Source : The Business Times, 03 Sep 2007
Have you been getting any indications, whether within your organisation or elsewhere in the industry, that the Singapore economy is entering a slowdown phase? How would a US economic slowdown affect Singapore and the region?
No signs of slowdown
Deb Dutta
Vice-President, Asia Pacific & Japan,
BROCADE
BULL and bear markets will always be part of macroeconomic cycles. What will be interesting to note would be whether the gap between the peaks and troughs will narrow over time as markets become more elastic due to a new set of parameters that are not necessarily related to the US and western Europe. The current sub-prime crisis in the US spread rapidly to Europe but thankfully did not significantly impact Asia, other than a few very jittery weeks.
While the rebound is not yet here, Asian financial markets have largely stabilised. Net-net, we should be happy that with the emergence of the financial muscle of China and India, the relative stability of Japan and the maturity of Singapore and Hong Kong, Asia now seems able to sustain macroeconomic shocks without buckling under. I am confident that this position will further strengthen over time.
The Asia Pacific and Japan tech sector has been robust through 2007. IDC forecasts technology spending in Asia Pacific to reach an estimated US$1.48 trillion by 2010. As organisations set up shop and expand and as business requirements continue to grow in size, spread and criticality, organisations will continue to invest in technology just to stay relevant in the 21st business world. The winners will have to do even better!
Eugene Wong
Managing Director,
Sirius Venture Consulting
OUR economy is now much more robust than it was during the Asian crisis as Singapore has a growing SME base, which is less dependent on export but has direct business dealings in China, India and the rest of Asia in addition to export to the US. So, any global slowdown would not affect Singapore SMEs much. In my area of business, which is in venture consulting and investments, any healthy correction or slowdown is good for us as it means that entrepreneurs’ expectations are back to realistic levels.
Tom Cheong
Managing Director, Singapore and Brunei,
Cisco
IN HIS comments following the recent announcement of Cisco’s Q4 and FY07 earnings, chairman and CEO John Chambers said that the quarter was the strongest one that the company has seen from a balanced product, geographic and customer segment perspective for many years. Elaborating, he said that growth was taking place throughout the world, unlike in previous boom years, when growth wasn’t so geographically balanced. The economic fundamentals in Singapore remain strong and with major projects such as the Next-Generation National Broadband Network and the integrated resorts, the future looks assured. The ICT build-out under iN2015 and Infocomm Development Authority of Singapore’s (IDA) leadership is going to be particularly crucial.
Globally, we are seeing what Cisco calls the second phase of Internet development, where Web 2.0 technologies and other collaboration tools are generating dramatic innovation and productivity increases.
Douglas Miller
Chairman,
The American Chamber of Commerce in Singapore
AMCHAM Singapore has not received any indications from its members that the Singapore economy is entering a slowdown phase. Many firms report very positively on their businesses’ growth in 2007.
If a US economic slowdown were to occur, while it would have some impact on Singapore and the region, it would be less than in previous years, given the much stronger economic and trade relationship among Asean, China, and India.
Liu Chunlin
Managing Director,
K&C Protective Technologies Pte Ltd
AS WE are dealing with the real estate and construction industry, we are not seeing a slowdown yet as there is a time lag between decision-making and the launch of a prospect. And there are quite a number of projects already on-stream.
A US slowdown would affect sentiment and there may be fewer projects after the current wave of building which is expected to last until the opening of the integrated resorts at end 2009 and early 2010.
For our business, which is in the security protective area, we are optimistic of continuing growth as there is demand both from new build and retrofit projects.
Erman Tan
CEO,
Asia Polyurethane Mfg
THE Singapore economy is currently facing fierce competition from other Asian countries that offer lower labour, operational and business costs. Undoubtedly, the US economy has a huge impact on Singapore’s economic performance. Being a small and open economy, Singapore’s growth is highly dependent on many factors such as the performance of the US and Asian economies, as well as global economic development.
Singapore has already developed new engines of growth, by establishing extensive business and trade links with other countries, such as the Middle East, China and India. The Free Trade Agreements (FTA) that Singapore has already established with countries such as India, the US, Japan and South Korea, have greatly facilitated the flow of trade and investment between Singapore and our trading partners.
This has, in turn, brought about closer economic cooperation between Singapore and our FTA trading partners. Last but not least, FTAs have also helped buffer Singapore’s economy from volatility in the global economy. I am generally upbeat about Singapore’s long-term economic growth. As such, I don’t see a slowdown for the Singapore economy, which should remain buoyant and robust in the next few years.
Tan Ser Giam
Chairman,
Eastern Navigation
THE marine, oil and gas industry does not appear to be heading for any significant slowdown. Orders for ships are still buoyant and the demand for offshore support vessels for the oil industry appears strong. In America, signs of a weakening economy and expected slower demand for Asian goods will see Singapore’s industrial exports decreasing.
But the momentum set by the integrated resorts and property upswing will continue to move the Singapore economy forward and will mitigate the expected slowdown and possible recession in the US. Singapore will see slower growth due to US problems but it is now less reliant on the US economy. As long as the Chinese, Indian and Vietnamese economies continue to grow, Singapore should be buffered against any dramatic slowdown and will remain positive.
Ross Wilson
Managing Director, Consumer Products
and Services, Apac region,
Trend Micro (Singapore)
I HAVEN’T personally witnessed any slowdown. A US slowdown would certainly affect a global hub like Singapore but, fortunately, Singapore has other markets in addition to the US to do business with. There is a lot of discussion as to why the sub-prime fiasco, the credit squeeze, rising oil prices and a hundred other things will affect us. They are all part and parcel of doing business. By all means take them into account when planning the future direction of your company’s growth, but don’t use them as an excuse for not trying!
Expect minimal impact
Derek Goh
Executive Chairman/Group CEO,
Serial System Ltd
THE official government forecast for the year remains rosy despite the recent US financial turbulence. The Singapore economy is fast diversifying and seems steady for the rest of 2007. Thus, there are no noticeable trends on the horizon to indicate any imminent slowdown. Nevertheless, we should not be resting on our laurels. The US economy may go on a roller-coaster again by year’s end.
Any major US slowdown will have an impact on Singapore and our Asian neighbours. Our exports to the US market will be affected. This will slow our manufacturing sector which employs a large segment of the workforce. Any outflow of capital will also slow the growth of our financial market.
Next year will be a year to watch as the US heads for its Presidential elections in November while China hosts the Beijing Olympics in August.
Wee Piew
CEO,
HG Metal Manufacturing
While confidence may be affected by the recent slide in global stock markets, I believe the fundamentals of the Singapore economy remain intact. Prime Minister Lee Hsien Loong, in his recent National Day rally speech, has raised the country’s long-term growth rates. There will be a temporary dent in investors’ confidence but the re-inventing of Singapore will continue. The construction of the integrated resorts is not stopping just because of a down swing in the stock markets. The development of Singapore as a wealth management hub and a magnet for high net worth individuals will also be unaffected by recent developments.Â
For the steel industry, demand for steel remains strong. There is no sign of developers and construction companies delaying their projects. Shipyards are still getting new contracts to build ships. In fact, prices for steel products are holding up or even rising, indicating the strong underlying demand for steel products.
Even if the US economy does actually slow down, I believe it will not affect Singapore and the region as badly as it did in the past. This is because Singapore’s economy is now more connected to the booming Asian economies like China and India and less reliant on the US economy alone.Â
Goh Chong Theng
General manager, Singapore,
Rabobank International
OUR clients in the energy, commodities, telecommunications and marine/logistics sectors tell us that their industries are still doing well. So I don’t think that the Singapore economy is entering a slowdown phase. In fact, I think some of these sectors are booming!
Many of the sectors in Singapore and the region are booming because of two very powerful, intertwined economic dynamos in Asia, namely, China and India. Their rapid industrialisation and the growing global market for their exports have increased demand for metals, fossil fuels and other materials.
Due to globalisation, raw materials and manufactured exports must be shipped between many countries. This has created numerous business opportunities for marine and logistics firms, and has thus increased demand for heavy engineering projects, ships, oil rigs, aeroplanes and other forms of capex.
Having said that, the US is still Singapore’s largest trading partner and it is also a substantial consumer of Chinese and Indian exports. As such, a slowdown in the US will lead to an economic downturn throughout Asia. However, the impact on Singapore and the region can be greatly limited if the European and Japanese economies remain healthy, and if China and India dip into their vast forex reserves for sustenance while the US economy recovers.
Downturn cannot be ruled out
Richard Chua
Managing Director,
Yusen Air @ Sea Service (S)
THE main markets for our company are the electronics/OA equipment industry and the automotive industry. Since the beginning of this year, the world electronics industry has slowed down drastically, as evidenced in the Singapore non-oil export of electronics products. The volume of such products handled by our company has dropped by over 15 per cent compared to a year ago, and the industry has not seen any recovery so far.
Pockets of opportunities arise, like the Rugby Australian Cup at the end of this year, while the Beijing Olympic 2008 will definitely stimulate consumer consumption and expand the economy further. However, a slowdown in the US or a dent in consumer sentiment, coupled with the financial market down cycle, would definitely pull down Singapore’s economy at this juncture.
Lim Soon Hock
Managing Director,
Plan-B Icag Pte Ltd
DESPITE the problems of the sub-prime market in the US, the Singapore economy appears to be on course and not entering a slowdown, as yet. This could be due to the momentum generated in the earlier quarters.
The problems of the sub-prime market will hit our shores. Financial markets today are complex and interconnected and I would not rule out other financial institutions, such as hedge funds and asset management companies, facing some problems arising from the non-performing collaterised debt obligations.
The economic slowdown in the US is already happening and the momentum which Singapore currently enjoys, in all probability, will not last for more than two quarters. Singapore and the region will likely experience an economic downturn in 2008, with the manufacturing and services sectors more severely hit. This won’t be due to a lack of strong economic fundamentals, which Singapore has, but more to an imminent deterioration of global economic health. Companies will do well to brace themselves for this eventuality.
Poh Mui Hoon
CEO,
NETS
DESPITE the recent market correction and the repercussions from the US sub-prime mortgage crisis, fundamentals for the Singapore economy remain sound, as acknowledged by various market watchers. While an imminent economic slowdown here is not impossible, it is unlikely to be prolonged as the introduction of Formula One racing and the two integrated resorts over the next few years will be an impetus to growth.
A US economic slowdown, on the other hand, will inevitably affect export-driven industries in Singapore and in the region, though the government’s move to reduce Singapore’s reliance on the electronics sector will lessen the impact here.
Under the NETS group’s regionalisation strategy, we have factored in such economic developments in our expansion plans at home and abroad. These will, however, have minimal impact on NETS’ long-term vision to be the integrated payment gateway of Asia.
We will weather the storm
Wong Teek Son
Executive Chairman and CEO,
Riverstone Holdings Ltd
THE US continues to be the largest economy in the world and has an impact for most businesses wanting to have a piece of the economic action. This is especially so for the electronics sector.
Riverstone, Asia’s leading manufacturer of high tech cleanroom gloves, produces a component that is needed at the electronics manufacturing chain. Since early this year, the hard disk drive and the semiconductor sector in the US and the rest of the world did show signs of weakness. But as we head towards the end of the year, we believe upstream and downstream players in the electronics industry will enjoy a more positive outlook, with the US economy aiding this upturn.
Annie Yap
CEO,
The GMP Group
WITH insight into recruitment trends from various industries, GMP has an indirect but unique vantage point of the health of the economy. Recruitment, especially for permanent placements and long-term contracts, reflects a broader sense of healthy activity because of its function as an expansionary investment. As a general overview, the talent squeeze and the consistent hiring indicate companies are not cutting back despite the recent turbulence from the west.
The current US crisis is undoubtedly making waves in our region, as stocks and shares continue to take a beating. However, in his National Day Rally speech, Prime Minister Lee Hsien Loong relayed a positive projection. He highlighted that the underlying fundamentals and infrastructure supporting the economy are strong and intact. In the same tone, I believe that with our eggs in many baskets, Singapore will be resilient enough to weather this slight setback.
Benjamin Low
Managing Director, SE Asia, India,
Secure Computing
SECURE computing has seen tremendous growth in Asia over the past year and we do not foresee a decline happening anytime soon. We have forged long-term relationships with our customers and are viewed as strategic partners, versus a mere security solutions supplier.
While the US market is currently experiencing some hiccups with their subprime loans, I believe it will be able to bounce back quickly. The advantage of being an open economy such as the US is its ability to correct itself and weed out the weak companies quickly.
On the Singapore front, I believe our strong financial sector will be able to weather the storm caused by the US subprime woes, without much disruption.
The US import-centric market will take a dip if their economic slowdown persists. Asian countries, such as Singapore, who are heavily dependent on exports, may be affected. However, Asian countries have been working towards better financial transparency and stronger corporate governance in the region. This, coupled with our ability to be interdependent, through the promotion of cross trade and strengthening bilateral ties during the economic boom, will help keep us afloat during the uncertain times ahead.
Lindsay Mann
Regional head, Asia,
First State Investments
Singapore’s macro environment appears healthy and the government’s long-term master plan is unlikely to be derailed by current events in global financial markets. However, the global credit crisis sees us in uncharted waters. Things may get worse before they get better, impacting some of the drivers of Singapore’s growth, particularly the financial services sector. This could affect employment with flow on effects on office and residential rents.
What’s encouraging is that Singaporeans are not highly leveraged and corporations have strong balance sheets. We are confident that the Singapore economy will weather this storm and continue to achieve strong growth. Our own Singapore business continues to achieve profit growth on the back of continuing growth in savings by Singapore investors. Despite the recent market volatility, Singaporeans continue to add to their investments, taking advantage of drops in the market to buy assets at cheaper prices.
Watch out
Ng Kong Yeam
Group Executive Chairman,
Sino-America Tours Corporation
IN THE travel business, it is true that the pace did flag in Q2 this year. However, heading into Q3, revenues for the sector are still positive and healthy. I do not think that is just a blip.
The tremendous rise in the price of properties is more a peak of the property sector than the general economy. With the new focus on making Singapore a financial and tourist centre, the economy will continue to grow at no less than 7-8 per cent. Singapore, despite its size, is the 10th largest trading partner of the US. Hence, any slowdown there will definitely affect our growth. It is perhaps time to increase trade with Europe, China and India to ensure that our economic growth continues.
Seamus O’brien
President & CEO,
World Sport Group
YOU would have to be living on Mars not to have read about the jitters emanating from the US housing sector. It is often too easy for business leaders (and even governments) to overlook how important housing is to a successful society and a successful economy. It could be argued that one of the pillars of Singapore’s success was establishing good housing for its citizens many decades ago.
Turning to the current day, I doubt there is a business manager in Singapore that has not had at least one member of staff come into their office extremely distressed about the current housing market in Singapore and how they can no longer afford the rental demands of landlords and are struggling to make ends meet.
This is a real problem and in my view perhaps the single biggest issue affecting Singapore’s burgeoning service sector. The result is that wages have to go up so that staff can simply afford to live. The end result of that is that Singapore becomes less competitive in the global economy.
I am all for free trade and letting market forces set a natural market price. However, what has gone on in the Singapore housing market over the past 12 months, perhaps the key supplier to the burgeoning service industry, is not natural. Singapore simply cannot sustain 100 per cent rent increases (as I have regularly seeen my staff suffer in recent months), let alone a 50 per cent rise. The time has probably come where this needs to be regulated otherwise we risk losing the unique competitive advantage that Singapore has.
A US economic slowdown triggered in the housing industry would obviously affect Singapore. However, a self-induced slowdown triggered by your own housing industry would be far worse.
Find alternative ways to grow
Lars Ronning
President, Asia Pacific (excluding China and Japan),
TANDBERG
FROM TANDBERG’s point of view, our business in Singapore is growing. Even as the market in Singapore becomes more mature, we see promising growth for video-based telecommunication solutions and great opportunity for players in this field.
On a broader front, however, Singapore has an open and relatively export-reliant economy that leaves us vulnerable to external factors such as how well other economies are faring.
With the anticipated downturn of the US economy and the threat of an economic slowdown, businesses have to be prepared to face weakened demand for exports, which will subsequently impact their bottom-line and profit margins. To minimise the impact, Asian enterprises should explore alternative ways of improving their bottom lines such as growing domestic demand and implementing cost-saving measures to keep operating costs down.
Charles Reed
CEO,
interTouch
SINGAPORE and the Asia Pacific region have built a strong economic foundation and I am confident that it will overcome any possible slowdown quickly.
However, to reduce the impact of any slowdown, businesses must recognise that momentary economic downturns do not necessarily mean red ink or downsizing. A long-term view is necessary. At interTouch, for instance, our plans for growth and expansion worldwide are carefully developed to minimise the impact of economic volatility. In fact, our global footprint of operations in 45 countries allows us to create a natural hedge.
Companies should also possess the ability to constantly reassess their business models, strategies and products in order to adapt to changing economic trends. I believe the role of management is to create a flexible approach to ensure that the business keeps to its strategy.
Any US slowdown would have minimal impact on the region’s economies and companies can continue to forge ahead if they can uphold these two core business principles.
Monday, September 3, 2007
Asian Productivity Surge To Boost Global Economy: ILO
Source : Channel NewsAsia, 03 September 2007
International Labour Organisation logo
GENEVA: Rising productivity levels in Asia are a boon and not a threat to the world economy, as growing prosperity spurs a demand for products made elsewhere in the world, the International Labour Organisation said on Monday.
The United States remained the most productive economy in 2006 in terms of labour productivity per person, far outstripping its nearest rivals among other developed economies, the ILO said in its "Key Indicators of the Labour Market" report.
US workers added 63,885 dollars (46,890 euros) of value to the economy per person, way ahead of its nearest competitors Ireland (55,986 dollars), Luxembourg (55,641 dollars), Belgium (55,235 dollars) and France (54,609 dollars).
However, the ILO noted that this is chiefly because Americans work more hours per year than in most other developed countries. When productivity is measured in terms of value added per hour worked, Norway came top with a level of 37.99 dollars – though the US does then come second with 35.63 dollars.
East Asia has seen the fastest growth in productivity levels, which have doubled in the decade to 2006, the ILO said. Output per worker was up to one-fifth of the level of industrialised countries in 2006, from one-eighth in 1996.
Some commentators in industrialised countries fear that rising Asian productivity will damage their own markets but the ILO painted the picture of a "virtuous circle" as growing productivity boosts prosperity and thus demand for other products.
"Some see the impressive growth of productivity in Asia and Southeast Asia as a threat, but let me stress that it is in fact a positive trend for the world economy," said ILO employment executive director Jose Salazar-Xirinachs.
"As their middle classes grow, they earn more money, they consume more goods and services, so these regions will become consumers for goods and services produced in Western countries and in the rest of the world," he added.
In contrast, sub-Saharan Africa still lags far behind the rest of the world, with productivity levels just one-twelfth of those in developed countries.
The ILO said the region required a fundamental change in how the labour market was promoted.
"It is essential that these countries put unemployment and decent work at the centre of their economic and social policies," Salazar-Xirinachs said.
ILO Director General Juan Somavia also said the wide gaps in productivity and wealth were a "major concern," and the organisation estimates that there are around 1.3 billion working poor who live with their families on less than two dollars per day per family member.
"Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world," the director general said.
The ILO defines "decent work" as that which is productive and delivers a fair income, security in the workplace and social protection for families, as well as guaranteeing labour rights and freedom of self-expression.
"Hundreds of millions of women and men are working hard and long, but without the conditions they need to lift themselves and their families out of poverty, they risk falling deeper into poverty," Somavia warned. - AFP/so
International Labour Organisation logoGENEVA: Rising productivity levels in Asia are a boon and not a threat to the world economy, as growing prosperity spurs a demand for products made elsewhere in the world, the International Labour Organisation said on Monday.
The United States remained the most productive economy in 2006 in terms of labour productivity per person, far outstripping its nearest rivals among other developed economies, the ILO said in its "Key Indicators of the Labour Market" report.
US workers added 63,885 dollars (46,890 euros) of value to the economy per person, way ahead of its nearest competitors Ireland (55,986 dollars), Luxembourg (55,641 dollars), Belgium (55,235 dollars) and France (54,609 dollars).
However, the ILO noted that this is chiefly because Americans work more hours per year than in most other developed countries. When productivity is measured in terms of value added per hour worked, Norway came top with a level of 37.99 dollars – though the US does then come second with 35.63 dollars.
East Asia has seen the fastest growth in productivity levels, which have doubled in the decade to 2006, the ILO said. Output per worker was up to one-fifth of the level of industrialised countries in 2006, from one-eighth in 1996.
Some commentators in industrialised countries fear that rising Asian productivity will damage their own markets but the ILO painted the picture of a "virtuous circle" as growing productivity boosts prosperity and thus demand for other products.
"Some see the impressive growth of productivity in Asia and Southeast Asia as a threat, but let me stress that it is in fact a positive trend for the world economy," said ILO employment executive director Jose Salazar-Xirinachs.
"As their middle classes grow, they earn more money, they consume more goods and services, so these regions will become consumers for goods and services produced in Western countries and in the rest of the world," he added.
In contrast, sub-Saharan Africa still lags far behind the rest of the world, with productivity levels just one-twelfth of those in developed countries.
The ILO said the region required a fundamental change in how the labour market was promoted.
"It is essential that these countries put unemployment and decent work at the centre of their economic and social policies," Salazar-Xirinachs said.
ILO Director General Juan Somavia also said the wide gaps in productivity and wealth were a "major concern," and the organisation estimates that there are around 1.3 billion working poor who live with their families on less than two dollars per day per family member.
"Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world," the director general said.
The ILO defines "decent work" as that which is productive and delivers a fair income, security in the workplace and social protection for families, as well as guaranteeing labour rights and freedom of self-expression.
"Hundreds of millions of women and men are working hard and long, but without the conditions they need to lift themselves and their families out of poverty, they risk falling deeper into poverty," Somavia warned. - AFP/so
Unpredictable Rise The Worry
Source : The Straits Times, Mon, Sep 03, 2007
MUCH ink has flowed about rising rents for residential and commercial properties, and the worry that this will result in higher costs that erode Singapore's competitiveness. On the other hand, there've been reassurances that though costs have gone up, the city remains a cheaper place to operate in than Hong Kong or
Tokyo. Both observations are valid. But the more significant point isn't that prices have risen to a higher plateau; it is that they've been launched on an indeterminate trajectory. For what business abhors isn't necessarily higher prices - stable growth in costs, even from a high base, can be planned for. But when they rise in unpredictable ways, budgets get busted, business plans must be revised and earnings cannot be accurately projected. This is why businesses are so concerned.
Trade and Industry Minister Lim Hng Kiang got closer to the issue when he said Singapore needs to 'maintain vigilance over (its) costs, as excessive cost increases will dampen (its) growth prospects'. But the question is: How? Mr Lim offered as examples recent measures such as releasing land for temporary offices and providing more public flats for rent. It remains to be seen how effective this will be. Mr Lim also said additional information on property prices and rents allows for 'more informed decisions on property purchases and rentals'. This is fine, but transacted-price information is only one side of the issue. Anecdotally, a number of recent renters say they felt they were bidding against phantom competitors. Transparency on the negotiation side would appear more important for taking out some of the excesses. But again, how can this be realistically accomplished? Ironically, one reason prices could be skyrocketing is because of an anticipated increase in supply in a few years' time. Realtors and owners might be hoping to maximise profit now before the supply squeeze eases. A number of renters, for instance, say landlords aren't willing to offer lease renewals of more than a year.
Short of intervention - unrealistic and meddlesome - there seems little prospect for relief until more rental space is available. Still, with the economy doing well, most companies will feel the squeeze on earnings but at least can afford the price crunch with some tweaks to operations. One hope, however, is that the demand side could eventually show that price elasticity has a limit. For now, that hasn't happened, perhaps because the wild ride in prices still is young. So one thing to do would be to be patient and watch if properties begin staying empty for longer than of late.
MUCH ink has flowed about rising rents for residential and commercial properties, and the worry that this will result in higher costs that erode Singapore's competitiveness. On the other hand, there've been reassurances that though costs have gone up, the city remains a cheaper place to operate in than Hong Kong or
Tokyo. Both observations are valid. But the more significant point isn't that prices have risen to a higher plateau; it is that they've been launched on an indeterminate trajectory. For what business abhors isn't necessarily higher prices - stable growth in costs, even from a high base, can be planned for. But when they rise in unpredictable ways, budgets get busted, business plans must be revised and earnings cannot be accurately projected. This is why businesses are so concerned.
Trade and Industry Minister Lim Hng Kiang got closer to the issue when he said Singapore needs to 'maintain vigilance over (its) costs, as excessive cost increases will dampen (its) growth prospects'. But the question is: How? Mr Lim offered as examples recent measures such as releasing land for temporary offices and providing more public flats for rent. It remains to be seen how effective this will be. Mr Lim also said additional information on property prices and rents allows for 'more informed decisions on property purchases and rentals'. This is fine, but transacted-price information is only one side of the issue. Anecdotally, a number of recent renters say they felt they were bidding against phantom competitors. Transparency on the negotiation side would appear more important for taking out some of the excesses. But again, how can this be realistically accomplished? Ironically, one reason prices could be skyrocketing is because of an anticipated increase in supply in a few years' time. Realtors and owners might be hoping to maximise profit now before the supply squeeze eases. A number of renters, for instance, say landlords aren't willing to offer lease renewals of more than a year.
Short of intervention - unrealistic and meddlesome - there seems little prospect for relief until more rental space is available. Still, with the economy doing well, most companies will feel the squeeze on earnings but at least can afford the price crunch with some tweaks to operations. One hope, however, is that the demand side could eventually show that price elasticity has a limit. For now, that hasn't happened, perhaps because the wild ride in prices still is young. So one thing to do would be to be patient and watch if properties begin staying empty for longer than of late.
POSB: Then And Now
Source : The Straits Times, Mon, Sep 03, 2007
FOR more than a century, POSB has stood as the champion of the small saver.
But it is how the bank and its staff go out of their way to help customers that makes it much more than just a place to store cash.
Back when POSB was a statutory board, old illiterate customers would approach tellers for help to read letters sent to them by the Government, POSB stalwart Chua Bee Choo recalls.
And for those who were too sick to go to the bank, staff would literally go the extra mile to the hospital or home to help the account holder complete the transaction, says another long-serving POSB employee Lili Chee.
Today, the bank is a commercial division of DBS Bank and may appear to some as little different from any other retail bank. But it remains, for scores of Singaporeans, still the People's Bank.
Founded in 1877 as the Post Office Savings Bank by the British colonial government, POSB has always been a key promoter of thrift among the general population. Those early days are still fondly remembered by older Singaporeans who recall saving with the bank in their schooldays.
'When I was a schoolboy in the 1930s, we were encouraged to save our pocket money by buying and pasting postage stamps on POSB cards,' says retired shipping businessman and regular Straits Times Forum page letter writer Lee Kip Lee.
'Once the card was filled with stamps, we would present it to the post office to credit our POSB account.'
Mr Lee, the father of local musician Dick Lee, also recalls that withdrawals were not instantaneous. 'To discourage spending, withdrawals in excess of $25 meant having to obtain approval from the Malayan higher authorities in Kuala Lumpur and thereby took more time to process.'
The focus on thrift continued when the bank was made a statutory board in 1972.
The Singapore Government then saw the bank's potential to promote the saving habit among Singaporeans, which would create a key source of financing for public infrastructure.
Under the new mandate, reforms, especially to ease the withdrawal of deposits, were made. Meanwhile, the bank started to computerise its operations, an industry first then.
It was also at this time that POSB developed a separate identity from the postal service. The familiar blue-and-yellow key logo was born, as was the POSB Girl later in 1977 - she was the approachable bank officer who cared more about helping customers than earning commissions.
'We were part of the public service and we were very enthusiastic and passionate about working to better the lives of the people,' says Ms Chua, who joined the bank 32 years ago.
The transformation was a big success and over the next 26 years, POSB cemented its position as the People's Bank, offering convenient, low-cost services with a rock-solid guarantee from the Government.
The bank was also at the forefront of a number of industry innovations, including the Giro electronic payment system, direct salary crediting and the automated teller machine (ATM), of which it had the biggest network.
Its home-loans arm, Credit POSB, was also a huge success as many homebuyers took advantage of its lower interest rates. Set up in 1974, it was formed to encourage home ownership and to stimulate the property market after the oil crisis in the previous year.
That era came to an end in 1998 when POSB was acquired by DBS, as the Government sought to give the commercial institution enough muscle to become a regional financial powerhouse.
While some rivals were miffed that they were not given a chance to bid for the popular bank, the biggest outcry came from the man in the street. Over the next few years, many Singaporeans spoke against the merger and against POSB's new parent.
After the conversion to a full commercial bank, home-loans borrowers had to wave goodbye to the cheap mortgages they had been enjoying.
Also, a government tax change meant that POSB was no longer the only bank with tax exemptions on interest paid to savers.
The introduction in 2000 of monthly service fees for small accounts drew further flak, as depositors were incensed that the bank would sacrifice poor Singaporeans for its bottom line.
This came despite the fact that exemptions are made for more than a million accounts of the young, the elderly, full-time National Servicemen and recipients of social welfare benefits.
An ongoing shutdown of POSB branches and ATMs raised fears that the bank's new owners might drop the much- loved name in favour of a more unified brand.
For POSB staff, it was a tumultuous time as they feared for their jobs and the end of a warm, family-like work environment that they had enjoyed for years.
'I can't kid anybody. POSB staff were very proud of the POSB tradition and if they had a choice, they would not want to leave the bank,' says Ms Chua. 'We had tears...a lot of tears.'
The $1.6 billion deal was not a shoo-in success for DBS either.
Integration of the two giants, with their very different cultures, was difficult and POSB was no money-spinner then.
DBS said in 2002 that the POSB franchise was bleeding $44 million a year as the bank was unable to cover the cost of serving small customers.
Critics say that DBS neglected and underinvested in the POSB brand during those early years after the merger.
But DBS regional consumer banking head Edmund Koh dismisses the notion that DBS had ever considered dropping the POSB name or its mandate to serve the average Singaporean saver.
'DBS had every intention to preserve POSB but didn't communicate that explicitly. This resulted in much misunderstanding from many interest groups, from grassroots organisations to the media.'
Indeed, rejuvenating the People's Bank has been a key priority since Mr Koh joined DBS six years ago.
The bank started to open new POSB branches while refurbishing existing ones, spending several million dollars in the process. It also set up a new division in 2002 to take special care of the POSB franchise.
Major change
BUT a bigger transformation has been taking place in the past two years. While few can miss the external makeover of the 49 branches, more significant is the change in the way DBS is approaching the POSB brand and business.
More than just a distribution network for DBS products, POSB is now seen as a valuable and moneymaking division to be developed in its own right.
While still a favourite among small depositors, more than a handful of accounts go into the millions, requiring a reconfiguration of the bank's passbook printing machines which could print up to only six-digit sums previously, says Mr Koh.
'Just like you wouldn't eat hamburgers every day, you can't go to Les Amis every day,' he says, referring to the upmarket French restaurant.
The bank now has its sights on revenue growth, and aims to achieve this by cross-selling more sophisticated products to its customers as their banking needs grow with their aspirations.
To do this, the new-look outlets are on average two to three times bigger than their predecessors. This is to provide more space for bankers to have the longer private discussions required to sell wealth management services.
Broader reach
THE move to go beyond basic savings is paying off. The proportion of deposits at POSB that go into investment products such as unit trusts, has doubled to 20 per cent over the past several years.
And the cost-to-income ratio has fallen from 99 per cent to 60 per cent - and is still falling.
At the other half of the equation, POSB continues to keep a tight rein on costs. For example, top DBS and POSB staff spent hours behind a teller's desk to optimise the counter's design, standardising stationery and furniture to help reduce refurbishment costs.
POSB chief Davy Wee, hired to lead the bank in 2004, proudly declares that the $35 million transformation it is embarking on is comfortably below the initial $57 million budget.
Mr Wee, a former McDonald's executive with more than 20 years of mass retail experience, also helped put in place a sophisticated planning tool for the bank's branch network.
Using a matrix of 16 factors, such as demography and human traffic, the tool has helped the bank streamline its network to serve each district more efficiently.
For example, the Tiong Bahru branch was moved from its cramped location opposite the wet market to a larger outlet next to the MRT station at Tiong Bahru Plaza.
Beyond the dollars and cents, the other half of the new strategy is to tap the wealth of goodwill and trust it has accumulated over the years. Its upcoming publicity drive will feature emotive ads designed to tug at the heartstrings.
Reviving the iconic POSB Girl, the TV advertisements feature images of warmth and family as Dick Lee's 1998 National Day song Home plays in the background.
Down at the branches, small touches like greeting customers with 'Welcome to your bank', help make them feel that the bank is there primarily to serve them.
Staff are trained to greet and offer help to any customer within 2m of them. On rainy days, they also lend customers their own umbrellas rather than corporate ones - a decision they made and one that goes some way to winning hearts, says Mr Wee.
Says Ms Chua: 'The service culture in POSB hasn't really changed much. There is still a core group of the old guard who now acts as good role models for the younger staff.'
Each branch is also encouraged to engage the local community.
During the relaunch of the Tiong Bahru branch, for example, food from famous hawkers in the area was served while at Bras Basah, a jazz band formed by Singapore Management University students kept guests entertained.
'We are neighbours first, bankers second,' says Mr Wee.
POSB's down-to-earth approach can also be seen in its products. The Everyday credit card launched two years ago was a big hit, with 150,000 sign-ups in the first year - half of whom were new card customers to DBS and POSB.
The card was unique in that it focused on down-to-earth things such as utility bills and groceries.
Ultimately, Mr Wee says that the basic rules of mass retail apply, be it serving hamburgers or selling mortgages.
'People just want to come in to a very pleasant environment, be served very quickly with products that are simple to understand.'
POSB's latest renewal comes just in time as rival banks have recently made big moves into the mass banking arena.
Global giant Citibank caused a stir last December when it hooked up with SMRT Corp to set up branches and ATMs at train stations, while launching a co-branded credit card.
This was followed soon after by OCBC Bank's February tie-up with NTUC FairPrice to offer no-frills banking services. The bank has also embarked on a $150 million revamp of its 60 branches in Singapore and 29 outlets in Malaysia.
It is still early days to see how these challengers will fare. But DBS is confident that the edge remains with POSB.
On the rising competition, Mr Koh said that POSB's established customer base and infrastructure are key advantages in the mass banking sector where size and presence matter.
'To build an infrastructure is very difficult. We have inherited one and we are reinforcing it thoroughly. I'm glad that competition comes from not one but from many because they will hopefully dilute themselves,' he said.
-------------------------------------------------------------------------------
Key milestones
1877: Founded as the Post Office Savings Bank by the British colonial government.
1972: Made a statutory board by the Singapore Government.
1977: Created POSB Girl.
1998: Taken over by DBS for $1.6 billion and converted into a full commercial bank.
2002: New division created to take special care of the POSB franchise.
2007: Spending $35 million on a makeover to transform its branches as well as a major ad campaign.
FOR more than a century, POSB has stood as the champion of the small saver.
But it is how the bank and its staff go out of their way to help customers that makes it much more than just a place to store cash.
Back when POSB was a statutory board, old illiterate customers would approach tellers for help to read letters sent to them by the Government, POSB stalwart Chua Bee Choo recalls.
And for those who were too sick to go to the bank, staff would literally go the extra mile to the hospital or home to help the account holder complete the transaction, says another long-serving POSB employee Lili Chee.
Today, the bank is a commercial division of DBS Bank and may appear to some as little different from any other retail bank. But it remains, for scores of Singaporeans, still the People's Bank.
Founded in 1877 as the Post Office Savings Bank by the British colonial government, POSB has always been a key promoter of thrift among the general population. Those early days are still fondly remembered by older Singaporeans who recall saving with the bank in their schooldays.
'When I was a schoolboy in the 1930s, we were encouraged to save our pocket money by buying and pasting postage stamps on POSB cards,' says retired shipping businessman and regular Straits Times Forum page letter writer Lee Kip Lee.
'Once the card was filled with stamps, we would present it to the post office to credit our POSB account.'
Mr Lee, the father of local musician Dick Lee, also recalls that withdrawals were not instantaneous. 'To discourage spending, withdrawals in excess of $25 meant having to obtain approval from the Malayan higher authorities in Kuala Lumpur and thereby took more time to process.'
The focus on thrift continued when the bank was made a statutory board in 1972.
The Singapore Government then saw the bank's potential to promote the saving habit among Singaporeans, which would create a key source of financing for public infrastructure.
Under the new mandate, reforms, especially to ease the withdrawal of deposits, were made. Meanwhile, the bank started to computerise its operations, an industry first then.
It was also at this time that POSB developed a separate identity from the postal service. The familiar blue-and-yellow key logo was born, as was the POSB Girl later in 1977 - she was the approachable bank officer who cared more about helping customers than earning commissions.
'We were part of the public service and we were very enthusiastic and passionate about working to better the lives of the people,' says Ms Chua, who joined the bank 32 years ago.
The transformation was a big success and over the next 26 years, POSB cemented its position as the People's Bank, offering convenient, low-cost services with a rock-solid guarantee from the Government.
The bank was also at the forefront of a number of industry innovations, including the Giro electronic payment system, direct salary crediting and the automated teller machine (ATM), of which it had the biggest network.
Its home-loans arm, Credit POSB, was also a huge success as many homebuyers took advantage of its lower interest rates. Set up in 1974, it was formed to encourage home ownership and to stimulate the property market after the oil crisis in the previous year.
That era came to an end in 1998 when POSB was acquired by DBS, as the Government sought to give the commercial institution enough muscle to become a regional financial powerhouse.
While some rivals were miffed that they were not given a chance to bid for the popular bank, the biggest outcry came from the man in the street. Over the next few years, many Singaporeans spoke against the merger and against POSB's new parent.
After the conversion to a full commercial bank, home-loans borrowers had to wave goodbye to the cheap mortgages they had been enjoying.
Also, a government tax change meant that POSB was no longer the only bank with tax exemptions on interest paid to savers.
The introduction in 2000 of monthly service fees for small accounts drew further flak, as depositors were incensed that the bank would sacrifice poor Singaporeans for its bottom line.
This came despite the fact that exemptions are made for more than a million accounts of the young, the elderly, full-time National Servicemen and recipients of social welfare benefits.
An ongoing shutdown of POSB branches and ATMs raised fears that the bank's new owners might drop the much- loved name in favour of a more unified brand.
For POSB staff, it was a tumultuous time as they feared for their jobs and the end of a warm, family-like work environment that they had enjoyed for years.
'I can't kid anybody. POSB staff were very proud of the POSB tradition and if they had a choice, they would not want to leave the bank,' says Ms Chua. 'We had tears...a lot of tears.'
The $1.6 billion deal was not a shoo-in success for DBS either.
Integration of the two giants, with their very different cultures, was difficult and POSB was no money-spinner then.
DBS said in 2002 that the POSB franchise was bleeding $44 million a year as the bank was unable to cover the cost of serving small customers.
Critics say that DBS neglected and underinvested in the POSB brand during those early years after the merger.
But DBS regional consumer banking head Edmund Koh dismisses the notion that DBS had ever considered dropping the POSB name or its mandate to serve the average Singaporean saver.
'DBS had every intention to preserve POSB but didn't communicate that explicitly. This resulted in much misunderstanding from many interest groups, from grassroots organisations to the media.'
Indeed, rejuvenating the People's Bank has been a key priority since Mr Koh joined DBS six years ago.
The bank started to open new POSB branches while refurbishing existing ones, spending several million dollars in the process. It also set up a new division in 2002 to take special care of the POSB franchise.
Major change
BUT a bigger transformation has been taking place in the past two years. While few can miss the external makeover of the 49 branches, more significant is the change in the way DBS is approaching the POSB brand and business.
More than just a distribution network for DBS products, POSB is now seen as a valuable and moneymaking division to be developed in its own right.
While still a favourite among small depositors, more than a handful of accounts go into the millions, requiring a reconfiguration of the bank's passbook printing machines which could print up to only six-digit sums previously, says Mr Koh.
'Just like you wouldn't eat hamburgers every day, you can't go to Les Amis every day,' he says, referring to the upmarket French restaurant.
The bank now has its sights on revenue growth, and aims to achieve this by cross-selling more sophisticated products to its customers as their banking needs grow with their aspirations.
To do this, the new-look outlets are on average two to three times bigger than their predecessors. This is to provide more space for bankers to have the longer private discussions required to sell wealth management services.
Broader reach
THE move to go beyond basic savings is paying off. The proportion of deposits at POSB that go into investment products such as unit trusts, has doubled to 20 per cent over the past several years.
And the cost-to-income ratio has fallen from 99 per cent to 60 per cent - and is still falling.
At the other half of the equation, POSB continues to keep a tight rein on costs. For example, top DBS and POSB staff spent hours behind a teller's desk to optimise the counter's design, standardising stationery and furniture to help reduce refurbishment costs.
POSB chief Davy Wee, hired to lead the bank in 2004, proudly declares that the $35 million transformation it is embarking on is comfortably below the initial $57 million budget.
Mr Wee, a former McDonald's executive with more than 20 years of mass retail experience, also helped put in place a sophisticated planning tool for the bank's branch network.
Using a matrix of 16 factors, such as demography and human traffic, the tool has helped the bank streamline its network to serve each district more efficiently.
For example, the Tiong Bahru branch was moved from its cramped location opposite the wet market to a larger outlet next to the MRT station at Tiong Bahru Plaza.
Beyond the dollars and cents, the other half of the new strategy is to tap the wealth of goodwill and trust it has accumulated over the years. Its upcoming publicity drive will feature emotive ads designed to tug at the heartstrings.
Reviving the iconic POSB Girl, the TV advertisements feature images of warmth and family as Dick Lee's 1998 National Day song Home plays in the background.
Down at the branches, small touches like greeting customers with 'Welcome to your bank', help make them feel that the bank is there primarily to serve them.
Staff are trained to greet and offer help to any customer within 2m of them. On rainy days, they also lend customers their own umbrellas rather than corporate ones - a decision they made and one that goes some way to winning hearts, says Mr Wee.
Says Ms Chua: 'The service culture in POSB hasn't really changed much. There is still a core group of the old guard who now acts as good role models for the younger staff.'
Each branch is also encouraged to engage the local community.
During the relaunch of the Tiong Bahru branch, for example, food from famous hawkers in the area was served while at Bras Basah, a jazz band formed by Singapore Management University students kept guests entertained.
'We are neighbours first, bankers second,' says Mr Wee.
POSB's down-to-earth approach can also be seen in its products. The Everyday credit card launched two years ago was a big hit, with 150,000 sign-ups in the first year - half of whom were new card customers to DBS and POSB.
The card was unique in that it focused on down-to-earth things such as utility bills and groceries.
Ultimately, Mr Wee says that the basic rules of mass retail apply, be it serving hamburgers or selling mortgages.
'People just want to come in to a very pleasant environment, be served very quickly with products that are simple to understand.'
POSB's latest renewal comes just in time as rival banks have recently made big moves into the mass banking arena.
Global giant Citibank caused a stir last December when it hooked up with SMRT Corp to set up branches and ATMs at train stations, while launching a co-branded credit card.
This was followed soon after by OCBC Bank's February tie-up with NTUC FairPrice to offer no-frills banking services. The bank has also embarked on a $150 million revamp of its 60 branches in Singapore and 29 outlets in Malaysia.
It is still early days to see how these challengers will fare. But DBS is confident that the edge remains with POSB.
On the rising competition, Mr Koh said that POSB's established customer base and infrastructure are key advantages in the mass banking sector where size and presence matter.
'To build an infrastructure is very difficult. We have inherited one and we are reinforcing it thoroughly. I'm glad that competition comes from not one but from many because they will hopefully dilute themselves,' he said.
-------------------------------------------------------------------------------
Key milestones
1877: Founded as the Post Office Savings Bank by the British colonial government.
1972: Made a statutory board by the Singapore Government.
1977: Created POSB Girl.
1998: Taken over by DBS for $1.6 billion and converted into a full commercial bank.
2002: New division created to take special care of the POSB franchise.
2007: Spending $35 million on a makeover to transform its branches as well as a major ad campaign.
DBS Says Indon Dealer Licence Loss Won't Hurt Plans
Source : The Straits Times, 3 Sept 2007
SINGAPORE'S DBS Group said that the loss of a primary dealer licence in Indonesia would have no impact on its banking operation and its plans to expand in South-east Asia's biggest economy.
Last week, Indonesia's finance ministry withdrew DBS Indonesia's primary dealership, which allowed the bank to participate in the ministry's bond auctions.
The licence was granted only at the beginning of the year, a bank spokesman said.
'While the impact on earnings is not material, we regard the loss as a matter of utmost concern,' said Mr Scott Armstrong, president director of DBS Indonesia in a statement.
Indonesia accounts for only a small portion of the bank's net profit. In the last financial year South and South-east Asia including Indonesia and India accounted for about 6 per cent of profit. DBS did not provide a separate breakdown for Indonesia.
DBS, which earns 90 per cent of its net profit from Singapore and Hong Kong, said the Indonesian ministry cited the bank's inability to fulfil licensing requirements in spite of three reminder letters in the past year.
The bank said on Monday it had initiated necessary actions to meet its obligations as a primary dealer and is in talks with the Indonesian authorities.
DBS Indonesia was among 15 banks and securities firms which had a primary dealer licence in the country.
South-east Asia's biggest bank by assets, said it has opened five new branches in Indonesia, extending its footprint to 13 branches and sub-branches in seven cities: Jakarta, Bandung, Semarang, Surabaya, Medan, Pekanbaru and Makassar.
DBS said further expansion plans in South-east Asia's biggest economy remain on track.
Shares of DBS opened flat at $20, but they are down 11.5 per cent this year, compared with a gain of 13.8 per cent on the Straits Times Index.
The fall has been triggered by fears that the bank may suffer mark-to-market losses on its portfolio of collateralised debt obligations amid small exposure to the US subprime market. -- REUTERS
SINGAPORE'S DBS Group said that the loss of a primary dealer licence in Indonesia would have no impact on its banking operation and its plans to expand in South-east Asia's biggest economy. Last week, Indonesia's finance ministry withdrew DBS Indonesia's primary dealership, which allowed the bank to participate in the ministry's bond auctions.
The licence was granted only at the beginning of the year, a bank spokesman said.
'While the impact on earnings is not material, we regard the loss as a matter of utmost concern,' said Mr Scott Armstrong, president director of DBS Indonesia in a statement.
Indonesia accounts for only a small portion of the bank's net profit. In the last financial year South and South-east Asia including Indonesia and India accounted for about 6 per cent of profit. DBS did not provide a separate breakdown for Indonesia.
DBS, which earns 90 per cent of its net profit from Singapore and Hong Kong, said the Indonesian ministry cited the bank's inability to fulfil licensing requirements in spite of three reminder letters in the past year.
The bank said on Monday it had initiated necessary actions to meet its obligations as a primary dealer and is in talks with the Indonesian authorities.
DBS Indonesia was among 15 banks and securities firms which had a primary dealer licence in the country.
South-east Asia's biggest bank by assets, said it has opened five new branches in Indonesia, extending its footprint to 13 branches and sub-branches in seven cities: Jakarta, Bandung, Semarang, Surabaya, Medan, Pekanbaru and Makassar.
DBS said further expansion plans in South-east Asia's biggest economy remain on track.
Shares of DBS opened flat at $20, but they are down 11.5 per cent this year, compared with a gain of 13.8 per cent on the Straits Times Index.
The fall has been triggered by fears that the bank may suffer mark-to-market losses on its portfolio of collateralised debt obligations amid small exposure to the US subprime market. -- REUTERS
Asian Productivity Rise To Boost Global Economy
Source : The Straits Times, Sep 3, 2007
'Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world,' said Mr Somavia. -- PHOTO: AFP
GENEVA - RISING productivity levels in Asia are a boon and not a threat to the world economy, as growing prosperity spurs a demand for products made elsewhere in the world, the International Labour Organisation (ILO) said on Monday.
The United States remained the most productive economy in 2006 in terms of labour productivity per person, far outstripping its nearest rivals among other developed economies, the ILO said in its 'Key Indicators of the Labour Market' report.
US workers added US$63,885 (S$96,100) of value to the economy per person, way ahead of its nearest competitors Ireland (US$55,986), Luxembourg (US$55,641), Belgium (US$55,235) and France (US$54,609).
However, the ILO noted that this is chiefly because Americans work more hours per year than in most other developed countries. When productivity is measured in terms of value added per hour worked, Norway came top with a level of US$37.99 - though the US does then come second with US$35.63.
East Asia
East Asia has seen the fastest growth in productivity levels, which have doubled in the decade to 2006, the ILO said. Output per worker was up to one-fifth of the level of industrialised countries in 2006, from one-eighth in 1996.
Some commentators in industrialised countries fear that rising Asian productivity will damage their own markets but the ILO painted the picture of a 'virtuous circle' as growing productivity boosts prosperity and thus demand for other products.
'Some see the impressive growth of productivity in Asia and South-east Asia as a threat, but let me stress that it is in fact a positive trend for the world economy,' said ILO employment executive director Jose Salazar-Xirinachs.
'As their middle classes grow, they earn more money, they consume more goods and services, so these regions will become consumers for goods and services produced in Western countries and in the rest of the world,' he added.
In contrast, sub-Saharan Africa still lags far behind the rest of the world, with productivity levels just one-twelfth of those in developed countries.
The ILO said the region required a fundamental change in how the labour market was promoted.
'It is essential that these countries put unemployment and decent work at the centre of their economic and social policies,' Mr Salazar-Xirinachs said.
ILO Director General Juan Somavia also said the wide gaps in productivity and wealth were a 'major concern,' and the organisation estimates that there are around 1.3 billion working poor who live with their families on less than US$2 per day per family member.
'Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world,' the director general said.
The ILO defines 'decent work' as that which is productive and delivers a fair income, security in the workplace and social protection for families, as well as guaranteeing labour rights and freedom of self-expression.
'Hundreds of millions of women and men are working hard and long but without the conditions they need to lift themselves and their families out of poverty; they risk falling deeper into poverty,' Mr Somavia warned. -- AFP
'Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world,' said Mr Somavia. -- PHOTO: AFP
GENEVA - RISING productivity levels in Asia are a boon and not a threat to the world economy, as growing prosperity spurs a demand for products made elsewhere in the world, the International Labour Organisation (ILO) said on Monday.
The United States remained the most productive economy in 2006 in terms of labour productivity per person, far outstripping its nearest rivals among other developed economies, the ILO said in its 'Key Indicators of the Labour Market' report.
US workers added US$63,885 (S$96,100) of value to the economy per person, way ahead of its nearest competitors Ireland (US$55,986), Luxembourg (US$55,641), Belgium (US$55,235) and France (US$54,609).
However, the ILO noted that this is chiefly because Americans work more hours per year than in most other developed countries. When productivity is measured in terms of value added per hour worked, Norway came top with a level of US$37.99 - though the US does then come second with US$35.63.
East Asia
East Asia has seen the fastest growth in productivity levels, which have doubled in the decade to 2006, the ILO said. Output per worker was up to one-fifth of the level of industrialised countries in 2006, from one-eighth in 1996.
Some commentators in industrialised countries fear that rising Asian productivity will damage their own markets but the ILO painted the picture of a 'virtuous circle' as growing productivity boosts prosperity and thus demand for other products.
'Some see the impressive growth of productivity in Asia and South-east Asia as a threat, but let me stress that it is in fact a positive trend for the world economy,' said ILO employment executive director Jose Salazar-Xirinachs.
'As their middle classes grow, they earn more money, they consume more goods and services, so these regions will become consumers for goods and services produced in Western countries and in the rest of the world,' he added.
In contrast, sub-Saharan Africa still lags far behind the rest of the world, with productivity levels just one-twelfth of those in developed countries.
The ILO said the region required a fundamental change in how the labour market was promoted.
'It is essential that these countries put unemployment and decent work at the centre of their economic and social policies,' Mr Salazar-Xirinachs said.
ILO Director General Juan Somavia also said the wide gaps in productivity and wealth were a 'major concern,' and the organisation estimates that there are around 1.3 billion working poor who live with their families on less than US$2 per day per family member.
'Raising the productivity levels of workers on the lowest incomes in the poorest countries is the key to reducing the enormous decent work deficits in the world,' the director general said.
The ILO defines 'decent work' as that which is productive and delivers a fair income, security in the workplace and social protection for families, as well as guaranteeing labour rights and freedom of self-expression.
'Hundreds of millions of women and men are working hard and long but without the conditions they need to lift themselves and their families out of poverty; they risk falling deeper into poverty,' Mr Somavia warned. -- AFP
Mini-CBDs In Satellite Towns To Ease Traffic Jams
Source : The Straits Times, Forum, Sep 3, 2007
IS ELECTRONIC road pricing (ERP) a solution to the congestion problem? On the surface, yes. It seems to change traffic patterns whenever new gantries are introduced, but only temporarily.
The bottlenecks do not disappear, they simply move around or come back later, and we have a scenario of more new gantries chasing after new bottlenecks.
What really contributes to the congestion is that too many vehicles go in the same direction at the same time.
By introducing more and more gantries on the road, drivers will�get used to paying ERP eventually.
The Land Transport Authority cannot solve the congestion problem alone. It requires the �integrated efforts of many other agencies.
For example, traffic conditions will improve if traffic can be redirected so it does not all flow in the same direction at the same time, especially into the Central Business District (CBD).
Why do so many vehicles move along the same routes at the same time? Because most are going to their driver's workplace. So there is a�convergence of traffic flowing into the CBD.
This is where town planners can help.
Satellite towns are mostly clusters of residential units and shops or shopping centres. Where are most office buildings? In the CBD.
If we build more office buildings in and around the satellite towns, and discourage new ones in the CBD, some of the traffic flow will be reversed and directed away from the city area.
If the satellite towns can be more integrated with not just residential units and shopping units but also office buildings, there will be a scattering of satellite business districts - some sort of mini-CBDs - away from the CBD in different parts of the island. Then people will move in different directions to their workplace.
Is the idea workable? I will leave it to the experts.
My point is, to alleviate traffic congestion, we need to get to the root�of the problem, and not move the bottlenecks around.
Tan Thiam Soon
IS ELECTRONIC road pricing (ERP) a solution to the congestion problem? On the surface, yes. It seems to change traffic patterns whenever new gantries are introduced, but only temporarily.
The bottlenecks do not disappear, they simply move around or come back later, and we have a scenario of more new gantries chasing after new bottlenecks.
What really contributes to the congestion is that too many vehicles go in the same direction at the same time.
By introducing more and more gantries on the road, drivers will�get used to paying ERP eventually.
The Land Transport Authority cannot solve the congestion problem alone. It requires the �integrated efforts of many other agencies.
For example, traffic conditions will improve if traffic can be redirected so it does not all flow in the same direction at the same time, especially into the Central Business District (CBD).
Why do so many vehicles move along the same routes at the same time? Because most are going to their driver's workplace. So there is a�convergence of traffic flowing into the CBD.
This is where town planners can help.
Satellite towns are mostly clusters of residential units and shops or shopping centres. Where are most office buildings? In the CBD.
If we build more office buildings in and around the satellite towns, and discourage new ones in the CBD, some of the traffic flow will be reversed and directed away from the city area.
If the satellite towns can be more integrated with not just residential units and shopping units but also office buildings, there will be a scattering of satellite business districts - some sort of mini-CBDs - away from the CBD in different parts of the island. Then people will move in different directions to their workplace.
Is the idea workable? I will leave it to the experts.
My point is, to alleviate traffic congestion, we need to get to the root�of the problem, and not move the bottlenecks around.
Tan Thiam Soon
Bollywood At The Bay
Source : The New Paper, September 03, 2007
5b Marina Bay Sands IR to feature shows by Hindi superstars
PICTURE this: With just a 10-minute drive from your office in Shenton Way after work, you could catch Hindi superstars like Aishwarya Rai and Shahrukh Khan on stage.
If Bollywood fare is not your cup of tea, how about a glitzy Broadway musical to jazz up your evening?
Mega-mall complete with ice-skating rink
In just a short two years when the Marina Bay Sands opens its door, such live extravanganzas will be regular features at the integrated resort's two 2,000-seater theatres.
That's not all.
Resorts operator Las Vegas Sands will introduce an indoor ice-skating rink in a mall.
It will be located at the atrium of Marina Bay Shoppes, a 1 million-sq ft mega mall the size of VivoCity that will be built along a canal linked to the main waterfront.
And yes, Sands, which opened The Venetian Macao Resort Hotel this week, will also introduce the gondola ride in Singapore.
For shutterbugs, panoramic views can be had at the resort's Sky Park - a 100,000-sq ft rooftop at the 50th storey which links the three hotel towers.
ROOFTOP POOLS
Gondola rides on canal connected to waterfront
You can even swim at one of the rooftop infinity pools for that top-of-the-world feeling. Spas, restaurants and landscaped gardens will complete the enjoyment.
Marina Bay Sands is also to become South-east Asia's top convention destination, expecting to draw at least 600,000 visitors for meetings, incentives, conventions and exhibitions in its first year of operations in 2010.
With 1.2 million-sq ft of convention space, it can accommodate more than 2,000 exhibition booths and up to 50,000 delegates.
Reportedly, organisers of about 20 major events have already made bookings up to the year 2013.
Operator Las Vegas Sands is optimistic about opening the resort in late 2009.
With over 2,500 five-star rooms in three hotel towers and an ArtScience Museum, the entire project will cost more than $5 billion.
In comparison, its sister resort The Venetian Macao - with 3,000 all-suite guest rooms and a 1 million-sq ft mega mall - costs $3.6b.
The mall features 350 luxury shops with upscale brands such as Franck Muller, Chopard, Piaget, Mont Blanc, Mikimoto and Versace.
Some of these global brands can be expected at the Marina Bay Shoppes to attract shoppers from China, Hong Kong, Indonesia and Malaysia.
UPSCALE OUTLETS
View from Sheares Bridge
When opened, the Singapore resort will boast upscale food and beverage outlets too.
In Macau, these include a 1,000-seater Cafe Deco restaurant, and the upcoming 35,000-sq ft Buddha Bar operated by Lifebrandz, a public-listed company in Singapore that runs the Ministry of Sound dance club in Clarke Quay.
In a phone interview from Macau, Lifebrandz CEO Clement Lee told The New Paper on Sunday that he would not rule out the possibility of opening Buddha Bar in Marina Bay Sands, though 'no plans have been drawn out yet'.
But how will The Venetian Macao rival Singapore?
In an e-mail response, Ms Margaret Teo, Singapore's Tourism Board (STB) director of integrated resorts, said: 'Sands have said that both Macau and Singapore resorts complement each other. There are synergies to be tapped.
'When the resort opens in Singapore, Sands will have invaluable experience and insight of the Asian market. This will enable them to make Marina Bay Sands, which is very different in design to their Macau resort, an even better proposition.'
For more than $5 billion, the sands would certainly bind better.
Las Vegas Sands COO William Weidner revealed on Tuesday that rising construction costs and design complexity of the hotel towers are likely to push up the overall project cost from the initial estimate of $5 billion by 20 to 40 per cent.
By opening day, perhaps the resort will wow Bollywood stars who have seen it all.
5b Marina Bay Sands IR to feature shows by Hindi superstars
PICTURE this: With just a 10-minute drive from your office in Shenton Way after work, you could catch Hindi superstars like Aishwarya Rai and Shahrukh Khan on stage.
If Bollywood fare is not your cup of tea, how about a glitzy Broadway musical to jazz up your evening?
Mega-mall complete with ice-skating rink
In just a short two years when the Marina Bay Sands opens its door, such live extravanganzas will be regular features at the integrated resort's two 2,000-seater theatres.
That's not all.
Resorts operator Las Vegas Sands will introduce an indoor ice-skating rink in a mall.
It will be located at the atrium of Marina Bay Shoppes, a 1 million-sq ft mega mall the size of VivoCity that will be built along a canal linked to the main waterfront.
And yes, Sands, which opened The Venetian Macao Resort Hotel this week, will also introduce the gondola ride in Singapore.
For shutterbugs, panoramic views can be had at the resort's Sky Park - a 100,000-sq ft rooftop at the 50th storey which links the three hotel towers.
ROOFTOP POOLS
Gondola rides on canal connected to waterfront
You can even swim at one of the rooftop infinity pools for that top-of-the-world feeling. Spas, restaurants and landscaped gardens will complete the enjoyment.
Marina Bay Sands is also to become South-east Asia's top convention destination, expecting to draw at least 600,000 visitors for meetings, incentives, conventions and exhibitions in its first year of operations in 2010.
With 1.2 million-sq ft of convention space, it can accommodate more than 2,000 exhibition booths and up to 50,000 delegates.
Reportedly, organisers of about 20 major events have already made bookings up to the year 2013.
Operator Las Vegas Sands is optimistic about opening the resort in late 2009.
With over 2,500 five-star rooms in three hotel towers and an ArtScience Museum, the entire project will cost more than $5 billion.
In comparison, its sister resort The Venetian Macao - with 3,000 all-suite guest rooms and a 1 million-sq ft mega mall - costs $3.6b.
The mall features 350 luxury shops with upscale brands such as Franck Muller, Chopard, Piaget, Mont Blanc, Mikimoto and Versace.
Some of these global brands can be expected at the Marina Bay Shoppes to attract shoppers from China, Hong Kong, Indonesia and Malaysia.
UPSCALE OUTLETS
View from Sheares Bridge
When opened, the Singapore resort will boast upscale food and beverage outlets too.
In Macau, these include a 1,000-seater Cafe Deco restaurant, and the upcoming 35,000-sq ft Buddha Bar operated by Lifebrandz, a public-listed company in Singapore that runs the Ministry of Sound dance club in Clarke Quay.
In a phone interview from Macau, Lifebrandz CEO Clement Lee told The New Paper on Sunday that he would not rule out the possibility of opening Buddha Bar in Marina Bay Sands, though 'no plans have been drawn out yet'.
But how will The Venetian Macao rival Singapore?
In an e-mail response, Ms Margaret Teo, Singapore's Tourism Board (STB) director of integrated resorts, said: 'Sands have said that both Macau and Singapore resorts complement each other. There are synergies to be tapped.
'When the resort opens in Singapore, Sands will have invaluable experience and insight of the Asian market. This will enable them to make Marina Bay Sands, which is very different in design to their Macau resort, an even better proposition.'
For more than $5 billion, the sands would certainly bind better.
Las Vegas Sands COO William Weidner revealed on Tuesday that rising construction costs and design complexity of the hotel towers are likely to push up the overall project cost from the initial estimate of $5 billion by 20 to 40 per cent.
By opening day, perhaps the resort will wow Bollywood stars who have seen it all.
Pasir Ritz
Source : The New Paper, September 03, 2007
NTUC Club's new e!Hub boasts 24-hour fun, food & games
THE buzz among residents in Pasir Ris these days is over a four-storey glass complex.
It houses the e!Hub, Singapore's first 24-hour lifestyle and entertainment complex at Downtown East.
The $80 million hub, operated by NTUC Club, is also slated to be a food paradise with nearly half of the 38tenants being restaurants and cafes.
The rest include a supermarket, bowling and gaming arcades, a cineplex, a karaoke club, and a youth club.
When the complex opens by the first quarter of next year, Pasir Ris town is expected to be considerably lively. The fun starts from the stretch along Pasir Ris Drive12 at the Kid's Kampong to Downtown East along Pasir Ris Close.
Mr Charles Chong, Member of Parliament for Pasir Ris-Punggol GRC, who has been living in the estate for 29 years, is upbeat.
'With Downtown East's makeover,' he said, 'it will inject more vibrancy to the beachfront and draw more people from other estates to Pasir Ris.'
Each year, an average of 6million people visit Downtown East. It has two theme parks - Wild Wild Wet and Escape Theme Park - and two resorts offering chalet accomodation.
Though there are no immediate plans to upgrade the theme parks, NTUC Club is expecting to draw about 8 million visitors to all facilities when the e!Hub opens next year.
Mr Chng Hee Kok, NTUC Club's CEO, said: 'This (e!Hub) will be a building that never sleeps.'
The e!Hub will open two years ahead of the integrated resorts (IRs) in Sentosa and Marina Bay.
And Downtown East can be seen as Singapore's very own heartland IR, with 'everything under one roof' that includes shopping, cinemas, theme parks and resorts.
NTUC Club is unfazed by the talk of competition from the two IRs scheduled to open in 2009 and 2010.
Mr Lim Eng Lee, NTUC Club's deputy CEO and chairman, said: 'With stiffer competition, a lifestyle hub like Downtown East becomes more important and relevant.' He added that world-class facilities and entertainment will be on offer at 'affordable prices'.
Pasir Ris resident Richard Ling, 32, a sales manager, is looking forward to the new developments.
He said: 'Right now, the only cinema in the east is at Tampines Mall. It's usually full-house on weekends. I can't wait for the cineplex at the e!Hub to open.'
And when it does, a colourful 25m-high ferris wheel mounted on the side of the e!Hub will be a traffic-stopper as well, as its bright lights usher in the pearl of the east.
NTUC Club's new e!Hub boasts 24-hour fun, food & games
THE buzz among residents in Pasir Ris these days is over a four-storey glass complex.It houses the e!Hub, Singapore's first 24-hour lifestyle and entertainment complex at Downtown East.
The $80 million hub, operated by NTUC Club, is also slated to be a food paradise with nearly half of the 38tenants being restaurants and cafes.
The rest include a supermarket, bowling and gaming arcades, a cineplex, a karaoke club, and a youth club.
When the complex opens by the first quarter of next year, Pasir Ris town is expected to be considerably lively. The fun starts from the stretch along Pasir Ris Drive12 at the Kid's Kampong to Downtown East along Pasir Ris Close.
Mr Charles Chong, Member of Parliament for Pasir Ris-Punggol GRC, who has been living in the estate for 29 years, is upbeat.
'With Downtown East's makeover,' he said, 'it will inject more vibrancy to the beachfront and draw more people from other estates to Pasir Ris.'
Each year, an average of 6million people visit Downtown East. It has two theme parks - Wild Wild Wet and Escape Theme Park - and two resorts offering chalet accomodation.
Though there are no immediate plans to upgrade the theme parks, NTUC Club is expecting to draw about 8 million visitors to all facilities when the e!Hub opens next year.
Mr Chng Hee Kok, NTUC Club's CEO, said: 'This (e!Hub) will be a building that never sleeps.'
The e!Hub will open two years ahead of the integrated resorts (IRs) in Sentosa and Marina Bay.
And Downtown East can be seen as Singapore's very own heartland IR, with 'everything under one roof' that includes shopping, cinemas, theme parks and resorts.
NTUC Club is unfazed by the talk of competition from the two IRs scheduled to open in 2009 and 2010.
Mr Lim Eng Lee, NTUC Club's deputy CEO and chairman, said: 'With stiffer competition, a lifestyle hub like Downtown East becomes more important and relevant.' He added that world-class facilities and entertainment will be on offer at 'affordable prices'.
Pasir Ris resident Richard Ling, 32, a sales manager, is looking forward to the new developments.
He said: 'Right now, the only cinema in the east is at Tampines Mall. It's usually full-house on weekends. I can't wait for the cineplex at the e!Hub to open.'
And when it does, a colourful 25m-high ferris wheel mounted on the side of the e!Hub will be a traffic-stopper as well, as its bright lights usher in the pearl of the east.
Don't Sweat Over The Fever, Cure The Disease
Source : TODAY, Monday, September 3, 2007
A UNANIMOUS chorus over the last two weeks has blamed sub-prime housing for the turmoil in the international financial markets. It would, however, be a grave istake to mix up cause and effect, and neglect the factors that have given rise to jitters the world over.
The real cause for the tension can be identified within three fundamental weaknesses in the global economy: The growing imbalances in the US economy, the central banks’ illusion that inflation targeting is a workable policy, and the asymmetry between global economic forces and the institutional frameworks that determine rules and regulations. Steps by central banks and monetary authorities to help stabilise markets may alleviate the temperature, but sweeping measures are needed to cure the patient.
One fundamental source of market chaos has been overspending in the United States. Deficits on the public budget and on the balance of payments have been financed by the rest of the world. The US consumer set sail in a sea of debt, heading into the well-known danger zone of dis-savings.
Curiously enough, no real action had been envisaged, even though many market-watchers realised something was going to give way. Creditors were more than ready to accumulate US assets, fearing the negative effects on global growth should they stop doing so. After all, the US consumer was the locomotive pulling the rest of the global economy along. The rest of the world acquiesced and the US itself saw no reason to act.
The political fallout from what may have appeared as a premature intervention to adjust the domestic economy seemed too costly. From the US’ perspective, foreigners, in particular China, were welcome to dump their dollars on the currency markets. An appreciation of foreign currencies, principally the yuan, which had been item No 1 on the US wishlist for a long time, would take place.
And so, the global economy lived with a strange equilibrium: The US over-consumed, China over-produced, the Federal Reserve System and Japan’s central bank oversupplied the world with money and the show was financed by Asia.
This tenuous equilibrium was never going to be sustainable, and the sub-prime housing crisis has acted as the whistleblower. Its message to polic-ymakers is simple: Redress these imbalances, if not, the market will. The current crisis may be solved and the wounds plastered over, but the respite will be short.
The quandary is not over whether the US balance of payments will be righted — they will, eventually. The issue is whether policymakers will allow for such a course of action to be implemented in an orderly and organised manner with costs spread over a number of years, so as to be politically manageable. Or if the market, as it has signalled, will do it in a brusque and pitiless way, without any consideration for the political consequences.
Central banks have over the last 15 years been seduced by inflation targeting. They pursued a policy of not more than about 2 per cent inflation per year. All major countries have achieved that target and central banks claimed credit even though they had very little to do with it. The main reason has been singularly down to the low-cost of production in China.
Convinced about the efficacy of their diagnosis, the central banks looked at the low inflation figures and decided everything was fine and kept printing money. As the money supply was too lavish, asset prices rose, stocks, property, minerals, gold — you name it. There was nothing else to use the money for.
The world moved into a strange zone of low inflation rates for goods and services while hosting tremendous asset price rises. Consumers mortgaged their properties and spent the money on consumption. In normal circumstances prices would rise, but not this time. China was capable of delivering an endless stream of goods at low prices. The carousel kept running and yet, central banks did not sense that something could be amiss.
The same central banks, and primarily the Fed, stoked the growing imbalances because they pursued inflation targeting instead of looking at the whole state of the economy. Looking back, monetary policy should have been tightened earlier than summer 2004 when the Fed started to raise interest rates.
Globalisation is a fantastic growth machine. Trade in goods and services, capital movements and investments all move across the world without noticing the lines on the map detailing which national boundaries they operate within.
Financial institutions lived happily with this model. They knew that risks were growing, but took comfort in the belief that a large number of financial institutions shared the risk. One key sentence frequently heard was that globalisation made it possible to spread risks, making the financial system more stable and secure. But this philosophy backfired.
Risk spreading did not work to calm nerves in the preliminary stages of the recent crisis; it spread anxiety to a large number of financial institutions around the world. When it dawned upon them that a crisis was brewing, all of them opted to get out of risky assets, triggering a storm instead of dousing the fire.
This is where one would expect international institutions to act, but they proved to be little more than paper tigers. Little has been done to put up the firewalls, ready to be activated if or when financial turmoil arose. The international community proved toothless when confronted by market forces.
The institution which should rise to the occasion, the International Monetary Fund, was in the midst of changing its managing director and has been absent from the stage even though it was the incumbent for the lead role.
Unless financial institutions, central bankers and politicians address these problems, sub-prime housing is only a bad omen for a series of financial crises to come — these in the long run may threaten the present version of economic globalisation.
The writer is a Visiting Senior Research Fellow at the Institute of South-east Asian Studies and an Adjunct Professor at the Copenhagen Business School. This article appeared on www.opinionasia.com
A UNANIMOUS chorus over the last two weeks has blamed sub-prime housing for the turmoil in the international financial markets. It would, however, be a grave istake to mix up cause and effect, and neglect the factors that have given rise to jitters the world over.
The real cause for the tension can be identified within three fundamental weaknesses in the global economy: The growing imbalances in the US economy, the central banks’ illusion that inflation targeting is a workable policy, and the asymmetry between global economic forces and the institutional frameworks that determine rules and regulations. Steps by central banks and monetary authorities to help stabilise markets may alleviate the temperature, but sweeping measures are needed to cure the patient.
One fundamental source of market chaos has been overspending in the United States. Deficits on the public budget and on the balance of payments have been financed by the rest of the world. The US consumer set sail in a sea of debt, heading into the well-known danger zone of dis-savings.
Curiously enough, no real action had been envisaged, even though many market-watchers realised something was going to give way. Creditors were more than ready to accumulate US assets, fearing the negative effects on global growth should they stop doing so. After all, the US consumer was the locomotive pulling the rest of the global economy along. The rest of the world acquiesced and the US itself saw no reason to act.
The political fallout from what may have appeared as a premature intervention to adjust the domestic economy seemed too costly. From the US’ perspective, foreigners, in particular China, were welcome to dump their dollars on the currency markets. An appreciation of foreign currencies, principally the yuan, which had been item No 1 on the US wishlist for a long time, would take place.
And so, the global economy lived with a strange equilibrium: The US over-consumed, China over-produced, the Federal Reserve System and Japan’s central bank oversupplied the world with money and the show was financed by Asia.
This tenuous equilibrium was never going to be sustainable, and the sub-prime housing crisis has acted as the whistleblower. Its message to polic-ymakers is simple: Redress these imbalances, if not, the market will. The current crisis may be solved and the wounds plastered over, but the respite will be short.
The quandary is not over whether the US balance of payments will be righted — they will, eventually. The issue is whether policymakers will allow for such a course of action to be implemented in an orderly and organised manner with costs spread over a number of years, so as to be politically manageable. Or if the market, as it has signalled, will do it in a brusque and pitiless way, without any consideration for the political consequences.
Central banks have over the last 15 years been seduced by inflation targeting. They pursued a policy of not more than about 2 per cent inflation per year. All major countries have achieved that target and central banks claimed credit even though they had very little to do with it. The main reason has been singularly down to the low-cost of production in China.
Convinced about the efficacy of their diagnosis, the central banks looked at the low inflation figures and decided everything was fine and kept printing money. As the money supply was too lavish, asset prices rose, stocks, property, minerals, gold — you name it. There was nothing else to use the money for.
The world moved into a strange zone of low inflation rates for goods and services while hosting tremendous asset price rises. Consumers mortgaged their properties and spent the money on consumption. In normal circumstances prices would rise, but not this time. China was capable of delivering an endless stream of goods at low prices. The carousel kept running and yet, central banks did not sense that something could be amiss.
The same central banks, and primarily the Fed, stoked the growing imbalances because they pursued inflation targeting instead of looking at the whole state of the economy. Looking back, monetary policy should have been tightened earlier than summer 2004 when the Fed started to raise interest rates.
Globalisation is a fantastic growth machine. Trade in goods and services, capital movements and investments all move across the world without noticing the lines on the map detailing which national boundaries they operate within.
Financial institutions lived happily with this model. They knew that risks were growing, but took comfort in the belief that a large number of financial institutions shared the risk. One key sentence frequently heard was that globalisation made it possible to spread risks, making the financial system more stable and secure. But this philosophy backfired.
Risk spreading did not work to calm nerves in the preliminary stages of the recent crisis; it spread anxiety to a large number of financial institutions around the world. When it dawned upon them that a crisis was brewing, all of them opted to get out of risky assets, triggering a storm instead of dousing the fire.
This is where one would expect international institutions to act, but they proved to be little more than paper tigers. Little has been done to put up the firewalls, ready to be activated if or when financial turmoil arose. The international community proved toothless when confronted by market forces.
The institution which should rise to the occasion, the International Monetary Fund, was in the midst of changing its managing director and has been absent from the stage even though it was the incumbent for the lead role.
Unless financial institutions, central bankers and politicians address these problems, sub-prime housing is only a bad omen for a series of financial crises to come — these in the long run may threaten the present version of economic globalisation.
The writer is a Visiting Senior Research Fellow at the Institute of South-east Asian Studies and an Adjunct Professor at the Copenhagen Business School. This article appeared on www.opinionasia.com
S'pore Flyer Riding High On Strong Pre-Opening Outlook
Source : The Straits Times, 3 Sept, 2007
Buoyant ticket sales and expected returns spur chairman to raise stake in iconic project to 90%
'It'll be an iconic development... We're going to have fireworks on New Year's Day, companies will use if to promote products.' MR BOLLEN, on various ideas for the 165m high observation wheel -- ST PHOTO LIM SIN THAI
BUMPER ticket sales and a higher forecast return have prompted Singapore Flyer chairman Florian Bollen to raise his stake in the $240 million observation wheel from 60 per cent to 90 per cent.
He told The Straits Times last Friday that he has bought the 30 per cent stake of Melchers - a German trading company - for an undisclosed sum.
The deal, estimated to be worth $40 million, was done via AAA Equity Holdings, a private investment vehicle headed by Mr Bollen.
O&P Management, which is in charge of the project's development management, owns the remaining 10 per cent.
Overseeing big projects is nothing new to Mr Bollen, a millionaire who was formerly a Hollywood producer - he produced blockbuster films such as Terminator and Basic Instinct.
The London-based German said of his new Flyer investment: 'That's due to the growing confidence we have in this project. Pre-sales are much better than expected.
'We're 100 per cent leased, and market sentiment tells us this is going to be the most iconic new attraction in Singapore over the next few years.'
Melchers general manager Alexander Melchers said: 'We like to complete the project till a certain stage... this will free up resources to develop new ideas. This is a case where the majority shareholder raises his stake.'
He will remain a Singapore Flyer director.
The initial signs are promising for the giant wheel, with its 80,000 sq ft of food and beverage and retail space fully leased.
And more than 500,000 people have already booked to ride the Flyer once operations start in March.
Ms Patsy Ong, managing director of Adval Brand Group, the Flyer's exclusive ticketing agent, said: 'Our sales have exceeded initial projections by 70 per cent. Our pre-bookings are almost full. We've also set aside about 20 per cent of tickets for walk-in customers.'
A ride on the Flyer - the world's tallest observation wheel at 165m, or 42 storeys high - costs $29.50 and will last about 37 minutes. It can hold a maximum of 784 people.
Mr Bollen, 42, expects a crowd of 2.5 million to four million to ride the Flyer in its first year.
'It'll be an iconic development... We're going to have fireworks on New Year's Day, companies will use it to promote products.'
He expects the project to break even with a positive cash flow in its first year, as well as yield an annual return of '10 per cent to 15 per cent' - higher than the 6 per cent to 10 per cent he had forecast earlier.
Mr Bollen also revealed that the group is 'in discussions with a number of companies' to sell naming rights for the Flyer.
'We're looking for a strong partner before we give the naming rights,' he said.
There are also plans to allow companies to sponsor the 28 individual capsules, which will involve adorning them in corporate colours.
As with his earlier Hollywood blockbusters, Mr Bollen hopes to shoot another successful flick with the Flyer.
He said: 'In the film industry, we're always looking for a good story. The Singapore Flyer is an extremely good story in the making. That's why we're increasing our stake.'
Buoyant ticket sales and expected returns spur chairman to raise stake in iconic project to 90%
'It'll be an iconic development... We're going to have fireworks on New Year's Day, companies will use if to promote products.' MR BOLLEN, on various ideas for the 165m high observation wheel -- ST PHOTO LIM SIN THAIBUMPER ticket sales and a higher forecast return have prompted Singapore Flyer chairman Florian Bollen to raise his stake in the $240 million observation wheel from 60 per cent to 90 per cent.
He told The Straits Times last Friday that he has bought the 30 per cent stake of Melchers - a German trading company - for an undisclosed sum.
The deal, estimated to be worth $40 million, was done via AAA Equity Holdings, a private investment vehicle headed by Mr Bollen.
O&P Management, which is in charge of the project's development management, owns the remaining 10 per cent.
Overseeing big projects is nothing new to Mr Bollen, a millionaire who was formerly a Hollywood producer - he produced blockbuster films such as Terminator and Basic Instinct.
The London-based German said of his new Flyer investment: 'That's due to the growing confidence we have in this project. Pre-sales are much better than expected.
'We're 100 per cent leased, and market sentiment tells us this is going to be the most iconic new attraction in Singapore over the next few years.'
Melchers general manager Alexander Melchers said: 'We like to complete the project till a certain stage... this will free up resources to develop new ideas. This is a case where the majority shareholder raises his stake.'
He will remain a Singapore Flyer director.
The initial signs are promising for the giant wheel, with its 80,000 sq ft of food and beverage and retail space fully leased.
And more than 500,000 people have already booked to ride the Flyer once operations start in March.
Ms Patsy Ong, managing director of Adval Brand Group, the Flyer's exclusive ticketing agent, said: 'Our sales have exceeded initial projections by 70 per cent. Our pre-bookings are almost full. We've also set aside about 20 per cent of tickets for walk-in customers.'
A ride on the Flyer - the world's tallest observation wheel at 165m, or 42 storeys high - costs $29.50 and will last about 37 minutes. It can hold a maximum of 784 people.
Mr Bollen, 42, expects a crowd of 2.5 million to four million to ride the Flyer in its first year.
'It'll be an iconic development... We're going to have fireworks on New Year's Day, companies will use it to promote products.'
He expects the project to break even with a positive cash flow in its first year, as well as yield an annual return of '10 per cent to 15 per cent' - higher than the 6 per cent to 10 per cent he had forecast earlier.
Mr Bollen also revealed that the group is 'in discussions with a number of companies' to sell naming rights for the Flyer.
'We're looking for a strong partner before we give the naming rights,' he said.
There are also plans to allow companies to sponsor the 28 individual capsules, which will involve adorning them in corporate colours.
As with his earlier Hollywood blockbusters, Mr Bollen hopes to shoot another successful flick with the Flyer.
He said: 'In the film industry, we're always looking for a good story. The Singapore Flyer is an extremely good story in the making. That's why we're increasing our stake.'
Before The New NUS College Town Is Designed...
Source : The Straits Times, 3 Sept, 2007
What will it take to make a really great university town? YouthInk writers weigh in with their views on what they think should be the dos - and don'ts - of this masterplan
TWO-LEVEL LINK: The proposed university town will be linked to the NUS campus across the Ayer Rajah Expressway by a two-level bridge - one for vehicles and the other for pedestrians. -- PHOTO: NUS
Consult Clementi residents
MY FIRST thoughts concern the potential impact this development will have on residents in Clementi. An obvious one is a mini economic boom - shops will definitely benefit from the increased business brought by the university students. Less predictable will be the socio-cultural impact. Will the old uncle be denied his usual kopi-o spot by a 'milo dinosaur'-chugging NUS student after his early morning run? Will the wonton mee stall give way to 'Pastamania Clementi' in anticipation of a different customer base? Granted, the proposed site is some distance from the main housing areas.
However, the creation of a university town will inevitably have a noticeable effect on surrounding areas. If it has not already been done, Clementi residents should be consulted.
Angela Xu, 22, will read for her Master of Law at University College London
Still a financial barrier
SCHOOL is back in session and for most undergraduates, the upcoming weeks will burn a deep hole in their pocket with tuition payments due and academic material to be bought.
Even if one studies at NUS and lives in the most affordable hall on campus, it still means shelling out an additional $680 in accommodation costs each term.
Meanwhile at the SMU hostel, a double room goes for $1,350 for a 15-week tenancy. Varying meal plans and registration fees have yet to be added to those figures.
It hardly seems economically viable for Singaporean students to pay for additional accommodation with home and family just a number of MRT stops away.
Ultimately, the limited availability of rooms in the universities creates financial barriers - where students who qualify for a dormitory room also need to be financially capable of paying for it.
Hostel living may strengthen collegiality among residents. However, it will be a shame this widens the divide with non-hostel residents, especially with those who cannot afford it.
Alicia Ng, 23, is a final-year accounting student at Singapore Management University
Don't leave polys behind
WITH the current developments at the universities, it seems the polytechnics have been left behind.
In building a university town, there is less need to worry about availability of lodging for NUS students.
In contrast, my school struggles to accommodate foreign students on campus due to lack of accommodation, let alone provide Singaporean students with the hostel 'experience'.
As plans for the site are drawn up, could there be accompanying developments at the other tertiary institutions?
If the universities and polytechnics can cooperate in development schemes that involve sharing facilities and experiences, it will be a win-win situation for all involved.
Cheryl Tan, 19, is a final-year interior architecture and design student at Temasek Polytechnic
Opportunity for cultural exchange
I AM heartened by NUS plans for a university town at the former Warren golf course.
A university should no longer be just academics-based, where students are moulded merely in classrooms and through exams.
They should also gain insights by living with both Singaporean and foreign students and through cultural exchanges.
I hope to see modules where one has to learn more about the cultures and countries of one's foreign roommates.
At the same time, participants in these activities must be willing and able to juggle them with their schoolwork, and not be compelled to do so.
Hence, NUS should be stringent in selecting hostelites for the university town.
Eisen Teo, 23, is on exchange at the University of North Carolina
Are luxuries really necessary?
RENT on accommodation at the university town could be two to three times more than what is charged at a Kent Ridge hostel.
Is comfort really necessary? Wouldn't it be ironic if students choose their flats solely for the facilities?
For example, the cluster lifestyle at NUS Prince George's Park Residences is meant to offer opportunities for interaction.
But students are known to apply there for the convenience of a gym and mini-mart.
To a great extent, the lack of luxury facilities in halls suggests a better chance for NUS' objective to be achieved.
Berton Lim, 19, has a place to read business administration at the National University of Singapore
Foster bonding between students
THE concept of the new NUS college sounds impressive but it may not have the desired effect of promoting interaction between Singaporean and foreign students.
Even with the higher Singaporean-to-foreign-student ratio, students of different nationalities may prefer to spend time with those from their own country and culture.
This may happen even if occupants, comprising students from different cultures, find themselves living under the same roof.
There must be residents charged with responsibility to foster bonding and a sense of community between the occupants in an apartment or across different apartments.
Only then may the aims of the college be achieved.
Kenny Tan, 21, is a second-year Economics student at SMU
What will it take to make a really great university town? YouthInk writers weigh in with their views on what they think should be the dos - and don'ts - of this masterplan
TWO-LEVEL LINK: The proposed university town will be linked to the NUS campus across the Ayer Rajah Expressway by a two-level bridge - one for vehicles and the other for pedestrians. -- PHOTO: NUS
Consult Clementi residents
MY FIRST thoughts concern the potential impact this development will have on residents in Clementi. An obvious one is a mini economic boom - shops will definitely benefit from the increased business brought by the university students. Less predictable will be the socio-cultural impact. Will the old uncle be denied his usual kopi-o spot by a 'milo dinosaur'-chugging NUS student after his early morning run? Will the wonton mee stall give way to 'Pastamania Clementi' in anticipation of a different customer base? Granted, the proposed site is some distance from the main housing areas.
However, the creation of a university town will inevitably have a noticeable effect on surrounding areas. If it has not already been done, Clementi residents should be consulted.
Angela Xu, 22, will read for her Master of Law at University College London
Still a financial barrier
SCHOOL is back in session and for most undergraduates, the upcoming weeks will burn a deep hole in their pocket with tuition payments due and academic material to be bought.
Even if one studies at NUS and lives in the most affordable hall on campus, it still means shelling out an additional $680 in accommodation costs each term.
Meanwhile at the SMU hostel, a double room goes for $1,350 for a 15-week tenancy. Varying meal plans and registration fees have yet to be added to those figures.
It hardly seems economically viable for Singaporean students to pay for additional accommodation with home and family just a number of MRT stops away.
Ultimately, the limited availability of rooms in the universities creates financial barriers - where students who qualify for a dormitory room also need to be financially capable of paying for it.
Hostel living may strengthen collegiality among residents. However, it will be a shame this widens the divide with non-hostel residents, especially with those who cannot afford it.
Alicia Ng, 23, is a final-year accounting student at Singapore Management University
Don't leave polys behind
WITH the current developments at the universities, it seems the polytechnics have been left behind.
In building a university town, there is less need to worry about availability of lodging for NUS students.
In contrast, my school struggles to accommodate foreign students on campus due to lack of accommodation, let alone provide Singaporean students with the hostel 'experience'.
As plans for the site are drawn up, could there be accompanying developments at the other tertiary institutions?
If the universities and polytechnics can cooperate in development schemes that involve sharing facilities and experiences, it will be a win-win situation for all involved.
Cheryl Tan, 19, is a final-year interior architecture and design student at Temasek Polytechnic
Opportunity for cultural exchange
I AM heartened by NUS plans for a university town at the former Warren golf course.
A university should no longer be just academics-based, where students are moulded merely in classrooms and through exams.
They should also gain insights by living with both Singaporean and foreign students and through cultural exchanges.
I hope to see modules where one has to learn more about the cultures and countries of one's foreign roommates.
At the same time, participants in these activities must be willing and able to juggle them with their schoolwork, and not be compelled to do so.
Hence, NUS should be stringent in selecting hostelites for the university town.
Eisen Teo, 23, is on exchange at the University of North Carolina
Are luxuries really necessary?
RENT on accommodation at the university town could be two to three times more than what is charged at a Kent Ridge hostel.
Is comfort really necessary? Wouldn't it be ironic if students choose their flats solely for the facilities?
For example, the cluster lifestyle at NUS Prince George's Park Residences is meant to offer opportunities for interaction.
But students are known to apply there for the convenience of a gym and mini-mart.
To a great extent, the lack of luxury facilities in halls suggests a better chance for NUS' objective to be achieved.
Berton Lim, 19, has a place to read business administration at the National University of Singapore
Foster bonding between students
THE concept of the new NUS college sounds impressive but it may not have the desired effect of promoting interaction between Singaporean and foreign students.
Even with the higher Singaporean-to-foreign-student ratio, students of different nationalities may prefer to spend time with those from their own country and culture.
This may happen even if occupants, comprising students from different cultures, find themselves living under the same roof.
There must be residents charged with responsibility to foster bonding and a sense of community between the occupants in an apartment or across different apartments.
Only then may the aims of the college be achieved.
Kenny Tan, 21, is a second-year Economics student at SMU
Hot Pick: Upper East Coast Road
Source : Property Report, 3 Sept 2007
Predictions
By the end of 2008, we predict the following benchmarks will be achieved for new and luxurious condominiums along Upper East Coast Road:
* S$1,200-1,700psf from Siglap Centre to Bedok South Avenue 1
* S$900-1,400psf from Bedok South Avenue 1 to Bedok South Avenue 3
* S$700-1,100psf from Bedok South Avenue 3 to Eastwood/Bedok Camp Area
Reasons
* The Upper East Coast Road location is ideal for mobile professionals, both local and expats, as it’s strategically located between Changi Airport and the Central Business District (CBD). It takes less than 20 minutes to reach the CBD via the East Coast Parkway, even during the morning and evening rush hour.
* Lifestyle - golf: For those who enjoy a round of golf on a weekend, the Upper East Coast district is a short drive away from international-class golf courses, like Tanah Merah Country Club, Laguna National Country Club, Marina Bay Golf Course and the Safra Country Club.
* Lifestyle - water: The district’s close proximity to the seaside and the East Coast Park means sea breeze all year round, sea sports and recreational facilities, picnic grounds and beach parties.
* Lifestyle - food and drinks: Upper East Coast Road begins with a 500m-long stretch of cosy eateries from Siglap to Jalan Tua Kong, ending with the famous Bedok Food Court.
* Rentals have been rising steadily, supporting capital values growth. Capital values will also see upward pressure from home owners displaced from enblocs in Katong, Telok Kurau, Marine Parade, East Coast Road and elsewhere. Potential enblocs in the near future may include Ocean Park, Rich East Gardens, Bagnall Court and Eastern Lagoon I and II.
Predictions
By the end of 2008, we predict the following benchmarks will be achieved for new and luxurious condominiums along Upper East Coast Road:
* S$1,200-1,700psf from Siglap Centre to Bedok South Avenue 1
* S$900-1,400psf from Bedok South Avenue 1 to Bedok South Avenue 3
* S$700-1,100psf from Bedok South Avenue 3 to Eastwood/Bedok Camp Area
Reasons
* The Upper East Coast Road location is ideal for mobile professionals, both local and expats, as it’s strategically located between Changi Airport and the Central Business District (CBD). It takes less than 20 minutes to reach the CBD via the East Coast Parkway, even during the morning and evening rush hour.
* Lifestyle - golf: For those who enjoy a round of golf on a weekend, the Upper East Coast district is a short drive away from international-class golf courses, like Tanah Merah Country Club, Laguna National Country Club, Marina Bay Golf Course and the Safra Country Club.
* Lifestyle - water: The district’s close proximity to the seaside and the East Coast Park means sea breeze all year round, sea sports and recreational facilities, picnic grounds and beach parties.
* Lifestyle - food and drinks: Upper East Coast Road begins with a 500m-long stretch of cosy eateries from Siglap to Jalan Tua Kong, ending with the famous Bedok Food Court.
* Rentals have been rising steadily, supporting capital values growth. Capital values will also see upward pressure from home owners displaced from enblocs in Katong, Telok Kurau, Marine Parade, East Coast Road and elsewhere. Potential enblocs in the near future may include Ocean Park, Rich East Gardens, Bagnall Court and Eastern Lagoon I and II.
Spa Sells For Soleil @ Sinaran
Source : Property Reporty, 3 Sept 2007
Soleil @ Sinaran, a 417-unit condominium located in the Newton-Novena belt close to the Novena MRT station, is almost fully sold following huge demand for its lifestyle-led concept, which includes a partnership with Aramsa Spa.
Developed by Frasers Centrepoint Homes (FCH), a division of Frasers Centrepoint Limited, the condo was 80% sold even before its public launch on August 17. A total of 156 units were snapped up in a private viewing, before a further 173 units were sold in a preview held the day before the launch. As of August 19, over 90% of the units were sold at an average of about S$1,500psf.
Cheang Kok Kheong, COO of Frasers Centrepoint Limited, said the spa and wellness features were a big reason behind the “overwhelming response” from buyers. “Homebuyers are becoming more discerning. They no longer just purchase four walls but look for the ‘x-factor’ that developers can offer. FCH decided to embark on this landmark spa-cum-wellness concept because we wanted to go beyond just providing home-owners with a ‘shell’ to live in,” he said.
“With spa retreats gaining immense popularity these days, having spa treatments at residents’ doorsteps has proved a pull factor. Aramsa Spas was a choice partner because they believe in helping people adopt a holistic lifestyle and that the concept of wellness goes beyond just eating well.”
The flagship partnership with Aramsa Spas will enable residents to enjoy a full range of private spa treatments on site. Designed by local firm Architects 61, the condo will feature spa cabanas (pictured) for residents to enjoy their treatments, as well as entertainment pavilions for parties to be held in a luxurious poolside setting. Soleil @ Sinaran will also feature a 13,000sqft sky terrace that will occupy the entire 20th floor and include an outdoor and indoor gym, a sky garden overlooking the city and a sports bar.
“City people today lead extremely hectic lifestyles and time is precious to them,” Cheang said. “Soleil @ Sinaran was formed because we wanted to promote the concept where a resident’s lifestyle is integrated with their living spaces, which in this case is an amalgamation of relaxation, wellness and entertainment. Its popularity is evidence that the lifestyle concept we’ve created contains the right mix of what they want: a comfortable home and more importantly, a lifestyle they want.”
The biggest development in the area to date, Soleil @ Sinaran will feature units ranging from studios to loft apartments and penthouses. FCH is currently preparing to launch two more projects: a 302-unit development at Kim Yam Road in October and a joint-venture project with Far East Organisation at Bedok Reservoir later this year
Soleil @ Sinaran, a 417-unit condominium located in the Newton-Novena belt close to the Novena MRT station, is almost fully sold following huge demand for its lifestyle-led concept, which includes a partnership with Aramsa Spa.
Developed by Frasers Centrepoint Homes (FCH), a division of Frasers Centrepoint Limited, the condo was 80% sold even before its public launch on August 17. A total of 156 units were snapped up in a private viewing, before a further 173 units were sold in a preview held the day before the launch. As of August 19, over 90% of the units were sold at an average of about S$1,500psf.
Cheang Kok Kheong, COO of Frasers Centrepoint Limited, said the spa and wellness features were a big reason behind the “overwhelming response” from buyers. “Homebuyers are becoming more discerning. They no longer just purchase four walls but look for the ‘x-factor’ that developers can offer. FCH decided to embark on this landmark spa-cum-wellness concept because we wanted to go beyond just providing home-owners with a ‘shell’ to live in,” he said.
“With spa retreats gaining immense popularity these days, having spa treatments at residents’ doorsteps has proved a pull factor. Aramsa Spas was a choice partner because they believe in helping people adopt a holistic lifestyle and that the concept of wellness goes beyond just eating well.”
The flagship partnership with Aramsa Spas will enable residents to enjoy a full range of private spa treatments on site. Designed by local firm Architects 61, the condo will feature spa cabanas (pictured) for residents to enjoy their treatments, as well as entertainment pavilions for parties to be held in a luxurious poolside setting. Soleil @ Sinaran will also feature a 13,000sqft sky terrace that will occupy the entire 20th floor and include an outdoor and indoor gym, a sky garden overlooking the city and a sports bar.
“City people today lead extremely hectic lifestyles and time is precious to them,” Cheang said. “Soleil @ Sinaran was formed because we wanted to promote the concept where a resident’s lifestyle is integrated with their living spaces, which in this case is an amalgamation of relaxation, wellness and entertainment. Its popularity is evidence that the lifestyle concept we’ve created contains the right mix of what they want: a comfortable home and more importantly, a lifestyle they want.”
The biggest development in the area to date, Soleil @ Sinaran will feature units ranging from studios to loft apartments and penthouses. FCH is currently preparing to launch two more projects: a 302-unit development at Kim Yam Road in October and a joint-venture project with Far East Organisation at Bedok Reservoir later this year
Educational Seminars From Intellectual Property
Source : Property Report, 3 Sept, 2007
Intellectual Property, a specialist in emerging property markets, will signal its new presence in Singapore in September, when it stages a seminar at the Swissotel and opens an office in The Concourse on Beach Road. The Hong Kong-based firm was launched last September by founder Tim Murphy, who will be the MC and one of the speakers at the Singapore seminar on September 18, which kicks off a series around Asia.
“The seminars will overview the world’s next new growth property markets. We’ll offer potential investors advice on how to select the most profitable markets and how to select the best properties within those destinations,” said Murphy, CEO of Intellectual Property, whose team includes ex-employees from Knight Frank, Prudential, The Henley Group and Dahsing Bank.
Intellectual Property will host further education seminars in Kuala Lumpur (Mandarin Oriental) on September 19, Hong Kong (Ritz-Carlton) on September 20 and 22, and finally in Tokyo (Roppongi Hills Club) on September 26.
The diverse line-up of speakers talking on their markets of expertise will include Marc Townsend, Managing Director of CB Richard Ellis in Vietnam; Rohan Cavaliero, Director of 99East in Malaysia; Robert Chojnacki, CEO of redNet Group in Poland; and Henry Madden Dehouche and Paul Irvine of Dehouche Land in Brazil.
Murphy expects the new Singapore office and the series of seminars to increase the regional presence of the company, which was one of the exhibitors at the recent International Homebuyer and Property Investor Show at the Kuala Lumpur Convention Centre.
Intellectual Property’s services include providing clients with information on the economic fundamentals of emerging markets, and managing the process of buying properties, including selection, mortgaging, legal aspects, renting and on-selling. In the last six months, the company has transacted US$85 million of property on behalf of its clients.
“We treat property the same way as investments, focusing on bricks and mortar that will deliver long or short-term capital growth as well as solid rental return on investment,” says Murphy, who personally invests in a minimum of 30 units in every development his company promotes. The company’s present projects include Seni Mont’ Kiara in Kuala Lumpur, Prime Mansion 31 in Bangkok and Indochina Riverside Towers in Danang.
Intellectual Property seminars
September 18 (7-10pm) - Swissotel, Singapore
September 19 (7-10pm) - Mandarin Oriental, Kuala Lumpur
September 20 (7-10pm) - Ritz-Carlton, Hong Kong
September 22 (1-4pm) - Ritz-Carlton, Hong Kong
September 26 (7-10pm) - Roppongi Hills Club, Tokyo
Intellectual Property, a specialist in emerging property markets, will signal its new presence in Singapore in September, when it stages a seminar at the Swissotel and opens an office in The Concourse on Beach Road. The Hong Kong-based firm was launched last September by founder Tim Murphy, who will be the MC and one of the speakers at the Singapore seminar on September 18, which kicks off a series around Asia.
“The seminars will overview the world’s next new growth property markets. We’ll offer potential investors advice on how to select the most profitable markets and how to select the best properties within those destinations,” said Murphy, CEO of Intellectual Property, whose team includes ex-employees from Knight Frank, Prudential, The Henley Group and Dahsing Bank.
Intellectual Property will host further education seminars in Kuala Lumpur (Mandarin Oriental) on September 19, Hong Kong (Ritz-Carlton) on September 20 and 22, and finally in Tokyo (Roppongi Hills Club) on September 26.
The diverse line-up of speakers talking on their markets of expertise will include Marc Townsend, Managing Director of CB Richard Ellis in Vietnam; Rohan Cavaliero, Director of 99East in Malaysia; Robert Chojnacki, CEO of redNet Group in Poland; and Henry Madden Dehouche and Paul Irvine of Dehouche Land in Brazil.
Murphy expects the new Singapore office and the series of seminars to increase the regional presence of the company, which was one of the exhibitors at the recent International Homebuyer and Property Investor Show at the Kuala Lumpur Convention Centre.
Intellectual Property’s services include providing clients with information on the economic fundamentals of emerging markets, and managing the process of buying properties, including selection, mortgaging, legal aspects, renting and on-selling. In the last six months, the company has transacted US$85 million of property on behalf of its clients.
“We treat property the same way as investments, focusing on bricks and mortar that will deliver long or short-term capital growth as well as solid rental return on investment,” says Murphy, who personally invests in a minimum of 30 units in every development his company promotes. The company’s present projects include Seni Mont’ Kiara in Kuala Lumpur, Prime Mansion 31 in Bangkok and Indochina Riverside Towers in Danang.
Intellectual Property seminars
September 18 (7-10pm) - Swissotel, Singapore
September 19 (7-10pm) - Mandarin Oriental, Kuala Lumpur
September 20 (7-10pm) - Ritz-Carlton, Hong Kong
September 22 (1-4pm) - Ritz-Carlton, Hong Kong
September 26 (7-10pm) - Roppongi Hills Club, Tokyo
Record Launches, Record Sales In Q2
Source : Property Report, 3 Sept, 2007
Marking the second straight quarter that the number of private residential launches in Singapore has hit a record high, a total of 4,400 units were launched in the second quarter of the year, up from a then-record 4,259 in the first. Among the major projects contributing to the big total were Casa Merah (556 units), Reflections at Keppel Bay (493 units) and Botannia (350 units).
New launches in the prime districts dominated the property scene in the previous three quarters, but this time the highest number of launches were in the ‘suburbs’, with about 2,100 units launched in Outside Central Region (OCR). About 1,400 units were launched in the Rest of Central Region (RCR), which includes ‘city-fringe’ areas such as Marine Parade, Queenstown and Toa Payoh.
Only 900 units (20.5%) were actually in the prime Core Central Region (CCR), which covers districts 9, 10, 11, Downtown Core and Sentosa. According to a Knight Frank report, the drop in the number of new launches in the CCR may be due to developers holding back the release of their high-end launches in the hope of achieving higher selling prices in the near future.
Going hand in hand with the record number of launches, residential sales also hit a record high in the second quarter, with about 5,100 private residential units sold in the primary market, a figure 6.6% higher than the 4,783 units sold in the first quarter, which was itself a record. New projects that recorded strong take-up in the primary market included Casa Merah, Montebleu, Northwood and The Riverine by the Park.
Demand is starting to spread from the high-end market to the mid-tier and mass markets, and out of the 4,800 uncompleted units sold, there were 2,100 units sold in OCR, 1,500 in RCR and only 1,200 in CCR.
Overall prices rose 8.3% compared to the first quarter, the highest QoQ growth since 2Q 1999, while prices were up 21% on the same period last year, the biggest YoY rise since 1Q 2000. Although prices were 5.3% higher than the last market peak in 2Q 2000, they were still about 18.5% lower than the record in 2Q 1996.
The rise in prices was also more evenly spread across the markets, with the non-core regions starting to rise like the prime areas. For the first time since 3Q 2005, price growth was led by RCR, with an 8.1% QoQ rise. This trend can be attributed to a growing number of homebuyers purchasing replacement properties in the city-fringe areas after selling their existing properties in en-bloc deals, as well as new local and foreign homebuyers priced out of prime locations.
Significantly, prices of non-landed residences outside the central region showed their strongest performance since the market bottomed out in 1Q 2004, growing by 7.2% QoQ, compared to the 2.0% recorded in 1Q 2007, and showing that mass-market prices are finally starting to follow the growth seen in the prime districts. The price growth was 7.9% in CCR, where projects on and around Orchard Road were reportedly sold at record prices.
The more even price growth for properties across all areas is positive for the residential market, as it not only confirms the mass-market sector’s recovery but also implies that there’s now greater uniformity in wealth creation across all tiers, revealed a Colliers report.
On the flip side, rental rises are affecting many residents in Singapore, with overall rentals growing by 10.4% in a quarter and 31.2% in a year, the highest QoQ and YoY growth since URA made rental data available to the public. It’s also the first time that residential rentals showed double-digit growth in one quarter. Still, rentals are 21.4% lower than the all-time high in 1Q 1996.
Although the rental growth of 12% in the CCR led the overall rise, the demand for rental housing continued to filter down to the rest of the market. Based on Knight Frank’s research, properties in the East Coast, Thomson and Bishan areas grew by a 10-12%.
Due to the collective sales of the last two years, some believe the reduction in existing housing stock is projected to exceed the number of new completions in the next six to 12 months. As such, strong rental demand is expected to cause average rentals to grow by 30-40% year-on-year, especially in Districts 9, 10, 11, 15 and 16.
However, the government has announced that there’s sufficient supply of housing units in the market to meet demand. In all, about 43,000 new private residential units are to be completed from 2H 2007 to 2010, of which the bulk will be completed in 2009 and 2010. Overall, private residential property prices, Colliers concludes, are still expected to grow by 23-30% for the whole of 2007
Marking the second straight quarter that the number of private residential launches in Singapore has hit a record high, a total of 4,400 units were launched in the second quarter of the year, up from a then-record 4,259 in the first. Among the major projects contributing to the big total were Casa Merah (556 units), Reflections at Keppel Bay (493 units) and Botannia (350 units).
New launches in the prime districts dominated the property scene in the previous three quarters, but this time the highest number of launches were in the ‘suburbs’, with about 2,100 units launched in Outside Central Region (OCR). About 1,400 units were launched in the Rest of Central Region (RCR), which includes ‘city-fringe’ areas such as Marine Parade, Queenstown and Toa Payoh.
Only 900 units (20.5%) were actually in the prime Core Central Region (CCR), which covers districts 9, 10, 11, Downtown Core and Sentosa. According to a Knight Frank report, the drop in the number of new launches in the CCR may be due to developers holding back the release of their high-end launches in the hope of achieving higher selling prices in the near future.
Going hand in hand with the record number of launches, residential sales also hit a record high in the second quarter, with about 5,100 private residential units sold in the primary market, a figure 6.6% higher than the 4,783 units sold in the first quarter, which was itself a record. New projects that recorded strong take-up in the primary market included Casa Merah, Montebleu, Northwood and The Riverine by the Park.
Demand is starting to spread from the high-end market to the mid-tier and mass markets, and out of the 4,800 uncompleted units sold, there were 2,100 units sold in OCR, 1,500 in RCR and only 1,200 in CCR.
Overall prices rose 8.3% compared to the first quarter, the highest QoQ growth since 2Q 1999, while prices were up 21% on the same period last year, the biggest YoY rise since 1Q 2000. Although prices were 5.3% higher than the last market peak in 2Q 2000, they were still about 18.5% lower than the record in 2Q 1996.
The rise in prices was also more evenly spread across the markets, with the non-core regions starting to rise like the prime areas. For the first time since 3Q 2005, price growth was led by RCR, with an 8.1% QoQ rise. This trend can be attributed to a growing number of homebuyers purchasing replacement properties in the city-fringe areas after selling their existing properties in en-bloc deals, as well as new local and foreign homebuyers priced out of prime locations.
Significantly, prices of non-landed residences outside the central region showed their strongest performance since the market bottomed out in 1Q 2004, growing by 7.2% QoQ, compared to the 2.0% recorded in 1Q 2007, and showing that mass-market prices are finally starting to follow the growth seen in the prime districts. The price growth was 7.9% in CCR, where projects on and around Orchard Road were reportedly sold at record prices.
The more even price growth for properties across all areas is positive for the residential market, as it not only confirms the mass-market sector’s recovery but also implies that there’s now greater uniformity in wealth creation across all tiers, revealed a Colliers report.
On the flip side, rental rises are affecting many residents in Singapore, with overall rentals growing by 10.4% in a quarter and 31.2% in a year, the highest QoQ and YoY growth since URA made rental data available to the public. It’s also the first time that residential rentals showed double-digit growth in one quarter. Still, rentals are 21.4% lower than the all-time high in 1Q 1996.
Although the rental growth of 12% in the CCR led the overall rise, the demand for rental housing continued to filter down to the rest of the market. Based on Knight Frank’s research, properties in the East Coast, Thomson and Bishan areas grew by a 10-12%.
Due to the collective sales of the last two years, some believe the reduction in existing housing stock is projected to exceed the number of new completions in the next six to 12 months. As such, strong rental demand is expected to cause average rentals to grow by 30-40% year-on-year, especially in Districts 9, 10, 11, 15 and 16.
However, the government has announced that there’s sufficient supply of housing units in the market to meet demand. In all, about 43,000 new private residential units are to be completed from 2H 2007 to 2010, of which the bulk will be completed in 2009 and 2010. Overall, private residential property prices, Colliers concludes, are still expected to grow by 23-30% for the whole of 2007
He Makes $200K Profit In 3 Months
Source : The New Paper, 3 Sept 2007
Some see property values double, but not all are cashing out now
ENVY them not.
For among those who ride the property market roller coaster these are both winners and losers.
Some can make a 100 per cent profit in less than three years.
Some, even within two years.
But others can incur a loss if they sell their property now.
It all depends on buying the right property at the right time.
Some bought when prices were low, before they started shooting up last year. Mr Chan, 32, a public relations manager, is one of them.
He paid $300,000 for a studio apartment in Mandarin Gardens in Marine Parade in December 2005.
Two months ago, he sold it for $650,000. The 732 sq ft leasehold apartment had more than doubled in value in about 11/2 years.
Mr Chan declined to give his full name as he did not want his colleagues and friends to know about his windfall.
A property agent who wanted to be known only as Ms Leng said she knows of other home owners who have made 100 per cent gains.
She mentioned one client whose property is also located in Mandarin Gardens.
This client bought an apartment there for $530,000 three years ago.
Recently, it was sold for nearly $1.24million, claimed Ms Leng, 53.
But not all owners sitting on such potential gains are selling.
And many who bought properties at the peak of the market in the mid-1990s cannot sell at a profit even now. (See other report, below.)
The New Paper on Sunday tracked down six owners who had bought properties between 2002 and early this year, and are now sitting on potential gains of 100 per cent or more. They had various reasons for not cashing in.
Mr Alex Wong, 59, paid $660 psf for his 1,647 sq ft freehold unit at The Esta in Katong last year. Last month, a unit there was sold at $1,130 psf, according to the Urban Redevelopment Authority website.
Mr Wong, who is retired, owns several properties in the east.
Contented: Mr Alex Wong and his wife in their Sanctuary Green apartment, which they've just sold.
He lives with his wife, mother and maid in a three-bedroom apartment in Sanctuary Green, Tanjong Rhu. He paid $750,000 for it in March. He sold it recently for $930,000, making a profit of $180,000 in just three months.
Around the same time, he also sold a 1,216 sq ft Water Place apartment for just above $1 million.
That was $218,880 more than what he paid for it in 2002.
Together he made nearly $400,000 from the two deals.
He hopes to be able to move into a new three-bedroom apartment in The Belvedere on Meyer Road soon.
QUICK PROFIT
Mr Wong is also sitting on a 100per cent paper profit on his new home. He paid $1.2 million for the 1,367 sq ft apartment.
Last month, a unit of the same size was sold for $2.08 million.
Mr Wong, who used to be in the timber business, said: ‘When I grow older, I thought I could just collect rent from the apartments. But since the market is good now, I decided to sell them to make a quick profit.
‘How else can I get $200,000 profit in just three months?’
But he is not in a hurry to snap up more properties with the gains.
‘I can always buy again when prices drop, as long as I have a roof over my head now,’ he said. ‘It is not wise to sell high and buy high.’
Mr Chan feels the same. He said: ‘I plan to rent a place in the east instead. Hopefully, the market will cool down in two to three years.
‘It will probably cost me $50,000 to $60,000 to rent an apartment for that period. I will still have about $300,000 in my bank account.’
Mr Mohd Ismail, chief executive of PropNex, said it is not rare for those who had bought properties in hot areas two years ago to make 100 per cent profit from selling now.
This is especially so when there is speculation about an en bloc sale.
But not all home owners who can get such gains are cashing in.
Said Mrs Ingrid Yeo, 56: ‘I can’t be bothered. It is only paper gain for me now. We can’t be always chasing after dollars and cents.’
--pictures| Joyce Lim
Mrs Yeo, who is semi-retired, lives in a four-bedroom Water Place apartment with her husband and daughter. She paid about $700 psf for it in 2005.
‘The developer is now selling the rest of the unsold units for about $1,550 psf,’ said Mrs Yeo.
For HDB-upgrader Anthony Tan, a two-bedroom unit in Citylights, which has not been completed yet, is his dream home.
The 49-year-old administrative assistant is unshaken by the 100 per cent profit he can get if he sells now, before even moving in.
Mr Tan said: ‘I get calls from property agents every day. They also mail me printouts of the latest transacted price for Citylights.
‘My family and friends encourage me to sell. They tell me that I could never have managed to save so much money in my life.
‘I know, but I am not selling. I want to live there. I’ve been saving hard for it for decades.
‘If I sell it, I will never find another apartment in the same location for the same price.’
He paid $535,000 for his 947 sq ft leasehold unit in 2005.
He is now living with his wife, teenage daughter and mother in a five-room HDB flat in Pasir Ris.
Mr Tan said: ‘Maybe I will sell it after I experience living in the city.’
Property agent Derreck Choo warns against going by headline-hitting high prices.
He said: ‘Prices are increasing gradually, not shooting sky high.
‘Banks aren’t really matching valuation of the properties with what sellers are asking for.
‘Many properties sold at sky high prices were bought by cash-rich foreigners who don’t need bank loans for their purchases.’
ALEX WONG
REALISED PROFIT AFTER…
5 years - $218,880
Water Place
3 months - $180,000
Sanctuary
PAPER PROFIT AFTER…
2 years - $800,000 to $1m
The Belvedere
18 months - $774,090
The Esta
——————————————————————————–
INGRID YEO
PAPER PROFIT AFTER…
2 years @ $1.1m
Water Place
1 year @ $740,000
One Amber
4 months @ $500,000 Santuary Green
——————————————————————————–
Retiree burnt by roller-coaster prices
HE is still recovering from the paper loss on properties bought in 1996. During the property boom then, Mr Tan decided to put a large portion of his retirement funds in property.
He bought two condominium units at Stratford Court in Bedok and two terrace houses nearby.
After the Asian financial crisis, the retiree, who declined to give his full name and age, was trapped in negative territory.
He said: ‘I had paid close to $700,000 for each of my condominium units. Their prices plunged to $400,000. I had to sell my terrace houses at a loss to finance those two apartments.
‘And I had to rent those two units out at a loss. At one point, I collected only $1,000 a month for each unit.’
Today, the value of Mr Tan’s two leasehold apartments, which are slightly more than 1,000 sq ft, has risen. He said he has been offered close to $600,000 for one. That’s still a big loss if he sells.
Some who bought HDB flats in prime areas when the market was at its peak are also in a similar situation.
Some see property values double, but not all are cashing out now
ENVY them not.
For among those who ride the property market roller coaster these are both winners and losers.
Some can make a 100 per cent profit in less than three years.
Some, even within two years.
But others can incur a loss if they sell their property now.
It all depends on buying the right property at the right time.
Some bought when prices were low, before they started shooting up last year. Mr Chan, 32, a public relations manager, is one of them.
He paid $300,000 for a studio apartment in Mandarin Gardens in Marine Parade in December 2005.
Two months ago, he sold it for $650,000. The 732 sq ft leasehold apartment had more than doubled in value in about 11/2 years.
Mr Chan declined to give his full name as he did not want his colleagues and friends to know about his windfall.
A property agent who wanted to be known only as Ms Leng said she knows of other home owners who have made 100 per cent gains.
She mentioned one client whose property is also located in Mandarin Gardens.
This client bought an apartment there for $530,000 three years ago.
Recently, it was sold for nearly $1.24million, claimed Ms Leng, 53.
But not all owners sitting on such potential gains are selling.
And many who bought properties at the peak of the market in the mid-1990s cannot sell at a profit even now. (See other report, below.)
The New Paper on Sunday tracked down six owners who had bought properties between 2002 and early this year, and are now sitting on potential gains of 100 per cent or more. They had various reasons for not cashing in.
Mr Alex Wong, 59, paid $660 psf for his 1,647 sq ft freehold unit at The Esta in Katong last year. Last month, a unit there was sold at $1,130 psf, according to the Urban Redevelopment Authority website.
Mr Wong, who is retired, owns several properties in the east.
Contented: Mr Alex Wong and his wife in their Sanctuary Green apartment, which they've just sold.
He lives with his wife, mother and maid in a three-bedroom apartment in Sanctuary Green, Tanjong Rhu. He paid $750,000 for it in March. He sold it recently for $930,000, making a profit of $180,000 in just three months.
Around the same time, he also sold a 1,216 sq ft Water Place apartment for just above $1 million.
That was $218,880 more than what he paid for it in 2002.
Together he made nearly $400,000 from the two deals.
He hopes to be able to move into a new three-bedroom apartment in The Belvedere on Meyer Road soon.
QUICK PROFIT
Mr Wong is also sitting on a 100per cent paper profit on his new home. He paid $1.2 million for the 1,367 sq ft apartment.
Last month, a unit of the same size was sold for $2.08 million.
Mr Wong, who used to be in the timber business, said: ‘When I grow older, I thought I could just collect rent from the apartments. But since the market is good now, I decided to sell them to make a quick profit.
‘How else can I get $200,000 profit in just three months?’
But he is not in a hurry to snap up more properties with the gains.
‘I can always buy again when prices drop, as long as I have a roof over my head now,’ he said. ‘It is not wise to sell high and buy high.’
Mr Chan feels the same. He said: ‘I plan to rent a place in the east instead. Hopefully, the market will cool down in two to three years.
‘It will probably cost me $50,000 to $60,000 to rent an apartment for that period. I will still have about $300,000 in my bank account.’
Mr Mohd Ismail, chief executive of PropNex, said it is not rare for those who had bought properties in hot areas two years ago to make 100 per cent profit from selling now.
This is especially so when there is speculation about an en bloc sale.
But not all home owners who can get such gains are cashing in.
Said Mrs Ingrid Yeo, 56: ‘I can’t be bothered. It is only paper gain for me now. We can’t be always chasing after dollars and cents.’
--pictures| Joyce Lim Mrs Yeo, who is semi-retired, lives in a four-bedroom Water Place apartment with her husband and daughter. She paid about $700 psf for it in 2005.
‘The developer is now selling the rest of the unsold units for about $1,550 psf,’ said Mrs Yeo.
For HDB-upgrader Anthony Tan, a two-bedroom unit in Citylights, which has not been completed yet, is his dream home.
The 49-year-old administrative assistant is unshaken by the 100 per cent profit he can get if he sells now, before even moving in.
Mr Tan said: ‘I get calls from property agents every day. They also mail me printouts of the latest transacted price for Citylights.
‘My family and friends encourage me to sell. They tell me that I could never have managed to save so much money in my life.
‘I know, but I am not selling. I want to live there. I’ve been saving hard for it for decades.
‘If I sell it, I will never find another apartment in the same location for the same price.’
He paid $535,000 for his 947 sq ft leasehold unit in 2005.
He is now living with his wife, teenage daughter and mother in a five-room HDB flat in Pasir Ris.
Mr Tan said: ‘Maybe I will sell it after I experience living in the city.’
Property agent Derreck Choo warns against going by headline-hitting high prices.
He said: ‘Prices are increasing gradually, not shooting sky high.
‘Banks aren’t really matching valuation of the properties with what sellers are asking for.
‘Many properties sold at sky high prices were bought by cash-rich foreigners who don’t need bank loans for their purchases.’
ALEX WONG
REALISED PROFIT AFTER…
5 years - $218,880
Water Place
3 months - $180,000
Sanctuary
PAPER PROFIT AFTER…
2 years - $800,000 to $1m
The Belvedere
18 months - $774,090
The Esta
——————————————————————————–
INGRID YEO
PAPER PROFIT AFTER…
2 years @ $1.1m
Water Place
1 year @ $740,000
One Amber
4 months @ $500,000 Santuary Green
——————————————————————————–
Retiree burnt by roller-coaster prices
HE is still recovering from the paper loss on properties bought in 1996. During the property boom then, Mr Tan decided to put a large portion of his retirement funds in property.
He bought two condominium units at Stratford Court in Bedok and two terrace houses nearby.
After the Asian financial crisis, the retiree, who declined to give his full name and age, was trapped in negative territory.
He said: ‘I had paid close to $700,000 for each of my condominium units. Their prices plunged to $400,000. I had to sell my terrace houses at a loss to finance those two apartments.
‘And I had to rent those two units out at a loss. At one point, I collected only $1,000 a month for each unit.’
Today, the value of Mr Tan’s two leasehold apartments, which are slightly more than 1,000 sq ft, has risen. He said he has been offered close to $600,000 for one. That’s still a big loss if he sells.
Some who bought HDB flats in prime areas when the market was at its peak are also in a similar situation.
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