By Brian Ellsworth
RIO DE JANEIRO
Fri Sep 3, 2010 2:24pm EDT
RIO DE JANEIRO (Reuters) - Brazilian state oil company Petrobras on Friday filed to sell up to $64.5 billion of new stock -- the largest in capital markets history -- sending its stock sharply higher after months of uncertainty that dragged on its share price.
The global stock offer could be expanded to as much as $74.7 billion if underwriters exercise a "greenshoe" option to sell an additional 564 million shares to meet extraordinary demand as the company raises funds for the world's biggest oil exploration program.
That would easily top the $22.1 billion initial public offering by Agricultural Bank of China (601288.SS) earlier this year, as well as the $36.8 billion share sale by Japanese telecommunications company NTT (9432.T) in 1987.
Despite lingering investor concerns about growing government sway over Petrobras (PBR.N) and the possibility of share dilution, the announcement helped investors regain confidence in a stock that slumped as much as 25 percent this year on uncertainty over the plan.
"It's better to have a tragic end than an unending tragedy," said Marcio Macedo, who oversees about $40 million of assets at Humaita Investimentos in Sao Paulo.
"Investors may not have liked the way they carried out the deal, but this is a world-class asset. There's no way you can't own it."
Petrobras preferred shares were up 4 percent at 28.71 reais in late afternoon trade, near the stock's high for the day.
The company filed to sell 1.59 billion new preferred shares (PETR4.SA) and 2.17 billion new common shares (PETR3.SA). At Thursday's closing prices, it would raise 67.8 billion reais ($39.2 billion) with the common shares sale and 43.8 billion reais ($25.4 billion) from the preferred shares.
The offer includes a $43 billion state-backed swap of oil for shares in which Petrobras will trade new shares for rights to produce 5 billion barrels of offshore oil.
The company faces skepticism from some investors who have questioned the price of $8.51 per barrel for the reserves to be used in the oil-for-shares swap, considerably higher than the $5 to $6 per barrel that analysts said was fair.
Petrobras expects to begin bookbuilding on Friday and price the share sale on September 23.
The plan has become the financial cornerstone of the company's $224 billion, five-year investment plan meant to turn Brazil into a major oil exporter by tapping crude buried deep under the ocean floor in a region known as the subsalt.
Petrobras ranks fifth in oil and gas production among the world's publicly listed oil companies, according to its own figures, with output of 2.53 million barrels of oil equivalent, an amount nearly equal to that of U.S.-based Chevron (CVX.N).
It expects by 2017 that its output will surpass that of Shell (RDSa.L), BP (BP.L), Exxon Mobil (XOM.N) and Chevron, mostly due to new production from the subsalt wells.
INVESTOR INTEREST
Government leaders have also said they plan to boost the state's participation in Petrobras' capital to around 40 percent from near 30 percent, which has left some investors nervous about greater state sway in the company.
Analysts say the large size of the swap of oil for shares with respect to the entire stock sale -- authorized by shareholders for up to $85 billion -- shows the government expects it will be able to pick up a considerable number of shares not purchased by private investors.
The stock offering will be led by Banco Bradesco (BBDC4.SA) in coordination with Bank of America Merrill Lynch (BAC.N), Citigroup (C.N), Banco Itau (ITUB4.SA), Morgan Stanley (MS.N), and Banco Santander Brasil. It will also be co-managed by BTG Pactual BTG.UL and Banco do Brasil (BBAS3.SA).
Some investors say the concerns about the government's stake have already been priced in and that the company is still a compelling investment given its unique access to quality oil reserves in a world that is quickly running out of them.
"I'm finally seeing a very clear pathway to the completion of this whole process, and that's a huge positive," said Marc Fogassa, a managing partner at Hedgefort Capital Management, which owns Petrobras shares.
Minority shareholder participation in the offering will be crucial since it will bring in much-needed cash for the company to shore up its balance sheet, stretched by heavy borrowing to finance the ambitious offshore plans.
The government has authorized state banks, including development lender BNDES, to purchase stock that minority shareholders do not subscribe.
Oil for the exchange will come from at least six fields in the subsalt region, most of which are adjacent to major offshore discoveries such as Franco and Tupi finds.
(Additional reporting by Elzio Barreto in Sao Paulo; Editing by Todd Benson and Steve Orlofsky)
Showing posts with label Singapore News. Show all posts
Showing posts with label Singapore News. Show all posts
Sunday, September 5, 2010
Friday, September 3, 2010
8 Singapore companies make it to Forbes' "Best under a billion' list
Eight Singapore companies made it to this year's Forbes' "Best Under A Billion" list, up from the five that were included in the previous year's list.
Related story:
» Singapore's 40 richest in 2010
The yearly list highlights the 200 top-performing small and medium enterprise firms from close to 13,000 publicly listed Asia-Pacific companies with actively traded shares and sales between US$5 million ($6.75 million)and US$1 billion.
The final 200 are selected based on earnings growth, sales growth, and shareholders' return on equity in the past 12 months and over three years.
China had the most entries at 71, followed by India at 39. India is the top gainer, with 19 new entries this year.
Singapore's best under a billion
Click on thumbnail to view
Japan, which had 24 entries last year, managed only 2 entries this year due to local domestic woes.
The 200 winning companies will be honored at the Forbes Asia "Best Under A Billion" award ceremony and dinner in Hong Kong on November 23, 2010
Related story:
» Singapore's 40 richest in 2010
The yearly list highlights the 200 top-performing small and medium enterprise firms from close to 13,000 publicly listed Asia-Pacific companies with actively traded shares and sales between US$5 million ($6.75 million)and US$1 billion.
The final 200 are selected based on earnings growth, sales growth, and shareholders' return on equity in the past 12 months and over three years.
China had the most entries at 71, followed by India at 39. India is the top gainer, with 19 new entries this year.
Singapore's best under a billion
Click on thumbnail to view
Japan, which had 24 entries last year, managed only 2 entries this year due to local domestic woes.
The 200 winning companies will be honored at the Forbes Asia "Best Under A Billion" award ceremony and dinner in Hong Kong on November 23, 2010
Monday, August 30, 2010
Singapore Tightens Loan Limits to Cool Housing Market
Singapore increased down payments for second mortgages and imposed a stamp duty on property held for less than three years to curb speculation after home prices surged 38 percent in the second quarter.
Buyers who hold more than one mortgage can only borrow up to 70 percent of a property’s value, versus 80 percent previously, and must pay 10 percent in cash, up from 5 percent, the government said in a statement today. A seller’s stamp duty will apply to all residential units and land sold within three years of purchase, from one year. The changes take effect today.
Singapore joins Hong Kong and China in introducing measures this year to cool their property markets amid concerns that asset bubbles are forming as home prices surge. Hong Kong said this month it will tighten mortgage lending rules and increase the supply of land, while China’s restrictions include higher down payments and mortgage rates for multiple-home buyers.
“The government is taking a preemptive approach to make sure prices don’t get out of hand,” said Donald Han, a Singapore-based managing director at real estate adviser Cushman & Wakefield Inc. “Most of the measures are really targeting repeat buyers and speculators who buy and sell over the short term, which is now defined as within three years.”
Stocks, Bonds
CapitaLand Ltd., Southeast Asia’s biggest developer, dropped 1 percent to S$3.96 as of 1:15 p.m. in Singapore trading, while the benchmark Straits Times Index rose 0.6 percent. City Developments Ltd., the island’s second-largest developer by market value, fell 3.2 percent to S$11.58, headed for its biggest decline since February.
CapitaLand’s S$250 million ($185 million) in 4.35 percent notes due 2019 fell to 101.88 cents on the dollar from 102.48 cents on Aug. 27, the lowest in about two weeks, according to Standard Chartered Plc prices. City Developments’ S$90 million in 2.92 percent notes due 2014 fell to 101.68 cents, the lowest since Aug. 10, according to DBS Group Holdings Ltd.
Property prices have surged as Singapore’s $182 billion economy rebounded from last year’s global slump to expand at a record 17.9 percent pace in the six months through June.
The city-state has been attempting to rein in home prices since last year when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.
Previous Measures
The government in February said it will levy a seller’s stamp duty on all residential properties and land that are sold within one year from the date of purchase. The city-state then also lowered the loan-to-value limit to 80 percent from 90 percent for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore.
The island nation’s Prime Minister Lee Hsien Loong yesterday said previous measures failed to keep prices in check.
“We twice attempted to cool the property market, once last year and once in February this year, but the prices are still rising,” Lee said in a televised speech. “Our purpose is to make sure in the long term, Singaporeans can own their homes and afford it and it will be a gradually appreciating asset which will grow as Singapore grows.”
Singapore’s property market would form a bubble if the current momentum continued, Mah Bow Tan, Minister of National Development, said today after the measures.
Prices Surge
“The property market is currently very buoyant,” the government said in the latest statement. “The government’s objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals.”
Singapore private residential prices rose 38 percent in the second quarter from a year earlier, according to the Urban Redevelopment Authority.
The island led 36 markets around the world in property- value changes last quarter, gaining 34 percent from a year earlier, according to the Global Property Guide in its survey of house prices.
Price levels have exceeded the historical peak in the second quarter of 1996, the government said today.
The government expects gross domestic product to grow 13 percent to 15 percent this year after the nation in 2009 exited its worst recession since independence 45 years ago.
‘Severe Implications’
“Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole,” the government said. “Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves.”
Hong Kong Aug. 13 raised down payments for apartments costing HK$12 million ($1.54 million) or more to 40 percent, from 30 percent. The government has been accelerating its auctions of land for development in a bid to cool prices that have soared about 45 percent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.
John Tsang, Hong Kong’s financial secretary, said home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
China, South Korea
In China, the banking regulator has ordered stress tests for lenders to gauge the impact of home prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said. China’s property prices rose at the slowest pace in six months in July as the government cracked down on speculation to prevent asset bubbles.
China has restricted pre-sales by developers, curbed loans for third-home purchases, raised minimum mortgage rates and tightened down-payment requirements for multiple-home purchases. It has also instructed lenders to halt third-home loans in areas with “excessive price gains.”
Taiwan in June introduced a 70 percent cap on loans for second homes, after low borrowing costs fueled lending and a jump in home prices. Central Bank Governor Perng Fai-nan wrote to the chairmen of all financial institutions on the island last month, asking them to take steps to prevent housing speculation.
Malaysia’s central bank has written to financial institutions to get their feedback on the possibility of capping the loan-to-value ratio for mortgages at 80 percent, the Edge weekly reported Aug. 28, citing unidentified people familiar with the matter.
South Korea may be an exception in Asia as the government steps up measures to spur the property market. The government yesterday said it will ease mortgage lending rules and extend tax breaks to encourage buyers back after home sales slumped to the lowest level in almost a year and a half.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net; Joyce Koh in Singapore at jkoh38@bloomberg.net
Buyers who hold more than one mortgage can only borrow up to 70 percent of a property’s value, versus 80 percent previously, and must pay 10 percent in cash, up from 5 percent, the government said in a statement today. A seller’s stamp duty will apply to all residential units and land sold within three years of purchase, from one year. The changes take effect today.
Singapore joins Hong Kong and China in introducing measures this year to cool their property markets amid concerns that asset bubbles are forming as home prices surge. Hong Kong said this month it will tighten mortgage lending rules and increase the supply of land, while China’s restrictions include higher down payments and mortgage rates for multiple-home buyers.
“The government is taking a preemptive approach to make sure prices don’t get out of hand,” said Donald Han, a Singapore-based managing director at real estate adviser Cushman & Wakefield Inc. “Most of the measures are really targeting repeat buyers and speculators who buy and sell over the short term, which is now defined as within three years.”
Stocks, Bonds
CapitaLand Ltd., Southeast Asia’s biggest developer, dropped 1 percent to S$3.96 as of 1:15 p.m. in Singapore trading, while the benchmark Straits Times Index rose 0.6 percent. City Developments Ltd., the island’s second-largest developer by market value, fell 3.2 percent to S$11.58, headed for its biggest decline since February.
CapitaLand’s S$250 million ($185 million) in 4.35 percent notes due 2019 fell to 101.88 cents on the dollar from 102.48 cents on Aug. 27, the lowest in about two weeks, according to Standard Chartered Plc prices. City Developments’ S$90 million in 2.92 percent notes due 2014 fell to 101.68 cents, the lowest since Aug. 10, according to DBS Group Holdings Ltd.
Property prices have surged as Singapore’s $182 billion economy rebounded from last year’s global slump to expand at a record 17.9 percent pace in the six months through June.
The city-state has been attempting to rein in home prices since last year when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.
Previous Measures
The government in February said it will levy a seller’s stamp duty on all residential properties and land that are sold within one year from the date of purchase. The city-state then also lowered the loan-to-value limit to 80 percent from 90 percent for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore.
The island nation’s Prime Minister Lee Hsien Loong yesterday said previous measures failed to keep prices in check.
“We twice attempted to cool the property market, once last year and once in February this year, but the prices are still rising,” Lee said in a televised speech. “Our purpose is to make sure in the long term, Singaporeans can own their homes and afford it and it will be a gradually appreciating asset which will grow as Singapore grows.”
Singapore’s property market would form a bubble if the current momentum continued, Mah Bow Tan, Minister of National Development, said today after the measures.
Prices Surge
“The property market is currently very buoyant,” the government said in the latest statement. “The government’s objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals.”
Singapore private residential prices rose 38 percent in the second quarter from a year earlier, according to the Urban Redevelopment Authority.
The island led 36 markets around the world in property- value changes last quarter, gaining 34 percent from a year earlier, according to the Global Property Guide in its survey of house prices.
Price levels have exceeded the historical peak in the second quarter of 1996, the government said today.
The government expects gross domestic product to grow 13 percent to 15 percent this year after the nation in 2009 exited its worst recession since independence 45 years ago.
‘Severe Implications’
“Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole,” the government said. “Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves.”
Hong Kong Aug. 13 raised down payments for apartments costing HK$12 million ($1.54 million) or more to 40 percent, from 30 percent. The government has been accelerating its auctions of land for development in a bid to cool prices that have soared about 45 percent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.
John Tsang, Hong Kong’s financial secretary, said home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.
China, South Korea
In China, the banking regulator has ordered stress tests for lenders to gauge the impact of home prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said. China’s property prices rose at the slowest pace in six months in July as the government cracked down on speculation to prevent asset bubbles.
China has restricted pre-sales by developers, curbed loans for third-home purchases, raised minimum mortgage rates and tightened down-payment requirements for multiple-home purchases. It has also instructed lenders to halt third-home loans in areas with “excessive price gains.”
Taiwan in June introduced a 70 percent cap on loans for second homes, after low borrowing costs fueled lending and a jump in home prices. Central Bank Governor Perng Fai-nan wrote to the chairmen of all financial institutions on the island last month, asking them to take steps to prevent housing speculation.
Malaysia’s central bank has written to financial institutions to get their feedback on the possibility of capping the loan-to-value ratio for mortgages at 80 percent, the Edge weekly reported Aug. 28, citing unidentified people familiar with the matter.
South Korea may be an exception in Asia as the government steps up measures to spur the property market. The government yesterday said it will ease mortgage lending rules and extend tax breaks to encourage buyers back after home sales slumped to the lowest level in almost a year and a half.
To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net; Joyce Koh in Singapore at jkoh38@bloomberg.net
Singapore moves to cool property market
Written by Thomson Reuters
Monday, 30 August 2010 10:09
Singapore on Monday announced restrictions on people buying second homes as part of new measures to cool its residential property market, hurting property stocks.
The new measures, which take immediate effect, include decreasing the amount people can borrow to buy second properties to 70% from 80 perent, as well as extending a stamp duty on sellers who buy and sell within three years.
Monday, 30 August 2010 10:09
Singapore on Monday announced restrictions on people buying second homes as part of new measures to cool its residential property market, hurting property stocks.
The new measures, which take immediate effect, include decreasing the amount people can borrow to buy second properties to 70% from 80 perent, as well as extending a stamp duty on sellers who buy and sell within three years.
Thursday, August 26, 2010
Casino cash may inject $1.5 bln into Singapore annually-DBS
On Thursday 26 August 2010, 16:15 SGT
SINGAPORE, Aug 26 (Reuters) - Revenues from two new casino-resorts could contribute as much as S$2 billion ($1.47 billion) annually to Singapore's economy, which is expected by the government to grow by up to 15 percent this year, DBS Bank said on Thursday.
The two resorts have already contributed S$470 million or 0.3 percentage points to gross domestic product (GDP), which grew 17.9 percent in the first half of 2010 from a year earlier, DBS economist Irvin Seah wrote in a report.
"If the GDP contributions by the integrated resorts continue to rise at the same pace going forward, we can expect full-year GDP contributions of about S$2 billion from these projects," Seah said in the note.
That would translate into adding 0.7 percentage points to GDP for the whole of 2010, he said.
Singapore is counting on the two resorts opened earlier this year by Malaysia's Genting Bhd and Las Vegas Sands to help fuel tourism and economic growth. It hopes to double visitor arrivals to 17 million by 2015.
In July alone, at least 1 million people visited Singapore, the highest number the city-state ever saw in a month, after seven consecutive months of record monthly visitor arrivals.
"However, the contributions derived from the GDP statistics reflect only the direct impact of the IRs. The overall economic gains to the economy are likely to be significantly larger if the spinoffs to other industries are taken into account," he said. ($1=1.358 Singapore dollar) (Reporting by Nopporn Wong-Anan; Editing by Kim Coghill)
SINGAPORE, Aug 26 (Reuters) - Revenues from two new casino-resorts could contribute as much as S$2 billion ($1.47 billion) annually to Singapore's economy, which is expected by the government to grow by up to 15 percent this year, DBS Bank said on Thursday.
The two resorts have already contributed S$470 million or 0.3 percentage points to gross domestic product (GDP), which grew 17.9 percent in the first half of 2010 from a year earlier, DBS economist Irvin Seah wrote in a report.
"If the GDP contributions by the integrated resorts continue to rise at the same pace going forward, we can expect full-year GDP contributions of about S$2 billion from these projects," Seah said in the note.
That would translate into adding 0.7 percentage points to GDP for the whole of 2010, he said.
Singapore is counting on the two resorts opened earlier this year by Malaysia's Genting Bhd and Las Vegas Sands to help fuel tourism and economic growth. It hopes to double visitor arrivals to 17 million by 2015.
In July alone, at least 1 million people visited Singapore, the highest number the city-state ever saw in a month, after seven consecutive months of record monthly visitor arrivals.
"However, the contributions derived from the GDP statistics reflect only the direct impact of the IRs. The overall economic gains to the economy are likely to be significantly larger if the spinoffs to other industries are taken into account," he said. ($1=1.358 Singapore dollar) (Reporting by Nopporn Wong-Anan; Editing by Kim Coghill)
Tuesday, August 24, 2010
Wednesday Bull Day for Shorts and Gap Down.
Please read this article below. Going to be a very RED day tomorrow. Watch out for Shorts. Very likely GAP DOWN.
---------------------------------
NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday as investors, fretting over recent economic weakness, moved to the safety of the dollar and Treasurys ahead of key housing data.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,017, -157.42, -1.55%) dropped 92 points, or 0.9%, to 10082, in early trading. All 30 of the measure's components were in the red. Leading the slide, Caterpillar, Inc. /quotes/comstock/13*!cat/quotes/nls/cat (CAT 64.76, -2.08, -3.11%) dropped 2.3%, Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 32.25, -0.69, -2.08%) dropped 2% and Cisco Systems Inc. /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 21.35, -0.34, -1.55%) declined 1.9%.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,121, -38.29, -1.77%) fell 1.4% to 2129. The Standard & Poor's 500 index /quotes/comstock/21z!i1:in\x (SPX 1,051, -16.76, -1.57%) declined 1.2% to 1055, with all its sectors in the red, led by technology and materials.
AM Report: Fed Split on Move to Bolster EconomyAs the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10. Jon Hilsenrath discusses. Also, Jenny Strasburg discusses a Chinese sovereign-wealth fund in talks to invest a large sum of money in a hedge fund devoted to profiting from 'Black Swan' market swoons.
The broad decline, which puts stocks on track for their fourth-straight day in the red, comes as investors have grown increasingly concerned about the global economy.
Despite strong second-quarter earnings and a recent uptick in merger-and-acquisition activity, economic data have been disappointing. Investors are fearful that if economic numbers continue to come in weak, the economy could be headed toward a double-dip.
"Investors are running away from risk," said John Apruzzese, partner and equity portfolio manager at Evercore Wealth Management. "It's clearly concern about economic growth in the U.S. as well as globally."
Crude-oil futures fell below $72 a barrel and gold futures declined as investors fled to the safety of the dollar and Treasurys. The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 83.13, +0.01, +0.01%) , which tracks the U.S. currency against a basket of six others, climbed 0.3%. Gains in Treasurys pushed the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.51, -0.09, -3.54%) down to 2.52%. The 10-year note earlier touched 2.509%, its lowest level since March 2009.
The data on tap Tuesday and this week are expected to provide more insight into the health of the economy, with existing-home sales due Tuesday, new-home sales to be released Wednesday and the government's second reading of second-quarter economic growth due Friday. That report is expected to show a significant slowdown in U.S. economic growth, with the estimate for second-quarter gross domestic product predicted to be cut to 1.3% growth from 2.4% growth.
Ahead of those reports, the market is particularly jittery.
"Investors are hyper sensitive to macro economic data because they got burned two years ago and they're afraid of it happening again," Apruzzese said.
---------------------------------
NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday as investors, fretting over recent economic weakness, moved to the safety of the dollar and Treasurys ahead of key housing data.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,017, -157.42, -1.55%) dropped 92 points, or 0.9%, to 10082, in early trading. All 30 of the measure's components were in the red. Leading the slide, Caterpillar, Inc. /quotes/comstock/13*!cat/quotes/nls/cat (CAT 64.76, -2.08, -3.11%) dropped 2.3%, Walt Disney /quotes/comstock/13*!dis/quotes/nls/dis (DIS 32.25, -0.69, -2.08%) dropped 2% and Cisco Systems Inc. /quotes/comstock/15*!csco/quotes/nls/csco (CSCO 21.35, -0.34, -1.55%) declined 1.9%.
The Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,121, -38.29, -1.77%) fell 1.4% to 2129. The Standard & Poor's 500 index /quotes/comstock/21z!i1:in\x (SPX 1,051, -16.76, -1.57%) declined 1.2% to 1055, with all its sectors in the red, led by technology and materials.
AM Report: Fed Split on Move to Bolster EconomyAs the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10. Jon Hilsenrath discusses. Also, Jenny Strasburg discusses a Chinese sovereign-wealth fund in talks to invest a large sum of money in a hedge fund devoted to profiting from 'Black Swan' market swoons.
The broad decline, which puts stocks on track for their fourth-straight day in the red, comes as investors have grown increasingly concerned about the global economy.
Despite strong second-quarter earnings and a recent uptick in merger-and-acquisition activity, economic data have been disappointing. Investors are fearful that if economic numbers continue to come in weak, the economy could be headed toward a double-dip.
"Investors are running away from risk," said John Apruzzese, partner and equity portfolio manager at Evercore Wealth Management. "It's clearly concern about economic growth in the U.S. as well as globally."
Crude-oil futures fell below $72 a barrel and gold futures declined as investors fled to the safety of the dollar and Treasurys. The U.S. Dollar Index /quotes/comstock/11j!i:dxy0 (DXY 83.13, +0.01, +0.01%) , which tracks the U.S. currency against a basket of six others, climbed 0.3%. Gains in Treasurys pushed the yield on the 10-year note /quotes/comstock/31*!ust10y (UST10Y 2.51, -0.09, -3.54%) down to 2.52%. The 10-year note earlier touched 2.509%, its lowest level since March 2009.
The data on tap Tuesday and this week are expected to provide more insight into the health of the economy, with existing-home sales due Tuesday, new-home sales to be released Wednesday and the government's second reading of second-quarter economic growth due Friday. That report is expected to show a significant slowdown in U.S. economic growth, with the estimate for second-quarter gross domestic product predicted to be cut to 1.3% growth from 2.4% growth.
Ahead of those reports, the market is particularly jittery.
"Investors are hyper sensitive to macro economic data because they got burned two years ago and they're afraid of it happening again," Apruzzese said.
Singapore H1 GDP grew 17.9 pct, sees global risks
Reuters - Monday, August 9
SINGAPORE, Aug 8 - Singapore's economy grew 17.9 percent in the first half of 2010, a pace likely to moderate in the second half, Prime Minister Lee Hsien Loong said on Sunday.
There are still risks facing the economies of Europe and the United States and the global financial system is yet to fully recover from the credit crisis, Lee said in a televised speech on the eve of a national day celebrating Singapore's 45th year of independence.
Lee maintained a government forecast for 13-15 percent growth in 2010, which would make Singapore one of the world's fastest growing economies.
The first-half GDP figure showed the economy expanded at a slightly lower pace in the second quarter from an earlier estimate of 19.3 percent released on July 14. [ID:nSGE673073]
The government had earlier estimated the economy grew 18.1 percent in the first half of 2010 from a year earlier.
Lee did not provide the final second quarter growth figure.
"Growth is likely to moderate in the second half," said Lee. "Risks remain in the world economy, especially in Europe and the U.S. The global financial system is not fully mended."
Lee also touched upon the issue of foreign workers, saying while the government will control the flow the country needed immigrants to make up for a shortage of local workers.
We will control the inflow, to ensure that it is not too fast, and not too large," Lee said. "We will only bring in people who can contribute to Singapore, and work harder to integrate them into our society. And we will make clear that citizens come first."
SINGAPORE, Aug 8 - Singapore's economy grew 17.9 percent in the first half of 2010, a pace likely to moderate in the second half, Prime Minister Lee Hsien Loong said on Sunday.
There are still risks facing the economies of Europe and the United States and the global financial system is yet to fully recover from the credit crisis, Lee said in a televised speech on the eve of a national day celebrating Singapore's 45th year of independence.
Lee maintained a government forecast for 13-15 percent growth in 2010, which would make Singapore one of the world's fastest growing economies.
The first-half GDP figure showed the economy expanded at a slightly lower pace in the second quarter from an earlier estimate of 19.3 percent released on July 14. [ID:nSGE673073]
The government had earlier estimated the economy grew 18.1 percent in the first half of 2010 from a year earlier.
Lee did not provide the final second quarter growth figure.
"Growth is likely to moderate in the second half," said Lee. "Risks remain in the world economy, especially in Europe and the U.S. The global financial system is not fully mended."
Lee also touched upon the issue of foreign workers, saying while the government will control the flow the country needed immigrants to make up for a shortage of local workers.
We will control the inflow, to ensure that it is not too fast, and not too large," Lee said. "We will only bring in people who can contribute to Singapore, and work harder to integrate them into our society. And we will make clear that citizens come first."
Singapore lifts ban on brokers on sale of structured notes
Reuters - 2 hours 27 minutes agoSend IM Story Print
SINGAPORE, Aug 24 - Singapore's central bank lifted a ban on the sale of structured notes for six brokerages on Tuesday after they complied with the regulator's orders.
The ban was imposed last year after a probe into the sale and marketing of the derivatives linked to failed Wall Street bank Lehman Brothers.
The brokerages are CIMB Securities Pte Ltd, DMG & Partners Securities Pte Ltd, Kim Eng Securities Pte Ltd, OCBC Securities Pte Ltd, Phillip Securities Pte Ltd and UOB Kay Hian Pte Ltd, the Monetary Authority of Singapore said in a statement.
The central bank said the six financial institutions have publicly pledged to implement various measures to ensure these products are fairly marketed and sold to retail investors. "These include stepping up training and supervision of their staff and enhancing the policies and procedures on their sales and advisory process, it said.
Thousands of Singapore investors lost money in 2008 after they bought risky derivatives linked to the collapsed U.S. investment bank that had been marketed as relatively safe alternatives to fixed deposits, sparking several protests in the tightly controlled city-state. [ID:nSIN22393]
Under MAS' directions, the financial institutions were required to appoint an external person to review their action plan and report on its implementation.
SINGAPORE, Aug 24 - Singapore's central bank lifted a ban on the sale of structured notes for six brokerages on Tuesday after they complied with the regulator's orders.
The ban was imposed last year after a probe into the sale and marketing of the derivatives linked to failed Wall Street bank Lehman Brothers.
The brokerages are CIMB Securities Pte Ltd, DMG & Partners Securities Pte Ltd, Kim Eng Securities Pte Ltd, OCBC Securities Pte Ltd, Phillip Securities Pte Ltd and UOB Kay Hian Pte Ltd, the Monetary Authority of Singapore said in a statement.
The central bank said the six financial institutions have publicly pledged to implement various measures to ensure these products are fairly marketed and sold to retail investors. "These include stepping up training and supervision of their staff and enhancing the policies and procedures on their sales and advisory process, it said.
Thousands of Singapore investors lost money in 2008 after they bought risky derivatives linked to the collapsed U.S. investment bank that had been marketed as relatively safe alternatives to fixed deposits, sparking several protests in the tightly controlled city-state. [ID:nSIN22393]
Under MAS' directions, the financial institutions were required to appoint an external person to review their action plan and report on its implementation.
S'poreans ill equipped for retirement, survey shows
Mon, Aug 23, 2010, my paper, By Reico Wong
SINGAPOREANS are not savvy enough when it comes to planning their long-term finances and are, thus, generally unprepared for retirement, a study by HSBC has revealed.
The HSBC Future of Retirement (FoR) survey, which polled 15,000 respondents across 15 markets and about 1,000 Singaporeans aged 30-70, found that a staggering 91 per cent of locals do not have any idea what their retirement income will look like.
HSBC said that this feeling of unpreparedness among Singaporeans was in part due to a tendency to focus more strongly on the short term.
They had limited understanding about their funds for the long haul, as reflected in the 23 per cent who indicated that they are confident about their long-term finances.
This is despite 26 per cent viewing retirement as a strong motivation to save. About 40 per cent of the locals aged 30 to 50 years said they were willing to save between $500 and $800 each month for retirement.
"This shows that Singaporeans are aware of the need for retirement planning but may not have taken action to prepare for it, perhaps because they don't know where to start," said Mr Walter de Oude, chief executive of HSBC Insurance.
He added that Singaporeans should be proactive in seeking the aid of financial advisers, even if they are saving regularly.
"They'll be able to better identify gaps in retirement planning and ensure that they are on track to achieve the retirement lifestyle they want," he said.
On the back of the FoR survey, HSBC will announce the launch of its new retirement plan, SecureIncome, today.
Targeted at individuals aged 40 to 65 years old, the plan is designed to provide a monthly income or lump-sum savings for one's future needs.
Customers are required to save at least $200 per month, and can choose to accumulate their savings over 10 years, or to age 55. One to 1.5 per cent yield is guaranteed per annum.
The policy can be extended on expiry, and customers can either leave the funds with the insurer to earn interest once again, or receive a monthly income for the next 10 years, together with a non-guaranteed monthly dividend.
If they choose the latter, they also have the option of leaving the income payments with the insurer. They will then receive additional non-guaranteed monthly dividends and interest.
Commenting on the new product, Mr de Oude said: "SecureIncome will make retirement planning less daunting, given its simple design and flexibility."
The policy allows for the deferment of premiums for a year, in the event of unemployment.
It also has a terminal-illness benefit that pays the death benefit in advance.
HSBC has, in recent years, increasingly boosted its suite of retirement solutions.
Past products from the group include Growth Manager, an investment- linked plan that facilitates regular investment and asset accumulation; and GoalSaver, which targets those younger and healthier but want slightly higher insurance coverage.
SINGAPOREANS are not savvy enough when it comes to planning their long-term finances and are, thus, generally unprepared for retirement, a study by HSBC has revealed.
The HSBC Future of Retirement (FoR) survey, which polled 15,000 respondents across 15 markets and about 1,000 Singaporeans aged 30-70, found that a staggering 91 per cent of locals do not have any idea what their retirement income will look like.
HSBC said that this feeling of unpreparedness among Singaporeans was in part due to a tendency to focus more strongly on the short term.
They had limited understanding about their funds for the long haul, as reflected in the 23 per cent who indicated that they are confident about their long-term finances.
This is despite 26 per cent viewing retirement as a strong motivation to save. About 40 per cent of the locals aged 30 to 50 years said they were willing to save between $500 and $800 each month for retirement.
"This shows that Singaporeans are aware of the need for retirement planning but may not have taken action to prepare for it, perhaps because they don't know where to start," said Mr Walter de Oude, chief executive of HSBC Insurance.
He added that Singaporeans should be proactive in seeking the aid of financial advisers, even if they are saving regularly.
"They'll be able to better identify gaps in retirement planning and ensure that they are on track to achieve the retirement lifestyle they want," he said.
On the back of the FoR survey, HSBC will announce the launch of its new retirement plan, SecureIncome, today.
Targeted at individuals aged 40 to 65 years old, the plan is designed to provide a monthly income or lump-sum savings for one's future needs.
Customers are required to save at least $200 per month, and can choose to accumulate their savings over 10 years, or to age 55. One to 1.5 per cent yield is guaranteed per annum.
The policy can be extended on expiry, and customers can either leave the funds with the insurer to earn interest once again, or receive a monthly income for the next 10 years, together with a non-guaranteed monthly dividend.
If they choose the latter, they also have the option of leaving the income payments with the insurer. They will then receive additional non-guaranteed monthly dividends and interest.
Commenting on the new product, Mr de Oude said: "SecureIncome will make retirement planning less daunting, given its simple design and flexibility."
The policy allows for the deferment of premiums for a year, in the event of unemployment.
It also has a terminal-illness benefit that pays the death benefit in advance.
HSBC has, in recent years, increasingly boosted its suite of retirement solutions.
Past products from the group include Growth Manager, an investment- linked plan that facilitates regular investment and asset accumulation; and GoalSaver, which targets those younger and healthier but want slightly higher insurance coverage.
Friday, August 20, 2010
DEUTSCHE BANK'S STOCK COMMENT - Money Mind
Singapore-listed companies delivered firm earnings growth in 2QCY10 but this was largely in line with our expectations. Out of our coverage universe, 36% of the companies delivered better-than-expected results, 38% were in line and 26% below forecasts. This compares to a 50:30:20 split in the previous tw...o quarters.Aggregate earnings were 8% above forecast.
Thursday, August 19, 2010
Singapore's Casinos Just Opened But They're Already Set To Knock-Out Las Vegas
It's been barely five years since Singapore announced that it would develop integrated casino resorts, yet already the island nation has become a serious rival to Las Vegas, with just two major casinos.
Second quarter 2010 winnings put Singapore on track to have a $4 billion casino market on an annualized basis according to the Wall Street Journal. That's just 20% shy of what Las Vegas is expected to do this year, and even Las Vegas is impressed:
WSJ:
"It's just proof that if you build it they will come and in Singapore they built two products that are worthy of that title," says Andy Nazarechuk, Dean of University of Nevada Las Vegas' Singapore campus.
"Las Vegas will continue to attract (Asian visitors) but instead of the player making two or three trips to Las Vegas in the year they may make only one trip and the other two trips may be more closer regionally."
Even the bears expect a substantial market size for Singapore:
Las Vegas-based gambling consultancy Galaviz & Company has relatively conservative forecasts for actual earnings in Singapore of $3.5 billion in 2011 and projects the Las Vegas strip will earn $5.8 billion, a modest improvement on the $5.1 billion expected in 2010.
And the bulls think Singapore could torpedo Las Vegas's market position within just the next few years:
However, some among the investment community believe the Singapore market will approach the sorts of numbers Galaviz expects for the Las Vegas strip, which accounts for about half of the state of Nevada's gaming revenue, by 2012.
Aaron Fischer of CLSA has some of the more bullish forecasts, expecting the combined gaming revenues of both Singapore resorts to generate $5.1 billion in 2011, up from his previous estimate of $3.9 billion. Goldman Sachs also expects the sector could bring in $5 billion in 2011.
Combined with the development of Macau, it seems like Las Vegas's leadership position could be toast over the next decade, even should the U.S. economy rebound well past its past peak. Las Vegas probably needs to roll out some heavy branding initiatives in Asia.
Note however that Steve Wynn, the founder of Wynn Casinos (WYNN), isn't waiting for any magic from the Nevada government. He's planting himself in Asia quite often, even if he's backed off from plans to move his HQ to Asia, realizing that Wynn's long-term success revolves around being a global company, like Hilton. It's not about being stuck in Las Vegas alone.
Thus it's not the U.S. casinos that need to be worried about the rise of Asian casino hubs per se, but more Nevada state. Nevada better move fast, given the ambition and well organized government efforts in Singapore and Macau. Heck, I've never been to Vegas, but I'm already dying to jump into Singapore's new infinity pool...
Now see jaw-dropping pictures of Singapore's casino-skyscraper infinity pool >
Second quarter 2010 winnings put Singapore on track to have a $4 billion casino market on an annualized basis according to the Wall Street Journal. That's just 20% shy of what Las Vegas is expected to do this year, and even Las Vegas is impressed:
WSJ:
"It's just proof that if you build it they will come and in Singapore they built two products that are worthy of that title," says Andy Nazarechuk, Dean of University of Nevada Las Vegas' Singapore campus.
"Las Vegas will continue to attract (Asian visitors) but instead of the player making two or three trips to Las Vegas in the year they may make only one trip and the other two trips may be more closer regionally."
Even the bears expect a substantial market size for Singapore:
Las Vegas-based gambling consultancy Galaviz & Company has relatively conservative forecasts for actual earnings in Singapore of $3.5 billion in 2011 and projects the Las Vegas strip will earn $5.8 billion, a modest improvement on the $5.1 billion expected in 2010.
And the bulls think Singapore could torpedo Las Vegas's market position within just the next few years:
However, some among the investment community believe the Singapore market will approach the sorts of numbers Galaviz expects for the Las Vegas strip, which accounts for about half of the state of Nevada's gaming revenue, by 2012.
Aaron Fischer of CLSA has some of the more bullish forecasts, expecting the combined gaming revenues of both Singapore resorts to generate $5.1 billion in 2011, up from his previous estimate of $3.9 billion. Goldman Sachs also expects the sector could bring in $5 billion in 2011.
Combined with the development of Macau, it seems like Las Vegas's leadership position could be toast over the next decade, even should the U.S. economy rebound well past its past peak. Las Vegas probably needs to roll out some heavy branding initiatives in Asia.
Note however that Steve Wynn, the founder of Wynn Casinos (WYNN), isn't waiting for any magic from the Nevada government. He's planting himself in Asia quite often, even if he's backed off from plans to move his HQ to Asia, realizing that Wynn's long-term success revolves around being a global company, like Hilton. It's not about being stuck in Las Vegas alone.
Thus it's not the U.S. casinos that need to be worried about the rise of Asian casino hubs per se, but more Nevada state. Nevada better move fast, given the ambition and well organized government efforts in Singapore and Macau. Heck, I've never been to Vegas, but I'm already dying to jump into Singapore's new infinity pool...
Now see jaw-dropping pictures of Singapore's casino-skyscraper infinity pool >
Singapore retains Fitch’s top credit rating on stable outlook
Written by Bloomberg
Wednesday, 18 August 2010 17:16
Singapore retained its top credit ranking of AAA at Fitch Ratings, which cited the country’s “exceptionally strong external financial and fiscal positions.”
“The exposure to external shocks and greater volatility associated with a small and very open economy is more than offset by the strength of Singapore’s external and fiscal buffers, as well as the credibility of its economic policy framework,” the company said in a statement today.
Wednesday, 18 August 2010 17:16
Singapore retained its top credit ranking of AAA at Fitch Ratings, which cited the country’s “exceptionally strong external financial and fiscal positions.”
“The exposure to external shocks and greater volatility associated with a small and very open economy is more than offset by the strength of Singapore’s external and fiscal buffers, as well as the credibility of its economic policy framework,” the company said in a statement today.
Singapore gaming may rival Las Vegas by 2012
Written by The Edge
Wednesday, 18 August 2010 16:24
Singapore’s very young gaming sector revenues could rival those from Las Vegas strip in next two years, according to some estimates, according to Dow Jones.
CLSA expects sector to generate US$5.1 billion ($19 billion) in 2011, which compares with Galaviz & Co.’s 2011 estimate of US$5.8 billion for Las Vegas strip for 2011.
Reflects weakness in gaming revenues in traditional US gambling Mecca of Las Vegas, especially as Asian players look closer to home at venues in Macau and now increasingly Singapore following opening of Las Vegas Sands’ (LVS) Marina Bay Sands and Genting Singapore’s (G13.SG) Resorts World Sentosa earlier this year.
“The appetite for gambling in Asia is significantly higher than it is outside of Asia,” CLSA analyst Aaron Fischer says.
Wednesday, 18 August 2010 16:24
Singapore’s very young gaming sector revenues could rival those from Las Vegas strip in next two years, according to some estimates, according to Dow Jones.
CLSA expects sector to generate US$5.1 billion ($19 billion) in 2011, which compares with Galaviz & Co.’s 2011 estimate of US$5.8 billion for Las Vegas strip for 2011.
Reflects weakness in gaming revenues in traditional US gambling Mecca of Las Vegas, especially as Asian players look closer to home at venues in Macau and now increasingly Singapore following opening of Las Vegas Sands’ (LVS) Marina Bay Sands and Genting Singapore’s (G13.SG) Resorts World Sentosa earlier this year.
“The appetite for gambling in Asia is significantly higher than it is outside of Asia,” CLSA analyst Aaron Fischer says.
Monday, August 16, 2010
Singapore stocks weaken on concerns over US economic outlook
Posted: 16 August 2010 1814 hrs
SGX Centre
SINGAPORE : Singapore stocks ended softer on Monday after investors turned cautious over the weak US economic outlook.
Traders said news of a slowdown in Japanese economic growth also weighed on the market.
The Japanese government said on Monday the economy grew an annualised 0.4 percent in the June quarter, from a revised 4.4 percent in the previous three months.
The ST index fell 6.46 points to 2,933.51 on a volume of 1,850 million shares.
There were 144 gainers compared to 349 rises by the close of dealings.
With the earnings season drawing to a close, analysts said markets are likely to focus now on economic data.
Shares of property companies fell on concerns that authorities may follow moves by the Hong Kong government to cool property prices in the Chinese territory.
On Friday, the Hong Kong government tightened mortgage lending for bigger flats as their prices headed for historic highs, fuelling asset bubbles.
Among active counters, Singapore Airlines was up 1.91 percent at S$15.98 while Singapore Telecom eased 2.63 percent to S$2.96. - CNA/ch
SGX Centre
SINGAPORE : Singapore stocks ended softer on Monday after investors turned cautious over the weak US economic outlook.
Traders said news of a slowdown in Japanese economic growth also weighed on the market.
The Japanese government said on Monday the economy grew an annualised 0.4 percent in the June quarter, from a revised 4.4 percent in the previous three months.
The ST index fell 6.46 points to 2,933.51 on a volume of 1,850 million shares.
There were 144 gainers compared to 349 rises by the close of dealings.
With the earnings season drawing to a close, analysts said markets are likely to focus now on economic data.
Shares of property companies fell on concerns that authorities may follow moves by the Hong Kong government to cool property prices in the Chinese territory.
On Friday, the Hong Kong government tightened mortgage lending for bigger flats as their prices headed for historic highs, fuelling asset bubbles.
Among active counters, Singapore Airlines was up 1.91 percent at S$15.98 while Singapore Telecom eased 2.63 percent to S$2.96. - CNA/ch
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