Dec 2, 2009
Dubai crisis sparks fears of other debt bombs
NEW YORK: As Dubai, that one-time wonderland in the desert, struggles to pay its bills, a troubling question hangs over the financial world: Is this latest financial crisis an isolated event, or a harbinger of still more debt shocks?
Big banks that have only just begun to recover from the financial shocks of last year are now nervously eyeing their potential exposure to highly indebted corporations and governments.
From the Baltics to the Mediterranean, the bills for an unprecedented borrowing binge are starting to fall due. In Russia and the former Soviet bloc, where high oil prices helped fuel blistering growth, a mountain of debt must be refinanced as short-term IOUs come due.
Even in rich nations like the United States and Japan, which are increasing government spending to shore up slack economies, mounting budget deficits are raising concern about governments' ability to shoulder their debts, especially once interest rates start to rise again.
The numbers are startling. In Germany, government debt outstanding is expected to increase to the equivalent of 77 per cent of the nation's economic output next year, from 60 per cent in 2002. In Britain, that figure is expected to more than double over the same period, to more than 80 per cent.
The burdens are even greater in Ireland and Latvia, where economic booms fuelled by easy credit and soaring property values have given way to precipitous busts. Public debt in Ireland is expected to soar to 83 per cent of gross domestic product (GDP) next year, from just 25 per cent in 2007. Latvia is sinking into debt even faster. Its borrowings will reach the equivalent of nearly half the economy next year, up from 9 per cent a mere two years ago.
Like Latvia, the Baltic states of Lithuania and Estonia remain worryingly exposed, as do Bulgaria and Hungry. All of these nations carry foreign debt that exceeds 100 per cent of their GDP.
External debt is often held in a foreign currency, which means governments cannot use devaluation of their own currencies as a tool to reduce their debt when they run into trouble, according to economics professor Maurice Obstfeld at the University of California, Berkeley.
Few analysts predict a major nation will default on its government debts in the immediate future. Indeed, many maintain that rich nations and the International Monetary Fund would intervene in the event that a government needs to be bailed out.
But there are no assurances that companies in these nations, which, like governments, gorged on debt in good times, will be rescued.
Dubai's refusal to guarantee the debts of its investment arm, Dubai World, may set a precedent for other indebted governments to abandon companies that investors had in the past assumed enjoyed full state backing.
'I see very good reasons to be worried that at some point in 2010, we are going to see more cases of ring-fencing because governments realise they can't afford to guarantee the debts of these companies,' said Mr Pierre Cailleteau, managing director of the global sovereign risk group and chief economist of Moody's.
Said noted Harvard economist Kenneth Rogoff: 'I think right now, every vulnerable country has one or two deep-pocketed backers that pretty much rule out a sudden run.'
But he said he expected a wave of defaults about two years from now, when the countries now serving as implicit guarantors turn their focus to economic problems at home.
One feature of the financial crisis is that some governments have taken on increasingly short- term debt. In the US, for example, Treasury debt maturing within one year has risen from around 33 per cent of total debt two years ago to around 44 per cent this summer, while falling slightly since then, according to Wrightson ICAP.
The US will soon have debt problems of its own.
'In another couple years, as industrialised countries' own debts - in places like Germany, Japan and the United States - get worse, they will become more reluctant to open up their wallets to spendthrift emerging markets, or at least countries they view that way,' Professor Rogoff said.
This might spell trouble for cash-tight nations. Facing a need to roll over their maturing debts, emerging markets may have to borrow around US$65 billion (S$90 billion) next year alone, said Mr Gary Kleiman of Kleiman International.
NEW YORK TIMES
Wednesday, December 2, 2009
ST : S'pore office rents tumble more than half
Dec 2, 2009
S'pore office rents tumble more than half
Slide set to continue but at slower rate as office leasing activities pick up
By Joyce Teo, Property Correspondent
GREAT news for office tenants in Singapore but far leaner times for landlords: Office rents have plummeted by more than half in the past 12 months.
On average, they fell a whopping 53.4 per cent from their peak in the third quarter of last year to Sept 30 this year - the second-fastest rate of fall in the world. Only rents in Kiev, Ukraine, fell more quickly, by 64.6 per cent.
That meant the Republic fell from 9th spot to No.32 in the latest Top 50 most expensive markets list, according to a half-yearly global survey done by US-based consultancy CB Richard Ellis.
The occupancy cost here - rent plus local taxes and service charges - is now US$63.89 (S$88.25) per square foot (psf) a year, down 23 per cent from six months ago when it was in 15th place. That is down more than half from US$135.13 psf a year ago.
'We've seen a dramatic correction in rents but in a way, it is helping businesses secure far more competitive business costs,' said CBRE's executive director, office services, Mr Moray Armstrong.
'The market is now roughly where it was three years back.' Just two years ago, Singapore was No. 1 in terms of the highest 12-month rise in occupancy costs across the globe. This threw many tenant companies into a frenzied search for cheaper digs.
CBRE said third-quarter prime office rents hit $7.50 psf on average, after falling nearly 13 per cent from the second.
The vacancy rate for Grade A space rose to 4.2 per cent, from 3.6 per cent in the second quarter and a mere 1.2 per cent a year ago.
Overall, a net 223,397 sq ft of Grade A space was left unoccupied in the first nine months of this year, taking into account new space, CBRE said. And more supply is coming.
Still, nervous office landlords can take heart from a significant pick-up in leasing activity, to a level Mr Armstrong described as 'frenetic'.
'It's a phenomenon of many occupiers getting on with projects that they had to put off in the past 18 months,' he said.
'Right now, we're seeing a very strong resurgence in leasing activities. There's some evidence of upgrading... of occupiers taking advantage of more competitive rentals of quality space.'
Now that business confidence is improving, the rate of fall in office rents is set to slow, with a slight drop expected in the fourth quarter, said Mr Armstrong. 'We are cautiously optimistic.'
In an earlier report, Colliers International had predicted a 5 per cent slide in office rents in the fourth quarter due to sustained demand weakness and growing new supply.
Indeed, office rents are not likely to head up any time soon because there is ample supply on the way, experts said.
Worldwide, London's West End is again the world's most expensive office market, with an occupancy cost of nearly US$185 psf. Inner central Tokyo is second at US$171.64 psf, with Tokyo's outer central area in third place at US$139.09 psf.
Hong Kong's central business district, which registered the fourth largest fall of 40.7 per cent worldwide, took the fourth spot with a rate of US$137.61 psf.
S'pore office rents tumble more than half
Slide set to continue but at slower rate as office leasing activities pick up
By Joyce Teo, Property Correspondent
GREAT news for office tenants in Singapore but far leaner times for landlords: Office rents have plummeted by more than half in the past 12 months.
On average, they fell a whopping 53.4 per cent from their peak in the third quarter of last year to Sept 30 this year - the second-fastest rate of fall in the world. Only rents in Kiev, Ukraine, fell more quickly, by 64.6 per cent.
That meant the Republic fell from 9th spot to No.32 in the latest Top 50 most expensive markets list, according to a half-yearly global survey done by US-based consultancy CB Richard Ellis.
The occupancy cost here - rent plus local taxes and service charges - is now US$63.89 (S$88.25) per square foot (psf) a year, down 23 per cent from six months ago when it was in 15th place. That is down more than half from US$135.13 psf a year ago.
'We've seen a dramatic correction in rents but in a way, it is helping businesses secure far more competitive business costs,' said CBRE's executive director, office services, Mr Moray Armstrong.
'The market is now roughly where it was three years back.' Just two years ago, Singapore was No. 1 in terms of the highest 12-month rise in occupancy costs across the globe. This threw many tenant companies into a frenzied search for cheaper digs.
CBRE said third-quarter prime office rents hit $7.50 psf on average, after falling nearly 13 per cent from the second.
The vacancy rate for Grade A space rose to 4.2 per cent, from 3.6 per cent in the second quarter and a mere 1.2 per cent a year ago.
Overall, a net 223,397 sq ft of Grade A space was left unoccupied in the first nine months of this year, taking into account new space, CBRE said. And more supply is coming.
Still, nervous office landlords can take heart from a significant pick-up in leasing activity, to a level Mr Armstrong described as 'frenetic'.
'It's a phenomenon of many occupiers getting on with projects that they had to put off in the past 18 months,' he said.
'Right now, we're seeing a very strong resurgence in leasing activities. There's some evidence of upgrading... of occupiers taking advantage of more competitive rentals of quality space.'
Now that business confidence is improving, the rate of fall in office rents is set to slow, with a slight drop expected in the fourth quarter, said Mr Armstrong. 'We are cautiously optimistic.'
In an earlier report, Colliers International had predicted a 5 per cent slide in office rents in the fourth quarter due to sustained demand weakness and growing new supply.
Indeed, office rents are not likely to head up any time soon because there is ample supply on the way, experts said.
Worldwide, London's West End is again the world's most expensive office market, with an occupancy cost of nearly US$185 psf. Inner central Tokyo is second at US$171.64 psf, with Tokyo's outer central area in third place at US$139.09 psf.
Hong Kong's central business district, which registered the fourth largest fall of 40.7 per cent worldwide, took the fourth spot with a rate of US$137.61 psf.
ST : $100m for first collective sale this year
Dec 2, 2009
$100m for first collective sale this year
Dragon Mansion deal is 'sign of confidence' in mid-tier homes market
By Joyce Teo
Owners of each Dragon Mansion unit will get $1.4 million, well above the estate's highest transacted price of $880,000, said the broker of the sale. -- ST PHOTO: ALPHONSUS CHERN
OWNERS at the Dragon Mansion have completed the first collective sale of the year with a $100.8 million deal to sell their 72-unit condominium.
The price for the Spottiswoode Park estate near Outram was below the reserve price but the deal with boutique developer Roxy-Pacific was sealed anyway yesterday.
Owners of each of the 1,399 sq ft units will pick up $1.4 million - well above the estate's highest transacted price of $880,000 achieved in May last year, according to the deal's broker.
The sale of the freehold estate is a 'positive sign', said Credo Real Estate managing director Karamjit Singh.
'The market has quietened down quite a bit recently but this shows there is still confidence in the market.'
Dragon Mansion owners initially wanted $120 million, or $1,020 per sq ft (psf) per plot ratio, which is significantly above collective sale prices racked up in the recent boom.
Their sale tender closed on Aug 11 with no firm bids. There were a few expressions of interest from developers keen to buy the land but clearly not prepared to pay the asking price.
Roxy's offer came in at the end of October, when it entered into a conditional agreement to acquire the site. Its offer of $100.8 million works out to $863 per sq ft per plot ratio and includes a development charge.
Because its offer was below the owners' reserve, a fresh set of signatures was needed. CKS Property Consultants, which brokered the deal, said it took five weeks to get just over 80 per cent of the owners to agree to the new price.
Ms Chia Mein Mein, CKS' investment manager, said some of those who opposed the sale did not want to sell for sentimental reasons.
Dragon Mansion has a land area of 41,874 sq ft. A new development on the site could potentially yield a maximum gross floor area of about 117,000 sq ft - or about 120 apartments of 1,000 sq ft each.
Its sale price, said CKS in a statement, 'sets a new benchmark for the Spottiswoode Park area and reflects the limited availability of such freehold residential land near the central business district'.
Mr Singh said: 'This is a vote of confidence in the mid-tier of the market', as most of the activities in the private homes market this year have been in the mass market.
Roxy-Pacific would likely need to sell the new homes on the Dragon Mansion site for $1,400 psf to $1,500 psf.
The collective sale market, will see more activity next year with experts expecting a number of launches from as early as the first quarter.
DTZ's senior director for investment advisory services, Mr Shaun Poh, said many estates are now keen to start the sale process.
'We are starting some new ones and restarting some of the old ones which did not take off,' he added.
Experts said that while some estates are keen to restart their sale at the same 2007 boom prices or higher, others may be more realistic.
Mr Singh said the collective sale sites hitting the market next year will be those that started the process recently and are priced more realistically, unlike those that were launched for sale in the third quarter.
Those estates had prices that were decided during the previous boom so price expectations were much higher, he said.
For instance, owners at the 528-unit Laguna Park in Marine Parade failed to conclude their collective sale at the price they wanted and chose to let their collective sale agreement lapse.
Later this month, CKS will launch the 124-unit Mayfair Gardens in the Bukit Timah area for collective sale.
The estate started the process early last year and obtained 80 per cent approval in March.
'Recently, we have been getting a lot of inquiries from owners. There may be some short-term uncertainty in the property market, but owners are looking further ahead,' said Ms Chia.
Under the new - and stricter - rules that came into force in late 2007, it will take quite some time, possibly at least nine to 12 months, to prepare a collective sale. This includes appointing the marketing agent and gathering enough signatures in order to launch the sale, she said.
Bedok Court, Pine Grove and Tulip Garden are some of the other estates that have a group of pro-collective sale owners looking to restart the process.
$100m for first collective sale this year
Dragon Mansion deal is 'sign of confidence' in mid-tier homes market
By Joyce Teo
Owners of each Dragon Mansion unit will get $1.4 million, well above the estate's highest transacted price of $880,000, said the broker of the sale. -- ST PHOTO: ALPHONSUS CHERN
OWNERS at the Dragon Mansion have completed the first collective sale of the year with a $100.8 million deal to sell their 72-unit condominium.
The price for the Spottiswoode Park estate near Outram was below the reserve price but the deal with boutique developer Roxy-Pacific was sealed anyway yesterday.
Owners of each of the 1,399 sq ft units will pick up $1.4 million - well above the estate's highest transacted price of $880,000 achieved in May last year, according to the deal's broker.
The sale of the freehold estate is a 'positive sign', said Credo Real Estate managing director Karamjit Singh.
'The market has quietened down quite a bit recently but this shows there is still confidence in the market.'
Dragon Mansion owners initially wanted $120 million, or $1,020 per sq ft (psf) per plot ratio, which is significantly above collective sale prices racked up in the recent boom.
Their sale tender closed on Aug 11 with no firm bids. There were a few expressions of interest from developers keen to buy the land but clearly not prepared to pay the asking price.
Roxy's offer came in at the end of October, when it entered into a conditional agreement to acquire the site. Its offer of $100.8 million works out to $863 per sq ft per plot ratio and includes a development charge.
Because its offer was below the owners' reserve, a fresh set of signatures was needed. CKS Property Consultants, which brokered the deal, said it took five weeks to get just over 80 per cent of the owners to agree to the new price.
Ms Chia Mein Mein, CKS' investment manager, said some of those who opposed the sale did not want to sell for sentimental reasons.
Dragon Mansion has a land area of 41,874 sq ft. A new development on the site could potentially yield a maximum gross floor area of about 117,000 sq ft - or about 120 apartments of 1,000 sq ft each.
Its sale price, said CKS in a statement, 'sets a new benchmark for the Spottiswoode Park area and reflects the limited availability of such freehold residential land near the central business district'.
Mr Singh said: 'This is a vote of confidence in the mid-tier of the market', as most of the activities in the private homes market this year have been in the mass market.
Roxy-Pacific would likely need to sell the new homes on the Dragon Mansion site for $1,400 psf to $1,500 psf.
The collective sale market, will see more activity next year with experts expecting a number of launches from as early as the first quarter.
DTZ's senior director for investment advisory services, Mr Shaun Poh, said many estates are now keen to start the sale process.
'We are starting some new ones and restarting some of the old ones which did not take off,' he added.
Experts said that while some estates are keen to restart their sale at the same 2007 boom prices or higher, others may be more realistic.
Mr Singh said the collective sale sites hitting the market next year will be those that started the process recently and are priced more realistically, unlike those that were launched for sale in the third quarter.
Those estates had prices that were decided during the previous boom so price expectations were much higher, he said.
For instance, owners at the 528-unit Laguna Park in Marine Parade failed to conclude their collective sale at the price they wanted and chose to let their collective sale agreement lapse.
Later this month, CKS will launch the 124-unit Mayfair Gardens in the Bukit Timah area for collective sale.
The estate started the process early last year and obtained 80 per cent approval in March.
'Recently, we have been getting a lot of inquiries from owners. There may be some short-term uncertainty in the property market, but owners are looking further ahead,' said Ms Chia.
Under the new - and stricter - rules that came into force in late 2007, it will take quite some time, possibly at least nine to 12 months, to prepare a collective sale. This includes appointing the marketing agent and gathering enough signatures in order to launch the sale, she said.
Bedok Court, Pine Grove and Tulip Garden are some of the other estates that have a group of pro-collective sale owners looking to restart the process.
BT : Pending sales of US existing homes up in Oct
Business Times - 02 Dec 2009
LATEST US DATA
Pending sales of US existing homes up in Oct
(NEW YORK) The number of contracts to buy US previously owned homes unexpectedly rose in October as consumers rushed to take advantage of a tax credit that was due to expire.
The index of signed purchase agreements, or pending home sales, climbed 3.7 per cent to 114.1 after increasing 6 per cent in September, the National Association of Realtors said yesterday in Washington.
The ninth consecutive gain compares with the median forecast of a decline in a Bloomberg News survey of economists.
The administration's incentive for first-time buyers, which last month was extended into next year and expanded to include current owners, will help housing emerge from its worst slump since the 1930s.
A jobless rate at a 26-year high and mounting foreclosures represent challenges that the industry will find difficult to overcome.
'Housing is showing encouraging signs of recovery,' Scott Brown, chief economist at Raymond James & Associates Inc in St Petersburg, Florida, said before the report.
'A turnaround in the job market is a necessary condition for further improvement.'
Sales were projected to fall one per cent after an originally reported gain of 6.1 per cent in September, according to the median of 37 forecasts in a Bloomberg News survey.
Estimates ranged from a drop of 5 per cent to a 6.5 per cent increase.
A separate report yesterday showed manufacturing in the US expanded in November for a fourth consecutive month.
The Institute for Supply Management's manufacturing index fell to 53.6, lower than economists forecast, from October's three-year high of 55.7, according to the Tempe, Arizona-based group. Readings above 50 signal expansion.
Pending home sales are considered a leading indicator because they track contract signings.
The Realtors' existing-home sales report tallies closings, which typically occur a month or two later. The Realtors group started publishing the index in March 2005, and data goes back to January 2001. Compared with October 2008, pending sales were up 29 per cent, the biggest year-over-year gain since records began. -- Bloomberg
LATEST US DATA
Pending sales of US existing homes up in Oct
(NEW YORK) The number of contracts to buy US previously owned homes unexpectedly rose in October as consumers rushed to take advantage of a tax credit that was due to expire.
The index of signed purchase agreements, or pending home sales, climbed 3.7 per cent to 114.1 after increasing 6 per cent in September, the National Association of Realtors said yesterday in Washington.
The ninth consecutive gain compares with the median forecast of a decline in a Bloomberg News survey of economists.
The administration's incentive for first-time buyers, which last month was extended into next year and expanded to include current owners, will help housing emerge from its worst slump since the 1930s.
A jobless rate at a 26-year high and mounting foreclosures represent challenges that the industry will find difficult to overcome.
'Housing is showing encouraging signs of recovery,' Scott Brown, chief economist at Raymond James & Associates Inc in St Petersburg, Florida, said before the report.
'A turnaround in the job market is a necessary condition for further improvement.'
Sales were projected to fall one per cent after an originally reported gain of 6.1 per cent in September, according to the median of 37 forecasts in a Bloomberg News survey.
Estimates ranged from a drop of 5 per cent to a 6.5 per cent increase.
A separate report yesterday showed manufacturing in the US expanded in November for a fourth consecutive month.
The Institute for Supply Management's manufacturing index fell to 53.6, lower than economists forecast, from October's three-year high of 55.7, according to the Tempe, Arizona-based group. Readings above 50 signal expansion.
Pending home sales are considered a leading indicator because they track contract signings.
The Realtors' existing-home sales report tallies closings, which typically occur a month or two later. The Realtors group started publishing the index in March 2005, and data goes back to January 2001. Compared with October 2008, pending sales were up 29 per cent, the biggest year-over-year gain since records began. -- Bloomberg
BT : Dubai's business hub reputation at stake
Business Times - 02 Dec 2009
Dubai's business hub reputation at stake
THE way that Dubai has handled the issue of the debt incurred by Dubai World - the state-owned investment fund - could have a serious long-term effect on the emirate's credibility as a financial hub.
Last Wednesday, Dubai World announced that it wanted to delay repayment of its US$59 billion debt till end-May next year. The US$59 billion is part of Dubai's US$80 billion debt, accumulated largely from developing lavish real estate projects.
The emirate, one of seven which make up the United Arab Emirates (UAE), has been the business and financial hub of the Gulf region for well over 20 years and has been striving to become a global financial centre as well.
In a region floating on oil, Dubai has very little hydrocarbon resources; petroleum and gas contribute less than 6 per cent of its GDP. But undeterred, the emirate set forth to reinvent itself as a place of big dreams and freewheeling enterprise. With easy finance available from banks awash with money before the global financial crisis, the various companies controlled by Dubai World, such as the property developer Nakheel, embarked on one grandiose project after another.
The city became a magnet for entrepreneurs and the super-rich, not only from the Arabian peninsula but from all over the world.
In fact, Dubai's expatriates far outnumber the locals. The tax-free economy's main revenues come from tourism, real estate and financial services.
As financial crises go, Dubai World's US$59 billion debt is big, but by no means overwhelming. On the face of it, finding cash to repay creditors shouldn't be a problem: Dubai's wealthy neighbour, the emirate of Abu Dhabi, has indicated that it will help 'on a case-by-case basis' and it has enough money to do so.
The UAE central bank has also set up an emergency facility to support bank liquidity. However, the lack of clarity about the terms on which Abu Dhabi's assistance will be forthcoming is worrying Dubai's creditors.
Uncertainties about other liabilities that Dubai-related entities might have incurred add to the problem.
Dubai's credibility as a global financial hub is therefore on the line. It had aimed to develop as a financial hub to rival Singapore and Hong Kong.
But achieving that goal needs much more than capital, connectivity and infrastructure; it also needs clear-cut rules and regulations, a credible supervisory framework, and most of all, trust, which is built up slowly, over several years.
And even then, reputation can evaporate with just one badly handled crisis. Which is why it is so critical that Dubai - working together with Abu Dhabi - handle the debt problems at Dubai World more transparently and equitably. At stake is nothing less than Dubai's reputation as a business hub.
Dubai's business hub reputation at stake
THE way that Dubai has handled the issue of the debt incurred by Dubai World - the state-owned investment fund - could have a serious long-term effect on the emirate's credibility as a financial hub.
Last Wednesday, Dubai World announced that it wanted to delay repayment of its US$59 billion debt till end-May next year. The US$59 billion is part of Dubai's US$80 billion debt, accumulated largely from developing lavish real estate projects.
The emirate, one of seven which make up the United Arab Emirates (UAE), has been the business and financial hub of the Gulf region for well over 20 years and has been striving to become a global financial centre as well.
In a region floating on oil, Dubai has very little hydrocarbon resources; petroleum and gas contribute less than 6 per cent of its GDP. But undeterred, the emirate set forth to reinvent itself as a place of big dreams and freewheeling enterprise. With easy finance available from banks awash with money before the global financial crisis, the various companies controlled by Dubai World, such as the property developer Nakheel, embarked on one grandiose project after another.
The city became a magnet for entrepreneurs and the super-rich, not only from the Arabian peninsula but from all over the world.
In fact, Dubai's expatriates far outnumber the locals. The tax-free economy's main revenues come from tourism, real estate and financial services.
As financial crises go, Dubai World's US$59 billion debt is big, but by no means overwhelming. On the face of it, finding cash to repay creditors shouldn't be a problem: Dubai's wealthy neighbour, the emirate of Abu Dhabi, has indicated that it will help 'on a case-by-case basis' and it has enough money to do so.
The UAE central bank has also set up an emergency facility to support bank liquidity. However, the lack of clarity about the terms on which Abu Dhabi's assistance will be forthcoming is worrying Dubai's creditors.
Uncertainties about other liabilities that Dubai-related entities might have incurred add to the problem.
Dubai's credibility as a global financial hub is therefore on the line. It had aimed to develop as a financial hub to rival Singapore and Hong Kong.
But achieving that goal needs much more than capital, connectivity and infrastructure; it also needs clear-cut rules and regulations, a credible supervisory framework, and most of all, trust, which is built up slowly, over several years.
And even then, reputation can evaporate with just one badly handled crisis. Which is why it is so critical that Dubai - working together with Abu Dhabi - handle the debt problems at Dubai World more transparently and equitably. At stake is nothing less than Dubai's reputation as a business hub.
BT : Asset bubbles not a risk yet for Asia: OCBC
Business Times - 02 Dec 2009
Asset bubbles not a risk yet for Asia: OCBC
Bank economist also does not expect a W-shape recovery
By OH BOON PING
ASSET bubbles will not be a problem in Asia until 2010 and beyond, even though policymakers appear well aware of the risks of excess liquidity in the system, say OCBC analysts.
At a briefing yesterday, economist Selena Ling explained that Asian markets are still early in the recovery cycle, and that attempts to address an overheated market should come much later.
However, she says, the days of 'easy money' under the Greenspan era are definitely over, and the central banks in the region are cognizant of the asset bubble risks. This can be seen from the rate hikes in Australia, while the others keep a close watch on the situation.
Yesterday, Ms Ling also downplayed the likelihood of a W-shape recovery, citing factors such as the cycle of upgrades to GDP growth, corporate earnings forecasts and ratings which are expected to continue into the first half of 2010.
'So, while growth may tail off in the second half of 2010, we don't expect a sharp correction to the same magnitude from Q4 last year to Q1 this year,' she said.
Turning to foreign exchange, OCBC thinks that the immediate outlook for the US dollar continues to be negative, as the economic recovery story plays out in the near-term, says FX strategist Emmanuel Ng.
Pointing to the Baltic Dry Index, which moves inversely with the US dollar and the production numbers in the OECD, Mr Ng explained that both indicators have posted sharp rebounds - an indication of higher economic activity.
Moreover, the forex markets are poised to see higher volatility if global exit strategies are not synchronised.
Under such situations, there could be a shake-up in the markets that will see the US dollar briefly 'gaining traction against the majors'.
As for Asian currencies, OCBC said that broad dollar direction coupled with equity market performance will continue to provide underlying impetus for those units.
In particular, the pick-up in the foreign purchases of Asian currencies is expected to be sustained going into the new year.
As for ratings on local stocks, OCBC is 'overweight' on telecommunications, oil & gas, commodities and infrastructure.
Top picks include the three telcos, Noble, Ezra, Wilmar, Midas and Tat Hong, said investment research head Carmen Lee.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Stock watch: Asian markets are still early in the recovery cycle, and attempts to address an overheated market should come much later, says OCBC economist Selena Ling
Asset bubbles not a risk yet for Asia: OCBC
Bank economist also does not expect a W-shape recovery
By OH BOON PING
ASSET bubbles will not be a problem in Asia until 2010 and beyond, even though policymakers appear well aware of the risks of excess liquidity in the system, say OCBC analysts.
At a briefing yesterday, economist Selena Ling explained that Asian markets are still early in the recovery cycle, and that attempts to address an overheated market should come much later.
However, she says, the days of 'easy money' under the Greenspan era are definitely over, and the central banks in the region are cognizant of the asset bubble risks. This can be seen from the rate hikes in Australia, while the others keep a close watch on the situation.
Yesterday, Ms Ling also downplayed the likelihood of a W-shape recovery, citing factors such as the cycle of upgrades to GDP growth, corporate earnings forecasts and ratings which are expected to continue into the first half of 2010.
'So, while growth may tail off in the second half of 2010, we don't expect a sharp correction to the same magnitude from Q4 last year to Q1 this year,' she said.
Turning to foreign exchange, OCBC thinks that the immediate outlook for the US dollar continues to be negative, as the economic recovery story plays out in the near-term, says FX strategist Emmanuel Ng.
Pointing to the Baltic Dry Index, which moves inversely with the US dollar and the production numbers in the OECD, Mr Ng explained that both indicators have posted sharp rebounds - an indication of higher economic activity.
Moreover, the forex markets are poised to see higher volatility if global exit strategies are not synchronised.
Under such situations, there could be a shake-up in the markets that will see the US dollar briefly 'gaining traction against the majors'.
As for Asian currencies, OCBC said that broad dollar direction coupled with equity market performance will continue to provide underlying impetus for those units.
In particular, the pick-up in the foreign purchases of Asian currencies is expected to be sustained going into the new year.
As for ratings on local stocks, OCBC is 'overweight' on telecommunications, oil & gas, commodities and infrastructure.
Top picks include the three telcos, Noble, Ezra, Wilmar, Midas and Tat Hong, said investment research head Carmen Lee.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Stock watch: Asian markets are still early in the recovery cycle, and attempts to address an overheated market should come much later, says OCBC economist Selena Ling
BT : Who's going to blow next?
Business Times - 02 Dec 2009
AFTER THE BINGE
Who's going to blow next?
Dubai's travails have some economists wondering if another debt bomb may be lurking dangerously
(NEW YORK) LIKE overstretched American homeowners, governments and companies across the globe are groaning under the weight of debts that, some fear, might never be fully paid back.
As Dubai, that one-time wonderland in the desert, struggles to pay its bills, a troubling question hangs over the financial world: Is this latest financial crisis an isolated event, or a harbinger of still more debt shocks?
For the moment, at least, global investors seem to be taking Dubai's sinking fortunes in their stride. On Monday, the American stock market rose modestly, even as share prices plunged throughout the Persian Gulf.
But the travails of Dubai, a boomtown that, with its palm-shaped islands and indoor ski slope became a potent symbol of hyperwealth, nonetheless have some economists wondering where other debt bombs might be lurking - and just how dangerous they might turn out to be.
Big banks that have only just begun to recover from the financial shocks of last year are now nervously eyeing their potential exposure to highly indebted corporations and governments.
From the Baltics to the Mediterranean, the bills for an unprecedented borrowing binge are starting to fall due. In Russia and the former Soviet bloc, where high oil prices helped fuel blistering growth, a mountain of debt must be refinanced as short-term IOUs come due.
The numbers are startling
Even in rich nations such as the United States and Japan, which are increasing government spending to shore up slack economies, mounting budget deficits are raising concern about governments' ability to shoulder their debts, especially once interest rates start to rise again.
The numbers are startling. In Germany, long the bastion of fiscal rectitude in Europe, government debt is on the rise. There, the government debt outstanding is expected to increase to the equivalent of 77 per cent of the nation's economic output next year, from 60 per cent in 2002. In Britain, that figure is expected to more than double over the same period, to more than 80 per cent.
The burdens are even greater in Ireland and Latvia, where economic booms fuelled by easy credit and soaring property values have given way to precipitous busts. Public debt in Ireland is expected to soar to 83 per cent of gross domestic product (GDP) next year, from just 25 per cent in 2007. Latvia is sinking into debt even faster. Its borrowings will reach the equivalent of nearly half the economy next year, up from 9 per cent a mere two years ago.
Like Latvia, the Baltic states of Lithuania and Estonia remain worryingly exposed, as do Bulgaria and Hungary. All of these nations carry foreign debt that exceeds 100 per cent of their GDPs, said Ivan Tchakarov, chief economist for Russia and the former Soviet states at Nomura bank.
External debt is often held in a foreign currency, which means that governments cannot use devaluation of their own currencies as a tool to reduce their debt when they run into trouble, according to Maurice Obstfeld, an economics professor at the University of California, Berkeley.
Few analysts predict that a major nation will default on its government debts in the immediate future. Indeed, many maintain that rich nations and the International Monetary Fund (IMF) would intervene in the event that a government needs to be bailed out.
But there are no assurances that companies in these nations, which, like governments, gorged on debt in good times, will be rescued.
Precedent for withdrawing state backing
Dubai's refusal to guarantee the debts of its investment arm, Dubai World, may set a precedent for other indebted governments to abandon companies that investors had in the past assumed enjoyed full state backing.
'I see very good reasons to be worried that at some point in 2010, we are going to see more cases of ring- fencing because governments realise they can't afford to guarantee the debts of these companies,' said Pierre Cailleteau, managing director of the global sovereign risk group and chief economist of Moody's.
Kenneth Rogoff, a Harvard economist whose recent book, This Time Is Different, chronicles 800 years of financial crises, said: 'I think right now, every vulnerable country has one or two deep-pocketed backers that pretty much rule out a sudden run.' But Mr Rogoff said that he expected a wave of defaults about two years from now, when the countries now serving as implicit guarantors turn their focus to economic problems at home.
One feature of the financial crisis is that some governments have taken on increasingly short-term debt. In the US, for example, Treasury debt maturing within one year has risen from around 33 per cent of total debt two years ago to around 44 per cent this summer, while falling slightly since then, according to Wrightson ICAP. The US will soon have debt problems of its own.
'In another couple years, as industrialised countries' own debts - in places like Germany, Japan and the United States - get worse, they will become more reluctant to open up their wallets to spendthrift emerging markets, or at least countries they view that way,' Mr Rogoff said.
This might spell trouble for cash-tight nations. Facing a need to roll over their maturing debts, emerging markets may have to borrow around US$65 billion in 2010 alone, according to Gary N Kleiman of Kleiman International. But while government indebtedness may be a problem for the future, corporate debt may set off a crisis that, in some ways, is already unfolding.
Corporate borrowing surged over the last five years. According to Mr Kleiman, US$200 billion of corporate debt is coming due this year or next year. He estimated that companies in Russia and the United Arab Emirates account for about half of that borrowing. 'This is where the Achilles' heel is,' he said.
Companies in several countries, beyond Russia and the emirates, face immediate tests in raising new money. Companies in China will have to borrow US$8.8 billion in 2010; companies in Mexico US$11 billion.
According to an analysis by JPMorgan Chase, Russian companies borrowed US$220 billion from banks or by selling bonds between 2006 and 2008. That is the equivalent of 13 per cent of Russia's GDP. In the emirates, that figure was US$135.6 billion, or 53 per cent of GDP; in Turkey, it was US$72 billion, or 10 per cent of GDP; and in Kazakhstan, it was US$44 billion, or 44 per cent of GDP.
In the past, if companies could not meet those obligations, governments might have stepped in. But already some companies have defaulted on payments after assumed government guarantees failed to materialise.
In Russia, for instance, the foreign debt totals more than US$470 billion. But only a tiny fraction of that - about US$29 billion - is sovereign debt. The rest is owed by Russian companies, including state giants such as Gazprom. The most troubling case in Russia is Rusal, the world's largest aluminium company, which owes a total of US$16 billion and has been in a standstill on repayment this year while renegotiating with a group of creditors.
A subsidiary of a Russian state aircraft manufacturing company defaulted on bonds last autumn despite a presumed sovereign guarantee.
In Ukraine, the state energy company, Naftogaz, and a state railroad, have restructured or asked to restructure their debt.
'This was a trail that was blazed in this part of the world,' said Rory MacFarquhar, an economist at Goldman Sachs in Moscow, referring to governments retreating from implied guarantees of state company debt as in the case of Dubai World.
The Dubai World debt restructuring is already lifting borrowing costs for Russian companies that must repay a total of US$20 billion in December, according to Vladimir Tikhomirov, chief economist of UralSib bank in Moscow. -- NYT
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Big burden: Newly built houses in Loughrea, County Galway, Ireland; public debt in Ireland is expected to soar to 83 per cent of gross domestic product next year, from just 25 per cent in 2007
AFTER THE BINGE
Who's going to blow next?
Dubai's travails have some economists wondering if another debt bomb may be lurking dangerously
(NEW YORK) LIKE overstretched American homeowners, governments and companies across the globe are groaning under the weight of debts that, some fear, might never be fully paid back.
As Dubai, that one-time wonderland in the desert, struggles to pay its bills, a troubling question hangs over the financial world: Is this latest financial crisis an isolated event, or a harbinger of still more debt shocks?
For the moment, at least, global investors seem to be taking Dubai's sinking fortunes in their stride. On Monday, the American stock market rose modestly, even as share prices plunged throughout the Persian Gulf.
But the travails of Dubai, a boomtown that, with its palm-shaped islands and indoor ski slope became a potent symbol of hyperwealth, nonetheless have some economists wondering where other debt bombs might be lurking - and just how dangerous they might turn out to be.
Big banks that have only just begun to recover from the financial shocks of last year are now nervously eyeing their potential exposure to highly indebted corporations and governments.
From the Baltics to the Mediterranean, the bills for an unprecedented borrowing binge are starting to fall due. In Russia and the former Soviet bloc, where high oil prices helped fuel blistering growth, a mountain of debt must be refinanced as short-term IOUs come due.
The numbers are startling
Even in rich nations such as the United States and Japan, which are increasing government spending to shore up slack economies, mounting budget deficits are raising concern about governments' ability to shoulder their debts, especially once interest rates start to rise again.
The numbers are startling. In Germany, long the bastion of fiscal rectitude in Europe, government debt is on the rise. There, the government debt outstanding is expected to increase to the equivalent of 77 per cent of the nation's economic output next year, from 60 per cent in 2002. In Britain, that figure is expected to more than double over the same period, to more than 80 per cent.
The burdens are even greater in Ireland and Latvia, where economic booms fuelled by easy credit and soaring property values have given way to precipitous busts. Public debt in Ireland is expected to soar to 83 per cent of gross domestic product (GDP) next year, from just 25 per cent in 2007. Latvia is sinking into debt even faster. Its borrowings will reach the equivalent of nearly half the economy next year, up from 9 per cent a mere two years ago.
Like Latvia, the Baltic states of Lithuania and Estonia remain worryingly exposed, as do Bulgaria and Hungary. All of these nations carry foreign debt that exceeds 100 per cent of their GDPs, said Ivan Tchakarov, chief economist for Russia and the former Soviet states at Nomura bank.
External debt is often held in a foreign currency, which means that governments cannot use devaluation of their own currencies as a tool to reduce their debt when they run into trouble, according to Maurice Obstfeld, an economics professor at the University of California, Berkeley.
Few analysts predict that a major nation will default on its government debts in the immediate future. Indeed, many maintain that rich nations and the International Monetary Fund (IMF) would intervene in the event that a government needs to be bailed out.
But there are no assurances that companies in these nations, which, like governments, gorged on debt in good times, will be rescued.
Precedent for withdrawing state backing
Dubai's refusal to guarantee the debts of its investment arm, Dubai World, may set a precedent for other indebted governments to abandon companies that investors had in the past assumed enjoyed full state backing.
'I see very good reasons to be worried that at some point in 2010, we are going to see more cases of ring- fencing because governments realise they can't afford to guarantee the debts of these companies,' said Pierre Cailleteau, managing director of the global sovereign risk group and chief economist of Moody's.
Kenneth Rogoff, a Harvard economist whose recent book, This Time Is Different, chronicles 800 years of financial crises, said: 'I think right now, every vulnerable country has one or two deep-pocketed backers that pretty much rule out a sudden run.' But Mr Rogoff said that he expected a wave of defaults about two years from now, when the countries now serving as implicit guarantors turn their focus to economic problems at home.
One feature of the financial crisis is that some governments have taken on increasingly short-term debt. In the US, for example, Treasury debt maturing within one year has risen from around 33 per cent of total debt two years ago to around 44 per cent this summer, while falling slightly since then, according to Wrightson ICAP. The US will soon have debt problems of its own.
'In another couple years, as industrialised countries' own debts - in places like Germany, Japan and the United States - get worse, they will become more reluctant to open up their wallets to spendthrift emerging markets, or at least countries they view that way,' Mr Rogoff said.
This might spell trouble for cash-tight nations. Facing a need to roll over their maturing debts, emerging markets may have to borrow around US$65 billion in 2010 alone, according to Gary N Kleiman of Kleiman International. But while government indebtedness may be a problem for the future, corporate debt may set off a crisis that, in some ways, is already unfolding.
Corporate borrowing surged over the last five years. According to Mr Kleiman, US$200 billion of corporate debt is coming due this year or next year. He estimated that companies in Russia and the United Arab Emirates account for about half of that borrowing. 'This is where the Achilles' heel is,' he said.
Companies in several countries, beyond Russia and the emirates, face immediate tests in raising new money. Companies in China will have to borrow US$8.8 billion in 2010; companies in Mexico US$11 billion.
According to an analysis by JPMorgan Chase, Russian companies borrowed US$220 billion from banks or by selling bonds between 2006 and 2008. That is the equivalent of 13 per cent of Russia's GDP. In the emirates, that figure was US$135.6 billion, or 53 per cent of GDP; in Turkey, it was US$72 billion, or 10 per cent of GDP; and in Kazakhstan, it was US$44 billion, or 44 per cent of GDP.
In the past, if companies could not meet those obligations, governments might have stepped in. But already some companies have defaulted on payments after assumed government guarantees failed to materialise.
In Russia, for instance, the foreign debt totals more than US$470 billion. But only a tiny fraction of that - about US$29 billion - is sovereign debt. The rest is owed by Russian companies, including state giants such as Gazprom. The most troubling case in Russia is Rusal, the world's largest aluminium company, which owes a total of US$16 billion and has been in a standstill on repayment this year while renegotiating with a group of creditors.
A subsidiary of a Russian state aircraft manufacturing company defaulted on bonds last autumn despite a presumed sovereign guarantee.
In Ukraine, the state energy company, Naftogaz, and a state railroad, have restructured or asked to restructure their debt.
'This was a trail that was blazed in this part of the world,' said Rory MacFarquhar, an economist at Goldman Sachs in Moscow, referring to governments retreating from implied guarantees of state company debt as in the case of Dubai World.
The Dubai World debt restructuring is already lifting borrowing costs for Russian companies that must repay a total of US$20 billion in December, according to Vladimir Tikhomirov, chief economist of UralSib bank in Moscow. -- NYT
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Big burden: Newly built houses in Loughrea, County Galway, Ireland; public debt in Ireland is expected to soar to 83 per cent of gross domestic product next year, from just 25 per cent in 2007
BT " Office rentals slide to a competitive perch
Business Times - 02 Dec 2009
Office rentals slide to a competitive perch
Falling occupancy costs place S'pore at 32nd spot; period of stability on the cards
By KALPANA RASHIWALA
(SINGAPORE) Following a year-long slide in prime office rentals, Singapore's office occupancy costs have become far more competitive.
Fourteen months ago, the island was the ninth most expensive place to rent offices. By end-March this year, it had slid to 15th spot and by the end of the third quarter, many others had become relatively more expensive and Singapore stood at No 32, according to CB Richard Ellis.
The property consultancy's latest global office rent survey covered a total of 179 markets and the rankings were in US dollar terms.
CBRE also measured in local currency terms year-on-year changes in prime office rents as at end-Q3. The 53.4 per cent drop for Singapore was surpassed only by Kiev, which suffered a 64.6 per cent decline.
For the latest semi-annual survey, prime office rents in US dollars in six Asia-Pacific markets were higher than Singapore's - Tokyo's Inner Central and Outer Central markets, Hong Kong (Central CBD), Mumbai (CBD), New Delhi (CBD) and Hong Kong (Citywide). However, office occupancy costs in Singapore were still higher than Seoul, Perth, Shanghai's Pudong and Puxi districts and Sydney.
London's West End regained its status as the world's most expensive office market, overtaking Tokyo (Inner Central).
Almost three quarters or 131 of the 179 markets tracked posted declines in prime office occupancy costs for the 12-month period ending Sept 30, 2009. Of these, nearly 50 saw double-digit percentage decreases.
'The office market may be on the cusp of moving from intensive care to the stabilisation stage - the first step to getting back to good health,' says CBRE global chief economist Raymond Torto.
Forty-one markets reported year-on-year rental increases in Q3. Aberdeen and Rio de Janeiro both grew by more than 10 per cent.
According to CBRE data, Singapore's gross average monthly rentals for prime and Grade A office space both fell about 53 per cent from their respective peaks of $16.10 per square foot and $18.80 psf in Q3 last year to $7.50 psf and $8.80 psf in Q3 this year.
The quarter-on-quarter rental declines in Q3 2009 - of 12.8 per cent for prime space and 13.3 per cent for Grade A offices - were smaller than falls in the preceding three quarters. CBRE executive director (office services) Moray Armstrong is predicting far smaller declines in the current quarter.
Cushman & Wakefield research director Ang Choon Beng says that monthly prime average rentals at Raffles Place eased 2.6 per cent in the first six weeks of this quarter from end-September. 'We're likely to end Q4 with a total drop of about 4-5 per cent from Q3.'
Mr Ang feels that office rents would remain soft next year in the face of considerable new supply.
Mr Armstrong points out that a strong revival in office leasing activity has 'surpassed what we could have anticipated six months ago'.
After three quarters of negative take-up, demand for office space finally turned positive, albeit modestly so, in Q3.
'I don't see a dramatic rebound in positive take-up in Q4 2009,' he says. 'However, all the leasing activity we're seeing right now is likely to underpin a return to positive take-up in 2010.
'We're entering a more stable period for office rents over the next six to 12 months.'
Agreeing, Knight Frank chairman Tan Tiong Cheng says: 'With improving business sentiment, landlords firstly will not be panicky and tenants will also give up squeezing (landlords). Hence, the short-term outlook for office rents is more positive.
'The rest depends on government policy. The authorities believe that keeping office rents affordable will help in Singapore's competitiveness . . . And they have a range of ammunition to ensure this - including the transitional office scheme, business parks, and considerable amount of good- quality office land set aside for development in Paya Lebar and Jurong East.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Office rentals slide to a competitive perch
Falling occupancy costs place S'pore at 32nd spot; period of stability on the cards
By KALPANA RASHIWALA
(SINGAPORE) Following a year-long slide in prime office rentals, Singapore's office occupancy costs have become far more competitive.
Fourteen months ago, the island was the ninth most expensive place to rent offices. By end-March this year, it had slid to 15th spot and by the end of the third quarter, many others had become relatively more expensive and Singapore stood at No 32, according to CB Richard Ellis.
The property consultancy's latest global office rent survey covered a total of 179 markets and the rankings were in US dollar terms.
CBRE also measured in local currency terms year-on-year changes in prime office rents as at end-Q3. The 53.4 per cent drop for Singapore was surpassed only by Kiev, which suffered a 64.6 per cent decline.
For the latest semi-annual survey, prime office rents in US dollars in six Asia-Pacific markets were higher than Singapore's - Tokyo's Inner Central and Outer Central markets, Hong Kong (Central CBD), Mumbai (CBD), New Delhi (CBD) and Hong Kong (Citywide). However, office occupancy costs in Singapore were still higher than Seoul, Perth, Shanghai's Pudong and Puxi districts and Sydney.
London's West End regained its status as the world's most expensive office market, overtaking Tokyo (Inner Central).
Almost three quarters or 131 of the 179 markets tracked posted declines in prime office occupancy costs for the 12-month period ending Sept 30, 2009. Of these, nearly 50 saw double-digit percentage decreases.
'The office market may be on the cusp of moving from intensive care to the stabilisation stage - the first step to getting back to good health,' says CBRE global chief economist Raymond Torto.
Forty-one markets reported year-on-year rental increases in Q3. Aberdeen and Rio de Janeiro both grew by more than 10 per cent.
According to CBRE data, Singapore's gross average monthly rentals for prime and Grade A office space both fell about 53 per cent from their respective peaks of $16.10 per square foot and $18.80 psf in Q3 last year to $7.50 psf and $8.80 psf in Q3 this year.
The quarter-on-quarter rental declines in Q3 2009 - of 12.8 per cent for prime space and 13.3 per cent for Grade A offices - were smaller than falls in the preceding three quarters. CBRE executive director (office services) Moray Armstrong is predicting far smaller declines in the current quarter.
Cushman & Wakefield research director Ang Choon Beng says that monthly prime average rentals at Raffles Place eased 2.6 per cent in the first six weeks of this quarter from end-September. 'We're likely to end Q4 with a total drop of about 4-5 per cent from Q3.'
Mr Ang feels that office rents would remain soft next year in the face of considerable new supply.
Mr Armstrong points out that a strong revival in office leasing activity has 'surpassed what we could have anticipated six months ago'.
After three quarters of negative take-up, demand for office space finally turned positive, albeit modestly so, in Q3.
'I don't see a dramatic rebound in positive take-up in Q4 2009,' he says. 'However, all the leasing activity we're seeing right now is likely to underpin a return to positive take-up in 2010.
'We're entering a more stable period for office rents over the next six to 12 months.'
Agreeing, Knight Frank chairman Tan Tiong Cheng says: 'With improving business sentiment, landlords firstly will not be panicky and tenants will also give up squeezing (landlords). Hence, the short-term outlook for office rents is more positive.
'The rest depends on government policy. The authorities believe that keeping office rents affordable will help in Singapore's competitiveness . . . And they have a range of ammunition to ensure this - including the transitional office scheme, business parks, and considerable amount of good- quality office land set aside for development in Paya Lebar and Jurong East.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
BT : More pressure on US lenders to modify mortgages
Business Times - 02 Dec 2009
More pressure on US lenders to modify mortgages
(WASHINGTON) The Obama administration on Monday promised tougher scrutiny of lenders participating in its marquee foreclosure prevention effort and threatened to penalise companies that don't do enough to help struggling homeowners.
The move is aimed at breaking a bottleneck in the Making Home Affordable programme, which was launched in March but has been slow to reach many borrowers.
Most of the 650,000 homeowners enrolled in the programme are stuck in its initial phase and still must prove that they qualify for reduced mortgage payments. Moving those borrowers from trial modifications into permanent ones is a key test of the effort's effectiveness.
Treasury Department officials would not say on Monday how many loans have been permanently modified. But a recent report by the Congressional Oversight Panel, which is monitoring the government's Troubled Assets Relief Program (TARP), found that only about one per cent of borrowers had moved from a trial modification into a permanent one.
'In our judgment, servicers, to date, have not done a good enough job of bringing people a permanent modification solution,' Assistant Treasury Secretary Michael Barr said in a conference call with reporters.
Under the programme, eligible homeowners can have their loans modified to reduce their mortgage payments to 31 per cent of their income. To qualify for a permanent modification, borrowers must provide extensive documentation and make three consecutive payments to prove they can afford the new loan.
To prod lenders to move more borrowers into permanent loan modifications, Treasury officials said they would use a combination of public shame and monetary penalties. Lenders' performance will be tracked in report cards that show how many loans have been permanently modified, and teams of officials from the Treasury and Fannie Mae will visit major banks to monitor their progress.
Lenders that fail to perform will be 'subject to consequences which could include monetary penalties and sanctions', according to a Treasury statement. Officials declined on Monday to detail what those penalties could be.
Lenders are not paid under the programme until a loan modification is made permanent, and it was unclear what additional recourse the government might have under its contracts with participating companies.
The announcement, however, failed to satisfy housing advocates.
'The lack of conversion of these loans is at dismal levels, which means the programme has been a failure,' said John Taylor, president of the National Community Reinvestment Coalition. 'The government needs to take the gloves off and do something much more proactive, and I don't think penalising is enough.'
Mr Taylor said the administration should support allowing bankruptcy judges to modify mortgages or use government bailout funds to buy these mortgages from lenders at a discount and then force their modification.
'If you wait for voluntary compliance, you're going to get more of what the government is already experiencing - and that's frustration,' he said\. \-- LAT-WP
More pressure on US lenders to modify mortgages
(WASHINGTON) The Obama administration on Monday promised tougher scrutiny of lenders participating in its marquee foreclosure prevention effort and threatened to penalise companies that don't do enough to help struggling homeowners.
The move is aimed at breaking a bottleneck in the Making Home Affordable programme, which was launched in March but has been slow to reach many borrowers.
Most of the 650,000 homeowners enrolled in the programme are stuck in its initial phase and still must prove that they qualify for reduced mortgage payments. Moving those borrowers from trial modifications into permanent ones is a key test of the effort's effectiveness.
Treasury Department officials would not say on Monday how many loans have been permanently modified. But a recent report by the Congressional Oversight Panel, which is monitoring the government's Troubled Assets Relief Program (TARP), found that only about one per cent of borrowers had moved from a trial modification into a permanent one.
'In our judgment, servicers, to date, have not done a good enough job of bringing people a permanent modification solution,' Assistant Treasury Secretary Michael Barr said in a conference call with reporters.
Under the programme, eligible homeowners can have their loans modified to reduce their mortgage payments to 31 per cent of their income. To qualify for a permanent modification, borrowers must provide extensive documentation and make three consecutive payments to prove they can afford the new loan.
To prod lenders to move more borrowers into permanent loan modifications, Treasury officials said they would use a combination of public shame and monetary penalties. Lenders' performance will be tracked in report cards that show how many loans have been permanently modified, and teams of officials from the Treasury and Fannie Mae will visit major banks to monitor their progress.
Lenders that fail to perform will be 'subject to consequences which could include monetary penalties and sanctions', according to a Treasury statement. Officials declined on Monday to detail what those penalties could be.
Lenders are not paid under the programme until a loan modification is made permanent, and it was unclear what additional recourse the government might have under its contracts with participating companies.
The announcement, however, failed to satisfy housing advocates.
'The lack of conversion of these loans is at dismal levels, which means the programme has been a failure,' said John Taylor, president of the National Community Reinvestment Coalition. 'The government needs to take the gloves off and do something much more proactive, and I don't think penalising is enough.'
Mr Taylor said the administration should support allowing bankruptcy judges to modify mortgages or use government bailout funds to buy these mortgages from lenders at a discount and then force their modification.
'If you wait for voluntary compliance, you're going to get more of what the government is already experiencing - and that's frustration,' he said\. \-- LAT-WP
BT : Dubai World's problems a wake-up call
Business Times - 02 Dec 2009
AFTER THE BINGE
Dubai World's problems a wake-up call
Economic recovery is still fragile, there are still risks: OECD
(ESTORIL, Portugal) Dubai World's debt problems are a wake-up call that the economic recovery is still fragile and that there are still risks, Organisation for Economic Cooperation & Development (OECD) secretary-general Angel Gurria said.
Mr Gurria told Reuters that the incident had reminded markets of growing debt concerns, something that should prompt governments to be cautious in withdrawing from large stimulus measures to boost growth after the worst global recession in decades.
Dubai spooked financial markets last week when it said that two flagship firms, Dubai World and and its Nakheel unit, planned to delay repaying billions of dollars in debts.
Dubai World 'is a reminder of the fragility of the recovery process, and that fact that it is still in its infancy and that there are still downside risks', Mr Gurria told Reuters during a summit of Ibero- American leaders in Portugal. 'It's a property development gone bad, but a big one.'
He said that governments should 'keep their guard up' and err on the side of caution when deciding to cut stimulus packages.
'It's better to stay a little longer than to withdraw too early,' Mr Gurria said. 'There is now also this parallel concern that debt is accumulating at a very fast speed, and that obviously is a problem because markets are also getting very tense about that.'
Dubai has alerted markets to those risks in recent days as have growing budget deficits in some countries, such as Greece which saw a widening of its bond spreads last week.
Mr Gurria said that the downturn was taking its toll on balance sheets.
'So you are having a lot of pressure on many balance sheets because of market related portfolios, that are not sub-prime, they weren't wrong in the beginning, but they are getting sour because of the economic situation in general,' he said.
Mr Gurria also warned of the growing risks of the so-called carry trade, where investors borrow funds in a currency with low interest rates or countries such as the United States to finance investments in countries with higher-yielding assets such as China, driving prices higher.
'There is a danger of creating a bubble, because if you have a very large flow into a relatively stable number of assets, you create inflation in the prices that is not consistent with the real change in value of the assets,' he said.
He said that assets such as Chinese stocks had risen much more than many other markets because of this process. -- Reuters
AFTER THE BINGE
Dubai World's problems a wake-up call
Economic recovery is still fragile, there are still risks: OECD
(ESTORIL, Portugal) Dubai World's debt problems are a wake-up call that the economic recovery is still fragile and that there are still risks, Organisation for Economic Cooperation & Development (OECD) secretary-general Angel Gurria said.
Mr Gurria told Reuters that the incident had reminded markets of growing debt concerns, something that should prompt governments to be cautious in withdrawing from large stimulus measures to boost growth after the worst global recession in decades.
Dubai spooked financial markets last week when it said that two flagship firms, Dubai World and and its Nakheel unit, planned to delay repaying billions of dollars in debts.
Dubai World 'is a reminder of the fragility of the recovery process, and that fact that it is still in its infancy and that there are still downside risks', Mr Gurria told Reuters during a summit of Ibero- American leaders in Portugal. 'It's a property development gone bad, but a big one.'
He said that governments should 'keep their guard up' and err on the side of caution when deciding to cut stimulus packages.
'It's better to stay a little longer than to withdraw too early,' Mr Gurria said. 'There is now also this parallel concern that debt is accumulating at a very fast speed, and that obviously is a problem because markets are also getting very tense about that.'
Dubai has alerted markets to those risks in recent days as have growing budget deficits in some countries, such as Greece which saw a widening of its bond spreads last week.
Mr Gurria said that the downturn was taking its toll on balance sheets.
'So you are having a lot of pressure on many balance sheets because of market related portfolios, that are not sub-prime, they weren't wrong in the beginning, but they are getting sour because of the economic situation in general,' he said.
Mr Gurria also warned of the growing risks of the so-called carry trade, where investors borrow funds in a currency with low interest rates or countries such as the United States to finance investments in countries with higher-yielding assets such as China, driving prices higher.
'There is a danger of creating a bubble, because if you have a very large flow into a relatively stable number of assets, you create inflation in the prices that is not consistent with the real change in value of the assets,' he said.
He said that assets such as Chinese stocks had risen much more than many other markets because of this process. -- Reuters
BT : Debt tests Islamic finance laws
Business Times - 02 Dec 2009
AFTER THE BINGE
Debt tests Islamic finance laws
(NEW DELHI) THE debt crisis in Dubai is about to test one of the fastest-growing areas in banking, Islamic finance, and put the city-state's opaque judicial system on trial, according to bankers and experts in finance.
Many loans and bonds that comply with Shariah, or Islamic law, were issued in recent years by Dubai World, the investment arm of Dubai, and other Persian Gulf companies as oil-rich Middle East nations increased spending, and the global credit crisis fed debt investments in emerging markets.
But, because there have been few major defaults in this market, there is little precedent for arbitrating the unique terms of these instruments.
That is likely to create many legal issues for investors in Dubai World, which sent jitters through global markets by seeking to delay payments on US$59 billion in debt. Abdulrahman al-Saleh, director-general of Dubai's finance department, said on Monday that Dubai World was not guaranteed by the government, and the creditors would need to 'bear some of the responsibility' for the company's debt.
Shariah-compliant investments prohibit lenders from earning interest, and effectively place lenders and borrowers into a form of partnership. Yet there are no consistent rules about who gets repaid first if a company defaults on such debt, said Zaher Barakat, a professor of Islamic finance at Cass Business School in London.
The first test of what that means for investors may happen around Dec 14, when payments on a US$3.5 billion Shariah-compliant bond owed by Dubai World's real estate subsidiary, Nakheel, come due. If Nakheel defaults on its payment, legal proceedings may be initiated.
It is unclear what may happen next. Nakheel bondholders have formed a creditors' group representing more than 25 per cent of the outstanding debt, a legal adviser to the group said on Monday.
Holders of these bonds 'are going to argue that they are in the secured position on the underlying asset,' said one bank investor involved in the issuance of some of Dubai's Shariah-compliant debt.
That means that bondholders could insist on being repaid before banks, upending the traditional bankruptcy hierarchy. 'No one has tested the legal system or the documentation,' a lawyer briefed on the situation said.
The 237-page prospectus for the Nakheel bond provides little clarity. In the case of a bankruptcy by Dubai World or Nakheel, bondholders have no guarantee of 'repayment of their claims in full or at all', it said. Under Dubai law, it added, no debt owed by the ruler or government can be recovered by taking possession of the government's assets.
A default would also pose a major new test for Dubai's courts, which have never handled a major bankruptcy of one of the government's own companies, lawyers and bankers said.
Unlike its neighbours, Dubai has kept its judiciary system separate from the United Arab Emirates Federal Judiciary Authority. The decisions of the Dubai courts, which are controlled by the emirate's ruling family, can be fickle, say lawyers in the region.
For example, in order to bring a court case against a government-owned or government-run entity, a corporation or individual needs to get permission - from the government. In the prospectus for Nakheel bonds, investors are warned that 'judicial precedents in Dubai have no binding effect on subsequent decisions', and that court decisions in Dubai are 'generally not recorded'.
Global issuance of Shariah-compliant bonds and loans grew 40 per cent in the first 10 months of 2009 from a year ago, Moody's Investors Services said in a November note to clients. The total amount of Shariah-compliant debt outstanding is estimated at about US$1 trillion, up from US$700 billion just two years ago. About 10 per cent of Dubai's US$80 billion debt load complies with Shariah, bankers and analysts estimate.
Malaysia was traditionally the hub of Islamic finance, but much of this new activity has been centred around Dubai, and foreign and local law firms and banks there helped the emirate raise much of its debt. Dubai even has a school that turns students into 'certified Islamic finance executives', whose stamp of approval is required for an instrument to be deemed Shariah-compliant.
The surge in Islamic finance has led to hiring sprees at banks, and given rise to a series of new financial indicators like the Dow Jones Islamic Market index. - NYT
AFTER THE BINGE
Debt tests Islamic finance laws
(NEW DELHI) THE debt crisis in Dubai is about to test one of the fastest-growing areas in banking, Islamic finance, and put the city-state's opaque judicial system on trial, according to bankers and experts in finance.
Many loans and bonds that comply with Shariah, or Islamic law, were issued in recent years by Dubai World, the investment arm of Dubai, and other Persian Gulf companies as oil-rich Middle East nations increased spending, and the global credit crisis fed debt investments in emerging markets.
But, because there have been few major defaults in this market, there is little precedent for arbitrating the unique terms of these instruments.
That is likely to create many legal issues for investors in Dubai World, which sent jitters through global markets by seeking to delay payments on US$59 billion in debt. Abdulrahman al-Saleh, director-general of Dubai's finance department, said on Monday that Dubai World was not guaranteed by the government, and the creditors would need to 'bear some of the responsibility' for the company's debt.
Shariah-compliant investments prohibit lenders from earning interest, and effectively place lenders and borrowers into a form of partnership. Yet there are no consistent rules about who gets repaid first if a company defaults on such debt, said Zaher Barakat, a professor of Islamic finance at Cass Business School in London.
The first test of what that means for investors may happen around Dec 14, when payments on a US$3.5 billion Shariah-compliant bond owed by Dubai World's real estate subsidiary, Nakheel, come due. If Nakheel defaults on its payment, legal proceedings may be initiated.
It is unclear what may happen next. Nakheel bondholders have formed a creditors' group representing more than 25 per cent of the outstanding debt, a legal adviser to the group said on Monday.
Holders of these bonds 'are going to argue that they are in the secured position on the underlying asset,' said one bank investor involved in the issuance of some of Dubai's Shariah-compliant debt.
That means that bondholders could insist on being repaid before banks, upending the traditional bankruptcy hierarchy. 'No one has tested the legal system or the documentation,' a lawyer briefed on the situation said.
The 237-page prospectus for the Nakheel bond provides little clarity. In the case of a bankruptcy by Dubai World or Nakheel, bondholders have no guarantee of 'repayment of their claims in full or at all', it said. Under Dubai law, it added, no debt owed by the ruler or government can be recovered by taking possession of the government's assets.
A default would also pose a major new test for Dubai's courts, which have never handled a major bankruptcy of one of the government's own companies, lawyers and bankers said.
Unlike its neighbours, Dubai has kept its judiciary system separate from the United Arab Emirates Federal Judiciary Authority. The decisions of the Dubai courts, which are controlled by the emirate's ruling family, can be fickle, say lawyers in the region.
For example, in order to bring a court case against a government-owned or government-run entity, a corporation or individual needs to get permission - from the government. In the prospectus for Nakheel bonds, investors are warned that 'judicial precedents in Dubai have no binding effect on subsequent decisions', and that court decisions in Dubai are 'generally not recorded'.
Global issuance of Shariah-compliant bonds and loans grew 40 per cent in the first 10 months of 2009 from a year ago, Moody's Investors Services said in a November note to clients. The total amount of Shariah-compliant debt outstanding is estimated at about US$1 trillion, up from US$700 billion just two years ago. About 10 per cent of Dubai's US$80 billion debt load complies with Shariah, bankers and analysts estimate.
Malaysia was traditionally the hub of Islamic finance, but much of this new activity has been centred around Dubai, and foreign and local law firms and banks there helped the emirate raise much of its debt. Dubai even has a school that turns students into 'certified Islamic finance executives', whose stamp of approval is required for an instrument to be deemed Shariah-compliant.
The surge in Islamic finance has led to hiring sprees at banks, and given rise to a series of new financial indicators like the Dow Jones Islamic Market index. - NYT
TODAY Online : $100.8m deal is year's first
$100.8m deal is year's first
But is it necessarily good news for other en bloc attempts here?
by Loh Chee Kong 05:55 AM Dec 02, 2009
SINGAPORE - It has taken more than 20 months, but the collective sale of Dragon Mansion in Spottiswoode Park has gone through at the second attempt - making it the first en bloc sale this year as 2009 draws to an end.
The $100.8 million deal, which is subject to approval from the Strata Titles Board, was sealed yesterday after consent was obtained from more than 80 per cent of the residents, who were earlier looking to sell the property for $120 million.
The buyer was RL Developments, a wholly-owned subsidiary of Roxy-Pacific Holdings.
Mr Mark Tozer, 72, who chairs the sale committee, told MediaCorp the process was tedious, particularly given the uncertain economic conditions. Residents have been trying for an en bloc sale since 2007, and the attempt was put on hold when the recession hit, he said.
"For six months, we put off the bid ... it was difficult, but there was very little animosity. Everyone looked at the current market and they are satisfied with what they will be getting," said Mr Tozer.
Built in the 1970s, Dragon Mansion comprises 72 units of three-bedroom apartments. Owners are mainly older folk and each unit, measuring 1,399 sq ft, would get $1.4 million in sale proceeds.
Resident Mr Ho remarked how he would get, at most, about $800,000 should he sell the unit on his own. Said the 70-year-old: "During the property boom about a decade ago, someone offered me $820,000, but I refused to sell. Until today, I regretted my decision."
The site was offered for collective sale in July for $120 million but no buyer had matched the asking price when the tender closed a month later.
In October, boutique developer Roxy-Pacific announced it had entered into a conditional agreement with the condominium for $100.8 million or $863 per square foot per plot ratio - sending the sale committee scurrying for a fresh round of approval from the residents.
Only if the price is right
CKS Property Consultants, which brokered the deal, said the price "sets a new benchmark for the Spottiswoode Park area" and it would soon launch another site, Mayfair Gardens, after more than 80 per cent of the residents consented to an en bloc sale.
But while en bloc sale aspirants elsewhere "would be encouraged" by the deal, Ngee Ann Polytechnic real estate lecturer Nicholas Mak doubted it would actually create momentum for collective sales - particularly when the Government is set to reinstate its Confirmed List for its land sales programme in the first half of next year.
"Developers can still be selective, especially when they will have a wide variety of choices," said Mr Mak.
ERA Asia Pacific associate director Eugene Lim pointed out the selling price was a "clear reflection that the developers are prudent and cautious".
At Laguna Park last month, residents finally called off the collective sale after its $967-million price tag - revised down from an initial $1.2 billion - saw no takers.
On Thursday, Pine Grove residents will be trying - for the fourth time since 2005 - to get enough signatures to sell the property for $1.33 billion, just shy of the record $1.34 billion fetched by Farrer Court in June 2007.
For Dragon Mansion residents, there will be few tears shed for their long-time abode. The windfall, said Mr Tozer, would be sufficient for "a nice place plus pension". "The place is getting old and it's time to move on," he added.
But is it necessarily good news for other en bloc attempts here?
by Loh Chee Kong 05:55 AM Dec 02, 2009
SINGAPORE - It has taken more than 20 months, but the collective sale of Dragon Mansion in Spottiswoode Park has gone through at the second attempt - making it the first en bloc sale this year as 2009 draws to an end.
The $100.8 million deal, which is subject to approval from the Strata Titles Board, was sealed yesterday after consent was obtained from more than 80 per cent of the residents, who were earlier looking to sell the property for $120 million.
The buyer was RL Developments, a wholly-owned subsidiary of Roxy-Pacific Holdings.
Mr Mark Tozer, 72, who chairs the sale committee, told MediaCorp the process was tedious, particularly given the uncertain economic conditions. Residents have been trying for an en bloc sale since 2007, and the attempt was put on hold when the recession hit, he said.
"For six months, we put off the bid ... it was difficult, but there was very little animosity. Everyone looked at the current market and they are satisfied with what they will be getting," said Mr Tozer.
Built in the 1970s, Dragon Mansion comprises 72 units of three-bedroom apartments. Owners are mainly older folk and each unit, measuring 1,399 sq ft, would get $1.4 million in sale proceeds.
Resident Mr Ho remarked how he would get, at most, about $800,000 should he sell the unit on his own. Said the 70-year-old: "During the property boom about a decade ago, someone offered me $820,000, but I refused to sell. Until today, I regretted my decision."
The site was offered for collective sale in July for $120 million but no buyer had matched the asking price when the tender closed a month later.
In October, boutique developer Roxy-Pacific announced it had entered into a conditional agreement with the condominium for $100.8 million or $863 per square foot per plot ratio - sending the sale committee scurrying for a fresh round of approval from the residents.
Only if the price is right
CKS Property Consultants, which brokered the deal, said the price "sets a new benchmark for the Spottiswoode Park area" and it would soon launch another site, Mayfair Gardens, after more than 80 per cent of the residents consented to an en bloc sale.
But while en bloc sale aspirants elsewhere "would be encouraged" by the deal, Ngee Ann Polytechnic real estate lecturer Nicholas Mak doubted it would actually create momentum for collective sales - particularly when the Government is set to reinstate its Confirmed List for its land sales programme in the first half of next year.
"Developers can still be selective, especially when they will have a wide variety of choices," said Mr Mak.
ERA Asia Pacific associate director Eugene Lim pointed out the selling price was a "clear reflection that the developers are prudent and cautious".
At Laguna Park last month, residents finally called off the collective sale after its $967-million price tag - revised down from an initial $1.2 billion - saw no takers.
On Thursday, Pine Grove residents will be trying - for the fourth time since 2005 - to get enough signatures to sell the property for $1.33 billion, just shy of the record $1.34 billion fetched by Farrer Court in June 2007.
For Dragon Mansion residents, there will be few tears shed for their long-time abode. The windfall, said Mr Tozer, would be sufficient for "a nice place plus pension". "The place is getting old and it's time to move on," he added.
TODAY Online : Town council to remove trees
Town council to remove trees
But some Marsiling Rise residents say the garden is source of community pride
by Esther Ng 05:55 AM Dec 02, 2009
SINGAPORE - For 10 years, the trees - an assortment of mango, jackfruit, drumstick, soursop and neem - have been carefully tended by a group of residents from Blocks 116 and 117 at Marsiling Rise.
Now, the trees look likely to be cut down, giving rise to the question of whether town councils should follow the letter of the law in disallowing the planting of trees and plants in common areas - or if they can show some discretion when residents take ownership of their surroundings.
Sembawang Town Council is planning to remove the "unauthorised planting" in the turf area between two residential blocks.
Dismayed about the decision conveyed in a notice last month, 31 residents sent the town council a petition on Nov 5.
"Political leaders have exhorted us to develop a sense of pride in our community, and we have taken this to heart and have spent money tending to our garden," wrote retired doctor Praema Raghavan, who has spotted Golden Orioles, Munias, Koels, Bulbuls among the trees.
But the plea failed to persuade the town council.
On Monday, the group spotted contractors surveying the area, two weeks after the last correspondence from the town council explaining why it could not accede to their request.
In an email to Dr Praema, senior property manager Terence Chan said: "While it has been our town council's policy to allow planting by residents, the plants should be kept in pots neatly arranged in front of their flat units.
"For residents who wish to carry out in-ground planting, we have also worked with the Residents' Committee to provide a community garden at Blk 116 for such activity.
"We believe this is a more balanced approach in catering to the hobby and community bonding of residents as well as maintaining the aesthetics of the estate."
According to Dr Praema, the plot of land where the trees are located had been saved once before.
This time, though, Member of Parliament Hawazi Daipi said he learnt of the situation only when contacted by MediaCorp.
Efforts by housing board residents to take ownership of their community have been in the news recently, for example, when the HDB set up a new community relations department.
And at a ministerial walkabout in October, Minister Lim Hwee Hua praised a petition by another group of residents, who were trying to convince the National Parks Board to allow them access to tend their herb garden at Bishan Park while the latter was undergoing upgrading.
"This is a very good reflection of a sense of ownership," Mrs Lim had said.
Dr Praema is still hoping that Marsiling Rise residents' efforts will similarly not go to waste.
"The garden has educational value. Kindergarten teachers bring their kids here for excursions," she told MediaCorp.
But some Marsiling Rise residents say the garden is source of community pride
by Esther Ng 05:55 AM Dec 02, 2009
SINGAPORE - For 10 years, the trees - an assortment of mango, jackfruit, drumstick, soursop and neem - have been carefully tended by a group of residents from Blocks 116 and 117 at Marsiling Rise.
Now, the trees look likely to be cut down, giving rise to the question of whether town councils should follow the letter of the law in disallowing the planting of trees and plants in common areas - or if they can show some discretion when residents take ownership of their surroundings.
Sembawang Town Council is planning to remove the "unauthorised planting" in the turf area between two residential blocks.
Dismayed about the decision conveyed in a notice last month, 31 residents sent the town council a petition on Nov 5.
"Political leaders have exhorted us to develop a sense of pride in our community, and we have taken this to heart and have spent money tending to our garden," wrote retired doctor Praema Raghavan, who has spotted Golden Orioles, Munias, Koels, Bulbuls among the trees.
But the plea failed to persuade the town council.
On Monday, the group spotted contractors surveying the area, two weeks after the last correspondence from the town council explaining why it could not accede to their request.
In an email to Dr Praema, senior property manager Terence Chan said: "While it has been our town council's policy to allow planting by residents, the plants should be kept in pots neatly arranged in front of their flat units.
"For residents who wish to carry out in-ground planting, we have also worked with the Residents' Committee to provide a community garden at Blk 116 for such activity.
"We believe this is a more balanced approach in catering to the hobby and community bonding of residents as well as maintaining the aesthetics of the estate."
According to Dr Praema, the plot of land where the trees are located had been saved once before.
This time, though, Member of Parliament Hawazi Daipi said he learnt of the situation only when contacted by MediaCorp.
Efforts by housing board residents to take ownership of their community have been in the news recently, for example, when the HDB set up a new community relations department.
And at a ministerial walkabout in October, Minister Lim Hwee Hua praised a petition by another group of residents, who were trying to convince the National Parks Board to allow them access to tend their herb garden at Bishan Park while the latter was undergoing upgrading.
"This is a very good reflection of a sense of ownership," Mrs Lim had said.
Dr Praema is still hoping that Marsiling Rise residents' efforts will similarly not go to waste.
"The garden has educational value. Kindergarten teachers bring their kids here for excursions," she told MediaCorp.
ST : S'pore office rents tumble
Dec 2, 2009
S'pore office rents tumble
Slide set to continue but at slower rate as office leasing activities pick up
By Joyce Teo, Property Correspondent
GREAT news for office tenants in Singapore but far leaner times for landlords: Office rents have plummeted by more than half in the past 12 months.
On average, they fell a whopping 53.4 per cent from their peak in the third quarter of last year to Sept 30 this year - the second-fastest rate of fall in the world. Only rents in Kiev, Ukraine, fell more quickly, by 64.6 per cent.
That meant the Republic fell from 9th spot to No.32 in the latest Top 50 most expensive markets list, according to a half-yearly global survey done by US-based consultancy CB Richard Ellis.
The occupancy cost here - rent plus local taxes and service charges - is now US$63.89 (S$88.25) per square foot (psf) a year, down 23 per cent from six months ago when it was in 15th place. That is down more than half from US$135.13 psf a year ago.
'We've seen a dramatic correction in rents but in a way, it is helping businesses secure far more competitive business costs,' said CBRE's executive director, office services, Mr Moray Armstrong.
'The market is now roughly where it was three years back.' Just two years ago, Singapore was No. 1 in terms of the highest 12-month rise in occupancy costs across the globe. This threw many tenant companies into a frenzied search for cheaper digs.
S'pore office rents tumble
Slide set to continue but at slower rate as office leasing activities pick up
By Joyce Teo, Property Correspondent
GREAT news for office tenants in Singapore but far leaner times for landlords: Office rents have plummeted by more than half in the past 12 months.
On average, they fell a whopping 53.4 per cent from their peak in the third quarter of last year to Sept 30 this year - the second-fastest rate of fall in the world. Only rents in Kiev, Ukraine, fell more quickly, by 64.6 per cent.
That meant the Republic fell from 9th spot to No.32 in the latest Top 50 most expensive markets list, according to a half-yearly global survey done by US-based consultancy CB Richard Ellis.
The occupancy cost here - rent plus local taxes and service charges - is now US$63.89 (S$88.25) per square foot (psf) a year, down 23 per cent from six months ago when it was in 15th place. That is down more than half from US$135.13 psf a year ago.
'We've seen a dramatic correction in rents but in a way, it is helping businesses secure far more competitive business costs,' said CBRE's executive director, office services, Mr Moray Armstrong.
'The market is now roughly where it was three years back.' Just two years ago, Singapore was No. 1 in terms of the highest 12-month rise in occupancy costs across the globe. This threw many tenant companies into a frenzied search for cheaper digs.
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