FUND managers across the world have turned “super-bearish” over the last month, abandoning hope that Europe and Asia can escape contagion from the United States housing crisis.
A Merrill Lynch survey found that a fifth of big investors now expect an outright global recession, an occurrence not seen since the 1930s. Some think the world is already in recession.
“The period of denial may be over,” said Mr David Bowers, who put together the closely-watched report.
“This month’s survey is the first in which investors have really started to recognise that the ‘credit crunch’ could lead to a major recession.
The vast majority expect profit margins to shrink in 2008.”
The report said global cash balances had jumped to 32 per cent of the average portfolio from 20 per cent as recently as November, with both bonds and equities falling out of favour. The survey covers 195 funds managing US$671 billion ($964 billion) across the three main regions.
The asset managers no longer want firms to take on more debt or pay out bigger dividends — the twin abuses at the height of the credit bubble.
They increasingly want them to batten down the hatches for a long storm by using cash flow to repair balance sheets.
What is striking is the broad perception that the US is no longer the sole epicentre of the crisis.
Indeed, most now think the US dollar is poised to rally as the trouble shifts increasingly to Europe.
A net 55 per cent view the euro as “overvalued”, and a net 61 per cent think the sterling is too high.
Asia is turning pessimistic as well. A net 29 per cent think China’s economy will slow and most are now underweight Chinese equities — preferring the Hong Kong stocks, which offers arbitrage opportunities against over-inflated Shanghai.
None of the regional managers thinks China’s growth rate will rise this year.
The Asian investors expect the region (excluding Japan) to face an unhealthy drift into stagflation, with growth slowing and price pressures rising at the same time. They are massively underweight on autos and media, but like staples and oil.
A net 50 per cent expect emerging markets around the world to deteriorate. A fifth seem to expect the bubble to burst altogether.
Bank and financial firms are the new pariahs.
Merrill Lynch’s credit strategist Barnaby Martin said the banks now faced much the same plight as telecom companies in 2002. “Their efforts to de-leverage will be bad for shareholders, but good for bondholders,” he said.
One glimmer of light is the rising — if small — number who think a fresh cycle of global growth is already beginning, despite the near-panic mood among their peers.— THE DAILY TELEGRAPH
Ambrose Evans-Pritchard has covered world politics and economics for a quarter of a century
Source : Today - 19 Jan 2008
Tuesday, January 22, 2008
$1,000 a night and higher have not deterred Formula 1 fans from snapping up trackside hotel rooms for the inaugural Singapore Grand Prix.
RATES of $1,000 a night and higher have not deterred Formula 1 fans from snapping up trackside hotel rooms for the inaugural Singapore Grand Prix.
Hotels ranging from the glitzy Ritz-Carlton Millennia Singapore to the Peninsula-Excelsior Hotel are already fully booked for the Sept 26 to 28 race. This is despite significantly higher than normal room rates of over $1,000 per night for the Ritz (about a 100 per cent increase) and $300 for the Peninsula (about a 50 per cent increase).
Two other hotels - Swissotel The Stamford and Pan Pacific Singapore - anticipate a 100 per cent occupancy rate.
One reason for the higher rates is that the Government will be imposing a special hotel tax on total room revenue from Sept 24 to 28 - the week of the race.
The tax will range from 30 per cent - for the 11 trackside hotels - to 20 per cent for all other hotels.
Trackside hotels such as Marina Mandarin ($1,500 per night) and Fairmont Singapore ($1,830) are still entertaining bookings.
The Fullerton has yet to confirm rates, but will place those interested on a wait-list.
The high take-up rate is not confined to trackside hotels.
The Four Seasons, along Orchard Boulevard, also managed to sell out all of its rooms from Sept 20 to 28.
The race will be held on Sept 28. Qualifying sessions begin on Sept 27.
Tourists are expected to form a significant portion of the 100,000 fans expected for the grand prix, and they are expected to spend around $100 million on hotels, and at food and beverage outlets, nightspots and the like.
Corporate hospitality packages ranging from $3,500 to $7,500 per head have also been selling well. These were put on the market by race organisers Singapore GP in November.
A Singapore GP spokesman declined comment, but it is believed that suites in areas such as the pit area and exclusive Paddock Club are close to being sold out.
Source : Straits Times -21 Jan 2008
Hotels ranging from the glitzy Ritz-Carlton Millennia Singapore to the Peninsula-Excelsior Hotel are already fully booked for the Sept 26 to 28 race. This is despite significantly higher than normal room rates of over $1,000 per night for the Ritz (about a 100 per cent increase) and $300 for the Peninsula (about a 50 per cent increase).
Two other hotels - Swissotel The Stamford and Pan Pacific Singapore - anticipate a 100 per cent occupancy rate.
One reason for the higher rates is that the Government will be imposing a special hotel tax on total room revenue from Sept 24 to 28 - the week of the race.
The tax will range from 30 per cent - for the 11 trackside hotels - to 20 per cent for all other hotels.
Trackside hotels such as Marina Mandarin ($1,500 per night) and Fairmont Singapore ($1,830) are still entertaining bookings.
The Fullerton has yet to confirm rates, but will place those interested on a wait-list.
The high take-up rate is not confined to trackside hotels.
The Four Seasons, along Orchard Boulevard, also managed to sell out all of its rooms from Sept 20 to 28.
The race will be held on Sept 28. Qualifying sessions begin on Sept 27.
Tourists are expected to form a significant portion of the 100,000 fans expected for the grand prix, and they are expected to spend around $100 million on hotels, and at food and beverage outlets, nightspots and the like.
Corporate hospitality packages ranging from $3,500 to $7,500 per head have also been selling well. These were put on the market by race organisers Singapore GP in November.
A Singapore GP spokesman declined comment, but it is believed that suites in areas such as the pit area and exclusive Paddock Club are close to being sold out.
Source : Straits Times -21 Jan 2008
Singapore property market has turned somewhat jittery in the face of growing fears about a recession in the United States.
Buyers might want to delay their property purchases till a clearer picture emerges, say experts
THE Singapore property market has turned somewhat jittery in the face of growing fears about a recession in the United States.
Analysts suggest that unless buyers need a home to live in, they might want to delay any purchases until a clearer picture emerges.
The days when speculators could make quick, easy profits are almost certainly over, they say.
Thus, consultants do not expect much sales activity in the lead-up to Chinese New Year, especially since few launches have been scheduled.
Indeed, market players might hold off till the Budget is released later next month, so they can gauge the Government’s stance, said one consultant, who added: ‘If I were a buyer, I’d wait before committing myself to a property investment.’
Apart from worries that a US recession might hurt growth in Singapore, some also believe last year’s price spurt in high-end homes was overdone.
‘If your goal is to flip the property before completion, you should stay out of the market,’ said Savills Residential director Ku Swee Yong. Such buyers could end up having to finance their purchases long term, he warned.
He noted that Singapore’s property market is stable but said there is a risk that prices could fall. If US sub- prime woes force mortgage insurers to write off bad insurance, this could trigger construction industry layoffs, as well as defaults on consumer credit-card rollover debt and car loans, said Mr Ku.
Some sellers appear to have lowered their expectations, particularly for high-end homes. But their asking levels are likely to remain above the purchase prices, analysts note.
In a recent classified advertisement in The Straits Times, high-floor units at Sky@eleven, a condominium off Thomson Road, were going for $1,250 per sq ft (psf). That falls short of earlier asking prices of $1,300 psf to $1,400 psf, but tops prices achieved at the launch early last year. Then, the highest price garnered was $1,200 psf, with the average at $975 psf.
‘The opportunities are there, but it is all a matter of timing,’ said a consultant. ‘In the short term, people who don’t have a lot of money to play with should think twice.’
‘Buyers should take a longer-term view and buy when they come across properties priced at acceptable levels,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy. ‘Developers are unlikely to cut prices, which should provide support for the market.’
Buyers who plan to live in their new homes, especially if they’re using collective sale gains, have less to worry about, though choices in the primary market might be limited. ‘Developers are waiting for the tempest in the stock market to pass before launching their properties,’ said Mr Mak.
There are favourable deals in the sub-sale and resale market, and the mass and landed markets remain laggards, consultants say. Recent caveats lodged show there are favourable landed buys in suburban spots.
One seasoned property investor said he would continue to scout for bargains but would be more selective.
‘The market is nervous but it’s not doomsday. There are still good buying opportunities,’ he said, adding that he scooped up a few cheap buys just after Sars. ‘Do your homework and narrow your search to, for example, areas with a growth story.’
Where new launches are concerned, two condos have started their staff previews. Martin Place Residences in Kim Yam Road is priced at $1,800 psf to $2,300 psf. Over in Bedok Reservoir, Waterfront Waves is priced at $750 psf to $800 psf.
Wait for the right price
‘Buyers should take a longer-term view and buy when they come across properties priced at acceptable levels. Developers are unlikely to cut prices, which should provide support for the market.’ MR MAK, on how homebuyers can cut down their risks when considering property investments in the current uncertain climate
Source : Sunday Times - 20 Jan 2008
THE Singapore property market has turned somewhat jittery in the face of growing fears about a recession in the United States.
Analysts suggest that unless buyers need a home to live in, they might want to delay any purchases until a clearer picture emerges.
The days when speculators could make quick, easy profits are almost certainly over, they say.
Thus, consultants do not expect much sales activity in the lead-up to Chinese New Year, especially since few launches have been scheduled.
Indeed, market players might hold off till the Budget is released later next month, so they can gauge the Government’s stance, said one consultant, who added: ‘If I were a buyer, I’d wait before committing myself to a property investment.’
Apart from worries that a US recession might hurt growth in Singapore, some also believe last year’s price spurt in high-end homes was overdone.
‘If your goal is to flip the property before completion, you should stay out of the market,’ said Savills Residential director Ku Swee Yong. Such buyers could end up having to finance their purchases long term, he warned.
He noted that Singapore’s property market is stable but said there is a risk that prices could fall. If US sub- prime woes force mortgage insurers to write off bad insurance, this could trigger construction industry layoffs, as well as defaults on consumer credit-card rollover debt and car loans, said Mr Ku.
Some sellers appear to have lowered their expectations, particularly for high-end homes. But their asking levels are likely to remain above the purchase prices, analysts note.
In a recent classified advertisement in The Straits Times, high-floor units at Sky@eleven, a condominium off Thomson Road, were going for $1,250 per sq ft (psf). That falls short of earlier asking prices of $1,300 psf to $1,400 psf, but tops prices achieved at the launch early last year. Then, the highest price garnered was $1,200 psf, with the average at $975 psf.
‘The opportunities are there, but it is all a matter of timing,’ said a consultant. ‘In the short term, people who don’t have a lot of money to play with should think twice.’
‘Buyers should take a longer-term view and buy when they come across properties priced at acceptable levels,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy. ‘Developers are unlikely to cut prices, which should provide support for the market.’
Buyers who plan to live in their new homes, especially if they’re using collective sale gains, have less to worry about, though choices in the primary market might be limited. ‘Developers are waiting for the tempest in the stock market to pass before launching their properties,’ said Mr Mak.
There are favourable deals in the sub-sale and resale market, and the mass and landed markets remain laggards, consultants say. Recent caveats lodged show there are favourable landed buys in suburban spots.
One seasoned property investor said he would continue to scout for bargains but would be more selective.
‘The market is nervous but it’s not doomsday. There are still good buying opportunities,’ he said, adding that he scooped up a few cheap buys just after Sars. ‘Do your homework and narrow your search to, for example, areas with a growth story.’
Where new launches are concerned, two condos have started their staff previews. Martin Place Residences in Kim Yam Road is priced at $1,800 psf to $2,300 psf. Over in Bedok Reservoir, Waterfront Waves is priced at $750 psf to $800 psf.
Wait for the right price
‘Buyers should take a longer-term view and buy when they come across properties priced at acceptable levels. Developers are unlikely to cut prices, which should provide support for the market.’ MR MAK, on how homebuyers can cut down their risks when considering property investments in the current uncertain climate
Source : Sunday Times - 20 Jan 2008
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