Houses at Cornwall Gardens Rd monitored for cracks

Houses at Cornwall Gardens Rd monitored for cracks


SINGAPORE : Channel NewsAsia understands that the Land Transport Authority (LTA) is monitoring some cracks in the houses at Cornwall Gardens Road, where there was a big cave-in last week.


Contractors are doing minor works to ensure that the houses in the area are safe.


LTA, which reopened one lane on Friday, has back-filled the entire road.


Residents living directly opposite the major dent had to move out for two days because the cave-in had cut their water supply and internet connection.


No one was injured but the road had to be temporarily closed to traffic, after a big part sank on Saturday.


LTA said the crater measured 8 metres by 7 metres, and was 3 metres deep.


It is just above a tunnel boring machine where tunnelling works for Circle Line 4 are being carried out.


This area is located between the future Holland and Farrer Road MRT stations. – CNA/ms


Source: Channel NewsAsia

Stamford Land profit up 29% on tax credit

Stamford Land profit up 29% on tax credit




THANKS to a deferred tax credit of $14.82 million, Stamford Land Corporation saw a 28.7 per cent rise in net profit to $42.94 million for the financial year ended March 31.


Stamford said the deferred tax credit arose from recognition of unrecorded tax losses carried forward as ‘the anticipated future taxable profit will allow the deferred tax assets to be recovered’.


Revenue for the year dipped 7.3 per cent to $276.1 million and pre-tax profit fell 14.6 per cent to $28.5 million as the group had a lower inventory of completed residential properties for sale compared with last year.


Earnings per share rose to 4.97 cents from 3.86 cents.


Its hotel segment achieved a 17 per cent increase in revenue to $232.2 million due to better occupancy and room rates and translation of revenue denominated in Australian dollars and New Zealand dollars into Singapore dollars at higher exchange rates.


The trading segment posted a 22.6 per cent growth in revenue to $14.82 million due to higher contribution from the group’s travel and interior decoration companies.


But growth in these segments was offset by a 66.8 per cent slump in revenue in the property development and investment segment to $28.96 million as fewer units of Stamford Marque remained for sale.


Stamford Land is optimistic about the outlook for the hotel industry in Australia in view of limited new hotel rooms coming on stream, likely further improvements in revenue per available room, and continued strength in the Australian dollar.


‘The group expects positive results from its hotel owning & management segment in the next reporting period and the next 12 months,’ it said.


On the residential front, Stamford Land said its Stamford Residences Auckland is expected to be completed in October this year and it will recognise income from the sale of this project accordingly.


It has pre-sold over 70 per cent of the Stamford Residences and Reynell Terraces, Sydney, which is scheduled for completion in August 2011.


‘The trading segment is expected to further improve on its performance on the back of the strong Singapore economy,’ it added.


Stamford Land has proposed a final dividend of 1.5 cents per share and a special dividend of one cent per share. It paid out an interim dividend of 1.5 cents per share on March 12.


Shares in Stamford Land closed trading yesterday at 67 cents, down one cent.


Source: Business Times

Wheels come off Raffles Hotel deal

Wheels come off Raffles Hotel deal


Proposed sale to consortium fails to materialise




(SINGAPORE) The proposed sale of Raffles Hotel is off.


A spokeswoman for the consortium led by former Credit Suisse banker Mark Pawley that was to have bought the Singapore icon confirmed yesterday: ‘We regret to say that the sale will not be completed as planned. The consortium is very disappointed with the current outcome as we had hoped for a win-win solution involving all parties.


‘This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel. We will continue to actively explore other opportunities to contribute to Singapore.’


She declined to give reasons for the deal not being completed, citing confidentiality clauses. The deal was reported to have been in the range of about $650 million and would have included the adjoining shopping arcade. But when asked about talk that there might have been some issues with the source of the money for the purchase, she replied strongly: ‘The source of the money has always been the same. This has never been an issue and there is no basis for these allegations. ‘


On suggestions that the consortium might have faced funding problems, the spokeswoman said: ‘We have the money. To say otherwise is baseless.’


BT understands that the completion of the sale was expected yesterday. The in-principle agreement for the deal was announced on May 8.


Fairmont Raffles Hotels International (FRHI), the owner of the landmark hotel and adjacent shopping arcade, was to have secured a very long-term management contract, reportedly for 40 years, to manage the hotel under its hotel management arm, Raffles Hotels & Resorts.


Colony Capital holds about 40 per cent in FRHI while Saudi Prince Alwaleed bin Talal’s Kingdom Hotels International owns the rest.


FRHI’s May 8 statement had said that similar to its past real estate transactions, any hotels sold would continue to be part of the company’s hotel collection and managed under long-term management contracts. Industry observers say that this is crucial to FRHI’s plans to spin off and float a hotel management arm.


‘Most existing hotel groups would be reluctant to purchase a hotel with a long-term management contract from the seller. And frankly, Fairmont Raffles would jealously guard their proprietary management systems from any potential hotel owner that is also in the business,’ a market watcher said.


Source: Business Times

Govts not facing up to long-term threat of inflation: HSBC boss

Govts not facing up to long-term threat of inflation: HSBC boss


US dragging feet, hoping inflation will help its housing market recover





BROAD inflation measures are understating the long-term threat of rising prices worldwide and policymakers are not acting fast enough, said HSBC group chief executive Michael Geoghegan.


Most governments and central bankers are ‘not facing up’ to the danger of inflationary expectations becoming entrenched, he said. ‘I think it’s going to be a long-term problem because I don’t think there’s a long-term will to solve it.’


Faced with higher household expenses on utilities and food, workers in some countries have already demanded sharp wage increases recently, he said.


This has in turn saddled businesses with higher costs that may result in further increases in the prices of goods and services – the start of a vicious cycle that could spiral out of control.


‘I do believe that to a very large degree, the inflation numbers that we see coming out of various central banks don’t reflect the underlying rate of growth in household expenditure, ‘ he said. ‘It’s easy to say inflation is slowing, but if costs have risen 30, 40, 50 per cent, saying inflation is slowing doesn’t achieve anything.’


Mr Geoghegan, who is usually based at HSBC’s headquarters in London, was speaking to a group of business leaders at a lunch organised by the Asia Society in Hong Kong earlier this week . ‘In the short term, it will need an increase in interest rates and I’m not sure governments have the courage to do that. I would urge them to, because inflation not controlled is very difficult to control later and I do hope governments will face up to that.’


One reason central banks are reluctant to raise interest rates – at least in the United States – is that higher inflation would help the US housing market recover more rapidly, he said. ‘In the short term that will benefit the US real estate market, because the cost of replacing homes will rise quite quickly.’


Since last September, the US Federal Reserve has slashed its key interest rate by 3.25 percentage points in a rapid succession of rate cuts to 2 per cent, in an attempt to steer the faltering US economy away from recession. Comments last week by Fed vice-chairman Donald Kohn suggested the US central bank is hoping to pause the rate cuts at its next policy meeting on June 24, but analysts do not expect rates to be raised until the end of the year, after the US presidential elections in November.


Outside the US, many central banks have also been reluctant to raise interest rates for fear of hurting their own economies that are already facing slower growth from the US downturn. ‘At the moment, I don’t see any real commitment to raise interest rates,’ said Mr Geoghegan.


He also said that the US sub-prime mortgage crisis had exposed flaws in the way investment banks do business, which is likely to change with pressure from regulators and internal reforms. ‘The idea that groups of people with no core deposit base can raise large amounts of money and take the position as banks is probably something that we’ll see change over time. I think you’ll find that banks will lend and investment banks will advise, but they won’t do both.’


Securitisation – the business of repackaging pools of basic loans such as mortgages and credit card debt into other financial products such as collateralised debt obligations or CDOs – will change, too. ‘We need a very transparent securitisation industry . . . where it’s easy to understand the risk and show it to others’ instead of relying on the opinions of credit rating agencies, he said.


Source: Business Times

HDB resale price growth expected to remain low

HDB resale price growth expected to remain low


Moderate 4-10% growth seen for 2008: Knight Frank




THE rate of price increase of Housing and Development Board (HDB) resale flats will further decelerate in the next six to nine months, resulting in a relatively moderate 4-10 per cent growth for the whole of 2008.


Knight Frank director (research and consultancy) Nicholas Mak added: ‘If the local economy were to slip into a recession in 2008, overall prices of HDB resale flats could vary between a 2 per cent contraction and a 3 per cent growth for the year.’


Knight Frank’s projections are based on HDB’s resale price index, which increased in Q1’08 by 3.7 per cent over the previous quarter. But Mr Mak explained that price movements in the resale market are difficult to project because data on average valuations are not available even if median prices, which is likely to include cash-over-valuation (COV), is.


As such, Mr Mak expected that median COV of all resale flats, which fell to $21,000 in Q1’08 from $22,000 in Q4’08, could continue to fall this year.


Another possible cause for lament is that potential HDB upgraders – a significant factor in private mass market housing – could disappear in sync with falling HDB resale transactions.


In Q1’08, transactions fell about 6 per cent to 6,358 units from 6,748 units in Q4’07.


Knight Frank also believed that HDB upgraders have been supporting the private secondary market, which saw 3,521 units transacted in Q4’07.


While it did not have precise numbers of HDB upgraders buying into the secondary market, it noted that in Q4’07, the greatest number of private secondary market transactions occurred in the Outside the Central Region (OCR), and was ‘attributable to the HDB upgraders bracket’.


And Knight Frank believed that there could be an emerging resistance to swelling home prices.


In January, Knight Frank noted that City View @ Boon Keng, under HDB’s Design, Build and Sell Scheme (DBSS), pushed prices to $727,000 for a five-room unit. While the launch generated a lot of buzz, at end March 2008, 250 of the 714 flats available were still unsold.


‘The issue that arises is the validity of the pricing of such DBSS flats. Keeping in mind that there are more of such developments proposed in places like Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok, and given that they are still bound by public housing rules such as the income ceiling of buyers, one could begin to wonder about the intrinsic affordability of public housing initiatives, ‘ Mr Mak said.


Source: Business Times

What a difference a year makes

What a difference a year makes


THIS time last year, the central banks of Asian countries such as India, Indonesia and the Philippines were trying their best to slow the US dollar’s slide against their home currencies. By Tuesday this week, traders reported that at least four Asian central banks had intervened to stop the US currency from rising too fast instead.


More than one reason has been forwarded for this sharp turnaround, but the most important one has to be the stratospheric surge in oil prices. A year ago, they were trading at something like US$70 per barrel, now they are threatening to double that, or go even higher. Researchers at US investment bank Goldman Sachs, among the first to predict oil would surpass US$100 per barrel, now warn it could even reach peaks twice as high.


Over the past year, a fast-falling US dollar, rising demand and increasing speculative interest have combined in ugly fashion to boost all manner of commodity prices to one record high after another. As a result, we learned this week that Indonesia has been obliged to raise its subsidised oil prices by some 30 per cent. Taiwan is also removing oil price controls, and has announced graduated increases in the prices of oil, electricity and utilities. Both countries’ central banks were among those believed to have slowed the greenback’s rise against their currencies this week. In the face of such unprecedented price pressures, some obvious winners and losers have emerged in currency terms, and here’s what it has appeared to come down to.


Countries with strong and growing external accounts may just have to let their currencies appreciate faster in order to deflect imported price pressures. On the other hand, those who suffer large current account deficits will have to tighten up at home if they don’t want to find themselves paying more and more – in local currency terms – for food and energy imports.


In the first category, the most obvious candidates are China, Japan and the countries of the oil-rich Gulf. Far less fortunate would be countries such as India, Indonesia and the Philippines. In the case of the latter, Barclays Capital researchers have already warned of interest rate hikes over the coming quarters. For India specifically, a US$100 billion oil import bill and a sharp reversal in portfolio flows has now convinced JPMorgan researchers to raise their end-2008 target for the US dollar to 45 rupees, from 40 rupees earlier.


At the other extreme, two US investment banks recently suggested that those with fixed US dollar peg currencies – such as those in the oil-rich Gulf and Hong Kong – may have no choice but to let their currencies rise against the greenback to relieve rising price pressures at home.


At home, the Monetary Authority of Singapore has kept the trade-weighted Singapore dollar on an appreciating path to defuse imported pressures. With local inflation at a 26-year high, it’s clear that’s the only way to go.


Source: Business Times




MR DESMOND Woon Choon Leng, executive director at Ho Bee Investment, has been snapping up shares in the property developer this week.


On Tuesday, he bought 150,000 shares on the open market at 95.8 cents apiece.


Then on Wednesday, he bought another 250,000 shares on the open market at 93.7 cents apiece.


Ho Bee’s share price fell nine cents, or more than 9 per cent, during five straight days of losses that ended on Wednesday. The counter rose one cent to close at 93 cents yesterday.


These two transactions raised Mr Woon’s direct stake to 1.55 million shares, or 0.21 per cent, of the firm’s issued share capital.


In March, Ho Bee chairman and chief executive Chua Thian Poh bought 300,000 shares at 89.5 cents apiece through Ho Bee Holdings, further raising his deemed stake to 476.4 million shares, or 64.61 per cent, of issued share capital.


Ho Bee’s first-quarter results, announced earlier this month, were hurt by a drop in home sales. It reported a 62 per cent plunge in its net earnings to $26.1 million for the quarter ended March 31.


Revenue also fell 62 per cent to $94.2 million, mainly due to the lower recognition of revenue from its property development project, The Coast, at Sentosa Cove.


While it warned that the property market is expected to remain soft in the near term, it expects earnings to be supported by recognition of income from the sale of its residential projects, which include Vertis at Amber Gardens and Quinterra in Holland Road, in the next few years.


Source: Straits Times

UBS chief says worst of crisis is over

UBS chief says worst of crisis is over


ZURICH – THE head of embattled Swiss bank UBS said yesterday that the worst was behind it after it was recently forced to write down about US$37 billion (S$50.7 billion) of assets hit by the United States sub-prime crisis.

‘I definitely think that the worst is behind us,’ UBS chief executive Marcel Rohner told Swiss newspaper Le Temps. ‘There will certainly be plenty of things for banks to clear up over the next two years, but as far as systemic risks are concerned, we’ve got over the hardest part.’


He added that UBS’ investment banking arm had ‘developed some questionable economic activities’ in the run-up to the sub-prime crisis. ‘We made the mistake of adopting an imitation strategy to try and catch up with our competitors in fixed income operations.’


Earlier this month, it posted first-quarter losses of 11.5 billion Swiss francs (S$15.1 billion). The bank faces fresh problems after a former member of its private banking team was detained in the US as part of a tax evasion probe.


The bank decided to shut down its cross-border private banking business for US customers in November last year, but recently, Bradley Birkenfeld, a former senior banker, was indicted for helping wealthy Americans to evade paying income tax on their investments.


Source: Straits Times