Financial News: 29th March – 3rd June 2011

 

CDL reports 78% jump in Q1 profit

 

Property group City Developments (CDL) said its net profit surged 78 percent to S$282.34 million for the first quarter ended March 31.

The property developer attributed its improved financial performance to strong profit contribution from the rental properties segment, as well as gains from the sale of investments.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1128231/1/.html

 

Brookvale Investments launches takeover of Allgreen Properties

 

Brookvale Investments has launched a friendly takeover of mainboard-listed Allgreen Properties by offering S$1.60 per share for the developer.

The cash offer values Allgreen at S$2.54 billion, which is a premium of 39.1 per cent over the stock’s closing price of S$1.15 on Friday.

In a filing with the Singapore Exchange, Allgreen also said the offer price is about 20.3 per cent higher than the highest price at which Allgreen’s shares have traded within the three years before the offer announcement.

Brookvale Investments, an investment holding firm owned by Malaysian billionaire Robert Kuok’s group of companies, plans to privatise and delist Allgreen from the Singapore Exchange.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1130697/1/.html

Financial News: 28th Oct – 16th Nov 2010

 

CapitaMalls Asia reports 14% rise in Q3 net profit to S$68m

 

However, revenue for the same period slipped 22.1 per cent to S$42.5 million.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1089970/1/.html

 

SIA Engineering’s Q2 net profit up 8.8%

 

This was due to an increase in airframe and component overhaul work and fleet management revenue.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1090939/1/.html

 

Dollar sinks after Fed move

 

The Fed announced Wednesday it would buy US$600 billion in new Treasury bonds through the middle of next year to boost a weak economic recovery.

‘Even though the details of the ’round two’ quantitative easing were close to market expectations, the Fed announcement has triggered a rush into risky assets,’ said Vassili Serebriakov, currency strategist at Wells Fargo Bank. ‘From the currency market perspective, as long as the Fed continues to reduce the attractiveness of US Treasuries, foreign assets and currencies should benefit at the expense of the dollar.’

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_599611.html

 

US jobless claims rise more than expected

 

Initial jobless claims rose to 457,000 in the week ending October 30, the Labour Department reported, an increase of 4.6 percent from the prior week when they had fallen close to the year’s low reached on July 10.

The increase surpassed the average analyst forecast of 445,000 new claims.

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http://www.channelnewsasia.com/stories/afp_world_business/view/1091420/1/.html

 

Hyflux’s Q3 profit up 5% on-year

 

Water solutions company Hyflux has reported a 5 per cent on-year rise in third quarter net profit to S$18.9 million. Revenue increased 9 per cent to S$137 million.

Both the municipal and industrial sectors recorded higher sales. The municipal sector contributed 85 per cent of total revenue at S$117.0 million, 3.5 per cent higher on-year. The industrial sector’s contribution rose 54 per cent to S$19.6 million.

This reflected progress made in projects that were put on hold by customers in China during the global economic downturn.

In terms of geographical contributions, the Middle East and North Africa region continued to be the group’s largest market, accounting for 62 per cent of total revenue. China contributed 29 per cent of total revenue, while Singapore and other territories made up the remaining 9 per cent.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1091397/1/.html

 

PLife REIT’s Q3 gross profit ups 28.3% on-year to S$21.2m

 

It said its higher revenue was mainly due to additional revenue contribution amounting to S$1.8 million from its Japanese properties.

The properties were acquired in the fourth quarter of 2009.

PLife REIT also reported its Q3 net property income rose 26.5 per cent on-year to S$19.4 million.

It added that as a result of strong operating performance, its third quarter distributable income rose 17.8 per cent on-year to S$13.6 million.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1091998/1/.html

 

Sembcorp Q3 profits up 65%

 

BUOYED by a strong performance from its marine arm, Sembcorp Industries has posted a strong 65 per cent jump in its third-quarter net profits to $244.1 million.

Sembcorp’s utilities and industrial parks businesses also helped to boost the bottom line for the three months ended Sept 30.

This profit figure includes the settlement paid by French bank Societe Generale to Sembcorp’s marine arm over foreign exchange losses.

Excluding this $32.1 million exceptional item, the Singapore energy, water and marine group’s profit was still up 43.2 per cent to $212 million.

Rig builder Sembcorp Marine, which is 61 per cent owned by Sembcorp Industries, had posted a 105 per cent gain in quarterly earnings last week. Its profit contribution to Sembcorp Industries grew 67 per cent to $148.4 million.

Profits from the group’s utilities arm climbed 6 per cent to $59.3 million, while its industrial parks business raked in $6.14 million, which is a 40 per cent jump from the previous period.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_600997.html

 

Local banks to continue bull run despite low interest rate: analysts

 

Even with some uncertainty on the global economic recovery, analysts said banks will continue to post decent earnings. This is because banks are expected to generate money from trading and IPO-underwriting activities.

Homebuyers can get a 5-year fixed rate home loan from DBS at just 1.99 per cent per annum.

UOB customers can choose to keep their fix monthly instalment for one year regardless of movements in interest rates. While for OCBC, rates on its variable packages are as low as 1.18 per cent.

Even with such aggressive competition, brokerage analysts are optimistic about Singapore banks’ prospects for 2011.

DBS, OCBC and UOB have so far been resilient in the current low interest environment.

Combined, the three local banks earned S$1.98 billion this quarter – the highest for the banks since June 2006 when the 3-month Singapore Interbank Offered Rate (SIBOR) averaged 3.44 per cent. It is currently less than 0.44 per cent.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092172/1/.html

 

Inflation-linked bonds may take off in Asia, amid rising inflation

 

While gold has been popular as a hedge against rising prices, some experts said inflation-linked bonds may be a smarter way to retire rich.

With populations ageing rapidly in many parts of Asia, finding ways to protect the spending power of national pensions is becoming a key issue for governments.

That is one reason why experts believe more countries in Asia will begin to offer inflation-linked government bonds in three to five years.

Currently in Asia, only Japan and Korea do so. Elsewhere, inflation-linked bonds are offered in Europe, US, and Australia.

Dariush Mirfendereski, MD and head of Inflation-Linked Trading at UBS said: "The market sees a lot of demand for this sort of an Asian growth story, and therefore exposure to higher inflation, and higher real rates that should come with that. The problem is that there aren’t many Asian economies issuing inflationary bonds.

"What the investor community probably would welcome is countries like Thailand, Malaysia, Singapore, Philippines and others entering into this market."

The advantage of inflation-linked securities is that the principal amount rises with the inflation rate, preventing the real value of the bonds from being eroded.

The trade-off is that this is usually in return for a lower coupon rate compared with what conventional bonds offer.

However, with conventional bonds currently trading at elevated prices, experts said inflation-linked products may offer better value.

When investing in inflation-linked bonds, investors must keep in mind that the secondary market in them might be rather shallow, compared with more liquid conventional bonds.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092119/1/.html

 

S’pore Land’s Q3 profit down 11%

 

Mainboard-listed property developer Singapore Land said its third-quarter net profit dropped 11 per cent from a year earlier to S$50.1 million.

This was despite revenue growing 29 per cent from a year ago to S$154 million.

The developer said the higher revenue was due to better sales of trading properties and higher revenue in the Pan Pacific Singapore hotel.

The hotel’s revenue rose 29 per cent to S$27 million with higher contributions from room rentals and F&B.

But Singapore Land said overall revenue growth was partially offset by lower rental income, with gross rental income from investment properties dropping 3 per cent to S$62 million.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092415/1/.html

 

ST Engineering Q3 net profits rise 8% to S$130.2m

 

Singapore Technologies Engineering (ST Engineering) said its third-quarter net profits rose 8 per cent from a year earlier due to higher revenue from its land systems and electronics business.

The defence contractor and aircraft maintenance company saw net profits rise to S$130.2 million from S$120.3 million for the three-month period.

Revenue gained 10 per cent to S$1.49 billion from S$1.35 billion a year ago.

ST Engineering said it expects to achieve higher revenue and profit in this financial year compared with last year.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092411/1/.html

 

Chip Eng Seng reports 37% growth in Q3 net profits

 

Mainboard-listed construction firm Chip Eng Seng said third-quarter net profit grew 37 per cent from a year earlier to S$23.7 million.

This compares with a net profit of S$17.3 million in the same three-month period last year.

Meanwhile, revenue grew 10 per cent from a year earlier to S$115 million.

The company said revenue growth was driven by property-development revenue, which jumped 79 per cent, led by sales in its Oasis@Elias project.

Some of this growth was offset by construction revenue, which fell 11 per cent after the completion of two major projects.

Chip Eng Seng said its construction order book is currently worth S$406 million.

The company added that it will continue to pursue opportunities to expand its portfolio of residential projects in Singapore and overseas.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092408/1/.html

 

Noble Group Q3 net profits rise 19% to US$157.6m

 

Singapore-based commodities supplier Noble Group said its third-quarter net profit rose 19 per cent from a year earlier to US$157.6 million.

Revenue jumped by 79 per cent to US$14.9 billion — a new quarterly record.

The company said its improved performance reflects a more stable economic environment, which returned commodity prices to more normal levels.

Going forward, Noble expects earnings to improve because of contributions from past investments and acquisitions.

Specifically, it said the acquisition of Sempra Energy Solutions, which has been renamed Noble Americas Energy Solutions, should strengthen the profitability of its energy business.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092374/1/.html

 

UOL’s Q3 profit rises 18%

 

Property developer UOL Group’s third-quarter profit increased to S$124.7 million, up 18 per cent from a year earlier.

The company’s revenue for the quarter rose 7 per cent on-year to S$345.2 million.

The increase was due to recognition of revenue from the sale of the group’s development properties, as well as the improved performance of hotel operations, UOL said.

UOL’s hotel properties include the Pan Pacific and the Parkroyal hotel chains, while its residential properties include Nassim Park Residences and Waterbank at Dakota.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092659/1/.html

 

CDL’s Q3 profit edges up 1%

 

City Developments (CDL) said its third-quarter net profit edged up 1 per cent from a year earlier to S$195 million.

The property company said its revenue fell 21 per cent to S$746 million, compared with S$941 million a year ago.

CDL said its hotel operations benefited from a recovery in the hospitality market across all regions.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092664/1/.html

 

RWS edges ahead of MBS

 

GENTING Singapore continues to lead the field in what is shaping up to be a two-horse race in Singapore’s booming gaming market.

The Asian gaming giant announced on Thursday that Resorts World Sentosa (RWS) generated $732 million in revenue and pre-tax profits of $346.5 million for the third quarter of this year.

On Thursday, it also unveiled details of new attractions set to make Universal Studios Singapore a leading theme park. Popular ride Battlestar Galactica, which has been suspended from operations since March, will re-open in the first half of next year.

While falling short of its performance last quarter, when the integrated resort’s (IR) cash tills rang up $860.8 million in revenue to produce pre-tax profits of $503.5 million, RWS still managed to edge ahead of arch rival Marina Bay Sands (MBS).

Last month, MBS owner Las Vegas Sands said the IR pulled in revenues of $631 million, making a pre-tax profit of $315 million for the period ended Sept 30 – its first full quarter of operations since opening in April.

But MBS enjoyed a higher profit margin of 49.7 per cent, compared to RWS’ 47 per cent over the same period, even though RWS had a head start after opening in phases from January.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_602327.html

 

Olam posts 56% rise in Q1 net profit

 

Commodities company Olam said first-quarter net profit rose 56 per cent to S$29.7 million.

This compares with a net profit of S$19 million for the same period a year ago.

Meanwhile, first-quarter revenue grew 31 per cent to S$2.5 billion, compared with S$1.9 billion in the year-earlier period.

Olam said all its five business segments – edible nuts; spices; beans; confectionery; and beverage Ingredients – have contributed to the strong performance.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092912/1/.html

 

APB’s full-year profit up 65%

 

Asia Pacific Breweries (APB) said its full-year profit before exceptional items rose 65 per cent from a year earlier to S$261 million.

Taking in account the exceptional items, its full-year profit rose 52.6 per cent to S$263 million.

Revenue for the year increased almost 26 per cent to S$2.5 billion.

APB said its Singapore unit saw improved domestic and export performance, which helped to contribute 16 per cent to the group’s profit before interest, tax and exceptional items.

The company’s board has recommended a final net dividend of 52 cents per share which, together with the interim dividend of 14 cents per share, brings total net dividend for the year to 66 cents per share.

The final dividend, if approved by shareholders, will be paid on 18 February 2011.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1092898/1/.html

 

Oil prices dive on stronger dollar

 

Oil prices slumped on Friday, after hitting two-year highs the previous day, as traders took their cue from a stronger dollar and speculation over a Chinese interest rate rise.

New York’s main contract, light sweet crude for December, fell to 84.88 dollars a barrel, down 2.93 dollars from Thursday’s closing level.

London’s Brent North Sea crude for December dropped 2.47 dollars to 86.34 dollars in London trade.

The drop in oil prices came "in reaction to fears about Chinese inflation and the worry… that China will increase its interest rates and that would impact growth," said analyst Andy Lipow of Lipow Oil Associates.

Traders fear that a rise in Chinese interest rates could slow down its economy, which has been a bulwark of the global economic recovery.

Meanwhile, the euro slid against the dollar as investors fretted over indebted eurozone nations, despite EU heavyweights rushing to downplay those concerns at the G20 meeting in Seoul.

A stronger dollar makes it more expensive for investors holding other currencies to buy dollar-denominated commodities like crude oil.

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http://www.channelnewsasia.com/stories/afp_world_business/view/1093218/1/.html

Financial News: 26th Oct– 1st Nov 2010

 

Basel III ‘incomplete answer’

 

INTERNATIONAL agreements requiring banks to hold more capital and a tax on bank balance sheets proposed by the British government are not enough to significantly reduce the risk embodied in giant banks, Bank of England Governor Mervyn King said.

Speaking to the Buttonwood Gathering in New York, Mr King said that banks deemed ‘too big to fail’ enjoy implicit government support which in turn gives banks incentives to take on greater risk.

‘The balance sheets of too many banks were an accident waiting to happen, with levels of leverage on a scale that could not resist even the slightest tremor to confidence about the uncertain value of bank assets,’ Mr King said.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_595304.html

 

Starhill Global REIT’s Q3 DPU up 5.3%

 

Starhill Global REIT said that its distribution per unit (DPU) for the third quarter improved by 5.3 per cent.

It announced a DPU of 1 cent, up from the 0.95 cent declared in the year-ago period.

Distributable income rose by 5.8 per cent on-year to S$19.4 million, while net property income was up by 37 per cent on-year to S$35.8 million. 

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1089513/1/.html

 

Suntec REIT acquiring one-third stake in Marina Bay Financial Centre

 

Suntec Real Estate Investment Trust (Suntec REIT) is acquiring a one-third stake in Marina Bay Financial Centre for S$1.5 billion.

Under the transaction, Suntec REIT will purchase Marina Bay Financial Centre Tower 1 and 2, the Marina Bay Link Mall and 695 car park lots.

The REIT has entered into a conditional share purchase agreement for the property with Choicewide Group Limited, Cavell Limited and Hutchinson Whampoa Properties Limited.

The agreed consideration for the one-third interest is S$1495.8 million.

 

Earlier, Suntec REIT reported that distribution income for the third quarter 2010 ended September 30 was S$46.2 million, and the distribution per unit was 2.502 cents.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1089486/1/.html

 

Eu Yan Sang’s Q1 net profit rises 14% to S$4.1m

 

Eu Yan Sang reported a first-quarter net profit of S$4.1 million.

This is a 14 per cent increase from a year earlier.

Meanwhile, its revenue for the same period came in at S$57.6 million, a 9 per cent increase when compared with the same period a year earlier.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1089971/1/.html

 

Cache Logistics Trust posts DPU of 1.94 cents for Q3

 

Cache Logistics Trust has posted a distribution per unit (DPU) of 1.94 Singapore cents for the fiscal third quarter and net property income for the quarter was S$14.36 million.

This represents an increase of around 13.5 per cent when compared with the previous quarter.

Meanwhile, distributable income came in at S$12.3 million, a 13.5 per cent increase from the quarter before.

The Cache portfolio currently comprises of six logistics properties located in Singapore. The trust says its portfolio is 100 per cent leased.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1089959/1/.html

 

EU unemployment at record high

 

EUROPEAN unemployment hit a record 10.1 per cent in September, the EU said, also logging a rise in inflation across the euro zone to 1.9 per cent.

EU data agency Eurostat’s flash estimate for annual eurozone inflation is expected to be 1.9 per cent in October, a rise from 1.8 per cent in September.

The seasonally-adjusted unemployment rate for the 16 countries that share the euro moved up from 10 per cent, maintaining its slow but painful rise over the past 12 months and underlining the lagging nature of recession’s impact on job markets.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_596843.html

 

SMRT’s Q2 net profit falls 13.3%

 

SMRT said its second-quarter net profit fell 13.3 per cent from a year earlier to S$45.8 million. The next 12 months may be challenging, the transport operator said.

Profit declined despite revenue for the period rising 7.2 per cent to S$246 million.

SMRT said the revenue increase is primarily because of higher MRT ridership, contributions from Circle Line Stages 1 and 2, higher Bus ridership and higher rental and advertising revenue.

These gains were partially offset by lower revenue from Palm Jumeirah Monorail.

Rental revenue grew 16.4 per cent from a year earlier to S$2.6 million, following the redevelopment of commercial spaces at various MRT stations.

Consequently, operating profit for the quarter increased 15.5 per cent to $14.7 million.

SMRT said the outlook for the next 12 months is expected to be challenging with continuing losses from its Circle Line operations, increasing cost pressures and the negative impact of distance fares on MRT revenue.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1090249/1/.html

 

Japan Inc grapples with strong yen

 

Surging quarterly profits for Japan’s top companies belie the threat posed by a strong yen, as the unit’s rise prompts firms to shift production out of the country to stay competitive, say analysts.

With the currency closing in on its post-World-War-II high of 79.75 against the dollar, Japan’s biggest companies are preparing to adapt to life with a currency that has defied Tokyo’s efforts to weaken it.

For many firms, the yen’s 14 percent rise against the dollar and near 16 percent rise versus the euro this year has mitigated a post-crisis demand revival and undermined the benefits of earlier cost cuts and restructuring.

With more companies considering moving production overseas to stay competitive against rivals benefiting from weaker currencies in their home countries, Japan’s fragile recovery could be further tested, analysts say.

"Japanese companies are losing their edge. They are aware that they need to take the next step," said Hideyuki Araki, economist at Resona Research Institute.

"This will mean shifting production overseas or a switch to imports of foreign-made parts from domestically produced ones," he said.

Such a scenario would mean more jobs being taken out of Japan, threatening an already weak economy dependent on exports that account for two-thirds of its growth, as government efforts to generate domestic demand falter.

An August government survey suggested that at least 40 percent of companies in Japan were considering moving production overseas if the yen stayed high.

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http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1090486/1/.html

Financial News: 16th – 25th Oct 2010

US deficit shrinks

 

THE US deficit shrank 9% last fiscal year but still topped US$1 trillion (S$1.29 trillion), the government said in a report seized on by Democrats’ rivals weeks ahead of mid-term elections.

For the 2010 fiscal year that ended on Sept 30, the government had a budget shortfall of US$1.294 trillion, down US$122 billion from the previous year’s record-setting high.

Revenue rose and spending fell amid recovery from recession and as President Barack Obama’s Democratic administration wound down some of the emergency measures taken to restore growth.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_591485.html

 

US to probe China’s policies

 

US AUTHORITIES announced a probe into claims that China is handing out hundreds of billions of dollars in illegal subsidies in a bid to dominate the green-energy sector.

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http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_591484.html

 

Oil prices slump as dollar rises

 

Crude oil prices slumped on Friday as the US dollar staged a small comeback despite the growing prospects of the Federal Reserve stepping in to kick-start the economy of the world’s top oil consumer.

Federal Reserve chairman Ben Bernanke on Friday gave the strongest indication yet that the central bank was set to resume purchasing assets, effectively printing money, in a bid to boost the fledgling economic recovery.

Bernanke also warned that the risk of deflation was growing amid the sluggish recovery and high unemployment.

A weakening dollars usually pushes traders to invest in the commodity market which is less exposed to big market swings.

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http://www.channelnewsasia.com/stories/afp_world_business/view/1087425/1/.html

 

Mapletree’s IPO gets 39.6 times subscription rate

 

In all, it received a total demand of some 21.6 billion units, 37.9 times more than the 569.4 million units available for subscription.

Strong demand from international and local institutional investors saw them requesting for 19.4 billion units, even though just some 488.7 million units were available for them.

This resulted in a 39.6 times subscription rate.

It was the same story in the public offer, where retail investors made bids for 2.2 billion units, chasing after the 80.6 million units available.

At that rate, the public offer was about 27.7 times subscribed.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1087980/1/.html

 

IMF backs China’s rate hike

 

THE International Monetary Fund on Thursday praised China’s interest rate hike and called on the United States to weigh carefully any measures to support a weak economic recovery.

‘We support the decision of the central bank of China to raise its rates,’ said an IMF spokesman, David Hawley, in response to a question at a news briefing at the institution’s Washington headquarters.

‘Given the pace of recovery in China, it’s appropriate that the central bank should continue to withdraw its monetary stimulus and return the pace of credit growth to more normal levels,’ he added.

China announced on Tuesday it would hike two key interest rates by a quarter point each

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http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_593925.html

 

Ericsson reveals profit jump

 

ERICSSON, the world’s biggest mobile network maker, revealed surprisingly strong quarterly net profits but said it was still grappling with sector-wide component shortages.

The Swedish company reported a net profit surge to 3.68 billion kroner (S$894.6 million) in the third quarter, up from 810 million in the same three-month period last year.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_594123.html

Financial News: 8th – 15th October 2010

 

Personal wealth in Asia Pac grows much faster than global average

 

Wealth in the region grew between 100 and 400 per cent in the last 10 years, compared to the average global rate of 42 per cent, according to the first Global Wealth Report by Credit Suisse.

Joseph Tan, director & Asian chief economist, Credit Suisse, said: "On a much longer-term structural basis, one key reason why Asian growth … (is) leading to Asian wealth accumulation is because the demographics are highly favourable for Asia – we have a lot more younger people out here in Asia."

Within Asia Pacific, Australians are the richest – with an average wealth per individual of nearly US$321,000. This is followed by Singaporeans, with some US$255,000 in individual wealth.
These are the only two Asia Pacific countries that made it to the top 10 list in the study.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1085975/1/.html

 

SGX sees more listing of resource firms as commodities trade grows

 

Resource companies are performing relatively well alongside a better economic environment. That has prompted firms like palm oil producer Mewah Group to consider listing on Singapore’s exchange in the months ahead.

XinRen Aluminium is another and is looking to raise S$200 million.

MORE…

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1085954/1/.html

 

SGD to strengthen against USD till year end, say analysts

 

The Singapore Dollar is likely to break the 1.30 level against the US Dollar as it continues to strengthen for the rest of the year.

Action Economics’ director of Asian Economic Forecasting David Cohen said: "There’s been a renewed inflow into the currencies of the emerging economies around the world and most of the emerging asian currencies have been appreciating against the USD.
"The combination of a little more investor risk appetite, together with the ongoing current account surpluses in most of the countries provide some underlying support for the regional currencies.
"And (the) Singapore dollar would just appreciate together with the others in the region".
All eyes will be on the central bank next week, when it’s expected to issue its semi-annual monetary policy statement.

MORE…

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1085930/1/.html

 

Yuan rise might cause havoc

 

A SHARP revaluation in the yuan would trigger mass factory closures and job losses in China, analysts say, backing up the government’s strident defence of its controversial exchange rate policy.

Premier Wen Jiabao told European leaders last week that the 20-40 per cent appreciation demanded by critics would destroy Chinese firms and lead to social upheaval by triggering widespread unemployment.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_588931.html

 

Mapletree sets IPO price

 

MAPLETREE Industrial Trust, a property trust linked to Temasek Holdings, has reportedly priced its initial public offering (IPO) at 93 cents a share and could now raise as much as $940 million.

The trust owns dozens of factories, business parks and industrial buildings, mainly in Singapore.

MORE…

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_589597.html

 

GLP launches newest IPO

 

Global Logistics Properties (GLP), the real-estate unit of the sovereign wealth fund, launched what could be Singapore’s largest initial public offering (IPO) since SingTel went public in 1993.

GLP is set to raise $3.45 billion by listing its shares – priced at $1.96 apiece - on the Singapore Exchange (SGX).

This will comprise 1.76 billion shares, of which about 102 million will be offered to small-time investors.

MORE…

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_589542.html

 

Asia now price setter for oil: experts

 

According to some experts, demand from Asia, especially China, has been driving oil prices to where they are now.
Last year, China surpassed Japan as the world’s second largest oil consumer, and industry watchers said it wants a say in pricing.

Demand for oil in China has grown by about 8 to 10 per cent annually, compared with the global increase of around 1.5 per cent.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1086672/1/.html

 

Oil prices slip after OPEC decision, falling US crude stocks

 

Oil prices dipped on Thursday after OPEC’s decision to maintain its output target and news of a surprise drop in crude reserves in the United States, the world’s top oil consumer.

New York’s main contract, light sweet crude for delivery in November, lost 32 cents to 82.69 dollars a barrel after earlier hitting 84.12 as the US currency plunged in value against the euro and the yen.

Brent North Sea crude for November dipped 11 cents to 84.53 dollars.

OPEC, which pumps 40 percent of the world’s oil, agreed to keep its target at 24.84 million barrels a day, current president Wilson Pastor-Morris of Ecuador told reporters after the meeting at its headquarters.

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http://www.channelnewsasia.com/stories/afp_world_business/view/1087206/1/.html

 

Inflation rises to hit 4 %

 

SINGAPORE’S inflation is set to rise to 4 per cent by end of the year and stay high in the first half of 2011, said the Monetary Authority of Singapore on Thursday.

The central banks said it will steepen and widen the trading band on the Singapore dollar to curb inflation, which it is seeking to cap at 2 to 3 per cent next year, from 2.5 to 3 per cent this year.

The consumer price index (CPI) edged up further to 3.2 per cent in July to August, driven by higher car and commodity prices, and other cost pressures amid a buoyant economy.

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http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_590566.html

 

MAS action to tackle inflation

 

THE Monetary Authority of Singapore (MAS) surprised markets by allowing the rising Singapore dollar to strengthen further, bucking a worldwide trend of countries resisting currency gains.

Citing concerns over inflation, the central bank set the Singdollar on a steeper appreciating path. It also gave the currency more room to fluctuate, in view of the unusual volatility in international currency markets.

The Singdollar soared as high as $1.289 against the greenback before settling down at about $1.294, a new record. With the Singdollar higher, other currencies had more room to rise as well.

The Australian dollar jumped to a 28-year high against the United States dollar, drawing almost level with it, while the Japanese yen hit a new 15-year peak.

The euro also climbed, by almost 1 per cent, to its highest level since January. Meanwhile, gold reached another record as investors mounted a fresh wave of exits from the US dollar.

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http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_590550.html

 

Singapore’s GDP expands by 10.3% on-year, contracts by 19.8% on-quarter in Q3

 

The advance estimates released by the Ministry of Trade and Industry (MTI) on Thursday said that the Singapore economy remains on track to achieve the overall growth forecast of 13 to 15 per cent for the whole of 2010.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1086998/1/.html

 

DBS raises S$1.7b through preference share issue

 

The preference shares will pay a non-cumulative fixed dividend rate of 4.7 per cent and will be callable in 2020.

The bank said the proceeds from the issue will be used to refinance preference shares that are callable in 2011.

The offer is expected to close on or around October 22.
According to DBS, the total book size of the issue was more than S$2.5 billion.
Going forward, DBS said it is considering a separate retail offering of preference shares to cater to retail demand.
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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1087151/1/.html

 

Asian currencies to weaken slightly next year: analysts

 

Swiss banking giant UBS said the Australian dollar, which has strengthened to be on par with the US dollar, is likely to suffer the biggest setback.
At a forum on Thursday, UBS warned that the Australian dollar is highly volatile now - after gaining huge ground on the US dollar recently.
The Aussie dollar traded at new 28-year highs – near parity with the greenback.
UBS said it does not expect the global economy to worsen at the same levels of the global downturn two years ago.
But it expects the eurozone debt crisis to have a domino effect on Asia and the rest of the world next year.

It is therefore forecasting Asian currencies to weaken slightly next year.
And Asian governments have also been wary of foreign fund flows pushing up their currencies.
"For instance, the Thai government has step in with a 15 per cent withholding tax on all Thai Baht denominated bond investments. We could possibly see that in other Asian countries as well, if the amount of capital coming into the economies is not abated," said Kelvin Tay, chief investment strategist (Singapore) with UBS AG.

Amid the gloomy outlook, one currency that UBS is positive on is the South Korean won, given the country’s strong economic fundamentals.
The won has appreciated to its strongest level since May this year, after the central bank held off from raising interest rates.
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http://www.channelnewsasia.com/stories/marketnews/view/1087144/1/.html

 

US jobless claims rise more than expected

 

New claims for US unemployment benefits rose by 13,000 last week, more than experts expected, government data showed Thursday.

Initial claims for the week ending October 9 rose to 462,000. That was well above the 450,000 claims expected by economists and the level needed to indicate falling unemployment.
"The gain put an end to two straight declines and reinforced that the labor market recovery is not going to come about quickly," said Andrew Gledhill of Moody’s Analytics.
"As major companies finish their labor restructuring, many of the newly unemployed are coming from smaller businesses.
"This tends to cause more hardship on Main Street as many of these workers are unprepared for their job loss."

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http://www.channelnewsasia.com/stories/afp_world_business/view/1087139/1/.html

Financial News: 1st – 8th October 2010

China offers to buy Greek debt

 

Premier Wen Jiabao made the offer at the start of a two-day visit to Greece, his first stop on a tour of Europe, and also said he wanted to boost shipping and trade ties with Athens, underscoring Beijing’s use of economic strength to win friends.

‘With its foreign exchange reserve, China has already bought and is holding Greek bonds and will keep a positive stance in participating and buying bonds that Greece will issue,’ Mr Wen said, speaking through an interpreter.

‘China will undertake a great effort to support euro zone countries and Greece to overcome the crisis.’ Mr Wen and his Greek counterpart George Papandreou said in a statement the world’s nations need to coordinate their economic policies for global recovery to find a sure footing.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_586159.html

 

UK banks may need bailout

 

MANY British banks may need another state bailout next year and their borrowing requirements could hit 25 billion pounds (S$51.9 billion) a month, the New Economics Foundation (NEF) thinktank said.

The NEF said it had examined Bank of England data and concluded that many UK banks appeared to face a funding cliff, as the NEF published a report on the British banking system.

Royal Bank of Scotland and Lloyds had to be part-nationalised as they ran up huge losses during the credit crisis, and others such as Barclays and HSBC have benefited from cheap credit provided by the central bank.

UK banks have a January 2012 deadline to repay 185 billion pounds they borrowed from the Bank of England against 287 billion pounds of illiquid assets, mostly residential mortgage backed securities, under the BoE’s Special Liquidity Scheme. They also face further pressure from new Basel III banking industry rules, due to be phased in by January 2019, which will require banks to hold more capital.

The main requirement of the new Basel rules is for banks to have a minimum Tier 1 capital ratio of 7 per cent. Many banks’ Tier 1 ratios are already above this but the Basel III regime is much stricter on what can be counted as Tier 1 capital.

http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_586453.html

 

Super-rich buy gold by ton

 

Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.

‘They don’t only buy ETFs or futures; they buy physical gold,’ said Mr Stadler, who runs the Swiss bank’s services for clients with assets of at least US$50 million (S$65.7 million) to invest.

UBS is recommending top-tier clients hold 7-10 per cent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around US$1,314.50 an ounce on Monday, near the record level reached last week. ‘We had a clear example of a couple buying over a ton of gold … and carrying it to another place,’ Mr Stadler said. At today’s prices, that shipment would be worth about US$42 million.

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http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_586785.html

 

Institutional investors see higher returns in private equities

 

Institutions see higher returns when they invest in private equities as opposed to publicly listed ones.

Industry players said they see an average return of up to 25 per cent from private equities, compared to about 10 per cent for those traded on Asia’s benchmark index MSCI Asia ex-Japan.

They added that private equities in emerging markets are where the opportunities lie.

Investors are looking at emerging countries like China for investment opportunities in the private equity market.

The value of private equity deals for China grew 48 per cent on-year to US$2.6 billion while value of deals in India more than doubled to US$2.2 billion for the first half of this year.

But industry players warn that investing in private equities also come with higher risks.

"The difference between private equity and public equity is that you are given a chance to participate in the growth story of a company earlier than the general public is allowed to. In exchange, you do face additional risk, but in exchange for that risk you have additional returns," said Pierre Hennes, Managing Partner, Extream Ventures.

Risks include poor company management and failed contracts.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1085283/1/.html

 

Firms rush to list in S’pore in face of uncertainty in 2011

 

The IPO market in Singapore is heating up – with six companies recently announcing plans to raise a combined S$5 billion.

And that’s on top of the other 26 new listings this year – already outnumbering the 22 IPOs in 2009.

Market watchers said the current offerings will see strong investor interest.

But going into next year, they warn that the global economic outlook is still uncertain.

Liquidity is also coming back to the Singapore Exchange (SGX).

Currently, around 2 billion shares are changing hands per day on the SGX, compared to 1 billion in June.

And several companies are looking to swoop in to raise capital in a more confident market.

"Singapore is a flush with liquidity, as is Hong Kong. And with the talk of QE2 in the US, expectations for liquidity continue to be pumped into Singapore and Hong Kong, as investors globally look to use and utilise those excess funds into markets that do provide real economic return," said Geoff Howie, Sales & Market Strategist, MF Global Singapore.

GIC’s Global Logistic Properties is aiming to raise around S$3 billion, while Temasek’s Mapletree Investment Trust is looking for S$1 billion.

Meanwhile, Malaysian palm oil producer Mewah is raising S$600 million.

Other IPOs waiting to be launched include New Century Ship Building, Yamada Green Resources and XinRen Aluminium.

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http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1085279/1/.html

Financial News: 23rd – 30th Sept 2010

 

S’pore tops expat income

 

SINGAPORE is home to the largest proportion of high-earning expatriates compared to 24 other countries and cities, a new global survey shows.

Nearly half the number of expats – 45 per cent – living and working here are earning more than US$200,000 (S$265,000) annually, compared to the worldwide average of 21 per cent, according to the Expat Explorer Survey conducted by HSBC Bank.

According to a paper on household income trends released by the Singapore Department of Statistics last month, the average annual income of the top 10 per cent of employed Singapore households from work was about $265,000. This means that less than 10 per cent of employed Singapore households earn $265,000 or more.

The HSBC figure puts expats in Singapore ahead of their counterparts in other countries and cities such as Russia, China, the Philippines, Malaysia and Hong Kong.

The bank said the annual poll – which interviewed more than 4,217 respondents – is the world’s largest survey of expatriates.

Last year, in the same survey, Singapore was ranked fourth out of 26 countries and cities when it came to expat income.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_582046.html

 

S’pore could become yuan trading centre for ASEAN: analysts

 

Singapore accounts for 12 per cent of offshore trading for the Chinese yuan but analysts expect that to double over the next five years.

The city-state will play a bigger role because of the growing Chinese trade and investments within Southeast Asia.
In addition, the Monetary Authority of Singapore (MAS) had signed a S$30 billion currency swap agreement with China in July.
Under the agreement, MAS can obtain yuan from the People’s Bank of China in exchange for Singapore dollars.
MAS will then lend the yuan to financial institutions in Singapore, which in turn lends it to their customers for trade and direct investments.

Hong Kong now accounts for 75 per cent of offshore yuan trading. But Singapore is hoping to get a slice of that pie.
Through the currency swap pact, observers hope China will see Singapore as an ideal regional base to internationalise its currency.

Geoff Howie, a sales & market strategist at MF Global Singapore, said: "We will be providing a key facilitating role, much like Hong Kong has for China, in all facets of its economy, the entrepot, the investment flows. I look at Singapore as the capital of capital of the ASEAN space, therefore we will be playing the key role in facilitating those cash inflows and outflows."
Trade between China and ASEAN amounted to US$161 billion in the first half of this year. That is up nearly 50 per cent on-year.

With a growing Southeast Asian region, experts said Singapore is well-placed to serve as a base for yuan-denominated investment products into China.
Thio Chin Loo, a senior currency analyst at BNP Paribas, said: "The availability of bringing the Chinese yuan outside back into the country, in terms of investment into the Chinese stock and bond markets, is a very positive development because in line with the rise in global trade volumes that we expect, the growth in Chinese domestic markets and the investment alternatives it provides is giving more room for offshore players to then park these yuan back into China."
Yuan-denominated equity-linked products are expected to be launched in Hong Kong later this year.
Analysts urge Singapore to consider offering such products as well, as the yuan market develops further

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1082774/1/.html

 

Muis revises CPF nomination

 

THE Islamic Religious Council of Singapore (Muis) has revised a 40-year position on Central Provident Fund (CPF) nominations, a move that will give Muslims more options on who can inherit their CPF savings.

In its new religious ruling, Muslims who wish to follow Islamic law can nominate a spouse or needy family member to inherit a larger portion or even their entire CPF savings, its fatwa or legal committee announced yesterday.

At the same time, they can choose not to make a nomination, in which case their savings would be distributed according to Islamic inheritance laws.

‘The decision on which approach to take, or to take both approaches, should be based on the condition of his or her beneficiaries and who among them needs the money the most,’ said the fatwa in Malay signed by Mufti Syed Isa Semait.

The previous fatwa, issued in 1971, held that the CPF savings of a Muslim form part of the individual’s estate.

Under Singapore law, the estate of a Muslim must be distributed according to Islamic inheritance laws.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_582550.html

 

GIC to raise $3.2b for IPO

 

THE biggest public float of shares on the local stock market since SingTel in 1993 is about to get under way.

The Government of Singapore Investment Corporation (GIC) is set to raise about $3.2 billion by listing its logistics unit Global Logistic Properties (GLP) on the Singapore Exchange.

The initial public offering (IPO), to be launched next month, will comprise almost 1.8 billion shares priced between $1.78 and $1.96 each.

About one billion will be offered to global investors, while key institutional investors will get 589 million shares.

There is also good news for retail investors. The preliminary IPO prospectus said about 119 million shares will be offered to the public.

This will be the first time a company majority-owned by Singapore’s sovereign wealth fund is to be listed.

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_583960.html

 

Analysts say STI could hit record 4,000 points by end 2012

 

The benchmark Straits Times Index (STI) could hit a record high of 4,000 points by the end of 2012. Experts said that is because companies earnings in Asia are trending upward and this will propel markets higher. Corporates within Asia are expected to report record earnings in the next two years on the back of economic growth. Some experts expect earnings growth in Singapore to hit 8.9 per cent in 2011, and 9.8 per cent in 2012. For the same period across Asia ex-Japan, earnings growth is expected to go up in the region of 11 per cent.
And experts said that this will give the market a boost.

Wong Sui Jau, GM of Fundsupermart.com said: "Within the next two years, several Asian markets will see record earnings growth by 2010, Singapore by 2012, and then other countries by 2011.
"The last time we had record earnings growth was in 2007, and… that was also the time that markets hit record highs. So the question will be, if in the next two years, we see (record) earnings again, then will we see Asian markets, Singapore markets hit an all-time high? We believe yes, this is what is going to happen."

In the last three months, the STI has climbed around 8 per cent, and reasonable valuations could contribute to the index moving even higher.
And during this period of earnings growth, experts said small cap companies, as well as sectors such as leisure and technology, offer potential.

Terence Wong, co-head of Research at DMG & Partners said: "If you look at the small cap space right now, a lot of them have risen considerably. I’d be a little bit cautious, but not too much because I think most of these small caps that have gone up over the last few months, a lot of them are fundamentally sound. It is very unlike 2007.
"So coming back to 2010, many of these stocks, despite them having risen quite a fair bit, I think the valuations still justify a buy position."
In the short term however, market watchers noted that investors continue to trade with caution under concerns of a double-dip recession in the US.
But some said that such dark clouds will eventually subside.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1083923/1/.html

 

House targets yuan

 

US LAWMAKERS overwhelmingly approved a bill Wednesday to punish China for what they branded its unfairly undervalued currency, blaming the weak yuan for killing US jobs weeks before key elections.

The House of Representatives passed the legislation by a 348-79 margin, one of its strongest showings against China in years, fuelled by deep voter anger at the sour economy and joblessness near 10 per cent ahead of the November ballot.

The US Senate has signalled it will take up a companion bill after the elections, but legislation’s fate is unclear and President Barack Obama has not formally taken a position on whether he supports it.

The measure would essentially consider Beijing’s actions as a trade subsidy, and expand the powers of the US Commerce Department by allowing it to slap retaliatory tariffs on Chinese goods.

‘We do this because one million American jobs could be created if the Chinese government took its thumb off the scales,’ said Democratic House Speaker Nancy Pelosi.

‘We understand the US-China relationships is an important one in every way – culturally, politically, diplomatically, economically, commercially – but we need to have them play by the rules,’ she said shortly before the vote.

http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_584893.html