Singaporeans gain, but expats lose

Singaporeans gain, but expats lose

 

Locals rush to visit the US and shop online, but things are more costly for some foreigners here

 

By Mavis Toh

 

WHEN the news broke that the United States dollar had hit an all-time low against the Singapore dollar last Thursday, teacher Teo Siew Chin went straight to a money changer.

 

She exchanged S$3,000 for US$2,150, even though she will be heading to the American state of Utah with her two sons a whole three months later in June.

 

A year ago, she would have received only about US$1,950. Mrs Teo, 36, said: ‘The rate is so good now, so I decided to act.’

 

Last Thursday, US$1 could be bought for under S$1.38 as speculators dumped the greenback, fearing a US recession.

 

Just six months ago, it was about S$1.51 to US$1.

 

The Teos are among the many Singaporeans who are cashing in. SA Tours spokesman Ruth Lim said that the demand for trips to the US had grown by 25 per cent this month compared to the same time last year.

 

CTC Travel enjoyed a 50 per cent boost in bookings for US package tours at the recent Natas travel fair compared to last year.

 

‘With the weak US dollar, one can look forward to savings on food, shopping and activities there. These can add up to quite a lot, especially for big families,’ said a CTC spokesman.

 

But both agencies said that the prices of US tour packages had not gone down due to other factors such as rising fuel costs and airport surcharges.

 

Still, that has not deterred Singaporeans from flying out. Marketing manager Maureen Ng, 39, plans to pick up designer handbags when she heads to Los Angeles to celebrate her birthday next month.

 

‘I can do more than window-shop. I’m going to squeeze the most out of this slump,’ she said.

 

Echoing her views, Mrs Teo said: ‘I’ll get Coach bags, Timberland shoes and OshKosh B’Gosh clothes for the kids.’

 

Student Lindy Lin, 20, is heading to Ohio for an exchange programme in May. She is looking forward to stretching her dollar.

 

‘I can travel and shop more,’ she said, adding that she expects the exchange rate to dip further when she makes the trip.

 

It is a bonus for online shoppers too. IT manager Terry Chia, 28, is consolidating orders from his friends to buy DVDs and video games on Amazon.com.

 

‘It’s a good time to buy but we also expect the US dollar to fall further,’ he said.

 

Parents with children studying in the US are also smiling. Mrs S.L. Wong, 56, pays about US$15,000 a semester for her son’s tuition fees at the University of Southern California. She paid about S$21,600 at the start of this year, at an exchange rate of S$1.44 to US$1.

 

She expects to save at least S$2,000 for the next semester.

 

‘I also give my son US$1,000 a month, so I save about S$60 after the currency exchange,’ said Mrs Wong.

 

Singaporeans working in the US are also benefiting. For Mrs Teo’s husband Andrew, 36, a training manager who has been based in Utah for the past nine months, things are rosier since he is paid in Singapore dollars.

 

‘My colleagues and I are buying iPhones and Coach bags for our friends back home because of the strong Singapore dollar,’ he said.

 

But consumers will not get to pay less for food imported from the US. NTUC FairPrice and Sheng Siong supermarket both said that prices have not changed. A FairPrice spokesman said that rising transport costs due to higher oil prices and the increased costs of raw materials such as wheat, milk and coffee have offset the currency dip.

 

Some fashion retailers that The Sunday Times spoke to said it would take some time before consumers enjoyed savings since their stocks had been ordered and paid for months ago, when the US currency was stronger.

 

And for some, the falling US dollar is actually bad news. Money changer Shethek S. said fewer clients were buying US dollars from his shop in Sim Lim Square.

 

‘Now, Americans have lower spending power, so they don’t exchange money. It’s dropping and dropping so no one is buying US dollars to keep too.’

 

For Mrs Katie Sargent, 47, a freelance writer and television producer working for an American company here, being paid in US dollars has become a disadvantage.

 

She has become poorer by S$5,000 since she signed her year-long employment contract in December and has cut down on shopping expenses.

 

‘I’ll definitely be more careful and take exchange rates into consideration when I sign another contract,’ she said.

 

Source: Straits Times

S’poreans flocking to overseas property launches held here

S’poreans flocking to overseas property launches held here

 

By Fiona Chan

 

IT IS the world’s tallest condominium, a spiral-shaped architectural feat that soars 150 storeys into the Chicago sky.

 

The best part: An apartment in this iconic building in the United States will cost you less than a unit at The Sail @ Marina Bay here.

 

Little wonder, then, that more than 800 people turned up at the launch of the much-vaunted Chicago Spire (below left) in Singapore‘s Four Seasons Hotel last week.

 

‘Both the turnout and the sales were overwhelming and way beyond expectations,’ said Mr Michael Ng, managing director of Savills Singapore, which is marketing the project worldwide.

 

‘Everyone was a bit uncertain about how the market would take to it, given the United States‘ economic issues. But I think the strength was that the Singapore dollar was at a record high and the interest came pouring in,’ he said.

 

Savills could not disclose official sale figures, but sources said about 30 units were sold, mostly one- and two-bedroom flats that averaged US$1 million (S$1.38 million) each.

 

About half the buyers are said to be Singaporeans or permanent residents and the rest, expatriates.

 

The response to the Chicago Spire – where units cost about US$1,000 per sq ft, 60 per cent less than The Sail – mirrors the growing demand in Singapore for overseas properties, said marketing agents.

 

‘Interest has definitely increased as Singapore becomes more open and more receptive to overseas investments,’ said Mrs Doris Tan, managing director of DST International Property Services, which markets foreign properties in Singapore and South-east Asia.

 

Her company brings in developments both in established markets such as Britain and the United States, as well as emerging ones, including Bulgaria, Bali and Dubai.

 

Mrs Tan’s clients, mainly Singaporeans or permanent residents, are ‘sophisticated investors who know what’s going on in property markets around the world’.

 

In recent years, the exhibitions she holds have seen bigger crowds and better sales. A popular property now attracts up to 100 people over two days.

 

‘Of course, the prices in Singapore have gone up a lot, so these provide an alternative,’ she added.

 

But large crowds do not always translate into many buyers, warned an agent who declined to be named.

 

‘You can get fantastic turnouts, but sales usually amount to only about 5 per cent of the crowd,’ he said.

 

Generally, the most seasoned investors buy homes in markets they know well.

 

Civil engineer Peter Rudland, 58, now owns six homes in London, where he worked before coming to Singapore, and one in Manchester, where he was born.

 

The British-born permanent resident has also resold a number of London investment properties for a profit of at least 20 per cent.

 

London is very safe financially,’ he said. ‘Singapore has too many speculators. I wouldn’t want to speculate here.’

 

Source: Straits Times

Whitley Road homes ooze quiet charm

Whitley Road homes ooze quiet charm

 

Buyers love the area’s lush greenery and wide open spaces, as well as its proximity to the city

 

By Joyce Teo

 

THE escape of terrorist Mas Selamat Kastari from the Whitley Road Detention Centre has thrown the spotlight on the quiet, high-end residential area.

 

Previously, many people had no idea that the relatively upmarket area with many landed homes boasted a detention centre in its midst.

 

Still, this discovery is not expected to dent the values of properties in the area’s private estates, though interest levels could dip a bit, said a property consultant.

 

‘Some people are just superstitious and they don’t want to live near a prison,’ he said.

 

Currently, the existing residential pockets are found at the two ends of Whitley Road, with quite a few apartment blocks on the Thomson Road side.

 

On the Merryn Road side, there are houses and a few condominiums such as The Trevose and Trevose Park.

 

Black and white bungalows, whose monthly rentals range from several thousand dollars to tens of thousands, can also be found around the area. Quite a few large and exclusive units dot the peaceful, tree-lined stretch along Mount Pleasant Road.

 

For people who love greenery and space, there are few places like Whitley, property consultants said.

 

‘The area is attractive because it is only a short drive to Orchard Road and there is easy access to the rest of the island via the Pan- Island Expressway (PIE),’ said CBRE Research’s executive director, Mr Li Hiaw Ho.

 

Apartments in the Whitley Road residential areas were sold at $900 per sq ft (psf) to $1,300 psf in the second half of last year, said CBRE Research. At The Trevose, there were two deals in February: one for $1 million or $1,050 psf and the other for $1.5 million or $1,142 psf, based on caveats lodged.

 

Freehold detached houses in the area were sold for between $6 million and $11 million each. Semi-detached houses went for around $4 million each over the same period.

 

The location also offers the cheaper option of 99-year leasehold landed homes, which can cost $2 million to $5 million.

 

A check with the Urban Redevelopment Authority (URA) shows that the area is zoned mainly for residential use. The URA says there are currently no specific detailed plans for the area.

 

Still, a section of the Whitley Road stretch that flanks the PIE remains largely undeveloped and might be reserved for future development, said CBRE Research.

 

Source: Straits Times

Designing a house begins with the site it sits on

Designing a house begins with the site it sits on

 

Each has its own look and feel, which dictate the design, developer Satinder Garcha says

 

By Joyce Teo

 

AN AVID polo player – he is the captain of the Singapore team – Mr Satinder Garcha, 37, is also a landed property developer, albeit a relatively new one.

 

In the three years since his first Singapore property was completed, he has built up a sizeable portfolio of 22 properties, many of which are being developed. He will build more on a $78.7 million strip of land at Sentosa Cove.

 

Mr Garcha, a New Delhi-born Singaporean, came to the Republic after selling his Silicon Valley information technology services company, People.com, in 2000.

 

The very first house he built in the Republic – a stately bungalow in White House Park that he and his family now live in – was featured in a coffee-table book titled 25 Tropical Houses: In Singapore And Malaysia.

 

Mr Garcha also managed to secure the services of world-

 

renowned architect Zaha Hadid for two bungalows to be built on Nassim Road. Based in Britain, the Baghdad-born architect became, in 2004, the first woman to receive the Pritzker Architecture Prize.

 

Ms Hadid is acclaimed for her unwavering commitment to modernism and innovation. She has built her career on defying convention, by disregarding traditional ideas of space and construction. The fragmented geometry and fluid mobility of her buildings demonstrate that architecture is a fine art that celebrates the human imagination.

 

Her masterpieces include the Chanel mobile art museum, a travelling exhibition featuring pieces inspired by the Chanel quilt bag; and Germany‘s Phaeno Science Centre, located in Wolfsburg, and the BMW Central Building, located in Leipzig.

 

Ms Hadid has also worked on the masterplan for one-north, but the bungalows, for which she was given an open budget, are her first residential project in Asia. CapitaLand has announced that she will design its huge Farrer Court site condo.

 

Q How involved are you in your projects? Do you come up with the design ideas yourself?

 

A Yes. An architect also responds to the needs of the clients and what he perceives the clients need. Every developer has his own flavour. In our case, we have a very strong flavour. We collect input from everyone, though about 80 per cent comes from me.

 

Q Where and how do you start?

 

A The most important thing that dictates the design is the site. No two sites should be alike in look, feel or design simply because every site is different.

 

When I talk about sites, I talk about the gradient, the steepness, the surrounding views, the shape, the neighbours – all of these things strongly dictate the design.

 

We spend a lot of time thinking about the form and the design of every site, studying it and thinking up something suitable for it.

 

Some people said they didn’t bid for the Sentosa Cove site because it was too long and narrow. I find that odd because that is the strength of the site. Every house would have a great view.

 

Q Why Zaha Hadid and how did you persuade her to sign on?

 

A I really like her forms. They are more sculptural, more organic. She is more the new-generation architect.

 

I’d contacted her office before about other projects but I didn’t push. When we procured this Nassim Road site, we actually flew to London to see her. It’s a great site, right next to the Botanic Gardens, and we were willing to be more experimental.

 

The Singapore brand helped. She wanted to do something in Asia and the timing was right.

 

We are using her latest ideas, including cast-iron shells for the houses. It’s pure art… The houses will be masterpieces. They’ll be among only five to six houses ever done by her.

 

Q How vital is it to rope in a famous architect?

 

A There are many architects in Singapore who could do the job, but there is the branding to consider. If a local architect said a project would cost double to develop, it would be hard to sell.

 

(Mr Garcha says his Nassim Road bungalows will cost far more to build than a typical house. For one thing, the cast-iron shells will be constructed overseas.)

 

Q What is good design?

 

A The form is very, very important. I see a lot of properties that are built around the layout of the rooms.

 

You’d be surprised how many buildings are built with bad designs. Small things can make a huge difference.

 

We focus a lot on the quality of the spaces and the feel of the spaces. The utility of the home is important to me. You can’t look at just the external design and forget about the space inside. You also can’t do the layout without giving thought to the shape of the house. It’s called inside out, outside in.

 

When you’re inside a house, it has to feel like a house – albeit a grand one – and not a museum. We don’t want to do crazy things with the inside of the house.

 

We sell a house and it is up to the client to make it a home… I don’t believe in adding gimmicky features.

 

Q How important is good design?

 

A It’s like having a Prada or Gucci bag… Hopefully, the properties will survive for 50 years or more, and add to the beauty of the neighbourhood. Good design does not necessarily mean more expense. It means giving thought to the quality of the space.

 

Today’s consumers are much more sophisticated. New-generation buyers are well-travelled and appreciate good design. Things that are not well-designed will become harder and harder to sell.

 

Source: Straits Times

Fed steps in to save Bear Stearns

Fed steps in to save Bear Stearns

 

Move prompted by fears that run on the firm could have repercussions on world financial system

 

NEW YORK – THE tumult in US stocks looks set to intensify this week after the Federal Reserve took the extraordinary step of providing emergency funding to one of Wall Street’s venerable firms, Bear Stearns, after it ran out of cash to repay its lenders.

 

The Fed used a little-known power it last exercised in the 1960s to stem a run on Bear Stearns that could have sent multibillion-dollar losses cascading across the world financial system, causing more failures on Wall Street and choking off global economic growth.

 

‘We’re on a knife’s edge,’ said Professor Eugene White, a Rutgers University expert on financial crises. ‘The danger is if people’s confidence is lost in a place like Bear Stearns, no one will lend to anybody.’

 

While the Fed’s action may have contained the immediate crisis, the move reinforced widening anxiety over the health of other banks and investment funds exposed to the credit meltdown.

 

Markets tumbled in the hours after the plan was announced. Bear struggled to manage a flood of calls from clients trying to redeem their investments. Its stock plummeted 47.4 per cent, or US$27 (S$37), to US$30 last Friday. That knocked US$3.2 billion off the firm’s market value, leaving it at US$3.5 billion.

 

Bear is actively shopping itself to other big Wall Street firms and has scheduled high-level talks over the weekend. It is also open to selling major divisions to raise cash, a bank official said.

 

J.P. Morgan Chase, which played a crucial role in Friday’s cash infusion, is a possible suitor. Other interested parties include J.C. Flowers & Company, the private equity investor, and the Royal Bank of Scotland.

 

As Bear’s troubles deepened last week, it was forced into a frantic search for cash, ending in the deal in which it would put up some of its assets as collateral in exchange for cash from the Fed.

 

The transaction would be routed through J.P. Morgan which, as a commercial bank, has access to the Fed’s discount window. That would give Bear time to raise funds through the private sector.

 

The Fed approved the deal after a series of conference calls from Thursday afternoon till 7am the following day. Among its considerations was that if it allowed Bear to fail, it could drag down the rest of Wall Street. A major financial institution would have gone from being worth US$8 billion to worthless, literally overnight.

 

Weighing on its mind was the concern that a bailout would be an inappropriate intervention that could lead banks to keep taking bigger risks, safe in the knowledge that they would be rescued.

 

But markets are so jittery that the policymakers feared inaction would prompt investors to hold back short-term loans to other big Wall Street banks and firms, sound ones included, driving them under too.

 

Under the deal, the New York Fed will accept collateral from Bear – long-term investments viewed as safe – in exchange for the short-term loan. But if the value of the collateral drops, the Fed could end up losing money.

 

In the end, the Fed decided that the danger of a stock market collapse and the untold damage to the wider US economy that would flow from that outweighed all other considerations.

 

The developments may only postpone the eventual sale of all or part of Bear, which has had crippling losses on mortgagelinked investments.

 

Some experts say Bear’s woes warn of potentially larger calamities that will severely test the Fed, the economy and, ultimately, taxpayers.

 

Washington Post, NYT, Reuters

 

Source: Straits Times

One big failure could bring down the entire system

One big failure could bring down the entire system

 

NEW YORK – THE Federal Reserve’s unusual decision to provide emergency assistance to Bear Stearns underscores a long-building concern that one failure could spread across the financial system.

 

Wall Street firms like Bear conduct business with many individuals, corporations, financial companies, pension funds and hedge funds. They also do billions of dollars of business with each other every day, borrowing and lending securities at a dizzying pace and fuelling the wheels of capitalism.

 

The sudden collapse of a major player could not only shake client confidence in the entire system, but also make it difficult for sound institutions to conduct business as usual.

 

Hedge funds that rely on Bear to finance their trading and hold their securities would be stranded; investors who wrote financial contracts with Bear would be at risk; and markets that depended on Bear to buy and sell securities would screech to a halt.

 

‘In a trading firm, trust is everything,’ said New York University financial historian Richard Sylla. ‘The person at the other end of the phone or the trading screen has to believe that you will make good on any deal that you make.’

 

Commercial banks, mutual fund companies and other big financial firms with deep pockets would presumably weather such turmoil. Firms that traded extensively with Bear could be at great risk if the bank failed.

 

Policymakers have been wrestling with questions about when and how they should provide assistance since the last major bailout of a tottering bank, Continental Illinois, in 1984. The bank was considered too big to fail without sending waves of losses through the financial system.

 

Regulators are facing an unprecedented and widespread deterioration in many markets. Now, even top-rated securities once deemed as safe as treasuries have hit the skids.

 

Financial firms have written down more than US$150 billion (S$207 billion) of their assets. Some analysts are predicting that losses in various credit markets will reach US$600 billion.

 

Bear Stearns was one of the first firms to take a direct hit from the sub-prime mortgage crisis when two of its hedge funds collapsed over the declining value of mortgage-backed securities. It is also among the biggest firms in the financing of hedge funds.

 

In recent weeks, nervous fund managers have scrambled to protect themselves. Mr Robert Sloan, who is the managing partner at S3 Partners, a financing specialist that works with hedge funds, has shifted US$25 billion out of Bear Stearns accounts in the last two months.

 

‘The problem is the financing of the hedge fund industry is very concentrated and very brittle,’ he noted. ‘If they go under, you will have thousands of funds frozen out.’ He added that everyone might then have to wait for a court to name a receiver before business could resume.

 

Compounding the problem, some big investment banks last week stopped accepting trades that would expose them to Bear Stearns. Money market funds also reduced their holdings of short-term debt issued by Bear, according to industry officials.

 

‘You get to where people can’t trade with each other,’ said Mr James Melcher, president of Balestra Capital, a hedge fund based in New York. ‘If the Fed hadn’t acted…and Bear did default on its obligations, then that could have triggered a very widespread panic and potentially a collapse of the financial system.’

 

NYT

 

 

——————————————————————————–

 

ON EDGE

 

‘We’re on a knife’s edge. The danger is if people’s confidence is lost in a place like Bear Stearns, no one will lend to anybody.’

EUGENE WHITE, an economics professor

 

A BRIDGE

 

‘What this is is a bridge to more permanent solutions. Investors will be able to see the facts instead of the fiction. We will look for any alternative that serves our customers as well as maximises shareholder value.’

BEAR STEARNS CHIEF EXECUTIVE ALAN SCHWARTZ, on the assets-for-cash deal with J. P. Morgan

 

GLOBAL EFFECT

 

‘It’s not like Chrysler or Lockheed needing a bailout because of problems within their specific industry. Because the financial system is interrelated worldwide, you can’t have a company like this under.’

RICHARD BOVE, an analyst with Punk Ziege

 

Source: Straits Times