MAS stuns market by flattening Singapore dollar policy band
Once again, the Monetary Authority of Singapore (MAS) caught the market off-guard – delivering an easing stroke by flattening the Singapore dollar policy band on Thursday, after tempering its core inflation forecast for 2016. This marked the first time the S$NEER (Singapore dollar nominal effective exchange rate) band’s slope was flattened in the absence of a recession – prompting some economists to call MAS’s decision “a new paradigm”. One analyst even remarked that market-watchers were “stunned like vegetable” – a reference to a local song and online meme
Weak Q1 data prompts full-year downgrades by economists
They are only advance estimates of Singapore’s economic growth in the first quarter of this year, but are enough to deepen fears of a technical recession among economists. Some have even downgraded their growth forecast for the full year. Their chief concern is that the projections portray a deeper weakening in the economy than thought. OCBC’s Selena Ling said: “Given the Q1 2016 gross domestic product (GDP) growth flash estimate disappointment, we downgrade our full-year growth forecast from 2 per cent year on year (yoy) to 1.8 per cent yoy.”
Despite MAS move, Singdollar remains Fed-driven: analysts
Thursday’s policy shift by the Monetary Authority of Singapore (MAS) to a zero per cent depreciation stance jolted the Singapore dollar, but the currency is still likely to be driven more by US Federal Reserve developments. With the MAS policy statement out of the way, the Singapore dollar (SGD) and local interest rates will move as expected, weaker and higher respectively, as the US hikes rates again sometime later this year, say analysts. Where the pundits differ is the number of rate hikes the Fed will make before the year is over.
Halt in Singdollar’s rise seen only during recession
Currency traders and other market watchers were taken by surprise yesterday when the central bank deployed a weapon it had used only when the country was in recession. The Monetary Authority of Singapore (MAS) announced yesterday that it would stop the Singapore dollar from rising further against a basket of key currencies. Its hand was forced by the prospect of weaker inflation over the coming months – shorthand for saying the economy will grow at an anaemic pace. Its announcement at 8am yesterday sent the Singdollar diving more than 1 per cent against the greenback before settling at $1.363 to one United States dollar at 8pm, from $1.35 on Wednesday.
MAS easing: core takeaways
Three things from Thursday’s surprise easing by the Monetary Authority of Singapore (MAS). The central bank caught the market off-guard by flattening the Singapore dollar policy band – shifting to a neutral policy stance of zero per cent appreciation of the S$NEER (Singapore dollar nominal effective exchange rate) band. The width of the policy band and the level at which it is centred remains unchanged.
New scheme to encourage corporate giving
The National Volunteer and Philanthropy Centre (NVPC) and the Singapore Business Federation (SBF) are working together on a new programme to drive corporate giving in Singapore. Called the Company of Good, the initiative to be launched this June will be open to all businesses in Singapore and “empower” them to give better, said Senior Minister of State for Culture, Community and Youth Sim Ann in Parliament on Thursday. The programme will offer levels of support customised to the varying needs of businesses, which will be given advice, resources and access to networks where they can learn best practices.
Type of home no longer an accurate measure of wealth
I refer to the letter “Review choice of home used in means-testing” (April 14). Living in a public flat is no longer a sign of an inability to afford private property. Today’s flats are a gold mine, with some selling for up to S$1 million, and it is not uncommon to see luxury cars in public housing car parks. Obviously, many of their owners earn more than their public dwellings may imply. It is thus wrong to associate dwelling type with overall wealth.
Singapore Real Estate
Cheung Kong Property eyeing GLS sites
Cheung Kong Property Holdings Limited, which is slated to commence sales for its eighth residential project in Singapore next month, is keen to clinch more sites under the Government Land Sales (GLS) programme – be it commercial, residential, or mixed-use sites. Group executive director Justin Chiu indicated that Cheung Kong wants to be more active in property development in Singapore and is interested in sites near the Marina Bay Financial Centre (MBFC), jointly developed by the group and its partners Hongkong Land and Keppel Land.
Public invited to submit ideas for redeveloped Funan DigitaLife Mall
Real estate company CapitaLand is calling for ideas for Funan DigitaLife Mall, which is set to close its doors for three years for redevelopment works from Jul 1. In a media release on Friday (Apr 15), CapitaLand said the public can submit their thoughts under three broad categories: Play, Create and Live, under an online campaign titled “#BeyondIT”. Submissions can be in the form of original images, videos, and/or text, CapitaLand said. Selected entries could also be translated into large-scale graffiti that will feature on the hoarding of the new development, it added.
HK developer sees opportunity in S’pore property, despite cooling measures
The Republic’s property market is still ripe with opportunities for developers, despite the Government’s cooling measures, executives of major Hong Kong-based developer Cheung Kong Property Holdings said yesterday. “Government policies are never a concern because for developers, we will just take that into account when we’re doing our numbers. If the risks are higher (because of the measures), we pay lower land prices. If the risks are low, then we can afford to pay a higher price for land,” said Mr Justin Chiu, executive director of Cheung Kong, founded by billionaire Li Ka-shing.
AA Reit awards redevelopment of Tuas property to Boustead
Industrial landlord AIMS AMP Capital Industrial Reit (AA Reit) has tapped engineering and construction firm Boustead Projects to redevelop an industrial property at 8 and 10 Tuas Avenue 20 for an undisclosed amount up to S$27 million. The real estate investment trust accelerated plans to redevelop the property after a “fire incident” that resulted in “partial damage”, it said in a Singapore Exchange (SGX) filing on Thursday morning, adding that its insurance “fully covered the loss of income caused by the incident, and the reinstatement of the asset”.
Perennial turns to court amid rift with Pontiac over Capitol Singapore
Diagreement between the co-owners of Capitol Singapore – an integrated development located at the junction of Stamford Road and North Bridge Road – over some key issues relating to the project have resulted in Perennial Real Estate Holdings Ltd (Perennial) seeking court action to wind up three associated companies. The three associated companies – Capitol Investment Holdings, Capitol Retail Management and Capitol Hotel Management – are equally owned by Perennial (through Perennial Capitol and New Capitol) and Pontiac Land (through Chesham Properties).
Guocoland attractive candidate for privatisation
The Singapore bourse seems to have been bitten by the “privatisation” bug. A combination of moribund market conditions and resulting undervaluations has prompted a steady stream of delistings over the past year. And many are saying opportunities abound for a further wave of privatisations. The move by OSIM International founder Ron Sim to take his company private is the latest such corporate action to have caught the eye – and imagination – of the market, with analysts hopping on the bandwagon, furiously working the numbers.
Enlarged unit base sees Keppel Reit trimming Q1 DPU by 1.2 per cent
Keppel Reit said on Thursday that the Singapore office market is expected to remain challenging these two years given the impending new supply. “For Keppel Reit, 85 per cent of total leases is not due for renewal till 2018 and beyond and approximately 80 per cent of total leases is not due for renewal till 2019 and beyond, when limited new office supply is expected,” it said. The office Reit declared a distribution per unit (DPU) of 1.68 Singapore cents for the first quarter ended March 31, a 1.2 per cent dip from a year ago due to an enlarged unit base. This translates to an annualised yield of 6.8 per cent based on the market closing price per unit on March 31.
Soilbuild Reit’s Q1 DPU down 4.7%
SOILBUILD Business Space Reit’s (Soilbuild Reit) distribution per unit for the first quarter ended March 31 dipped 4.7 per cent from 1.633 Singapore cents to 1.557 Singapore cents while distributable income rose 9.6 per cent, from S$13.3 million to S$14.6 million. Gross revenue for the quarter rose 8.2 per cent from S$18.6 million to S$20.1 million, mainly due to additional rental revenue from Technics and Solaris. They amount to S$2.0 million and S$0.1 million respectively. This was partially offset by a reduction in revenue from Tuas Connection and West Park BizCentral amounting to S$0.4 million and S$0.3 million respectively.
Views, Reviews & Forum
Office space: Where do we go from here?
Given the changes in the economic winds, recent investors in the office segment must be scratching their heads over the wisdom of their decisions. With rentals dropping while vacancies and interest rates climb, their profitability and cash flows are taking hard hits.
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