Source : The Straits Times Forum News, Aug 27, 2007
THE Land Transport Authority (LTA) has decided to put put up more gantries and alter Electronic Road Pricing (ERP) hours to manage traffic congestion.
But how does the LTA expect motorists to remember what times each gantry's operation begins and ends, with wide variations in times from 7am to 10.30pm depending where you drive?
More HDB estates are being built along the Central Expressway (CTE) and other expressways - so naturally the car population on these highways will escalate.
Hitting motorists in the pocket is both unfair and heavy-handed.
The three Hobson's choices given to us are sadly lacking and dismal - alternative roads, unreliable public buses and elusive taxis.
Lim Boon Hee
I READ with astonishment the measures taken by the LTA to curb peak hour traffic on expressways. For many years now, the LTA has decided the only way to prevent congestion on expressways is to charge higher and higher ERP rates. Apparently, this measure has not succeeded, yet the LTA has again decided to raise ERP rates, extend operating hours as well as put up new gantries.
I hope the LTA will come up with other innovative solutions which will be more successful in curbing peak hour congestion rather than rely on the tried, tested and unsuccessful ERP system.
Joshua Lim Boon Yew
I HOPE the LTA will plan the new gantry on the northbound CTE carefully. As reported in the media, this new gantry is to manage congestion caused by motorists using the northbound CTE to exit onto the Pan-Island Expressway (PIE).
If this is the case, the new gantry should be located only at the exit point to the PIE and not across the whole northbound CTE. Otherwise motorists not exiting onto the PIE will be charged twice, once at the new gantry and again at the existing gantry at the Braddell exit.
Tan Jiann Ching
Monday, August 27, 2007
US Recession Risk Highest Since 9/11: Summers
Source : The Straits Times, Aug 27, 2007
WASHINGTON - FORMER US Treasury secretary Larry Summers said on Sunday it was too early to declare the financial markets crisis over and said chances had risen sharply of an economic downturn in the United States.
Despite interventions by the US Federal Reserve last week which appeared to reverse heavy selling pressure over the collapsing US housing debt market, Mr Summers said the risk of recession was its highest since the immediate aftermath of the Sept 11, 2001 attacks.
'We certainly saw some repair and some return to normality this week, but I think it would be far premature to judge this crisis over for at least two reasons,' he told ABC television.
'First, we can't yet know that there aren't more shoes to drop in the financial area,' he said, referring to the massive loss of confidence in securitised housing loans as US real estate prices sag.
'Second, we haven't yet had the time to observe what all this is going to mean for the real economy and for the actual process of job creation in our economy.
'I do not think we yet have ... a basis of making a prediction that there will be a recession, but I would say that the risks of recession are now greater than they've been any time since the period in the aftermath of 9/11.'
Mr Summers, who headed the US Treasury from 1999 to 2001 and then was president of Harvard University until a year ago, criticised the administration for not using government-backed mortgage lenders to help homeowners facing default on their loans.
He said policy should not be targeted at protecting investors or corporate lenders in the risky 'subprime' sector, which targets borrowers with patchy credit records.
'You know, the substantial majority of the firms that were in the subprime mortgage business have already gone out of business. Many of the firms that remain have seen their stock prices fall by half or more,' said Mr Summers, now with the New York investment bank DE Shaw & Co.
'But the focus shouldn't be on those firms. The focus should be on the homeowner. The focus should be on the guy who bought a mortgage,' he said. -- AFP
WASHINGTON - FORMER US Treasury secretary Larry Summers said on Sunday it was too early to declare the financial markets crisis over and said chances had risen sharply of an economic downturn in the United States.
Despite interventions by the US Federal Reserve last week which appeared to reverse heavy selling pressure over the collapsing US housing debt market, Mr Summers said the risk of recession was its highest since the immediate aftermath of the Sept 11, 2001 attacks.
'We certainly saw some repair and some return to normality this week, but I think it would be far premature to judge this crisis over for at least two reasons,' he told ABC television.
'First, we can't yet know that there aren't more shoes to drop in the financial area,' he said, referring to the massive loss of confidence in securitised housing loans as US real estate prices sag.
'Second, we haven't yet had the time to observe what all this is going to mean for the real economy and for the actual process of job creation in our economy.
'I do not think we yet have ... a basis of making a prediction that there will be a recession, but I would say that the risks of recession are now greater than they've been any time since the period in the aftermath of 9/11.'
Mr Summers, who headed the US Treasury from 1999 to 2001 and then was president of Harvard University until a year ago, criticised the administration for not using government-backed mortgage lenders to help homeowners facing default on their loans.
He said policy should not be targeted at protecting investors or corporate lenders in the risky 'subprime' sector, which targets borrowers with patchy credit records.
'You know, the substantial majority of the firms that were in the subprime mortgage business have already gone out of business. Many of the firms that remain have seen their stock prices fall by half or more,' said Mr Summers, now with the New York investment bank DE Shaw & Co.
'But the focus shouldn't be on those firms. The focus should be on the homeowner. The focus should be on the guy who bought a mortgage,' he said. -- AFP
Bad Credit Tops Terrorism As Biggest Risk To Economy: Nabe
Source : The Straits Times, Aug 27, 2007
NEW YORK - BAD credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported on Monday.
Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics.
Nabe, a Washington-based association, said 32 per cent of its surveyed members cited loan defaults and excessive debt as their biggest near-term concern.
Only 20 per cent of members cited defence and terrorism as their biggest immediate worry, down from 35 per cent when the survey was last conducted in March. Credit risk also topped gas prices, inflation and government spending.
'Financial market turmoil has shifted the focus away from terrorism and towards subprime and other credit problems as the most important near-term threats to the US economy,' said Carl Tannenbaum, president of Nabe and the chief economist at LaSalle Bank/ABN Amro.
Market tumble
The market turmoil began earlier this year, when mortgage lenders like New Century Financial Corp. and H&R Block Inc.'s Option One Mortgage Corp. unit reported their clients were missing payments on their home loans more frequently.
This led the Wall Street banks that finance the mortgage market to ultimately pull much of their money out. With cash draining rapidly from the industry, more than 50 lenders have gone bankrupt and a number of investment funds have gone under.
Victims of this flare-up include two of the 10 biggest mortgage lenders in America and two hedge funds managed by Bear Stearns Cos.
Loan brokers say it has become more difficult for some people to line up mortgages. Subprime loans, or loans to people with spotty credit histories, have all but disappeared as lenders scale back or shut down completely.
Reassessment
The shakeout in the subprime mortgage market forced investors around the world to reassess how much risk they were willing to stomach. This led to an exodus of cash from investments like securities backed by home loans, short-term corporate bonds and stocks whose values were inflated because they were perceived as takeover targets.
In the past five weeks, the stock market has lost 5 per cent. The US dollar fell to an all-time low versus the euro. A number of companies have had to cancel bond sales because of an absence of buyers.
And, the Federal Reserve has lent billions of dollars to banks from its 'discount window,' normally associated with bailouts for struggling financial institutions. The Fed this month issued a statement that the risks to the economy have risen considerably and traders ramped up their expectations the Fed would cut targets for interest rates this year.
The tumult in the financial markets has led businesses to revisit their interpretation of the housing boom earlier this decade and the easy credit that fuelled it, Nabe said. The proportion of surveyed members who call it a 'serious national bubble' more than doubled from two years ago to 29 per cent, the group said.
Nabe said the market turmoil is considered a short-term risk because the five-year outlook for housing is still strong. More surveyed members expect home values to appreciate in the next five years than fall. Very few expect a serious drop in home prices in the next five years.
The greatest long-term risk facing the economy is still health care costs and the medical needs of an aging population, Nabe said. -- AP
NEW YORK - BAD credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported on Monday.
Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics.
Nabe, a Washington-based association, said 32 per cent of its surveyed members cited loan defaults and excessive debt as their biggest near-term concern.
Only 20 per cent of members cited defence and terrorism as their biggest immediate worry, down from 35 per cent when the survey was last conducted in March. Credit risk also topped gas prices, inflation and government spending.
'Financial market turmoil has shifted the focus away from terrorism and towards subprime and other credit problems as the most important near-term threats to the US economy,' said Carl Tannenbaum, president of Nabe and the chief economist at LaSalle Bank/ABN Amro.
Market tumble
The market turmoil began earlier this year, when mortgage lenders like New Century Financial Corp. and H&R Block Inc.'s Option One Mortgage Corp. unit reported their clients were missing payments on their home loans more frequently.
This led the Wall Street banks that finance the mortgage market to ultimately pull much of their money out. With cash draining rapidly from the industry, more than 50 lenders have gone bankrupt and a number of investment funds have gone under.
Victims of this flare-up include two of the 10 biggest mortgage lenders in America and two hedge funds managed by Bear Stearns Cos.
Loan brokers say it has become more difficult for some people to line up mortgages. Subprime loans, or loans to people with spotty credit histories, have all but disappeared as lenders scale back or shut down completely.
Reassessment
The shakeout in the subprime mortgage market forced investors around the world to reassess how much risk they were willing to stomach. This led to an exodus of cash from investments like securities backed by home loans, short-term corporate bonds and stocks whose values were inflated because they were perceived as takeover targets.
In the past five weeks, the stock market has lost 5 per cent. The US dollar fell to an all-time low versus the euro. A number of companies have had to cancel bond sales because of an absence of buyers.
And, the Federal Reserve has lent billions of dollars to banks from its 'discount window,' normally associated with bailouts for struggling financial institutions. The Fed this month issued a statement that the risks to the economy have risen considerably and traders ramped up their expectations the Fed would cut targets for interest rates this year.
The tumult in the financial markets has led businesses to revisit their interpretation of the housing boom earlier this decade and the easy credit that fuelled it, Nabe said. The proportion of surveyed members who call it a 'serious national bubble' more than doubled from two years ago to 29 per cent, the group said.
Nabe said the market turmoil is considered a short-term risk because the five-year outlook for housing is still strong. More surveyed members expect home values to appreciate in the next five years than fall. Very few expect a serious drop in home prices in the next five years.
The greatest long-term risk facing the economy is still health care costs and the medical needs of an aging population, Nabe said. -- AP
Strong US Data Helps Asian Stocks Rise
Source : The Straits Times, Aug 27, 2007
Asian stocks rose on Monday, taking their cue from a Wall Street rally triggered by surprisingly strong economic data.
The solid US housing and durable goods numbers on Friday helped quell fears about the impact of the worst credit market turmoil of the decade on the outlook for global growth and corporate profits.
This renewed investors' appetite for riskier assets but weighed on Japanese government bonds.
'Investors will certainly welcome the sense of relative calm returning to global financial markets,' said Guy Hutchings, chief executive officer at MFS Investment Management.
'Investors should still prepare for further uncertainty in weeks ahead and until such time as losses related to the subprime crisis become apparent,' he added.
TOKYO
Japanese share prices closed 0.32 per cent higher on Monday as early gains shrank in late trading amid growing caution ahead of new US housing data, dealers said.
The Tokyo Stock Exchange's benchmark Nikkei-225 index of leading shares rose 52.42 points to close at 16,301.39, off the day's high of 16,413.79 touched in early afternoon trade.
The broader Topix index of all first-section shares closed up 1.91 points or 0.12 per cent at 1,587.76.
The market was up more than one per cent in morning trade after solid gains on Wall Street on Friday following surprisingly strong US housing data.
But dealers said the market grew cautious looking to further housing data due out later on Monday in the United States.
Dealers said the market was not overly impacted by reports of new members in Prime Minister Shinzo Abe's cabinet as it already saw the premier as weak following a crushing election defeat last month.
CHINA
China's main stock index surged 1.40 per cent to a fresh record high on Monday, buoyed by the blue chips favoured by mutual funds, although most stocks fell on profit-taking.
The Shanghai Composite Index ended the morning at 5,179.009 points, off an intra-day high of 5,192.061. But losing Shanghai stocks outnumbered gainers by 493 to 341.
Turnover in Shanghai A shares climbed to 94.0 billion yuan (S$18.9 billion) from Friday morning's 84.3 billion yuan because of funds' aggressive buying of banking and steel blue chips in particular.
HONG KONG
Hong Kong share prices finished the Monday morning session 1.97 per cent higher as index heavyweight China Mobile hit a record high on its strong gains in the United States, dealers said.
They said the stock was also boosted on hopes that it would be a major beneficiary from mainland individual investments in Hong Kong under Beijing's eased overseas investment rules.
The Hang Seng index closed the morning up 450.5 points at 23,372.39, off a high of 23,467.39 and a low of 23,285.71. Turnover was heavy at HK$67.43 billion(S$13.1 billion).
The Hang Seng China Enterprises index was up 553.14 points or 4.2 per cent at 13,731.23.
KUALA LUMPUR
Share prices on Bursa Malaysia were firmer at mid-morning today led by gains on selected counters like Bumiputra-Commerce after announcing stronger half-year financial results last Friday.
At midday the benchmark Composite Index rose 7.77 points to 1,281.29. -- REUTERS, BERNAMA, AFP
Asian stocks rose on Monday, taking their cue from a Wall Street rally triggered by surprisingly strong economic data.
The solid US housing and durable goods numbers on Friday helped quell fears about the impact of the worst credit market turmoil of the decade on the outlook for global growth and corporate profits.
This renewed investors' appetite for riskier assets but weighed on Japanese government bonds.
'Investors will certainly welcome the sense of relative calm returning to global financial markets,' said Guy Hutchings, chief executive officer at MFS Investment Management.
'Investors should still prepare for further uncertainty in weeks ahead and until such time as losses related to the subprime crisis become apparent,' he added.
TOKYO
Japanese share prices closed 0.32 per cent higher on Monday as early gains shrank in late trading amid growing caution ahead of new US housing data, dealers said.
The Tokyo Stock Exchange's benchmark Nikkei-225 index of leading shares rose 52.42 points to close at 16,301.39, off the day's high of 16,413.79 touched in early afternoon trade.
The broader Topix index of all first-section shares closed up 1.91 points or 0.12 per cent at 1,587.76.
The market was up more than one per cent in morning trade after solid gains on Wall Street on Friday following surprisingly strong US housing data.
But dealers said the market grew cautious looking to further housing data due out later on Monday in the United States.
Dealers said the market was not overly impacted by reports of new members in Prime Minister Shinzo Abe's cabinet as it already saw the premier as weak following a crushing election defeat last month.
CHINA
China's main stock index surged 1.40 per cent to a fresh record high on Monday, buoyed by the blue chips favoured by mutual funds, although most stocks fell on profit-taking.
The Shanghai Composite Index ended the morning at 5,179.009 points, off an intra-day high of 5,192.061. But losing Shanghai stocks outnumbered gainers by 493 to 341.
Turnover in Shanghai A shares climbed to 94.0 billion yuan (S$18.9 billion) from Friday morning's 84.3 billion yuan because of funds' aggressive buying of banking and steel blue chips in particular.
HONG KONG
Hong Kong share prices finished the Monday morning session 1.97 per cent higher as index heavyweight China Mobile hit a record high on its strong gains in the United States, dealers said.
They said the stock was also boosted on hopes that it would be a major beneficiary from mainland individual investments in Hong Kong under Beijing's eased overseas investment rules.
The Hang Seng index closed the morning up 450.5 points at 23,372.39, off a high of 23,467.39 and a low of 23,285.71. Turnover was heavy at HK$67.43 billion(S$13.1 billion).
The Hang Seng China Enterprises index was up 553.14 points or 4.2 per cent at 13,731.23.
KUALA LUMPUR
Share prices on Bursa Malaysia were firmer at mid-morning today led by gains on selected counters like Bumiputra-Commerce after announcing stronger half-year financial results last Friday.
At midday the benchmark Composite Index rose 7.77 points to 1,281.29. -- REUTERS, BERNAMA, AFP
M-East Investors Set To Pump $1.5b Into IDR
Source : The Straits Times, Aug 27, 2007
Agreement on first large foreign deal in Johor region may be reached this week
KUALA LUMPUR - A GROUP of Middle Eastern investors, including Saudi Arabia's diversified Hariri Group, is set to plough an initial investment of over US$1 billion (S$1.53 billion) into the Iskandar Development Region (IDR) in Johor.
The deal would be the first large foreign investment into the IDR and could provide a boost for Prime Minister Abdullah Ahmad Badawi's pet economic project, analysts say.
Government officials say talks between the foreign investors and state investment arm Khazanah Nasional are in the final stages. An agreement could be reached as early as this week.
Officials say the other investors were groups from Abu Dhabi and Dubai which have established themselves as builders of new cities. The total amount of Middle East investments could be as much as US$6 billion in coming years, they say.
The IDR is a 2,217 sq km area in southern Johor that Malaysia has targeted as its next fast-growth area by attracting foreign investors, including those from Singapore.
Financial executives close to ongoing negotiations say the development will be a joint venture between Khazanah and the Middle Eastern groups.
The foreign investors will own a more than 50 per cent stake in the planned project, which will include a financial centre, a medical city and an entertainment enclave.
Khazanah's equity in the project will be in the form of the land that it will provide.
The size of the land and its valuation have yet to be ironed out, the executives say.
'This will mark a huge turning point for Iskandar because this is the economic component for the infrastructure that will be pumped into the project,' said Mr Manu Bhaskaran, regional director of the Washington-based Centennial Group, a strategic advisory firm.
The IDR is the cornerstone of Datuk Seri Abdullah's national economic agenda and represents a major shift away from the infrastructure and heavy industries strategy pursued by his predecessor Tun Dr Mahathir Mohamad.
A key feature of PM Abdullah's economic plan is the creation of so-called economic clusters to spread growth throughout Malaysia.
The IDR is also meant to be a template for developing two other growth centres covering the east coast states, and the north-west states of Peninsular Malaysia.
And unlike past undertakings, such as the Johor's Tanjung Pelepas Port which was built to claw away business from Singapore, government planners say the IDR is aimed at leveraging on Singapore's economy.
The planned investments underscores the growing trend among Middle Eastern investors to look for new destinations to plough their excess oil incomes outside traditional centres such as the United States.
Financial executives involved in the IDR say the project is also drawing interest from Middle Eastern investors because of the competitive nature of companies from that part of the world.
They say the interest from Abu Dhabi and Dubai investors is partly because Singapore has been successful in attracting investments from Qatar, particularly the Al-Thani family.
Analysts also say that Singapore's economic boom which has led to a rise in the cost of doing business in the island state could give the Iskandar region a boost.
'Iskandar could become the natural outlet for businesses in Singapore,' said Centennial's Mr Manu. 'But Malaysia must ensure there is a seamless access between Iskandar and Singapore. That will be the main challenge.'
Agreement on first large foreign deal in Johor region may be reached this week
KUALA LUMPUR - A GROUP of Middle Eastern investors, including Saudi Arabia's diversified Hariri Group, is set to plough an initial investment of over US$1 billion (S$1.53 billion) into the Iskandar Development Region (IDR) in Johor.
The deal would be the first large foreign investment into the IDR and could provide a boost for Prime Minister Abdullah Ahmad Badawi's pet economic project, analysts say.
Government officials say talks between the foreign investors and state investment arm Khazanah Nasional are in the final stages. An agreement could be reached as early as this week.
Officials say the other investors were groups from Abu Dhabi and Dubai which have established themselves as builders of new cities. The total amount of Middle East investments could be as much as US$6 billion in coming years, they say.
The IDR is a 2,217 sq km area in southern Johor that Malaysia has targeted as its next fast-growth area by attracting foreign investors, including those from Singapore.
Financial executives close to ongoing negotiations say the development will be a joint venture between Khazanah and the Middle Eastern groups.
The foreign investors will own a more than 50 per cent stake in the planned project, which will include a financial centre, a medical city and an entertainment enclave.
Khazanah's equity in the project will be in the form of the land that it will provide.
The size of the land and its valuation have yet to be ironed out, the executives say.
'This will mark a huge turning point for Iskandar because this is the economic component for the infrastructure that will be pumped into the project,' said Mr Manu Bhaskaran, regional director of the Washington-based Centennial Group, a strategic advisory firm.
The IDR is the cornerstone of Datuk Seri Abdullah's national economic agenda and represents a major shift away from the infrastructure and heavy industries strategy pursued by his predecessor Tun Dr Mahathir Mohamad.
A key feature of PM Abdullah's economic plan is the creation of so-called economic clusters to spread growth throughout Malaysia.
The IDR is also meant to be a template for developing two other growth centres covering the east coast states, and the north-west states of Peninsular Malaysia.
And unlike past undertakings, such as the Johor's Tanjung Pelepas Port which was built to claw away business from Singapore, government planners say the IDR is aimed at leveraging on Singapore's economy.
The planned investments underscores the growing trend among Middle Eastern investors to look for new destinations to plough their excess oil incomes outside traditional centres such as the United States.
Financial executives involved in the IDR say the project is also drawing interest from Middle Eastern investors because of the competitive nature of companies from that part of the world.
They say the interest from Abu Dhabi and Dubai investors is partly because Singapore has been successful in attracting investments from Qatar, particularly the Al-Thani family.
Analysts also say that Singapore's economic boom which has led to a rise in the cost of doing business in the island state could give the Iskandar region a boost.
'Iskandar could become the natural outlet for businesses in Singapore,' said Centennial's Mr Manu. 'But Malaysia must ensure there is a seamless access between Iskandar and Singapore. That will be the main challenge.'
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