Lushhomemedia

Archive for April 22nd, 2008

Residential sector seen taking hit

Posted by luxuryasiahome on April 22, 2008

Prices expected to fall further, with the high-end most at risk due to a lack of foreigner interest, reports UMA SHANKARI

RESIDENTIAL markets across Asia are expected to take a hit in the wake of the credit crunch in the US. While the residential sectors in key Asian cities are forecast to continue to grow strongly, as they have since the start of 2007, equity bull markets were the main contributing factor to well-received launches last year, industry sources say. ‘Without the sentiment that has pushed up capital values and rents of residential property across the region, there will obviously be some slackening,’ a market player says.

However, the fundamentals of the region – including Singapore – are strong, which means residential markets should not take too hard a beating, analysts point out.

‘The story of real estate in Asia is one of continuing investment – particularly by foreigners. Occupier demand remains in place, and with limited supply in most developing cities, the future looks fine,’ property firm Cushman & Wakefield (C&W) says in a recent report.

The report notes, however, that Hong Kong and Singapore are the two cities expected to be most affected by the credit crunch and global economic slowdown

In Singapore, the impact on the residential market is already being felt, with slowing sales and price cuts.

The number of new homes sold in the first quarter of 2008 was 787, or about half the 1,449 sold in the previous quarter, official data shows.

DTZ Debenham Tie Leung, for one, points out that the numbers represent the second-lowest quarter of developer sales since Sars-hit Q1 2003.

The lacklustre performance is expected to continue, say property analysts.

‘The current market sentiment is likely to continue into the second quarter,’ says Li Hiaw Ho, executive director for research at CB Richard Ellis (CBRE).

Nicholas Mak, director of research and consultancy at Knight Frank, agrees. ‘Sales are expected to stay thin in the coming few months due to the continuing uncertainty about the US economic outlook and financial market problems. Home-buyers, especially in the mass-market segment, are expected to remain cautious until there is a sustained recovery in financial markets and economic conditions, which would spill over to the property market.’

Interestingly, news has emerged that some developers are starting to cut their prices – a sure sign of weakening market sentiment.

A recent media report says property heavyweight Far East Organization has achieved encouraging sales for three 99-year leasehold suburban projects – after it trimmed their prices 3-5 per cent after the Chinese New Year.

‘If the credit crisis or economic slowdown deepens, launches and take-up would remain subdued and prices are likely to ease,’ according to DTZ. ‘Some smaller developers have lowered prices to dispose of their units and this may spread as the residential property market is largely affected by sentiments.’

UBS Investment Research notes similarly that it expects mass-market projects to be launched at lower-than-expected prices. Sentosa Cove prices have also fallen – 13-20 per cent in Q1 2008, potentially wiping out the profit of Sentosa sites bought by SC Global and Ho Bee, UBS notes.

‘We expect the negative news to motivate sellers to close the wide bid-ask spreads and home prices to fall further, with high-end prices most at risk due to a lack of foreigner interest,’ UBS analyst Regina Lim says in a recent note.

Her research team has downgraded its residential price forecasts for 2008 and 2009 by as much as 20 per cent – expecting prices in prime and mid-range segments to fall 20 per cent and 10 per cent respectively. Mass-market prices are expected to hold steady.

Rent increases for private residential property are also likely to moderate due to budget constraints and the slower influx of expatriates, analysts say.

And residential investment sales also fell hard in Q1 2008, data from property firm Colliers International shows.

‘Investment sales value dipped some 35.7 per cent in Q1 2008 to $2.27 billion, from $3.54 billion in the preceding quarter,’ the firm says.

Colliers notes, in particular, that the residential collective sales market virtually ground to a halt in Q1, with just one deal – that of Ban Guan Park for $31.1 million or $871 per square foot per plot ratio. This was a big slide from $1.16 billion sealed in Q4 2007 from 10 collective sale sites, and a dramatic plunge from 41 collective sale transactions totalling some $6.53 billion sealed during the peak in Q2 2007.

Despite all the negative news, there seems to be some optimism. DBS Group Research, for example, recently upgraded its call on the Singapore property sector from ‘neutral’ to ‘overweight’.

But many are taking a wait-and-see approach to the market, including the residential segment.

‘We believe Singapore’s property secular uptrend is still intact, thanks to its ongoing efforts to transform itself into a globalised city-state,’ says DBS Vickers Securities analyst Lock Mun Yee. ‘However, in the near term, spillover uncertainties from the credit crunch and talks of a possible US recession have affected sentiment.’

According to Margaret Thean, DTZ’s executive director for residential: ‘It is still too early to gauge the residential sector performance as this is just the first quarter.’

Source : Business Times – 22 Apr 2008

Posted in General, Market Reports | Tagged: , , , , , , , , , , | Leave a Comment »

Commercial unit, GCB for sale by tender

Posted by luxuryasiahome on April 22, 2008

A LARGE commercial unit at The Riverwalk, Upper Circular Road, is up for sale at an indicative price of $23 million.

The unit, which has a strata area of 20,161 sq ft that represents a 12.11 per cent ownership stake, is owned by private investors. The indicative price works out to about $1,140 per square foot.

CB Richard Ellis (CBRE), which is marketing the 99-year leasehold property, says rent of $5 to $6 per sq ft is being asked for comparable office space in the area. Assuming rent of $5.50 psf, the $1,140 psf guide price reflects a net yield of about 5.5 per cent.

The current lease expires in mid-July this year.

In March, a unit at High Street Centre was sold for about $1,500 psf.

CBRE associate director of investment properties Liau Wee Boon said of the Riverwalk unit: ‘In addition, there is collective sale potential as the development is undergoing an en bloc exercise. The potential payout is more than 50 per cent above the guide price.’

The Riverwalk comprises 181 commercial units ranging from 54 sq ft to 20,161 sq ft, plus 118 apartments ranging from 818 sq ft to 3,821 sq ft, plus 290 parking lots. It was put up for collective sale late last year at an indicative price of about $700 million or $1,735 psf per plot ratio (psf ppr) and zoned for residential and commercial use.

Meanwhile, in the Victoria Park area off Holland Road, a good class bungalow (GCB) has been put up for sale by DTZ Debenham Tie Leung (DTZ).

The 999-year leasehold GCB sits on a site of 32,687 sq ft. DTZ said that a recent valuation put the value of the site at $26.5 million.

The land is now occupied by an old two-storey detached house with a garage and swimming pool.

DTZ said recent transactions of GCB land in the area include sites in Leedon Park for $914 psf and Victoria Park Road for $920 psf.

DTZ director (Investment Advisory Services) Quek Soh Hoon said: ‘Given the positive attributes and distinctive location, the subject property would be an attractive and choice acquisition for high-net-worth individuals looking for land to build their dream house or investment property.’

Source : Business Times – 22 Apr 2008

Posted in General, Landed Property, Luxury Property, Office / Retail Space | Tagged: , , , , , , | Leave a Comment »

Nuts and bolts of green buildings

Posted by luxuryasiahome on April 22, 2008

A perfect orientation is best but architects can also use other means to reduce energy consumption, reports MATTHEW PHAN

IT IS hard to pin down exactly what green architecture entails. Each building is a case study in itself, with specific surroundings, usage patterns, client requirements and weather conditions. One might use a north-south alignment to block off the sun’s heat. Another, forced by circumstance to face the rising or setting sun, might use glazing or shades to achieve the same. Light and temperature controls for a residential apartment block differ from those for retail malls or industrial facilities. Still, certain principles run throughout.

Architects approach a design in two ways – passive and active. ‘If you have the passive side right, half the battle is won. Then you actively use technology to manage the things you couldn’t solve with the passive approach’, says Tang Kok Thye, senior principal architect at ADDP Architects.

Passive refers to elements like site layout, the facing of a building and how it is structured to allow for natural lighting and ventilation. Active refers to add-ons, like special glass to keep out heat and glare, solar panels or green roofing and the building’s mechanical and electrical (M&E) guts.

Because air-conditioning is typically the largest user of energy in a building, the biggest energy savings come from temperature control. In a local context, this means figuring out how to stop a building from getting too hot. The right orientation is critical. ‘If a building is facing east-west, a lot of money is spent just to make it comfortable to live in’, says Mr Tang. Site layout and surroundings are also important. A building next to the sea or a park is cooler than one standing next to another building that might reflect heat and light.

In the early stages of design, architects often simulate how the sunlight and wind might flow into a structure, using techniques known as Computational Fluid Dynamics.

Sun-path and wind analysis are the most common analyses. A third kind, which examines the amount of energy a building uses under varying conditions and people movements, is far more expensive and rare in Singapore.

But even the more basic analyses, due to cost, are not always done, says Mr Tang. In contrast, architectural firms in the US, where the green building movement is more advanced, often conduct environmental analysis as part of the design process.

If a building cannot have a perfect north-south orientation, which is often the case due to site constraints, architects can use other means to protect the main activity areas.

For example, Xilinx’s Asia-Pacific Headquarters building – winner of the Building & Construction Authority’s Green Mark Platinum award in 2007 – is diagonally oriented.

But its designer, RSP Architects Planners & Engineers, cleverly placed the stairwells and M&E rooms at the corners of the building facing the east and west, protecting the offices and chip-testing facilities at the centre of the building from the direct sun.

Xilinx also invested in doubled-glazed, low-emissive glass that helped it achieve an envelope thermal transfer value (ETTV) – a calculation how much heat a building gains through walls and windows – of 38.53 W per square metre.

This is remarkably low, said Vivien Heng, a director at RSP. There is a mandatory standard of 50 W/sq m, but most buildings don’t achieve lower than 45 W/sq m, she said.

The wind flow simulation also showed up a ‘dead space’ with poor cross-ventilation at one portion of the building, said Ms Heng. The firm jigged the design by opening up external gaps in the facade, resulting in vastly improved wind movement through this part of the building and up and out through the central atrium. The building’s internal courtyards and ’shallow’ offices – no work space is more than 10 metres from the glass walls – allow wind and natural light to flow through the space, Ms Heng said.

Lend Lease Retail, the design consultant for City Square Mall, City Developments’ eco-mall at Serangoon, faced similar challenges on that project. Because of the site’s peculiar square shape and orientation, the mall has to contend with a main entrance facing the hot afternoon sun, though it is blocked from the rising sun by the adjacent City Square Residences, which were separately designed.

Malls are typically designed in a ‘dumb-bell’ layout, to maximise shop frontage, said Felix Lim, principal architect at Lend Lease Retail. This means that they are laid out in a linear strip, with speciality shops on both sides, and anchor tenants, like supermarkets or department stores, at the far ends.

The squarish site constrains an effective linear layout. So instead, Lend Lease Retail created an ‘L-shape’, with smaller speciality shops along the east and south sides of the square to achieve linearity, and large anchor tenants at the north-west corner.

Compared with speciality shops, anchor tenants need less ‘transparency’ or glass windows that allow passers-by to look in. Since the west side was largely occupied by anchor tenants, the layout meant that half or more of the mall’s western front could be solid, rather than glass. This shields the mall from the western sun, and allows for advertising space on the external facade, Mr Lim explained.

For the rest of the facade – part was glass to make for an attractive entrance and allow natural light to flood the mall’s large atrium – Lend Lease Retail used double-glazed low-emission glass to mitigate excessive heat and glare.

It also planned an automatic, timed sun-screen that will come down in the early afternoon and rise back up in the evening, to allow evening pedestrian traffic to look into the mall.

Both Xilinx’s building and City Square Mall feature Pre-cooled Air-Handling Units (AHUs) to contain energy bills.

Air-conditioning is energy consuming because the air here is warm and humid. A Pre-cooled AHU system first brings in outside air, cools it via cooling coils and mixes it with treated return air in a separate chamber. The pre-cooled air is then further cooled in the AHU system proper and piped into the building.

The process is capital intensive upfront but results in long-term savings. Thanks to such measures, as well as other green innovations, City Square Mall, which won the Building and Construction Authority’s Green Mark Platinum award last year, saves the equivalent of 11.4 million kWH per year or equivalent to the total consumption of nearly 2,400 four-room HDB flats.

ADDP Architects incorporated light screens, solar panels and rainwater harvesting into its design for Cliveden, a CDL condominium project and another 2007 Green Mark Platinum award winner.

On Cliveden’s clubhouse, solar panels reduce energy dependence on the main grid, while a green roof not only helps to reduce heat inside the clubhouse but also the surrounding environment. The centre was planned as an educational centre for public awareness on using green power, said Mr Tang.

The condo collects rainwater from its roof and reuses it for landscaping, saving about 10 swimming pools of water a year. The total water and energy saved, about 30 per cent, is equivalent to saving 77,475 trees.

Another green building, from a water conservation point of view, is Temasek Polytechnic. The school installed a $1.6 million rainwater harvesting system when its 30 hectare campus was being built in the early 1990s, with the water used to for the school’s extensive gardens.

Ultimately, though, the greenest of green architecture is conservation and restoration, because a lot of energy is required to knock down a building and erect a new one, architects say.

‘Building is one of the most energy-intensive activities around’, says Ms Heng. And ADDP’s Mr Tang agrees. ‘As an architect. you would like to preserve nature but it depends on the developers’ needs,’ he said. ‘Buildings should be made to last more than 50 to 100 years.’

Source : Business Times – 22 Apr 2008

Posted in General | Tagged: , , , , , , , , , , , , , | Leave a Comment »

Similar names, but different HDB projects

Posted by luxuryasiahome on April 22, 2008

UNSUCCESSFUL applicants in the HDB’s build-to-order project, Jade Spring@Yishun, cannot be moved automatically to the queue for an adjacent similarly named development, MPs heard yesterday.

This is because the two projects are separate exercises, Senior Minister of State (National Development) Grace Fu explained.

Applicants who did not select a unit at Jade Spring@Yishun when given a chance must re-apply and ballot again for the other project, which is known as Jade Spring@Yishun Phase 2.

She said: ‘It would not have been fair to the applicants who booked a unit in the first project if applicants behind them in the queue were allowed to choose from not just the list of remnant flats, but also from a whole new batch of flats,’ she said.

Ms Lee Bee Wah (Ang Mo Kio GRC) had asked why applicants who were unsuccessful in the first phase of a new HDB project were not automatically invited to the second phase of the project without having to submit a fresh application.

Ms Fu said the names of the two projects in Yishun may have inadvertently given the impression that they were under the same build-to-order exercise. But they were not. And it was made clear to applicants of the first project that their applications would be only for that particular development.

The reality, Ms Fu noted, was that many applicants did not select a flat when given the chance to do so. The 384-unit Jade Spring@Yishun received 1,900 applications. Yet not all units have been taken up. The HDB has been going down the list of applicants and has called the 1,700th applicant to get him to select a flat. 

Source : Straits Times – 22 Apr 2008 

Posted in General, HDB News | Tagged: , , , | Leave a Comment »

Act fast or face deep recession: Tony Tan

Posted by luxuryasiahome on April 22, 2008

The global economy will run into even more turbulence if policy makers don’t act quickly and decisively to ease the credit crunch spilling over from the United States, says the Government of Singapore Investment Corp (GIC).

But the sovereign wealth fund is standing by its substantial investments in UBS and Citigroup after the sub-prime crisis ravaged the two mega banks.

Speaking to some 1,000 employees at the inaugural GIC Staff Conference yesterday, GIC deputy chairman and executive director Tony Tan warned that the world may face a recession ‘longer, deeper and wider than any we have encountered in the past 30 years’.

‘We are entering a period of extreme uncertainty in the world economy and global financial markets. As banks continue to de-leverage, cutting their lending activities and causing a contraction in credit supply, the prospects for the US economy – and possibly the world economy – are fraught with downside risks.’

But Dr Tan believes the economic downturn can be mitigated if the authorities in the US and elsewhere take decisive and timely action. ‘If policymakers respond strongly and appropriately, investment markets and sentiments can turn around sharply.

‘However, if such actions by the authorities are not taken within the next 3-4 months, it will be left to the market forces of supply and demand to stabilise the US housing market before we can see the light at the end of the tunnel. This will be a considerably more painful and long-drawn process.’

Despite the uncertainty, GIC is standing by its decision to invest billions of dollars in troubled banks UBS and Citigroup.

‘We regard our investments in UBS and Citicorp as long-term investments that will give us good returns when markets stabilise and economic conditions return to more normal levels,’ Dr Tan said.

GIC pumped 11 billion Swiss francs (S$14.7 billion) into UBS last December via a convertible bond issue that would eventually give it a stake in the bank. It has also not ruled out injecting more cash into UBS, which is looking to raise 15 billion Swiss francs through a rights issue, after reporting a second straight quarterly loss this month. GIC has said that it would examine the terms of the rights issue before deciding.

GIC also invested US$6.88 billion in Citigroup in January this year through a private offering of convertible preferred securities.

Dr Tan yesterday reiterated that GIC was able to make such investments because it was well prepared for the current credit crisis.

‘We had moved to a more conservative posture in our portfolio by liquidating a portion of our equity holdings in the third quarter of 2007 and moving into cash – a measure we had not taken for quite some time. This provided us the liquidity to make substantial investments in UBS and Citicorp when these opportunities arose.’

He added, however, that financial and investment markets would be nervous and volatile over the next 1-2 years.

‘Instead of the rising tide that broadly benefited financial and investment markets for the past 10-20 years, we are now facing choppy seas that could engulf the broader economy globally. Policymakers, business managers and investors will require fortitude and nimbleness to navigate safely through the turbulence.’

Still, he expressed optimism for GIC’s future. ‘Working together as a team and with the right policies, we will successfully navigate the treacherous currents that lie ahead with sufficient ballast to be able to take advantage of opportunities as they arise. When this turbulent period is over, I am confident that GIC will emerge stronger and more resilient and take its place as one of the most competent and respected investment organisations in the world.’

Dr Tan’s speech yesterday to staff and the media, at Swissotel The Stamford, is seen as part of GIC’s efforts to be more open about its investments. Set up in 1981 to manage Singapore’s foreign reserves, the company is not required to give the same level of detail about its activities as a publicly listed company. But it has made overtures in recent months to be more transparent, without compromising its competitiveness.

GIC is the world’s third- largest sovereign wealth fund, with US$330 billion in assets under management, according to Morgan Stanley in February. It ranks behind the Abu Dhabi Investment Authority with US$875 billion and Norway’s Government Pension Fund with US$380 billion.

Source : Business Times – 22 Apr 2008

Posted in General, Global Economy | Tagged: , , , , , | Leave a Comment »

Yummy times for F&B and hospitality

Posted by luxuryasiahome on April 22, 2008

SINGAPORE’S F&B and hospitality industries appear to be set for another strong year ahead – despite rising costs and the shaky economic climate in the United States – on the back of strong demand and increased spending from both Singaporeans and foreign visitors.

‘2008 looks set to be a robust year (for the local hospitality industry) with average occupancy rates in excess of 80 per cent and average rate growth forecast at 25 per cent,’ said Cheryl Ng, public relations manager for Pan Pacific Singapore, singling out Singapore’s location and infrastructure as assets that will contribute to long-term growth.

For Pan Pacific, the overall demand for rooms this year has been growing at a steady rate, a trend that mirrors last year’s, Ms Ng said. The MICE industry has contributed substantially to the strong demand.

‘We expect the trend for growth to continue this year and although we expect variations in the costs of operations, we will ensure that our product remains competitive in the market with minimal adjustments to the price,’ she added.

The global hotel industry saw a profitable year in 2007, according to the HotelBenchmark Survey by Deloitte. Regions such as the Asia-Pacific, South America, Europe and the Middle East registered double digit growth in both average room rate and revenue per available room.

The Asia-Pacific region, in particular, grew by 12.7 per cent. As such, Asia is working actively to meet the hotel room crunch and maintain high standards of quality to meet the rising demands of the growing industry.

The F&B industry here has little reason to complain either. ‘The vibrant entertainment scene and growing tourist attractions are attracting visitors to Singapore in increasing numbers,’ noted a spokesman for Sushi Tei, adding that the robust economy in 2007 has translated to the increased spending power of Singaporeans.

While these factors will undoubtedly play a part in the growth of the local F&B industry, he says, inflation and the rising cost of living also have to be considered. ‘Rising costs is definitely a major challenge. For Sushi Tei, we are still not increasing prices yet, even though the prices of several food materials have gone up by double digit percentage,’ the spokesman said.

Economies of scale enable the company to cope with the increase. The consistent prices, unsurprisingly, have gone over well with customers, he said.

Sushi Tei, which currently has nine outlets in Singapore as well as additional outlets in cities such as Sydney, Shanghai and Bangkok, has its sights set on breaking into potential markets such as the US and the UAE.

‘FHA2008 (Food&HotelAsia) is being held against a backdrop of Singapore’s growing hospitality and tourism industries,’ said Stephen Tan, chief executive of Singapore Exhibition Services (SES) Pte Ltd. SES is the organiser of FHA2008 – Asia’s largest international food and hospitality trade event – which will be held at the Singapore Expo from April 22 to 25. It will act as a sourcing ground and a platform for buyers and sellers to converge, and Singapore’s geographic location puts it in an ideal position to gain from the booming trade.

FHA2006 generated $37 million in tourism contributions, nearly 30 per cent more than the $29 million for FHA2002.

Buyers are expected to come armed with a budget in the region of US$6.1 billion, according to a survey that polled the buyers attending FHA2008, a marked increase from the estimated US$5.9 billion sourcing budget for FHA2006.

FHA2008 will occupy seven halls – or 75,000 square metres – at the Expo and play host to 2,626 exhibiting companies from 69 countries. Over 37,000 visitors from 80 countries are expected to attend the biennial trade show, of which 38 per cent will hail from overseas. Visitors that have already pre-registered for the show include Banyan Tree and Singapore Airlines.

Source : Business Times – 22 Apr 2008

Posted in General, Hotel | Tagged: , , , , , , | Leave a Comment »

Meltdown fears pass, but worst may not be over yet: IMF

Posted by luxuryasiahome on April 22, 2008

Although the risk of a financial meltdown has passed, the worst of the US banking and economic crisis may not yet be over, as the crisis moves into new phases, according to a senior official from the International Monetary Fund.

In an interview with BT, Charles Collyns, the Fund’s deputy director of research, pointed out that there are still downside risks arising from the interaction between the weak financial system and the weakening real economy. The US housing market could get weaker for at least another year, he said. In addition, unemployment is rising, as are the risks of corporate defaults. ‘Those developments could put further pressure on the financial system,’ he said.

In its latest World Economic Outlook released this month, the IMF forecasts that US GDP growth will slow to 0.5 per cent this year (from 2.2 per cent in 2007) and the economy ‘could tip into mild recession’ before recovering gradually in 2009. Under this scenario, the IMF estimates that total losses for the US financial system arising from the sub-prime crisis (but including losses in non-sub-prime related areas) would total US$945 billion. However Mr Collyns acknowledged that if the US recession were deeper and longer – as some economists predict – the losses ‘could be substantially larger’.

The IMF forecasts that other advanced economies will also slow down this year, but by less than the US; it forecasts growth in both the Euro area and Japan at 1.4 per cent in 2008 (compared with 2.6 per cent and 2.1 per cent, respectively in 2007).

Global growth is predicted to come in at 3.7 per cent this year, compared with 4.9 per cent in 2007.

Mr Collyns pointed out that while emerging market economies will experience some slowdown in the wake of weaker growth in advanced countries, they will still grow above their average trend growth during the last ten years.

The IMF forecasts emerging economies will grow by 6.7 per cent this year, compared with 7.9 per cent in 2007.

Mr Collyns pointed out that these economies will be less adversely affected by the current crisis than by previous US recessions such as those in 2001 and 1991. ‘Emerging markets are stronger now than they were ten years ago,’ he said, pointing to stronger public sector balance sheets, large current account surpluses, substantial foreign exchange reserves and better macro policies, particularly in Asia – which also enjoys strong domestic demand growth. Developing Asia is projected to enjoy 8.2 per cent growth this year, compared with 9.7 per cent in 2007. Growth in Africa, Latin America and the Middle East is also expected to stay resilient, partly because of higher commodity prices.

Mr Collyns attributed the commodity price surge – which is fuelling higher inflation everywhere – mainly to a supply-demand imbalance. Strong demand, particularly from large emerging economies like China and India and the rising demand for biofuels, has not been accompanied by commensurate increases in supply. Food price inflation has been aggravated by the weakening of the US dollar and increased interest among investors in commodities as an asset class.

The Fund has called for urgent action to tackle rising food prices, including increased financing for poor countries – including via its own loan facilities – and higher funding for the United Nations’ World Food Programme.

Mr Collyns also said countries should avoid imposing export taxes and export bans on food items. By keeping domestic prices artificially low, such measures inhibit much-needed increases in food production and prevent farmers from benefiting from higher food prices. Globally, they also exacerbate food shortages, as well as inflation.

Source : Business Times – 22 Apr 2008

Posted in General, Global Economy | Tagged: , , , , , , , , | Leave a Comment »

Inflation is Asia’s top risk: Aussie economist

Posted by luxuryasiahome on April 22, 2008

INFLATION is the No 1 risk for Asia, ranking even higher than the current credit squeeze and global economic slowdown, a top Australian economist said yesterday.

But inflation can be managed if countries allow greater appreciation of their currency, according to Roger Donnelly, chief economist of the Australian Export Finance and Insurance Corporation (EFIC).

Although the likes of Singapore and China have recently strengthened their currencies against the US dollar, this has to be seen in the ‘broader context of the US dollar sinking against every other currency’, he said.

‘Asian currencies are still very weak, and in many people’s judgment there is scope to combat inflation by allowing greater exchange rate flexibility,’ Mr Donnelly told reporters during a discussion here yesterday while on a two-day visit.

The EFIC – the Australian government’s export credit agency – has been supporting the international growth of Australian businesses for 50 years. It also provides finance and insurance to Australian companies exporting and investing overseas.

Acknowledging that a stronger currency can hurt competitiveness, Mr Donnelly said: ‘Yes, it will not help export industries. But domestic demand will be supported, and that will cause a re-balance in these economies, which is healthy.’

On how the global economic slowdown could affect growth in Asia, and particularly Singapore, he said: ‘I’m a cautious optimistic. I think Asia will be able to weather the storm. Back in 1997 you were a big importer, but this time round you are suppliers of capital to the rest of the world. And since 1997 your relative economic weight in the world has increased.’

Asia, as a whole, has enough in its tank to ‘ride out’ the international downturn, said Mr Donnelly, thanks to increasing intra-regional trade making up for a dip in exports to the US.

Singapore is Australia’s seventh-largest trading partner, with Japan topping the list.

Source : Business Times – 22 Apr 2008

Posted in General, Global Economy, Singapore Economy | Tagged: , , , , , , | Leave a Comment »

Inflation is Asia’s top risk: Aussie economist

Posted by luxuryasiahome on April 22, 2008

INFLATION is the No 1 risk for Asia, ranking even higher than the current credit squeeze and global economic slowdown, a top Australian economist said yesterday.

But inflation can be managed if countries allow greater appreciation of their currency, according to Roger Donnelly, chief economist of the Australian Export Finance and Insurance Corporation (EFIC).

Although the likes of Singapore and China have recently strengthened their currencies against the US dollar, this has to be seen in the ‘broader context of the US dollar sinking against every other currency’, he said.

‘Asian currencies are still very weak, and in many people’s judgment there is scope to combat inflation by allowing greater exchange rate flexibility,’ Mr Donnelly told reporters during a discussion here yesterday while on a two-day visit.

The EFIC – the Australian government’s export credit agency – has been supporting the international growth of Australian businesses for 50 years. It also provides finance and insurance to Australian companies exporting and investing overseas.

Acknowledging that a stronger currency can hurt competitiveness, Mr Donnelly said: ‘Yes, it will not help export industries. But domestic demand will be supported, and that will cause a re-balance in these economies, which is healthy.’

On how the global economic slowdown could affect growth in Asia, and particularly Singapore, he said: ‘I’m a cautious optimistic. I think Asia will be able to weather the storm. Back in 1997 you were a big importer, but this time round you are suppliers of capital to the rest of the world. And since 1997 your relative economic weight in the world has increased.’

Asia, as a whole, has enough in its tank to ‘ride out’ the international downturn, said Mr Donnelly, thanks to increasing intra-regional trade making up for a dip in exports to the US.

Singapore is Australia’s seventh-largest trading partner, with Japan topping the list.

Source : Business Times – 22 Apr 2008

Posted in General, Global Economy, Singapore Economy | Tagged: , , , , , , | Leave a Comment »

Inflation is Asia’s top risk: Aussie economist

Posted by luxuryasiahome on April 22, 2008

INFLATION is the No 1 risk for Asia, ranking even higher than the current credit squeeze and global economic slowdown, a top Australian economist said yesterday.

But inflation can be managed if countries allow greater appreciation of their currency, according to Roger Donnelly, chief economist of the Australian Export Finance and Insurance Corporation (EFIC).

Although the likes of Singapore and China have recently strengthened their currencies against the US dollar, this has to be seen in the ‘broader context of the US dollar sinking against every other currency’, he said.

‘Asian currencies are still very weak, and in many people’s judgment there is scope to combat inflation by allowing greater exchange rate flexibility,’ Mr Donnelly told reporters during a discussion here yesterday while on a two-day visit.

The EFIC – the Australian government’s export credit agency – has been supporting the international growth of Australian businesses for 50 years. It also provides finance and insurance to Australian companies exporting and investing overseas.

Acknowledging that a stronger currency can hurt competitiveness, Mr Donnelly said: ‘Yes, it will not help export industries. But domestic demand will be supported, and that will cause a re-balance in these economies, which is healthy.’

On how the global economic slowdown could affect growth in Asia, and particularly Singapore, he said: ‘I’m a cautious optimistic. I think Asia will be able to weather the storm. Back in 1997 you were a big importer, but this time round you are suppliers of capital to the rest of the world. And since 1997 your relative economic weight in the world has increased.’

Asia, as a whole, has enough in its tank to ‘ride out’ the international downturn, said Mr Donnelly, thanks to increasing intra-regional trade making up for a dip in exports to the US.

Singapore is Australia’s seventh-largest trading partner, with Japan topping the list.

Source : Business Times – 22 Apr 2008

Posted in General, Global Economy, Singapore Economy | Tagged: , , , , , , | Leave a Comment »