Home leasing deals rise 15.8%

Increased demand from relocating expats, prime districts most popular

THE number of residential leasing transactions increased to 8,807 over the first three months of this year. This represents a 15.8 per cent increase compared to the same period last year when the number of transactions was 7,599

 And according to Savills Singapore senior manager Wallace Chu, there have been 3,284 leases registered in April and May so far. 'These are just the preliminary numbers and I am confident the final figure for Q2 could top the previous quarter,' he said.

 Mr Chu said that Districts 9, 10, 11, 15, 16 and 21 are the most popular residential districts among lessees. An analysis based on the latest full-year figures in 2005 by Savills revealed that District 10 registered the most leases - 17 per cent or 5,887 out of a total of 33,874.

 District 15 - which includes Katong, Joo Chiat and Amber Road - came in second with 3,872 transactions, beating District 9's 3,474 leases. Mr Chu said one explanation for District 15's popularity could be the sheer number of developments there.

 The most expensive homes for rent are in District 10 with developments like Ardmore Park, Spring Grove and The Wilby Residence fetching average rents of $48.64 psm pm, $32.17 psm pm and $34.12 psm pm (as of Q1 2006) respectively.

 The Bayshore, costing $17.24 psm pm in District 16, had the most number of units leased - 75 units. Valley Park ($26.99 psm pm) in District 10 had 71 units leased and Aspen Heights ($30.08 psm pm) in District 9 had 66 units leased.

 Rents also depend on the age of the development, and Mr Chu noted that the rental gap for developments less than five years old and those older than five years has ranged between 33-38 per cent for the last seven quarters.

 Mr Chu said that the increase in leasing activity is due in part to the number of expatriates in Asian countries like Hong Kong and Japan relocating to Singapore. 'They come from sectors like banking and R&D,' he said. Based on Savills' own data, Mr Chu said that these expatriates are senior executives with housing allowances of at least $15,000 per month.

 With increased housing allowances, Mr Chu said that expatriates are looking for larger apartments and landed property.

 He said that the volume for detached and terrace houses was 20 per cent more in the first quarter of this year than in the first quarter of 2005. He added that apart from the prime districts, landed property in Districts 15 and 16 were also popular with expatriates.

 Those keen on buying property as an investment will be interested to know that gross rental yields are on par with Hong Kong at between 3.5-4.5 per cent. Those with a higher appetite for risk may want to consider China; Mr Chu said yields in Shanghai are 7-8 per cent.

S'pore June CPI falls 0.1% from May

SINGAPORE - Singapore's consumer prices fell 0.1 per cent in June from May, less than expected, government data showed on Monday.

Click here to read Singstat press release

Economists had forecast that the consumer price index (CPI) would fall a seasonally adjusted 0.2 per cent in June as cheaper car prices offset higher energy costs. June's CPI was 1.4 per cent higher than a year earlier, matching economists' expectations. May's annual CPI rose 1.1 per cent.

June's monthly decline comes after prices were unchanged in May, Department of Statistics data shows. The CPI rose 0.2 per cent in both March and April.

The Monetary Authority of Singapore expects average inflation in 2006 of between 1 per cent to 2 per cent on higher oil prices and rising labour costs. The central bank said last Thursday that average inflation would be at the lower end of the 1 to 2 per cent range in 2007. -- REUTERS

Following is a breakdown of data from the department ..... June 2006 Percentage change against June 05 May 06 Food 1.8 0.2 Clothing & Footwear 1.1 -3.4 Housing 4.7 -1.7 Transport and communication -1.4 -1.0 Education and Stationery 2.0 -0.1 Health Care 1.0 0.0 Recreation & Others 0.2 0.3 Note: Changes in the sub-indexes from the month earlier are not seasonally adjusted. Source: Department of Statistics Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

S'pore June CPI seen down on cheaper cars

SINGAPORE - Singapore's consumer prices probably fell in June as higher energy costs were offset by cheaper car prices, a poll of economists showed on Friday.

The median forecast of seven economists was for the consumer price index to fall a seasonally adjusted 0.2 per cent in June. The CPI was unchanged in May from April. While petrol prices rose, economists said the cost of certificates required to own a car in Singapore fell nearly 4 per cent in June from May to a two-month low of $10,735 (US$6,770).

Transport and communication costs account for 22 per cent of the total index. From the previous year, June consumer prices were expected to have risen 1.4 per cent, accelerating slightly from May's 1.1 percent increase.

The Department of Statistics is due to release the data on Monday at 1pm (0500 GMT). -- REUTERS

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

MAS profit falls 68% on lower foreign income

THE Monetary Authority of Singapore (MAS) made a profit of $1.22 billion in its latest financial year, which ended on March 31, it reported yesterday. The central bank's profit was down 68 per cent from the $3.85 billion of the previous financial year.

The monetary authority's total income fell by 54 per cent to $2.03 billion - most of which was accounted for by reduced income from foreign operations, which fell from $4.16 billion to $1.79 billion.

The $2.63 billion decline in profit came about as 'interest rates rose globally and the Singapore dollar strengthened against the major currencies', MAS said.

Managing director Heng Swee Keat pointed out that foreign currency-denominated assets declined in value due to the Singapore dollar gaining 2 per cent versus the US dollar, 11 per cent versus the Japanese yen and 9 per cent versus the euro.

Asked whether he was pleased with the financial performance, Mr Heng said 'we should be looking at returns over the medium term'.

He added that, year to year, there would be fluctuations.

Mr Heng said the authority has done well in managing its investments to preserve the purchasing power of the Singapore currency.

MAS invests in liquid assets such as foreign government bonds. Bond prices fall when interest rates rise.

MAS's objectives include the conduct of monetary policy and the management of official foreign reserves.

The authority's total spending for the year went up from $558 million in the previous financial year to $812 million - something MAS said was 'mostly due to higher interest and investment expenses'.

Investment, interest and other expenses increased by $250 million to $644 million in the latest financial year, while personnel costs went up by $3 million to $118 million.

MAS had total assets of $206 billion as at March 31, up from $194 billion a year ago.

The authority held $198 billion worth of gold and foreign assets, including $177 billion worth of foreign securities - instruments such as treasury bills, bonds and equities.

MAS carries its foreign assets at cost, with provisions made for diminution in value, if any, based on the lower of cost and market value.

Net assets, including those of the financial sector development fund, were $17.2 billion at March 31.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Global slowdown won't hit S'pore badly, says MAS

Inflation seen staying in projected 1-2% range despite oil price hike

By ANNA TEO

(SINGAPORE) There is an increasing risk of a sharper slowdown in the world economy - not least because oil prices are likely to stay high - but Singapore's economic growth prospects should not be badly hit, says the Monetary Authority of Singapore (MAS).

Read the full text of Mr Heng's opening remarks

There may be a stronger pass-through of high oil prices on energy-related consumer items and business operating costs this year, but domestic price pressures 'should be fairly well contained', with inflation within the projected 1-2 per cent range, MAS managing director Heng Swee Keat said yesterday.

As such, current policy of a 'modest and gradual appreciation' of the Singapore dollar - 'with no re-centring of the band, nor any change to its slope or width' - remains appropriate, he added.

Speaking at a media conference on the latest MAS annual report, Mr Heng noted that the futures market suggests that oil prices could well stay at 'elevated levels of about US$80 a barrel', with ongoing geopolitical tensions in the Middle East.

External demand has so far held up, with improving conditions in Europe and Japan, as well as robust growth in China and India, offsetting somewhat a possible moderation in the US economy.

And while the potential US slowdown in the second half could cap global IT demand growth, Singapore's growth prospects in the coming quarters 'appear intact', Mr Heng said.

After an estimated 9 per cent first-half expansion, Singapore is on track to achieving the projected 5-7 per cent GDP growth in 2006. Private sector economists say the forecast is well within reach, barring unforeseen shocks. The economy grew 6.4 per cent in 2005.

Despite the latest surge in oil prices, MAS is maintaining its 1-2 per cent inflation forecast for the year 'because if you look at the pass-through of oil prices to the Singapore economy, it has been fairly moderate', Mr Heng said.

Singapore's energy intensity - or rate of energy usage - is relatively low, and the Sing dollar has appreciated against the US greenback.

While oil prices breached record highs above US$78 last week and remained above US$74 a barrel yesterday with the escalating conflict in Lebanon, the base price range used in MAS economic assessments and forecasts is a year-round average of US$68-US$75 per barrel.

Barring any further shocks to oil prices, and if global growth slows this year, MAS reckons Singapore's inflation rate could edge back down to the lower part of the 1-2 per cent range. Inflation averaged only 0.5 per cent last year, but rose to 1.4 per cent in the first quarter of 2006. Wage rises are also expected to be fairly moderate this year.

Meanwhile, MAS economists have embarked on a study that takes a long-term view of the impact of changing demographics - notably, an ageing population - on fiscal policy and economic variables such as the current account surplus.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

S'pore economy on track despite high oil prices: MAS

SINGAPORE - Oil prices will remain near US$80 a barrel but Singapore's economy should weather the impact, the Monetary Authority of Singapore (MAS) said on Thursday.

Inflation should be within the targeted 1-2 per cent this year despite rising oil prices and there will be no changes to the current policy of 'modest and gradual appreciation' of the Singapore dollar, it said.

MAS managing director Heng Swee Keat said, 'Rising tensions in the Middle East have recently pushed up oil prices further. The futures market suggests that oil prices are expected to stay at these elevated levels of about US$80 a barrel.'

While a slowdown is expected in the second half, Singapore's economic growth target of 5-7 per cent during the year will remain, Mr Heng said at a news conference to release the MAS annual report.

The impact of a projected moderation in the US economy, a major export market, will be cushioned by improving conditions in Europe and Japan, along with strong growth in China and India, he said.

MAS maintains the 1-2 percent inflation forecast 'largely because if you look at the pass-through of oil prices to the Singapore economy it has been largely fairly moderate,' he said, adding the Singapore dollar remains strong against the US dollar.

Singapore's gross domestic product expanded 6.4 per cent in 2005. For the first half of 2006, GDP grew 9 per cent year-on-year but the second quarter slowed to 7.5 per cent from 10.6 per cent in the first, according to government figures. -- AFP

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Corporate debt volume climbs 11.5% to $137b in 2005

Corporate debt issuance last year highest in 10 years, up 46% y-o-y

By LESLIE YEE

THE corporate debt market in Singapore turned in a healthy performance in 2005 with total outstanding volume of corporate debt increasing by 11.5 per cent year-on-year to $137 billion, according to the Monetary Authority of Singapore (MAS).

Corporate debt issuance in Singapore last year was the highest in the past 10 years, growing by 46 per cent from $79 billion in 2004 to $115 billion in 2005. Separately, MAS said: 'hedge funds and hedge fund managers are an increasingly important segment of our asset management industry.'

The number of hedge fund mangers grew by 51 per cent to 109 in 2005, with hedge funds assets under management more than doubling year-on-year to US$6.1 billion.

But MAS said a survey it conducted showed that Singapore's banking industry did not have significant exposure to the hedge funds industry as at May 2005. MAS says it will continue to monitor international developments in the hedge fund industry and fine-tune its regulatory approach in consultation with market participants.

Commenting on developments in Singapore's corporate debt market, Heng Swee Keat, managing director of MAS said: 'While Singapore dollar corporate debt issuance slowed slightly as a result of the interest rate environment, the market saw increased diversity in issuer profile in the past year, with first time issuance from a number of Middle Eastern and Latin American entities. 'Issuance of commercial mortgage-backed securities remained strong on the back of a healthy real estate investment trusts' market,' added Mr Heng.

Looking ahead, Mr Heng said: 'This year, we expect a continued strong pipeline of Singapore dollar debt issuance as Singapore dollar swap spreads have widened.'

He noted that the amount of Singapore dollar issuance reached $7.4 billion in the first quarter of this year, almost twice the level a year earlier. The amount of Singapore dollar corporate debt issuance last year was $20 billion, while the amount of non-Singapore dollar issuance was $95 billion.

Foreign entities accounted for 14 per cent of Singapore dollar denominated debt issued in 2005. In 2005, 34 foreign entities tapped the Singapore dollar debt market, with issuance totalling $2.7 billion.

By issuer profile, special purpose vehicle, financial institutions and corporations accounted for 37 per cent, 30 per cent and 26 per cent of Singapore dollar denominated debt respectively. Speaking at MAS' annual report press conference yesterday, Mr Heng said 'although domestic equity prices were also hit by the worldwide sell-off in May and June, this followed a period of strong run-up in asset prices and did not reflect a shift in underlying fundamentals'.

'The outlook for the domestic fund management industry is positive and banking lending activities are expected to remain firm this year,' he said.

He noted that there has been growth in the demand for alternative investments such as real estate and infrastructure investments.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

Headcount and wage increases expected in Q3

Survey also shows record number of upbeat HR execs since Q1 2001

By ROLAND LIM

(SINGAPORE) The Singapore job market has never looked better in recent years as more firms in Singapore seek to add to their headcount and increase salaries, according to the latest survey results from human resource firm Hudson, covering the months of July to September.

Hudson's latest survey shows that 56 per cent of the human resource decision makers it surveyed here were forecasting an increase in headcount in the third quarter of this year. This is the highest percentage reported since Q1 2001, and easily beats the 52 per cent for the same period last year. The increased hiring expectations seen in Singapore were in line with the trend in other Asian markets.

'Expectations for permanent employment are at five-year highs in all the markets surveyed, except for China, which has seen a steady drop since the peak in Q4 2005,' said Gary Lazzarotto, chief executive officer for Hudson's Asia operations.

Among the various industries surveyed, companies in the media, and the public relations and advertising industry showed the biggest improvement in hiring expectations, with 59 per cent of respondents forecasting a headcount increase, up from 51 per cent last year.

The Hudson survey also revealed that the 'hottest' jobs are in sales and IT, with each accounting for 21 per cent of the new positions to be filled.

The latest survey results are part of Hudson's quarterly survey, which polled about 2,300 human resource executives between May 26 and June 2, mostly in multinational corporations across Singapore, Japan, Hong Kong and Shanghai.

The survey also found that more firms here are also expecting to increase salaries, with 46 per cent of the respondents expecting pay to go up by 5 per cent or more in the next 12 months. Seven per cent of respondents here expect to increase salaries by 15 per cent or more - the highest among the Asian markets surveyed.

The banking sector saw the highest percentage of respondents who expected to increase salaries by 5 per cent or more, at 57 per cent. The media, public relations and advertising industry came in next at 47 per cent.

Another trend revealed by the survey was that almost a third of the respondents were reporting that they had candidates decline jobs offered to them, and the most popular reason cited was a better offer from another company.

'Companies in all sectors are confident that they will perform well in the next six months. However, the war for talent is pushing salaries up and multiple job offers mean that many candidates are declining positions,' concluded Mark Sparrow, Hudson's Singapore country manager, in the report.

The increasing use of incentive payments, such as revenue or profit-based incentives, was also a trend revealed in the survey, with 72 per cent of respondents seeing such a trend - the highest among the Asian markets surveyed.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

S'pore trade growth expected to ease in H2

Unyielding oil prices could foil upgraded forecast of 10-12% growth in 2006 NODX

By ANNA TEO

(SINGAPORE) After a robust pace in the first half, Singapore's trade growth is expected to ease a bit in the second half-year. But statisticians warn that the upgraded forecast of 10-12 per cent non-oil export growth for 2006 could come undone if oil prices stay persistently high.

International Enterprise (IE) Singapore, the trade development agency, yesterday said it has revised upwards the year's projected increase in non-oil domestic exports (NODX), from earlier estimates of 5-7 per cent.

This follows a super-healthy expansion of 16 per cent in the first six months, thanks mainly to strong growth in non-electronics exports. In 2005, NODX grew 5 per cent in the first half, and slightly over 11 per cent in the second half.

The projected increase in total trade - exports plus imports - in 2006 has also been jacked up to 13-15 per cent from the previous forecast of 8-10 per cent.

The optimism stems from a stronger than expected first-half showing - where total trade grew 19 per cent to reach $394 billion - and IE Singapore's expectations that external demand is likely to remain firm in the second half of the year.

While the full-year forecasts have been raised, the new estimates actually amount to a projected second-half slowdown.

Chong Lit Cheong, in his first media briefing since becoming IE Singapore's chief executive officer on June 1, noted that US economic growth is expected to moderate a little, with slower private spending on the back of a slowing housing market. Rising interest rates, muted job gains and high oil prices would also affect personal consumption.

Mostly, the growth rates may see some moderation due to base effects as Q4 2005 saw a surge that is unlikely to be repeated, said Ho Shih Chuan, deputy director of IE Singapore's research and statistics division.

In volume and dollar terms, exports in the latter six months should still well exceed first-half levels, he added.

IE Singapore is fairly upbeat about the strength of global demand for electronics, pharmaceutical and chemical products, and about the healthy economic outlook of Singapore's key trade markets - the US, Europe, Japan, China and the rest of Asia.

But the rosy forecasts would be thrown off if the past week's oil price rise - which has had prices nearly touching US$80 - persists.

IE Singapore's trade forecasts assumed, prior to the latest hikes, average oil prices of US$65 per barrel for 2006, Mr Chong said. Obviously, if oil prices stay high or continue to climb, 'then we'll need to make some adjustments', he said.

Every US$10 rise in oil price sustained over a year is estimated to cut Singapore's NODX growth by 0.3 of a percentage point, and also reduces non-oil re-exports (NORX) by 0.8-point.

But high oil prices also boost Singapore's oil trade, which accounted for about 18 per cent of total trade in the first half, contributing nearly 30 per cent to total trade growth.

The European Union, US, Hong Kong, China and Malaysia were the top five contributors to NODX growth in the first half. Hong Kong overtook Indonesia to become the fifth biggest NODX market, while Thailand displaced Taiwan to take the eighth spot. As in 2005, non-electronics provided stronger support to NODX growth in the first half of 2005.

Indeed, the electronics share of NODX has decreased steadily from 52 per cent in 2003 to 49 per cent in 2005 and 47 per cent in the first six months of this year.

The share of chemical exports, on the other hand, has grown from 20 per cent in 2003 to 24 per cent in the latest half-year.

But gains in NORX have been somewhat more broad-based, driven by double-digit increases in both electronics and non-electronics exports. Economists see no surprises in the June and first-half trade data, saying that the latest figures are in line with expectations of a second-half moderation in external demand.

The underperformance of electronics exports in June - only 9 per cent growth - is 'in line with our view of a lull in global electronics demand', says Citigroup economist Sim Moh Siong in a report. This could keep Singapore's economic growth momentum at, or slightly below, trend pace in the second half, he adds, though 'a sharp economic slowdown is not our base case'.

And 'if exports moderate, domestic demand will probably not be enough to keep the Singapore economy in an accelerating mode', Mr Sim says. 'Consumption and investment prospects appear stable, but a boom is unlikely.'

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

May retail sales rise 4.5% to $2.5b from April's $2.4b

By WEE LI-EN

MAY was a month for eating and driving, and for buying jewellery rather than clothes or things for the home. Shoppers pushed up overall retail sales in the month by 4.5 per cent to $2.5 billion from $2.4 billion in April, the Department of Statistics said yesterday.

Excluding motor vehicles, the index increased by 4 per cent.

Retailers of watches and jewellery enjoyed the greatest increase in sales of 16.3 per cent while department stores saw a 12.1 per cent rise.

Trade at petrol service stations, and provision and sundry shops, and sales of motor vehicles, medical goods and toiletries saw increases of between 3.8 per cent and 5.6 per cent in May.

The catering trade index also posted positive gains made in May with a 6.3 per cent rise from April.

The total value of catering trade receipts in May was estimated at $331.9 million, up from from $312.2 million in the previous month. The total value of May's restaurant bills rose by 9.4 per cent, while fast food outlets registered higher sales of 8.6 per cent.

Other eating places such as cafes, canteens and food caterers managed about 1.9 per cent.

While most sectors reported higher sales in May than in the previous month, sales of household items, optical goods and books and apparel declined marginally.

Sales of apparel and footwear fell by 3.3 per cent while sales of furniture and household equipment dropped by 1 per cent.

Most retail sectors also reported higher sales compared to the corresponding period in the previous year.

Petrol service stations and retailers of motor vehicles enjoyed growth of 18.4 per cent and 16.4 per cent respectively.

Only the retailing of food and beverages posted lower sales in May compared to a year ago.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.

S'pore export, retail sales firm; growth on track

SINGAPORE - Singapore posted stronger-than-expected exports and retail sales figures on Monday, underlining government expectations the economy will grow as much as 7 per cent this year.

The government raised its forecast for 2006 non-oil exports growth to between 10 per cent and 12 per cent from a forecast in January of 5 per cent to 7 per cent on strong global electronics and pharmaceutical demand.

But it said that persistently high oil prices would start to impact the economy if they stayed at current levels beyond the next six months.

Singapore's June non-oil domestic exports rose 3 per cent from May, while May retail sales grew 3 per cent from April thanks to strong vehicle sales. Both sets of seasonally adjusted figures beat forecasts for 1 per cent growth.

'It puts the official forecast for growth of 5-7 per cent well on track,' said Joseph Tan, an economist from Standard Chartered. 'In fact, I think growth is going to come in at the top end of that range.'

Government figures showed total external trade in the first half rose 19 per cent from a year earlier, while non-oil domestic exports were up 16 per cent.

'Non-oil trade is likely to be boosted by the continued strength of the global electronics demand and pharmaceutical production,' said Chong Lit Cheong, chief executive of International Enterprise Singapore.

Mr Chong said external demand would continue to remain solid as the growth outlook for both industrialised and regional economies remained broadly positive even though some markets may experience marginally slower growth this year.

Total trade in 2006 is expected to grow between 13 per cent and 15 per cent, higher than the earlier forecast of 8 per cent to 10 per cent.

Mr Chong also said the strength of the Singapore dollar, up more than 4 per cent against the US dollar since the start of the year, would not crimp the island-state's export performance.

The trade agency made its forecasts based on oil prices averaging US$65 per barrel for 2006.

It said if prices stay at current levels beyond the next six months, the economy could start to suffer.

'Every $10 increase on oil prices on a long-term basis would shave off 1 per cent of full-year GDP and 0.3 per cent of non-oil exports a year,' said Deputy Director Ho Shih Chuan. -- REUTERS

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.