Business Times - 31 Jan 2008
Asian stocks - down but not out
BUFFETED by headwinds from the US sub-prime mortgage crisis, global stock markets are now currently in the grip of a cyclical bear market - on average, the major South-east Asian equity indices are down 12-15 per cent for the year so far.
However, investors suffering from the hard hits of the past 3-4 months can take some comfort: there are plenty of reasons to expect this to be only a cyclical and not secular bear market. It might stretch past the half-year mark, but could well run its course by the third quarter.
The key to equities bouncing back lies with Wall Street. Although many observers predicted at the start of 2007 that Asian markets would decouple from the US because of their exposure to the explosive growth of China and India, the events of the past year have confirmed the old market adage 'when Wall Street sneezes, the rest of the world catches a cold'. However, despite the huge drag on the US economy posed by sub-prime losses and the resulting dent this has created on US consumer spending, there are good reasons to expect the slowdown to be less drastic as some expect, or that it will extend into 2009.
For one, a Fed that was earlier criticised for being too far behind the curve now appears determined to pull out all stops to ensure a soft landing for the economy and the markets. As a result, chairman Ben Bernanke will probably lower the Fed funds funds rate by as much as it takes - to perhaps even as low as one per cent - by the end of the first half, to combat the deflationary forces now at work. Together with a generous fiscal stimulus package announced this week and provided financial institutions manage to strengthen their balance sheets adequately in the aftermath of their sub-prime losses, these moves should provide some relief for beleaguered US consumers and sow the seeds for a recovery later this year.
In addition, although Asian markets have not decoupled from Wall Street, the original premise that Asian economies are now less reliant on the US than before still holds. A US recession will impact Asian growth but this may not be too profound - as US broker Merrill Lynch correctly pointed out in a Jan 23 report, Asia's macro backdrop is a mirror image of the US: Asia is a lender, not a borrower; leverage is low, not excessive; the housing upturn is young, not mature; financial systems have been conservative, not aggressive; and current accounts are in surplus, not deficit.
There will, of course, be plenty of turbulence ahead and there's no denying that risks have increased - for instance, there is a chance that the US might find itself mired in stagflation, or stagnant growth amid rising inflation. Also, it is not clear how badly corporate profits will be affected by the slowdown.
However, the chance that the present cyclical bear market will not degenerate into a secular one rises with each day and investors would do well to look beyond the present turmoil. On a medium term view, those who remain long on Asian stocks may well find themselves reasonably well placed.
Thursday, January 31, 2008
Wednesday, January 30, 2008
CNA: More electronic road pricing (or ERP) gantries
By Asha Popatlal, Channel NewsAsia
Posted: 30 January 2008 1448 hrs
SINGAPORE : More electronic road pricing (or ERP) gantries will be put up and some ERP rates will be raised as part of the government's wide ranging move to ease traffic congestion.
In addition, the rate of annual vehicle growth will be moderated but road taxes will be cut.
In the last of three major announcements on changes to the land transport system, Transport Minister Raymond Lim says even as public transport is being improved, firm steps must be taken to curb excessive car travel demand.
So the incremental ERP charge will be raised from 50 cents to S$1 progressively from July.
At the same time, the ERP base charge, which is the starting charge for a new ERP gantry point, will be increased from S$1 to S$2. The number of vehicles on the road is also set to go down.
From May 2009, the rate of annual vehicle growth will be halved - from 3 percent to 1.5 percent.
But road taxes will be reduced by 15 percent from July this year as part of the general move towards taxing based on usage, rather than ownership.
To lower the upfront cost of car ownership, the Additional Registration Fee (or ARF) will be lowered from 110 percent of the Open Market Value (or OMV) to 100 percent from March. On the new gantries, 16 will come up in phases during the year.
On April 7, the gantries at Upper Bukit Timah Road, Toa Payoh Lorong 6, Upper Boon Keng Road, Geylang Bahru Road and Kallang Bahru Road will be switched on.
On July 7, five new gantries will run along the Singapore River line - from Clemenceau Avenue to Fullerton Road - at Eu Tong Sen Street, New Bridge Road, South Bridge Road and Fullerton Road.
Then on November 3, six new gantries will come up - at Commonwealth Avenue, Jalan Bukit Merah, Alexandra Road, AYE (westbound) and PIE (westbound) near Eunos and Serangoon Road. Mr Lim explained that the ERP system has largely remained unchanged since it was introduced 10 years ago so it has to be enhanced to address current and future traffic conditions.
He made the announcements during a visit to the Kallang-Paya Lebar Expressway on Wednesday morning. - CNA/ch
Posted: 30 January 2008 1448 hrs
SINGAPORE : More electronic road pricing (or ERP) gantries will be put up and some ERP rates will be raised as part of the government's wide ranging move to ease traffic congestion.
In addition, the rate of annual vehicle growth will be moderated but road taxes will be cut.
In the last of three major announcements on changes to the land transport system, Transport Minister Raymond Lim says even as public transport is being improved, firm steps must be taken to curb excessive car travel demand.
So the incremental ERP charge will be raised from 50 cents to S$1 progressively from July.
At the same time, the ERP base charge, which is the starting charge for a new ERP gantry point, will be increased from S$1 to S$2. The number of vehicles on the road is also set to go down.
From May 2009, the rate of annual vehicle growth will be halved - from 3 percent to 1.5 percent.
But road taxes will be reduced by 15 percent from July this year as part of the general move towards taxing based on usage, rather than ownership.
To lower the upfront cost of car ownership, the Additional Registration Fee (or ARF) will be lowered from 110 percent of the Open Market Value (or OMV) to 100 percent from March. On the new gantries, 16 will come up in phases during the year.
On April 7, the gantries at Upper Bukit Timah Road, Toa Payoh Lorong 6, Upper Boon Keng Road, Geylang Bahru Road and Kallang Bahru Road will be switched on.
On July 7, five new gantries will run along the Singapore River line - from Clemenceau Avenue to Fullerton Road - at Eu Tong Sen Street, New Bridge Road, South Bridge Road and Fullerton Road.
Then on November 3, six new gantries will come up - at Commonwealth Avenue, Jalan Bukit Merah, Alexandra Road, AYE (westbound) and PIE (westbound) near Eunos and Serangoon Road. Mr Lim explained that the ERP system has largely remained unchanged since it was introduced 10 years ago so it has to be enhanced to address current and future traffic conditions.
He made the announcements during a visit to the Kallang-Paya Lebar Expressway on Wednesday morning. - CNA/ch
Reuters: S'pore plans $8b North-South Expressway
Business Times - 30 Jan 2008
S'pore plans $8b North-South Expressway
SINGAPORE - Singapore will spend up to $8 billion (US$5.6 billion) to build a new expressway spanning the island state to help ease growing congestion on its roads, a government minister said on Wednesday.
The announcement of the 21-km North-South Expressway (NSE) comes days after the government said it would spend US$14 billion to double Singapore's rail network, and after saying this month that it wanted more competition in the public bus sector.
Analysts say Singapore's investments on mega construction projects, that also include two casinos with a combined price tag of over US$8 billion and a US$1.3 billion water-front sports complex, could help boost economic growth as the city-state fights slowing exports - the economy's traditional mainstay.
Transport Minister Raymond Lim told reporters on Wednesday that the NSE, to be completed by 2020, will cut travel time by 30 per cent for residents living in the island's north heading to the central business district in the south.
He also announced an expansion of the electronic road pricing system, emulated in some European cities, where motorists pay to drive into city areas.
The aim is to 'encourage motorists to switch to public transport' to help reduce road congestion, which has increased by 25 per cent since 1999, he said.
'Against our ever growing appetite for car use, we are faced with the immutable realities of Singapore's situation: a compact city state with 12 per cent of its land already used up for roads,' he said.
The number of vehicles in Singapore, one of the most expensive places in the world to own a car due to high taxes and charges, hit 850,000 on an annual growth rate of 3 per cent.
Mr Lim said starting in 2009, the government will take steps aimed at lowering the vehicle population growth rate to 1.5 per cent. -- REUTERS
S'pore plans $8b North-South Expressway
SINGAPORE - Singapore will spend up to $8 billion (US$5.6 billion) to build a new expressway spanning the island state to help ease growing congestion on its roads, a government minister said on Wednesday.
The announcement of the 21-km North-South Expressway (NSE) comes days after the government said it would spend US$14 billion to double Singapore's rail network, and after saying this month that it wanted more competition in the public bus sector.
Analysts say Singapore's investments on mega construction projects, that also include two casinos with a combined price tag of over US$8 billion and a US$1.3 billion water-front sports complex, could help boost economic growth as the city-state fights slowing exports - the economy's traditional mainstay.
Transport Minister Raymond Lim told reporters on Wednesday that the NSE, to be completed by 2020, will cut travel time by 30 per cent for residents living in the island's north heading to the central business district in the south.
He also announced an expansion of the electronic road pricing system, emulated in some European cities, where motorists pay to drive into city areas.
The aim is to 'encourage motorists to switch to public transport' to help reduce road congestion, which has increased by 25 per cent since 1999, he said.
'Against our ever growing appetite for car use, we are faced with the immutable realities of Singapore's situation: a compact city state with 12 per cent of its land already used up for roads,' he said.
The number of vehicles in Singapore, one of the most expensive places in the world to own a car due to high taxes and charges, hit 850,000 on an annual growth rate of 3 per cent.
Mr Lim said starting in 2009, the government will take steps aimed at lowering the vehicle population growth rate to 1.5 per cent. -- REUTERS
BT: Buy European shares, JPMorgan advises
Business Times - 30 Jan 2008
Buy European shares, JPMorgan advises
(LONDON) JPMorgan Chase & Co's Mislav Matejka, the only strategist to predict losses for European stocks in 2007, said investors should increase their equity holdings in the region after a market tumble last week.
The London-based strategist raised his recommendation on European shares to 'overweight' from 'neutral', meaning investors should hold more stocks than are represented in asset-allocation models. The move comes after the MSCI Europe Index, a benchmark used by JPMorgan, plummeted 12 per cent in 2008.
'While the concerns we had for the market, namely terrible growth-inflation trade-off and negative earnings revisions, are not going away,' equities have fallen to JPMorgan's 'bear case scenario', Mr Matejka and colleagues wrote in a note to investors yesterday. 'We feel that risk reward for equities has improved.'
JPMorgan joins other brokerages such as Morgan Stanley, ABN Amro Holding NV and Lehman Brothers Holdings Inc in advising investors to take advantage of the market losses. Benchmarks in more than 40 countries last week were at, or entered, a so-called bear market, defined as losses of more than 20 per cent in a 12-month period, amid concern that the US economy will go into a recession.
The relative value of members in the Dow Jones Stoxx 600 Index, another European benchmark, has fallen to 11 times their expected earnings, the lowest in two years, Bloomberg data show. JPMorgan expects corporate profits in Europe to rise 6 per cent this year\. \-- Bloomberg
Buy European shares, JPMorgan advises
(LONDON) JPMorgan Chase & Co's Mislav Matejka, the only strategist to predict losses for European stocks in 2007, said investors should increase their equity holdings in the region after a market tumble last week.
The London-based strategist raised his recommendation on European shares to 'overweight' from 'neutral', meaning investors should hold more stocks than are represented in asset-allocation models. The move comes after the MSCI Europe Index, a benchmark used by JPMorgan, plummeted 12 per cent in 2008.
'While the concerns we had for the market, namely terrible growth-inflation trade-off and negative earnings revisions, are not going away,' equities have fallen to JPMorgan's 'bear case scenario', Mr Matejka and colleagues wrote in a note to investors yesterday. 'We feel that risk reward for equities has improved.'
JPMorgan joins other brokerages such as Morgan Stanley, ABN Amro Holding NV and Lehman Brothers Holdings Inc in advising investors to take advantage of the market losses. Benchmarks in more than 40 countries last week were at, or entered, a so-called bear market, defined as losses of more than 20 per cent in a 12-month period, amid concern that the US economy will go into a recession.
The relative value of members in the Dow Jones Stoxx 600 Index, another European benchmark, has fallen to 11 times their expected earnings, the lowest in two years, Bloomberg data show. JPMorgan expects corporate profits in Europe to rise 6 per cent this year\. \-- Bloomberg
BT: Beating inflation at its own game
Business Times - 30 Jan 2008
MONEY MATTERS
Beating inflation at its own game
Invest at least 15 per cent of your income, control your expenses and hold assets that act as hedges against general price increases
By BEN FOK
INFLATION is commonly taught in business classes as a situation where demand exceeds supply. For instance, office rents in Singapore have gone up because there is a lack of supply and an increase in demand. Students, though, might not be as concerned about inflation as their parents, who have to cope with rising bills.
Singaporeans today are feeling the impact of inflation on their standard of living. With oil prices breaching US$100 per barrel, it is likely that inflation will continue to rise. The high price of oil is behind the rising cost of transport, electricity bills and food.
As a financial adviser, I find that clients these days inevitably bring up the topic of inflation. After listening to their laments, my advice to them is, first, take a deep breath and relax. However high inflation may be today, this is not the 1970s.
Before we discuss what an individual can do to lessen the impact of inflation, let's look at it from the macroeconomic perspective. Central banks of Western countries, for example, the Bank of England and the US Federal Reserve, use interest rates as part of their monetary policy to control inflation. As inflation goes up, interest rates also rise to counter inflation. Borrowers may be stretched servicing loans as the interest rate rises. On the other hand, as base rates increase, the returns on savings should improve. Hence, people will borrow and spend less, and save more.
But Singapore's central bank, the Monetary Authority of Singapore (MAS), does not use interest rates to fight inflation; instead, it uses the strength of the Singapore dollar.
The reason is that Singapore is a small and open economy that imports most of its food and fuel. With a strong Singapore dollar, we pay less when importing goods from overseas. So, Singapore's monetary policy is to maintain an appropriate level for the Singapore dollar with reference to a trade-weighted basket of currencies.
Singapore's interest rates are determined by supply and demand. The MAS does not directly control the movement of interest rates as they are set by the financial institutions independently. That means that even if inflation is high, the savings rate does not necessarily move in tandem. That's why our savings rate remains low despite higher inflation.
Unfortunately, individuals have little control over inflation, which can creep up and diminish the value of savings over time.
But don't fret. If you think about it, you've probably already hedged some of the higher costs without even realising it. According to the online research house Global Property Guide, Singapore's residential market was the world's hottest in 2007. It rose 24.3 per cent after adjusting for inflation (2.66 per cent), ahead of bullish markets like Shanghai and Bulgaria.
The majority of Singaporean households own their homes so even if you don't consider your house an investment, it has helped to hedge your family against rising prices.
And while prices have gone up, earnings have also increased, in some cases, at a faster clip than inflation. If you happen to have skills that are in demand, you could command higher earnings. All this shows that the effects of inflation are being mitigated.
For lower income families and retirees, the government is offering help through the goods and services tax (GST) offset and other rebates. For essential items, NTUC FairPrice and other supermarkets are finding new sources of supply and offering house brands that can keep costs down.
But the best way to mitigate inflation is to have a proper investment strategy. Investing in quality, blue chip stocks has traditionally been the best long-term way to beat inflation. The only problem is that if inflation becomes a major impediment to economic growth, the stock market will most likely suffer too. One way to lessen that risk is to stick with big, blue chip companies which, by virtue of their size, have more pricing power than small companies. Moreover, because they have been beaten down and overlooked, large, blue chip stocks have the least room to fall should inflation threaten the equity market.
Another way is to consider investing in natural resources funds. While most people find it difficult to understand why gold prices have soared, it's easy to see why oil prices have shot up. Demand for oil is strong, and supplies are limited. The strength of the global economy, coupled with the difficulty in constructing new refineries, has led many market watchers to believe that energy prices will remain high for some time.
With a global boom in commodities, the staple ingredients of a modern economy, many experts see a fundamental shift in the market. For example, the price of wheat and soy beans rose 70 per cent in 2007, while prices of gold, silver, lead, uranium, cattle and cocoa are all at or near record levels. This is not a temporary situation, so any investment in this area will probably give you some hedge against inflation. All these strategies, however, call for proper asset allocation.
The chart shows how gold, mining, energy and commodities performed in the last year. All of them proved to be highly correlated. However, they are not as correlated to the stock market. Exposure to any of these sectors would have provided you with some form of protection against inflation.
But if you think that the above is too complicated, consider this basic strategy. First, save and invest at least 15 per cent of your annual income. Second, control your expenses in any way possible. Third, buy and hold assets that historically have been hedges against inflation. Lastly, understand that inflation is difficult to quantify, and that your personal experience will differ from others.
Ultimately, there is no substitute for awareness of the effects of inflation and being prepared to face it squarely. Individuals must also know the importance of inflation-beating assets and make them part of their overall portfolio.
Ben Fok is Chief Executive Officer, Grandtag Financial Consultancy (Singapore) Pte LtdHe can be reached at ben.fok@grandtag.com
MONEY MATTERS
Beating inflation at its own game
Invest at least 15 per cent of your income, control your expenses and hold assets that act as hedges against general price increases
By BEN FOK
INFLATION is commonly taught in business classes as a situation where demand exceeds supply. For instance, office rents in Singapore have gone up because there is a lack of supply and an increase in demand. Students, though, might not be as concerned about inflation as their parents, who have to cope with rising bills.
Singaporeans today are feeling the impact of inflation on their standard of living. With oil prices breaching US$100 per barrel, it is likely that inflation will continue to rise. The high price of oil is behind the rising cost of transport, electricity bills and food.
As a financial adviser, I find that clients these days inevitably bring up the topic of inflation. After listening to their laments, my advice to them is, first, take a deep breath and relax. However high inflation may be today, this is not the 1970s.
Before we discuss what an individual can do to lessen the impact of inflation, let's look at it from the macroeconomic perspective. Central banks of Western countries, for example, the Bank of England and the US Federal Reserve, use interest rates as part of their monetary policy to control inflation. As inflation goes up, interest rates also rise to counter inflation. Borrowers may be stretched servicing loans as the interest rate rises. On the other hand, as base rates increase, the returns on savings should improve. Hence, people will borrow and spend less, and save more.
But Singapore's central bank, the Monetary Authority of Singapore (MAS), does not use interest rates to fight inflation; instead, it uses the strength of the Singapore dollar.
The reason is that Singapore is a small and open economy that imports most of its food and fuel. With a strong Singapore dollar, we pay less when importing goods from overseas. So, Singapore's monetary policy is to maintain an appropriate level for the Singapore dollar with reference to a trade-weighted basket of currencies.
Singapore's interest rates are determined by supply and demand. The MAS does not directly control the movement of interest rates as they are set by the financial institutions independently. That means that even if inflation is high, the savings rate does not necessarily move in tandem. That's why our savings rate remains low despite higher inflation.
Unfortunately, individuals have little control over inflation, which can creep up and diminish the value of savings over time.
But don't fret. If you think about it, you've probably already hedged some of the higher costs without even realising it. According to the online research house Global Property Guide, Singapore's residential market was the world's hottest in 2007. It rose 24.3 per cent after adjusting for inflation (2.66 per cent), ahead of bullish markets like Shanghai and Bulgaria.
The majority of Singaporean households own their homes so even if you don't consider your house an investment, it has helped to hedge your family against rising prices.
And while prices have gone up, earnings have also increased, in some cases, at a faster clip than inflation. If you happen to have skills that are in demand, you could command higher earnings. All this shows that the effects of inflation are being mitigated.
For lower income families and retirees, the government is offering help through the goods and services tax (GST) offset and other rebates. For essential items, NTUC FairPrice and other supermarkets are finding new sources of supply and offering house brands that can keep costs down.
But the best way to mitigate inflation is to have a proper investment strategy. Investing in quality, blue chip stocks has traditionally been the best long-term way to beat inflation. The only problem is that if inflation becomes a major impediment to economic growth, the stock market will most likely suffer too. One way to lessen that risk is to stick with big, blue chip companies which, by virtue of their size, have more pricing power than small companies. Moreover, because they have been beaten down and overlooked, large, blue chip stocks have the least room to fall should inflation threaten the equity market.
Another way is to consider investing in natural resources funds. While most people find it difficult to understand why gold prices have soared, it's easy to see why oil prices have shot up. Demand for oil is strong, and supplies are limited. The strength of the global economy, coupled with the difficulty in constructing new refineries, has led many market watchers to believe that energy prices will remain high for some time.
With a global boom in commodities, the staple ingredients of a modern economy, many experts see a fundamental shift in the market. For example, the price of wheat and soy beans rose 70 per cent in 2007, while prices of gold, silver, lead, uranium, cattle and cocoa are all at or near record levels. This is not a temporary situation, so any investment in this area will probably give you some hedge against inflation. All these strategies, however, call for proper asset allocation.
The chart shows how gold, mining, energy and commodities performed in the last year. All of them proved to be highly correlated. However, they are not as correlated to the stock market. Exposure to any of these sectors would have provided you with some form of protection against inflation.
But if you think that the above is too complicated, consider this basic strategy. First, save and invest at least 15 per cent of your annual income. Second, control your expenses in any way possible. Third, buy and hold assets that historically have been hedges against inflation. Lastly, understand that inflation is difficult to quantify, and that your personal experience will differ from others.
Ultimately, there is no substitute for awareness of the effects of inflation and being prepared to face it squarely. Individuals must also know the importance of inflation-beating assets and make them part of their overall portfolio.
Ben Fok is Chief Executive Officer, Grandtag Financial Consultancy (Singapore) Pte LtdHe can be reached at ben.fok@grandtag.com
BT: CPF members earn $6b in paper profit
Business Times - 30 Jan 2008
CPF members earn $6b in paper profit
Substantial gains made by those who invested in gold, reports GENEVIEVE CUA
THANKS to strong markets for the most of last year, Central Provident Fund members are sitting on paper gains of roughly $6 billion in aggregate value in ordinary and special accounts, according to the latest profit and loss statement for the CPF Investment Scheme.
The data tots up members' historical entry price against the assets' respective market values for the CPF's fiscal year up to Sept 30, 2007. The data gives a broad idea of how members have fared, but there is no indication of for how long each investment has been held.
The most substantial gains in percentage terms were achieved by members who invested in gold, with unrealised gains of as much as 57.1 per cent. The second most rewarding was property funds, which reflected paper gains of 50.77 per cent. Gold, however, is subject to a 10 per cent investment limit. This gives it almost the smallest share in members' investment accounts on an aggregate basis. Property funds are subject to a 35 per cent investment limit, which also applies to stocks in general.
Yesterday CPF officials briefed the press on the progress of steps taken to raise the quality of funds in the CPFIS and to lower the investment costs. The number of funds in the scheme has steadily declined from 444 as at the fourth quarter of 2006 to 387 as at January - a drop of about 13 per cent.
The CPF's new measures, which include a requirement for a three-year track record, top quartile performance, and a cap on expense ratios, were implemented for new funds seeking inclusion in the CPFIS from February 2006. From January this year, all funds have to comply with prescribed expense ratio caps. Those which are unable to comply will not be allowed to take in new CPF money.
To distinguish between those companies that are able to satisfy all the requirements including the expense ratio cap, CPF has created a list of the qualifying funds, called 'List A'. There are currently 46 funds in List A. Another 30 top quartile funds are as yet unable to meet the expense ratio criteria and are put in List B, along with the rest.
The distinction between lists A and B, however, remains a point of contention among a number of fund managers, as Executive Money gathers. One fund manager says: 'Some fund managers do not want to continue to be in the CPF market any longer. They are being asked to try to curb funds with high expenses, but people want to invest in them as they do give you performance. People should still be given that choice.'
The expense requirement is also awkward for funds with a performance fee structure. Ironically, a strong year of outperformance could result in the fund being closed to new money as the effective fees would shoot up.
Does a presence in List A draw investor interest? Another fund marketer is uncertain. 'The distinction between List A and B is in its infancy. I have had some funds in List A and others which are in List B,' he said.
CPF assistant director (investments) Wu Meei said it is possible that more funds may drop off the scheme. 'That depends on their commercial decision,' she said.
While the lion's share of CPF savings continues to be invested in insurance-linked products, the amount invested in unit trusts has just exceeded that in stocks - by a tiny margin. As at the third quarter last year, $4.5 billion was invested in unit trusts, compared to $4.47 billion in shares.
In terms of performance, however, investment-linked policies (ILPs) registered a paper gain of 36.97 per cent against historical costs, compared to 17 per cent for unit trusts, and 27.67 per cent for shares.
As the underlying asset classes for ILPs and unit trusts are similar - a number of ILPs in fact feed into unit trusts - one reason for the differential in unrealised gain could be behavioural. Investors in insurance policies are said to be less likely to trade their funds. They are also more likely to be invested in balanced funds.
As for those who realised their investments in the fiscal year ended in September, 28 per cent made net profits after bank charges and in excess of the CPF Ordinary Account interest rate, compared to 23 per cent in 2006. The proportion with realised losses, however, remained substantial at 43 per cent.
During the period under review, the SES All Index gained 52 per cent, and the STI 44 per cent. The MSCI World Index gained 19 per cent.
CPF also briefed the press yesterday on the progress of initiatives to encourage members to defer withdrawal of their savings in retirement. As part of measures announced last year, savings of $60,000 in combined CPF balances will earn an extra 1 per cent in interest. The drawdown age is also to be raised progressively.
To help members between 50 and 57 cope with the later drawdown age, CPF will pay a one-off 'D-bonus' in May. Some 105,000 letters will be sent out this week to members who were 55 to 57 in age last year.
There is also a 'V-Bonus' or voluntary bonus to encourage members to voluntarily defer their drawdowns to age 65. Of the 10,123 members who turned 63 or 64 between January and February this year, 75 per cent - 7,583 - have deferred their withdrawals.
CPF members earn $6b in paper profit
Substantial gains made by those who invested in gold, reports GENEVIEVE CUA
THANKS to strong markets for the most of last year, Central Provident Fund members are sitting on paper gains of roughly $6 billion in aggregate value in ordinary and special accounts, according to the latest profit and loss statement for the CPF Investment Scheme.
The data tots up members' historical entry price against the assets' respective market values for the CPF's fiscal year up to Sept 30, 2007. The data gives a broad idea of how members have fared, but there is no indication of for how long each investment has been held.
The most substantial gains in percentage terms were achieved by members who invested in gold, with unrealised gains of as much as 57.1 per cent. The second most rewarding was property funds, which reflected paper gains of 50.77 per cent. Gold, however, is subject to a 10 per cent investment limit. This gives it almost the smallest share in members' investment accounts on an aggregate basis. Property funds are subject to a 35 per cent investment limit, which also applies to stocks in general.
Yesterday CPF officials briefed the press on the progress of steps taken to raise the quality of funds in the CPFIS and to lower the investment costs. The number of funds in the scheme has steadily declined from 444 as at the fourth quarter of 2006 to 387 as at January - a drop of about 13 per cent.
The CPF's new measures, which include a requirement for a three-year track record, top quartile performance, and a cap on expense ratios, were implemented for new funds seeking inclusion in the CPFIS from February 2006. From January this year, all funds have to comply with prescribed expense ratio caps. Those which are unable to comply will not be allowed to take in new CPF money.
To distinguish between those companies that are able to satisfy all the requirements including the expense ratio cap, CPF has created a list of the qualifying funds, called 'List A'. There are currently 46 funds in List A. Another 30 top quartile funds are as yet unable to meet the expense ratio criteria and are put in List B, along with the rest.
The distinction between lists A and B, however, remains a point of contention among a number of fund managers, as Executive Money gathers. One fund manager says: 'Some fund managers do not want to continue to be in the CPF market any longer. They are being asked to try to curb funds with high expenses, but people want to invest in them as they do give you performance. People should still be given that choice.'
The expense requirement is also awkward for funds with a performance fee structure. Ironically, a strong year of outperformance could result in the fund being closed to new money as the effective fees would shoot up.
Does a presence in List A draw investor interest? Another fund marketer is uncertain. 'The distinction between List A and B is in its infancy. I have had some funds in List A and others which are in List B,' he said.
CPF assistant director (investments) Wu Meei said it is possible that more funds may drop off the scheme. 'That depends on their commercial decision,' she said.
While the lion's share of CPF savings continues to be invested in insurance-linked products, the amount invested in unit trusts has just exceeded that in stocks - by a tiny margin. As at the third quarter last year, $4.5 billion was invested in unit trusts, compared to $4.47 billion in shares.
In terms of performance, however, investment-linked policies (ILPs) registered a paper gain of 36.97 per cent against historical costs, compared to 17 per cent for unit trusts, and 27.67 per cent for shares.
As the underlying asset classes for ILPs and unit trusts are similar - a number of ILPs in fact feed into unit trusts - one reason for the differential in unrealised gain could be behavioural. Investors in insurance policies are said to be less likely to trade their funds. They are also more likely to be invested in balanced funds.
As for those who realised their investments in the fiscal year ended in September, 28 per cent made net profits after bank charges and in excess of the CPF Ordinary Account interest rate, compared to 23 per cent in 2006. The proportion with realised losses, however, remained substantial at 43 per cent.
During the period under review, the SES All Index gained 52 per cent, and the STI 44 per cent. The MSCI World Index gained 19 per cent.
CPF also briefed the press yesterday on the progress of initiatives to encourage members to defer withdrawal of their savings in retirement. As part of measures announced last year, savings of $60,000 in combined CPF balances will earn an extra 1 per cent in interest. The drawdown age is also to be raised progressively.
To help members between 50 and 57 cope with the later drawdown age, CPF will pay a one-off 'D-bonus' in May. Some 105,000 letters will be sent out this week to members who were 55 to 57 in age last year.
There is also a 'V-Bonus' or voluntary bonus to encourage members to voluntarily defer their drawdowns to age 65. Of the 10,123 members who turned 63 or 64 between January and February this year, 75 per cent - 7,583 - have deferred their withdrawals.
Tuesday, January 29, 2008
BT: Goldman says 60% chance of Japan sliding into recession
Business Times - 29 Jan 2008
Goldman says 60% chance of Japan sliding into recession
Prediction comes as exports falter amid rising yen, weaker global demand
By ANTHONY ROWLEY IN TOKYO
THERE is now a 60 per cent chance that Japan's economy will slide into recession in the first half of this year, and the contraction may even have begun already, according to Goldman Sachs. The US investment bank's prediction comes as Japanese exports are faltering in the face of a rising yen and weakening global demand.
The Nikkei 225 stock average, meanwhile, slumped in value by nearly 4 per cent yesterday as another leading financial house, Macquarie Securities, warned of a decline in Japanese corporate profits in 2008. Bank of Japan governor Toshihiro Fukui linked the stock slide to the strong yen which hit around 106 to the dollar and also rose against other currencies.
Goldman Sachs pointed out in a research report that five out of 11 key government indicators that give an indication of which way the economy is going were already falling and if others followed, the economy was certain to have entered a recession.
Macquarie's chief economist, Richard Jerram, argued also in a research report that the economy should be able to avoid a technical recession in 2008 but downgraded the forecast for growth in the fiscal year beginning April 1 from 2.8 per cent to 2.1 per cent and said that 'large firms' profits could easily decline in fiscal year 2008'.
Darkening economic prospects saw the Nikkei shed 541.25 points to 13,087.91. Falls in Japanese stocks have been relatively bigger than those in other markets because of the yen's rise, BOJ governor Mr Fukui told a parliamentary committee. 'The rise in the yen, due to an unwinding of past (positions) based on the yen's weakness, is affecting Japanese stock prices,' he said.
Speculation is mounting that the BOJ may be forced to cut interest rates soon in order to take upward pressure off the yen and to avert or minimise the length of a recession in Japan. But data released last Friday showed that core consumer price inflation hit a near 10-year high in December, creating a dilemma for the central bank over which way it should move.
In an ominous sign that Chinese demand for Japanese raw materials is beginning to flag, as well as that in the United States, Nippon Steel Corporation, the world's second largest steelmaker, announced yesterday that its pre-tax profit in the nine months to December fell by 0.7 per cent, sending steel shares sharply lower and increasing pessimism in the broader market.
Goldman says 60% chance of Japan sliding into recession
Prediction comes as exports falter amid rising yen, weaker global demand
By ANTHONY ROWLEY IN TOKYO
THERE is now a 60 per cent chance that Japan's economy will slide into recession in the first half of this year, and the contraction may even have begun already, according to Goldman Sachs. The US investment bank's prediction comes as Japanese exports are faltering in the face of a rising yen and weakening global demand.
The Nikkei 225 stock average, meanwhile, slumped in value by nearly 4 per cent yesterday as another leading financial house, Macquarie Securities, warned of a decline in Japanese corporate profits in 2008. Bank of Japan governor Toshihiro Fukui linked the stock slide to the strong yen which hit around 106 to the dollar and also rose against other currencies.
Goldman Sachs pointed out in a research report that five out of 11 key government indicators that give an indication of which way the economy is going were already falling and if others followed, the economy was certain to have entered a recession.
Macquarie's chief economist, Richard Jerram, argued also in a research report that the economy should be able to avoid a technical recession in 2008 but downgraded the forecast for growth in the fiscal year beginning April 1 from 2.8 per cent to 2.1 per cent and said that 'large firms' profits could easily decline in fiscal year 2008'.
Darkening economic prospects saw the Nikkei shed 541.25 points to 13,087.91. Falls in Japanese stocks have been relatively bigger than those in other markets because of the yen's rise, BOJ governor Mr Fukui told a parliamentary committee. 'The rise in the yen, due to an unwinding of past (positions) based on the yen's weakness, is affecting Japanese stock prices,' he said.
Speculation is mounting that the BOJ may be forced to cut interest rates soon in order to take upward pressure off the yen and to avert or minimise the length of a recession in Japan. But data released last Friday showed that core consumer price inflation hit a near 10-year high in December, creating a dilemma for the central bank over which way it should move.
In an ominous sign that Chinese demand for Japanese raw materials is beginning to flag, as well as that in the United States, Nippon Steel Corporation, the world's second largest steelmaker, announced yesterday that its pre-tax profit in the nine months to December fell by 0.7 per cent, sending steel shares sharply lower and increasing pessimism in the broader market.
Monday, January 28, 2008
The Economist: It's a rough out there
It's rough out there
Jan 24th 2008 From The Economist print edition
Panic in the markets is scary. Among policymakers it only makes things worse
THE financial storm that blew up in America's subprime mortgage market last year has become a hurricane. The ill wind from reckless property lending blasted first the market in asset-backed securities, then banks' balance sheets and, most recently, stockmarkets. Across the globe, more than $5 trillion has disappeared from the value of public companies in the first three weeks of January. Many markets are 20% or more below their highs, the informal definition of a bear market. On January 21st share prices plunged from Brazil to Britain in the worst day of trading since September 11th 2001.
Although America's exchanges were closed that day, its policymakers' response was more than commensurate. Before Wall Street opened on January 22nd the Federal Reserve announced an unscheduled rate cut of three-quarters of a percentage point, to 3.5%, its fastest easing in a quarter of a century. A day later the New York insurance regulator and leading banks began work on a multi-billion-dollar plan to rescue the country's teetering bond insurers. As the markets pitch and yaw the pressing question is whether central bankers and regulators have acted with swift prudence, or ill-judged panic.
There is no doubt that this is a frightening moment. But the narrow economic rationale for the Fed's emergency rate-cut this week was thin. America's weak economy means monetary policy can, and should, be loosened considerably. But the central bankers' next scheduled meeting begins on January 29th. Since lower interest rates take several months to work through the economy, accelerating rate cuts by a few days will not much affect the outcome. Yes, share prices had been falling sharply across the globe, but the slide was orderly and the system had not seized up. The Fed seems to have been spooked, and wanted to stop the markets' fall (see article).
That is a dangerous path for a central bank to tread. Its success will now be identified with short-term movements on Wall Street. Indeed, as the stockmarket shrugged off the latest rate cut, the Fed's authority already looked diminished. As if to prove the point, shares soared only when the insurance regulator appeared. Ben Bernanke, Fed chairman and guardian of America's economy, moved Wall Street less than Eric Dinallo, whom nobody had heard of, saying he would rescue some insurers nobody understood (see article).
Rather than chasing the market's tail, the Fed ought to be asking what the markets' fall really signals. The answer is: unsurprising judgments that should not have led it to panic.
The Bernanke put-upon
For much of last year, stockmarkets ignored the bad news from the credit markets, thanks to three assumptions. First, that policymakers, led by the Fed, would avert recession in the United States. Second, that even if America stumbled, the rest of the world economy was “decoupled” and would carry on growing healthily. And third, that the credit mess would be confined to areas related to subprime mortgages.
These assumptions were always over-optimistic. America's economy has stalled as the building bust deepens and consumers cope with the triple whammy of falling house prices, tighter credit and dearer oil. The labour market is weakening at a pace that has in the past heralded recession. The rest of the world, meanwhile, is slowing. Europe's outlook has darkened. Its banks are embroiled in the credit crisis; and one of them, Société Générale, has lost €4.9 billion ($7.1 billion) in a fraud. Japan is weak; even turbo-charged China may cool.
And the credit crisis has continued to spread. Corporate lending and parts of consumer credit, such as credit cards and car loans, are wobbly. The looming downgrades—and possible bankruptcies—of the “monoline” insurers of some $2.4 trillion of bonds boded worse until Mr Dinallo moved. They would have hurt states and municipalities that are their biggest customers; and banks that had bought insurance in credit-derivative trades would also have been hit. A further round of losses at the banks could have been catastrophic. With the system at risk, no wonder stockmarkets swooned.
Heavy weather
None of this is exactly cheerful, but it is not disastrous, either. Particular problems, like the monoline insurers, should be dealt with by particular remedies, not the warm bath of monetary policy. It is early days, but one choice for Mr Dinallo would be to corral their worst risks in a “bad bank”, leaving the rest intact—and more tightly regulated.
As to decoupling, although the rest of the world remains somewhat vulnerable to America's troubles, most rich economies are in a slightly better shape than the United States, and most emerging ones are better able to withstand an American downturn than they were (see article). Many have plenty of reserves and flexible exchange rates, making a rerun of the 1997-98 crises unlikely. Many are growing nicely on the back of rising domestic demand and regional trade links. And many have strong budget positions, leaving room for fiscal loosening to offset weakening exports.
American policymakers also have tools to cushion—if not forestall—the downturn. Lower interest rates may not stop house prices falling, nor will they prevent banks from tightening their lending standards. But monetary policy can still stimulate the economy, as lower rates boost banks' profitability, bring down firms' borrowing costs and improve indebted consumers' cash flow (see article). Equally, fiscal policy will be a prop. Of course, President Bush promised too much when he suggested that a stimulus package would keep the economy “healthy”. But Congress is rushing the $150 billion package through, and, even if it takes a while to reach firms and consumers, it will give the economy a boost.
Taken together, the signs from the world economy are troubling. The credit binge will not unwind quickly or gently. Asset prices will fall. But central bankers and regulators have the tools to stop a downturn from becoming a slump, so long as they use them sensibly. Reacting to market panic with panicky rate cuts is likely to make things worse rather than better. The Fed should always be the calm centre of a financial storm.
Jan 24th 2008 From The Economist print edition
Panic in the markets is scary. Among policymakers it only makes things worse
THE financial storm that blew up in America's subprime mortgage market last year has become a hurricane. The ill wind from reckless property lending blasted first the market in asset-backed securities, then banks' balance sheets and, most recently, stockmarkets. Across the globe, more than $5 trillion has disappeared from the value of public companies in the first three weeks of January. Many markets are 20% or more below their highs, the informal definition of a bear market. On January 21st share prices plunged from Brazil to Britain in the worst day of trading since September 11th 2001.
Although America's exchanges were closed that day, its policymakers' response was more than commensurate. Before Wall Street opened on January 22nd the Federal Reserve announced an unscheduled rate cut of three-quarters of a percentage point, to 3.5%, its fastest easing in a quarter of a century. A day later the New York insurance regulator and leading banks began work on a multi-billion-dollar plan to rescue the country's teetering bond insurers. As the markets pitch and yaw the pressing question is whether central bankers and regulators have acted with swift prudence, or ill-judged panic.
There is no doubt that this is a frightening moment. But the narrow economic rationale for the Fed's emergency rate-cut this week was thin. America's weak economy means monetary policy can, and should, be loosened considerably. But the central bankers' next scheduled meeting begins on January 29th. Since lower interest rates take several months to work through the economy, accelerating rate cuts by a few days will not much affect the outcome. Yes, share prices had been falling sharply across the globe, but the slide was orderly and the system had not seized up. The Fed seems to have been spooked, and wanted to stop the markets' fall (see article).
That is a dangerous path for a central bank to tread. Its success will now be identified with short-term movements on Wall Street. Indeed, as the stockmarket shrugged off the latest rate cut, the Fed's authority already looked diminished. As if to prove the point, shares soared only when the insurance regulator appeared. Ben Bernanke, Fed chairman and guardian of America's economy, moved Wall Street less than Eric Dinallo, whom nobody had heard of, saying he would rescue some insurers nobody understood (see article).
Rather than chasing the market's tail, the Fed ought to be asking what the markets' fall really signals. The answer is: unsurprising judgments that should not have led it to panic.
The Bernanke put-upon
For much of last year, stockmarkets ignored the bad news from the credit markets, thanks to three assumptions. First, that policymakers, led by the Fed, would avert recession in the United States. Second, that even if America stumbled, the rest of the world economy was “decoupled” and would carry on growing healthily. And third, that the credit mess would be confined to areas related to subprime mortgages.
These assumptions were always over-optimistic. America's economy has stalled as the building bust deepens and consumers cope with the triple whammy of falling house prices, tighter credit and dearer oil. The labour market is weakening at a pace that has in the past heralded recession. The rest of the world, meanwhile, is slowing. Europe's outlook has darkened. Its banks are embroiled in the credit crisis; and one of them, Société Générale, has lost €4.9 billion ($7.1 billion) in a fraud. Japan is weak; even turbo-charged China may cool.
And the credit crisis has continued to spread. Corporate lending and parts of consumer credit, such as credit cards and car loans, are wobbly. The looming downgrades—and possible bankruptcies—of the “monoline” insurers of some $2.4 trillion of bonds boded worse until Mr Dinallo moved. They would have hurt states and municipalities that are their biggest customers; and banks that had bought insurance in credit-derivative trades would also have been hit. A further round of losses at the banks could have been catastrophic. With the system at risk, no wonder stockmarkets swooned.
Heavy weather
None of this is exactly cheerful, but it is not disastrous, either. Particular problems, like the monoline insurers, should be dealt with by particular remedies, not the warm bath of monetary policy. It is early days, but one choice for Mr Dinallo would be to corral their worst risks in a “bad bank”, leaving the rest intact—and more tightly regulated.
As to decoupling, although the rest of the world remains somewhat vulnerable to America's troubles, most rich economies are in a slightly better shape than the United States, and most emerging ones are better able to withstand an American downturn than they were (see article). Many have plenty of reserves and flexible exchange rates, making a rerun of the 1997-98 crises unlikely. Many are growing nicely on the back of rising domestic demand and regional trade links. And many have strong budget positions, leaving room for fiscal loosening to offset weakening exports.
American policymakers also have tools to cushion—if not forestall—the downturn. Lower interest rates may not stop house prices falling, nor will they prevent banks from tightening their lending standards. But monetary policy can still stimulate the economy, as lower rates boost banks' profitability, bring down firms' borrowing costs and improve indebted consumers' cash flow (see article). Equally, fiscal policy will be a prop. Of course, President Bush promised too much when he suggested that a stimulus package would keep the economy “healthy”. But Congress is rushing the $150 billion package through, and, even if it takes a while to reach firms and consumers, it will give the economy a boost.
Taken together, the signs from the world economy are troubling. The credit binge will not unwind quickly or gently. Asset prices will fall. But central bankers and regulators have the tools to stop a downturn from becoming a slump, so long as they use them sensibly. Reacting to market panic with panicky rate cuts is likely to make things worse rather than better. The Fed should always be the calm centre of a financial storm.
Wednesday, January 16, 2008
BT: 2008 construction deals seen hitting record $27b
Business Times - 16 Jan 2008
2008 construction deals seen hitting record $27b
BCA forecast based on strong demand from private sector
By UMA SHANKARI
(SINGAPORE) The value of construction contracts awarded this year will reach $23-27 billion on the back of strong demand from the private sector, according to official estimates released yesterday.
Last year, the total value of construction contracts awarded hit $24.5 billion - also mainly due to strong private sector demand - according to the Building and Construction Authority (BCA).
The figure came in slightly above analysts' estimates of around $24 billion as well as BCA's previous estimate of $19-22 billion.
In terms of nominal value, last year's figure is higher than the peak demand of $24.4 billion seen in 1997. But if inflation is taken into account, last year's demand still fell about 9 per cent short of the total value of contracts awarded in 1997, BCA said.
Analysts said that the pace of contracts awarded in 2007 shows that growth is still to come.
'The $24.5 billion number is certainly impressive,' said Citigroup economist Kit Wei Zheng. 'Consider this. In the first 10 months of the year, we had $18.5 billion of construction contracts.
This implies that $6 billion of contracts were awarded in November and December alone - roughly $3 billion a month. This is far higher than the $1.85 billion monthly average in the January to October period.'
Mr Kit said that the trend indicates that the pipeline of future contracts is likely to support construction GDP growth well into the second half of 2008 and 2009.
For this year, the private sector is again expected to account for the bulk of construction demand, mostly from residential and commercial developments. In 2007, some $18.8 billion worth of contracts came from the private sector.
However, the high construction demand is expected to continue to exert pressure on the construction industry's resources by driving costs up and leading to a capacity crunch.
In 2007, the price of ready-mixed concrete climbed 75 per cent to $130 per cubic metre, while the price of steel bars rose 34 per cent to $1,000 per tonne, BCA's data showed. Labour costs are also on the way up. Overall construction costs increased as much as 40 per cent last year, analysts said.
Many developers are also reporting that most contractors are fully booked for 2008.
Addressing this, the government said that it is 'taking proactive measures' to ease the pressure on construction resources.
Last November, it identified more than $2 billion worth of public sector projects that could be rescheduled to 2010 or beyond. 'All ministries are currently combing through their list of projects to identify more projects for rescheduling,' Parliamentary Secretary for the Ministry of National Development Mohamad Maliki bin Osman said yesterday.
BCA will also increase the number of overseas testing centres to 25 by mid-2009, up from 19 at present. This would allow more foreign workers to be employed.
The government is also encouraging the industry to use more recycled and alternative construction materials. A proposed licensing scheme for importers of materials like sand and granite is being finalised, said Dr Maliki.
He said that the assistance scheme that BCA implemented last year to share the risk of bringing in sand from distant sources will be ended, since it has been a year since Indonesia banned the export of concreting sand to Singapore. 'The move is based on feedback from the industry that the scheme is no longer necessary,' Dr Maliki said.
BCA also intends to continue to encourage the development of environmentally sustainable buildings. New guidelines on concrete usage will be introduced later this month, it said.
2008 construction deals seen hitting record $27b
BCA forecast based on strong demand from private sector
By UMA SHANKARI
(SINGAPORE) The value of construction contracts awarded this year will reach $23-27 billion on the back of strong demand from the private sector, according to official estimates released yesterday.
Last year, the total value of construction contracts awarded hit $24.5 billion - also mainly due to strong private sector demand - according to the Building and Construction Authority (BCA).
The figure came in slightly above analysts' estimates of around $24 billion as well as BCA's previous estimate of $19-22 billion.
In terms of nominal value, last year's figure is higher than the peak demand of $24.4 billion seen in 1997. But if inflation is taken into account, last year's demand still fell about 9 per cent short of the total value of contracts awarded in 1997, BCA said.
Analysts said that the pace of contracts awarded in 2007 shows that growth is still to come.
'The $24.5 billion number is certainly impressive,' said Citigroup economist Kit Wei Zheng. 'Consider this. In the first 10 months of the year, we had $18.5 billion of construction contracts.
This implies that $6 billion of contracts were awarded in November and December alone - roughly $3 billion a month. This is far higher than the $1.85 billion monthly average in the January to October period.'
Mr Kit said that the trend indicates that the pipeline of future contracts is likely to support construction GDP growth well into the second half of 2008 and 2009.
For this year, the private sector is again expected to account for the bulk of construction demand, mostly from residential and commercial developments. In 2007, some $18.8 billion worth of contracts came from the private sector.
However, the high construction demand is expected to continue to exert pressure on the construction industry's resources by driving costs up and leading to a capacity crunch.
In 2007, the price of ready-mixed concrete climbed 75 per cent to $130 per cubic metre, while the price of steel bars rose 34 per cent to $1,000 per tonne, BCA's data showed. Labour costs are also on the way up. Overall construction costs increased as much as 40 per cent last year, analysts said.
Many developers are also reporting that most contractors are fully booked for 2008.
Addressing this, the government said that it is 'taking proactive measures' to ease the pressure on construction resources.
Last November, it identified more than $2 billion worth of public sector projects that could be rescheduled to 2010 or beyond. 'All ministries are currently combing through their list of projects to identify more projects for rescheduling,' Parliamentary Secretary for the Ministry of National Development Mohamad Maliki bin Osman said yesterday.
BCA will also increase the number of overseas testing centres to 25 by mid-2009, up from 19 at present. This would allow more foreign workers to be employed.
The government is also encouraging the industry to use more recycled and alternative construction materials. A proposed licensing scheme for importers of materials like sand and granite is being finalised, said Dr Maliki.
He said that the assistance scheme that BCA implemented last year to share the risk of bringing in sand from distant sources will be ended, since it has been a year since Indonesia banned the export of concreting sand to Singapore. 'The move is based on feedback from the industry that the scheme is no longer necessary,' Dr Maliki said.
BCA also intends to continue to encourage the development of environmentally sustainable buildings. New guidelines on concrete usage will be introduced later this month, it said.
Monday, January 14, 2008
BT: Annuities: making nest eggs last
Business Times - 14 Jan 2008
Annuities: making nest eggs last
Check out the payout sum and period, the underlying returns and the insurer's track record before buying one, says CRYSTAL NEO
DON'T feel compelled to rush to buy annuities before the compulsory annuity scheme kicks in. There are some factors you should consider first - and yes, age is one of them.
You must understand what annuities are. They are contracts which provide periodic payments for an agreed-upon span of time. Among them are those that offer periodic payouts for a fixed number of years. Then there are life annuities which make such payouts for the duration of the annuitants' lives.
The key insurance role of annuities is to cover people against the risk of outliving their resources.
Associate professor Fong Wai Mun of the National University of Singapore Business School describes annuities as a retirement product. He says that while they are important financial planning tools, you should shun them if you are young.
A younger person has to pay more for an annuity due to the high cost sustained by the insurance company, which would have to pay out for many more years.
But insurance companies are quick to point out that retirement planning is one area that younger people tend to overlook.
'A young person needs to start saving early to accumulate sufficient funds for retirement needs. Annuities are one of the most important tools for retirement needs,' an NTUC Income spokesman says. 'The more you save and accumulate to purchase an annuity, the higher the monthly payout you will receive from it.'
While annuities seem to have made the news only in recent years, they're not all that new. Annuities date back to Roman times.
Contracts made during the emperor's time were known as annua, or 'annual stipends' in Latin. The annua promised an individual a stream of payments for a fixed term, possibly for life, in return for a one-time payment.
Financial planners and insurance industry players say that Singaporeans are often reluctant to buy annuities due to the low payouts. Most people usually opt to leave their money with the Central Provident Fund (CPF) until age 62, when they can draw a higher monthly payout of $790 for 20 years.
In comparison, the life annuity products on the market now pay some $400 to just over $500 a month for an initial investment of $99,600 - the current CPF Minimum Sum - although the payments last for life.
In his National Day Rally speech last year, Prime Minister Lee Hsien Loong acknowledged that the returns on annuities were not very attractive, but he still insisted that 'we do need annuities as part of our old age planning'.
Associate professor Benedict Koh at the Singapore Management University Lee Kong Chian School of Business says that while the drawdown for annuities is available only after age 82, most Singaporeans worry more about the immediate future - the ability to finance their retirement years from 62 to 82. And that's why they are not so keen on annuities. Also, the amount of payout per month is very low to live on in Singapore.
Another reason Prof Koh cites is that by participating in the compulsory annuity scheme, Singaporeans will receive less payout from the CPF minimum sum from age 62 to 82.
He adds: 'If they die before 82, they will be hit by a double whammy. They die prematurely (most want to live longer) and they lose the capital used to purchase the annuity (they prefer that this sum goes to their loved ones).'
According to an AIA spokesman, annuity take-up rates tend to be driven by compulsory schemes and/or tax incentives in most countries. The lack of both here has meant that the take-up has been low.
In Singapore, the current Minimum Sum annuities offered by insurers provide a lifetime monthly annuity benefit which is lower than the monthly benefit offered by the CPF Board. The public may prefer a higher benefit as they do not fully apprehend the possibility that they may live longer than expected.
A safety net
Prof Fong says that the many misgivings that Singaporeans have about annuities stem from a lack of understanding of, or disregard towards, annuities.
One way Singaporeans can expand their knowledge on the issue is by checking out the Monetary Authority of Singapore and the CPF websites, he says. Other ways to dispel doubts include reading financial books or speaking to financial advisers.
At AIA, for example, customers can go through a financial health check, a process that involves identifying their goals, establishing priorities and assessing their available options to help them achieve these goals.
'When planning for retirement, some of the important questions that we would help you to answer include: what are my retirement goals, how much do I need to finance my retirement goals, how much do I need to invest to achieve my desired retirement income, what financial obligations will I have now and when I retire?' the AIA spokesman says.
Prof Koh says that some key issues that people should consider when deciding to buy annuities would be the period of payout, which should ideally cover the person's lifespan; the amount of payout, which should be sufficient for living expenses; and the underlying returns quoted by the issuer because a higher return ensures larger payouts.
Looking for an insurance company with a good track record in the annuity market is especially important when buying participating annuity plans, the NTUC Income spokesman adds.
Both Prof Koh and Prof Fong agree that annuities have become more important in financial planning in recent years as people are living longer.
Prof Koh says that annuities are particularly important for people who have limited savings for retirement. 'The compulsory annuity scheme proposed by the government allows pooling of risk so that the annuity payout is enough for subsistence living and the drawdown period is for life.'
And Prof Fong feels that while annuities should not be the only protection in old age, virtually everyone should buy them.
'The very rich don't need annuities because they have enough money to last for a long time,' he says. 'But for people with a healthy background who expect to live long, it is a form of guaranteed payout.
'For many who are not prepared financially, every dollar helps. So annuities are like a safety net.'
Annuities: making nest eggs last
Check out the payout sum and period, the underlying returns and the insurer's track record before buying one, says CRYSTAL NEO
DON'T feel compelled to rush to buy annuities before the compulsory annuity scheme kicks in. There are some factors you should consider first - and yes, age is one of them.
You must understand what annuities are. They are contracts which provide periodic payments for an agreed-upon span of time. Among them are those that offer periodic payouts for a fixed number of years. Then there are life annuities which make such payouts for the duration of the annuitants' lives.
The key insurance role of annuities is to cover people against the risk of outliving their resources.
Associate professor Fong Wai Mun of the National University of Singapore Business School describes annuities as a retirement product. He says that while they are important financial planning tools, you should shun them if you are young.
A younger person has to pay more for an annuity due to the high cost sustained by the insurance company, which would have to pay out for many more years.
But insurance companies are quick to point out that retirement planning is one area that younger people tend to overlook.
'A young person needs to start saving early to accumulate sufficient funds for retirement needs. Annuities are one of the most important tools for retirement needs,' an NTUC Income spokesman says. 'The more you save and accumulate to purchase an annuity, the higher the monthly payout you will receive from it.'
While annuities seem to have made the news only in recent years, they're not all that new. Annuities date back to Roman times.
Contracts made during the emperor's time were known as annua, or 'annual stipends' in Latin. The annua promised an individual a stream of payments for a fixed term, possibly for life, in return for a one-time payment.
Financial planners and insurance industry players say that Singaporeans are often reluctant to buy annuities due to the low payouts. Most people usually opt to leave their money with the Central Provident Fund (CPF) until age 62, when they can draw a higher monthly payout of $790 for 20 years.
In comparison, the life annuity products on the market now pay some $400 to just over $500 a month for an initial investment of $99,600 - the current CPF Minimum Sum - although the payments last for life.
In his National Day Rally speech last year, Prime Minister Lee Hsien Loong acknowledged that the returns on annuities were not very attractive, but he still insisted that 'we do need annuities as part of our old age planning'.
Associate professor Benedict Koh at the Singapore Management University Lee Kong Chian School of Business says that while the drawdown for annuities is available only after age 82, most Singaporeans worry more about the immediate future - the ability to finance their retirement years from 62 to 82. And that's why they are not so keen on annuities. Also, the amount of payout per month is very low to live on in Singapore.
Another reason Prof Koh cites is that by participating in the compulsory annuity scheme, Singaporeans will receive less payout from the CPF minimum sum from age 62 to 82.
He adds: 'If they die before 82, they will be hit by a double whammy. They die prematurely (most want to live longer) and they lose the capital used to purchase the annuity (they prefer that this sum goes to their loved ones).'
According to an AIA spokesman, annuity take-up rates tend to be driven by compulsory schemes and/or tax incentives in most countries. The lack of both here has meant that the take-up has been low.
In Singapore, the current Minimum Sum annuities offered by insurers provide a lifetime monthly annuity benefit which is lower than the monthly benefit offered by the CPF Board. The public may prefer a higher benefit as they do not fully apprehend the possibility that they may live longer than expected.
A safety net
Prof Fong says that the many misgivings that Singaporeans have about annuities stem from a lack of understanding of, or disregard towards, annuities.
One way Singaporeans can expand their knowledge on the issue is by checking out the Monetary Authority of Singapore and the CPF websites, he says. Other ways to dispel doubts include reading financial books or speaking to financial advisers.
At AIA, for example, customers can go through a financial health check, a process that involves identifying their goals, establishing priorities and assessing their available options to help them achieve these goals.
'When planning for retirement, some of the important questions that we would help you to answer include: what are my retirement goals, how much do I need to finance my retirement goals, how much do I need to invest to achieve my desired retirement income, what financial obligations will I have now and when I retire?' the AIA spokesman says.
Prof Koh says that some key issues that people should consider when deciding to buy annuities would be the period of payout, which should ideally cover the person's lifespan; the amount of payout, which should be sufficient for living expenses; and the underlying returns quoted by the issuer because a higher return ensures larger payouts.
Looking for an insurance company with a good track record in the annuity market is especially important when buying participating annuity plans, the NTUC Income spokesman adds.
Both Prof Koh and Prof Fong agree that annuities have become more important in financial planning in recent years as people are living longer.
Prof Koh says that annuities are particularly important for people who have limited savings for retirement. 'The compulsory annuity scheme proposed by the government allows pooling of risk so that the annuity payout is enough for subsistence living and the drawdown period is for life.'
And Prof Fong feels that while annuities should not be the only protection in old age, virtually everyone should buy them.
'The very rich don't need annuities because they have enough money to last for a long time,' he says. 'But for people with a healthy background who expect to live long, it is a form of guaranteed payout.
'For many who are not prepared financially, every dollar helps. So annuities are like a safety net.'
BT: Construction demand could set new record
Staying invested with the booming sector cannot go any wrong.
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Business Times - 14 Jan 2008
Construction demand could set new record
Analysts estimate $24 billion worth of contracts were inked in 2007
By UMA SHANKARI
(SINGAPORE) Construction demand in 2007 exceeded official estimates and is likely to have hit $24 billion, analysts said.
At present, the official forecast for last year's construction demand is $19-$22 billion. But in just the first ten months of 2007, construction demand hit $18.5 billion. In addition, several major contracts were also awarded in the last two months of the year.
'A ballpark estimate suggests that contracts awarded could have reached $23 billion for the whole of 2007,' said Citigroup economist Kit Wei Zheng. CIMB-GK economist Song Seng Wun is slightly more bullish - he expects construction demand for last year to come in at $24 billion.
Singapore's construction sector has once again emerged as a major growth driver, after being in the doldrums for about eight years following the Asian Financial Crisis of 1997/98.
Last August, industry regulator Building and Construction Authority upped its construction demand forecast for 2007 from its earlier estimate of $17-$19 billion.
There is also a sense that this year, construction demand will exceed the previous peak of $24.4 billion seen in 1997.
'The construction sector is expected to remain a key driver to GDP growth in 2008,' said Kim Eng's research team. 'The combined construction budget of the two Integrated Resorts amounts to over $12 billion and there is burgeoning demand from the residential property segment.'
Citigroup, for one, predicts that the pipeline of future contracts will likely remain large, supporting construction growth well into the second half of 2008 and 2009. 'Given the synchronised supports from the integrated resorts, residential and commercial property boom and infrastructure projects, construction demand could well exceed the previous 1997 peak this year,' said Citigroup's Mr Kit.
Apart from the two IRs and infrastructure projects, the large pipeline of residential projects could yield between $12-15 billion of contracts awarded over the next two years, he said.
OCBC Investment Research analyst Serene Lim also pointed out that the government intends to raise the value added of Singapore's energy industry to $34 billion in 2015 - an increase of about 70 per cent from current levels. The initiatives include probable plans to build an oil refinery with a capacity of 150,000 barrels per day, a liquefied natural gas terminal and biodiesel production plants, she said.
A recent report by construction cost consultancy Rider Levett Bucknall says that Singapore is on the upturn of the construction activity cycle, having recently emerged from a trough.
Analysts are also bullish on the prospects of construction firms in 2008.
'The going will continue to be good for local builders as they enjoy strong order books and margins expansion,' said Kim Eng Research.
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++++++++++++++++++++++++++++++++++
Business Times - 14 Jan 2008
Construction demand could set new record
Analysts estimate $24 billion worth of contracts were inked in 2007
By UMA SHANKARI
(SINGAPORE) Construction demand in 2007 exceeded official estimates and is likely to have hit $24 billion, analysts said.
At present, the official forecast for last year's construction demand is $19-$22 billion. But in just the first ten months of 2007, construction demand hit $18.5 billion. In addition, several major contracts were also awarded in the last two months of the year.
'A ballpark estimate suggests that contracts awarded could have reached $23 billion for the whole of 2007,' said Citigroup economist Kit Wei Zheng. CIMB-GK economist Song Seng Wun is slightly more bullish - he expects construction demand for last year to come in at $24 billion.
Singapore's construction sector has once again emerged as a major growth driver, after being in the doldrums for about eight years following the Asian Financial Crisis of 1997/98.
Last August, industry regulator Building and Construction Authority upped its construction demand forecast for 2007 from its earlier estimate of $17-$19 billion.
There is also a sense that this year, construction demand will exceed the previous peak of $24.4 billion seen in 1997.
'The construction sector is expected to remain a key driver to GDP growth in 2008,' said Kim Eng's research team. 'The combined construction budget of the two Integrated Resorts amounts to over $12 billion and there is burgeoning demand from the residential property segment.'
Citigroup, for one, predicts that the pipeline of future contracts will likely remain large, supporting construction growth well into the second half of 2008 and 2009. 'Given the synchronised supports from the integrated resorts, residential and commercial property boom and infrastructure projects, construction demand could well exceed the previous 1997 peak this year,' said Citigroup's Mr Kit.
Apart from the two IRs and infrastructure projects, the large pipeline of residential projects could yield between $12-15 billion of contracts awarded over the next two years, he said.
OCBC Investment Research analyst Serene Lim also pointed out that the government intends to raise the value added of Singapore's energy industry to $34 billion in 2015 - an increase of about 70 per cent from current levels. The initiatives include probable plans to build an oil refinery with a capacity of 150,000 barrels per day, a liquefied natural gas terminal and biodiesel production plants, she said.
A recent report by construction cost consultancy Rider Levett Bucknall says that Singapore is on the upturn of the construction activity cycle, having recently emerged from a trough.
Analysts are also bullish on the prospects of construction firms in 2008.
'The going will continue to be good for local builders as they enjoy strong order books and margins expansion,' said Kim Eng Research.
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Sunday, January 13, 2008
CSC share price evaluation review
I have got this rather simplified yet achievable approach to estimate CSC fair value in the next 12 month.
1. 1H08 net profit 19m.
2. 2H08 net profit estimate 27m (very conservative guesstimate) which is solely based on the 2 IRs incomes:
- Sands IR contracts + Resort World IR contract = 240m+54m+6m=300m,
- assuming only 90% completion by end march 08 (FY08 date),
- assuming a conservative profit margin of 10% (realistic range shld be 15-20%),
- so net profit for 2H08= 300mx90%x10%=27m
3. so FY08 conservative net profilt = 19m+27m = 46m
4. FY08 EPS = 46m / 1,126m ordinary issued shares = 4.1c
So now the current market paying CSC at 32c/share, ie trading FY08 PE at 7.8x, or 37x FY07 (FY07 EPS = 0.86c).
so lets have a look on how CSC price ranging along with the FY08 EPS 4.1c
at PE 10x, share price => 41c
at PE 20x, share price => 82c
at PE 30x, share price => $1.23
Conclusion:
Current market trading CSC at 32c, ie the current down market still values CSC at 37x FY07 PE (0.32/0.0086), CSC traget price for the next 12 months should be within $0.82 -$1.23. This is supported by:
1. FY08 EPS of 4.1c is based on a very conservative calculation.
2. When market sentiment turns bullish.
3. When it is in bullish market sentiment, CSC share price trading at PE 20x - 30x is undemanding.
4. More analysts coverage.
1. 1H08 net profit 19m.
2. 2H08 net profit estimate 27m (very conservative guesstimate) which is solely based on the 2 IRs incomes:
- Sands IR contracts + Resort World IR contract = 240m+54m+6m=300m,
- assuming only 90% completion by end march 08 (FY08 date),
- assuming a conservative profit margin of 10% (realistic range shld be 15-20%),
- so net profit for 2H08= 300mx90%x10%=27m
3. so FY08 conservative net profilt = 19m+27m = 46m
4. FY08 EPS = 46m / 1,126m ordinary issued shares = 4.1c
So now the current market paying CSC at 32c/share, ie trading FY08 PE at 7.8x, or 37x FY07 (FY07 EPS = 0.86c).
so lets have a look on how CSC price ranging along with the FY08 EPS 4.1c
at PE 10x, share price => 41c
at PE 20x, share price => 82c
at PE 30x, share price => $1.23
Conclusion:
Current market trading CSC at 32c, ie the current down market still values CSC at 37x FY07 PE (0.32/0.0086), CSC traget price for the next 12 months should be within $0.82 -$1.23. This is supported by:
1. FY08 EPS of 4.1c is based on a very conservative calculation.
2. When market sentiment turns bullish.
3. When it is in bullish market sentiment, CSC share price trading at PE 20x - 30x is undemanding.
4. More analysts coverage.
Friday, January 11, 2008
KE: CSC Holdings TP $0.53, S$120m contracts won over past 2 months
KE live
CSC Holdings - S$120m worth of contracts won over past 2 months.
CSC announced that it has clinched a total of S$120m worth of foundation and geotechnical engineering contracts from both the public and private sectors over the past two months. Some of the more notable projects include foundation works for Collyer Quay commercial development, Reflections at Keppel Bay, Downtown Line extension, Fusionpolis, etc.
With this latest round of contract wins, CSC’s orderbook has swelled to S$330m; these will be delivered over the next 12 months.
As one of the largest player in Singapore specializing in foundation and geotechnical engineering works, the company is poised to benefit from the construction industry upturn in Singapore amid a tight supply situation, translating to pricing power and healthy margins. To alleviate the capacity strains in the industry, the government recently pushed back some public sector infrastructural projects.
We believe the company will continue to exhibit strong earnings growth on the back of acquisitive and organic growth. The stock is trading at undemanding 9x P/E (FY3/0 and 8x P/E (FY3/09).
Assuming it trades up to peer average of 12x, fair value target is S$0.53/share. In our view, consensus estimate has not priced in the group’s buoyant prospects.
CSC Holdings - S$120m worth of contracts won over past 2 months.
CSC announced that it has clinched a total of S$120m worth of foundation and geotechnical engineering contracts from both the public and private sectors over the past two months. Some of the more notable projects include foundation works for Collyer Quay commercial development, Reflections at Keppel Bay, Downtown Line extension, Fusionpolis, etc.
With this latest round of contract wins, CSC’s orderbook has swelled to S$330m; these will be delivered over the next 12 months.
As one of the largest player in Singapore specializing in foundation and geotechnical engineering works, the company is poised to benefit from the construction industry upturn in Singapore amid a tight supply situation, translating to pricing power and healthy margins. To alleviate the capacity strains in the industry, the government recently pushed back some public sector infrastructural projects.
We believe the company will continue to exhibit strong earnings growth on the back of acquisitive and organic growth. The stock is trading at undemanding 9x P/E (FY3/0 and 8x P/E (FY3/09).
Assuming it trades up to peer average of 12x, fair value target is S$0.53/share. In our view, consensus estimate has not priced in the group’s buoyant prospects.
BT: Deals worth $120m secured in the past two months
Business Times - 11 Jan 2008
New contracts boost CSC's order book to $330m
Deals worth $120m secured in the past two months
SINGAPORE ground-engineering specialist CSC Holdings has won $120 million of foundation and geo-technical contracts from the public and private sectors in the past two months.
The deals have boosted its order book to some $330 million as of Wednesday this week, the group said in an update yesterday.
The new contracts are expected to be largely completed within 12 months.
CSC said construction demand in Singapore remains vibrant, with new potential projects on the horizon from redevelopment in Orchard and Beach roads, a proposed bio-diesel complex, a solar panel manufacturing plant, Jurong Island petrochemical plants, Tuas pharmaceutical hub, Phase 2 of the Business and Financial Centre and increased public housing projects.
To help position itself for the boom, CSC recently proposed to acquire an investment holding company of Singapore's largest earthworks contractor, Kok Tong Group, and leading tunnelling and automatic monitoring survey specialist Wisescan Engineering Services.
CSC has also entered into a joint-venture with Malaysia-based IJM Construction, which has experience in civil, building and infrastructure works and has an extensive Malaysian and regional network.
CSC is also exploring opportunities in Vietnam and the Middle East.
'The construction boom in Singapore and the region has presented many exciting opportunities and we will continue to seize the day,' said its chief executive See Yen Tarn.
'As the market continues to grow steadily we look forward to more opportunities to grow alongside our existing and potential partners in the construction sector and enhance our stakeholders' value.'
Major foundation contracts won recently from the public sector include The Tree Lodge, a Housing Development Board (HDB) project for the green precinct development at Punggol West; Fusionopolis, a project at the one-north research and innovation hub; and sections of the Mass Rapid Transport Downtown Line extension.
Private sector deals won include foundation contracts for The Reflections at Keppel Bay, a high-end waterfront residential condominium; a hotel and commercial development at Collyer Quay; and Mont Kiara @ Eleven, a luxury condominium development in Kuala Lumpur.
For the first six months ended September 2007, CSC's revenue was $185 million. This surpassed group revenue of $127 million for the full financial year ended March 2007.
New contracts boost CSC's order book to $330m
Deals worth $120m secured in the past two months
SINGAPORE ground-engineering specialist CSC Holdings has won $120 million of foundation and geo-technical contracts from the public and private sectors in the past two months.
The deals have boosted its order book to some $330 million as of Wednesday this week, the group said in an update yesterday.
The new contracts are expected to be largely completed within 12 months.
CSC said construction demand in Singapore remains vibrant, with new potential projects on the horizon from redevelopment in Orchard and Beach roads, a proposed bio-diesel complex, a solar panel manufacturing plant, Jurong Island petrochemical plants, Tuas pharmaceutical hub, Phase 2 of the Business and Financial Centre and increased public housing projects.
To help position itself for the boom, CSC recently proposed to acquire an investment holding company of Singapore's largest earthworks contractor, Kok Tong Group, and leading tunnelling and automatic monitoring survey specialist Wisescan Engineering Services.
CSC has also entered into a joint-venture with Malaysia-based IJM Construction, which has experience in civil, building and infrastructure works and has an extensive Malaysian and regional network.
CSC is also exploring opportunities in Vietnam and the Middle East.
'The construction boom in Singapore and the region has presented many exciting opportunities and we will continue to seize the day,' said its chief executive See Yen Tarn.
'As the market continues to grow steadily we look forward to more opportunities to grow alongside our existing and potential partners in the construction sector and enhance our stakeholders' value.'
Major foundation contracts won recently from the public sector include The Tree Lodge, a Housing Development Board (HDB) project for the green precinct development at Punggol West; Fusionopolis, a project at the one-north research and innovation hub; and sections of the Mass Rapid Transport Downtown Line extension.
Private sector deals won include foundation contracts for The Reflections at Keppel Bay, a high-end waterfront residential condominium; a hotel and commercial development at Collyer Quay; and Mont Kiara @ Eleven, a luxury condominium development in Kuala Lumpur.
For the first six months ended September 2007, CSC's revenue was $185 million. This surpassed group revenue of $127 million for the full financial year ended March 2007.
Sunday, January 6, 2008
BT: CSC to buy 70% of Wisescan Engg for $2.7m
Business Times - 05 Jan 2008
CSC to buy 70% of Wisescan Engg for $2.7m
By CHEW XIANG
CONSTRUCTION group CSC Holdings, which specialises in foundation and geotechnical engineering, has signed a sale and purchase agreement for a 70 per cent stake in Wisescan Engineering Services for $2.65 million.
The purchase will be made through CSC's wholly owned subsidiary, Soil Investigation.
The sellers are Wisescan's managing director Chua Keng Guan and Chua Limin. Mr Chua Keng Guan will retain a 30 per cent stake and his position as managing director.
The sellers are guaranteeing a pre-tax profit of at least $800,000 a year for three years from April 1 this year. They will pay 70 per cent of the shortfall if the target is not met.
Wisescan is a surveyor specialising in solutions relating to tunnelling and automatic monitoring survey. It also has a presence in several overseas markets including Taiwan, China, India and Malaysia.
With the proposed acquisition, CSC is gearing up to handle more infrastructure and transport projects in Singapore such as the extension of mass rapid transit lines and the underground utility cable tunnel.
'With the Singapore government's recent announcements to develop and build new mass rapid transport and other infrastructure plans ... the proposed acquisition will enhance the group's synergistic competitiveness while broadening the group's presence in overseas markets,' it said in a statement.
The acquisition, which is subject to satisfactory due diligence on Wisescan, is expected to be completed within four months. It is not expected to have any material effect on the group's net tangible assets and earnings per share for the current financial year.
Last November, CSC reported net profit for the six months to Sept 30 of $19.1 million, up from $4.8 million for the previous corresponding period, as revenue surged 245 per cent to $185 million.
CSC closed yesterday at 33.5 cents, down 1.5 per cent.
CSC to buy 70% of Wisescan Engg for $2.7m
By CHEW XIANG
CONSTRUCTION group CSC Holdings, which specialises in foundation and geotechnical engineering, has signed a sale and purchase agreement for a 70 per cent stake in Wisescan Engineering Services for $2.65 million.
The purchase will be made through CSC's wholly owned subsidiary, Soil Investigation.
The sellers are Wisescan's managing director Chua Keng Guan and Chua Limin. Mr Chua Keng Guan will retain a 30 per cent stake and his position as managing director.
The sellers are guaranteeing a pre-tax profit of at least $800,000 a year for three years from April 1 this year. They will pay 70 per cent of the shortfall if the target is not met.
Wisescan is a surveyor specialising in solutions relating to tunnelling and automatic monitoring survey. It also has a presence in several overseas markets including Taiwan, China, India and Malaysia.
With the proposed acquisition, CSC is gearing up to handle more infrastructure and transport projects in Singapore such as the extension of mass rapid transit lines and the underground utility cable tunnel.
'With the Singapore government's recent announcements to develop and build new mass rapid transport and other infrastructure plans ... the proposed acquisition will enhance the group's synergistic competitiveness while broadening the group's presence in overseas markets,' it said in a statement.
The acquisition, which is subject to satisfactory due diligence on Wisescan, is expected to be completed within four months. It is not expected to have any material effect on the group's net tangible assets and earnings per share for the current financial year.
Last November, CSC reported net profit for the six months to Sept 30 of $19.1 million, up from $4.8 million for the previous corresponding period, as revenue surged 245 per cent to $185 million.
CSC closed yesterday at 33.5 cents, down 1.5 per cent.
ST: She bought her first house with casino tips
She bought her first house with casino tips
From the age of 16, fitness firm CEO realised real estate was where the money was, and has stuck with it since.
Lorna TanSun, Dec 30, 2007The Sunday Times
AT THE age of 30, Shanghai-born Annie Sun was already the owner of a string of properties in Melbourne, where she had been a student.
Her belief that real estate investments offered good returns over time sprang from her observation as a student that many rich people had made their money from property.
The lesson stuck. Now, the chief executive (CEO) of fitness and wellness firm Dynaforce - which distributes high-end gym equipment - has 80 per cent of her investments in property.
In a recent interview with The Sunday Times, Ms Sun, 38, recalled how, even at 16, she had wanted to own property.
'Even then, I decided I needed to be smart and invest well, instead of relying on a monthly salary. I figured I could make more money from investing and collecting properties,' she said.
Armed with a degree in hospitality and health sciences, Ms Sun hobnobbed with international celebrities and high rollers during her stint at Melbourne's Crown Casino complex, where she managed the spa and fitness club. She worked in Hong Kong and Shanghai before coming to Singapore.
She never imagined that she would be a high-flying CEO herself one day, but the opportunity presented itself when there was a mass resignation at the Dynaforce Singapore office two years ago.
As a result of the 2006 crisis, the company's chairman promoted her and put her in charge. She had become a design and spa consultant at one of Dynaforce's units in 2004.
This year, the company generated a turnover of $15 million for the period to Oct 31. It manages 11 gyms in Singapore and has helped conceptualise the gyms in St Regis Residences and at various hotels including the Ritz-Carlton, Mandarin Oriental, Fullerton, Shangri-La and Hyatt.
Ms Sun, who is single, works out in the office gym three times a week and practises power yoga once a week.
Q What are your money habits?
A I save two-thirds of what I earn. Although I enjoy the finer things in life, I have learnt to moderate my needs these days, so I spend much less than when I was younger. I don't carry much cash around, maybe $300 at a time, so I rely on credit cards. Since I eat out most days, I think hotel cards are a great invention.
During my Crown Casino days, money came easily. The high rollers gave generous tips when they came to the spa. I quickly saved up enough money to buy my first house by the sea in Melbourne.
Those were heady days. There was no financial planning. It was almost a given that if I showed up for work, there would be big tips and money coming in.
Q What financial planning have you done?
A I'm not a risk taker. Currently, about 80 per cent of my investments are in property and the balance is in a stock portfolio managed out of Melbourne. It is invested mainly in the Australian stock market and includes telecoms shares. I seldom monitor it.
I know I need to be more proactive in my financial planning, but I have been too busy to think about it. My bankers have been hounding me and I think next year will be a good time to sit down with them to work out a better plan. That will be my New Year resolution.
Q What about insurance planning?
A I have an investment-linked plan with AMP back in Australia. I'm insured for about $1 million. Apart from that, I have medical and travel insurance. My annual premiums top A$5,000 (S$6,340).
Q What are your property investments?
A At present, I have four properties, three in Melbourne and one in Singapore. One of my Melbourne properties is being rented out. This is a one-bedroom apartment in the prestigious St Kilda residential area. I bought it for A$380,000 in the late 1990s, for tax planning purposes.
Q Moneywise, what were your growing-up years like?
A I was never short of money. I always got what I wanted as I was the only child. My father's family owned a textile factory in Shanghai. My mother came from a wealthy family. When money is handed to you easily, you don't see its value.
My perception of money changed when I was alone in Australia before my family migrated there. I learnt how to live independently and had to take financial responsibility for myself. I learnt to budget and worked as a part-time waitress.
The experience taught me to believe in hard work. It is through making my own money that I enjoy real financial freedom.
Q What has been a bad investment?
A At Crown Casino, I saved up so much money that I was itching to try something new. The entrepreneur in me kept trying to emerge. The opportunity came when a relative in Shanghai asked me to join him in setting up a wine bar and fusion restaurant along the Shanghai Bund.
It was 1999 and Shanghai was starting to boom big time, so I thought the timing was perfect. I packed my bags and sold my beach house in Melbourne and moved to Shanghai. I bought that two-storey beach house in 1994 for A$300,000 and sold it for almost A$800,000.
After six months of fighting red tape and being cheated by my main contractor, who was also a distant relative, I threw in the towel and returned to Melbourne - A$400,000 poorer but much wiser. I learnt not to trust people easily and to read the circumstances and the business environment much better.
Q Your best investment to date?
A My best investment came when I was invited to become a shareholder in Dynaforce. It is an investment that I can take active control of to produce results for my team and myself. I have a 30 per cent shareholding currently and there are plans to list Dynaforce at a later stage.
Another good investment was my first apartment in Singapore, at 8 @ Mount Sophia, which I bought for $800,000 in 2004 and sold for $1.5 million this year. It is 1,100 sq ft in size.
Q What retirement plans do you have?
A I want to retire within 10 years, with $50 million in hand, so I can do more charity work and learn other things that I did not have the time or the opportunity to do before. I would be interested in charities that involve children and might even set up one if I can't find a suitable one to contribute my resources to.
I plan to spend time in Melbourne, Singapore, Thailand, Bali and Shanghai.
Q And your home now is... ?
A I invested the profits from the sale of my apartment this year into a 1,400 sq ft, 99-year leasehold apartment, also around Mt Sophia. It cost $1 million.
Q And your car is... ?
A A dark-grey Porsche Boxster.
From the age of 16, fitness firm CEO realised real estate was where the money was, and has stuck with it since.
Lorna TanSun, Dec 30, 2007The Sunday Times
AT THE age of 30, Shanghai-born Annie Sun was already the owner of a string of properties in Melbourne, where she had been a student.
Her belief that real estate investments offered good returns over time sprang from her observation as a student that many rich people had made their money from property.
The lesson stuck. Now, the chief executive (CEO) of fitness and wellness firm Dynaforce - which distributes high-end gym equipment - has 80 per cent of her investments in property.
In a recent interview with The Sunday Times, Ms Sun, 38, recalled how, even at 16, she had wanted to own property.
'Even then, I decided I needed to be smart and invest well, instead of relying on a monthly salary. I figured I could make more money from investing and collecting properties,' she said.
Armed with a degree in hospitality and health sciences, Ms Sun hobnobbed with international celebrities and high rollers during her stint at Melbourne's Crown Casino complex, where she managed the spa and fitness club. She worked in Hong Kong and Shanghai before coming to Singapore.
She never imagined that she would be a high-flying CEO herself one day, but the opportunity presented itself when there was a mass resignation at the Dynaforce Singapore office two years ago.
As a result of the 2006 crisis, the company's chairman promoted her and put her in charge. She had become a design and spa consultant at one of Dynaforce's units in 2004.
This year, the company generated a turnover of $15 million for the period to Oct 31. It manages 11 gyms in Singapore and has helped conceptualise the gyms in St Regis Residences and at various hotels including the Ritz-Carlton, Mandarin Oriental, Fullerton, Shangri-La and Hyatt.
Ms Sun, who is single, works out in the office gym three times a week and practises power yoga once a week.
Q What are your money habits?
A I save two-thirds of what I earn. Although I enjoy the finer things in life, I have learnt to moderate my needs these days, so I spend much less than when I was younger. I don't carry much cash around, maybe $300 at a time, so I rely on credit cards. Since I eat out most days, I think hotel cards are a great invention.
During my Crown Casino days, money came easily. The high rollers gave generous tips when they came to the spa. I quickly saved up enough money to buy my first house by the sea in Melbourne.
Those were heady days. There was no financial planning. It was almost a given that if I showed up for work, there would be big tips and money coming in.
Q What financial planning have you done?
A I'm not a risk taker. Currently, about 80 per cent of my investments are in property and the balance is in a stock portfolio managed out of Melbourne. It is invested mainly in the Australian stock market and includes telecoms shares. I seldom monitor it.
I know I need to be more proactive in my financial planning, but I have been too busy to think about it. My bankers have been hounding me and I think next year will be a good time to sit down with them to work out a better plan. That will be my New Year resolution.
Q What about insurance planning?
A I have an investment-linked plan with AMP back in Australia. I'm insured for about $1 million. Apart from that, I have medical and travel insurance. My annual premiums top A$5,000 (S$6,340).
Q What are your property investments?
A At present, I have four properties, three in Melbourne and one in Singapore. One of my Melbourne properties is being rented out. This is a one-bedroom apartment in the prestigious St Kilda residential area. I bought it for A$380,000 in the late 1990s, for tax planning purposes.
Q Moneywise, what were your growing-up years like?
A I was never short of money. I always got what I wanted as I was the only child. My father's family owned a textile factory in Shanghai. My mother came from a wealthy family. When money is handed to you easily, you don't see its value.
My perception of money changed when I was alone in Australia before my family migrated there. I learnt how to live independently and had to take financial responsibility for myself. I learnt to budget and worked as a part-time waitress.
The experience taught me to believe in hard work. It is through making my own money that I enjoy real financial freedom.
Q What has been a bad investment?
A At Crown Casino, I saved up so much money that I was itching to try something new. The entrepreneur in me kept trying to emerge. The opportunity came when a relative in Shanghai asked me to join him in setting up a wine bar and fusion restaurant along the Shanghai Bund.
It was 1999 and Shanghai was starting to boom big time, so I thought the timing was perfect. I packed my bags and sold my beach house in Melbourne and moved to Shanghai. I bought that two-storey beach house in 1994 for A$300,000 and sold it for almost A$800,000.
After six months of fighting red tape and being cheated by my main contractor, who was also a distant relative, I threw in the towel and returned to Melbourne - A$400,000 poorer but much wiser. I learnt not to trust people easily and to read the circumstances and the business environment much better.
Q Your best investment to date?
A My best investment came when I was invited to become a shareholder in Dynaforce. It is an investment that I can take active control of to produce results for my team and myself. I have a 30 per cent shareholding currently and there are plans to list Dynaforce at a later stage.
Another good investment was my first apartment in Singapore, at 8 @ Mount Sophia, which I bought for $800,000 in 2004 and sold for $1.5 million this year. It is 1,100 sq ft in size.
Q What retirement plans do you have?
A I want to retire within 10 years, with $50 million in hand, so I can do more charity work and learn other things that I did not have the time or the opportunity to do before. I would be interested in charities that involve children and might even set up one if I can't find a suitable one to contribute my resources to.
I plan to spend time in Melbourne, Singapore, Thailand, Bali and Shanghai.
Q And your home now is... ?
A I invested the profits from the sale of my apartment this year into a 1,400 sq ft, 99-year leasehold apartment, also around Mt Sophia. It cost $1 million.
Q And your car is... ?
A A dark-grey Porsche Boxster.
Friday, January 4, 2008
CSC 2007 Review
One thing we have to appreciate CSC in fact has done very well in 2007.
3/1 - 31/12 of 2007
CSC share price movement
21cts - 32cts => up 52% (an investment delivers 52% rtn a yr one has to be contented)
SGX Construction index
461 - 596 => up 29%
SGX STI index
3037 - 3482 => up 15%
With visible fatty incomes generated from sands IR and other key projects into financial year 2008, CSC FY08 will definitely outperform FY07 as well as its share price appreciation moving into 2008! From my own judgement, final dividend payout for FY08 is almost certain.
3/1 - 31/12 of 2007
CSC share price movement
21cts - 32cts => up 52% (an investment delivers 52% rtn a yr one has to be contented)
SGX Construction index
461 - 596 => up 29%
SGX STI index
3037 - 3482 => up 15%
With visible fatty incomes generated from sands IR and other key projects into financial year 2008, CSC FY08 will definitely outperform FY07 as well as its share price appreciation moving into 2008! From my own judgement, final dividend payout for FY08 is almost certain.
BT: Circle Line key to higher plot ratios: JLL
Business Times - 04 Jan 2008
Circle Line key to higher plot ratios: JLL
Study looks at how Master Plan 2008 could change landscape, usher in new initiatives
By KALPANA RASHIWALA
(SINGAPORE) When Master Plan 2008 is unveiled sometime this year, certain areas are likely to see an increase in plot ratios. A study by Jones Lang LaSalle has tried to zero in on which areas could be allowed more intensive use of land.
Its conclusion: Look out for undeveloped state sites within walking distance of Circle Line MRT stations, particularly those that intersect with existing MRT lines. They are the top candidates for higher plot ratios.
The property consulting group specifically highlighted the areas near Paya Lebar MRT Station, Buona Vista MRT Station (which will see the Circle Line intersecting with the existing East-West Line) and HarbourFront MRT Station (Circle Line crosses North-East Line). Also, while Buona Vista is shaping into an R&D/commercial hub, the HarbourFront district's redevelopment potential is increasing because of projects in Sentosa and Keppel Bay nearby.
Another promising area is in the vicinity of the Circle Line Station at Telok Blangah. Although it does not intersect with an existing MRT line, it will benefit from a spillover from the ongoing redevelopment in Sentosa and HarbourFront.
JLL does not see major, across-the-board increases in plot ratios in MP 2008. But it argues that intensifying land use for undeveloped state plots along these stations will spread social benefits from the government's investment in the Circle Line to more people and also improve accessibility.
Raising plot ratios (ratio of maximum potential gross floor area to land area) will also address the issue of rising demand for Singapore's properties and prevent overcrowding in specific areas such as the central and CBD regions.
Although the Circle Line also touches locations near Dhoby Ghaut and Bishan MRT stations, JLL excludes them as these areas already have high plot ratios.
The study also suggests that white sites - with a range of uses and change in use mix allowed - will be more readily available islandwide instead of being confined largely to the CBD. 'It further promotes creativity in future projects,' says JLL's head of research (South-east Asia) Chua Yang Liang.
He also sees the Urban Redevelopment Authority introducing more mixed use, rather than traditional single-use zones, to 'further provide the flexibility needed to accommodate changing demand patterns as a result of shifting demographics'. MP 2008 could also be more tolerant of non-traditional types of residences. For instance, obsolete industrial buildings could be re-modelled along the lines of New York's Manhattan lofts. 'This will accommodate shifting market forces and tastes,' Dr Chua argues.
JLL also suggests that URA may realign traditional industrial estates to support demand needs of the knowledge-based economy or rezone them for other uses. 'For example, industrial areas within housing estates such as those found in Jalan Pemimpin could potentially be rezoned to residential or possibly an education hub,' it said. After all, the area is near Raffles Institution and Raffles Junior College.
MP 2008 could also extend the 'work, live and play' concept beyond Marina Bay into the suburbs as Singapore cannot live by its business image alone, JLL predicts. 'We can expect to see more areas designed for cultural developments, for example, the civic, cultural and retail complex in Buona Vista, and new conservation areas that serve to retain the fabric of the collective memory,' Dr Chua said.
JLL also expects to see many more recreational zones across Singapore. 'The likes of the recent Punggol announcement will be more common,' the study said.
On the back of Sentosa Cove's success, JLL expects other islets around Singapore like Southern Islands and Pulau Ubin to be put for waterfront residential use.
In the existing CBD, JLL suggests that Shenton Way will see a further shift towards a mixed-use (including residential) district, once the current office supply crunch eases. In May last year, URA announced a temporary ban on conversion of office use in the central area, including the CBD, to other uses until end-2009.
Last year, the government identified Jurong East and Paya Lebar for development into business hubs. Dr Chua says land around Paya Lebar MRT Station will be intensified in line with government plans to transform it into a sub-regional centre and that the location will be ideal for cost-conscious office tenants.
However, Dr Chua suggests that the area around Jurong East MRT Station is more suited for research and development because of its proximity to universities, the Science Park and one-north rather than as an alternative backoffice hub along the lines of Tampines.
National Development Minister Mah Bow Tan last year also ruled out massive, across-the-board islandwide increases in plot ratios for MP 2008 to cope with a higher population target of 6.5 million. The Master Plan, a detailed land use plan that guides Singapore's medium-term physical development, is reviewed every five years.
Circle Line key to higher plot ratios: JLL
Study looks at how Master Plan 2008 could change landscape, usher in new initiatives
By KALPANA RASHIWALA
(SINGAPORE) When Master Plan 2008 is unveiled sometime this year, certain areas are likely to see an increase in plot ratios. A study by Jones Lang LaSalle has tried to zero in on which areas could be allowed more intensive use of land.
Its conclusion: Look out for undeveloped state sites within walking distance of Circle Line MRT stations, particularly those that intersect with existing MRT lines. They are the top candidates for higher plot ratios.
The property consulting group specifically highlighted the areas near Paya Lebar MRT Station, Buona Vista MRT Station (which will see the Circle Line intersecting with the existing East-West Line) and HarbourFront MRT Station (Circle Line crosses North-East Line). Also, while Buona Vista is shaping into an R&D/commercial hub, the HarbourFront district's redevelopment potential is increasing because of projects in Sentosa and Keppel Bay nearby.
Another promising area is in the vicinity of the Circle Line Station at Telok Blangah. Although it does not intersect with an existing MRT line, it will benefit from a spillover from the ongoing redevelopment in Sentosa and HarbourFront.
JLL does not see major, across-the-board increases in plot ratios in MP 2008. But it argues that intensifying land use for undeveloped state plots along these stations will spread social benefits from the government's investment in the Circle Line to more people and also improve accessibility.
Raising plot ratios (ratio of maximum potential gross floor area to land area) will also address the issue of rising demand for Singapore's properties and prevent overcrowding in specific areas such as the central and CBD regions.
Although the Circle Line also touches locations near Dhoby Ghaut and Bishan MRT stations, JLL excludes them as these areas already have high plot ratios.
The study also suggests that white sites - with a range of uses and change in use mix allowed - will be more readily available islandwide instead of being confined largely to the CBD. 'It further promotes creativity in future projects,' says JLL's head of research (South-east Asia) Chua Yang Liang.
He also sees the Urban Redevelopment Authority introducing more mixed use, rather than traditional single-use zones, to 'further provide the flexibility needed to accommodate changing demand patterns as a result of shifting demographics'. MP 2008 could also be more tolerant of non-traditional types of residences. For instance, obsolete industrial buildings could be re-modelled along the lines of New York's Manhattan lofts. 'This will accommodate shifting market forces and tastes,' Dr Chua argues.
JLL also suggests that URA may realign traditional industrial estates to support demand needs of the knowledge-based economy or rezone them for other uses. 'For example, industrial areas within housing estates such as those found in Jalan Pemimpin could potentially be rezoned to residential or possibly an education hub,' it said. After all, the area is near Raffles Institution and Raffles Junior College.
MP 2008 could also extend the 'work, live and play' concept beyond Marina Bay into the suburbs as Singapore cannot live by its business image alone, JLL predicts. 'We can expect to see more areas designed for cultural developments, for example, the civic, cultural and retail complex in Buona Vista, and new conservation areas that serve to retain the fabric of the collective memory,' Dr Chua said.
JLL also expects to see many more recreational zones across Singapore. 'The likes of the recent Punggol announcement will be more common,' the study said.
On the back of Sentosa Cove's success, JLL expects other islets around Singapore like Southern Islands and Pulau Ubin to be put for waterfront residential use.
In the existing CBD, JLL suggests that Shenton Way will see a further shift towards a mixed-use (including residential) district, once the current office supply crunch eases. In May last year, URA announced a temporary ban on conversion of office use in the central area, including the CBD, to other uses until end-2009.
Last year, the government identified Jurong East and Paya Lebar for development into business hubs. Dr Chua says land around Paya Lebar MRT Station will be intensified in line with government plans to transform it into a sub-regional centre and that the location will be ideal for cost-conscious office tenants.
However, Dr Chua suggests that the area around Jurong East MRT Station is more suited for research and development because of its proximity to universities, the Science Park and one-north rather than as an alternative backoffice hub along the lines of Tampines.
National Development Minister Mah Bow Tan last year also ruled out massive, across-the-board islandwide increases in plot ratios for MP 2008 to cope with a higher population target of 6.5 million. The Master Plan, a detailed land use plan that guides Singapore's medium-term physical development, is reviewed every five years.
Thursday, January 3, 2008
Reuters: Construction firms up on casino hopes
Business Times - 03 Jan 2008
Construction firms up on casino hopes
SINGAPORE - Shares of construction firms soared as expectations that Koh Brothers Group and Lian Beng Group would win a lucrative contract lifted sentiment for the whole sector, bucking the downward trend of the market.
A consortium of Koh Brothers and Lian Beng Group are running for contract worth around $500 million (US$348 million) for works related to one of the two casinos under construction in the city-state.
'The market expects that they will win the bid, it's quite a firm deal already,' said a local dealer.
Lian Beng rose as much as 5.1 per cent to an eight and a half year high of $0.82 and was the third most actively traded counter on the Singapore bourse with 18.8 million shares traded.
Koh Brothers jumped 6.5 per cent to $0.49 with 8.5 million shares changing hands.
Other construction plays such as Yongnam Holdings rose as much as 3.3 per cent to $0.31 with seven million shares traded. CSC Holdings was up 1.5 per cent to $0.33 with six million traded.
Economic data released on Wednesday showed Singapore's construction sector growing a healthy 24.4 per cent in the fourth-quarter. -- REUTERS
Construction firms up on casino hopes
SINGAPORE - Shares of construction firms soared as expectations that Koh Brothers Group and Lian Beng Group would win a lucrative contract lifted sentiment for the whole sector, bucking the downward trend of the market.
A consortium of Koh Brothers and Lian Beng Group are running for contract worth around $500 million (US$348 million) for works related to one of the two casinos under construction in the city-state.
'The market expects that they will win the bid, it's quite a firm deal already,' said a local dealer.
Lian Beng rose as much as 5.1 per cent to an eight and a half year high of $0.82 and was the third most actively traded counter on the Singapore bourse with 18.8 million shares traded.
Koh Brothers jumped 6.5 per cent to $0.49 with 8.5 million shares changing hands.
Other construction plays such as Yongnam Holdings rose as much as 3.3 per cent to $0.31 with seven million shares traded. CSC Holdings was up 1.5 per cent to $0.33 with six million traded.
Economic data released on Wednesday showed Singapore's construction sector growing a healthy 24.4 per cent in the fourth-quarter. -- REUTERS
BT: Ho Chi Minh City frets over property investment
Business Times - 03 Jan 2008
Ho Chi Minh City frets over property investment
(HO CHI MINH CITY) Around 85 per cent of foreign direct investment (FDI) in Ho Chi Minh City last year has flowed into the property sector, worrying experts and authorities, Vietnam News Agency (VNA) reported yesterday.
HCM City had attracted US$2.5 billion in the first 11 months, the highest in the country along with Hanoi and Dong Nai province, Thai Van Re, head of the city's Department of Planning and Investment, said. Over US$2.1 billion had been invested in real estate, mainly apartment and office blocks, he added.
Do Thi Loan, general secretary of the HCM City Real Estate Association, said her association had been contacted by many companies from the US, Australia, Canada, Italy, Singapore, China and Japan about investing in the city's property market as well as elsewhere in Vietnam. They said other Asian markets were nearly saturated while Vietnam was in the first stage of urbanisation, she said.
But the deputy head of the Economics Institute, Nguyen Thieng Duc, warned that haphazard construction would affect the city's visual appeal and environment. He added the administration should improve infrastructure to prevent traffic jams and floods, and make it appealing for foreigners to invest in other sectors\. \-- Bernama
Ho Chi Minh City frets over property investment
(HO CHI MINH CITY) Around 85 per cent of foreign direct investment (FDI) in Ho Chi Minh City last year has flowed into the property sector, worrying experts and authorities, Vietnam News Agency (VNA) reported yesterday.
HCM City had attracted US$2.5 billion in the first 11 months, the highest in the country along with Hanoi and Dong Nai province, Thai Van Re, head of the city's Department of Planning and Investment, said. Over US$2.1 billion had been invested in real estate, mainly apartment and office blocks, he added.
Do Thi Loan, general secretary of the HCM City Real Estate Association, said her association had been contacted by many companies from the US, Australia, Canada, Italy, Singapore, China and Japan about investing in the city's property market as well as elsewhere in Vietnam. They said other Asian markets were nearly saturated while Vietnam was in the first stage of urbanisation, she said.
But the deputy head of the Economics Institute, Nguyen Thieng Duc, warned that haphazard construction would affect the city's visual appeal and environment. He added the administration should improve infrastructure to prevent traffic jams and floods, and make it appealing for foreigners to invest in other sectors\. \-- Bernama
BT: Land price hits a high at Johor's Iskandar region
Business Times - 03 Jan 2008
Land price hits a high at Johor's Iskandar region
Analysts see positive effect of rise on companies' shares
By S JAYASANKARAN IN KUALA LUMPUR
LAND prices in the Iskandar Development Region (IDR) continue to spurt, with a transaction done last week at RM50 (S$21.7) per square foot (psf), compared with RM43 psf four months ago and several times the price two years ago.
It was announced last Friday that a consortium between Dubai's Limitless Holdings (60 per cent) and Malaysia's state-owned UEM World (40 per cent) would embark on a high-end, waterfront development on 45ha of land at Nusajaya that it had bought for RM242 million, or RM50 psf.
Nusajaya, almost in the middle of the IDR, is where a new state administrative capital is being constructed.
The IDR - a special economic zone three times the size of Singapore - has been made a development priority by the administration of Prime Minister Abdullah Badawi. Special incentives, including tax holidays, liberal investment rules and the absence of affirmative action policies that favour ethnic Malays, are aimed at drawing in foreign investment.
The Dubai-UEM World transaction is the third sizeable land purchase in the IDR in as many months.
Recent land purchases totalling RM5.8 billion epitomise a mindset shift by the policy-makers in Kulala Lumpur, who are trying to attract new foreign investment by opening up Malaysia's property markets in selected areas like the IDR.
So far, the new investors have all been well-heeled Middle Easterners with a development track record in other countries.
This influx of predominantly Islamic investment into predominantly Muslim Malaysia has obviated criticism from ethnic Malays disgruntled by Mr Abdullah's suspension of affirmative action policies in the IDR.
The continuing inflow of foreign investment into the area could also jump-start the relatively slow-moving project as it will not only diminish execution risk but, in the nature of a virtuous cycle, also attract other investors beguiled by rising land prices.
The authorities certainly seem to think so. Last week, New Straits Times quoted Johor Chief Minister Ghani Othman as saying at least RM7 billion of projects in the IDR will begin by April this year. They include highways, river clean-ups, residential and office complexes and leisure facilities.
Analysts are excited by the effect of rising land prices in Johor on the share prices of companies with large land banks there. The biggest beneficiary is reckoned to be UEM World, a listed entity that still owns 4,137ha at Nusajaya.
'Its current share price (around RM3.90) imputes an average valuation (of its land bank) of RM12.50 a square foot despite the fact that bungalow and industrial lots are already transacting above RM20 a square foot,' a recent UOB KayHian report estimated. 'At RM50 a square foot, UEM World's real net asset value would jump to RM12.46 a share.'
Land price hits a high at Johor's Iskandar region
Analysts see positive effect of rise on companies' shares
By S JAYASANKARAN IN KUALA LUMPUR
LAND prices in the Iskandar Development Region (IDR) continue to spurt, with a transaction done last week at RM50 (S$21.7) per square foot (psf), compared with RM43 psf four months ago and several times the price two years ago.
It was announced last Friday that a consortium between Dubai's Limitless Holdings (60 per cent) and Malaysia's state-owned UEM World (40 per cent) would embark on a high-end, waterfront development on 45ha of land at Nusajaya that it had bought for RM242 million, or RM50 psf.
Nusajaya, almost in the middle of the IDR, is where a new state administrative capital is being constructed.
The IDR - a special economic zone three times the size of Singapore - has been made a development priority by the administration of Prime Minister Abdullah Badawi. Special incentives, including tax holidays, liberal investment rules and the absence of affirmative action policies that favour ethnic Malays, are aimed at drawing in foreign investment.
The Dubai-UEM World transaction is the third sizeable land purchase in the IDR in as many months.
Recent land purchases totalling RM5.8 billion epitomise a mindset shift by the policy-makers in Kulala Lumpur, who are trying to attract new foreign investment by opening up Malaysia's property markets in selected areas like the IDR.
So far, the new investors have all been well-heeled Middle Easterners with a development track record in other countries.
This influx of predominantly Islamic investment into predominantly Muslim Malaysia has obviated criticism from ethnic Malays disgruntled by Mr Abdullah's suspension of affirmative action policies in the IDR.
The continuing inflow of foreign investment into the area could also jump-start the relatively slow-moving project as it will not only diminish execution risk but, in the nature of a virtuous cycle, also attract other investors beguiled by rising land prices.
The authorities certainly seem to think so. Last week, New Straits Times quoted Johor Chief Minister Ghani Othman as saying at least RM7 billion of projects in the IDR will begin by April this year. They include highways, river clean-ups, residential and office complexes and leisure facilities.
Analysts are excited by the effect of rising land prices in Johor on the share prices of companies with large land banks there. The biggest beneficiary is reckoned to be UEM World, a listed entity that still owns 4,137ha at Nusajaya.
'Its current share price (around RM3.90) imputes an average valuation (of its land bank) of RM12.50 a square foot despite the fact that bungalow and industrial lots are already transacting above RM20 a square foot,' a recent UOB KayHian report estimated. 'At RM50 a square foot, UEM World's real net asset value would jump to RM12.46 a share.'
BT: Chip Eng Seng signs Vietnam deals
Business Times - 03 Jan 2008
Chip Eng Seng signs Vietnam deals
Property group in joint deals to develop two residential projects
By CHEW XIANG
CONSTRUCTION and property group Chip Eng Seng has signed separate agreements to develop two residential projects in Vietnam.
The first is a 20 per cent stake in a business co-operation deal with two local partners there to build a 782-unit condominium in Ho Chi Minh City's District 8. The total development cost is estimated at $90 million, Chip Eng Seng said in a statement.
The local partners are Vinh Tien Joint Stock Company and Hoa Binh House Joint Stock Company, which will hold 41 per cent and 39 per cent of the project respectively.
The second deal is for a 25 per cent stake in Viet Investment Link Joint Stock Company (VL).
Chip Eng Seng and VL are talking with another local partner to develop a condominium on a 7,000-square-metre site in Ho Chi Minh City's District 2.
Related link:
Click here for Chip Eng Seng's press release
Chip Eng Seng said that its stake in VL will rise to 49 per cent this year. The total development cost is estimated at $90 million.
Both projects should be launched in the second half of the year, and Chip Eng Seng said that it will also provide project management and consultancy services for both.
The investments, each held through a wholly owned subsidiary, is expected to contribute positively to its net tangible assets and earnings per share for its current financial year.
The deals are its first in the country since it took a 5 per cent stake in a listed Vietnamese construction company, Hoa Binh Construction & Real Estate Corporation, last July. The tie-up has brought 'good equity returns and excellent business opportunities', Chip Eng Seng said.
The company is setting up an office in Ho Chi Minh and is considering investments in hotels and commercial and retail properties in the country.
Chief executive officer Raymond Chia said in a statement: 'The Vietnam market is roaring with potential. Our investment in this market is taken with a long-term view. I see Chip Eng Seng becoming one of the key foreign investors in Vietnam.'
The company plans to expand extensively through the region, Mr Chia said. It is also looking for opportunities in Bangkok, Kuala Lumpur and China.
'In three years, I am looking to have 30 per cent of our revenue and profit coming from the overseas market,' Mr Chia added.
Chip Eng Seng signs Vietnam deals
Property group in joint deals to develop two residential projects
By CHEW XIANG
CONSTRUCTION and property group Chip Eng Seng has signed separate agreements to develop two residential projects in Vietnam.
The first is a 20 per cent stake in a business co-operation deal with two local partners there to build a 782-unit condominium in Ho Chi Minh City's District 8. The total development cost is estimated at $90 million, Chip Eng Seng said in a statement.
The local partners are Vinh Tien Joint Stock Company and Hoa Binh House Joint Stock Company, which will hold 41 per cent and 39 per cent of the project respectively.
The second deal is for a 25 per cent stake in Viet Investment Link Joint Stock Company (VL).
Chip Eng Seng and VL are talking with another local partner to develop a condominium on a 7,000-square-metre site in Ho Chi Minh City's District 2.
Related link:
Click here for Chip Eng Seng's press release
Chip Eng Seng said that its stake in VL will rise to 49 per cent this year. The total development cost is estimated at $90 million.
Both projects should be launched in the second half of the year, and Chip Eng Seng said that it will also provide project management and consultancy services for both.
The investments, each held through a wholly owned subsidiary, is expected to contribute positively to its net tangible assets and earnings per share for its current financial year.
The deals are its first in the country since it took a 5 per cent stake in a listed Vietnamese construction company, Hoa Binh Construction & Real Estate Corporation, last July. The tie-up has brought 'good equity returns and excellent business opportunities', Chip Eng Seng said.
The company is setting up an office in Ho Chi Minh and is considering investments in hotels and commercial and retail properties in the country.
Chief executive officer Raymond Chia said in a statement: 'The Vietnam market is roaring with potential. Our investment in this market is taken with a long-term view. I see Chip Eng Seng becoming one of the key foreign investors in Vietnam.'
The company plans to expand extensively through the region, Mr Chia said. It is also looking for opportunities in Bangkok, Kuala Lumpur and China.
'In three years, I am looking to have 30 per cent of our revenue and profit coming from the overseas market,' Mr Chia added.
BT: M'sian building sector set for 5.8% growth
Business Times - 03 Jan 2008
M'sian building sector set for 5.8% growth
Driving expansion are oil pipeline, rail, water, undersea power cable projects
(KUALA LUMPUR) Malaysia's construction sector is expected to grow for the second consecutive year by 5.8 per cent compared with 4.7 per cent last year, fuelled by stimulus measures outlined to boost domestic activities, says research company Inter-Pacific Research Sdn Bhd.
In its economic and market outlook report released here yesterday, the research house said the positive outlook will help boost investors' confidence by yielding the desired multiplier effect that will enable the domestic economy to withstand any adverse shocks arising from the external front.
The country's construction sector was in recession for three consecutive years from 2004.
Inter-Pacific said some of the high impact projects expected to contribute to the growth will be the Trans-Peninsular oil pipeline (RM25 billion or S$10.8 billion), double tracking rail projects (RM19 billion), Pahang-Selangor water transfer (RM9 billion) and the Bakun undersea cable and overhead transmission (RM9 billion) projects.
Following the slight decline in government development expenditure by 2.1 per cent to RM40 billion this year from RM40.9 billion last year, private finance initiative projects are also expected to play a more meaningful role this year.
However, Inter-Pacific said in its report that there was a disturbing trend in the utilisation of development expenditure. 'A total of RM200 billion has been allocated under the Ninth Malaysia Plan and only 29.1 per cent or RM58.2 billion has been utilised so far.
'For instance, the actual projection for development expenditure in 2007 is RM40.9 billion but only RM22.3 billion were utilised until third quarter.
'On an annualised basis, our estimates showed gross development expenditure would reach RM30 billion in 2007, a shortfall of RM10.9 billion. This trend is somewhat disturbing.'
Citing the importance of the current development of economic zones in the country where huge funds have been allocated, it said: 'If it persists, it raises our scepticism as to whether there will be another construction boom. The last time we experienced a boom was between 1994 and 1996 driven by buildings and transport-led projects. This time around, we expect growth to come from rail, water, oil and gas and regional developments. Hence, we hope for greater development expenditure in 2008.'
Meanwhile, the building materials industry is also expected to benefit from the improving construction activities, with cement and steel being the two sub-sectors to see significant gains.
'Whilst taking advantage of improving domestic construction/infrastructure activities, we expect pick up in property activities, strong demand from Singapore for their resorts built and a healthy export market (Middle East construction boom) to further lend support for higher demand of cement. We expect cement demand to grow by about 6 per cent per annum over 2008 and 2009,' Inter-Pacific said.
It said the stable cement price averaging RM215 per tonne coupled with better utilisation rate, should help to partly offset the rising operation costs from electricity, paper bags, fuel and raw materials.
Steel, meanwhile, is envisaged to exhibit better performance supported by domestic construction activities, higher selling prices, and stronger export market.
Steel prices are expected to remain firm in the near term, mainly supported by strong demand from the single largest consumer namely China, said Inter-Pacific.
The International Iron and Steel Institute has projected the global demand for steel this year to grow by 6.1 per cent, while demand from China, which consumes 35 per cent of the total world steel, is set to expand by an additional 10 per cent this year. - Bernama
M'sian building sector set for 5.8% growth
Driving expansion are oil pipeline, rail, water, undersea power cable projects
(KUALA LUMPUR) Malaysia's construction sector is expected to grow for the second consecutive year by 5.8 per cent compared with 4.7 per cent last year, fuelled by stimulus measures outlined to boost domestic activities, says research company Inter-Pacific Research Sdn Bhd.
In its economic and market outlook report released here yesterday, the research house said the positive outlook will help boost investors' confidence by yielding the desired multiplier effect that will enable the domestic economy to withstand any adverse shocks arising from the external front.
The country's construction sector was in recession for three consecutive years from 2004.
Inter-Pacific said some of the high impact projects expected to contribute to the growth will be the Trans-Peninsular oil pipeline (RM25 billion or S$10.8 billion), double tracking rail projects (RM19 billion), Pahang-Selangor water transfer (RM9 billion) and the Bakun undersea cable and overhead transmission (RM9 billion) projects.
Following the slight decline in government development expenditure by 2.1 per cent to RM40 billion this year from RM40.9 billion last year, private finance initiative projects are also expected to play a more meaningful role this year.
However, Inter-Pacific said in its report that there was a disturbing trend in the utilisation of development expenditure. 'A total of RM200 billion has been allocated under the Ninth Malaysia Plan and only 29.1 per cent or RM58.2 billion has been utilised so far.
'For instance, the actual projection for development expenditure in 2007 is RM40.9 billion but only RM22.3 billion were utilised until third quarter.
'On an annualised basis, our estimates showed gross development expenditure would reach RM30 billion in 2007, a shortfall of RM10.9 billion. This trend is somewhat disturbing.'
Citing the importance of the current development of economic zones in the country where huge funds have been allocated, it said: 'If it persists, it raises our scepticism as to whether there will be another construction boom. The last time we experienced a boom was between 1994 and 1996 driven by buildings and transport-led projects. This time around, we expect growth to come from rail, water, oil and gas and regional developments. Hence, we hope for greater development expenditure in 2008.'
Meanwhile, the building materials industry is also expected to benefit from the improving construction activities, with cement and steel being the two sub-sectors to see significant gains.
'Whilst taking advantage of improving domestic construction/infrastructure activities, we expect pick up in property activities, strong demand from Singapore for their resorts built and a healthy export market (Middle East construction boom) to further lend support for higher demand of cement. We expect cement demand to grow by about 6 per cent per annum over 2008 and 2009,' Inter-Pacific said.
It said the stable cement price averaging RM215 per tonne coupled with better utilisation rate, should help to partly offset the rising operation costs from electricity, paper bags, fuel and raw materials.
Steel, meanwhile, is envisaged to exhibit better performance supported by domestic construction activities, higher selling prices, and stronger export market.
Steel prices are expected to remain firm in the near term, mainly supported by strong demand from the single largest consumer namely China, said Inter-Pacific.
The International Iron and Steel Institute has projected the global demand for steel this year to grow by 6.1 per cent, while demand from China, which consumes 35 per cent of the total world steel, is set to expand by an additional 10 per cent this year. - Bernama
Tuesday, January 1, 2008
The Top 10 Reasons Why Many Christian Don't Celebrate Christmas
The Top 10 Reasons Why Many Christian Don't Celebrate Christmas
by Scott Ashley
Source: http://www.gnmagazine.org/index.htm
1. Christmas is driven by commercialism.
It's not that difficult to recognize what really drives the holiday in our age. Cal Thomas, an American syndicated columnist who often writes from a Christian perspective, acknowledged uncomfortable truths about Christmas in a December 2003 column.
"I'm not sure it's worth keeping Christmas anymore," he began, lamenting that the holiday has become a "road show of reindeer, winter scenes, elves and the God substitute, Santa Claus, who serves as a front for merchants seeking to play on the guilt some parents bear for ignoring their kids the rest of the year."
He asks a great question: "Why participate any longer in this charade where the focal point of worship has shifted from a babe in a manger to a babe in the Victoria 's Secret window? . . . No room in the inn has been replaced by no room in the mall parking lot."
But perhaps his most insightful statement is this: "It's instructive how just one season away from lusting after material things can break the habit. It's something like liberation from an addiction or lifestyle choice. Being away from it can cause one to realize the behavior is neither missed nor needed for fulfillment and enjoyment."
Having said good-bye to the Christmas habit several decades ago, I couldn't have said it better myself!
2. Christmas is nowhere mentioned in the Bible.
This is rather obvious, but most people never give it a second thought. The books of the New Testament cover 30+ years of Jesus Christ's life, then another 30+ years of the early Church following His death and resurrection, but nowhere do we find any hint of a Christmas celebration or anything remotely like it.
Yes, the Bible does give us quite a few details of His birth--the angelic appearance to Mary and then Joseph, the conditions surrounding His birth in a stable in Bethlehem, the heavenly choir's performance for the shepherds in the fields outside the town. But nowhere in the Bible is there any record of anyone observing Christmas or any hint that God the Father or Jesus Christ expects us to do so.
3. Jesus wasn't born on or near Dec. 25.
Surprising but true! Remember those shepherds who were "living out in the fields, keeping watch over their flock by night"? (Luke 2:. December weather around Bethlehem is often miserably cold, wet and rainy. No shepherd in his right mind would have kept his flocks outside at night at that time of year!
The Interpreter's One-Volume Commentary says this passage argues "against the birth [of Christ] occurring on Dec. 25 since the weather would not have permitted" shepherds to be out in the fields with their flocks then.
And Celebrations: The Complete Book of American Holidays tells us that Luke's account of Christ's birth "suggests that Jesus may have been born in summer or early fall. Since December is cold and rainy in Judea, it is likely the shepherds would have sought shelter for their flocks at night" (p. 309) rather than keeping them outdoors.
Also, Luke 2:1-4 tells us that Jesus was born in Bethlehem because his parents came to that town to register in a Roman census. The Romans were well known as highly efficient administrators. It would have made no sense to have conducted a census in the dead of winter, when temperatures often dropped below freezing and traveling was difficult due to poor road conditions. Taking a census under such conditions would have been self-defeating!
4. The Christmas holiday is largely a recycled pagan celebration.
Again, surprising but true! Read it for yourself in just about any encyclopedia.
Consider the customs associated with Christmas. What do decorated evergreen trees, holly, mistletoe, yule logs, a jolly plump man in a fur-lined red suit, sleighs and flying reindeer have to do with the birth of Jesus Christ?
None of these things have anything to do with Him, but they have a lot to do with ancient pagan festivals. (Read the eye-opening details in our free booklet Holidays or Holy Days: Does It Matter Which Days We Keep?)
And what about the date of Dec. 25? How did it come to be assigned as the supposed date of Jesus Christ's birth? Historians Gerard and Patricia Del Re explain:
"The tradition of celebrating December 25 as Christ's birthday came to the Romans from Persia. Mithra, the Persian god of light and sacred contracts, was born out of a rock on December 25. Rome was famous for its flirtations with strange gods and cults, and in the third century the unchristian emperor Aurelian established the festival of Dies Invicti Solis, the Day of the Invincible Sun, on December 25.
"Mithra was an embodiment of the sun, so this period of its rebirth was a major day in Mithraism, which had become Rome's latest official religion . . . It is believed that the emperor Constantine adhered to Mithraism up to the time of his conversion to Christianity. He was probably instrumental in seeing that the major feast of his old religion was carried over to his new faith" (The Christmas Almanac, 1979, p. 17).
It's difficult to determine the first time anyone celebrated Dec. 25 as Christmas, but historians generally agree that it was sometime during the fourth century--some 300 years after Christ's death. And then a contrived date was chosen because it was already a popular pagan holiday celebrating the birth of the sun god!
Similarly, virtually all of the customs associated with Christmas are recycled from ancient pagan festivals honoring other gods.
5. God condemns using pagan customs to worship Him.
Since Christmas is supposedly a day to worship and celebrate God the Father and Jesus Christ, wouldn't it be a good idea to look into the Bible to see what it says about how we should worship God?
The answer is quite clear. God gives specific instruction about using pagan practices to worship Him--the exact thing Christmas does! Notice what He says in Deuteronomy 12:30-32: ". . . Do not inquire after their gods, saying, 'How did these nations serve their gods? I also will do likewise.' You shall not worship the LORD your God in that way . . . Whatever I command you, be careful to observe it; you shall not add to it nor take away from it" (emphasis added throughout).
And lest some think this is simply an Old Testament command that no longer applies, the apostle Paul makes the same point in 2 Corinthians 6, where he addresses whether unbiblical religious customs and practices have any place in the worship of God's people:
"What fellowship has righteousness with lawlessness? And what communion has light with darkness? And what accord has Christ with Belial [the devil and/or demons]? Or what part has a believer with an unbeliever? And what agreement has the temple of God with idols? For you are the temple of the living God . . .
"Therefore 'Come out from among them and be separate, says the Lord. Do not touch what is unclean, and I will receive you.' 'I will be a Father to you, and you shall be My sons and daughters, says the LORD Almighty.' Therefore, having these promises, beloved, let us cleanse ourselves from all filthiness of the flesh and spirit, perfecting holiness in the fear of God" (2 Corinthians 6:14-18; 7:1).
Rather than relabeling pagan customs as Christian, or allowing members of the Church to continue their old pagan practices, the apostle Paul told them in no uncertain terms to leave behind all these forms of worship and worship God in true holiness as He commands. Jesus likewise says His true followers "must worship in spirit and truth" (John 4:24)--not revel in recycled pagan customs and symbolism.
6. Christmas is worshipping God in vain.
Since Christmas is a jumble of ancient pagan customs invented by men, and a holiday found nowhere in the Bible, does God honor or accept such worship?
Jesus provides the answer in His stern rebuke of the religious teachers of His day, men who had substituted human traditions and teachings for God's divine truths and commands: "Well did Isaiah prophesy of you hypocrites . . . 'in vain they worship Me, teaching as doctrines the commandments of men.' . . . All too well you reject the commandment of God, that you may keep your tradition" (Mark 7:6-9).
In the 17th century Christmas was actually outlawed in England and some parts of the American colonies because of its unbiblical and pagan origins. They knew something most people today have forgotten or have never known!
7. You can't put Christ back into something He was never in. Some people admit the many problems with Christmas. But rather than face up to those problems, some assert that we should "put Christ back in Christmas."
However, it's impossible to "put Christ back in Christmas" since He never was in Christmas in the first place! He never so much as heard the word "Christmas" during His lifetime on earth, nor did His apostles after Him. You can search the Bible cover to cover but you won't find the words "Christmas," "Christmas tree," "mistletoe," "holly," "Santa Claus" or "flying reindeer."
Putting Christ back in Christmas may sound like a nice sentiment, but it's really only a misguided effort to try to justify a long-standing human tradition rather than what the Bible tells us we should do.
8. The Bible nowhere tells us to observe a holiday celebrating Jesus Christ's birth--but it clearly does tell us to commemorate His death.
As noted earlier, the Bible nowhere mentions Christmas or tells us to celebrate Christ's birth.
This is not to say that the Bible doesn't tell us to commemorate a highly significant event in Jesus Christ's life on earth. It does--but that event is His death, not His birth.
Notice what the apostle Paul, conveying the instructions of Jesus Himself, tells Christians: "For I received from the Lord that which I also delivered to you: that the Lord Jesus on the same night in which He was betrayed took bread; and when He had given thanks, He broke it and said, 'Take, eat; this is My body which is broken for you; do this in remembrance of Me.'
"In the same manner He also took the cup after supper, saying, 'This cup is the new covenant in My blood. This do, as often as you drink it, in remembrance of Me.' For as often as you eat this bread and drink this cup, you proclaim the Lord's death till He comes . . . Let a man examine himself, and so let him eat of the bread and drink of the cup" (1 Corinthians 11:23-2.
And yes, many believers do what they consider a form of this today in taking communion or "the Lord's supper." They fail to realize, however, the full significance of these acts, or that what Paul is actually describing here is the Passover -- which is what Jesus Himself called this observance (Matthew 26:18-19; Mark 14:14-16; Luke 22:8-13, 15).
And many have no idea of the real date of Christ's death and the annual Passover observance, but that's an issue for another time. (Hint: It isn't "Good Friday" prior to Easter as so many mistakenly believe. See our booklet Holidays or Holy Days: Does It Matter Which Days We Keep? for details.) The point is: Jesus clearly expects His true followers to commemorate His death--not His birth--by observing the Passover.
9. Christmas obscures God's plan for mankind.
Passover, mentioned above, has enormous significance in God's plan for humanity. The Old Testament Passover, described in Exodus 12, was symbolic of Jesus Christ's future role and sacrifice. As the blood of the slain Passover lambs on the Israelites' houses spared them while the firstborn of the Egyptians were slain, so does Jesus Christ's sacrificial death on our behalf spare us from death-- eternal death.
Paul alluded to this great truth when he wrote in 1 Corinthians 5:7 that "Christ, our Passover, was sacrificed for us." Similarly John the Baptist, speaking under divine inspiration, said of Jesus, "Behold! The Lamb of God who takes away the sin of the world!" (John 1:29).
Peter wrote that we are redeemed "with the precious blood of Christ, as of a lamb without blemish and without spot" (1 Peter 1:19)--a clear reference to the Passover lambs (Exodus 12:5).
A central key to God's plan for humanity is Jesus Christ's sacrificial death on our behalf. He is "the Lamb slain from the foundation of the world" (Revelation 13:--meaning His death for our sins was planned before the first human beings were ever created (1 Peter 1:18-20). Only through His death to pay the penalty for our sins can human beings receive God's gift of eternal life (John 3:14-17; Acts 4:12; 1 Corinthians 15:20-22).
Christmas, in contrast, teaches us none of this. Regrettably, because it is a hodgepodge of unbiblical customs and beliefs thrown together with a few elements of biblical truth, it only obscures the incredible purpose of Jesus Christ's coming--as well as why He must return to earth a second time! (For more details, request our free booklets Jesus Christ: The Real Story and The Gospel of the Kingdom.)
10. I'd rather celebrate the Holy Days Jesus Christ and the apostles observed.
God in His Word sets out many choices for us. Will we do things His way or our own? Will we worship Him as He tells us to, or expect Him to honor whatever religious practices we choose regardless of what His Word says?
It's always good to ask the question, What would Jesus do? The answer, from the Scriptures, is quite clear as to what Jesus did. Jesus didn't allow His followers the option of adopting pagan practices in their worship. He and the apostles plainly kept God's Holy Days and festivals that we find recorded in Leviticus 23.
As noted above, they kept the Passover (1 Corinthians 11:23-26). Scripture shows they also observed the Days of Unleavened Bread (Acts 20:6; 1 Corinthians 5:7-. The New Testament Church itself was founded on the Feast of Pentecost (Acts 2:1), another biblical festival they clearly observed (Acts 20:16). They likewise kept the Day of Atonement (called "the Fast" in Acts 27:9) and the Feast of Tabernacles (John 7:2, 10).
Christmas, meanwhile, is totally missing from the biblical record.
Most people don't know that the Bible includes a whole list of festivals that God commanded, that Jesus Himself observed and that the apostles and early Church were still keeping decades after Christ's death and resurrection. And unlike Christmas, these reveal a great deal about Jesus Christ's role and mission.
Each one teaches us a vital lesson in what Jesus has done, is doing and will yet do in carrying out God's great plan for humankind. The differences between these and the tired old paganism and crass commercialism of Christmas is truly like the difference between day and night. Why not look into them for yourself?
I've given you my top 10 reasons for not celebrating Christmas. What do you suppose God thinks of your reasons for continuing to observe it? GN
by Scott Ashley
Source: http://www.gnmagazine.org/index.htm
1. Christmas is driven by commercialism.
It's not that difficult to recognize what really drives the holiday in our age. Cal Thomas, an American syndicated columnist who often writes from a Christian perspective, acknowledged uncomfortable truths about Christmas in a December 2003 column.
"I'm not sure it's worth keeping Christmas anymore," he began, lamenting that the holiday has become a "road show of reindeer, winter scenes, elves and the God substitute, Santa Claus, who serves as a front for merchants seeking to play on the guilt some parents bear for ignoring their kids the rest of the year."
He asks a great question: "Why participate any longer in this charade where the focal point of worship has shifted from a babe in a manger to a babe in the Victoria 's Secret window? . . . No room in the inn has been replaced by no room in the mall parking lot."
But perhaps his most insightful statement is this: "It's instructive how just one season away from lusting after material things can break the habit. It's something like liberation from an addiction or lifestyle choice. Being away from it can cause one to realize the behavior is neither missed nor needed for fulfillment and enjoyment."
Having said good-bye to the Christmas habit several decades ago, I couldn't have said it better myself!
2. Christmas is nowhere mentioned in the Bible.
This is rather obvious, but most people never give it a second thought. The books of the New Testament cover 30+ years of Jesus Christ's life, then another 30+ years of the early Church following His death and resurrection, but nowhere do we find any hint of a Christmas celebration or anything remotely like it.
Yes, the Bible does give us quite a few details of His birth--the angelic appearance to Mary and then Joseph, the conditions surrounding His birth in a stable in Bethlehem, the heavenly choir's performance for the shepherds in the fields outside the town. But nowhere in the Bible is there any record of anyone observing Christmas or any hint that God the Father or Jesus Christ expects us to do so.
3. Jesus wasn't born on or near Dec. 25.
Surprising but true! Remember those shepherds who were "living out in the fields, keeping watch over their flock by night"? (Luke 2:. December weather around Bethlehem is often miserably cold, wet and rainy. No shepherd in his right mind would have kept his flocks outside at night at that time of year!
The Interpreter's One-Volume Commentary says this passage argues "against the birth [of Christ] occurring on Dec. 25 since the weather would not have permitted" shepherds to be out in the fields with their flocks then.
And Celebrations: The Complete Book of American Holidays tells us that Luke's account of Christ's birth "suggests that Jesus may have been born in summer or early fall. Since December is cold and rainy in Judea, it is likely the shepherds would have sought shelter for their flocks at night" (p. 309) rather than keeping them outdoors.
Also, Luke 2:1-4 tells us that Jesus was born in Bethlehem because his parents came to that town to register in a Roman census. The Romans were well known as highly efficient administrators. It would have made no sense to have conducted a census in the dead of winter, when temperatures often dropped below freezing and traveling was difficult due to poor road conditions. Taking a census under such conditions would have been self-defeating!
4. The Christmas holiday is largely a recycled pagan celebration.
Again, surprising but true! Read it for yourself in just about any encyclopedia.
Consider the customs associated with Christmas. What do decorated evergreen trees, holly, mistletoe, yule logs, a jolly plump man in a fur-lined red suit, sleighs and flying reindeer have to do with the birth of Jesus Christ?
None of these things have anything to do with Him, but they have a lot to do with ancient pagan festivals. (Read the eye-opening details in our free booklet Holidays or Holy Days: Does It Matter Which Days We Keep?)
And what about the date of Dec. 25? How did it come to be assigned as the supposed date of Jesus Christ's birth? Historians Gerard and Patricia Del Re explain:
"The tradition of celebrating December 25 as Christ's birthday came to the Romans from Persia. Mithra, the Persian god of light and sacred contracts, was born out of a rock on December 25. Rome was famous for its flirtations with strange gods and cults, and in the third century the unchristian emperor Aurelian established the festival of Dies Invicti Solis, the Day of the Invincible Sun, on December 25.
"Mithra was an embodiment of the sun, so this period of its rebirth was a major day in Mithraism, which had become Rome's latest official religion . . . It is believed that the emperor Constantine adhered to Mithraism up to the time of his conversion to Christianity. He was probably instrumental in seeing that the major feast of his old religion was carried over to his new faith" (The Christmas Almanac, 1979, p. 17).
It's difficult to determine the first time anyone celebrated Dec. 25 as Christmas, but historians generally agree that it was sometime during the fourth century--some 300 years after Christ's death. And then a contrived date was chosen because it was already a popular pagan holiday celebrating the birth of the sun god!
Similarly, virtually all of the customs associated with Christmas are recycled from ancient pagan festivals honoring other gods.
5. God condemns using pagan customs to worship Him.
Since Christmas is supposedly a day to worship and celebrate God the Father and Jesus Christ, wouldn't it be a good idea to look into the Bible to see what it says about how we should worship God?
The answer is quite clear. God gives specific instruction about using pagan practices to worship Him--the exact thing Christmas does! Notice what He says in Deuteronomy 12:30-32: ". . . Do not inquire after their gods, saying, 'How did these nations serve their gods? I also will do likewise.' You shall not worship the LORD your God in that way . . . Whatever I command you, be careful to observe it; you shall not add to it nor take away from it" (emphasis added throughout).
And lest some think this is simply an Old Testament command that no longer applies, the apostle Paul makes the same point in 2 Corinthians 6, where he addresses whether unbiblical religious customs and practices have any place in the worship of God's people:
"What fellowship has righteousness with lawlessness? And what communion has light with darkness? And what accord has Christ with Belial [the devil and/or demons]? Or what part has a believer with an unbeliever? And what agreement has the temple of God with idols? For you are the temple of the living God . . .
"Therefore 'Come out from among them and be separate, says the Lord. Do not touch what is unclean, and I will receive you.' 'I will be a Father to you, and you shall be My sons and daughters, says the LORD Almighty.' Therefore, having these promises, beloved, let us cleanse ourselves from all filthiness of the flesh and spirit, perfecting holiness in the fear of God" (2 Corinthians 6:14-18; 7:1).
Rather than relabeling pagan customs as Christian, or allowing members of the Church to continue their old pagan practices, the apostle Paul told them in no uncertain terms to leave behind all these forms of worship and worship God in true holiness as He commands. Jesus likewise says His true followers "must worship in spirit and truth" (John 4:24)--not revel in recycled pagan customs and symbolism.
6. Christmas is worshipping God in vain.
Since Christmas is a jumble of ancient pagan customs invented by men, and a holiday found nowhere in the Bible, does God honor or accept such worship?
Jesus provides the answer in His stern rebuke of the religious teachers of His day, men who had substituted human traditions and teachings for God's divine truths and commands: "Well did Isaiah prophesy of you hypocrites . . . 'in vain they worship Me, teaching as doctrines the commandments of men.' . . . All too well you reject the commandment of God, that you may keep your tradition" (Mark 7:6-9).
In the 17th century Christmas was actually outlawed in England and some parts of the American colonies because of its unbiblical and pagan origins. They knew something most people today have forgotten or have never known!
7. You can't put Christ back into something He was never in. Some people admit the many problems with Christmas. But rather than face up to those problems, some assert that we should "put Christ back in Christmas."
However, it's impossible to "put Christ back in Christmas" since He never was in Christmas in the first place! He never so much as heard the word "Christmas" during His lifetime on earth, nor did His apostles after Him. You can search the Bible cover to cover but you won't find the words "Christmas," "Christmas tree," "mistletoe," "holly," "Santa Claus" or "flying reindeer."
Putting Christ back in Christmas may sound like a nice sentiment, but it's really only a misguided effort to try to justify a long-standing human tradition rather than what the Bible tells us we should do.
8. The Bible nowhere tells us to observe a holiday celebrating Jesus Christ's birth--but it clearly does tell us to commemorate His death.
As noted earlier, the Bible nowhere mentions Christmas or tells us to celebrate Christ's birth.
This is not to say that the Bible doesn't tell us to commemorate a highly significant event in Jesus Christ's life on earth. It does--but that event is His death, not His birth.
Notice what the apostle Paul, conveying the instructions of Jesus Himself, tells Christians: "For I received from the Lord that which I also delivered to you: that the Lord Jesus on the same night in which He was betrayed took bread; and when He had given thanks, He broke it and said, 'Take, eat; this is My body which is broken for you; do this in remembrance of Me.'
"In the same manner He also took the cup after supper, saying, 'This cup is the new covenant in My blood. This do, as often as you drink it, in remembrance of Me.' For as often as you eat this bread and drink this cup, you proclaim the Lord's death till He comes . . . Let a man examine himself, and so let him eat of the bread and drink of the cup" (1 Corinthians 11:23-2.
And yes, many believers do what they consider a form of this today in taking communion or "the Lord's supper." They fail to realize, however, the full significance of these acts, or that what Paul is actually describing here is the Passover -- which is what Jesus Himself called this observance (Matthew 26:18-19; Mark 14:14-16; Luke 22:8-13, 15).
And many have no idea of the real date of Christ's death and the annual Passover observance, but that's an issue for another time. (Hint: It isn't "Good Friday" prior to Easter as so many mistakenly believe. See our booklet Holidays or Holy Days: Does It Matter Which Days We Keep? for details.) The point is: Jesus clearly expects His true followers to commemorate His death--not His birth--by observing the Passover.
9. Christmas obscures God's plan for mankind.
Passover, mentioned above, has enormous significance in God's plan for humanity. The Old Testament Passover, described in Exodus 12, was symbolic of Jesus Christ's future role and sacrifice. As the blood of the slain Passover lambs on the Israelites' houses spared them while the firstborn of the Egyptians were slain, so does Jesus Christ's sacrificial death on our behalf spare us from death-- eternal death.
Paul alluded to this great truth when he wrote in 1 Corinthians 5:7 that "Christ, our Passover, was sacrificed for us." Similarly John the Baptist, speaking under divine inspiration, said of Jesus, "Behold! The Lamb of God who takes away the sin of the world!" (John 1:29).
Peter wrote that we are redeemed "with the precious blood of Christ, as of a lamb without blemish and without spot" (1 Peter 1:19)--a clear reference to the Passover lambs (Exodus 12:5).
A central key to God's plan for humanity is Jesus Christ's sacrificial death on our behalf. He is "the Lamb slain from the foundation of the world" (Revelation 13:--meaning His death for our sins was planned before the first human beings were ever created (1 Peter 1:18-20). Only through His death to pay the penalty for our sins can human beings receive God's gift of eternal life (John 3:14-17; Acts 4:12; 1 Corinthians 15:20-22).
Christmas, in contrast, teaches us none of this. Regrettably, because it is a hodgepodge of unbiblical customs and beliefs thrown together with a few elements of biblical truth, it only obscures the incredible purpose of Jesus Christ's coming--as well as why He must return to earth a second time! (For more details, request our free booklets Jesus Christ: The Real Story and The Gospel of the Kingdom.)
10. I'd rather celebrate the Holy Days Jesus Christ and the apostles observed.
God in His Word sets out many choices for us. Will we do things His way or our own? Will we worship Him as He tells us to, or expect Him to honor whatever religious practices we choose regardless of what His Word says?
It's always good to ask the question, What would Jesus do? The answer, from the Scriptures, is quite clear as to what Jesus did. Jesus didn't allow His followers the option of adopting pagan practices in their worship. He and the apostles plainly kept God's Holy Days and festivals that we find recorded in Leviticus 23.
As noted above, they kept the Passover (1 Corinthians 11:23-26). Scripture shows they also observed the Days of Unleavened Bread (Acts 20:6; 1 Corinthians 5:7-. The New Testament Church itself was founded on the Feast of Pentecost (Acts 2:1), another biblical festival they clearly observed (Acts 20:16). They likewise kept the Day of Atonement (called "the Fast" in Acts 27:9) and the Feast of Tabernacles (John 7:2, 10).
Christmas, meanwhile, is totally missing from the biblical record.
Most people don't know that the Bible includes a whole list of festivals that God commanded, that Jesus Himself observed and that the apostles and early Church were still keeping decades after Christ's death and resurrection. And unlike Christmas, these reveal a great deal about Jesus Christ's role and mission.
Each one teaches us a vital lesson in what Jesus has done, is doing and will yet do in carrying out God's great plan for humankind. The differences between these and the tired old paganism and crass commercialism of Christmas is truly like the difference between day and night. Why not look into them for yourself?
I've given you my top 10 reasons for not celebrating Christmas. What do you suppose God thinks of your reasons for continuing to observe it? GN
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