Source : The Business Times, November 18, 2008
But govt considering IRs' requests to open in phases
MARINA Bay Sands (MBS) and Resorts World at Sentosa (RWS) may be allowed to open in phases but will not be allowed to open as stand-alone casinos.
Senior Minister of State for Trade and Industry S Iswaran told Parliament yesterday the Singapore Tourism Board (STB) and other government agencies are considering requests by MBS and RWS to phase the opening of the integrated resorts (IRs).
'If the requests are allowed, they will also be subject to various terms and conditions,' he said. 'Even as we do so, our expectation remains that each development will open as an integrated resort, and not just a stand-alone casino.'
Mr Iswaran's comments are the clearest indication so far that even though MBS and RWS will be allowed to apply for casino licences upon spending at least 50 per cent of committed investment capital and building at least 50 per cent of committed gross floor area, this does not mean either will necessarily be allowed to open in phases.
According to the Request for Proposal for Marina Bay, if the IR is developed in phases, the public attractions at the Bayfront Promontory, the Waterfront Promenade, Event Plaza and infrastructure work must be completed in the first phase.
In response to NMP Eunice Olsen's question on when the IR's boost to the GDP can be achieved and whether the Ministry of Trade and Industry (MTI) anticipates the financial crisis affecting business prospects, Mr Iswaran said he expects, 'there may be some impact'.
In 2006, when it was announced that Las Vegas Sands had won the Marina Bay site, MTI said that based on its simulation, visitor arrivals and tourism revenue from MBS could add $2.7 billion to Singapore's GDP by 2015, or about 0.8 per cent of the GDP at that point.
When Genting International won the Sentosa site in the same year, its chairman and CEO Lim Kok Thay said RWS was expected to generate $15 billion in revenue by 2015, accounting for half of the $30 billion tourism revenue target set by STB by 2015.
Mr Iswaran said yesterday: 'It is premature to try to ascertain in quantitative terms what the exact impact (of the global financial crisis) will be, given the volatile economic conditions.'
He was, however, more upbeat on the longer term prospects of the IRs, saying he believes they will still add as many as 40,000 jobs by 2015. This is on top of the 20,000 direct jobs created by the IRs.
Tuesday, November 18, 2008
UK Economy Will Contract By 1.7% In 2009: Industry Body
Source : The Business Times, November 18, 2008
(LONDON) Britain will suffer its sharpest economic contraction in almost two decades next year and the number of people out of work could rise to nearly three million by 2010, the Confederation of British Industry (CBI) said yesterday.
It said it expects the British economy to contract by 1.7 per cent in 2009 and blamed the fallout from global financial turmoil for the massive revision to the 0.3 per cent growth forecast it had issued in September.
'What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer-lasting,' said John Cridland, CBI deputy director-general. 'The banking system has come under immense strain, sending consumer and business confidence plummeting in its wake.'
The CBI said it expected unemployment to reach two million by the end of this year and rise to 2.88 million, or 9 per cent of the workforce, in 2010 - the year by which the ruling Labour Party must call a general election.
That would be the highest jobless total since the last quarter of 1993. Official figures released last week showed British unemployment rose to its highest since 1997 in the three months to September, with 1.825 million people out of work.
The CBI said a deteriorating labour market and weak consumer confidence would weigh on household spending. It predicted household consumption would contract by 1.8 per cent in 2009. 'This latest forecast shows that 2009 is going to be a very tough year for business, with the sharpest fall in GDP since 1991,' said Ian McCafferty, the CBI's chief economic adviser.
Reduced spending and falling commodity prices will ease price pressures, the CBI said, predicting the inflation rate would fall to 1.7 per cent by the end of next year from 4.2 per cent last quarter. -- Reuters
(LONDON) Britain will suffer its sharpest economic contraction in almost two decades next year and the number of people out of work could rise to nearly three million by 2010, the Confederation of British Industry (CBI) said yesterday.
It said it expects the British economy to contract by 1.7 per cent in 2009 and blamed the fallout from global financial turmoil for the massive revision to the 0.3 per cent growth forecast it had issued in September.
'What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer-lasting,' said John Cridland, CBI deputy director-general. 'The banking system has come under immense strain, sending consumer and business confidence plummeting in its wake.'
The CBI said it expected unemployment to reach two million by the end of this year and rise to 2.88 million, or 9 per cent of the workforce, in 2010 - the year by which the ruling Labour Party must call a general election.
That would be the highest jobless total since the last quarter of 1993. Official figures released last week showed British unemployment rose to its highest since 1997 in the three months to September, with 1.825 million people out of work.
The CBI said a deteriorating labour market and weak consumer confidence would weigh on household spending. It predicted household consumption would contract by 1.8 per cent in 2009. 'This latest forecast shows that 2009 is going to be a very tough year for business, with the sharpest fall in GDP since 1991,' said Ian McCafferty, the CBI's chief economic adviser.
Reduced spending and falling commodity prices will ease price pressures, the CBI said, predicting the inflation rate would fall to 1.7 per cent by the end of next year from 4.2 per cent last quarter. -- Reuters
US Recession To Extend Into Next Year: Survey
Source : The Business Times, November 18, 2008
(NEW YORK) The United States has entered a recession that will persist into next year, and economies around the world will follow suit, according to a survey of business economists.
After growing 1.4 per cent this year, the US will contract 0.2 per cent in 2009, according to the median estimate in a poll taken by the National Association for Business Economics (NABE).
A majority of respondents said the UK, euro area, Japan, Canada and Mexico are either now, or will soon be, in a recession.
'Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit- market stresses,' Chris Varvares, president of Macro-economic Advisers LLC in St. Louis and of NABE, said in a statement.
Pessimism about the outlook for stocks, construction, home prices and employment means household wealth and spending will keep weakening, the report said.
Of all the measures undertaken so far to stem the slump, the US Treasury's bank-capital injections and Federal Reserve support for the commercial paper market will prove the most effective, the economists said.
The jobless rate, now at a 14-year high of 6.5 per cent, will climb to 7.5 per cent by the end of 2009, according to the median forecast. Last month, the group anticipated it would peak at 6.4 per cent by the middle of next year.
Car sales, which the group last month projected would stabilise in 2009, are now forecast to keep sliding. Purchases will decline 6.7 per cent in 2009 after dropping 17 per cent this year, according to the survey.
Similarly, the economists said housing starts won't bottom until next year. Builders will break ground on 870,000 homes in 2009, the fewest in 50 years of record-keeping. Property values are likely to fall another 3.5 per cent in 2009 after dropping 6 per cent this year, the group said.
The outlook for home sales was less dire, with almost all respondents projecting purchases would reach a low by next June.
On a quarterly basis, the business economists projected the US would shrink at a 2.6 per cent annual pace from October to December and at a 1.3 per cent rate in the first three months of next year.
The world's largest economy would resume growing in the second quarter of 2009, expanding at a 0.5 per cent pace.
Fed policy makers are likely to hold the benchmark interest rate at one per cent through the third quarter of next year, even as the outlook for growth dims and inflation is projected to cool, the survey showed. -- Bloomberg
(NEW YORK) The United States has entered a recession that will persist into next year, and economies around the world will follow suit, according to a survey of business economists.
After growing 1.4 per cent this year, the US will contract 0.2 per cent in 2009, according to the median estimate in a poll taken by the National Association for Business Economics (NABE).
A majority of respondents said the UK, euro area, Japan, Canada and Mexico are either now, or will soon be, in a recession.
'Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit- market stresses,' Chris Varvares, president of Macro-economic Advisers LLC in St. Louis and of NABE, said in a statement.
Pessimism about the outlook for stocks, construction, home prices and employment means household wealth and spending will keep weakening, the report said.
Of all the measures undertaken so far to stem the slump, the US Treasury's bank-capital injections and Federal Reserve support for the commercial paper market will prove the most effective, the economists said.
The jobless rate, now at a 14-year high of 6.5 per cent, will climb to 7.5 per cent by the end of 2009, according to the median forecast. Last month, the group anticipated it would peak at 6.4 per cent by the middle of next year.
Car sales, which the group last month projected would stabilise in 2009, are now forecast to keep sliding. Purchases will decline 6.7 per cent in 2009 after dropping 17 per cent this year, according to the survey.
Similarly, the economists said housing starts won't bottom until next year. Builders will break ground on 870,000 homes in 2009, the fewest in 50 years of record-keeping. Property values are likely to fall another 3.5 per cent in 2009 after dropping 6 per cent this year, the group said.
The outlook for home sales was less dire, with almost all respondents projecting purchases would reach a low by next June.
On a quarterly basis, the business economists projected the US would shrink at a 2.6 per cent annual pace from October to December and at a 1.3 per cent rate in the first three months of next year.
The world's largest economy would resume growing in the second quarter of 2009, expanding at a 0.5 per cent pace.
Fed policy makers are likely to hold the benchmark interest rate at one per cent through the third quarter of next year, even as the outlook for growth dims and inflation is projected to cool, the survey showed. -- Bloomberg
Ho Bee's Sale Of Frontech Centre Hits Snag
Source : The Business Times, November 18, 2008
Purchaser backs off from deal, misses Nov 14 deadline
HO Bee Group's proposed $30 million sale of its Frontech Centre has fallen through.
The company said yesterday that it had received notice on Nov 12 that the purchaser was not going ahead with the deal.
No details of the purchaser were revealed, except that it is a company registered as AG Frontech Pte Ltd. However, it is understood that the purchaser is a US-based property fund.
No reason for the collapse of the deal was given. Ho Bee said that it wrote to the purchaser on Nov 12, saying it was willing and ready to complete the sale on Nov 14 as agreed. However, the purchaser failed to complete the transaction.
Following legal advice, Ho Bee has given the purchaser 21 days' notice as of yesterday to complete the acquisition.
Frontech Centre is an eight-storey high-tech industrial building with a gross floor area of 71,992 square feet and a lettable area of about 69,382 sq ft.
Ho Bee said earlier that it planned to use the sale proceeds to cut its borrowing and increase working capital.
The $30 million price for the Frontech Centre was arrived at by taking into account the open market value of $18.5 million as at Dec 31, 2007, as appraised by Colliers International.
No revaluation was conducted for the purpose of the sale, save the last valuation.
Purchaser backs off from deal, misses Nov 14 deadline
HO Bee Group's proposed $30 million sale of its Frontech Centre has fallen through.
The company said yesterday that it had received notice on Nov 12 that the purchaser was not going ahead with the deal.No details of the purchaser were revealed, except that it is a company registered as AG Frontech Pte Ltd. However, it is understood that the purchaser is a US-based property fund.
No reason for the collapse of the deal was given. Ho Bee said that it wrote to the purchaser on Nov 12, saying it was willing and ready to complete the sale on Nov 14 as agreed. However, the purchaser failed to complete the transaction.
Following legal advice, Ho Bee has given the purchaser 21 days' notice as of yesterday to complete the acquisition.
Frontech Centre is an eight-storey high-tech industrial building with a gross floor area of 71,992 square feet and a lettable area of about 69,382 sq ft.
Ho Bee said earlier that it planned to use the sale proceeds to cut its borrowing and increase working capital.
The $30 million price for the Frontech Centre was arrived at by taking into account the open market value of $18.5 million as at Dec 31, 2007, as appraised by Colliers International.
No revaluation was conducted for the purpose of the sale, save the last valuation.
More Steps To Stimulate China Market On The Cards
Source : The Business Times, November 18, 2008
But measures likely to have little impact, recovery not in sight for another year
(BEIJING) China is likely to roll out more measures before long to stimulate demand for housing, but recovery in the all-important property market is unlikely for another year.
Next turning: Nationwide urban real estate prices rose only 1.6% in the year to October, the weakest rise since Beijing started publishing the data in 2005, and economists expect prices soon to be in outright decline despite steps to boost the economy
Nationwide urban real estate prices rose only 1.6 per cent in the year to October, the weakest rise since Beijing started publishing the data in 2005, and economists expect prices soon to be in outright decline despite steps to boost the economy.
'The immediate impact of the stimulus policies is limited,' said Li Zhanhong, vice-president of Jinke Group, a developer headquartered in the western city of Chongqing.
China lowered mortgage rates, reduced down payments and cut transaction taxes on Oct 22 to make it easier for people to buy homes. Then on Nov 9 it unveiled a broad package to stimulate domestic demand with a headline price tag of 4 trillion yuan (S$895 billion).
Comments a day later by Premier Wen Jiabao raised expectations that additional steps could emerge when top officials gather to chart economic policy for 2009.
Mr Wen instructed provincial officials to 'properly guide and control' the real estate sector, which he described as a pillar industry critical for everything from steel to home appliances.
'That's the strongest signal yet, which says that the government is going to support the real estate market,' said Lu Zhengwei, chief economist of Industrial Bank in Shanghai.
Analysts say China still has plenty of policy leeway to aid a sector that makes up a quarter of China's fixed asset investment, for example by further cutting taxes and mortgage rates.
'More forceful measures will come out during the economic work conference later this month,' said Fan Xiaochong, vice-president of the Beijing-based Sunshine 100 Real Estate Group.
The problem for developers is that policies in the pipeline, notably a plan by the Ministry of Housing and Urban-Rural Development to spend 900 billion yuan on affordable housing over three years, are likely to lower average house prices.
Stephen Green, head of China research at Standard Chartered Bank in Shanghai, said the laudable aim was to provide subsidised housing for low-income migrant workers. The initiative would also stir demand for cement, steel and construction workers.
But he said it could face opposition from developers and local governments. Low-cost housing is less profitable than high-end developments and, despite market segmentation, will augment overall supply in a market that is already overstocked.
'The developers - a considerable political force in Beijing, some believe - will not be fans since the policy runs the risk of bringing down urban house prices,' Mr Green said in a report.
Sun Mingchun, an economist for Nomura in Hong Kong, judges that oversupply is so great that prices could fall 20 per cent from peak to trough, but by no more than 30 per cent.
Mr Sun is positive in the long term given China's urbanisation and rising incomes, but he said in a report that a price correction that started in early 2008 could last about two years.
With buyers holding off, Vanke, China's biggest listed developer, reported a 35 per cent fall in property sales in October from a year earlier, the fifth monthly decline in a row.
'Whatever measures the government takes, the ultimate goal is to boost transactions, not prices,' Mr Li of Jinke Group said.
Forecasts that the property market will start to revive by this time next year could prove to be optimistic in the light of October indicators pointing to a sharp slowdown in growth, said Mr Lu, the Industrial Bank economist.
As for developers, they will be scrambling for cash as the year draws to a close to pay for land they have already bought and to pay back bank loans.
'Developers may possibly resort to a fresh round of price competition at the year end,' Jinke's Mr Li said. -- Reuters
But measures likely to have little impact, recovery not in sight for another year
(BEIJING) China is likely to roll out more measures before long to stimulate demand for housing, but recovery in the all-important property market is unlikely for another year.
Next turning: Nationwide urban real estate prices rose only 1.6% in the year to October, the weakest rise since Beijing started publishing the data in 2005, and economists expect prices soon to be in outright decline despite steps to boost the economyNationwide urban real estate prices rose only 1.6 per cent in the year to October, the weakest rise since Beijing started publishing the data in 2005, and economists expect prices soon to be in outright decline despite steps to boost the economy.
'The immediate impact of the stimulus policies is limited,' said Li Zhanhong, vice-president of Jinke Group, a developer headquartered in the western city of Chongqing.
China lowered mortgage rates, reduced down payments and cut transaction taxes on Oct 22 to make it easier for people to buy homes. Then on Nov 9 it unveiled a broad package to stimulate domestic demand with a headline price tag of 4 trillion yuan (S$895 billion).
Comments a day later by Premier Wen Jiabao raised expectations that additional steps could emerge when top officials gather to chart economic policy for 2009.
Mr Wen instructed provincial officials to 'properly guide and control' the real estate sector, which he described as a pillar industry critical for everything from steel to home appliances.
'That's the strongest signal yet, which says that the government is going to support the real estate market,' said Lu Zhengwei, chief economist of Industrial Bank in Shanghai.
Analysts say China still has plenty of policy leeway to aid a sector that makes up a quarter of China's fixed asset investment, for example by further cutting taxes and mortgage rates.
'More forceful measures will come out during the economic work conference later this month,' said Fan Xiaochong, vice-president of the Beijing-based Sunshine 100 Real Estate Group.
The problem for developers is that policies in the pipeline, notably a plan by the Ministry of Housing and Urban-Rural Development to spend 900 billion yuan on affordable housing over three years, are likely to lower average house prices.
Stephen Green, head of China research at Standard Chartered Bank in Shanghai, said the laudable aim was to provide subsidised housing for low-income migrant workers. The initiative would also stir demand for cement, steel and construction workers.
But he said it could face opposition from developers and local governments. Low-cost housing is less profitable than high-end developments and, despite market segmentation, will augment overall supply in a market that is already overstocked.
'The developers - a considerable political force in Beijing, some believe - will not be fans since the policy runs the risk of bringing down urban house prices,' Mr Green said in a report.
Sun Mingchun, an economist for Nomura in Hong Kong, judges that oversupply is so great that prices could fall 20 per cent from peak to trough, but by no more than 30 per cent.
Mr Sun is positive in the long term given China's urbanisation and rising incomes, but he said in a report that a price correction that started in early 2008 could last about two years.
With buyers holding off, Vanke, China's biggest listed developer, reported a 35 per cent fall in property sales in October from a year earlier, the fifth monthly decline in a row.
'Whatever measures the government takes, the ultimate goal is to boost transactions, not prices,' Mr Li of Jinke Group said.
Forecasts that the property market will start to revive by this time next year could prove to be optimistic in the light of October indicators pointing to a sharp slowdown in growth, said Mr Lu, the Industrial Bank economist.
As for developers, they will be scrambling for cash as the year draws to a close to pay for land they have already bought and to pay back bank loans.
'Developers may possibly resort to a fresh round of price competition at the year end,' Jinke's Mr Li said. -- Reuters
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