Luxury home prices to fall 32% by 2010: Nomura

[mr funny]

Published March 27, 2008

Luxury home prices to fall 32% by 2010: Nomura

It says sector has risen too fast relative to rental expectations

By UMA SHANKARI


TAKING a bearish stance on Singapore's residential sector, Nomura Research expects luxury home prices to slide a staggering 32.3 per cent from their 2007 peak between now and 2010.

Average prices in the luxury segment will fall 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010 as rental growth slows and yields are reappraised, Nomura says in a report.

Luxury residential prices have risen too fast relative to rental expectations, the report says.

'Sentiment in the market has deteriorated rapidly - asset prices look to have fallen by about 5 per cent over the first two months of the year, with falls of up to 15 per cent in some non-prime locations,' Nomura analysts Tony Darwell and Daniel Raats say.

'We see asset prices being driven lower by marginal speculative sellers amid low transaction volumes and higher unsold pre-sale inventories.'

These factors will add up to a major correction - but not a crash - with a 2010 average price of $1,847 per square foot, marginally higher than $1,811 psf in the 1996 peak and 22.4 per cent above the 2001 peak of $1,508 psf. The mass market will not be immune from falling prices amid rising new supply, Nomura believes. 'Mass residential prices appear on a firmer footing, supported by rental growth and prevailing yields,' its analysts say.

'However, the advent of new supply and the resultant increase in rental availability in prime locations is likely to see demand that was once displaced to 'non-core mass market' locations returning to prime districts, hurting non-core rents and ultimately mass market prices.'

As a result, mass residential prices will remain flat in 2008, climbing just 0.5 per cent, Nomura believes. And as new supply is completed in the prime districts, it expects prices to fall 10.3 per cent in 2009 and 10.1 per cent in 2010 - a total fall of some 19.4 per cent from the 2008 peak.

In view of this, the firm is maintaining its bearish stance on Singapore residential property and says the market will move swiftly from a 'state of denial' to the realities on the ground.

Residential rents are likely to remain firm in the short term, given the low vacancy rate, Nomura reckons. But rising new supply is likely to cap rental gains from the second half of this year. Nomura forecasts that the vacancy rate will rise from 5.7 per cent at end-2007 to 8.2 per cent at end-2010.

Average rents are expected to peak in 2008, rising five per cent year-on-year to $3.64 psf per month, after rises of 14.1 per cent year-on-year in 2006 and 41.2 per cent year-on-year in 2007, Nomura says. But with supply on the rise, rents will ease 10.3 per cent year-on-year in 2009 and 15.7 per cent year-on-year in 2010.

http://www.businesstimes.com.sg/mnt/media/image/launched/2008-03-27/BT_IMAGES_OUTLOOK27.jpg

[Unregistered]

Absolutely agree with both hands up!

Any detractors out there?

Maybe they are all busy looking for property agents now to rid off their speculative property investments.

[Unregistered]

Absolutely agree with both hands up!

Any detractors out there?

Maybe they are all busy looking for property agents now to rid off their speculative property investments.
Absolutely agree with the report below with both hands up!

Any detractors out there?

Maybe they are all busy looking to buy something fast.

Published March 27, 2008

Home prices surpass 1996 levels

Even if the US sub-prime problem drags on, mid and mass market homes would still see price increases this year, says HAN HUAN MEI


RESIDENTIAL property prices in Singapore saw phenomenal growth in 2006-7. Robust economic growth of about 7-8 per cent in the past three years, a growing number of millionaires and anticipated spinoffs from the integrated resorts ignited the high-end segment before finally filtering down to the mid and mass markets in the second quarter of 2007.

By the end of 2007, prices in dollar terms had surpassed the levels in 1996, although the Urban Redevelopment Authority (URA) private residential price index had yet to hit the peak of 181.4 points achieved in Q2 1996. This is especially the case for new projects. For example, units in luxury projects like Cliveden at Grange, Hilltops and The Orchard Residences were selling at above $3,500 per sq ft compared with those in Ardmore Park, which were selling above $1,800 psf in 1996.

In the mid-tier segment, units in projects like Aalto, Jardin and Zenith were selling above $1,600 psf in 2007, compared to 1 King Albert Park and Trellis Tower, which were sold at $900-$1,100 psf in 1996. As for mass market projects, 2007 saw units in projects like Fontaine Parry, Hillvista and Oasis Garden being sold at $850-$1,000 psf while in 1996, units in Hazel Park, Ballota Park and Sherwood Condominium were sold at $680 psf-$850 psf.

In the last two years, the URA price index showed that prices of landed homes rose by 32 per cent while those of non-landed homes (apartments and condominiums) rose by 47 per cent. Furthermore, within the non-landed segment, prices of uncompleted homes (mostly new launches and developers' sales) grew by 53 per cent whereas those of completed homes (existing stock, resale transactions) rose 45 per cent.

Based on URA price indices by region for uncompleted non-landed properties, the Core Central Region (CCR, districts 9, 10, 11 and Downtown Core and Sentosa) took the lead with a 67 per cent growth followed by the Rest of Central Region (RCR, Central Region outside the core region) with a 41 per cent growth and the Outside Central Region (OCR), with a 35 per cent growth.

For non-landed homes in the resale market, the price increase was 45 per cent over the last two years, driven mostly by transactions in the CCR. Prices there rose by 43 per cent, followed by 31 per cent for those in the RCR and 28 per cent for those in the OCR.

A comparison of median prices in Q4 2007 showed an interesting geographical shift across the island from Q4 2006. For simplicity, we have confined our analysis to non-landed homes.

For the new homes sold as at Q4 2006, the highest price band was $1,500-$2,000 psf for properties in districts 1, 2 and 4. Examples of new projects in these districts in 2006 would include Marina Bay Residences, Lumiere, and The Coast and The Oceanfront at Sentosa Cove.

Properties in the lowest band - below $700 psf - were found in districts 5, 8, 12, 13, 14, 16, 17, 19, 22, 23, 6 and 27. Examples of new launches at that time included Ferraria Park, One St Michael's, The Infiniti, The Quartz and The Stellar. Most of these are 99-year leasehold projects catering to the mass market. However, by Q4 2007, the highest price band moved up to over $3,000 psf for properties in districts 9 and 10 for projects like 8 Napier, Cliveden At Grange, Scotts Square and The Orchard Residences. Similarly, the lowest band was raised to $700 psf to $1,000 psf for projects in districts 3, 5, 8, 12, 13, 17, 19 and 22, reflective of prices of Casa Fortuna, Fontaine Parry, Oasis Garden and The Lakeshore.

As for properties in the popular East Coast area, their prices have moved up from $700-$1,000 psf to $1,000-$1,500 psf for district 15. In district 16, they moved from below $700 psf to $700-$1,000 psf over the same period.

In the resale market, there was a lag in price growth because this sector involved basically older properties which lacked the aesthetic appeal and quality of new properties. As at Q4 2006, among the properties that were sold, only those in district 9 made it to the top of the range for the price band of $1,000-$1,500 psf. These included properties like Aspen Heights, Cairnhill Crest, The Claymore and The Pier At Robertson. However, a year on, the price band moved up to $1,500-$2,000 psf. Transactions in district 10 joined this category, involving units in Ardmore Park, Draycott Eight and The Tessarina.

With the exception of districts 4, 9, 10 and 11, resale transactions in the rest of the island were largely below $700 psf in Q4 2006, the price band for mass market properties. Similarly, in Q4 2007, property prices in the more popular districts (1, 2, 3, 5, 7, 8, 12, 15, 16 and 21) moved up to the $700-$1,000 psf price band.

Notably, prices of properties in districts 1 and 3 as well as 11 moved up to the $1,000-$1,500 psf band in Q4 2007 from previous price bands of below $700 psf and $700-$1,000 psf respectively.

Last year ended on a cautious note as the sub-prime mortgage crisis in the US had a somewhat negative effect on global financial markets and the economy. Most home buyers have been infected by the current mood and have turned cautious. Should the US enter a mild recession in the first six months of 2008 and the sub-prime problems clear up so that sentiment improves after June this year, the private residential market should continue where it left off in the third quarter of 2007.

Luxury prices would remain firm, mid-market homes would be expected to rise by 5 to 10 per cent while mass market home prices could grow by 10 to 15 per cent in 2008, once the situation becomes more positive.

In the worst case scenario, where the US sub-prime problem drags on to the end of the year and beyond, prices of luxury properties may ease marginally, while mid- and mass market homes would still see price increases, albeit at one to 2 per cent and 3 to 5 per cent respectively.

Han Huan Mei is an associate director, CBRE Research, CB Richard Ellis.

[Unregistered]

Absolutely agree with both hands up!

Any detractors out there?

Maybe they are all busy looking for property agents now to rid off their speculative property investments.

So the sour grape has finally found one article to make him so happy.

What about the others that appeared in the Business Times today? e.g.

1. Home prices surpass 1996 levels

2. Prices and rentals of landed homes set to rise

3. Residential rents seen rising further

4. HDB resale buzz set to continue

5. Retail rents unlikely to soften

6. Shophouses star at auctions

Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.

[Unregistered]

Published March 27, 2008

Luxury home prices to fall 32% by 2010: Nomura

It says sector has risen too fast relative to rental expectations

By UMA SHANKARI


TAKING a bearish stance on Singapore's residential sector, Nomura Research expects luxury home prices to slide a staggering 32.3 per cent from their 2007 peak between now and 2010.

Average prices in the luxury segment will fall 16.9 per cent in 2008, 10.3 per cent in 2009 and 9.3 per cent in 2010 as rental growth slows and yields are reappraised, Nomura says in a report.

Luxury residential prices have risen too fast relative to rental expectations, the report says.

'Sentiment in the market has deteriorated rapidly - asset prices look to have fallen by about 5 per cent over the first two months of the year, with falls of up to 15 per cent in some non-prime locations,' Nomura analysts Tony Darwell and Daniel Raats say.

'We see asset prices being driven lower by marginal speculative sellers amid low transaction volumes and higher unsold pre-sale inventories.'

These factors will add up to a major correction - but not a crash - with a 2010 average price of $1,847 per square foot, marginally higher than $1,811 psf in the 1996 peak and 22.4 per cent above the 2001 peak of $1,508 psf. The mass market will not be immune from falling prices amid rising new supply, Nomura believes. 'Mass residential prices appear on a firmer footing, supported by rental growth and prevailing yields,' its analysts say.

'However, the advent of new supply and the resultant increase in rental availability in prime locations is likely to see demand that was once displaced to 'non-core mass market' locations returning to prime districts, hurting non-core rents and ultimately mass market prices.'

As a result, mass residential prices will remain flat in 2008, climbing just 0.5 per cent, Nomura believes. And as new supply is completed in the prime districts, it expects prices to fall 10.3 per cent in 2009 and 10.1 per cent in 2010 - a total fall of some 19.4 per cent from the 2008 peak.

In view of this, the firm is maintaining its bearish stance on Singapore residential property and says the market will move swiftly from a 'state of denial' to the realities on the ground.

Residential rents are likely to remain firm in the short term, given the low vacancy rate, Nomura reckons. But rising new supply is likely to cap rental gains from the second half of this year. Nomura forecasts that the vacancy rate will rise from 5.7 per cent at end-2007 to 8.2 per cent at end-2010.

Average rents are expected to peak in 2008, rising five per cent year-on-year to $3.64 psf per month, after rises of 14.1 per cent year-on-year in 2006 and 41.2 per cent year-on-year in 2007, Nomura says. But with supply on the rise, rents will ease 10.3 per cent year-on-year in 2009 and 15.7 per cent year-on-year in 2010.

http://www.businesstimes.com.sg/mnt/media/image/launched/2008-03-27/BT_IMAGES_OUTLOOK27.jpg

Well well well....whats so surprising? Any primary school student would have told this 6 months ago.
The rest of the market to follow....watch out for the official news in 6 months. Only then do speculators wake up.

[Unregistered]

So the sour grape has finally found one article to make him so happy.

What about the others that appeared in the Business Times today? e.g.

1. Home prices surpass 1996 levels

2. Prices and rentals of landed homes set to rise

3. Residential rents seen rising further

4. HDB resale buzz set to continue

5. Retail rents unlikely to soften

6. Shophouses star at auctions

Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.
Please list more but fact is that property market is sinking. You can yell and scream over housetops but the big hasn't struck yet. These are just minor shocks but the tsunami is coming and the waves will sweep you away. We will miss all your postings then.

[Unregistered]

So the sour grape has finally found one article to make him so happy.

What about the others that appeared in the Business Times today? e.g.

1. Home prices surpass 1996 levels

2. Prices and rentals of landed homes set to rise

3. Residential rents seen rising further

4. HDB resale buzz set to continue

5. Retail rents unlikely to soften

6. Shophouses star at auctions

Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.



KLB is definitely right here.
He is rich, he knows how rich people think, they see the future of spore that is why they invest here, they will not sell in 2010 like nomura said.
nobody bother about nomura report in spore as they are always on the wrong side. They are wrong again this time.

[Unregistered]

Well well well....whats so surprising? Any primary school student would have told this 6 months ago.
The rest of the market to follow....watch out for the official news in 6 months. Only then do speculators wake up.


Dear Uncle Sour Grapes,

I am sorry to hear that you will be disappointed once again after waiting for a correction in the last 18 months

yours truly,
primary school kid of Mr. Tan Koo Koo

[Unregistered]

Dear Uncle Sour Grapes,

I am sorry to hear that you will be disappointed once again after waiting for a correction in the last 18 months

yours truly,
primary school kid of Mr. Tan Koo Koo
Oh so many names of people saying this and that. But everyone can see what is happening. Tell them all to get more vocal. People may start believing. Hahaha.

[Unregistered]

Two groups of sour grapes. One missed the boat and one stuck and cannot get out. God save them both. Dont worry in 10 years the first group will be able to buy again. Dont miss the boat then. In 15 years the stuck ones would be able to sell. So just relax now and enjoy what you both are good at. Post Post Post!!!!!

[Unregistered]

So the sour grape has finally found one article to make him so happy.

What about the others that appeared in the Business Times today? e.g.

1. Home prices surpass 1996 levels

2. Prices and rentals of landed homes set to rise

3. Residential rents seen rising further

4. HDB resale buzz set to continue

5. Retail rents unlikely to soften

6. Shophouses star at auctions

Also, below is an excerpt from Business Times 29 Feb 2008 about Kwek Leng Beng's views:

On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. 'Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

'With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,' CDL said in its results statement.

The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. 'It will be a different Singapore altogether. Singapore is a hub. I've been harping on this. Nobody believed me until last year,' said Mr Kwek.

Wealthy investors are not stupid and they are not only good at entering a rising markets before anyone else, an even more important skill is to exit the falling market before anyone else. Only fools like you are talking about holding power. It got nothing to do with it.

[Unregistered]

Wealthy investors are not stupid and they are not only good at entering a rising markets before anyone else, an even more important skill is to exit the falling market before anyone else. Only fools like you are talking about holding power. It got nothing to do with it.
You are right. Fools keep holding to show their holding power and continue to hold even when market falls 50%. What a strategy. kikikikikiki...

[Unregistered]

KLB is definitely right here.
He is rich, he knows how rich people think, they see the future of spore that is why they invest here, they will not sell in 2010 like nomura said.
nobody bother about nomura report in spore as they are always on the wrong side. They are wrong again this time.
Oh KLB isn't as stupid as you to keep holding in a falling market. Enter and Exit is a matter of timing and the timing to exit has arrived.

[Unregistered]

folks, the uber rich can take care of themself. the nomura analyst for all you know has never even step into a St. Regis apartment.

[Unregistered]

folks, the uber rich can take care of themself. the nomura analyst for all you know has never even step into a St. Regis apartment.
You dont have to drown yourself to realise that someone else is drowning. You just stand on the shore and watch him go under.

[Unregistered]

folks, the uber rich can take care of themself. the nomura analyst for all you know has never even step into a St. Regis apartment.

Statistically, the sour grapes are borderline condo owners who are absolute whiners. They see their dreams vaporise before their very eyes and they just can't stand it...so they make it a personal crusade to bring on bad news even though it is not relevant to their station in life. If you don't have networth of $15 million, what has top high end luxury condo got to do with you. I mean seriously, many can barely afford to own a small yard toilet/powder room in a St. Regis Condo.

[Unregistered]

Nomura has done their homework. Along with prime, mass markets would also experience the same level of fall. All the Humpty Dumpty's sitting on the high wall, slide down and run before you experience the BIG fall. I am sliding down...see u all at the finish. Good luck to all and congratulations to all those who make it through the bloodshed...aaah!

[Unregistered]

Statistically, the sour grapes are borderline condo owners who are absolute whiners. They see their dreams vaporise before their very eyes and they just can't stand it...so they make it a personal crusade to bring on bad news even though it is not relevant to their station in life. If you don't have networth of $15 million, what has top high end luxury condo got to do with you. I mean seriously, many can barely afford to own a small yard toilet/powder room in a St. Regis Condo.
Don't judge people by your standards...please!

[Unregistered]

Oh KLB isn't as stupid as you to keep holding in a falling market. Enter and Exit is a matter of timing and the timing to exit has arrived.

Shame on you, I started selling in June, 2007 and sold last holding back in October 2007 already. If you want to sell now, my advise is don't be greedy and try to get real before the stampede starts

[Unregistered]

Shame on you, I started selling in June, 2007 and sold last holding back in October 2007 already. If you want to sell now, my advise is don't be greedy and try to get real before the stampede starts
Oh my you started selling but haven't finished yet and it looks like thats why you know about the stampede. Well said my friend.
It is a lesson to all those speculators holding. See our friend started selling but couldn't complete yet. So please dump and rush out before you get trampled in the stampede.

[Unregistered]

Oh my you started selling but haven't finished yet and it looks like thats why you know about the stampede. Well said my friend.
It is a lesson to all those speculators holding. See our friend started selling but couldn't complete yet. So please dump and rush out before you get trampled in the stampede.

He said he sold his "last holding" in October, 2007. Can't you read simple english?

[Unregistered]

He said he sold his "last holding" in October, 2007. Can't you read simple english?
He or you?

[Unregistered]

Japan Inflation Rate Climbs to Decade High; Unemployment Rises

By Mayumi Otsuma and Toru Fujioka

March 28 (Bloomberg) -- Japan's consumer prices rose at the fastest pace in a decade and the unemployment rate increased for the first time in five months, putting pressure on households already strapped by falling wages.

Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. The jobless rate unexpectedly climbed to 3.9 percent, the first increase since September, and job vacancies slid to a two-year low.

A worsening job market is the latest evidence of economic deterioration that may force the Bank of Japan to reverse its policy and cut interest rates even as prices surge. Economic and Fiscal Policy Minister Hiroko Ota said faster inflation caused by higher energy and food costs may hurt consumers, whose spending accounts for more than half of the economy.

``All of today's numbers show that the Japanese economy is already in a mild recession,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Naturally the policy board needs to discuss a rate cut.''

Household spending stalled last month, the statistics bureau said. Economists estimated a 2.4 percent increase. The ratio of jobs to available to each applicant slid to 0.97, the lowest since September 2005.

The yield on Japan's 10-year bond fell 2 basis points to 1.25 percent at 10:58 a.m. in Tokyo. The yen traded at 99.50 per dollar from 99.44 before the reports were published.

`Flexible' Policy

Three central bank policy makers -- acting Governor Masaaki Shirakawa, Deputy Governor Kiyohiko Nishimura and board member Miyako Suda -- have said since last week that the bank is ready to take ``flexible'' policy steps if needed.

Traders see a 53 percent chance the central bank will lower the key overnight lending rate from 0.5 percent by December, JPMorgan Chase & Co. calculations show.

Today's figures signal wages, which had the steepest drop in three years in 2007, are unlikely to pick up anytime soon as higher oil and raw-materials costs squeeze companies' profits.

Pasona Group Inc., a temp agency, this week cut its profit forecast 36 percent for the year ending May 31, citing weaker- than-expected demand for temporary workers as the economy slows.

``Companies can't afford to hire employees and raise wages even if they want to,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``Profits are under pressure from oil, the surging yen, the U.S. slowdown and more reasons I can't even count.''

Production Slump

Reports next week will probably provide more evidence of the economy's deterioration.

Industrial production fell for a second month, economists expect the government to say on March 31. The Bank of Japan's Tankan survey, the nation's most closely watched gauge of business confidence, on April 1 is likely to show sentiment among large manufacturers fell to the lowest level in four years.

``A stalled job market and weakening consumer spending are evidence that Japan's economy is already in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. ``The Bank of Japan will have to cut interest rates between April and June.''

BOJ policy maker Suda said yesterday that growth in the year starting April 1 will probably fall short of the bank's 2.1 percent projection made last October. The central bank will release its next forecasts on April 30.

Core consumer prices started rising in October after declining for eight months. They either hovered near zero or fell since March 1998, when an increase in the country's sales tax pushed gains to 1.8 percent.

Inflation May Wane

Some analysts say inflation may wane later this year as oil and commodities costs ease and consumer demand fails to pick up.

``With growth slowing and demand weakening in coming months, oil prices will probably fall and companies will continue to struggle to raise prices beyond oil and food,'' said Azusa Kato, an economist at BNP Paribas in Tokyo. ``Core-price inflation may slump to almost zero in the first quarter of 2009.''

Excluding energy as well as food, Japan's consumer prices fell 0.1 percent in February. By that measure, prices have failed to rise for more than nine years.

Parliament's decision on whether to extend a higher tax on gasoline may also affect inflation. The tax is set to expire on March 31 after the opposition Democratic Party of Japan refused to discuss a bill to extend it.

The tax may be renewed in a month or disappear indefinitely. An end to the levy would lower core prices by 0.4 percentage point and warrant a change in the inflation outlook, said Chiwoong Lee, an associate economist at Goldman Sachs Group Inc. in Tokyo.

[mr funny.]

Published March 28, 2008

Low point of crisis may be over, feels Temasek unit

Investors have reached the point of maximum fear, says Fullerton CEO


(SINGAPORE) Temasek Holdings' fund management unit says investors have passed 'the point of maximum fear' amid the global credit squeeze. Fullerton Fund Management sees the US Federal Reserve's decision to rescue Bear Stearns as a turning point in the crisis.

'The Fed coming in to facilitate JPMorgan Chase & Co's purchase of Bear Stearns is a watershed event, and most bottoms are found during watershed events,' Fullerton CEO Gerard Lee said in an interview here yesterday. 'From that perspective, we could have already crossed the point of maximum fear.'

The Fed stepped in with JPMorgan on March 14 to provide emergency funding to Bear Stearns in the biggest government bailout of a US securities firm. The move is now being probed by the Senate.

Before the announcement, Bear Stearns' clients withdrew US$17 billion in two days amid speculation that the firm was running short of cash.

Templeton Asset Management's Mark Mobius said he 'generally' agrees with Temasek's assessment that the markets have reached a bottom.

'If we haven't achieved it, we're damn close,' Mr Mobius, who oversees US$47 billion in emerging- market equities, said in a phone interview from Hong Kong yesterday.

'With the kind of liquidity that's pouring into the system, with the Fed, and now the European Central Bank and others putting more money into the system, we think stock prices are not going to remain down. We think there's a good chance of growth going forward.'

Some funds are already planning to buy shares in Asia, where stocks have tumbled this year even as economies in China and India continue to grow. The MSCI Asia Pacific Index trades at 14 times estimated earnings, after slumping 13 per cent the past six months as fallout from the US sub-prime crisis spread through Asia, making stocks in the benchmark 36 per cent cheaper than the five-year average.

Value Partners Group, Asia's second-largest hedge fund manager, is buying stocks in the region that were battered by the collapse of the US sub-prime mortgage market, chief investment officer Cheah Cheng Hye said this week. The Hong Kong-based asset manager aims to start a new fund in the second quarter to invest in Greater China property stocks, Mr Cheah said.

Funds such as Clariden Leu AG, which manages US$300 million, said the recovery from the US housing crisis may take 1-2 years.

'What we have seen in the last couple of weeks culminating in the rescue of Bear Stearns by the Fed and a further pump of liquidity in the market may somewhat signal an inflexion point in the crisis - but this bottoming-out phase, we reckon, will take a long time,' Michael Foo, head of Asian portfolio management at Clariden, said in an interview yesterday.

Fullerton, which oversees US$2.5 billion of third- party money, is still bullish on prospects in Asia, where it has most of its assets. It said the goal to manage US$3 billion excluding Temasek's funds by mid-year is achievable. Temasek manages a portfolio worth more than US$100 billion.

'The fundamental reasons for this secular growth are all in place,' Mr Lee said. 'The few of the big economies are found in Asia. I'm talking about China, India, Vietnam and South Korea. So Asia, being a destination for investment money from the developed world, will continue to grow.'

Fullerton's main customers are wealthy individuals in Japan, South Korea, Taiwan, Hong Kong and institutions in Singapore, where it became a separate unit of Temasek in 2003. It aims to expand in the US, Europe, Australia and the Middle East. -- Bloomberg

[Unregistered]

Japan Inflation Rate Climbs to Decade High; Unemployment Rises

By Mayumi Otsuma and Toru Fujioka

March 28 (Bloomberg) -- Japan's consumer prices rose at the fastest pace in a decade and the unemployment rate increased for the first time in five months, putting pressure on households already strapped by falling wages.

Core prices, which exclude fruit, fish and vegetables, climbed 1 percent in February from a year earlier, the statistics bureau said today in Tokyo. The jobless rate unexpectedly climbed to 3.9 percent, the first increase since September, and job vacancies slid to a two-year low.

A worsening job market is the latest evidence of economic deterioration that may force the Bank of Japan to reverse its policy and cut interest rates even as prices surge. Economic and Fiscal Policy Minister Hiroko Ota said faster inflation caused by higher energy and food costs may hurt consumers, whose spending accounts for more than half of the economy.

``All of today's numbers show that the Japanese economy is already in a mild recession,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. ``Naturally the policy board needs to discuss a rate cut.''

Household spending stalled last month, the statistics bureau said. Economists estimated a 2.4 percent increase. The ratio of jobs to available to each applicant slid to 0.97, the lowest since September 2005.

The yield on Japan's 10-year bond fell 2 basis points to 1.25 percent at 10:58 a.m. in Tokyo. The yen traded at 99.50 per dollar from 99.44 before the reports were published.

`Flexible' Policy

Three central bank policy makers -- acting Governor Masaaki Shirakawa, Deputy Governor Kiyohiko Nishimura and board member Miyako Suda -- have said since last week that the bank is ready to take ``flexible'' policy steps if needed.

Traders see a 53 percent chance the central bank will lower the key overnight lending rate from 0.5 percent by December, JPMorgan Chase & Co. calculations show.

Today's figures signal wages, which had the steepest drop in three years in 2007, are unlikely to pick up anytime soon as higher oil and raw-materials costs squeeze companies' profits.

Pasona Group Inc., a temp agency, this week cut its profit forecast 36 percent for the year ending May 31, citing weaker- than-expected demand for temporary workers as the economy slows.

``Companies can't afford to hire employees and raise wages even if they want to,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. ``Profits are under pressure from oil, the surging yen, the U.S. slowdown and more reasons I can't even count.''

Production Slump

Reports next week will probably provide more evidence of the economy's deterioration.

Industrial production fell for a second month, economists expect the government to say on March 31. The Bank of Japan's Tankan survey, the nation's most closely watched gauge of business confidence, on April 1 is likely to show sentiment among large manufacturers fell to the lowest level in four years.

``A stalled job market and weakening consumer spending are evidence that Japan's economy is already in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. ``The Bank of Japan will have to cut interest rates between April and June.''

BOJ policy maker Suda said yesterday that growth in the year starting April 1 will probably fall short of the bank's 2.1 percent projection made last October. The central bank will release its next forecasts on April 30.

Core consumer prices started rising in October after declining for eight months. They either hovered near zero or fell since March 1998, when an increase in the country's sales tax pushed gains to 1.8 percent.

Inflation May Wane

Some analysts say inflation may wane later this year as oil and commodities costs ease and consumer demand fails to pick up.

``With growth slowing and demand weakening in coming months, oil prices will probably fall and companies will continue to struggle to raise prices beyond oil and food,'' said Azusa Kato, an economist at BNP Paribas in Tokyo. ``Core-price inflation may slump to almost zero in the first quarter of 2009.''

Excluding energy as well as food, Japan's consumer prices fell 0.1 percent in February. By that measure, prices have failed to rise for more than nine years.

Parliament's decision on whether to extend a higher tax on gasoline may also affect inflation. The tax is set to expire on March 31 after the opposition Democratic Party of Japan refused to discuss a bill to extend it.

The tax may be renewed in a month or disappear indefinitely. An end to the levy would lower core prices by 0.4 percentage point and warrant a change in the inflation outlook, said Chiwoong Lee, an associate economist at Goldman Sachs Group Inc. in Tokyo.
Oh its coming closer to home. Japan going to be hit soon. Oh domino effect.

[Unregistered]

Published March 28, 2008

Low point of crisis may be over, feels Temasek unit

Investors have reached the point of maximum fear, says Fullerton CEO


(SINGAPORE) Temasek Holdings' fund management unit says investors have passed 'the point of maximum fear' amid the global credit squeeze. Fullerton Fund Management sees the US Federal Reserve's decision to rescue Bear Stearns as a turning point in the crisis.

'The Fed coming in to facilitate JPMorgan Chase & Co's purchase of Bear Stearns is a watershed event, and most bottoms are found during watershed events,' Fullerton CEO Gerard Lee said in an interview here yesterday. 'From that perspective, we could have already crossed the point of maximum fear.'

The Fed stepped in with JPMorgan on March 14 to provide emergency funding to Bear Stearns in the biggest government bailout of a US securities firm. The move is now being probed by the Senate.

Before the announcement, Bear Stearns' clients withdrew US$17 billion in two days amid speculation that the firm was running short of cash.

Templeton Asset Management's Mark Mobius said he 'generally' agrees with Temasek's assessment that the markets have reached a bottom.

'If we haven't achieved it, we're damn close,' Mr Mobius, who oversees US$47 billion in emerging- market equities, said in a phone interview from Hong Kong yesterday.

'With the kind of liquidity that's pouring into the system, with the Fed, and now the European Central Bank and others putting more money into the system, we think stock prices are not going to remain down. We think there's a good chance of growth going forward.'

Some funds are already planning to buy shares in Asia, where stocks have tumbled this year even as economies in China and India continue to grow. The MSCI Asia Pacific Index trades at 14 times estimated earnings, after slumping 13 per cent the past six months as fallout from the US sub-prime crisis spread through Asia, making stocks in the benchmark 36 per cent cheaper than the five-year average.

Value Partners Group, Asia's second-largest hedge fund manager, is buying stocks in the region that were battered by the collapse of the US sub-prime mortgage market, chief investment officer Cheah Cheng Hye said this week. The Hong Kong-based asset manager aims to start a new fund in the second quarter to invest in Greater China property stocks, Mr Cheah said.

Funds such as Clariden Leu AG, which manages US$300 million, said the recovery from the US housing crisis may take 1-2 years.

'What we have seen in the last couple of weeks culminating in the rescue of Bear Stearns by the Fed and a further pump of liquidity in the market may somewhat signal an inflexion point in the crisis - but this bottoming-out phase, we reckon, will take a long time,' Michael Foo, head of Asian portfolio management at Clariden, said in an interview yesterday.

Fullerton, which oversees US$2.5 billion of third- party money, is still bullish on prospects in Asia, where it has most of its assets. It said the goal to manage US$3 billion excluding Temasek's funds by mid-year is achievable. Temasek manages a portfolio worth more than US$100 billion.

'The fundamental reasons for this secular growth are all in place,' Mr Lee said. 'The few of the big economies are found in Asia. I'm talking about China, India, Vietnam and South Korea. So Asia, being a destination for investment money from the developed world, will continue to grow.'

Fullerton's main customers are wealthy individuals in Japan, South Korea, Taiwan, Hong Kong and institutions in Singapore, where it became a separate unit of Temasek in 2003. It aims to expand in the US, Europe, Australia and the Middle East. -- Bloomberg



Temasek is right here!
The worse is over for now on subprime & credit issues. As long as we can see recovery is coming, there may be some more dip in front but people had enough of it, they will discount & already factor in, so market will go for a quick rebound, follow by gradual recovery.
So what MM & MBT said, due to concern on US situation, our property market is quiet. But once this is resolved, you can see the action in stock market, buyers will flock in like last year, another wave of rise will be in.
Be patient, time will come in less than 3 months time.

[Unregistered]

Temasek is right here!
The worse is over for now on subprime & credit issues. As long as we can see recovery is coming, there may be some more dip in front but people had enough of it, they will discount & already factor in, so market will go for a quick rebound, follow by gradual recovery.
So what MM & MBT said, due to concern on US situation, our property market is quiet. But once this is resolved, you can see the action in stock market, buyers will flock in like last year, another wave of rise will be in.
Be patient, time will come in less than 3 months time.
The worse is just beginning not only for US but for ROW. Buyers will be chasing food and buying fields to cultivate. Big wave of fall coming.

[Unregistered]

The worse is just beginning not only for US but for ROW. Buyers will be chasing food and buying fields to cultivate. Big wave of fall coming.


chasing food? are you crazy?
chap-chai png is still $3-3.5, chase what?
If go up to $10, then property will up 5x=500% from here.
The best way to hedge inflation is to buy property.

[Unregistered]

chasing food? are you crazy?
chap-chai png is still $3-3.5, chase what?
If go up to $10, then property will up 5x=500% from here.
The best way to hedge inflation is to buy property.
Sour grape finding it difficult to sell brother. Dreaming of it going up. wooohahahahaha.

[Unregistered]

Sour grape finding it difficult to sell brother. Dreaming of it going up. wooohahahahaha.
Exactly!
How to sell food, metal, etc. commodity? The prices are dropping.

Singapore property prices are still firm and growing. So the best bet is Singapore property.

[Unregistered]

Sour grapes are at most, sour. That's all.

Let's hope that when the property market crashes like what Nomura analysts had predicted, those who call others sour will not turn rotten (i.e. bankrupt)themselves.

[Unregistered]

Sour grapes are at most, sour. That's all.

Let's hope that when the property market crashes like what Nomura analysts had predicted, those who call others sour will not turn rotten (i.e. bankrupt)themselves.

That you don't have to worry.

As long as you remain well capitalised and don't over borrow, you can ride out the bumps in the market, if there are any.

What you can be sure is that the long term trend of property prices is up, for the simple reason that the value of money has to go down.

The devaluation of money is a fact of life you can never run away from.

[Unregistered]

Two groups of sour grapes. One missed the boat and one stuck and cannot get out. God save them both. Dont worry in 10 years the first group will be able to buy again. Dont miss the boat then. In 15 years the stuck ones would be able to sell. So just relax now and enjoy what you both are good at. Post Post Post!!!!!

Forget about next down turn, folk! Today ppty price is the future bottom level already. Forget the past and face tmrw with our new global city, Singapore.

We are now at the bottom of the new ppty cycle. The wheel is just to begin to spin.

[Unregistered]

Sour grapes are at most, sour. That's all.

Let's hope that when the property market crashes like what Nomura analysts had predicted, those who call others sour will not turn rotten (i.e. bankrupt)themselves.

You know, too sour also can kill.

[Unregistered]

Whatever that is reported in the newspapers is history. It was yesterday's, last month's, last quarters' news, outlook. What is happening now, this point will be reported tomorrow, next quarter, next year. It is true that the market is very quiet. It is true too, that people are struggling with more important issues like rising cost of living, even the expatriates living here. It will take a long while more before people have money to invest in illiquid properties. Those who need a quick exit will have to sell at a discount.

[Unregistered]

Whatever that is reported in the newspapers is history. It was yesterday's, last month's, last quarters' news, outlook. What is happening now, this point will be reported tomorrow, next quarter, next year. It is true that the market is very quiet. It is true too, that people are struggling with more important issues like rising cost of living, even the expatriates living here. It will take a long while more before people have money to invest in illiquid properties. Those who need a quick exit will have to sell at a discount.

Even more useless than "yesterday's news" is "tomorrow's predictions".

Only "today" is meaningful.

Today, the market is very quiet.

Today, the market is holding steady.

Yesterday, the bulls mauled the bears.

Today, the bulls and bears are deadlocked.

Tomorrow, nobody knows.

Any "tomorrow's predictions" made by any individual is his own opinion, and hence meaningless.

[Unregistered]

Even more useless than "yesterday's news" is "tomorrow's predictions".

Only "today" is meaningful.

Today, the market is very quiet.

Today, the market is holding steady.

Yesterday, the bulls mauled the bears.

Today, the bulls and bears are deadlocked.

Tomorrow, nobody knows.

Any "tomorrow's predictions" made by any individual is his own opinion, and hence meaningless.

Yes, economists are paid highly for their meaningless predictions.

[Unregistered]

Business confidence takes a dive

Business Times - 24 Mar 2008

BT-UniSIM survey shows companies gloomy about next six months, despite strong orders

(SINGAPORE) Business confidence in Singapore has slumped to its lowest level since end-2004, according to the latest business climate survey by The Business Times (BT) and SIM University (UniSIM).

While sales and profit figures were largely unchanged in the three months to Dec 31, 2007, prospects have fallen dramatically for the next six months, the poll of 128 companies revealed.

This was despite companies reporting a strong pipeline of orders and new business. Some 71 per cent of the firms polled have overseas businesses.

Chow Kit Boey, director of the quarterly BT-UniSIM survey, said: ‘I think the firms may be overly pessimistic because of the grim prospects in the US economy, accompanying volatile and weak stock markets and rising oil prices.’

She said that improved orders and new business numbers suggest that the Singapore economy would not suffer too badly in the first quarter of 2008, given the low growth rate a year ago and the largely successful air show in February.

The quarter marked the 17th successive one with positive net balances in sales and orders as well as new business, she added. ‘This implies that the slowdown could be mild. It appears that the economy could grow at a faster rate in Q1 2008 than in Q4 of 2007.’

Economists polled recently by the Monetary Authority of Singapore (MAS) pared their first-quarter growth forecast to a median 5.7 per cent from 7 per cent previously, slightly higher than the 5.4 per cent recorded in Q4 2007.

The BT-UniSIM survey showed that the business prospects net balance - the difference between the percentage of optimistic and pessimistic companies - fell to 20 per cent, from 39 per cent in the third quarter of the year. This was itself a sharp drop from an average of 57 per cent for the first half of 2007, showing how confidence has crashed in recent months.

The drop was particularly severe among large and local firms, whose net balances dropped by more than half from the previous quarter. But foreign firms were about as confident as they were in the preceding three months and, intriguingly, small firms were much more upbeat - net balance for the segment tripled to 26 per cent from 8 per cent.

The overall poor sentiment was partly balanced by healthy orders and new business numbers. The overall net balance - the difference between those reporting more orders or new business and those reporting fewer - rose slightly to 39 per cent, from 32 per cent in the third quarter.

But conditions varied widely across firms. Small companies reported a net balance of minus-one per cent, though still an improvement on the previous quarter (-12 per cent). Foreign companies recorded a net balance of 51 per cent, up from 26 per cent previously.

Among sectors, financial and business services was the star performer for the quarter. It had the highest net balances in sales, profits and orders, and new business.

Firms in the construction sector were the most confident of business prospects for the next six months for the eighth quarter running.

Foreign firms recorded the best performances for Q4, with the largest increases in net balances for sales, profits and orders, and new business. Local firms saw the biggest decline, owing partly to weaker profits, said Ms Chow.

And comparing overall and overseas sales, orders and prospects showed that domestic business activities were stronger in the fourth quarter. In the previous three months, businesses found better sales and orders overseas. But small and local firms still saw better prospects from their foreign operations, while foreign and large firms were more optimistic on the local market.

Vietnam is also fast climbing the charts as a favoured investment destination. China and India were the other frontrunners but ‘Vietnam has gained much popularity as an investment destination by almost all types of firms’, said Ms Chow.

The BT-UniSIM survey was launched in 1996 and is now in its 13th year.

[Unregistered]

Even more useless than "yesterday's news" is "tomorrow's predictions".

Only "today" is meaningful.

Today, the market is very quiet.

Today, the market is holding steady.

Yesterday, the bulls mauled the bears.

Today, the bulls and bears are deadlocked.

Tomorrow, nobody knows.

Any "tomorrow's predictions" made by any individual is his own opinion, and hence meaningless.
Meaningless post too. Dont waste your time and ours.

[Unregistered]

Yes, economists are paid highly for their meaningless predictions.

Yes that's quite true.

I never cease to be amused by their "forecasts" which are almost always off the mark.

Last year they predicted a rosy year for 2008, then when the sub-prime hit, now they adjust their forecasts downwards.

So what's the use of their forecast?

[Unregistered]

Meaningless post too. Dont waste your time and ours.

Then you still reply to the meaningless post? You are even more meaningless.

[Unregistered]

Then you still reply to the meaningless post? You are even more meaningless.
wooooohahahahaha

[Unregistered]

Monday March 31, 3:43 AM
Markets brace for slump in Japanese business confidence

A key survey of corporate Japan is expected to show that business confidence has plunged to a four-year low on worries about high oil prices, a stronger yen and a weak US economy, analysts predict.

The Bank of Japan's closely watched "Tankan" report, due out Tuesday, is likely to show companies are scaling back their profit forecasts and investment plans as a result of the tougher operating environment, they said.

"The deterioration of the profit environment, stemming from a slowdown in overseas economies and surging crude oil prices, as well as the appreciation of the yen, have dealt a huge blow to corporate sentiment," Mitsubishi UFJ Securities senior economist Tatsushi Shikano said.

"Reflecting a slowdown in overseas economies, some companies now face the need to reduce production to deal with unexpected rises in inventories," Shikano said.

Economists, on average, predict the headline index of confidence among major manufacturers slumped to 12 in March from 19 in the December Tankan survey of more than 10,000 companies, according to a survey by the Nikkei business daily.

That would be the lowest level since March 2004. Confidence has already fallen from a two-year high of 25 seen in December 2006 but it is still much higher than a low of minus 38 struck six years ago.

Sentiment among big non-manufacturers is expected to have deteriorated to a reading of seven from 16 in the December poll.

The indices represent the percentage of firms experiencing favourable business conditions minus the percentage of those seeing unfavourable conditions.

Japan's corporate sector has been a key driver of the recovery in the world's second largest economy after a decade-long slump.

Helped by a weak yen, companies have racked up record profits in recent years that allowed them to invest heavily in new equipment and factories.

But many firms are now looking to scale down capital spending to cope with an expected drop in earnings.

In mid-March, the dollar fell to a 12-year low of 96 yen, far below the level companies had been preparing for at the time of the December Tankan.

Economists are also expecting a worsening of sentiment in the March quarter among smaller companies, which employ most of Japan's workforce, due to growing profit concerns and sluggish domestic demand.

Japan's economy is on the mend after a slump stretching back over a decade, but sluggish consumer spending has raised concern that the country's export-led recovery is vulnerable to a global economic slowdown.

Although core inflation hit a decade high of 1.0 percent in February, Japan's central bank is seen as unlikely to raise its super-low interest rates from 0.5 percent any time soon, with some analysts even predicting a rate cut.

Goldman Sachs Securities chief economist Tetsufumi Yamakawa is predicting a rate cut by the Bank of Japan at one of its two meetings in April.

"The Tankan is likely to show an accelerated decline in sentiment across the broad front, forcing the BoJ to revise its economic view and scenario, which is already distant from the perception shared by the market," Yamakawa said.

The BoJ raised interest rates in 2006 for the first time in almost six years. It hiked rates again in February last year but has held them steady since then amid domestic political uncertainty and financial market turmoil.

[Unregistered]

Monday March 31, 3:43 AM
Markets brace for slump in Japanese business confidence

Japan had been in a state of slump for the past 15 years.