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this will b colorful thread esp 4 those will like 2 bold n big fonts
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Every1 has own views? Yes
Any1 can criticize? Yes
Watch ur words otherwise u will b spending new yr hvg free coffee in lock up
Mortgage Rates for 30-Year U.S. Loans Climb From Record Low
December 29, 2011, 12:03 PM EST
S&P Downgrade Proves Absurd as Investors Prefer U.S. Assets
BofA Agrees to Record $335 Million Fair-Lending Deal With U.S.
BofA Said Close to Settling Countrywide Fair-Lending Probe
Dudley Doesn’t See Additional Fed Action Against Europe Crisis
Mortgage Rates for 30-Year U.S. Loans Decline to Record Low
By Prashant Gopal
(Updates with pending home sales in last paragraph.)
Dec. 29 (Bloomberg) -- U.S. mortgage rates for 30-year fixed loans increased from the lowest on record as home sales rose amid improved consumer confidence and employment data.
The average rate for a 30-year fixed loan rose to 3.95 percent in the week ended today, from 3.91 percent last week, the lowest in records dating to 1971, Freddie Mac said in a statement. The average 15-year rate climbed to 3.24 percent from 3.21 percent, according to the McLean, Virginia-based mortgage- finance company.
New-home sales jumped to a seven-month high in November, figures from the Commerce Department showed Dec. 23. The unemployment rate declined to 8.6 percent last month, the lowest level in more than two years, and confidence among consumers reached an eight-month high in December.
“Low interest rates are a necessary condition to help the housing market but they aren’t sufficient,” Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, New Jersey, said in an interview before Freddie Mac made the announcement. “We need some other things to happen to help housing. The most important of those is for job growth to continue at a stronger pace.”
The number of Americans filing claims for unemployment benefits decreased for the week ended Dec. 17 to the lowest level since April 2008, the Labor Department said last week.
Residential home values, weighed down by foreclosures, fell 3.4 percent in October from a year earlier, according to the S&P/Case-Shiller index of property values in 20 cities.
A measure of contracts to buy previously owned homes increased 7.3 percent in November to the highest level since April 2010 after climbing 10.4 percent the prior month, the National Association of Realtors said today in Washington.
Oil prices rise on Mideast tensions
Posted: 30 December 2011 0436 hrs
NEW YORK: Oil prices edged higher on Thursday in volatile trading in New York, boosted by geopolitical tensions in the Middle East and better-than-expected US economic news.
New York's main contract West Texas Intermediate light sweet crude for February delivery, finished at $99.65 a barrel, an increase of 29 cents from Wednesday's close.
In London, Brent North Sea crude for February gained 45 cents to settle at $108.01 a barrel.
The WTI price took a hit after the government reported an unexpected increase in US crude oil stockpiles, by 3.9 million barrels, last week, reflecting weaker demand in the world's biggest oil-consuming nation.
Distillates also rose unexpectedly, by 1.2 million barrels. These stockpiles, which include heating fuel, are closely watched by the market at the beginning of winter.
Also tempering demand was a feeble Italian debt auction that helped push the euro to a 16-month low against the dollar. That makes dollar-priced crude less attractive to buyers using euros.
But oil prices rebounded into positive territory in late trade.
"The market is extremely lightly traded so it does not take a lot" to produce sharp price movements, said Tom Bentz at BNP Paribas.
"After getting down towards the $98 area the market got quiet, and we got a recovery," Bentz said.
"The reality is that there is a lot of stuff going on in the Middle East and that the market is nervous about it."
A showdown between Iran and the United States over Tehran's threats to close the strategic Strait of Hormuz to oil tankers worsened on Thursday.
Iran's Revolutionary Guards rejected a warning that the US military would "not tolerate" such a closure, saying they would act decisively "to protect our vital interests."
More than a third of the world's tanker-borne oil passes through the Strait of Hormuz, a choke point linking the Gulf's petroleum-exporting states to the Arabian Sea and beyond.
Also helping prices were better-than-expected reports on pending sales of US homes and manufacturing activity in the Chicago region, and a weekly jobless claims reading that confirmed the broader trend of improvement in the depressed labour market.
devilplate
30-12-11, 10:09
Welcome 2 d FIGHT RING
this will b colorful thread esp 4 those will like 2 bold n big fonts
Any1 can post? Yes
Any1 can comment? Yes
Every1 has own views? Yes
Any1 can criticize? Yes
Watch ur words otherwise u will b spending new yr hvg free coffee in lock up
tks for setting up this thread
well done bro! :)
i take back my word saying basic=richie$$$ :D
tks in advance for ur effort and time to post :)
tks for setting up this thread
well done bro! :)
i take back my word saying basic=richie$$$ :D
tks in advance for ur effort and time to post :)
np :)
find a contender n get in2 d ring. BULL /Bear?
Gloomy outlook for HK's exports sector
By Leslie Tang | Posted: 29 December 2011 1848 hrs
HONG KONG: Hong Kong's Trade Development Council is forecasting a gloomy outlook for the city's key exports sector.
It says Hong Kong's export growth will slow down to just one percent in 2012, down sharply from 10 percent this year.
The council uses Christmas sales in Hong Kong's major overseas markets as a gauge for prospects in the year ahead.
It says consumers in major markets such as the US and Europe are tightening their belts amid shaky economic outlook.
Daniel Poon, assistant chief economist, Hong Kong Trade Development Council, said: "US consumers will continue to be cautious and their demand for Hong Kong products will continue to moderate next year.
"And across the Atlantic, the EU is actually now on the brink of recession because of the sovereign debt crisis. And most European countries will have a very slow or negative growth next year.
"So consumers in general in Europe will continue to be very conscious and their demand for Hong Kong products will show no growth or even decline. So our exports to the EU will not be optimistic next year."
Exports account for about 25 percent of Hong Kong's GDP.
devilplate
30-12-11, 10:17
exports acct for how many % of SG's GDP?
New cooling measures may be scrapped if economy worsens
Dec 29, 2011 - PropertyGuru.com.sg
The latest property cooling measures could be removed if the Singapore economy deteriorates or stagnates amid the looming economic downturn, according to analysts.
However, if home prices continue to increase despite the new policy, home buyers can expect the measures to remain.
According to a report by The Straits Times, developers have been giving warnings since the implementation of the cooling measures, saying it could turn away foreign investment, drive down property values, and therefore, possibly damage an already volatile economy.
Wong Heang Fine, President of the Real Estate Developers Association, warned of a knock-on effect on mortgages that could lead to a decline in home equity values and shrinking wealth.
Record profits for property companies in Singapore
Sep 9, 2011 - PropertyGuru.com.sg
Most of the 97 companies that released their full-year earnings for the financial year ended June 2011 saw continued growth, with combined net profits of approximately S$2.4 billion, 14.6 percent higher than the total earnings recorded in the previous financial year.
Three of the top five earners for this year were property companies and analysts noted that real estate groups had benefited from strong sales in the past two to three years, according to a report by The Business Times.
Luxury property developer Wing Tai came in second with total earnings of S$314.2 million, while Sim Lian Group ranked fourth with S$200.1 million. Commercial and residential property developer GuocoLand was fifth, with S$130.2 million in full-year earnings.
Terence Wong, Co-Head of Research at DMG & Partners Securities, said many developers had locked in earnings from real estate sales over the past few years, which have been resilient, in light of the government’s tightening measures to cool the property market.
He noted that the strong sales recorded by most developers will likely “bring them through over the next two-three years.”
“That is why many of them have been reluctant to slash property prices,” he said. “Many also have cash to spare, and some are trying to buy more land.”
China limits foreign auto investment
Posted: 30 December 2011 0107 hrs
BEIJING: China said on Thursday it will "withdraw support" for foreign investment in auto manufacturing to encourage domestic industry in the world's largest car market.
Some of the world's biggest car firms, including General Motors, Honda and Volkswagen, have long had operations in China, but the state news agency said Beijing would "withdraw support for foreign capital in auto manufacturing".
The move, announced by the National Reform and Development Commission and the Ministry of Commerce, comes as auto sales slump and Beijing tries to shore up the domestic economy against a forecast slowdown.
The new obstacles to foreign auto makers, due to go into effect on January 30, come "because of the need of the healthy development of domestic auto making," the NDRC and commerce ministry said, according to Xinhua.
The report did not provide specific details of what the withdrawal of support might amount to, nor were they immediately available from either organisation's web site.
But the measure comes as China's auto sales slow and just 10 days after Saab was forced into bankruptcy following successful efforts by GM to block Chinese companies from acquiring the Swedish car maker.
Sales in the world's biggest auto market rose more than 32 percent last year to a record 18.06 million units, but the sector has since lost steam after Beijing phased out sales incentives such as tax breaks for small-engine cars.
Auto sales in China slid 2.4 percent in November from a year earlier to around 1.66 million vehicles, marking the second straight monthly decline.
China, which overtook the United States to become the world's top auto market in 2009, has become increasingly important for global players such as GM and Volkswagen.
As China's overall auto sales have dropped, some foreign firms have fared well, with GM showing a more than 20 percent sales rise in November from a year earlier, bolstered by strong demand for passenger cars.
In the first 11 months of this year, GM sold around 2.35 million vehicles in China, up more than 8.0 percent from the same period last year.
In September, GM China Group president Kevin Wale forecast China's total auto sales will reach 19 million units this year, marking growth of around five percent from the record 18.06 million units sold last year.
Industry group the China Association of Automobile Manufacturers also expects growth in car sales for the whole of 2011 to be just five percent, down from an earlier forecast of 10-15 percent.
The moves against the international auto sector come fast on the heels of Beijing's decision earlier this month to hike tariffs on US passenger cars and sports utility vehicles with engine capacities of 2.5 litres or more.
China challenged the US to bring a complaint to the World Trade Organisation.
The NDRC and commerce ministry also said China will ease restrictions on foreign investment in some sectors while lifting caps on the proportion of foreign capital in others.
In the first 11 months of 2011, China attracted $103.77 billion in foreign direct investment, up 13.15 percent from a year earlier, Xinhua said.
Signs that China's economy is in for a hard year ahead are seen in government forecasts which halve the export growth on which the nation's economy heavily depends, as economic turmoil in Europe and the United States bites.
Taiwan central bank leaves interest rate unchanged
Posted: 29 December 2011 1950 hrs
TAIPEI: Taiwan's central bank on Thursday left its key interest rate unchanged, saying the island's economy was being hit by weakening overseas demand.
"The global slowdown is affecting our economy... and the central bank will maintain the current rate in order to boost economic growth and stabilise consumer prices," it said in a statement after its quarterly board meeting.
Taiwan's trade-dependent economy has shown signs of weakness in recent months as demand slows from its major markets in China, the United States, and debt crisis-hit Europe.
Last month, Taiwanese industrial output fell for the first time in two years, while export orders grew at their slowest pace in 27 months due to sluggish overseas demand for its signature high-tech products.
Taiwan's economy grew a slower-than-expected 3.42 percent in the third quarter and the government has lowered its 2011 forecast from 4.56 percent to 4.51 percent.
Prices of shoebox apartments slide in November
Dec 29, 2011 - PropertyGuru.com.sg
Prices of completed shoebox apartments peaked in August and dropped three percent in November, according to the flash estimates from NUS’ Institute of Real Estate Studies.
Month-on-month, prices of these units dropped 0.2 percent in November.
The flash estimates also showed that prices of larger apartments in both Central and Non-Central regions continued to rise in the previous month.
Since 2010, the price hike for shoebox apartments in Singapore has been slower compared to larger apartments in the Non-Central region (NCR) but faster than for larger apartments in the Central Region.
Meanwhile, flash estimates for the Singapore Residential Price Index (SRPI) revealed that the sub-index for shoebox apartments in the country dropped 0.2 percent month-on-month in November. The index has declined three percent since peaking in August.
The SRPI for the NCR (excluding shoebox apartments) climbed 1.8 percent month-on-month, while the sub-index for the Central region rose 1.5 percent in November.
In addition, the Overall SRPI rose 1.7 percent month-on-month in November, up from the one percent month-on-month growth in October.
“As more of these units are completed, those who can’t hold may be under pressure to sell. So far, rents of small apartments have held well, but competition for tenants may intensify when more such stock is completed,” said Ong Choon Fah, Chief Operating Officer of DTZ Southeast Asia.
exports acct for how many % of SG's GDP?
Economy
GDP (2010 nominal prices): $222.7 billion.
Annual real growth rate: 8.8% (2007), 1.5% (2008), -0.8% (2009), 14.5% (2010).
Per capita GDP (2010): $43,867.
Natural resources: None.
Agriculture (under 0.5% of GDP): Products--poultry, orchids, vegetables, fruits, ornamental fish.
Manufacturing (22.2% of real GDP): Types--electronic and electrical products and components, petroleum products, machinery and metal products, chemical and pharmaceutical products, transport equipment (mainly aircraft repairs/maintenance, shipbuilding/repair and oil rigs), food and beverages, printing and publishing, optical and photographic equipment, plastic products/modules, instrumentation equipment.
Trade (2010): Exports--$351.18 billion: petroleum products, food/beverages, chemicals, pharmaceuticals, industrial machinery and equipment, electronic components, telecommunication apparatus, transport equipment. Major markets--Malaysia (11.9%), Indonesia (9.4%), Hong Kong (11.7%), EU (9.8%), China (10.3%), United States (6.4%), and Japan (4.7%). Imports--$310.39 billion: aircraft, crude oil and petroleum products, electronic components, radio and television receivers/parts, motor vehicles, chemicals, food/beverages, iron/steel, electricity generators. Major suppliers--EU (12.3%), Malaysia (11.7%), United States (11.2%), China (10.8%), and Japan (7.9%).
Alan Shearer
30-12-11, 10:40
Newcastle United to beat a weakened Liverpool 3-1 tonight pays 60 to 1 at Singapore Pools. bet of the year!
New mortgage loans in HK down 8%
Dec 29, 2011 - PropertyGuru.com.sg
New mortgage loans in Hong Kong declined eight percent to HK$10.6 billion (S$1.77 billion) in November, according to data released by the Hong Kong Monetary Authority (HKMA).
The data showed that the value of new loans approved last month dropped 4.7 percent to HK$11.9 billion (S$1.99 billion), while loans approved for new property climbed 0.9 percent to HK$2.2 billion (S$368.22 million) from the previous month.
Furthermore, the number of new loan applications climbed seven percent to 7,074 cases, while the outstanding value of mortgage loans surged 0.2 percent to HK$802.3 billion (S$134.27 billion).
Meanwhile, the proportion of new loans priced with reference to Hong Kong interbank offered rates (Hibor) fell to 19.2 percent in November from 28.1 percent in October, attributed to banks’ upward adjustments of mortgage rates.
Euro rebounds after hitting 15-month lows
Posted: 30 December 2011 0730 hrs
NEW YORK: The euro rebounded slightly on Thursday after sinking to 15-month lows against the dollar, in trading coloured by a mixed-result Italian bond auction.
The European single currency tumbled to $1.2858 - the lowest level since September 14, 2010 - before pushing back to $1.2960 at 2000 GMT, for a gain from Wednesday's $1.2934.
The fall was sparked by some disappointment in Italy's market-testing auction of long-term debt.
"This came after the Italian debt auction showed borrowing costs slipping from recent highs but still remaining at an 'unsustainable' level. Moreover, the Italian government failed to reach the auction target of 8.5 billion euros," said Joel Kruger of DailyFX.
Rome was only able to find buyers for seven billion euros worth of bonds, but the rate it paid remained lower than the seven percent threshold.
But the single currency bounced back in late trade, possibly the victim of the low holiday period trading volume.
At 2200 GMT, the euro was at 100.61 yen, down from 100.80 on Wednesday. The dollar bought 77.62 yen, down from 77.90.
The dollar traded at 0.9400 Swiss francs compared to 0.9427 francs. The British pound continued to sag, buying $1.5411, from $1.5450 a day earlier.
- AFP/de
China Factory Activity Shrinks Again in December
Published: Thursday, 29 Dec 2011 | 9:35 PM ET Text Size
By: Reuters
China's factory activity likely shrank again December as demand at home and abroad slackened, a purchasing managers' survey showed on Friday, reinforcing the case for pro-growth policies to underpin the world's second-largest economy.
Getty Images
HSBC Purchasing Manager's Index, designed to preview the state of Chinese industry before official output data are published, inched up to 48.7 in December from a 32-month low of 47.7 in November but fell short of the flash reading of 49.
The HSBC PMI has been mostly under 50, which demarcates expansion from contraction, since July.
Underlying indices showed softening demand at home and abroad, according to the data collated by UK-based information firm, Markit.
The sub-index for overall new orders edged up to 46.9 in December from November's 45, but still signalled falling demand. New export orders also shrank.
"While the pace of slowdown is stabilising somewhat, weakening external demand is starting to bite," said Qu Hongbin, China economist at HSBC.
"This, plus the ongoing property market corrections, adds to calls for more aggressive action on both fiscal and monetary fronts to stabilise growth and jobs, especially with prices easing rapidly."
China will avoid a hard economic landing so long as policy easing measures filter through in the coming months, Qu added.
HSBC believes a PMI reading of as low as 48 in China still points to annual growth of 12-13 percent in industrial output.
China's GDP growth has slowed in successive quarters, from an annual 9.7 percent in the first quarter to 9.1 percent in the third. The consensus call among economists for the fourth quarter is for growth to slip below 9 percent.
Both the official and HSBC PMIs are stuck near their weakest levels since early 2009.
Still, analysts are looking for signs of stabilisation in the factory sector and are anticipating a shift by Beijing to a more supportive economic policy stance to prevent a sharp slowdown.
China's central bank cut reserve requirements for commercial lenders late in November for the first time in three years, signalling a shift in policy to ease credit conditions for business borrowers.
Euro Slide Could Be Preview of a Troubled New Year
Published: Thursday, 29 Dec 2011 | 2:24 PM ET Text Size
The euro’s dramatic slide to the year’s lows in light trading is a likely prelude to more weakening in the New Year and highlights the long haul ahead for the euro zone’s debt crisis.
Analysts say the euro’s fall, to a level of 1.2858 against the dollar Thursday morning, was in part due to the lack of participants in the market but also because the list of hurdles facing the euro zone remains long. The euro later recovered from its 15-month low and was trading above 1.29 in afternoon trading.
The euro fell to a decade low against the yen. As the euro recovered Thursday morning, stocks also rose, turning the S&P 500 [.SPX 1263.02 13.38 (+1.07%) ] slightly positive for the year. Gold [GLD 150.34 -0.69 (-0.46%) ] also came off its low of $1,523 per ounce, a 20 percent decline from its September highs, which put it in bear market territory.
“I think the euro is telling us it’s a very thin market, but people are preparing for the worst next year,” said Brown Brothers Harriman chief currency strategist Marc Chandler.
Chandler said the market is looking ahead to the huge rollover of sovereign debt next year, with a total of more than $150 billion in the first quarter. Italy auctioned 7 billion euros in long dated bonds on Thursday, and the yield on its 10-year fell to 6.93 from November’s 7.56 percent rate. But in trading the yield continued to touch 7 percent, perceived by the market as an unsustainable level for Italy.
Italy alone has to raise at least another 50 billion euros in the first quarter, he said.
Chandler said there were several factors at play for the euro. “We saw money supply implode in the euro zone,” he said. M3 money supply growth, the broadest measure of money supply growth in the euro zone, was reported Thursday to have slowed to an annual pace of 2 percent in November, down from 2.6 percent in October. Economists had expected a 2.5 percent rate. At the same time, loan growth to the private sector slowed to 1.7 percent from 2.7 percent in October.
“All this money is not going anywhere. It’s not translating into loans. The banks are sitting with it. They are flush with cash and they’re not using it because they don’t know what’s going to happen next year,” he said, adding the banks need to raise 800 billion euros in capital. “They haven’t issued senior debt. Many of the banks are frozen out of the market.”
BNP Paribas strategist Mary Nicola said the two-day drop in the euro really started Wednesday morning with heavy corporate flows. “The afterthought was the market didn’t react immediately, but it later on realized that the ECB balance sheet expanding to a record high is that the ECB is in fact engaging in some credit easing,” she said.
The market also anticipates another rate cut from the ECB which cut its interest rate to 1 percent earlier this month, and that too could send the currency lower.
The European Central Bank balance sheet rose to a record 2.73 trillion euros, after its latest program launched last week to lend banks money at cheap rates for a longer term. The ECB gave more than 500 banks loans totaling 489 billion euros in an effort to encourage lending and boost liquidity.
“The thing is there’s such big linkages between the sovereigns and the banks,” said Chandler. “In many of these countries, sovereigns and banks are trading as if they already got downgraded.”
Even as the New Year’s holiday approaches, there continues to be speculation that several euro zone sovereigns could be downgraded by rating agencies, making borrowing more costly.
“What you do tend to find is that in thin markets, trends seem to be exacerbated and the tendency is for weakness and that’s what’s happening,” said Alan Ruskin, chief G-10 currency strategist at Deutsche Bank [DB 38.22 1.03 (+2.77%) ].
Ruskin said the ECB balance sheet expansion did not cause the euro’s decline. “It’s not a causal relationship but the size of the balance sheet is indicative of euro area problems, which are associated with euro weakness,” he said.
He said the euro decline also parallels a strengthening of the dollar on better U.S. data. As for the euro, the decline could continue. “1.25 is fairly easily in sight,” Ruskin said.
Chandler said the weaker euro would be part of the solution for the euro zone, helping exports in its weakest members and its wealthiest—Germany.
What’s really going on is an attempt to cure the patient. Castor oil doesn’t taste good, but it helps,” he said.
More local investors look to offshore properties
Dec 28, 2011 - PropertyGuru.com.sg
With the bleak outlook on local property prices, more local investors are eyeing offshore properties, said industry watchers and real estate agents.
According to a PropertyGuru survey, 19 percent of over 1,737 respondents polled were “tempted” to invest overseas, up from 14 percent in June.
The poll — conducted before the government’s recent cooling measures — also cited that Malaysia was the top overseas investment destination, with 32 percent interested, followed by Australia with 24 percent, while the Philippines and New Zealand both landed in third spot with nine percent.
As the residential market in Singapore is expected to slow, PropertyGuru also expects the number of foreign and local investors looking overseas to increase in the next six months.
Malaysia-based developer Eastern & Oriental noted a 20 percent increase in inquiries from Singaporean home hunters about its Penang projects.
Analysts believe that the cooling measures have taken some of the heat out of the luxury residential market and this will likely continue next year, as investors turn to opportunities in Western markets. This could affect demand for luxury homes in Singapore, Beijing, Hong Kong and Shanghai, where prices have risen by approximately 25 percent in recent years.
“While we saw very strong activity by high-net-worth investors, particularly from the Asia-Pacific region…the course might change in the next 12 months, where we see more outflow in terms of money going into markets like in Europe, in key markets in the US, by high-net-worth Asian investors,” said Donald Han, Vice-Chairman of Cushman & Wakefield.
29 December 2011 Last updated at 13:41 GMT
Hungarian government abandons part of debt auction
S&P raised doubts about the independence of the Hungarian central bank
Hungary ups interest rates to 7%
EU and IMF end Hungary debt talks
Hungarian debt downgraded to junk
The Hungarian government has abandoned part of a planned bond auction and seen interest on the debt it did issue rise.
When Hungary scrapped an auction in 2008 it was forced to seek IMF help.
The country, which is not part of the eurozone, is already in talks with the European Commission (EC) and IMF over a refinancing package.
However negotiators from the EC and IMF left Hungary earlier in December due to worries over the independence of its central bank.
The government sold 15bn forints ($62m, £40.5m) of debt in the auction, compared with a target of 18bn forints.
The average interest rate on its 10-year bonds increased from 8.78% to 9.7%.
The country's debt agency, AKK, said it had cancelled the three-year auction because the range of yields offered was too wide.
However it said there was not a shortage of lenders, as had happened in 2008.
"The 16 billion (in bids) is not too much but is an acceptable amount relative to the 15 billion on offer, but yields came in such a wide range that the AKK decided to reject all bids," said deputy chief executive of the AKK Laszlo Andras Borbely.
Downgrade
The unsuccessful auction follows a downgrade of Hungary's debt to junk status by Standard & Poor's (S&P) last week.
S&P cited changes to the constitution that had undermined the independence of the central bank and other institutions as part of the reason for the downgrade.
"In our view, the predictability of Hungary's policy framework continues to weaken, harming Hungary's medium-term growth prospects," the agency said after the downgrade.
S&P also cited heightened risks to the country's ability to repay its debts due to the weakening domestic and global economic outlook.
Economists say Hungary can continue to fund its spending from the markets in the short term but may eventually need IMF assistance again.
The head of the IMF mission to Hungary, Christoph Rosenberg said on Wednesday that no decision had been made on when and if formal negotiations over a new standby facility would begin.
30 December 2011 Last updated at 00:39 GMT
Recession 'to return' to Europe, say economists
Government austerity has undermined growth and caused a great deal of anger around Europe
Continue reading the main story
Global Economy
What caused the eurozone crisis?
How will the euro crisis end?
Crisis jargon buster
Europe's four big dilemmas
The vast majority of leading economists polled by the BBC believe recession will return to Europe next year.
One fifth said the eurozone would not exist in its current 17-member form, while the majority put the possibility of a eurozone break-up at 30%-40%.
The poll also found that most economists expect UK interest rates to remain at 0.5% throughout next year.
It was conducted among 34 UK and European economists who regularly advise the Bank of England.
Of the 27 who responded, 25 forecast recession for Europe next year.
Closer union
Growth in Europe has slowed in recent months as the eurozone debt crisis has forced governments to rein in spending and has undermined confidence in global financial markets.
The eurozone economy grew by 0.2% between July and September, while the 27 economies of the European Union grew collectively by 0.3%.
Politicians have attempted to resolve the crisis, including an agreement to forge closer ties between EU members, but markets have yet to be convinced the measures they have taken are sufficient.
The longer the debt crisis rumbles on, the more likely Europe will return to recession, economists believe.
'Deficit pain'
Growth in the UK during the third quarter was 0.6%. However, growth in the previous three months was flat.
The CBI business group said that 2012 could be the beginning of a more prosperous future if the "pain" of deficit reduction passed quickly.
In his New Year message, the CBI's John Cridland said the eurozone crisis posed a "significant threat" to the British economy, because 40% of UK exports were sold there.
Mr Cridland added that the faltering recovery and the continuing debt crisis were stark reminders of the need to rebalance Britain's economy away from household and government debt.
US mortgage delinquencies to slide further next year
Dec 28, 2011 - PropertyGuru.com.sg
Mortgage delinquency rates in the US are predicted to decline in the last three quarters of next year, after hitting a high of 6.02 percent in the first quarter of 2011, according to TransUnion.
The global information management services firm noted that mortgage loan delinquencies are expected to drop one full percentage point to approximately five percent.
“Although house prices and unemployment will likely face continued pressure next year, this forecast calls for gradual improvements in the second half of 2012 to other key variables, like improving credit quality of new originations, consumer confidence and GDP, that will positively influence homeowners’ ability and willingness to pay their mortgages,” said Tim Martin, Group Vice President of US housing in TransUnion’s Financial Services Business Unit.
Mortgage delinquency rate declines in the US have become more common in recent years, falling seven percent in 2010 and another seven percent this year. TransUnion said the decline next year could be even more significant.
“If things go as expected, there are no additional negative shocks to the US economy and the average borrower’s situation, mortgage delinquencies could fall as much as 16 percent in 2012 compared to 2011,” said Martin.
29 December 2011 Last updated at 17:25 GMT
Italian long term cost of borrowing stays high
The Italian government raised around 7bn euros ($8.96bn, £5.86bn) of medium and long-term debt on Thursday.
The interest rate on Italian 10-year bonds was 6.98%, viewed as unsustainably high by investors.
Italy has 161bn euros in debt repayments due between February and April, all of which it will have to finance through new borrowing.
Following the auction the euro fell to its lowest level against the dollar for 15 months, at $1.287, ending at $1.29 on Thursday.
European markets closed up on Thursday despite the concerns over Italy's financial future.
The FTSE-100 ended 1.08% up, while the Paris CAC rose 1.84% and the German Dax edged up 1.34% at the close.
Interest payments
The interest rate on Italy's ten-year debt was just over 0.5 percentage points lower than the 7.56% it had to pay at its last auction of 10-year bonds on 30 November.
Economists had hoped for a larger fall to make Italy's interest repayments more sustainable.
"The rate is still quite high but the most important thing is they are finding buyers for their debt," said Neville Hill, European economist at Credit Suisse.
The government paid 5.62% on new three-year debt, down from the 7.89% paid a month ago.
On Wednesday, the country raised 9bn euros ($11.8bn, £7.56bn) of very short-term debt at far lower borrowing costs.
ECB intervention
In a press conference Italy's new Prime Minister, Mario Monti, said he was "relieved" by the auctions.
"Auctions held yesterday and today went rather well, but the financial turbulence absolutely isn't over," said the former economist and EU commissioner.
The auctions were the first since the European Central Bank provided European lenders with 489bn euros of its new three-year loans just before Christmas.
Euro v US Dollar
LAST UPDATED AT 30 DEC 2011, 04:00 GMT
€1 buys change %
1.2944 -
-0.00
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-0.14
Just over half of the money was used to service banks' existing debts leaving lenders with around 190bn euros in spare cash to invest elsewhere, possibly including government bonds.
The injection of money into the banking system may have reduced Italy's short-term borrowing costs.
Mixed news
The latest auction came on a day of mixed economic news for the single currency bloc.
The euro fell sharply against most major currencies, reaching 100.35 against the yen, its lowest level since July 2001 and a 15-month low against the dollar
Spain's central bank has said that its economy shrank in the final 3 months of 2011 based on incomplete economic data
Italian business confidence in December fell, according to official data from Istat. Confidence fell most sharply in the construction and retail sectors
Markets were affected by the news that European banks had deposited record amounts overnight with the European Central Bank, raising fears of a credit crunch.
One interpretation of this increased usage of the ECB's deposit facility is that it reflects nervousness among Europe's banks about lending the money to each other due to the economic uncertainty.
"It could be a sign of market tension," said James Ashley a senior economist at the Royal Bank of Canada.
"But there are a number of other interpretations. We don't know which banks are depositing and in which size."
Some suggest, instead, that the increased use of the facility is simply a response to the recent intervention by the ECB.
http://www.oneshift.com/news/news.php?newsid=5828
The all-new 2012 Hyundai Veloster earned a GOOD DESIGN™ Award in the Transportation category for its innovative and unique three-door design.
The all-new 2012 Hyundai Veloster earned a GOOD DESIGN™ Award in the Transportation category for its innovative and unique three-door design.
The GOOD DESIGN Awards are presented annually by The Chicago Athenaeum: Museum of Architecture and Design together with The European Centre for Architecture Art Design and Urban Studies. Founded in Chicago in 1950, GOOD DESIGN bestows international recognition upon the world's most prominent designers and manufacturers for advancing new, visionary, and innovative product concepts, invention and originality, and for stretching the envelope beyond what is considered ordinary product and consumer design.
Hyundai’s Veloster continues to grab consumer attention and media headlines from experts both inside and outside the automotive industry. For 2011, The GOOD DESIGN Awards were judged at the American Institute of Architects in Los Angeles by an international jury of design professionals, architects, experts, and cultural leaders.
“With Veloster, we want to show consumers that high style, fuel efficiency and affordable pricing can all be found in one vehicle,” said Scott Margason, director, Product Planning, Hyundai Motor America. “Veloster stands out from the crowd with a stylish yet functional design. We’re honored that GOOD DESIGN is recognizing the beautiful design and unique personality of the car.”
Veloster’s cutting edge integration of the third-door combined with a breakthrough design inspired by a high-performance sport bike allows Veloster to stand-out from its competition and makes a bold statement about Hyundai’s commitment to innovative design. Distinctive black A-pillars give the glass a motorcycle helmet visor appearance and in the front is an aggressive form of Hyundai’s signature hexagonal front grille and unique Hyundai-signature LED position lights. Veloster’s dynamic rear design has a distinctive glass hatch, dual centered chrome exhaust tips and black lower fascia that complement the assertive front fascia. Inside, the center stack and controls resemble a sport bike fuel tank and the air vents are inspired by motorcycle tailpipes, while the floor console mirrors the seat of a bike.
primeesense
30-12-11, 11:16
mortgage delinquency drop = good news for property isn't it?? not all falls are bad
US mortgage delinquencies to slide further next year
Dec 28, 2011 - PropertyGuru.com.sg
Mortgage delinquency rates in the US are predicted to decline in the last three quarters of next year, after hitting a high of 6.02 percent in the first quarter of 2011, according to TransUnion.
The global information management services firm noted that mortgage loan delinquencies are expected to drop one full percentage point to approximately five percent.
“Although house prices and unemployment will likely face continued pressure next year, this forecast calls for gradual improvements in the second half of 2012 to other key variables, like improving credit quality of new originations, consumer confidence and GDP, that will positively influence homeowners’ ability and willingness to pay their mortgages,” said Tim Martin, Group Vice President of US housing in TransUnion’s Financial Services Business Unit.
Mortgage delinquency rate declines in the US have become more common in recent years, falling seven percent in 2010 and another seven percent this year. TransUnion said the decline next year could be even more significant.
“If things go as expected, there are no additional negative shocks to the US economy and the average borrower’s situation, mortgage delinquencies could fall as much as 16 percent in 2012 compared to 2011,” said Martin.
Affordable housing lifts volume of land sales
By Wang Yanlin | 2011-12-30 | NEWSPAPER EDITION
The story appears on Page A11
Dec 30, 2011
People check Shanghai's first residential complex built for public rental housing in Xuhui District yesterday. The program is open to families with Shanghai residency and who reside in a living space per capital of less than 15 square meters. The lowest rent for a one-bedroom apartment in the complex was only 1,649 yuan (US$260).
More in photo gallery
THE value of land sales in Shanghai fell in 2011 for the first time in three years although the volume of land sold rose, Soufun.com said yesterday in a report.
The increase was attributed to more land allocated for the construction of affordable housing while land prices fell amid restraining measures on home purchases.
The city saw 281 land parcels totalling 13.4 million square meters sold this year, up 4.72 percent from a year earlier, said Soufun, a major real estate website.
However, the value of sales dropped 14.4 percent to 118.3 billion yuan (US$18.7 billion) from that in 2010, the first fall in three years.
"A growing allocation of land for affordable housing is the main reason the volume of land sales rose," said Zhang Wanyu, a Soufun analyst.
The land parcels designated for government-funded affordable housing grew 42.6 percent annually to 5.5 million square meters. Their sales value surged 68.3 percent to 21.2 billion yuan.
By contrast, the parcels allocated for regular residential uses declined 16.9 percent annually to 4.8 million square meters, and their sales value dived 39.5 percent to 47 billion yuan.
The report said the value and volume of land sales for commercial uses were relatively stable.
Of the 281 land parcels sold this year, 170 were auctioned at the asking prices. Their average premium rate was 17.6 percent this year, down from 46 percent in 2010.
"The price drop reflects an overall weak land market in Shanghai, especially in the last quarter of this year," Zhang said.
He added the auctions of 27 parcels were terminated due to lack of interest from buyers this year, and 20 of them took place in the fourth quarter.
Despite the rapid drop in land prices Shanghai reiterated last week its determination to strengthen efforts next year to rein in housing speculation and enhance enforcement of home-purchase curbs.
Sky Xue, an analyst at China Real Estate Information Corp, said land prices may continue to fall next year as home sales may not rebound soon.
Chinese shares close up at midday Friday
Source: XINHUA | 2011-12-30 | ONLINE EDITION
BEIJING, Dec. 30 (Xinhua) -- Chinese shares closed up for the morning break on Friday, with the benchmark Shanghai Composite Index up 0.82 percent, or 17.90 points, to close at 2,191.46.
The Shenzhen Component Index rose 1.12 percent, or 98.36 points, to finish at 8,879.68.
FEO's The Tennery sold out
Dec 30, 2011 - PropertyGuru.com.sg
All 338 units at The Tennery in Bukit Panjang have been sold, said developer Far East Organization (FEO).
It noted that the small office, home office (Soho) apartment project was sold over the span of a year at an average price of S$1,200 psf.
Over 80 percent of the buyers were Singaporeans and permanent residents (PRs), it added.
Located at the junction of Upper Bukit Timah Road and Woodlands Road, the new trans-urban development comprises 338 Soho units situated above a three storey retail podium, Junction 10, which houses the Ten Mile Junction LRT station. The units, with sizes ranging from 614 to 936 sq ft, come with high ceilings. Full recreational facilities such as a meeting pod, dining pod, entertainment pavilion, lap pool, hammock court, tennis court and sky garden terrace are located on the roof of the retail podium.
“For residents of The Tennery, travelling to the Jurong Lake District is just a few LRT and MRT stops away. Under the URA 2008 Master Plan, the Jurong Lake District is earmarked as the biggest lakeside destination for business and leisure in the West,” said FEO.
It added that residents at the project will enjoy unparalleled convenience, given its connectivity to the Bukit Panjang MRT and LRT stations, as well as the upcoming Bukit Panjang bus interchange.
Aussie home prices to decline further next year
Dec 30, 2011 - PropertyGuru.com.sg
Mortgage customers in Australia foresee further decline in home prices next year, which may leave many home loan borrowers facing negative equity issues.
According to a report by Realty Biz News, several property experts warned that some people on the property ladder may be left “under water” next year, despite Australia’s real estate market having fared much better than other countries since the economic downturn.
The report noted that cases of negative equity, where a person ends up owing more than their property value, are still quite rare, though a four percent decline in home prices this year has not helped the issue.
The percentage of late loan payments, which dropped from 1.77 to 1.42 percent in September, is also a good sign.
Moreover, experts are now predicting that home prices in the country could fall by as much as five percent next year, which could test the steadiness of the Aussie property market.
Local News: COE Results for December Round 2
Posted by Bjorn 21 Dec 2011
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COE results bring you something to cheer about this Holiday Season. The second round of this month’s Certificate of Entitlement (COE) bidding results is out and the good news from last round continues.
COE results bring you something to cheer about this Holiday Season. The second round of this month’s Certificate of Entitlement (COE) bidding results is out and the good news from last round continues. COE bidding results continue to drop, this time across the board in all categories.
more gd news in States
US mortgage delinquencies to slide further next year
Dec 28, 2011 - PropertyGuru.com.sg
Mortgage delinquency rates in the US are predicted to decline in the last three quarters of next year, after hitting a high of 6.02 percent in the first quarter of 2011, according to TransUnion.
The global information management services firm noted that mortgage loan delinquencies are expected to drop one full percentage point to approximately five percent.
“Although house prices and unemployment will likely face continued pressure next year, this forecast calls for gradual improvements in the second half of 2012 to other key variables, like improving credit quality of new originations, consumer confidence and GDP, that will positively influence homeowners’ ability and willingness to pay their mortgages,” said Tim Martin, Group Vice President of US housing in TransUnion’s Financial Services Business Unit.
Mortgage delinquency rate declines in the US have become more common in recent years, falling seven percent in 2010 and another seven percent this year. TransUnion said the decline next year could be even more significant.
“If things go as expected, there are no additional negative shocks to the US economy and the average borrower’s situation, mortgage delinquencies could fall as much as 16 percent in 2012 compared to 2011,” said Martin.
Singapore's bank lending up in November
Posted: 30 December 2011 1210 hrs
Bank lending totalled S$415.8 billion in November, up from S$406.5 billion in October.
Compared to a year earlier, bank lending rose 31 per cent.
Housing loans to consumers rose to S$129.4 billion in November from S$128.1 billion in October.
US, Europe woes hit China manufacturing
Posted: 30 December 2011 1154 hrs
BEIJING: China's manufacturing activity continued to shrink in December, HSBC said Friday, as economic strife in the key European and US markets hobbled demand for the nation's goods.
The final HSBC purchasing managers' index (PMI) reached 48.7 in December, slightly better than the 47.7 in November but lower than preliminary PMI of 49 released earlier this month, as new orders dropped.
A reading above 50 indicates expansion while a reading below 50 suggests a contraction.
While the figures are a slight improvement, the data adds to mounting evidence export-driven China is slowing and will ratchet up pressure on Beijing to further loosen monetary policies to prevent a painful hard landing.
Manufacturing activity contracted in November for the first time in 33 months, while consumer prices rose at their slowest pace in more than a year and industrial output growth hit its lowest level since 2009.
"Weakening external demand is starting to bite," Qu Hongbin, HSBC chief economist, said in a statement.
"This, plus the ongoing property market corrections, adds to calls for more aggressive action on both fiscal and monetary fronts to stabilise growth and jobs, especially with prices easing rapidly.
"Hard landings should be avoided so long as easing measures filter through in the coming months."
Beijing is anxious to prevent a sharp slowdown in the economy but at the same time it wants to avoid reigniting inflation, which hit a more than three year high of 6.5 per cent in July but has since slowed.
The government has also enacted a series of policies to cool the red-hot property market, and official data has shown that home prices in most major Chinese cities fell in November from the previous month.
In a bid to boost growth and counter turmoil in Europe and the United States, China cut the amount of money banks must hold in reserve for the first time in three years late last month
2 new projects entice local buyers
Dec 23, 2011 - PropertyGuru.com.sg
Two new projects, The Nautical in Sembawang and The Hillier (pictured) in the Hillview area, have pushed ahead with their previews, while most property developers consider whether or not to release new projects following the implementation of the additional buyer's stamp duty this month.
Both residential projects are 99-year leasehold developments.
The Nautical sold some 50 units at an average price of S$860 psf during its weekend preview.
Featuring one- to four-bedroom units and penthouses, including 32 dual-key units, prices at The Nautical start from about S$409,000 for a 420 sq ft one-bedder. A 1,916 sq ft penthouse is the most expensive unit at slightly over S$1.5 million.
Meanwhile, Far East Organization has reportedly collected more than 100 cheques mostly from local buyers for Soho-style apartments at The Hillier. The preview of the project began last Friday.
After absorbing the standard three percent buyer's stamp duty and providing a furniture voucher, the average price reached S$1,150 psf.
The sizes of the apartments range between 500 sq ft and 800-plus sq ft, and feature a flexible floor plan as well as a 3.4-metre ceiling height. Inspired by New York City's trendy Soho neighbourhood, it offers “strategic locale, excellent connectivity and flexible space.”
The Hillier is near an upcoming MRT station on the Downtown Line and is slated to be a mixed-use development featuring 528 Soho apartments and a retail podium.
PUB provides updates on Orchard flash floods
Posted: 30 December 2011 1029 hrs
SINGAPORE: Heavy afternoon rain over three hours in the Orchard Road area on December 23 caused flooding and hit places such as Thomson and Cambridge, as well as the basements of Liat Towers and Lucky Plaza.
National water agency PUB said on Friday that 152.8mm of rain fell from 2.20pm to 5.20pm.
This is about half of the average monthly total of 287.4mm for the entire month of December over 142 years.
PUB said it understands that the public is concerned about the adequacy of measures taken to date and takes its responsibility for flood management seriously.
While it's not possible to completely eliminate flash floods, it'll do everything feasible to prevent it, mitigate it and keep the public informed.
PUB said its officers have been working closely with the management of affected buildings to investigate the cause of the flooding and identify measures to prevent a recurrence.
Explaining why the flooding occurred on December 23, PUB said the prolonged and heavy rain caused some parts of Stamford Canal to flow full.
For Liat Towers, rainwater that drained off from the roof and the back area of the building overflowed into the basement area from an internal drain, as water could not flow out into the canal when it was full.
The pumping system at Liat Towers is able to pump out the water from the open basement area when the canal is not full.
But when the canal in front of Liat Towers reached 100 per cent, the pumps were not able to discharge that water in the basement into the Stamford Canal.
However, the pumps were still able to channel some water onto the pedestrian walkway.
At Lucky Plaza, rainwater drained into the basement via the steps.
Liat Towers has put in place the flood barriers to protect its premises since the June 2010 flood, which PUB said had effectively prevented water collected on the pedestrian walkway from flowing down into the basement plaza.
To increase flood protection for similar storm conditions, Liat Towers and PUB are looking into building a perimeter wall along their internal drain to prevent water from flowing back into the basement.
As for Lucky Plaza, in-principle approval has been obtained from the relevant agencies.
The management is in the process of putting in place the flood barriers.
PUB will work with it to ensure that an effective flood prevention system is implemented quickly.
The national water agency said that after the June 2010 flood in Orchard Road, it raised the road to increase flood protection for the area.
This was completed in June this year.
PUB said although the rain fall recorded on December 23 was higher than what was recorded in June 2010, Orchard Road remained passable to traffic.
With the constraints in expanding Stamford canal given the highly urbanised development in the area, PUB is studying the feasibility of building a detention pond and a diversion canal for the Stamford catchment for the longer term.
The study commenced in August 2011.
PUB will share the details when it completes the study by May 2012.
PUB added that it regrets the inconveniences caused by the floods to the public and businesses.
Yuan hits record, heads for 4.5 percent 2011 gain
FRIDAY, 30 DECEMBER 2011 10:01 0 COMMENTS
SHANGHAI: China's yuan headed for a strong close to 2011 on Friday, touching a record high in early trade after the central bank set the mid-point at a fresh high, putting it on course to gain 4.5 percent for the year.
The yuan's gains for the year are in line with the 4 to 5 percent traders in the onshore market had expected at the start of the year.
Traders still see the yuan appreciating for all of 2012 as China faces US pressure to do more to rebalance bilateral and world trade, while it continues to record trade surpluses.
But the rate of appreciation is expected to slow to about 3 percent next year, with most of the rise happening in the second half, they said.
Many market players saw the strong mid-point as an attempt by the People's Bank of China to make the percent gain for the year look better.
"After the PBOC set a record high mid-point today, some major state-owned Chinese banks quoted the yuan at high levels to support the central bank's window-dressing move," said a dealer at a major European bank in Shanghai.
"But that does not represent a strong uptrend for the yuan. Instead, the yuan is most likely to move narrowly in the first few months of 2012 before resuming a slow appreciation process well into 2012."
NDFS IMPLY DEPRECIATION
Many dealers said the yuan would likely move in a narrow 6.3/6.4 range in the first few months of 2012 as China assesses the impact of global weakness, caused mainly by the euro zone debt crisis, on its economy and exports.
Spot yuan opened at an all-time high of 6.3070 versus the dollar, topping its previous record of 6.3160 touched on Monday. It then pulled back slightly to trade mainly around 6.31, still up 0.15 percent from Thursday's close of 6.3192.
Before trading began, the PBOC fixed the dollar/yuan mid-point at a record high of 6.3009, up 0.23 percent from Thursday's 6.3157. The central bank uses the fixing to express the government's intention for the yuan's movements in a day.
Offshore, benchmark one-year non-deliverable forwards (NDFs) fell to 6.3900 on Friday against 6.4000 at the close on Thursday, but still implied that the yuan would depreciate over the next year.
They now imply 1.39 percent depreciation over the next year, compared with a 1.55 percent fall implied on Thursday.
One-year NDFs began to mainly imply yuan depreciation in late September, reversing a general trend of forecasting yuan appreciation in place since the yuan's landmark revaluation in July 2005.
Some overseas investors have since September shorted the yuan amid signs that the world's second largest economy is slowing.
Chinese investors prefer funds to property
Dec 28, 2011 - PropertyGuru.com.sg
Many Chinese investors favour funds and other investment products over property, according to the People’s Bank of China quarterly survey.
In a survey of 20,000 individuals in 50 cities across mainland China, only 16.5 percent listed property as their primary investment choice, a decrease of 7.1 percentage points from Q3.
Around 22.5 percent chose funds and other investment products, while 16.4 percent opted for bonds.
The survey also revealed that 46.2 percent of the respondents expect property prices to stay flat next year, while another 20.8 percent believe that prices will fall. Only 19 percent predicted home prices would increase.
Meanwhile, about 28.5 percent of respondents from Beijing expect the capital’s flat prices to drop, while 26.8 percent in Shanghai are bearish.
Only 13.9 percent of respondents across China stated that they will purchase a flat in the next three months.
Global investor confidence down in December
Dec 30, 2011 - PropertyGuru.com.sg
Global investor confidence dipped slightly in December but a glimpse at individual regions showed that European institutional investors are more upbeat than their Asian and North American counterparts.
According to the State Investor Confidence Index for December, which was released by State Street Global Markets, the confidence of institutional investors in Asia declined 1.0 points to 93.7 from November's revised reading of 94.7, while in North America, the figure dropped 2.0 points to 96.4 from the revised reading of 98.4 in November.
However, European institutional investors bucked the trend, with confidence surging 0.6 points to 102.2, from the revised level of 101.6 in November.
Developed by Paul O'Connell of State Street Associates and Harvard University professor Kenneth Froot, the index differs from survey-based measures as it is based on the actual trades and not the opinions of institutional investors.
Commenting on the confidence of European investors, O'Connell said this is a turnabout from the first half of the year, “when European investors showed the most pessimism.”
“It does not necessarily mean that prospects for the European region itself have improved, but it does suggest that European institutions are more willing to allocate to equities both inside and outside Europe than they were earlier in the year,” he said.
devilplate
30-12-11, 14:07
Keep up the gd work
Happy new yr everyone ;)
Jim Rogers: Little Reason for Optimism in Anything but Agriculture
Published: Wednesday, 28 Dec 2011 | 6:35 PM ET Text Size
World markets may be riddled with uncertainty, but billionaire investor Jim Rogers anticipates gains in one sector for years to come.
MIKE CLARKE | AFP | Getty Images
Billionaire investor Jim Rogers anticipates gains in ag stocks for 10 years or more.
“If I were buying anything I’d be buying agricultural commodities,” he says. “Going forward we’re going to have huge shortages of everything – including farmers – I think ag will be a great place for the next 10-20 years,” he says.
But don’t take that to mean that ag stocks are a buy – that’s not what he means.
“Yale did a study recently showing that investors made 300% more by putting money in commodities themselves rather than commodity stocks – that is unless you’re a great stock picker.”
In other words, he’d play his thesis with commodities futures or ETFs that track them.
And his thesis is based on massive research, part of which involves the performance of commodities in the 1970’s. “At the time economies did nothing and yet commodities went through the roof,” he explains.
Jim Rogers co-founded the Quantum Fund with George Soros in 1973. Although a native of Alabama, Rogers famously moved to Singapore due to his on-going belief that Asia is on the cusp of great prosperity.
“He’s an investor who eats his own cooking,” says Fast Money trader Stephen Weiss. In other words, he doesn’t just talk the talk, Rogers walks the walk.
And largely Rogers is short because he is not optimistic about what’s going to happen in the world over the next two or three years.
“I’m short emerging markets, short American technology, short European stocks – I don’t see much reason to own equities,” he says.
In a nutshell, Rogers expects global economic problems to get much worse.
But whether that happens or not he still thinks a long position in commodities makes sense. That’s the one area of the market where he sees potential.
Here's why.
If his thesis doesn’t hold and the economies of the world improve, “I’ll make money in commodities because (increased demand will generate) shortages,” he says. “But if the world doesn’t get better, then governments print money and the way to protect against that is to own real assets.”
In other words, he thinks commodities are a win/win.
And in case you’re wondering about his thoughts on gold [GCCV1 1562.70 21.80 (+1.41%) ], Rogers says, “it would not surprise me to see gold go to $1200 – but if it goes that low I’d buy a lot more – gold has been up 11 years in a row it deserves a substantial correction.”
FRIDAY, 30 DECEMBER 2011 12:00 0 COMMENTS
TOKYO: Japan's headline Nikkei-225 index finished 2011 at its lowest year-end level since 1982, despite rising on Friday thanks to upbeat US data.
The Nikkei index of the Tokyo Stock Exchange finished at 8,455.35, down 17.34 percent, or 1,773.57 points, from the 2010 close of 10,228.92, with the March 11 earthquake and tsunami taking its toll on share prices.
It was the worst year-end figure since 1982, when the index saw out December at 8,016.67.
On the day, the benchmark index closed up 56.46 points or 0.67 percent from the previous day.
The Topix index of all first section issues closed the day's session 0.90 percent or 6.49 points higher at 728.61.
"There were a few times when the Nikkei index recovered to 9,000 to 10,000 after the disaster, but it didn't hold at those levels too long," Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking Corp., told AFP.
"The Tokyo stock market has had a weak year, falling about 2,000 points since the beginning of the year," he said.
Tokyo shares, which had ended above the 10,400 level on the day before the disaster, plummeted to 8,605.15 on March 15, as Japan was gripped by the worst nuclear disaster the world has seen since Chernobyl.
Investors are not optimistic about the coming year with the eurozone sovereign debt crisis expected to continue taking its toll on the global economy.
"As the year 2012 begins, market participants will likely be reminded that the European fiscal problems continue to worsen," Dai-ichi Life Research Institute chief economist Yoshikiyo Shimamine told Dow Jones Newswires.
"The market's focus, whether willing or not, will be on Europe at the beginning of the New Year, as rating companies are expected to announce results of their reviews on eurozone nations," he added.
India Suspends Banks From New Listings
Published: Friday, 30 Dec 2011 | 1:42 AM ET Text Size
By: James Lamont and Neil Munshi
India’s stock market regulator has issued a wake up call to investment banks operating in the country by banning some prominent banks from new listings and warning that it will overhaul the rules governing initial public offerings.
Bloomberg | Getty Images
Bombay Stock Exchange
The tough response to irregularities surrounding recent listings is unusual for a slow-moving regulator that has in the past taken years to act on investigations.
UK Sinha, the chairman of the Securities and Exchange Board of India, said the barring of seven small companies from capital raising activities this week had triggered a review of the “entire” IPO process to simplify future listings.
He told the Financial Times that the Mumbai-based regulator had evidence of a sharp deterioration in capital raising activities over the past six months in the world’s fastest growing large economy after China.
“People are becoming very audacious and they are taking measures which are in complete conflict with the Sebi regulations,” Mr Sinha warned. “So we set up a crack team and they did a very fast but co-ordinated job [of finding out what was wrong].”
Sebi has suspended several investment banks from new share sales. These include PNB Investments, the investment banking arm of India’s second-largest state-owned lender Punjab National Bank, D&A Financial, Artherstone Capital and Almondz Global Securities.
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The investigation into listings over the past six months uncovered the diversion of IPO proceeds, inadequate documentation and trading violations on the day of listing among seven companies. Sebi said some companies and their financiers had a tacit understanding to defraud investors and “siphon off” funds.
Among the seven companies that Sebi banned from fresh capital raising activities were PG Electroplast, a Noida-based consumer electronics company, Brooks Laboratories, a pharmaceutical group, and Onelife Capital Advisors, a Mumbai-based financial services company.
Mr Sinha said he was sending a signal that the regulator could “crack the whip very fast” to restore confidence in the equity market.
“The important thing is that we have also gone after the intermediaries, that is the merchant bankers,” he said.
Sebi wants to cut the time span of an IPO and simplify procedures to encourage more participation by retail investors.
“The IPO process has undergone some minor changes over last three to four years, but by and large the structure is the same as eight to 10 years back,” Mr Sinha said.
“One of the important things we have in mind is to reduce the time lag between closure of an issue and actual listing.”
Brokers said they expected this to be the start of tougher action by the regulator. Many were struck by the unusual speed with which Sebi had acted to censure irregular listings.
Deven Choksey, managing director at KR Choksey stockbrokers in Mumbai, said the system needed an overhaul to include safety nets put in place to protect investors.
“I think [Sebi] had to take this decision because it was long overdue. They have been finding such kind of notorious behaviour for long time now,” he said.
“They don’t have mechanism to prevent it, they only have mechanism to [deal with malfeasance in a] postmortem exercise.”
Fraudulent listings have embarrassed India’s equity markets in the past and cheated naive investors. Lax regulatory standards allowed serious market abuses in the 1990s, punishing investors who had put money into initial public offerings.
Two years ago, the Indian government launched prosecutions against more than 100 “vanishing companies” that listed on the country’s stock exchanges in the 1990s and then disappeared after failing to meet regulatory filing requirements.
Then Sebi barred 100 companies and 378 directors from using the capital markets for five years.
Spain economy shrinks, outlook bleak: minister
By Anna Cuenca | AFP News – Tue, Dec 27, 2011
People walk in front of a restaurant displaying a giant sticker of a Euro coin on …
Spain's economy will shrink in the last quarter and faces a bleak outlook for the coming months, its new economy minister warned Monday, heightening fears of a fresh recession.
Luis de Guindos dampened already gloomy expectations for the economy as the new conservative government got to work on its programme of tough spending cuts.
"This quarter the Spanish economy will surely see a downturn and we will return to negative growth," he told reporters.
"Make no mistake, the next two months are not going to be easy, neither from a growth nor a jobs point of view," he said at a ceremony for his top ministry staff taking office.
The fourth-quarter outlook "is logically going to determine the (economic) profile we will enter in the coming year, which is going to be a relatively slowed-down profile."
Media quoted him later telling reporters that gross domestic product would contract by 0.2 to 0.3 percent in the current quarter. Spain's official growth figure for the third quarter was zero.
Media seized on De Guindos' words Monday as a sign that Spain will tip back into recession in the coming months. Both leading dailies El Pais and El Mundo interpreted his words as signalling a recession at the start of 2012.
Various economists have forecast negative growth in the current quarter and the first three months of 2012. A recession is commonly defined as two quarters of contraction in a row.
Analyst Daniel Pingarron of investment IG Markets said many European countries are "approaching negative GDP growth in this fourth quarter and the first quarter of next year, to improve slightly in the second half."
"All the forecasts point to this as the most likely scenario" for Spain, he told AFP after De Guindos' remarks.
Spain only emerged at the start of 2010 from an 18-month recession, triggered by the global financial crisis and a property bubble collapse, which destroyed millions of jobs and left banks with mountains of bad loans.
The collapse forced a major restructuring of the financial sector and tough spending cuts which the new government has vowed to deepen in order to create jobs and reassure the financial markets that lend to Spain.
The new right-leaning government of Prime Minister Mariano Rajoy following November elections has set a tight timetable for reforms to fix the slumping economy and reduce the public deficit.
Its top priority is to cut its unemployment rate, which is the highest in the industrial world at 21.5 percent.
Rajoy has said he will slash Spain's deficit by 16.5 billion ($21.7 billion) in 2012 through sweeping cuts, with only pensions escaping the knife, as well as cleaning up banks and reforming the labour market.
World stocks waver on last trading day of 2011
By PAMELA SAMPSON | AP – 7 minutes ago
BANGKOK (AP) — Global stock markets were mixed Friday on 2011's last trading day and turned in heavy losses for the year after Europe's debt crisis and natural disasters battered a struggling global economy. Japan's benchmark hit its lowest close in 29 years.
Benchmark oil hovered below $100 per barrel and the dollar weakened against the yen but rose against the euro.
Asian traders recorded gains for the day Friday but markets in Tokyo, Shanghai and Hong Kong ended the year with double-digit losses.
Japan's Nikkei 225 index, after three straight days of losses, rose 0.4 percent to 8,429.45, but it was the lowest closing since 1982. China's benchmark gained 1.2 percent to close at 2,199.42 — still, a 20 percent loss for the year.
European shares were steady or slightly down in early trading. Britain's FTSE 100 lost 0.2 percent at 5,555.92. Germany's DAX was marginally down at 5,846.35 and France's CAC-40 was nearly unchanged at 3,127.34.
Wall Street appeared headed for a lower closing, with Dow Jones industrial futures down 0.2 percent at 12,194 and S&P 500 futures slipping 0.2 percent to 1,255.40.
Hong Kong's Hang Seng Index gained 0.2 percent to close at 18,434.39 — a precipitous slide of 19.7 percent from a year ago. Singapore's Straits Times Index closed down 1 percent at 2,646.35 — a 17.5 percent dive.
Australia's benchmark S&P ASX 200 ended the year at 4,140.4 — down 0.4 percent on the day and 14.5 percent lower for 2011. A day earlier, South Korea's benchmark Kospi closed at 1,825.74 on Thursday — 11 percent down on its last trading session of the year Thursday.
Analysts said global stocks tumbled in lockstep, suffering from the effects of natural disasters, a wobbly recovery in the U.S. — and an escalating European debt crisis that has resisted repeated measures taken by the region's governments and financial institutions.
"The big reason is Europe. Europe tried to muddle through without a real solution. They can save a small country like Greece, but they cannot save a big country like Italy. Two trillion euros in foreign debt — nobody in the world has that kind of money," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.
"Europe will enter a lost decade, a decade of no solutions and no growth," he said. "Maybe except in Germany, their machinery is still selling."
Japan's benchmark plunged after the March 11 tsunami and earthquake disaster that destroyed huge chunks of the island nation's northeastern region, left 20,000 people dead or missing and set off the world's worst nuclear crisis since Chernobyl.
Disaster damage extended to key suppliers for major companies like Toyota Motor Corp. and Sony Corp., which suffered production disruptions. The Thai flooding that followed caused similar problems for automakers, including Honda Motor Co., but on a smaller scale.
The Tokyo market also saw two big-name brands lose much of their value.
One was Tokyo Electric Power Co., the utility that runs Fukushima Dai-ichi nuclear power plant, where at least three reactors went into meltdown after tsunami destroyed backup generators to keep power going at the plant.
Some officials say TEPCO may have to be nationalized because of ballooning losses and the costs to bring the reactors under control and compensate victims.
Another was camera and medical equipment maker Olympus Corp., whose offices have been raided by criminal investigators after fabricated accounting to cover up massive investment losses came to light.
A British executive, who has since resigned from the board, was first to draw attention to the dubious investments, and has become a celebrity figure raising questions about old-style Japanese management.
Across the board, Japanese companies have been slammed by the rising value of the yen, which erodes the value of revenue from exports.
The Nikkei lost nearly a fifth of its value over the past year. It nose-dived right after the disaster, recouped some of those losses in July, but then started a decline that has the benchmark hovering at below the March value.
China's benchmark Shanghai Composite Index lost 21 percent in 2011 as the impact of Beijing's multibillion-dollar stimulus faded and the government tightened curbs on lending and investment to cool blistering economic growth.
The flood of state spending and bank lending after the 2008 crisis fueled a surge in real estate and stock prices. In 2010, Beijing responded by clamping down on credit and real estate speculation to cool inflation and soaring housing prices.
Beijing is trying to steer growth to a more sustainable level after 2010's explosive 10.3 percent expansion. Growth eased to 9.1 percent in the three months ending in September, down from 9.5 percent the previous quarter.
Chinese leaders have promised to ease credit to help exporters and smaller companies cope with falling global demand and weaker domestic growth. But they say most controls will remain in place. That has disappointed stock traders who are hoping for interest rate cuts and looser controls on bank lending. They have responded in recent weeks by dumping stocks and moving some money to U.S. and European markets.
The benchmark Hang Seng Index slipped in the second half of the year as concerns over Europe accelerated, sending it to a 2011 low in early October before bouncing slightly to end the year at a 20 percent loss.
Hong Kong is Chinese territory, but its financial markets are open to foreign companies and investors, which made it a popular destination this year for foreign companies looking to go public, drawn by the prospect of raising their brand profiles with China's newly wealthy as growth flags in their home markets.
Italian fashion house Prada was one of the biggest names to list in Hong Kong, with an initial public offering in June that raised $2.5 billion, making it the sixth-biggest IPO globally this year, according to deal tracking service Dealogic.
Other foreign companies that took out primary or secondary listings in Hong Kong include MGM China Holdings Ltd., the Macau casino arm of MGM Resorts International, luggage maker Samsonite S.A. and U.S. luxury handbag maker Coach Inc. However, the slumping market means share prices for many companies that went public are ending the year lower than IPO price.
Benchmark crude for February delivery fell 28 cents to $99.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 29 cents to settle at $99.65 in New York on Thursday.
In currency trading, the dollar fell to 77.58 yen from 77.65 yen late Thursday in New York. The euro fell to $1.2913 from $1.2939.
Hope to see this come true:Rogers says, “it would not surprise me to see gold go to $1200 – but if it goes that low I’d buy a lot more – gold has been up 11 years in a row it deserves a substantial correction."
Gold Prices Melt, Hit Three-Month Low
Published December 29, 2011
Reuters
Reuters
Gold fell to its lowest in three months on Thursday on a stronger dollar, worries over a critical euro zone debt situation and a liquidity crisis which is pushing banks to sell assets such as precious metals to raise cash.
The euro fell to its lowest in nearly a year versus the dollar as Italian bond yields fell from recent record highs at auction.
But cautious investors still demanded a near 7 percent yield to buy 10-year paper, a level seen unsustainable over time for the euro zone third-largest economy. A stronger U.S. unit makes dollar-priced commodities such as precious metals costlier for holders of other currencies.
Gold was on course for a 11 percent fall this month, its biggest drop since October 2008 when the credit crunch hit most financial markets.
A spiralling euro debt crisis and increased need for liquidity in the last few months have pushed banks and other financial participants to sell assets including gold, generally deemed to be a safe haven during economic woes.
"The stress in the banking sector has increases as indicators such as the euro/dollar basis swaps show... There is a shortage of liquidity and, if you have to refinance, you have to sell your assets, including gold," said Credit Suisse analyst Tobias Merath.
"Gold is not a safe haven assets against a liquidity crisis. Banks need to sell assets to raise cash and avoid bankruptcy."
Spot gold fell 1.18 percent to $1,536.80 an ounce by 1043 GMT, from $1,555.19 late in New York on Wednesday.
Earlier it hit a three-month low of $1,534.59.
U.S. gold February futures lost 1.7 percent to $1,538.
Technical analysis suggested spot gold could drop to $1,542 an ounce during the day, said Reuters market analyst Wang Tao.
QUICK REBOUND UNLIKELY
Gold lacked interest from Asian physical buyers, even as it fell to a 3-month through.
Asia's physical buyers have mostly moved to the sidelines of the market as they wait for the new year.
"Many clients are closing for the year already," said a Singapore-based dealer.
A rebound for gold is possible if policymakers take measures such as liquidity injection or interest rates cuts, which could help alleviate the credit crunch and would lessen the necessity to sell assets such as commodities, analysts said.
However a quick turnaround is unlikely in the next few days.
"In the short run, gold remains caught in a macro trap and there is little chance for a yearend rebound in the next two sessions," VTB Capital said in a note.
"Bullion's inverse monthly rolling correlation to the U.S. dollar index continues to hold well over one-year highs, nearing 97 percent yesterday or levels last seen in early October 2010."
Many investors have liquidated gold to buy dollars, which in the current credit climate are seen as the safest assets to own.
Silver was down 1.1 percent at $26.74 an ounce, echoing the weakness in gold.
Platinum was last down 2.3 percent at $1,350.70 an ounce, while palladium was down 1.50 percent at $625 an ounce. (Editing by William Hardy)
Banks' deposits at ECB down from record high
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THURSDAY, 29 DECEMBER 2011 14:01 0 COMMENTS
FRANKFURT:The volume of overnight funds held by banks at the European Central Bank has declined from the record highs seen earlier this week, official data showed on Thursday.
Banks put 436.58 billion euros ($564 billion) on deposit at the ECB for 24 hours on Wednesday, down from the record 452.03 billion euros set on Tuesday, according to data published on the central bank's website.
Rising levels of deposits at the ECB are seen as a sign of market tension, since the money deposited earns an interest rate of 0.25 percent, much less than the rate available on the interbank market.
Thus, heavy use of the facility suggests banks favour parking the money at low interest with the ECB rather than lending it to each other.
The phenomenon has been particularly closely watched this week because it comes just days after eurozone banks borrowed a nearly half a trillion euros from the ECB in a brand-new three-year lending facility.
The ECB agreed to loan a record 489.2 billion euros to 532 banks in the longest-ever refinancing operation in a move to avert a possible credit crunch.
But the deposit data suggest the banks are now simply parking the cash with the ECB.
Published December 29, 2011
2012 could be a quiet year for collective sales
Market cooling measures, more housing supply and eurozone woes set to weigh on sentiment: analysts
By MINDY TAN
CAUTION pervades discussions of collective sales come 2012, with analysts of the opinion that it could be a quiet year given recent developments.
No takers: Owners of Pearl Bank Apartments, near Chinatown, lowered their asking price to $725 million in October, from $750 million in March, but still failed to find a buyer
Topmost on most people's minds include the recent round of cooling measures by the government, alongside the number of private homes made available under the Government Land Sales (GLS) programme.
'Together with the large supply of sites from the GLS programme and the cooling measures introduced by the government in 2011, collective sales are likely to continue the downward trend unless owners are willing to lower their expectations,' noted Denson Phua, head of investment sales at Dennis Wee Group (DWG).
From a macro perspective, economic uncertainties have also made developers more cautious, said Jones Lang LaSalle's head of research Chua Yang Liang.
'Given the global economic uncertainty stemming from the eurozone sovereign debt situation, investors are likely to remain cautious. Coupled with the recent stamp duty on buyers, we could see further tightening of demand for collective sales in 2012,' he said.
Credo's deputy managing director Tan Hong Boon expects collective sales next year to hit $2 billion, driven by small and medium-size deals, if owners' price expectations are realistic.'We expect a slight slowdown because of the new measures, but we still feel developers will continue to pick up sites because collective sales are still the main source of freehold sites,' he said.
To-date, 2011 has seen 49 collective sale deals, crossing the $3 billion mark, according to Credo's data.
Indeed, policies implemented to cool the property market are making themselves felt on 2012 collective sales projections.
The additional buyer's stamp duty (ABSD), for instance, which came into effect this month, affects developers on two fronts.
For one, developers must build and sell all units on residential sites within five years, or face a 10 per cent stamp duty.
Market watchers agree that this five-year limit will give developers more cause for pause, and make them weigh their land purchase decisions more carefully.
In addition, foreigners might be less willing to sell their homes, pointed out Petra Blazkova, CBRE's head of research for South-east Asia.
'Foreigners who own properties in potential collective sale sites will not give their consent to the sale because they will have to pay an additional 10 per cent stamp duty under the latest property measure if they have to buy a replacement property,' she said.
There is also the pipeline of GLS sites to contend with. New land released for the first half of 2012 will constitute about 14,100 private homes, of which around 7,000 will be rolled out through the confirmed list.
'This puts a dampener on developers' interest in collective sales, especially for the larger sites,' said Ms Blazkova. 'GLS sites are also more attractive because the acquisition process is straightforward and they are not subject to development charge.'
There is also the issue of bank financing, said Ku Swee Yong, chief executive of International Property Advisor. 'Banks prefer to lend to developers who bid for GLS rather than bidding for large en bloc sites (because) . . . the drawdown of the credit line by a developer could take two to three years, assuming the en bloc is successful,' he said.
That being said, Credo's Mr Tan pointed out that small developers priced out of the large GLS sites have become more active in the collective sales market this year.
This is one of the key reasons why most of the collective sale sites sold in 2010/11 have generally been below $100 million each - within the financial means of smaller developers.
Noted DWG's Mr Phua: 'Smaller collective sale sites of below $100 million will be well received if the sites are reasonably priced.'
He added: 'It would be better if these sites have obtained 100 per cent approval as the entire process will be expedited.'
In the course of this year, sites with hefty price tags - Pine Grove, Pearl Bank Apartments, Laguna Park, Hawaii Tower and Tulip Garden, which launched en bloc attempts priced at more than $500 million - have failed to find buyers, despite being relaunched at lower asking prices.
The largest collective sale, by value, to take place this year was a site at Henry Park, which was bought for $175.9 million by Kentish View, a subsidiary of Far East Organization, in December.
Owners of freehold condo Tulip Garden in District 10 relaunched a collective sale bid at $600 million in June, down from the $650 million price tag in January. Pearl Bank Apartments, near Chinatown, also lowered its asking price to $725 million in October, down from $750 million in March.
On the other hand, it was the smaller deals that went through more smoothly. Of 47 known deals concluded prior to Henry Park, the average was about $60 million, said Credo's Mr Tan.
Published December 29, 2011
Regulator shoots down Nakheel's extra fees
(DUBAI) Nakheel PJSC, Dubai's largest property developer by assets, doesn't have the right to deny residents of a palm-shaped island access to communal facilities by turning them into exclusive clubs, according to the emirate's property regulator.
Palm Jumeirah: Residents told they can't use the property's beach, swimming pools and gyms unless they pay an additional 5,000 dirhams per household
Nakheel posted leaflets earlier this month telling residents at the Palm Jumeirah that they were banned from using the property's beach, swimming pools and gyms unless they pay an additional 5,000 dirhams (S$1,763) per household.
'By law, no one can stop an owner or a registered tenant from using the communal areas once they have paid service fees,' Marwan bin Ghalita, chief executive of Dubai's Real Estate Regulatory Agency (Rera), said on Tuesday. 'If you bought something based on an agreement with a developer, he can't change it.'
A spokesman for Nakheel declined to comment.
Dubai developers are looking at new ways of generating income after the global credit crisis left many of them short of funding to complete projects across the emirate. Nakheel has incurred 78.6 billion dirhams in losses since the crisis began in the third quarter of 2008.
Nakheel's staff distributed membership application forms showing that Palm Jumeirah's residents will have to pay the additional fees from Jan 1.
Non-residents will be charged 12,000 dirhams, or as much as 200 dirhams a day.
Nakheel, which owns the clubhouses between the shoreline buildings, can charge residents for the use of facilities and services that aren't specified in their contracts, such as poolside sun beds, towels, showers and changing rooms, Mr Bin Ghalita said.
If the developer wants to block residents from entering the clubhouses where gyms are located, it would have to provide gyms inside the apartment buildings, he said.
Many homeowners haven't yet paid their services charges and Nakheel required temporary security cards to prevent those who haven't paid from accessing the facilities, Mr Bin Ghalita said.
The developer and the Homeowners' Association will soon reach an agreement that will resolve the standoff, according to Mr Bin Ghalita.
Nakheel and other developers are in the process of submitting blueprints of their buildings to Rera to establish and define communal areas.
'We want to make sure that all non-communal areas aren't included in the service charges, so owners won't overpay,' Mr Bin Ghalita said. 'That's why we are taking our time to sub-divide all of the buildings.'
Nakheel charges residents service fees based on the size of their apartments, said Rakesh Sharma, a consultant at RBA Real Estate, which manages properties on the shoreline. The fees amount to 25 dirhams per square foot.
Some homeowners say that developers are inflating the fees and using the charges as an additional source of revenue.
The formation of homeowners associations should resolve the issue as owners would be in charge of the accounts and could manage the costs, Mr Bin Ghalita said.
Tenants who are barred from using the facilities at Palm Jumeirah because their landlords failed to pay service fees may be allowed to withhold their rent, he added. Instead, they could pay the developer directly after consulting Rera, he said.
'Tenants have contracts and paying service fees is the responsibility of the landlord,' he said.
In the past, Nakheel derived most of its income from selling properties before they were built. It also sold plots of land to smaller competitors after providing infrastructure such as roads, water, sewage and electricity.
The company, which was forced to suspend work on two other man- made islands after the credit crisis, is trying to increase recurring income from rentals and shopping malls. -- Bloomberg
New property rules may go if economy worsens: Analysts
Posted on December 30, 2011 by www.SgRealty.info
But buyers should expect measures to stay if home prices keep rising
By Yasmine Yahya
Analysts say the latest round of property cooling measures is unlikely to be a permanent feature in Singapore if the property market grinds to a standstill amid the upcoming economic downturn.
But if home prices continue surging despite the new rules, buyers can expect that the measures will stay.
Developers have been sounding the alarm bell since the new rules were announced, saying that they could drive down home values, turn away foreign investment, and thus potentially damage an already fragile economy.
At Tuesday’s Real Estate Developers Association of Singapore’s 52nd anniversary dinner, president Wong Heang Fine warned of a knock-on effect on mortgages resulting in a possible decline in home equity values and, consequently, shrinking wealth, he said.
The Government has argued that the measures, which include an additional buyer’s stamp duty of 10 per cent on foreigners buying homes, are necessary to maintain a sustainable property market.
At the dinner, Minister of State for National Development Tan Chuan-Jin said he did not expect developers to welcome the measures, but that given the volatile equity markets and a worsening economic situation, ‘our small property market is attractive to foreign funds’. The moves are meant ‘to moderate such investment demand in order to avoid the need for a major correction down the road.’
The outspoken views from the property developers have raised questions if the measures are here to stay.
Bank of America Merrill Lynch economist Chua Hak Bin has said that the new stamp duty could be permanent, as it is a political step in line with the Government’s aim to differentiate the privileges and rights of Singaporeans, permanent residents and foreigners.
But property consultants reckon that if the property market turns south too rapidly, the Government will look to remove the new rules.
‘While the recent measures may seem to be more political rather than economic, I believe the Government… will relax the measures if the economic situation worsens significantly,’ said Mr Png Poh Soon, Knight Frank’s head of research and consultancy.
‘After all, it would not be politically acceptable if the property market comes down and people start blaming the Government for all the cooling measures which may have triggered or further exacerbated the downturn.’
Typically, property cooling measures last for an average of two to 2-1/2 years, Mr Png said. Most of the time, such measures are removed due to a sharp slowdown in Singapore’s economic performance.
Associate Professor Sing Tien Foo of the National University of Singapore’s department of real estate agreed that the measures will likely be removed if the property market slows down too much.
However, if prices continue to rise in the face of these tightening measures, the new rules will likely remain in place, he added, as measures targeting the private market are likely to have a trickle-down effect on the public market.
‘I think the Government’s main concern is more on public housing. It has to make sure that public housing remains affordable, but the private and public markets are quite integrated in Singapore,’ he said.
Some local investors have welcomed the latest measures. One home buyer, who declined to be named, recently bought a property in the East Coast, and said she was happy about the new rules because she felt it ‘levels the playing field’ for local buyers.
She said: ‘When I was house-hunting, there were several foreigners viewing the same properties, and they have the buying power. At least now we don’t have to compete with them.’
Property transactions for districts 1 to 23 with contract dates between Nov 30 and Dec 6, 2011
http://www.businesstimes.com.sg/sub/esuitetables/infopage/0,4547,4001-20111229,00.html?
Property transactions for districts 1 to 20 with contract dates between Nov 2 and Nov 8, 2011
http://www.businesstimes.com.sg/sub/esuitetables/infopage/0,4547,4001-20111201,00.html?
Sears Gets Downgraded, Names Store Closings
Published December 29, 2011
Reuters
Sears Holdings Corp (SHLD: 32.90, -0.43, -1.29%) on Thursday identified 79 of the 100 to 120 Sears and Kmart stores it said earlier this week it would close, with the list split almost evenly between the two chains.
The struggling retailer on Tuesday reported weak holiday sales and forecast earnings for the current quarter would fall by more than half compared to the year earlier results. It also said it tapped its credit line.
Fitch Ratings on Thursday afternoon downgraded Sears to 'CCC' from 'B', citing a "continued deterioration" in earnings before interest, tax, depreciation and amortization (EBITDA), which it said could turn negative next year.
Fitch said in a note it expects Sears' liquidity to be "inadequate" in 2012. If the retailer can't tap the markets or other sources, and if EBITDA stays where it is or falls, "there is a heightened risk of restructuring over the next 24 months."
The cost of insuring Sears' debt with credit default swaps rose as investors saw more default risk. As of Thursday, it cost $3.23 million paid upfront to insure $10 million of Sears Roebuck Acceptance Corp debt, plus $500,000 annual payments, according to data provider CMA.
That is up from an upfront cost of $2.93 million on $10 million of debt, plus $500,000 annually on Wednesday.
Standard & Poor's on Wednesday placed Sears' credit rating on review for a possible downgrade, saying the closings would not do much to improve its performance.
Sears, which is based in Hoffman Estates, Illinois, will close 41 Sears stores and 38 Kmart stores. It did not say by when, or how many employees will be affected.
For a list of the affected locations, see www.searsmedia.com/tools/122711--close.pdf
The list does not include any stores in Illinois, where Governor Pat Quinn two weeks ago signed into law tax breaks aimed at keeping Sears and other Illinois-based companies from leaving the state.
Sears Holdings' sales have declined every year since the 2005 merger that combined the two chains.
The closings announced on Tuesday follow 49 closings announced earlier this fiscal year. At the start of the year, the company operated 1,278 Kmart discount stores and 842 big box Sears stores.
Read more: http://www.foxbusiness.com/industries/2011/12/29/sears-names-7-its-planned-store-closings/#ixzz1i0urr8SS
Luxury Apartment Prices Have Peaked In Singapore
October 17, 2011 - Singapore
The private home market in Singapore may have continued to enjoy robust turnover in the third quarter of this year but the prices of luxury apartments appear to have peaked, according to international real estate consultants.
The average price per square foot for non landed high end private homes fell 2% to S$2,243 for the first two months of the third quarter from S$2,286 in the second quarter of this year, according to Savills.
In the super luxury segment, prices slipped marginally, by 0.4% to S$3,667 per square foot from S$3,681 per square foot.
Compared to the prices at the start of the year, high end homes cost 0.7% less, while super luxury prices increased by 8.4%.
Savills said the price gaps between the current and previous price peaks in the fourth quarter of 2007 narrowed further, with high end and super luxury home prices being just 6.9% and 0.4% from their peak levels, respectively.
But Savills warned that the outlook for the luxury home segment remains clouded as high end properties saw poor sales in the first two months of the third quarter of 2011. In July, only 122 units were transacted in the Core Central Region and sales were almost halved in August with 65 transactions.
Performance for the rest of the private home market was mixed. In the mid tier non landed homes segment, prices dipped marginally by 1.4% to S$1,193 per square foot in the first two months of the third quarter from S$1,210 per square foot in the second quarter.
Mass market apartment prices continued to increase, up 2% to S$932 per square foot in the first two months of the third quarter from S$913 per square foot in the second quarter.
Savills said the increases were observed across all sectors. New sales were up 2%, sub sales up 5% and resales also up 2%.
In July, a total of 1,398 new private homes were sold, an 18% increase from the previous month. Including executive condominiums, the number of new home sales rose by a more significant 41% month on month to 1,966 units.
In August, primary sales, excluding executive condominiums remained steady at 1,348 units.
MRT stations and property prices
by Ku Swee Yong 04:46 AM Dec 30, 2011
As more and more MRT stations are built in Singapore, there has been much discussion over whether the presence of an MRT station will boost the prices of residential units nearby.
Let's use the recently completed Circle Line for discussion. According to one school of thought, when the Circle Line and the locations of its stations were first announced in the early 2000s, prices of developments within walking distance to the stations started to pick up. Very quickly, advertisements for developers' new launches and classified ads placed by real estate agents highlighted the benefits of the future MRT stations: Accessibility and travel convenience, resulting in increased demand from both owner-occupiers and tenants, leading to improved rentals and higher transacted prices.
Some investors believe in entering the market early because with the view that when the MRT stations are completed and the line starts running, the market for residential properties nearby would have already "priced in" the premium of the convenience. There is also a view that in the very long term, most Singaporeans will be living within 500m from an MRT station and any "price premium" arising from such proximity will disappear.
It seems that we still lack solid data to substantiate and quantify the effects. But I think it is correct to say that there is an initial euphoria as sellers of properties around the named stations will immediately raise their prices.
CONSTRUCTION INCONVENIENCE
However, what follows after is about five to seven years of construction work for the MRT lines and the stations. During this period, there will be traffic diversions and residents in the vicinity are inconvenienced by the noise, dust and poor traffic conditions.
Based on our observations from serving investors and tenants, expatriates and locals looking for units to rent or buy typically shun condominiums where there is construction nearby. This is especially true for condominiums that suffer limited access due to the construction works for the MRT line and the stations.
For example, residents of LevelZ, Spanish Village and Gallop Gables at Farrer Road were inconvenienced during the construction of the Circle Line's Farrer Road Station, when there was reduced access to their main entrances. Farrer Road itself had many changes and diversions, with new twists and turns appearing every few months or so. Residents had to bear with dust, noise and the occasional movement of heavy construction equipment. The result: Lower occupancy rates and longer periods of vacancies between tenants, which led to weaker rentals and, in many cases, lower-than-market transaction prices.
As completion nears and the streetscape is brought back to normal, with roads straightened and potholes patched up, prospective tenants are more willing to consider renting these properties in the knowledge that the MRT line will begin operating soon. Once the station is open, tenants are willing to pay a bit more and may also make quicker decisions on signing the tenancy agreements. Therefore rentals rise and as yields in Singapore remain within 3 per cent per annum, the prices of the condominiums will grow with the rental growth.
It is difficult, almost impossible, to use a standard yardstick to measure the opportunity costs or the relative underperformance of property values affected by MRT construction. Some cases can be pretty obvious as evidenced by the retail outlets around Chun Tin Road and Beauty World Centre. Due to a reduction in parking lots and traffic congestion, patronage of the food outlets is reduced and, therefore, rentals drop.
In the case of residential properties, things are less obvious. Rental data is not rich for comparison and over the five-to-seven-year period, rentals and sale prices may go up or down depending on the overall external economy, en bloc exercises and new launches, etc.
However, we do have snippets of data that can support our empirical observations. From the chart, we can compare the median rental prices for residential properties around Lorong Chuan and Farrer Road MRT Stations over the last three years.
We see that from May to Sept 2009, when Lorong Chuan MRT Station began operating, median rentals climbed 55 per cent from S$1.97 per sq ft per month to S$3.06 psf per month. Over the same period, median rentals along Farrer Road rose about 30 per cent from a three-month average of S$3.01 psf per month (Note: I have used the average of April to June 2009 because of the spike in May) to S$3.91 psf per month in Sept 2011. In fact, during the period in May to Dec 2009, when rentals around Lorong Chuan station were creeping up steadily, the average rentals along Farrer Road were flattish, due to the fact that Farrer Road was still in a mess as far as the traffic flow and the MRT construction were concerned.
WHAT TO INVEST IN AND WHEN?
I would summarise it as such: Prices of residential properties rise due to exuberant expectations when the locations of the MRT stations are announced, subsequently underperform the rest of the market during the construction period, and then trend up again when the work is completed.
So, buy at the correct time: When the MRT stations are about to be completed, not when the stations are announced and certainly not when the construction is at its peak.
In a previous commentary in Today, I had recommended that investors avoid Upper Bukit Timah, Thomson and Upper Thomson, especially the latter locations as two major infrastructure projects will be built at the same time - the North South Expressway and the Thomson MRT line - choking north-south traffic until 2020.
With Circle Line's Stages 4 and 5 - from Marymount to Harbourfront - running since October and cutting travelling times to Holland Village, Buona Vista, Science Park, NUS, etc, where the working population and student population are high, I am optimistic that the residential markets will begin to show rental and price growth.
Furthermore, I believe that price growth will not be limited to the two new stages. Stage 3 of the Circle Line (Bartley to Marymount) began operations in May 2009, while Stages 1 and 2 (Dhoby Ghaut to Bartley) commenced services last April. Looking at the potential of the residential segments across these stations, I believe there are several locations that are particularly promising:
1) At Bartley MRT Station, where works on the Bartley viaduct and the Paya Lebar underpass had inconvenienced traffic for several years, watch out for a new condominium launching soon between Lorong How Sun and Bartley Road. This residential precinct has been neglected by investors for a while due to the lack of new projects and the traffic situation. Now that traffic has improved and the environment is nice and neat like it used to be over 10 years ago, property values can begin to rise with the convenience of the expressways and the Circle Line.
2) Lorong Chuan MRT Station is surrounded by a cluster of private condominiums. Several international schools and major shopping malls are within a five-to-10 minute drive. In the past, a resident here would take 30 minutes to an hour to commute by public transport to Alexandra, Pasir Panjang or NUS. Today it takes 20 to 40 minutes. The 10-year-old condominiums there are priced at S$800 to S$1,100psf, with rental yields of 3.5 per cent per annum and higher.
3) Pasir Panjang MRT Station, where freehold condominiums are trading around S$1,000psf. I would consider them undervalued relative to mass market locations at the same price level, given that these condominiums are within a five-to-10 minute drive to the financial district and both the integrated resorts.
Analysts predict Singapore economy shrank in Q4
GDP figures set to be released on Jan 3
10:32 AM Dec 30, 2011
SINGAPORE - The economy probably contracted in the fourth quarter as manufacturing slumped, increasing pressure on the island's policy makers to stimulate growth even as inflation accelerates.
Gross domestic product probably dropped an annualised 5 per cent in the three months through December from the previous quarter, when it rose 1.9 per cent, according to the median of 11 estimates in a Bloomberg News survey. The report is scheduled for release at 8am, next Tuesday, Jan 3.
Singapore forecasts economic expansion will moderate next year as a faltering global recovery weighs on demand for goods and services. The island's exports have dropped even after the central bank, which uses the local dollar to manage inflation, moved in October to slow gains in the currency, which has retreated 4.7 per cent against the dollar in the past two months.
"Singapore is one of Asia's most vulnerable economies to a slowdown in global growth," said Mr Sukhy Ubhi, an economist at Capital Economics in London. "The upshot is we think that the Monetary Authority will loosen its policy settings at its next biannual review in April."
Other Asian nations from Thailand to Indonesia have reduced interest rates to shield their economies from the protracted European debt crisis. Taiwan's central bank yesterday left borrowing costs unchanged for a second straight quarter after boosting its benchmark earlier in the year to damp inflation.
Prime Minister Lee Hsien Loong may give some economic estimates in his annual New Year message tomorrow. The government expects GDP to expand about 5 per cent in 2011 and predicts growth to slow to 1 to 3 per cent in 2012.
The island's inflation was 5.7 per cent in November, matching the fastest pace since 2008. The Monetary Authority of Singapore has joined most other Asian policy makers who have allowed their currencies to depreciate this year to defend exports even as the step boosts inflation risk by making imported goods more costly.
The Singapore dollar weakened about 5.7 per cent in the second half of 2011.
Soros sees the bear behind the bullion
Some hedge funds slashing gold holding, saying the bubble's about to burst. Not all agree, however
by BLOOMBERG 09:57 AM Dec 30, 2011
NEW YORK - Gold is poised to complete its 11th consecutive annual gain, the longest winning streak in at least nine decades, on the brink of a bear market.
Mr George Soros, the billionaire who two years ago called it the "ultimate asset bubble", cut 99 per cent of his holdings in the first quarter, Securities and Exchange Commission data show. Hedge fund managers John Paulson, Paul Touradji and Eric Mindich also sold bullion this year.
While speculators in New York futures are the least bullish in 31 months, the median estimate in a Bloomberg survey of 44 traders and analysts is for prices to rally as much as 40 per cent to US$2,140 an ounce in 2012.
The divergence of views is widening after prices declined 19 per cent from a record close of US$1,900.23 on Sept 5, or 1 percentage point away from a bear market. As some investors retreated to cash amid a US$10 trillion slump in global equity values since May, others bought more metal, taking holdings in exchange-traded products to an all-time high two weeks ago. Bullion's 7.6-per-cent gain in 2011 means it is on track to beat stocks, bonds and the US dollar for a second straight year.
"It's done its job this year of protecting investors," said Mr Michael Cuggino, 48, who helps manage about US$15 billion of assets, including US$3 billion in gold, at Permanent Portfolio Funds in San Francisco and correctly predicted in February that prices would keep rising.
"Gold has been all over the place. If you bought gold at US$1,800 then you aren't too happy. Some people will get out of gold, but the longer-term investors will remain."
Bullion was at US$1,530.07 at 2.35pm in London yesterday, below this year's average of US$1,572.47 and six times more than when the bull market began in 2001.
Investment in physical metal is cooling. The US Mint's sales of American Eagle gold coins in November were the weakest since June 2008, data on its website show. Holdings in bullion-backed ETPs fell about 35 metric tons since reaching a record on Dec 14, according to data compiled by Bloomberg. They are still 140 tons higher than at the start of 2011 and the total of 2,326 tons, valued at about US$116 billion, exceeds the reserves (001.046) of all but four central banks. ETP holdings climbed 0.3 per cent yesterday, the first increase in two weeks.
Demand had strengthened most of this year as Europe's debt crisis widened and the US Federal Reserve pledged to keep interest rates near zero until at least mid-2013. The European Central Bank cut rates to 1 per cent on Dec 8, matching the record low of the euro era that began in 1999. That increases the appeal of bullion because it generally earns investors returns only through price gains.
"The longer-term trends, mainly government fiscal and monetary policies, haven't changed," said Mr Tom Winmill, who helps manage more than US$200 million of assets for Midas Funds. "Gold has that preservation-of-wealth role and was probably used quite a bit in the last several weeks."
Options traders are also bullish, with the top nine holdings all betting on higher prices. The two most widely held contracts give holders the right to buy gold at US$2,000 by the end of March and May, data from the Comex exchange show.
HEDGING THEIR BETS
That contrasts with money managers, who cut their wagers on a rally to 117,151 futures and options in the week ended Dec 20, from as many as 253,653 in August, according to data from the Commodity Futures Trading Commission. The hedge funds and other speculators are now the least bullish since May 2009, a month in which gold jumped 10 percent.
Mr Paulson, the billionaire fund manager mired in the worst slump of his career, sold 36 per cent of his stake in the SPDR Gold Trust in the third quarter, an SEC filing showed. Paulson & Co. remains the biggest investor in the largest gold-backed ETP, with a stake valued at US$3.17 billion.
Soros Fund Management, based in New York, sold almost all its shares in the SPDR Gold Trust and the iShares Gold Trust in the first quarter, SEC data show. Its 81-year-old founder, who made US$1 billion breaking the Bank of England's defence of the pound in 1992, said in January 2010 that buying at the start of a bubble was "rational".
The fund's gold sales preceded a decision in July to return the less than US$1 billion managed for outsiders and focus on family and foundation money. It bought more SPDR Gold Trust shares in the third quarter and added options, SEC data show.
"Gold became very overbought," said Charles Morris, who oversees about US$2.2 billion of assets at HSBC Global Asset Management in London and cut his bullion holdings to 6 per cent at the end of November from 15 per cent six months ago. "It will at least consolidate following this almighty rally. When the new bull market arrives, maybe a year or so away from now, then gold will once again prove to be a leading asset."
"Gold is going to go higher, but it's not going to go in a straight line," said Mr Martin Murenbeeld, the 67-year-old chief economist at Toronto-based DundeeWealth Inc, which manages about US$100 billion in the Dynamic Mutual Funds. "Gold has given positive returns, but it doesn't necessarily do it in the way that gives comfort, and that makes people nervous."
HDFC property fair promises good deals
Friday, Dec 30, 2011
The depreciating rupee makes property in India a tempting investment
MOST of us know that India is regarded as one of the growing economies in the world right now. And that, as expected, has an effect on the various markets within the country. Therefore, its property market is very dynamic and growing exponentially.
According to various studies, the Indian real estate market is expected to reach US$90 billion (S$117 billion) by 2015. So, despite a recent slump in property demand in India's biggest cities due to high rates of interest and a general economic slowdown thanks to the Euro-zone concerns, property developers in the country are not a worried lot.
Reason: The growth in tier II cities and fringe townships around the metros are driving the Indian property market forward.
And, with the rupee hitting an all-time low of Rs54.30 against the US dollar on Dec14 (it dropped to Rs41.39 against the Sing $ the same day), there is never a better time for NRIs and PIOs to invest in property in India.
India's central bank, the Reserve Bank of India (RBI), has promised to stabilise the rupee - it imposed restrictions on forward trading in the middle of this month - and curb excess volatility, but the NRIs/PIOs earning in foreign currencies can still benefit from the depreciation of the rupee.
Therefore, Housing Development Finance Corporation (HDFC) is bringing the India Homes Fair to Singapore at a very opportune time. To be held at Suntec's International Convention & Exhibition Centre on Jan 14 and 15, it will have over 50 developers from across India exhibiting more than 300 projects to help Singapore-based NRIs and PIOs pick up a dream home in the country.
HDFC's managing director Renu Sud Karnad tells tabla!: "Not only have the number of developers at our fair gone up, but also the number of projects on display across price range, size and locations which will provide more choices to the customers."
The fair, which is being held in Singapore for the third time, drew more than 5,000 visitors in 2009 and more then 7,000 this year. HDFC is expecting more than 7,500 visitors at its fair next month and has geared up by taking a larger space - 1,990 sq m - as compared to 1,770 sq m at the previous fair.
This time, the fair will feature developers from cities like Chennai, the National Capital Region (which includes New Delhi, Gurgaon, Noida, Greater Noida, Ghaziabad and Faridabad), Mumbai, Bangalore and Pune. Besides these, there will be developers from other cities as well.
Mumbai-based Lodha Group's senior vice-president of marketing Samujjwal Ghosh tells tabla!: "It is always a wise decision to invest in property, especially in an attractive real estate market like Mumbai. The overall macro-economic indicators in India also remain fairly robust - many Indian professionals settled abroad are looking to return, given the business opportunities as well as the improving lifestyle choices available to them."
The Lodha Group is currently developing over 27 projects in Mumbai, from prime locations in Napean Sea Road to suburbs like Dombivali. And visitors at the upcoming India Homes Fair can choose from its range of super-luxury residential projects to mid-income luxury homes.
Bangalore-based Sterling Developers' director of sales and marketing Ratan Kanal stresses that there is no better investment option than real estate, as the economic scenarios of the last few years have shown. He says: "This is the best time to buy property, especially in markets like Bangalore, since prices have now started rising due to sustained buying.
"This is particularly true because of the volatility in the global and Indian stock markets, mutual funds and other investment options. Real estate is now being perceived as a safe haven for investment with decent returns on the investments."
Sterling Developers, a first-time participant at the India Homes Fair, will be showcasing its premier properties at the event.
Even though the interest rates are at an all-time high, market pundits in India are encouraging buyers to seal the deal when it comes to property. Their reasoning is that besides a marginal correction, prices are headed only one way - upwards.
The base rate, the minimum rate at which a bank can lend to any customer, has increased sharply in the last one year. The base rate of India's three largest banks - State Bank of India, ICICI Bank and HDFC Bank - has increased from eight per cent at the beginning of the year to 10 per cent now.
Chennai-based real estate developer Isha Homes' managing director Suresh Krishn says: "A lot of corrections have already happened in the property market and there may not be much downtrend in the real estate market in the years to come."
Stating that Isha Homes gets 10 to 12 per cent of its NRI/PIO business from Singapore, he added that it will be exhibiting some of its top properties at the India Homes Fair.
More land to be provided for EC sites next year
PropertyGuru.com.sg – Wed, Dec 28, 2011
More land will be allotted for executive condominiums (ECs) in 2012, said the Ministry of National Development (MND), noting that it is prepared to provide sites for 5,000 EC units next year.This move comes after the government had committed to help more higher-income Singaporeans own private housing by broadening the EC market.The government raised the monthly income ceiling for buying new EC units from S$10,000 to S$12,000 in August.The increased income ceiling has helped about 220 households, who have since reserved their ECs, according to Tan Chuan-Jin, Minister of State for National Development and Manpower.First introduced in 1995, the EC scheme offers Singaporeans an affordable private housing option. Since its introduction, around 14,600 EC units have been launched, with 3,000 units coming on-stream.Tan, however, noted that the majority of Singaporeans will continue to reside in public housing, and reiterated that the government remains dedicated to helping first-time owners and newlyweds acquire their own flats. He added that the government will start paying more attention to assisting HDB second-timers by next year.
On 10th anniversary, euro takes blame for economy
By SARAH DiLORENZO | AP – 1 hour 3 minutes ago
PARIS (AP) — Just three years ago, the euro was being praised as the can-do currency that had delivered unprecedented prosperity in Europe.
Now, it's widely derided as a hugely flawed experiment in the wake of a debt crisis that's threatening its very existence — an uncomfortable backdrop as the currency's notes and coins hit their first decade in circulation on Jan. 1.
The question is: Will it get to its 11th birthday, let alone 20th? In the euro's tumultuous short history, it has already been heralded as the ultimate mark of a peaceful, united Europe; scoffed at as a giant act of hubris by a distant political elite; and credited with giving Europe a more influential voice in the world.
These days, as it faces its biggest crisis yet, the euro is a daily reminder to more than 330 million people of the dismal state of the economy in the 17-nation eurozone. Many countries seem headed back into recession, and policymakers are grappling with a spiraling debt crisis.
While few Europeans are prepared to scrap the euro — in part because they fear a chaotic collapse more than the current muddle — some are nostalgic for the money they counted on before it arrived.
Parisians waiting to exchange their old francs outside a branch of the Banque de France before a Feb. 17 deadline harked back to the "rosy" days.
"Life was better before," said Mamia Zenak, a 52-year-old doctor. "It (the euro) is a misery for everyone."
But it was not always so.
In 2009, fanfare accompanied the 10th anniversary of the euro's "launch," when it began floating on international exchanges and banks and governments started using it in their accounting. It was widely credited with briefly cushioning the countries that use it from the banking crisis sparked by the collapse of U.S. investment bank Lehman Brothers in 2008, and for preventing proud euro member Ireland from descending into the economic chaos that befell non-euro Iceland.
"When the euro was launched there were plenty of people who thought it would crash and burn," the BBC wrote in a story on its website at the time. "Ten years on, its role as a global currency is secure."
It doesn't look so secure now. Events took a dark turn in 2010, when the debt-fueled boom years finally caught up with Greece and the eurozone realized it didn't have the tools to deal with its economic implosion.
Eventually Greece's euro partners and the International Monetary Fund found the money to bail the country out but it wasn't long before Ireland had to be rescued too after its property and banking sectors collapsed. In 2011, Portugal's failure to deal with its chronically sclerotic economy meant it joined the bailout club too. Meanwhile, Iceland, which suffered terribly in the crisis of 2008 appears to be on the mend after allowing its currency to fall and its banks take big financial hits.
Now as 2012 dawns, the euro's role as even a regional currency is uncertain as the crisis has spread to much-bigger Italy, with many skeptical about its ability to survive, at least in its present form.
Today's pessimism, which saw the euro fall to a 15-month low against the dollar of $1.2857 on Dec. 29, recalls the early days, when consumers worried that the currency would do them in financially, as shopkeepers took advantage of the changeover to hike prices. Maria Esteban, a catering manager in Madrid, remembered the price of a beer jumping from 150 pesetas to euro1.50 — an increase of 66 percent.
"People barely knew what they were paying," said the 50-year-old.
Prices that had been set for their ease — 10 francs, which was one coin, for a cone of roasted chestnuts in Paris, for instance — saw some of the most egregious markups. Overnight, those chestnuts rose by a third — to euro2, also a single coin.
A European Central Bank analysis found that while the perception that prices skyrocketed after the euro is generally exaggerated, 0.3 percentage point of 2002's 2.3 percent inflation was due to the introduction of the new notes and coins.
But, after that first uneasy year, an EU survey found that just over half of respondents thought the euro was "overall advantageous," while nearly a third thought the opposite. By 2007, at the height of an economic boom and with calls for the euro to become the world's reserve currency, 72 percent thought the currency was a "good thing" for Europe.
In the EU's latest survey, that figure has fallen to around two-thirds of respondents, and the economic downturn has renewed complaints about the squeeze exerted by the single currency.
While public affection for the euro vacillates frequently, Europeans have remained convinced of one thing: Few believe the currency has achieved one of its more lofty goals, forging a common European identity from Dublin to Tallinn.
The European Commission most recently asked citizens last year if the euro had made them feel more European. More than three-quarters said it had "no effect." That number has remained fairly intractable over the years; it was 80 percent in 2002.
Dutchman Patrick Plomp, who collects and trades rare bank notes, said the bills' design is partially responsible for their failure to instill a connection to Europe.
Whereas his country's guilders carried pictures of the sunflower, Austrian schillings depicted a Lipizzaner stallion and Greece's drachma bore Apollo's head, the drawings on euros are merely examples of different types of European architecture: They don't represent real monuments.
"If you look at a euro, you'll see that it's made with buildings that don't exist, bridges to nowhere," said Plomp, 44. "The effect that this has is that people feel alienated from the money. It's something that comes from far away."
Taina Kovamaki, a 40-year-old nurse, added that a feeling of alienation from the note leads to worries about the currency in general.
"After all the Finnish markka was Finnish — it was our own," Kovamaki said as she lined up at the Bank of Finland counter in Helsinki, where the markka can be changed until Feb. 29. "The financial crisis scares me. I'm just not sure those people in Brussels know what they're doing."
But as with all things euro, how people feel about it depends largely on what they had before.
While many deride their generic look, stationery store owner Yiannakis Ioannides compares the notes to the flimsiness of the old Cypriot pound.
"It's better quality than the pound, which wasn't as good," the 52-year-old said.
The view from outside the currency union has also been just as fickle. Once seen as a sign that eastern European countries had "made it," joining the euro is now a far more sensitive subject. Poland, for one, is carefully measuring its words, calling for reforms before it joins.
Pauline Frommer, the managing editor of the Frommer's travel guides, recounts the glee of the currency's early days, when an Italian shopping spree could be had on the cheap by Americans because of the favorable exchange rate and the eventual dismay as the rate turned around in recent years.
Now, the euro has moved into a new phase, she said.
"The euro has come to symbolize something that may not have been fully thought through and may come back to bite us," said Frommer. "I think we're all very worried about the future of the euro, that maybe its 10th anniversary will be its last."
U put Reporter/Mr Funny to shame with ur numerpus updates.
Friday, Dec 30, 2011
Reuters
Beijing to start 2012 with higher minimum wage
BEIJING - The city of Beijing has decided to raise the minimum monthly wage by 8.6 per cent to 1,260 yuan (S$260), effective from January 2012, the Beijing municipal government said.
Beijing is not the first to announce a higher minimum wage for 2012 - the southwestern Chinese province of Sichuan last week raised its minimum wage by 23 per cent and Jiangxi has published a 21.5 per cent rise.
Local media reported that other Chinese cities and provinces are likely to follow suit.
China's labour ministry said 24 of the 32 mainland provinces increased minimum wages by an average 22 per cent in 2011.
That came after an average 22.8 per cent minimum wage increase in 30 Chinese provinces in 2010.
Wages have risen sharply in recent years as urban labour supply has tightened after three decades of China's "one-child policy".
In the city of Beijing where a yawning wealth gap is vivid, a monthly income of $200 is barely enough to cover one night's stay in a luxurious hotel room, but would meet a poor man's living costs for a month.
Published: 12 Dec 11
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Take your pick: 14,100 potential homes for Singaporeans in 2012
Question is - will most of them get sold?
The Ministry of National Development has taken this into consideration, seeing that of the 81,600 units available in the pipeline, about 41,000 units were still unsold as of 3Q11.
The MND announced that the first half 2012 GLS Programme will comprise 14 Confirmed List sites and 27 Reserve List sites. These sites can yield about 14,100 private residential units, including 3,500 Executive Condominium units, 218,000 sqm gross floor area of commercial space and 4,800 hotel rooms.
All 14 Confirmed List sites are for private residential developments, including 5 EC sites. These sites can yield about 7,000 residential units (including 2,900 EC units).
Of the 27 sites in the Reserve List, 15 are residential sites (including 1 EC site), 2 are commercial sites, 2 are white sites and 8 are hotel sites. These sites can yield about 7,100 private residential units, 218,000 sqm GFA of commercial space and 4,800 hotel rooms.
Large Pipeline Supply to Meet Demand
The Government had injected a strong supply of land for new private residential, commercial and hotel developments in the last few GLS Programmes. Together with additional supply from private land sources, there is currently a large pipeline supply of private residential units, commercial space and hotel rooms that is expected to be completed in the next few years.
In planning for the 1H2012 GLS Programme, MND has taken into consideration this strong pipeline supply, as well as other factors, including prevailing market conditions and the policy measure announced today by MND and Ministry of Finance for the private residential market.
Supply of Private Housing
To continue to ensure that there is adequate supply of land for private housing to meet demand from home-buyers, the Government has placed 14 private residential sites on the Confirmed List, which can yield about 7,000 residential units. In deciding on this supply, which is slightly less than the 8,100 units in the second half 2011 Confirmed List, MND has taken into consideration the large supply of 81,600 private residential units (including 5,300 EC units) that are already available in the pipeline as at 3rd Quarter 2011 as well as the possible moderation in investment demand for private housing due to the policy measure announced today. Of the 81,600 units available in the pipeline, about 41,000 units (including 1,900 EC units) were still unsold.
Most of the private residential sites in the 1H2012 GLS Programme, including the 15 sites on the Reserve List, are located in the Outside Central Region or in locations in the Rest of Central Region where more affordable private housing is expected to be built.
Supply of Office Space
The 1H2012 Reserve List will have 2 sites for office development. The first is the white site at Marina View, which is already available in the 2H2011 Reserve List. This site will be carried over to the 1H2012 Reserve List. The commercial site at Sims Avenue / Tanjong Katong Road, which was put up for tender under the 2H2011 Confirmed List but was not awarded, will also be added to the 1H2012 Reserve List.
In addition, there is more supply from projects that are pending approvals such as at Choon Guan Street and the 6 plots of land at Marina Bay and Ophir Road / Rochor Road by M+S Pte Ltd3. Together, these projects are estimated to add another 400,000 to 500,000 sqm GFA of office space. The potential office supply in the 1H2012 Reserve List will provide opportunities for developers to trigger more office supply if there is demand.
Supply of Hotel Rooms
The 1H2102 GLS Programme will include 2 new hotel sites at Jurong Town Hall Road and East Coast Road. Together with the existing sites carried over from the 2H2011 GLS Programme, these 2 new hotel sites on the Reserve List will provide ample opportunities for developers to initiate additional supply of hotel rooms over and above the pipeline supply of about 11,000 hotel rooms as at 3rd Quarter 2011.
Other Government Supply to be Made Available in 1H2012
Apart from the GLS Programme, the Government also makes available other supply of land and properties through its various agencies to meet economic or development objectives.
The various Government agencies plan to initiate about 52,000 sqm GFA of commercial space outside the GLS Programme in 1H2012. This includes:
Leasing of vacant state properties for commercial, including office uses (about 39,000 sqm GFA); and
Localised retail facilities at parks, MRT stations and community centres.
I believe this property is a bubble. Anyway property is a cashcow for the government. Revenue from:
1. Land sales
2. Buyer's stamp duties
3. GST from legal firms, renovation companies, construction firms etc
4. Property taxes
5. Seller's stamp duties
...
Newcastle United to beat a weakened Liverpool 3-1 tonight pays 60 to 1 at Singapore Pools. bet of the year!
Super sub Gerrard inspires Liverpool
By Stephen Wood, editing by Tony Jimenez | Reuters – 48 minutes ago
Super sub Gerrard inspires Liverpool
Reuters - 48 minutes ago
More »
(Reuters) - Steven Gerrard ended a troubled year in fine style Friday by leading Liverpool to a 3-1 victory over Newcastle United that sent the Anfield club into fifth place in the Premier League.
The England midfielder, who missed much of 2011 with a groin injury and an ankle infection, scored the third goal 12 minutes from time after coming on as a 59th-minute substitute.
Stocks ending flat for year after big ups, downs
By BERNARD CONDON | AP – 1 hour 10 minutes ago
NEW YORK (AP) — The stock market is ending a tumultuous year right where it started.
The Standard & Poor's 500 index closed 2011 a fraction of a point below where it started the year. The S&P closed at 1,257.60, up 5.42 points or 0.4 percent. It ended 2010 at nearly the exact same level, at 1,257.64. Its loss for the year is 0.04 point.
The Dow Jones industrial average lost 69 points, or 0.6 percent, at 12,218. The Dow is up 5.5 percent for the year. The Nasdaq composite index fell 9 points, or 0.3 percent, to 2,605. It lost 1.8 percent for the year.
McDonald's Corp. was the biggest winner in the Dow this year with a gain of 31 percent. Bank of America Corp. was the worst, down 58 percent.
The conventional wisdom is the more risk, the greater the potential rewards. But the opposite is proving true this year: Investors playing it safe have gained the most.
The most dull and conservative of stocks — utilities — gained 15 percent, the largest gain of the ten industry sectors in the S&P 500 index. Other winning groups are consumer staples and health care companies, up 11 percent and 10 percent in 2011 respectively.
In Europe, many of the biggest markets ended down for the year. Britain's FTSE 100 lost 5.6 percent, Germany's DAX 14.7 percent.
Trading has been quiet this week with many investors away on vacation. Volume on the New York Stock Exchange has been about half of its daily average. Markets will be closed Monday in observance of New Year's Day.
Better news on the job market and home sales lifted stocks Thursday, pushing the Dow up 135 points. On Friday Ford reported that its sales topped 2 million this year for the first time since 2007. Ford fell 0.1 percent.
Rising and falling stocks were about even on the New York Stock Exchange. Volume was just 2.2 billion shares, about half of the recent daily average.
In other corporate news:
— Sears Holdings Corp. fell 3 percent to $31.78 after Fitch Ratings downgraded the company's credit rating to "junk." Sears has plunged 30 percent this week after disclosing that it would close more than 100 Sears and Kmart stores because of weak holiday sales.
— Diamond Foods Inc. jumped 2.4 percent to $32.27. Rumors have been circulating that the hedge fund manager David Einhorn has acquired a stake in the food company that makes Emerald Nuts.
— AMR Corp., the parent company of American Airlines, fell 17 cents to 35 cents. The company filed for bankruptcy protection last month. Late Thursday the company said its stock would be delisted from the New York Stock Exchange next week.
Three Years of Gains: Oil Prices Surged in 2011
Published December 30, 2011
Reuters
Oil prices ended 2011 up 13 percent as a fresh wave of supply concerns capped a year of unrest and disruptions in North Africa and the Middle East that overwhelmed concerns about the economic health of large consuming nations.
Iran's recent threats to shut the Strait of Hormuz, a vital oil shipping chokepoint, added another geopolitical threat to markets gripped throughout the year by the unrest of the Arab Spring, most notably shutting exports from OPEC-member Libya.
The supply problems helped lift the price of global benchmark Brent crude by 13.3 percent on the year to average nearly $111 a barrel for 2011, eclipsing the previous annual record of nearly $100 struck in 2008 and marking the third year of annual gains.
"(The 2011 price gains) belied an extremely volatile pricing environment that saw (U.S.) values drop to as low as $75 in early October after advancing to around $115 in early May," Jim
Ritterbusch, president at Ritterbusch & Associates said in a note.
U.S. crude prices rose 8.2 percent from the close of 2010, outperforming most other commodities tracked in the 19 commodities tracked on the Thomson Reuters-Jefferies CRB index that fell on the year. The average price for the year was about $95 a barrel.
Market players said the factors that helped capped price gains in 2011 could continue into the new year.
"While a (2012) test of the $75 level might appear out of reach in view of a variety of geopolitical uncertainties, we feel that global contagion off of a weakening euro zone will be
providing significant bearish impetus," Ritterbusch added.
U.S. heating oil futures were the top performer on the index, gathering strength from rising U.S. exports and the impending closure of three of Petroplus' five European refineries after lenders froze its credit lines this week.
Heating oil gained over 15 percent in 2011, while U.S. RBOB gasoline futures rose by more than 9 percent.
On Friday, Brent February crude fell 63 cents to $107.38 a barrel, having swung from $106.62 to $108.25 in light holiday trade, weighed down by ongoing concerns about Europe's debt crisis and slowing Chinese factories.
U.S. February crude fell 82 cents to settle at $98.83 a barrel, having swung from $98.61 to $100.16.
Trading was choppy on Friday and pressure came from data from the HSBC Purchasing Manager's Index showing factory activity in No. 2 oil consumer China shrank again in December as demand at home and abroad slackened.
"Weak Chinese data gave oil some pressure, but (U.S.) prices are still in the $95-$100 area so the market needs to see continuing U.S. economic growth and whether or not Europe can
resolve its debt problems," said Gene McGillian, analyst at Tradition Energy in Stamford Connecticut.
The market was also closely eyeing news Iran plans to fire long-range missiles during a naval drill in the Gulf on Saturday. Tehran has threatened to close the Strait of Hormuz, through which more than a third of daily seaborne crude shipments pass, if the West imposes sanctions on its oil
exports.
The premium of Brent crude to U.S. futures held above $8 a barrel in post-settlement trading on Friday, after blowing out to $28 a barrel in October. The resumption of Libyan exports has helped narrow the spread along expectations new pipeline plans will ease a glut of crude in the U.S. Midwest that has weighed on U.S. futures.
Speculators hiked their net long positions in U.S. crude oil futures and options positions in the week to Dec. 27, data from the U.S. Commodity Futures Trading Commission showed.
Read more: http://www.foxbusiness.com/markets/2011/12/30/three-years-gains-oil-prices-surged-in-2011/#ixzz1i3uZL6Vh
USA Today: Banks, Homeowners Donate Houses to Charity
Friday, 30 Dec 2011 01:51 PM
By Michelle Smith
Banks and homeowners have found a way to free themselves from the burden of houses that they can't sell — just give them away. There is a growing trend of houses being donated to charity, USA Today reported.
Charities and nonprofits have long been the recipients of donated cash, cars, food and clothing, but now there is a trend toward houses, The Detroit Free Press reports.
People are feeling the financial burden of paying taxes, insurance and maintenance on homes that won't sell — and continue to drop in value, The Detroit Free Press reports. When they donate the house, the charity benefits from proceeds from its eventual sale and the donor gets a tax deduction.
It isn't only cash strapped homeowners that see charity as a way out. Banks are also showing a penchant for charity.
Bank of America donated 150 houses in 2011 and plans to donate more than 1,200 next year, USA Today reports. Wells Fargo donated more than 1,120 homes this year, up from 295 last year.
It’s a win-win for the bank, the neighborhood, and the investor, USA Today quoted Rebecca Maroine, head of Bank of America's donation program as saying.
When parties donate houses they aren't interested in caring for, it often helps to protect the value of the surrounding properties. It can also be a means for recipients to earn much more cash than they would from other fundraising measures, such as bake sales or car washes.
But, many of the houses owners are looking to off-load are in bad shape and either need to be demolished or require expensive rehabilitation. In some cases, potential recipients have to say no thank you because they are not equipped to handle the projects or the return isn't worth it.
As the foreclosure crisis drags on, this trend of home donations is expected to grow, which may become overwhelming for those on the receiving end.
In the metro Detroit area, for example, charities report they've been so flooded with offers to donate houses that they've been forced to adopt strict policies for what they'll take, The Detroit Free Press reports.
Read more: USA Today: Banks, Homeowners Donate Houses to Charity
Important: Can you afford to Retire? Shocking Poll Results
Report: Chinese man likely infected with bird flu
By the CNN Wire Staff
December 30, 2011 -- Updated 2255 GMT (0655 HKT)
STORY HIGHLIGHTS
A 39-year-old man in Shenzhen tests positive for the H5N1 avian flu virus
He hadn't left the city or had direct contact with poultry in the prior month, state media says
Nearby Hong Kong ordered 17,000 chickens culled after a carcass tested positive for the flu
(CNN) -- A 39-year-old man is in a southern Chinese hospital suffering from what appears to be a contagious strain of avian flu, state media reported Friday.
The man -- identified by Xinhua as a bus driver with the surname Chen -- was hospitalized in Shenzhen on December 21 as he battled a fever. He tested positive for the H5N1 avian influenza virus, a provincial health department said Friday, according to the official news agency.
Chen was in critical condition Friday at the hospital, where he was receiving emergency treatment, the health department said.
The man had not traveled out of the city of Shenzhen, nor did he have direct contact with poultry in the month before he came down with the fever, according to the department.
Shenzhen borders Hong Kong, where more than 17,000 chickens were ordered culled on the same day that Chen was hospitalized. That decision, made by Hong Kong's government, came after a chicken carcass tested positive for avian flu.
The territory's director of Agriculture, Fisheries & Conservation declared the Cheung Sha Wan Temporary Wholesale Poultry Market an infected place, the government said then in a statement.
Farmers were told they could not send chickens to the market for 21 days.
The Hong Kong government said it was working to trace the origin of the chicken, which was infected with the H5N1 avian influenza virus. But, as of December 21, authorities did not know the source.
Saturday, Dec 31, 2011
The New Paper
Why some flats have zero COV
By Lediati Tan
HE HAS neither owed money nor has anyone in his family become a guarantor for a loan. The same goes for his neighbour.
But that has not stopped loan sharks from disturbing the peace and quiet of his Jurong neighbourhood after his neighbour lost his identity card two years ago.
First, his neighbour's house was splashed with paint several times.
When that failed to compel the neighbour to pay up for what he did not owe, the loan shark sent chilling letters threatening to splash paint or set fire to neighbouring units.
This made Mr A Chiam, 35, an engineer, worried because his five-room flat is right next door to his neighbour's flat.
He then installed CCTVs outside his and his neighbour's flats.
But that did not scare them off.
On Dec 1, the loan shark sent a letter taunting them: "Don't think your house got camera we don't dare to do."
To drive home the point, the letter came with images of different flats being vandalised.
Said Mr Chiam: "I'm living in a nice environment with good neighbours, then this type of thing starts happening in my neighbourhood.
"It's very disturbing and scary that they are using this kind of tactic to break this kind of harmony that we have."
As he lives with his wife and two young children aged three and seven, he's worried for the safety of his family.
He contemplated moving out, but decided against it.
"Why should I move? I don't think I should move out because of this illegal loan shark when I have such wonderful neighbours," he said.
There's also the concern over the value of his property.
Added Mr Chiam: "Who would buy this house if they knew there was this kind of thing going around?" His concern is not unfounded.
At a time when home owners are demanding cash-over-valuation (COV) in the tens of thousands, there are flats that make no demands for COV.
Like the one property agent Cheah Kian Choong recently sold.
Spain sets out 8.9bn euros of new austerity measures
Spain has seen a number of large protests against the government's austerity measures
Continue reading the main story
Global Economy
The announcement is the first in a wave of austerity measures, with a total of 16.5bn euros to be cut in 2012.
It also said Spain's 2011 deficit will be about 8% of its output - higher than the 6% seen by the previous government.
The Popular Party last month ousted the Socialists from power at elections amid deep economic gloom. - think be4 u want change
The government of new Prime Minister Mariano Rajoy has vowed to meet Spain's target of reducing the public deficit to 4.4% of gross domestic product in 2012, no matter what.
On Friday, Deputy Prime Minister Soraya Saenz de Santamaria maintained a freeze on public sector wages for another year and ruled out practically all government hiring.
"This is the beginning of the beginning," Ms Saenz de Santamaria said.
"We are facing an extraordinary, unexpected situation, which will force us to take extraordinary and unexpected measures."
Taxes on the wealthiest Spaniards will also be raised for at least two years, raising 6bn euros, she said.
Spain's borrowing costs have jumped in the last year - reaching as high as 6.7% for 10-year debts - as investors feared that Spain might join Greece, the Irish Republic and Portugal in needing a bailout.
The country's economy has shrunk sharply since a housing bubble burst in 2008, and it has an unemployment rate of 21%, the highest in Europe.
The austerity measures have sparked a number of large protests across the country.
30 December 2011 Last updated at 15:16 GMT
Barratts announces 1,610 redundancies
How High Street retailers are faring
The administrator of troubled shoe chain Barratts Priceless has said it has made 1,610 employees redundant.
The job losses are at the retailer's concessions within other stores in the UK and the Republic of Ireland.
Administrators Deloitte said selling the concession part of the business will "not be achieved".
However they are still trying to find a buyer for Barratt's 173 high street stores, which remain open. 18 store closures have already been announced.
Deloitte said it is working with the concession holders, which include department stores, to see if the former employees could be re-employed in other parts of their businesses.
URA Dec 2011 Cairnhill R $2131psf (transacted)
Propertyguru Dec 2011 Cairnhill R $2405psf (asking)
Difference 10% or more?
we still hv ppl claiming 2 can c future wth advices fm westerners.
if i hv $$$ i wld nt b spending time on forum. open eyes big big
common sense...all d Mr Bs
EU economics has screwed the pooch
Posted On Monday, 26 Dec 2011 By Admin. Under Economics, Finance, International Tags: Black Swan Plc, British Leyland, Chinese GDP Growth, EU, Government Spending, Greek Debt Crisis, Occupy Movement, Richard Poulden, Tom Wolfe. The Right Stuff, Year Of The Water Dragon
In making his financial predictions for international markets in 2012, prominent investment specialist Richard Poulden notes that “Western politicians have screwed the pooch something rotten”.
BLACK SWAN NEW YEAR LETTER 2012
There is a marvellous expression, popularised by Tom Wolfe in The Right Stuff, which is “screwing the pooch”. This describes not just a mistake or failure of judgement, but a f*** up so egregious that the perpetrator should be shot immediately without waiting for dawn.
Be under no illusion: Western politicians have screwed the pooch something rotten and a lot of people are going to suffer as a result. You all know about the sovereign debt crisis, profligate Greeks, etc, and as 2012 dawns, I’m going to assume that all my readers accept that the one-off shift of economic growth and power to the East is well underway and that the collapse of the Euro is a slow dance of inevitability.
However there is a political crisis, which may make the financial crisis far more severe. I have long criticised the creeping encroachment of the state in the latter part of the 20th Century but I think we may now have reached a tipping point where economies are so overburdened with the cost of government that they may never recover. Think British Leyland, the French Computer industry, etc.
Government Overload Reaches Tipping Point
In Britain, when the Industrial Revolution started, the State accounted for approximately 15 per cent of GDP; as late as 1900 it was still only 20 per cent. Politicians were drawn from the wealthy landowning class and were not paid. Simply, they ran the country because they owned it. The majority of the civil service was drawn from the lesser aristocracy and the controls and costs of the Colonies were left to the people who were running them. Much the same was true in the United States where, for example, although he was voted a salary, George Washington refused to accept it and, much later, JFK famously gave his salary to charity. Indeed up until 2001, the President of the United States of America was paid only $200,000 a year.
Today, in most of the EU the state accounts for an eye watering 55 per cent of GDP. But get this: that figure does not include the cost of the EU itself! Compare that to Australia or America running at 34 per cent and 32 per cent respectively. Those figures do include the motherly hand of their federal governments overlaying that of the states. Okay, pour yourself a glass of wine and sit down because the next bit is not nice.
Now this 55 per cent of GDP is not like the socialists seizing (and running) the “commanding heights of the economy”. It is not like all that infrastructure expenditure in China (where the State is a miserly 25 per cent of GDP). It is plain, unproductive overhead. This trend started in the latter half of the 20th Century and has continued unchecked into the 21st.
So I hypothesise that what has actually happened here is that the EU economies have reached a tipping point where too much is being spent on government with the idea that this is actually doing something which benefits people. Once that tipping point is reached and I think it is below 40 per cent of GDP, true GDP growth, both absolute and per-capita, disappears and until that imbalance is corrected growth will not return.
Successive governments have concealed this for a period of time by allowing asset price inflation to occur, which stimulates spending, and claiming that the consumption thus generated is growth: but it isn’t and that particular party has now ended.
To look at this in a more graphic example, imagine that you are offered the opportunity to turn around a loss making company. It is up to its eyeballs in debt (they always are), it has investments on its books which are mostly invested in other loss making companies and thus are at best temporarily unrealisable and at worst worthless, you are not allowed to touch 55 per cent of the overhead, 20 per cent of the workforce are not working but you still have to pay them and the costs of everything you produce are 30 per cent higher than your competitors.
You have one or two niche products: aero-engines, passenger aircraft, super cars and fashion but there is no way these can support the overhead on their own. Would you take it on? I wouldn’t and that is every economy in Europe except Germany.
Post 2008 there was an opportunity for change. Governments could have come in and said: “it’s a total mess, we’ve screwed the pooch for the last 100 years and here’s what is going to happen…”
Instead, with their eyes firmly fixed on the next MORI poll, they made promises that times would be tough for a little but they could fix it. This was a huge mistake.
The Future
Quite possibly, no matter what is done within the current structure, there are a number of European economies which cannot be saved. The promise that growth will return like some long-lost uncle from a happy holiday is an illusion. I am sorry to tell you that your Uncle died in a pooch screwing European train wreck.
I do not think that any of the current crop of politicians will face up to this. The result will be even greater social unrest than I predicted for 2011. We have seen the various “Occupy” movements emerge during the last year, coupled with less subtle simple rioting and looting.
As 2012 unfolds, the East will continue to move ahead: the current Chinese five year plan only requires 8 per cent growth to succeed and China is still running stubbornly up against double digits on an annual basis. The idea that Asian growth will “pull the West out of recession” is a foolish illusion spouted by politicians who in their hearts know better.
More interesting is the possible re-cycling of some of China’s surplus into the purchase of European infrastructure: SNCF for example.
Over the next 5 years many of the “over 40 per cent” economies will collapse: which means most of Europe. I freely admit that Germany appears an exception at the moment but I think the rest may pull them down. America will escape in some form, as with nearly 70 per cent of the economy still productive; if you just tighten the bolts in the rust belt there is the capacity for them to pull through.
In November, China purchased 82Mt of gold. This compares with 170Mt for the whole of 2010 so it will be interesting to see the full year statistics for 2011. Gold remains a fundamental play, as devaluation of most western currencies appears inevitable.
In conclusion I wish everyone not just a happy New Year for 2012, but also the very best for the Year of the Water Dragon, which begins on 23rd January. I am a Water Dragon and because of the 60-year cycle most of us only see two birth years in our lives. I shall be toasting medical research over the festive season in the hope of seeing in a third!
50:50 chances in predicting mkt direction
nxt 6mths? nxt 12 mths?
did they warn of recent cooling measure if so connected?
Tough year ahead, says Merkel
Posted: 31 December 2011 0750 hrs
BERLIN: Germany Chancellor Angela Merkel warned of a difficult year ahead, particularly for the eurozone, but also said there were good reasons to be confident, in New Year greetings released Saturday.
"Germany is doing well, even if next year will no doubt be more difficult than 2011," Merkel said in a speech to be broadcast Saturday evening, the text of which AFP received in advance.
Merkel said 2011 had been marked by major upheavals such as the Arab Spring and Japan's nuclear disaster at Fukushima which eventually prompted Germany to phase out nuclear power by 2022.
But Europe had also suffered upheaval, she added. "Here, the debt crisis is still keeping us in suspense," she said.
Merkel also mounted a defence of the European project. Detailing what it had offered the continent over the past 50 years, she listed: "Peace, freedom, justice, human rights and democracy."
Europe, she insisted, was growing through this crisis, even if "the path to overcome it remains long and will not be without setbacks.
"At the end of this path however, Europe will re-emerge stronger from the crisis that it was when it entered it," she argued.
"In Germany, we have good reasons to be confident," she said, arguing that the country's economic competitiveness had suffered less than its European partners, with the jobless rate in particular at its lowest in 20 years.
The German economy in 2012 is forecast to grow between 0.5 percent and 1.0 percent, much lower than the three percent expected in 2011. It could avoid negative growth and recession predicted earlier by economists for this winter.
One study, by the Allensbach institute published on Thursday showed that 49 percent of Germans were optimistic for 2012, against 17 percent who declared themselves pessimistic and 26 percent sceptical.
The results attracted attention because over the past 12 years of the poll, the optimists have outnumbered the pessimists and sceptics on only four occasions.
Greece sells jets for quick cash
Posted: 31 December 2011 0241 hrs
Greece on Friday said it had sold four disused Airbus A340 jets to Miami-based aircraft traders Apollo Aviation for US$40.4 million (AFP/File - Leon Neal)
ATHENS: Greece on Friday said it had sold four disused Airbus A340 jets to Miami-based aircraft traders Apollo Aviation for 40.4 million dollars under an ongoing asset push for quick cash.
A government statement said the sale had been approved by a five-ministry privatisation committee and a finance ministry source specified the price.
"Apollo Aviation Group was the highest bidder," the government said.
The four aircraft were previously part of Olympic Airlines, Greece's former state carrier that was privatised in 2009.
The Greek state had been trying to sell the planes since November 2010.
Athens last year pledged a sweeping privatisation drive in return for bailout loans from the European Union and the International Monetary Fund.
The process originally aimed to raise 5.5 billion euros by the end of the year, and 50 billion overall by 2015.
The finance ministry now hopes to close the year with 1.8 billion euros in revenue and another 9.3 billion in 2012.
The privatisation list includes ports, regional airports, utilities and motorways, a leading casino, public-owned defence, train and mining companies, and a key stake in Greece's monopoly gaming operator.
The proceeds are designed to help alleviate a crushing state debt of over 350 billion euros.
Petroplus to shut 3 refineries
Posted: 30 December 2011 2344 hrs
The refinery of Swiss firm Petroplus in Cressier, Switzerland. (AFP/File - Fabrice Coffrini)
GENEVA: Embattled oil refiner Petroplus said on Friday it will begin a temporary shutdown of three of its plants in January after lenders froze a $1 billion credit facility.
"The company will start temporary economic shutdowns of the Petit Couronne, Antwerp and Cressier refineries in January 2012, given limited credit availability and the economic climate in Europe," the Swiss firm said in a statement.
Europe's largest independent oil refiner said it held meetings with lenders in Zurich on Thursday, describing the talks as "open and constructive".
Further negotiations will take place in the coming days as the company seeks to get the credit line crucial to its operations restored.
Restarting the refineries will depend on economic conditions and credit availability, Petroplus said.
The firm owns and operates the Petit Couronne refinery in France, Antwerp in Belgium and Cressier in Switzerland as well as the Coryton refinery in England and the Ingolstadt refinery in Germany.
Petroplus Holdings AG is headquartered in the city of Zug near Zurich and headed by Frenchman Jean-Paul Vettier.
The group, which employs 2,500 people, indicated at the beginning of December that it faced increasing liquidity problems.
Its five refineries, which include the Antwerp plant in Belgium, have a combined capacity of about 667,000 barrels a day.
SP Services to raise electricity tariffs in next quarter
Posted: 30 December 2011 1544 hrs
SINGAPORE: Households will pay more for electricity in the next quarter in 2012.
On average, a family living in a four-room HDB flat can expect to pay S$2.30 more.
SP Services said on Friday that electricity tariffs for households for the period between January 1 and March 31 will increase by an average 2.3 per cent due to higher fuel prices, which will drive up power generation costs.
A family living in a four-room HDB flat for example, can expect to pay S$2.30 more per month on average.
This is 0.61 cents per kWh more - from the current 26.98 cents to 27.59 cents per kWh.
SP Services said the average fuel oil price over the last three months (October 1 to December 15) increased by 4.4 per cent - from S$121.68 to S$127.07 per barrel.
It reviews the electricity tariffs every three months, based on guidelines set by the Energy Market Authority, which is the electricity industry regulator.
You thought 2011 was tough?
Stock market forecasts for 2012
7:21pm EST
By Edward Krudy
NEW YORK | Fri Dec 30, 2011 7:56pm EST
(Reuters) - Shaky Europe. Political gridlock. Volatile markets.
Familiar themes for those who lived through 2011, and investors should be ready to revisit them next year.
With a spiraling debt crisis in Europe, political upheaval around the world, and crumbling creditworthiness in major industrial nations, 2011 was a tough year to know where to invest. 2012 is unlikely to offer much respite.
The S&P 500, a measure of the biggest U.S. companies' market value, spent much of the year getting pushed up and down, flummoxing shorts and longs - and scaring Moms and Pops away from stocks. It ended the year at 1,257.60, down a mere 0.04 of a point.
But the S&P 500's tepid performance was encouraging, compared with other world equity markets. The United States may still be seen as a safe haven, though even that looks uncertain.
For every rally built on improving economic figures this year, selloffs were never far away on worries the European debt crisis would eventually drag the continent into a recession and perhaps the United States as well. That could continue in 2012.
China and other fast-growing emerging markets can no longer be leaned on as those economies slow. In 2011's last half, the poorest-performing sectors outside of banks were most connected to global growth - materials, energy and industrial companies.
"There is a growing realization that the global economy is in jeopardy," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "There is uncertainty in every corner of the world."
That uncertainty fed substantial volatility in 2011. Despite the S&P's flat performance this year, there were 66 trading days when stocks moved in a 2 percent range. In 2008, when Lehman Brothers collapsed during a global financial crisis, there were more than 130 trading days when stocks swung that much. But that led to a flight from equities by retail investors.
U.S. equity funds had outflows in every month since May. More than $483 billion left U.S. mutual funds in 2011 through the year's second-to-last week, even though the U.S. market outperformed foreign stocks late in the game.
BEATING GLOBAL RIVALS
The S&P 500 ended the year off a scant 0.003 percent, the closest it has come to unchanged since 1947, according to Standard & Poor's. The Dow Jones industrial average .DJI finished 2011 with a 5.5 percent gain, while the Nasdaq Composite Index .IXIC slipped 1.8 percent.
In contrast, the MSCI world stocks index .MIWD00000PUS fell 9 percent, while the FTSEurofirst-300 index .FTEU3 slid nearly 11 percent.
The darlings in the emerging markets fared the worst. China's Shanghai Composite index .SSEC lost 22 percent, India's BSE .BSESN sank 25 percent, and Brazil's Bovespa .BVSP dropped 18 percent.
Strategists say the U.S. stock market may benefit from reasonable economic growth and attractive market valuation. The S&P 500 is expected to rise 6 percent by the end of 2012, according to the most recent poll of Wall Street strategists.
When Wall Street gets back to work on Tuesday, it will face a holiday-shortened week and a slew of economic indicators. The most crucial numbers will come on Friday when the government will release the December non-farm payrolls report. Economists polled by Reuters expect a December gain of 150,000 jobs, compared with an increase of 120,000 jobs in November.
Volatility is likely to persist through early 2012 because of the uncertainty in Europe and rising concern about slowed earnings growth due to recent revisions.
The S&P 500's price-to-earnings ratio - what investors are willing to pay for a dollar of earnings - is under 12, below the 25-year average of 15. In weaker markets like Germany's DAX, the figure is below 9.
"We're building in a massive recession into these numbers," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.
U.S. companies cutting earnings' outlooks recently outpaced those raising theirs by the greatest ratio in 10 years. Some sectors, such as materials, have seen a sharp drop in forecasts for the fourth quarter, Thomson Reuters data showed.
Last week, downbeat earnings from Oracle Corp (ORCL.O) shook confidence in the tech sector's health before the quarterly earnings season's start in January. Oracle joined a growing list of companies, including some of technology's biggest names, whose results and outlooks have set off alarm bells.
Next year, S&P 500 earnings are seen rising 9.9 percent, down from an estimate of 13 percent in October.
RECESSION FEARS
Many economists believe the euro zone is already in recession. They forecast that the economies of the 17-nation bloc will stagnate in 2012 after contracting in this year's fourth quarter and the first quarter of the next.
Investors are worried that Italy and Spain will have to keep refinancing borrowings at unsustainable levels early next year, which could escalate the crisis.
The correlation between the U.S. stock market and the euro skyrocketed in 2011 as investors tied bets on risky assets to the euro's moves. That trend ebbed as equities rallied near the end of the year, but it is likely to flare up again.
So far the U.S. economy has stayed on course for moderate growth. Economists expect it to expand by about 2.1 percent next year. But it is unclear how a slowdown in the rest of the world will affect the economy stateside.
The key may be China rather than Europe.
"China is the 800-pound gorilla in the room and is probably the most important country to watch in terms of their contribution to global growth," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Chinese business confidence is weakening. A survey showed export orders fell for the first time in nearly three years.
The drop in materials shares in 2011's second half reflects worry about declining activity overseas. The S&P Materials Index .GSPM lost nearly 14 percent in the last six months.
GRIDLOCK SHOCK
One of the pivotal events of 2011 was the downgrade of the United States' perfect triple-A credit rating. Standard & Poor's cited congressional bickering as the reason for the downgrade.
August's stalemate in Washington over raising the debt ceiling sparked a selloff that accelerated after the downgrade.
Investors expect the gridlock in Congress to get worse as the U.S. presidential election approaches in November. The election is likely to be close, which will not make legislative efforts to tackle high debt levels and weak demand any easier.
Rancor was in view again in December as Congress struggled to pass a two-month extension of U.S. payroll-tax cuts.
"There will be less certainty about taxation and regulation so that will inhibit business formation and business growth," said Brian Battle, a trader at Performance Trust Capital Partners in Chicago.
Goldman Sachs sees global growth highly susceptible in 2012 to even minor shocks - and those shocks may be political.
"Slowing growth (and in places outright contraction), public-sector cuts, and a renegotiation of the social compact between state and society in different parts of the world is an environment ripe for political turmoil," Goldman said in a note to clients.
You thought 2011 was tough?
Stock market forecasts for 2012
7:21pm EST
By Edward Krudy
NEW YORK | Fri Dec 30, 2011 7:56pm EST
(Reuters) - Shaky Europe. Political gridlock. Volatile markets.
Familiar themes for those who lived through 2011, and investors should be ready to revisit them next year.
With a spiraling debt crisis in Europe, political upheaval around the world, and crumbling creditworthiness in major industrial nations, 2011 was a tough year to know where to invest. 2012 is unlikely to offer much respite.
The S&P 500, a measure of the biggest U.S. companies' market value, spent much of the year getting pushed up and down, flummoxing shorts and longs - and scaring Moms and Pops away from stocks. It ended the year at 1,257.60, down a mere 0.04 of a point.
But the S&P 500's tepid performance was encouraging, compared with other world equity markets. The United States may still be seen as a safe haven, though even that looks uncertain.
For every rally built on improving economic figures this year, selloffs were never far away on worries the European debt crisis would eventually drag the continent into a recession and perhaps the United States as well. That could continue in 2012.
China and other fast-growing emerging markets can no longer be leaned on as those economies slow. In 2011's last half, the poorest-performing sectors outside of banks were most connected to global growth - materials, energy and industrial companies.
"There is a growing realization that the global economy is in jeopardy," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "There is uncertainty in every corner of the world."
That uncertainty fed substantial volatility in 2011. Despite the S&P's flat performance this year, there were 66 trading days when stocks moved in a 2 percent range. In 2008, when Lehman Brothers collapsed during a global financial crisis, there were more than 130 trading days when stocks swung that much. But that led to a flight from equities by retail investors.
U.S. equity funds had outflows in every month since May. More than $483 billion left U.S. mutual funds in 2011 through the year's second-to-last week, even though the U.S. market outperformed foreign stocks late in the game.
BEATING GLOBAL RIVALS
The S&P 500 ended the year off a scant 0.003 percent, the closest it has come to unchanged since 1947, according to Standard & Poor's. The Dow Jones industrial average .DJI finished 2011 with a 5.5 percent gain, while the Nasdaq Composite Index .IXIC slipped 1.8 percent.
In contrast, the MSCI world stocks index .MIWD00000PUS fell 9 percent, while the FTSEurofirst-300 index .FTEU3 slid nearly 11 percent.
The darlings in the emerging markets fared the worst. China's Shanghai Composite index .SSEC lost 22 percent, India's BSE .BSESN sank 25 percent, and Brazil's Bovespa .BVSP dropped 18 percent.
Strategists say the U.S. stock market may benefit from reasonable economic growth and attractive market valuation. The S&P 500 is expected to rise 6 percent by the end of 2012, according to the most recent poll of Wall Street strategists.
When Wall Street gets back to work on Tuesday, it will face a holiday-shortened week and a slew of economic indicators. The most crucial numbers will come on Friday when the government will release the December non-farm payrolls report. Economists polled by Reuters expect a December gain of 150,000 jobs, compared with an increase of 120,000 jobs in November.
Volatility is likely to persist through early 2012 because of the uncertainty in Europe and rising concern about slowed earnings growth due to recent revisions.
The S&P 500's price-to-earnings ratio - what investors are willing to pay for a dollar of earnings - is under 12, below the 25-year average of 15. In weaker markets like Germany's DAX, the figure is below 9.
"We're building in a massive recession into these numbers," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.
U.S. companies cutting earnings' outlooks recently outpaced those raising theirs by the greatest ratio in 10 years. Some sectors, such as materials, have seen a sharp drop in forecasts for the fourth quarter, Thomson Reuters data showed.
Last week, downbeat earnings from Oracle Corp (ORCL.O) shook confidence in the tech sector's health before the quarterly earnings season's start in January. Oracle joined a growing list of companies, including some of technology's biggest names, whose results and outlooks have set off alarm bells.
Next year, S&P 500 earnings are seen rising 9.9 percent, down from an estimate of 13 percent in October.
RECESSION FEARS
Many economists believe the euro zone is already in recession. They forecast that the economies of the 17-nation bloc will stagnate in 2012 after contracting in this year's fourth quarter and the first quarter of the next.
Investors are worried that Italy and Spain will have to keep refinancing borrowings at unsustainable levels early next year, which could escalate the crisis.
The correlation between the U.S. stock market and the euro skyrocketed in 2011 as investors tied bets on risky assets to the euro's moves. That trend ebbed as equities rallied near the end of the year, but it is likely to flare up again.
So far the U.S. economy has stayed on course for moderate growth. Economists expect it to expand by about 2.1 percent next year. But it is unclear how a slowdown in the rest of the world will affect the economy stateside.
The key may be China rather than Europe.
"China is the 800-pound gorilla in the room and is probably the most important country to watch in terms of their contribution to global growth," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Chinese business confidence is weakening. A survey showed export orders fell for the first time in nearly three years.
The drop in materials shares in 2011's second half reflects worry about declining activity overseas. The S&P Materials Index .GSPM lost nearly 14 percent in the last six months.
GRIDLOCK SHOCK
One of the pivotal events of 2011 was the downgrade of the United States' perfect triple-A credit rating. Standard & Poor's cited congressional bickering as the reason for the downgrade.
August's stalemate in Washington over raising the debt ceiling sparked a selloff that accelerated after the downgrade.
Investors expect the gridlock in Congress to get worse as the U.S. presidential election approaches in November. The election is likely to be close, which will not make legislative efforts to tackle high debt levels and weak demand any easier.
Rancor was in view again in December as Congress struggled to pass a two-month extension of U.S. payroll-tax cuts.
"There will be less certainty about taxation and regulation so that will inhibit business formation and business growth," said Brian Battle, a trader at Performance Trust Capital Partners in Chicago.
Goldman Sachs sees global growth highly susceptible in 2012 to even minor shocks - and those shocks may be political.
"Slowing growth (and in places outright contraction), public-sector cuts, and a renegotiation of the social compact between state and society in different parts of the world is an environment ripe for political turmoil," Goldman said in a note to clients.
By Pedro Nicolaci da Costa
WASHINGTON (Reuters) - Banks tightened the screws on lending to major financial market participants in recent months, the U.S. Federal Reserve said on Thursday, reflecting concerns about Europe's banking crisis.
The central bank's survey of senior credit officers did not mention Europe directly, but indicated a "broad but moderate tightening of credit terms applicable to important classes of counterparties over the past three months."
Large financial firms have been under pressure from worries that Europe's political deadlock may eventually lead to some type of sovereign debt default, saddling institutions with massive losses.
The Fed said tighter credit terms were especially evident for hedge funds, real estate investment trusts and non-financial corporations.
"These responses reflect an apparent continuation and intensification of developments already in evidence in the last survey in September," the report said.
Since then, Europe's crisis has engulfed financial markets in a fear of a possible repeat of the fall of 2008, when massive investment bank failures sent an already weak economy into a nose dive.
The European Central Bank's latest attempt to stem the crisis, a 489-billion-euro program of cheap three-year loans for banks, has managed to bring down interbank borrowing costs for now. But few analysts see the situation as sustainable.
"I expect (banks) to keep the money in deposits ... because they fear they can run short of liquidity and that they cannot face a bond redemption, (while) deposits are shrinking so they need higher liquidity buffers," ING rate strategist Alessandro Giansanti said.
Indeed, despite being awash with liquidity, banks still appear distrustful and prefer to deposit their money at the ECB's overnight facility rather than lend to each other.
(Additional reporting by Marius Zaharia in London; Editing by Neil Stempleman; and Jan Paschal)
Tuesday, September 13, 2011
Singapore Residential Property Prices to fall 8-10% in 2012
Will property prices fall in Singapore? After all these economic uncertainties, many are asking this question. If you look at the press and TV, almost all "experts" are saying that the prices at most will stay flat next year or , at worst case scenario, drop slightly. You should be cautious about these experts if you are new in Singapore. This is because Singapore media almost always ask the question to people from companies who earn their revenue by selling property. So it is not surprising to see that according to the experts, as long as world does not come to end, property prices will not come down :)
But an expert today gave a different opinion and answer. "Singapore residential property prices are expected to fall 8 to 10 per cent in 2012" said UOB Kay Hian. Huge supply of properties coming in the next 2-3 years, bad economic environment waiting for the world and Singapore combined with the government property cooling measures seems to be stronger than the zero interest rate environment promised by FED (Singapore interest rates usually follow US rates)[1]
Singapore property prices rose 17 percent in 2010 after declining 25 percent during 2009 thanks to ultra low interest rates. The worrying sharp climb made Singapore Government to introduce four rounds of cooling measures, the last one seen in January 2011. Up to now, Singapore property market is still experiencing price increases, but slower than it was a year ago.
Common sense also says property prices will most probably fall next year. There are many factors which would pressure prices downwards:
1) There is a huge supply of 50,000 private residential units are coming in from now to 2015. Increase in supply is not supportive for prices.
2) Immigration policy is getting tighter and PR approval numbers are in declining trend. Decrease in demand is also not supportive for prices.
3) HDB was building 8,000 units per year until 2010. Due to severe shortage and public cry, they are now building 25,000 units per year in 2011 and 2012.
4) Tighter Employment Pass rules are kicking in. Less foreigners mean less rent demand. Combine it with extra supply competing for the rental demand, prices would probably be under pressure.
5) Global economic printed money party will end sooner or later with a slow global growth or even another global recession.
6) And interest rates in the near future can only go up from current near zero rates. And they may potentially go higher rates than normal 4-5% after this long, artificial zero interest rate period.
Condos near Tan Tock Seng/KK Hospital impacted on price $?
Man dies from bird flu in southern China
AFP News – 29 minutes ago
A bus driver in southern China who contracted the bird flu virus died Saturday, health authorities said, in the nation's first reported human case of the deadly disease in 18 months.
The man, surnamed Chen, died in Shenzhen -- a boomtown that borders Hong Kong where thousands of chickens have already been culled after three birds tested positive for the H5N1 avian influenza virus in mid-December.
He developed a fever on December 21 and was taken to hospital four days later, and diagnosed with severe pneumonia, said the health department in Shenzhen, a city of more than 10 million people.
The 39-year-old then tested positive for the H5N1 virus, the department said, adding he had apparently had no direct contact with poultry in the month before he was taken ill, nor had he left the city.
The H5N1 virus is fatal in humans in about 60 percent of cases.
However, it does not pass easily among humans, and the World Health Organization says it has never identified a "sustained human-to-human spread" of the virus since it re-emerged in 2003.
The health department in Guangdong province, where Shenzhen is located, announced Saturday that the bus driver died after his lung, heart and liver functions deteriorated.
"So far, 120 people who have had close contact with him have not presented abnormal symptoms," it said in a statement.
An official at the Shenzhen agriculture and fisheries bureau, surnamed Jiang, told AFP the bus driver had had no contact with birds.
"So far, we have not received any reports of any birds being infected," he said.
"It is unclear where the patient got the flu from. We will not make any plans to kill domestic birds unless we know that was the source, or if there is any sign of birds being infected."
Chinese and Hong Kong authorities have been working closely together since December 21 after live poultry supplies were suspended to the glitzy financial hub following the discovery of infected birds.
A spokesman for the Hong Kong health department said in a statement authorities would heighten their vigilance "and continue to maintain stringent port health measures in connection with this development".
Health authorities in China have also vowed to stay in "close contact and work together" with Hong Kong and "jointly step up measures in controlling the epidemic", the official Xinhua news agency said.
China is considered one of the nations most at risk of bird flu epidemics because it has the world's biggest poultry population and many chickens in rural areas are kept close to humans.
In the last reported human case in China, a young pregnant woman died of bird flu in June 2010 in the central province of Hubei.
The bus driver's death brought to 27 the number of people who have died in China since 2003, out of 41 reported human cases.
Authorities in Hong Kong have raised the bird flu alert level to "serious" since they discovered infected chickens, resulting in major disruptions to poultry supplies over the busy Christmas period.
The avian influenza virus has killed more than 330 people around the world, with Indonesia the worst-hit country. Most human infections are the result of direct contact with infected birds.
Scientists fear H5N1 could mutate into a form readily transmissible between humans, with the potential to cause millions of deaths.
Highlighting those fears, the World Health Organization said on Friday it was "deeply concerned" about research into whether H5N1 could be made more transmissible between humans after mutant strains were produced in labs.
Two separate research teams -- one in the Netherlands and the other in the United States -- separately found ways to alter the virus H5N1 so it could pass easily between mammals.
Sunday, December 25, 2011
Singapore job outlook bleak in 2012
Since the printed money stopped flowing into Asia by the end of Quantitative Easing (Money Printing) 2 and European sovereign debt crisis became a norm, job outlook in Singapore is getting grimmer every passing quarter. Inflation, which is persistently expected to ease next quarter, is surprising(!) experts every quarter with its increasing trend, exports are recording q-o-q fall every quarter and banking and financing professionals are nervously watching job reductions in western banks.
The trend for financial back office jobs was already mentioned in a previous article in October 2011:
"We heard about redundancies in Hong Kong some time ago, but news of layoffs in Singapore’s financial sector have only hit the headlines recently.
The Business Times reported that Bank of American Merrill Lynch (BoAML) and UBS have both fired i-bank staff. And other firms like HSBC have confirmed the restructuring of their Singapore business. Although Asian redundancies haven’t been large-scale so far, staff are certainly getting the jitters.
One headhunter, who asked not to be named, says RBS may make cuts in Asia later this year. Citi too, could potentially slash investment banking jobs given its focus on global transaction services and retail. Another anonymous source tells us that Barclays and J.P. Morgan could make layoffs. Those in client-facing i-bank roles can breathe a little easier though: firings have been mostly in the back office thus far, he adds."
Source : Back-office jobs under threat at Singapore investment banks
Some comments in the article says that RBS, Barclays and Morgan Stanley has already started lay-offs in Singapore at that time. Later in early December, it was reported that Citigroup laid off 40 staff recently:
"Citigroup Singapore has laid off about 40 employees in recent weeks, The Straits Times has learnt. The job cuts, which included senior positions, have come as the American bank on Wednesday announced it would axe 4,500 jobs globally and set aside US$400 million (S$515 million) for severance and other related costs.
The cuts here are believed to have come selectively across its investment bank, markets team and private bank. A Citi spokesman in Singapore confirmed on Wednesday that there have been layoffs."
Source : Citigroup Singapore laid off about 40 staff recently
Just a week after these bad news, Morgan Stanley slashed 80 Singapore support staff and offered transfers to India and Hungary. According to the efinancialcareers.com news other banks have back-office relocation on their radars:
"In one of the most sizable redeployments this year, Morgan Stanley is shifting 80 back-office roles out of Singapore, with employees given the chance to move to India and Hungary, according to sources quoted in The Wall Street Journal. The news provides a high-profile illustration of a general trend: Singapore – aided by an appreciating currency – is becoming more expensive just at the time when Western banks are urgently looking to cut costs and improve efficiency.
...
Back-office recruiters in Singapore have been talking about the relocation “threat” for several months, so Morgan Stanley’s plans come as no great surprise. “Singapore is now a much different place to when it was developing as an infrastructure hub in 2005 to 2007. While costs have risen – both salaries and property – a lot of banks tell me that real estate expenses aren’t too different to India; compensation is the real differential,” says Craig Brewer director, banking and financial services, Hudson."
Source : Morgan Stanley slashes 80 Singapore support staff
Luckily as some jobs are moving out of Singapore to India, some jobs are moving from more expensive and regulated places like London to Singapore so the pace of job loss is not so severe now. Read the last paragraph of the news above.
According to The Business Review Singapore, more lay offs may be on the way:
"More worrying still are reports heard on the streets of Singapore by your correspondent that at least 2 international banks are planning net headcount reductions over the course of 2012 - the first in the living memory of many young bankers.
The reason is that while some more jobs are offshored, in years past they would have been made up for by growth in other parts of the bank. But with global markets and investment banking business also in a hold or dive pattern, the outlook is really quite bleak."
Source : Will the last bank stop hiring please turn the lights out, The Business Review Singapore
So it is not surprising to see that nearly half of Singaporeans bearish on hiring activity in the next 12 months and more than half of male employees bearish on business outlook for 2012.
Posted by milleplateaux at 8:14 PM
Tuesday, December 27, 2011
25000 more BTO flats will be released in 2012
We have entered 2011 with long application queues for Built-To-Order flats and frustrated new weds repeatedly failing to get a flat since all were oversubscribed, sometime 5-7 times. In 2011, with the new Minister for National Development Khaw Boon Wan, BTO practice is shelved for a while and HDB have started to released record number of flats without waiting for a demand to accumulate. 2011 saw 25,000+ releases, nearly more than the last 4 years combined and according to the HDB, 2012 will also see high number of HDB releases:
"Another 4,200 new flats in 7 BTO projects has been launched by HDB today, following its bumper 8,200 flats just two months ago. The latest launch offers new flats in Bedok, Bukit Panjang, Hougang, Punggol and Yishun. This brings the total number of BTO flats offered in 2011 to 25,200 units. HDB will continue to offer another 25,000 BTO units in 2012."
Source : Another 4,200 New Flats Launched; 25,000 More to Come Next Year
2012 launches will start in January with 3,890 flats offered in Choa Chu Kang, Punggol, Sengkang and Tampines. HDB also signalled that it will look into building more flats in mature towns. Previously HDB was offering new flats only in new towns.
This number is significantly more than 15,000 new weds per year. Newly wed couples are the majority of the first time applicants who had priority up to now. But these numbers show that next year, focus will be shifted to second timers. Actually, Khaw Boon Wan has already wrote about the shift in his recent blog entry:
"There will of course be new first-timer applicants, but their numbers will be below the 25,000 BTO flat supply for next year. First marriages involving Singaporeans number about 15,000 a year. Currently, we reserve 95 percent of BTO flats for first-timers, leaving only 5 percent for second-timers. Once we have cleared the first-timer queue, we can help the second-timers more. Registration for the current BTO launch will close in a few hours. "
Source : BTO wish coming true?
This development is also very important for secondary HDB market. For who are not familiar, HDB or BTO flats are public housing flats developed by Housing Development Board. Singaporeans can buy brand new flats either directly from HDB or buy used HDBs from owners (resale market). This market is also open to Singapore PRs but both markets are closed to foreigners. 23% of the resale flat buyers are first timers, many frustrated with long queues of new BTO flats or priced out from new flat market (there is a household income limit for new BTO flats). %34 are second timers and %15 are singles. 20% percent of demand came from Singapore PRs and 8% came from private property owners (Source : Who buys the resale flats?). Since more than 50 per cent of the demand for resale flats come from first timers and second timers, these new BTO flats will remove significant amount of demand from resale market, which is still recording price gains although the transaction numbers are going down.
Posted by milleplateaux at 9:06 PM
ESIDENTIAL PROPERTY | Staff Reporter, Singapore
Published: 07 Nov 11
601 views
More supply of small apartments drive rising rents in city fringe
Now guess how narrow the gap is between the rents in the prime districts and the rest of central region?
According to CB Richard Ellis, the gap between the rest of central region and core central region narrowed to 24.5 per cent in Q3 2011.
According to a release, CBRE’s latest analysis of residential non-landed rents points to a steady increase in rents in the Rest of Central Region since the rental market bottomed out in 2009. The Rest of Central Region (RCR) covers the city fringe areas of Balestier, Bishan, Geylang. Rents in the RCR stood at a median of $2.86psf at the height of the market in 2008. It fell to $2.64psf in 2009 but rose 19.3 per cent to $3.15 in 2010 when the market recovered. Rents in the RCR rose to $3.36 psf by Q3 2011.
Li Hiaw Ho, Executive Director, CBRE Research said “The increase in rents in the Rest of Central Region corresponds to the rise in the number of small-format sized apartments in Serangoon, Balestier and Geylang over the last few years. Renting in the city fringe area, near the CBD, is a viable option with more expatriates having switched over to local packages in recent years. Apartments in the Outside of Central Region near MRT stations have also risen in popularity.”
Average rents in the Outside of Central Region (OCR) have seen steady increases too. In 2010, rents increased 17.5 per cent to $2.68 psf from a low of $ 2.28 psf in 2009. Compared to RCR, rents in OCR have increased at a slower rate partly because of the large supply of HDB flats that are available for lease in the OCR.
Rents in the prime Core Central Region recorded a lower increase of 15.6 per cent over the 2009 – 2010 period compared to the RCR. Prime rents recovered to register $4.30psf in 2010, after having fallen to $3.72psf in 2009.
Since 2009, the gap between RCR and CCR has narrowed from 29.0 per cent in 2009 to 24.5 per cent in Q3 2011.
CBRE projects that the gap will probably stabilise at around 26 per cent by end of 2011 as rents in both CCR and RCR remain at current levels in the coming months.
Since 2008, the number of tenancies contracted, comprising new leases and renewals, has exceeded 30,000 every year. Between January and September 2011, the number of tenancies stood at 31,083. Total volume of tenancies will probably hit an alltime high of between 37,000 – 38,000. As the impact of the economic slow-down begins to filter, CBRE expects a lower volume in the coming year.
Mr Li said “Rents are likely to stabilize in Q4 as leasing activity eases. The sluggish economic growth projected for 2012 may translate to reduced job opportunities for expatriates. Coupled with a high number of new completions in 2011 and 2012, there will be some pressure on rents going forward".
AVIATION | Krisana Gallezo, Singapore
Published: 27 Dec 11
418 views
Airlines to face headwinds in 2012
Singapore Airlines shares with Singapore Business Review next year’s outlook for the airline industry.
1. What are the likely challenges?
The prevailing economic uncertainty and weak consumer confidence has had an impact on demand for air travel. We are seeing signs of weakness in advance bookings, especially in Europe and United States. As a result, we expect our passenger and cargo yields to remain under pressure in the near term. Jet fuel prices remain a major challenge for airlines, as it remains high and volatile.
2. What are the growth opportunities?
Even in this difficult operating environment, we continue to be on the lookout for opportunities for measured growth, in markets where demand for air travel remains strong.
3. How do you respond to some pressures on profitability due to higher costs and greater competition?
We continue to exercise cost discipline within the Group, even as we continue to invest in maintaining the high standards of our products and services. We will also manage greater competition in the same way, by strengthening our offerings and competing on the basis of our established strengths - stellar service, product innovation and a diverse route network.
4. Are you seeking inorganic growth opportunities like M&As?
As you may be aware, transnational mergers and acquisitions by airlines is generally a complex enterprise due to existing regulations about airline ownership. But as we have always said, we will consider interesting opportunities that may arise.
INFORMATION TECHNOLOGY | Staff Reporter, Singapore
Published: 23 Dec 11
606 views
Will Singapore’s technology sector crash in 2012?
2011 has been a hard year for the industry and it seems like things won’t get any better soon.
OCBC says rising cost pressures, including labour wages increases, raw material costs and higher interest rates, especially in China, have culminated in a margin squeeze on companies.
Macro headwinds are likely to remain strong come 2012; hence tepid growth is expected for the sector.
Here’s more from OCBC:
Macro headwinds continue to cast a pall. 2011 has been a year fraught with challenges and uncertainties for the technology sector. Events such as the historical downgrade of the US government credit rating by S&P and escalating concerns over the euro zone sovereign debt crisis have amplified the frailties in the macro economy and heightened investor risk aversion.
As such, the highly cyclical tech sector has taken a hit in both its financial and share price performance (the FTSE ST Technology Index has significantly underperformed the broader market YTD). Moving into 2012, we opine that macro headwinds will remain strong. Hence we are expecting tepid growth for the sector, in tandem with easing global economic conditions. Many of the tech companies we spoke to have highlighted the cautious sentiment adopted by their customers, thus increasing the risk of order delays and/or pullbacks.
Cost pressures and cloudy visibility to persist. This situation is exacerbated by rising cost pressures, as increases in labour wages, raw material costs and higher interest rates, especially in China, have culminated in a margin squeeze on companies. Currency volatility and supply chain disruptions from recent catastrophes have also shrouded the visibility of the tech sector.
Lessons learnt from the past. In general, we note that tech companies have emerged from the last financial maelstrom with stronger balance sheets. This should provide them with better resilience to weather another economic downturn, in our view. For the companies under our coverage, all with the exception of ECS Holdings are in a net cash position.
Better long-term prospects. We believe that the tech sector still carries good long-term growth potential, given the increasing importance of IT as a business growth driver, continued technological innovation and rising affluence in the region. Stronger growth would likely come from the emerging markets as ample opportunities exist for continued IT penetration.
The share prices of most tech stocks have already corrected sharply this year. Although current valuations do not appear demanding, downside earnings risks exist should the macroeconomic landscape continue to deteriorate sharper than our expectations. On the other hand, cyclical plays could also potentially benefit from a stronger rebound should the global economy recover faster-than-expected. In our view, the possibility of the first scenario seems more plausible.
i also hv powers - can predict like others
property mkt will go up...to $1000psf for HDB
gold price will bounce back from $1600 to $2100
TRANSPORT & LOGISTICS | Staff Reporter, Singapore
Published: 23 Dec 11
Bumpy ride ahead for Singapore’s transport sector
Outlook for the aviation and shipping industries have turned gloomy as global travel and trade are likely to remain subdued in 2012.
However, OCBC says land transport is likely to remain stable as ridership levels are unlikely to dip regardless of economic cycles.
Here’s more from OCBC:
Weak leading aviation indicators and high fuel prices. Business confidence and global air freight volumes, which usually fall ahead of air travel traffic during downturns, have been declining in recent months. Both these indicators point to weakening demand in air travel. Together with high jet fuel prices, which have averaged 29% higher than in CY10, there is a prevalent pessimism surrounding the aviation sub-sector.
Aviation service providers' outlook is also gloomy, but longer term prospects are intact. The air of pessimism that currently surrounds the aviation industry may, in the near term, cascade down to the maintenance, repair and overhaul service providers and ground handlers. However, the longer term prospects for MRO players and ground handlers are still positive. Global air travel traffic is projected to continue growing in the long term and the global passenger aircraft fleet is forecasted to double by 2030.
Excess capacity in shipping exacerbated by poor demand. Global trade volumes in 2011 failed to grow in line with earlier expectations. With the global fleet of container ships growing 17% over the past four years, the unfavourable demand-supply dynamics have hit freight rates - the Shanghai Containerised Freight Index is down 24% YTD. Looking forward, excess capacity is unlikely to ease while global trade is likely to remain subdued in 2012.
Singapore's land transport has no viable substitute. The land transportation sub-sector in Singapore has no viable large-scale substitute. Ridership levels are unlikely to dip regardless of economic cycles, as long as the infrastructure maintains its relevance and the cost of private car ownership remain out-of-reach for a majority of the populace.
Likely bumpy ride ahead - seek defensives. The uncertain economic outlook ahead continues to weigh down on business confidence, which in turn negatively impacts global travel and trade volume.
Certainly lots of stuff for reading during new years' eve....:eek:
Most set own mindset
read n interpret wht thy wun 2 c on outcome
Purging info thread
Some just dun get it. 1 thinks end of world..whilst another1 thinks all day sunshine.
Wht goes down will come up?
Wht goes up will come down?
in both scenarios, can make $$
Higher close offsets biggest annual loss
By Lu Nengneng | 2011-12-31 | NEWSPAPER EDITION
The story appears on Page A9
Dec 31, 2011
Investors talk at a securities branch in Wuxi, Jiangsu Province, yesterday. China stocks advanced on the last trading day of 2011, trimming the benchmark index's biggest annual loss since 2008. The Shanghai Composite Index ended at 1.19 percent higher, the biggest in two weeks, at 2,199.42 yesterday.
SHANGHAI'S key stock index yesterday eased its biggest annual loss since 2008 when it closed higher on renewed optimism over the market's direction next year.
The Shanghai Composite Index ended 1.19 percent up, the biggest in two weeks, at 2,199.42 on the last trading day of 2011.
The gauge, which lost 14 percent in 2010, tumbled 21.68 percent this year.
The Shanghai market performed the worst globally this year, second only to India among the 15 biggest stock exchanges. The local market saw a three-year low in turnover on Thursday as investors adopted a wait-and-see stance with the year-end approaching.
For the most part of the year there was a general sell-off by jittery investors due to the escalating European debt crisis and the slowing Chinese economy weakened by dismal data for investments and exports.
According to a research by Sina, one of the biggest news portals in China, more than 34 percent of investors lost half their stock value amid the market downturn.
The investor sentiment improved slightly after Guo Shuqing, new head of the China Securities Regulatory Commission, called on pension and housing funds to invest in the stock market.
His remark gave investors hope of better days in 2012.
The government also tried to channel more capital inflow in a bid to revive investor sentiment. Between October and December, it accelerated approval of quotas under the Qualified Foreign Institutional Investors scheme, which took up almost half of the full-year figure of US$1.92 billion.
The branches of 12 Hong Kong brokers received the green light from the central bank last week to run a yuan-denominated fund management business under the trial Renminbi Qualified Foreign Institutional Investor scheme.
China's mainland stock market consolidated its position as the one of the biggest fund-raisers globally this year despite the nearly 20 percent erosion in market value.
Companies have raised more than 825 billion yuan (US$130.8 billion) through initial public offerings, additional share sales, allotment of shares, and corporate bonds on the A-share market this year, according to data provider Wind. But the two domestic stock markets in Shanghai and Shenzhen saw their total value shrink from 30.5 trillion yuan to 24.6 trillion yuan.
Up to 2,119 out of 2,320 stocks on the A-share market saw their value fall, with 73 percent sinking deeper than the key CSI 300 index.
Singapore GDP Slowed to 4.8% as Lee Predicts ‘Difficult’ Global Conditions
By Shamim Adam -
Singapore’s growth will weaken further this year after slowing in 2011, constrained by a “difficult” global environment and government efforts to cut foreign-worker inflow, Prime Minister Lee Hsien Loong said.
Gross domestic product (SGDYTY) rose 4.8 percent last year, Lee, 59, said in his New Year message released in Singapore yesterday. That compares with the government’s earlier forecast of a 5 percent increase and a 14.5 percent pace in 2010. The economy will expand 1 percent to 3 percent in 2012, Lee said, reiterating a trade-ministry estimate.
“Debt problems in Europe are far from solved,” Lee said. This year “looks like being difficult for the global economy. As a small, open country, Singapore will inevitably be affected,” he said.
Singapore, which uses the island’s dollar to manage inflation, said in October it will slow gains in its currency as it joined Asian nations in moving to shield their economies from faltering growth in Europe and China. At the same time, the island has sought to counter a voter backlash against a surge in immigration by promising to damp the influx of foreigners, a move Lee says will curb expansion.
“The extent of the soft landing in China, the pace of recovery in the U.S. and the downside risks in the euro zone are the three key factors that underscore Singapore’s outlook for 2012,” said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. Slowing the inflow of foreign workers will pose a “constraint” on growth as it raises business costs, he said.
Economic Contraction
The growth rate Lee estimates for 2011 implies that the fourth-quarter contraction in the economy “will be more severe than what most people in the market expected,” Seah said.
The economy probably shrank an annualized 5 percent in the fourth quarter from the previous three-month period, according to the median of 11 estimates in a Bloomberg News survey. The trade ministry will release the GDP report on Jan. 3.
The MSCI Asia Pacific Index (MXAP) of stocks slumped 17 percent last year as concern Europe’s protracted sovereign-debt crisis will weigh on the region’s growth halted a two-year rally in equities. Singapore’s benchmark Straits Times Index (FSSTI) dropped by a similar amount, and its currency weakened 1 percent against the U.S. dollar.
Singapore, located at the southern end of the 600-mile (965-kilometer) Malacca Strait and home to the world’s second- busiest container port, has remained vulnerable to fluctuations in overseas demand for manufactured goods even as the government boosts the financial services and tourism industries to cut its reliance on exports.
General Election
Lee’s ruling People’s Action Party won the general election in May with the smallest margin of popular votes since independence in 1965 as citizens expressed discontent over the rising cost of living and competition with foreigners for jobs and housing.
Singaporeans also voted for a new president in August and former Deputy Prime Minister Tony Tan, who was backed by Lee and several ministers, won the largely ceremonial post with a margin of about 0.3 percent over his nearest rival.
“Having made a significant political transition, we are all now adjusting to new norms in a changed environment,” the prime minister said yesterday. “We are working hard to tackle our immediate challenges.”
Since the general election, the government has tightened rules on overseas labor and made it more expensive for foreigners to buy property in Singapore.
Property Curbs
The island imposed additional taxes on purchases of private residential property in December to curb excessive investment that it said may spur economic and banking-industry risks. Foreigners and corporate entities will have to pay an additional 10 percent stamp duty, the government said Dec. 7.
“The government is committed to keeping homes affordable to all Singaporeans,” Lee said yesterday, adding that more public housing will be made available in 2012. “In the private property market, the additional buyer’s stamp duty will moderate capital inflows and foreign demand, and help to stabilize prices.”
The country, ranked by the World Bank as the easiest place to do business, has cut taxes in recent years to spur investment, prompting companies to hire hundreds of thousands of foreigners to fill positions. More than a third of the 5.2 million population is made up of foreigners and permanent residents, and about half of all new jobs created in 2010 went to workers from overseas.
The island is tightening the number of foreign workers entering the country to a “more sustainable” rate, Lee said yesterday. The government announced in August that it would raise salary thresholds and require better educational qualifications for some non-Singaporean workers.
“Companies are already feeling the pinch,” especially small and medium-sized enterprises, Lee said. “Singaporeans will feel it too, because many foreign workers do jobs that serve citizens. Admitting fewer foreign workers also means forgoing business opportunities and accepting slower growth. This is one reason why we only expect 1 percent to 3 percent growth.”
Singapore GDP Slowed to 4.8% as Lee Predicts ‘Difficult’ Global Conditions
By Shamim Adam -
Singapore’s growth will weaken further this year after slowing in 2011, constrained by a “difficult” global environment and government efforts to cut foreign-worker inflow, Prime Minister Lee Hsien Loong said.
Gross domestic product (SGDYTY) rose 4.8 percent last year, Lee, 59, said in his New Year message released in Singapore yesterday. That compares with the government’s earlier forecast of a 5 percent increase and a 14.5 percent pace in 2010. The economy will expand 1 percent to 3 percent in 2012, Lee said, reiterating a trade-ministry estimate.
“Debt problems in Europe are far from solved,” Lee said. This year “looks like being difficult for the global economy. As a small, open country, Singapore will inevitably be affected,” he said.
Singapore, which uses the island’s dollar to manage inflation, said in October it will slow gains in its currency as it joined Asian nations in moving to shield their economies from faltering growth in Europe and China. At the same time, the island has sought to counter a voter backlash against a surge in immigration by promising to damp the influx of foreigners, a move Lee says will curb expansion.
“The extent of the soft landing in China, the pace of recovery in the U.S. and the downside risks in the euro zone are the three key factors that underscore Singapore’s outlook for 2012,” said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. Slowing the inflow of foreign workers will pose a “constraint” on growth as it raises business costs, he said.
Economic Contraction
The growth rate Lee estimates for 2011 implies that the fourth-quarter contraction in the economy “will be more severe than what most people in the market expected,” Seah said.
The economy probably shrank an annualized 5 percent in the fourth quarter from the previous three-month period, according to the median of 11 estimates in a Bloomberg News survey. The trade ministry will release the GDP report on Jan. 3.
The MSCI Asia Pacific Index (MXAP) of stocks slumped 17 percent last year as concern Europe’s protracted sovereign-debt crisis will weigh on the region’s growth halted a two-year rally in equities. Singapore’s benchmark Straits Times Index (FSSTI) dropped by a similar amount, and its currency weakened 1 percent against the U.S. dollar.
Singapore, located at the southern end of the 600-mile (965-kilometer) Malacca Strait and home to the world’s second- busiest container port, has remained vulnerable to fluctuations in overseas demand for manufactured goods even as the government boosts the financial services and tourism industries to cut its reliance on exports.
General Election
Lee’s ruling People’s Action Party won the general election in May with the smallest margin of popular votes since independence in 1965 as citizens expressed discontent over the rising cost of living and competition with foreigners for jobs and housing.
Singaporeans also voted for a new president in August and former Deputy Prime Minister Tony Tan, who was backed by Lee and several ministers, won the largely ceremonial post with a margin of about 0.3 percent over his nearest rival.
“Having made a significant political transition, we are all now adjusting to new norms in a changed environment,” the prime minister said yesterday. “We are working hard to tackle our immediate challenges.”
Since the general election, the government has tightened rules on overseas labor and made it more expensive for foreigners to buy property in Singapore.
Property Curbs
The island imposed additional taxes on purchases of private residential property in December to curb excessive investment that it said may spur economic and banking-industry risks. Foreigners and corporate entities will have to pay an additional 10 percent stamp duty, the government said Dec. 7.
“The government is committed to keeping homes affordable to all Singaporeans,” Lee said yesterday, adding that more public housing will be made available in 2012. “In the private property market, the additional buyer’s stamp duty will moderate capital inflows and foreign demand, and help to stabilize prices.”
The country, ranked by the World Bank as the easiest place to do business, has cut taxes in recent years to spur investment, prompting companies to hire hundreds of thousands of foreigners to fill positions. More than a third of the 5.2 million population is made up of foreigners and permanent residents, and about half of all new jobs created in 2010 went to workers from overseas.
The island is tightening the number of foreign workers entering the country to a “more sustainable” rate, Lee said yesterday. The government announced in August that it would raise salary thresholds and require better educational qualifications for some non-Singaporean workers.
“Companies are already feeling the pinch,” especially small and medium-sized enterprises, Lee said. “Singaporeans will feel it too, because many foreign workers do jobs that serve citizens. Admitting fewer foreign workers also means forgoing business opportunities and accepting slower growth. This is one reason why we only expect 1 percent to 3 percent growth.”
So simple, just stop the FT, FW tap for awhile, when business start retrenching with slow growth and because SG is not as competitive globally.
Singaporeans will be scared and ask government to stimulate growth, and then let out subtle news that we MUST embrace global multiculturalism to grow.....
Thereafter, tap will open coz everyone's ricebowl is on the tenterhooks.
It's all about giving what you want when you don't exactly know what you want.
Let you experience some pain of your decision and then guide you back to the proper idea of surviving in Singapore.
Major questions facing the world in 2012
By Shao Jin, Liu Jian (Xinhua)
13:55, December 31, 2011
Edited and translated by People's Daily Online
The international situation has undergone complex and profound changes in 2011, and people believe that 2012 will be another eventful year. As the New Year is approaching, certain nations are making difficult choices between struggle and compromise, recovery and recession, and war and peace.
Question 1: How big is the risk of a global recession?
The global economic recovery is becoming increasingly uncertain and unstable, arousing concerns that the international economic situation will become more complex and changeable in 2012.
The economic growth has slowed in certain major economies, and the sovereign debt crisis has intensified in certain countries in 2011. Emerging markets are facing various challenges such as shrinking external demands and rising internal inflation. Protectionism has increased significantly worldwide in various forms.
In addition, certain international and regional hot-spot issues remain unsolved. Global challenges such as food security, energy security, climate change, and frequent natural disasters are becoming increasingly serious. All these factors will exert their impact on the global economy in 2012.
Question 2: Can the European debt crisis be contained?
The European sovereign debt crisis has become a major uncertain factor affecting the world economy. Euro zone will usher in a new repayment peak in 2012.
The European Union held the last summit meeting in early December this year. This conference introduced new measures on dealing with the sovereign debt problems in Europe and strengthening internal governance of Europe. EU leaders believe that these measures have taken an important step towards establishing a fiscal union and ensuring euro’s lasting stability. But some analysts said it’s hard to achieve the objective of short-term bailout with these measures. Market confidence is still insufficient in whether the debt crisis can be contained in 2012.
Question 3: Can the United States stabilize Iraq and Afghanistan?
President Obama will withdraw all U.S. forces from Iraq by the end of 2011 and the war in Iraq comes to an end. The United States has begun to withdraw its troops from Afghanistan. What the U.S. has paid in these two protracted wars are casualty and war cost, which are unexpected and not worth. In the coming year, the U.S. will face many challenges to stabilize the situation in Iraq and Afghanistan.
In current Iraq and Afghanistan, social and economic development is slow; national unity is very fragile, the security situation is difficult to control and their leaderships have many differences with the United States. Therefore, the U.S. shall face a number of problems to establish a stable pro-Western regime in these two countries.
US - Analysts predict a volatile market, moderate improvement in stocks for 2012
By Martha C. White
Buckle your seatbelts. That's the message analysts have for investors in 2012.
Although the S&P 500 is on pace to wrap up this year more or less flat, the stock market gyrated wildly over the last 12 months. The good news is that experts say we're likely to finish 2012 with stocks in positive territory. Getting there could be a bumpy ride.
"Flat years are very unusual and the history of the year after the flat years is actually very positive," said said Wayne Kaufman, chief market analyst for John Thomas Financial.
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"I see the markets higher by about 10 percent in 2012," said Gary Harloff, owner of Harloff Capital Management.
Tim Speiss, chairman of the personal wealth advisor practice at EisnerAmper LLP, also predicted a positive 2012. "Let's say when we open for business on Tuesday, the Dow is at 12,200," he said. "I think you could see that climb up to something close to 13,000."
But this optimism for a modest increase is tempered by another shared sentiment: Getting there isn't necessarily going to be pretty.
In the near term, there's European sovereign debt to worry about, Speiss said. "The European Union financials are going to be the most troublesome areas for investors." Intervention by the European Central Bank is a good sign, he said, but they're playing catch-up trying to contain the mess. "They're in the midst right now of something they should have done a year ago," he said.
Speiss added that the market could turn negative at least temporarily if the Iranian regime follows through on its threat to disrupt oil shipments by closing the Strait of Hormuz. "[This] could be in the near term a significant issue" if investors lose confidence and if oil prices gyrate or spike higher, he said. "Most oil analysts are looking at oil prices around $105 to $110," Kaufman said. "If it goes much higher than that, it's not a great thing."
"I've been focusing on February of this coming year as being an important time," Kaufman said, because for the last three quarters, investors have snapped up stocks during earnings seasons. The next one happens in mid-January. But they tend to get buyer's remorse and dump the stocks shortly afterwards. Especially if companies lower their forecasts, Kaufman added, "Then you're going to see a pre-spring correction."
In the second half of the year, investors will have to steel themselves for what's virtually guaranteed to be an ugly battle for the White House and Congress. "I think that may take investors' eyes off of the stock market," Kaufman said.
"The administration will probably enjoy a decrease in unemployment rates, which from a political perspective could play to their advantage," Speiss said. He predicted the number of jobless Americans could drop from 8.6 percent as of November to as low as 8.3 percent by the summer — still high, but an improvement.
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Gary Harloff also said improvements in employment should be evident in the third quarter as more companies become confident enough to start hiring. "It's starting, but it's not noticeable yet," he said.
If President Obama is voted out of office in November, though, Speiss said bank stocks could benefit. "If the Republicans are elected it could very well be that you'll see a more bank friendly environment," he said. If a new administration relaxes restrictions and capital requirements, "(t)hat could be very positive outcome for the financial services sector."
Kaufman said the election of a new president perceived to be more business-friendly than President Obama could boost investor optimism. If that happens, "I think you'll see an amazing fourth quarter rally," he said.
All of these factors will contribute the kind of volatility that marked this year's trading. One culprit is the proliferation of automated and high-frequency trading, Kaufman said. With machines rather than people responding to triggers in nanoseconds, even small movements can snowball rapidly.
Political and economic events also play a role, though, and 2012 will have more than its fair share. "I do think it's going to be a continuation of the type of volatility we've seen this year," Kaufman said. This year, there were 74 trading days during which 90 percent of stocks moved in the same direction, an all-time high. "It's like every few days we have one of these very lopsided days that used to be very rare occurrences," he said.
Rhino poaching hits record as horns worth more than gold
Street value of rhinoceros horns soars to about $65,000 a kilogram
Part of a shipment of 33 rhino horns seized by Hong Kong Customs and Excise Department.
JOHANNESBURG — A record number of rhinos were poached this year in South Africa, home to the greatest number of the animals, as rising demand in Asia for their horns led to increased killings of the threatened species.
At least 443 rhinos have been killed in South Africa in 2011, up from 333 last year, according to National Geographic News Watch.
The street value of rhinoceros horns has soared to about $65,000 a kilogram (2.2 pounds), making it more expensive than gold, platinum and in many cases cocaine, as a belief — with no basis in science — has taken hold in recent years in parts of Asia that ingesting it can cure or prevent cancer.
South Africa, home to more than 20,000 rhinos, was losing about 15 animals a year a decade ago. But poaching increased dramatically from about 2007 as a growing affluent class in places such as Vietnam and Thailand began spending more on rhino horn for traditional medicine.
STORY: Endangered Rhinos airlifted to new home
The number of rhinoceroses dying unnatural deaths in South Africa, either through illegal poaching or legal hunts, has reached a level likely to lead to population decline, according to a study by Richard Emslie, an expert in the field.
About half of poaching takes place in Kruger National Park, the country's flagship park covering an area about the size of Israel, where soldiers and surveillance aircraft have been deployed in recent months to slow the carnage.
The park has been the focal point of an arms race as gangs of poachers sponsored by international crime syndicates have used high-powered weaponry, night vision goggles and helicopters to hunt the animals, investigators said.
In a separate study, the number of large scale ivory seizures is likely set a record this year, pointing to increased African elephant poaching.
STORY: 2011 'worst ever year' for elephants
South Africa, home to over 90 percent of the rhinos in Africa, grants licenses for legal hunts, with a growing number of the horns then mounted as trophies, shipped to Asia and sold on the black market, according to police and customs officials.
Many poachers were trained by Mozambique's military or police and are now living in squalor in the border region next to Kruger, South African investigators said.
Their cut of the rhino money is relatively small compared to other players in the international trade but is considered a fortune at home.
Rhino horn has been used for centuries in Chinese medicine, where it was ground into a powder and often mixed with hot water to treat a variety of maladies including rheumatism, gout, high fever and even devil possession.
In recent years, it has also taken on a reputation for being an aphrodisiac and cancer cure.
"Nothing is more tragic than to see this totally unnecessary and brutal killing of an animal for its horn, and the horn in turn has zero medicinal value," said Pelham Jones, a leader of the South Africa Private Rhino Owners Association.
Campaigners in South Africa are urging President Jacob Zuma to uphold a 1993 treaty on international trade in endangered species and to engage with China, Vietnam and Thailand with a view to ending the trade in rhino horn and other animal parts.
In September the country's Department of Water and Environmental Affairs signed a memorandum of understanding with Vietnam which it hoped would lead to an agreement to help curb rhino poaching in South Africa. The department is seeking similar agreements with Thailand and China.
Reflections 1100units+ TOP
few units asking $1600psf n below. not gd enuf. at 1400psf maybe. cant rent n cant sell. EMI 1 mth $6000 2 EMIs $12000....1 yr cant rent $72000
Commodities fm Nigeria - reduce global supply?
Nigerian cities in lockdown after emergency decree
By Aderogba Obisesan | AFP News – 11 hours ago
Nigeria began the new year Sunday under a state of emergency in areas targeted by Islamist attacks as soldiers patrolled hard-hit cities in a bid to end spiralling violence in Africa's most populous nation.
Residents in the northeastern city of Maiduguri reported an increase in patrols and checkpoints, with soldiers in pickup trucks and armed with rifles stopping vehicles and forcing drivers to exit while also questioning them.
In the central city of Jos, security agents took over local government headquarters and two helicopters hovered overhead, while intensified patrols occurred on the ground.
"Everywhere is deserted," one Maiduguri resident said. "People have refused to leave their homes because they are afraid of what soldiers might do to them now that there is a state of emergency in the city."
President Goodluck Jonathan's emergency declaration on Saturday gives security agencies more powers to search and arrest, seals off borders in hard-hit areas and establishes a military counter-terrorism force.
The declaration comes in response to scores of attacks blamed on Islamist group Boko Haram, particularly a wave of bombings on Christmas that killed 49 people, most in a gruesome blast at a Catholic church as services were ending.
While Boko Haram has been carrying out increasingly deadly attacks for months, including an August suicide bombing of UN headquarters in Abuja that left 25 dead, the Christmas violence sparked intense fear and outrage.
It also led to warnings from Christian leaders that they would defend themselves if such attacks continued, raising deep concern in a country roughly divided between a mainly Muslim north and predominately Christian south.
In declaring the state of emergency in Africa's largest oil producer, Jonathan acknowledged that the attacks "have threatened our collective security and shaken the foundations of our corporate existence as a nation."
Jonathan said in a nationwide broadcast that "it has become imperative to take some decisive measures necessary to restore normalcy in the country especially within the affected communities."
The decree applies to parts of the states of Borno, where Boko Haram traditionally has its base, as well as Yobe, Niger and Plateau.
The measures and rhetoric marked a sharp change for Jonathan, who has come under mounting criticism over the authorities' failure to stop the violence.
Many of his previous pronouncements sought to minimise the attacks and reassure the country that the violence was only temporary and would soon be brought to an end despite near daily shootings and bombings.
While some welcomed the declaration, others raised concerns that it would provide legal cover for soldiers to carry out further abuses.
A military task force in Borno state has been accused in recent months of killing civilians and burning homes after bomb attacks, claiming residents collaborated with the extremists.
"The declaration of a state of emergency by the federal government will not stop or reduce the spate of violence across the affected areas, but will simply be a blank cheque for human rights violations by security agents," said northern-based rights activist Shehu Sani.
"Civilians will continue to be at the mercy of the military and the militants. Dialogue still remains the valid option to end this bloodletting."
Hundreds of people were killed in 2011 alone in attacks blamed on Boko Haram, most in the northeast.
An early version of the group formed in 2004, though it has taken on different forms since that time. It launched an uprising in 2009 put down by a brutal military assault which left some 800 dead.
It is believed to have several factions, including those with political links as well as radical Islamist cells.
There has been intense speculation over whether it has formed links with outside extremist groups, such as Al-Qaeda's north African branch.
In addition to the attacks that have rocked the country for months, Nigeria is facing other issues that will add to difficulties in the weeks ahead.
Regulators on Sunday surprisingly announced the start of a deeply controversial measure to remove fuel subsidies, with labour unions warning of protests over the policy expected to lead to higher petrol prices.
"By this announcement, the downstream sub-sector of the petroleum industry is hereby deregulated for (petrol)," a statement from the Petroleum Products Pricing Regulatory Agency said.
"Service providers in the sector are now to procure products and sell same in accordance with the indicative benchmark price to be published fortnightly and posted on the PPPRA website."
Local sources in neighbouring Niger meanwhile said the border between the two countries was still open Sunday, a day after Jonathan announced a border closure.
"The closure of the border with Nigeria has been announced, but it has not been implemented. Traffic is normal between Diffa and Maiduguri," the Nigerian state where Boko Haram is particularly active, Diffa prefect Inoussa Sauna told AFP by telephone.
But a correspondent for private radio station Anfani said the announcement had hit traders in the Diffa region hard as it was economically dependent on Borno and Yobe, two other Nigerian states.
Hyundai, Kia see slower sales growth in 2012
SEOUL | Mon Jan 2, 2012 12:55am EST
(Reuters) - Hyundai Motor (005380.KS) and affiliate Kia Motors (000270.KS) aim to boost global vehicle sales by 6 percent this year to a combined 7 million vehicles, which would mark a slowdown for a duo that has enjoyed double-digit sales rises in recent years.
The South Korean automakers, which together rank fifth in global car sales, are unable to keep up with demand because of stretched production capacity. But they have refrained from boosting capacity sharply, instead focusing on improving product quality and profits.
Bigger rival Toyota Motor (7203.T) last month forecast a 20 percent jump in 2012 sales to a record 8.48 million vehicles, as it is recovering from output losses caused by natural disasters in Japan and Thailand last year.
"We will strengthen quality management we have continuously pursued," Chung Mong-koo, chairman of Hyundai and Kia's parent group, said on Monday in his annual speech to employees.
The 73-year-old Chung has headed Hyundai Motor Group since 2000 when he led auto-related firms out of the parent Hyundai Group, then South Korea's biggest conglomerate marred by financial troubles and a bitter family feud.
The son of Hyundai's founder is credited with transforming the once maker of cheap, poor-quality vehicles into a stellar performer, especially during the global economic downturn.
Hyundai Motor Group, South Korea's No.2 conglomerate, is expected to top Samsung Group, which also includes Samsung Electronics (005930.KS), in terms of net profit in 2011, media reports said, showing how fast the motor group has grown in the past decade.
Shares of Hyundai Motor dropped 0.9 percent and Kia shares fell 0.3 percent in the wider market .KS11 that was down 0.2 percent as of 0534 GMT on Monday.
Shares in Hyundai Motor rose 23 percent and Kia shares rose 32 percent last year, far outperforming the wider market's 11 percent fall.
CONSERVATIVE TARGET
The South Korean carmakers enjoyed sales gains in the United States, Europe and other key markets last year when their Japanese rivals suffered from Japan's earthquake and Thailand's floods as well as the strong yen.
Hyundai and Kia sold 6.6 million vehicles in 2011, beating their earlier target of 6.33 million and up 15 percent from the previous year.
In December, Hyundai's global sales jumped 22 percent and Kia sales rose 8 percent from a year earlier, as strong overseas sales continued to offset declines in domestic sales.
Hyundai is expected to report biggest year-on-year sales gains of about 40 percent among automakers in the United States in December.
But Japanese rivals are recovering from output losses caused by natural disasters, while a free trade deal with the United States is set to take effect early this year and cut tariffs on U.S. auto imports in South Korea.
"I expect the automotive industry to see growth slowing because of the European debt crisis and the global economic slowdown, while competion is expected to intensify among automakers this year," Chung said.
He did not give a breakdown of Hyundai and Kia's individual sales targets.
Analysts noted Hyundai and Kia have history of topping their earlier sales targets.
"Hyundai and Kia have offered a conservative sales target based on the negative economic outlook. I expect it to be fully achievable and sales to reach 7.2 million (vehicles) next year," said Ahn Sang-jun, an auto analyst at Tong Yang Securities in Seoul.
"The U.S. and Chinese auto markets are not worse than expected and will improve this year," he said.
The global car market will grow by 4 percent to 68 million vehicles in 2012 from an estimated 65.4 million in 2011, driven in part by robust sales in the United States, German auto industry association VDA said in December.
Hyundai plans to start production at its third Chinese plant and its first factory in Brazil in 2012, while Kia has no new plants beginning operations this year.
Hyundai plans to launch a fully revamped version of its Santa Fe SUV and a Brazil-dedicated model, the HB, in 2012. Kia is set to roll out large-sized sedan K9 and an all-new Cee'd this year, and is also discussing the launch timing of a fully revamped Forte compact.
Chung said he will beef up personnel and investments to develop eco-friendly vehicles and to secure core technology in the electronic control area.
Hyundai and Kia are playing a catch-up in the race for electric vehicles, earmarking 4.6 trillion Korean won ($3.99 billion) this year for the development of eco-friendly and fuel-efficient vehicles.
($1 = 1152.0000 Korean won)
Authorities identify virus leading to Guangdong bird flu death
Source: Xinhua | 2012-1-2 | ONLINE EDITION
HEALTH authorities in south Guangdong province have identified the type of the virus that led to the death of a bus driver, but the cause of the bird flu remains unclear, a local disease control center confirmed today.
The receptor of the virus, a highly pathogenic H5N1, is poultry, according to a statement released by the Shenzhen Disease Control Center.
Though it is highly pathogenic to human beings, the virus can not spread among people, the center said in the statement, adding that there is no need for Shenzhen citizens to panic.
Genetic analysis also indicated that the virus was spread directly from poultry to human, according to the statement.
A 39-year-old man surnamed Chen in Bao'an district of Shenzhen was hospitalized for fever on December. 21 and tested positive for the H5N1 avian influenza virus. Chen died of multiple organ failure Saturday afternoon.
Health authorities are trying to figure out where Chen acquired the virus.
The Guangdong Department of Agriculture announced Saturday that no epidemic of bird flu among poultry had been reported in the province.
HK property sales down by a third last year
Buyer sentiment was hit by anti-speculation policies and shaky economy, agents say
Sandy Li
Jan 02, 2012
Property sales in Hong Kong fell by 33 per cent to just 108,504 deals last year as concerns over the economy and government moves to curb speculation soured buyer sentiment, property agents said....
Are we helping? Singapore? India? China?
Austerity Reigns Over Euro Zone as Crisis Deepens
Published: January 1, 2012
Europe’s leaders braced their nations for a turbulent year, with their beleaguered economies facing a threat on two fronts: widening deficits that force more borrowing but increasing austerity measures that put growth further out of reach.
French President Nicolas Sarkozy will meet on Jan. 9 with German Chancellor Angela Merkel to discuss a new fiscal treaty intended to impose stringent budget requirements on European Union nations.
Saying that Europe was facing its “harshest test in decades,” Chancellor Angela Merkel of Germany warned on New Year’s Eve that “next year will no doubt be more difficult than 2011” — a marked change in tone from a year ago, when she praised Germans for “mastering the crisis as no other nation.”
Her blunt message was echoed in Italy, France and Greece, the epicenter of the debt crisis, where Prime Minister Lucas Papademos asked for resolve in seeing reforms through, “so that the sacrifices we have made up to now won’t be in vain.”
While the economic picture in the United States has brightened recently with more upbeat employment figures, Europe remains mired in a slump. Most economists are forecasting a recession for 2012, which will heighten the pressure governments and financial institutions across the Continent are seeing.
Adding to the gloomy outlook is the prospect of a downgrade in France’s sterling credit rating, a move that analysts say could happen early in the new year and have wide-ranging consequences on efforts to stabilize Europe’s finances.
Despite criticism from many economists, though, most European governments are sticking to austerity plans, rejecting the Keynesian approach of economic stimulus favored by Washington after the financial crisis in 2008, in a bid to show investors they are serious about fiscal discipline.
This cycle was evident on Friday, when Spain surprised observers by announcing a larger-than-expected budget gap for 2011 even as the new conservative government there laid out plans to increase property and income taxes in 2012.
Indeed, even in the country where the crisis began, Greece, the cycle of spending cuts, tax increases and contraction has not resulted in a course correction, and the same path now lies in store for much larger economies like those of Italy and Spain.
“Every government in Europe with the exception of Germany is bending over backwards to prove to the market that they won’t hesitate to do what it takes,” said Charles Wyplosz, a professor of economics at the Graduate Institute of Geneva. “We’re going straight into a wall with this kind of policy. It’s sheer madness.”
Rather than the austerity measures now being imposed, Mr. Wyplosz said he would like to see governments halt the recent tax increases and spending reductions, and instead cut consumption taxes in a bid to encourage consumer spending. More belt-tightening, he said, increases the likelihood that Europe will see a “lost decade” of economic torpor like Japan faced in the 1990s.
In fact, economists and strategists on both sides of the Atlantic have been steadily ratcheting down their growth expectations for 2012.
“Europe is likely to have a meaningful recession in 2012,” said Tobias Levkovich, Citigroup’s chief equity strategist. While Mr. Levkovich does not see that as a significant threat to the bottom line of most American businesses — he estimates that Europe accounts for about 8.5 percent of sales for the typical company in the Standard & Poor’s 500-stock index — the psychological effects on global markets will be magnified if political opposition to austerity increases.
“Powerful street protests could bring it back to the front pages,” he said. “We’ve seen episodic crises in Europe over the past two years. It’s a recurring event.” He expects Europe to remain a key worry for investors worldwide in 2012.
Neville Hill, head of European economics at Credit Suisse, expects gross domestic product in the euro zone to shrink by 0.5 percent in 2012, with the worst of the pain being felt in the first quarter. At the same time, borrowing needs will remain elevated, with Italy and Spain planning to raise more than 100 billion euros in the first quarter alone.
“We shouldn’t underestimate the scale of the challenge the euro zone faces in early 2012,” Mr. Hill said. “Italian and Spanish sovereign borrowers are at the foot of the mountain, rather than the top. The first quarter is a crunch point.”
The Continent’s economic outlook will take center stage on Jan. 9, when Mrs. Merkel and President Nicolas Sarkozy of France will discuss a new fiscal treaty intended to impose stringent budget requirements on European Union nations. Then on Jan. 30, European Union leaders will gather in Brussels to discuss ways to spur growth.
There are some bright spots as Europe enters 2012. The recent drop of the euro currency against foreign rivals like the yen and the dollar makes European exports more competitive — a critical advantage for Germany, Europe’s largest exporter and its largest economy. German unemployment now stands at 5.5 percent, the lowest since German reunification.
Enlarge This Image
Future in Mind, E.U. Plans for Less Unanimity (January 2, 2012)
No Fireworks for Euro as It Reaches the 10-Year Mark (January 1, 2012)
About 15 percent of the euro zone’s gross domestic product comes from German consumer spending, more than the contribution of Greece, Spain, Portugal and Ireland combined, according to Mr. Hill.
The first test for the Continent will come this Thursday, when France is expected to raise as much as 8 billion euros. On Jan. 12, Spain plans to auction 3 billion euros worth of euro debt, followed by Italy the next day with 9 billion euros. Along with governments tapping the market, European banks are also expected to keep borrowing heavily as loans come due.
In the first quarter of 2012, about 215 billion euros worth of euro zone bank debt must be rolled over, according to Julian Callow, chief European economist at Barclays.
Over all, Mr. Callow said, “the big picture is one of very restricted visibility. The choice is whether you get a mild or more severe recession.”
Despite a move by the European Central Bank on Dec. 21 to provide 489 billion euros in cheap, long-term credit to European banks, the central bank remains reluctant to take more aggressive steps to become the lender of the last resort as the Federal Reserve did in the wake of the financial crisis in the United States in 2008.
In particular, the European bank has remained steadfast in its opposition to buying up sovereign debt outright, for fear of encouraging a return to the kind of deficit spending that got countries like Greece — which continues to rely on bailout money — into trouble in the first place. But the bank’s move to inject liquidity on Dec. 21 was seen as a kind of backdoor way of supporting government bonds, since it is likely that a substantial portion of the money the banks borrowed was quickly parked in sovereign bonds.
Rates have fallen since then, especially on short-term notes. At an auction Wednesday of Italian six-month bills, the yield fell to 3.25 percent from a record 6.5 percent yield a month earlier. But plenty of caution remains — a sale by Italy Thursday of longer-term debt, including 10-year bonds, managed to raise only 7 billion euros instead of the 8.5 billion euros that had been forecast.
“Europe is going about this the hard way,” Mr. Callow added. “It’s not really using the central bank to alleviate these pressures in a dominant way.”
In addition, with governments in Spain, Portugal, Italy and Ireland planning more austerity measures, Mr. Callow said, “this is likely to fuel growing political and social tension. The markets will be closely watching the level of domestic support.”
Funeral of Bahrain youth turns into street protest
04:37 PM Jan 02, 2012
DUBAI - Bahraini police fired tear gas and sound grenades after hundreds of Shi'ite youths demonstrated on Sunday over the death of a 15-year-old protester a day earlier in the Sunni-ruled Gulf island kingdom, residents and activists said.
Confrontations between security forces and protesters take place almost daily in areas populated by majority Shi'ites, who led anti-government protests that were crushed last year.
"After the funeral, many of the mourners started protesting and the police began using tear gas and sound bombs. It is still going on hours later," a resident told Reuters from the mostly Shi'ite village of Sitra, south of the capital Manama.
At least one demonstrator was wounded after being hit in the head by a tear gas canister, activists said in Twitter messages.
The opposition said earlier that Sayed Hashim Saeed, who died on Saturday, had been hit by a tear gas canister at close range, but officials said the youth's body had extensive burns which could not have been caused by a tear gas canister.
"Preliminary investigations show that the deceased was among those who took part in attacks on security forces by throwing petrol bombs," the state news agency BNA quoted a police official as saying.
A coroner's report said the youth had a neck wound which may have been fatal and that the cause of death would be investigated.
Authorities said on Sunday they had arrested 11 "saboteurs" suspected of throwing petrol bombs at police during a protest on Friday in the village of Nuwaidrat, near Sitra, south of Manama, BNA reported.
Shi'ite youths chanting slogans against Bahrain's royal family clashed with riot police across the Gulf state on Friday and Saturday. Security forces fired tear gas to try to prevent them from blocking roads, a tactic often used by protesters.
Inspired by Arab uprisings in Tunisia and Egypt, thousands of mainly Shi'ite Bahrainis took to the streets in February and March demanding curbs on the power of the ruling Sunni Muslim Al-Khalifa family and an end to perceived discrimination.
The broader pro-democracy movement was suppressed with military backing from Bahrain's Sunni-led Gulf neighbours Saudi Arabia and the United Arab Emirates.
At least 35 people, including five members of the security forces, were killed in the unrest, according to an inquiry Bahrain commissioned into the protests and their aftermath. The inquiry said it found evidence of systematic abuse and torture.
Bahrain has promised to implement the inquiry's recommendations, which the U.S. Congress has linked to its approval of a $53 million arms sale to Manama. Opposition groups doubt the kingdom's commitment to reform.
On Saturday, the independent daily Al Wasat said on its website that the head of the body tasked with implementing the recommendations, Ali al-Salih, had resigned. There was no official confirmation of the report.
Bahrain is important to Western interests in the Middle East because it hosts the U.S. Fifth Fleet and faces Shi'ite giant Iran on the other side of the Gulf. Iran has denied Bahraini government accusations that it has incited the protests. REUTERS
Investors to tread with caution this year
by Millet Enriquez 04:47 AM Jan 02, 2012
SINGAPORE - Investors are likely to tread 2012 with caution as growth prospects in the United States, the euro zone and China remain uncertain.
Volatility will likely rule the day in the first six months before markets find some clarity about the euro zone in the second half of the year.
"Europe has a bearing on the rest of the world, and that is going to keep investors nervous on the sidelines and extremely risk averse from time to time," said Mr Arjuna Mahendran, managing director & head investment strategy - Asia, HSBC Private Bank.
Asian currencies, bonds and high-yielding stocks are three asset classes that investment experts are betting on for 2012. These, they say, will offer investors enough buffer to ride through another year of downturn.
Analysts say markets could correct another 10 to 15 per cent in 2012, and in the event of a euro zone collapse, could fall by as much as 30 to 35 per cent.
And the best strategy would be to adopt a selective and measured approach by including defensive and high-yielding stocks and bonds in one's portfolio.
These could make up 60 to 70 per cent of the portfolio, while the rest could be invested in Asian equities, gold and cash.
"The Asian bonds segment is still very attractive given the relatively high yields and the strong fundamentals that these Asian corporates and governments have. If you have a longer-term investment horizon of between 24 to 36 months, this is a good a time to buy as any to actually start investing in the market," said Mr Kelvin Tay, Chief Investment Strategist, UBS Wealth Management.
"You are not buying, hoping to make quick money. You are buying with a view of three years and I think with three years, it's enough for investors to be sufficiently rewarded," said Mr Vasu Menon, vice-president, Wealth Management Singapore, OCBC Bank.
Analysts are singling out Asia-ex Japan for its resilience and strong growth prospects, with a strategy to buy on sharp dips.
They say investors also need to have portions of their assets in US dollar, citing that in risk-averse scenario, the dollar will continue to strengthen especially in the first half of the year.
As for sectors, analysts are underweight on both the residential and commercial property but some are favouring Singapore banks for their attractive valuations.
In the meantime, investors can look out for some potential relief rally in this month, after a fairly quiet December: "You can use those opportunities, very short-term, to make some good investments which could grow in the very short-term. But you shouldn't be greedy, you should try and be disciplined," said HSBC's Mr Mahendran, adding that investors must take their profit once they reach the 5 to 10 per cent profit level.
Major Dubai companies may need bailouts, warns S&P
04:47 AM Dec 31, 2011
DUBAI - Some of Dubai's biggest companies will need state-funded bailouts next year if large-scale defaults are to be avoided, Standard & Poor's (S&P) has warned.
The credit rating agency said on Thursday that five conglomerates, including Dubai's financial services zone's investment arm and the main electricity and water company, will "struggle" to service their vast debt piles by themselves.
S&P said the five Dubai government-related entities (GREs) it rates are "up against significant risks from the weakening global economic outlook, the Arab Spring, and the volatile equity and bond markets. These risks have raised concerns as GREs face large debt maturities and refinancing needs in 2012".
The fears will compound the outlook for global banks, some of which have a high exposure to Dubai debt. The emirate's total debt load is about US$119.8 billion (S$155.7 billion), according to Bank of America Merrill Lynch. Some US$15 billion needs to be repaid or refinanced next year, the bank said.
The Dubai Electricity and Water Authority is at "very high" risk of needing extraordinary government support, S&P said. DIFC Investments, the investment arm of the Dubai International Financial Centre, is at "high" risk. The Jebel Ali Free Zone, a tax-free business hub set up in 1985 to attract foreign investment, is also "likely to struggle without some form of government support", according to S&P.
The government of Dubai has tried to contain global concerns about its financial stability since Dubai World, one of the emirate's flagship holding companies, shocked investors by asking for a debt standstill in Nov 2009.
In the event, Abu Dhabi's government stepped in with US$20 billion to help prop up Dubai World and Dubai Holding. S&P said: "Given the Dubai government's involvement in various debt restructurings in the past three years, we think the main issues at this stage are which GREs the government is likely to support and, equally important, whether support would be timely and sufficient to avoid a default." The Daily Telegraph
Rate of increase in private home prices continues to moderate in Q4 2011
Posted: 03 January 2012 0900 hrs
SINGAPORE: The rate of increase in private residential property prices continued to moderate for the 9th consecutive quarter since Q4 2009.
Flash estimates by the Urban Redevelopment Authority showed that the private homes index rose to 206.2 points in Q4 2011, up 0.2 per cent, compared to the 1.3 per cent increase in Q3.
Prices of non-landed private residential properties increased by 0.5 per cent in the Core Central region and by 0.6 per cent in the Outside Central region, in the quarter.
There was no change in prices in the Rest of the Central region.
But compared to Q3 figures, prices of non-landed private residential properties went up by 0.7 per cent in the Core Central region, 1.2 per cent in the Rest of the Central region and 2.1 per cent in the Outside Central region.
Economic slowdown notwithstanding, the government is determined to stem the gains that have seen 10 consecutive quarters of record high prices.
The latest cooling measures are aimed at foreign investors.
Chia Siew Chuin, director of research and advisory at Colliers International, said: "They have to pay additional buyers stamp duty of 10 per cent. In addition to that, if they should offload their assets in the next four years, again there is an additional seller stamp duty for them."
While the additional taxes may undermine the entire market - whether the property is local or foreign owned - the government may have even more ammunition to fire in its battle to halt the gains.
Nicholas Mak, executive director of research and consultancy at SLP International, said: "With the low interest rate environment and high liquidity available in the market, the Singapore government may need to intervene yet again to try to keep the local property market at a sustainable level."
In fact, even slower economic growth is no promise that prices will fall.
Colin Tan, research and consultancy head at Chesterton Suntec International, said: "So long as we have slow growth or at least positive growth, so long as employment holds up, I think we do not expect prices to correct anytime soon."
Analysts said developers have the staying power, so won't be forced to lower prices in the near term.
- CNA/cc/ms
Private home prices may have peaked
http://www.straitstimes.com/STI/STIMEDIA/image/20120104/privatehousing-alphonsuschern.jpg (http://www.straitstimes.com/STI/STIMEDIA/image/20120104/privatehousing-alphonsuscherne.jpg) Private home prices, which have been defying gravity for the past two years, finally seem to be close to their turning point, inching up by just a smidgen in the three months to December.
Flash estimates released by the Urban Redevelopment Authority (URA) on Tuesday showed prices rising just 0.2 per cent in the fourth quarter last year, down from a 1.3 per cent gain the quarter before.
Experts note that while this brings home prices to a new high, it is the smallest quarterly growth since the market bottomed out in the second quarter of 2009 and could signal that the market has peaked or is close to doing so.
A series of market cooling measures since September 2009 - most recently last month - global economic uncertainties and a boost in housing supply have provided a check on prices, they add.
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S'pore could see 2 years of sub-par growth: DPM Tharman
By Thomas Cho | Posted: 03 January 2012 1326 hrs
SINGAPORE: Singapore's economy is expected to enter a phase of slower growth.
Deputy Prime Minister Tharman Shanmugaratnam said this is due to the recession in Europe and economic weakness in the US.
He added that the expected slowdown may last for at least two years.
Mr Tharman was speaking at the sidelines of a national productivity event on Tuesday after advance estimates released earlier showed that the Singapore economy grew by 3.6 per cent on-year in the fourth quarter of 2011.
Rather than introducing short-term fiscal measures, Mr Tharman said the government will help companies and workers to upgrade for the long-term with more intensive schemes.
And this will be a key topic that will be addressed in the upcoming Budget.
"It may not be a slowdown for just one year. My sense is that this is going to be an environment of slow growth for some time, for at least two years I would say we'll see sub-par growth," said Mr Tharman.
"So it means that we will focus our minds on preparing for the upgrading of the economy. Upgrading not just to get around a one year slowdown but upgrading so as to get beyond what we are doing into new products, new services, new quality of jobs. That's a comprehensive effort across the economy and the government is focusing its mind on it," he added.
- CNA/cc
Euro eases losses as debt worries recede
Posted: 04 January 2012 0714 hrs
NEW YORK: The euro erased some of its recent losses against the dollar on Tuesday, as solid European manufacturing data helped put concerns about debt on the back burner, at least for a time.
"The dollar got the new year off to a broadly weaker start as positive manufacturing data from China and Europe helped fan investor appetite for risky assets," said analysts at Travelex.
The European single currency rose sharply to $1.3051 from $1.2934 late Monday.
It hit a 15-month low last week at $1.2858 on eurozone debt crisis concerns.
"It comes as little surprise then that today's rally in the stock markets has coincided with a technical bounce on the EUR/USD," said David Morrison of Global Forex Trading.
"But with the debt crisis still ongoing and more sovereign downgrades looming, the euro is likely to face further headwinds in the months ahead."
The dollar hit 76.68 yen, slightly weaker than the 76.90 yen seen the day before and 0.9320 Swiss francs versus 0.8337.
The pound strengthened to $1.5646 versus $1.5514.
Looking back.....old report. Factors still apply??
A macro outlook on the Singapore property market
May 23, 2011
Despite a number of cooling measures from the government in the past year, the Singapore property market continues to be strong, hitting all-time high in prices. A recent prime condo traded at new record high of $5,842psf.
This resilience is/was due to both domestic and global factors:
1. Bullish contradictions in economic and social policies in the form of very aggressive immigration policy, the more liberal approach to PR purchasing GCBs and prime properties in Sentosa, the relative slow increase in supply especially in HDB public housing and the mark up of prices in new HDB flats. These domestic factors provided strong underlying support and the base to the uptrend in property prices across the board.
2. Global inflation from aggressive monetary policy by central banks led by the US Fed and China resulting in capital flows into commodities and other hard assets including properties. Singapore with its open economy inevitably becomes a recipient of these fluid global flows, part of which find its way into the local property market.
3. The huge phenomenal increase in the number of Asian high net worth individuals especially from China and India, who look to diversify their risk and investments through private banking centres like Singapore and Hongkong, thereby parking some of their funds in local properties.
Given the landmark political election in Singapore, it is highly likely that the domestic bullish contradictions in economic and social policies will be addressed. Aggressive immigration will likely be much moderated, a more stringent approach towards foreigners and PR purchasing properties may be
considered and HDB public housing pricing policies toward better affordability for Singaporeans will be addressed to help its citizens cope with high costs of living. These likely forthcoming measures will have dampening effects on local property prices.
However, the global factors will continue to be very bullish and mitigate the bearish effects until such time when the US Fed decides to reverse its extremely loose monetary policy.
It may be instructional for policy makers and Singaporeans to study the history of the formation of the huge and long Japanese property bubble, its burst (20 years and still going on) and its after effects and learn a few lessons:
1. Big property bubbles do not benefit citizens in the long run, instead they may be harmful. While the party of paper wealth creation is ongoing, things all look very good but they are hollow and superficial. A relative massive wealth distribution is part of the many problems (eg low productivity), where a few savvy players gained much when the game is over with many others having purchased at or near the peak and an indebted generation suffering serious financial consequences subsequently.
2. The bigger and longer the bubble, more likely the bigger and the longer the burst.
3. The peak of the bubble will usually coincide with high costs of living, high economic growth, with the timing being near the peak of the total population with insane valuations. sounds familiar?
If Singapore’s peak population is 6.5 million, then maybe we may want to consider stretching the time to reach this peak as long as possible (over 30 to 50 years) to sustain gradual positive economic and social development for its citizens. More haste, more mistakes. May I also add more aggression likely more volatility.
Interest rates predictions: When will the UK bank rate rise again?
Last updated at 1:59 PM on 30th December
The MPC voted to 'hold' (http://www.thisismoney.co.uk/money/news/article-2059806/Rates-held-0-5-cent-eurozone-crisis-threatens-plunge-UK-recession.html)again in December and a rise looks a long way off - the range of predictions are 2013 to 2016.
The grim new forecasts for the economy (http://www.thisismoney.co.uk/money/news/article-2067568/Mini-Budget-The-UK-economy-pictures--chart-recovery-far-expect-next.html)in November's mini-Budget made rate rises even less likely. And the worsening state of the eurozone crisis - which will damage the UK economy - continues to push out predictions of the first UK bank rate rise.
There was a particularly sharp move in mid-December as markets appeared to all but give up hope of a rate rise before the middle of the decade.
The prospect of low rates for years exists despite inflation remaining painfully high - it hit a peak of 5.2% (11 October) (http://www.thisismoney.co.uk/money/news/article-2050409/Cost-living-shock-UK-households-rate-inflation-soars-5-2.html)but is slowly easing back, down to 4.8% in the latest figures (13 December) (http://www.thisismoney.co.uk/money/news/article-2073508/Rate-inflation-falls-4-8-cent-sign-Bank-free-expand-QE.html). Policymakers are adamant it will fall back further next year, and be under the 2% target by 2013.
The committee has dismissed inflation concerns and is more focused on heading off a double-dip recession. At its October meeting, it opted to restart its quantitative easing programme - an electronic form of money printing. The MPC minutes revealed members talked about £100billion of QE before agreeing on £75billion.
The vote was 9-0 in in favour of holding rates in December (http://www.thisismoney.co.uk/money/news/article-2076978/Bank-England-rate-setters-stand-ready-pull-trigger-QE-year.html) - the fifth month in a row of unanimity. Members had been locked at a 7-2 vote for two months before that and it was 6-3 earlier this year when a rate rise looked a possibility.
That shift in voting reflects the remarkable and rapid movement in forecasts for rates last summer, with predictions for the first rise, week by week, taking huge strides into the future:
- In March/April, a rise was seen as imminent;
- In June, the forecast was for a hike in July/August 2012;
- By early August, futures markets earmarked early 2013 for the first increase;
- By October, the market priced early 2014 for a rate rise.
- By November, the market priced early 2015 for a rate rise.
- By early December, it suggested late 2015.
Market predictions
So when will the MPC make the first move? Interest rate futures have seen a big shift in recent months. At the extremes, they pointed to an immediate rise in spring, but by the end of the year indicated 2015 for the first increase.
Today (30 December), markets pencil in the first hike for November 2015.
But these forecasts are wildly volatile - as we've constantly warned - and should be treated with caution.
Economists, predict the first rate rise for mid-2013, according to a poll by Reuters (1 November - read the Reuters story (http://uk.reuters.com/article/2011/11/02/uk-boe-rates-poll-idUKTRE7A14LN20111102)), although this opinion is likely to have since shifted.
Important note: Markets, economists and other experts haven't had a great record of making the right calls in recent years: 2010 predictions (http://www.thisismoney.co.uk/money/news/article-1607881/savings-and-banking/article.html?in_article_id=498660&in_page_id=7) | 2008 predictions (http://www.thisismoney.co.uk/money/news/article-1607881/news/article.html?in_article_id=454163&in_page_id=2). This is Money has always advocated caution with predictions, including our own! There's no guarantee that those who have made correct calls in the past will make them in the future. [More: Whether to trust predictions] (http://www.thisismoney.co.uk/money/news/article-1607881/30-second-guides/article.html?in_article_id=497389&in_page_id=53611).
Enlarge http://i.dailymail.co.uk/i/pix/2011/12/19/article-1607881-0F10509600000578-235_468x463.jpg (http://i.dailymail.co.uk/i/pix/2011/12/19/article-1607881-0F10509600000578-235_468x463_popup.jpg)Base rate rise: Leading economists' expectations for base rate (source: HM Treasury - December 2011)
Money market forecast for rates: 30 November
Enlarge http://i.dailymail.co.uk/i/pix/2011/11/30/article-1607881-0F00D9DF00000578-902_468x271.jpg (http://i.dailymail.co.uk/i/pix/2011/11/30/article-1607881-0F00D9DF00000578-902_468x271_popup.jpg)Market forecast: This 'SONIA' curve of swap rates shows how markets expect rates to rise - SOURCE: BLOOMBERG
This is Money: View from the Editor
Regular readers of this page will know we've warned for several years that rates would remain low for a very long spell - and that readers should beware of false dawns on rising rates; we've seen many (see below).
You talking to yourself for very long already. Way to go.
You talking to yourself for very long already. Way to go.
Forest gump.....
3-month SIBOR rate shot up to an astonishing 9.5% in early 1998
Or that it went to a low of 0.35% sep 2011?
loan amt=$1 million
tenor = 25yrs
interest rate 1.5% mthly instalment $4k
Interest rate 5% mthly instalment $6k
interest rate 9% mthly instalment $8k
top up if rent cant cover
New home sales account for 46% market share
Jan 25, 2012 - PropertyGuru.com.sg
Singapore’s property sector is changing, with new home sales by developers taking up an increasing share of the private housing market.
According to caveats lodged with the Urban Redevelopment Authority (URA), primary market sales and those of executive condos (ECs) accounted for 46 percent of all property deals last year, the highest level since 2003.
The remaining 54 percent were made up of secondary market transactions, comprising both subsale and resale homes, totalling 17,405 units.
Subsales are sales prior to completion of the units, and are basically projects that have yet to receive the Certificate of Statutory Completion (CSC), while resales refer to sales of existing residential properties with CSC.
Property experts said secondary sales have gradually ceded its market share, as the government has rolled out a large supply of land in recent years to curb rising home prices.
The recovery of the collective sales market in 2010 also brought more property launches and a host of choices for buyers, resulting in many consumers flocking to this sector.
The secondary market accounted for 71 percent of the property market in 2008, as property developers held back on new launches. Since then, its proportion has been decreasing to stand at 61 percent in 2010.
Ong Teck Hui, Head of Research and Consultancy at Credo Real Estate, said the cooling measures have also changed the landscape of the market. For example, the seller’s stamp duty of up to 16 percent could have driven some property investors to look for new home acquisitions instead, as they can reduce their capital exposure due to progress payments.
Collective sales fever goes down: Khaw
Jan 25, 2012 - PropertyGuru.com.sg
Singapore’s property market has showed signs of stabilising and the collective sales fever is now receding, according to National Development Minister Khaw Boon Wan in his latest blog post.
“En-bloc activities reached feverish heights in 2006 and 2007, when some 10,200 housing units were sold for redevelopment. This added stress to an already hot property market as housing units were removed from the market, and displaced owners or tenants had to look for replacement properties to stay and invest in, pushing up property and rental prices,” he wrote.
He noted that en-bloc has its pluses and minuses and it can “rejuvenate the city by removing old and dilapidated buildings.”
“But if done excessively, en-bloc activities can waste resources, if relatively new buildings are prematurely demolished.”
Not everyone favours living through an en-bloc exercise, said Mr Khaw.
“Some owners resent losing the home and community they have grown to be comfortable in. In some instances, neighbours have turned against each other in the lead-up to obtaining the requisite 80 percent signatories.”
Last year, the total number of properties sold in the en-bloc market reached 1,400 units, significantly lower compared to the peak in 2007.
“It looks like the en-bloc fever is receding. If so, it signals the increasing stabilisation of our property market,” said Mr Khaw.
“This will be a good development for Singapore in the Year of the Dragon.”
US to step up trade pressure on China
Posted: 25 January 2012 1132 hrs
WASHINGTON: US President Barack Obama said Tuesday he would step up pressure on China and other countries that unfairly subsidize exports and ship pirated goods to the United States.
In an ambitious push to rebuild the US manufacturing sector, Obama said his administration would launch a new unit dedicated to stopping unfair trade practices by rival economies.
"I will not stand by when our competitors don't play by the rules," Obama said in his annual State of the Union address.
"It's not right when another country lets our movies, music, and software be pirated. It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized."
Obama told Congress he would establish a new Trade Enforcement Unit "charged with investigating unfair trading practices in countries like China."
"There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders," he added.
The threat of a tougher crackdown on unfair trade came as part of a new White House push to shore up American manufacturing and create jobs in the country.
Obama said his administration had already stepped up trade actions China and other countries to protect US goods producers.
In recent months the administration has launched investigations or sought to implement protective tariffs on wind towers, solar cells, a wide range of steel products, garlic, and other goods from China.
Meanwhile the government has attacked Chinese barriers to US exports like luxury cars and chicken meat.
"Over a thousand Americans are working today because we stopped a surge in Chinese tires," the president said.
But Obama said more was needed to rebuild the country's manufacturing sector, which employs just nine percent of the workforce.
"We can't bring back every job that's left our shores. But right now, it's getting more expensive to do business in places like China. Meanwhile, America is more productive," he said.
"We have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it."
He called on Congress to "make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia.
"Our workers are the most productive on Earth, and if the playing field is level, I promise you -- America will always win."
John Frisbie, president of the US-China Business Council, said they welcomed Obama's focus on trade relations with China.
"USCBC has long advocated a well-coordinated interagency approach to the commercial relationship with China, directed out of the White House. We look forward to hearing more details about how this new initiative will be structured," he said in a statement.
But he criticized Obama's claim of benefits for the country by restricting imports of Chinese tires.
"We disagree that the tariffs on imports of low-end Chinese tires have had any positive effect on American jobs or the American economy. All evidence suggests that the beneficiaries have been other low-end tire producers in Asia and Mexico," he said.
"Let's build on those strengths and not repeat tariff actions that hurt American consumers without first doing a fuller investigation of the full impact of the tire tariffs."
Japan sees first annual trade deficit in 31 years
Posted: 25 January 2012 0823 hrs
TOKYO: Japan announced its first annual trade deficit for more than 30 years on Wednesday after the March quake-tsunami and strong yen hit exports in 2011, and high fuel costs pushed up import bills.
The first calendar-year deficit in goods since 1980 came to 2.49 trillion yen ($32 billion), the finance ministry said.
Imports were up 12.0 percent on 2010, it said, particularly crude oil and liquefied natural gas (LNG), while exports fell 2.7 percent, led by automobiles, semiconductors and other components.
After rising from the ashes of World War II Japan established itself as a trading nation, enjoying enormous trade surpluses with its competitive cars, electronics and other exports.
But energy imports to the resource-poor country have soared in the wake of the Fukushima nuclear crisis with atomic power stations being taken offline and fossil fuel plants used to make up the difference.
The earthquake and tsunami that triggered the disaster also disrupted manufacturing supply chains across the country, while the eurozone debt crisis slowed the global economy and sent traders scurrying into the safety of the yen, driving up its value and reducing Japanese exporters' income.
In total, crude oil imports jumped 21.3 percent by value, LNG was up 37.5 percent and petroleum products up 39.5 percent, while automobile exports fell 10.6 percent, with electronic parts down 14.2 percent.
The deficit with China, Japan's biggest trading partner, was more than five times that of 2010. The country recorded a trade surplus with the European Union, but it was down 31.3 percent on 2010.
Japan posted a deficit of 10.8 trillion yen with the Middle East alone, which provides almost all its oil, and a deficit of 3.1 trillion yen with Oceania, the source of large quantities of raw materials, especially Australia.
Japan's last calendar-year trade deficit came in 1980, when the nation was reeling from the second oil crisis and imports exceeded exports by 2.6 trillion yen -- still a record.
"It was the worst year for Japan's trade since 1980. It was caused by slumps in exports and rises in imports due to the higher need for alternative energy," said Satoshi Osanai, economist at Daiwa Institute of Research.
"Trade went in bad directions both ways," he said, noting that export falls had been worse in the 2008 financial turmoil that followed the Lehman Brothers collapse, when Japan recorded a trade deficit over the fiscal year.
Japanese demand for oil and other fuel is unlikely to decrease in the near future and Osanai pointed out that resource prices remained high, "inflicting a big negative impact".
The strong yen, which hit repeated post-World War II highs against the dollar in 2011 and remains close to its peak, contributes to lowering import costs but its negative effect on exports is larger.
UBS economist Daiju Aoki warned Japan was on course to record repeated trade deficits.
"As the nation ages its production capability declines, hurting export power," he said.
"Japan will come to run trade deficits over the long term. It may return to figures in the black in 2012 or 2013 but the trend of suffering deficits could start."
Toyota Australia to axe 350 jobs
Posted: 23 January 2012 1541 hrs
SYDNEY: The Australian arm of Japanese auto giant Toyota announced Monday that it would sack 350 workers at its southern carmaking plant, citing "unprecedented" pressure on its operations.
Toyota Australia chief Max Yasuda said the firm would "immediately adjust its workforce" at its Altona auto plant, describing it as a necessary step given "current and anticipated" conditions.
"Toyota Australia is facing severe operating conditions resulting in unsustainable financial returns due to factors including the strong Australian currency, reduced cost competitiveness and volume decline, especially in export markets," Yasuda said.
The cuts represent about 7.5 percent of the plant's workforce.
Demand had failed to recover from the global downturn, with production slipping a staggering 36 percent since 2007, when 149,000 cars were made, to just 95,000 forecast for 2012, he added.
"What we assumed was a temporary circumstance has turned into a permanent situation," said Yasuda.
The job cuts come less than a year after Toyota scaled back production by 20 percent, putting staff on half-shifts, after an earthquake and tsunami devastated Japan.
Fellow car giant Ford shed 240 Australian jobs following the March 11 disaster, also citing a slump in demand for its popular large sedans.
Canberra pledged Aus$34 (US$36) million to help prop up production at Ford's operations earlier this month, saying it was vital to both Toyota and Holden, Australia's third major auto firm, that it stay afloat.
Manufacturing Minister Kim Carr said the latest layoffs were an "unfortunate consequence of the high dollar and global uncertainty," with Toyota shipping about 70 percent of its Australian production offshore, mostly to the Middle East.
"The harsh reality of the continuing strong Australian dollar means that Toyota's export markets are under severe pressure and they are struggling to sell enough cars to keep the Altona line at full capacity," Carr said.
"Ultimately, companies have to take tough decisions based on commercial realities to ensure that their business model remains sustainable, and that is what Toyota has done today."
The government extended a multi-billion-dollar lifeline to the nation's ailing auto industry at the height of the global financial crisis, after Ford cut 450 jobs.
It also offered Holden an Aus$200 million credit line in 2009 after US parent General Motors filed for bankruptcy, handing 60 percent of the company to Washington.
The auto industry directly employs some 46,000 people in Australia and supports another 230,000 jobs, with 219,376 cars made in the country last year and 1.01 million vehicles sold
FTSE LIVE: Stocks slide as 0.2% GDP fall sparks recession fears; US Fed eyed for rate signals
By THIS IS MONEY REPORTERS
Last updated at 2:27 PM on 25th January 2012
14.20: The FTSE 100 is 32,9 points in the red at 5,719 as investors mull today's news of a contraction in UK economic output.
'A drop of 0.2% in GDP is not exactly dire, but with sentiment still so uncertain it provided an unfortunate surprise,' Chris Beauchamp, Market Analyst, IG Index.
Meanwhile, Simon Smith, chief economist at FXPro, believes recent comments by the Bank of England Mervyn King and today's minutes of the latest rate-setting meeting suggest the central bank may be leaning towards more quantitative easing.
Rate watch: The US Federal Reserve is set to release interest rate forecasts to markets following its latest meeting
'Even if GDP expands in the current quarter (and we escape a technical recession), for most it will feel like recessionary conditions, especially with credit conditions remaining tight,' he added.
Futures trading indicates a lower open on the Dow Jones as strong quarterly results from consumer bellwether Apple are offset by caution ahead of the U.S. Fed's comments on interest rates later.
£100 for a tank of diesel and record petrol prices predicted as Coryton refinery goes bankrupt
By RAY MASSEY
Last updated at 8:14 AM on 25th January 2012
Motorists are facing the threat of fuel shortages and £100 fill-ups after one of Britain’s biggest refineries went bust yesterday.
As well as posing a serious risk to forecourt supplies, retailers say it could see petrol prices soaring to record highs as speculators and profiteers capitalise on the disruption.
Diesel prices in particular are set to rise by up to 3p to a record £1.45 a litre, they warn. That would mean more than £100 to fill up a typical family saloon with a 70-litre tank.
MPs and unions joined the chorus warning of shortages while forecourt bosses said there was a risk of parts of the South East ‘grinding to a halt’ after supplies from the giant Coryton refinery in Essex were suspended.
Crisis looms: MPs and forecourt bosses warned parts of the South East could 'grind to a halt' amid reports production had stopped at the giant Coryton refinery in Essex, pictured
No petrol, diesel or other products, including bitumen for road building, were leaving the site yesterday.
The action came when the refinery’s owner ran out of cash and was unable to extend its credit facilities. Administrator PricewaterhouseCoopers said it had no idea when supplies would resume but was ‘talking to customers’.
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Coryton supplies around 10 per cent of the UK’s petrol and diesel, and 20 per cent of the total in the South East. The warnings came as Coryton’s Swiss-parent company Petroplus filed for bankruptcy with the threat to up to 1,000 UK jobs at the former BP-owned refinery.
A separate strike by more than 80 tanker drivers at the South Killingholme refinery in Lincolnshire, which supplies around 340 Jet filling stations, is exacerbating supply concerns.
But energy ministers and oil industry bosses said they were doing their best to make up the shortfall from the UK’s seven remaining refineries and by buying in from abroad. A sudden rush to the pumps, however, could trigger filling stations running dry.
Will the Fed's Rate Cut Help? The Japan Lesson
By MICHAEL SCHUMAN AND COCO MASTERS Thursday, Oct. 30, 2008
The U.S. Federal Reserve cut its benchmark interest rate by 50 basis points to 1% on Wednesday, continuing an aggressive effort to fend off a deep recession. The rate now stands at the lowest level since 2004 — and central bankers signaled that they may resort to more cuts in the months ahead.
The hope is that further rate cuts will stabilize volatile financial markets and accelerate the slowing economy. But as the rate heads toward zero, the Fed is rapidly running out of room for reductions. Not only that, economists and analysts are questioning whether rate cuts produce any bang for the buck under the current extraordinary circumstances.
In a normal cyclical slowdown, lowering interest rates encourages fresh business activity by reducing the cost of borrowing from banks. With more borrowing comes more investment, more jobs and more growth. But these are far from ordinary times. Banks, already burdened with bad consumer and commercial debts, are desperate to clean up their balance sheets and avoid risk — they are not eager to take on more risk by issuing new loans against the backdrop of a deteriorating business climate. American consumers, too, are trying to reduce household debt, so borrowing more money for a new car or to remodel the kitchen is not a high priority. And without greater consumer spending, most companies have little need for new loans to expand operations. "Interest rate cuts don't matter in this environment," says Kirby Daley, senior strategist at financial-services firm Newedge Group in Hong Kong. "It doesn't get at the heart of the issue."
Japan discovered the futility of ultra-low interest rates in the 1990s, when the Bank of Japan (BOJ) tried to prod the country out of a protracted recession by lowering the rate all the way to zero in 1999 — where it stayed, with one brief interlude, until 2006. Despite the fact that lenders could essentially get free money from the government, Japanese banks were busy recapitalizing and paring down mountains of bad assets, and had little interest in doling out more loans in a moribund economy. The zero-rate policy did little to stimulate growth.
Analysts in Japan say the U.S. faces a similar situation today. The Fed's recent rate cut "is better than doing nothing, but it will unlikely work so much as it did in the past," says Masaaki Kanno, chief economist at JPMorgan Securities in Tokyo. Hiromichi Shirakawa, chief economist at Credit Suisse in Tokyo, believes that the Fed may bring its rates down to zero by the middle of 2009, as the U.S. economy slows in coming quarters. "Will it be effective or stimulative? My answer is not necessarily so," he says.
Still, central bankers around the world, in an effort to ward off the worst effects of a global economic slowdown, appear to be engaging in a rate race to the bottom. China on Oct. 29 cut its interest rates for the third time in six weeks, and the BOJ is expected to cut its key policy rate below the current 0.5% soon. Though rates in Japan are already almost nil, Tokyo's hand is to an extent being forced by Washington. That's because as U.S. rates fall, fewer investors are willing to hold U.S. dollar debt, which undermines the value of American currency vs. the yen — and a stronger yen is bad news for Japan. It makes the country's exports more expensive, curtailing economic growth. Credit Suisse's Shirakawa believes the chances of the BOJ returning to a zero rate is less than 50%, "because they know that a return to a zero-rate policy doesn't help the economy much." But, he says, "they know that the risk is that the yen appreciation will be quite significant if they don't move."
According to Japanese analysts, U.S. Federal Reserve Chairman Ben Bernanke may decide that it's best to lower rates again, to below 1%, in the coming months as the economy weakens. Even though ultra-low rates may have little immediate economic impact, they help to stabilize the financial sector as well as stock markets. Equities become more attractive when interest earned by stashing cash in the bank is lower than the inflation rate. "While the BOJ's zero-rate policy did not work as expected in terms of reviving the economy, it contributed to preventing the financial system from collapsing," says JPMorgan's Kanno. The U.S. may soon find itself in a strange, zenlike economic state in which zero is, in fact, better than nothing.
This article is 3.5 years old
This article is 3.5 years old
so? on hindsight.
wht lesson learnt
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