Source : The Straits Times, Dec 17, 2008
THE economy is expected to suffer more pain next year, but the contraction should be shortlived, according to a top international economist yesterday.
Mr Donald Hanna, Citi's global head of emerging markets, said Singapore's economy should shrink by 1.2 per cent next year but bounce back with 3.8 per cent growth in 2010.
'The biggest underlying driver of the recession would likely be an export contraction that is deepening in intensity and broadening in scope,' said New-York based Mr Hanna, who was speaking to the media after presenting his report Emerging World: The Rocky Road to Recovery.
'But given the highly open nature of the Singapore economy, virtually no sector will be spared.'
Mr Hanna's prediction of a rebound in 2010 represents a view shared by a growing chorus of experts, who are tipping a 'relatively short' U-shaped recovery for Singapore.
But their key assumptions are that the US housing market starts to bottom next year while no new 'systemic financial risks' pop up.
Mr Hanna said that Asia emerging markets look 'best protected' due to better fiscal positions and more effective governments.
Yet long-term growth and the prospects for asset appreciation in emerging markets will likely suffer even after the shock of the recession fades, he predicted.
Mr Hanna also believes that emerging markets run the risk that the souring of near-term global growth could spark more protectionist trade attitudes and generally undermine confidence in the ability of markets to provide for 'predictable growth'.
'While world leaders have been quick to call for the avoidance of beggar-thy-neighbour devaluations or trade barriers, the worst for many countries still lies ahead,' he said.
He added that demand for corporate bonds - which have taken a beating this year - might come back in the middle of next year as investor appetite for risk re-emerges.
And there might be better opportunities in Asian bonds because the 'dislocations are bigger in US bond market than in Asian markets,' Mr Hanna said.
Mr Thomas Kaegi, senior economist at UBS Wealth Management Research, told The Straits Times that in terms of Singapore corporate bonds, it is important to go for defensive sectors.
They include utilities, telecommunications and consumer staples.
Wednesday, December 17, 2008
Silver Lining Amid Gloomy Outlook, Says Barclays
Source : The Straits Times, Dec 17, 2008
Falling oil prices, fiscal measures could boost growth by 11/2 to 3 percentage points
DARK clouds are still gathering on the economic horizon, but a silver lining is apparent too, said Barclays Capital economists yesterday.
The rapid fall in oil prices could provide a larger-than-expected stimulus to economic growth, while the effects from heavy government spending in the region should kick in soon, said Mr Peter Redward, Barclays' chief economist for Asia excluding Japan.
'We do see some significant stimulus coming down the pipeline into the region,' he told a media briefing on the macroeconomic outlook for emerging Asia.
The fiscal stimulus measures being announced by Asian governments alone 'could add up to 11/2 percentage points of growth in the region next year'.
This is a significant contribution, especially since it is 'probably the first time in the best part of 20 years that Asian countries have been in a position to use fiscal policy as a counter-cyclical tool', Mr Redward said.
A lack of reserves amid the Asian financial crisis in 1998 made it impossible for most governments to spend their way out of recession.
Countries in the region will also benefit from the recent plunge in energy prices.
'We estimate that the fall in crude oil prices will inject something like 2.5 to 3percentage points of GDP into the region,' on top of the fiscal expansion, added Mr Redward.
Pump prices in Singapore have already fallen a number of times in recent months, and 'can come down significantly further', he said. 'We're going to start seeing utility bills come down as well.'
Mr Redward is projecting GDP growth for Asia of 7.2per cent this year and 5.2per cent next year - well below previous forecasts.
For Singapore, Barclays economist Leong Wai Ho has cut his growth prediction to 2per cent this year from 3.8per cent. He is tipping a contraction of 1per cent next year. Weakness in the manufacturing sector will spread to other industries, dampening private consumption and raising unemployment, he said.
Job losses are also expected to exceed those in 2001, with unemployment doubling to 5per cent by the second quarter next year.
But the economy could find a bottom in the third quarter, followed by two or three quarters of 'sub-trend growth' before picking up for real. This means stock market investors could see a turnaround in their fortunes as early as the first quarter of next year, said Mr Redward.
Another good sign: Inflation has all but disappeared as a policy concern for governments in Asia. Food and energy prices are starting to fall, and slower economic growth will lower core inflation.
In fact, deflation could emerge next year, with prices declining by a half to one percentage point in economies such as China, Taiwan and Singapore, Mr Redward suggested.
Falling oil prices, fiscal measures could boost growth by 11/2 to 3 percentage points
DARK clouds are still gathering on the economic horizon, but a silver lining is apparent too, said Barclays Capital economists yesterday.
The rapid fall in oil prices could provide a larger-than-expected stimulus to economic growth, while the effects from heavy government spending in the region should kick in soon, said Mr Peter Redward, Barclays' chief economist for Asia excluding Japan.
'We do see some significant stimulus coming down the pipeline into the region,' he told a media briefing on the macroeconomic outlook for emerging Asia.
The fiscal stimulus measures being announced by Asian governments alone 'could add up to 11/2 percentage points of growth in the region next year'.
This is a significant contribution, especially since it is 'probably the first time in the best part of 20 years that Asian countries have been in a position to use fiscal policy as a counter-cyclical tool', Mr Redward said.
A lack of reserves amid the Asian financial crisis in 1998 made it impossible for most governments to spend their way out of recession.
Countries in the region will also benefit from the recent plunge in energy prices.
'We estimate that the fall in crude oil prices will inject something like 2.5 to 3percentage points of GDP into the region,' on top of the fiscal expansion, added Mr Redward.
Pump prices in Singapore have already fallen a number of times in recent months, and 'can come down significantly further', he said. 'We're going to start seeing utility bills come down as well.'
Mr Redward is projecting GDP growth for Asia of 7.2per cent this year and 5.2per cent next year - well below previous forecasts.
For Singapore, Barclays economist Leong Wai Ho has cut his growth prediction to 2per cent this year from 3.8per cent. He is tipping a contraction of 1per cent next year. Weakness in the manufacturing sector will spread to other industries, dampening private consumption and raising unemployment, he said.
Job losses are also expected to exceed those in 2001, with unemployment doubling to 5per cent by the second quarter next year.
But the economy could find a bottom in the third quarter, followed by two or three quarters of 'sub-trend growth' before picking up for real. This means stock market investors could see a turnaround in their fortunes as early as the first quarter of next year, said Mr Redward.
Another good sign: Inflation has all but disappeared as a policy concern for governments in Asia. Food and energy prices are starting to fall, and slower economic growth will lower core inflation.
In fact, deflation could emerge next year, with prices declining by a half to one percentage point in economies such as China, Taiwan and Singapore, Mr Redward suggested.
野村证券：我国高档私宅价格 至后年可能跌43.8％
Source :《联合早报》December 17, 2008
遭金融海啸吹袭入“冷宫”，我国高档私宅的“身价”可能在2008至2010年之间共暴跌43.8％，而大众化私宅也无法幸免，可能锐减32.1％。
野村证券（Nomura）最新的新加坡房地产研究报告中作出了上述大胆预测。这是目前对本地楼市前景，看法最为悲观的一份报告。
在这之前，瑞士信贷（Credit Suisse）在今年5月发表的报告曾预测，私宅租金和楼价可能下跌高达40％。野村则在3月25日发表的《暴风眼》中预测，豪宅价格将在未来三年内滑落32％，大众化私宅价格也可能在2010年下滑高达20％。
考虑到新加坡的宏观经济前景迅速趋软，明年的全年经济增长几乎是零，甚至萎缩，撰写报告的分析师达尔威（Tony Darwell）和蔡明兆指出，私宅租金已开始急速下跌，进而将拖累楼价跟着跳水。
他们表示，高档私宅的租金已从今年第一季的高峰退低了14.1％，而大众化私宅租金相比第二季达颠峰期已下滑了11.1％，进而拖累全岛私宅租金在今年可能退低8.5％。
由于私宅需求处于疲弱状态，而空置率有上升的趋势，他们预测明年的情况更糟，业主能收取的租金将进一步锐减16.3％，使租金在2008年至2010年之间将总共下降29％。大众化私宅的月租可能跌至每平方英尺2.46元。
此外，分析师也提出，去年高调成交的一些集体出售项目遭发展商延后发展出租，使市场一时间被大量供应充斥，打压了实际租金。
报告中提到，去年8月创下本地99年地契私宅售价新高的景福苑（The Grangeford），近几个星期被推出市场短期出租。这个由华联企业（OUE）以6亿2500万元买下的项目，两房和三房式单位的月租为每平方英尺3.13至3.41元，或每月4000至5000元。这要比第9、10和11邮区黄金地段私宅单位所收取的每平方英尺4.60至5元的月租，显著来得低。
至于楼价走势，分析师指出，买卖双方的出价和要价差距正在扩大，但由于成交量过于微薄，阻碍了分析。
参考了转手交易数据，分析师表示，本地楼价自年初已平均退低了13.4％，身价被打折超过15％的项目也有增加的趋势，下跌幅度更高达超过30％。
他们举例，圣淘沙的升涛舫(Oceanfront@Sentosa Cove)在9月份卖出的三个单位，平均售价为每平方英尺1578元，较1月份的每平方英尺2450元低35.6％。大众化私宅方面，去年卖得满堂红的红山公寓The Metropolitan，9月份的每平方英尺930元成交价也比1月份的1150元少了19.1％。
分析师表示，在经济进一步萎缩的拖累下，大众化私宅将逃不过折价的命运，在未来6至12个月将直线下滑。高档私宅的尺价则预计在2010年回跌至每平方英尺1847元，接近1996年高峰的水平。
警惕投资者也许短期内不是进场的时机，分析师提出，发展商在未来几个月里为了清仓而削价的可能性相当可观，而炒卖者抛售资产也将给楼价带来下跌压力。
遭金融海啸吹袭入“冷宫”，我国高档私宅的“身价”可能在2008至2010年之间共暴跌43.8％，而大众化私宅也无法幸免，可能锐减32.1％。
野村证券（Nomura）最新的新加坡房地产研究报告中作出了上述大胆预测。这是目前对本地楼市前景，看法最为悲观的一份报告。
在这之前，瑞士信贷（Credit Suisse）在今年5月发表的报告曾预测，私宅租金和楼价可能下跌高达40％。野村则在3月25日发表的《暴风眼》中预测，豪宅价格将在未来三年内滑落32％，大众化私宅价格也可能在2010年下滑高达20％。考虑到新加坡的宏观经济前景迅速趋软，明年的全年经济增长几乎是零，甚至萎缩，撰写报告的分析师达尔威（Tony Darwell）和蔡明兆指出，私宅租金已开始急速下跌，进而将拖累楼价跟着跳水。
他们表示，高档私宅的租金已从今年第一季的高峰退低了14.1％，而大众化私宅租金相比第二季达颠峰期已下滑了11.1％，进而拖累全岛私宅租金在今年可能退低8.5％。
由于私宅需求处于疲弱状态，而空置率有上升的趋势，他们预测明年的情况更糟，业主能收取的租金将进一步锐减16.3％，使租金在2008年至2010年之间将总共下降29％。大众化私宅的月租可能跌至每平方英尺2.46元。
此外，分析师也提出，去年高调成交的一些集体出售项目遭发展商延后发展出租，使市场一时间被大量供应充斥，打压了实际租金。
报告中提到，去年8月创下本地99年地契私宅售价新高的景福苑（The Grangeford），近几个星期被推出市场短期出租。这个由华联企业（OUE）以6亿2500万元买下的项目，两房和三房式单位的月租为每平方英尺3.13至3.41元，或每月4000至5000元。这要比第9、10和11邮区黄金地段私宅单位所收取的每平方英尺4.60至5元的月租，显著来得低。
至于楼价走势，分析师指出，买卖双方的出价和要价差距正在扩大，但由于成交量过于微薄，阻碍了分析。
参考了转手交易数据，分析师表示，本地楼价自年初已平均退低了13.4％，身价被打折超过15％的项目也有增加的趋势，下跌幅度更高达超过30％。
他们举例，圣淘沙的升涛舫(Oceanfront@Sentosa Cove)在9月份卖出的三个单位，平均售价为每平方英尺1578元，较1月份的每平方英尺2450元低35.6％。大众化私宅方面，去年卖得满堂红的红山公寓The Metropolitan，9月份的每平方英尺930元成交价也比1月份的1150元少了19.1％。
分析师表示，在经济进一步萎缩的拖累下，大众化私宅将逃不过折价的命运，在未来6至12个月将直线下滑。高档私宅的尺价则预计在2010年回跌至每平方英尺1847元，接近1996年高峰的水平。
警惕投资者也许短期内不是进场的时机，分析师提出，发展商在未来几个月里为了清仓而削价的可能性相当可观，而炒卖者抛售资产也将给楼价带来下跌压力。
Tuesday, December 16, 2008
Developer's Profits Up 245% Despite Gloom
Source : The Straits Times, Dec 16, 2008
DEVELOPER Low Keng Huat has defied the gloom in corporate Singapore by reporting that its third-quarter net profit surged 245 per cent to $13 million.
Low Keng Huat's gross profits were lifted by the completion of construction projects such as Domain 21 last year. PHOTO: KHENG LONG CO
Revenue for the three months ended Oct 31 nearly doubled to $52.2 million from $26.4 million last year, the company announced yesterday.
The nine-month numbers were equally impressive, with net profits up from $11.4 million last year to $23.4 million on the back of a 66 per cent jump in revenue to $148.1 million.
Low Keng Huat's robust bottom line was due to higher development profits from associated companies, lower construction losses that were offset by lower profits from its hotel and investment segments, and a higher taxation charge.
The group's construction segment, however, was its key driver, with revenue for the nine months hitting $60.6 million.
Gross profit for the same period rose by $9.1 million to $18.3 million, mainly due to ex gratia payments from partners for the Domain 21 condominium development, cost recovery for concrete due to the Indonesian sand ban, and the completion of construction projects like The Chuan, Novena Phase 3, Twin Regency and Domain 21 last year.
Two of its new projects - Meritus Mandarin Hotel and Hard Rock Hotel at Sentosa - have also started to contribute to the group's performance.
Earnings per share for the quarter rose from 0.51 cent to 1.75 cents, while net asset value per share was at 28 cents as at Oct 31, down from 54 cents as at Jan 31.
No dividend has been declared or recommended for the nine months ended Oct 31.
Managing director Low Keng Boon hinted in the group's financial statement that harder times are ahead. He said: 'There is no certainty on how long the recession is going to last.'
The firm secured a $295 million project last month to build a shopping mall with an integrated bus interchange at Serangoon Central. This took its total order book to about $900 million.
Mr Low was also quoted in the statement as saying that the group's remaining two hotels, in Perth and Ho Chi Minh City, are expected to continue to perform well despite the looming recession.
Low Keng Huat shares closed one cent, or 8 per cent, up at 13.5 cents yesterday.
DEVELOPER Low Keng Huat has defied the gloom in corporate Singapore by reporting that its third-quarter net profit surged 245 per cent to $13 million.
Low Keng Huat's gross profits were lifted by the completion of construction projects such as Domain 21 last year. PHOTO: KHENG LONG CORevenue for the three months ended Oct 31 nearly doubled to $52.2 million from $26.4 million last year, the company announced yesterday.
The nine-month numbers were equally impressive, with net profits up from $11.4 million last year to $23.4 million on the back of a 66 per cent jump in revenue to $148.1 million.
Low Keng Huat's robust bottom line was due to higher development profits from associated companies, lower construction losses that were offset by lower profits from its hotel and investment segments, and a higher taxation charge.
The group's construction segment, however, was its key driver, with revenue for the nine months hitting $60.6 million.
Gross profit for the same period rose by $9.1 million to $18.3 million, mainly due to ex gratia payments from partners for the Domain 21 condominium development, cost recovery for concrete due to the Indonesian sand ban, and the completion of construction projects like The Chuan, Novena Phase 3, Twin Regency and Domain 21 last year.
Two of its new projects - Meritus Mandarin Hotel and Hard Rock Hotel at Sentosa - have also started to contribute to the group's performance.
Earnings per share for the quarter rose from 0.51 cent to 1.75 cents, while net asset value per share was at 28 cents as at Oct 31, down from 54 cents as at Jan 31.
No dividend has been declared or recommended for the nine months ended Oct 31.
Managing director Low Keng Boon hinted in the group's financial statement that harder times are ahead. He said: 'There is no certainty on how long the recession is going to last.'
The firm secured a $295 million project last month to build a shopping mall with an integrated bus interchange at Serangoon Central. This took its total order book to about $900 million.
Mr Low was also quoted in the statement as saying that the group's remaining two hotels, in Perth and Ho Chi Minh City, are expected to continue to perform well despite the looming recession.
Low Keng Huat shares closed one cent, or 8 per cent, up at 13.5 cents yesterday.
New Private Home Sales 'Could Fall To 18-Year Low'
Source : The Business Times, December 16, 2008
Many of last month's 192 sales were made at just five developments
ONLY 192 new private homes were sold last month, sparking concerns that total sales this year could plunge to levels not seen since 1990.
CBRE Research tips a total sales figure of around 4,300 units - a striking plunge from the boom last year when a record 14,811 new private homes changed hands.
If the projection pans out, private home transactions this year will be the lowest in 18 years when 2,526 units were sold in 1990.
And there is not much cheer on the horizon either with the 'sluggish sales momentum' likely to persist as the economy is expected to weaken further, said CBRE Research executive director Li Hiaw Ho.
The Urban Redevelopment Authority (URA) data yesterday showed that last month's sales were up slightly on the 118 units shifted in October but down from September's 376.
The latest numbers add up to 4,200 private homes sold in the first 11 months.
Sales at a few projects held up reasonably well, probably due to competitive pricing, say experts. Developers launched 382 units for sale last month - up from 159 in October when the market was in shock - but half the 767 units launched in September. It was also below the 12-month average of 541 units, said Knight Frank.
'The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote,' said its director of research and consultancy Nicholas Mak.
Many sales were made at just five developments with many projects not attracting a single buyer. Last month's top seller was Rosewood Suites in Woodlands, a 99-year leasehold project that moved 42 units at between $512 per sq ft (psf) and $687 psf.
Two prime projects also did relatively well. Newton Edge sold 34 units while 19 went at RV Suites in River Valley Road.
Mr Li said the two have mostly small units, which help contain the absolute price at $550,000 to $900,000 per unit, based on their median prices of $1,201 psf and $1,350 psf respectively.
Buyers snapped up 15 units at Evania in Upper Paya Lebar at between $612 psf and $650 psf after prices were apparently cut from above $800 psf at the launch in March last year, said Mr Li. 'Price remains a critical factor to move sales, as seen by the good response.'
And 11 houses at Andrews Terrace, a project in a new landed estate called Sembawang Greenvale, sold at prices starting from $1.3 million each.
Suburban homes accounted for 53 per cent of developers' sales last month, which shows that there is a pool of genuine buyers out there, said Ms Tay Huey Ying, director for research and advisory at Colliers International.
But prime properties dominated last month's launches. Developers have stepped up releases since August, a reversal of the first-half trend when they held back prime homes, she said. 'This could be an indication of weakening holding power among smallish and mid-tier developers with prime development sites.'
Homebuying sentiment and launch activity should remain subdued in the month ahead as the economy further contracts and the employment market is anticipated to tighten further, said Mr Mak.
'Buyers will remain very cautious, even if some re-pricing sets in.'
WEAK SENTIMENTS REMAIN
'The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote.'
Knight Frank's director of research and consultancy Nicholas Mak
Many of last month's 192 sales were made at just five developments
ONLY 192 new private homes were sold last month, sparking concerns that total sales this year could plunge to levels not seen since 1990.
CBRE Research tips a total sales figure of around 4,300 units - a striking plunge from the boom last year when a record 14,811 new private homes changed hands.
If the projection pans out, private home transactions this year will be the lowest in 18 years when 2,526 units were sold in 1990.
And there is not much cheer on the horizon either with the 'sluggish sales momentum' likely to persist as the economy is expected to weaken further, said CBRE Research executive director Li Hiaw Ho.
The Urban Redevelopment Authority (URA) data yesterday showed that last month's sales were up slightly on the 118 units shifted in October but down from September's 376.
The latest numbers add up to 4,200 private homes sold in the first 11 months.
Sales at a few projects held up reasonably well, probably due to competitive pricing, say experts. Developers launched 382 units for sale last month - up from 159 in October when the market was in shock - but half the 767 units launched in September. It was also below the 12-month average of 541 units, said Knight Frank.
'The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote,' said its director of research and consultancy Nicholas Mak.
Many sales were made at just five developments with many projects not attracting a single buyer. Last month's top seller was Rosewood Suites in Woodlands, a 99-year leasehold project that moved 42 units at between $512 per sq ft (psf) and $687 psf.
Two prime projects also did relatively well. Newton Edge sold 34 units while 19 went at RV Suites in River Valley Road.
Mr Li said the two have mostly small units, which help contain the absolute price at $550,000 to $900,000 per unit, based on their median prices of $1,201 psf and $1,350 psf respectively.
Buyers snapped up 15 units at Evania in Upper Paya Lebar at between $612 psf and $650 psf after prices were apparently cut from above $800 psf at the launch in March last year, said Mr Li. 'Price remains a critical factor to move sales, as seen by the good response.'
And 11 houses at Andrews Terrace, a project in a new landed estate called Sembawang Greenvale, sold at prices starting from $1.3 million each.
Suburban homes accounted for 53 per cent of developers' sales last month, which shows that there is a pool of genuine buyers out there, said Ms Tay Huey Ying, director for research and advisory at Colliers International.
But prime properties dominated last month's launches. Developers have stepped up releases since August, a reversal of the first-half trend when they held back prime homes, she said. 'This could be an indication of weakening holding power among smallish and mid-tier developers with prime development sites.'
Homebuying sentiment and launch activity should remain subdued in the month ahead as the economy further contracts and the employment market is anticipated to tighten further, said Mr Mak.
'Buyers will remain very cautious, even if some re-pricing sets in.'
WEAK SENTIMENTS REMAIN
'The increase in November signalled some hope for the private residential market, although general homebuying sentiments remained weak and possibilities for a recovery remained remote.'
Knight Frank's director of research and consultancy Nicholas Mak
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