the upward revision, the official growth trend forecast still falls behind estimates by private sector economists. With contributions from labour, capital and productivity, they have estimated Singapore’s growth trend to be at a near-8 per cent pace, according to a BT report last month.

Mr Lee, however, views the 4-6 per cent long-term growth as an ambitious feat. ‘At our stage of development for Singapore, this is a very ambitious target,’ he said. ‘Very few countries have done it, maybe Japan until it ran into problems in the 1990s but not the European countries, not even America.

‘But I think we can do it provided we continue to adapt, stay open, remain competitive and ride the wave. Then we will grow, with the whole of Asia and not just based on what we have on this little island in Singapore, physically here.’
Commenting for the first time on the market turbulence triggered by the US sub-prime woes, Mr Lee said that the situation may affect Asia over the next three to six months. ‘But even if it does, the fundamentals in Asia remain strong and so too for Singapore,’ he added.

Even with the positive outlook, he urged Singaporeans to strive to do better than the revised estimate. After all, the environment looks favourable for the next few years. The economy is more vibrant and competitive, relations with neighbours are good, and Singaporeans as well as Singapore companies are going all over the world.

Singapore’s economy grew 7.6 per cent in the first six months of this year, riding on a better-than-expected 8.6 per cent second quarter growth.

To Narrow The Gap

Source : TODAY, Monday, August 20, 2007

WITH the little red dot increasingly tinted by shades of grey, Prime Minister Lee Hsien Loong got back to basics in his most important political speech of the year.

At the University Cultural Centre yesterday, Mr Lee outlined — in his most comprehensive National Day Rally address to date — a slew of measures to tackle the growing income gap made worse by Singapore's fast-ageing population.

These included sweeping changes to fundamental policies in education, housing, jobs and the Central Provident Fund (CPF) scheme.

"I brought (these issues) together tonight, so that Singaporeans understand the whole picture," he said.

The first and overall strategy in tackling the income gap, he said, was to generate more resources to help those in need — in other words, to grow the economy.

Despite the challenges ahead, he was confident Singapore would outperform the growth estimate of 4 to 6 per cent for the next few years.

"At our stage of development, for Singapore this is a very ambitious target. Very few countries have done it, such as Japan ... but not European countries, not America. But we can, provided we continue to adapt, stay open, ride the wave," Mr Lee said.

As Singapore surges ahead, however, the difficulty will be in ensuring we move forward together.

To help elderly Singaporeans support themselves, Mr Lee said laws would be in place from 2012 that would require employers to offer re-employment to workers reaching retirement age.

Changes to the Workfare Income Supplement scheme will also be brought forward, whereby incentives for those in their 50s and 60s to continue working will be enhanced.

With the higher life expectancy, major changes to the CPF are also in the pipeline. Both the CPF interest rate and the draw-down age for the Minimum Sum would be increased, and it will soon be made compulsory for those below 50 to take up annuities.

To help lower-income Singaporeans pay for their homes, Mr Lee said the Additional CPF Housing Grant cap would be raised, in tandem with the household income ceiling.

Related Video Link :
CPF changes for a healthy nest egg

Prime Minister Lee Hsien Loong has announced a raft of measures aimed at bridging the widening income gap among Singaporeans.

Key to the changes - the CPF system - which will be tweaked to ensure Singaporeans have enough retirement funds even as they live longer.

Related Video Link
Channel NewsAsia Video News :
CPF Savings

But Mr Lee did not just dwell on the challenges that Singapore faces as its society ages. He also offered a peek into the future of what he called the "City of Possibilities".

With the aid of 3D satellite images, Mr Lee took the audience — which included, for the first time, Opposition MPs such as Mr Chiam See Tong and Mr Low Thia Khiang — on a virtual tour of the new "Punggol 21", or "Punggol 21+".

From waterfront flats to promenades, the town will be "the face of the new Singapore", said Mr Lee. With the aid of computer graphics, the Prime Minister also gave a glimpse of how Singapore's housing estates would be transformed in "20 or 30

Old estates will be rejuvenated and new upgrading programmes extended to all flats built before the 1990s, Mr Lee said.

In a gesture that underlined the Government's faith in education as the fundamental solution to income disparity, Mr Lee asked a group of teachers and principals in the audience to stand up as he paid tribute to the country's educators — before unveiling two major education initiatives.

With the three universities here operating near full capacity, Singapore could see at least one more publicly-funded university by 2015, Mr Lee said.

To get young Singaporeans to be conversant in Malay so they are better equipped to engage neighbouring countries, bonus points for Junior College admission will be given to students who take Malay as a third language. This will also be extended to non-Chinese students who take Chinese as a third language.

In spite of the comprehensive measures, Mr Lee said Singaporeans should not expect the Government to shoulder the entire responsibility of helping the poor.

He recounted how the late Ee Peng Liang, who was the chairman of the Community Chest, once had to admonish a man who came to him for help "because he felt that the man was not making the effort to help himself". Added Mr Lee, half in jest: "But an MP or a Minister has to think twice, maybe three times, before he does so."

Apart from self-help, there is also a need for greater philanthropy in an increasingly "winner-takes-all society", Mr Lee said.

Political scientist Dr Ho Khai Leong said he was struck by the way the Prime Minister focused his speech entirely on domestic affairs — in particular, the income

Dr Ho added: "The income disparity will be a major challenge for Mr Lee's administration."

The Institute of Policy Studies' Dr Gillian Koh described the speech as "very substantive in dealing with some of the key social challenges".

Said Dr Koh: "In the previous two Rally speeches, there was a focus on the vision for Singapore going forward. This one had a lot of emphasis on what it would mean for the ordinary Singaporean."

CPF Savings To Earn Higher Interest

Source : Channel NewsAsia, 19 Aug 2007

Prime Minister Lee Hsien Loong announced a 1 percentage point increase in interest for part of the savings in Central Provident Fund (CPF) accounts in his National Day Rally speech on Sunday.

He said the CPF scheme is being adjusted to better meet Singaporeans’ needs for housing, medical care and retirement.

Mr Lee noted that when the scheme pioneered in 1955, Singaporeans generally lived up to 61 years old.

Today, life expectancy is at 80.

Currently, contributions to the Ordinary Account drew interest of 2.5 percent per annum, compared to 4 percent for Special, Medisave and Retirement accounts.

With the change, Singaporeans are set to get 1 percentage point more in interest for part of their CPF savings, which means 3.5 percent to the first S$20,000 in the Ordinary Account.

The additional 1 percentage point interest also applies to the first S$60,000 in member’s combined accounts.

Half of active CPF accounts have balances below S$45,000.

PM Lee said: “But we will put in one restriction, the catch is you will not take out this part of the money for the CPF investment scheme because this is long-term money and we will treat it like retirement funds and we will give you the higher interest rate.”

Mr Lee said the main focus of this move is to help the lower and middle income groups, who have modest balances in their CPF.

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CPF Savings To Earn Higher Interest

The change means that more than half of all active CPF members will have an additional 1 percentage point in interest and these members include young workers who are just starting to save.

A Singaporean who started work at the age of 21, earning S$1,700 a month and staying in a 4-room HDB flat is expected to have S$20,000 more in interest when he turns 55. - CNA/so

Draw-Down Age For CPF Minimum Sum To Be Raised Progressively To 65

Source : Channel NewsAsia, 19 Aug 2007

SINGAPORE : The government is taking more steps to ensure that Singaporeans have enough CPF savings for their old age.

It is raising the draw-down age for the minimum sum from 62 to 65.

This was announced by Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday.

Currently, Singaporeans who have turned 62 can start withdrawing their CPF minimum sum and enjoy a S$790 monthly payout for the next 20 years.

This will change in five years (in 2012) when the new "Draw-Down Age", or DDA, is progressively raised to 65.

The first to be affected will be those aged 56 or 57 by the end of 2007.

They will have to wait one year longer - till they are 63 - before they can tap into their CPF minimum sum.

Those 54 or 55 this year will have to wait two years longer - till they're 64 while those between 49 and 53 can only withdraw the minimum sum when they hit 65 - the new DDA.

PM Lee said: "I know this is not so popular. But we have no choice. People are living longer, we have to work longer. And we have to start drawing on the reserves later. Therefore we have to start moving now. Not move all the way now. But we have to start moving now. And we will get there in good time."

And the prime minister has promised something extra for older workers who are affected by the change.

These will come in the form of Deferment Bonuses into their CPF retirement accounts.

Details will be announced later.

But just delaying the withdrawal age is not enough to cover older Singaporeans who are living longer than expected.

So the government has decided to make annuities compulsory for Singaporeans aged 50 and below.

CPF members are currently allowed to convert their minimum sums to annuities with an insurance company and then get monthly payouts for the rest of their lives.

But the voluntary scheme has not been popular.

Mr Lee said: "It's partly because Singaporeans don't understand annuities, don't understand why they need them. It's also because frankly speaking, the returns haven't been very attractive. The costs have been high. But despite these limitations, we do need annuities as part of our old age planning."

Details on the CPF changes will be spelt out when Parliament sits next month. - CNA/ch

HDB To Revamp Housing Estates With Series Of Upgrading Initiatives

Source : Channel NewsAsia, 19 Aug 2007

Prime Minister Lee Hsien Loong outlined a series of plans to make public housing more attractive, appealing and affordable in his National Day Rally speech on Sunday.

These plans include giving a new shine to old estates and developing first-class living environment.

Mr Lee said the Punggol 21+ estate would give residents plenty to do and talk about after its makeover.

Related Video Link -
HDB To Revamp Housing Estates With Series Of Upgrading Initiatives

There are plans to dam the river mouths of Sungei Punggol and Sungei Serangoon, creating two reservoirs for water activities.

Apart from lush greenery, the area will also have lots of entertainment options like shopping malls and waterfront dining.

While it will take some years to develop the area, Mr Lee said facilities would be coming on stream by the end of the year, including the new Anchorvale Community Club in Sengkang, sports centre and a floating island.

“Even with the fun and buzz, (we are) retaining our image (as a) clean, green, safe island. This is Singapore. And it’s quite important that we keep that brand recognition even as we acquire new attributes and new lifestyles,” said Mr Lee.

Older estates will also be given a new lease of life, starting with the Dawson area in Queenstown.

Mr Lee said there is enough space to develop 10,000 HDB and private flats there, which are likely to be designed by award-winning local architects.

A new park will also be built above the Alexandra Canal.

But amidst the re-development, some old landmarks will be preserved.

A new Neighbourhood Renewal Programme will combine upgrading works between two or more precincts, resulting in economies of scale and better facilities.

The HDB will also roll out a new Home Improvement Programme aimed at upgrading features within a flat, starting with the flats in Tampines and Yishun.

Private home owners are also included in the larger scheme of things as a new committee will explore ways to give them more funds to enhance their living environment. - CNA/so

Bigger Housing Subsidy To Help Lower Income Families Buy Flats

Source : Channel NewsAsia, 19 Aug 2007

The dream of owning a home may come sooner for many lower income families.

The government is planning to enhance the Additional CPF Housing Grant subsidy.

Speaking at this year’s National Day Rally, Prime Minister Lee Hsien Loong also announced a new initiative that could help older Singaporeans monetise their flats.

The Housing and Development Board is set to improve the Additional CPF Housing Grant scheme which was introduced last year.

The grant will be increased from S$20,000 to S$30,000, and it will give needy families a leg up to buy their first subsidised flat.

PM Lee said: “Now, a 3-room flat, new from HDB today, cost you $120,000, so $30,000 out of that is a lot of money.

Not only will they be getting more subsidy, more lower income families will also be eligible for the Additional CPF Housing Grant.

HDB will be raising the household income ceiling from S$3,000 a month to S$4,000.

This, Mr Lee said, would cover about half of all households in Singapore.

The government also wants to put more money in the hands of older Singaporeans to aid retirement.

By helping them to unlock the value of their flats, especially those living in 2 or 3-room flat who have only had one bite of the housing cherry.

PM Lee said: “Right now, they can sell it, move to a studio apartment, 30-year lease. But we will introduce a new alternative, a new scheme. Instead of letting you move out of a flat and into a new place with 30 years, we will just let you stay in your flat and take back the tail of your lease and leave you with 30 years lease on your present flat.”

The payout will be in two parts - an upfront lump sum payment and monthly payments for the rest of their lives, much like an annuity.

The scheme will target those aged 62 and above.

Mr Lee added that the 30-year lease should see them through their twilight years, and ease concerns that they will have nowhere to stay.

The government will work out some arrangements for those who live longer. - CNA/ch

‘The Whole Country Will Be Transformed’

Source : TODAY, 20 Aug 2007

HUNDREDS of thousands of homes — from ageing and middle-aged flats, to private homes and even the sluggish Punggol 21 development — are up for a fresh lease of life, as the Prime Minister unveiled a slew of upgrading initiatives aimed at boosting Singaporeans’ asset values.

Reiterating the Government’s promise to upgrade flats and estates when it has the surpluses to, Mr Lee Hsien Loong said: “We will remake the whole country. It will take us 20 or 30 years but eventually, the whole country will be transformed.”

One old neighbourhood getting a completely new face is Dawson Estate in Queenstown. The mammoth plan is to build some 10,000 HDB and private units — designed by award-winning architects — in an area that includes three HDB precincts and the Alexandra Canal, which will be turned into a linear park.

At the same time, landmarks like the old town centre square and the old Commonwealth Avenue wet market will be preserved, for “a sense of history and place” as well as character, Mr Lee said.

At the other end of the scale, the Punggol 21 development — which saw a slow-down due to the financial crisis upon its launch in 1998 — will be brought back on track, with bonus features.

The upgraded Punggol 21+ plan will include a big water feature created by damming Sungei Punggol and Sungei Serangoon, providing river views and water activities. A town centre will also be developed by the waterfront, as will rooftop gardens, al-fresco dining and even a floating island.

Punggol 21+, an enclave of some 18,000 units, will be “the face of the new Singapore” — with fun and buzz, said Mr Lee.

NEW SHINE FOR MORE FLATS At least 360,000 flats are being lined up for two new upgrading programmes.

Interim Upgrading will be replaced with Neighbourhood Renewal Programme (NRP), which will combine two or more precincts for better planning, and include “non-standard” items such as skate parks. Residents get to decide what they want through, say, a town hall meet.

Main Upgrading will make way for Home Improvement Programme (HIP), which will include toilet upgrading, fixing spalling concrete and the replacement of entrance doors and grille gates.

This will be extended to 100,000 flats built up to 1980, but also another 200,000 flats built between 1981 and 1986 — starting with Yishun and Tampines precincts — which will also enjoy the NRP.

Another 60,000 flats built between 1987 and 1989 will get the NRP

Meanwhile, private estates, which have professed to feeling “neglected”, will come under a “big bang” upgrading programme, and be allowed to dip into Community Improvement Projects Committee funds — now limited to HDB precincts — for upgrading works.

Mr Lee summed up: “No other city in the world can do this: Public housing that is attractive, affordable, appealing, that gives a quality home for every citizen and … an asset which will appreciate in value and help to provide for your old age. In Singapore, we can do it.”