DAILY NEWS

Daily News – 24th, 25 & 26th February 2018

Top Story

Few districts see chance of oversupply of homes: study
A new study on the upcoming supply of private residential units from development sites sold suggests that oversupply risks, if any, may be contained within certain districts. Islandwide, only Districts 3, 5, 13, 18 and 19 appear to have a relatively high number of upcoming residential units in relation to the current completed units there – in the proportions of 12 to 34 per cent.
http://www.businesstimes.com.sg/real-estate/few-districts-see-chance-of-oversupply-of-homes-study

Redas chief: BSD tweak unlikely to derail housing recovery
Should buyers be expecting higher home prices with the recent hike to the top marginal rate for buyer’s stamp duty (BSD)? The answer may be “yes”, going by comments from Augustine Tan, president of the Real Estate Developers’ Association of Singapore (Redas). He said on Friday: “In the purchase of sites from the Government Land Sales (GLS) programme or private collective sites, the substantial premiums paid by developers for residential sites, together with the one per cent hike in the buyer’s stamp duty may translate into higher prices for new projects in the future.”
http://www.businesstimes.com.sg/companies-markets/redas-chief-bsd-tweak-unlikely-to-derail-housing-recovery
http://www.straitstimes.com/business/property/prices-at-new-projects-may-rise-due-to-hike-in-duty
http://www.straitstimes.com/business/property/buyers-stamp-duty-hike-may-translate-to-higher-prices-for-new-projects-redas

Singapore Economy

‘Pro-R&D measures good, but won’t help SMEs much’
Businesses and industry players have lauded the measures unveiled on Monday to spur innovation, saying they are much needed to maintain Singapore’s global competitiveness as a research and development (R&D) hub. But observers say that the measures are unlikely to move the needle for smaller businesses which are not keen to pursue innovation in the first place.
http://www.businesstimes.com.sg/sme/pro-rd-measures-good-but-wont-help-smes-much

A quiet but seismic shift in Singapore’s approach to borrowing
The Singapore government’s conservative approach to spending is well known – it has not borrowed to finance its expenditures since the 1980s. But Budget 2018 seemed to signal a potentially seismic shift in this way of thinking. As Singapore’s infrastructure needs grow, the option to use debt to finance big-ticket expenditures is back in the limelight.
http://www.businesstimes.com.sg/government-economy/a-quiet-but-seismic-shift-in-singapores-approach-to-borrowing

Consumer prices stay flat in January
Inflation stayed flat last month even though the prices of key items such as healthcare and education went up. There was no change in the consumer price index – the main measure of inflation – compared with the same month last year, said the Statistics Department yesterday. This was a dip from December’s rate of 0.4 per cent and well below economist estimates of a 0.4 per cent increase. This was mostly due to lower accommodation and private road transport inflation.
http://www.straitstimes.com/business/economy/consumer-prices-stay-flat-in-january
http://www.businesstimes.com.sg/infographics/headline-inflation-down-in-january-but-core-inflation-edges-up

Short squeeze to limit Treasury yield upside
Since January 2018, the 10-year Treasury yield has risen 49 basis points to the current high of 2.92 per cent as the market anticipates three more rate hikes this year. However, moving forward, we do not expect this trend to continue and see limited upside in the 10-year Treasury yield due to the overcrowded shorts in the bond complex that has been building up since February.
http://www.businesstimes.com.sg/companies-markets/short-squeeze-to-limit-treasury-yield-upside

Busy week ahead with economic data releases
Traders will be kept busy this week with a slew of Singapore economic data releases. Singapore’s January factory output numbers are due this afternoon and the February Purchasing Managers’ Index survey – an early indicator of production – is slated for release on Friday. Trade numbers have already helped the economy to start 2018 on the right foot, with non-oil domestic exports for January recently clocking 13 per cent year-on-year growth.
http://www.straitstimes.com/business/economy/busy-week-ahead-with-economic-data-releases

Strong reserves signal strong Sing$: Chun Sing
Minister in the Prime Minister’s Office Chan Chun Sing yesterday highlighted the benefits of having strong national reserves, amid some calls for the Government to spend a higher share of returns from past reserves instead of raising taxes. Speaking at a Chinese New Year dinner for Tanjong Pagar GRC last night, he said the current approach of not spending more than half the returns from investing the reserves will signal to the currency markets that the Singapore dollar is strong.
http://www.straitstimes.com/singapore/strong-reserves-signal-strong-sing-chun-sing

India’s offshore hub not competing with S’pore: Gujarat business city’s CEO
Comparing India’s fledgling Gujarat International Finance Tec-City (GIFT) to established finance hubs such as Singapore or Dubai is “not comparing apples with apples” and is “unfair” as these took years to build while the ambitious project in the subcontinent has been operational for far less, said the project’s head honcho.
http://www.businesstimes.com.sg/companies-markets/indias-offshore-hub-not-competing-with-spore-gujarat-business-citys-ceo

‘$2b in cost savings’ with integrated rail, bus depot
The East Coast Integrated Depot, incorporating three MRT depots as well as one for buses, will save $2 billion in taxpayer money, said Minister for Transport Khaw Boon Wan. In a Facebook post yesterday, he said the cost of construction of the depot is about $3.2 billion, 40 per cent less than what it would have cost had the four depots been built separately. He also noted that building the depots separately would have used up an additional 44ha of land, twice the land size of Changi Airport’s Terminal 4.
http://www.straitstimes.com/singapore/transport/2b-in-cost-savings-with-integrated-rail-bus-depot

Singapore Real Estate

Developers’ war chest of cash keeps collective sale party going
Are developers still on a prowl for land? That question naturally cropped up when the public tenders of 10 or more collective sale sites closed without concluding a sale in recent months. But four of such sites have since found buyers under private treaty, which market watchers were quick to attribute to developers’ sustained interest for land though they are proceeding more cautiously than before.
http://www.businesstimes.com.sg/real-estate/developers-war-chest-of-cash-keeps-collective-sale-party-going

93% take-up for 1st batch of Re-offer of Balance Flats
Come April, barista Adrian Tay and his wife Joan Tan will no longer have to change their year-old daughter’s nappy in the living room due to a lack of space. Nor will the family have to continue squeezing into a room at his mother’s two-room flat in Sengkang where they have been living for the past two years. The Tays will be moving into a new three-room flat in Woodlands which they bought in last August’s inaugural Re-offer of Balance Flats (ROF) exercise.
http://www.straitstimes.com/singapore/housing/93-take-up-for-1st-batch-of-re-offer-of-balance-flats

Abandoned Upper Thomson house with grim past to be put up for state auction on Feb 27
How much will property-crazed Singaporeans pay for an abandoned house where skeletal remains were found? The answer may be revealed next week. One of Singapore’s most storied houses at Sembawang Hills Estate, where two skeletal remains were found about 10 years apart, will be put up for sale by auction by the government next Tuesday.
http://www.businesstimes.com.sg/real-estate/abandoned-upper-thomson-house-with-grim-past-to-be-put-up-for-state-auction-on-feb-27
http://www.straitstimes.com/singapore/housing/home-where-skeletal-remains-found-how-much-would-you-pay
http://www.straitstimes.com/singapore/housing/sale-will-close-sad-chapter-of-widows-life-says-niece

If time is a luxury . . . it could be now
In 2017, according to Q4 URA statistics, the residential market saw just north of 25,000 transactions lodged. These include new sales, resales and sub-sales. Some 74 per cent of these transactions were transacted below the quantum of S$2 million. In fact, while the primary market saw a four-year high in terms of sales volume at 10,566 units, 85 per cent of the new private homes sold in 2017 were below S$2 million. Generally, the residential market was driven predominantly by quantum.
http://www.businesstimes.com.sg/real-estate/if-time-is-a-luxury-it-could-be-now

New Punggol district mixes technology and lush greenery
The upcoming Punggol Digital District, which will be a hub for cyber-security and technology firms in Singapore, is set to feature an environment that balances technology with lush greenery. The district’s project manager, Mr Chan Ee Mun, revealed project details, such as an emphasis on industry-academia collaboration.
http://www.straitstimes.com/singapore/new-punggol-district-mixes-technology-and-lush-greenery
http://www.straitstimes.com/singapore/housing/marrying-punggols-green-with-high-tech-facilities
http://www.straitstimes.com/singapore/housing/being-a-dad-shaped-architects-designs

Nine in 10 older buyers of two-room flats opt for shorter leases
Mr Yeoh Seh Dong, 69, had to give up his canteen-helper job three years ago because of poor health. Surgery on his neck affected his movement and hearing, and he has had health issues since being diagnosed with nose cancer 12 years ago.
http://www.straitstimes.com/singapore/housing/nine-in-10-older-buyers-of-two-room-flats-opt-for-shorter-leases

Rates are up – it may be time to review the home loan
Rising interest rates are raising the spectre of higher monthly mortgage payments for many home owners, especially those with floating home loan packages. No one needs reminding that home loan repayments form a large part of our monthly expenses, so it is important to look at cash flow and set aside more funds to prepare for higher rates, says Ms Tok Geok Peng, executive director of secured lending at DBS Bank.
http://www.straitstimes.com/business/property/rates-are-up-it-may-be-time-to-review-the-home-loan

Help to better manage home loan as rates rise
When public servant Amos Koh bought his four-room Housing Board flat in Bukit Batok in 2014 for $470,000, he took up a floating interest rate home loan pegged to the DBS Singapore Dollar Fixed Deposit rate, plus an additional component – a rate of 1.2 per cent which increases each year. By this month, this component will have increased to 1.25 per cent.
http://www.straitstimes.com/business/help-to-better-manage-home-loan-as-rates-rise

Singapore’s oldest Muslim cemetery may shrink
A proposed new annexe for a mosque in Victoria Street might result in the exhumation of around 10 to 15 unidentified graves from Singapore’s oldest Muslim graveyard – Jalan Kubor – that houses remains of luminaries from early Singapore.
http://www.straitstimes.com/singapore/singapores-oldest-muslim-cemetery-may-shrink

Companies’ Brief

SPH unit submits joint bid to manage Singapore Expo
A unit of Singapore Press Holdings (SPH) has thrown its hat into the ring for a government tender to become the managers of Singapore Expo for 10 years from 2019, in a three-cornered fight involving incumbent SingEx Venues and a unit of Singapore entrepreneur Ron Sim’s V3 Group.
http://www.businesstimes.com.sg/companies-markets/sph-unit-submits-joint-bid-to-manage-singapore-expo

EL Development plans a hotel with over 300 rooms on Hill St
EL Development is planning to develop a mid- to high-end business hotel with more than 300 rooms on the Hill Street site that it is buying for S$118 million from Singtel. “We have not finalised on the concept for the hotel and are also in the process of sourcing for an operator,” said EL Development managing director Lim Yew Soon.
http://www.businesstimes.com.sg/real-estate/el-development-plans-a-hotel-with-over-300-rooms-on-hill-st

Oxley blocks UE’s bid to buy WBL shares from Yanlord Perennial
In a surprise turn of events, minority shareholders of United Engineers (UE), including property developer Oxley Holdings, have foiled a bid by UE’s new shareholder, Yanlord Perennial Investment (YPI), and UE’s former shareholder OCBC to sell their WBL shares to UE.
http://www.businesstimes.com.sg/companies-markets/oxley-blocks-ues-bid-to-buy-wbl-shares-from-yanlord-perennial
http://www.straitstimes.com/business/companies-markets/oxley-blocks-ues-purchase-of-wbl-shares-from-yanlord

Genting Singapore proposes higher final dividend of S$0.02
A drop in operating profit weighed on fourth-quarter earnings at casino operator Genting Singapore. Net profit for the three months to Dec 31 slid 17 per cent to S$132.8 million, compared with S$159.2 million from the same period a year earlier. Earnings per share was down 17 per cent to 1.1 Singapore cents, from 1.33 Singapore cents previously.
http://www.businesstimes.com.sg/companies-markets/genting-singapore-proposes-higher-final-dividend-of-s002
http://www.straitstimes.com/business/companies-markets/q4-profit-dips-but-genting-spore-raises-dividend

CapitaLand builds mega sky bridge in China’s Chongqing
Raffles City Chongqing’s curved accordion-shaped “horizontal skyscraper”, which sits atop four 250m-tall towers, can also boast of a world record for a commercial and residential complex, according to its developer. It has the highest sky bridge linking the most number of towers.
http://www.straitstimes.com/business/capitaland-builds-mega-sky-bridge-in-china

UIC’s full-year net profit up 5% at S$301.5m
United Industrial Corporation’s full-year net profit rose 5 per cent to S$301.5 million from the previous year, the group said in a Singapore Exchange filing on Friday evening. For the 12 months ended Dec 31, 2017, revenue climbed 25 per cent to S$1.29 billion from the previous year. This was due largely to a 47 per cent jump in revenue recognised from the sales of trading properties to S$760.3 million in FY2017 from S$516.3 million in FY2016 arising mainly from higher sales in the Alex Residences and Pollen & Bleu projects in Singapore.
http://www.businesstimes.com.sg/companies-markets/uics-full-year-net-profit-up-5-at-s3015m

APAC Realty Q4 net profit up 60% to S$7.9m
Property broker APAC Realty reported net profit of S$7.9 million for the three months ended Dec 31, up 60 per cent year-on-year, in a Singapore Exchange filing last night. Revenue that quarter rose to S$128.7 million, up 63 per cent. Fourth-quarter earnings per share were 2.22 Singapore cents, up from 1.59 Singapore cents a year before.
http://www.businesstimes.com.sg/companies-markets/apac-realty-q4-net-profit-up-60-to-s79m

Views, Reviews & Forum

Short-term pain for a stronger fiscal footing
This week’s topic: What would be the impact on business and the economy of the two-point hike in the GST rate to 9 per cent, due sometime in 2021-2025?
http://www.businesstimes.com.sg/views-from-the-top/short-term-pain-for-a-stronger-fiscal-footing

Wish upon a budget
Another year, another list (or several) of wishes, wants and needs. As with any spending plan, a country’s Budget allocates funds where they are seen to be needed. Who gets what might be a function of timing, lobbying, or vision. In the wake of Monday’s Singapore Budget speech, we see some wishes granted, while others were shelved for another financial year.
https://www.businesstimes.com.sg/brunch/wish-upon-a-budget

Why a recession is still some way off
The period since the Global Financial Crisis (GFC) has seemed unusual in the sense that periodic crises and post-GFC caution have prevented the global economy from overheating and excesses building, in turn preventing the return of the conventional economic cycle.
https://www.businesstimes.com.sg/investing-wealth/why-a-recession-is-still-some-way-off

From GST hike to using the national reserves: 5 burning Budget questions
Monday’s Budget generated a flurry of discussion among Singaporeans – especially over the GST hike due some time from 2021 to 2025. Will the tax take still attract talk by that time, when elections will have been held?
http://www.straitstimes.com/politics/5-burning-budget-questions

Budget has mixed impact on investment assets
The 2018 Budget is likely to have a positive impact on the economy, given its expansionary bias. However, its impact on the various Singapore dollar asset classes is likely to be mixed. In our view, the buyer’s stamp duty (BSD) hike is unlikely to derail the ongoing recovery in the property market.
http://www.straitstimes.com/business/economy/budget-has-mixed-impact-on-investment-assets

S’poreans benefit today from having strong reserves, Sing$
Keeping half of Singapore’s earnings from its reserves is important as it signals to currency markets the strength of the Singapore dollar, Minister in the Prime Minister’s Office Chan Chun Sing has said. Mr Chan cited this as an “important reason” the Government does not spend more than half of returns from past reserves.
http://www.straitstimes.com/politics/sporeans-benefit-today-from-having-strong-reserves-sing

SG Bonus a boost for economy
Finance Minister Heng Swee Keat announced in his Budget speech that Singaporeans aged 21 and above this year will get a one-off SG Bonus or “hongbao” of up to $300 each, in line with the Government’s longstanding commitment to share the fruits of the nation’s development.
http://www.straitstimes.com/business/invest/sg-bonus-a-boost-for-economy

Bringing families closer to elders
Last week’s Budget underlined what has long been the bedrock of social planning in Singapore. This is that public housing is not only about putting a collective roof over people’s heads but is also about ensuring the transmission of practices and institutions that can sustain society’s ability to reproduce its values and structures.
http://www.straitstimes.com/opinion/st-editorial/bringing-families-closer-to-elders

Overseas property investments: The grass isn’t always greener
Like me, Singaporeans may have contemplated buying property abroad at some point in their lives as a form of investment. After all, a wise buy might yield healthy rental income and a sizeable gain if the value appreciates over time. But venturing into foreign waters can come with its dangers.
http://www.straitstimes.com/business/invest/overseas-property-investments-the-grass-isnt-always-greener