Margin requirements up amid Brexit tension
Market players around the world battened down the hatches on Thursday ahead of Britain’s referendum on European Union membership, raising margin requirements in anticipation of heightened volatility when the results arrive. The Singapore Exchange (SGX) said it applied a “standard measure” of addressing event risk by raising requirements for potentially vulnerable derivatives, and that it would continue to monitor developments and may make further adjustments if needed.
Singapore’s CPI down for 19th straight month
Singapore’s consumer prices fell for the 19th straight month in May, recording the biggest decline since August 1986. The large drop is mostly due to the timing of conservancy rebates in May 2016, which were not given in the same month last year. Service and conservancy charges (S&CC) rebates, which affect the housing maintenance and repair cost component were disbursed in April, July and October last year. This year, they were disbursed in May, and will be disbursed in July and October.
MTI sees ‘modest’ impact on S’pore in mid to long term
Singapore expects the direct impact of the United Kingdom leaving the European Union (EU) on its trade-reliant economy to be “modest” in the medium- to long-term. This assessment, made by the Ministry of Trade and Industry (MTI) in response to queries from The Business Times, adds to similar readings made recently by Singaporean government agencies and officials. Polling for a referendum on whether Britain should stay in or leave the EU were slated to close at 10pm on Thursday in the UK (5am on Friday in Singapore).
Government ‘ready to back firms going overseas’
Going abroad has never been more vital for local businesses amid a prolonged economic slowdown and limited growth opportunities, Minister for Trade and Industry (Trade) Lim Hng Kiang has said. The Government stands ready to support firms venturing overseas, while partnerships with trade chambers and big corporates will also help them do so, Mr Lim said. “To describe the economic environment facing us in the next few years: lower for longer. Lower economic growth for longer than we should expect, and lower commodity prices than we think we will face,” he said yesterday.
Singapore Real Estate
Property investment sales up 18.2% to $9.6b in first half
Property investment sales have risen 18.2 per cent to $9.56 billion over the same period last year, according to CBRE. Foreign investors were more active buyers, accounting for 59.5 per cent of the deals by value, or about $5.68 billion. CBRE’s overall sales tally – it only counts transactions above $10 million – has been helped by several big private investment deals closing in this half-year, noted Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia. “The market saw a few new entrants making their first foray in the Singapore market, including Qatar Investment Authority (QIA) and Hong Kong-based Shun Tak Holdings.”
S&P’s downgrade of Sabana Reit withdrawn on trust’s request
S&P Global Ratings on Thursday downgraded its long-term corporate credit rating on Sabana Shari’ah Compliant Reit to “BB+” from “BBB-” with stable outlook, only to withdraw all ratings of Sabana Reit upon the Reit’s request on the same day. Explaining the rationale of the downgrade, Standard & Poor’s (S&P) said that the Reit’s balance sheet has weakened on prolonged difficult industry conditions.
FCL unit to launch Tokyo serviced residence
FRASERS Hospitality, the hospitality unit of Frasers Centrepoint Limited (FCL), has tied up with Japanese developer Sekisui House to launch its first serviced residence in Tokyo under its Fraser Suites brand. Redeveloped from an existing four-storey office building, Fraser Suites Tokyo will be a 23-storey building with 223 units of serviced residence. It is slated to open in time for the 2020 Summer Olympics in Japan. Frasers Hospitality CEO Choe Peng Sum told BT that the group is accelerating its expansion in Japan, with an eye on cities such as Tokyo, Yokohama, Sapporo, Kyoto, and Oaska, either through direct investments or management contracts.
Cityneon stock hits new high as Avengers attraction opens in LasVegas
Shares of Cityneon Holdings reached a new high of S$0.905 in early trading on Thursday following news that its Avengers STATION immersive attraction has opened at the Treasure Island Hotel and Casino in Las Vegas. But having come a long way from its S$0.325 price at end-2015 and on a day when caution reigned ahead of the Brexit referendum in Britain, the stock of the interior architecture and exhibitions firm failed to sustain its momentum, ending half a cent lower at S$0.885. It kicked off trading at S$0.90. About 2.4 million shares changed hands. DBS Vickers in June recommended a “buy” for the stock with a S$1.05 target price. UOB Kay Hian and CIMB also made “buy” calls, with respective target price of S$0.85 and S$0.88.
Views, Reviews & Forum
Earnings expected to stabilise for Singapore’s hospitality Reits
Following a tough year for the local tourism industry in 2015, the earnings of Singapore’s hospitality Reits are expected to stabilise this year on the back of higher visitor arrivals to Singapore and income from new assets, Fitch Ratings said in a report. “This is a more upbeat view than that of last year when weaker visitor arrivals prompted (Fitch) to forecast Hospitality S-Reit earnings would fall in 2016,” the report said. Preliminary data from the Singapore Tourism Board showed that visitor arrivals to Singapore from January to April have jumped 14 per cent year on year to 5.53 million. This is thanks to robust demand from Singapore’s two biggest source markets, China and Indonesia.
Private equity may not fit retail, but regulated access beats a ban
Crowdfunding has opened the gates of private equity to retail investors, and further innovations such as collateralisation are about to widen the entrance even more. From a risk perspective, that greater access also opens the doors to potential fraud, abuse and plain poor decision-making because unsophisticated investors are not the best equipped to properly handle the risks attached to investing in early-stage and unlisted businesses. But the greater systemic risk is that of a black market as investors find ways to get the returns that they crave. In this regard, Singapore policymakers have wisely eschewed a total ban on retail participation in private equity in favour of a framework that enables participation within certain rules.
Asia keenly watching result of Brexit referendum
Asia is closely watching the outcome of Britain’s European Union referendum, with a vote to leave threatening to unravel the United Kingdom and reverberate across Asia, affecting trade and financial markets. Voting booths closed at 10pm in Britain yesterday and results from most areas should be in by this morning Singapore time. Lightning storms in south-east England and rain in the capital kept some of the 46.5 million registered voters indoors yesterday morning, but many still voted despite floods and downpours.
HDB season parking fee for 2nd car may rise
There are about 31,500 HDB households here with two or more cars, and these families may soon have to fork out more for season parking charges. The Housing Board (HDB), which is reviewing public parking rates, provided the figures in response to queries. There are 981,100 resident HDB households in total, according to the 2015 General Household Survey. HDB is mulling over differentiated season parking charges for residents who own more than one car and non-residents who use its carparks to manage demand. A resident’s first car will get priority.
Buying an Executive Condominium a no-brainer for those who qualify
Executive Condominiums (ECs) have been among the best-selling projects this year. Six of the 10 top selling projects in April were ECs. Wandervale, the top seller in March, saw about 50 per cent of its units sold during its launch weekend. Launched developments are also seeing a pick-up in buyer activity. The Terrace was the best seller in February and has been seeing a constant stream of buyers, with nearly 80 units sold in March and April. A total of 51 units were sold at The Vales in April, while Bellewaters, an EC launched in 2014, is now close to 90 per cent sold. Projects approaching completion, such as Ecopolitan, Forestville and Sea Horizon have also managed to find buyers for almost all their units.
Promote safe working practices on the ground
Low wages may be one of the main factors behind workplace deaths and injuries, but adequate training, enforcement of safety regulations and proper treatment of workers are also relevant issues (“Low wages a factor in injuries, deaths at work” by Transient Workers Count Too; June 8). Singapore’s heavy industry, particularly the construction sector, is dependent on low-cost foreign labour. As is the case in many aspects of business, this is motivated largely by a desire to reduce cost. Indeed, this accounts for the depressed wages. Companies also have an incentive to find savings by trimming other aspects of labour management, such as training.
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