Monday, April 14, 2008

Be Cautious In Response To Inflation: Stern

Source : The Business Times, April 14, 2008

Mostly commodities driven; but changing diets is a worrying trend, says economist

Policymakers should not overreact to rising inflation, which is largely commodities driven, according to eminent economist Nicholas Stern. However, there are some worrying long-term trends that could keep upward pressures on prices, he said.

Mr Stern: Reckons that Asian economies would be affected by the US sub-prime crisis because they depend on export markets. 'But they're not totally dependent; a lot of Asia's dynamics are internally driven.'

Mr Stern, who holds the IG Patel Chair in economics at the London School of Economics and was formerly the World Bank's chief economist, also said the US economy will probably head into recession this year as the sub- prime crisis unfolds. However, Europe will avoid that fate while Asia will see some moderation in growth.

'I would be inclined not to overreact to inflation for the moment,' said Mr Stern in an interview with BT. 'In the short term, monetary and fiscal policies can be accommodating. You might tighten monetary policy a little bit, but you can relax fiscal policy by lowering some taxes.'

He noted that inflation - which is on a rising trend everywhere, including in Asia - is 'largely commodity price driven. We've seen big increases in prices of oil and gas and wheat and rice.'

The causes of this come from both the supply and demand side, he said. On the supply side, he pointed to extended droughts in Australia, which have pushed up grain prices. Subsidies provided by the US and Europe to produce ethanol from corn - which he said were 'a mistake' - have also reduced grain supplies.

On the demand side, higher food consumption in the developing world, particularly in the fast growing economies of China and India, is adding to price pressures.

A worrying longer-term trend here is changes in diets, according to Mr Stern. He pointed out that as countries get richer, meat consumption goes up. 'One hundred calories coming from meat consumes a lot more grain than 100 calories coming directly from grain,' he said.

While there would be some supply response to higher food prices, policymakers would need to think about policies to encourage production.

'We must also switch away as fast as we can from hydrocarbons, to bring down the prices of oil and gas and coal,' added Mr Stern, who in 2006 produced the Stern Report, a comprehensive study on climate change commissioned by the UK government.

On the impact of the US sub-prime crisis, Mr Stern said it would depress economic activity through both lower investment and consumption - investment would decline if lending seizes up in the wake of the credit crunch, while consumption could fall following declines in asset prices which would erode wealth.

'In the US, we probably will see recession for a few quarters,' he said. 'We're probably already seeing that.'

But he added that with easy monetary and fiscal policies over the coming year or two, the recession 'shouldn't be too long or too deep'.

Europe, including the UK, will manage to avoid recession, according to Mr Stern. 'I think what you'll see is small falls in house prices and decreased activity in housing markets. Over a period of three or four years, the income-to-house price ratio would rise, with some increase in money incomes and a small decline in the value of houses.'

He reckoned that Asian economies would be affected because they depend on export markets. 'But they're not totally dependent; a lot of Asia's dynamics are internally driven,' he said. The large and fast-growing Asian economies of China and India would experience a moderate slowdown, he said. 'But if a country's growing at 9-10 per cent and it grows at 7-8 per cent, yes that's a slowdown, but it's still fast growth.'

Seletar Aerospace Park Tenants Hazy About Future

Source : The Business Times, April 14, 2008

Some unhappy incumbent operators at Seletar Aerospace Park are grumbling about facilities being taken away and poor communication by authorities who are developing the 300-hectare aerospace park.

Better communication: Prithpal Singh, who runs EJA, says the agencies should engage tenants regularly

Several tenants who spoke to BT said they feared their days in Seletar could be numbered, as they face the prospect of being evicted from their existing facilities - but without adequate new ones being offered.

Airmark Group, a $100-million business which operates charter cargo flights out of Seletar, claims it has been operating out of two 20-feet containers with no power or electricity since its facilities were taken back to redevelop West Camp.

‘We have been at Seletar for 30 years, and it looks like we are back to the primitive past,’ said the company’s chairman Yunos Ishak. ‘We have no hangar space, no facilities, no priority. The authorities developing this place seem to have no plans for players like us.’

It’s a similar complaint from Executive Jets Asia (EJA), whose regional business jet operations is headquartered at Seletar.

Prithpal Singh, who runs EJA, said his company had been told to vacate their premises at Seletar East Camp by the end of 2009.

‘We understand the redevelopment needs,’ he said. ‘But what alternatives are there for us? Until now, we have had no indication of where we will be relocated, what kind of facilities will be given to us or how we will be relocated. And we are barely 20 months away from having to vacate this place.’

Another criticism levelled at Jurong Town Corporation and other agencies spearheading the redevelopment of Seletar was that they were turning Seletar into another ‘Loyang aviation factory area’, with players like Rolls-Royce and Pratt & Whitney being accorded priority.

Rolls-Royce has broken ground on its $320-million Trent aero engine facility at the Seletar Aerospace Park, while P&W is building its new US$30-million, 105,000-sq-ft facility at the Park. Meanwhile, ST Aero’s latest $17.3-million, two-bay hangar will give it eight wide-body, and 13 narrow-body, bays in Singapore, while Jet Aviations’ existing facility is being extended.

But when contacted, JTC Corporation, which is spearheading the redevelopment of Seletar, denied that it was neglecting existing tenants and operators.

‘Seletar is for everyone in the industry,’ said a JTC spokesperson. ‘Currently, we are redeveloping the plots which are not fronting the runway, but in the years to come, we will be in a better position to evaluate the availablity and allocation of runway-fronting land.’

She said that JTC, together with the Economic Development Board would allocate land based on need, availability and business plans presented by individual corporations.

‘We are still at the early phase of development, and this is a complex project which still has 10 years to completion in 2018,’ the JTC spokesperson added. ‘We will be offering more land and facilities to players - big, small, local and foreign - as we move forward into our second and third phases in mid-2009 and after 2011, respectively.’

She added that plans were already being studied to build a commercial complex to house smaller aviation players, including business aviation.

‘We will look into what they need,’ she added. ‘But as this is not a greenfield project, we will have to work around existing land constraints.’

Meanwhile, the existing tenants want more clear timelines in order to plan their businesses and investment needs.

“We need better communication,” Mr Singh said. ‘They (the agencies) need to engage us on a regular basis.’

Seletar Aerospace Park is a 300-ha development cluster for aerospace MRO, design and manufacturing, training and business/ general aviation, all aimed at making Seletar Airport the region’s premier business aviation hub. The existing runway - built by the British Air Force over half a century ago - is being extended to cater to bigger business jets.

Investors Nervously Await US Numbers

Source : The Business Times, April 14, 2008

The volatile ride in the market has not reached the end yet as investors nervously await a slew of corporate earnings as well as economic reports in the US. So far, news from the US earnings front has been grim with a sharply disappointing earnings report from General Electric, which is often seen as a microcosm of the economy, and lacklustre results from aluminium maker Alcoa, according to an AFP report.

The big question for investors is whether the market has already priced in the impact of the housing and financial market turmoil on stock prices and earnings, or whether more surprises are in the offing, say analysts.

In the week to Friday, the Dow Jones Industrial Average lost 2.25 per cent to 12,325.42, while the Standard & Poor’s 500 broad-market index shed 2.74 per cent to 1,332.83. The tech-dominated Nasdaq composite index slid 3.4 per cent to 2,290.24.

The past week’s market action was also marked by a disappointing report on the US trade balance, a sharply weaker consumer sentiment survey as well as the earnings news. In addition, the Federal Reserve released meeting minutes which effectively acknowledged a contraction in the US economy and the threat of recession.

Among the economic indicators due to be released are two inflation indicators - the Producer Price Index and the Consumer Price Index. Others include US housing starts, industrial output and capacity utilisation, and the Fed’s Beige Book.

Views are split as to whether the market has reached the bottom. Barry Ritholtz at Ritholtz Research & Analytics said markets are not cheap, and are not priced for a full-blown earnings recession. ‘The stock market may be entering a minefield as earnings start to flood the tape next week. We shall soon see if investors are getting real about earnings. GE proves that the economic slowdown is directly impacting corporate America,’ AFP quoted him as saying. Another analyst, Gregory Drahuschak at Janney Montgomery Scott, however, said it is important to keep a longer view in mind. ‘The news is and has been largely negative lately, but it is important to remember that it is highly likely the market will begin a turnaround long before the economic data do,’ he said.

Prices in Singapore are expected to ease this week as well, following the strong surge in prices on Friday which was not supported by Wall Street. Gabriel Yap, dealing director at DMG and Partners Securities, was quoted by AFP as saying that the market is expected to be clouded by the slowing US economy and further losses in financial institutions related to risky mortgage loans. ‘We would be expecting signs of market troughing very soon in the absence of bad news. But if you ask me whether there will be more bad news, the answer is yes,’ he said.

The International Monetary Fund said last week that the worldwide losses stemming from the US sub-prime mortgage crisis could hit US$945 billion as its impact continues to spread through the global economy.

Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney, said: “Despite some recent improvement, credit markets are still a long way from behaving normally, the economic outlook is still deteriorating, and considerable profit downgrades lie ahead.”

For the week ended April 11, the Straits Times Index closed at 3,126.87, down 28.69 points or 0.91 per cent from the previous week. Average daily volume was 1.64 billion shares valued at $1.72 billion, compared with 1.68 billion shares worth $2.03 billion the week before.

All our portfolios weakened, except the lowest price-to-book portfolio which climbed 6.2 per cent. The portfolio was boosted by the doubling of the price of Tri-M Technologies. As for our portfolios, the purpose is to provide real-time tracking of the various trading strategies - namely, buying the stocks recently upgraded by analysts, the one-year top losers, the one-month top winners, stocks with the lowest PE ratio, and those with the lowest PTB ratio. The process is mechanical and no qualitative judgement is exercised. So stocks that appear in the portfolios are not necessarily good buys.

But as the state of the portfolios shows, and as numerous other empirical studies have found, a low PTB ratio has again turned out to be the best predictor of future price performance - despite the severe decline of the portfolio in the current market turmoil.

IMF Urged To Keep A Closer Eye On Economy

Source : The Business Times, April 14, 2008

It’s also told to provide emergency aid to poor states if food crisis worsens

(WASHINGTON) World finance officials on Saturday urged the International Monetary Fund to keep closer tabs on the global economy in the hope future crises like the one currently shaking world markets can be prevented.

After one of its twice-yearly meetings, the IMF’s 24-nation steering committee said global financial instability had increased and inflation risks had risen due to a sharp run-up in the cost of food and other commodities.

‘Policy-makers should continue to respond to the challenge of dealing with the financial crisis and supporting activity, while making sure that inflation is kept under control,’ the International Monetary and Financial Committee said in a communique.

As rich countries struggle to get a handle on financial turmoil that has rocked markets for nine months and worry the US dollar may have fallen too far, emerging and developing nations wondered whether they would be spared from a crisis that may have already pushed the US economy into recession.

The IMFC said developing economies had shown resilience in the face of the crisis sparked by mounting US mortgage defaults, but cautioned that inflationary risks had picked up.

‘For many countries, containing inflation and addressing vulnerabilities remain key priorities,’ it said.

Concerns over rising prices for food and other commodities, and related shortages of key staples, has shaken developing economies worldwide, sparking often violent protests. Haiti’s government fell on Saturday after senators fired Prime Minister Jacques Edouard Alexis following a week of food riots.

Developing countries called on the IMF and World Bank to stand ready with emergency funding to help the poorer nations in case financial market woes spread to their economies and the food crisis worsened.

Just 12 months ago, finance ministers and central bank chiefs were basking in five consecutive years of strong world growth, unaware a US housing boom was about to go bust, triggering what may be the biggest financial shock since the Great Depression.

All of this has taken place at a time the IMF, traditionally a lender of last resort in times of crises, has sought a new role for itself amid a sharp decline in borrowing from emerging and developing economies.

It has also sought to boost its relevance by giving emerging economies China, India, Brazil, Mexico and South Korea more voting power in the institution.

While voting power changes and a new financial model aimed at putting the fund on sounder footing still need the approval of all of the IMF’s 185 member countries, they were endorsed by the IMFC. ‘The fact that the most relevant economic and financial multilateral institution in the world shows the capability to reform itself at this very moment, constitutes by itself a response to the crisis and an indication that a global crisis has to be addressed with a global view,’ IMFC chairman Tommaso Padoa-Schioppa told a news conference.

While emerging economies such as China, India, Mexico, South Korea and Brazil support the changes in their relative voting power, some nations that stand to lose from the shift - such as Russia, Argentina, Saudi Arabia, Iran and Egypt - oppose the move, saying it does not go far enough. The changes will be decided by April 28.

Meanwhile, advanced countries complained its growth forecasts for 2008 and 2009 were overly pessimistic. ‘I think it’s useful that the fund took a very dry and realistic view of the situation,’ Mr Padoa-Schioppa said in defence of the IMF.

IMF managing director Dominique Strauss-Kahn said forecasting growth was especially tough in the current environment. ‘I don’t think really that the difference between 0.1 or 0.2 has such an importance,’ he said.

There was widespread acknowledgment, however, that risks to global growth had risen with a sharp slowdown in the US economy.

“The risk that the US will fall into a recession in 2008 has increased and real GDP growth in the euro area is also slowing down,” European Monetary Affairs Commissioner Joaquin Almunia said. — Reuters

Your Millions Will Not Move Me

Source : The Electric New Paper, April 14, 2008

This house dwarfed by tall condos, owners refuse to budge

ON St Francis Road lies a piece of old Singapore - an old house between two tall, modern condominiums.

The stilt-bungalow is a relic from a time when bullock carts, not cars, plied the roads, and old attap houses, not condominiums, lined the streets.

But its owners have remained deaf to the call of change, even when property developers dangle 'millions of dollars' and a new house elsewhere.

Property, even with the recent slowdown after a boom, is always hot stuff. Last year saw a record-breaking 14,800-plus residential units sold.

Development is relentless in Singapore and huge sums are involved.

Behind the house, a noisy crane hovers, where another condominium is going up. But to the old man of the house, Mr Gerard Clarke, 90, all the development is just noise.

'If this (the new construction) is noisy, how about when they were building this and that,' he said, pointing to the St Francis Court and StFrancis Lodge condominiums.

Mr Clarke, a kindly, sprightly gentleman - the type who refers to women as ladies - is a retired Shell employee. Some 10 years ago, before the condominiums were built, he was approached to sell the property.

His daughter, the bungalow's owner, Ms Louise Clarke, 53, an educational psychologist, said: 'It was terrible. They would just come and badger and badger.'

She recalled how one property agent even turned up at their doorstep with a picture of a terrace house that they could move into.

She said she was offered 'millions' but she would not sell. Not while her father is alive.

She doesn't remember how big her land is (her title deed is in a safe somewhere) but she says the house itself is about 2,500 sq ft, about the size of two five-room HDB flats.

The land area looks to be about three times the size of the house.

Recent transactions on the Urban Redevelopment Authority website showed that properties on St Francis Road and nearby St Michael's Road sold for $500psf to more than $1000psf.

Going by those numbers, the house alone can be worth up to $2.5 million.


But for the Clarkes, it is not about money. Mr Clarke has lived in the house since 1947, when he got married. It is spacious, charming, rustic and cool - though it was cooler before the condominiums blocked out the breeze.

According to Ms Clarke, the land up to St Michael's Road used to belong to her great-grandfather.

He divided it among three daughters (a fourth got nothing as she had moved to the US) and one of them - her grandmother - passed the land to her mother, Mr Clarke's wife.

When Mrs Clarke died last March, she inherited it.

Walking around the house is like taking a trip back in time. You see old pictures, a battered Bible that's older than Mr Clarke, and a wind-up clock.

Though the furniture looks old, there's nothing from before the Japanese Occupation, except a bulky cabinet. 'It was the only one looters couldn't carry off,' he said.

The floor, too, has been changed. There were big holes everywhere after the Second World War.

Maintaining an old house, estimated to be at least 90 years old, is not cheap.

Ms Clarke has had to pay for a new roof and supports under the aging floor. She wouldn't say how much all that cost, only that it was expensive.

Among their former neighbours was one Leslie Hoffman, whom Mr Clarke remembered as a journalist.

MrHoffman was actually the first local editor-in-chief of The Straits Times.

One unusual problem they face is strangers wandering on their property. (Like homeowners in the good old days, the Clarkes leave their gates unlocked during the day).

'Some of them were very rude,' said Ms Clarke.

Despite all that, property agents will likely still have no luck with the Clarkes.

Ms Clarke said she would rather bequeath the property to a relative than sell it.

As for Mr Clarke, what use has he for money at his age?

'I want to stay here till they have to carry me out,' he said.

Asian Policy Makers Face Inflation Vs Growth Dilemma

Source : The Straits Times, Apr 14, 2008

BEIJING - THAT banging sound across much of Asia is the stable door being slammed shut long after the galloping horse that is inflation has bolted.

Governments are resorting to everything from rice export bans to price controls to prevent an unprecedented spike in food and energy costs from metamorphosing into more generalised inflation.

Economists at Lehman Brothers count no fewer than 48 such trade and fiscal measures across Asia since the start of the year to counter what policy makers hope is a temporary shock.

Central banks are also soaking up liquidity and letting exchange rates appreciate.

Yet they are too late in many cases. Consumer prices are up by nearly 20 per cent from a year earlier in Vietnam and by more than 8 per cent in China and Indonesia. Inflation is just below a 26-year high in Singapore and rising worryingly fast in India.

If that wasn't enough of a headache, a shocking drop on Friday in profits at General Electric Co, a bellwether of the US and global economies, has underlined the risks to growth.

In short, Asian policy makers need to be mobilising for the next war, a potential slide in export demand, as well as calling up reinforcements for the current battle against inflation.

'The global economic and financial outlook is of grave concern. Global growth faces substantial downside risks in 2008,' Mr Zhou Xiaochuan, governor of the People's Bank of China, told a meeting of the International Monetary Fund and World Bank in Washington on Saturday.


Now, if the world economy does move down a gear, commodity prices should fall back too, especially as farmers are presumably planting more right now to cash in on sky-high prices. An end to Australia's drought should also help boost global supplies.

But what if the great commodity inflation is not a temporary supply shock? Many economists, not only monetarists, believe rather that Asia is finally paying the price for years of lax monetary policy and long-undervalued exchange rates and so are importing the inflationary stimulus imparted by a declining dollar and huge US current account deficits.

'We need to think about the fundamentals such as, say, the over-liquidity problem...which turned out to be inflationary at the end,' Mr Fan Gang, an adviser to the People's Bank of China, said on Sunday in Boao on the southern island of Hainan.

According to this school of thought, central banks might already have missed the chance to lean against the wind so as to prevent producers from passing on their higher input costs and workers from demanding higher wages to compensate.

'Second-round effects are starting to kick in in a number of countries, reflecting the fact that domestic demand has been still pretty strong in many countries,' said Mr David Burton, the director of the IMF's Asia and Pacific department.

'At the same time, we're seeing producer price inflation is now rising quite rapidly across many countries in the region, and that points to a compression of profit margins and the possibility of further inflationary pressure ahead,' Mr Burton told a news briefing in Washington.

Adding to the risks from commodity inflation are structural changes in big emerging economies such as India and China, where urbanisation is encroaching on arable land and rising incomes are fuelling demand for meat and dairy produce. Western subsidies for biofuels and global warming are also changing the food equation.

'The risk is that this time round there are more secular drivers of inflation,' said Mr Rob Subbaraman, chief non-Japan Asia economist at Lehman Brothers in Hong Kong.

'If it is more secular, fiscal/trade measures could do more harm than good because the longer it goes on, the more it exacerbates the supply/demand imbalance and the greater the risk of it feeding into inflationary expectations,' he said.


This may already be happening, prompting middlemen to hoard rice in India and Thailand, for example, in anticipation of ever-higher prices.

'The recent jump in rice prices in Asia, in the absence of any supply shocks, demonstrated how powerful inflation expectations could push up some prices instantaneously,' Mr Hong Liang, Goldman Sachs's chief China economist, said in a report last week. Some rice prices have doubled already this year.

So how should policy makers react? Subsidies and export bans merely muffle price signals, economists say, so governments would do much better to invest in rural infrastructure, such as cold storage and irrigation, and target handouts at the urban poor.

The poorest in society would be those hardest hit by a blanket tightening of monetary policy, said Glenn Maguire, Societe Generale's chief Asian economist based in Hong Kong.

'If food inflation has become an embedded dynamic and people have less money to spend on food, then raising interest rates to try to quell that seems a little perverse,' he said.

The appropriate policy response, he said, would be continued currency appreciation, which would cut the cost of food imports and generally tighten monetary conditions. 'That will be the most equitable way to handle these equity/distributional problems.'

Singapore did just that in decisive fashion on Thursday by effectively revaluing its dollar by at least 1.0 per cent.

Vietnam has widened the dong's trading band. And China has now let the yuan rise 18 per cent against the U.S. dollar since July 2005.

Of course, stronger exchange rates will eventually take a toll on exports. Which is why Asian central bankers are facing perhaps their toughest challenge since the 1997/98 financial crisis. - REUTERS

Decision To Let Sing$ Strengthen 'Not A Response To Spike In Inflation'

Source : The Straits Times, Apr 14, 2008

Policy change not a knee-jerk reaction, but aimed at medium term, says Tharman

THE decision to let the Singapore dollar rise further was not a knee-jerk response to a recent spike in inflation, but a decision with longer-term considerations in mind, said Finance Minister Tharman Shanmugaratnam yesterday.

'Short term, we're not in a crisis and if we do face a very severe downturn in growth, you can't rely on monetary policy to solve that; you've got to have other policy responses,' he told reporters yesterday on the sidelines of a community event.

The Monetary Authority of Singapore (MAS) caught many by surprise last Thursday when it said it would allow for an immediate one-off jump in the Sing dollar's value in response to a backdrop of 'continuing cost pressures'.

Singapore manages the value of the local currency as its chief weapon against inflation. A stronger Sing dollar helps make imports, such as oil and food, cheaper. But it also makes local exports less competitive in the global marketplace.

The policy change, which was widely regarded as an aggressive move, caught most analysts by surprise.

Many expected that economic growth concerns would deter the central bank from tweaking its monetary policy so soon after it had moved to allow for a faster Sing dollar appreciation at the last scheduled review in October.

Some analysts said the move suggested that the Government may have underestimated the inflation threat and is playing catch-up.

However, Mr Tharman said yesterday that the central bank looked at price trends over the next one to three years when it decided on the policy change.

'It's got to keep its focus on the medium term. That's the way the MAS does its job.'

As such, Mr Tharman said he expected little impact on inflation in the short term. MAS has projected Singapore's inflation rate this year to come in at the upper half of the 4.5-5.5 per cent forecast range.

Mr Tharman said that the MAS' last two policy changes were not large jumps, but discreet moves that allow a gradual appreciation of the Sing dollar.

They came as the MAS assessed that in the next few years, inflation will be a risk around the world.

'And if it's a risk all round the world, we have to be on guard as well,' said Mr Tharman.

Still, he acknowledged that there are short-term risks, which the Government is watching carefully.

'The exchange rate remains supportive of sustainable growth in the medium term, so it's always a fine balance between paying heed to inflation and paying heed to wanting to ensure that the economy keeps growing.'

The Government last week released a better-than-expected advance estimate of 7.2 per cent gross domestic product growth in the first quarter of the year.

At this point, he said, if Singapore did not focus enough on inflation over the next one to three years, growth would ultimately be undermined.

Asked if a stronger Sing dollar would hurt export competitiveness, he said there will be some compromise in the short to medium term, but it would be mitigated by the economy's performance in the short term, which he said was at its potential.

'It does not make a significant dent on competitiveness over the medium to longer term,' added Mr Tharman. The exchange rate is now about S$1.36 to the US dollar.

Farm Fun On S'pore Vacations

More farms going into agri-tainment for extra income

CITY-SLICKERS here can now go a little bit country if they want to.
And the place to do it is in Singapore's boondocks, where farms are re-inventing themselves.

D'KRANJI FARM RESORT: Visitors can expect a spa, a seafood restaurant and a beer garden with a live band. Opens in September. -- MARK CHEONG

Sure, these farms are where you can buy fresh produce - but think also hotel-style villas with terraces looking out onto fields of bananas.

Think spa, seafood restaurant and beer garden with a live band playing by night.

This is what visitors can expect from a stay at the 5ha D'Kranji Farm Resort when it opens in September in north-western Singapore.

Run by Indonesia-based HLH Agri-International, this $10-million venture is the latest and most costly instance of how farms here are marketing themselves.

ORCHIDVILLE: Orchid farm in Mandai. Its restaurant, Forrest, opened six months ago.

Termed agri-tainment, this business concept draws people to out-of-the-way farms with restaurants, cafes and farm-stay opportunities.

Smaller farms can stay viable with this new income.

To date, eight farms out of 228 here have visitor amenities like food outlets and souvenir shops, said the Agri-Food & Veterinary Authority.

NYEE PHOR FLOWER GARDEN: In Kranji. Petals and leaves Bistro is rented out for retreats and weddings. Farm stays planned

HLH hopes to attract 500,000 visitors to D'Kranji Farm Resort every year.

Bollywood Veggies in Neo Tiew Road, owned by former Netball Singapore president Ivy Singh-Lim, added the Poison Ivy bistro to its premises in 2004. A culinary school is on the cards.

The bistro brings in about $400,000 a year. The money is used to cover expenses like rent and wages.

BOLLYWOOD VEGGIES: In Neo Tiew Road. Poison Ivy bistro opened in 2004. A culinary school is on the cards.

Green Valley Farm at Bah Soon Pah Road in Sembawang opened a cafe serving finger food, made with its produce, last year.

It may also introduce farm stays, said Mr Casey Oh, one of the owners.

Over at Nyee Phoe Flower Garden in Kranji, the three-year-old Petals and Leaves Bistro is rented out for retreats and weddings. Farm stays are also planned.

Nyee Phoe Group's business development manager, MrKenny Eng, said: 'Why should someone come to a farm to buy something rather than go to the supermarket? It must be to experience a different lifestyle.'

This is what engineer Sentiono Tan, 43, and his family hanker for on their visits to the Kranji farms. His daughters aged four, eight and 10 are thrilled to see animals like goats there, he said.

'It's something different to do in our free time besides shopping. It would be nice for families if more farms had places to eat and stay.'

Agri-tainment is good for the farms here, said Mr Eng, adding that more players and public awareness will help sustain these businesses. The additional source of income will also help to cover utilities and other bills.

'Agriculture is a tough industry in Singapore and we need more like-minded players. We need everybody to prosper,' he said.

Mandai's Orchidville orchid farm, for instance, has doubled its weekly visitors to 500 since its restaurant, Forrest, opened six months ago. Takings from the sale of orchids have also doubled to $5,000 every weekend.

The extra income has cushioned it against higher oil and fertiliser prices.

Its managing director, MrJoseph Phua, said the farm's dining facilities encouraged visitors to linger.

'That encourages them to buy more flowers. It's a good synergy,' he said.

He sees agri-tainment as a way of keeping a more relaxed way of life alive here, where things zip along at a hectic pace.

Ms Singh-Lim, who also heads the Kranji Countryside Association, agreed, saying that the rural atmosphere must be retained even as agri-tainment grows.

'We are trying to make sure that this doesn't become another Sentosa,' she said.

Court Of Appeal Slashes Damages Awarded To JTC

Source : The Business Times, April 12, 2008

The Court of Appeal has substantially slashed damages granted to JTC Corporation after its 2005 victory over Hong Kong contractor Wishing Star.

The Appeal Court, on Thursday, reduced JTC’s original award of $8.14 million damages to just $339,824 - and ordered it to pay three-quarters of costs.

The case has its roots in a contract dating back to June 2002. JTC Corporation, Singapore’s biggest industrial landlord, contracted Wishing Star to provide glass facade walls at the Biopolis, the biomedical research centre at JTC’s one-north project in Buona Vista.

In September 2002, JTC terminated the deal, accusing Wishing Star of misrepresenting its facilities and capabilities when it bid for the project in an open tender. Wishing Star sued, and the High Court ruled in its favour, in 2004. But JTC appealed.

In 2005, the Appeal Court found that Wishing Star had made fraudulent misrepresentations that were material to the award of the contract by JTC - and held Wishing Star liable to JTC for damages due to the termination of the contract.

In 2007, the High Court deemed Wishing Star to be liable to JTC for some $8.14 million damages - of which, $7.8 million was the difference in the value of Wishing Star’s contract and the value of contract between JTC and another sub-contractor, Bovine Lend Lease, which was hired to carry out the facade works after Wishing Star’s termination. Wishing Star appealed against the award of damages.

The Appeal Court on Wednesday dismissed Wishing Star’s appeal against all other claims - but allowed it against the $7.8 million.

The court looked at whether the $7.8 million was the loss suffered by JTC as a direct result of fraudulent misrepresentations by Wishing Star.

In the first tender, Wishing Star was the lowest bidder at $54 million, followed by SB Facade Pte Ltd at $54.07 million and Liang Huat Aluminum Industries Pte Ltd at $63.46 million.

JTC did not consider SB Facade’s bid because of its past experience with the contractor - which made Liang Huat’s the next lowest bid, after Wishing Star’s.

After JTC terminated the contract with Wishing Star, it invited parties to submit a tender - and Bovine Lend Lease won with its lowest bid of $61.81 million.

The Appeal Court noted that in the original tender exercise, if JTC had not contracted with Wishing Star it would have hired Liang Huat. And Liang Huat’s contract value at $63.46 million would have been more than that of Bovine Lend Lease’s at $61.81 million.

The court ruled that, given the principles governing the award of damages for tort, there was no loss proven by JTC.

Wishing Star was represented by Tan Liam Beng, Eugene Tan and Ling Vey Hong of Drew & Napier, while JTC was represented by Ho Chien Mien and Sheik Umar Bin Mohamed Bagushair.

Different Views Of A Failed HDB Application

Source : The Straits Times, Apr 12, 2008

ACCORDING to the Housing Board, first-time applicants who have been unsuccessful for four times or more will be given an additional chance in the ballot for each subsequent unsuccessful attempt.

I have been unsuccessful in at least four exercises, and yet, the HDB tells me that I have been unsuccessful in only two attempts.

The HDB’s definition of unsuccessful is ‘not successful in the balloting’.

Those who have been given a number in the ballot but are yet unable to select a flat, because their numbers were so big or the quota had been filled, are considered ’successful’.

To me, the definition of “unsuccessful” is when I have put in an application, paid a fee and got nothing out of it.

The HDB should consider situations such as mine when it reviews the current application process.

Vilian Loh (Mdm)

Another Revamp In The Works For Malay Village

Source : The Straits Times, Apr 12, 2008

The Malay Village will undergo yet another revamp in a bid to save it, its owners said yesterday.

The overhaul for the 22-ha Geylang Serai complex will be financed with the $50 million put in by investors in China and Thailand, said Mr Jeffrey Chan, the general manager of Malay Village Pte Ltd. He was responding yesterday to reports that the Malay Village has yet to find its stride - even after so many management changes in two decades.

Sources said it will be torn down and replaced with a mixed development at the end of its current 20-year lease, which expires in 2011.

Meanwhile, the place is deserted, and some business owners told The Straits Times they were making barely enough to pay the rents.

The Urban Redevelopment Authority (URA) told The Straits Times last week that the authorities were looking into redeveloping Paya Lebar, within which the village sits.

Mr Chan said he was unaware of the URA’s plans, but that Malay Village Pte Ltd had written to its landlord, the Housing Board, last week to seek a 20- to 30-year extension on its lease.

He was unable to say what form the revamp would take. All he would say was that it would still be dedicated to preserving and showcasing Singapore’s Malay heritage and culture.

Mr Chan also took pains to refute labels like ‘white elephant’ and ‘dead town’, noting that 70 of the 80 units there were leased out. He said: “We are working very hard to make this place work.”

Asia Is Still Hitched To US Train, Warns IMF

Source : The Business Times, Aril 12, 2008

Economic and financial spillovers are still significant

IN a report likely to shake the confidence of Asian markets and regional policy makers, the International Monetary Fund (IMF) firmly rejected yesterday the notion that Asian economies have largely decoupled from the impact of a slowdown in the US and other advanced economies.

‘Asia has not de-linked and spillovers (from turmoil and recession elsewhere) could be significant,’ the report said, while urging financial and monetary authorities to step up contingency plans to deal with possible problems ahead.

The report on the Regional Economic Outlook for Asia and the Pacific is the latest - and most bearish - of a series of official reports published this week on the economic outlook in the wake of the still-spreading US sub-prime mortgage crisis.

Forecasting a 1.25 percentage point drop in overall Asian growth to 6.2 per cent in 2008, the report says ‘risks to the outlook remain on the downside’. And chief among these is ‘a further credit market-led deterioration of global financial conditions’.

According to the IMF: ‘While foreign demand for Asian exports would be lower in such a scenario, it is likely that the financial channel would be more virulent and complicated.’

Any deepening of credit turmoil could hit Asian equity and other asset prices, as well as consumer and business confidence, and send borrowing costs soaring, it suggested.

Economic activity across much of the Asia-Pacific region ‘remains fairly buoyant’ and domestic demand is ’still robust’, the IMF noted. But ‘key activity indicators in recent months suggest that momentum is easing. Confidence indicators also point to a slowing pace of activity’.

Meanwhile, inflation pressures are rising across most of Asia, food and commodity prices have soared and producer prices have shot up as a result.

The tone of the IMF report contrasted with a more upbeat note struck this week by the World Bank in its latest East Asia Economic Update, in which it suggested Asia could emerge as a ‘growth pole’ for the world as the US and Europe slow.

The IMF’s sterner approach reflects the deeper involvement that the institution is assuming in crisis management under recently appointed managing director Dominique Strass Kahn.

Spillovers from previous slowdowns in the US economy have been moderate, the IMF report acknowledged. But ‘there are reasons to believe that the current US slowdown could have a significantly larger impact. There is evidence that spillovers from the US, in particular to China, have risen in recent years and that financial contagion and global confidence effects could raise significantly the size of (these)’.

The IMF broke ranks with other official and private sector forecasters this week by suggesting in its latest World Economic Outlook that the US will suffer a mild recession in 2008 rather than a simple slowdown. Europe too is slowing sharply, the IMF said in its report. And given its trade and financial links with the rest of the world, Asia cannot expect to emerge unscathed.

One reason why Asian economies have remained relatively buoyant so far despite a slowdown in US demand has been their growing focus on non-traditional export markets in Latin America, Eastern Europe and the Middle East, the IMF noted. But it warned that these regions too have yet to feel the full impact of the ongoing slowdown in the US and in Europe.

‘Given the financial sector risks, monetary and supervisory authorities (in Asia) should step up monitoring and reviewing contingency plans, including those for central bank liquidity provision and bank capitalisation,’ the IMF said.

The report singled out Japan, Hong Kong and Singapore as three countries where regulators have moved to ensure that small banks are adequately capitalised before moving into complex structured financial products.

Policy makers in Asia have relatively limited room to manoeuvre on the monetary front because of fast-rising inflation in many parts of the region, the IMF said. But ‘greater exchange rate flexibility in many countries would help dampen imported price pressures and could contribute to a re-balancing of global demand’.

On the more positive side, the IMF said: “If the (Asia-Pacific) region finds itself in a substantially weaker growth environment, most Asian economies would have considerable scope to ease macro-economic policies, particularly on the fiscal front.”

Prudent policies in recent years have led to fiscal space that could be ‘used to comb at any serious growth slowdown’, it believed.

JTC Launches New Space For The Arts

Source : The Business Times, April 12, 2008

MEMBERS of the arts community in Singapore will now have another platform to showcase their talent.

JTC Corporation yesterday launched the Wessex Village Square @ one-north - a space for art exhibitions, music and dance performances and other events.

The square will also house an art workshop and studio, a dessert cafe and an Italian trattoria and cocktail bar, all accompanied by gallery spaces.

“Wessex Village Square will be a focal point and vibrant hotspot where community events will be held and artistic talents will show their work,” said JTC assistant chief executive officer Philip Su.

The 10,000 sq ft Wessex Village Square is at the heart of the Wessex Estate, a heritage area in the one-north innovation and research hub that includes Biopolis and Fusionopolis.

JTC has refurbished four blocks of walk-up apartments into 24 experimental work lofts and adapted the previous Judo Federation Club and Colbar into the Village Square, Mr Su explained.

In conjunction with the launch, several artistic events have been lined up for the public at the Wessex Estate today.

People can catch the Wessex Artists Open House, Arts Bazaar and a movie, among other things.

Bukit Panjang Residents One Of The First To Benefit From NRP

Source : Channel NewsAsia, 12 April 2008

More than 6,000 residents in Bukit Panjang will be among the first in Singapore to benefit from the Neighbourhood Renewal Programme (NRP).

Announced by Prime Minister Lee Hsien Loong at the National Day Rally last year, it is a new programme that focuses on neighbourhood improvements.

Flats that have been built before or in 1989 are eligible for NRP if they have not undergone any kind of main or interim upgrading.

Community Development, Youth and Sports Minister Vivian Balakrishnan said on Saturday that although it may be a free programme for the residents, it will require at least 75 percent support before it can be rolled out.

This is because the programme covers a larger area – at least two precincts – compared to other upgrading programmes. The minister added that he hopes economies of scale will allow the government to do more.

With NRP, residents have a direct say in the kinds of facilities they wish to have in their neighbourhood.

A consultation exercise that is expected to take four to six months has kicked off.

Dr Balakrishnan said: "They will tell us what they want and they will spell out the ideas. We'll then form a working committee, work with those ideas, come up with a proposal and go back to the residents for them to choose." - CNA/so

Tharman Says Recent MAS Moves Not In Response To Inflationary Pressures

Source : Channel NewsAsia, 13 April 2008

Finance Minister Tharman Shanmugaratnam on Sunday said Singapore has to be on its guard against inflation, or the country's growth could be undermined.

Responding to questions about the recent monetary adjustments made by Singapore's central bank, Mr Tharman said the adjustments were not made in response to short-term inflationary pressures.

"If you don't continuously focus on the mid-term, we'll also lose the short-term game... You regret what you did not do three years ago, and you find yourself in deeper problems in the short term," he said.

The finance minister added that the Monetary Authority of Singapore (MAS)'s recent revisions to allow the Singapore dollar to appreciate at a faster pace have been gradual.

The Singapore dollar hit 1.36 against the greenback last week.

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The MAS moves are seen as a way to curb rising inflation, which hit a high of 6.6 per cent earlier this year.

But with a stronger Singapore dollar, there are concerns that this would hurt Singapore's exports to other countries.

Mr Tharman said there is always a trade-off between short-term and medium-term objectives.

"In the short term, the economy is performing at its potential. If it takes a severe dip, then we'll need other policy responses. But monetary responses cannot be geared towards short term... (or) you undermine growth."

The Singapore economy has performed better than expected in the first three months of 2008, growing 7.2 per cent on year.

For the entire year, Singapore's economy is expected to grow between four and six per cent while its inflation rate is estimated to be between 4.5 per cent and 5.5 per cent.

Mr Tharman was speaking to reporters while visiting the Central Sikh Temple where the community was celebrating the 300th anniversary of Gurgaddi Day and the Vesakhi festival.

Tamils in Singapore also celebrated their New Year on Sunday. Special prayer sessions were conducted, and devotees offered fruits and flowers to their favourite deities. - CNA/ac/ir

$50m Plan To Revamp Malay Village

Source : The Electric New Paper, 13 April 2008

But where's the Malay input?

BIG bucks and big plans. That's what Mr Jeffrey Chan, 35, general manager of Malay Village Pte Ltd, claims he has for the place.

He claimed he has $50 million from investors in China and Thailand. He declined to reveal more or give details of who these investors are.

Mr Chan said a draft proposal was submitted to the authorities last week.

Plans include tearing down the Minangkabau-styled kampong structures, rebuilding with a similar 'kampong ambience' and adding 20 per cent more retail space.

Mr Chan said he is also bringing in shops which can pull in traffic, like halal food outlets. The 2.2-ha space, which is about the size of two football fields, has 80 units now. Some 90 per cent are occupied.

His management took over in April 2006 and the current lease expires in 2011.

At a press conference yesterday, Mr Chan said he is waiting for an appointment with the Housing Board - which owns the land - to discuss ideas and secure approval for the lease to be renewed for up to 30 years.

When asked if he had consulted anyone on the plans or was looking at any similar culture-focused retail space as a model, Mr Chan said 'No'.

He had also not spoken to the Urban Redevelopment Authority, which is studying plans for the Paya Lebar area, where the Malay Village is situated.

Said Mr Chan: 'The ideas are brought up by us. We are not copying anyone.

'There is no point spending time and money to talk to people until we can get... approval from HDB.'

Mr Chan said the revamp plans will revive the Village into something of a 'Malay hub'.

Malay culture will be kept alive, he promised, with more cultural performances and exhibits of Malay icons and pioneers.

He said: 'Our team is trying our best to provide this service to the Malay community.'

Out of the six management committee members, two are Malay - his secretary and his marketing manager.


Doesn't he think getting more feedback from the community will be necessary in planning such a Malay-themed location?

Mr Chan said his personal experience will help.

He said: 'I do know something about Malay culture. I was brought up in a kampong and a nenek (Malay for grandmother) helped care for me when I was younger.'

He said his previous tie-ups of activities with Malay organisations and mosques would also help.

When contacted, Mr Mohamed Akbar Kader, 46, vice-president of the Singapore Malay Chamber of Commerce and Industry, said: 'If the intention is to preserve the cultural aspect, then you have to consult people from the community or get their support.

'If you go purely commercial, then the idea of making a Malay cultural hub there could fail.'

Another industry observer said basic market research has to be done, like getting feedback from business organisations, cultural leaders and even tourism officials.

He said: 'How do you expect to come up with a plan without proper research?'

Since its inception in 1989, the Malay Village has changed management five times and has been described as a white elephant. It has also been plagued by poor business.

But the general manager remained optimistic.

Rebutting comments that the place seemed dead, Mr Chan said: 'Have they come inside and taken a look?'

His events manager, Mr Ken Tan, said about 450,000 people attended weddings at the Malay Village last year and about 1,800 tourists visited the museum there.

Late last year, they started welcoming school groups to the area.

Spa boss Siti Suhaila Yahya sees Malay Village as having potential.

Her Wayan Retreat Balinese Spa, which is taking up the largest unit of 7,000 square feet there, will open in May.

Ms Siti Suhaila, 30, said: 'I see this place as a diamond in the rough. It is a strategic business decision... my location is facing the wet market and this area is an ideal Malay catchment market for me.'


Kg Glam, Geylang Serai tourist attractions: STB

BOTH Geylang Serai and Kampong Glam will be continue to be promoted as places showcasing unique aspects of Muslim culture here.

Singapore Tourism Board's (STB's) Director of Cluster Development, Sightseeing and Cruises, Ms Carrie Kwik, said this in response to The New Paper queries on which is the Malay hub of Singapore.

Kampong Glam, she noted, was one of Singapore's oldest settlements. It was a transit hub for regional Haj pilgrims and housed the Malay royalty of Singapore.

Geylang Serai, a gathering place for local Malays, will remain a selling point to tourists interested in observing daily life, she said.

On The Market: East Coast

Source : The Sunday Times, Apr 13, 2008

In this weekly column, we bring you a sampling of properties up for sale. In the spotlight this week: New launches in East Coast area

58 Joo Chiat Lane
Units: 30

Prices: From $800 to $950 per sq ft (psf)

Launch date: Sometime this month

A project by the HLH Group, D’Fresco features private lifts for all units as well as a swimming pool, spa pool and barbecue area. Two-bedroom units span 700 to 1,100 sq ft, three-bedroom units 1,500 to 1,700 sq ft, and four-bedroom penthouses 1,500 to 3,000 sq ft.

118 Lor H Telok Kurau
Units: 32

Prices: Average $912 psf

Launch date: Yesterday

Large apartments are on offer at Verte, where most units come in three- or four-bedroom sizes, ranging from 1,098 sq ft to 2,594 sq ft. There is also one townhouse that spans 2,756 sq ft. Developer Roxy Homes will provide some units with a pool and jacuzzi.

Also on sale at the Verte showflat is The Azzuro, a nearby project that boasts mainly smaller units, starting from one-bedroom apartments at 646 sq ft in size. The average price is $801 psf.

Both projects come with a pool, marble and timber floors, built-in wardrobes and kitchen cabinets.

Chateau La Salle,
36 La Salle Street

Units: Six cluster bungalows

Prices: Average $3.3 million for each unit

Launch date: Last Saturday

Each two-storey bungalow comes with an attic as well as a basement carpark and a communal pool. Living and dining areas are fitted with imported natural marble tiles, while bedrooms have timber floors.

Jurong Could Be Next Suburban Hot Spot

Source : The Sunday Times, Apr 13, 2008

Swanky new facilities at Jurong Lake District will turn area into top commercial hub

The property market might have slowed in recent months, but for home hunters seeking good-value, long-term investments, there is one suburban estate screaming for attention: Jurong.

Jurong's rejuvenation involves the building of new waterways, 1,000 private homes and 2,800 hotel rooms, as well as the addition of 500,000 sq m of office space and 250,000 of retail space. -- PHOTO: URA

The Housing Board (HDB) town in the western region of Singapore might conjure up images of sprawling factories and sleepy suburbia, but in 10 to 15 years' time, it will undergo a transformation that could propel the estate to the forefront of the suburban property market, say industry experts.

Last week, National Development Minister Mah Bow Tan unveiled an ambitious blueprint to transform Jurong into Singapore's only lakeside destination: the Jurong Lake District.

It is set to become the largest commercial hub outside the Central Business District (CBD) - almost three times the size of Tampines, now Singapore's biggest suburban commercial hub.

Jurong's rejuvenation involves the building of new waterways, 1,000 private homes and 2,800 hotel rooms, as well as the addition of 500,000 sq m of office space and 250,000 of retail space.

The Jurong Lake District, which at 360ha will rival Marina Bay in size, consists of two precincts: Jurong Gateway and Lakeside.

The 70ha Jurong Gateway will boast swanky new high-rise offices, condos and entertainment facilities, all within walking distance of the Jurong East MRT station.

Lakeside is being marketed as a unique lakeside destination that will offer water activities and many tourist attractions, including a first-class science centre. It will be located around the Chinese Garden and Lakeside MRT stations, and will target young families.

In the short term, market watchers say Jurong is unlikely to see 'exceptional boosts to prices', given the current lacklustre market sentiment.

'Plans are still at a very early stage, and it's difficult to predict exact figures for future increases in property values when many factors are at play,' said Colliers International's director of research and consultancy, Ms Tay Huey Ying. But in the long term, property prices in Jurong could match those in established suburban towns such as Bishan and Ang Mo Kio, she added.

With or without the newly announced plans, private condos in Jurong - such as Parc Vista, Parc Oasis, The Mayfair and The Lakeshore - have seen price increases of 50 to 60 per cent since 2005.

The home investor can get attractive rental yields at some properties such as those within walking distance of MRT stations.

For example, units at The Mayfair, completed in 2000, and Parc Oasis, completed in 1994, sold for a median price of $560 per sq ft (psf) between the middle of last year and March this year.

Both developments are near the Chinese Garden MRT station.

With monthly rentals averaging $2.70 psf, owners enjoy rental yields of 5 per cent, said Ms Tay.

Units at newer condos near the Lakeside MRT station such as The Lakeshore, completed last year, went for a median price of $730 psf. They commanded monthly rents of $4 psf, providing an attractive average yield of 5.8 per cent.

The director of marketing and business development at Savills Singapore, Mr Ku Swee Yong, noted that prices at The Lakeshore jumped 40 per cent to around $803 psf on average in the first quarter of this year compared with the first quarter of last year - driven no doubt by the buoyant market last year.

In view of rising inflation and declining interest rates, Ms Tay said properties in the Jurong Lake District area present 'relatively attractive investments', as they cater to a niche leasing market, made up of foreign white-collar professionals who work at the International Business Park.

Other choices for investors include private apartments such as the former Housing and Urban Development Company estate Ivory Heights - just a stone's throw from the Jurong East MRT station - and executive condos such as Westmere and Summervale.

The huge catchment of standard HDB homes surrounding the district adds to the broad range of properties available.

Prices of HDB homes at Jurong East have also risen, with executive units selling for a median price of $490,000 in the fourth quarter of last year, up from $468,000 in the previous quarter.

PropNex chief executive Mohamed Ismail said activity in the HDB segment, unlike that in the high-end residential market, is still very healthy.

Jurong East public flats have strong potential upside. For instance, a five-room flat in Jurong East now costs, on average, $90,000 less than one in Bishan and $135,000 less than one in Toa Payoh.

'I expect prices for public housing to increase 5 to 10 per cent in the next two years,' said Mr Ismail.

Leaning on the side of caution, the director of consultancy and research at Knight Frank, Mr Nicholas Mak, said property values will start to appreciate only when the Lake District plans materialise, which could take many years.

Government land is the most likely to go up in value, he said. If plot ratios go up, prices will also increase.

Because little of the land in the precinct is freehold, Mr Mak thinks it is unlikely that high-end private homes will be built in the area.

One likely investor, Mr Ivan Koh, 27, who works in a law firm, said the area has now emerged at the 'top of the list' for his property hunting. 'There are still other factors to consider,' he said. 'But at least, there is some security if I choose to invest in a home in Jurong, as I know there are big redevelopment plans there.'