Inflation Fears Mar Vietnam’s Economic Boom

Source : The Business Times, October 29, 2007

(HANOI) Vietnam’s blistering economic growth is attracting foreign investors, but the boom is proving costly for households, which face big rises in the price of basic products such as rice.

Alarming: The price of food in Vietnam rose 13.94 per cent in October. The cost of rice and other grains alone increased by 15.98 per cent

Consumer prices rose 9.34 per cent year-on-year in October, after an 8.8 per cent increase in September, according to the General Statistics Office.

Inflation is worrying Hanoi, which aims to keep the rate below the growth in gross domestic product.

Vietnam’s economy grew by 8.16 per cent in the first nine months of the year.

The alarm bells grew louder last week as the national assembly seized on the issue, with Prime Minister Nguyen Tan Dung saying: ‘We want a higher economic growth and a lower inflation rate.’

The price of food, which forms more than 40 per cent of the basket of goods used to calculate Vietnam’s inflation rate, rose 13.94 per cent in October. The cost of rice and other grains alone increased by 15.98 per cent.

‘Global rice prices are high and global rice prices stay high as long as oil prices are high, because farmers need to buy fertiliser and fertiliser is a by-product of natural gas,’ said Jonathan Pincus, economist with the UN Development Programme (UNDP).

Vietnam joined the World Trade Organisation in January, and is opening its markets up to the world.

Dao Viet Dung of the Asian Development Bank warned this means ‘it is also more open to external shocks like the increase in oil prices…resulting in the increase of pressure on prices.’

He also pointed to the property fever gripping Vietnam, from northern Hanoi to the southern economic centre of Ho Chi Minh City, the former Saigon.

The price of construction materials such as steel and cement rose by 11.72 per cent in October.

Economists say pressure is increased by the huge inflow of foreign direct investment and the increasing use of credit (up 25 per cent in 2006 and 35 per cent by mid-2007, according to the World Bank), both for consumption and business lending.

‘It’s not good for the poor at all and it’s probably one of the reasons why the government is so keen to keep inflation under control,’ said Mr Pincus.


He added that while there was no immediate problem for investors, there was a risk that inflation would give rise to concern about Vietnam’s competitiveness.

‘If inflation is going up, people will demand higher wages, it’s natural,’ he added.

Hanoi has taken measures to curb price pressures, selling bonds and increasing bank reserves to mop up liquidity.But Mr Pincus said it would have to go further and increase interest rates to encourage saving. --AFP

HK Monetary Chief Warns Of Bubble

Source: The Business Times, October 29, 2007

He urges investors to act with caution as Hang Seng surges over 40% in 2 mths

HONG Kong’s monetary chief Joseph Yam has added a cautionary voice to a growing chorus of warnings in the city by observers who fear a bubble market has formed as stocks remain at giddy highs.

The Hang Seng Index has surged more than 40 per cent in just two months, reflecting a stellar appetite for China focused firms as China’s markets trade at new highs, and an expectation that mainland investors will soon be able to invest in the city’s market.

Some, however, fear that valuations are overstretched, with an asset bubble forming. And as punters continue to wade into the China boom story, they worry a serious correction could have a potent effect.

The bull run first started gathering pace on the heels of an Aug 20 announcement from Beijing that it would allow mainlanders to invest directly in Hong Kong stocks. This prompted an expectation of a fierce flow of cash from across the border.

In his weekly Viewpoint column on the Hong Kong Monetary Authority’s website, Mr Yam warns of ‘risks ahead’, particularly given the uncertain economic and financial outlooks for both China and the United States.

‘A sharp spike in the delinquency rate of sub-prime mortgages in the US has led to great tension in the money markets of Europe and the US, and a general credit tightening,’ Mr Yam notes.

He warned the possibility of a recession in the US cannot be ruled out, with adverse implications for cities such as Hong Kong.

Mr Yam also points to China’s macro monetary conditions as a cause for concern. With large foreign reserves, cooling down measures have been implemented by the Chinese central bank. At the same time, inflation is climbing to ‘uncomfortable levels’, he stresses.

Although China has announced it will allow residents to invest outside China, this has not yet happened and a heightened demand for stocks has pushed prices higher, ‘causing concerns about the possibility of a stock market bubble’.

Any market adjustment would have serious implications for financial stability in Hong Kong, he notes.

Against this backdrop, he urged Hong Kong to be cautious ‘despite the different and bullish signals that our financial markets are sending us’, Mr Yam says.

‘Irrational exuberance or not, investors should act with caution.’

Corporate governance activist David Webb has also sounded a note of caution, arguing that the mainland stock bubble is sure to burst. When it does, it will ‘certainly take the Hong Kong market down with it, since most of the market capitalisation is now either mainland stocks or stocks with a large component of mainland business’, he says on his website.

‘It would not be at all unreasonable to visit 15,000 or even 12,000 again on the Hang Seng Index, despite the depreciation of the dollar and the time value of money since we were last at those levels,’ he notes.

He says Hong Kong will be able to sustain any bursting of the bubble, ‘and mainland companies will still come here to list’. He urged Hong Kong policy-makers to shift their attention to improving the city’s competitive advantage in the meantime, by beefing up the regulatory framework.

Australia Faces Turbulence From US Meltdown : PM

Source: The Business Times, October 29, 2007

Australia, one of the best-performing advanced economies, faces looming economic turbulence from the sub-prime lending meltdown in the United States, Prime Minister John Howard warned yesterday.

Last Friday, Australian Treasurer Peter Costello had warned of an approaching international financial ‘tsunami’, with China at its epicentre.

‘We are entering a more difficult time of economic management. There are storm clouds on the international economic horizon,’ Mr Howard told Channel 9 television yesterday.

He was speaking on the campaign trail for Australia’s federal election on Nov 24, which the coalition government is fighting largely on its economic credentials.

Battling poor opinion polls, Mr Howard faces the prospect of an official interest rate increase by the Reserve Bank on Nov 6, during the election campaign.

‘I don’t think it’s panicking anybody to say that the sub-prime meltdown in the United States, which has already had an impact on market interest rates, because of the globalised nature of our economy, is going to have an effect,’ he said.

In an interview with the Sydney Morning Herald last Friday, Mr Costello said global financial markets face a ‘huge tsunami’.

The US economy would weaken in the wake of its sub-prime mortgage meltdown, and the breakneck pace of Chinese growth also could not continue, Mr Costello said.

At some stage, likely to coincide with a move to a floating of the Chinese currency, China would unleash greater instability on global markets than the United States had, he said.

‘That will be a wild ride when it happens. That will set off a huge tsunami that will go through world financial markets,’ said Mr Costello, one of Australia’s longest-serving treasurers.

Yesterday, Mr Howard pledged to keep interest rates down in Australia, but admitted that rates could rise.

‘The (Reserve) Bank will make a decision on interest rates . . . Interest rate changes happen, they go up and they go down, according to economic circumstances,’ he said.-- Reuters

Riveria Point Up For En Bloc Sale

Oct 29, 2007

A freehold residential development along River Valley Road has been put up for enbloc sale.

Residents at the 33-unit Rivieria Point are asking for $73.5 million for the development or about $1,800 per square foot per plot ratio.

Marketing agent Newman & Goh says the site has a plot ratio of 2.8 and can be re-developed into a project with 27 ultra luxurious boutique apartments averaging 1,500 square feet in size.

The maximium height for the site is 36 storeys.

Tender closes on the 23rd of next month.

新加坡首个出售会所地段宗亲会馆 韩氏祠趁房地产热潮卖祖产

《联合早报》Oct 29, 2007

社团售卖先辈遗留下来的祖产筹款，从来不是一项简单的决定，但是对于新加坡韩氏祠的理事会和会员而言，这却是一项轻松而且欢欣鼓舞的事。

地段底价600万元

韩氏祠昨天召开临时祠员大会，商议售卖靠近汤申路的达比莎路（Derbyshire Road）祠堂所在的地段，结果获得70名出席会员一致投票赞成通过。韩氏祠将在近日登报招请发展商投标这块面积为7039平方英尺的祠堂园地，预料在两个星期内便能知道招标结果。

韩氏祠理事长韩伯丰透露，已经有两个发展商和两个经纪先后表示有意买下这块底价订在600万元的地段，其中一个相信是已展开收购附近地段做整体建设的发展公司。

这是自去年初房地产被发展商整体收购以进行重建的热潮涌现以来，第一个受潮流影响而出售会所地段的宗亲会馆。

实际上，韩氏祠理事会提出这个议案征询祠员的意见时，非但没有遭到出席祠员的责难，议案在理事长解释需要趁目前有利情势出售地段的半小时讲话之后提出表决，间中只有两名会员分别提出有关妥善利用售地所得资金的问题，包括要求增加奖助学金基金的拨款和保障投资。

获100％赞成票通过

根据祠员缴交月捐纪录，韩氏祠共有265名祠员。昨天出席大会者总共75名，只有70名参与投票，不过全体投票者一致赞成通过大会售地以另作发展的议案。当大会宣布议案获得100％赞成票通过时，议事厅立刻响起一阵热烈掌声。

韩氏祠理事会是因有发展商表示有意以高价收购祠堂的地段，而考虑趁机卖地以取得购置新祠堂和长远会务活动的经费。理事会认为，现有祠堂平房式建筑已有70年之久，陈旧而且缺乏设施，加上毗邻地段都已改建成豪华公寓，祠堂如果不搬迁，就得考虑重新发展，以避免土地被征用的命运。

理事会早在8月间召开一次特别会议，21名出席理事全部投票赞成卖地的议案，并将决议案交给全体祠员投票表决。理事会的议决案拟议将卖地所得的钱，绝大部分用来购置一座楼房或一个大厦单位充作祖祠；购置两间双层店屋和两间公寓供出租，以长远取得活动经费。
　　
韩伯丰在受访时说：“我们事前没料到议案会获得祠员一致赞成通过，这显示我们祠员都明白破旧立新、求取活动资金长远发展的道理。因为，现在祠堂每月活动经费都短缺1200元，很不利长久的发展。”　　

他也说：“理事会办事开诚布公，相信也是获得会员支持的一大原因。我们为了避免日后图谋祠堂利益的情况出现，已经决定不将大笔现金储存在银行，而为了做到公开和透明处理买卖祠堂房地产，我本人也决定不参与下来有关买卖的决定。”

韩氏祠现在着手计划在明年12月初举行三庆会：祠堂成立108周年、新祠堂开幕仪式以及在本地主办“第三届世界韩氏恳亲大会”。

今年71岁的韩钵元谈起投赞成票的原因时说：“这是一个非常难得的转机，我们有源源不绝的活动会务经费，我知道我们的下一代将会有更好的机会推动会务发展。”

另一祠员韩爱卿也说：“我们现在祠堂的地点是蛮好的，可惜建筑太旧了，为了将来的发展，趁价高卖掉，也是一个不错的选择。”　　

韩氏祠成立于1899年，祠堂最初设在汤申路红桥头一间亚答屋内。在1976年搬入目前旧洋楼现址前，该祠曾经三度迁址。

URA Launches Tender For Hospital Development At Novena Terrace

Source : Channel NewsAsia, 29 October 2007

The Urban Redevelopment Authority (URA) has launched a hospital site at Novena Terrace in Irrawaddy Road for sale by public tender.

URA says it has worked with the Health Ministry to identify this site to meet rising demand for healthcare services in Singapore.

According to URA, the site was picked because Novena is fast establishing itself as a distinctive medical cluster in Singapore.

A number of leading medical institutions are already located in the area.

These institutions include the Tan Tock Seng Hospital, which is Singapore's second largest hospital; Thomson Medical Centre and specialist centres such as the Johns Hopkins International Medical Centre, Novena Medical Centre, National Neuroscience Institute and the National Skin Centre.

The 1.7 hectare site has a maximum permissible gross floor area of about 72,350 square metres.

URA says the site, which is located in the heart of the Novena medical cluster, provides the opportunity for a world-class hospital development.

This will enhance and complement the existing range of healthcare services in the area.

URA says Singapore, as one of Asia's leading medical destinations, has seen exponential growth in international patient volumes with more than 410,000 visitors in 2006.

This translates to a growth rate of 20 percent per annum.

Singapore expects to receive about one million international healthcare visitors by 2012, and the Novena hospital site will help meet this growing demand.

The tender will close at 12 noon on 15 February 2008.- CNA/so

More Measures To Cool Property Market, If Necessary: PM Lee

Source : Channel NewsAsia, 29 October 2007

Singapore's Prime Minister Lee Hsien Loong said more measures, if necessary, will be taken to cool the property market.

He was addressing 1,000 unionists at the labour movement's National Delegates Conference on Monday.

Just last Friday, the government withdrew the deferred payment scheme for property purchases in a move to cool the booming property market.

But PM Lee said other measures will follow, if necessary.

"This step will help to dampen excessive speculation and to inject some reality into the market. But more fundamental than the ups and downs of the property cycle, the government is committed to keeping housing affordable for Singaporeans," said the Prime Minister.

"We will continue to monitor the property market carefully and watch the trends. If necessary, we will continue to take more action... and make sure that the property market stays in balance over the long term," he added.

The Prime Minister also added that the government is keeping a close watch on the financial markets, given the recent turmoil over the US housing credit crisis.

PM Lee said: "But the impact is not just the US sub-prime mortgages. It is much wider and has affected the financial markets around the world. There is nervousness and instability. Prices go down even on the Singapore market.

"So the big question is will this cause a recession in the US and affect the real economy. The answer is, 'We can't tell, maybe.' The next question after that is, if there is a recession in America will it affect Singapore? That answer I can tell you is 'Yes, it must affect Singapore.' "

Overall, though, the Prime Minister is keeping to a positive outlook, saying he is confident that Singapore can achieve the higher end of the 7-8 percent growth forecast for the whole of 2007. - CNA /ls

Property Stocks Fall On Axing Of Deferred Payment Scheme

Source : The Business Times, October 29, 2007

Property counters such as City Developments fell after the Government said real estate developers could no longer let home buyers delay payments on the bulk of their property purchases.

City Developments fell 3.1 per cent, Wing Tai Holdings was down 4.4 per cent and Allgreen Properties lost 3.9 per cent.

'We may see annual double-digit residential price increases come to a halt, or grow at a more gradual pace,' said Morgan Stanley analyst Melissa Bon in a note. -- REUTERS

S'pore Says CPI On Track, Economy Not Overheating

Source : The Business Times, October 29, 2007

Singapore Trade and Industry Minister Lim Hng Kiang on Monday played down risks the fast-growing city-state's economy would overheat as inflation was expected to fall between the government's forecast range of 1.5 to 2 per cent this year.

Mr Lim said he was confident that Asian economies could weather an economic slowdown in the United States, which is the region's largest export market.

Mr Lim also said he was confident growth prospects would not be hurt by a slowdown in the global economy thanks to demand from within Asia.

'The economy is growing very strongly. There are some supply constraints, and we are taking steps to relieve the supply constraints with regard to manpower and space. So we don't see serious overheating problems,' he said.

His comments came after some economists warned that the US$129 billion economy may overheat as strong wage and employment growth, as well as rising office and residential rents, have helped push inflation to a 12-year high.

He acknowledged that 'overall there is strong price pressure' from rising food and energy costs but reiterated the government's inflation forecast of 1.5 to 2 per cent for this year.

'We believe inflation can come in at this range because in the first half of the year we had very good numbers,' he told reporters at a factory opening.

'In the second half, we are seeing inflation at around 2.5 (per cent), so I think overall for the year, you'll come in at between 1.5 and 2 (per cent).'

Prime Minister Lee Hsien Loong reiterated on Monday the government's target for gross domestic product growth at the upper end of a 7-8 per cent range, putting it on track to beat last year's 7.9 per cent growth rate.

Growth this year has been fuelled by a building boom, including two casino resorts for US$7 billion, a new financial district, new underground train lines, and the construction of tens of thousands of new apartments.

Mr Lim said that in spite of a slowdown in global economic growth, partly the result of credit market woes in the United States, Asian economies could cope with weakening demand from external markets.

'In Asia, momentum is still very strong. We are very confident that we would be able to ride through the slowdown in the world economy.'

He said Singapore's trade volume for 2007 was not as strong as the government had hoped, but declined to give an outlook for 2008.

Non-oil domestic exports in September fell a seasonally adjusted 1.5 per cent from August, missing expectations for a marginal rise and ending a four-month series of rising exports as weak electronics shipments failed to pick up. -- REUTERS

Orchard Road To Be Spruced Up

Source : The Business Times, October 29, 2007

Singapore's prime Orchard Road shopping belt will be spruced up in a makeover worth $40 million (US$27.6 million) to enhance its appeal to tourists, the government said on Monday.

Under the makeover, the shopping belt will have improved road and pedestrian mall lighting to complement its tree-lined boulevard, the Singapore Tourism Board (STB) said in a statement.

STB's media release - http://tinyurl.com/2s4em3

The busiest section of the shopping precinct, which draws more than seven million visitors annually, will also feature a so-called forest theme made up of the area's famous Angsana trees, it said.

Margaret Teo, assistant chief executive for leisure at the tourism body, said it was necessary to invest in Orchard Road's infrastructure and services to make it an 'even more compelling lifestyle hub'.

The improvements would 'open up many more entertainment and outdoor spaces for events and activities to create a more vibrant streetscape, thus enhancing the lifestyle experience on Orchard Road', she said.

The upgrade is expected to be completed by April 2009. -- AFP

PM Assures Singaporeans Of Affordable Housing

Source : The Straits Times, Oct 29, 2007

THE Singapore government is committed to keeping housing affordable for Singaporeans.























Prime Minister Lee Hsien Loong gave this assurance when he opened the NTUC national delegates conference on Monday.

The strong economy has led to soaring public and private housing prices here. There is also an acute shortage of prime office space.

Mr Lee said the government is building more flats and releasing more land for executive condominiums.

He said the government is expected to inject more office space into the market over the next 2-3 years.

He said the government is monitoring trends closely and will take further action if necessary.

It has scrapped the deferred payment for homebuyers on Friday to deter speculators and force people to be more prudent when committing to pricey real estate.

Mr Lee said stressed that the government will make sure that the property market stays in balance over the long term.

Turning to challenges facing Singapore, Mr Lee said the Republic must keep adjusting and adapting to change to stay ahead.

He said the Ministry of Transport is working on the Land Transport Review to improve our public transport system.

He pointed out that it is not just bosses who drive cars but also many unionists and workers. The government wants to keep our roads free flowing but has to use painful measures like the ERP and COE.

On healthcare, Mr Lee said the Ministry of Health is working systematically to ensure that it is good and affordable.

He pointed out that many initiatives are being rolled out. He said subsidies are targeted especially at the lower-income group who need them most.

He said means-testing is necessary to ensure that lower-income Singaporeans get more subsidy than the higher-income group. This is already done in nursing homes and will be implemented in hospitals.

The Prime Minister said the health ministry is studying the idea carefully so that it can be implemented fairly and simply, without making hospital care unaffordable for the middle-income group.

He added that the ministry will consult the unions when it has firmer ideas of what to do.

S. Asian Workers Strike In Dubai, Threatening Building Boom

Source : The Straits Times, Oct 29, 2007

DUBAI (United Arab Emirates) - THOUSANDS of South Asian construction workers went on strike over harsh working conditions in the latest threat to a spectacular building boom already endangered by a falling currency and labour shortage.

While labourers have long complained about working conditions in this Gulf city known for its event-grade skyscrapers, luxury dwellings and archipelagoes of artificial islands, their recent action comes as contractors are struggling to find workers to complete their ambitious projects.

Tuba is home to the world's tallest building a the Burn Tuba, expected to be completed in 2008 a and the first Armenia luxury hotel. Authorities report an annual average growth rate of 12 per cent over the past decade, largely driven by construction.

The boom has been possible due to plentiful investment from oil-rich neighbours and armies of non-unionised south Asian workers whose fear of deportation, until recently, kept them from voicing discontent over low wages.

'The cost of living here has increased so much in the past two years that I cannot survive with my salary,' said Rajahs Khmer, a 24-year-old worker from the south Indian state of Andorra Prudish who earns US$149 (S$216) a month.

The labourers ignored the threat of deportation and refused to go to work Sunday, staging protests at a labour camp in Tuba's Rebel All Industrial Zone and on a construction site in the A Quashes residential neighbourhood.

They demanded pay increases, improved housing and better transportation services to construction sites. On Saturday, workers threw stones at the riot police and damaged to police cars.

'Uncivilised'
Emirates' Minister of Labour All bin Abdullah a-Kabul described workers' behaviour as 'uncivilised,' saying they were tampering with national security and endangering residents' safety.

They could have registered their complaints peacefully but instead 'turned themselves into rioters,' he told state news agency WAM. Those who damaged public property will be deported, the labour minister said.

Companies, however, do not want more workers to leave as they struggle to find enough to complete existing projects following an overwhelming response to a government amnesty programme to persuade illegal labourers to leave.

In June, the government offered, no questions asked, free one-way plane tickets to illegal workers hoping to leave. They have since been swamped by 280,000 workers who, fed up with a rising cost of living and low wages, were ready to go home.

A booming economy in India also means that many there no longer see the need to travel to Dubai and the Gulf, said Bernard Raj, managing director of the Dubai-based Keith International, which supplies Indian workers.

'In the past, when we go for recruitment of workers we were able to choose whomever we wanted. Now the turnout of candidates is very low,' he said, estimating that at least 40 per cent more workers were needed for the city's projects.

Less traditional sources
With the usual labour markets like India, Pakistan, Bangladesh and Sri Lanka drying up, labour companies are turning to less traditional places like Tibet and North Korea.

At the root of the problem is the Emirati Dirham's close connection to the US dollar, which has seen it plummet in value, further decreasing labourers already low salaries.

Kumar and his fellow workers said they asked their employer, Al Habtoor Engineering Enterprises, for a pay increase several times, but management was not willing to address the issue.

'We were left without any choice but to stage the protest,' Kumar said.

Other workers said similar requests to the other main labour company, Al Mussa Contracting, were unsuccessful.

'I cannot save anything,' said Sunder Raj, a 32-year-old worker who at the end of the month has nothing to send to his family in India from his salary of US$162.

'We are working hard for nothing and there is no way for us to continue like this,' said Mohammed Hussein, a Bangladeshi worker.

Hard hit
K.V. Shamsudheen of the Pravasi Bhandu Welfare Trust, a group that helps workers, said it is the unskilled labour force that has been especially hard hit, with many no longer able to send money home.

'The low exchange rate of Dirham against Indian Rupee left labourers without any savings,' he said. 'The only way for the UAE to attract workers is to set competitive salaries and assure better living conditions.' While Mohammed al-Shaiba, a UAE-based labour analyst, criticised the strikes, saying they could only harm an economy gripped by a labour shortage, he acknowledged that the government had to do something.

'Now it's the right time to set a minimum wage,' he said, adding that the government should require companies to pay workers at least US$272 a month.

'If they allow a strike today, tomorrow there will be another one,' he added. -- AP

Orchard Road To Get $40m Rejuvenation

Source : The Straits Times, Oct 29, 2007

The overhaul is set to heighten pedestrian experience and present new lifestyle experiences.











Orchard Road is set to undergo a S$40 million rejuvenation to make it a more attractive destination, with state of the art lighting, lush tree-lined boulevard, new creative spaces for staging events and a more integrated and engaging pedestrian mall.

The Orchard Road rejuvenation plans were unveiled on Monday ahead of a tender for the main mall enhancement construction works, which will be called next month.

The announcement follows the sale of three prime sites by the Urban Redevelopment Authority last year, targeted to increase the number of shopping venues and diversity of retail concepts and options to Orchard Road.

Apart from the development of ION Orchard, Somerset Central and Orchard Central, older venues such as Hotel Phoenix and Specialist's Shopping Centre are slated for redevelopment, said the Singapore Tourism Board (STB) on Monday.

New international brands like Frank Muller, Jimmy Choo, Richard Mille and Van Cleef & Arpels, as well as new initiatives such as the weekly Late Night Shopping have injected new vibrancy to the retail scene.

Consistently ranked the most-visited attraction in Singapore, Orchard Road attracts more than seven million visitors each year, while thousands of local residents visit the area for leisure and work each day.














The Orchard Road mall enhancement initiative was driven by a inter-agency taskforce comprising agencies such as LTA, NParks, STB and the URA. -- PHOTO: NG SOR LUAN

'Orchard Road is synonymous with shopping in Singapore, and is the venue for some of Singapore's signature annual leisure events such as the Great Singapore Sale, Singapore Fashion Festival, Christmas in the Tropics light-up and Chingay Parade of Dreams,' said Ms Margaret Teo, STB Assistant Chief Executive (Leisure).

'For Orchard Road to become an even more compelling lifestyle hub, we need to invest in both its infrastructure and services. Besides introducing new concept malls and exciting international brands to boost the retail offerings available, we need to improve the public infrastructure to enhance the pedestrian experience along Orchard Road.

"These infrastructural improvements will also open up many more entertainment and outdoor spaces for events and activities to create a more vibrant streetscape, thus enhancing the lifestyle experience on Orchard Road.'

The Orchard Road mall enhancement initiative was driven by a inter-agency taskforce comprising agencies such as Land Transport Authority (LTA) , National Parks Board ( NParks), STB and the Urban Redevelopment Authority (URA).

The Task Force has been working closely with the design consultant team, Cox Group (Australia) in partnership with Architects 61 (Singapore), to develop and fine-tune the design plans. A Design Advisory Panel (DAP), chaired by the Urban Redevelopment Authority was also appointed to evaluate the concept design and guide the design development. The views of the Orchard Road Business Association and various stakeholders of Orchard Road were also sought before finalising the concept plan.

Starting at the Tanglin Road/Grange Road intersection where Tanglin Mall is located, the infrastructural works will continue down Orchard Road to the intersection with Buyong Road, where Le Meridien Singapore is located. Three zones, namely the Tanglin, Orchard and Somerset zones, have been identified and will be characterised by the Flower, Forest and Fruit themes respectively.

All three zones will have enhanced road and pedestrian mall lighting, including state-of-the-art accent lighting to highlight Orchard Road's mature trees and foliage and to create strong night-time landscapes. In line with the minimal and sophisticated aesthetics of Orchard Road's enhancement design, new coordinated street furniture (granite benches, stainless steel-clad waste bins and bollards) and multi-functional lamp posts with a more extensive height and reach will be installed.

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Three Zones, Three Themes
The Tanglin Zone, stretching from the intersection of Tanglin Road and Grange Road to the junction of Scotts and Paterson roads, will feature a flower theme mainly through 21 flower totem planters located along the pedestrian mall on the southern side of the road from Forum The Shopping Mall to Liat Towers.

A typical flower totem planter measures 3.5 metres tall and 0.9 metres in diameter, and its blooms can be changed to reflect different seasons and festival celebrations. Working in collaboration with the National Parks Board, the designers will enhance Tanglin gateway's existing tropical landscape with Frangipani trees that feature crimson flowers. The pedestrian mall on the north side of Tanglin fronting Delfi Orchard to International Building will also be enhanced with new paving, street furniture and lighting.

The Orchard Zone, stretching from the junction of Scotts and Paterson roads to the Cairnhill Road/Orchard Road junction, will feature a forest theme, inspired by the signature Angsana trees that frame Orchard Road.

Providing pockets of respite along this zone are Urban Green Rooms, which are located between existing trees and bordered in parts by moveable planters. These rooms can be used as shady resting places, art and exhibition areas, mini-performance areas and seating or viewing areas when events are staged along Orchard Road. Stretches of the pedestrian mall fronting ION Orchard, Wisma Atria and Meritus Mandarin Hotel will be widened to facilitate the creation of these Urban Green Rooms.

Vertical glass panels that are 3.6m high and 1.5m to 1.8m wide will further enhance the new Urban Green Rooms. These laminated, heat-strengthened glass panels will feature botanic graphics in line with the forest theme, and will be lit at night. Together with the surrounding tree lighting, these elements will create a strong night-time vista along Orchard Road.

The Somerset Zone, bound by the intersections between Cairnhill Road and Buyong Road, will feature a fruit theme to reflect Orchard Road's history as a nutmeg and fruit plantation. Besides the cinnamon and nutmeg trees that will be planted on the grass bank between Oxley Road and Buyong Road, opposite the Le Meridien Singapore, flowering plants with orange, yellow and red blooms will also characterise the zone. The north side of this zone will be enhanced with new granite pavement and street furniture.

Mrs Sng Ngoi May, Chairman of the Orchard Road Business Association (ORBA), welcoming this new phase in Orchard Road's rejuvenation plan, said: 'The government's support would be instrumental in strengthening Orchard Road's positioning as one of the world's premier shopping streets in the years to come. We hope this phase of development would only be the first step to ensure Orchard Road remains a beautiful, vibrant and pedestrian-friendly world-class shopping street.'

STB is working closely with relevant agencies such as the Land Transport Authority (LTA), National Parks Board (NParks), Urban Redevelopment Authority (URA) as well as the various stakeholders of Orchard Road to ensure the enhancement works progress smoothly. Orchard Road's infrastructure works will be carried out in phases to minimise disruption to businesses and the public, while access points to buildings will be maintained at all times.

Preliminary works to divert underground cables and telecommunication lines began in September while work on the pedestrian malls will begin after Chinese New Year next year in order to accommodate the crowds during the bumper Christmas and Chinese New Year festive shopping periods. Works are expected to be completed by April 2009.

Site For New Hospital In Novena Area Up For Sale

Source : The Straits Times, Oct 29, 2007

THE Urban Redevelopment Authority (URA) on Monday put up a hospital site at Novena Terrace/Irrawaddy Road for sale by public tender, to meet the rising demand for health care services in Singapore, which aims to become a premier healthcare hub.

On why it has picked the site, USA said in a statement that Novena is fast establishing itself as a distinctive medical cluster in Singapore with a number of leading medical institutions already located in the area.

These include theTan Tock Seng Hospital (Singapore's second largest hospital), Thomson Medical Centre and specialist centres such as the Johns Hopkins International Medical Centre, Novena Medical Centre, National Neuroscience Institute (NNI) and the National Skin Centre (NSC).

The Renci Hospital, which is due for completion in 2008, is also located within the Novena medical cluster.

Located in the heart of the Novena medical cluster, the 1.7 ha site with a maximum permissible gross floor area of about 72,350 sq m provides the opportunity for a worldclass hospital development that will enhance and complement the existing range of healthcare services within the Novena medical cluster, said URA.

In line with this, at least 35 per cent of the maximum permissible Gross Floor Area (GFA) of the proposed development must be set aside for hospital in-patient wards.

This is to meet growing demand for in-patient care facilities from domestic patients and international medical travellers, said the URA.

In addition, complementary retail uses such as gifts shops and food and beverages outlets will be subject to a maximum 5 per cent of the total GFA as the bulk of the development should be retained for hospital use.

'Singapore is one of Asia's leading medical destinations. It has experienced exponential growth in international patient volumes over the last few years with more than 410,000 visitors in 2006,' noted the URA.

'Growing at a rate of 20% per annum, Singapore expects to receive about one million international healthcare visitors by 2012.'

With continued economic growth in Singapore and neighbouring countries, it said there will be increasing demands for basic healthcare and high quality specialist care services such as cardiology, oncology, orthopedics and neurology.

The tender will close at 12 noon on Feb 15. Selection of the successful bid will be based on the tendered land price only.

More details on the site are available on URA website (http://www.ura.gov.sg)

Orchard Road To Undergo S$40m Rejuvenation: STB

Source : Channel NewsAsia, 29 October 2007

Orchard Road is set to undergo a S$40 million rejuvenation.

Enhancement works will start late February next year and are slated to be completed in April 2009.

The Singapore Tourism Board (STB) says the 14-month construction project will include the closure of the extreme right lane in front of Wisma Atria.

This is to create a wider pedestrian walkway to reduce overcrowding during major events like Chingay.

The entire Orchard Road belt will also be divided into three zones with three themes - flower, forest and fruit, reflecting the history of the area.

"Orchard Road is synonymous with shopping in Singapore...for Orchard Road to become an even more compelling lifestyle hub, we need to invest in both its infrastructure and services," said Margaret Teo, assistant chief executive for leisure at the tourism body.

Related Video Link - http://tinyurl.com/2c82f2
Orchard Road to undergo S$40m rejuvenation: STB

"These infrastructural improvements will also open up many more entertainment and outdoor spaces for events and activities to create a more vibrant streetscape, thus enhancing the lifestyle experience on Orchard Road." - CNA/ch

Asian Rally Expected Ahead Of Fed Meeting

Source : The Straits Times, Oct 29, 2007

Singapore property plays likely to be hurt by govt move to curb overheating.

PROPERTY stocks are likely to come under selling pressure today, following last Friday night’s news that the Government will scrap the deferred payment scheme to slow down overheating in the property market.

The move, which took place with immediate effect, will affect private properties that have yet to be completed.

Analysts say the withdrawal of the deferred payment scheme is aimed at discouraging speculators from entering the market and driving up home prices.

This may result in a temporary cooling of the market.

‘This will definitely affect sentiment, and make property shares less attractive for the time being, but it will not spark a panic selling,’ said a remisier.

‘The initial impact will be there, but it is only temporary. Developers are still holding their prices very high.’

Smaller developers are likely to be more affected, as they have a greater proportion of lower-end projects. Bigger developers have a good balance of high-end projects that can attract foreign investors, who do not usually required deferred payment on their property purchases.

Still, property bellwether stocks such as CapitaLand and City Developments (CDL) will be closely watched to gauge market reaction.

Property counters had a sparkling run last Friday before the withdrawal of the deferred scheme was announced. CapitaLand rose 25 cents, or 3.2 per cent, to $8.05, while CDL jumped 70 cents, or 4.5 per cent, to $16.30.

Meanwhile, bank stocks may even gain from the curb on deferred payment as buyers of uncompleted homes will now be seeking loans from banks instead of waiting two to three years till their homes are completed.

Property counters aside, the overall market sentiment is expected to remain bullish. Support for the benchmark Straits Times Index is expected following a solid showing from Wall Street last Friday.

Regional markets are bullish on expectations of a US interest rate cut when the United States Federal Reserve meets over the next two days.

‘Expect another last- minute short rally, until there is a direction from the US,’ said a trader.

Asian bourses mostly closed higher last Friday, with Hong Kong’s Hang Seng Index being the star of the show - jumping 3.2 per cent for the week to close above the 30,000-point barrier.

But a Citigroup report last week noted that a slowdown in the US will have a great impact on Asian markets, especially Singapore and the Asean region.

‘Decoupling is highly unlikely,’ according to a report by three Citigroup analysts. ‘Asian equity markets are the most correlated to the US and Europe that they’ve been in 30 years.’

COOLING EFFORTS

‘The initial impact will be there, but it is only temporary. Developers are still holding their prices very high.’A REMISIER, on the withdrawal of deferred payment probably having a temporary effect

What Water Theme Park Projects?

Source : The New Paper, October 29, 2007

Blacklisted S'pore MLM company unveils lavish M'sian developments. But M'sian authorities say...

THEIR presentation was certainly designed to impress and strike awe.















With just $12,000, you stand to make many times more by being part of a 'global' company that has stakes in many high-profile projects in the region.

These include a trading portal that is supposedly better than eBay, as well as majestic theme parks in Malacca and Sabah that boast floating villas and underwater hotel rooms.















Project: Underwater Hotel, Malaysia. Status: Unknown

To prove the point to about 100 people who attended Sunshine Empire's talk last week, a slide show titled Anything Is Possible was shown.

Without any explanation, the audience was shown several pictures, including one of an overcrowded bus in India with some passengers on the roof and others with legs dangling out of the windows.

Another photo showed square watermelons from Japan.

WOULD YOU BELIEVE?

Project: Sunshine Villa, Malacca. Status: Unknown.

The audience was told: 'To believe or not to believe is up to you.'

Sunshine Empire, a multi-level marketing (MLM) firm, is now on the radar of the Monetary Authority of Singapore (MAS). Though MLM companies are legal here, MAS has included the firm on its list of unauthorised companies that investors should avoid.

The Securities Commission in Malaysia has also listed Sunshine Empire on its investor-alert list. It advised the public not to make any investment with companies that are not licensed or approved by it.

The commission's website noted: 'Offers often come in the guise of seemingly attractive investment opportunities or schemes and may also be camouflaged as direct-selling or business opportunities.'

In Singapore, a visit to Sunshine Empire's office in Toa Payoh Hub saw several people there holding stacks of cash, presumably to pay for their investment.

One man had a thick stack of Indonesian rupiah.

"It is a positive things that the ST (Straits Times) did not call Sunshine Empire a scam, or say it is illegal - it merely said that the public should 'take care'. - Sunshine Empire Asia Pacific president Jackie Hoo in a memo to merchants and staff posted on Wednesday on the company website.

Earlier, they had been given a brief overview of 'the Empire', as it is called, detailing its ventures in a range of businesses from telecommunications to health to property.

A representative showed various slides of the company's regional projects, including two impressive marine theme park developments in Malacca and Sabah.

Graphics of the park in Malacca showed an intricate network of floating villas and structures on the water which formed the shape of a lion's head. The park also has an adjoining condominium project.

Artists' impressions of the park in Sabah, called The Magic Kingdom, showed a lavish underwater hotel.

An aerial view showed a network of structures in the water which took the shape of an lobster. These structures are purportedly underwater hotel rooms.

'You can open the curtains to your room and see your friends swimming outside,' the representative said.

However, the Malaysian authorities appeared to be unaware of the projects.

When contacted by The New Paper on Sunday, the press secretary to the Minister of Tourism, Culture and Environment Sabah, MrFrancis Au Chee Thong, said he had not heard about the Empire's plan to build a water theme park in Sabah.

Mr Au said: 'To our Ministry's knowledge, we have no information relating to a water theme park project.

'And, at this point, there is no such project that is under construction or in progress in Sabah at the moment.'

As for the project in Malacca, Datuk Zaini Md Nor, the mayor of Malacca City Council, told The New Paper on Sunday that the council had indeed received an application in August for approval of a piece of 0.87-ha land (slightly larger than a football field).

The land, located at Pekan Klebang, is listed under developer Empire Property Venture, an affiliate of Sunshine Empire. It is supposed to be for a commercial building.

However, the mayor said the application is still being processed.

On the water theme park, Datuk Zaini said: 'No application has been made to the city Council for the building of a water theme park till today.'

Nevertheless, the Empire's projects were not the only thing that impressed visitors.

Its sprawling office on the seventh floor of Toa Payoh Hub exudes opulence. Crystal chandeliers cascade from the ceiling and the marble walls are trimmed in gold.

The company's logo - a lion's head - is imprinted everywhere, from the carpet to a painting spanning an entire wall of the lobby.

At the reception was a stream of people queuing up to hand money to the receptionists. At least two people in the queue held wads of $50 notes.

The New Paper on Sunday had earlier phoned the number listed on the Sunshine Empire website and the woman who answered said it was not an investment company.

She also asked for the name of our 'introducer' and recommended we attend the 8pm presentation.

YOUNG SPEAKER

At the presentation, the speaker was a young woman who appeared to be in her mid-20s. She was dressed smartly in a black blazer over white business shirt and skirt.

The talk took the tone of a motivational speech with the speaker running up from the back of the room to the stage energetically.

The audience of about 50 (with 50 more in another room) appeared to come from all walks of life. There were housewives in their 50s, 20-somethings in office wear and a handful of teenagers. Among them were several people dressed in black suits.

At regular intervals, the speaker would urge the audience to applaud themselves.

She would ask: 'Who is here to learn how to make more money?'

When some in the audience responded with a show of hands, she exclaimed: 'Give yourselves a big round of applause!'

A 17-year-old student, who wanted to be only known as Tan, told us he was approached by a friend from the company two weeks ago.

He said: 'My friend told me about a part-time job with many benefits and I can start with just $2,000.

'All I need to do is to keep the money in the account for 11 months and every month, the company would pay me a sum.

'At the end of 11 months, I would get my money back, and the company would still pay me a monthly sum. My friend said he earned $1,000 in two weeks.'

In the end, Tan said he did not sign up as he did not want to have his money tied up for 11 months.

-------------------------------------------------------------------------------
SO WHERE DO SUPER RETURNS COME FROM?

MAS ADVISES INVESTORS NOT TO DEAL WITH BLACKLISTED FIRM

THE returns for this investment is supposedly so 'good' that even famed billionaire investor Warren Buffett can't hold a candle to it.

Mr James Phang, Sunshine Empire's international president, had told The Straits Times in an interview earlier this week that he was a 'legend'.

'I'm very good - better than Warren Buffett,' he declared.

And the company's promises are indeed sweet. It told people at its talk this week that they would get back their $12,000 investment in a year, plus $1,000 every month for the next seven years.

That roughly translates into a 700per cent profit within eight years - compared to Buffet's 21 per cent a year.

That's not all. Each investor would also get $21,000 worth of mobile talktime with Emcall, a local company with links to Sunshine Empire.

The claimed returns are mind-boggling and 20,000 people have signed up here since it was set up last July.

Responding to The New Paper on Sunday's queries, the Monetary Authority of Singapore (MAS) advised investors not to deal with Sunshine Empire.

Noting that the company was put on the Investor Alert List last month, a MAS spokesman said 'entities on this list are not authorised by MAS to conduct regulated activities'.

'In making financial investments, we urge all investors to deal only with persons regulated by MAS,' the spokesman said.

'If investors choose to deal with persons not regulated by MAS, they forgo the protection afforded under laws administered by MAS.'

The concern seems to be that Sunshine Empire, unlike other multi-level marketing firms, allows its members to notch up what seem like profits without buying or selling products. This makes its business model look like a pure financial investment scheme.

MrPhang had said that Sunshine Empire is not an 'investment firm'.

If so, then how does it give such super returns to its investors?

A LawNet check showed that MrPhang - described as 'international president' on the company's website - is not listed as a director or shareholder of Sunshine Empire.

It also showed that Sunshine Empire, which changed its name from Niutrend International in January, is a company 'providing entrepreneur and self-improvement courses'.

It has a paid-up capital of $150,000.

On its website, it said it is involved in 'network marketing' and is interested in 'wealth redistribution'.

It also listed offices in Malaysia, Thailand, Korea, Indonesia, Taiwan and Hong Kong.

There are reasons that MAS raises caution to those who guarantee high returns in a short time. In the US, for instance, some get-rich-quick schemes are known as 'Ponzi' schemes, named after convicted conman Charles Ponzi.

He took US$10million ($14.6m) from 10,000 people in Boston in the early 1920s by guaranteeing investors 50 per cent returns on investments in postal coupons after 45 days.

The website of the US Federal Bureau of Investigation (FBI) noted: 'A Ponzi scheme is essentially an investment fraud... Instead of investing victims' funds, the operator pays 'dividends' to initial investors using the principle amounts 'invested' by subsequent investors.

'The scheme falls apart when the operator flees with all the proceeds, or when a sufficient number of new investors can't be found to allow the continued payment of 'dividends'.'

In other words, money is taken from Ah Kow to pay initial investor Ah Seng. No goods are bought and sold. Neither is the money collected invested in anything.

Ah Kow's position is riskier than AhSeng's as Ah Kow joined the scheme after Ah Seng. This is because the purpose of recruiting AhKow is to pay Ah Seng, but there is no guarantee someone else can be recruited to pay Ah Kow.

But if everything goes smoothly, no one will complain so long as they are paid on time.

Mr Leong Sze Hian, president of the Society of Financial Service Professionals, thinks that such schemes are normally too good to be true.

He said: 'It's very rewarding and lucrative to those who join at the start. But the funds will dry up eventually and the company will close and set up shop elsewhere, or in another country.'

When You Can Withdraw From CPF Before Age 55

Source : TODAY, Monday, October 29, 2007

















MOST Singaporeans know that at the age of 55, they can withdraw their hard-earned savings in the Central Provident Fund (CPF).

But how many also know that they can make withdrawals earlier, under special medical conditions?

Since 1965, the CPF Board has allowed members to make such withdrawals if a permanent disability leaves them unable to work.

The rule was further relaxed last year when the Government said the provision would also apply to those who contracted a severe medical illness, including one that is terminal.

The legislative change is aimed at providing a source of income for such needy Singaporeans, to reduce the financial burden on them and their families.

But public awareness of this policy may not be pervasive.

Each year since 2002, an average of 700 members withdrew their CPF because they were physically or mentally incapacitated, said a spokesman of the Ministry of Manpower (MOM).

He could not provide pre-2002 figures for comparison, nor disclose the amount of CPF monies released on those medical grounds.

Could the life insurance market, where there are about 14 players, shed some light?

At NTUC Income alone, the insurer annually processes some 700 claims for critical diseases which include paralysis and coma, said a spokeswoman. In addition, the company receives about 140 claims for total and permanent disability, and terminal illness, she told Today.

To Dr Noreen Chan, the figure of 700 for early CPF withdrawal "seems very low", said the chief executive officer and medical director of Dover Park Hospice.

Based on anecdotal evidence and her dealings with terminally ill patients, Dr Chan said the early withdrawal of CPF for serious medical needs "is not something we think about when we're well".

She feels there needs to be more awareness about how one can deal with future crises.

"The Government has always tried to encourage financial planning — that isn't just to do with making sure your CPF lasts. We need to be more aware of what happens when we get sick during our active working life," said Dr Noreen Chan, chief executive officer and medical director, Dover Park Hospice.

Going by the situation at Dover Park Hospice, the proportion of Singaporeans caught in such a mid-life bind is not small. Between 20 and 25 per cent of its patients are 55 years old and below, said Dr Chan.

Her hospice, which handled 410 inpatient cases in the last fiscal year, is among a total of eight facilities providing services for the terminally ill here, according to information on the website of the Singapore Hospice Council.

Some of the facilities will guide a patient and his family through financial matters such as the subsidies available and whether he is eligible for early CPF withdrawal.

To apply for early withdrawal under special medical conditions, a CPF member has to give the CPF Board a recent doctor's memo on his health status. The board will then obtain a medical report from his doctor or refer the member to the board's panel of doctors to assess his application.

If deemed terminally ill, the CPF member will be allowed to make a lump-sum withdrawal of all his savings in the Ordinary, Special and Retirement accounts, plus Medisave Account savings above the prevailing Medisave Minimum Sum of $28,500.

If a member is deemed not terminally ill but severely impaired either physically or mentally, the amount he can withdraw early will be determined "on a case by case basis and, where applicable, subject to sufficient funds being set aside in their CPF for their medical and other needs for their remaining life span", said the MOM spokesman.

URA Launches Tender For Hospital Development At Novena Terrace/ Irrawaddy Road

Source : Urban Redevelopment Authority (URA) News Release, 29 October 2007

The Urban Redevelopment Authority (URA) launched a hospital site at Novena Terrace / Irrawaddy Road for sale by public tender today.

Singapore as a Premier Healthcare Hub

Singapore is one of Asia’s leading medical destinations. It has experienced exponential growth in international patient volumes over the last few years with more than 410,000 visitors in 2006. Growing at a rate of 20% per annum, Singapore expects to receive about one million international healthcare visitors by 2012.

With continued economic growth in Singapore and neighbouring countries, there will be increasing demands for basic healthcare and high quality specialist care services such as cardiology, oncology, orthopedics and neurology.

To meet the rising demand for health care services in Singapore, URA worked with the Ministry of Health and identified the site at Novena for sale as a hospital development.

Medical Cluster at Novena

Novena is fast establishing itself as a distinctive medical cluster in Singapore with a number of leading medical institutions already located in the area. These include the Tan Tock Seng Hospital (Singapore’s second largest hospital), Thomson Medical Centre and specialist centres such as the Johns Hopkins International Medical Centre, Novena Medical Centre, National Neuroscience Institute (NNI) and the National Skin Centre (NSC). The Renci Hospital, which is due for completion in 2008, is also located within the Novena medical cluster.

Land Parcel at Novena

Located in the heart of the Novena medical cluster, the 1.7 ha site with a maximum permissible gross floor area of about 72,350 sq m provides the opportunity for a world-class hospital development that will enhance and complement the existing range of healthcare services within the Novena medical cluster.

In line with this intention, at least 35% of the maximum permissible Gross Floor Area (GFA) of the proposed development is to be set aside for hospital in-patient wards. This is to meet growing demand for in-patient care facilities from domestic patients and international medical travellers. In addition, complementary retail uses such as gifts shops and food and beverages outlets will be subject to a maximum 5% of the total GFA as the bulk of the development should be retained for hospital use.

The details of the site are given at Annex A-1 and the location plan at Annex A-2. More details on the site are available on URA website at http://www.ura.gov.sg/sales/NovenaTer/NovenaTer-intro.html

Details of tender

A tender period of about 16 weeks will be allowed for the site. The tender will close at 12 noon on 15 February 2008. Selection of the successful tenderer will be based on the tendered land price only.

Developer’s Packets containing details of the site, development requirements and conditions of tender are available at S$105 each (inclusive of GST). These can be purchased from the Customer Service Counter on the 1st storey of The URA Centre, 45 Maxwell Road, Singapore 069118. The Developer’s Packets can also be purchased via URA-Online at http://www.ura.gov.sg/sales/sale_of_developer’s_packet.html at a cost of S$105 each (excluding delivery charges) for local and overseas purchases.

--------------------------------------------------------------------------------

For any media enquiries, please contact:

Ms Serene Tng

Manager, Public Relations
Urban Redevelopment Authority
DID: 6329 3224
Email: serene_tng@ura.gov.sg

Ms Julie Sim Boon Lee

Deputy Director, Media Relations
Ministry of Health
DID: 6325 1749
Email: julie_sim@moh.gov.sg

Exit Of Deferred Payments Not A Fatal Blow: Goldman

Source : The Business Times, October 29, 2007

Mid to mass market may be hardest hit as some projects see 50% opt for scheme

The withdrawal of the deferred payment scheme (DPS) for property purchases may quell demand in the short term, but will not deal a fatal blow to Singapore's residential market, says Goldman Sachs.

Negative sentiment: Analysts have trimmed their forecast residential selling prices by around 3-4%.

The investment bank also expects negative investor sentiment on property developers in the short term, but kept its 'buy' on GuocoLand and a positive view on real estate investment trusts (Reits).

Goldman Sachs Global Investment Research's report is among the first to be made available after the government announced last Friday that it was removing a scheme that allowed the bulk of payments for property purchases to be deferred till the project was completed.

Goldman said that parties that are likely to be affected by the move include property speculators, foreigners buying Singapore properties here and 'buyers who are stretching their affordability to buy a property'.

The bank says that the key test bed for the negative impact is the mid to mass market, even though the prime to luxury end of the residential market will be affected as well.

This is because 'there are projects in this segment where over 50 per cent of purchases are accounted for by buyers opting for the DPS route', and 'the need to secure financing upfront will cause buyers in this segment to hesitate in committing to buying'.

However, its analysts see certain mitigating factors like strong job creation and economic growth, which supports a positive long-term outlook on this segment.

In the short run, the pace of new launches and take-up of new launches are expected to slow over the next three to six months as property prices are likely to come under marginal pressure.

Goldman said that this would result from undiscounted selling prices, which could have been set higher using DPS, negative impact on certain pools of demand and negative impact on sentiment.

Indeed, the removal of DPS raises the risk of government intervention to curb rising property prices, the report added.

'Given such a backdrop, we foresee developers being less aggressive in recycling monies earned from successful launches into beefing up residential land banks,' it said.

Hence, its analysts have trimmed their forecast residential selling prices by around 3-4 per cent, assuming flat prices in 2008 as well as slower growth going forward.

'We also remove the 10 per cent premium to return on net asset value, where applicable, to reflect a more murky picture on developers recycling capital to expand land bank.'

Against this backdrop, Goldman kept its 'buy' on GuocoLand with a price target of $6.20 as 'we continue to like the China projects and find valuation attractive'.

Also, it maintains its 'neutral' stance on CapitaLand, City Developments and Keppel Land with price targets of $8.30, $15.70 and $8.90 respectively.