DAILY NEWS

Daily News – 1st March 2018

Top Story

Hike in DC rates unlikely to derail en bloc fever soon
The current collective sale market is unlikely to be derailed by the average 22.8 per cent hike in development charge (DC) rates for non-landed residential use in the next six months, say property consultants. However, they say the latest set of DC rates, payable by developers seeking to enhance the use of a site or to build a bigger project on it, could tame developers’ land bids. Some en bloc sellers may also need to rethink their price expectations.
http://www.businesstimes.com.sg/real-estate/hike-in-dc-rates-unlikely-to-derail-en-bloc-fever-soon
http://www.straitstimes.com/business/property/non-landed-residential-dc-rates-surge
https://www.todayonline.com/singapore/development-charges-rise-sharply-non-landed-homes-amid-en-bloc-fever

Singapore Economy

Active investment strategies pay off in volatile times
Passive investing is no longer the way to go in a volatile stock market. While many retail investors were caught offguard when global stock markets turned volatile at the start of the year, eight in 10 institutional investors had anticipated the wild swings and cushioned themselves by adopting more active investment strategies.
http://www.businesstimes.com.sg/stocks/active-investment-strategies-pay-off-in-volatile-times

Singapore Feb market cap down 1.6% month-on-month to S$1.01 trillion
Early February’s correction brought the bears out of the woods: The value of Singapore bourse members shrank in the shortest month, with the market capitalisation of all 742 listed companies down to S$1.01 trillion. Bourse value dipped by 1.6 per cent from January, and came as the benchmark Straits Times Index (STI) lost 0.8 per cent to S$594.5 billion.
http://www.businesstimes.com.sg/companies-markets/singapore-feb-market-cap-down-16-month-on-month-to-s101-trillion

Singapore will feel global flare-ups acutely: EIU
Typically, a strong global economy is good news, but there is a growing disconnect between the strength of the global economy and the magnitude of geopolitical, financial and operational risks that organisations are facing. For an open economy like Singapore, a major world trade and financial hub, this cannot be ignored, said Pamela Qiu, associate director of The Economist Corporate Network for South-east Asia.
http://www.businesstimes.com.sg/government-economy/singapore-will-feel-global-flare-ups-acutely-eiu

Airlines flag cost pressures as Changi Airport unveils new levy, fee hikes to help fund expansion
Airlines have expressed concerns over Changi Airport’s just unveiled new levy and hike in passenger and airport charges, which could be passed on to consumers as the industry grapples with cost pressures and competition.
http://www.businesstimes.com.sg/transport/airlines-flag-cost-pressures-as-changi-airport-unveils-new-levy-fee-hikes-to-help-fund
http://www.straitstimes.com/singapore/transport/higher-fees-for-airport-users-to-fund-changis-expansion
http://www.straitstimes.com/singapore/transport/some-travellers-put-off-by-higher-airport-taxes
https://www.channelnewsasia.com/news/singapore/changi-airport-levy-terminal5-iata-disappointed-9999940
https://www.todayonline.com/singapore/changi-airport-charge-development

Business lending risks losing steam
If bank loan numbers in January are to go by, there are some signs of stronger consumer confidence in Singapore from a year ago. But there is caution over whether business lending is set to slow faster than the slight step-down in headline GDP growth expected in 2018.
http://www.businesstimes.com.sg/government-economy/business-lending-risks-losing-steam

GST announcement a distraction: Low
Workers’ Party (WP) chief Low Thia Khiang yesterday criticised what he called the premature announcement of the planned increase in the goods and services tax (GST). He said it was an “unnecessary distraction” in a forward-looking Budget that largely aims to position Singapore to take advantage of economic opportunities, particularly from the rise of China.
http://www.straitstimes.com/politics/gst-announcement-a-distraction-low

Singapore Real Estate

Help SMEs to go beyond being sub-contractors and compete globally, MPs urge
Members of Parliament on Wednesday pitched a number of ideas to help small local firms scale up and compete with established global players. Ang Wei Neng of Jurong GRC, for example, pointed out that in Singapore’s rail system, most of the tunnelling projects go to large foreign firms, leaving local construction companies the subcontracted jobs.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2018/help-smes-to-go-beyond-being-sub-contractors-and-compete

Companies’ Brief

CDL’s Q4 net profit falls 23% against ‘very strong’ 2016
City Developments (CDL) on Wednesday posted a 23 per cent fall in net profit to S$186.7 million for its fourth quarter, but the property developer put it down to an exceptionally strong 2016 that proved hard to beat on a year-on-year comparison.
http://www.businesstimes.com.sg/companies-markets/cdls-q4-net-profit-falls-23-against-very-strong-2016
http://www.straitstimes.com/business/companies-markets/cdls-q4-earnings-slide-against-very-strong-2016

CDL’s fund management platform targeting US$5b in assets by 2023
Though admittedly “late to the game”, City Developments on Wednesday said it is planning to build its own fund management platform, with a target to manage US$5 billion in assets by 2023. This is to tap into some US$5 trillion in private capital from institutional investors in the real estate industry.
http://www.businesstimes.com.sg/companies-markets/cdls-fund-management-platform-targeting-us5b-in-assets-by-2023

Ho Bee’s FY17 profit up 15% on back of China JV project
Buoyed by a surge in contributions from a Shanghai joint venture project, Ho Bee Land’s net profit for the full-year ended Dec 31, 2017 rose 15 per cent to S$249.26 million. This joint venture project led a 235 per cent surge in the share of profits from associates to S$99.3 million, Ho Bee said on Wednesday.
http://www.businesstimes.com.sg/companies-markets/ho-bees-fy17-profit-up-15-on-back-of-china-jv-project

GIC, global investors to take 4.4b euro majority stake in AccorInvest
Singapore’s sovereign wealth fund GIC, along with a group of international investors, have signed an agreement to acquire a 55 per cent stake in AccorHotels’ property business arm, AccorInvest. The majority stake will be sold by the French hotel chain to investors including Saudi Arabia’s sovereign fund, also known as the Public Investment Fund, as well as institutional investors Credit Agricole Assurances, Colony NorthStar, and Amundi, among others.
http://www.businesstimes.com.sg/real-estate/gic-global-investors-to-take-44b-euro-majority-stake-in-accorinvest
http://www.straitstimes.com/business/companies-markets/gic-investors-buy-55-stake-in-accorinvest

Views, Reviews & Forum

GST: Fiscally sound, politically costly
Though earmarked for the future, the goods and services tax (GST) rate increase outlined in the Budget has already raised a number of understandable concerns among MPs. However, the rationale for the tax on consumption, introduced here in 1994, is generally accepted. GST is strongly backed by the International Monetary Fund and the World Bank for being an efficient tax tool with a direct impact on “fiscal mobilisation, macroeconomic stability, and development”. Consequently, it’s the globe’s most widespread general consumption tax.
http://www.straitstimes.com/opinion/st-editorial/gst-fiscally-sound-politically-costly

WP’s land sales proposal draws more criticism
A suggestion by Workers’ Party MP Pritam Singh to raise government revenue from land sales drew criticism for the second day in a row during the Budget debate. The WP assistant secretary-general had made the point on Tuesday, when he said the party does not support the plan to raise the goods and services tax (GST).
http://www.straitstimes.com/politics/wps-land-sales-proposal-draws-more-criticism

Pervasive innovation, not Budget goodies, can help firms thrive
Singapore’s largest supplier of ready-mixed concrete was propelled onto the national stage when Finance Minister Heng Swee Keat described how Pan United harnessed pervasive innovation to develop a breakthrough product that could cushion aircraft landings.
http://www.businesstimes.com.sg/opinion/pervasive-innovation-not-budget-goodies-can-help-firms-thrive