Malaysia’s removal of fuel price control will impact S’pore inflation

Malaysia‘s removal of fuel price control will impact S’pore inflation 



Malaysia’s recent move to remove fuel price controls will likely suppress economic growth and drive up the country’s inflation to as high as 5 percent this year according to industry experts.


But the impact may not just be isolated to our neighbouring country, as analysts say the pressure of rising costs may also spill over to Singapore.


938LIVE’s Irene Chan with the details..


With Malaysia being Singapore’s largest trading partner and trade between the two countries reaching nearly $110 billion last year.


Asian Strategist of Deutsche Bank Private Wealth Management, Chua Hak Bin, says the recent developments in Malaysia will likely add to inflationary pressure in Singapore in the near term.


“I think a lot of the food stuff and other manufactured products are also do come through Malaysia. The fuelprice hike in Malaysia is pretty significant, it’s up 40 percent, so a lot of the transport companies will be raising their costs. So this should raise the prices for quite a bit of products coming from Malaysia to Singapore. But I guess it is probably a one off impact. So there’s a risk that inflation could stay high for June.”


Dr Chua adds that the impact however is unlikely to be significant as the global surge in energy and food prices still remain the key concerns for inflation here.


Fortis Startegist Joseph Tan agrees and says if the price escalation continues, there’s a risk that inflation may breach the top end of the government’s inflation forecast of 5 to 6 percent this year.


“A lot of it really hinges on the second half the year where the base effect will actually be positive in terms of reducing inflation. But nevertheless, what’s very important is to keep our eyes focused on the external sources of inflation. In this sense, the sources of inflation at this point in time are very direct and specific, they really come out of commodity price inflation, both in terms of food and fuel.”


Mr Tan forecasts that Singapore’s inflation will average 6 percent this year.


Source: 938Live

Indiabulls prices S’pore IPO at bottom of band

Indiabulls prices S’pore IPO at bottom of band




MUMBAI – Indiabulls Properties Investment Trust said on Friday it had priced its initial public offer of shares in Singapore at $1 (73 US cents) each, the lower end of the indicative price band, to raise $353.5 million (US$259 million).



The real estate investment trust, a unit of Indiabulls Real Estate, India’s fourth-largest developer by market value, had extended the retail portion of the offer by one day to Friday as it was not fully subscribed.


The offer opened on June 2 with an indicative range of $1 to $1.10. The shares are set to list on June 11, a filing to the Singapore Stock Exchange showed, marking the first Reit listing in Singapore since November.


The 353.5 million shares issue is made up of a public offer of 262.5 million shares and an already completed sale of 91 million shares to a firm owned by LN Mittal, the chief executive of Arcelor Mittal, the world’s largest steel maker.


The last two Reits to list in Singapore, Lippo-Mapletree Indonesia Retail on Nov 19 last year and Saizen Reit on Nov 9, tanked on their debuts amid turmoil in global markets.


Deutsche Bank and Merrill Lynch arranged the share sale. The Reit has two Mumbai projects under development carrying a total of 3.4 million square feet of space.


Indiabulls Real Estate shares, which have fallen 43 per cent so far in 2008, rose 4.6 per cent at 424.10 rupees on Friday in a Mumbai market that fell 1.25 per cent. — REUTERS


Source: Business Times

130-room Raffles Moscow set to open in 2011

130-room Raffles Moscow set to open in 2011


MOSCOW : Raffles Hotels & Resorts is set to open in Moscow in 2011. The 130-room Raffles Moscow will be managed by Raffles under a long-term contract that may last more than 20 years.


An agreement was sealed with its partner ALT Corporation, witnessed by Senior Minister Goh Chok Tong who is currently on a visit to Moscow.


Raffles Hotel said the new property will be located in Moscow’s business district, near prominent landmarks like the Red Square, Kremlin and Bolshoi Theatre.


The stately building, currently managed by ALT Corporation, will soon undergo redevelopment to transform it into a luxurious hotel.


Average room rates are likely to range between US$800 and US$1,000 a night.


Raffles Moscow will be part of a larger development, which will include apartments, high-end retail galleries as well as historic buildings, such as an 18th century Russian Orthodox Church and the house where Napoleon Bonaparte occasionally stayed.


Raffles Moscow will feature six restaurants and a bar, and a 1,300-square-metre RafflesAmrita Spa.


Raffles and ALT are also exploring other opportunities in the St Petersburg area. – CNA/ms


Source: Channel NewsAsia

Yongnam secures S$84m contracts for Marina Bay Sands IR projects

Yongnam secures S$84m contracts for Marina Bay Sands IR projects


SINGAPORE: Infrastructure firm Yongnam Holdings has won two more subcontracts worth a combined S$84 million for construction works at Marina Bay Sands Integrated Resort.


The two contracts will see Yongnam build the structural steelworks for the resort’s iconic lotus-shaped ArtScience Museum, casino and theatre podium.


The latest deals come on the back of earlier contracts worth about S$178 million, announced in May 2008 and November 2007.


Both new contracts are expected to have a material impact on the group’s financial performance for financial year 2008. – CNA/ac


Source: Channel NewsAsia

JTC to conduct strategic review exercise

JTC to conduct strategic review exercise


SINGAPORE: JTC will conduct a strategic review exercise in light of challenges from an increasingly globalised economic environment.


According to JTC’s Chairman, Cedric Foo, this involves looking into maximising Singapore’s land use and boosting the industrial property market. JTC will also continue to undertake large-scale projects essential to Singapore’s growth.


The theme at JTC’s 40th anniversary celebration at the Shangri-La hotel on Friday is on the challenges of today’s market conditions and how to tackle them.


Prime Minister Lee Hsien Loong said: “I am glad that JTC is evolving its mission in response to these new challenges and demands. In particular, JTC will be sharpening its focus to fill market gaps and maximise its effectiveness. The private sector is now more capable of developing industrial projects.”


JTC is already taking steps to divest its industrial facilities to the private sector, allowing the agency to focus more on its core functions such as master planning industrial estates.


“We must be a strategic infrastructure provider, undertaking large-scale specialised projects which Singapore requires for future economic growth and which the private sector lacks the capability or confidence to take on,” Mr Foo said.


This makes up one of the three objectives that JTC will focus on in its strategic review. The other objective is to look into cost- and space-saving real estate solutions.


Lastly, JTC will further promote an active industrial property market. Mr Foo said: “Our divestment exercise will foster competitiveness and vibrancy in the private sector.”


Ong Geok Soo, Assistant CEO, JTC Corporation, said: “We are divesting our flatted factory. It’s only a small component of the overall assets that we have.


“We are still retaining all those landed properties because these are, by and large, a big chunk of the industrial support that we have to give. At the present moment, we are not looking at anymore divestment. We will see how it goes along. The decision will be made later as we go along.”


JTC’s ready-built industrial facilities will be divested to Mapletree at the end of June.


Source: Channel NewsAsia

Indiabulls raises S$262m after pricing IPO units at S$1

Indiabulls raises S$262m after pricing IPO units at S$1


SINGAPORE: Indiabulls Properties Investment Trust has raised S$262 million from its initial public offering after pricing its units at S$1 each.


This is at the lower end of its indicative range of S$1.00 to S$1.10. Analysts said the lower pricing could be a sign of a subdued IPO market.


Indiabulls had offered 262 million units to investors. It also extended the closing date for its IPO to Friday, June 6.


Based on the offer price of S$1 per unit, the trust has a forecast distribution per unit of 5.12 Singapore cents in 2009 and 9.82 Singapore cents in 2010.


Indiabulls is India’s third-largest property developer and is listed on the Bombay Stock Exchange and the National Stock Exchange of India.


Its main businesses span from project management, construction services and IT parks to hotels and resorts.


Source: Channel NewsAsia

Fed chief sees no repeat of 1970s inflation

Fed chief sees no repeat of 1970s inflation


CAMBRIDGE (MASSACHUSETTS) – UNITED States Federal Reserve chairman Ben Bernanke said rising long-term inflation expectations were a ‘significant concern’ for policymakers, but dismissed worries that a wage-price spiral was developing.


‘Some indicators of longer-term inflation expectations have risen in recent months, which is a significant concern for the Federal Reserve,’ he told graduating students at Harvard University on Wednesday.


He described overall inflation as ‘significantly higher than we would like’, the second straight day he had sounded a warning on inflation, which financial markets took as a firm signal that interest rates were likely to be on hold for some time.


Nonetheless, Mr Bernanke said he saw no sign that a ‘1970s-style wage-price spiral, in which wages and prices chased each other ever upward’ might be starting.


While inflation has averaged 3.5 per cent over the past four quarters, that was much less than rates reached in the 1970s and again in 1980.


Analysts said the tone of his remarks indicated that the Fed was firmly focused on inflation risks and was unlikely to ease rates.


‘I’m not saying that he will not lower rates even if the economy falters severely, but he’s certainly suggesting that inflation is of equal importance,’ said Mr John McCarthy, the director of foreign exchange at ING Capital Markets in New York.


Bond prices dropped after Mr Bernanke’s remarks were published, as investors bet it reduced chances of more rate cuts, but the US dollar’s value rose. Stock prices also fell on the fresh expression of concern about inflation.


Mr Bernanke said soaring oil prices have had a ‘relatively muted’ impact so far because the amount of energy used to produce a given amount of output – energy intensity – has fallen markedly since the 1970s.


But he also said policymakers had learnt a lesson in the 1970s, in particular, that they must keep long-term inflation expectations anchored to achieve low and stable inflation.


‘If people expect an increase in inflation to be temporary and do not build it into their long-term plans for setting wages and prices, then the inflation created by a shock to oil prices will tend to fade relatively quickly.’




Source: Straits Times

The only way is up?

The only way is up?


Some economists say short-term rate has bottomed out, but they expect increases to be tiny


By Michelle Tay


THE period of rock-bottom interest rates may be over, with some experts tipping that levels in Singapore are set to head north – but at a gentle pace.


The three-month Singapore Interbank Offered Rate (Sibor) – the level at which banks lend to each other – is at 1.3 per cent. That is still a remarkably modest rate, but it is up from the 12-month low of 1.25 per cent a few days ago.


It is also dramatically lower than the 3.1875 per cent in March last year, before rates began plunging.


Economists expect rate rises to be tiny, but home owners might think it smart to refinance mortgages before rates creep up.


The rates pressure is coming from the United States. The Sibor tends to track US rates, which are tipped to rise by 50 basis points by year end.


Dr Chua Hak Bin, Asian strategist at Deutsche Bank Private Wealth Management, said: ‘I believe the short- term interest rate has bottomed out. Our rates track the US rates quite closely, and there is a sense that the Fed, after a 325 basis point cut, is due to raise rates soon.’


He expects rates to rise to 1.4 per cent in 12 months and to go back to above 2 per cent in three years.


OCBC Bank economist Selena Ling said: ‘We would expect the short-term interest rate to rise to 1.5 per cent by year end. It won’t rise sharply because the Monetary Authority of Singapore (MAS) is still on a tight monetary policy to combat inflation.’


But HSBC economist Robert Prior-Wandesforde sees things differently: ‘We are not expecting a Fed hike before the end of this year, and I’m still looking for the three-month Sibor to fall to 1 per cent over the next few months. With the MAS thought to keep the Singapore dollar strong, this is encouraging foreign inflows, which in turn is depressing interest rates.’


One indicator of where short-term rates might be headed lies in the bond market, where long-term interest rates seem to have spiked.


The 10-year Singapore Government Securities bond yield was 2.73 per cent in the middle of last month, but has now risen to 3.6 per cent.


United Overseas Bank’s treasury research head, Mr Jimmy Koh, said: ‘We have inflation climbing in the region, making long-term rates move up. Over time, this could drag up short- term rates.’


He also noted that central banks in Indonesia and the Philippines have already started raising short-term interest rates.


Deutsche Bank’s Dr Chua said: ‘Long-term interest rates are determined by long-term views on growth and inflation. As risk appetite returns, these might move up faster than the short-term rates because of inflation risks, and the Fed may not be able to move as fast as we hope.’


Whatever the cause, rising interest rates affect everyone, from bank savers to homebuyers and retirees looking for a good return on their cash.


If the Sibor rises, so might bank deposit rates in time to come. A DBS Bank spokesman said: ‘Our rates will move in tandem with market forces.’


Home owners might also think it prudent to switch to a fixed-term mortgage now as rates are linked to the Sibor.


Mr Prior-Wandesforde said ‘it is worth thinking seriously about shifting to a fixed rate’.


He added: ‘Although fixed-term mortgage rates haven’t come down that much during the recent decline in short-term market rates, they also didn’t rise as much as one would have expected during the period of rising short-term rates from 2005 to 2006.’


Source: Straits Times

Interest in Nusajaya industrial park warms

Interest in Nusajaya industrial park warms




(SINGAPORE) Initial response may have been cool, but companies in Singapore are showing more interest in Nusajaya’s Southern Industrial and Logistics Clusters (SiLC), where land prices are on a climb.


And according to a diplomat, Malaysia’s political developments should not cloud prospects for the Iskandar Malaysia economic zone.


Nusajaya’s master developer UEM Land said yesterday that SiLC’s Phase 1 has sold over 52.5ha of land, valued at around RM145 million (S$61 million). Some 95 per cent of the buyers, or around 22 companies, are based in Singapore.


Buyers include engineering and construction services provider Yong Nam Holdings and container handling firm Stinis Singapore.


UEM Land was in town to market another 40.4ha of freehold land in SiLC. Prices are likely to be around RM26 psf, a 30 per cent jump from RM20 psf when the land was first sold early last year.


SiLC is a 525.3ha park for advanced technologies, nutrition and health and integrated logistics industries in Nusajaya, a township in South Johor’s Iskandar Malaysia zone. Phase 1 of the park spans 121.2ha and UEM Land expects the remaining land in this phase to be taken up by the year-end.


The roadshow also showcased various developments in Iskandar Malaysia, but a Reuters report on Monday cast doubts over the future of the economic zone. Some investors may be ‘worried that the plans will be shelved if Mr Abdullah loses power’, the report said.


Calling the Reuters report ‘frivolous’, Malaysian High Commissioner to Singapore N Parameswaran said that the claims were ‘something that investors need not be concerned about, because this is a project … which enjoys the support of the entire Cabinet’. Referring to political developments in the country, he said: ‘I don’t see that this will affect the project at all.’


The Reuters story also noted ‘lukewarm response from big investors in nearby Singapore’ to the Iskandar Malaysia project. Sharing his experience marketing the SiLC, UEM Land managing director Wan Abdullah said that it was because investors ‘want to see delivery’.


He pointed out that developments in SiLC are taking shape, and that ‘we will continue to further enhance and improve’.


He also said that SiLC’s Phase 2 is under construction and may offer ‘a new value proposition that would make the buyers happy and our shareholders happy’.


Source: Business Times

Life in a self-contained township

Life in a self-contained township

one-north aims to be a place where residents can work, live, learn and play seamlessly. CLARISSA Tan reports


IT’S Friday morning. Your alarm rings. You decide to swim a few laps, so you head for the rooftop pool. Then you stroll to work, which takes only a few minutes. Throughout the day, you rub shoulders with academics, media types, a few artists.


Later you want to welcome the weekend with a bang. A host of restaurants and bars are just a short walk or an MRT stop away. And while your workplace is an impressive, futuristic building, you can opt to dine in a cosy colonial setting.


Living in one-north will help you enjoy this kind of lifestyle, according to some property developers and consultants. The 200-hectare area around Buona Vista, which includes scientific research centre Biopolis and media hub Fusionoplis, aims to be a place where residents can ‘work, live, learn and play’ seamlessly.


one-north’s ’self-contained township’ concept and proximity to a research-and-development hub, the Science Park and education campuses are a draw for researchers, academics and professionals, says Ku Swee Yong, director of marketing and business development at property consultant Savills Singapore.


‘Singapore has just begun to reap the benefits of R&D in the pure sciences,’ he says. ‘one-north is expected to contribute the lion’s share in the commercialisation value of these efforts’.


Two residential projects are under construction at one-north – one-north Residences and The Rochester.


The Rochester, going by the job-home-leisure concept, is a mixed development that will comprise a condominium, a business hotel and a mall.


The cluster will have ‘unparalleled accessibility,’ says Jackson Yap, group managing director and chief executive of developer United Engineers.


‘There’s the East-West MRT line a five-minute walk away at Buona Vista station and the Circle Line to be running by 2011. It is also a short drive to Orchard Road and walking distance to Holland Village.’


The Rochester Condominium will have 366 units. Besides being near the sleek towers of Biopolis and Fusionopolis, it will be flanked by the lush Rochester Park, a green belt with colonial black-and-white bungalows that have been leased to food-and-beverage outlets.


‘It enjoys all the amenities of a mature residential estate with the greenery of the Rochester Hill in the background,’ says Mr Yap.


The Rochester Mall will be 100,000 sq ft and the business hotel, called Park Avenue Suites @ The Rochester, will have 350 rooms.


‘Apart from serving business travellers to one-north, the hotel will cater to medical tourists, with the National University Hospital and Gleneagles in the vicinity,’ Mr Yap says.


It will also attract ‘edu-tourists’ on short-term post-graduate courses at the nearby INSEAD business school and the National University of Singapore, he adds.


The entire project should be completed by 2011.


one-north Residences, developed by Vista Development, will have about 400 residential units and 20 street retail units. Its design concept leans towards glass and steel, with blocks connected by sky bridges, and fits in with the area’s master plan to create a ‘fenceless’ community.


‘Because there is a limited supply of residential projects there, demand for housing will be extremely great from expatriates who work there,’ says Emily Eng, associate director of the residential department of Knight Frank, the project’s marketing consultant and agent.


‘People who buy see the potential of the hub. After all, the government has committed to spend $15 billion to develop this city within the city.’


Savills’ Mr Ku says a development like one-north Residences will ‘allow like-minded experts and professionals to get together, mingle and socialise within a short walk of their home.’


Such is the concern for seamless interconnectivity that if you’re the sort who prefers to roll out of bed and into the office, you can opt to live in the very building where you work.


Fusionopolis, a twin-tower, 24-floor skyscraper dedicated to ‘infocomms’ or media and IT-related businesses, will house 50 serviced apartments. These units will have access to a rooftop pool, a clubhouse and skygardens – as well as five floors of entertainment and retail outlets including a supermarket, restaurants, a bookstore and a food court.


While one-north may look scientific, high-tech and top-speed at first glance, it also has a more laidback and historical side. Nestled in a green enclave is the Wessex Estate, a close-knit cluster of black-and-white houses and apartments built by the British in the 1940s.


While the various blocks of the Biopolis complex are given names such as Neuros, Genome and Chromos, the apartment buildings of Wessex Estate bear names that recall another time – Waterloo, Somme, Lucknow, Pegu.


And unlike the colonial district at Rochester Park, which now features restaurants and bars, the Wessex Estate is still very much residential and has a strong neighbourhood feel. The aim is to foster it as a home for artists, teachers, writers and actors. A few of the apartment blocks have been converted into work lofts for people involved in the creative and fine arts.


The Wessex Estate has always had interconnectivity of its own. For decades, its inhabitants could head down to the nearby Colbar (short for Colonial Bar), where pickled onions and fish-and-chips are on the menu.


The Colbar still exists and is as popular as ever, but recently it has been joined by two new restaurants, a cafe and a cocktail bar – all of them forming an area called the Village Square.


At sundown, when you chug your beer at the square, perhaps you will see the twinkling lights of the hovering skyscrapers.


Source: Business Times