Monday, April 7, 2008

US Moves May Be Too Late To Tame Recession

Source : The Business Times, April 7, 2008

Of 8 postwar recessions, only once was stimulus package passed before recession ended

(WASHINGTON) If history is a guide, US government efforts to combat recessions often come too late to do much good. Furthermore, such efforts can sow the seeds for the next downturn.

The news last Friday that the economy shed 80,000 jobs in March, the worst loss in five years, triggered a wave of hand-wringing, fault-finding and proposed fixes in Congress and in the presidential campaign. The jobs report added to a building consensus that the country has slipped into recession, one that may have begun early this year or in late 2007.

Yet past efforts to head off or alleviate recessions with crash spending programmes and tax rebates, classic anti-recessionary plays, often did not kick in until after the recession had ended.

‘History shows very often that these programmes even go on for years and years after the recession is over,’ said economist Bruce Bartlett, who worked in the 1980s administrations of Presidents Ronald Reagan and George H W Bush.

Of the eight US recessions in the six decades since World War II ended, only once was the stimulus package passed before the recession’s end, Mr Bartlett found. That was legislation enacted in June 2001 that contained the first round of President George W Bush’s tax cuts - to combat a recession that began in March 2001 and ended in November 2001. ‘That would be the rare case,’ Mr Bartlett said.

In the seven other postwar recessions - Nov 1948-Oct 1949, Aug 1957-Apr 1958, Apr 1960-Feb 1961, Dec 1969-Nov 1970, Nov 1973-March 1975, July 1981-Nov 1982, and July 1990-March 1991 - stimulus packages were either passed just as they were ending or considerably later.

Part of the reason for the mismatches, besides usual congressional delay, is because it often is not known for months, even years, when a recession officially begins and ends. Two consecutive quarterly contractions in the gross domestic product is the common definition. But the official determination, made by the National Bureau of Economic Research, takes longer and is based on a more complicated formula.

It is still too early to know the impact on the economy of the US$168 billion stimulus package passed by Congress and signed by Mr Bush in January. Rebate cheques of up to US$1,200 per couple and even more for families with dependent children will start arriving in mailboxes in May. Mr Bush has argued against additional stimulus packages.

The Federal Reserve, the US central bank, also has anti-recessionary weapons at its disposal, primarily the ability to lower short-term interest rates and inject more liquidity into the financial system. The Fed has dropped rates a full 3 percentage points since September to 2.25 per cent. Studies show it takes nine to 12 months for Fed rate cuts to affect the economy.

The central bank recently took extraordinary steps to calm financial markets from a panic triggered by mortgage defaults, including arranging the US$29 billion rescue of investment house Bear Stearns, and offering hundreds of billions of dollars in new emergency loans to investment banks and other financial institutions.

The new jobs report shows a loss of jobs so far this year of 232,000 and a jump in the unemployment rate to 5.1 per cent from 4.8 per cent. That puts the Fed under pressure to cut rates further and to do more to calm jittery markets. But there are limits to how much more it can do.

It probably is too late to do much else that will help, either by the Fed or by Congress, to keep the recession from ending earlier than it will on its own, said David Wyss, chief economist at Standard and Poor’s.

The US$168 billion package will help a bit, Mr Wyss said. ‘Otherwise, the usual pattern is that by the time Congress does anything, you’re back in the recovery phase, and you end up boosting the recovery too much. And creating the seeds of the next recession,’ he said.

Still, Alice Rivlin, former director of the Congressional Budget Office and later deputy Fed chairwoman, said the government has been quite successful in recent years in mitigating the severity of recessions. ‘We haven’t had a really bad one in quite a long time. We have a lot more tools now, and the economy is more flexible than it used to be,’ she said.

Chris Edwards, director of tax policy for the libertarian-leaning Cato Institute, cites an unquenchable thirst in Washington to find quick fixes for hard times, and that is even more pronounced in an election year. ‘Congress and the administration want to be seen as doing something, and the politicians on the campaign trail are going to be promising even more.’

As if on cue, Republican John McCain and Democrats Hillary Rodham Clinton and Barack Obama all issued statements decrying the job losses, and offering their competing remedies, within an hour of the bleak Labor Department employment report’s release. — AP

The Fine Line Between Confidence, Complacency

Source : The Business Times, April 7, 2008

THERE’S a fine line between confidence and complacency and markets are currently treading dangerously close to it - the US Federal Reserve’s actions may have calmed some nerves for now, but there is the very real likelihood that Wall Street has moved too far into a complacency zone and may not have fully appreciated the magnitude of the slowdown ahead.

One sign of this, for example, is that experts including Fed chief Ben Bernanke himself are still debating whether the US is in recession, as if there is any doubt. At last week’s Senate testimony, Mr Bernanke said the US economy ‘may contract’ in the first half, clearly reluctant to admit present reality.

Research house Ideaglobal, however, has no qualms calling a spade a spade: ‘The US economy saw some unequivocally bad news on Friday. Non-farm payrolls revealed that the US economy shed 80,000 jobs in March, versus a loss of 76,000 in February and 76,000 in January. The February and January numbers were revised upwards from 63,000 and 22,000 respectively which add up to -67,000 in back-to-back revisions…

‘The data clearly confirms that the US economy is in recession. As a result, expectations for a 50 basis point cut by the FOMC (Federal Open Market Committee) at its April 30 meeting rose to 36 per cent from 20 per cent on Thursday.’

Ideaglobal also expects more downward revisions in the months ahead. ‘The recession that has yet to enter its most intense phase will continue to extract a painful price in terms of overall output and productivity… we expect the shape of the recession will see one trough reached in spring 2008 and another in the early winter of 2009.’

Either confident or complacent - readers should judge for themselves - is BCA Research, which said in its second-quarter strategy outlook that the bear market has ended and that investors should start buying now. ‘Our sense is that monetary reflation may be slowly winning the battle against deflationary pressures coming from the housing meltdown, financial de-leveraging and retrenchment in banking activity,’ said BCA.

It used various indicators to arrive at this conclusion, including sentiment indicators like insider buying/selling and the spread between the two-year Treasury and federal funds rate. In its haste to call a market bottom, BCA may have forgotten that the end of a bear market does not necessarily herald the start of a new bull market.

DBS Bank recognises this important point in its second-quarter regional equities strategy in which it said ‘we remain cautious about the second quarter because of the buildup of risks in the US credit market and economy. We expect earnings forecasts and downgrades to bite, leading to further adjustments in stock prices globally’.

It added that although expectations are that the US will recover in the second half, it believes the negative news flows have yet to run their course as risks increase.

‘The conviction for a second-half recovery now is not as high as compared to the first quarter. Risks we are seeing now include: 1) magnifying of US credit rick, 2) balancing of US inflation risks that could lead to a lack of relief from rate cuts, 3) little bearishness in terms of growth and earnings forecasts, implying room for downward revisions, 4) a potential Europe slowdown that has not been priced in, 5) high correlation between US and Asian equity markets, 6) a slowdown in Asia’s growth on its own cyclical dynamics.’

A best-guess is that the ‘confidence’ in stocks over the past fortnight has come solely because short-covering has helped to keep the upward momentum going, aided no doubt by hedge funds which have had an awful first quarter and are looking to quickly redeem themselves.

In other words, markets know that the excesses built up over six years cannot be purged in a few months but are riding the momentum for the time being, in the hope that the Fed’s actions have bought them enough time to make some quick money.

DBS is probably right in saying that investors should ‘go defensive’ in the second quarter because it’s unlikely that markets can continue to shrug off repeated doses of bad news as they seem to have done in the past week, nor can they cope when below-par earnings start to be reported.

Bank Savings Earn Less Interest As Key Rate Plunges

Source : The Straits Times, Apr 7, 2008

Banks trim rates on deposits as they struggle to maintain margins

SAVERS are again feeling the pinch as interest rates continue to fall, further squeezing what meagre returns they might get on bank deposits.

Citibank, Maybank and Standard Chartered Bank (Stanchart) have all trimmed rates for their high interest savings accounts given the fall in the rate banks pay each other to borrow cash.

This rate - the Singapore Interbank Offered Rate (Sibor) - hit a 12-month low of 1.25 per cent last month. It has fallen steadily from 2.88 per cent a year ago, and economists say it will drop further.

With their own margins under pressure, banks have responded by trimming rates for customers.

Maybank has cut rates for iSAVvy, an online savings account, from 1.08 per cent to 0.88 per cent a year for a daily balance of $5,000 to $50,000.

Stanchart’s rate for its eSaver online savings product is 1.08 per cent a year, down a tad from a month ago when it paid 1.2 per cent for deposits from $50,000 to $199,999.

The base rate for Citibank’s Step-Up Interest Account - it pays progressively higher rates as the monthly balance increases - has fallen by more than half to 0.3 per cent a year.

Mr Robin Chua, the head of deposits at Citibank Singapore, said the revised rate of 0.3 per cent is competitive compared with rates for other typical savings accounts.

‘The maximum Step-Up interest rate, at 1.2 per cent a year, is actually in line with what the industry offers on a Singdollar, 12-month time deposit,’ he added.

DBS Group Holdings, United Overseas Bank and OCBC Bank have also adjusted some of their fixed deposit rates downwards.

For instance, the three banks recently lowered their 12-month fixed deposit rate for amounts between $50,000 and $1 million to 1.2 per cent a year from 1.4 per cent earlier this year.

The leaner interest rates have prompted some consumers to shop around for the best offers in town.

Client servicing staff Mak Wei Jiat recently closed her eSaver account at Stanchart and moved the money to a Maybank iSAVvy account.

‘It may be only a small change in interest rates, but it can add up to a lot when you’re factoring in a big sum,’ she said.

IT operations manager Calvin Chin said with inflation climbing and interest rates declining, he will be earning less on his savings.

Meanwhile, with the share market so volatile, people like himself will be cautious about committing themselves to risky investments.

‘For the man in the street, besides keeping cash at home, the option available to him is to continue to keep savings in a bank,’ complains the unhappy 38-year-old.

Economists believe saving rates here could head lower in the near term, partly because of interest rate cuts in the United States and a strengthening Singapore dollar.

‘We think Sibor will trend below 1 per cent by the second half of the year, and stay low for a while,’ said Stanchart economist Alvin Liew, who also believes the US will be in for a protracted recession.

OCBC Bank economist Selena Ling feels any turnaround in Sibor is likely to come only when there is greater clarity over the US recession, what end-point the Federal Reserve sets for its rate-cutting cycle and what monetary policy expectations Singapore’s central bank has.

Lobby Group To Fight Higher Taxes On US Expats

Source : The Straits Times, Apr 07, 2008

A UNITED States tax policy is affecting American expatriates working in Singapore and elsewhere so badly that a group of American chambers in the region has headed to Washington to campaign for a change.

The unhappiness among American expats and companies in Singapore stems from a 2006 tax law that has resulted in higher taxes for those who work outside the United States.

There are about 15,000 Americans working in Singapore. In 2006, US investments in the Republic grew to US$60.4 billion (S$83.6 billion).

Unlike citizens of most countries, Americans are taxed based on their worldwide income.

Last week, the Asia-Pacific Council of American Chambers of Commerce, a group of various US chambers in the region, launched in Washington a coalition representing Americans working abroad.

The Alliance for a Competitive Tax Policy seeks to eliminate what it sees as the unfair taxation of American expats that has resulted in the biggest tax increase for them in 30 years.

Senator Jim DeMint from South Carolina and Representative Gregory Meeks from New York are sponsors of this legislation. They were joined by the president of Amcham Korea, Ms Tami Overby, and representatives from several Washington-based business associations.

Ms Kristin Paulson, the chairman of the Asia-Pacific council, said: 'The changes in the tax law that Congress passed in 2006 have increased the tax burden on Americans working abroad by as much as US$25,000. This is simply unfair and discourages Americans from taking jobs outside the United States.'

According to Amcham Singapore, about four million Americans worldwide are affected.

'These tax law changes are detrimental to America's global competitiveness, and it is more expensive to hire Americans relative to hiring Europeans or Australians than previously.'

What the 2006 revision to the tax law did was to push many Americans working abroad into a higher tax bracket, even though their salaries and benefits remained the same.

The income tax deduction for housing costs was capped at a lower level. High tax rates were levied on payments made by employers, even though these were payments to reflect the higher cost of living overseas.

Simplistically, under the previous regime, a housing benefit of US$12,000 was taxed and additional housing costs were tax-free. The 2006 tax bill reversed the situation, giving a mere US$12,000 in tax-free housing benefits and taxing the rest. That hit expats hard in places like Hong Kong and Singapore, where housing costs are relatively higher.

Previous lobbying has seen the tax-free amount rise to about US$56,000 now for expats in Singapore. This is still untenable for many of them.

Take a standard American family who gets about $120,000 a year for housing. Deducting the tax-free amount of US$56,000 means that about $40,000 is still taxable. At the top rate of 38 per cent, an expat needs to shell out an additional $14,000 in taxes.

Mr Landis Hicks, a former chairman of Amcham Singapore, told The Straits Times: 'The realisation of the impact of the law has really hit home over the last year or so since the tax bills arrived.

'There is mounting concern among the American business community that the number of Americans severely affected by the cost of the tax will rise.'

'We are very concerned for the long term, that this will reduce the number of Americans working outside the US. We are trying to bring awareness to lawmakers of the serious impact on American competitiveness that the tax has.'


'This is simply unfair and discourages Americans from taking jobs outside the United States.'

MS PAULSON, chairman of a group of US chambers in the Asia-Pacific, on the effects of a 2006 tax law on Americans working outside the US

Court 'Made Use Of': Lawyers' Intent Queried

Source : The Straits Times, Apr 07, 2008

THE Court of Three Judges is deliberating over how three lawyers should be taken to task for their roles in making a court wrongly pay out $4.27million.

In hearing the matter last Thursday, Chief Justice Chan Sek Keong said it was clear the court had been 'made use of'.

The question though, said the CJ, was the intent of the three lawyers - Ms Nor'ain Abu Bakar, Ms Ruby Tan and MrPeter Chua.

In 2005, Justice V.K. Rajah had a disciplinary committee look into their conduct. He also referred the case to the Attorney-General's Chambers.

The lawyers' passports were impounded by commercial crime investigators but have since been returned. No criminal charges were filed.

Still, the disciplinary committee found the case serious enough to be referred to the Court of Three Judges, which hears cases on errant lawyers and has the power to suspend or strike lawyers off the rolls.

Ms Nor'ain and Ms Tan were acting for Indonesian company JAK Alhadad & Co, in a complicated battle over properties left by an Indonesian millionaire who died in 1953.

In July 2004, $4.6 million from the sale of the properties was handed over to the courts, pending a decision on how it should be split. Two months later, the two women lawyers applied to a court for $4.27 million to be paid to JAK.

However, they made this application under a different lawsuit between JAK and MrChua's clients, two Indonesian lawyers acting for some of the beneficiaries.

None of the three lawyers told the assistant registrar about the competing claims. The assistant registrar ordered the release of the money to JAK.

Justice Rajah has ordered JAK to return the money to the courts but that may prove to be an uphill task as it has been split among multiple parties, including lawyers and various parties in Indonesia.

After a four-hour hearing on Thursday, the Court of Three Judges reserved judgment. It will give its decision later.

Senior Counsel Andre Yeap, representing the Law Society, called it a classic case of lawyers 'saying things they know are false, not saying things they should - all with a view to depriving other people of benefits and entitlement'.

Ms Nor'ain's lawyer, Mr N. Sreenivasan, conceded that her non-disclosure amounted to grossly improper conduct, but said it did not constitute fraud and deceit.

Ms Tan's lawyer, Mr Shashi Nathan, said his client, who now lives in Austria, was 'naive' and was acting on MsNor'ain's instructions. MsTan, who received $64,000 in legal fees for the case, has repaid $15,000 and will pay $1,000 more each month, he said.

Mr Chua's lawyer, Senior Counsel Deborah Barker, argued that he did not think he had any duty to feed the court 'background' information.

She said that even if the court found that he had a duty to inform, his failure to do so could not be seen as fraud or deceit. She also pointed out that MrChua got nothing out of the $4.27 million paid out.

IMF Chief Says Global Intervention Needed On Credit Crisis

Source : The Straits Times, Apr 7, 2008

LONDON - GOVERNMENT intervention at a worldwide level is needed to address the credit crisis, the head of the International Monetary Fund said.

'I really think that the need for public intervention is becoming more evident,' IMF Managing Director Dominique Strauss-Kahn told the Financial Times in an interview on Monday.

Mr Strauss-Kahn's comments come just days before world finance ministers and central bank governors gather in Washington for the meetings of the IMF and the World Bank, where steps to address the crunch in financial markets will be discussed.

Mr Strauss-Kahn told the paper that government intervention - in the securities market, the housing market or the banking sector - would act as a 'third line of defence' to support monetary and fiscal policy.

'Effort has to be made on loan restructuring. With respect to the banks, if capital buffers cannot be repaired quickly enough by the private sector, use of public money can be examined,' he said.

Finance officials and central banks from a host of countries have been putting their heads together in past months to find ways to tackle the crisis, to prevent it from spiralling out of control and to stop such conditions from recurring.

Mr Strauss-Kahn said the credit crisis was far more than an American problem.

'The crisis is global,' he said. 'The so-called decoupling theory is totally misleading.' Developing countries such as China and India would be affected, the paper said.

He added that the IMF this week will revise down its global economic forecasts to below the current private and official consensus.

'The forecasts we are going to release in a few days are not very optimistic. The downside risks we underlined in the last world economic outlook have materialised,' he said.

He said central banks around the world were constrained in their ability to battle the growth risks by high commodity prices, the paper said.

The IMF's twice-yearly World Economic Outlook is due to be released on April 9.

The fund said on Thursday it had cut its 2008 outlook for world economic growth for the second time this year, in a move that acknowledged housing and credit problems in the United States were exacting a heavy toll on the global economy. -- REUTERS

More To Apply For Home Office Scheme As Approval Period Extends

Source : Channel NewsAsia, 06 April 2008

The Home Office Scheme has been popular since it was introduced in 2003.

So far, more than 20,600 authorisations have been issued, with 19,500 approved applications for HDB flats and 1,100 for private properties.

With the Housing and Development Board (HDB) extending the approval period for the scheme from three years to five years, more are expected to join the scheme.

From the beginning of this month, the approval period for all new applications and renewals will be on a five-year validity period.

HDB said the aim of the extension is to give home offices more time to develop their businesses.

Authorities said most of the applications are for IT consultancy, web design, real estate services and advertising. - CNA/ac

Businesses In Toa Payoh Brace For Impact Of New ERP Gantry

Source : Channel NewsAsia, 06 April 2008

The first five of the 16 new Electronic Road Pricing (ERP) gantries for the year will start operating on Monday, and Toa Payoh will become the first heartland area to have an ERP gantry at its doorstep.

All the new gantries, including the one at Toa Payoh, will start with S$1 charge during morning peak hours.

Some stores in the centrally located town are expecting an impact on their businesses when the gantry is switched on from 8am to 9am.

"Nowadays people don't want to go out. Remember, if you go out, you must pay. Go there, pay. Go here, also pay. So if people don't have a reason to go out, they won't. And that makes it tough on business," said a storekeeper.

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However, many said they can't tell just yet what impact the new ERP gantry will have on businesses.

"It will affect (us) more or less. But how many per cent I can't really tell because... this is the first time we encounter this kind of thing," said a medicine shopkeeper.

A money changer agreed: "I don't know how it's going to affect (us). I am not sure."

"It's definitely going to affect the morning crowd... as they may not have time to come after work," said someone who works at a pet shop.

Others are not as concerned, especially since their shops open after 9am when the gantry is switched off, and expect to be unaffected by the morning ERP.

"I open at 11, so (it) does not affect me so much," said a small business owner.

"Usually the crowds come here at lunch hour," said another.

The new ERP gantries at Upper Bukit Timah Road, Upper Boon Keng Road, Geylang Bahru and Kallang Bahru will also be switched on Monday. - CNA/ac

Panel Set Up To Help Developers Incorporate Waterways Into Projects

Source : Channel NewsAsia, 5 Apr 2008

Singapore’s water agency, PUB, has formed an ABC Waters Review Panel to help developers incorporate water bodies into their projects.

It was set up late last year together with the Urban Redevelopment Authority (URA) and the Law Ministry. The panel also has several high-profile local architects as members.

Environment and Water Resources Minister, Dr Yaacob Ibrahim, revealed this at the launch of the S$2.5 million Kolam Ayer ABC Waterfront pilot project - under PUB’s Active, Beautiful and Clean (ABC) Waters programme - on Saturday.

Dr Yaacob said: “The idea is very simple. At the end of the day, when developers develop their projects, I’m sure there must be ways in which they can integrate waterways in their design. Previously, that integration had not occurred. They saw it as a setback to have to fulfil a PUB requirement, but now we are telling them that there are ways in which that can be integrated.

“The panel will help to advise the developers on what they can do to integrate the waterways. With the enhancement, that could be a selling point. We want to explore the possibilities.”

PUB will also produce a set of ABC Waters Design Guidelines to provide design ideas and technical support for professionals.

Developers who incorporate water features into projects already have a fast-track process to tap on the ‘green lane’. Since it was introduced in 2006, 15 proposals have been submitted via this channel.

On the Kolam Ayer facelift project, Dr Yaacob said even though the physical infrastructure has been completed, the important factor now is the involvement of the community to take ownership and ensure the area remains clean and vibrant.

He said: “For the place to come alive, we need residents to take ownership. I’ll be very happy if we can demonstrate this as a viable and sustainable project over the long term.”

Chiang Heng Liang, Chairman of the ABC Waters Project Community Workshop, said: “It’s up to the community, the people, the grassroots, residents, interest groups and all these people coming together to organise gatherings and meaningful activities… to interact and mingle.”

Four groups have already expressed interest in helping to inject vibrancy into the area. They include Bendemeer primary and secondary schools which have adopted sections of the river to conduct river patrols and organise river clean-ups.

For a particular family, the completion of the waterfront project is worth waiting for.

Ismail Yacob, a Kolam Ayer resident, said: “It enhances the quality of life and, at the same time, beautifies our estate.”

His wife, Nurashikin I Cheong, said: “Maybe during school holidays, we can come here to barbeque.”

With this development completed, residents can look forward to more activities by the waterfront such as yoga and a Sunday flea market.

Subsequent facelifts under PUB’s ABC Waters programme will be conducted at Bedok and MacRitchie reservoirs.

Mum Dead For Two Years, But No Sign Of Probate Yet

Source : The Sunday Times, Apr 6, 2008

Q I am the executor and trustee for the estate of my mother, who died in April 2006. Her estate is worth less than $600,000, and I have a certified true copy of her will.

Soon after my mother’s death, my father and I engaged her lawyer to prepare and file duty returns. However, it has been almost two years and we still have not obtained the grant of probate.

In the two years, the lawyer switched to another law firm without informing us. My father later managed to trace her to her new firm.

More recently, some shares that form part of my mother’s estate dropped in price. And a cheque worth $3,700, which was issued to my father by an insurance company, cannot be banked in as my mother was the trustee.

This long process of waiting has created a lot of distress for my father. He and I have urged the lawyer to speed up the process on many occasions, but we are still waiting for the grant of probate.

We wish to know what we can do to help reduce the waiting time. We are also concerned that the legal and court fees and the drop in value of shares owned by my mother will increase as the process lengthens. Can you suggest what we should do?

A I note that you did not mention the cause(s) of the delay. If you are unsure of the actual cause(s), you should ask your lawyer and try to understand what are the obstacles she faces so as to take appropriate measures to solve the problem.

As there is no dispute over the validity of the will, I assume that the delay is due to an inability to obtain the certificate from the Commissioner of Estate Duties, which enables you to obtain the grant of probate from the court.

Generally, the entire procedure for obtaining the grant of probate for deaths before Feb 15 can be divided into three stages:

1. Apply to the court and obtain a tentative order of grant of probate. (This takes about two weeks to one month.)

2. File the estate duty affidavit, cooperate fully with the Estate Duty Branch (Inland Revenue Authority of Singapore) if it has queries or requires documentation. (This takes about one month onwards depending on whether you are able to address inquiries made by the Commissioner of Estate Duties.)

3. If no estate duty is payable, the Commissioner will issue a certificate to confirm this. If the Commissioner’s assessment is that estate duty is payable, there will be a request for payment, after which a certificate will be issued to confirm that estate duty has been paid. With the certificate, you can return to court to obtain the final grant of probate. (This takes about one month.)

I believe the delay in your case is because it was held up at the second stage. You need to know why the Commissioner of Estate Duties is not able to issue the certificate. Even if your mother’s estate does not attract estate duty because it is worth less than $600,000, you still need to address the Commissioner’s queries so as to obtain a certificate stating that no estate duty is payable.

Before issuing such a certificate, the Commissioner needs to be satisfied, among other things, that your mother did not make any gift within five years of her death. Such gifts might attract duty. The Commissioner also needs to be satisfied that the sum of $3,700, which you say is due to your father, should be excluded from the assessment of estate duty because your mother was only the trustee.

To reduce the processing time, you need to cooperate fully with the Commissioner of Estate Duties. Attend to all the queries that have not been satisfactorily addressed. Locate and deliver all the documents the Commissioner has requested. If you are unable to supply the answers or documents, you should inform the Commissioner, who might then make certain assumptions so as to proceed with the assessment.

Lawyers In Trouble: In The Soup Again Over Conflict Of Interest

Source : The Straits Times, Apr 7, 2008

Three counsel have become the first this year to be referred to the Court of Three Judges, which hears cases of serious misconduct by lawyers. Law Correspondent K.C. Vijayan reports

SUSPENDED lawyer Vasantha Vardan will have to face the Court of Three Judges again on four new charges involving different clients - in circumstances similar to that for which she was penalised over a year ago.

In November 2006, she was found guilty of acting improperly in the case of a property agent who fleeced his clients, and was suspended for two years.

She had acted for the property agent as well as his clients, placing herself in a conflict-of-interest situation.

Ms Vardan, a lawyer since 1994, had failed to explain the contents of the documents to the clients - a couple trying to sell their home - and they ended up being cheated by housing agent Shaik Raheem Abdul Shaik Shaikh Dawood in 2001.

Shaik, 55, is serving 22 months behind bars for cheating.

In the present charges, Ms Vardan is said to have acted improperly in relation to three other couples and another woman who went to Shaik to sell their HDB flats and ended up short-changed by him.

The complainants were generally illiterate couples who were cash-strapped. The complaints occurred in 2001.

The disciplinary committee found no dishonesty on Ms Vardan’s part, but held that she had placed herself in a conflict- of-interest position.

Senior Counsel Tan Tee Jim, prosecuting for the Law Society, said Ms Vardan had placed her own as well as Shaik’s interests over those of the complainants. ‘Members of the profession would be well advised to avoid all such situations of conflict of interest and to conscientiously advance the interests of their clients.’

Her lawyer, Mr Thangavelu, urged the committee to reprimand her or impose a fine instead of referring the case to the Court of Three Judges. Rejecting the plea, the committee said these were serious breaches of duty.

Entrapment defence fails in touting case

ENTRAPMENT as a defence did not save lawyer Rayney Wong from being referred to the Court of Three Judges for touting.

Mr Wong, a lawyer for the last 23 years, had offered referral fees to a Ms Jenny Lee, who had approached him with a property deal for his firm.

It turned out that Ms Lee was a private investigator working undercover, who recorded their conversations and then complained to the Law Society.

Ms Lee was part of a group of private investigators hired by some lawyers to check if competing law firms were offering fees to estate agents.

Faced with disciplinary committee hearings in 2005, Mr Wong refused to enter his defence then, claiming that Ms Lee’s evidence should be excluded because it was obtained by entrapment.

Mr Wong took this argument to the High Court and even to the Court of Appeal, but was turned down each time as the courts ruled that there was no entrapment.

When the case returned to the committee and it reconvened last year, Mr Wong pleaded guilty to the charge and urged the committee to reprimand or fine him instead of referring it to the Court of Three Judges.

His lawyer, Senior Counsel Sant Singh, said the fact that Mr Wong was entrapped and that he pleaded guilty were mitigating factors.

But the committee, chaired by Senior Counsel Steven Chong, said there was ‘no entrapment’, as Mr Wong offered the incentive to Ms Lee without incitement from her.

The committee also said it was ‘apparent’ this was not the first time Mr Wong had offered a referral fee.

It also said he decided to plead guilty only upon realising that his defence was almost certainly bound to fail and the guilty plea therefore carried ‘little weight’.

Accused of overcharging clients

A LAWYER has been referred to the Court of Three Judges for allegedly overcharging his clients.

It follows a hearing by a disciplinary committee, set up by the Chief Justice, which decided that lawyer Low Yong Sen had billed a couple three times more than what it felt would have been fair.

In all, Mr Low, a sole proprietor who has been in practice for about 15 years, billed his clients $4,300 in expenses he incurred in a property deal he handled for them in November 2005.

The committee felt $1,385 would have been a more reasonable amount, based on the Law Society’s submissions.

As part of that $4,300 bill, Mr Low had charged $1,850 for expenses related to his dealings with eight government departments.

The society’s valuation of that bit of work: $193.

For incidental expenses such as phone charges, Mr Low charged $350, seven times what the committee felt was reasonable.

A second misconduct charge involved Mr Low engaging his brother’s firm to undertake some services for his clients without informing them about their relationship, as required under the Legal Profession (Professional Conduct) Rules.

Mr Low’s brother, Mr Michael Low, was also a secretary in his law firm.

The committee, chaired by Senior Counsel Steven Chong, held that the two charges were sufficiently serious to be referred to the Court of Three Judges.

The committee has alternative powers to fine or reprimand a lawyer if it considers the charge to be less serious.

Another charge for billing his clients $3,000 in legal fees was dropped as the committee felt it was not excessive.

Another 60 Units Sold At City View

Source : The Straits Times, Apr 7, 2008

CITY View @ Boon Keng, a condo-like Housing Board project, has sold an additional 60 units under a walk-in selection process that ended yesterday.

In all, almost 520 units out of 714 have been sold, a spokesman for Hoi Hup Sunway Development told The Straits Times.

As for the remaining 190-odd units, the developer will decide how best to sell them. Meanwhile, the project is still open to the public for sale, he added.

Some 460 units were sold earlier under a different process that required balloting, as applications had outnumbered the units available. As it turned out, many successful applicants got cold feet, and there were excess units left after all buyers had been given a chance to buy the flats they wanted.

City View boasts condo-like features, such as timber floors, built-in wardrobes and air-conditioning. But they do not have more expensive common facilities like swimming pools.

The project, which comprises 72 three-room flats, 168 four-room flats and 474 five-room flats, can be bought only by families earning no more than $8,000 a month.

The units cost between $349,000 and $727,000 each.

The take-up for City View has been a major talking point because the overwhelming response from potential home buyers has not translated into actual sales.

About 3,500 applications for the flats were received by the time registration closed in January.


Source : The Sunday Times, Apr 6, 2008

It stands for the Singapore Interbank Offered Rate

Where do you see this?

In bank statements explaining how your mortgage rates are determined.

What does it mean?

It refers, more or less, to repayments on your loans, because Sibor affects the mortgage rate.

Sibor is the rate at which banks lend to one another. When it falls, so do rates for variable or Sibor-linked mortgages. When the Sibor rises, you have to fork out more.

Sibor also gives a rough indication of where deposit and savings account rates at banks might be headed, as it is influenced partly by the supply and demand for funds in the Singapore interbank market.

When Sibor is low, it is cheaper for foreign banks, which have a smaller deposit base than local ones do, to borrow funds from the interbank market for their lending activities.

When this happens, the foreign banks are less likely to offer higher fixed deposit rates to attract Singaporeans to park cash with them.

But when liquidity in the market is tight and interbank rates rise, local banks will offer more attractive rates to convince Singapore savers not to switch to foreign rivals.

Why is it important?

Sibor is a key component used by banks in setting their home loan rates.

A blend of different interest rates - such as one-month, three-month and even 12-month Sibors - is typically used by banks to set fixed or variable rates for home loans.

The three-month Sibor is a common benchmark rate used by the banks to adjust their deposit rates. By monitoring it, you can get an indication of where banks are headed next with their fixed deposit and savings account rates.

Sibor is also used to set rates for so-called transparent mortgage packages offered by the three local banks as well as Standard Chartered, HSBC and Citibank.

These are linked directly to Sibor or another publicly disclosed rate, such as the Central Provident Fund (CPF) rate or the swap offered rate (SOR).

SOR is made up of Sibor plus a bank's lending costs, and is currently at about 1.39 per cent, down from 3 per cent a year ago.

In a falling interest rate environment, mortgage rates linked to Sibor or SOR will also trend downwards.

Sibor tends to track the United States Federal Reserve funds rate, which has been slashed in recent weeks to 2.25 per cent as the Fed attempts to stave off an economic recession in the US.

Sibor has plummeted from 2.94 per cent to 1.31 per cent over the past year, and economists say it might not have bottomed out yet.

On The Market

Source : The Sunday Times, Apr 6, 2008

In this new weekly column, we bring you a sampling of properties up for sale around the island. In the spotlight this week and next: New project launches.

Whitley Villas,
115 Whitley Road

Units: Six semi-detached houses and two cluster bungalows

Prices: $3.5 million for a semi-detached house, $4.5 million for each bungalow

Launch date: Yesterday

Developed by the Fortune Group, this series of two-storey houses, with attics, is located in an established residential area near the Catholic Junior College.

The semi-detached units range in size from 2,895 sq ft to 3,024 sq ft.

Also on offer are two cluster bungalows - one 4,219 sq ft and the other, 4,316 sq ft, in size.

Inquiries: Mr Lawrence Chia, 9617-2884

Huit Terraces,
999-year leasehold
6-10 Meng Suan Road

Units: Eight terraces

Prices: $2.3 million for corner units and $1.75 million for intermediate ones

Launch date: Yesterday

The main draw of these three-storey terrace houses is a private infinity pool on the second floor of each unit.

The corner houses each have a land area of up to 3,162 sq ft, with a built-up area of up to 5,134 sq ft.

The intermediate units each have a land area of 1,957 sq ft and a built-up area of 3,912 sq ft.

Inquiries: Mr Lawrence Chia, 9617-2884

East Coast Residences,
412 Upper East Coast Road

Units: 59

Prices: From $994 per sq ft (psf), averaging $1,125 psf. Monthly maintenance estimated at $225 to $360

Expected launch date: April/May, but previews are ongoing now

This project, near the Lucky Heights area, offers mainly smaller units, starting at 517 sq ft for a one-bedroom unit with a study and going up to 1,238 sq ft for the three-bedroom units.

There are also 10 penthouses, from 1,378 sq ft to 1,679 sq ft in size. Floors are marble in the living and dining areas and timber in the bedrooms. Wardrobes, kitchen cabinets and ovens are provided.

Inquiries: Mr Alan Koh, 9436-2262, or Mr Jeffrey Tan, 9452-5999

Ventura View,
16 Rambutan Road, off Joo Chiat Place

Units: 24

Prices: $800 to $950 psf

Launch date: This week

Located near several well-known eateries, Ventura View offers a wide range of units, from studios starting at 397 sq ft in size to a four-bedroom penthouse that spans 2,286 sq ft.

The project, by construction firm DJ Builders, comes with a swimming pool, a gym and barbecue areas.

Inquiries: Call 8161-1234

Next Week: New launches in the East Coast area

7 Signs Of A Property Slowdown

Source : The Sunday Times, Apr 6, 2008

Buyers seem to be gaining ground again in the private homes market but consultants say it's far from crashing yet

After rocketing to dizzying heights last year, the private homes market has stalled because of the global credit crunch - an external factor that took the market by surprise.

The withdrawal of the deferred payment scheme last year has also dampened demand somewhat.

Sales volumes and interest have fizzled out just as quickly as the market surged last year.

While many players hang on to the notion that strong fundamentals - low interest rates, for instance - will support the market, sentiment has fast melted away.

Is the property market slowing to a crawl? We examine the mounting evidence.

1 Growth in home prices weakens

The Urban Redevelopment Authority's (URA's) early estimate of first-quarter data showed a 4.2 per cent rise in private home prices against 6.8 per cent in the previous quarter and 31 per cent last year.

Consultants expect price growth to weaken. Prices, especially for high-end homes, might fall but not significantly as sellers are still reluctant to accept lower prices, said a seasoned property agent. 'There's no urgency to do so.'

2 Launches are held back

Developers have ample properties to sell but most continue to hold back launches. Some small ones have gone ahead but the response has been unimpressive.

With buyers and sellers choosing to remain on the sidelines as the global impact of a slowing United States economy remains uncertain, the market is largely quiet.

URA data showed that only 185 new private homes were sold in February, down from 328 in January. Last year, developers sold 14,811 new homes.

3 Collective sales have died down

This market is dead, for now at least, as developers stay away and new rules make it tougher for owners to sell en bloc.

So far this year, only one sale has been done compared with 26 in the first quarter of last year.

And one potential sale - that of Makeway View in Newton - was cancelled after the buyer, Bravo Building Construction, said it had found out that it would have to pay a higher-than-expected development charge.

Owners of some estates are starting to lower their price expectations.

Pinetree Condominium in Balmoral Park, for instance, was recently relaunched at a lower indicative price of $128 million - down from around $145 million last September, but still well above the 2006 price tag of $59 million.

4 Investor funds pull out or hold off

Islamic investment bank Kuwait Finance House, which agreed last December to buy 97 Goodwood Residence units for $818.4 million from GuocoLand, allowed the purchase option to lapse.

Both parties said last month that they were still in talks but did not provide clear reasons for the pullout. Industry sources had speculated that the fund's price - a record for the condo's area - was too high.

A recent DTZ Research report said some funds are holding off making investments, at least for the first half of this year, until the extent of the US slowdown and its global impact become clearer.

5 Sellers hand out discounts galore

In the resale market, sellers are getting more flexible. There are more desperate sellers in the market this year, property agents said.

Some want to sell one or two of their properties because they had bought some units under the deferred payment scheme, and payment is due in six months to a year, one agent said.

For new launches or sales of new units, some developers are also willing to give discounts when asked, while others offer stamp duty rebates to attract buyers.

6 Agents less sought after, ads dwindle

Property agents have more free time and are taking out fewer advertisements because of the poor response.

Last year, a seller's unit could be marketed by five to six agents, with the deal going to the agent who garnered the best price.

But this year, a seller might go with one agent, said HSR Property Group's executive director, Mr Eric Cheng.

On average, an ad for a reasonably priced unit could attract 12 to 15 calls last year. That is now down by half, he said. Prime, high-end homes have it worse, he added, noting that there could be no calls at all for some ads.

'I have not been advertising since Nov 15 because I could see sales volume falling,' said agent Andrew Soh.

7 Buyers toss in low bids to test the waters

Some developers have offered rather low bids in recent land tenders, which signals a slowing property market.

The Government in mid-March decided not to award a landed housing site in Jurong West as the bids were too low.

Then, the lowest bid for a Yishun condo site came in at just $95 per sq ft of potential gross floor area.

'The developers are pricing in the risks of falling prices,' said Knight Frank's director for consultancy and research, Mr Nicholas Mak.

'Given thin volume, they could also be hoping that there is no competition.'

Going forward, optimistic players are waiting for the market to regain some of its former glory in the next six months.

The pessimistic ones are prepared to ride out the whole year and possibly the next.

'If volume remains thin, there is a chance that private home prices might weaken this year, but the market is not expected to crash,' said Mr Mak.

由裕廊东地铁站周围与湖畔区组成 15年内完工

《联合早报》Apr 5, 2008


裕廊区域中心是2008年新加坡发展总蓝图(Masterplan 2008)的重点之一。国家发展部长马宝山昨天在市区重建局常年工作计划研讨会上公布裕廊湖区(Jurong Lake District)发展蓝图。



为此,发展总蓝图将裕廊湖区分成两大发展核心,即裕廊东地铁站周围的裕廊商业区(Jurong Gateway)和裕廊湖畔区(Lakeside)。











2008年发展总蓝图另一个重点是将巴耶利峇发展成小型区域中心(sub-regional centre)。市建局将在不久后展出2008年发展总蓝图草图及更多详情,公众可针对草图提出看法。

获选购组屋机会却放弃 建屋局将设法使申请者不轻易这么做

《联合早报》Apr 5, 2008