Thursday, January 24, 2008

Property Transactions With Contract Dates Between Dec 17, 2007 - Jan 5, 2008

We Can Weather US Storm: PM

Source : TODAY, Thursday, January 24, 2008

Reasons why it won't be like the 1997 financial crisis

LIKE the bearish investors who have been stalking financial markets in recent weeks, Prime Minister Lee Hsien Loong believes that a recession is looming in the world's largest economy, the United States.















Still, Mr Lee is hopeful that the policies implemented earlier will provide buffers for the Singapore economy should a US recession come to pass.

"I'm confident that we're going to be able to weather this storm. This is not like the 1997 financial crisis and we got through that," Mr Lee told a group of 40 businessmen yesterday during a breakfast meeting hosted by the French Business Confederation (Medef).

A slowdown may also be the very thing needed for Singapore right now. Said Mr Lee: "If we have to ease this year, there may be some silver lining because it may relieve some supply constraints which have built up — manpower shortages, land shortages — and ensure more sustainable growth over the medium term."

It was the first time that the Prime Minister was giving his take on the current market chaos, since the United States Federal Reserve dramatically slashed interest rates and President George W Bush proposed an economic stimulus package.

Will the measures work wonders for the US, where massive losses linked to subprime mortgages have shaken major banks and investor confidence?

That is anyone's guess.

But in Mr Lee's view, "it is entirely possible and likely that America will go into recession", which is technically defined as a fall in economic growth for two straight quarters.

Once that happens, Singapore will certainly take a hit.

"Ours is a totally open economy, completely exposed to global markets. There is no way you can shelter from the wind-chill," he said, adding that external trade is a whopping 3.5 times that of domestic demand while the US alone buys 15 per cent of Singapore's non-oil exports every year.

In fact, when Uncle Sam sneezes, the whole of South-east Asia may catch the worst chill, according to Mr Steven Dunaway, the International Monetary Fund's deputy director for the Asia and Pacific department.

This is because if the US imports less, South-east Asian countries may face "extra competition" from China, which could slash prices in order to compete for a slice of the smaller pie.

Mr Dunaway predicted that a drop of one percentage point in US growth would shave 0.5 to 1 percentage point off Asia's growth.

However, some in the region may not feel as much pain. Mr Lee has China and India in mind:

"Whatever happens in America, they (China and India) are going to continue to grow. Their momentum is considerable … the domestic demand has been very robust," he said.

That resilience will be Asia's pillar of strength.

At the same time, Singapore can count on some pluses at home, said Mr Lee, who maintained the official growth forecast of 4.5 to 6 per cent this year.

First, years of restructuring the economy have boosted competitiveness, helping to draw in a strong flow of high-quality, new investments that will create jobs and growth in coming months and years. Examples he cited include a $6.3-billion plan by Norway's Renewable Energy Corp to build the world's biggest solar cell plant in Singapore.

Second, the services industry will be bolstered by an upcoming string of mega projects, such as the two Integrated Resorts and the Formula One night race in September.

Together, these factors give the Prime Minister hope. Sure, Singapore's economy is likely to decelerate this year after last year's stellar 7.5 per cent. But a slowdown would mean a pace that is more sustainable, Mr Lee said, as the Republic has enjoyed four consecutive years of above-trend growth since 2004. Analysts expect a mature economy such as Singapore to expand at around 3.5 per cent annually.

Mr Lee's bottom line to French businesses: Regardless of the present financial instability, opportunities remain in Asia.

After the breakfast meeting, the Prime Minister met former French President Jacques Chirac to go on a tour of Musée du Quai Branly, the primitive art museum started by Mr Chirac in 2006.

Earlier on Monday, Mr Lee also held talks with other French leaders such as President Nicolas Sarkozy and Prime Minister Francois Fillon.

From Paris, Mr Lee yesterday made his way to Davos, the Swiss ski resort town hosting the World Economic Forum's annual meeting, which is expected to be dominated by America's economic woes.

(Quote lift can use if there's space)

"We're not going to come back to the situation before August last year, where risk was under-priced and there was a remarkable ebullience, which could not be repressed despite many people realising that things could not continue indefinitely." – Mr Lee Hsien Loong

Inflation Up 4.4%, Hits 25-Year High

Source : The Straits Times, Jan 24, 2008

Rising transport, oil, food costs drive up index; economists still positive, though

COSTLIER food, transport and health care drove Singapore’s inflation rate to a 25-year high of 4.4 per cent last month.

This comes amid growing fears that a possible United States recession will drag the global economy into a slowdown.

Economists, however, do not believe the Republic faces the dreaded spectre of stagflation - when an economy becomes stagnant as inflation gets far worse.

The Department of Statistics announced yesterday that the consumer price index rose 4.4 per cent last month from a year earlier. The index was up 4.2 per cent in November.

The index is a key measure of inflation and reflects changes in the prices of a fixed basket of goods and services households commonly purchase.

The rise was the highest since April 1982, but it was largely in line with earlier forecasts.

Key contributors to higher prices included transportation costs, which grew 6.4 per cent, soaring crude oil prices and a hike in taxi fares towards the end of last year.

Food prices went up 5.5 per cent due to more expensive cooked food, fresh fruits and vegetables, and milk products.

At the same time, health-care costs went up 6.3 per cent, reflecting higher charges for daily ward and medical treatment.

Compared with 2006, consumer prices for the whole of last year rose 2.1 per cent, partly reflecting the two-percentage-point hike in the goods and services tax in July.

Market watchers expect this inflationary trend to continue into the early part of the year.

Minister for Trade and Industry Lim Hng Kiang flagged this in November, when he said inflation could hit 5 per cent in the first quarter before moderating in the second half.

Economists Robert Prior-Wandesforde and Prakriti Sofat of HSBC’s Asian Economics team said in a note yesterday that inflation this month could reach as high as 6 per cent.

They cited reasons such as another round of electricity tariff hikes kicking in, as well as higher imputed HDB rents due to the Inland Revenue Authority of Singapore (Iras) raising the annual values of HDB flats.

However, when asked if higher inflation could combine with a potential global economic slowdown in a brutal double-

whammy for Singapore, economists were more upbeat.

CIMB-GK economist Song Seng Wun said the local economy would likely grow next year, albeit at a slower pace than this year.

‘With the construction and services sectors likely to continue growing strongly, gross domestic product is likely to make the minimum 4.5 per cent to 5 per cent growth forecast by the Government.

‘High inflation should continue into the first half, but I expect oil prices to plunge in the second half. This could ease inflationary pressures very quickly.’

Citigroup economist Chua Hak Bin agreed, saying: ‘The inflation we are seeing now is still demand-driven, and I doubt that a lot of prices can stay up if there is an economic slowdown.

‘Oil prices have eased drastically last week, and food prices are stabilising. So, it’s unlikely for us to see any stagflation.’

However, Ms Selena Ling, an economist with OCBC Bank, was more circumspect.

‘A lot of the inflationary factors we are seeing are domestically driven, such as higher taxi fares and the Iras revision of property values, and these will not be affected by a cooling of the global economy.

‘We could see some stagflation on a very small scale, much different from that during the oil shocks some 20 years ago, as the inflation is not in double digits this time.’

Regent Garden Owners Deny Trying To Back Out Of Deal

Source : The Straits Times, Jan 24, 2008

MAJORITY owners at Regent Garden have denied that they are ‘greedy’ and trying to back out of a collective sale they are challenging in court.

The 25 owners told The Straits Times that they only want the court to clarify if the agreement with Allgreen Properties can proceed even if the price undervalues their property.

They want to know whether the contract is still binding in a case where the development charge is wrong.

The owners are also upset that Allgreen paid more money to the six minority owners, who did not vote for the sale, than it did to those who backed it.

The 25 owners inked an agreement last April to sell their property in West Coast Road to mainboard-listed Allgreen for $34 million.

One of these owners is former MP Aline Wong, who stepped down from the chairmanship of the Housing Board last year.

But the owners are claiming that the price is too low as the actual development charge - which is much lower - was not obtained. They want damages of between $5.7 million and $6.685 million from Allgreen.

The damages claim is based on two revised valuation figures that use the correct development charge.

The owners wrote to Allgreen last month, claiming that the sale price of $34 million was a ‘mutual fundamental mistake’ as it factored in a far higher development charge.

Allgreen said last Friday that it intends to ‘vigorously contest this action, and the claims and allegations made by the majority vendors’.

The Straits Times understands from the majority owners that they are only ’seeking clarification and fairness’ from the courts.

They want to know if the sale can go ahead at this ‘undervalue’ and not at ‘market value’.

They also query if minority owners can be entitled to additional payments from Allgreen but not share them with the majority owners.

Recession? What Recession?

Source : TODAY, Thursday, January 24, 2008

The global market panic driving Tuesday’s United States Federal Reserve rate cut is rooted in the still controversial idea that the US economy has slipped into a recession.

Many market participants now take it as an article of faith that the US economy is, or will soon be, in a contractionary phase of economic activity. Some even argue that as long as it “feels” like a recession, it is one. But that sentiment obscures the reality that thus far, there is no definitive view among economists about how weak the economy is or might become.

That’s not to say anxiety is not riding high. The Fed, which cut interest rates by an unprecedented margin on Tuesday, has consistently downplayed and underestimated economic and market conditions over recent months. Clearly, policy-makers have grown more anxious.

Since September, the Fed has cut its key overnight target rate by nearly two percentage points and engineered novel mechanisms aimed at getting liquidity into financial markets. In turn, the institution’s good works have been washed away by weakening economic data, most notably on the employment and manufacturing fronts, and by a seemingly-endless stream of bad news from financial markets.

Views held by forecasters have been unusually diverse. In recent weeks, several major investment banks, including Goldman Sachs and Merrill Lynch, have officially endorsed the view that the US economy is contracting.

Merrill’s frequently-bearish chief economist David Rosenberg said the four factors watched by official business-cycle-dating body, the National Bureau of Economic Research, are each on the way down. Employment, manufacturing and retail sales, along with industrial production and income, all appear to be coming off cycle high points: Mr Rosenberg sees this as a clear sign of a recession.

What’s worse, “the healing phase involved in expunging all the excesses left over from a multi-year leveraged boom in asset values takes time,” Mr Rosenberg said. He reckons the current year will scrape by with an average growth rate of 0.8 per cent - the year will likely see three contractionary quarters - with 2009 limping by at a 1-per-cent pace.

Mr John Silvia, Wachovia Securities chief economist, sees 50-50 odds of a recession but believes if policy-makers move aggressively, a downturn need not take place.

Miller Tabak strategist Tony Crescenzi sees reasons to be hopeful. The monetary policy stance and the prospect of fiscal stimulus are reasons to believe any contraction will be short-lived. Low inventories, rising exports, healthy corporate cash positions and possible new mortgage refinancings now that rates are moving lower are other positives.

Mr Joel Naroff, who helms forecasting firm Naroff Economic Advisors, said the economic data now in hand “does not tell us we are in a recession yet”.

While he’s cautious about the outlook, he argued that Tuesday’s rate cut was forced as much by market expectations as anything else. It is entirely possible that the upcoming January jobs report may be stronger than many think, which could make the size of Tuesday’s action seem over the top, he said.

While Tuesday’s action clearly shows that Fed officials are at least mindful of worst-case outcomes, even there, one finds diversity. Mr William Poole, who will soon retire as president of the Federal Reserve in St Louis, Missouri, used his final vote as a Federal Open Market Committee member to say that the apocalypse is not now.

Mr Poole has been an unreliable guide on monetary policy, but he also represents the views of many when he argued that as bad as things are for markets, the real economy has not lost its bearings.

阿裕尼短期办公楼地段因投标价太低当局不卖

《联合早报》Jan 23, 2008

不出市场所料,由于投标价太低,市区重建局(URA)昨天拒绝发售阿裕尼地铁站旁的短期办公楼(transitional office)地段。这是该局7年以来,首次拒绝颁售已获得投标的地段。  

上个星期招标截止的这个短期办公楼地段,只有本地建筑商MV Land属下的Mezzo Development出手,但标价比近期短期办公楼地段低超过一半,仅达到总建筑楼面每平方英尺38.37元。由于反应冷淡,标价又低,一些市场人士有预感,市区重建局可能不会将它颁售。

第一太平戴维斯(Savills)行销与业务开发主管邱瑞荣指出,目前推出市场的短期办公楼可能将成为明日黄花,市场因此不愿进场。

他说:“在建筑成本要比租金增加得更快,建设时间更长的背景下,短期办公楼预计只能在2009年底以后建成。届时将有大批办公楼供应推出市场,这类位于市区以外的短期办公楼要与市区内的办公楼竞争相当困难。”

至于是否会进而停止推出短期办公楼地段,市建局在回答本报询问时说,政府正在检讨最近的短期办公楼地段投标以及市场对这类地段的需求,并重申会视市场情况而定,若有需求将继续推出这类地段。

据了解,政府原本有计划在今年上半年多推出另外一两个短期办公楼地段。

莱坊(Knight Frank)研究部主管麦俊荣提出,政府应把短期办公楼地段纳入备售名单”(reserve list)里,这样一来就无需担心标价太低,或市场反应的问题。

他也预计,该地段反应冷淡也许和近期全球股市动荡有关,政府可能在迟些时候再把它推出市场。

政府是去年7月首次推出短期办公楼地段,目的是协助市场应付暂时性的办公楼面供应短缺现象,至今共推出四幅地段。据估计,新加坡办公楼市场的短期问题,预料要到2010年,滨海湾金融中心第一期工程完工后才有望舒解,因此政府采取几项措施协助舒缓这个暂时性问题,包括推出短期办公楼地段及出租现有的国有房地产作办公用途。

尽管本地办公楼供应吃紧问题仍存在,租金也居高不下,除了第一幅位于史各士路的短期办公楼地段获得市场热烈反应,之后推出市场的短期办公楼的反应却相当冷淡。

惹兰苏丹Jalan Sultan保留店屋竞标最高价比预测高一倍

《联合早报》Jan 23, 2008

尽管新加坡市区重建局一方面因标价太低,七年来第一次拒绝发售地段,但另一方面,售地市场却出现令人惊讶的景象。  

环球股市狂泻似乎没有浇灭买家的兴致,位于惹兰苏丹(Jalan Sultan)的17间受保留店屋的投标反应异常热烈,获得20份投标书,是市建局10年来所获得的最多投标书。此外,最高标价更达到1480万元,即每平方英尺974元,是市场人士所之前预测的约两倍。

市建局于去年11月将这块位于政府指定的甘榜格南(Kampong Glam)历史保留区内的地段推出市场,昨天截止招标。该地段是政府去年下半年“备售名单”(reserve list)中的地段之一,市建局是收到一名发展商承诺以至少780万元的价格参与投标后,才把地段勾出来在市场上招标。

地段的面积为0.14公顷,属于99年地契,包括17间两层楼的保留建筑。得标者必须根据历史保留区的竞标条件和保护条例,整修这些获得保留的旧店屋,重新发展为酒店、办公楼、商店、餐馆等。

据本报查询,20名投标者当中,以酒店业者和房地产发展商居多。开出1480万元最高标价的为九鼎企业私人有限公司(Chiu Teng Enterprises)旗下的Chiu Teng Estates。最低标价则为800万元,出价的是一家宿舍经营商。

其他投标者还包括泰国服务公寓经营商Boutique Land,医疗服务公司Katong Medical Centre以及一些独立人士。市场人士之前预测,这块地段预计能取得容积率每平方英尺470元至680元的标价。

莱坊(Knight Frank)咨询与研究部主管麦俊荣对如此热烈的反应感到惊讶,认为这主要因为总标价数额较少,小型发展商都能负担得起,参与的人数自然就会多,加上这些店屋面向大路,又靠近惹兰苏丹和美芝路的交界处,而这个地带相信将在新总发展蓝图中重点发展成一个新的商业娱乐地点,尤其对酒店和餐饮业者具吸引力。  

第一太平戴维斯(Savills)行销与业务开发主管邱瑞荣则指出,受保留店屋很稀有,有很多发展商、建筑师和酒店业者感兴趣,何况,这些旧店屋的地点优越,处于旅游和购物区,第二层的面积用途更具伸缩性,还可发展为办公楼。

政府料不会在F1大赛前放宽服务公寓限制

《联合早报》Jan 22, 2008

尽管新加坡酒店客房吃紧情况日益严重,但新加坡市区重建局和新加坡旅游局预料不会在9月,举行一级方程式大赛之前,重新检讨对服务公寓(serviced apartments)所实施的“至少住七晚”限制。

服务公寓业者两年前开始与有关当局会面,争取让服务公寓接待短期旅客的可行性,从而协助解决酒店客房短缺的情况。即使近期酒店短缺情况愈演愈烈,而且9月26日至28日车赛期间的客房叫价已超过1000元,但以上枷锁仍没被松开。

旅游局指出,这是由于至今仍未获服务公寓协会(Serviced Apartment Association)取消“至少住七晚”限制的计划书,而该局也不断采取各项措施确保客房供应充足,今年将有10个酒店开张,供应1700个客房,因此没打算暂时取消限制。  

对此,服务公寓协会主席王健忠解释说,当年向有关当局提出这要求,用意并不单是为了舒缓酒店客房不足的压力,同时也希望为旅客提供多一种选择,以及改善行业的服务水平和设下一套监管准则。

然而,在经济强劲增长带动下,新加坡服务公寓去年平均住用率超过90%,要比酒店的80%以上住客率来得高,平均租用期介于3至6个月,业者已应接不暇,因此没极力争取或提呈这方面的计划书。

王健忠说:“新加坡服务公寓有3000多个单位,占新加坡酒店客房总数的10%,即使放宽让我们接待短期旅客,对市面上的供应也不会有显著影响。”

市建局是在1998年11月发布对服务公寓的要求,以便区别服务公寓和其他的住宅发展及短期住宿地点如酒店和宿舍。除了住宿期外,它也限制服务公寓的开设地点、必须提供的设施和服务等。

尽管过去几年平均住客率都在95%以上,经营400多个单位的辉盛国际管理(Frasers Hospitality)总裁曹炳森仍支持取消“至少住七晚”限制,并表示曾多次有顾客要求短期住宿。他认为,这能使新加坡的旅客住宿达到伦敦和悉尼等国际大都会的水平,也让旅客拥有更多选择。

有别于酒店,除了酒店式服务外,服务公寓房间较大,布置和设施像住家,有厨房、洗衣机等,适合长期住宿。随着到访旅客人数激增,王健忠指出,过去两年有不少新业者加入本地服务公寓行列。不过,在这同时,也有不少人假借服务公寓名义,把房子出租却没有提供全套服务,货不对办有损新加坡形象。

MIT Putting Down Roots At New Campus

Source : The Straits Times, Jan 24, 2008

200 of its top minds will link up with local talent to jumpstart research powerhouse

AFTER a 10-year engagement, Singapore and the Massachusetts Institute of Technology (MIT) have tied the knot.

The decade of research and teaching tie-ups between MIT, the National University of Singapore (NUS) and Nanyang Technological University (NTU) has culminated in MIT's most ambitious international effort to date.

About 200 of MIT's top minds will join hands with local and regional researchers at a centre here dubbed Smart - the Singapore-MIT Alliance for Research and Technology.

By 2010, they will join other global powerhouses at a new research campus at the NUS University Town @ Warren. The campus will boast academic, sporting and leisure facilities, as well as hostels and shops.

For a start, infectious diseases and environmental sensing and modelling are being put under the microscope.

MIT's first two of five interdisciplinary research groups have already set up operations here, with about 60 researchers working in temporary labs at NUS. When fully operational, about half will be from MIT.

The effort is part of a $1-billion experiment to entice the world's best and brightest research minds here, under a National Research Foundation (NRF) scheme dubbed the Campus for Research Excellence and Technological Enterprise (Create).

Plans are being drawn up to develop laboratories, office space and world-class facilities at the complex.

Using MIT as an example, NRF head Tony Tan said yesterday that research universities can make a big contribution to the economy.

'If the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make that nation the 24th largest economy in the world,' Dr Tan said.

A total of 4,000 MIT-related companies employ 1.1 million people and have annual world sales of US$232 billion (S$325 billion).

Dr Tan pointed out that 64 members of MIT have won the Nobel prize, proving that 'use-inspired research does not compromise the quality of scientific research'.

Speaking at the opening of the fifth international symposium of nano-manufacturing yesterday, he also announced an innovation centre to take great ideas to the marketplace.

In addition, the Education Ministry will match dollar for dollar gifts and donations to Smart to set up Singapore research professorships. These will be held by senior MIT faculty or scientists who are actively involved with Smart research programmes.

MIT provost Rafael Reif outlined his university's contribution to Smart.

'What MIT brings to the union is its talent. Our contribution is the people,' he said.

And it will be a long-haul partnership. Said Smart director Thomas Magnanti: 'We plan on working together for at least another 20 years.'

The exact amount being pumped into Smart is being kept under wraps, but Professor Magnanti, who is MIT's former dean of engineering, estimated it will cost up to US$40 million to run the five research groups every year.

Smart's work here will centre on research that cannot be conducted at MIT.

Said Prof Reif: 'Of the two research areas we've chosen so far, getting access to pathogens from the region and the facilities of environmental sensing labs are not available at MIT, which makes it very attractive to work here.'

Strong Bids Expected For West Coast Site

Source : The Straits Times, Jan 24, 2008

A RESIDENTIAL site released for sale at West Coast Crescent yesterday is expected to draw a good response.

Property consultants said the 1.2ha plot could fetch between $94 million and $112 million.
















This works out to $260 per sq ft (psf) to $310 psf of the site's potential gross floor area which stands at 361,667 sq ft. These expected prices are slightly higher than the $248 psf of gross floor area fetched for a site at Boon Lay Way last month.

The West Coast plot was launched for public tender by the Urban Redevelopment Authority yesterday as part of the Government's confirmed land sales programme, which identifies sites to be sold at a pre-determined date.

It is attractively located near schools - including the Japanese Supplementary School - as well the National University of Singapore, said market experts.

A new condominium built on the 99-year leasehold parcel 'promises a view of the sea and greenery at West Coast Park and Clementi Woods', said Mr Li Hiaw Ho, executive director of CB Richard Ellis Research.

He added that such a condo, which can be built to up to 36 storeys, would be only the second high-rise development 'on this stretch of West Coast', after Blue Horizon.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, expects the site to attract three to six bids. About 290 to 300 condo units can be developed on the land, he said.

The breakeven cost for a future building on the site is likely to be about $650 to $690 psf, he added. 'The new units in this proposed development could be sold at prices between $740 and $780 psf.'

Mr Li also pointed out that some units in adjacent Blue Horizon were sold at about $750 psf in the fourth quarter of last year. Sub-sales of uncompleted homes at nearby Varsity Park were also in that price bracket.

Recession Unlikely, But Expect Some Gloom

Source : The Straits Times, Jan 24, 2008

S'pore can rely on construction projects to drive growth even if US downturn occurs

THE week is turning out to be a most unsettling one for the world - and Singapore.
Stock markets have crashed while a succession of assessments pronounced the US already in recession - Merrill Lynch being the latest to join the chorus.

Policymakers, not least the US Federal Reserve, are being forced to make unprecedented moves to stave off a downturn and calm the market maelstrom.

VOLATILE MARKET: The stock index at One Raffles Quay showed Asian markets have rebounded yesterday in response to the US interest rate cut. -- ST PHOTO: ALBERT SIM

Companies and financial investors, no doubt, are already feeling the pain from steep declines in share prices across the board.

And even those with little interest in finance or economics must be sitting up to the alarming headlines that seem to paint a gloomier picture with every passing day.

Yet what exactly should Singapore and Singaporeans be worried about?











Certainly, the heart-stopping action in the past three days on the Singapore stock market has clearly shown financial investors that markets here and in the region are not independent of developments in the world's largest economy.

But even those who do not invest should be interested to know if, and how, a US contraction will affect the local economy.

If history is anything to go by, a US recession has always dragged Singapore's economy into the red.

Will things be different this time round?


Dip in exports

THE manufacturing sector is one of Singapore's key growth engines. With Singapore's small domestic market, its health depends critically on external demand for its exports.

A slowdown in the US, the biggest market for local exports after Europe, will inevitably hurt manufacturers that sell most of their wares overseas.

The electronics sector will be one of the more vulnerable, as demand dries up for computers, phones and other gadgets.

Shipping companies, air cargo firms and other logistics firms will also take a hit, as will wholesale traders.

In fact, exports are already starting to slide with contractions in the past two months.

Much has been said in recent months about Asia weaning itself off Uncle Sam in this regard.

Some argue that the fast economic growth in recent years has given rise to an increasingly affluent middle class in Asia that can act as a counterweight to the almighty American consumer.

Flourishing trade within the region appears to support these 'decoupling' theories.

But experts say this may not be true, because much of the movement of goods within Asia is merely a manifestation of global production lines that are not contained within a single factory but span across countries.

For instance, microchips made in Singapore are shipped to China, where they are assembled, along with other imported components from elsewhere in the region, into a laptop computer that is ultimately bound for the US.

This trend is backed by empirical studies, which show that half of intra-Asian trade is driven by final demand outside the region.

In any case, the Asian consumer may not be as resilient as some are inclined to think.

Citigroup economist Chua Hak Bin warns that Chinese consumers, often held up as an important alternative source of demand, may not be as enthusiastic about a shopping spree if the export-driven factories many of them work in face tough times.

There are a few bright spots, however. Oil rig production should continue to be robust given that shipyards here are already fully booked for the next few years.

Pharmaceutical sales, which arguably are driven less by economic cycles, could also provide support.

New plants in the electronics and pharmaceutical sectors coming on stream later this year may also bolster exports, although the extra capacity will help little if demand caves in.


Financial contagion

WHAT about the services industries, which spectacularly contributed about 70 per cent of the economy's phenomenal growth of 7.5 per cent last year?

Services geared at overseas markets and customers may see business slowing down.

But the deceleration may not be as acute because Singapore's services industry is significantly driven by Asian economies, which are expected to fare better than those in the West.

And the Formula One race scheduled in September will also provide a boost to tourism-related activities.

But the financial sector, with its globalised nature, may prove to be a big spoiler. It will be hit harder as the shattered confidence of the Western financial sector spills over to Asia.

Companies are already postponing fund-raising activities. Share trading volumes are falling as stock market turbulence keeps investors, and private banking clients, on the sidelines.

Foreign banks that have been badly hit by the US sub-prime mortgage crisis may also turn more cautious about lending and hiring here.

On the domestic front, the uncertainty about the US economy may prompt property investors to hold back on purchases, which will hurt real estate-related services. It may also slow or stall property price increases.

What this means is that the local consumer who is looking at stock market losses and the absence of surging home values could hold back on spending.

And this will ultimately drag down sectors such as retail and restaurants.


Betting on construction

AMID the gloom, the building sector will most likely survive the US recession unscathed.

Mega projects like the integrated resorts will keep construction firms busy, as will the huge pipeline of projects from a property boom over the past two years.

Barclays Capital economist Leong Wai Ho says these projects are unlikely to be derailed by US - or global - economic woes and will be a key growth driver for the local economy this year.

So, all things considered, what will 2008 - hobbled by a failing US economy - be like for Singapore?

For all the growing worries about the US and the general world economy, economists reckon Singapore and Asia will escape a recession this year.

For one thing, the jury is still out on where the US is headed.

Many forecasters are still hoping for a benign slowdown, aided by aggressive interest rate cuts by the American and European central banks.

Even among the more bearish, and their number appears to be growing by the day, the consensus is that Singapore and the region are still expected to expand, even in the face of a twin recession in the US and Europe.

Regardless of the final GDP growth figure, it will represent a significant downshift after four years of spectacular economic growth in Singapore.

Even if the economy stays in the black, Singaporeans will need to take heed, and make their own adjustments for less exuberant times.

Singapore Sets Up New Research Centre With MIT

Source : Channel NewsAsia, 23 January 2008

Research in Singapore has received a boost with the setting up of the Singapore-MIT Alliance for Research and Technology (SMART) Centre.

The centre is also the largest international research endeavour by the Massachusetts Institute of Technology (MIT) outside the US.

Collaborating with Singapore gives the MIT access to the necessary facilities or information on infectious diseases such as tuberculosis and malaria.

Related Video Link - http://tinyurl.com/36yokr

SMART Centre governing board co-chair, MIT provost Prof Rafael Reif said, "Singapore is very unique to offer those kinds of facilities and laboratories. MIT does not have them. We have talent; we have personnel; we have the interest. Singapore also has the talent and personnel and laboratories, and those make a very unique set of opportunities for us to interact and carry out those projects here in Singapore."

Another research area being looked at is environment sustainability.

In fact, five interdisciplinary research groups are to be established under the SMART Centre.

The group conducting research on infectious diseases has already been set up, with its focus on influenza, malaria, respiratory virus and tuberculosis. And to study these diseases, the group will be perfecting a mouse model with human immune tissues.

The collaboration will see up to 400 researchers from MIT conducting research in Singapore for up to six months.

The centre will be built on the old site of Warren golf course, and the first phase of the project is expected to be completed in two years. Till then, researchers will be housed at the nearby National University of Singapore (NUS).

The SMART Centre is the first entity of the National Research Foundation's billion-dollar project called Campus for Research Excellence And Technological Enterprise. Under this project, a complex of research centres will be set up by world-class research universities and corporations working together with Singapore's research community. - CNA/ac

ART Buying Another Property In Australia

Source : The Business Times, January 22, 2008

ASCOTT Residence Trust (ART) is acquiring an 84-unit serviced residence in Australia for a total purchase price of A$28.5 million (S$35.6 million).

In a statement released yesterday, ART said the acquisition is yield-accretive at an estimated annualised property yield of 6.1 per cent in the forecast year 2008.

The freehold property, currently known as Chifley On The Terrace, is located along the prime St Georges Terrace in Perth's central business district. ART said the acquisition will be funded by borrowings, which will bring its gearing to 34.5 per cent. Upon completion of the acquisition, the property will be rebranded Somerset St Georges Terrace, Perth and will be managed by Ascott International Management (Australia).

Chong Kee Hiong, CEO of ART manager Ascott Residence Trust Management Ltd, said: 'Perth is an attractive market as there is high potential for organic growth.' St Georges Terrace's location makes it attractive to corporate travellers visiting the city, he added.

Citing Deloitte's HotelBenchmark Survey, ART said Perth was the best-performing Australian city in 2007, with average room rates growing at 15 per cent in the first nine months of that year to reach A$159 and occupancy averaging 84 per cent.

Mr Chong added: 'In view of the limited supply of good-quality accommodation in Perth currently and in the next few years, we anticipate that room rates in the city will continue to grow.'

Comprising 84 studios and one-bedroom apartments, the Perth property enjoys an average occupancy level of about 90 per cent and provides facilities such as daily housekeeping services, a bar and restaurant, function rooms and car parking.

Upon completion of its latest acquisition, ART's total portfolio value will stand at $1.37 billion, comprising 3,550 units in 37 properties in 11 cities across seven countries.

Its assets in Australia will make up 4 per cent of the total portfolio value, an increase from one per cent before the acquisition. ART's other property in Australia is Somerset Gordon Heights in Melbourne's central business district.

Foreign Investors More Keen On Malaysian Reits

Source : The Business Times, January 23, 2008

They're grabbing stocks that seem undervalued

Since the listing of the first real estate investment trust (Reit), Axis Reit, in August 2005, Malaysian Reits have grown steadily. An increasing number of Reits of different asset classes are being listed on Bursa Malaysia each year, says a StarBiz report.

Foreign institutional investors who have not seriously considered Malaysia as a preferred investment destination for Reits are now taking a second look at this option.

Greater foreign interest in Malaysian Reits comes as a result of the infrastructure developments taking place in major cities across the country, especially in the Klang Valley and the Iskandar Development Region in Johor.

Kurnia Insurans Bhd chief investment officer Pankaj Kumar, who manages funds of about US$460m, told the paper that foreign institutions were generally more keen than locals to invest in Malaysian Reits, despite their infancy and the asset size of local reits.

'Malaysian Reits may be small compared with Reits in mature economies that are worth billions, but foreign investors are still willing to invest. One of the reasons is that they are more familiar and knowledgeable about Reits,' he told StarBiz.

A local broker said that Malaysian investors were generally not interested in Reits because they had a short-term investment strategy.

'The Reit industry is defensive by nature and the stocks under trusts generally rise slowly in value over time. If managed well, they provide steady returns,' he said.

The broker said that many of the pension funds from developed economies were parked in Reits, with investors taking a medium to long-term view to investment.

'While there were some liberalisation of foreign ownership rules in the property sector, the last Budget did not provide much for Malaysian Reits,' he said.

Another issue was the lack of detailed coverage by analysts on Malaysian Reits, Mr Pankaj added.

A Singapore-based fund manager concurs about the lack of incentives. She said that the tax regime for Malaysian Reits should be more investor-friendly to attract more local and foreign investors into the industry.

'Currently, individuals pay a flat 15 per cent tax while foreign investors pay 20per cent. which is higher than in Hong Kong and Singapore,' said the fund manager. The problem with Malaysian Reits was that they were too small, she added. One way to fast-track the growth of the asset size is to allow Reits to be invested in development projects, subject to a cap in their fund size.

Mapletree Fund Buys 4 Johor Properties

Source : The Business Times, January 23, 2008

MAPLETREE Industrial Fund (MIF), a private real estate fund, said yesterday that it has signed two separate agreements with two related Malaysian investment and construction companies to acquire their four properties in Johor for RM61.5 million (S$27 million).

The agreements with Tangkai Jaya Sdn Bhd and Setegap Jaya Sdn Bhd are on a sale-and-leaseback basis.

The properties at the Tampoi Industrial Estate consist of four double-storey purpose-built detached factory buildings with a total gross floor area of 406,250 square feet.

Each of the four properties is sub-leased to individual tenants.

Phua Kok Kim, chief executive of Mapletree Industrial Fund Management Pte Ltd (MIFM), said: 'This acquisition has enabled the MIF to increase its portfolio of good quality industrial assets in Malaysia, thus highlighting our commitment towards growing the MIF into a pan-Asian industrial fund.

'The properties are well positioned to benefit from their location within the burgeoning Iskandar Development Region, which forms the nucleus of a dynamic economic and growth region in Malaysia's southern region.'

MIFM, a wholly owned subsidiary of Mapletree Investments Pte Ltd, is the manager of MIF.

K-Reit Proposes $700m Rights Issue

Source : The Business Times, January 23, 2008

Singapore office property trust K-Reit Asia said on Wednesday that it is making a fully renounceable rights issue to raise $700 million (US$488 million) to fund an acquisition.

The funds will repay part of a bridging loan of $942 million from major shareholder Keppel Corp, which it had taken to fund the purchase of a one-third share in the One Raffles Quay office building, K-Reit Asia said in a statement.

It said major unitholders Keppel Corp and Keppel Land have committed to taking up their respective allocation of the rights units, and any units not subscribed by minority unitholders.

The trust also reported a 63 per cent year-on-year increase in distributable income to $6.9 million for the fourth quarter to December 2007. -- REUTERS

CapitaLand Plans To Set Up Reit For Indian Retail Malls

Source : The Business Times, January 23, 2008

It unveils separate ventures with two partners for 15 projects worth $2.1b

CAPITALAND plans to create a Real Estate Investment Trust or listed vehicle holding Indian malls as an exit strategy for retail projects that it will develop jointly with two separate Indian partners.

The Singapore property giant yesterday announced separate joint ventures with Prestige Group and Advance India Projects Ltd (AIPL) to develop/invest in and manage an initial portfolio of 15 retail or predominantly retail projects worth over $2.12 billion. They will have a total lettable area of more than 11 million sq ft.

The tie-up with Prestige Group, the developer of The Forum in Bangalore, will be for malls in South India. The partnership with AIPL is for North India.

CapitaLand will participate in the develop- ment/investment of these various projects through the CapitaRetail India Development Fund, which has an equity fund size of about US$600 million (S$880 million). CapitaLand has 45 per cent stake in this fund, which was set up late last year.

The group's 2006 tie-up with Indian retailer Pantaloon, which was to jointly manage about 50 malls throughout India, is moving on a slow track as these malls do not meet the rules for foreign direct investment in India, which means CapitaLand cannot take stakes in them. Foreigners are only allowed to invest in the development of properties in India with built-up areas of more than 50,000 sq metres.

However, CapitaLand Retail CEO Pua Seck Guan did not preclude Pantaloon - whose retail formats include Big Bazaar hypermarkets and Food Bazaar supermarkets - being a tenant at some of the 15 malls under the latest partnerships with Prestige and AIPL.

There may also be potential collaborations between CapitaLand and Prestige or AIPL to develop built-to- suit malls for Pantaloon, Mr Pua added.

Under the earlier deal, it has been reported that CapitaLand also made a US$75 million investment in the Pantaloon-sponsored Horizon Realty Fund, which is investing in predominantly retail real estate development assets in locations like Mumbai, Chennai, Bangalore and Kolkata.

CapitaLand Group president and CEO Liew Mun Leong said the latest joint ventures with Prestige and AIPL will further boost CapitaLand's position as the leading retail real estate player in Asia and replicate its success in China. The group's portfolio includes over 70 malls in China, seven in Japan, 17 in Singapore, and two in Malaysia. It has also started to look out for malls in Vietnam.

All 15 malls under yesterday's announcements are under construction. When completed, the assets are likely to generate property yields (based on project cost), of 16 to 22 per cent - higher than the borrowing cost of 11-12 per cent in India, with a sufficient gap for a development profit.

Prestige Group chairman and managing director Irfan Razack pointed to abundant opportunities in India's retail real estate market, with rapid urbanisation and growing affluence, and where 'organised retail formats', such as shopping centres and department stores, constitute only 3 per cent of the retail market.

AIPL executive director Daljeet Singh said CapitaLand's strong real estate financial skills sets will add significant value to their joint venture, especially when the two parties share a common exit strategy for the retail assets, through a listed vehicle or Reit.

AIPL's Udaipur Celebration mall in Rajasthan, one of India's top tourist destinations, opens in Q1 2009. In all, the CapitaLand-AIPL joint venture has identified an initial batch of eight projects which will be completed between Q1 2009 and 2010 and worth about S$1 billion (26.5 billion rupees), based on 100 per cent ownership.

CapitaLand Retail will hold a majority stake (expected to be over 60 per cent) in both the development/investment and mall management entities covering the joint venture, with AIPL holding the rest.

CapitaLand's tie-up with Prestige is for an initial slate of seven projects expected to be completed between Q1 2009 and 2011 and worth about S$1.12 billion (29 billion rupees), based on 100 per cent ownership. The two partners will hold 50:50 stakes in both the develop- ment/investment and mall management entities for their joint venture.

CapitaLand will also have right of first refusal for future mall or predominantly retail projects by Prestige and AIPL.

Pacific Star, Israeli Firm Plan Viet Property Fund

Source : The Business Times, January 23, 2008

SINGAPORE-BASED Pacific Star Group said yesterday that it has signed a binding memorandum of understanding (MOU) with Alony Hetz to set up a fund to invest in Vietnamese real estate.

Both parties expect to raise US$200 million for the fund from institutional investors by July. Tel-Aviv Stock Exchange-listed Alony Hetz has meanwhile committed to investing US$50 million in the fund, its first real estate investment in South-east Asia.

Under the deal, Pacific Star and Alony Hetz will both manage the fund through a joint venture company to be established.

Commenting on the latest venture, Frank Rainer Vaessen, president of Pacific Star Fund Management, said: 'We are pleased to partner a firm with highly efficient management practices and an outstanding investment track record in Israel, Europe and North America.'

And Nathan Hetz, founder and chief executive of Alony Hetz, said: 'Pacific Star has extensive local experience in Asia and is thus an excellent partner for our entry into the region.'

Recently, Alony Hetz also invested US$40 million in a real estate fund in India, while Pacific Star has launched a 500 million euro (S$1.05 billion) Asian Real Estate Fund set up with HSH Real Estate AG, as well as a US$400 million Asian Real Estate Prime Development Fund which invests in prime development projects in Singapore, Malaysia, mainland China, Hong Kong, Macau, Japan and Korea.

Soros Warns Of Worst Financial Crisis Since WWII

Source : The Business Times, January 23, 2008

Billionaire investor George Soros said the world was facing the worst financial crisis since World War II and the United States was threatened with recession, according to an interview by the Austrian daily Standard.

'The situation is much more serious than any other financial crisis since the end of World War II,' Mr Soros was quoted as saying.

He said that, over the past few years, politics had been guided by some basic misunderstandings stemming from something which he called 'market fundamentalism' - the belief financial markets tended to act as a balance.

'This is the wrong idea,' he said. 'We really do have a serious financial crisis now.'

Asked whether he thought the US was headed for a recession, he said: 'Yes, this is a threat in the United States.'

He added that he was surprised how little understanding there had been on how recession was also a threat to Europe.

European shares fell nearly 6 per cent on Monday, their biggest one-day slide since the Sept 11 attacks of 2001, as fears of a US recession and more writedowns in the financial sector sparked a broad-based sell-off.

In Washington, US Treasury Secretary Henry Paulson said that the US economy remained resilient and has healthy long-term fundamentals, but has slowed 'materially' in recent weeks.

Warning that, in the short term, risks were clearly to the downside, he said that Congress and the administration need to agree quickly on a package of tax cuts and other measures to boost the economy.

'Time is of the essence and the president stands ready to work on a bipartisan basis to enact economic growth legislation as soon as possible,' Mr Paulson said in remarks to the US Chamber of Commerce as House Speaker Nancy Pelosi and leaders in both parties prepared to meet President George W Bush at the White House to discuss a stimulus bill.

Such legislation presumably would involve tax rebates, business tax cuts and funding for a Democratic-led call for additional food stamp and employment aid. -- AP, Reuters

DBS Analysts See US Slowdown, Not Recession

Source : The Business Times, January 23, 2008

WITH the markets falling all around them, DBS analysts are standing out with a contrarian and notably optimistic view on where macroeconomic variables are headed.

The bank's head of group research, Sanjit Maitra, said at DBS's annual outlook seminar for corporate and private clients yesterday that he believes that US domestic consumption is not headed for negative territory, although it will slow. He believes that the worst is over, with the turning point not in the last month but actually as far back as the first quarter of last year.

Mr Maitra compared the current US slowdown to the downturn in late 2001. At the time, monthly job losses reached nearly 300,000, with some 2.6 million people losing their jobs over the period, yet growth in consumption never fell below 2 per cent.

'Now we're talking about job growth being weak, with losses picking back up to around 100,000 per month. But unless another external dynamic comes into play, it is hard to conclude there will be negative consumption growth,' he said.

And from looking at historical US GDP growth, the slowdown - which Mr Maitra said was 'three years old' - was sharpest in 1Q07, when year-on-year growth slowed to about 1.5 per cent.

Meanwhile, Asian domestic demand has grown to the point where it will represent 93 per cent of US growth in 2008. That means that this year, for every dollar of American consumption Asians will consume about 93 cents - a proportion that has steadily increased from less than 50 cents in the late 1980s.

By 2010, Asia will contribute at least as much as, if not more than, the US to world consumption, Mr Maitra said.

He also reminded the audience that China's largest trading partner is the European Union - at an average 24.6 per cent of total exports for the last three months - and not the United States, which took in 23.6 per cent of Chinese exports. Another 19 per cent go to Asia ex-Japan and India.

As such, it is actually the US that relies more on foreign demand. Some 19.5 per cent of America's GDP growth came from a rise in net exports in 2006-2007, compared to 18.5 per cent for China, said Mr Maitra.

In sum, DBS expects US growth for 2008 to slow to 2.4 per cent, but not slip into recession. The euro zone will see steady growth at 2.25 per cent, China's growth will slow to 10 per cent, and the rest of Asia ex-Japan will stay the pace at 6.25 per cent.

But this does not mean that regional equity markets will bounce back within the week, said Timothy Wong, head of regional equities at DBS Group Research.

Asian markets are still very much driven by liquidity from the US and Europe, and high-risk aversion has led these foreign investors to sell down - in the face of uncertainty, they retreat from what they perceive as risky emerging markets back to their home markets, he said.

Things Are No Different After All

Source : The Business Times, January 23, 2008

FOR months, the warning signs were apparent, but euphoric investors, boosted by a liquidity-driven bull market that had lasted more than three years, chose to ignore them. Furthermore, they were lulled into complacency by repeated bouncebacks from various shocks ranging from Chinese monetary tightening to the yen 'carry trade'.

Now, in the space of months, markets are making up for lost time, rapidly repricing risks even as abject fear replaces complacency and bewildered investors find themselves firmly in the grip of the bear.

The first whiff of the beast came when global markets were jolted by a Wall Street plunge on Friday, Aug 3 last year, following release of a weaker-than-expected US jobs report and news of massive layoffs at American Home Mortgage Investments because of a collapsing property market.

On Monday, Aug 6, the Straits Times Index (STI) plunged 127 points or 3.7 per cent to 3,308 in response to worries over the exposure of local banks to US collaterised debt obligations (CDOs), but thanks to a slew of immediate 'buy' reports from local analysts, it rebounded 111 points the next day. Two months later, it hit an all-time high.

In recommending a 'buy' on local banks, one foreign house at the time said '(the selling) is clearly an over-reaction and we would urge investors to buy the Singapore banks . . . at current prices. The risk from CDOs has been priced in'.

A foreign research house at the same time wrote that its analysis showed that there were no signs of a bear market and urged clients to stay invested. 'There is plenty of growth outside of the US economy: economic news from China and the rest of Asia has been very strong . . . suffice to say that the world economy is still in a low-inflation boom, driven by enormous supply-side expansion,' it said.

To be fair, analysts were not entirely to blame for being so wide of the mark. Banks themselves were unaware of the extent of the problem and even normally conservative public sector officials were quick to step forth with reassurances - Mervyn King, the Bank of England governor, on Aug 8, said sub-prime woes were largely confined to the US and there would be no international crisis as a result.

Moreover, until only very recently, US Federal Reserve and Bush administration officials maintained that US growth was robust, the economy was resilient and despite a crashing dollar, there was nothing to worry about.

A further factor at play in fostering complacency in the face of rising risk was market conditioning - for example, a mini-crash in China early in 2007 raised contagion fears that sent stocks diving, but the resulting correction was short-lived because China quickly recovered. Similarly, the unwinding of the yen 'carry trade' adversely affected stocks for only a few days before the rally resumed.

Because the bull repeatedly reasserted itself in the face of such adversity, the majority of observers expected the US sub-prime crisis to blow over just as quickly. The mantra from the bullish camp was 'this time is different'.

Not all analysts and brokers were bullish - Morgan Stanley was among a small minority to warn of impending danger, writing last August that 'the market has for some time exhibited excessive optimism, driven by liquidity rather than fundamentals, and hence has been willing to extrapolate the positive and ignore the negative'. It is very likely that just as markets are liable to overshoot on the upside because of irrational exuberance, they can equally overshoot on the downside because of irrational fear. In fact, until the full extent of the US slowdown and its impact on all corporate profits - not just the banks' - is known, markets could still come under intense pressure. As we noted last August, things are really no different from historical trends.

Overheating Of Asian Economies Likely: Lehman

Source : The Business Times, January 23, 2008

Better growth rate will attract massive capital inflows

GOOD economic news now could lead to tough times later, an American investment bank is warning. The bank, Lehman Brothers, says that a soft landing for the global economy could lead Asia ex-Japan economies to overheat later this year or into next year.

Lehman's chief economist Asia ex-Japan, Robert Subbaraman, says the bank expects the region to 'attract massive capital inflows' because of its better growth rate than those of other regions, higher interest rates, and stronger economic fundamentals.

'So our core view of the region is that the aggregate GDP growth for the Asia ex-Japan economies will weaken by about one percentage point this year to about 7.5 per cent,' he said. 'The weakening will be because of weakening exports; however, because of the strong capital inflows, the domestic economies are going to be red-hot.'

He also expects that, with the region's exports weakening, Asian central banks will intervene heavily to slow currency appreciation, even more so than before.

This may result in the dilemma of the 'impossible trinity', which holds that a country can have only two of the three economic options of a fixed exchange rate, control over interest rates, and an open capital account.

'We doubt that countries will impose Draconian capital controls,' he said. 'Thus it will become harder for central banks to raise interest rates, because to do so would attract even stronger capital inflows and put greater upward pressure on their currency.

'In our view, that is a recipe for an overheating economy.'

On the other hand, the bank predicted that if there is a global recession, Asia ex-Japan economies will be severely hit - falling by as much as 4.5 percentage points. This would be nowhere near as bad as during 1997's Asian financial crisis, because of 'sound economic fundamentals' and 'plenty of room for macro policy to respond'.

However, Lehman Brothers has not gone out with a full-blown recession prediction for the United States, forecasting only a 40 per cent risk of a recession this year, slightly higher than its predicted one-in-three chance at the beginning of this year.

S'pore Developers Seen Posting Sterling Results

Source : The Business Times, January 24, 2008

But market turmoil, govts' moves to curb inflation cloud this year's prospects

Singapore's top three property developers are expected to report a sterling year of results, benefiting from a boom in Asia, but market turmoil and government intervention to curb house inflation is clouding 2008 prospects.

Keppel Land, which kicks off results for developers on Jan 29, is set to report fourth-quarter net profit more than tripled on rising property values and a one-off divestment gain, according to a Reuters poll of four analysts.

For the full year, Keppel Land's net profit is expected to have more than doubled, reflecting strong residential property sales at its harbour-front Keppel Bay projects.

'We're expecting a very strong quarter for developers based on contributions from the residential sector,' said Daiwa analyst David Lum.

Analysts say Keppel Land, 53 per cent owned by conglomerate Keppel Corp, will see fourth quarter earnings boosted by the divestment of its one-third stake in the One Raffles Quay office building to 40 per cent owned K-Reit Asia for S$939 million.

Private home prices in Singapore jumped 31 per cent in 2007, the largest increase in eight years, while developers will also benefit from booming property markets in China, India and Vietnam.

Mr Lum said a move by the government in October to cool Singapore's housing market by ending a delayed payments scheme would have had little impact on the quarter.

But sales figures and the price growth of homes are expected to be slower in 2008, as homebuyers hold off on purchases to wait out the financial turmoil hitting global markets.

'New property launches will probably be delayed until the second quarter of the year and beyond because buyers are more cautious, but we think prices will still pick up especially in the middle end of the market,' said Wilson Liew, property analyst at Kim Eng.

Analysts expect CapitaLand's fourth-quarter net profit to have slipped 23 per cent year-on-year, due to the absence of one-off revaluation gains that lifted earnings in the fourth quarter of 2006.

For the full year, five analysts polled by Reuters expect CapitaLand, South- east Asia's largest developer by market value, to report a 135 per cent jump in earnings to S$2.4 billion.

Analysts say this would have been boosted by strong property sales in China, which currently contribute 32 per cent to CapitaLand earnings, despite a move by Beijing in July to curb property speculation by imposing a land appreciation tax.

'The change had no impact as CapitaLand's inventory in China is now close to fully sold, so any effect would probably only be felt later,' said CIMB-GK analyst Donald Chua.

He also expects CapitaLand's real estate investment trust (Reit) subsidiaries, which include CapitaMall Trust, CapitaCommercial Trust, and CapitaRetail China Trust, to continue making strong contributions.

City Developments, Singapore's second-biggest developer, is expected to report fourth-quarter net profit slid 2.9 per cent from the same period the previous year, which was inflated by a S$151 million one-time gain from the divestment of four hotels to CDL Hospitality Trusts.

But analysts expect City- Dev to continue booking strong income from sales of its luxury apartments including the waterfront Sail @ Marina Bay project, and the sold-out Solitaire apartments in Singapore's high-end Bukit Timah residential district.

For the full year, City- Dev's net profit is expected to jump 77 per cent, according to a Reuters poll of five analysts.

They expect a further boost from continued earnings growth from its UK hotels arm, Millennium & Copthorne Hotels, which is scheduled to post its full-year results on Feb 20.

Shares in the three companies underperformed the 4.9 per cent fall in the benchmark STI Index in the quarter. Keppel Land shed 12.3 per cent, CapitaLand fell 23.1 per cent and CityDev was down 12.4 per cent. -- Reuters

December Inflation Hits 25-Year High

Source : The Business Times, January 24, 2008

CPI jumps 4.4% on higher health care, transportation and food costs

FUELLED by higher transportation, food and health care costs, inflation here hit a 25-year high in December, when the Consumer Price Index (CPI) jumped 4.4 per cent from a year ago.

For the whole year of 2007, the CPI rose 2.1 per cent from 2006, partly reflecting the two percentage point hike in the Goods and Services Tax (GST) in July last year, data released by the Department of Statistics showed.

'A large part of the up-move was on account of higher global oil prices (oil prices currently running at 47 per cent year-on-year in Singapore dollar terms), which has led in recent months to hikes in bus and taxi fares,' said Robert Prior-Wandesforde, an economist with HSBC.

Food prices rose 2.9 per cent in 2007 due to dearer cooked food, fresh vegetables, milk products and fruits. They were 5.5 per cent higher in December from a year ago.

Higher taxi fares, car prices and dearer petrol accounted for the 2 per cent increase in transport and communication prices in 2007 from a year ago while the increase in December alone was a steeper 6.4 per cent year-on-year.

Health care costs last year also accelerated to a 4.1 per cent growth from a year ago, driven by higher charges for daily ward and medical treatment, specialist services, general medical consultation, dental treatment and dearer Chinese herbs. In December, health care costs were 6.3 per cent higher than the same month in 2006.

On a seasonally adjusted basis, the CPI in December grew 0.5 per cent from the preceding month.

While the government may be prompted to act to curb further uptick in consumer prices, an easing economic growth is making its monetary policy call harder to make.

'The possibility of tightening is always there but our expectation is that they will keep on hold at the next April policy meeting because we see that growth concerns would outweigh inflationary concerns as we are seeing an increasingly uncertain outlook,' Standard Chartered economist Alvin Liew said.

'At the same time, we would expect there would be a significant easing of inflationary pressures in the second half of 2008,' he added. 'The reason for this easing, for one, is the dissipation of GST hike after June 2008. We are also looking at global demand easing and the result is that the pressure on some, not all, commodities would also ease.'

Mr Liew said that he expects oil prices to cool from the recent highs to hover in the range of US$70-80 a barrel.

But Mr Prior-Wandesforde believes that although the exchange rate call is becoming a tougher one given the cloudy outlook, 'the MAS will find it difficult to ignore a 5-6 per cent inflation rate at the time of the next policy meeting in April'.

Recession Unlikely But Concerns Could Spread: Bush's Ex-Adviser

Source : The Business Times, January 24, 2008

The US Federal Reserve's surprise 75 basis point cut in the Fed Funds rate on Tuesday 'was certainly the right thing to do' and 'more action is warranted', but the US economy is unlikely to fall into recession, according to the former chairman of President George W Bush's Council of Economic Advisors.

Glenn Hubbard, who is currently dean of Columbia University's business school and also holds a chair in economics, added however that it might be a few months before financial markets settle down. He maintained that the effect of the Fed's rate cut on the US dollar would not necessarily be negative.

In an interview with BT, Mr Hubbard said that a US recession was unlikely. 'A literal recession is what the National Bureau of Economic Research says it is, but normally they look at labour market deterioration, they look at unemployment insurance claims data - and those don't look anything like a recession,' he pointed out. 'We have slowdowns in hiring, but nothing like what you'd see in a recession. I think it's unlikely, particularly because of the lagged effects of the monetary accommodation we've had already. Given all that, I would expect the Fed to do a little bit more, but not a lot.'

The Fed's rate cut would, he said, help financial institutions by steepening the yield curve.

A steeper yield curve implies a greater differential between short-term rates and longer-term rates. This typically benefits banks which can make bigger spreads by borrowing, or taking deposits, at lower short-term rates and lending at higher longer-term rates.

Mr Hubbard cautioned however that although the Fed can help improve liquidity, it cannot make good the capital shortfalls faced by many financial institutions. And it's the uncertainties surrounding this issue that worries investors. 'That's what's alarming people,' he said. 'We don't really know where all the problems lie, so we think of really outsized losses, like the losses at Citi and Merrill, Bank of America, Wachovia Bank and Bank of China. Market participants are wondering how many more shoes are going to drop.'

He added that it could be a few months till the financial markets settle down. 'I think it'll be a while, well into the spring, because people will be looking at not just this round of earnings, but the next quarterly earnings to see how many additional write-offs there'll be,' he said.

He also pointed to the possibility of contagion to other areas. 'There's concern about other businesses. Everything's been focused on sub-prime so far, but Citi's news about credit cards raises other concerns. How big is this? We don't know. So, until that becomes clear, there'll be a big weight on the financial sector stocks.'

A week ago, Citigroup announced net credit losses of US$1.56 billion largely due to credit-card operations.

Mr Hubbard, who now serves as economic adviser to Republican presidential candidate Mitt Romney, said that rate cuts by the Fed are not necessarily negative for the US dollar. 'There are multiple determinants of the value of the dollar,' he pointed out. 'The interest rate differential is one, but there's also the health of the US economy. If you think that the Fed's action was important for avoiding a recession, then it's not obvious that it would be a significant negative for the dollar. And other major central banks may well follow suit.'

MIT To Make S'pore Its Second Home

Source : The Business Times, January 24, 2008

It could send 400 faculty and students here by 2010 for joint projects

Singapore is set to become the largest international research base for the Massachusetts Institute of Technology (MIT), enabling the Republic to benefit from the American institution's illustrious track record of marrying teaching and research with innovation and entrepreneurship.

A tie-up with the National Research Foundation (NRF), in a research partnership called the Singapore-MIT Alliance for Research and Technology (Smart), could see MIT send as many as 400 faculty staff and students to Singapore to work in local laboratories by 2010.

Smart was officially launched yesterday by NRF chairman Tony Tan at the Singapore-MIT Alliance International Conference 2008 and fifth International Symposium on Nanomanufacturing.

First announced in 2006, it is part of NRF's billion-dollar Campus for Research Excellence and Technological Enterprise (Create) project, which was set up in that same year to enhance research know-how in Singapore through joint activities with research agencies worldwide.

Besides MIT, the Swiss research agency ETH Domain and Israel's Technion Institute of Technology have also been brought in under the Create programme.

MIT is no stranger to Singapore. In 1998, it established an academic exchange partnership here called the Singapore-MIT Alliance (SMA) that helped advance Singapore's life sciences and biomedical economic thrusts. The level of partnership has now been heightened.

Dr Tan said: 'If the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make the nation the 24th largest economy in the world.'

This showed the contribution that research universities could bring to the economy.

Smart will kick off with two 'inter-disciplinary research groups', or IRGs, to conduct research on infectious diseases, and environmental sensing and modelling. These research disciplines were chosen because they are areas where both Singapore and MIT can add unique value.

For instance, in the study of infectious diseases, Singapore can provide access to pathogenic bacteria samples that cannot be found in the US. In environmental sensing and modelling, Singapore's well-developed urban and toll policies will add insight for researchers.

Besides the IRGs, Smart will also create a new innovation centre linked to the Deshpande Centre for Technological Innovation at MIT, which helps take emerging technologies from the labs to the market.

Intellectual property from the joint research work in Smart could materialise in three or four years' time, said Thomas Magnanti, dean of the School of Engineering at MIT.

Prof Magnanti, who is also the director of Smart, added that three more IRGs will be mooted next year, with all five to be operational by 2010.

'Singapore will be a second home to MIT,' said Prof Magnanti.

PM Lee Confident S'pore Will Weather Storm

Source : The Business Times, January 24, 2008

Asian growth story will help it ride turbulence elsewhere, he says

PRIME Minister Lee Hsien Loong believes a US recession is likely, and in the event, Singapore and other Asian economies will not be untouched.

Fundamental valuations in Asia have not changed overnight. Whatever happens to America, China and India will continue to grow. This should give the region a boost.

But he is confident that Singapore will weather the storm, and despite the global turmoil, Asia remains a dynamic market with abundant growth opportunities.

Addressing a breakfast meeting organised by MEDEF, the French Business Confederation on the final day of his three-day visit to France, Mr Lee spoke about the impact of this week's financial turbulence on Asian bourses, financial institutions and the real economy.

Despite the US Federal Reserve's unprecedented, out-of-session 75 basis point cut, and President George Bush's proposed fiscal stimulus package - which Mr Lee hopes will 'pass expeditiously and effectively within the next couple of months in Congress' - consumer and business confidence has been severely shaken.

Nobody can say if the measures will work, and 'it is entirely possible, indeed likely, that America will go into a recession', Mr Lee said. 'If it does go into recession, then we can be sure that Asia too will be affected.'

Virtually all Asian economies export to the US, and as the big selloff across Asian bourses this week shows, 'capital markets worldwide are closely inter-linked; we are not decoupled at all', he added.

'Looking ahead, I cannot tell you how the markets will perform, but it will be safe to say that they will continue to be volatile and that it will not come back to the situation it was before August last year.'

But fundamental valuations in Asia have not changed overnight, he pointed out, and 'whatever happens to America, China and India will continue to grow'. This should give the region a boost, he said.

Another positive for Asia - unlike the Western banks, most Asian banks have limited direct exposure to the US sub-prime market.

As for Singapore, 'our economy is completely open and exposed to global markets; there is nowhere we can take shelter', Mr Lee told the French executives, most of whom have business interests in Singapore.

But it has several positives going, not least a competitive economy that has drawn a flow of high-quality investment projects, including, from France, a REC solar plant and Soitec's 300mm wafer fab plant.

It has also in Asian emerging economies a market for its export services, and at home, a lineup of major international events and a full pipeline of construction projects.

'I am therefore confident that we are going to be able to weather this storm,' Mr Lee said, pointing out that the current instability is not like the 1997 financial crisis that was more systemic in nature.

For now, the Singapore government is maintaining its GDP growth forecast of 4.5-6.5 for 2008, which, while down from last year's 7.5 per cent, would not be a bad showing in the circumstances, he said.

Indeed, some easing will help to relieve supply constraints and ensure more sustainable growth over the medium term, he added.

'We will watch the situation closely, and update the forecast if necessary. We should not have a kneejerk reaction and lose our bearings in the middle of a dramatic market volatility.'

His parting shot for French businesses: Despite the present turmoil, Asia is a dynamic, growing market. Singapore itself is home to some 2,800 Chinese and 3,300 Indian companies, he told them.

'From Singapore, you can tap into this network of firms, and distribute your goods and services regionally and globally,' he said. 'Asean and Singapore can be your partner and business associate in this new Asia.'

Mr Lee later met former president Jacques Chirac, who led the Singapore delegation on a tour of the Musee du Quai Branly, a museum of non-Western artefacts that he is linked with. In the afternoon, Mr Lee flew to Davos for the World Economic Forum meetings.

S'pore Will Weather Market Turmoil: PM

Source : The Straits Times, Jan 24, 2008

Government sticking with growth forecast of 4.5%-6.5% despite fears of US slowdown

PARIS - PRIME Minister Lee Hsien Loong has said that he is confident Singapore will be able to weather the current turmoil in global financial markets and continue to do well economically this year.

While Singapore and Asia could not be sheltered from the 'chill winds' buffeting the world economy, and would be hit in the likelihood that the US economy goes into a recession, they were in a good position to face the economic storm ahead.

He said he was 'confident that we are going to be able to weather this storm'.

Addressing a meeting of French business leaders yesterday, he gave several reasons why he remained bullish about Singapore and Asia, even as he gave a sober assessment of the economic impact of the drubbing that global markets took earlier this week.

Describing Monday as something of a 'disaster' in Singapore, which saw its worst one-day share price plunge since 1987, he said that the world's capital markets were now linked as one common pool of global funds, and there was no way they could be delinked, as some economists had suggested.

Singapore and Asian economies would be hit if the United States were to be plunged into a recession, as seems likely, he said. The US remains a major market for many Asian countries

With Singapore's economy completely open to the world, and its external trade 31/2 times the size of its gross domestic product, there was 'nowhere you can shelter from the wind chill'.

But PM Lee explained why he remained confident despite this.

He said Singapore's efforts to restructure and upgrade its economy in recent years were paying off with a good stream of high quality investments, which would generate jobs and opportunities for Singaporeans.

He cited the plans by Norway's Renewable Energy Corporation to build the world's largest solar panel plant in Singapore, and also French company Soitec, which was constructing a major wafer fab plant.

Other projects, such as the $1.87 billion sports hub to be built by French firm Dragages, and work on the two integrated resorts would keep the construction industry more than busy for now.

The Republic was also increasingly linked to China and India, where robust domestic demand would continue to generate growth and boost Singapore and others in the region.

Singapore's role as a regional service hub would ensure that the financial, transport and tourism sectors continue to do well. Major events such as next month's Singapore Air Show and September's Formula One race would give tourism a further boost.

Mr Lee added that four years of strong growth, from 2004 to last year, had 'put us in a strong position'.

Other positive factors included the fact that Asian banks had been slow to embrace some of the new and more risky financial instruments, and so were limited in their exposure to the 'sub-prime' or risky loans made by some US banks, which have contributed to the current market uncertainty.

Mr Lee also saw as a plus the Federal Reserve's unprecedented 75 basis-point interest rate cut in between its regular meetings, as well as the Bush administration's move to put together an economic stimulus package, which he hoped would be 'passed expeditiously' by Congress.

Despite the market volatility, Mr Lee said the government would not make a 'knee-jerk' reaction and would stick with its growth forecast of 4.5-6.5 per cent for the year for now.

Mr Lee left Paris later yesterday for Davos, Switzerland, to attend the World Economic Forum meeting.

Speaking in Riyadh, Minister Mentor Lee Kuan Yew also gave his assessment of the impact of a possible US recession on Asia.

He said that while the Chinese and Indian economies were not immune to a US slowdown, he believed they were now much less influenced by a US recession because they have got enough going in their own internal economies.

'They can increase investments in infrastructure, they can increase consumption, they can increase all their projects and keep the economy buoyant. And if they can keep their economy up, say, instead of making 11, 12 per cent, they make 8, 9 per cent, then we will not go down so much. But that may take one, two years before we see the results.'


UP TO THE CHALLENGE

'I am confident that we are going to be able to weather this storm.
This is not like the 1997 financial crisis, and we got through that. That was all around us, and we were at ground zero.

This is something broader, and in Asia, I think we are stronger, we are better prepared, and we will weather it.'

PM LEE

S'pore To Keep '08 GDP Forecast Despite Volatility: PM

Source : The Business Times, January 23, 2008

Singapore is sticking to its economic growth forecast of 4.5-6.5 per cent for 2008 despite a likely recession in the United States, the city-state's Prime Minister Lee Hsien Loong was quoted as saying by local media.

Channel NewsAsia quoted Mr Lee as saying on Wednesday that the government will not review its economic outlook in a 'knee-jerk' reaction to market volatility.

He said the Singapore economy had expanded at a pace that was faster than its long-term potential growth rate in the past four years. The Singapore economy is expected to have grown 7.5 per cent in 2007, government estimates have shown, slightly slower than the 7.9 per cent expansion in 2006.

'We should not have a knee-jerk reaction and lose our bearings in the middle of dramatic market volatility,' Mr Lee, who is in France for an official visit, was quoted as saying.

'We'll watch the situation closely and will update the forecast if necessary,' he said. -- REUTERS

West Coast Sea-Facing Condo Site Launched

Source : The Business Times, January 24, 2008

URA site likely to attract top bids of $260 to $400 psf ppr, say analysts

THE Urban Redevelopment Authority (URA) yesterday launched the tender for a 99-year-leasehold condo site next to Blue Horizon condo facing West Coast Park and overlooking the sea.

Property consultants generally expect the site at West Coast Crescent to attract widespread interest from developers given its strong attributes - the plot can be built into a new condo up to 36 storeys high boasting nice views of surrounding parks and the sea and just a 10-minute drive away from shopping and entertainment attractions at VivoCity, St James Power Station and Sentosa.

However, the range of likely top bids for the 1.2ha site with a 2.8 plot ratio (ratio of maximum potential gross floor area to land area) indicated by consultants polled by BT yesterday varied widely - from $260 to $400 per square foot (psf) of potential gross floor area.

At the high end, Savills Singapore director (marketing and business development) Ku Swee Yong predicts top bids for the site will be around $380-$400 psf of potential gross floor area, working out to absolute bid quantums of about $137 million to $145 million.

This will result in a breakeven cost of about $750-$800 psf for the new condo. 'The developer should be able to achieve an average selling price of about $900-950 psf assuming the new project is launched next year,' Mr Ku added.

He reckons units in the condo should enjoy strong demand from both owner occupiers as well as those seeking to rent out their units to expats, including Japanese, given the site's proximity to the Waseda Shibuya Senior High School.

'The western part of Singapore is attracting a lot of foreign investments from the petrochemical and pharmaceutical industries, among others.

'The area is also near National University of Singapore, one north, and Science Park. So high-income professionals, researchers and engineers would be keen on living in the condo,' Mr Ku said.

Agreeing, Knight Frank director (consultancy and research) Nicholas Mak added that the new condo will have views of West Coast Park, Clementi Woods and the sea, and yet be close to the CBD. 'The District 5 site's developer can count on demand from both the upgrader/mass market and mid-tier buyers,' Mr Mak argues.

He expects the plot to attract three to six bids, with top bids in the $270-$310 psf ppr range, translating to breakeven cost of about $650-690 psf. 'The developer would be looking at a likely average selling price of around $740-780 psf,' Mr Mak added.

CB Richard Ellis executive director Li Hiaw Ho says that units at Blue Horizon next door were transacted in the resale market at an average $750 psf in Q4 last year. 'Taking into consideration the award of a high-rise condo site in Boon Lay Way at $248 psf ppr in December 2007, it's likely the mid-range of bids for the latest plot will come in at around $260-280 psf ppr, resulting in a break-even cost of around $600-650 psf. However, top bids may be higher than this, depending on market conditions at the time of the tender close.'

The site can be developed into a condo with about 300 units averaging 1,250 square feet. The tender for the plot closes on March 19.

傅海燕:建屋局依市场需求 来调整组屋供应量

《联合早报》Jan 23, 2008

国家发展部政务部长傅海燕说,建屋局很难准确预测未来三年的组屋需求,但还是会根据市场需求来调整供应量。

她解释说,建屋局在2006年卖出5700个单位的组屋,却在2007年推出1万3000个新组屋单位供国人选购,比之前一年卖出的单位多了一倍以上。

今年上半年,建屋局将推出大约6000个新单位,和2007年不相上下。

傅海燕昨天在国会回答议员的询问说,如果建屋局只是根据卖出的组屋数量来制定未来计划,就不会调整数字。

她说,建屋局在拟定未来发展计划时,是具备灵活性的,而且如果某个地区的组屋有很大需求量,建屋局也尽可能增加供应。

潘惜玉(阿裕尼集选区)在口头询问时指出,三年前建屋局出现组屋过剩现象,现在却供不应求。对此,傅海燕回应说,有些地区的新组屋出现供不应求现象,并不是因为结婚的人增加了,而是受到某些市场力量所左右。

她说,位于不同地点的新政府组屋,申请人数可能出现很大的差距,国人可上网看看个别发展计划的预购率。

她以建屋局在直落布兰雅供预购的新组屋“Telok Blangah Towers”为例说,这一发展计划因为地点好,离圣淘沙很近,反应异常热烈。400个供预购单位,申请者却多达7800人,预购率超过20倍。

申请者中,有5000人是第一次申请组屋的国人,当中还有千多名申请者,父母就住在附近。

但同一个时候在榜鹅推出的Punggol Lodge预购计划,516个单位面对1600名申请者,每三人有一个机会,如果是第一次申请组屋的话,则是两人有一次机会。

傅海燕建议首次申请组屋的国人,先上网了解申请到的几率有多高,盘算一下负担能力,以及准备等候多久等问题,再做出明智决定。

安顺路79号商楼 2.15亿卖给欧洲基金 尺价比去年底成交78号高

《联合早报》Jan 23, 2008

根据消息人士向本报透露,国际基金富怡(Ferrell)资产管理集团刚把安顺路(Anson Road)79号的商业大楼,以2亿1500万元卖给一个欧洲基金。若以可租用楼面来计算,售卖尺价超过1900元,这就比去年底成交的安顺路78号的1857元尺价还要高。

去年,买下安顺路78号的是德国的CGI集团。

安顺路79号的可租用楼面为11万平方英尺,属于永久地契地段。据消息人士说,富怡资产管理集团在脱售这项资产后,接下来也会积极寻找适合的发展投资良机。

武吉知马购地段发展高档住宅

富怡不久前就买下位于武吉知马路一个占地3万1371平方英尺的永久地契地段,打算发展高档房地产住宅项目。这个项目将有30个单位,相信每平方英尺的售价至少要2300元。项目估计会在今年中推出市场。

除此之外,富怡相信还在寻找其他机会,购买适合的商业地段,发展办公楼项目。

富怡资产管理集团是由李国权博士所创立的。李国权曾任本地上市公司华联企业(OUE)的总裁和金利太平洋集团(Auric Pacific Group)的董事经理。华联企业主要大股东就是力宝集团,而力宝集团的李棕也是金利太平洋集团的执行董事。

李国权去年底辞去华联企业总裁一职后,继续管理自己的富怡资产管理集团。李国权虽然与力宝集团的李棕有长久的合作关系,李棕也是富怡资产管理集团的主要客户之一,但富怡资产管理集团并非力宝集团属下的公司。

Mapletree Logistics Books 78% Jump In Full Year Distributable Income

Source : Channel NewsAsia, 23 January 2008

Mapletree Logistics Trust has booked a 78% increase in distributable income for the year ended in December.

Dictributable income came in at S$71.8 millions, beating its own forecast.

Mapletree said distribution per unit for the whole year amounted to 6.57 cents, up 30% on year.

Mapletree's portfolio is branching out to 75 properties across five countries. - CNA /ls

Ascott Residence Trust Posts S$45.1m Distributable Income For 2007

Source : Channel NewsAsia, 23 January 2008

Mainboard-listed Ascott Residence Trust has posted better-than-expected full year earnings with distributable income for 2007 came in at S$45.1 million, an 83 per cent jump year-on-year and 12 per cent higher than its own forecast.

Key drivers for Ascott Residence Trust's good results were its strong overall operating performance and the acquisition of properties in Ho Chi Minh City, Manila, Melbourne and Tokyo.

Distribution per unit (DPU) for the year ended in December is 7.7 cents, a 47 per cent rise over the previous year.

For the fourth quarter, DPU is 2.12 cents, an increase of 28 per cent year-on-year.

And the property trust is confident that it will see strong growth this year despite the credit crunch.

Its CEO Chong Kee Hiong said, "I think the challenge is actually the equity market, so fund raising through equity will be a challenge. However, we are well positioned. Our gearing is only about less than 34 per cent, way below the 60 per cent limit we can gear up to."

The trust will continue to source for yield-accretive acquisitions in countries such as India and Thailand. Its portfolio is expected to grow to S$1.53 billion upon completion of its latest acquisition in Perth.

Mr Chong said, "Perth is a very good market, the growth last year has been 6.3 per cent versus the national Australian average of about 3.2 per cent. And this mainly comes from mining business. And mining business, as you know, is very long term in nature, so the growth will not be just for a year. So we think now is the right time to go into the Perth market."

The acquisition is expected to be completed in the second quarter of this year. - CNA/ac

Bankrupts To Be Barred From Casinos In Singapore

Source : Channel NewsAsia, 23 January 2008

People who are bankrupt will not be allowed to enter the future casinos in Singapore.

Recipients of Public Assistance or Special Grant are also barred from the casinos.

These two groups are excluded under the "Third Party Exclusion" in the Casino Control Act (2006).

This means that about 28,000 people are expected to be excluded from the casinos under the "Third Party Exclusion".

This was announced by the Ministry of Community Development, Youth and Sports (MCYS) on Tuesday.

MCYS is currently working with the National Council on Problem Gambling on the regulations and procedures to administer the "Third Party Exclusion".

There are altogether three types of exclusion orders.

Besides the "Third Party Exclusion", the other two types of exclusions from the casinos are Self-Exclusion and Family Exclusion. - CNA/ms

MM Lee Uncertain How A Possible US Recession Might Affect S'pore

Source : Channel NewsAsia, 23 January 2008

SAUDI ARABIA: Singapore's Minister Mentor Lee Kuan Yew said he is not certain what impact a possible US recession will have on Singapore.

Although it is not clear whether financial markets will take up to two years to recover from the ordeal, Mr Lee said he feels that China and India may provide some cushion for the slowdown in the US.

Asian stock markets took a beating early this week amid mounting concerns of a possible US recession.

As fund managers adjust their portfolios, the minister mentor said the real strategy is to look beyond the actions of investors and study how each economy performs amid a drop in American demand.

"I do not believe the Chinese economy is immune to a US slowdown, nor is the Indian economy. But I believe they are now much less... influenced by US recession because they've got enough going in their own internal economy. They can increase investments in infrastructure; they can increase consumption; they can increase all their projects and keep the economy buoyant," he said.

Wrapping up his five-day visit to Saudi Arabia, Mr Lee said if China can maintain economic growth at around eight to nine per cent a year, then it could weather the economic storm well.

How well Singapore does, he said, will depend on how other economies fare, though he feels Singapore should be able to ride on the healthy performance of China and India.

"Our total trade is 300 per cent of our GDP (gross domestic product). So when the external trade goes down, you tell me how we buffer ourselves. But the external trade may not go down so dramatically because of India and China," he said.

Mr Lee said the current situation is unlike the Asian financial crisis in 1997, when China and India were almost immediately affected. - CNA/ac