Published August 27, 2009
Foreign buyers warm to mid-tier city-fringe homes
Q2 resurgence sees Indonesians pick up 5 times the number they bought in Q1
By KALPANA RASHIWALA
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(SINGAPORE) Foreign buying of private homes rose in Q2 but is not back in full force in terms of its share of higher-priced transactions, according to a caveats analysis by DTZ. The quarter also saw a resurgence of purchases by Indonesians, who were the top buyers in the upper-tier segments.
Foreigners, excluding Singapore permanent residents (PRs), made up only 15 per cent of those who bought private homes costing over $1,110 per square foot (psf) in Q2 2009, much lower than their 29 per cent share in 2006 when the property market began to heat up.
In terms of absolute price quantums, too, non-PR foreigners made up 14 per cent of total transactions done at above $1.5 million in Q2 2009 - considerably below the 20 per cent figure in 2006.
'The profile of foreigners has changed gradually over time. They are increasingly moving to mid-tier homes located at the city fringes,' DTZ said.
Knight Frank executive director (residential) Peter Ow said the trend is also due to several city-fringe projects being launched recently in locations such as Novena and Holland Road at prices that foreign buyers have found attractive.
'Their prices are about 30-40 per cent lower than prime Orchard Road properties with similar-quality finishes. And most of these projects are near MRT stations and often 10 minutes' drive to Orchard Road,' he added.
DTZ's analysis showed that homes in the prime districts of 9, 10 and 11, as well as district 15, accounted for 47 per cent of total private homes bought by non-PR foreigners in Q2 - much lower than a 62 per cent share in 2006.
The total number of private homes bought by both PRs and non-PR foreigners more than trebled from 497 units in Q1 to 1,678 units in Q2.
The most popular projects among non-PR foreigners in Q2 were Rivergate (33 purchases), The Arte (31 units), Martin Place Residences (26 units) and The Lakeshore (23 units).
Among PRs, their top picks were The Arte, Martin Place Residences, The Lakeshore, Mi Casa and Melville Park.
The second quarter saw a big resurgence in Indonesian buying. They picked up 349 units in Q2, almost five times the 70 units they bought in Q1. As a result, Indonesians accounted for 21 per cent of private homes bought by foreigners and PRs, up significantly from a 14 per cent share in Q1.
However, they still trailed Malaysians, who made up the lion's share or 29 per cent of purchases by foreigners and PRs. Mainland Chinese accounted for 15 per cent and Indian citizens, 12 per cent.
Although Indonesians made up about one-fifth of total private residential purchases by PRs and non-PR foreigners, they bought one-third of homes costing above $1,110 psf that were picked up by foreigners and PRs in Q2.
In terms of absolute price quantums, Indonesians also had a one-third share of total purchases by PRs and non-PR foreigners done at above $1.5 million in Q2.
Thursday, 3 September 2009
Published August 26, 2009
S-chip issues - crux lies in enforcement
By LYNETTE KHOO
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THE wide-ranging measures proposed by Singapore Exchange (SGX) last week have driven home a strong message - that the exchange views the failure of issuers and the problems plaguing them with gravity.
Measures such as imposing disclosure of pledged shares and custodising shares of controlling shareholders have plucked right at the heart of issues plaguing S-chips (China-based companies listed in Singapore). It was also comforting to hear from SGX that there is no pervasive fraud risk relating to China companies.
But the jury is still out on whether this move will restore investors' confidence and prevent some issuers from entertaining thoughts to move to other stock exchanges offering better valuations.
This week, Sihuan Pharmaceutical's parent company, China Pharmaceutical, has decided to initiate a move to take Sihuan private, citing thin trading volumes. Just a few days ago, Z-Obee Holdings said that it was looking into the possibility of a dual primary listing on the Hong Kong bourse, shortly after China XLX filed its application for a dual listing there.
It is unclear if these are isolated cases or part of a wider trend of some S-chips seeking greener pastures. There have been market whispers that some S-chips are contemplating such a move if their valuations continue to stay depressed.
The two S-chips eyeing dual listing have cited as reasons a desire to gain access to two different equity markets, to widen their investor base and to raise share trading liquidity.
But there is some speculation that S-chips contemplating a dual listing in both Singapore and Hong Kong could eventually pull out of one stock exchange to avoid paying two separate listing fees. Such a decision would probably hinge on how well the S-chips' shares perform in Hong Kong and how soon Singapore would catch up in the valuation race. All eyes will thus be on how handicraft and furnishing maker Passion Holdings - the first Chinese IPO here this year - will fare on its debut next week.
The latest proposed measures by SGX are a welcome move to instil market confidence. But it would be presumptuous to assume things will look up right away for the S-chips sector. There remains lingering doubts over the listing compliance of some existing issuers and the problem of enforcement. One of the proposed measures is for new listings on the mainboard to appoint governance advisers for the first two years post-listing to help companies institute a robust framework of reporting accountability, internal controls and other components of good corporate governance.
It is good to have an extra pair of eyes on new listings, which are green in the ways of a listed company. Most S-chips tend to head for the mainboard instead of Catalist, which means that future new S-chips will need to appoint governance advisers.
But on practical grounds, it does beg the question of how effective the proposed measures would be for foreign listings. If independent directors here find it hard to oversee companies whose operations are mostly offshore, what more the governance advisers?
Corporate governance concerns about S-chips have not fully blown over yet. Of about 10 cases of listed companies with irregularities since the beginning of 2008, half are Chinese listings, whose problems are still largely unresolved.
At FibreChem, external auditors Ernst & Young could not finalise an audit of its trade receivables and cash balances for the year ended Dec 31, 2008. Until now, it is unable to report its financial results for fiscal 2008 and the two quarters of this year.
China Sun has also faced an accounting mess. But the services of its chairman appeared to be indispensable as after the independent directors suspended him for failing to attend a board meeting to explain missing cash, he was reinstated three weeks later, albeit with conditions.
In the case of Oriental Century, even after police reports have been filed by its board for the massive fraud perpetuated by its chairman-cum-chief executive, the question shareholders like to ask is the outcome of the investigation and the action to be taken.
The proposed measures by SGX are laudable and would strengthen corporate governance here. But enforcement over existing S-chip issues has to be part of the equation to restore faith in this market segment.
SGX's reiteration of high baseline standards as a frontline regulator is assuring, and has been demonstrated in its proactiveness with the planned measures. Having new rules to pre-empt future problems is a good thing, but the heart of the issue is still that of enforceability.
S-chip issues - crux lies in enforcement
By LYNETTE KHOO
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THE wide-ranging measures proposed by Singapore Exchange (SGX) last week have driven home a strong message - that the exchange views the failure of issuers and the problems plaguing them with gravity.
Measures such as imposing disclosure of pledged shares and custodising shares of controlling shareholders have plucked right at the heart of issues plaguing S-chips (China-based companies listed in Singapore). It was also comforting to hear from SGX that there is no pervasive fraud risk relating to China companies.
But the jury is still out on whether this move will restore investors' confidence and prevent some issuers from entertaining thoughts to move to other stock exchanges offering better valuations.
This week, Sihuan Pharmaceutical's parent company, China Pharmaceutical, has decided to initiate a move to take Sihuan private, citing thin trading volumes. Just a few days ago, Z-Obee Holdings said that it was looking into the possibility of a dual primary listing on the Hong Kong bourse, shortly after China XLX filed its application for a dual listing there.
It is unclear if these are isolated cases or part of a wider trend of some S-chips seeking greener pastures. There have been market whispers that some S-chips are contemplating such a move if their valuations continue to stay depressed.
The two S-chips eyeing dual listing have cited as reasons a desire to gain access to two different equity markets, to widen their investor base and to raise share trading liquidity.
But there is some speculation that S-chips contemplating a dual listing in both Singapore and Hong Kong could eventually pull out of one stock exchange to avoid paying two separate listing fees. Such a decision would probably hinge on how well the S-chips' shares perform in Hong Kong and how soon Singapore would catch up in the valuation race. All eyes will thus be on how handicraft and furnishing maker Passion Holdings - the first Chinese IPO here this year - will fare on its debut next week.
The latest proposed measures by SGX are a welcome move to instil market confidence. But it would be presumptuous to assume things will look up right away for the S-chips sector. There remains lingering doubts over the listing compliance of some existing issuers and the problem of enforcement. One of the proposed measures is for new listings on the mainboard to appoint governance advisers for the first two years post-listing to help companies institute a robust framework of reporting accountability, internal controls and other components of good corporate governance.
It is good to have an extra pair of eyes on new listings, which are green in the ways of a listed company. Most S-chips tend to head for the mainboard instead of Catalist, which means that future new S-chips will need to appoint governance advisers.
But on practical grounds, it does beg the question of how effective the proposed measures would be for foreign listings. If independent directors here find it hard to oversee companies whose operations are mostly offshore, what more the governance advisers?
Corporate governance concerns about S-chips have not fully blown over yet. Of about 10 cases of listed companies with irregularities since the beginning of 2008, half are Chinese listings, whose problems are still largely unresolved.
At FibreChem, external auditors Ernst & Young could not finalise an audit of its trade receivables and cash balances for the year ended Dec 31, 2008. Until now, it is unable to report its financial results for fiscal 2008 and the two quarters of this year.
China Sun has also faced an accounting mess. But the services of its chairman appeared to be indispensable as after the independent directors suspended him for failing to attend a board meeting to explain missing cash, he was reinstated three weeks later, albeit with conditions.
In the case of Oriental Century, even after police reports have been filed by its board for the massive fraud perpetuated by its chairman-cum-chief executive, the question shareholders like to ask is the outcome of the investigation and the action to be taken.
The proposed measures by SGX are laudable and would strengthen corporate governance here. But enforcement over existing S-chip issues has to be part of the equation to restore faith in this market segment.
SGX's reiteration of high baseline standards as a frontline regulator is assuring, and has been demonstrated in its proactiveness with the planned measures. Having new rules to pre-empt future problems is a good thing, but the heart of the issue is still that of enforceability.
Wednesday, 2 September 2009
Published August 26, 2009
White House paints darker economic picture
GDP to shrink 2.8%, joblessness to hit 10% this year
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(WASHINGTON) US unemployment will surge to 10 per cent this year and the budget deficit will widen to US$1.5 trillion next year, reflecting a 'deeper recession' than previously expected, White House budget chief Peter Orszag said.
The Office of Management and Budget (OMB) also forecasts that the US economy will shrink 2.8 per cent this year, worse than the 1.2 per cent contraction that the OMB projected in May.
For next year, the budget office said that the gross domestic product (GDP) will grow 2.0 per cent, less than the 3.2 per cent expected in May. By 2011, the economy would be well on its way to recovery, growing at a 3.8 per cent annual rate, according to the administration's mid-year economic review, released yesterday morning.
The budget shortfall for 2010 will mark the second straight year of trillion- dollar deficits. The projected deficit for the fiscal year that begins Oct 1 is higher than the US$1.26 trillion forecast in May and reflects expectations that economic growth will be slower this year and next because of 'the severity of the crisis in the US and in our trading partners', said Christina Romer, White House chief economist, who along with Mr Orszag briefed reporters on the report.
The deficit and unemployment numbers may weigh down President Barack Obama's drive for his top domestic priority, overhauling the US health care system.
'It throws a wrench in health care reforms,' Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said in an interview before the report was released. 'No matter the specific numbers, they're a constant reminder that we're in bad, bad shape.'
Separately, Congressional budget analysts project a cumulative US$7 trillion deficit from 2010-2019, a figure roughly US$2 trillion less than the one projected by the White House budget office.
The nonpartisan Congressional Budget Office said that the deficit this year will total US$1.6 trillion, and that putting the US on a sustainable fiscal course will require a mix of lower spending and higher tax revenues than the amounts now projected.
The administration said last week that the deficit for the 2009 fiscal year, which ends on Sept 30, will be US$1.58 trillion, less than the US$1.84 trillion projected in May, because budget officials were able to delete hundreds of billions of dollars that had been set aside for bank bailouts. Last year's deficit was US$459 billion.
Mr Orszag defended the trillion-dollar deficits during a recession and said that it was desirable to reduce them as the economy recovers.
'The first step is to stop making those deficits worse' by enforcing pay-as-you-go legislation so that 'any new tax or entitlement' programmes are paid for, and by adopting a health care system that does not add to the deficit, he said.
'I know there are going to be some who say this report proves we can't afford health reform,' he said. 'I think that has it backwards,' because savings must be squeezed from the system.
Even with economic conditions worse that originally forecast, Ms Romer said, 'we do expect positive GDP growth by the end of this year' for the fourth quarter, as the economy reaches 'a turning point'. This is in line with 94 per cent of Blue Chip economists, according to Mr Orszag.
'A return to employment growth will take longer,' Ms Romer said. -- Bloomberg, AP
White House paints darker economic picture
GDP to shrink 2.8%, joblessness to hit 10% this year
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(WASHINGTON) US unemployment will surge to 10 per cent this year and the budget deficit will widen to US$1.5 trillion next year, reflecting a 'deeper recession' than previously expected, White House budget chief Peter Orszag said.
The Office of Management and Budget (OMB) also forecasts that the US economy will shrink 2.8 per cent this year, worse than the 1.2 per cent contraction that the OMB projected in May.
For next year, the budget office said that the gross domestic product (GDP) will grow 2.0 per cent, less than the 3.2 per cent expected in May. By 2011, the economy would be well on its way to recovery, growing at a 3.8 per cent annual rate, according to the administration's mid-year economic review, released yesterday morning.
The budget shortfall for 2010 will mark the second straight year of trillion- dollar deficits. The projected deficit for the fiscal year that begins Oct 1 is higher than the US$1.26 trillion forecast in May and reflects expectations that economic growth will be slower this year and next because of 'the severity of the crisis in the US and in our trading partners', said Christina Romer, White House chief economist, who along with Mr Orszag briefed reporters on the report.
The deficit and unemployment numbers may weigh down President Barack Obama's drive for his top domestic priority, overhauling the US health care system.
'It throws a wrench in health care reforms,' Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said in an interview before the report was released. 'No matter the specific numbers, they're a constant reminder that we're in bad, bad shape.'
Separately, Congressional budget analysts project a cumulative US$7 trillion deficit from 2010-2019, a figure roughly US$2 trillion less than the one projected by the White House budget office.
The nonpartisan Congressional Budget Office said that the deficit this year will total US$1.6 trillion, and that putting the US on a sustainable fiscal course will require a mix of lower spending and higher tax revenues than the amounts now projected.
The administration said last week that the deficit for the 2009 fiscal year, which ends on Sept 30, will be US$1.58 trillion, less than the US$1.84 trillion projected in May, because budget officials were able to delete hundreds of billions of dollars that had been set aside for bank bailouts. Last year's deficit was US$459 billion.
Mr Orszag defended the trillion-dollar deficits during a recession and said that it was desirable to reduce them as the economy recovers.
'The first step is to stop making those deficits worse' by enforcing pay-as-you-go legislation so that 'any new tax or entitlement' programmes are paid for, and by adopting a health care system that does not add to the deficit, he said.
'I know there are going to be some who say this report proves we can't afford health reform,' he said. 'I think that has it backwards,' because savings must be squeezed from the system.
Even with economic conditions worse that originally forecast, Ms Romer said, 'we do expect positive GDP growth by the end of this year' for the fourth quarter, as the economy reaches 'a turning point'. This is in line with 94 per cent of Blue Chip economists, according to Mr Orszag.
'A return to employment growth will take longer,' Ms Romer said. -- Bloomberg, AP
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