The Board of Directors of CSC Holdings Limited (the “Company” or “CSC”) wishes to announce that it has entered into a Shareholders Agreement (“SA”) with IJM Construction Sdn Bhd (“IJMC”) a wholly owned subsidiary of IJM Corporation Berhad (a company listed on the Bursa Malaysia Securities Berhad) to form a joint venture (the “JV Co”) for the purpose of carrying out the business of foundation engineering and other related works in Malaysia and the region.
IJMC has its core business and competencies in civil, building and infrastructure constructions and has a strong and extensive network in Malaysia in relation to its business.
It is the intention of both parties for the JV Co to have an authorised share capital of RM20,000,000 or approximately S$8,700,000 with an initial paid up capital of RM10,000,000
or approximately S$4,350,000. Under the terms of the SA, CSC shall hold 70% of the JV Co while IJMC would hold the remaining 30%.
The completion of the SA is conditional upon the fulfillment of all conditions precedent in the SA and obtaining of all governmental and other approvals and/or consents which may be required in connection with the transactions contemplated.
The formation of the JV Co is not expected to have any material impact on the earnings of the Company for the financial year ending 31 March 2008. The Company intends to fund the investment in the JV Co using its own internal resources.
None of the directors or substantial shareholders of the Company has any interest, direct or indirect, in the SA.
BY ORDER OF THE BOARD
Lee Quang Loong
Company Secretary
Date: 21 December 2007
Monday, December 31, 2007
HWT (Hyflux NewSpring,Yangzhou), granted an exclusive 20-year concession by the people’s government of Jiangsu Province
Source: SGX Masnet
Hyflux Water Trust (“HWT”) announced that HWT’s wholly-owned subsidiary, Hyflux NewSpring (Yangzhou) Co., Ltd, has been granted an exclusive 20-year concession by the people’s government of Jiangsu Province, China to build, own, operate and transfer an expansion plant next to HWT’s existing waste water treatment plant in the Yangzhou Chemical Industrial Park. Upon expiry of the concession agreement, HWT as a first right to negotiate for an extension of the concession term.
With a design capacity of 20,000m3/day, and an estimated project cost of RMB 50 million, the expansion plant is HWT’s second plant in the Yangzhou Chemical Industrial Park, the first being the existing waste water treatment plant, which was acquired by HWT as part of the initial portfolio of HWT upon its listing.
The combined design capacity of the two plants will be 40,000m3/day. The expansion plant is required to meet the growing industrial demand for waste water treatment in the concession area.
Construction of the expansion plant is expected to begin in the second quarter of 2008. Operation is expected to commence in mid 2009, with full capacity utilization by 2011.
Hyflux Water Trust (“HWT”) announced that HWT’s wholly-owned subsidiary, Hyflux NewSpring (Yangzhou) Co., Ltd, has been granted an exclusive 20-year concession by the people’s government of Jiangsu Province, China to build, own, operate and transfer an expansion plant next to HWT’s existing waste water treatment plant in the Yangzhou Chemical Industrial Park. Upon expiry of the concession agreement, HWT as a first right to negotiate for an extension of the concession term.
With a design capacity of 20,000m3/day, and an estimated project cost of RMB 50 million, the expansion plant is HWT’s second plant in the Yangzhou Chemical Industrial Park, the first being the existing waste water treatment plant, which was acquired by HWT as part of the initial portfolio of HWT upon its listing.
The combined design capacity of the two plants will be 40,000m3/day. The expansion plant is required to meet the growing industrial demand for waste water treatment in the concession area.
Construction of the expansion plant is expected to begin in the second quarter of 2008. Operation is expected to commence in mid 2009, with full capacity utilization by 2011.
Friday, December 21, 2007
The Economist: Crunching the credit crunch
The credit crunch Postcards from the ledge
Dec 19th 2007
From The Economist print edition
There is certainly a path out of the gathering banking crisis, but no guarantee that the world economy will find it
A CREDIT crunch, a liquidity squeeze, a subprime meltdown—the shape-shifting menace that has vexed the world in 2007 has been all these things. But now it looks like becoming a banking crisis as well. The grievous experience of two centuries of financial busts is that when the banking system is in difficulties the mess spreads. Straitened banks lend less, sucking money out of the economy. In rich countries that threatens to tie down companies and give ailing housing markets a kicking. The data barely show it yet, but the financial malaise could yet be aggravated by a broader economic malaise.
Back in October it briefly seemed as if the summer's turmoil was abating. But a month later investors' confidence took a giddying turn as the weakening American housing market jeopardised the banks' capital. In December the leading central banks acted together to jolt the money markets into life. On December 18th the European Central Bank lent almost €350 billion ($500 billion) to tide banks over the new year. And yet most fear-meters, including, crucially, the price banks have to pay for funds (see chart), still register chronic anxiety.
This raises two broad questions. How gravely will the economy suffer? And what will become of the financial innovation that promised so much, but has proved so treacherous?
Subprime suspect
For answers, start in America's housing market, where the crisis had its origins. Subprime borrowers will probably default on $200 billion-300 billion of mortgages. That is a lot of money, to be sure, but hardly enough to imperil the world economy. For that, you need the baroque superstructure of mortgage-backed derivatives that enabled investors to bet on the housing market. From a mathematical viewpoint, the combined profits and losses on these derivatives will, by definition, cancel out, so they should not add anything to the total underlying loss. But that is only half the story. Individual investment vehicles may have sustained huge losses, especially if they borrowed heavily: it is the fear that your counterparty might be in that predicament that is gumming up the markets.
In theory the damage is safely contained off banks' balance sheets. But then, in theory American house prices never fall. The banks have belatedly discovered that they cannot just abandon their failing progeny of SIVs, conduits and the rest—at least if they want a reputation worth having. Worse, the banks now facing up to these contingent liabilities have not had to set aside capital in case of trouble—that gap in the regulations was precisely what made it so attractive to get their investments off the balance sheets in the first place.
November marked the stomach-churning moment when investors realised that the housing market was falling, that the losses would be big, that the banks would end up owning them, and that they had not put capital aside for the job. To make a bad case worse, nobody knows which bank is sitting on which liability. Every bank is suspect and any bank seeking to raise money by selling a position is more suspect than ever. As fear has played upon this lack of information, the money-market funds have gone on strike, cutting off the interbank markets' main source of cash, and the (embryonic) market for complex mortgage-backed derivatives has closed. It is an alarming mix of hiatus and distress.
If you put all that together, it is easy to see why an economy burdened by debt and a housing bust is in extra danger. Starved of funds and facing not just losses but lawsuits (see article), the banks are hoarding liquidity and capital. That can create a vicious circle. As the system of leverage that magnified credit collapses in on itself, borrowing becomes harder and demand falters. The rot can spread from housing to other areas, such as commercial property and credit-card debt. If the money-market funds then withdraw even more of their longer-term lending from the banks, then banks will need to conserve yet more capital. And so it goes dismally on.
Just take the hit
Nobody yet knows whether the extreme borrowing in the credit boom was a sensible result of the powerful new machinery of debt, or the sort of excess still unwinding in Japan: the lawyers will argue about that. But if the downward spiral takes hold, America will end up in recession and so quite possibly will Europe. The need is to break the chain—which leads back to the financial system. It urgently needs attention.
The markets will not recover until lenders believe the banks have credibly owned up to their losses. Sometimes this is best done when a bank chief has quit, as at Merrill Lynch. Often, the reckoning is more convincing when the bank has absorbed its off-balance-sheet ventures—as at HSBC and Citigroup. That is a risk, because it can weaken the banks' capital base and because the assets can fall further in value. But it is better than leaving the mess to fester and investors to fear the worst. Some banks will need fresh capital. UBS sugared a huge loss by announcing billions of dollars of new capital from government-backed funds in Singapore and the Gulf.
Citigroup took $7.5 billion of Abu Dhabi's money. Others are sure to need help—and may well turn to sovereign wealth funds, too.
There is an irony in seeing state-owned investors bail out capitalism's most ardent exponents; back when money was plentiful, the government outfits were rebuffed. But the banks are less choosy now. Moreover, the frenzy of innovation around debt and securitisation got out of hand. Risk was supposed to be bought by those best able to afford it, but often ended up with those seduced by yields they did not understand. Mathematical brilliance was supposed to model risk with precision, but the models evaporated along with the liquidity that they had failed to quantify. Rating agencies were supposed to serve the market, but their first loyalty seems to have been to the issuers who were paying their fees.
Finance now needs a flight to simplicity—to tame the jungle of investment vehicles, to reform the rating agencies, and to price liquidity risk. In a few cases regulation, chiefly aimed at transparency, looks justified. But do not expect the ethos of finance to change—or even wish that it were so. The system will purge the worst complexities of the past few years of its own accord. The tools of modern finance are too valuable to be cast aside. Securitisation makes assets easier to sell. Derivatives, used well, increase financial flexibility. And opportunists with names like Goldman Sachs and Cerberus are just the people to pick over the carcass of the credit boom and make a market where none exists today. When they put their billions to work, you will know the corner has been turned.
Back to Ben
Until that moment, the burden will fall on the central banks. They have tried to help by tinkering with the technical operations that supply liquidity (though they keep overnight interest rates on target by draining money elsewhere). By and large, this has failed: the banks' problems are not technical, but real.
Monetary policy matters far more and central banks must weigh the short-term danger to the economy against the medium-term threat to their own standing as inflation fighters. If the economy looks likely to weaken, further interest-rate cuts will be needed. But the effect of any rate cut will be lessened by those wide, fear-induced spreads in the money markets. And the severity of the slowdown is unknown. If central banks overestimate this and cut too much, it will fuel inflation, already stoked by demand in the emerging economies. Inflation is above target in the euro zone and (by a shade) in Britain and rising in America. It is a recipe for repenting at leisure.
The hope is that the credit markets unblock themselves and that buoyant emerging markets buy rich-world exports and recapitalise rich-world banks. The fear is that this crisis will assume yet more guises before it takes its leave—especially if politicians try to seize control. Bankruptcies, recession, litigation, protectionism: sadly, all are possible in 2008
Dec 19th 2007
From The Economist print edition
There is certainly a path out of the gathering banking crisis, but no guarantee that the world economy will find it
A CREDIT crunch, a liquidity squeeze, a subprime meltdown—the shape-shifting menace that has vexed the world in 2007 has been all these things. But now it looks like becoming a banking crisis as well. The grievous experience of two centuries of financial busts is that when the banking system is in difficulties the mess spreads. Straitened banks lend less, sucking money out of the economy. In rich countries that threatens to tie down companies and give ailing housing markets a kicking. The data barely show it yet, but the financial malaise could yet be aggravated by a broader economic malaise.
Back in October it briefly seemed as if the summer's turmoil was abating. But a month later investors' confidence took a giddying turn as the weakening American housing market jeopardised the banks' capital. In December the leading central banks acted together to jolt the money markets into life. On December 18th the European Central Bank lent almost €350 billion ($500 billion) to tide banks over the new year. And yet most fear-meters, including, crucially, the price banks have to pay for funds (see chart), still register chronic anxiety.
This raises two broad questions. How gravely will the economy suffer? And what will become of the financial innovation that promised so much, but has proved so treacherous?
Subprime suspect
For answers, start in America's housing market, where the crisis had its origins. Subprime borrowers will probably default on $200 billion-300 billion of mortgages. That is a lot of money, to be sure, but hardly enough to imperil the world economy. For that, you need the baroque superstructure of mortgage-backed derivatives that enabled investors to bet on the housing market. From a mathematical viewpoint, the combined profits and losses on these derivatives will, by definition, cancel out, so they should not add anything to the total underlying loss. But that is only half the story. Individual investment vehicles may have sustained huge losses, especially if they borrowed heavily: it is the fear that your counterparty might be in that predicament that is gumming up the markets.
In theory the damage is safely contained off banks' balance sheets. But then, in theory American house prices never fall. The banks have belatedly discovered that they cannot just abandon their failing progeny of SIVs, conduits and the rest—at least if they want a reputation worth having. Worse, the banks now facing up to these contingent liabilities have not had to set aside capital in case of trouble—that gap in the regulations was precisely what made it so attractive to get their investments off the balance sheets in the first place.
November marked the stomach-churning moment when investors realised that the housing market was falling, that the losses would be big, that the banks would end up owning them, and that they had not put capital aside for the job. To make a bad case worse, nobody knows which bank is sitting on which liability. Every bank is suspect and any bank seeking to raise money by selling a position is more suspect than ever. As fear has played upon this lack of information, the money-market funds have gone on strike, cutting off the interbank markets' main source of cash, and the (embryonic) market for complex mortgage-backed derivatives has closed. It is an alarming mix of hiatus and distress.
If you put all that together, it is easy to see why an economy burdened by debt and a housing bust is in extra danger. Starved of funds and facing not just losses but lawsuits (see article), the banks are hoarding liquidity and capital. That can create a vicious circle. As the system of leverage that magnified credit collapses in on itself, borrowing becomes harder and demand falters. The rot can spread from housing to other areas, such as commercial property and credit-card debt. If the money-market funds then withdraw even more of their longer-term lending from the banks, then banks will need to conserve yet more capital. And so it goes dismally on.
Just take the hit
Nobody yet knows whether the extreme borrowing in the credit boom was a sensible result of the powerful new machinery of debt, or the sort of excess still unwinding in Japan: the lawyers will argue about that. But if the downward spiral takes hold, America will end up in recession and so quite possibly will Europe. The need is to break the chain—which leads back to the financial system. It urgently needs attention.
The markets will not recover until lenders believe the banks have credibly owned up to their losses. Sometimes this is best done when a bank chief has quit, as at Merrill Lynch. Often, the reckoning is more convincing when the bank has absorbed its off-balance-sheet ventures—as at HSBC and Citigroup. That is a risk, because it can weaken the banks' capital base and because the assets can fall further in value. But it is better than leaving the mess to fester and investors to fear the worst. Some banks will need fresh capital. UBS sugared a huge loss by announcing billions of dollars of new capital from government-backed funds in Singapore and the Gulf.
Citigroup took $7.5 billion of Abu Dhabi's money. Others are sure to need help—and may well turn to sovereign wealth funds, too.
There is an irony in seeing state-owned investors bail out capitalism's most ardent exponents; back when money was plentiful, the government outfits were rebuffed. But the banks are less choosy now. Moreover, the frenzy of innovation around debt and securitisation got out of hand. Risk was supposed to be bought by those best able to afford it, but often ended up with those seduced by yields they did not understand. Mathematical brilliance was supposed to model risk with precision, but the models evaporated along with the liquidity that they had failed to quantify. Rating agencies were supposed to serve the market, but their first loyalty seems to have been to the issuers who were paying their fees.
Finance now needs a flight to simplicity—to tame the jungle of investment vehicles, to reform the rating agencies, and to price liquidity risk. In a few cases regulation, chiefly aimed at transparency, looks justified. But do not expect the ethos of finance to change—or even wish that it were so. The system will purge the worst complexities of the past few years of its own accord. The tools of modern finance are too valuable to be cast aside. Securitisation makes assets easier to sell. Derivatives, used well, increase financial flexibility. And opportunists with names like Goldman Sachs and Cerberus are just the people to pick over the carcass of the credit boom and make a market where none exists today. When they put their billions to work, you will know the corner has been turned.
Back to Ben
Until that moment, the burden will fall on the central banks. They have tried to help by tinkering with the technical operations that supply liquidity (though they keep overnight interest rates on target by draining money elsewhere). By and large, this has failed: the banks' problems are not technical, but real.
Monetary policy matters far more and central banks must weigh the short-term danger to the economy against the medium-term threat to their own standing as inflation fighters. If the economy looks likely to weaken, further interest-rate cuts will be needed. But the effect of any rate cut will be lessened by those wide, fear-induced spreads in the money markets. And the severity of the slowdown is unknown. If central banks overestimate this and cut too much, it will fuel inflation, already stoked by demand in the emerging economies. Inflation is above target in the euro zone and (by a shade) in Britain and rising in America. It is a recipe for repenting at leisure.
The hope is that the credit markets unblock themselves and that buoyant emerging markets buy rich-world exports and recapitalise rich-world banks. The fear is that this crisis will assume yet more guises before it takes its leave—especially if politicians try to seize control. Bankruptcies, recession, litigation, protectionism: sadly, all are possible in 2008
Thursday, December 20, 2007
BT: Dubai World unit, UEM to develop waterfront homes
Business Times - 20 Dec 2007
Dubai World unit, UEM to develop waterfront homes
111-acre project is in the Residential North precinct of Puteri Harbour
By PAULINE NG IN KUALA LUMPUR
A UNIT of Dubai World has signed an agreement with Malaysia's UEM Land to jointly develop a premier waterfront real estate project with canal-front homes and high-end condominiums in Nusajaya in the Iskandar Development Region (IDR).
Haute Property, the special purpose vehicle established to undertake the 111-acre development in the Residential North precinct of Puteri Harbour, would be 60 per cent held by Limitless Holdings - the global development arm of Dubai World - and 40 per cent by UEM Land.
Limitless's majority stake indicates that it is likely to call the shots. In any event, its participation is calculated to boost the prospects of the 688-acre Puteri Harbour integrated waterfront and marina development which its promoters say is to be fashioned after the French Riviera, 'offering a panoramic view of the Straits of Johor'.
Limitless regional director, South East Asia, Philip Atkinson said that Nusajaya was an 'excellent initiative' by the Malaysian government. In view of the developments in the Far East and China, he believed that it is important for countries to form strategic alliances, this initiative allowing closer ties with Singapore.
Haute has been set up with an initial investment of nearly RM242 million (S$106 million), mainly for land costs. Physical activity on the Residential North precinct - said by some to be similar to Singapore's Sentosa Cove - is expected to commence in the second half of next year, with Limitless expected to tap into the experience and exposure gained by its other real estate initiatives including the Palm Islands, World Islands and Jumeirah Islands in Dubai.
Residence North's estimated gross development value is expected to be in excess of RM1.5 billion by the time of its completion in 2013.
The Dubai World unit is the latest Middle East outfit to signal its real estate development intentions in the IDR, which the Malaysian government seeks to transform into a special economic zone.
In August, the Abu Dhabi government investment arm Mubadala Development Company, Kuwait Finance House and Millennium International Development Co signed a conditional agreement with the State Johor Investment Committee to invest an initial US$1.2 billion to develop 902 ha in South Johor into a lifestyle, cultural and financial centre. But the amount was mainly for land and infrastructure costs and could rise to up to US$10 billion upon completion of the entire development.
A bigger project in South Johor which Dubai World is also involved in is a planned RM16 billion Petroleum & Maritime Industrial Zone and ports and shipyards expansion project with local conglomerate Malaysian Mining Corporation.
Residence North is the smallest of Limitless' six global projects which total some US$100 billion. The flagship project of the two-year-old global integrated real estate master developer, which has a regional office in Singapore, is Downtown Jebel Ali in Dubai. But its biggest and most complex project by far must be the US$61 billion 20,000 ha 'city within a city' Arabian Canal mega project, also in Dubai.
Dubai World unit, UEM to develop waterfront homes
111-acre project is in the Residential North precinct of Puteri Harbour
By PAULINE NG IN KUALA LUMPUR
A UNIT of Dubai World has signed an agreement with Malaysia's UEM Land to jointly develop a premier waterfront real estate project with canal-front homes and high-end condominiums in Nusajaya in the Iskandar Development Region (IDR).
Haute Property, the special purpose vehicle established to undertake the 111-acre development in the Residential North precinct of Puteri Harbour, would be 60 per cent held by Limitless Holdings - the global development arm of Dubai World - and 40 per cent by UEM Land.
Limitless's majority stake indicates that it is likely to call the shots. In any event, its participation is calculated to boost the prospects of the 688-acre Puteri Harbour integrated waterfront and marina development which its promoters say is to be fashioned after the French Riviera, 'offering a panoramic view of the Straits of Johor'.
Limitless regional director, South East Asia, Philip Atkinson said that Nusajaya was an 'excellent initiative' by the Malaysian government. In view of the developments in the Far East and China, he believed that it is important for countries to form strategic alliances, this initiative allowing closer ties with Singapore.
Haute has been set up with an initial investment of nearly RM242 million (S$106 million), mainly for land costs. Physical activity on the Residential North precinct - said by some to be similar to Singapore's Sentosa Cove - is expected to commence in the second half of next year, with Limitless expected to tap into the experience and exposure gained by its other real estate initiatives including the Palm Islands, World Islands and Jumeirah Islands in Dubai.
Residence North's estimated gross development value is expected to be in excess of RM1.5 billion by the time of its completion in 2013.
The Dubai World unit is the latest Middle East outfit to signal its real estate development intentions in the IDR, which the Malaysian government seeks to transform into a special economic zone.
In August, the Abu Dhabi government investment arm Mubadala Development Company, Kuwait Finance House and Millennium International Development Co signed a conditional agreement with the State Johor Investment Committee to invest an initial US$1.2 billion to develop 902 ha in South Johor into a lifestyle, cultural and financial centre. But the amount was mainly for land and infrastructure costs and could rise to up to US$10 billion upon completion of the entire development.
A bigger project in South Johor which Dubai World is also involved in is a planned RM16 billion Petroleum & Maritime Industrial Zone and ports and shipyards expansion project with local conglomerate Malaysian Mining Corporation.
Residence North is the smallest of Limitless' six global projects which total some US$100 billion. The flagship project of the two-year-old global integrated real estate master developer, which has a regional office in Singapore, is Downtown Jebel Ali in Dubai. But its biggest and most complex project by far must be the US$61 billion 20,000 ha 'city within a city' Arabian Canal mega project, also in Dubai.
BT: Outlook for S-Reit market remains positive despite sub-prime fears
Business Times - 20 Dec 2007
Outlook for S-Reit market remains positive despite sub-prime fears
Increased volatility in Reit prices will attract more investors in 2008
By CHRISTOPHER TANG
SINCE consumer confidence is the most fickle of all economic factors, the retail trade is a good barometer for the health of an economy.
For 2007, this barometer has been in the 'extremely healthy' range. Sales have been up - to the tune of 14.4 per cent as of June 2007 - and so has rental of retail space.
We expect retail to continue nicely right through 2008. For one thing, retail malls - led by the professionally run retail Reits - are investing in physical enhancements to improve and maintain competitiveness.
The enhancements inject a new vibrancy, creating a better experience for the shoppers and improved business for the tenants. For example, thanks to Anchorpoint's $12 million repositioning as a village-mall, shopper traffic and tenant business have improved substantially.
The malls are not the only innovators. Retailers, too, are coming up with new concepts. For instance, the Tung Lok Group created their first kitchen-concept eatery in the new Anchorpoint with Zhou's Kitchen. Similarly, Charles & Keith, G2000, FOS, Club Marc, City Chain, Capitol Optical, Pedro and Giordano have also created unique outlet concepts.
With the advantages of Reits, there will be increasing securitisation of the Singapore retail scene through 2008, with more properties being injected into a Reit structure.
Singapore's Reit scene is only about five years old but the market has grown. By September 2007, there were 18 listed Reits with a total market capitalisation of $29.5 billion, which made Singapore the third-largest Reit market in the Asia-Pacific and the seventh largest worldwide.
We expect more Reits to be launched in the medium term, with at least one or two being retail Reits or Reits with retail components.
The two retail Reits listed at present - Frasers Centrepoint Trust and CapitaMall Trust - are also growing aggressively in the region, particularly in Malaysia and China.
Institutional and retail investor appetite for Singapore Reits continue to be strong.
Reit prices took a bit of a correction in the second half of 2007 when prices fell by about 25 per cent as a result of the US sub-prime fears. I believe the increased volatility will attract more investors to Reits in 2008. Reits are a defensive investment instrument - providing a consistent underlying yield and yet providing exposure to the on-going recovery and long-term growth of the Asian economies and property markets.
Investors will gravitate towards Reits with quality assets. In this respect, suburban malls are very resilient. After all, Singaporeans will still need to shop for their basic necessities. Suburban malls in Singapore managed to ride through the Sars epidemic as people cut back on luxury goods and focused on daily essentials. There exists a very inelastic demand at the suburban mall level.
Investors will also look to Reits with proven track records. Typically, institutional investors have found Reits associated with strong sponsors attractive because of their ability to leverage on the synergies with the sponsor for growth opportunities.
Ultimately, the outlook on Singapore's overall Reit market remains very positive, with market experts expecting it to double by 2010. Retail Reits should continue to remain stable and sensible investment options, even in the current sub-prime environment.
The writer is CEO, Frasers Centrepoint Trust
Outlook for S-Reit market remains positive despite sub-prime fears
Increased volatility in Reit prices will attract more investors in 2008
By CHRISTOPHER TANG
SINCE consumer confidence is the most fickle of all economic factors, the retail trade is a good barometer for the health of an economy.
For 2007, this barometer has been in the 'extremely healthy' range. Sales have been up - to the tune of 14.4 per cent as of June 2007 - and so has rental of retail space.
We expect retail to continue nicely right through 2008. For one thing, retail malls - led by the professionally run retail Reits - are investing in physical enhancements to improve and maintain competitiveness.
The enhancements inject a new vibrancy, creating a better experience for the shoppers and improved business for the tenants. For example, thanks to Anchorpoint's $12 million repositioning as a village-mall, shopper traffic and tenant business have improved substantially.
The malls are not the only innovators. Retailers, too, are coming up with new concepts. For instance, the Tung Lok Group created their first kitchen-concept eatery in the new Anchorpoint with Zhou's Kitchen. Similarly, Charles & Keith, G2000, FOS, Club Marc, City Chain, Capitol Optical, Pedro and Giordano have also created unique outlet concepts.
With the advantages of Reits, there will be increasing securitisation of the Singapore retail scene through 2008, with more properties being injected into a Reit structure.
Singapore's Reit scene is only about five years old but the market has grown. By September 2007, there were 18 listed Reits with a total market capitalisation of $29.5 billion, which made Singapore the third-largest Reit market in the Asia-Pacific and the seventh largest worldwide.
We expect more Reits to be launched in the medium term, with at least one or two being retail Reits or Reits with retail components.
The two retail Reits listed at present - Frasers Centrepoint Trust and CapitaMall Trust - are also growing aggressively in the region, particularly in Malaysia and China.
Institutional and retail investor appetite for Singapore Reits continue to be strong.
Reit prices took a bit of a correction in the second half of 2007 when prices fell by about 25 per cent as a result of the US sub-prime fears. I believe the increased volatility will attract more investors to Reits in 2008. Reits are a defensive investment instrument - providing a consistent underlying yield and yet providing exposure to the on-going recovery and long-term growth of the Asian economies and property markets.
Investors will gravitate towards Reits with quality assets. In this respect, suburban malls are very resilient. After all, Singaporeans will still need to shop for their basic necessities. Suburban malls in Singapore managed to ride through the Sars epidemic as people cut back on luxury goods and focused on daily essentials. There exists a very inelastic demand at the suburban mall level.
Investors will also look to Reits with proven track records. Typically, institutional investors have found Reits associated with strong sponsors attractive because of their ability to leverage on the synergies with the sponsor for growth opportunities.
Ultimately, the outlook on Singapore's overall Reit market remains very positive, with market experts expecting it to double by 2010. Retail Reits should continue to remain stable and sensible investment options, even in the current sub-prime environment.
The writer is CEO, Frasers Centrepoint Trust
BT: Abterra to buy stake in China coal mining firm
Published December 20, 2007
ACQUISITIONS
Abterra to buy stake in China coal mining firm
It'll pay 188m yuan for 49% share; deal includes 30m yuan profit guarantee
By MATTHEW PHAN
MINING and logistics firm Abterra yesterday signed a conditional agreement to buy 49 per cent of a Chinese coal mining company for 188 million yuan ($37 million).
The seller is Shenzhen Manfu Industrial Co, from which Abterra plans to acquire part of the Shanxi Tai Xing Jiao Zhong Coal Industry Company (Tai Xing).
Tai Xing's main asset is the Jiao Zhong Coal Mine in Shanxi, which produces high-quality coking coal.
It has reserves of 10.24 million tonnes of coal and annual production capacity of 150,000 tonnes. Production started in 1986.
Abterra said that the acquisition was in line with 'plans to expand the scope of its business activities, vertically and horizontally, into the production of coal and coke, and other synergistic businesses'.
The firm is involved in developing iron ore mines in Australia, India and Indonesia and selling the ore to steel mills in China. It also owns a stake in a firm that processes coal into coke.
Abterra said on Tuesday that it would acquire 22.8 per cent of Zuoquan Xinrui Metallurgy Mine Co Ltd for about $77.8 million.
Payment for the Tai Xing stake will be in two stages - an initial 94 million yuan in cash, then the remainder when the seller meets certain obligations.
Abterra said that it would fund the acquisition - which represents about 8 per cent of its market value as of Tuesday's close - with the proceeds from a rights issue that took place in October.
Seller Manfu, which now owns 80 per cent of Tai Xing, has guaranteed that Tai Xing's net profit would not be less than 30 million yuan for the year ending Dec 31, 2008.
If the target is not met, Manfu will compensate Abterra for 49 per cent of the shortfall.
As security for the guarantee, Manfu will deposit 14.7 million yuan in a bank account.
The transaction is contingent on Chinese government approval and other conditions.
ACQUISITIONS
Abterra to buy stake in China coal mining firm
It'll pay 188m yuan for 49% share; deal includes 30m yuan profit guarantee
By MATTHEW PHAN
MINING and logistics firm Abterra yesterday signed a conditional agreement to buy 49 per cent of a Chinese coal mining company for 188 million yuan ($37 million).
The seller is Shenzhen Manfu Industrial Co, from which Abterra plans to acquire part of the Shanxi Tai Xing Jiao Zhong Coal Industry Company (Tai Xing).
Tai Xing's main asset is the Jiao Zhong Coal Mine in Shanxi, which produces high-quality coking coal.
It has reserves of 10.24 million tonnes of coal and annual production capacity of 150,000 tonnes. Production started in 1986.
Abterra said that the acquisition was in line with 'plans to expand the scope of its business activities, vertically and horizontally, into the production of coal and coke, and other synergistic businesses'.
The firm is involved in developing iron ore mines in Australia, India and Indonesia and selling the ore to steel mills in China. It also owns a stake in a firm that processes coal into coke.
Abterra said on Tuesday that it would acquire 22.8 per cent of Zuoquan Xinrui Metallurgy Mine Co Ltd for about $77.8 million.
Payment for the Tai Xing stake will be in two stages - an initial 94 million yuan in cash, then the remainder when the seller meets certain obligations.
Abterra said that it would fund the acquisition - which represents about 8 per cent of its market value as of Tuesday's close - with the proceeds from a rights issue that took place in October.
Seller Manfu, which now owns 80 per cent of Tai Xing, has guaranteed that Tai Xing's net profit would not be less than 30 million yuan for the year ending Dec 31, 2008.
If the target is not met, Manfu will compensate Abterra for 49 per cent of the shortfall.
As security for the guarantee, Manfu will deposit 14.7 million yuan in a bank account.
The transaction is contingent on Chinese government approval and other conditions.
Wednesday, December 19, 2007
BT: India sees 10% growth by 2012, sub-prime a risk
Business Times - 19 Dec 2007
India sees 10% growth by 2012, sub-prime a risk
NEW DELHI - India's economy could be growing by 10 per cent a year by 2012 with the right set of policies, but the US sub-prime crisis might trim exports and capital flows, the prime minister said on Wednesday.
Annual growth dipped to 8.9 per cent in the September quarter, falling below 9 per cent for the first time in three quarters, as industrial output slowed due to monetary tightening designed to trim inflation.
Top officials are confident they can maintain growth momentum despite a surge in the value of the rupee against the dollar this year, which is hurting exporters, and high interest rates.
'It is possible that with the correct set of policies ...
we will not only be able to maintain this momentum of high growth into the near future but may be able to raise it to 10 per cent,' Manmohan Singh told top policy makers.
India, the world's fastest-growing major economy after China, grew 9.4 per cent in the last fiscal year, its strongest in 18 years. Its surging expansion has attracted global investors, fuelling a stock market boom and pushing firms to expand capacity.
'This high growth rate has become possible because of the historically high savings and investment rates which we are witnessing,' Mr Singh said at a meeting of the National Development Council set to approve a policies for the 5 years to 2012.
'Our savings rate after stagnating for almost two decades has touched 34 percent of GDP and the investment rate has crossed 35 per cent. These high rates ... are likely to go up in future because of our young population profile.' Trade Minister Kamal Nath said on Tuesday expansion in the 2007/08 fiscal year to March 31 would be in excess of 9 per cent, and analysts say the central bank's forecast of 8.5 per cent should be met in Asia's third-largest economy.
Mr Singh said global credit worries would not completely skirt India's economy, despite it being largely driven by domestic demand.
'There are somes clouds on global financial markets following the subprime lending crisis. There are worries that the growth of the US and other leading economies may slow down and some may even go into a recession,' he said. 'This may impact both our exports as well as capital flows.'
Such concerns mean India must redouble efforts to maintain domestic drivers of growth, the prime minister said.
The government is discussing ways to minimise the impact of the rupee's appreciation on exporters, who have seen their margins squeezed by a 12 per cent rise in the currency this year.
The Reserve Bank of India, keen to cool price pressures and stop the economy from overheating, raised interest rates five times between mid-2006 and March this year, but has since held them steady. Many economists now expect the next move to be down. -- REUTERS
India sees 10% growth by 2012, sub-prime a risk
NEW DELHI - India's economy could be growing by 10 per cent a year by 2012 with the right set of policies, but the US sub-prime crisis might trim exports and capital flows, the prime minister said on Wednesday.
Annual growth dipped to 8.9 per cent in the September quarter, falling below 9 per cent for the first time in three quarters, as industrial output slowed due to monetary tightening designed to trim inflation.
Top officials are confident they can maintain growth momentum despite a surge in the value of the rupee against the dollar this year, which is hurting exporters, and high interest rates.
'It is possible that with the correct set of policies ...
we will not only be able to maintain this momentum of high growth into the near future but may be able to raise it to 10 per cent,' Manmohan Singh told top policy makers.
India, the world's fastest-growing major economy after China, grew 9.4 per cent in the last fiscal year, its strongest in 18 years. Its surging expansion has attracted global investors, fuelling a stock market boom and pushing firms to expand capacity.
'This high growth rate has become possible because of the historically high savings and investment rates which we are witnessing,' Mr Singh said at a meeting of the National Development Council set to approve a policies for the 5 years to 2012.
'Our savings rate after stagnating for almost two decades has touched 34 percent of GDP and the investment rate has crossed 35 per cent. These high rates ... are likely to go up in future because of our young population profile.' Trade Minister Kamal Nath said on Tuesday expansion in the 2007/08 fiscal year to March 31 would be in excess of 9 per cent, and analysts say the central bank's forecast of 8.5 per cent should be met in Asia's third-largest economy.
Mr Singh said global credit worries would not completely skirt India's economy, despite it being largely driven by domestic demand.
'There are somes clouds on global financial markets following the subprime lending crisis. There are worries that the growth of the US and other leading economies may slow down and some may even go into a recession,' he said. 'This may impact both our exports as well as capital flows.'
Such concerns mean India must redouble efforts to maintain domestic drivers of growth, the prime minister said.
The government is discussing ways to minimise the impact of the rupee's appreciation on exporters, who have seen their margins squeezed by a 12 per cent rise in the currency this year.
The Reserve Bank of India, keen to cool price pressures and stop the economy from overheating, raised interest rates five times between mid-2006 and March this year, but has since held them steady. Many economists now expect the next move to be down. -- REUTERS
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