Mr B

Retail Report

2009-04-14T21:58:00.000+08:00

INGTON (Reuters) - Sales at U.S. retailers unexpectedly fell in March, snapping two months of increases, as motor vehicle and electronic good purchases declined, according to a government report on Tuesday that indicated subdued consumer spending amid rising unemployment.

The Commerce Department said total retail sales dropped 1.1 percent after rising by a revised 0.3 percent in February, previously reported as a 0.1 percent fall.

Excluding motor vehicles and parts, sales fell 0.9 percent in March, compared to a 1 percent gain the prior month. The data highlighted the continuing problems in the U.S. auto industry, with vehicle and parts sales dropping 2.3 percent after a 3 percent decline in February.

Analysts polled by Reuters had forecast retail sales rising 0.3 percent in March. Excluding motor vehicles, sales had been predicted to be flat.

Gasoline sales fell 1.6 percent in March after increasing by 3.1 percent the previous month. Sales of electronic goods tumbled 5.9 percent, versus a 0.7 percent gain in February, while building materials eased 0.6 percent after slipping 0.5 percent.

Source : Retail Sales Slip unexpertedly - Reuters

14/04/2009 Market Update Singapore

2009-04-14T21:54:00.000+08:00

A key reversal day today. The market simple shrugged off the bad GDP figures as investors look at that as the end of our tunnel. At closing, STI got matched up to close at day high of 1,897, with a gain of 20 points – unbelievable. We have breached above the 1,880 resistance already. Volume traded was also incredibly high at 2.19 billion shares worth $1.33 billion.
The matched up was partly due to the US futures gaining strength as well. Furthermore, there is news that our government is considering a second stimulus plan worth $10 billion.

I think this is the fundamental confirmation that we have been waiting for. Whether there are any pullbacks or not have became secondary because everyone has come to a consensus that the market had bottomed last month. That’s why when we wait for the fundamentals to prove to us, we have to be prepared to buy at prices that are 15-20% higher from the trough. This is because as I have always said, the stock markets are forward-looking mechanisms.
Chart wise, I think given the current situation, STI is quite likely to minimally break above the previous high point (1,960) during the last bear rally in January. Given all these confirmations, the market is basically ideal for investors who have holding power regardless of traders or investors. Those without holding power should at least have the discipline to cut loss if things go awry, especially if you are trading the second-liner stocks. Whatever you do, just make sure that you do not miss out the sprouting bull market. It might come anytime for all we know.

F&N:
It has been very weak these few days. I vaguely remember that I read somewhere about one of its subsidiary company is in some kind of refinancing problems. If I recall correctly, it should be FrasersCT. As the mother company, F&N will be obliged to lend a helping, to the extent of raising capital such as a rights issue. Therefore, we see its price being so depressed. It might be worth collecting some of it at this junction taking into consideration that it didn't run up during this rally. Once the uncertainty is removed, the share price is likely to bounce back up.

Kep Corp:

This counter did quite badly today compared to the rest. I wonder if it has anything to do with the rumors out there saying that it might need to raise capital. But it should be worth collecting it again soon once the share price discounted adequately the likelihood of a rights issue etc. Just take not that it will go XD on 28/04/2009 though and thus the share price is likely to adjust downwards on that date. So do not mistake that behavior as the discounting mechanism for a likely rights issue.

SIA:

The chart is showing a correction in the making. It should be worthwhile to start collecting it before it bounces back up again.

Source :My stocks Buddy

Goldman Sachs Plans to Raise $5 Billion to Repay U.S.

2009-04-14T21:52:00.000+08:00

pril 14 (Bloomberg) -- Goldman Sachs Group Inc., buoyed by profit that exceeded the most optimistic Wall Street estimates and a 54 percent jump in its stock price, plans to raise $5 billion to repay federal rescue funds and shed government limits on executive pay.

Chief Executive Officer Lloyd Blankfein, eager to redeem the $10 billion his New York-based bank received in October, announced the fundraising plan yesterday as the company reported a $1.81 billion profit in the first quarter. The bank earned $3.39 a share, more than double the $1.64 average of 16 analysts surveyed by Bloomberg News.

“They’ll do better now in terms of what it costs to raise money than they can for the rest of the year,” said Christopher Whalen, a managing director at Torrance, California-based Institutional Risk Analytics. “I don’t think the rest of this year will be good.”

Goldman Sachs was the most profitable Wall Street firm before converting to a bank last year and posting its first quarterly loss since the company went public in 1999. The bank also said yesterday that it lost $780 million, or $2.15 a share, in the month of December, before the start of its new fiscal year.

The bank said it will use proceeds from the common stock offering plus “additional resources” to pay back the funds it got from the Troubled Asset Relief Program. Andrew Williams, a spokesman for the Treasury Department, declined to comment on Goldman Sachs’s announcement.

‘Eye of Storm’

U.S. regulators are unlikely to object to the repayment. The government favors letting banks return money if they fare well on stress tests completed by the end of this month and can get private capital, according to people familiar with the matter.

“They can raise capital now; clearly the stock is strong,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors, which has about $13.3 billion under management. “This is like the eye of the storm passing.”

Goldman Sachs traded at $126.44 before the start of New York Stock Exchange trading today. The stock climbed 4.7 percent yesterday to $130.15 in New York trading, valuing the firm at $65.7 billion.

AIG ‘Rounded to Zero’

Chief Financial Officer David Viniar said on a conference call today that profit resulting from American International Group Inc. payments to the firm “rounded to zero” in the first quarter. Most of the cash flow from AIG payments took place prior to the end of the year, he said.

After AIG was rescued by the U.S. from collapse last year, banks that bought credit-default swaps got $22.4 billion in collateral and $27.1 billion in payments to retire the contracts, the insurer said last month. Lawmakers have called for a federal probe into whether banks including Goldman Sachs received more funds than necessary from the bailout.

The company remains “cautious about the near-term outlook,” Viniar said.

The firm’s business model depends on its ability to attract top traders and bankers with promises of lucrative bonuses, a Wall Street pay model that is now under attack by politicians incensed at multimillion-dollar payouts to executives in an industry blamed for causing the economic crisis. The government imposed limits on executive compensation at banks such as Goldman Sachs that accepted more than $500 million in TARP funds.

Compensation Costs Rise

Before last year, Goldman Sachs set two consecutive Wall Street pay records. Even last year, 953 of the bank’s employees made more than $1 million, the Wall Street Journal reported, citing unidentified people familiar with the matter. Lucas van Praag, a spokesman at Goldman Sachs, declined to comment.

This year, the bank set aside $4.71 billion for compensation and benefits, 18 percent more than during the first quarter a year earlier. The expense totaled 50 percent of revenue, up from 48 percent in last year’s first quarter, even as the firm’s workforce shrank 12 percent to 27,989.

Blankfein said last week at a conference in Washington sponsored by the Council of Institutional Investors that the U.S. funds Wall Street firms received weren’t intended to be “permanent capital.”

‘Return the Money’

“The minute that an institution is allowed to return the money and is capable of returning the money, while still carrying out its obligations and its role in the capital markets effectively, then it should do it that minute,” Blankfein said.

Viniar said in February that the firm would like to repay the money because “operating our business without the government capital would be an easier thing to do.”

If Goldman Sachs returns the TARP money, it may pressure other banks to follow suit or risk appearing dependent on the government, said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York who rates Goldman Sachs “market perform.”

The better-than-expected earnings will also make it difficult for competitors that are scheduled to report their own results this week or next week, said Sorrentino.

“This makes life much more difficult for everyone else out there,” he said. “To merely beat your numbers now will be viewed as, ‘What’s wrong?’”

Goldman Sachs Results

Book value per share rose to $98.82 at the end of March compared with $98.68 in November, and return on equity, a gauge of how effectively the firm invests earnings, was 14.3 percent in the first quarter, Goldman Sachs said.

First-quarter revenue was $9.43 billion. The highlight was Goldman’s fixed-income, currencies and commodities business, known as FICC, in which trading revenue was a record $6.56 billion, 34 percent higher than its previous high, as client- driven income outweighed an $800 million loss on commercial mortgage loans, excluding hedges.

Goldman Sachs benefited as the gap between what banks pay to buy fixed-income securities and the price at which they sell, the so-called bid-ask spread, almost doubled to 19 basis points in six months, according to data compiled by Bloomberg.

“FICC operated in a generally favorable environment characterized by client-driven activity, particularly in more liquid products, and high levels of volatility,” the bank said in a statement. “Illiquid assets generally continued to decline in value.”

Fewer Rivals

The loss of competitors including Lehman Brothers Holdings Inc. and Bear Stearns Cos. meant Goldman Sachs attracted more trading business, said Huntington’s Sorrentino.

“A lot has to do with the fact that they really narrowed the playing field,” he said. “All that business has to be flowing through to someone.”

Because trading revenue is so hard to predict, “the market’s going to value asset management and investment banking and retail brokerage higher than it’s going to value trading,” said Bernstein’s Hintz. “As an analyst you have to ask yourself, ‘Is this sustainable?’”

Every other business unit had lower revenue compared with the first quarter of 2008 or reported a loss.

Equity trading revenue was $2.0 billion as slower activity outside the U.S. meant the firm generated fewer trading commissions than a year ago.

Investment Banking

Investment banking revenue of $823 million compared with $1.17 billion in the first quarter of 2008, reflecting a decline in leveraged finance activity and fewer mergers and share offerings.

Asset management fees slumped 28 percent to $949 million as assets under management fell 3.3 percent. Securities services, which include the firm’s prime brokerage unit, made $503 million, 30 percent less than the first quarter of 2008.

Goldman Sachs had a $1.41 billion net loss from principal investments, including a $151 million loss from the firm’s investment in Industrial and Commercial Bank of China Ltd.

Total assets on the balance sheet rose 5 percent from the end of November to $925 billion as of March 27. Of that, about $59 billion qualified as “Level 3” assets, which are the hardest to value, down from $66 billion at the end of November.

Goldman Sachs raised $5.75 billion by selling shares at $123 apiece in September in an offering that started after the company announced that Warren Buffett’s Berkshire Hathaway Inc. bought $5 billion in preferred stock.

A month later, Goldman Sachs was among nine financial institutions that shared $125 billion in the first payments from the Treasury’s $700 billion bailout program.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Source:Bloomberg

SPH’s 2Q earnings fall 13% on lower print ad sales

2009-04-13T21:42:00.001+08:00

Singapore Press Holdings, the city-state’s biggest newspaper publisher, said second-quarter profit dropped 13% after an economic recession hurt advertising revenue, reported Bloomberg.

Net income declined to $87 million, or 5 cents a share, in the three months ended Feb 28, compared with $99.6 million, or 6 cents, a year earlier, the company said in a statement to the Singapore stock exchange. Revenue fell to $287.2 million from $298.1 million.

Singapore’s worst recession on record is forcing companies to slow hiring and advertising spending, hurting the company’s core newspaper publishing business. Government data due tomorrow may show the economy shrank 9.6% last quarter, the fourth straight contraction, according to the median forecast of economists surveyed by Bloomberg News.

“The recession in Singapore is expected to last through 2009 and this would have a continued impact on advertisement revenue,” Chief Executive Officer Alan Chan said in the statement. “Our priority is to preserve resources, protect jobs, and position ourselves so as to emerge stronger when the economy improves.”

Earnings were reported after markets in Singapore closed. SPH shares rallied 3.2% to $2.89 today. They have plunged 36% in the past 12 months, compared with a 40% slump in the benchmark Straits Times Index.

Print ad sales fell 19% to $145.9 million last quarter, according to today’s statement. Operating expenses climbed 3% to $195.7 million, SPH said.

In October, the newspaper publisher raised prices for some of its newspapers, including its flagship English-language The Straits Times, for the first time in four years. The company said today newsprint costs jumped 24% in the quarter.

Earnings last quarter didn’t take into account savings from pay reductions. SPH lowered salaries for 3,000 employees from April 1 by as much as 10% and reduced bonuses amid a “sharp deterioration in business conditions,” the company said on March 12.

The cuts are expected to reduce its wage bill by 20%, SPH has said.

Source :THE EDGE

Several Banks Are Surviving, Even Thriving

2009-04-12T22:08:00.001+08:00

Sunday, April 12, 2009

Wells Fargo shocked the market Thursday when it revealed that it expects to have earned $3 billion in the first quarter. (Yes, that was after announcing $3.3 billion in write-offs, but hey, who's counting?)

While signs of post-TARP animation from any of the big players are comforting, the fact is there are plenty of banks that are holding their own or even gaining ground, despite today's dismal economic climate. Chris Whalen of Institutional Risk Analytics, a company that monitors bank performance, says there are thousands of banks in the United States that aren't in danger of failing, which tends to get overlooked by the attention focused on the 250 or so that need a lifeboat.

What makes a bank less bad in this climate? Formulas for figuring out the health of other types of businesses (like manufacturing or retail) can't be usefully applied to banks because these firms tend to be so highly leveraged. In theory, you could look at a capital-to-asset ratio or a liabilities-to-asset ratio. The hitch with both of these, of course, is that many banks today are carrying assets that are hard to value because there's no market for them anymore.

There are a few indicators that can help paint a picture of a bank's relative robustness. Analysts also like banks that focus their business on lending. Despite the mortgage mess, writing loans is still safer than managing securities portfolios and trading derivatives and other exotic instruments.

Sometimes, it's a size thing. Many healthy banks are regional or community institutions that never got involved in the high-stakes derivatives trading that brought down higher-profile institutions. In some cases, a smaller geographic footprint helps. Banks with sizable offshore operations have to divert resources to feed those hungry enterprises.

The Big Money talked to market watchers and number crunchers to come up with a short list of banks notable for how far they haven't fallen.

-- BB&T: In a season when cutting dividends is the new black, just holding steady at 47 cents per share was enough to make BB&T Corp. stand out from the pack. Though there's been a bit of controversy as to whether a Troubled Assets Relief Program recipient should be sharing the wealth -- BB&T took $3.1 billion from the government -- analysts point out that handing capital to banks like the North Carolina-based BB&T puts them in a position to absorb smaller, weaker banks that might otherwise die on the vine.

-- Beal Bank: Texas-based and privately owned, this bank is a bit of an odd duck, as Forbes pointed out in a recent profile of Beal's eponymous, poker-playing, libertarian founder. Beal (the bank, not the man) is kind of like the gawky AV-club member at the prom who turns up at the reunion with a Rolex on one arm and a blonde on the other. The bank effectively sat out the credit boom, putting the brakes on its standard M.O. of gobbling up loans on the secondary market just when everyone else was clamoring to get in the game. In 2008, Beal turned out an eye-popping 8.1 return-on-assets ratio (a number in the range of 1 to 1.5 is considered good).

-- Hudson City Savings Bank: This bank is an industry pace car; its so-called "stress level," which takes into account factors such as its loan defaults and lending capacity, has been nearly flat over the past two years. Looking at Hudson City's numbers in a vacuum, no one would suspect the current level of market turmoil. While its percentage of nonperforming loans has risen to nearly 1 percent as of last month, that's still well below the industry standard. What's more, Hudson City never so much as dipped a toe into exotic derivatives like the credit-default swaps that were the downfall of so many.

-- Signature Bank: Despite being headquartered a scant few miles from the wreckage of Wall Street, this New York-based bank has managed to stay above the fray. Although bigger players, including Goldman Sachs and Bank of America, have announced they're planning to return TARP money -- eventually -- Signature was among the first to put its money where its mouth was, giving back $120 million earlier this month. It's in a stronger position than many of its peers because that TARP infusion came just after Signature raised $148 million in a public offering.

-- US Bancorp: Despite a bruising 65 percent drop in profit in the last quarter of 2008, thanks to a quadrupling of nonperforming assets, this Minneapolis-based bank has a long history as a conservative lender. In addition, although its Midwestern home turf has been beset by job losses in manufacturing and other industries, this part of the country never saw the speculative real estate bubbles that exploded in Miami and Las Vegas. In November, the Office of Thrift Supervision gave this TARP recipient a tacit vote of confidence when it sold to US Bancorp the deposits and assets of failed California bank Downey Savings and Loan.

Source :washingtonpost

Asean emergency fund on its way

2009-04-12T22:04:00.000+08:00

SOUTH-EAST Asian nations are expected to move one step closer this weekend to their goal of setting up a US$120 billion emergency currency swap fund.

This is after the leaders of 13 countries, who are meeting in Pattaya for the Asean+3 summit, put the finishing touches today on a foreign currency pool that will helpÂ shield their respective currencies and manage liquidity problems.

In a joint statement that is expected toÂ be issued this weekend, the leaders areÂ also likelyÂ to push for the setting up of an independent regional body that can monitor signs of an impending financial crisis.

There is still no fixed date for the expanded fund, called the Chiang Mai Initiative Multilateralisation, to be launched but observers say that it should happen soon.

At a meeting in the Thai resort town of Hua Hin in February, the Asean+3 finance ministers -Â all 10 from the Association of Southeast Asian Nations (Asean) and their counterparts from South Korea, Japan and China - agreed to expand the crisis fund from its original US$80 billion.

At a press conference yesterday, Thai Finance Minister Korn Chatikavanij said that the individual contributions for each Asean member had been finalised. Asean will contribute 20 per cent of the US$120 billion, while China, Japan and South Korea will account for the rest. Singapore, Indonesia, Malaysia and Thailand will pump in US$4.76 billion each and the Philippines US$3.68 billion.

The other five members - Brunei, Cambodia, Laos, Vietnam and Myanmar - will contribute amounts based on the size of their foreign exchange reserves, said Mr Korn. China, Japan and South Korea will discuss the size of their contributions among themselves.

The expanded emergency fund allows for currency swaps to be multilateral, making it easier for struggling countries to tap on the funds. The exact details of the fund will be fleshed out in May when Asian finance ministers next meet in Bali.

Creating financial stability aside, the three-day Asean summit, which ends tomorrow, will also go a long way to helping the region achieve its long-term aim of creating a European Union-style community by 2015, said Mr Korn.

In one key statement that the leaders are expected to issue this weekend, they will make a greater call to expand regional trade links and reject protectionism. They are also likely to step up preparatory work for a giant free trade zone that would stretch all the way from China to Australia.

Source :BT

US$10b fund for SE-Asia

2009-04-12T22:02:00.000+08:00

BEIJING - CHINA had planned to announce a $10 billion infrastucture investment fund and offer credit to neighbours at a cancelled weekend summit of Asian leaders in Thailand, its foreign minister said.
Anti-government protestors forced the cancellation of the summit in Pattaya after they swarmed into the summit venue.

In an interview with state media on a flight back to China, Foreign minister Yang Jiechi avoided direct criticism of the Thai government while detailing measures that Chinese premier Wen Jiabao had planned to offer at the summit.

China plans to establish a US$10 billion (S$15 billion) China-Asean investment cooperation fund to promote infrastructure that connects it to Asean nations, Mr Yang said.

China has been active in building roads from its southern border through neighbouring Myanmar, Laos, and Vietnam, to ease trade.

It will also offer a credit of $15 billion to Asean countries, including preferential loans of US$1.7 billion for cooperation projects, Mr Yang said.

It plans to offer 270 million yuan (S$59.9 million) in aid to Cambodia, Laos and Myanmar to help those impoverished countries combat the global financial crisis, and will inject US$50 million into the China-Asean cooperation fund, Yang said.

While not an Asean member, China's growing economic clout, huge market and competitive exports make it an important participant in Asean summits, although tensions persist over competing claims to the South China Sea and Chinese plans for dams that are opposed by other nations along the Mekong river.

China recently appointed its first ambassador to Asean, after the 10-member grouping formally adopted a charter. -- REUTERS

Source :Straits Times

STI falls 1% to close at 1,783.96

2009-04-08T20:54:00.002+08:00

he Straits Times Index dropped 1% to 1,783.96 at the close. Four stocks declined for every three that advanced among the gauge’s 30 constituents. The following companies were among the most active in the stock market today, reported Bloomberg.

Commodity suppliers: The Reuters/Jefferies CRB Index of 19 commodities fell 0.7% yesterday in New York, its second-consecutive drop. Palm oil for June delivery slipped as much as 1.2% in Kuala Lumpur today. Olam International (OLAM SP), a supplier of agricultural commodities, dipped 1.9% to $1.59. Wilmar International (WIL SP), the world’s biggest palm oil trader, lost 1.5% to $3.27. Noble Group (NOBL SP), a Hong Kong-based commodity supplier, declined 0.8% to $1.21.

CapitaLand (CAPL SP), Southeast Asia’s biggest developer, slipped 2.7% to $2.47. Oversea-Chinese Banking Corp. downgraded its rating to “hold” from “buy”.

Neptune Orient Lines (NOL SP), Southeast Asia’s biggest container carrier, slumped 6.7% to $1.26. The company’s Chief Executive Officer Ron Widdows told The Financial Times that an oversupply of container ships has left companies that own them in a worse position than dry bulk carriers.

SembCorp Marine (SMM SP), the world’s second-biggest oil-rig builder, declined 1.5% to $1.97. ABN Amro Holding NV downgraded its rating to “hold” from “buy” and maintained its share-price target to $2.10.

Source:The edge
Singapore Petroleum Co. (SPC SP), the city’s only publicly traded oil refiner and explorer, slid 1.3% to $2.98. Crude-oil futures fell 2.7% to US$47.83 a barrel in Asian trading, its fourth-straight day of declines.

Singapore Press Holdings (SPH SP), the city’s biggest newspaper publisher, gained 1.2% to $2.65. The company is likely to maintain a dividend of 8 cents a share when it announces earnings for the second quarter ended February on April 13, Andy Sim, analyst at DBS Group Holdings , wrote in a note today. Sim expects Singapore Press’ second-quarter operating profit to fall 12% to $103 million due to a drop in advertising revenue.

SMRT Corp. (MRT SP), the city’s biggest commuter train operator, gained 3.4% to $1.53. Train ridership is expected to grow 3.5% in the year ending March 2010, supported by the extension of the existing railway in the western part of the city-state and opening of the new circle line, BNP Paribas analyst Damien Chua wrote in a note yesterday.

Straits Trading Co. (STRTR SP), which has interests in tin smelting and property leasing, slipped 2.5% to $3.12. The company said Victoria Tse has retired as group chief financial officer. Financial controller Eldon Wan will assume Tse’s responsibilities, it said.

STX Pan Ocean Co. (STX SP), South Korea’s biggest bulk carrier, dipped 1.5% to $11.90. The Baltic Dry Index, which measures the cost of shipping commodities, fell 1.4% in London yesterday, its 20th day of declines and the longest losing streak since Nov 4.

DBS says eyeing market share gains

2009-04-08T20:52:00.000+08:00

DBS Group (DBSM.SI), Southeast Asia's biggest bank, is well-capitalised and plans to take advantage of opportunities to increase its market share as foreign banks retreat from Asia, its chairman said today, reported Thomson Reuters.
The remarks were a sign how DBS, like other Asian banks, is gunning for higher market share as battered Western rivals shun loan and debt deals.
DBS Chairman Koh Boon Hwee told shareholders at the bank’s annual general meeting that the capital-raising, such as the $4 billion rights issue DBS made in January, would enable it to expand its share in existing and newer markets in the region.

Source: The edge magazine, singapore

G-20 strikes US$1 trillion deal to roll back recession

2009-04-03T19:55:00.000+08:00

LONDON) World leaders agreed to a trillion-dollar deal yesterday to combat the deepest economic downturn since the Great Depression.

First order of business: US President Barack Obama (bottom right) greeting some of the world leaders and top financial officials yesterday as they prepare to pose for a group photo
The Group of 20 (G-20) leaders called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks. They also boosted the resources of the International Monetary Fund (IMF) and offered cash to revive trade to help governments weather the economic and social turmoil.

But they sidestepped the question of whether to deliver more fiscal stimulus in their own economies.

The group of leading industrial and developing nations also agreed to create a new supervisory body to flag potential problems in the global financial system.

'This is the day that the world came together, to fight back against the global recession. Not with words but a plan for global recovery and for reform and with a clear timetable,' British Prime Minister Gordon Brown, the summit host, said.

Mr Brown says the G-20 will create a new financial stability board to ensure cooperation across frontiers, to spot risks to the world economy and - together with the IMF - provide 'the early warning mechanism that this new global economy needs'.

Mr Brown says it is essential that the world does everything necessary to 'rebuild trust' and make sure 'a crisis such as this' never happens again.

World markets reacted positively. The index of top European shares was up 5 per cent after Japan's Nikkei gained 4.4 per cent. On Wall Street, the Nasdaq was up 4 per cent and the Dow Jones 3.6 per cent.

Mr Brown said that while there were 'no quick fixes', the decisions meant that 'we can shorten the recession and we can save jobs'.

French President Nicolas Sarkozy said the results were beyond what could have been imagined while German Chancellor Angela Merkel said that the package of measures agreed on by the leaders was 'very, very good'.

The G-20 agreement is 'a victory for common sense' and an 'important step towards order' in markets, Ms Merkel told reporters. The G-20 agreed to build a new 'financial-market architecture', a key German demand, she added.

Mr Brown said the leaders agreed 'there will be an end to tax havens that do not transfer information on request. The banking secrecy of the past must come to an end'.

He said leaders agreed to commit new resources of US$1 trillion that are available to the world economy through the IMF and other institutions.

This included US$250 billion of IMF reserve units called Special Drawing Rights.

'This is available to all IMF members,' Mr Brown said.

In addition, the IMF would see its own resources tripled, with up to US$500 billion of new funds.

The G-20 also ordered the IMF to sell billions of dollars of gold reserves to help the world's poor countries and a trade finance package worth US$250 billion over two years to support global trade flows. -- Reuters, AP, AFP, Bloomberg

Source : BUsiness Times Singapore

SingTel to push ahead feature-rich services

2009-04-03T19:54:00.000+08:00

SingTel, which has failed to win Singapore's Next Generation National Broadband Network project, said on Friday it will continue to develop feature-rich services in preparation for the opening of the fibre access market.

The services include ultra highspeed communications and home entertainment, Mark Chong Chin Kok, SingTel's Executive Vice-President of Networks, said.

'We look forward to delivering these exciting SingTel services and applications over the fibre network to our customers soon,' Mr Chong said.

Source : BT

Obama Defends Push to Cut Tax Deductions for Charitable Gifts

2009-03-26T13:54:00.002+08:00

President Obama defends his proposal to cut the tax deductions that wealthy Americans can claim for their charitable donations by arguing that the shift would not have an adverse effect on giving, but two independent analyses concluded that the proposal could result in a drop of as much as $3.87 billion for the already reeling nonprofit sector.

Read more...

Asia to drive mobile broadband Internet access

2009-03-26T13:54:00.001+08:00

SINGAPORE - Broadband-service providers will see their revenue from mobile services jump to US$137 billion worldwide by 2014, up 450 per cent from 2008, a report said on Thursday.

But the number of mobile broadband users will likely outpace revenue growth as competition drives prices lower and because most of the new clients will come from less wealthy users in emerging markets, industry consulting firm Ovum said.

The number of mobile broadband users - both through handsets and laptop computers - should top two billion in 2014, up over 1,000 per cent from 181 million in 2008, with the Asia Pacific emerging as a key driver, it said.

'The most aggressive growth comes from emerging markets, where the unavailability of fixed broadband offers a major opportunity for mobile broadband players,' the consultancy said in its latest research.

It said 40 per cent of total mobile laptop users will come from the Asia Pacific region by 2014, powered by increasing usage in China and India, the world's two most populous nations.

However, handsets are likely to continue to dominate the market for mobile Internet access compared with laptops, Ovum said.

In China alone, there will be 325 million handset users against 52.5 million laptop users by 2013, it said. -- AFP

Source : Business Times

Sensex may be in rally: Elliott Wave

2009-03-26T13:52:00.000+08:00

(SINGAPORE) India's key stock index may be embarking on its second rally of a five-wave cycle that may help the benchmark surpass its earlier record high, according to technical analysis by Elliott Wave International Inc.

The Bombay Stock Exchange Sensitive Index may be breaking out from its downtrend line, Elliott Wave said in its Asian-Pacific Financial Forecast report. The index may be following the pattern of gains and losses set between 2003 and 2008, and may have already started on the next leg of a longer bull market that can last for another 15 years, the market forecaster said.

'Prices in India's Sensex have just broken above a downtrend line, imitating a pattern from 2004 that led a strong rally,' Elliott Wave said.

The Sensex rose 5.6 per cent in the past two days, trimming the year's loss to 1.8 per cent, on optimism that US plans to rid banks of toxic assets will help ease the credit crisis and revive global economic growth.

This five-wave cycle will include three rallies, with each peak exceeding the previous one. The first wave started with gains between April 2003 and January 2008, Elliot Wave said, while the bear market in the past year marked the second. The prediction of this rally, or the third wave, is based on a similar pattern of market movements within the first, the researcher said.

Elliott Wave Theory, created by US market analyst Ralph Elliott in 1938, attempts to predict future price moves by dividing past trends into sections, or waves, and calculating changes in value. - Bloomberg

Source:

BT

Obama sees signs of economic turnaround

2009-03-26T08:54:00.002+08:00

Obama sees signs of economic turnaround
He urges patience as full-fledged recovery is months away

(WASHINGTON) US President Barack Obama says his aggressive campaign to lead the United States out of its worst economic crisis in 70 years is showing signs of progress and declared that despite obstacles ahead, the US is 'moving in the right direction'.

Prime time message: 'The dollar is extraordinarily strong right now' and 'I don't believe that there is a need for a global currency', said Mr Obama, who is enjoying 63 per cent approval rating
The nationally broadcast evening news conference on Tuesday came at a pivotal moment in Mr Obama's young presidency.

On Monday, his administration presented its plan to revive the US financial system. Last month, Mr Obama signed into law a US$787 billion economic stimulus plan.

Mr Obama's budget has ignited a firestorm in Congress, with Republicans assailing it for record spending and budget deficits.

Senate Republican leader Mitch McConnell cast Mr Obama's proposed budget as an over-spending, over-taxing disaster. An analysis by the nonpartisan Congressional Budget Office released last Friday estimates Mr Obama's budget would generate deficits totalling US$9.3 trillion over the next decade. 'If these plans are carried out, we run the risk of looking like a Third World country,' Mr McConnell said.

Democrats in the US House of Representatives yesterday proposed slimming down his fiscal 2010 budget proposal to US$3.45 trillion from US$3.55 trillion amid bipartisan concerns.

The House Budget Committee Democrats' proposal includes instructions aimed at overhauling healthcare and making changes to education. Their budget plan projects deficit of US$1.2 trillion for fiscal 2010 and US$3.95 trillion from 2010 to 2014.

Meanwhile, Mr Obama is preparing for a European trip next week that includes a London summit on the global economic crisis, while, away from the economy, an announcement is expected by tomorrow on a revamped US strategy for Afghanistan and Pakistan.

At Tuesday's news conference, Mr Obama defended the US dollar in the wake of China's suggestion for a universal currency, saying: 'The dollar is extraordinarily strong right now,' and 'I don't believe that there is a need for a global currency.'

Mr Obama, just 64 days in office, urged patience with his presidency, not only in trying to lift the United States out of the recession, but also in seeking peace between Israel and Palestinians and in preventing Iran from developing nuclear weapons.

'This is a big ocean liner. It's not a speedboat. It doesn't turn around immediately,' he said.

Mr Obama remains widely popular, but has passed through some tumultuous weeks. The news has been dominated by outrage over bonuses to executives at bailed-out insurance giant AIG. Republicans have attacked Mr Obama's spending plans as wasteful and too costly. And some key congressional Democrats have resisted Mr Obama's calls for middle-class tax cuts and a 'cap-and-trade' programme to fight global warming.

Mr Obama defended cap-and-trade as the best way to move toward cleaner energy, but noted 'there are a lot of technical issues that are going to have to be sorted through'.

On the economy, Mr Obama defended the steps his administration has taken to counter the recession and the unprecedented credit crisis.

He said teachers and others have jobs today because of the economic stimulus measure, and the United States is 'beginning to see signs of increased sales and stabilised housing prices for the first time in a long time'. But he said full-fledged recovery is months away, and he added: 'It will take patience.' At the same time, he said: 'We're in a better place because of the decisions that we made.'

Mr Obama's job approval rating is 63 per cent, according to the Gallup polling organisation. That number has been relatively stable recently, down from the 68 per cent when the president took office mostly on a loss of support among Republicans.

At the Tuesday news conference, Mr Obama said the American people are assessing his ability on his skills and work, not the colour of his skin. He said there was justifiable pride in January, when he was inaugurated as the first black president. -- AP, Reuters

Source:

Business Times

Business park space offers long-term cost advantage

2009-03-26T08:51:00.000+08:00

MUCH has been written about the global economic downturn in terms of the financial industry, the impact on non-financial industries and the knock-on effect on occupier demand across the globe. While this forms the backdrop to this article, we will be discussing Jones Lang LaSalle's (JLL) view on the likely impact on business park and high-tech occupancy rates and rental trends over both the short term (next one to two years) and the long term (next five to 10 years).

Looking into the future: Artist's impression of Mapletree Business City, one of the major upcoming developments. The current high-tech/business park supply pipeline shows 7.9 million sq ft of space over the next four years.
Over the past four years, Singapore has seen rapid growth on a number of fronts; the financial services sector and its supporting industries, professional services, multinational corporations and small and medium enterprises (SME). The most startling of this growth is in the financial services sector. This is a result of Singapore's efforts to reposition itself as a financial hub. The growth of the financial services sector has been in both front office and back office functions.

The share of office space usage of Grade A CBD Core buildings by financial services companies has risen from 37 per cent to 46 per cent between 2004 and 2008.

Similarly, the growth in the financial services back office function is evidenced by the recent acquisitions of significant chunks of business park space by Citi, Standard Chartered Bank, DBS Bank and HSBC over the last 24 months.

Post Sept 15, the economic environment has changed fundamentally across the globe and hence, we are unlikely to see growth in short-term occupier demand whether it be financial services industry or others.

Average Raffles Place Grade A office rents are currently tracking $14.95 psf while average high-tech rents are commanding $3.75 psf. That difference in rents is still compelling but... we should expect the gap to narrow.

Current market trends show that we are now in negative growth and many occupiers are surrendering space.

The current high-tech/business park supply pipeline shows 7.9 million sq ft of space over the next four years. The major developments include Mapletree Business City (1.3 million sq ft), Icon @ International Business Park (386,000 sq ft) and Ascendas-Frasers Centrepoint development at Plots 61-63 (645,000 sq ft) at Changi Business Park.

With significant new pure office supply coming on-stream islandwide between 2009 and 2012 (about 9.7 million sq ft), the office market is becoming increasingly competitive with landlords reducing rents to attract tenants. The anticipated effect on high-tech/business park space will be that there will be less spillover of occupier demand from a point of view of both availability of pure office space and reduced rental differentiation.

At the peak of the market in 3Q 2008, average Raffles Place Grade A rents stood at $18.40 per square foot a month whereas high-tech rents stood at $4.25 psf a month. This is a differential of $14.15 psf. Based on this, the financial driver behind much of the back office operation is compelling. As rents in the CBD decline, this differential will reduce.

The office market bottomed out in the second half of 2004 and saw a rental rise of 23 per cent in 2005, followed by a 63 per cent jump in 2006 and a further 67 per cent surge in 2007, peaking Q3 2008 at $18.40 psf a month. However, with the rapid acceleration of the financial crisis and a global recession currently being experienced, 4Q 2008 saw demand drop off and the overall y-o-y rental growth was reduced to 7 per cent given a Q4 2008 rental of $14.95 psf a month.

The high-tech sector also saw rent increases of 13 per cent, 11 per cent and 98 per cent in 2005, 2006 and 2007 respectively. The high-tech market correlated with the office market in 2008 as rents also fell in the last quarter of 2008 to an overall correction of 5 per cent. While 2007 saw a virtual doubling of high-tech rents, the increases from the bottom of the market till today has nowhere been as dramatic as the office market which has trebled.

We have a scenario today where there is still a significant gap between office and high-tech rents. To put that in perspective, average Raffles Place Grade A office rents are currently tracking $14.95 psf. while average high-tech rents are currently commanding $3.75 psf. That difference in rents is still compelling but with rents for both the office and high-tech market expected to ease in line with the economic slowdown and significant new supply coming on stream in both markets, especially within the CBD, we should expect the gap to narrow. This, as office rents fall at a faster clip compared with the high-tech sector.

Over the last three years, the landscape of the high-tech/business park space in Singapore has changed dramatically. This comes about with the significant developments in Changi Business Park, one-north in Buona Vista as well the establishment of Alexandra as a high-tech hub with a proposed new development known as Mapletree Business City. There have also been a number of high quality high-tech buildings developed in various locations across Singapore.

Our view is that the long-term outlook for high-tech/business park space remains a positive story even if it is challenging in the near term. The reason for this view is based on a number of factors. Once the economic downturn is over, Singapore is well-positioned to continue its growth as a financial services hub and this will include back office growth which is likely to be located in business park space.

Business park space is much less volatile in terms of cyclical rental fluctuations. This can be seen in the trough to peak rents for both segments: The most recent office market cycle saw rents rise from $4.80 to $18.40 psf a month whereas high-tech rents over the same period went from $1.60 to $4.25 psf a month.

Given that most back office functions are not directly revenue generating, they cannot contend with such a widely ranging impact on their cost base. A front office operation would generally have increased revenue that would counteract the impact of increased rent.

Another key point to note is that a number of the business parks are now reaching critical mass in terms of the number of employees working in the parks to support much needed local infrastructure, such as retail amenities. The lack of amenities had been a major criticism of business parks in previous years.

Finally, our house view is that there will always be a compelling cost advantage argument for business park space when viewed on a long-term basis, ie, 10-15 years or two to three property cycles.

Chris Archibold is regional director and head of markets, Singapore, Jones Lang LaSalle; and Tahlil Khan is associate director of markets, Singapore, Jones Lang LaSalle

Source :
Business Times

Singapore Banks- DBS, UOB, OCBC

2009-03-26T08:48:00.002+08:00

CONSOLIDATION is unlikely: In November 1998, POSBank was consolidated into DBS, in the midst of the Asian financial crisis. Then in 2001, in the midst of the economic downturn (Singapore GDP contracted 2.4 per cent then), OCBC Bank acquired Keppel Bank and UOB acquired OUB.

This past consolidation of banks occurred during periods of economic downturn. We are in the midst of another recession now, and some market players are asking whether there could be consolidation within the financial sector.

In our view, the following issues are relevant with respect to the consolidation possibility:

A larger asset base will provide banks with additional capacity to expand overseas - either via organic growth through existing overseas subsidiaries or through inorganic means;

Economies of scale could be enhanced;

The presence of willing sellers and willing buyers.

Our analysis shows that OCBC Bank, the smallest bank with assets of $85.4 billion in 2001, aggressively grew its non-Singapore assets by a high 19.6 per cent seven-year compound annual growth rate (CAGR) to the current level.

Though a significant part of the growth arose from the 2004 consolidation of Great Eastern Holdings (which includes GEH Malaysia), this still shows that the banks are actively engaged in overseas expansion.

Our view is that the three Singapore banks are sufficiently large to continue their overseas expansion, and that there is no need for further in-market consolidation from this perspective.

The current expense-income ratio is somewhat similar to the levels in 2001. The synergies that were reaped in the first few years after consolidation have been somewhat offset by cost increases thereafter. Anyway, we see cost efficiency only as a secondary reason for consolidation, and not as a primary driver.

All the three banks have capital adequacy ratios way above regulatory requirements. We expect all the banks to remain profitable, despite the recession.

Hence, we see no push factor for consolidation.

In our view, the likelihood of near-term consolidation is low. UOB remains our top 'buy' within the banking sector. Its less aggressive lending stance over the past few years and its push into lower-risk home mortgages will help to keep its asset quality high. Our UOB target price of $11.60 is pegged to 1.2x 2009 book value. We have 'neutral' calls on both DBS and OCBC.
Sector - NEUTRAL

Source:
Business Times

Raffles Education makes $30.5m share placement

2009-03-26T08:46:00.001+08:00

RAFFLES Education Corporation (REC) has placed out $30.5 million worth of new shares. The education services provider will issue 80 million shares at 38.1 cents apiece and said that the placement yesterday was 'comfortably oversubscribed'.

The price was a near 10 per cent discount to the stock's average traded price of 42.3 cents on Tuesday.

The shares were placed with institutional and other investors 'outside Singapore', as well as existing shareholders.

REC's substantial shareholders include Singapore's FIL Investment Management, which owns about 8 per cent of the company.

Nomura Singapore was the placement agent. BT understands that senior banker Patrick Lee from Nomura was in charge of the deal.

To 'facilitate the placement', REC said that its chief executive Chew Hua Seng had agreed to lend up to 80 million shares to Nomura for delivery to placees. The shares will be returned to Mr Chew five business days after completion of the placement.

All of the funds will be used to repay loans, which REC said it had drawn for acquisitions and as working capital.

It said that the move would reduce net debt about 20 per cent and lower its net gearing.

Based on REC's financial statements for the half-year ended Dec 31, net debt comes to $130 million.

An analyst said that the share placement would allay some fears in the market over REC's short-term borrowings.

'With the credit tightening, there was a lot of concern whether Raffles Education's high short-term borrowing would pose a problem,' he said.

He expects part of the funds to be used to repay short-term loans of $164 million. 'They are looking to bring the gearing back to zero,' he said.

REC said that its debt-to-equity ratio was 0.23 times at end-2008. Its biggest buy so far is the $392 million acquisition in 2007 of campus operator Oriental University City in Hebei, China.

Two weeks ago, Oriental Century, which is 29.9 per cent owned by the Raffles Education group, said that its chairman and CEO Wang Yuean had admitted inflating sales and cash figures.

When asked if any of the placement proceeds would be channelled to Oriental Century - a $34.6 million investment - the company merely reiterated that the money would be 'fully used' to repay banking facilities.

The analyst thinks that the fund-raising was not triggered by the fraud case, as any write-off would be a non-cash item.

REC shares fell one cent yesterday to close at 39.5 cents.

Source :Business Times

Keen on 2-year no-pay leave? SIA asks staff

2009-03-26T08:42:00.002+08:00

Shorter workweek edges closer; no plans to shut flying schools in Australia

(SINGAPORE) Singapore Airlines (SIA) is in advanced talks with unions to introduce a shorter workweek for all staff.

The company has also asked staff for 'expressions of interest' in taking no-pay leave for up to two years. Applications close on March 31.

After that, the company will look at other measures to reduce man-hours to match its planned capacity cuts of 11 per cent in the coming financial year.

'We are in discussions with all our unions about proposals to introduce a shorter work month, achieved through accelerated leave clearance or no-pay leave, or a combination of both,' said SIA spokesman Stephen Forshaw.

'The measures will help manage the surplus staff capacity that arises across the business from the reduction in flights over the next financial year.'

He said that the scheme has been offered to pilots, cabin crew and all ground staff, but will be implemented differently, based on operational needs.

'A critical component of our plan to manage the consequences of the downturn is to spread the burden evenly across the organisation. The approach to the discussions with staff and unions is cooperative and we hope to work forward with our staff soon.'

Mr Forshaw also denied reports suggesting that SIA was shutting down its Australian flying schools in Perth and on the Gold Coast.

'We are in fact continuing to recruit trainee pilots. It takes up to two-and- a-half years to train these pilots and we need to keep the flow of pilots coming well after this slowdown is over.'

As for the closure of SIA's Brisbane and Perth overseas pilot bases, he said that this was part of a process of overseas-base shutdowns that began several years ago.

'We have progressively, for some time now, been winding down our overseas pilot bases in Sydney, London, Los Angeles, Brisbane and Perth.

'Sydney, LA and London have all been closed for some time. Brisbane and Perth are being closed also, and this will result in the 19 pilots from those two bases being made redundant. Our flight operations team is in discussion with those pilots about the issues involved.'

While cost considerations are largely behind the closure of overseas bases, the latest shutdowns are also related to the fact that SIA's Perth and Brisbane services will be served by the airline's new A330- 300s, which will replace the B777s that now serve the route.

'The overseas bases were useful in the past when we wanted different locations for pilot bases, but this isn't the case any more,' said Mr Forshaw.

'We stopped recruiting into those bases some years ago and have been gradually reducing them by natural attrition for some time. The change of aircraft type operating to Brisbane and Perth from April - we will be flying the A330 on these routes - means there is no benefit from basing pilots in these locations for aircraft that don't even fly there.'

But SIA is not contemplating cutting headcount or pay yet. 'The formula for pay cuts has not been triggered yet as the company is still making profit,' Mr Forshaw said.

Asked if the airline's 7,000 cabin crew could be trimmed, he said: 'These employees are on contract terms, and we generally see high turnover and natural attrition. The surplus will reduce as we stop recruiting.'

SIA has also rejected oft-heard calls from its pilots' union to retrench expatriate pilots first, if it starts cutting cockpit crew.

'The expiry of pilot contracts is reviewed on a case-by-case basis and we repudiate the view put by the union that expatriate pilots should be the first to go,' Mr Forshaw said.

'That said, it will depend on whether we will require the pilot's services, and in the case of some of the expatriate pilots who are on the 747-400 fleet, where our need for pilots is reducing as we phase the fleet out, it does, unfortunately, stand to reason that some of the pilots on contract from this fleet have not had their contracts renewed.

'As we have often stated in the past, we rely on a good mix of local and expatriate pilots to strengthen the expertise across the fleet types we operate - and that position will remain one that we adhere to. We do not - and will not - distinguish selection of pilots on the basis of race.'

SIA's capacity and cost- cutting measures come as the global aviation industry stares at a US$4.7 billion loss this year as passenger traffic falls 5.7 per cent and cargo traffic slumps 13 per cent.

Source:

I feel that a good price to enter SIA would be anything around $9.80
BT

Bounce or Bottom?

2009-03-25T13:23:00.001+08:00

THE STRAITS TIMES Index ended the week 1.2% higher, its second consecutive week of gains. But, volumes are still thin as the debate heats up on whether this is the long-awaited bottom.

Supporting the uptrend has been a rally in banks, particularly in the US. But, Goldman Sachs is doubtful of the recovery as fundamental data on consumer credit is not improving. The brokerage believes recent bank profitability has been driven partly by oneoff factors such as mortgage origination fees. Meanwhile, results of the stress tests on US banks may be released next month. Banks that fail could be forced to raise capital, while those that pass may issue equity to repay the government. Either way, significant equity issuance is expected.

Tham Mun Hon, an analyst at Daiwa, is advising clients against increasing equity exposure ahead of firmer signs of stabilisation. “Equities may be oversold from a technical perspective, but we believe that the fundamentals still do not justify a sustained rally. In fact, the latter have deteriorated further, prompting us to expect a retest of the October 2008 lows, and a probable break below,” he says. Tham recommends investors stick to defensive sectors such as infrastructure, telecoms and utilities.

But, HSBC strategist Garry Evans points to evidence from the biggest banking crises in the past, which show that as soon as the last troubled bank is rescued and monetary policy is eased aggressively, the stock market recovers strongly. “Even if this turns out to be only a bear market rally, it could go on for a while,” he says. “There is probably no point in being excessively bearish just now.”

Meanwhile, Credit Suisse notes that US mortgage applications have risen 131% from the lows in October. The bank says that of the nine global leading indicators it watches, six seem to be bottoming: US mortgages, China’s purchasing managers’ index (PMI), US Institute for Supply Management, German IFO business expectations, Chicago’s PMI and the Baltic Dry Index. It suggests investors play the theme of a bottoming in indicators via cyclicals such as Taiwan Semiconductor Manufacturing Co, BHP Billiton, China Shenhua Energy Co and Posco.

WHAT TO LOOK OUT FOR?
Expect the fever of rights anxiety to continue a little longer. The latest victim was Sembcorp Industries, which had to issue a statement clarifying that the shareholder approval it is seeking for a share issue mandate is mere routine. A recent note by Kim Eng, however, does not rule out the possibility of a cash call in the near future as the company could need money to fund a water-and-power project in Oman. The company reportedly had trouble securing financing for the project. Kim Eng also cites concern over low margins as sources suggest Sembcorp dropped its tariff pricing to clinch the deal.

DMG & Partners Securities says United Overseas Bank, Suntec REIT and Swiber Holdings are also possible candidates for rights issues.

VOLUME MOVERS
By Angeline Cheong

China Fishery (58 cents) was heavily traded last week. The fi shmeal processor said it would not proceed with a fi nal dividend of 6.03 cents a share through the issue of new shares. Instead, the company has proposed a one-for-10 bonus issue. China Fishery announced a 13% increase in revenue to US$459 million ($694 million) and a 6.5% rise in earnings to US$94.3 million in FY2008. As at Dec 31, cash balances stood at US$7.7 million versus borrowings of US$317 million.

Sembcorp Industries ($2.15) rebounded last Friday after clarifying that its request for shareholders’ approval for a share issue at its annual general meeting was to allow the company to raise funds should the need arise and that it did not plan to embark on a rights issue now. DBS Group Research, which has a “hold” on the stock, notes that the company’s need for an immediate cash call is low.

Cosco Corp (74 cents) trended lower on concerns of more contract cancellations. Kim Eng has downgraded the stock to a “sell” from a “hold” in view of faster-than-expected deterioration in fundamentals. The brokerage raised concerns that Norwegian’s Sevan Marine may be facing funding issues and this may affect its ability to pay Cosco for a drilling unit worth US$202 million ($306 million) — only 65% has been paid as at December. “Management will also need time to get its house in order, having expanded too quickly and with insufficient risk controls,” says Kim Eng.

Singapore Airlines ($9.71) shares traded on high volume last week. With passenger carriage down 17% in February, the company was quoted by Bloomberg as saying it does not rule out postponing the delivery of Airbus A380 aircraft. Earlier, SIA announced an 11% reduction in capacity from April 2009 to March 2010. This will involve suspensions of flights and use of smaller aircraft. In 3Q2009, SIA reported a 43% fall in earnings to $337 million, and a 2.6% dip in revenue to $4.2 billion.

Source :

The Edge Singapore

Olam International rated outperform

2009-03-25T13:20:00.002+08:00

Macquarie Research in a Mar 18 research report says: "Olam just announced that it has renewed and increased its revolving multicurrency trade facility for US$170 million. The renewal of its trade facilities across the next few months are important events, we believe, after the difficulties registered across the credit world in the past nine months.
"We estimate Olam can register positive earnings growth of 13% y-o-y in FY2009 (stripping out the gains from the convertible bonds buyback), driven by volume growth of 16% across the produce in which it deals. Twelve-month price target of $1.65 based on a PER methodology.In our view, Olam's ability to scale earnings without relying on profits driven by commodity prices offers a better risk/reward proposition than for other soft commodity growers. OUTPERFORM

Olam International rated outperform
Wednesday, 25 March 2009

Obama sees 'signs of progress' on economic crisis

2009-03-25T13:18:00.000+08:00

* Obama: there are no quick fixes or silver bullets
* Obama says dollar strong, no need for global currency
* Says restoring confidence in global US leadership

WASHINGTON - President Barack Obama said on Tuesday he was seeing signs of progress in his drive to lead the United States out of economic crisis as he sought to reassure recession-weary Americans he was on the right track.

Mr Obama: 'We've put in place a comprehensive strategy designed to attack this crisis on all fronts'
'We're moving in the right direction,' Mr Obama said at his second prime-time White House news conference since taking office on Jan 20.

Knocked off stride by public anger over hefty corporate bonuses and facing scepticism about his massive budget plan, Mr Obama moved to regain his political footing and refocus attention on his broader economic agenda.

He made his case to the American people the same day he pressed for coordinated action among the world's major economies, and just a day after unveiling a trillion-dollar plan to soak up toxic bank assets at the root of the global financial meltdown.

Mr Obama took the podium after US stocks slid while investors paused to reassess the government's latest effort to clean up bank balance sheets. Initial euphoria over the plan had driven stocks sharply higher on Monday.

Though the economy was in the spotlight, Mr Obama's news conference also gave him a chance to lay some groundwork a week before he makes his debut on the world stage with his first major presidential trip overseas.

Brushing aside suggestions the G20 summit of major economies in London on April 2 would find him at odds with European partners, Mr Obama said he expected leaders to share common goals of boosting growth and updating antiquated financial regulations while avoiding trade protectionism.

Mr Obama, who has vowed to repair America's image overseas after eight years under predecessor George W Bush, said there were indications his policy changes were 'restoring confidence' internationally in US global leadership He also made clear he was serious about his recent overtures of a fresh start with longtime US foe Iran and said the status quo of the Israeli-Palestinian conflict, in which he has promised strong US engagement, was 'unsustainable.'

Economy dominates
Focusing on the economy, Mr Obama said, 'We've put in place a comprehensive strategy designed to attack this crisis on all fronts. It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long-term. And we are beginning to see signs of progress.' The administration has recently cited glimmers of improvement in the devastated housing market, but most key economic indicators remain under extreme stress.

Mr Obama's high approval ratings have been tested amid a public backlash over payment of US$165 million in executive bonuses by American International Group after the insurance giant received US$180 billion in taxpayer bailout funds.

Mr Obama was forced to repeatedly denounce the AIG bonuses while trying to temper public outrage and fend off calls for Treasury Secretary Timothy Geithner's resignation for his handling of the affair.

Mr Obama kept a serious demeanour during the back-and-forth with reporters but became testy when pressed on the AIG scandal.

Asked why he delayed his own condemnation of the AIG payouts, the president - who has cultivated a 'No-drama Obama' image' - said tersely, 'It took us a couple of days because I like to know what I'm talking about before I speak.'

The AIG furore distracted from Mr Obama's effort to convince Americans that his US$787 billion economic stimulus programme will jolt the economy out of recession and his record US$3.55 trillion budget for fiscal 2010 will be money well spent.

Trying to change the subject back to his economic rescue efforts, Mr Obama defended his budget blueprint, which opposition Republicans and even some fellow Democrats have criticised for being too costly.

Mr Obama said his budget, which will be taken up by congressional committees this week, would pave the way for broad economic growth 'by moving from an era of borrow and spend to one where we save and invest.'

The Congressional Budget Office projects under Mr Obama's budget plan the deficit for fiscal 2009 will be just over US$1.8 trillion and for fiscal 2010 will be almost US$1.4 trillion.

Mindful of the challenges he faces, Mr Obama tempered his economic outlook. 'There are no quick fixes and there are no silver bullets,' he said.

He insisted that despite US economic troubles, the dollar was 'extraordinarily strong' due to confidence in America's economic prospects and said there was no need for a single global currency - a suggestion recently put forth by China and Russia. -- REUTERS

$29.86m accrued bonus over 3 yrs for CapLand CEO

2009-03-25T13:15:00.000+08:00

DEVELOPER CapitaLand's chief executive officer Liew Mun Leong was awarded a performance-based bonus of $2.98 million last year, bringing the total awarded to $29.86 million for three record profit years from 2006 to 2008.

The EVA bonus for a bad year will be negative and will be subtracted from the accrued bonus account of the individual.

But this does not mean that he gets to take home all the money as accrued bonuses in his account are subject to clawbacks during bad years for the group.

The bonus awards for 2006 and 2007 were $6.36 million and $20.52 million respectively.

The three years from 2006 to 2008 saw net earnings of $1.01 billion, $2.76 billion and $1.26 billion respectively.

The bonuses accrued to Mr Liew were due primarily to an economic value added (EVA) bonus payment, CapitaLand said yesterday in its 2008 summary report.

'Essentially, EVA measures the net operating profit after tax of the group minus the cost of all capital employed,' said CapitaLand.

However, Mr Liew did not get to take home all the money.

The bonuses for CapitaLand's top management are awarded on an accrual basis.

This means that the bonus awarded in a particular year for any individual will be credited into a bonus account, and one-third of the balance in that accumulated account will be paid out each year, provided the account balance is positive. If the group performs poorly in a certain year, the EVA bonus for that year will be negative and will accordingly be subtracted from the individual's accrued bonus account - what the company calls a 'clawback'.

Under this scheme, CapitaLand said in its 2007 annual report that Mr Liew was paid $5.35 million from his bonus account, which was paid in respect of the 2006 financial year.

But to facilitate the disclosure of bonuses awarded for the performance of the financial year immediately ended, the group said that it will, with effect from 2008, disclose bonus figures based on an accrual basis.

Therefore, the bonus disclosed in the 2008 summary report reflects the accrued bonus awarded for the performance of the financial year ended Dec 31, 2008.

For Mr Liew, this means that from 2008 onwards, CapitaLand will not report what he is paid each year.

Rather, the reports will state the amount the company awards to him each year on an accrual basis. This is the sum that will then be put into the bonus account.

'So for 2007, I have not been paid $20.5 million - it is the account accrued to me,' Mr Liew explained to reporters yesterday.

Mr Liew was also paid a basic salary of $1.15 million for 2007 and $1.2 million for 2008.

The pay-for-performance EVA scheme under CapitaLand's bonus plan for its top management was adopted by the group when it was formed in 2000.

While the sum of $20.52 million might seem very high - it could very well be the highest bonus amount awarded to a chief executive of any Singapore-listed company - Mr Liew said that if you consider it as a percentage of net profit, his bonus in 2007 was the smallest among the 10 biggest companies listed on the Singapore Exchange (SGX).

Based on CapitaLand's net profit of $2.76 billion for 2007, Mr Liew's bonus that year works out to 0.74 per cent of the company's earnings, he said.

By contrast, the average bonuses drawn for the 2007 financial year by the chief executives of the 10 largest companies listed on SGX came to 3.9 per cent, Mr Liew said.

He also added that the EVA system means that his bonus account will be hit during years when the group EVA performs poorly.

In 2003, for example, his accrued bonus account saw a subtraction, Mr Liew said.

This could happen again in the coming years as the economy slows, he said.

Source: Singapore Business Times

Straits Asia shares swing on PTT's bid

2009-03-25T13:13:00.001+08:00

THAI energy group PTT Public Company's intentions to acquire Straits Asia Resources saw a mixed reaction on the stock market yesterday as the mining company's share price gyrated before closing unchanged.

The stock ended the day at 84.5 cents - unchanged from its closing price last week prior to a trading halt on Monday - but not before it had swung between the day's high of 87.5 cents and low of 83 cents.

PTT Public Company on Monday unveiled a pre-conditional mandatory cash offer for Straits Asia Resources at 80.7 cents a share, pricing Straits Asia Resources at about $880 million.

Analysts viewed the bid as 'lacklustre' and 'below market expectations', citing an undervaluation of Straits Asia Resources, which owns and operates two coal mines in Indonesia.

'The offer price was derived from Straits Asia Resources' 20-day volume-weighted average price (VWAP) prior to March 20, but falls 4.5 per cent below its last transacted price and 7.9 per cent short of its six-month VWAP,' said Lee Wen Ching, an analyst with OCBC Investment Research, in a report yesterday.

'We are of the view that the takeover offer undervalues Straits Asia Resources, and do not expect investors to accept the offer,' said Mr Lee, who is maintaining a 'buy' rating on the company with a fair value estimate of $1.15, based on its fundamentals and earnings prospects.

A DBS Vickers Securities analyst has also advised investors not to accept the tender offer because of Straits Asia Resources' expanding volumes and its ongoing exploration to strengthen its coal reserves.

The pre-conditional offer had come on the back of PTT Public Company's US$335 million conditional deal with Australia-incorporated resources company, Straits Resources Limited (SRL), to acquire 60 per cent of SRL's subsidiary, Straits Bulk and Industrial Pty Ltd (SBI).

The completion of the acquisition of SBI will trigger a firm offer for Straits Asia Resources, in which SBI owns a 47.1 per cent stake.

Straits Asia Resources said that it would appoint an independent financial adviser in due course to make a recommendation about the offer.

Source : Singapore Business Times

U.S. Economy: Home Resales Unexpectedly Increased (Update1)

2009-03-24T08:26:00.000+08:00

March 23 (Bloomberg) -- Sales of previously owned homes in the U.S. unexpectedly increased in February as record foreclosures pushed down prices and lured first-time buyers into the market.

Purchases rose 5.1 percent to an annual rate of 4.72 million from 4.49 million in January, the National Association of Realtors said today in Washington. The median price slumped 15.5 percent from a year ago, the second-biggest drop on record, and distressed properties accounted for 45 percent of all sales.

Stocks, already up after the Obama administration unveiled details of a plan to buy up to $1 trillion in troubled assets, extended the rally after the report. The president’s proposal, combined with last week’s Federal Reserve initiative to commit as much as $1.1 trillion more to unclog credit markets, is raising speculation the global economic slump may soon ease.

The plans “will certainly help, but will take time,” said Guy LeBas, chief economist at Janney Montgomery Scott LLC in Philadelphia, who had forecast an increase in sales. “We’re reaching a point where extreme sales declines will not happen, but we haven’t seen stability yet. There’s a long ways to go.”

The Standard & Poor’s 500 Index climbed 7.1 percent to close at 822.92. The S&P homebuilder composite index jumped 15 percent.

Year-on-Year Sales

Economists forecast resales would fall to a 4.45 million annual rate, according to the median of 65 projections in a Bloomberg News survey. Estimates ranged from 4.26 million to 4.75 million. Sales were down 4.6 percent compared with a year earlier.

First-time buyers accounted for about half of all sales last month, led by growing demand for lower-priced properties, said the realtors group’s chief economist Lawrence Yun. That’s contributing to the drop in values, he said.

The median price of an existing home decreased to $165,400 from $195,800 in February a year earlier, the group said.

Lower prices have drummed up enough demand in some of the most distressed areas of the country to allow values to stabilize. In California, median listing prices rose last month for the first time in three years, Yun said.

“Part of the market-clearing process is that distressed properties must be sold, so the fact that this is occurring is good,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm, said in a note to clients. “Still, it certainly depresses prices, and there are plenty more foreclosed -- or soon to be foreclosed -- homes in the pipeline.” He said values will therefore keep falling.

Flooded Market

The number of unsold homes on the market at the end of February represented 9.7 months’ worth at the current sales pace, the same as in January. The group has said a five to six months supply is usually consistent with a balanced market.

Resales of single-family homes increased 4.4 percent to an annual rate of 4.23 million. Sales of condos and co-ops climbed 11.4 percent to a 490,000 rate.

All four regions showed an increase in sales last month, led by a 15.6 percent gain in the Northeast.

Home sales have been falling since 2005 and prices peaked in 2006. The S&P/Case-Shiller home-price index of 20 metropolitan cities was down 18.5 percent in December from a year earlier, a record decline, the group said last month.

The drop in prices and declining mortgage rates have made buying a home more attractive. The realtor group’s affordability index reached a record high in January.

Government Action

Fed policy makers last week announced the central bank will buy as much as $300 billion in long-term Treasuries and more than double mortgage-debt purchases to $1.45 trillion. The central bank had already committed to buying $600 billion of mortgage-backed securities and bonds sold by government- sponsored housing agencies.

The Obama administration plans to use up to $100 billion of the $700 billion in bailout money to spur a public-private effort to purchase illiquid securities and loans that caused credit to dry up. Officials have also pledged to spend $275 billion to help keep as many as 9 million Americans in their homes and stem the rise of foreclosures. The program includes a tax break of as much as $8,000 for first-time homebuyers that wouldn’t require repayment.

Buyer traffic was up 5 percent last month, said Charles McMillan, NAR’s president and an agent in the Dallas-Fort Worth area. “It appears most of the increase in buyer traffic occurred in the latter part of the month after the $8,000 first- time buyer tax credit was put in place,” he said in a statement. “We expect to see sales picking up” around the middle of the year, he said.

Distressed sales are hurting builders. Toll Brothers Inc., the largest U.S. builder of luxury homes, this month reported its sixth consecutive quarterly loss. Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, had a 10th straight quarterly loss.

“We expect demand for all homes, both new and existing, to remain far below normalized levels,” Chief Executive Officer Ara Hovnanian said in a March 10 statement.

Source :Bloomberg

Obama sees flickers of hope for economy

2009-03-24T08:21:00.001+08:00

(WASHINGTON) President Barack Obama has said there are 'flickers of hope' for the recession-hit US economy as his administration readied a big-spending plan to clear toxic assets off banks' books.

'Well, we're already starting to see flickers of hope out there,' he told the CBS programme '60 Minutes,' noting that mortgage refinancings have significantly increased and interest rates have never been lower.

'That promises the possibility at least of the housing market bottoming out and stabilising.'

The interconnection of the modern global economy offered hope as well as danger, he said.

'Now there's a potential silver lining, which may be that things are so accelerated now, the modern economy is so intertwined and wired, that things happen really fast - for ill, but things may recover faster than they have in the past.'

The interview was a day before the president's beleaguered Treasury Secretary Timothy Geithner detailed a 'Public Private Investment Programme' yesterday to entice hedge funds and other private investors into investing in bad assets choking banks' balance sheets.

In the CBS interview, the president was asked if the financial system could implode if the likes of AIG or banking giant Citibank were to fail.

'Yes,' he replied. 'I think that systemic risks are still out there. And if we did nothing you could still have some big problems.'

But Mr Obama stressed: 'I'm optimistic about that not happening. Because I think we did learn lessons from the Great Depression.'

Christina Romer, who chairs Mr Obama's Council of Economic Advisers, said the administration is 'incredibly confident' that the US economy will rebound within a year. 'We will be seeing signs the economy is turning around,' Ms Romer told the 'Fox News Sunday' programme.

On CNN's 'State of the Union' show, Ms Romer said she had 'every expectation, as do private forecasters, that we will bottom out this year and actually be growing again by the end of the year.'

Mr Obama's steps to reverse a deep recession and restructure the ailing US financial system have global implications as he prepares to meet leaders of major developed and developing nations at a Group of 20 summit in early April.

But his reform plans and the vast spending envisioned to reboot the world's largest economy and purge at least US$1 trillion in 'toxic' assets from banks face steep resistance from some in Congress and corporate boardrooms.

Mr Obama, a Democrat whose high approval ratings are being tested in his third month as president as public anger rages over big bonuses at bailed-out financial firms, will discuss his recovery efforts in a prime- time news conference today.

Mr Geithner has been attacked over his failure to halt bonuses of at least US$165 million, and possibly as much as US$218 million, paid out to employees by hobbled insurer American International Group, which has been bailed out with about US$180 billion in taxpayer money.

Mr Obama stepped up his defence of Mr Geithner, saying he would not accept his treasury secretary's resignation even if it were tendered. - AFP, Reuters

Source :

Business Times

Wall St comes alive on plan to suck out toxic assets

2009-03-24T08:16:00.003+08:00

US Treasury Secretary Timothy Geithner finally unveiled details of the plan that the world has been waiting for. Aimed sharply at buying up the so-called toxic assets that have weighed so heavily on the balance sheets of US banks, it brought a measure of clarity to investors and saw Wall Street and bourses worldwide rally with relief. It could prove to be a major turning point in the long trek back to normality.

The plan, announced shortly before yesterday's opening bell on the New York Stock Exchange, will provide US$500 billion in financing to private investors to get them to purchase the banks' distressed assets. The Treasury Department said that the programme could be expanded to as much as US$1 trillion.

The key element of the government's financing package is US$75 billion to US$100 billion in capital from the current bank bailout programme, known as TARP, the Troubled Assets Relief Program, which has already provided US$500 billion in equity and aid to embattled banks.

The government expects that private investors will provide about 5 per cent or more of the funds to buy distressed assets. By leveraging this programme through the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, huge amounts of bad loans can be acquired.

Under the plan, while the Treasury and private capital will provide equity financing, the FDIC is to guarantee the debt financing issued by the public-private investment funds to fund asset purchases. The private investors would be subsidised, but could stand to lose their investments, while the taxpayers could share in prospective profits as the assets are eventually sold, the Treasury said.

The announcement of the programme sent Wall Street into powerful rally mode yesterday morning. US stocks joined rallying bourses in Asia and Europe, which had already burst into a powerful round of stock buying and optimism ahead of the formal unveiling of the plan.

The Dow Jones Industrial Average burst out of the gates, posting a 212-point, or 2.92 per cent, gain in the first half-hour of trading, rising to 7,490.8. The broader S&P 500 was faring even better than blue chips, rising 24.55 points, or 3.19 per cent, to 793.09, while the technology-heavy Nasdaq composite index was charging ahead with a gain of 41.3 points, or 2.83 per cent, to 1,498.56.

Earlier, Asian markets rose with Tokyo jumping 3.39 per cent despite a sharp fall in business confidence, while Hong Kong soared 4.78 per cent and Sydney rose 2.4 per cent. Europe then took up the baton, with London up 3.44 per cent, Paris gaining 2.25 per cent and Frankfurt adding 2.38 per cent.

'This is it, the government move we've been waiting for basically since Lehman Brothers went under,' said a clearly elated Marc Pado, chief investment strategist at Cantor Fitzgerald. 'Wall Street was befuddled when (former Treasury secretary Henry) Paulson changed his mind and used the TARP funds to inject equity into the banks and buy up the bad loans on the banks' book, and the delay by the new administration in coming up with a toxic asset plan has kept Wall Street frustrated and made investors keep their money on the sidelines until we got some clarity.'

'Now we're finally getting the clarity, and the stock market is enthusiastically embracing it,' Mr Pado added. 'In the coming days, you'll see some critiquing of the plan and maybe even some pullback from today's rally, but this plan is going to have a long-term beneficial impact on stocks. Investors will be more willing to shift back into the stock market now.'
Indeed, money manager Hugh Johnson, who manages about US$2 billion as the chief investment strategist at Johnson Illington Advisors, said he's now ready to 'pull the trigger' and start recommending clients increase their stock weightings. 'We've been waiting for this a long time, it's a key element to bringing stability to the financial system,' he said. 'I don't know that this means stocks can go straight up from here - in fact I doubt that very much, with the economy continuing to decline - but it takes enough risk out of the equation that we can start adding stocks to our portfolios,' he said.

Critics of the plan complain that the government should set up a 'bad bank' as was originally intended back in September when TARP was first being put together, and purchase the toxic securities alone.

But for yesterday at least, Wall Street was only interested in celebrating the plan, designed to leverage the government's dwindling TARP funds, prodding private investors to take some of the toxic debt off bank balance sheets with low interest financing and guarantees backstopping the investments.

'Tomorrow we'll start the deeper analysis, today it's just relief and optimism,' said Jack Ellison, a trader at Jupiter Capital Management

Source :Business Times

Read more

Straits Asia requests trading halt

2009-03-23T16:55:00.000+08:00

SINGAPORE - Singapore-listed mining firm Straits Asia has asked for a trading halt pending the release of announcements.

Australian miner Straits Resources, Straits Asia's parent, will sell part of its coal and salt assets to Thai energy firm PTT in a deal worth about A$500 million (US$343 million), Reuters reported on Monday, citing a source familiar with the deal.

Source : Singapore Business Times

Directors' purchases dive but buybacks still heavy last week

2009-03-23T16:18:00.000+08:00

INSIDER activity fell last week - based on filings with the Singapore Exchange - with 24 companies recording 40 purchases worth $6.5 million versus two firms with five disposals worth $720,000. The buys were sharply down from the previous week's 41 firms, 92 trades, and $21.3 million, while the sales were down from the previous week's four companies, eight trades, and $2.1 million.

Directors are positive so far this month with net buy totals of 61 firms, 192 trades, 74 insiders, and $32.7 million. The figures are based on 68 companies, 207 purchases, 81 directors, and $36.1 million on the buying side and seven firms, 15 disposals, seven insiders, and $3.3 million on the selling side.

While the buying by directors fell sharply last week, the buyback activity among listed firms remained high with 25 firms that posted 89 repurchases worth $12.8 million. The figures were consistent with the previous week's 22 companies, 90 trades, and $8.4 million.

The heavy buybacks in the past two weeks pushed the trade totals this month to 33 firms, 255 trades, and $29.6 million. The trade figures so far in March are already higher than the 20 companies, 99 trades, and $14.5 million in February and 21 firms, 151 trades, and $13.8 million in January and there are still seven days remaining this month.

There were several significant trades in the local market last week. On the negative side, investors should trade with caution in Frasers Commercial Trust, China Hongxing Sports, and Celestial NutriFoods due to heavy sales by substantial shareholders.

On the positive side, there is strong price support in Leeden Ltd with buybacks by the company and purchases by two executive directors this month. There were also first-time buybacks by Wanxiang International last week due to the decline in its share price since June last year.

Frasers Commercial Trust
The Capital Group Companies, Inc reduced its stake in Frasers Commercial Trust this month at sharply lower than its purchase prices with 6.6 million units sold on March 12 at an estimated price of 14 cents each. The trade reduced its deemed holdings by 9 per cent to 65.9 million units or 8.9 per cent of the issued capital.

The group previously acquired 12.9 million units from March 26 to June 11, 2008 at estimated prices of 82 cents to 86 cents each. Prior to those purchases, the fund manager sold a net 44.9 million units from July 2007 to March 2008 at estimated prices of $0.70 to $1.18 each.

The Capital Group Companies became a substantial shareholder in March 2006 following the purchase of an initial 31.9 million units or 6.4 per cent at $1.00 each. The unit trust closed at 13.5 cents on Friday.

China Hongxing Sports
Wasatch Advisors, Inc recorded its first sale in mainland sports shoes, apparel and accessories manufacturer and seller China Hongxing Sports since it became a substantial shareholder in September 2008 with 28.9 million shares sold on March 12 at an estimated price of 6 cents each. The trade reduced its deemed holdings by 16 per cent to 157.7 million shares or 5.7 per cent. The disposal was made at sharply lower than its purchase prices based on the 57.7 million shares that it acquired from September 18, 2008 to March 3 at estimated prices of 9 cents to 29 cents each.

Wasatch Advisors reported an initial filing (for the fourth time since June 2007) on Sept 8, 2008 of 7.5 million shares at 36 cents each, which raised its interest to 5.1 per cent.

The sentiment is not entirely negative this month as The Overlook Partners' Fund LP acquired 25 million shares on March 4 at an estimated price of 9.5 cents each, which increased its direct holdings by 18 per cent to 165.05 million shares or 6.0 per cent. The group previously reported an initial filing on Feb 24 of 15 million shares at 17 cents each, which raised its interest to 5.3 per cent. Investors should note that chairman Wu Rongguang purchased one million shares in November 2008 at 19 cents each, which increased his direct holdings to 463.1 million shares or 16.8 per cent. He previously acquired 2 million shares in January 2008 at 81 cents each. The stock closed at 9 cents on Friday.

Celestial NutriFoods
Cheung Wai Kwok ceased to be a substantial shareholder of soybean-based food products manufacturer Celestial NutriFoods following the sale of 6.2 million shares from March 3 to 13 at estimated prices of 9 cents to 12.5 cents each. The trades reduced his direct holdings by 16 per cent to 31.6 million shares or 4.9 per cent. The disposals were made on the back of the decline in the share price since June 2008 from 89 cents. The counter is also sharply down since October 2007 from $1.65.

Mr Cheung's previous on-market trade was in March 2005 when he acquired 5 million shares at 38 cents each. Celestial NutriFoods announced its Q4 results on Feb 27 with net profit down by 26.1 per cent to 96.876 million yuan for the three months to Dec 31, 2008. Earnings for the full-year, however, rose by 19.1 per cent to 499.158 million yuan. The counter closed at 10.5 cents on Friday.

Leeden Ltd
There is strong price support in welding, gas and safety products and services provider Leeden Ltd this month with buybacks by the company and purchases by CEO Steven Tham Weng Cheong and executive director Lim How Boon.

The acquisitions totalling 1.3 million shares accounted for 84 per cent of the stock's trading volume. The group repurchased one million shares from March 2 to 20 at an average of 34.5 cents each.

The company previously acquired 70,000 shares on Feb 26 at 35.5 cents each and 3.4 million shares from February 2007 to December 2008 at 31 cents to 42 cents each.

On the directors' side, CEO Steven Tham purchased 250,000 shares on March 19 at 33 cents each, which increased his holdings (direct and deemed) to 37.3 million shares or 21.7 per cent. He previously acquired 5.1 million shares from March 6 to Dec 3, 2008 at 37 cents to 49 cents each.

Executive director Lim How Boon, on the other hand, picked up 12,000 shares on March 13 at 34 cents each, which boosted his stake (direct and deemed) to 20.7 million shares or 11.9 per cent. He previously acquired 193,000 shares in March 2008 at 42 cents each.

The sentiment is not entirely positive this month as substantial shareholder Ong Nai Pew sold 733,000 shares from March 2 to 19 at an estimated price of 35 cents each, which reduced his holdings (direct and deemed) to 12.5 million shares or 7.3 per cent. He previously acquired 93,000 shares on Jan 7 at 39 cents each. The stock closed at 35 cents on Friday.

Wanxiang International
Natural and synthetic flavours and fragrances producer Wanxiang International bought back shares for the first time since listing in 2007 with 800,000 shares purchased from March 16 to 17 at 5 cents each.

The trades were made on the back of the 60 per cent decline in the share price since June 2008 from 12.5 cents.

Investors should note that the initial buybacks were made at sharply lower than the IPO price of 29 cents.

The company announced on Feb 28 a fourth quarter profit of 734,000 yuan for the three months to Dec 31, 2008 versus a loss of 677,000 yuan in the same period last year. Earnings for the full-year, however, fell by 74 per cent to 7.569 million yuan. The counter closed at 4.5 cents on Friday.

The writer is managing director, Asia Insider Limited \
Source: Business Times Singapore

Update: US to spend US$500 bln to clean bad assets from US banks

2009-03-23T16:15:00.002+08:00

WASHINGTON - Treasury Secretary Timothy Geithner announced late on Sunday a new US$500-billion federal programme to remove from bank balance sheets troubled assets that he said 'are now clogging' the US financial system.

'The financial system as a whole is still working against recovery,' Mr Geithner wrote in an op-ed piece published in The Wall Street Journal outlining his plans.

'Many banks, still burdened by bad lending decisions, are holding back on providing credit.'

The administration of President Barack Obama has developed a new 'Public-Private Investment Programme' that will set up funds to provide a market for the troubled loans and securities issued by banks over the past several years, he wrote.

'The new Public-Private Investment Program will initially provide financing for US$500 billion with the potential to expand up to US$1 trillion over time, which is a substantial share of real-estate related assets originated before the recession that are now clogging our financial system,' he pointed out.

The treasury secretary was due to make a formal announcement of the plan and provide details at a press conference on Monday.

In the op-ed piece Mr Geithner indicated the programme will have three essential elements.

It will use funds from the Treasury, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve to mobilise capital from private investors.

Second,, it will ensure that private-sector participants share the risks alongside with the government, and that the government shares in potential profits from these investments.

The funds established under the programme will be open to investors of all types, including pension funds, Mr Geithner noted.

Third, the value of the loans and securities purchased under the programme will be established by the private sector in order to protect the government from overpaying for the assets, according to the secretary.

'Over time, by providing a market for these assets that does not now exist, this programme will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets,' Mr Geithner noted.

He said the ability to sell assets to these funds will make it easier for banks to raise private capital, which will accelerate their ability to replace the capital investments provided by the Treasury.

Despite the crisis facing the US banking system, Mr Geithner described it as 'diverse and resilient'. But he cautioned that the process of repairing it 'will take time, and progress will be uneven, with periods of stress and fragility'.

However, the treasury secretary expressed confidence that the economic policies adopted by the Obama administration 'will work'. The comments followed an optimistic assessment of the US economy provided by President Obama in a television interview broadcast earlier on Sunday.

'Well, we're already starting to see flickers of hope out there,' Mr Obama told the CBS programme '60 Minutes', noting that mortgage refinancings have significantly increased and interest rates have never been lower.

'That promises the possibility at least of the housing market bottoming out and stabilising.'

But Mr Obama warned of a system-wide collapse with the potential to trigger an economic 'depression' if another big financial institution like insurer American International Group (AIG) or banking giant Citibank were to fail.

'Yes,' said the president, 'I think that systemic risks are still out there. And if we did nothing you could still have some big problems.'

But he said stressed that he was optimistic about that not happening because American society 'did learn lessons from the Great Depression'.

Source: Business Times Singapore

F&N issues S$108m fixed-rate bonds with 5.5% coupon

2009-03-18T22:54:00.000+08:00

SINGAPORE: Singapore conglomerate Fraser and Neave (F&N) said it has issued S$108 million worth of fixed-rate bonds. They carry a coupon of 5.5 per cent.

In a filing to the Singapore Exchange, F&N said the notes will mature in March 2016.

The bonds are part of its S$2 billion multi-currency medium-term note programme which it established in 2007.

F&N said the net proceeds will be used for working capital and to refinance existing debt. - 938LIVE/vm

Source: Channel News Asia

Rally again?

2009-03-18T10:39:00.001+08:00

Wall Street managed to reverse all the previous day losses after a report
showed new home construction unexpectedly jumped in February. Stocks ended
higher led mainly by the tech stocks.
The Dow closed back up at 7,395 with a gain of 178 points, erasing the
extreme negativity from yesterday's bearish "shooting star" candlestick.
Very unexpected. But volume trend is losing strength.

At their core, stocks are a bet

DURING Thursday night's verbal drawing and quartering of CNBC's Jim Cramer by Comedy Central's Jon Stewart, the inevitable conclusion emerged: Long-term investing in the stock market is a sick joke.

Stewart: 'My mother is 75. And she bought into the idea that long-term investing is the way to go. And guess what?' Cramer: 'It didn't work.'

Distill the last 16 months of financial hell down to one thought, and that would be it for millions of Americans. The US stock market's plunge has wiped out more than a decade's worth of accumulated wealth, driving blue-chip indexes back to 1997 levels.

Twelve years qualifies as 'long term' for most people. Ergo, it would seem, the stock market doesn't work. If this were only an academic exercise - a study of numbers and the alternating human emotions of greed and fear - we could all shake our heads in disgust, or resignation, and get on with our lives.

But the question of whether to keep even a dime in the stock market anymore isn't academic to many Americans who either are retired or old enough to be thinking about retirement.

Down 30 per cent, 40 per cent, 50 per cent or more from 2007, their natural urge is to sell stocks and protect whatever remaining nest egg they have. Many already have done just that in the last six months.

How much more pain?

Those who still have some portion of their portfolio in stocks undoubtedly have thought about how much more pain they can stand. With last week's market rebound, which lifted the Dow Jones industrial average 10.3 per cent from Tuesday through Friday, the focus of many kitchen-table discussions isn't, 'Is it time to buy?' but 'Should we sell before it dives again?'

Financial advisers have been reduced to begging their clients to be patient, to stick with stocks in a diversified portfolio, and to put their faith in long-term market performance data that get longer-term with every conversation. Did you know, your adviser might point out, that the total return on the Standard & Poor's 500 index hasn't averaged less than 8.5 per cent annually in any 30-year stretch between 1955 and 2008?

In the period from 1925 to 1955, which includes the Great Depression years as well as the post-war boom, the stock market's average gain was 10.2 per cent a year. In the 30 years ended in 1981, which encompasses the go-go period of the early 1960s and the inflation-racked economy of the 1970s, the average gain was 9.9 per cent a year.

The upshot, of course, is that if you can just hang on, the next 30 years in stocks should be OK, assuming history is a guide. Even if it is - obviously, a big if - the problem is that we have to live through the short term to reach the long term. What if the next 10 years are like the last 10 for stocks, or not much better, before some glorious new era of growth arrives in 2019? If you're 30, you can wait. If you're 60, it may be a bridge too far.

Options for investors

Running away from stocks now is the safe thing to do, if you can't bear the thought of another meltdown. You also might succeed in protecting yourself from being fleeced by the next Bernie Madoff or by a no-name broker whose self interests will never take a back seat to yours.

But leaving the market entirely exposes you to another risk: running out of money in retirement, if the alternatives to stocks generate returns too low to cover your cost of living.

Investors who bought the US$18 billion of new 10-year Treasury notes that the government sold on Thursday know they will earn 3.04 per cent a year for the next decade, and then their principal will be returned in full.

If that yield is all you require for a comfortable retirement, the stock market needn't enter the picture. But if your financial future depends on earning, say, 7 per cent a year for the next 20 years, you may be hard-pressed to keep stocks out of your portfolio. People of average means just don't have that many investment choices other than the basics: stocks, bonds, cash accounts, gold and real estate.

On one level, what Jon Stewart's assault on Jim Cramer demonstrated is that the desire for payback trumps any interest in a rational analysis of the stock market's prospects. Any discussion immediately becomes clouded by the rage we all feel toward Wall Street.

The financial markets' geniuses designed mortgage-backed securities that were too complex even for their creators to fully understand. They borrowed excessively in an effort to multiply the returns on their market bets, pretending that the risks inherent in that leverage didn't apply to them. And they paid themselves outrageous fees and bonuses and believed they were worth every penny.

'Criminal enterprise'

At times like this, Wall Street fully lives up to its image as a vast criminal enterprise. And yet, there isn't much that's new in this debacle. It's just a matter of degree. In any decade, the list of financial market scandals and despicable behaviour goes on for miles.

The computer-driven stock crash of 1987, the dotcom bubble, the Enron Corp collapse - after these, and many more sordid episodes, some investors swore they'd never trust the market again.

Why do we keep coming back? Because in a capitalist society, equities remain the easiest way for most people to make a bet on economic growth. If a company prospers over time, so should its shareholders. Simple concept, right?

What is exposed in desperate moments like this one is that stocks indeed are a bet - a game of chance that offers probabilities but absolutely no assurances of a payoff. -- LAT-WP

Source: BT

Asian bull run continues despite exports warning

2009-03-18T00:26:00.001+08:00

TOKYO: Asia's stock market rally accelerated on Tuesday, with Tokyo leaping 3.18 per cent, but a sharp fall in exports from Singapore underlined the severe problems facing the region's economies.

Japan's Nikkei-225 led the charge with its third straight day of gains while Sydney grew 3.1 per cent and Seoul rose 3.4 per cent. Hong Kong was up 0.57 per cent in the afternoon session.

Share prices, especially in financials, continued to climb despite slight falls on Wall Street, where a late sell-off ended a four-day rebound based on cautious hopes of a recovery.

"Whether this is all a bounce in a bear market or a real move up from the bottom remains to be seen," said Bob Dickey, a technical analyst at RBC Wealth Management in New York.

"But with the market having gone through a five-month bottoming process that included three distinct bottoming moves, we are more inclined to believe that a major market low has been made."

World markets have plunged in recent months as the financial crisis hit companies and sparked a widespread economic downturn, raising fears of another Great Depression.

The slump in demand from the United States and Europe has badly affected Asia's all-important exports, as Singapore's latest figures show.

Key exports fell 24 per cent in February year on year, following January's record 35 per cent fall, reinforcing fears Singapore is primed for its worst-ever recession this year.

The tiny but affluent state's 10th straight monthly drop follows Japan's record 45.7 per cent plunge in January and a slide of about 26 per cent in last month's shipments from China.

Flag-carrier Singapore Airlines (SIA) also reported a steep fall in passenger numbers and cargo shipments.

The airline, seen as a bellwether for the industry, said it carried 1.18 million passengers in February, down 20.2 per cent from the same month last year.

"The prevailing global economic crisis has significantly dampened travel demand, translating to weaker uplifts," SIA said.

Airlines have been especially hard hit by the slowdown, with SIA reporting a 42.8 per cent profit fall in the third quarter and Hong Kong's Cathay Pacific losing US$1.1 billion last year.

Other bad news continued to trickle in from around the region, with Hong Kong's Disneyland saying it has shelved expansion plans.

The US-based entertainment giant said the decision would mean about 30 Hong Kong-based "Imagineers," who plan, design and engineer the company's theme parks, would lose their jobs.

A spokesman for the Hong Kong Commerce and Economic Development Bureau expressed "grave concern" at the decision and urged Disney to reconsider.

Anglo-Australian mining giant Rio Tinto predicted the global economy would remain difficult for two years, pinning hopes for an upturn on China.

And the remote, US-administered Northern Mariana Islands lamented a 25 per cent drop in visitors from South Korea as its important tourism sector suffers.

South Korea, whose economy shrank 5.6 per cent in the December quarter, is the second biggest tourist market for the Pacific archipelago, accounting for a third of visitors every year.

Meanwhile, one of Vietnam's top leaders said its formerly red-hot economy should start to bounce back from a period of slow growth by the end of this year.

"By the end of this 2009 and from the beginning of 2010, the situation will improve. The quality of the economy will be better by 2011," said Deputy Prime Minister Nguyen Sinh Hung.

The Economist Intelligence Unit earlier predicted Vietnam's economy would grow by just 0.3 per cent this year, well below the government's target of 6.5 per cent.

China to boost Africa investment fund, says report

2009-03-18T00:24:00.000+08:00

BEIJING: China will boost its state-run Africa investment fund by US$2 billion, so as to snap up opportunities left by Western investors leaving the continent, the Financial Times said Tuesday.

Since its launch in 2006, the China-Africa Development Fund has invested about US$400 million in the continent, the paper quoted fund chief executive Chi Jianxin as saying in Johannesburg.

Most of the fund's initial capital of US$1 billion would likely be spent by the end of the year, up to two years ahead of schedule, Chi said.

"We are moving faster," he was quoted as saying, adding that African companies "need more money from us" because other investors had turned more reluctant.

Next year the fund plans to embark on a US$2-billion second phase of investments on its way to reaching a goal of US$5 billion, Chi said.

When establishing the fund, run by the government-run China Development Bank, fund managers said their goal was to offer investment to encourage more Chinese companies to do business in Africa.

Chinese President Hu Jintao announced the establishment of the fund at a 2006 China-Africa summit that ushered in a deepening of ties with the continent.

Some Western critics have accused China of worsening repression and human rights abuses in Africa through support of countries such as Sudan and Zimbabwe in a cynical drive to increase access to African oil and other resources needed to fuel its growth back home.

But observers have said the fund is focused on industries that would make it easier for Africa to develop, such as agriculture, electric power, road and water drainage systems.

Pharma still growing in Singapore?

2009-03-18T00:23:00.001+08:00

INGAPORE: The German drug giant Bayer Schering is in talks to expand its operations in Singapore. This is part of its efforts to grow in the region to keep up with demand.

Bayer Schering has already set aside S$20 million to work with local players to boost research and development in Singapore.

Chris Lee, the regional head of Bayer Schering Pharma Asia Pacific, said: "In addition to this already announced S$20 million investment in conjunction with the one at the leading university in Singapore in the area of cancer research, we do have an ongoing dialogue with many other institutions in Singapore.

"So we will be committed in investing more in Singapore and other Asian countries, and so these are ongoing negotiations in the developments."

Bayer Schering said sales increased by some 23 per cent on-year to S$1.9 billion in the Asia-Pacific region last year.

The company said growth is expected to continue at a double digit pace this year for its products such as Aspirin. Sales of Aspirin grew by some 55 per cent in 2008

Bayer Schering Pharma in talks to expand presence in Singapore

Olam International increases trade facility to US$170m

2009-03-18T00:22:00.001+08:00

INGAPORE: Global supply chain manager Olam International said it has renewed and increased a one-year multi-currency trade facility to US$170 million.

The company said the funds will be used to finance its cocoa and coffee operations and for working capital in its businesses in Nigeria and Ivory Coast.

The facility was granted by a number of banks, including Standard Chartered, ING Bank, Bank of Tokyo-Mitsubishi UFJ, and Sumitomo Mitsui Banking Corporation.

CNA

CapitaLand's rights issue 1.22 times oversubscribed

2009-03-18T00:20:00.000+08:00

SINGAPORE: CapitaLand said its S$1.84 billion rights issue was 1.22 times oversubscribed.

Southeast Asia's largest property developer first announced the fundraising exercise last month. It offered one rights share for every two existing shares at S$1.30 each.

CapitaLand said its major shareholder Temasek Holdings took up its entire 40 per cent allotment of the rights shares.

The rights shares are expected to be listed on or around March 23.

In trade on Tuesday, CapitaLand shares fell 4 per cent to S$2.07.

Source : Channel News Asia

Allgreen novates rights to Nanjing site

2009-03-16T21:21:00.001+08:00

Allgreen Properties is exiting its intended participation in investing in a commercial site in Nanjing, China.

In a regulatory filing with the Singapore Exchange, Allgreen said that in light of the current economic climate, it had on March 16, 2009 entered into a conditional deed with Shangri-La Asia and Kerry Properties Ltd (its joint venture partners for the Nanjing site) to novate all of Allgreen's rights, title, interests, liabilities, duties and obligations under the master joint venture agreement to Shangri-La Asia in consideration for the payment by Shangri-La Asia to Allgreen of HK$5.2 million (about S$1 million).

This amount is equivalent to the deposit contributed thus far by Allgreen for the successful bid for the Nanjing site. The novation is conditional on approvals from the relevant China authorities, among other parties.

Source: Business Times

Updates

2009-03-16T21:20:00.001+08:00

SINGAPORE: Singapore-listed Jade Technologies says it plans to buy a 20 per cent indirect stake in Chinese company Xin Long Chemical for S$7.8 million.

Xin Long's main business activities are in the manufacturing and trading of titanium dioxide-related products.

Jade says the acquisition will allow it to gain a steady stream of revenue and profit.

It says this will also diversify its business profile and reduce its reliance on coal-mining.

The transaction will be effected through a restructuring plan where Jade takes an indirect stake in Xin Long through a joint venture with Xin Long's owners.

Jade will fund the acquisition by issuing 565 million new shares at one cent each.

It will also issue S$2.2 million worth of corporate bonds to the vendors.

The vendors have indicated that Xin Long should have a net profit after tax of at least 40 million yuan or S$9 million for the 2008 financial year.

Jade says it has the right to abort the transaction if the 2008 net profits come in lower than 28 million yuan or S$6.3 million.

Singapore posts 19.8% drop in February cargo-box traffic

2009-03-16T21:19:00.001+08:00

SINGAPORE: Singapore, the world's busiest container port, has posted the biggest drop in cargo-box traffic in at least 11 years, as the global recession cuts demand.

According to preliminary figures from the Maritime and Port Authority, terminals in Singapore handled 1.85 million twenty-foot equivalent units, or standard containers, in February.

That is 19.8 per cent lower as compared to the same period a year earlier, according to preliminary data from the Maritime & Port Authority.

It is the biggest decline since at least December 1997, overtaking January's 19.6 per cent on-year drop.

The dominant port operator, PSA International, moved about 3.72 million standard containers at its Singapore terminals in the first two months of 2009.

This is already down nearly 20 per cent compared with the same period a year ago.

Terminals in Singapore handled about 30 million containers last year.

NY Fed manufacturing extends slump in March

2009-03-16T21:17:00.000+08:00

NEW YORK (Reuters) - Manufacturing production in New York State fell to yet another record low in March, extending its slump as gauges tracking new orders and investments deteriorated, according to a survey released on Monday.

The New York Federal Reserve said its Empire State factory index fell to minus 38.23 in March -- the lowest in the history of the index, which dates back to July 2001. It was also down from February's minus 34.65.

"A weak Empire State release, suggesting a faster pace of contraction in March than in February," said Ian Lyngen, interest rate strategist at RBS Greenwich, in a research note.

Economists had expected a reading of minus 32.0, according to the median of their 50 forecasts, which ranged from minus 40.0 to negative 25.0.

On Wall Street, stock index futures pared their gains. U.S. Government bonds, which generally benefit from signs of economic weakness, trimmed their losses.

One silver lining in the report was that the six-months-ahead expectations gauge of general business conditions improved to positive 3.14 from February's minus 6.56.

However, this was coupled with more signs that tight credit conditions were hampering business.

"The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in March," the report said.

"Respondents did report fairly widespread tightening in credit standards and borrowing costs," the report added. "These changes have in turn affected both capital spending plans and hiring plans for a greater proportion of firms than in last autumn's survey."

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

The report said its new orders and shipments indexes also dropped sharply to record lows and investment was also suffering, with capital spending and technology spending gauges also falling to their weakest on record.

Since January 2008, the main index has had only one month in positive territory, which came in April last year and even so was barely above zero at 0.81.

The Institute for Supply Management said earlier this month that in February, national factory activity contracted for the 13th consecutive month as businesses struggled to work off an inventory glut arising from the sharp economic deterioration.

Source :Reuters

Obama to announce steps to aid small businesses

2009-03-16T20:44:00.000+08:00

WASHINGTON (Reuters) - U.S. President Barack Obama will announce steps on Monday to make it easier for small business owners to borrow money, using $730 million in stimulus funds to cut lending fees, boost loan guarantees and expand other programs, officials said.

"We know that small businesses are the engine of growth in the economy," said Christina Romer, chair of the White House Council of Economic Advisers. "We absolutely want to do things to help them."

Romer, speaking on the NBC program "Meet the Press" on Sunday, said the government would pump "a significant amount" of money into encouraging small business lending but did not give a total figure.

Lawrence Summers, head of the White House National Economic Council, told ABC's "This Week" the small businesses plan was part of the president's overall effort to "put in place a program that addresses the crucial problems and permits (economic) stability to be regained."

The Obama administration believes small businesses, which accounted for about 70 percent of new job growth over the past 10 years, will ultimately drive the recovery from the current recession, one of worst in decades, a U.S. official said.

The programs being announced on Monday build on the $730 million for small businesses included in the $787 billion economic stimulus package approved by Congress last month.

"There are already a lot of things to help them in the recovery package," Romer told NBC. "Some of what will be coming out are things that were in the recovery package -- increasing the SBA (Small Business Administration) loan guarantees, lowering fees."

Obama and Treasury Secretary Timothy Geithner will announce a plan to increase federal guarantees under the SBA's most widely used loan program, an official said.

The current maximum guarantees are 85 percent of loans under $150,000 and up to 75 percent of larger loans. The guarantee will be raised to 90 percent with the aim of reducing risk and encouraging banks to make loans, the official said.

The administration also plans eliminate a number of borrower and lender fees on loans originated through its main loan program and a program to encourage long-term borrowing for major fixed assets like land and buildings.

As part of his financial stability plan in February, Geithner said the administration would boost secondary lending markets that buy up loans and would encourage small business lending by targeting markets that buy small business loans.

The SBA usually guarantees some $20 billion in loans annually but new lending is headed below $10 billion this year, a U.S. official said.

"We have talked to a lot of small business owners and one of the troubles that they are having is that community banks don't want to lend to them because of the secondary market in SBA loans has virtually disappeared," Romer said.

"So one of the things that we will be announcing is a program to get that market cleared and working again," she added. "Basically, the government will go in and step up and buy those loans if there aren't private investors to do it."
Reuters

Singapore Economy

2009-03-16T19:29:00.000+08:00

SINGAPORE - Singapore is expected to slide deeper into recession this year before staging a weak recovery in the final quarter and registering mild growth in 2010, a central bank survey showed Monday.

Gross domestic product (GDP) is likely to fall 8.5 percent in the quarter to March from a year ago, more than double the 4.2 percent shrinkage in the fourth quarter of 2008, according to the survey of professional economists.

Singapore slipped into recession in the third quarter of last year ahead of its Asian neighbours.

The GDP decline would likely continue in the second and third quarters this year at 6.9 percent and 4.6 percent, respectively, before output grows at 0.5 percent in the final three months, the survey showed.

For 2009, the economy was expected to shrink by 4.9 percent -- just within the government's forecast contraction range of 2.0 and 5.0 percent -- which would make it the worst recession since independence in 1965.

A recovery is expected in 2010, with the economists forecasting an average of 3.3 percent growth, the poll showed.

Singapore's trade-driven economy grew just 1.1 percent last year from 7.8 percent in 2007 after a worldwide economic downturn weakened demand for its exports and fewer travellers visited the country.

Source:CNA

Manufacturing is likely to bear the brunt of the downturn, with the sector forecast to fall by 19.6 percent in the first quarter this year, followed by the financial services sector, which is expected to drop 11 percent.

Exports are projected to plunge 27.4 percent during the quarter, according to the survey of 20 professional economists and analysts.

Singapore's exports declined by 35 percent, the largest amount on record, in January from a year earlier.

February figures will be released on Tuesday, with DBS Bank saying it expects exports to have fallen 23.6 percent year-on-year.

"The general expectation is that it will be another dreadful month," it said in a market commentary.

Minister Mentor Lee Kuan Yew warned this month that GDP may contract by as much as 10 percent this year if exports continue to fall sharply. - AFP/vm

Fear still in focus after strong rally

2009-03-16T19:27:00.000+08:00

NEW YORK (Reuters) - Investors are dubious that Wall Street's best week since November means the stock market has found a bottom.

Even though the Dow industrials advanced 9 percent for the week and the S&P 500 shot up over 10 percent from the close on March 6, investors still fear the same problems. Read on...

Asian markets continue rise as Fed eyes recovery

2009-03-16T19:25:00.000+08:00

TOKYO: Asian markets continued higher on Monday after US Federal Reserve chairman Ben Bernanke said America had averted another Great Depression and was already seeing the "green shoots" of economic recovery.

Resuming last week's strong rebound, Tokyo's Nikkei-225 closed up 1.78 per cent with Hong Kong 0.96 per cent higher in the afternoon session. Taipei and New Zealand also made gains with Sydney finishing 0.1 per cent stronger.

Tokyo rocketed 5.15 per cent on Friday and Bernanke's upbeat comments will do nothing to hurt the long-awaited rally in Asian share prices.

In his first television interview, the Federal Reserve chairman said no more big banks would fail and expressed confidence the world was not about to see a repeat of the 1930s Great Depression.

"I think we've averted that risk," Bernanke told CBS, adding that recovery depended on fixing the banking system.

"We're working on it. And I do think that we will get it stabilised, and we'll see the recession coming to an end probably this year," Bernanke said.

"We'll see recovery beginning next year. And it will pick up steam over time."

Last week, the blue-chip Dow Jones share index fought back from 12-year lows, while Bernanke said a government fund of US$500 billion was stabilising the mortgage market and business lending was picking up.

"And I think as those green shoots begin to appear in different markets, and as some confidence begins to come back, that will begin the positive dynamic that brings our economy back," he said.

But optimism was tempered by another raft of gloomy reports from Asia, with Singapore saying its recession will get worse this year before staging a weak recovery in the last quarter.

Gross domestic product (GDP) is likely to fall 8.5 per cent in the quarter to March from a year ago, more than double the 4.2 per cent shrinkage in the fourth quarter of 2008, according to a central bank survey.

DBS Bank said it expected February exports, which will be announced on Tuesday, plummeted 23.6 per cent year on year.

"The general expectation is that it will be another dreadful month," it said in a market commentary.

China said foreign direct investment fell nearly 16 per cent in February from a year earlier, while the Financial Times newspaper said Beijing may have lost US$80 billion in ill-timed investments of its foreign exchange reserves.

"It appears SAFE (State Administration of Foreign Exchange) began diversifying into equities early in 2007 and, rather than being deterred by the subprime crisis, it continued to buy," Brad Setser, an economist at the Council on Foreign Relations, a US-based think tank, told the paper.

The report comes after Chinese Premier Wen Jiabao said last week he was "a little bit worried" about the fate of his nation's huge investments in the United States.

Australia also moved to head off rising unemployment, now at a four-year high of 5.2 per cent, by slashing its number of foreign migrant workers for the first time in 10 years.

"We don't want people coming in who are going to compete with Australians for limited jobs," said Immigration Minister Chris Evans, announcing a 14 per cent cut in the number of skilled migrant visas.

Meanwhile the Economist Intelligence Unit said Vietnam's once-runaway economy would show almost zero growth this year. However, South Korea said it expected a record trade surplus this month thanks to plunging crude oil prices.

Source :Channel News Asia

China may have lost billions on foreign equities, says report

2009-03-16T19:23:00.001+08:00

EIJING: China may have lost more than US$80 billion of its foreign exchange reserves after buying into equities just before world markets collapsed last year, the Financial Times said Monday.

The poorly-timed investments were carried out by the State Administration of Foreign Exchange (SAFE), the manager of the nation's nearly US$2 trillion of reserves, the newspaper said.

"SAFE has built up one of the largest US equity portfolios of any foreign government entity investing abroad, including the major sovereign wealth funds," Brad Setser, an economist at the Council on Foreign Relations, a US-based think tank, told the paper.

"It appears SAFE began diversifying into equities early in 2007 and, rather than being deterred by the subprime crisis, it continued to buy."

The report comes after Chinese Premier Wen Jiabao said last week he was "a little bit worried" about the fate of his nation's huge investments in the United States.

Any estimate of SAFE's investment portfolio has a large margin of error, since it does not tell the public where it puts its money.

However, according to Setser's calculations, reported by the Financial Times, China has lost over US$80 billion on holdings of about US$160 billion in overseas equities.

China's decision to diversify into equities came after growing criticism that it was not getting enough out of its traditional method of parking its forex reserves mainly in safe but low-yielding US Treasury bonds.

In another bid to diversify, China in 2007 set up a sovereign wealth fund, the China Investment Corporation, charged with managing US$200 billion of the nation's forex reserves.

That corporation's investment also have now come across as being badly timed, with huge losses sustained on a number of high-profile transactions, including shares in troubled financial giants Morgan Stanley and Blackstone.

Source : Channel News Asia /a>

SIA says passenger load down to 69.7% in February

2009-03-16T19:16:00.001+08:00

SINGAPORE: Singapore Airlines (SIA) said its overall passenger load in February fell to 69.7 per cent from 76.8 per cent a year earlier, mainly due to planned reduction in frequencies across its routes.

In addition, the termination of the Los Angeles, Osaka and Amritsar services also contributed to the capacity reduction.

SIA said its cargo traffic continued to dip in February as weak market conditions affected global demand for air cargo.

The cargo load factor declined 5.5 percentage points to 56.7 per cent in February.

Overall, SIA filled 62.1 per cent of the space available on its planes for passengers and cargo last month – lower than January's 63 per cent.

Channel News Asia

Updates

2009-03-16T17:48:00.000+08:00

Moody's confirms FCT's Baa1 rating; outlook negative

Moody's Investors Service on Monday confirmed the Baa1 corporate family rating of Frasers Centrepoint Trust ('FCT').

The outlook for the rating is negative.

This concludes the review for possible downgrade initiated on October 20, 2008.

'The rating confirmation reflects FCT's good franchise value and relatively stable income stream supported by its well-located suburban retail assets. In Moody's opinion, these assets are at the lower end of the asset risk spectrum as they mainly provide tenants with non-discretionary household items,' says Kathleen Lee, a Moody's VP/Senior Analyst and lead analyst for the trust.

'The confirmation also factors in the trust's manageable debt maturities and with banks with good relationships with its sponsor, Fraser Centrepoint Ltd ('FCL'), to facilitate gradual conversion of its short-term debts to term and/or committed banking facilities, which will support its ongoing capital expenditure needs,' says Lee.

'FCT's conservative financial policy also generates good credit metrics relative to its peers -- - as reflected by Debt/EBITDA of 6x -7x and EDBITA/Interest coverage of 3.4x -4.5x,' she adds.

The outlook for the rating is negative reflecting the trust's asset concentration exposing it to the weak economic environment and property market conditions in Singapore. Furthermore, these conditions render uncertainties in the level of tenant occupation and achieved rentals at Northpoint upon completion of the renovation works expected by 2Q2009.

A return to a stable outlook is unlikely at this stage given the inherent weaknesses in the trust's operating profile and its limited financial flexibility amid the weak operating environment.

Conversely, the ratings could face downward pressure if progress is not made in securing committed medium-term bank facilities to fund the trust's ongoing capital expenditure over the next few months, and/or should headroom in its unitholders' funds covenant fall away due to material asset impairments or worse than expected rental or occupancy conditions.

In addition, the rating could be lowered if financial metrics weaken such that the trust's Debt/EBITDA increases above 6.5x and interest coverage falls below 4x.

The last rating action with regard to FCT was taken on December 1, 2008, when its Baa1 rating was placed on review for possible downgrade.

Source: Business Times Singapore

Company Updates

2009-03-16T17:42:00.001+08:00

RESILIENT to recession: Olam International Ltd (Olam) has been delivering consistent revenue and earnings growth since its listing in 2005, and growth momentum is expected to sustain despite the global recession.

Management has guided for 16 to 20 per cent topline CAGR and 25 to 30 per cent earnings CAGR over the next three years. These goals are achievable, given that demand for food is relatively inelastic and earnings are therefore less vulnerable to the global economic downturn.

Olam has already proven its resilience by delivering a 32.9 per cent growth in H1 2009 core earnings despite the recent collapse of commodity prices, demonstrating its ability to perform under difficult conditions.

Growth opportunities abound: The global economic turmoil has presented Olam with organic and inorganic growth opportunities. The group has been expanding its market share at the expense of weaker competitors, who have been ousted as a result of the credit crunch and economic downturn.

At the same time, distressed assets have emerged following the financial meltdown, presenting the group with M&A opportunities. Management has articulated its interest to pursue bite-sized acquisitions, but remains cautious to contain its gearing levels.

But gearing is relatively high: Olam's key weakness, in our view, is its high gearing ratio. It is more heavily geared than its peers, with total debt to equity ratio of 4.67x, substantially higher than its peers, whose gearing ratios range from 0.48x to 1.38x.

Even after adjusting for its hedged inventories and receivables, gearing remains above that of its peers'. The group's reliance on debt could pose refinancing risks in the event of a protracted credit crunch. Rising interest costs could also erode profit margins should the group find itself unable to pass on these higher costs to its customers.

Valuations near historical trough; initiate with 'buy': The equity market meltdown has brought Olam down to its trough valuations. We see value emerging at current levels although the volatility could persist in the near term. Olam's key investment merit lies in its resilient earnings growth profile against a climate of earnings contraction. We initiate coverage on the stock with a 'buy' rating and $1.37 fair value estimate based on 10x FY10 PER. Key risks include high gearing, counter-party risk, and dilution risk from its convertible bonds.
BUY

CHALLENGING times: We are turning more cautious on ST Engg's earnings outlook, in the face of the most challenging economic conditions seen in over two decades. We are therefore tempering our earnings growth forecasts, due to a higher assumption of provisioning for bad debts on some of its contracts.

Assuming higher risk profile: We have assumed higher risk mainly on contracts with 1) non-sovereign customers, 2) riskier country profiles and 3) non-defence related contracts. We are also factoring in lower earnings from non-orderbook business in the aerospace division, where conditions are still challenging.

Majority of orderbook still very secure: We see increased risk to geographies such as Greater China and the Middle East. Shakier business segments include low-cost airlines and aviation in general. However, these contracts still represent less than 5 per cent of ST Engg's overall orderbook, and are tempered by ST Engg's own risk controls.

Cutting forecasts by 7 per cent: FY09 earnings are therefore trimmed by 7 per cent to $480.7 million, which implies modest 1.5 per cent growth y-o-y. FY10 earnings are similarly cut by 7 per cent to $508 million. ST Engg's orderbook stands at $10.6 billion, of which it expects to deliver $3.6 billion for FY09, or about 66 per cent of our turnover projection.

Premium valuations run higher risk of de-rating: ST Engg continues to trade at some of the highest valuations in the Singapore market. Price to book ratio stands at 4.6x versus the STI's 2.4x, and FY09 PER stands at 14.0x versus 7.3x for the index.

While we believe that premium valuations are justified due to ST Engg's outstanding track record, any disappointment or underperformance from the company will negatively impact the share price more severely.

Maintain 'buy', TP $2.70: ST Engg has re-affirmed it will still pay out 100 per cent of earnings as dividends. However, along with our earnings cut, we are raising our risk-reward threshold by pegging a minimum 6 per cent yield from FY09 projected dividends. This generates a TP of $2.70, from $3.60 previously. With an upside of 20 per cent and dividend yield of 7.7 per cent, we maintain our 'buy' call.
BUY

Reference :

BT

Brokers Take

2009-03-03T20:34:00.000+08:00

UOB

City Dev

S'pore shares close down 0.32%

2009-03-03T20:32:00.001+08:00

Analysts were eyeing a technical rally after the index plunged to new lows again on Tuesday, breaching levels reached on Monday when it had closed at its lowest point in more than five years.

'The market is very, very oversold. I'm expecting a major relief rally soon after the recent sharp selldown. It could happen within days,' said a trader at a bank-backed brokerage.

Banking shares closed down. United Overseas Bank fell 12 cents to $9.13, DBS dropped 17 cents to $7.24 and Oversea-Chinese Banking Corp eased four cents to $4.12.

Among property shares, CapitaLand edged up five cents to $1.85, City Developments gained 14 cents to $4.74 and Keppel Land remained unchanged at $1.24.

Full article : BT

Monitoring SPH, UOB, DBS, Straits Asia, Keppel Land, Capital Land, Singtel, SIA

Update: Standard Chartered profits jump, positive on Asia

2009-03-03T20:31:00.000+08:00

LONDON - Standard Chartered, the emerging markets bank, said on Tuesday that its net profits jumped a fifth to US$3.41 billion in 2008, leaving it well-placed to tackle the Asia slowdown.

Despite the lift in profits after tax, Standard Chartered was not immune to rising bad debts linked to the credit crisis, as it wrote off US$1.79 billion in 2008, more than double the amount of US$818 million in 2007
Despite the lift in profits after tax, Standard Chartered was not immune to rising bad debts linked to the credit crisis, as it wrote off US$1.79 billion in 2008, more than double the amount of US$818 million in 2007.

'To deliver record results in this exceptional environment is a great achievement,' the bank's acting chairman John Peace said in the group's earnings statement.

Chief executive Peter Sands said the best way to continue delivering shareholder value was through Standard Chartered's 'rigorous focus on Asia, Africa and the Middle East' in addition to a 'prudent approach to liquidity and capital' and 'continued discipline in cost and risk management'.

Mr Sands said Asian banks were far better placed to withstand the financial crisis than their Western peers that are losing billions of dollars because of the credit crisis and issuing new shares to boost capital.

Full Article :Business Times

CCT gets Moody's downgrade

2009-03-03T20:30:00.000+08:00

Moody's Investors Service Tuesday downgraded CapitaCommerical Trust's (CCT) corporate family rating to Baa2 from Baa1 and the senior unsecured ratings to Baa3 from Baa2. The outlook for both ratings is negative.

'The downgrade of CCT's ratings reflects the company's strained credit metrics, particularly debt to EBITDA leverage and EBITDA/interest coverage which are in excess of 10 times and around 2.5 times respectively. These metrics are anticipated to weaken further to the extent that they would not be consistent with a Baa1-rated Reit,' said senior analyst Kathleen Lee

'Furthermore, Moody's expects it will be difficult for CCT to improve these metrics over the intermediate term, as its operations will likely continue to be impacted by the slowing economy and constrained capital markets, which could be further exacerbated by upcoming new office completions from 2009 onwards,' Ms Lee added.

Source :Business Times

The Government and The banks

2009-02-22T11:46:00.001+08:00

This can soon be a title of a movie. Oh wells.

Personally, I feel that nationalization may not be a bad idea. Consolidation is usually good.
Full ARTICLE

Warren your moves

2009-02-21T23:27:00.003+08:00

Warren's latest Move
ABOUT WARREN BUFFETT

How to make money from the current market?

2009-02-21T22:23:00.001+08:00

I think this article from business time is pretty interesting. Game enough for investment?

I read in a book written by Teh Hooi Ling ( Show me the Money ) and she wrote
" There was clearly an inverse relationship between stock prices and the equity risk premium between 1987 and 2000. Every time the risk premium measured in basis points- hit 350, it was an indication of under valuation of equities. On the other hand, a drop to about 60 points suggested that the market was overvalued. Equity risk Premium =( 1/PE - 1 year fixed deposit rate ) * 10,000

PER ( Price Earning Ratio ) is when you tally up the most recent year earnings of the 45 companies that made up the STI index Also add up their market capitalization. Dividing the combined market cap of STI index stocks with the combined earnings will give you the average PER for STI.

Taking the inverse of PER - 1 year fixed deposit rate = estimated Equity risk premium.

Market cap will fluctuate daily as the stock prices move up and down. As stock prices go up. the PER will be higher and consequently the equity risk premium will become lower. When it gets to a low enough level, it is time to reduce exposure to equities. Conversely, if stock prices go down, PER will be lower and the equity risk premium will be higher. When the premium gets too high, it is time to load up on shares.

The Economy is not that stinky afterall

2009-02-21T21:47:00.004+08:00

Full article

After reading the many articles on the US Economy and the stimulus plan, it is normal that the nation is feeling insecure, skeptical and are panicky. It is not wrong to be super pessimistic about the economy as no one know what will happen.

Robert Kiyosaki once said :" Today, dont play it safe. PLay it smart"

Warren once said :" In the midst of everyone's panic, there are opportunities.

Time and time again, the market has handsomely rewarded those willing to bear equity risk n uncertain times. Extreme pessimism which leads to swings from the equilibrium- It will naturally swing back to equiblibrium. The more a share price falls, the more return it promises the buyer.

So what should an investor do ?

Set your investment horizon properly read here!

See the picture from the Business Times. YOu really should read this article Game for Investing

Find out more about yourself and start working towards making money from stocks.

The two giants will work hand in hand to save this crisis

2009-02-20T23:57:00.004+08:00

INVESTORS, DO NOT PANIC.

If the bail package is not attractive, then what other methods are good?
If the bail package aint going to help and save the situation, please give me a better method?
If you wanted the bail package, yet you dont even believe in it. Then, why ask for it? Does it make you feel better for a moment?

CALM is the word for all now. Take a chill pill.

US updates

2009-02-19T00:40:00.000+08:00

US stock holding better than in OCt

BUFFETT, what are you doing?

2009-02-19T00:34:00.000+08:00

BUFFETT, what are you doing?

Updates

2009-02-19T00:28:00.001+08:00

OCBC open to foreign banks’ local operations

Oversea-Chinese Banking Corporation ($4.89), Singapore’s best capitalized bank reported a 16% decline in net profit to $1,749 million for the financial year ended December 31 2008 (FY08). Excluding divestment gains from Straits Trading and Robinsons & Co and tax refunds, net profit would have fallen by 21% to $1,486 million.

The bank blamed the decline in profitability on the severe market conditions and depressed economic environment during the year, especially in the second half. The contribution from insurance subsidiary Great Eastern Holdings to the OCBC’s net profit fell from $449 million to $160 million the bank said.

CEO David Conner assured media during a results briefing that the bank had no plans for a rights issue. Instead, the bank is offering shareholders scrip dividend in lieu of the 14 cents payout for its final dividend should they wish to opt for the scrip dividend scheme. The bank’s interim dividend for 1H08 was 14 cents.
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OCBC would also be interested in the local operations of foreign banks if they fitted in with the bank’s own New Horizon’s II strategy. Great Eastern for instance took a look at the Taiwanese and Philippine operations of AIG but decided they didn’t fit into the local insurer’s business strategy.
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Elsewhere, the credit crunch continues to bite. STATS ChipPAC has called off its US$813 million capital reduction / distribution plan, as it failed to secure financing in the past 13 months for what was supposed to be an American-style LBO. Temasek spent $1.6 billion (paying $1.75 per Stats share) to raise its stake to 83% from 36% during the takeover in early 2007. Their share from the distribution would have been about $1 billion local broker Lim & Tan calculates. “With the stock at 40 cents, this has turned out to be another bad investment” the report states.
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Chart Watch: SGX
The Singapore Exchange ($4.90) could be breaking down following its inability to hold on to the $5.00 support level. If so, selling could materialize. Support is at the opening low of $4.35 attained on Nov 21 last year. Short- and medium-term indicators continue to display positive divergences with price. This is an indication that current moves are part of a much broader base formation. It also suggests that the $4.35 support mark should hold.

Source :THE EDGE!

I love reading the edge. I think everyone should subscribe to the magazine. Cheap and good!

GM and Chrysler to detail plans

2009-02-17T22:58:00.004+08:00

Troubled US carmakers General Motors and Chrysler must later submit their survival plans to the government, as part of the terms of their bail-outs.

They are set to detail their latest cost-cutting programmes in order to keep multi-billion government's loans.
A US official said GM would get another $4bn ($2.8bn) on Tuesday on top of already received loans worth $10.4bn.
Chrysler is also expected to get an additional $3bn loan on Tuesday. It has already received $4bn.

Full article : BCC

Stock prices begin to tumble as the investors worry about GM and CHrysler's survivor. Read more

Will Bloom be able to make a difference?

Will the car makers come together to help each other of this situation. Yes, cost cutting by axing the human resources is one way to go but it will not solve the problem. I am simply skeptical about this whole bail out. Instead of sinking and putting efforts to save it, why not start something else given the current resources. Yes, the world is pretty dependent of the car maker and if they fall, the rest of the world supplying materials or are working with them will need to end their business. Its a domino effect. Why am i not too hopeful of this.

As much as I am a fan of the Influential man, Mr Obama, I think the people need to unite themselves and start to think positive. He cant lead the nation if everyone walks a different direction from him. Will the American unite?

Chemical Industry

2009-02-17T22:48:00.005+08:00

Lately, there have been an increased demand for Chemical Warehouse. Does it mean that this industry is picking up in such climax? Yes, Linkers ( Far East ) Pte Ltd proves it right.

CWT has done the biggest chemical warehouse earlier. They might have foresee the increase demand for such spaces.

With a strong foothold in South- east Asia and South Asia, Linkers is now seeking to grow its business in West Africa with a new branch office in Nigeria, and augment its position in the Middle East where it has two branches in Dubai and Egypt.

'We are spending more time in Africa and we are in the process of selecting a representative to increase our supply there,' says Linkers founder and managing director Shamsher Zaman. He tells BT that the group hopes to get a local representative in two to three months' time.

Full Article on LInkers: Business Times

My view : They say that where there is up, there is a down. There will come a chance where some companies get weaker while others get stronger. For instance, at the expense of another's downfall, you gain strength. If today, I have two groceries shop next to each other, one closes due to cash flow issues, the other will benefit as most customers will switch. If x brand of potato chips has problems, will you switch to another brand? Yes! you will. The other brand will gain market share.

Property players look beyond black January

2009-02-17T22:45:00.002+08:00

SINGAPORE) As they say, it is always darkest before the dawn. So it may be with the 107 private homes that developers sold last month.

The number is the lowest since the government started making available monthly home sales data in June 2007, and could mark the nadir in sales volume, property industry players reckon.

House-hunting season has just begun for the year, and buyers are expected to scoop up units in projects with appealing locations, as developers continue to price projects attractively, especially in the mass-market segment. Interest absorption schemes being offered by developers will help ease home purchases in the months to come, property consultants say.

Full article : Business Times

My view on the property market is that it will start to pick up in March when more cash rich people are entering the money. You will see the up graders and the down graders. You will start to see people coming into the market, buy and hold.
We will see how it goes. Stay Tune. I will keep updating.

SIA to slash capacity, talks with unions to cut costs

2009-02-17T22:44:00.000+08:00

SINGAPORE) Faced with the worst operating environment in years, Singapore Airlines (SIA) will slash capacity 11 per cent and has started talking to unions about cutting staff costs.

The airline said yesterday it will decommission 17 aircraft from its fleet of 104 this financial year. This is a big increase from the four planes it planned to remove from service - one B747-400 for conversion to a freighter and three B777-200s to be returned to lessors on completion of lease contracts.

This is the first time SIA has decommissioned aircraft since the downturn brought on by Sars in 2003-2004.

Full Article :Business Times

Updates on US market

2009-02-17T22:40:00.001+08:00

U.S. stock futures tumbled, extending a global slump, on concern an economic stimulus package being signed into law today won’t be enough curb the deepening recession.

Full Article

UPDATE 2-Wal-Mart profit beats Wall St view, shares up

The world's largest retailer saw U.S. sales rise 6 percent in the quarter as it attracted more shoppers trying to save money in the recession. International sales slid 8.4 percent due to a stronger U.S. dollar while sales at its Sam's Club warehouse clubs were flat.

Net sales rose 1.7 percent to $108 billion.

Full article :HERE

Updates

2009-02-16T15:18:00.002+08:00

Rotation plays on property stocks

Source : The Edge Singapore

Capital Land

2009-02-15T19:46:00.001+08:00

CapitaLand

The President and CEO of CapitaLand is Liew Mun Leong. Concurrently, he is Deputy Chairman of The Ascott Group Limited, CapitaLand's serviced residence arm, which is listed on the Singapore stock exchange. He is Deputy Chairman of CapitaMall Trust Management Limited, the manager of CapitaMall Trust, the first listed real estate investment trust in Singapore, CapitaCommercial Trust Management Limited, Ascott Residence Trust Management Limited and CapitaRetail China Trust Management Limited. He is also a Director of CapitaLand Hope Foundation. In addition, Mr Liew chairs the Civil Aviation Authority of Singapore (CAAS).
Mr Liew graduated from the University of Singapore with a Civil Engineering degree in 1970 and is a registered professional civil engineer. In 2006, he was awarded Outstanding CEO of the Year in the Singapore Business Awards.

2009-02-15T19:43:00.001+08:00

S'pore GDP may shrink up to 5.8% in Q1

Mr Geithner
Dives in with a plan to scrub toxic assets from the books of US banks and to help thaw credit markets
WITH business prospects hitting lows not seen since 2001, the economy could contract 5.8 per cent in the present quarter, according to the latest BT-UniSIM Business Climate Survey. Survey director Chow Kit Boey said that the worst-case scenario could see 18 months of growth wiped out.

PM Lee urges support of Jobs Credit Scheme

PRIME Minister Lee Hsien Loong has thrown threw his weight behind the Jobs Credit Scheme, calling it a major policy which will help Singaporeans keep their jobs and make them 'more attractive to companies'. But he warned against pushing out foreigners because that would raise costs and harm businesses.

Banks expected to post poor Q4 results

INVESTORS and analysts, while bracing for poor fourth-quarter results from banks this month, will mainly be scouring the earnings reports for clues of what lies ahead. Any sharp rise in provisions for bad loans and what the bank chiefs say about the outlook for the coming months are more likely to sway the banks' share prices than what happened in the final three months of last year.

Rights issues to pad up CapitaLand, CMT war chests

CAPITALAND and CapitaMall Trust (CMT) announced on Monday rights issues totalling some $3.07 billion. CapitaLand will raise $1.84 billion to build up its war chest to $6 billion and CMT, $1.23 billion to pay off $956.2 million of debt due this year.

Investment company Ariel goes belly up

A PRIVATE investment vehicle linked to investor Low Shiong Jin which took hefty stakes in listed companies such as Oculus, Enzer Corp and China Yongsheng is going bust. The vehicle, Ariel Singapore, appointed provisional liquidators last Friday.

Scale of China's job woes ballooning: economists

CHINA'S surprise report last week that 20 million migrant rural workers have lost their jobs because of factory closures was a signal of official concern over the problem. However, the figure is understated and is set to grow as the country's economy slows down dramatically.

Geithner goes for US$2 trillion big bang

US Treasury Secretary Timothy Geithner on Tuesday unveiled an aggressive financial rescue plan of up to US$1 trillion to scrub toxic assets from the books of banks. To help thaw credit markets, there will also be government support for US$1 trillion in new consumer and business lending.

2 years of Temasek growth wiped out in months

THE global financial meltdown cost Temasek Holdings a $58 billion paper loss in eight months, the government revealed on Tuesday. And the Government of Singapore Investment Corporation's portfolio is expected to yield a lower than average return this year. Temasek's net portfolio value fell 31 per cent from $185 billion at March 31, 2008, to $127 billion at Nov 30, 2008.

Peter Lim's suit fails; judge ticks off new RTC owners

THE High Court yesterday dismissed a defamation lawsuit by ex-remisier king Peter Lim against the current owners of Raffles Town Club, ruling that the defence of qualified privilege held. However, the judge ticked off the defendants, Lin Jian Wei and Margaret Tung, for 'unabashedly and systematically' bleeding the company dry since they took control in 2001.

DC rates may be cut in unforgiving market

PROPERTY consultants expect the government to make bigger cuts of up to 20 per cent in development charges for the upcoming revision effective March 1. And some observers say that the authorities may even lower the proportion of the enhancement in land value that goes to the state.

Weak brands may stall following COE quota cut

THE new sharply reduced COE quota could lead to a shakeout in the motor industry and drive some brands off the road, say distributors. The annual quota of Certificates of Entitlement for Quota Year 2009 will be 24.1 per cent smaller than last year's, Transport Minister Raymond Lim told Parliament on Thursday.

GM saga not over yet

2009-02-15T19:41:00.000+08:00

GM to ask for more govt aid or file for bankruptcy

Brokers' take

2009-02-15T19:40:00.000+08:00

CAPITALAND announced a 1-for-2 renounceable rights issue to raise $1.8 billion, priced at $1.30 per rights share - a 54 per cent discount to the post-rights net tangible assets of $2.81 per share. The rationale includes pre-emptively boosting its balance sheet, allowing it to pursue growth opportunities. Its post-rights net gearing will be a very comfortable 0.28 times. 30 per cent-owned CMT has concurrently announced a 9-for-10 renounceable rights issue at a price of $0.82 to raise $1.23 billion. CapitaLand has committed to subscribe up to 60 per cent of the new units, totalling up to $739.2 million. Should that be the case, CapitaLand's net gearing would still remain a comfortable 0.36 times.

Following the rights issue, CapitaLand will be positioned even more strongly to build a base for the next stage of growth. We maintain our 'Buy' recommendation, with a post-rights target price of $3.06, based on a 10 per cent discount to revised net asset value (RNAV).

Source

Obama to unveil foreclosure plan, big lenders wait

2009-02-15T19:37:00.001+08:00

I would wait until Wednesday to see what the president offers and be careful that we don't set an unreasonable series of expectations based on leaks from God only knows where,' Mr Gibbs said.

A Reuters report on Thursday of the Obama administration's mortgage plans triggered a US stock market rally. On Friday, talk of Mr Obama's plan initially lifted stocks, but Mr Gibbs' cautionary statements pushed the market lower, analysts said.

Foreclosures have skyrocketed during the mortgage crisis.

A total of 8.1 million homes, or 16 per cent of all households with mortgages, could fall into foreclosure by 2012, according to a Credit Suisse report in December.

The National Association of Realtors said on Thursday that sales of foreclosed homes helped drag the median price of existing homes to its lowest level since 2003.

US Treasury Secretary Timothy Geithner on Feb 10 had announced a plan to stabilise the financial system, which includes US$50 billion of assistance to 'prevent avoidable foreclosures' of middle-class homes occupied by their owners, according to a document Mr Geithner released.

Bank of America Corp (BOA), Citigroup, Fannie Mae, Freddie Mac, Goldman Sachs, JPMorgan Chase & Co, Morgan Stanley and Wells Fargo & Co all said on Friday they had stopped putting any new mortgages into foreclosure until they have more details about the program.

Full Article

Company Updates

2009-02-15T19:28:00.002+08:00

&N Q1 net profit tumbles 18% to $89m

The group's Q1 net profit attribute to shareholders was $88.98 million, down 18 per cent from the same period last year after including $29.2 million in fair value gain on investment properties and $7.7 million in exceptional gain (mainly from negative goodwill arising from the acquisition of an associate).

xcluding these items, net profit would have fallen by almost 50 per cent to $52.06 million. The group's share of losses of associated firms totalled $28 million for the period, against a share of profits of $2.4 million a year ago.

Group revenue also weakened by 6 per cent year-on-year to $1.24 billion in Q1.

However, performance within the segment varied. While the soft drinks, breweries and glass containers businesses did better, the dairies business was affected by losses from an associated company. PBIT from the printing and publishing arm weakened by 8 per cent to $14.1 million in Q1.

As of Dec 31, F&N had $1.69 billion of borrowings repayable within a year and it said it has secured financing of $1 billion. 'We are well able to service our debt,' it reassured.

My views: If F&N focuses on their drink businesses and didn't diversify so much, I would want to invest in this company.
I like companies that focus on their core businesses.

Asia Pac Breweries Q1 net up 13% to $48.3m

The increase was largely driven by a one-time gain of $3.5 million from selling a New Zealand unit, Liquorland Limited, as opposed to exceptional losses of $1.35 million a year ago.

Earnings per share after exceptionals rose to 18.7 cents from 16.5 cents. Excluding exceptionals, Q1 net profit remained relatively steady at $44.8 million, 1.9 per cent up year-on-year.

Group revenue rose 2.2 per cent from a year ago to $580.2 million, as APB increased beer prices in some markets and sale volumes went up. 'Amongst the best performing markets was Singapore,' said APB's CEO Roland Pirmez. He took on the role from Oct 1 last year after the former CEO of 15 years, Koh Poh Tiong, left to head F&N's food and beverage business.

Profit before interest and taxation (PBIT) for the Singapore market grew 63 per cent as sales volume rose and margins improved from price increases and lower overheads. APB's businesses in Malaysia and Papua New Guinea also enjoyed considerable PBIT increases.

Mr Pirmez expects the operating environment to remain challenging as the global financial crisis continues to unfold.

But he added: 'APB has a strong balance sheet and the group's business fundamentals remain sound . . . the group will keep reviewing investment plans in light of the current environment and invest selectively to support future growth and boost our competitiveness.'

APB shares ended trading yesterday at $10, up 10 cents.

My views: APB is worth investing in.

No distribution from Saizen Reit for Q2

Saizen Reit, listed on the Singapore Exchange in November 2007, invests in Japanese regional residential properties. The Reit reported that income attributable to its unitholders for the three months ended Dec 31, 2008 (Q2 2009) came to 214.7 million yen (S$3.5 million). In Q2 the previous year, Saizen Reit recorded income attributable to its unitholders of negative 565.2 million yen on the back of high IPO expenses. Due to an increase in the size of the Reit's property portfolio, gross revenue and net property income rose by 24.5 per cent and 24.7 per cent respectively in Q2 2009 compared to a year ago.

Source : Business Times
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How to know if Stimulus work?

2009-02-11T17:14:00.002+08:00

Consumer confidence and job creation may be slow to emerge and hard to measure, but boosts in umemployment benefits and food stamps will be fast acting

1. Are jobs being created?
2. Are consumers morale raised?
3. Is Tax Aid able to help people relieve their issues?

STI updates

2009-02-11T17:08:00.002+08:00

STI was down and float slightly above water level before lunch. SIA started to move quite a fair bit while Capland had really good volume. Looks like it is one our the hot favorite counters despite the rights issue. I supposed the investors are taking it very positively. I will buy capland when it is around $2.50 depending on the market situation.

Straits Asia has been holding throughout the day while the bank counters struggle before it took off to positive range much later. UOB remains pretty strong.

My watchlist : Kepland, DBS, Straits Asia, Singtel, Capland.

Singapore seals open skies deal with Oman

2009-02-11T17:05:00.001+08:00

Full Article

This probably explains why SIA counter rallied quite a bit today.

Peter Lim's suit fails but judge ticks off new RTC owners

2009-02-11T16:45:00.003+08:00

The Ex - Remisier King

US economy updates

2009-02-11T08:43:00.003+08:00

US thumbs down bank rescue plan

DOW is down by 381 points. The bank led the blood shed and I guess the asian market is likely to follow suit.

STI is likely to open low as investors starts to worry. I am sure there will be some sell down for some counters as investors panic.

I remain pretty optimistic about the situation.

Start collecting good stocks like SPH, Singtel, Capland, DBS and UOB.

US updates

2009-02-10T20:22:00.004+08:00

Pictures from Bloomberg.com

Obama is ipen to expanding financial rescue plan

‘Dangerous Dynamic’

“The financial system is working against recovery, and that’s the dangerous dynamic we need to change,” Geithner said in remarks prepared for delivery today. “Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged.”

Update: SIA Q3 net falls 43%, may cut flights

2009-02-10T20:17:00.002+08:00

Q3 net down 43% on hedging losses, cargo demand weakens
* sees weak demand for air transport in 2009
* says to adjust flight schedules, capacity

SINGAPORE - Singapore Airlines, the world's largest airline by market value, posted a 43 per cent drop in quarterly profit, hurt by hedging losses and slowing demand for travel and cargo amid a global economic downturn.

Singapore Air, which ranks ahead of Japan's All Nippon Airways, also warned that demand for air transport will remain weak this year as global trade slows. The city-state's flag carrier may continue to scale back flights and reduce capacity to cope with the downturn.

Financial statements

Singapore Air, 55 per cent-owned by state investor Temasek Holdings, has seen declining passenger demand as the global slowdown crimps corporate and leisure travel, forcing it to cut flights to other Asian cities.

For full article : Business Times

SIA has been through many crisis and had survived. My Target Price for this counter is 10.00 per share. I maintain that SIA 's TP at $13.00 per share. ( next six months )

Company Updates

2009-02-10T20:13:00.002+08:00

SingTel mobile subscribers growing

Singtel closing for today is at 2.48 per share.

Wilmar risks selling bout

Source : Business Times

Full Article

I personally like this counter. 2.65 per share will be the price I don't mind entering. Good Company.

Singapore Stock Exchange

2009-02-10T20:06:00.002+08:00

The ST Index went up by 20.95 percent. This is mainly due to Capital Land where investors showed a positive side to the news announced yesterday.

I personally like Capland for the management and the balance sheet looks good.

The few counters that are worth looking at would be Capital Land, Keppel Land, SIA, Singtel, DBS, UOB.

Capital Land Ahead of the curves

2009-02-10T20:02:00.001+08:00

SINGAPORE) Slightly less than 12 months ago, CapitaLand boss Liew Mun Leong bragged about how the company still had access to the capital markets after selling $1.3 billion convertible bonds despite the credit crunch.

In a BT interview in March 2008, he said that the current credit crunch was making borrowing very difficult for real estate companies whose balance sheets were not too strong. 'If banks are now restricting their exposure to you in direct lending, and the capital market is now very cautious, then funding becomes a problem,' he said. 'For us, we are very well capitalised. Banks still trust us to do the normal borrowing.'

Yesterday Mr Liew seemed to be turning his back on banks and tapping shareholders for funds. CapitaLand announced a $3 billion rights issuance and 30-per cent owned CapitaMall Trust launched its $1.2 billion rights.

While it would be impossible to get that amount of funding from international banks, a blue chip like CapitaLand should be able to borrow from the local banks which are flush with liquidity. In addition, the company has $4.2 billion cash, so why raise equity at a hefty 45 per cent discount, especially when there are no specific acquisitions in mind, were some of the questions asked.

In normal times, you don't raise equity which is expensive and scarce, unless needed.

But these being far from normal times, bankers say CapitaLand is reading the market correctly - which is that investors want deleveraged companies given that no one knows just how long the downturn will last.

Investors now want companies to have fortress balance sheets, to paraphrase JP Morgan's chief executive Jamie Dimon, and CapitaLand wants to be so strong that no one questions it, regardless of how bad the recession gets, said one banker.

'The view is that in Europe and US where things went bad first, banks which raise funds from shareholders earlier did better,' said another.

'In Asia, the downturn is hitting only now, there is a limited pool of capital and it makes sense to go first,' he said.

After the rights issue, CapitaLand's net debt-to- equity ratio will improve to 0.28 from the current 0.47. CapitaMall Trust said its aggregate leverage will reduce to 29.1 per cent from 43.2 per cent assuming it repays borrowings with the rights proceeds.

CapitaLand's move is seen as tactical, strengthening its balance sheet, preparing for the downturn and ready for opportunities which will come.

Mr Liew may not feel much like thumping his chest but one admirer said: 'By being the first, he's listening to the market.'

Source :Business Times

CapitaLand finds '07 tough act to follow

Views on the economy

2009-02-02T23:24:00.001+08:00

A litmus test for Asian business groups

Their diversified structure, resource sharing and stronger governance will help them fare better in this crisis, writes SEA-JIN CHANG

Why dow holding at 8000

Oil On Troubled Waters

2009-02-02T23:22:00.000+08:00

Exxon and Chevron navigate the recession.

Investors looking for safe havens need look no further than the integrated oil companies Exxon Mobil and Chevron for shelter from the financial storm.

It's not so much that these companies are seeing profits grow -- they aren't -- but they had better-than-expected fourth-quarter results, significant cash resources and because they do everything from finding and pumping oil to refining and selling it to motorists, they are benefiting from the recent decline in energy prices in ways that smaller companies cannot.

Full Article : FORBES

American spending, income shrink amid recession

2009-02-02T23:20:00.000+08:00

WASHINGTON - US consumer spending contracted in December as Americans took home lower incomes amid a deepening recession, the Commerce Department said on Monday.

Consumption expenditures shrank for the six consecutive month, falling by 1.0 per cent in December from the previous month, a steeper fall than the 0.9 per cent projected by analysts, according to the department.

Expenditures shrank by a revised 0.8 per cent in November, it said.

Personal income also contracted for the third consecutive month at 0.2 per cent in December, compared with a 0.4 per cent decline projected by analysts, as millions of Americans lost jobs as companies downsized to cope with tough times.

In November, income had shrunk 0.4 per cent based on revised estimates.

The United States is facing prolonged recession after a housing mortgage crisis sparked financial turmoil across the globe and caused a severe economic downturn. -- AFP

Source :Business Times

Wall Street lower amid global weakness

2009-02-02T23:17:00.000+08:00

WALL Street followed global markets lower at the opening on Monday amid more weak US economic news and heightened fears about the banking sector's ability to weather the financial crisis.
In the first exchanges, the Dow Jones Industrial Average fell 92.95 points (1.16 per cent) to 7907.91 after another losing week for US shares.

The Nasdaq composite slipped 12.51 points (0.85 per cent) to 1,463.91 and the broad Standard & Poor's 500 index declined 10.54 points (1.28 per cent) to 815.34.

The market was greeted with more weak US economic data.

The Commerce Department said US consumer spending fell 1.0 per cent in December, a sixth consecutive drop, while incomes rose a sluggish 0.2 per cent.

"Wall Street remains very concerned over the continuing deterioration in the economy, huge questions over the size and structure of the proposed federal economic spending plan that won approval in the House (of Representatives) and the proposed structure of the Treasury plan for use of remaining (bank rescue) funds," said Fred Dickson, analyst at DA Davidson & Co.

"The lack of encouraging news from companies reporting fourth-quarter earnings is just adding another level of concern on the continuing stream of very disturbing economic news. Wall Street desperately needs good news from some front."

Source :news.com.au

Tapping reserves doesn't mean breaking piggy bank: SM Goh

2009-02-02T19:59:00.000+08:00

The funds will only be used during exceptional crisis and not to support welfare

(SINGAPORE) The government will dip into the country's reserves only in times of exceptional crisis - and will not use them to support welfare and other programmes, Senior Minister Goh Chok Tong said yesterday.

And tapping Singapore's reserves to help the country ride out the current economic crisis is not equivalent to breaking the piggy bank, he said.

'To break the piggy bank is to allow all the coins and notes to spill out, which means no control over the expenditure,' he explained. 'We did not break the piggy bank. We've asked permission for the president to use his second key for us to take a bit of the reserves out of the safe.'

Business Times, Full article

Few insider transactions during CNY week

2009-02-02T19:55:00.004+08:00

Low volume of purchases and no sales by directors as disposals considered inauspicious

TRADING by directors was sharply down last week: Only two companies recorded three purchases worth a paltry $100,000 during the holiday-shortened week of Jan 28 to 30. The figures are sharply down from the previous week's 19 firms, 50 acquisitions, and $40.3 million.

Apart from the low insider buys, there were no sales by directors last week. The sellers' absence, however, is not surprising as any disposals by directors would be rather inauspicious for the market during the Chinese New Year.

Investors should note that there were also no sales by directors in the Hong Kong market last week. Aside from the low insider buys, there were no buybacks in the Singapore market last week. Listed firms were more active in the previous week with 13 companies posting 44 repurchases worth $3.3 million.

Substantial shareholder activity was also low last week with only seven shareholders that recorded 17 transactions in six listed firms. The sentiment among substantial shareholders was negative last week with sales recorded by several fund managers in CapitaLand, China Lifestyle Food & Beverages and Yongnam Holdings.

There was also a rare sale by mutual fund manager The Capital Group Companies in Singapore Technologies Engineering Ltd.

On the buying side, there was more price support by substantial shareholders in Sunpower Group and Asia-Pacific Strategic Investments Ltd last week.

Investors should note, however, that the substantial shareholder purchase in Asia-Pacific Strategic Investments was somewhat offset by a sale by an executive director of the company earlier this month.

CapitaLand

Janus Capital Management LLC unloaded more shares of property developer and hotel operator CapitaLand Ltd at a sharply lower price with 33.3 million shares sold on Jan 28 at an estimated $2.49 each.

The trade reduced its direct holdings by 15 per cent to 192.4 million shares or 6.8 per cent of the issued capital. The group previously sold 1.5 million shares on Nov 10, 2008 at an estimated price of $3.24 each.

The disposals by Janus Capital were made at sharply lower than its acquisition prices based on the 83.7 million shares that it acquired from August to September 2008 at estimated prices of $5.00 to $4.10 each. The group reported an initial filing in July 2008 of 5.9 million shares at $5.66 each, which raised its interest to 5.1 per cent.

Investors should note that non-executive independent director Richard Edward Hale sold 50,000 shares on Dec 11, 2008 at $2.84 each, which reduced his stake by 10 per cent to 435,000 shares. He previously sold 12,000 shares in May 2007 at $8.40 each.

The large sale by Janus Capital this month at a significantly lower price strongly suggests that the fund manager will lower its stake to below 5 per cent in the near-term.

CapitaLand will announce its annual results on Feb 10. The stock closed at $2.40 on Friday.

China Lifestyle Food & Beverages

Orange Capital LLC and Value Partners Ltd recorded huge sales in lifestyle food products manufacturer and distributor China Lifestyle Food & Beverages Group this month.

The disposals were significant as they were made at sharply lower than their purchase prices.

Orange Capital LLC ceased to be a substantial shareholder on Jan 29 following the sale of 20 million shares at an estimated price of 8.5 cents each, which reduced its deemed holdings by 50 per cent to 19.7 million shares or 3.9 per cent.

The group previously acquired 5.6 million shares from February to November 2007 at estimated prices of 33 cents to 49 cents each. Orange Capital became a substantial shareholder in December 2006 after it subscribed for 20 million shares via placement agreement at 38 cents each, which raised its interest by 142 per cent to 6.9 per cent.

Value Partners Limited (VPL), on the other hand, sold 5.1 million shares on Jan 22 at an estimated price of 7 cents each, which lowered its deemed stake by 13 per cent to 35.1 million shares or 6.9 per cent. The group previously acquired 15 million shares from June 18 to Nov 30, 2007 at estimated prices of 41 cents to 48 cents each.

VPL reported an initial filing (for the third time) on April 3, 2007 of 380,000 shares at 36 cents each, which raised its interest to 5.1 per cent. The counter closed at 8 cents on Friday.

Yongnam Holdings

JPMorgan Chase & Co ceased to be a substantial shareholder of mechanical engineering services provider Yongnam Holdings following the sale of 24.4 million shares from Jan 21 to 28 at an estimated price of 9.5 cents each.

The trades reduced its deemed holdings by 29 per cent to 60.6 million shares, or 4.9 per cent. The disposals were made at sharply lower than its previous sale prices based on the 27.04 million shares that the group sold from November 2007 to March 2008 at estimated prices of 21 cents to 36 cents each.

Prior to the sales since November 2007, JPMorgan acquired a net 59.6 million shares from February to August 2007 at estimated prices of 22 cents to 44 cents each.

The group reported an initial filing on Feb 5, 2007 of 10.7 million shares at 23 cents each, which raised its interest to 5.2 per cent. The counter closed at 9 cents on Friday.

Singapore Technologies Engineering

The Capital Group Companies, Inc recorded its first trade in engineering services provider Singapore Technologies Engineering Ltd since February 2008 with 698,000 shares sold on Jan 23 at an estimated price of $2.28 each.

The trade reduced its deemed holdings to 208.7 million shares or 6.9 per cent.

The sale was significant as it was made at sharply lower than its purchase prices. The Capital Group Companies previously acquired 30.9 million shares in February 2008 at an estimated price of $3.60 each and 9.3 million shares in April 2006 at an estimated price of $3.12 each. The stock closed at $2.28 on Friday.

Sunpower Group

Substantial shareholder Arthur Jurczakowski acquired more shares of energy saving and environmental protection products designer and manufacturer Sunpower Group with 238,000 shares purchased from January 14 to 29 at an estimated price of 9 cents each.

The trades increased his direct holdings to 36.5 million shares or 11.1 per cent. He previously acquired 172,000 shares from Nov 17 to 18, 2008 at an estimated price of 8 cents each.

The acquisitions since November 2008 were made at sharply lower than his previous purchase prices based on the 19.8 million shares that he acquired from March to December 2007 at estimated prices of 25 cents to 53 cents each.

Arthur Jurczakowski became a substantial shareholder in March 2007 following the purchase of 600,000 shares at 31 cents each, which raised his interest from 4.9 per cent to 5.1 per cent. The purchases by Mr Jurczakowski since 2007 were the first corporate shareholder trades in Sunpower Group since the stock was listed in March 2005.

The company is expected to release its annual results this month. The counter closed at 9 cents on Friday.

Asia-Pacific Strategic Investments

There were conflicting trades in memorial parks and columbariums operator Asia-Pacific Strategic Investments, with more buys by The Nassim Fund and more sales by executive director Heng Aik Koon.

The Nassim Fund purchased 1.7 million shares from Jan 2 to 30 at an estimated price of 21 cents each, which increased its deemed holdings to 68.6 million shares or 11.6 per cent.

The group previously acquired 11.8 million shares from April 1 to Dec 31, 2008 in 114 transactions at estimated prices of 21 cents to 30 cents each.

The Nassim Fund reported an initial filing on March 27, 2008 of 51.1 million shares at 18 cents each, which raised its interest to 10.01 per cent. Overall, the group's stake is up by 13.6 million shares or 25 per cent since that initial filing in March 2008.

On the negative side, executive director Heng Aik Koon sold 2 million shares on Jan 14 at 18 cents each, which reduced his direct stake to 112.4 million shares or 19.1 per cent.

He previously sold 5 million shares on Dec 17, 2008 at 20 cents each. The disposals by Mr Heng since December 2008 were his first on-market trades since his appointment in July 2006. The stock closed at 21 cents on Friday.

Business Times

SIA, Turkish Airlines in code share deal

2009-02-02T19:54:00.000+08:00

From 15 February 2009, Singapore Airlines' customers traveling between Singapore and Istanbul will have a choice of ten flights a week, as a result of a new codeshare agreement between Singapore Airlines and Turkish Airlines.

The signing ceremony held at Fairmont Hotel, Singapore, on Monday, signified the forging of a closer relationship between the airlines, both members of Star Alliance.

Source :

Obama hits out at 'shameful' Wall St bonuses

2009-01-31T12:30:00.001+08:00

PRESIDENT Barack Obama's attack on 'shameful' Wall Street bonuses may lead to new pay limits and management restrictions as the price for companies seeking more government aid.

Mr Obama called the estimated US$18.4 billion in bonuses that financial executives received for 2008 as the height of irresponsibility
Mr Obama was reacting to a report by the New York state comptroller which found that financial executives had received an estimated US$18.4 billion in bonuses for 2008, less than for the previous several years but the same level of bonuses as they received in 2004, when times were flush.

'That is the height of irresponsibility,' Mr Obama said during an appearance in the Oval Office with Treasury Secretary Timothy Geithner. 'It is shameful. And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.'

'There will be time for them to make profits, and there will be time for them to get bonuses,' Mr Obama said. 'Now's not that time. And that's a message that I intend to send directly to them, I expect Secretary Geithner to send to them.'

Mr Geithner has already signalled a willingness to impose stricter compensation limits as part of a revamped approach to dealing with the banking crisis.

During his confirmation hearings, Mr Geithner said the administration is preparing rules that would require executives at companies receiving taxpayer money to agree that any compensation above a certain amount - he did not specify how much - be 'paid in restricted stock or similar form' that could not be liquidated or sold until the government had been repaid.

But with his strong words on Thursday, Mr Obama seemed intent on reassuring Congress and the public that he would step up the pressure on bankers before granting them additional assistance.

'You know it's coming politically,' said Paul Miller, an analyst with FBR Capital Markets in Arlington, Virginia, predicting restrictions on further aid. 'You know it looks really bad giving someone US$10 million.'

Mr Obama's attack was a pointed - if calculated - flash of anger from the president, who frequently railed against excesses in executive compensation on the campaign trail.

He struck his populist tone as he confronted the possibility of having to ask Congress for additional large sums of money, beyond the US$700 billion already authorised, to prop up the financial system, even as he pushes Congress to move quickly on a separate economic stimulus package that could cost taxpayers as much as US$900 billion.

About half of that US$700 billion is still available, but the new administration has yet to announce how it will use it, and many analysts think it will take far more money to stabilise the banking system.

Should Mr Obama have to go to Congress to seek more money for the bailout fund to avert the failure of more banks, he would likely encounter opposition within both parties and demands for tighter restrictions on pay for executives of institutions that receive government assistance.

Banks and financial firms have fired 265,000 people since the collapse of the sub-prime mortgage market triggered the financial crisis. The Treasury Department has injected about US$200 billion into banks across the country through its Troubled Asset Relief Program.

Senator Christopher Dodd, chairman of the Banking Committee and a Connecticut Democrat, said of the bonuses: 'I'm going to be urging - in fact not urging, demanding - that the Treasury Department figures out some way to get the money back.'

The senator said he will summon executives whose companies received taxpayer aid to testify before his committee and explain their bonuses.

Mr Obama's stand also came just one day after he surrounded himself with well-paid chief executives at the White House. He had pulled in those business leaders and hailed them for being on the 'front lines in seeing the enormous problems in our economy right now'. The executives who appeared with Mr Obama are not leaders of the Wall Street financial companies but rather, heads of well-known manufacturing and technology giants.

Source:BT

Fed says ready to buy debt to aid economy

2009-01-29T08:38:00.000+08:00

WASHINGTON - The Federal Reserve on Wednesday said it is prepared to buy long-term government debt if that would help improve credit conditions and signalled some concern that deflation risks were rising.

In a statement issued at the end of a two-day meeting, the central bank's policy-setting panel also said it was holding its target range for overnight interest rates at zero to 0.25 per cent - the level reached in December - and repeated that it thought rates could stay unusually low for some time.

'The committee ... is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets,' it said. In December, the Fed had said only that it was studying that option.

The panel voted 8-1 in support of the decision. Richmond Federal Reserve Bank President Jeffrey Lacker dissented, saying he thought the Fed should immediately move to a programme to purchase government bonds.

Full Article

Noble Group rated OUTPERFORM

2009-01-28T23:39:00.000+08:00

Macquarie Research in a Jan 23 research report says: “Expectations of softer prices led the company to lower inventory levels: in 3Q08, inventory was US$2.1 billion, –14% q-o-q, with 94% of this classified as readily marketable or hedged inventory. The quarterly net profit was also achieved with Noble's VAR (value at risk) in the daily range of 2.64–1.74% of shareholders’ funds.

“Cash levels rose by 37% q-o-q to US$1.1 billion in 3Q08, helped by a US$1.5 billion reduction in current assets, ex cash (led by prepayments, which fell by 30% q-o-q). The nominal net gearing ratio in 3Q08 fell to 108% from 132% 2Q08. We expect a 20% contraction in overall volumes for FY2009, with net profit of US$293 million, –43% y-o-y. Twelve-month price target of $1.35 based on a PER methodology. Noble currently trades at a FY2009E PER of 7x and a P/BV of 1.1x. OUTPERFORM.”

Source :The Edge Singapore

SingTel shares gain on speculation units’ earnings will rise

2009-01-28T23:37:00.000+08:00

ingapore Telecommunications shares gained the most in almost two weeks on speculation earnings at its units will grow this year even as economic growth in Asia falters, reports Bloomberg.

SingTel, Southeast Asia’s biggest telecommunications company, rose 3.2% to trade at $2.64, the sharpest gain since Jan 16.

“There is still some growth in regional telcos,” Carey Wong, an analyst at Oversea-Chinese Banking Corp.’s broking unit, said in a telephone interview. “SingTel’s associates are serving under-penetrated markets, giving them room for growth.”

SingTel is due to announce third-quarter earnings on Feb 10. Bharti Airtel, India’s largest mobile-phone operator that is 15.6% owned by SingTel, last week said third-quarter profit climbed 26% after the company added record subscribers and widened its lead over rivals.

Besides Bharti, SingTel owns stakes in mobile-phone operators in Thailand, Indonesia, Philippines and Pakistan. It also fully owns Optus, Australia’s second-largest telecommunications company.

Source:The Edge Singapore

SIA cuts back more flights to India, US, Europe

2009-01-28T23:35:00.000+08:00

Singapore Airlines is making further adjustments to its route network, to better match capacity with demand, it said in a statement to the SGX. The changes will take place progressively and will apply till end-March, it added.

On India routes, Hyderabad-Singapore services (SQ439 and SQ438) will be reduced from four to three times weekly, with the suspension of the Saturday service from Feb 21. There are no changes to flights on Wednesdays, Fridays and Sundays.

SQ405 and SQ406 will be reduced from a six times’ weekly service, to five times’ weekly service, between New Delhi and Singapore from Mar 10–24, as flights on Tuesdays during that period will be suspended.

Services SQ421 and SQ422 operating between Mumbai and Singapore, will be progressively reduced from five to four times weekly services, starting Feb 27. Flights on Fridays will be suspended.

In Southeast Asia, services between Singapore and Bangkok (SQ972 and SQ975) will be suspended from Feb 2 until the end of March. Despite this reduction, SIA will continue to operate 25 flights weekly to and from the Thai capital.

Frequency on the all-Business Class Singapore-Los Angeles and Singapore-Newark routes will reduce by two flights to five weekly flights on each route. The Tuesday and Wednesday services, where demand is lowest, will be suspended.

In Europe, SQ308 and SQ319 operating between Singapore and London Heathrow airport will be suspended on Mondays and Thursdays between Mar 9 and 23. Frequency on the Singapore-London route will reduce from 21 to 19 flights per week.

Services operating between Singapore and Zurich (SQ342 and SQ341) will be reduced from daily to five times weekly, from Mar 9. Singapore Airlines continues to operate 12 times weekly to Zurich.

However, in the Middle East, SIA will start four times weekly services to Kuwait, via Abu Dhabi, from Mar 15. With the introduction of SQ458 and SQ457 on Tuesdays, Thursdays, Saturdays and Sundays, Singapore Airlines will fly between Singapore and Abu Dhabi daily, up from the existing three times weekly service.

From Mar 12, Singapore Airlines will increase flights between Singapore and Cairo from three times a week to four. The four flights (SQ 492 and SQ493) will operate via Dubai. Frequency between Singapore and Dubai will be 16 per week.

Source : The Edge Singapore

NOL says container shipping volumes fall 24% y-o-y for Nov 15-Dec 26

2009-01-28T23:33:00.000+08:00

Shipper NOL reported container shipping volumes for the six weeks (Period 12) from Nov 15 2008 to Dec 26 2008 declined 24% over the same period last year to 218,100 FEUs (Forty-foot Equivalent Units).

“The decrease in container shipping volumes in P12 2008 is a result of the rapid deterioration in demand on all major trade lanes and pro-active capacity management by the company to reduce costs,” the shipper said in a statement to the SGX.

Average revenue per FEU increased 3% over the same period last year largely due to recovery of bunker fuel costs.

2008 container shipping volumes increased 5% while average revenue per FEU showed an 11% improvement over 2007 levels.

Source :The Edge Singapore

SIA, Singapore hit by recession in Richistan

2009-01-28T23:28:00.001+08:00

Full Article by The Edge

Updates

2009-01-28T18:21:00.001+08:00

SINGAPORE - Singapore share prices closed higher on Wednesday with the Straits Times Index up 80.85 points at 1,766.08 on volume of 646.1 million shares worth $777.6 million.

Source: Business Times

Japan okays new US$54b stimulus

2009-01-28T15:36:00.000+08:00

(TOKYO) Japan said yesterday it would inject public funds into companies to help them through the recession as Parliament passed a US$54 billion extra budget including cash handouts for households.

Now it plans to channel funds to other industries through state-backed lenders in a scheme local media said could be worth 1.5 trillion yen (S$25.2 billion).

'Markets welcomed the plan as it would mean that capital would flow to companies and the economy. Fears that companies may go bankrupt eased,' said Okasan Securities equity strategist Hideyuki Ishiguro. But the market rally may be short-lived as 'economic conditions in general remain severe and the plan is unlikely to revive the economy in the mid and long term', he added.

Source:
Business Times

Dollar Value

2009-01-28T00:22:00.002+08:00

U.S. Dollar Climbs Higher Despite Record-Low Consumer Confidence

The dollar Depths

History of the US dollar