DAILY NEWS

Daily News – 5th October 2016

Singapore Economy

Singdollar slides, local interest rates remain weak
The Singdollar (SGD) fell on Tuesday and is now back to its early-June levels, but local interest rates remain weak on ample liquidity, as inflows make their way to the resurgent region. The SGD fell to S$1.3687 against the US dollar from S$1.3637 on Monday, on the back of broad-based USD strength; it was also influenced by the battered sterling and lower euro amid the markets’ worry about a hard Brexit. The SGD is pegged to a basket of currencies, but it tends to follow the majors like the USD, sterling, yen, yuan and euro, said Philip Wee, DBS Bank senior currency strategist.
http://www.businesstimes.com.sg/banking-finance/singdollar-slides-local-interest-rates-remain-weak

Singapore overtakes Hong Kong as 2nd-most pricey Asian city
Living the high life in Singapore will need pretty deep pockets, according to the latest wealth report by private Swiss bank Julius Baer. “Singapore has overtaken Hong Kong as the second most expensive city in Asia as the latter remains out of favour with Chinese tourists,” said the report which was released yesterday. Hong Kong was in third position. Shanghai remains the most expensive city – the same as last year – despite its relatively cheaper BMW price. Especially pricey there are hospital stays, watches, botox, cigars and high-end skin cream.
http://www.straitstimes.com/singapore/spore-overtakes-hk-as-2nd-most-pricey-asian-city
http://www.businesstimes.com.sg/executive-money/luxury-lifestyle-prices-slip-julius-baer-index

Salaries in Singapore likely to rise 4% next year: Survey
Salaries in Singapore are set to rise 4 per cent next year, compared to an average of 5.9 per cent across the Asia-Pacific region, according to a survey released on Tuesday (Oct 4). After taking into account Singapore’s inflation forecast of 0.8 per cent, salaries in the city-state are expected to rise 3.2 per cent, the survey by professional services company Willis Towers Watson found. Among Asia-Pacific countries, wages in Pakistan are expected to rise the most at 10.2 per cent, followed by Bangladesh and India with a 10 per cent increase. Vietnam is expected to see an increase in salaries of 9.6 per cent, Indonesia 9 per cent and China 7 per cent.
http://www.channelnewsasia.com/news/singapore/salaries-in-singapore-likely-to-rise-4-next-year-survey/3178352.html
http://www.todayonline.com/singapore/salaries-spore-expected-rise-4-next-year-survey

Call for Metro to return excess cash to investors
Activist investor Quarz Capital Management has turned its sights on Singapore, calling on retailer and real estate developer Metro Holdings to return excess cash to investors. Metro’s net cash holdings of $393 million are high compared with other companies listed on the Singapore stock exchange, and account for more than half its market capitalisation, Quarz said in a letter to the management and board. Metro shares ended the day up 8.2 per cent to 99 cents yesterday, after reaching a high of 99.5 cents.
http://www.straitstimes.com/business/call-for-metro-to-return-excess-cash-to-investors
http://www.straitstimes.com/business/companies-markets/activist-investor-quarz-urges-metro-holdings-to-return-cash-to
http://www.businesstimes.com.sg/companies-markets/hedge-fund-urges-metro-to-pay-extra-dividend

Singapore Real Estate

Opportunities in an integrated Asean real estate market
The Association of Southeast Asian Nations (Asean) was founded in 1967 as a regional-based association to promote government-to-government cooperation in areas including economic, social, culture, technical and education. As a key step towards forging closer cooperation and integration, the Asean Economic Community (AEC) was officially launched in December 2015 as one of the three pillars of the Asean community. As a regional economic bloc and alliance, AEC aims to create a single market and production base with a combined GDP of US$2.7 trillion, which is the seventh largest economy in the world.
http://www.businesstimes.com.sg/real-estate/opportunities-in-an-integrated-asean-real-estate-market

Sentosa Cove bungalow fetches near-record price of S$2,923 psf on land area
A bungalow in a prime seafront location on Sentosa Cove has been sold for a near-record price of S$2,923 per square foot (psf) on land area. The absolute price works out to S$28 million for the property, which is located along Ocean Drive and consists of two storeys and a basement. It sits on 9,580 square feet of land with 99-year-leasehold tenure starting June 2005 – reflecting a balance lease tenure of 88 years. This is only the second caveat to be lodged for a bungalow purchase in Sentosa Cove this year. The property has four bedrooms, a meeting room, a swimming pool (with views of the sea, CBD and container terminals), a koi pond and a roof terrace.
http://www.businesstimes.com.sg/real-estate/sentosa-cove-bungalow-fetches-near-record-price-of-s2923-psf-on-land-area

Companies’ Brief

GIC, GSA to invest in German student dorm
Singapore sovereign wealth fund GIC and student accommodation operator GSA on Tuesday announced a partnership to invest in the German student accommodation market together. They plan to invest in a portfolio of close to 1,000 student beds which GSA acquired in June this year. This portfolio features properties in Frankfurt, Darmstadt, Munster and Dresden as well as a pipeline of 1,500 beds, which will be expanded through investments, developments and in working with local property companies. A joint press release said GSA’s partnership with GIC will target the major university cities in Germany such as Berlin, Cologne, Frankfurt, Hamburg and Munich.
http://www.businesstimes.com.sg/real-estate/gic-gsa-to-invest-in-german-student-dorm
http://www.straitstimes.com/business/property/gic-invests-in-student-housing-in-germany

Ascendas-Singbridge in JV to redevelop old CPF Building
Ascendas-Singbridge Group has entered into a joint venture with Mitsui and Tokyo Tatemono to redevelop the former CPF Building. The 79 Robinson Road property will be redeveloped into a Grade-A office building with retail amenities; its total development cost is estimated at S$1 billion. The joint venture company, Southernwood Property, comprises Ascendas-Singbridge and a consortium formed by Mitsui and Tokyo Tatemono. The former will hold a 65 per cent stake, while the consortium will have the remaining 35 per cent.
http://www.businesstimes.com.sg/real-estate/ascendas-singbridge-in-jv-to-redevelop-old-cpf-building
http://www.straitstimes.com/business/joint-venture-to-redevelop-former-cpf-building-in-1b-project

Lippo Group may consider moving Singapore-listed Reits to Indonesia, says Mochtar Riady
Lippo Group may consider moving its Singapore-listed real estate investment trusts to Indonesia if tax incentives are made as attractive as Singapore, said its chairman billionaire Mochtar Riady. The group has two property trusts listed in the island state – First Real Estate Investment Trust, which owns Indonesian hospitals, and Lippo Malls Indonesia Retail Trust, which holds shopping centres. The trusts’ relocation depends on a government ruling on further lowering the final income tax for Reits, Mr Riady, 87, said in a Bloomberg Television interview in Singapore.
http://www.straitstimes.com/business/companies-markets/lippo-group-may-consider-moving-singapore-listed-reits-to-indonesia-says

China Int’l to sell loss-making Tianjin unit for 460m yuan
Investment holding company China International Holdings (CIH) has inked a deal to sell a loss-making property-development unit for 460 million yuan (S$94.4 million) in cash, it said in a Singapore Exchange (SGX) filing on Tuesday. The unit, Tianjin Xinzhong Property Development Co, holds the rights and benefits for the group’s Tianjin Jixian project, which comprises the land use rights for some land in the North Shore of Cui Ping Lake Tourist District, east of Jixian, or Ji county, in Tianjin, the group said. Tianjin is a city in northern China. The buyer is Beijing Hongkunweiye Property Development Co, a property management and development company.
http://www.businesstimes.com.sg/companies-markets/china-intl-to-sell-loss-making-tianjin-unit-for-460m-yuan

Views, Reviews & Forum

Opportunities in stocks of three high-end developers
An adage in investment circles goes: be greedy when others are fearful. Equity markets are forward-looking and when participants grow overly pessimistic about the future, share prices fall too much. This creates opportunities for cool-headed investors who focus on fundamental value, realistic forward scenarios and have sufficiently long horizons. Today, we see these opportunities in three high-end developer stocks. While private home prices will likely correct further, we believe their share prices now reflect too-bearish expectations on the extent of the correction.
http://www.businesstimes.com.sg/companies-markets/opportunities-in-stocks-of-three-high-end-developers