KReitAsia
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_7BAC95EB0E7F72234825792C00337CDD/$file/3Q11KREITAsia.Results.pdf?openelement
M1
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_51AA6712B29A09594825792C002DF59A/$file/3Q11SGXAnnouncement.pdf?openelement
AReit
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_B824A131F50F32614825792C002E0D32/$file/2QFY1112ResultsPresentation.pdf?openelement
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_B824A131F50F32614825792C002E0D32/$file/SupplementaryInformation2QFY1112.pdf?openelement
Analyst's Report
M1
http://www.remisiers.org/cms_images/research/Research-Oct24-Oct28_2011/28Oct11-_M1.pdf
Bottleneck issues should be behind soon. We expect much of the bottleneck issues (largely at the OpenNet level) afflicting the slow take-up of the NGNBN services in Singapore thus far to resolve by end- 2011/1Q2012.
M1 indicated at the recent 3QFY11 results call that interest on its entry level fiber plan (Singapore’s
cheapest offering at SGD59/mth for 100Mbps) has picked-up with greater awareness in the market.
M1 said 40-45% of the 16k fiber customers recorded as at 3QFY11 were added during the quarter, translating into some 7k new additions although it was not able to guide on its share of the market.
This contributed to the 77% y-o-y growth (+9% q-o-q) in fixed services revenue for the quarter.
It believes there are at least 12k broadband users on cable/ADSL coming out of contracts which presents a good potential catchment.
M1 deployed its own NGNBN OpCo in Sept with its geographical footprint widening to 100% by end- 2011 from 50% currently.
The company saves up to SGD31 in wholesaling cost per customer by linking its fiber customers across its own OpCo than the government mandated Nucleus Connect.
All is not lost without Vodafone. We believe all is not lost as the Vodafone agreement entails strict volume commitments that M1 could have found prohibitive given the scale and its roaming traffic profiles, and it would be able to save substantially on fees paid to Vodafone by not renewing the partnership.
Monday, October 17, 2011
China news
China surpasses US as EU's top trade partner
Updated: 2011-10-17 09:51
(Xinhua)
BEIJING -- Trade between China and the European Union (EU) totaled 35.6 billion euros ($49.4 billion) in July, allowing China to overtake the United States as the EU's largest trade partner, the Ministry of Commerce said, citing the latest statistics from Eurostat.
The overall value of China-EU trade in July exceeded that of the EU and the United States by 800 million euros, accounting for 13.4 percent of the region's total imports and exports, according to data released by the EU's statistics office.
However, bilateral trade shrank for a second consecutive month in July, falling 0.8 percent from the same period last year.
Meanwhile, China remained the EU's second largest export market. EU exports to China totaled 11.7 billion euros in July, up 12.3 percent year-on-year, which is higher than EU's total export growth rate of 4.1 percent.
The EU imported 23.9 billion euros in Chinese goods, down 6.2 percent from the previous year. But China still held the top spot as the region's import source, making up 17.4 percent of the EU's total imports.
The EU reported a 12.2-billion-euro trade deficit with China in July.
_________________
My Thots......
Game- changing significance?
Updated: 2011-10-17 09:51
(Xinhua)
BEIJING -- Trade between China and the European Union (EU) totaled 35.6 billion euros ($49.4 billion) in July, allowing China to overtake the United States as the EU's largest trade partner, the Ministry of Commerce said, citing the latest statistics from Eurostat.
The overall value of China-EU trade in July exceeded that of the EU and the United States by 800 million euros, accounting for 13.4 percent of the region's total imports and exports, according to data released by the EU's statistics office.
However, bilateral trade shrank for a second consecutive month in July, falling 0.8 percent from the same period last year.
Meanwhile, China remained the EU's second largest export market. EU exports to China totaled 11.7 billion euros in July, up 12.3 percent year-on-year, which is higher than EU's total export growth rate of 4.1 percent.
The EU imported 23.9 billion euros in Chinese goods, down 6.2 percent from the previous year. But China still held the top spot as the region's import source, making up 17.4 percent of the EU's total imports.
The EU reported a 12.2-billion-euro trade deficit with China in July.
_________________
My Thots......
Game- changing significance?
China news
Loopholes suspected in Wal-Mart managementUpdated: 2011-10-12 14:40
(Xinhua)
The local government ordered the stores to close for 15 days and fined the company 2.69 million yuan ($421,894.58) after the stores were found to be selling ordinary pork labelled as organic pork, the Chongqing Administration of Industry and Commerce said on Sunday.
"It is not an isolated case, but a reflection of the company's dysfunctional management mechanism," said Zuo Yong, an administration official in charge of supervision and management of food distribution.
"The Wal-Mart stores in Chongqing have once and again violated laws and regulations and infringed upon the rights of consumers," Zuo said.
In March, Wal-Mart was fined after it was found to be selling expired duck meat in a store in Chongqing. The company has been punished by the local government 21 times since 2006 for exaggerated advertising and selling expired and substandard food.
Zuo said the problems indicate that the company is prioritizing economic benefit instead of the interests of consumers.
Tang Chuan, a law enforcement official from the Chongqing Administration of Industry and Commerce, said government supervision has often been ignored by Wal-Mart.
"The company was quick to apologize after the incidents happened, but it has not made efforts to improve its management in accordance," Tang said.
Some analysts said the government's lax supervision of foreign companies is also to blame, arguing that some laws and regulations have not been effectively enforced by relevant government departments and that punishments for violators are sometimes too light to have a deterrent effect.
Analysts said that some local governments have set less stringent supervision standards for foreign companies than for Chinese-owned companies in order to attract more foreign investments.
Tang said that the cost of breaking the law is too low for foreign companies.
"Comparing to the amount they've earned, the fines are an extremely small amount of money," Tang said.
The Chongqing municipal government started a campaign this year to crack down on food safety violators. The local government has shut down 91 companies and revoked 602 production licenses during the campaign so far.
__________________
My Thots...
Not very inspiring behaviour from a US powerhouse.
Given the headline news that grab the US media whenever those flouting the rules are non-US related Chinese companies, Walmart is getting it light in terms of western media scrutiny.
The MD has been sacked today.
(Xinhua)
The local government ordered the stores to close for 15 days and fined the company 2.69 million yuan ($421,894.58) after the stores were found to be selling ordinary pork labelled as organic pork, the Chongqing Administration of Industry and Commerce said on Sunday.
"It is not an isolated case, but a reflection of the company's dysfunctional management mechanism," said Zuo Yong, an administration official in charge of supervision and management of food distribution.
"The Wal-Mart stores in Chongqing have once and again violated laws and regulations and infringed upon the rights of consumers," Zuo said.
In March, Wal-Mart was fined after it was found to be selling expired duck meat in a store in Chongqing. The company has been punished by the local government 21 times since 2006 for exaggerated advertising and selling expired and substandard food.
Zuo said the problems indicate that the company is prioritizing economic benefit instead of the interests of consumers.
Tang Chuan, a law enforcement official from the Chongqing Administration of Industry and Commerce, said government supervision has often been ignored by Wal-Mart.
"The company was quick to apologize after the incidents happened, but it has not made efforts to improve its management in accordance," Tang said.
Some analysts said the government's lax supervision of foreign companies is also to blame, arguing that some laws and regulations have not been effectively enforced by relevant government departments and that punishments for violators are sometimes too light to have a deterrent effect.
Analysts said that some local governments have set less stringent supervision standards for foreign companies than for Chinese-owned companies in order to attract more foreign investments.
Tang said that the cost of breaking the law is too low for foreign companies.
"Comparing to the amount they've earned, the fines are an extremely small amount of money," Tang said.
The Chongqing municipal government started a campaign this year to crack down on food safety violators. The local government has shut down 91 companies and revoked 602 production licenses during the campaign so far.
__________________
My Thots...
Not very inspiring behaviour from a US powerhouse.
Given the headline news that grab the US media whenever those flouting the rules are non-US related Chinese companies, Walmart is getting it light in terms of western media scrutiny.
The MD has been sacked today.
Shipping news
Published October 17, 2011 | |
Baltic index rises to highest in 10 months (LONDON) The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose to its highest in over 10 months on Friday although the pace of gains slowed. Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds. The overall index rose 18 points or 0.84 per cent to 2,173 points in a eighth straight session of gains and was at its highest since Dec 7, 2010. Prior to the move higher last week, it had fallen for six previous sessions. 'A solid end to the week for the big ships with West Australia extremely active this week and a significant volume of business done for October and some 1-15 November,' the Baltic Exchange said in its weekly report on Friday. 'Next week could see a slow start with Coaltrans in Madrid taking some players potentially out of the market,' it said, referring to the major coal and dry freight conference. The recent dry freight market rally had been driven by firmer coal and iron exports from Australia and Brazil to China, which boosted the larger capesize market. Coal imports into Japan have also picked up. Manufacturing in Australia had been disrupted earlier this year by floods, while Japanese industrial raw materials import demand had been affected by an earthquake which crippled a nuclear plant and threw its economy into disarray. In August, the overall index, which gauges the cost of shipping commodities including iron ore, coal and grain, dropped to its lowest in more than three months after falling for 18 consecutive sessions. It has remained erratic and is still over 20 per cent down from the same period last year. London clearing house LCH.Clearnet said on Friday that the recent rally had lifted the volume of over-the-counter volumes in September to its highest this year. LCH.Clearnet, which handles over 70 per cent of cleared dry freight derivatives contracts, said 86,000 lots were cleared in September compared with a monthly average of around 71,000 lots so far this year. 'Freight volumes have rallied in recent weeks as a result of volatility in capesize rates and increased Chinese demand for iron ore shipments from Brazil,' the London clearing house said. 'Following a year of lower price volatility and weaker prices in general, September's results represent a welcome positive inflection in the market.' The Baltic's capesize index rose 1.16 per cent on Friday, with average daily earnings reaching US$31,329 a day, and at their highest since the end of November last year. 'The BCI has kept pace with the market and has risen over the week,' broker Braemar Seascope said. 'Although the feeling is that these levels won't last past mid-next week, let alone the new year.' Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal. The Baltic's panamax index rose 1.07 per cent. Average daily earnings for panamaxes, which usually transport 60,000-70,000 tonne cargoes of coal or grains, reached US$16,702 and at its highest since the end of March. Brokers said US wheat exports and coal sales to Asia were bolstering rates in both Atlantic and Pacific markets. Worries over the health of the world economy have signalled more pain in the coming months for dry bulk ship owners, who face a glut of new vessels ordered when times were good. 'We remain optimistic in the short term; however, we see the risk of accelerated fleet growth and lower rates after the New Year,' broker Lorentzen & Stemoco said. -- Reuters |
_______________________
My Thots.....
Trends still erratic and volatile.
Otherwise, a good forward indication of the state of the global economy
China news
Published October 17, 2011 | |
China fights to dispel shadow over its SMEs Move to spur bank lending to firms which are now in the grip of underground lenders By VIRGINIE MANGIN IN BEIJING A GRIM battle is raging in Wenzhou to pump some life back into its dying small and medium enterprises (SMEs). The outcome may well decide what the future holds for China's SME sector. Starved of funds and racked by debt, many SMEs in this industrial city in Zhejiang province have defaulted while 100 or so CEOs have fled the city since April. Some have committed suicide. The situation was considered serious enough for Premier Wen Jiabao to make a visit during the October holiday. Following his visit, measures have been announced to help SMEs and crack down on illegal lending practices. Many companies have been borrowing from underground lenders at annualised interest rates that can touch 100 per cent in some cases - a situation that is strangling them. In its statement, the Cabinet said small banks will continue to be allowed to enjoy 'relatively low' reserve requirements compared with big banks, so that small banks would be able to extend more credit to smaller companies. In addition, the Cabinet said it will reduce the tax burden on small firms. Wenzhou illustrates the difficulties that China's SMEs are facing at the moment. Caught between rocketing labour costs, slowing exports and the current credit-tightening monetary policy, many are struggling to make ends meet. One of the direct consequences of China's fight against inflation is that there is limited credit available. The reserve requirement ratio - the amount of money banks have to hold against deposits - has been raised by 600 basis points since the beginning of 2010. As a result, banks have preferred lending to more creditworthy state-owned enterprises (SOEs), leaving China's SMEs scrambling for cash and accumulating debt. In the first seven months of the year, Wenzhou enterprises posted a total of 640 million yuan (S$127 million) in losses, 220 million yuan more than a year earlier, according to local government data. Many turned to the shadow banking system to finance daily operations. In Wenzhou alone, the local China Association of Small and Medium Enterprises, a sort of SME lobby, estimates that up to two thirds of the city's 200,000 SMEs have to resort to underground lending. They borrow cash from 'credit guarantee companies' at rates sometimes four times higher than the benchmark rate. These companies - not all are legally registered - have become extremely profitable and benefit from relatively loose controls compared to banks. There are now some 320 credit guarantee companies in Wenzhou alone. Similar outfits are sprouting in Guangdong province as well as Beijing, Shanghai and even Inner Mongolia. Some of China's big SOEs have also set up private financing arms. Shadow banking has always existed in China but it is only since the recent tightening that it has become the main source of credit for SMEs. But interest rates are exorbitant. 'In the long run this will kill China's SMEs,' explains Cai Zhaijun, of the SME association. 'How can they make a profit when borrowing at rates sometimes three times higher than their margins?' There is a lot at stake for China. Some analysts estimate that SMEs include some 40 million companies and account for 80 per cent of the country's jobs and more than half of the economic output. And some are worried that the Wenzhou crisis could spread to other cities where an increasing number of SMEs are facing similar difficulties. 'Numerous reports of debt distress in Wenzhou have contributed to the latest iteration of China hard-landing anxiety,' said Tim Condon, Singapore-based chief Asia economist with ING Groep NV, in a research note. 'The fear is that Wenzhou is the tip of an iceberg.' The government is trying to push commercial banks to start lending to SMEs again. The Wenzhou government has pleaded with the Zhejiang provincial authorities to apply for 60 billion yuan in emergency liquidity injection in the form of 'financial stability refinancing loans'. And while the crackdown of the shadow banking system was welcomed by analysts, some say that the move will dry up credit altogether. 'The existing shadow banking system will continue to challenge policymakers,' wrote Wei Yao, China economist for Societe General in a recent note. 'Bankruptcies of those SMEs that borrow and engage in speculative activities may become a social problem, as people lose savings,' she said. Analysts are also concerned that if liquidity becomes too much of a concern nationally, this could spark sell-offs in the property market and spread to the whole economy. 'We think more measures will be needed down the road,' concluded Ms Wei. BT |
_______________
My Thots....
China needs to nip this in the bud, before it spreads.
That Premier Wen visited Wenzhou shows the attention policymakers are paying to the problem.
Central to the whole issue is the way the policymakers handle property loans. Much of the SPVs loans that were interlinked are tied to property.
To tackle inflation, China raised RRRs for banks and thetype of loans that were covered in the reserves; which had the effect of tightening the credit that smaller banks can loan to SMEs.
With inflation at 6.1% (vs 6.2% last mth), the policymakers may consider that inflation has peaked and be a little less forceful with the tightening.
Saturday, October 15, 2011
MIIF
Biz Trusts with wrong incentive structure.
http://www.macquarie.com/mgl/miif/investor-centre/management-fees
Base Fee
In effect, by doing share purchase.....
They are trying to nudge A up and bring C down, have been unsuccessful at D and know that they can't raise B becos the cost of equity is so much higher than the cost of debt at the ridiculous price MIIF (discount to NAV) is trading at.
Performance Fee
The only way they can bring the share price up (more correctly support the share price in a plunging bear market) is by share purchase.
My Thots....
As a fund manager, their track record on "Buys" and "Sells"; on trading of assets is weak.
Check out their acquisition and divestments of Arqiva and CAC.
In one fell swoop, they negated all the profits made since IPO.
The acquisition and divestments were made to comply with the wishes and decisions made by fellow co-investors ( or some higher ups in the MacQ structure?) who have their own calculations and motivations.
As a FoF (fund of fund), the basic U would expect from such an investment fund is that they will buy when prices are down and sell when prices are up. They did the exact reverse.
Having sold in a distressed mkt, U would expect them to have better acquisitions in mind. Instead, they got stuck with cash they do not seem to be able to make better use of for the past yrs.
Failed to do due diligence when buying Miaoli windfarm : i.e. they bought a windfarm w/o much wind.
Somehow, the Big M name did not live to its reputation and the whole biz model of the M Group failed to deliver when under savage attack by Jim Chanos and his gang.
Management of MIIF should put shareholders first, not their siblings in the MacQ Group.
MIIF is one big lesson for me.
Divested, about breakeven, slightly underwater.
Needs plenty of patience and a bouyant equity mkt to recover.
Other Thots...
MAS should review Biz Funds Incentives & Structure too
Opaque
MIIF remains opaque. altho it owns 81% of Hua Nan ,we do not know much about the loan structure.
See Hua Nan slide 19, the senior debt is supposedly pegged at
5 year PBOC2 rate:
- 7.83% without 10% discount
- 7.05% with 10% discount
As the loan starts after acquistion in 2007, and the interest rates(based on the above) are pegged at 5yrs PBOC rate, will the interest rates change?
And when? Every year ? Or every 5 yrs? Will it go up or down in 2012?
What instruments do they use to hedge this huge variability?
There is no update on this, since the acquisition.
At the same time, slide 20, says there are no hedging mechanism for both forex and the interest rates in China.
So what are we to make of the latest results 2011 Interim presentation that maturity is 2022?
There is no info on whether how the Senior Note is structured .
Who subscribed for the Senior Notes?
Are there covenants?
Asset level debt is supposedly non-recouse at MIIF level.
Are there SPVs involved, what are they and how are they structured?
MIIF has 81%, the vendors Topwise and Preciseway has 9% and the Guangzhou authorities 10%, so if anything go wrong with the Senior Notes, who is ultimately responsible .
Will MIIF be ultimately accountable; as with Miaoli; even tho the debt is non-recourse?
Incentives
Some may argue that the incentive structure for Performance Fees are aligned with unitholders interests.
True, but the fact is that after the sale of Arqiva, MIMAL has NOT matched Basic minimal performance expected of Infrastructure Fund.
Yes, the question is NOT Performance Fees, but whether MIMAL should even be paid Basic Fees.
MIIF's raison d'etre as an Infrastructure fund, is to do the basic of researching and finding good long term Infrastructure assets and investing in them to provide DCF; this they are not doing well as I will explain later.
MIIF has ended up as a short term trader of assets, destroying shareholder value in the process as they incurred losses from their trades.
NIV is basically pegged to Market Cap (with Cash at hand end of yr and Borrowings as other side factors).
MIMAL, it seems has "switched off " , focussed on using the cash for Daily Share buy backs to shore up Market Cap ( a no-win situation in a Bear Market); which arguably could be better put to better use to acquire good undervalued Infrastructure assets in a bear market.
MIMAL is sitting on the Cash Pile they hurriedly collected when they sold in the last distressed market (during the GFC) and NOT putting it to use in the current bear mkt caused by the Eurozone crisis.
Yet, MIMAL is collecting the Base Fees, altho they are not doing what they are expected to do.
Isn't the incentive i.e. "Base Fees"----- not aligned to unitholders interests?
In fact, one may even argue that the cash be better spend as a dividend payout to long suffering unitholders, if they cannot be put to better use than share buybacks ( which is arguably a form of leakage thru Base Fees).
MAS Review?
The reason I am revisiting this post is that I think that MAS should look into both the incentive structure for Biz Trusts; as well as the need for more disclosure about the assets whereby the Biz Trusts has majority (>50% control) of the assets.
There is a strong case for making the Biz Trusts asset class more transparent .... less opaque.
see post at Valuebuddies forum
http://www.macquarie.com/mgl/miif/investor-centre/management-fees
Base Fee
In effect, by doing share purchase.....
They are trying to nudge A up and bring C down, have been unsuccessful at D and know that they can't raise B becos the cost of equity is so much higher than the cost of debt at the ridiculous price MIIF (discount to NAV) is trading at.
Performance Fee
The only way they can bring the share price up (more correctly support the share price in a plunging bear market) is by share purchase.
My Thots....
As a fund manager, their track record on "Buys" and "Sells"; on trading of assets is weak.
Check out their acquisition and divestments of Arqiva and CAC.
In one fell swoop, they negated all the profits made since IPO.
The acquisition and divestments were made to comply with the wishes and decisions made by fellow co-investors ( or some higher ups in the MacQ structure?) who have their own calculations and motivations.
As a FoF (fund of fund), the basic U would expect from such an investment fund is that they will buy when prices are down and sell when prices are up. They did the exact reverse.
Having sold in a distressed mkt, U would expect them to have better acquisitions in mind. Instead, they got stuck with cash they do not seem to be able to make better use of for the past yrs.
Failed to do due diligence when buying Miaoli windfarm : i.e. they bought a windfarm w/o much wind.
Somehow, the Big M name did not live to its reputation and the whole biz model of the M Group failed to deliver when under savage attack by Jim Chanos and his gang.
Management of MIIF should put shareholders first, not their siblings in the MacQ Group.
MIIF is one big lesson for me.
Divested, about breakeven, slightly underwater.
Needs plenty of patience and a bouyant equity mkt to recover.
Other Thots...
MAS should review Biz Funds Incentives & Structure too
Opaque
MIIF remains opaque. altho it owns 81% of Hua Nan ,we do not know much about the loan structure.
See Hua Nan slide 19, the senior debt is supposedly pegged at
5 year PBOC2 rate:
- 7.83% without 10% discount
- 7.05% with 10% discount
As the loan starts after acquistion in 2007, and the interest rates(based on the above) are pegged at 5yrs PBOC rate, will the interest rates change?
And when? Every year ? Or every 5 yrs? Will it go up or down in 2012?
What instruments do they use to hedge this huge variability?
There is no update on this, since the acquisition.
At the same time, slide 20, says there are no hedging mechanism for both forex and the interest rates in China.
So what are we to make of the latest results 2011 Interim presentation that maturity is 2022?
There is no info on whether how the Senior Note is structured .
Who subscribed for the Senior Notes?
Are there covenants?
Asset level debt is supposedly non-recouse at MIIF level.
Are there SPVs involved, what are they and how are they structured?
MIIF has 81%, the vendors Topwise and Preciseway has 9% and the Guangzhou authorities 10%, so if anything go wrong with the Senior Notes, who is ultimately responsible .
Will MIIF be ultimately accountable; as with Miaoli; even tho the debt is non-recourse?
Incentives
Some may argue that the incentive structure for Performance Fees are aligned with unitholders interests.
True, but the fact is that after the sale of Arqiva, MIMAL has NOT matched Basic minimal performance expected of Infrastructure Fund.
Yes, the question is NOT Performance Fees, but whether MIMAL should even be paid Basic Fees.
MIIF's raison d'etre as an Infrastructure fund, is to do the basic of researching and finding good long term Infrastructure assets and investing in them to provide DCF; this they are not doing well as I will explain later.
MIIF has ended up as a short term trader of assets, destroying shareholder value in the process as they incurred losses from their trades.
NIV is basically pegged to Market Cap (with Cash at hand end of yr and Borrowings as other side factors).
MIMAL, it seems has "switched off " , focussed on using the cash for Daily Share buy backs to shore up Market Cap ( a no-win situation in a Bear Market); which arguably could be better put to better use to acquire good undervalued Infrastructure assets in a bear market.
MIMAL is sitting on the Cash Pile they hurriedly collected when they sold in the last distressed market (during the GFC) and NOT putting it to use in the current bear mkt caused by the Eurozone crisis.
Yet, MIMAL is collecting the Base Fees, altho they are not doing what they are expected to do.
Isn't the incentive i.e. "Base Fees"----- not aligned to unitholders interests?
In fact, one may even argue that the cash be better spend as a dividend payout to long suffering unitholders, if they cannot be put to better use than share buybacks ( which is arguably a form of leakage thru Base Fees).
MAS Review?
The reason I am revisiting this post is that I think that MAS should look into both the incentive structure for Biz Trusts; as well as the need for more disclosure about the assets whereby the Biz Trusts has majority (>50% control) of the assets.
There is a strong case for making the Biz Trusts asset class more transparent .... less opaque.
see post at Valuebuddies forum
Thursday, October 13, 2011
Landed Homes
Published October 13, 2011 | |
Approvals for PRs buying landed homes set to plunge By UMA SHANKARI (SINGAPORE) The number of approvals given to permanent residents (PRs) who want to buy landed homes in Singapore is set to fall by more than half after the criteria was tightened further recently, Law Minister K Shanmugam said yesterday. 'After the further tightening, I suspect we are looking at very few people who would qualify. I think probably less than half of those who had previously qualified - under the previous already strict criteria - would qualify now. I'd be surprised if approvals are more than 50 per year,' Mr Shanmugam said. 'Our belief is that landed property is primarily for Singaporeans and the exceptions have to be very rare.' Mr Shanmugam was speaking to reporters after visiting a black-and-white bungalow at Goodwood Hill. The Ministry of Law said that the criteria was tightened 'recently' but declined to provide a more exact date. A ministry spokeswoman said that over the last three years, the ministry had received an average of about 230 applications a year from PRs for the purchase of landed residential property. On average, about 60 per cent of the applications were approved. With the revised criteria, the approval rate could drop by more than 50 per cent, she said. This means that the number of approvals could fall from around 138 a year to Mr Shanmugam's prediction of not more than 50. Foreigners who are PRs currently own about 3.5 per cent of the total stock of 70,000 landed homes in Singapore. This includes properties in Sentosa Cove, where the government has made a decision to liberally allow purchases by foreigners. Foreigners cannot buy such properties without the prior approval of the law minister. And only foreigners who are PRs can apply to purchase landed properties. Mr Shanmugam told The Business Times in an interview in July that his ministry regularly reviews the rules to ensure that they are current and relevant. And yesterday, he said that the 'strict' criteria were tightened further this year. 'We have reviewed it further this year . . . as we are even stricter, it (the number of approvals) may fall by half,' Mr Shanmugam said. The Law Ministry spokeswoman added that PRs who want to buy landed properties must demonstrate that they are making a 'very significant economic contribution' to Singapore. 'Some discretion is also exercised by considering the commitment shown to Singapore by the applicants, including how rooted they and their children are in Singapore,' she said. 'Since the criteria have been further revised this year, the approval rate is expected to fall further from the already small number of approvals in the past years.' |
BT
________________________
My Observations & Thots.....
138 out of 70K is 0.2%; so not significant enuf to affect the property mkt for landed homes.
More likely that the policy change is meant to reflect the benefits of citizenship.
Will these PRs then be encouraged to become citizens?
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