Funds seek opportunities amid ‘lower for longer’ setting
A fund house is preparing to launch a global long-short equity strategy. Another is buying emerging market local currency debt in India and Indonesia. And a fund manager is rotating from expensive consumer and tech names into cyclical stocks like US banks and energy stocks. As bond prices continue to defy gravity and central banks cause bond yields to plummet to historic lows, the financial world is grappling with the implications – even as it vainly encourages savers to take more risk to achieve returns.
SME-friendly taxation for fairness: Tharman
Policymakers have to be especially friendly to small and medium-sized enterprises (SMEs) when designing policies to boost innovation and productivity, said Deputy Prime Minister Tharman Shanmugaratnam at a high-powered meeting over the weekend. Mr Tharman said this was one way to ensure tax policy can support income growth in an inclusive manner. “Studies in the US and some other places show that a fair amount of the inequality in our workforces is about inequality between enterprises – people employed by SMEs tend to get paid less than people who work in the same jobs in large firms,” he said.
S’pore firms eye growth opportunities in Australia
A recently concluded partnership agreement between Singapore and Australia could help newly re-elected Australian Prime Minister Malcolm Turnbull deliver on some objectives of his agenda. Mr Turnbull was sworn in for a fresh term last week after protracted vote-counting gave him victory in the July 2 polls, with the ruling conservative Liberal-National coalition hanging on to power by a whisker.
Singapore businesses nervous amid volatile economy: poll
Business confidence in the Asia-Pacific region picked up in the second quarter, led by a stronger sentiment in China, where the sense of crisis that dominated the second half of 2015 has faded, said a global economic conditions survey report for 2Q16 released yesterday by the Association of Chartered Certified Accountants and the Institute of Management Accountants. “Although we are seeing a pickup in confidence, businesses in Singapore are undoubtedly still nervous about the future,” said Reuter Chua, head of ACCA Singapore.
Singapore Real Estate
Q2 home prices show signs of bottoming out
Early signs of a bottoming-out in the private residential market surfaced in official quarterly data on Friday, indicating that the declines in the prices of private non-landed homes have eased, and HDB resale prices stayed flat in the second quarter. A rebound in resale transactions may also be setting the stage for prices to stabilise, market watchers say. But a convincing price recovery is unlikely to take place yet, given pockets of weakness in the market.
Steeper falls in office and retail rents in Q2: URA
Rentals and prices of office and retail space fell more steeply in the second quarter than in the first, data released by the Urban Redevelopment Authority (URA) on Friday showed. Rentals of office space fell 3.5 per cent, after a 2.1 per cent decline in Q1; prices fell 1.5 per cent in Q2, after a 0.3 per cent decline in the previous quarter. This is the fifth straight quarter-on-quarter (q-o-q) decline in office rents.
New Jurong buzz triggers red-hot response at condo launch
In an unusual occurrence in today’s lacklustre private residential market, a condominium launch over the weekend drew a red-hot response. Lake Grande, a 710-unit condo along Jurong West Street that is being developed by MCL Land, released 500 units for sale on Saturday. About 87 per cent of these apartments – or 436 in total – were sold at an average price of $1,368 per sq ft. MCL Land chief executive Koh Teck Chuan said 83 per cent of the transactions were for the one- and two-bedroom units. Seventeen out of every 20 buyers are Singaporeans. Lake Grande, a 17-storey project with units in one- to five-bedroom configurations, is a few minutes’ walk from the Lakeside MRT station and overlooks Jurong Lake.
Khong Guan puts Tai Seng property up for sale
Khong Guan, one of Singapore’s biggest home-grown biscuit makers, is selling a freehold industrial building in the Tai Seng area. The property, Khong Guan Industrial Building, will be sold through a public tender exercise that will close on Sept 7. The building is next to the company’s 64-year-old conservation-listed factory, which is being renovated but is not for sale. Khong Guan Land, a fully owned unit of Khong Guan Biscuit, has appointed Edmund Tie & Company (SEA) as sole marketing agent.
CMT to fork out S$560m for Funan redevelopment
Retail landlord CapitaLand Mall Trust (CMT) plans to spend an estimated S$560 million to turn Funan DigitaLife Mall into an integrated development consisting of retail, office and serviced apartments, the trust manager said on Friday morning as it announced a slight rise in distribution for its second quarter. That amount also includes the cost of installing new technology and other initiatives aimed at differentiating the mall from others in Singapore, the trust manager’s chief executive officer (CEO) Wilson Tan told a results briefing held at Capital Tower.
Sephora remains upbeat about Singapore retail sector
Despite a challenging operating environment, Sephora is committed to the local retail scene and to South-east Asia as a whole, which it says remains a growth market. In Singapore, the French cosmetics chain on Friday re-opened its store in ION Orchard’s Basement 2, having relocated from the ground floor. The Singapore flagship outlet is among its top 10 worldwide by revenue.
Cambridge Industrial Trust’s Q2 DPU falls in absence of one-off items
Cambridge Industrial Trust (CIT) has posted a 10.9 per cent year-on-year drop in its second- quarter distributable amount to S$14.07 million, as the amount in the same period a year ago was cushioned by a one-off capital distribution of S$967,000. For the three months as at end-June, distribution per unit (DPU) was 1.078 Singapore cents, down 12 per cent year on year. This will be paid on Aug 31.
Clio puts on its best face to woo Asia
The South Korean cosmetics firm Clio could open a flagship store here within months as it gears up expansion plans in the wake of a cash injection from the private equity arm of LVMH Moet Hennessy Louis Vuitton. L Capital Asia has invested US$50 million (S$68 million) in Clio and will help the company expand quickly across China and South-east Asia, capitalising on the world’s appetite for Korean cultural exports.
Frasers Commercial Trust posts higher Q3 earnings
Stronger contributions from two properties and the completed acquisition of a third helped lift third-quarter earnings at Frasers Commercial Trust (FCOT). The trust yesterday posted a 19 per cent rise in distributable income to $19.1 million for the three months to June 30, up on the $16.1 million in the same period a year ago. Distribution per unit for the quarter rose 3 per cent to 2.41 cents, and will be paid out on Aug 29. Gross revenue grew 11 per cent to $38.6 million while net property income increased 16 per cent to $28.1 million. This was largely due to a better performance at Alexandra Technopark on the back of higher rentals and lower utilities expenses.
Ascendas India Trust
Ascendas India Trust’s net profit rose 14 per cent to S$9.4 million in its fiscal first quarter, while income to be distributed stayed flat at 1.36 Singapore cents per unit. Total property income rose 6 per cent to S$36.1 million as base rent increased by 7 per cent to S$22.7 million while operations, maintenance and utilities income stayed flat at S$10.8 million.
City Developments Ltd
CITY Developments Ltd (CDL) has inked an agreement to sell its controlling stake of 52.52 per cent in Hong Kong-listed City e-Solutions Limited (CES) to China Tian Yuan Manganese Limited for HK$566.4 million (S$98.2 million). Following the completion of the transaction, CDL will cease to have any interest in CES.
Lum Chang Holdings
Lum Chang Holdings’ wholly owned Lum Chang Building Contractors has scored a S$60.8 million contract to build a 14-storey industrial building at the junction of Boon Keng Road and Kallang Place.
Architecture and property firm Rowsley yesterday announced a net loss of $5.29 million for the three months to June 30, a sharp reversal from the $516,000 profit a year ago. Earnings weakened amid the ongoing slowdown in Singapore’s property market, Rowsley said in its announcement after market close. Revenue for the period still grew 26 per cent to $22.32 million, owing mainly to a higher contribution of $4.2 million from its hospitality businesses acquired in Britain last November.
Target price: S$1.67
CIMB Research, July 22
We expect office spot rents to trend down on the back of a large influx of new office supply and anticipate this to be a drag on Suntec’s office revenue over the next two years. Meanwhile, Suntec re-contracted 165,000 sq ft of retail space in Q2, with average rents slipping 3.5 per cent quarter on quarter to S$11.58 psf while occupancy was kept high at 97.7 per cent. The dip was largely due to the renewal of leases in Phase 1 of the Suntec City Mall asset enhancement initiative, which was contracted at the peak of the market three years ago.
Target price: S$2.60
Citi Research, July 21
Though Ascendas Reit managed to push up Singapore occupancies and achieve a commendable rental reversion in the June quarter, this could potentially be overshadowed by a relatively steep fall in Australia occupancies (and likely read-through of a very low retention ratio).
Ascott Residence Trust
Broker: DBS Group Research
Target Price: $1.31
Amid the volatility in the Singapore hospitality market, ART’s diversified portfolio with serviced residences and rental housing across 14 countries in the Asia-Pacific region, Europe and United States provides investors with a more resilient distribution per unit outlook. ART’s resiliency and cash-flow visibility also come from having 40 per cent to 50 per cent of its income sourced from master leases and management contracts with minimum guaranteed income.
Views, Reviews & Forum
A few steps? HDB to make homes more elderly-friendly
Older residents who have to climb a small flight of steps to get into their Housing Board flat may soon have one less obstacle to overcome. The Housing Board plans to expand its Enhancement for Active Seniors (Ease) programme to include subsidies for ramps more than one step high, National Development Minister Lawrence Wong said yesterday. The goal is to make HDB estates more elderly-friendly, given the ageing population, he told reporters after visiting Nee Soon GRC’s Kebun Baru ward. “You’ll see more of these needs emerging – mobility, access, connectivity but also community. You want (the elderly) to stay active,” he said, adding that expanding Ease is one way to help seniors.
The dos and don’ts of growth investing
Britain’s decision to leave the European Union came as a shock to many people. It even surprised those who were campaigning for Brexit. So great was the disbelief that stock markets around the world buckled at the knees, briefly. But canny investors took advantage of the fall to add to their holdings. Mr Peter Lynch, one of the best growth investors of our time, said: “Develop a disciplined approach to investing that enables us to block out our own distress signals.” The key to successful investing is to have a plan. So whether you are a growth investor or an income investor, it is important to block out market noise, regardless of how loud the din might be.
Airbnb must adapt to laws of the land
I am not surprised that progressive cities like New York, San Francisco and Berlin are seeking to tame the regressive beast of short-term rental companies like Airbnb (“Airbnb in bitter disputes with New York and San Francisco”; July 3). In today’s commercialisation of the ancient home-sharing concept via cyberspace, platforms such as Airbnb seek a commission from every trade as middlemen while disclaiming responsibility for any illegal activity by their clients on either side of the deal. Is such corporate social irresponsibility something we want to encourage in a town that takes great pride in its social decorum, ethics and the rule of law?
Paid parking sends strong signal to private home owners
Paid parking in landed residential estates is long overdue and should be introduced as soon as possible (“Introduce paid parking to private estates?”; last Sunday). This will send a strong message to car owners that the estate roads are public property and do not belong to them. Often, owners put chairs or other objects on the road beside their homes to reserve the space. Some even place nasty warning notices on the windscreens of cars which are parked in that space.
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