Originally Posted by Unregistered
Sorry about my post above.
I read wrongly.
You are right.
Sorry about my post above.
I read wrongly.
You are right.
Should have bought Bear Sterns when it is around US$3 a few days ago.
Asian Markets Rally on Easing US Worries
Most Asian Markets Rise on US Housing Data, Revised Offer for Bear Stearns, Wall Street Rally
Malcolm Foster
Business Writer
Associated Press
Tuesday, 25 March 2008, 2:06 pm Thailand Time
Most Asian markets rose Tuesday as investors returned from the Easter holiday in a mood to buy, encouraged by upbeat U.S. housing numbers and an overnight rally on Wall Street.
Stocks in Hong Kong and Australia, both of which were closed since Thursday, surged on easing concerns about the global credit crisis that has battered Asian markets since the start of the year.
"I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "We have gone down low enough and the market is ready for a rebound. Banks will lead the rally."
Hong Kong's benchmark Hang Seng index jumped 4.2% to 22,010.91 in afternoon trading, while Australia's S&P/ASX 200 index soared 3.7% to finish at 5,318.4. Japan's Nikkei 225 index rose 2.2% to 12,745.2 after ending flat on Monday.
Investors were heartened by a new agreement that will give Bear Stearns Cos. shareholders five times the payout that was set in a JPMorgan Chase & Co. buyout deal a week ago. In the revised offer, JPMorgan raised its offer for Bear Stearns, which has been at the center of the mortgage meltdown, to $10 a share from $2 a share.
"The offer gives the market renewed confidence, indicating that after further assessment, the situation at Bear Stearns may not be as bad as initially thought," said Jamie Spiteri, head of trading at Shaw Stockbroking in Sydney.
There was also optimism about the U.S. housing sector, which has been at the heart of the credit problems. The National Association of Realtors that Monday said sales of existing homes rose 2.9% in February, the first gain since last July.
The Dow Jones industrial average rose 187.32, or 1.52%, to 12,548.64 on Monday, after rising more than 260 points on Thursday, the last day of trading before the Easter weekend.
In Australia, banks led the market higher. National Australia Bank, the nation's largest lender, rose 5.1%, while Australia and New Zealand Banking Group added 5.9%.
Still, some analysts warned that the declines in regional markets may not be over.
"It's too early to conclude an end of the prevailing bear market," said Ernie Hon, a strategist at ICEA Securities in Hong Kong.
In mainland China, the Shanghai Composite Index was flat in afternoon trading after falling earlier. Taiwan's main index was down 0.8% after surging 4% Monday amid expectations that president-elect Ma Ying-jeou will bring greater economic engagement with China.
Yishun condo site draws record bid of $213.5M
Fiona Chan
The Straits Times
Wednesday, 26 March 2008
A Yishun condominium site drew a higher-than-expected top bid when its tender closed yesterday, belying expectations of a property market slide.
Developer MCL Land offered $213.5 million for the 99-year leasehold plot, which works out to about $350 per sq ft per plot ratio (psf ppr) - believed to be a new benchmark for Yishun.
Property consultants said this could translate into the finished project selling at record prices for the area, even as home buyers are now holding out for lower prices in a subdued market.
Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the end units for the Yishun project could be priced from $830 psf up to almost $900 psf.
This would be almost double what the 99-year leasehold Orchid Park Condo down the road is fetching. Four units at the 14-year-old development have been sold there this year at an average price of $460 psf.
MCL Land's bid pipped four others and came in almost 70% higher than the next bid, from Peak Green, at $127 million, or $208 psf ppr.
Frasers Centrepoint, Sim Lian and Hong Kong's Cheung Kong also tabled offers ranging from $57.7 million to $109.7 million, or $95 to $180 psf ppr - which some consultants said were 'unrealistically low' bids. They had predicted bids of between $200 and $300 psf ppr.
But Mr Li Hiaw Ho, executive director of CBRE Research, said the response was 'fairly robust' and signalled 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.
'Should the United States enter a mild recession and the sub-prime problems clear up, sentiment for suburban homes should improve after June, bringing demand and upward price momentum back to the market.'
Experts described MCL Land's offer as 'extremely bullish' and suggested that the developer may be short on land bank in the mass market segment.
MCL Land said in its latest financial results that it bought some sites last year, including Holland Hill Mansions and Dynasty Court Garden 1 in Sixth Avenue. Its land bank can now yield 780 units with a total gross floor area of 1.4 million sqft.
The Yishun site is at the corner of Yishun Avenues 1 and 2, and is 10 minutes' walk from Khatib MRT Station. It is next to Yishun Stadium and overlooks Lower Seletar Reservoir.
'The site is good in that frontage to the reservoir is fantastic,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. 'I agree you should pay a premium for this site, but this seems to be a very significant premium.'
Separately, HDB yesterday put two more sites up for sale through its reserve list system.
One is a 182,986 sq ft plot at Jurong West Street 42 for executive condos, while the other is a 244,341 sq ft condo site at Chestnut Avenue in Bukit Panjang.
High Bid = High Home Prices?
Property consultants said the higher-than-expected offer by MCL Land could translate into the finished project selling at record prices for Yishun, even as home buyers are now holding out for lower prices in a subdued market.
S&P 500 and Nasdaq inch up
Ellis Mnyandu
Reuters
New York, New York, U.S.
Tuesday, 25 March 2008, 5:36 PM U.S. EDT
Traders work on the floor of the New York Stock Exchange March 25, 2008. Photo: Brendan MeDermid, Reuters
The S&P 500 and Nasdaq rose on Tuesday as rebounding metal and oil prices lifted mining and energy shares, offsetting news of the biggest drop in consumer confidence in five years.
The Dow ended slightly lower, held back by a 3.5% drop in Bank of America Corp after a brokerage advised investors to sell the stock, citing the No. 2 U.S. bank's exposure to the bursting housing bubble.
Stocks weakened early after a Conference Board report showed consumer confidence fell sharply in March, raising the specter of Americans tightening their purse strings.
The data also hurt the dollar, which in turn fueled a rebound in commodity prices after last week's sell-off. That benefited companies such as aluminum producer Alcoa Inc, up 2%, and Freeport-McMoran Copper & Gold Inc which jumped 4.1%.
Standouts included shares of independent oil and gas producer Devon Energy, up 3.8%, and oil services company Schlumberger Ltd, which jumped 1.7%. Both stocks were among the Dow's biggest gainers.
"The catalyst for commodities is the weaker dollar and it's allowing other groups to rally," said Steve Goldman,
market strategist at Weeden & Co., based in Greenwich, Connecticut. "Global growth, at least from a commodities standpoint, will probably stay intact."
The Dow Jones industrial average slipped 16.04 points, or 0.13%, to close at 12,532.60. But the Standard & Poor's 500 Index inched up 3.11 points, or 0.23%, to 1,352.99. The Nasdaq Composite Index ose 14.30 points, or 0.61%, to close at 2,341.05.
As the market had rallied on Monday to book its strongest 2-day advance in nearly four months, some investors opted to take profits, particularly in the financials, which had rallied on news of a revised buyout offer for beleaguered Wall Street investment bank Bear Stearns Cos from JPMorgan Chase & Co.
Shares of Bank of America dropped to $40.97 on the New York Stock Exchange, where shares of JPMorgan, the No. 3 U.S. bank by assets, slid to $46.06. Both stocks were among the top drags on the Dow and the S&P 500.
Alcoa And Qualcomm Climb
But shares of Alcoa led the Dow's advancers, finishing up 2%, or 70 cents, at $35.74, followed by shares of chemical maker DuPont, which gained 1.4%, or 64 cents, to $47.30.
Shares of Caterpillar Inc, the maker of bulldozers and excavating equipment, which is an exporter that benefits from a declining dollar, rose almost 1% to finish at $76.64 on the NYSE. Its customers include miners.
Monsanto Co was another bright spot on the commodities front after the U.S. agricultural biotechnology company raised its profit forecasts. Its shares jumped 9.9% to $114.54 on the NYSE.
"Outside of financial companies, earnings remain pretty strong," said Cleveland Rueckert, market analyst with Birinyi Associates Inc in Stamford, Connecticut.
Investors also snapped up technology shares following positive broker comments on the sector's bellwether stocks, including Qualcomm Inc.
The wireless chipmaker's stock, which gained 2.3% to close at $40.80 on the Nasdaq, was raised to a "buy" from "neutral" at Merrill Lynch, according to theflyonthewall.com, a financial Web site.
Shares of Yahoo Inc jumped 4.4% to close at $28.73 on Nasdaq after Citigroup said it is likely that Microsoft Corp will raise its takeover offer for the Internet media firm. Shares of BlackBerry maker Research In Motion Ltd ended at $115.95, up 3.7%.
Static For Clear Channel
In after-hours trade, shares of Clear Channel Communications Inc slid 19.4% to $26.25 on news that talks concerning the $20 billion leveraged buyout of the U.S. radio and TV station operator had hit a snag. The stock ended the regular session at $32.56, down 5.6% on the NYSE.
Trading was extremely light on the New York Stock Exchange, with about 1.48 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 2.12 billion shares traded, slightly below last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 2 to 1 on both the NYSE and the Nasdaq.
'Bullish outlook' for private equity in Southeast Asia
Alvin Foo
The Straits Times
Wednesday, 26 March 2008
The recent global market turmoil may have made private equity a more attractive source of funding, said speakers at a private equity conference yesterday.
They said the outlook for private equity deals in Southeast Asia is bullish despite the current gloom.
The United States credit crisis and turbulence in equity markets could force those seeking funds to turn to private equity, they added.
'Stock market valuations have come down and initial public offerings are now a much less attractive means of raising funds,' said Celadon Capital chief executive Nicholas Ashby. 'Thus, private equity funds have got better negotiating leverage now.'
Ms Darawati Hussain, director of CIMB's private equity unit, said: 'The liquidity crunch and potential global slowdown have made it harder for companies to find traditional sources of funding.'
She added that this gives them more motivation to turn to private equity.
Speakers at the Private Equity IQ Southeast Asia conference, organised by the International Quality & Productivity Centre and held at the Meritus Mandarin, said the US subprime crisis has had no direct impact on private equity in Southeast Asia because the region is insulated.
However, it may have an indirect impact as a slowdown in US consumer spending may eventually mean a fall in large capital buyouts.
Private equity investments in Southeast Asia totalled about US$12.4 billion (S$17.3 billion) last year. Of that, about US$5.3 billion was seen in Singapore, more than double the US$2.1 billion witnessed in 2006. In 2005, this figure was US$1.7 billion.
Among the mega deals in Singapore last year was a $2.2 billion takeover of local chip tester and assembler United Test and Assembly Center by private equity firms TPG Capital and Affinity Equity Partners.
The transaction value of private equity here was 3.2% of Singapore's gross domestic product - the highest percentage among countries in the region.
The twin engines of high growth and good corporate governance make Singapore a thriving location for private equity, noted Mr Grant Kelley, chief executive of Colony Capital Asia.
He added: 'You've got probably the best of both worlds ... hence Singapore leads the region in terms of the benchmark for private equity.'
Pacific Star forms Munich joint venture for property investments in Asia, Europe
Channel NewsAsia
Tuesday, 25 March 2008, 2001 hrs
Real estate investment house Pacific Star has formed a joint venture in Munich which will help investors park their funds in prime Asian and European properties.
Under the deal, Pacific Star Europe also launched its Asian funds distribution business with targeted assets under management of over US$2 billion.
These will focus on real estate in India, China, Northeast Asia and Southeast Asia.
Pacific Star Europe will also manage a Fund of Funds that invests in global real estate.
The joint venture links Pacific Star with two individuals Dr Matthias Sturmer and Dirk Grosse-Wordemann.
Under the deal, Pacific Star Fund Management Singapore will own 51% of the company while the two partners will hold the remaining 49% stake.
European institutional investors transacted an estimated US$2.2 billion worth of property deals in Asia in the first half of 2007, according to figures by Jones Lang LaSalle.
At the same time, Asian inflows into European real estate totalled US$3.5 billion.
German business confidence posts surprise rise in March: Ifo
Agence France-Presse
Frankfurt, Germany
Wednesday, 25 March 2008, 1:35PM CET
A stock trader observes the developments on the stock market at the German Stock Exchange in the central German city of Frankfurt on 17 March 2008. German business confidence posted a surprise jump in March, a key survey showed on Wednesday, pointing to fresh vigour and a bullish outlook in Europe's biggest economy. - Thomas Lohnes, AFP
German business confidence posted a surprise jump in March, a key survey showed on Wednesday, pointing to fresh vigour and a bullish outlook in Europe's biggest economy.
In the closely watched business climate index, calculated each month by the Munich-based economic research institute Ifo, the March reading climbed to 104.8 points from 104.1 points in February.
Economists polled by Thomson Financial News had forecast the index would fall to 103.4 points.
"The results indicate that with the beginning of the year the German economy has gained strength," Ifo president Hans-Werner Sinn said in a statement.
"The outlook for the coming six months has also brightened somewhat."
For its monthly survey, Ifo polls 7,000 companies about their current business conditions and their outlook for the next six months.
The survey showed relative optimism among German firms on both scores.
The business expectations sub-index, which measures the outlook for the next six months, rose to an indexed 98.4 from 98.2 in February.
The business assessment index, which covers current conditions, showed a stronger gain to 111.5 from 110.3 last month.
Analysts had expected the former figure to fall to 97.6 points and the latter to ease back to 109.5 points.
The climate indicators for the manufacturing and construction sectors both rose as well, while that for retailing fell slightly following a strong rise in February, Ifo said.
Analyst Andreas Rees at UniCredit said that exporters, the backbone of the German economy, appeared to be shrugging off the rapid rise in the euro exchange rate, the ongoing turbulence on financial markets and the slowdown of the US economy.
"German companies are currently giving the impression of supernatural and hence imperturbable species -- a mixture between Superman and Batman," he said.
Jennifer McKeown of Capital Economics in London agreed that German industry appeared well-insulated from the chill on global markets.
"Slowing global demand and the strong euro must surely take their toll on German business confidence at some point," she said.
"But for now, this buoyant survey adds to the evidence that the slowdown in German GDP growth this year will not be too sharp."
Matthias Rubisch, an analyst at Commerzbank in Frankfurt, said the survey findings were auspicious for German growth, forecast at between 1.5 and 1.8% this year.
"The German economy is evidently proving surprisingly stable in a relatively harsh climate, and is likely to have achieved strong first-quarter growth," Rubisch said.
But he said stagnation in the Ifo data over the last six months kept more optimistic expectations in check.
"We do not therefore see the survey's findings as a sign of an upturn, but as indicative of the slowdown that set in last year taking a breather for the time being," he said.
Economist Sylvain Broyer at Natixis said upbeat business indices across the eurozone should give the European Central Bank reason for confidence.
"Even if stable business confidence does not mean that the eurozone economy is unaffected by the global turmoil, today's readings are for sure good news for the ECB," he said.
"In such a context, the European Central Bank can wait before easing monetary conditions, probably until June 08, when hard data will have shown the entire scope of the slowdown. We expect sluggish growth this year, with the eurozone gross domestic product rising by 1.5% year on year, but no lasting stagflation and no recession."
Even better to buy distressed companies. Gains are faster and more than 100%. Property is not going to be as popular an instrument.
wooohahahahahahaha
'Bullish outlook' for private equity in Southeast Asia
Alvin Foo
The Straits Times
Wednesday, 26 March 2008
The recent global market turmoil may have made private equity a more attractive source of funding, said speakers at a private equity conference yesterday.
They said the outlook for private equity deals in Southeast Asia is bullish despite the current gloom.
The United States credit crisis and turbulence in equity markets could force those seeking funds to turn to private equity, they added.
'Stock market valuations have come down and initial public offerings are now a much less attractive means of raising funds,' said Celadon Capital chief executive Nicholas Ashby. 'Thus, private equity funds have got better negotiating leverage now.'
Ms Darawati Hussain, director of CIMB's private equity unit, said: 'The liquidity crunch and potential global slowdown have made it harder for companies to find traditional sources of funding.'
She added that this gives them more motivation to turn to private equity.
Speakers at the Private Equity IQ Southeast Asia conference, organised by the International Quality & Productivity Centre and held at the Meritus Mandarin, said the US subprime crisis has had no direct impact on private equity in Southeast Asia because the region is insulated.
However, it may have an indirect impact as a slowdown in US consumer spending may eventually mean a fall in large capital buyouts.
Private equity investments in Southeast Asia totalled about US$12.4 billion (S$17.3 billion) last year. Of that, about US$5.3 billion was seen in Singapore, more than double the US$2.1 billion witnessed in 2006. In 2005, this figure was US$1.7 billion.
Among the mega deals in Singapore last year was a $2.2 billion takeover of local chip tester and assembler United Test and Assembly Center by private equity firms TPG Capital and Affinity Equity Partners.
The transaction value of private equity here was 3.2% of Singapore's gross domestic product - the highest percentage among countries in the region.
The twin engines of high growth and good corporate governance make Singapore a thriving location for private equity, noted Mr Grant Kelley, chief executive of Colony Capital Asia.
He added: 'You've got probably the best of both worlds ... hence Singapore leads the region in terms of the benchmark for private equity.'
U.S. Economy: Durable-Goods Orders Drop, New-Home Sales Slide
By Shobhana Chandra and Courtney Schlisserman
March 26 (Bloomberg) -- Orders for U.S. durable goods unexpectedly fell in February, led by a slump in demand for machinery, as the housing downturn and the prospect of a recession made companies hesitant to invest.
The 1.7 percent drop in demand for products made to last at least three years followed a 4.7 percent decrease in the prior month, the Commerce Department said today in Washington. The department also reported that sales of new homes dropped 1.8 percent last month to a 13-year low.
Businesses are cutting equipment purchases as the biggest housing decline in a quarter century hurts sales, and rising fuel costs erode profit. Only exports are preventing manufacturing from declining even more. Economists at Morgan Stanley now predict the economy will shrink at an annual rate of 0.7 percent in the first quarter, from a previous forecast for a 0.4 percent contraction.
``We're right in the teeth of the recession,'' John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said in a Bloomberg Radio interview. ``The recession's going to be characterized as the first half of 2008, and waiting for recovery in the second half.''
Treasuries rose after the reports, pushing yields lower. The benchmark 10-year note yielded 3.46 percent as of 11:15 a.m. in New York, down 5 basis points from yesterday. The Dow Jones Industrial Average declined 1 percent to 12,408.5.
`Bit of Fatigue'
``Businesses definitely have shown they are beginning to retrench,'' said Aaron Smith, senior economist at Moody's Economy.com in West Chester, Pennsylvania, in an interview with Bloomberg Television. ``Demand is weakening and investment intentions are showing a bit of fatigue.''
Economists projected orders would rise 0.7 percent, according to the median of 69 forecasts in a Bloomberg News survey, after a previously reported 5.3 percent slump in January. Excluding orders for transportation equipment, which tend to be volatile, bookings fell 2.6 percent, the most since January 2007.
The slump in orders was paced by a 13 percent decline in demand for machinery that was the biggest since comparable records began in 1992.
Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, decreased 2.6 percent, the most since October. Shipments of those items, used in calculating gross domestic product, dropped 2.1 percent, the most since January 2007.
Orders excluding defense equipment decreased 1.6 percent and bookings for military gear dropped 10 percent.
Economist Estimates
New home sales fell to a 590,000 annual pace, the lowest level since February 1995. Purchases were down 30 percent from February 2007.
Economists had forecast new-home sales would decline to an annual pace of 578,000, according to the median of 71 forecasts in a Bloomberg News survey. Estimates ranged from 560,000 to 600,000. Purchases in January were revised up to 601,000 from a previously estimated 588,000 pace.
Purchases declined in two of four regions, led by a 40 percent plunge in the Northeast, the biggest drop since 1996. Sales improved in the South and West.
The report did contain one bit of positive news. The number of new homes for sale at the end of February dropped to 471,000, the fewest since July 2005, indicating builders are making headway in clearing out the inventory glut.
Still, the decline in sales kept supply at 9.8 months, the same as in January and the highest since 1981.
Elevated inventories are pushing down prices as builders struggle to unload homes they've already built. The median price fell 2.7 percent from February 2007 to $244,100.
`In a Pinch'
The durable-goods report also showed bookings for fabricated metals and automobiles dropped.
``There's a lot more economic uncertainty than we thought,'' Mark LaNeve, North American marketing chief for General Motors Corp., the world's largest automaker, said in a Bloomberg Television interview on March 19. ``With consumers in a pinch and some of the liquidity and credit issues we are experiencing in the economy, we are being more aggressive with incentives.''
A strike at auto-parts supplier American Axle & Manufacturing Holdings Inc. that has idled several automobile plants may also be contributing to the decline at vehicle makers. The four-week walkout has led to slowdowns at GM plants and at companies that supply parts and ship vehicles.
Manufacturing Weakness
Other factory surveys signal weakness. The Federal Reserve Bank of Philadelphia's index of business activity showed manufacturing contracted in March for the fourth month in a row. A similar measure from the New York Fed showed manufacturing shrank this month at the fastest pace since records began in 2001.
The Fed cut its main lending rate by three-quarters of a percentage point to 2.25 percent on March 18 in an attempt to prop up the faltering economy and restore faith in the U.S. financial system.
``Recent information indicates that the outlook for economic activity has weakened further,'' policy makers said in a statement after the meeting.
Manufacturers are getting help from growth in emerging markets. Terex Corp., the world's third-largest maker of construction equipment, is facing a record backlog in crane orders on surging overseas demand. The Westport, Connecticut- based company said it plans to expand facilities in China and India and expects to meet a goal of $12 billion in sales by 2010.
``Accelerated growth in developing markets'' is driving growth, Chief Executive Officer Ron DeFeo said at a trade show in Las Vegas on March 12. ``We're running as fast as we can to add as much capacity as we can.''
Citigroup Estimates Cut by Oppenheimer's Whitney
By Adam Haigh and Poppy Trowbridge
March 26 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, will post a quarterly loss four times as large as Oppenheimer & Co. analyst Meredith Whitney previously estimated, she said in a revised forecast.
Citigroup fell 5.5 percent in New York trading to $22.17 at 11:15 a.m. after Whitney predicted the bank will lose $1.15 a share in the first quarter. That compares with her earlier loss estimate of 28 cents, Whitney wrote in an investor note yesterday.
Whitney correctly predicted two months in advance that Citigroup Inc. would reduce its dividend to preserve capital. Citigroup may write down $13.1 billion of assets including leveraged loans and collateralized debt obligations in the first quarter, according to her latest estimate. U.S. bank earnings overall will tumble 84 percent in the quarter, she said.
``This will not be our last reduction in 2008,'' Whitney wrote in the note. ``We anticipate further downside to both estimates and stock prices'' because banks will be under pressure to mark down assets to reflect falling market indexes.
Citigroup may write down $9 billion on CDOs and $2.15 billion on leverage loans in the first quarter, Whitney said. She cut her full-year estimate for Citigroup to a loss of 15 cents a share, down from her previous forecast of a 75 cent profit.
Biggest Loss
New York-based Citigroup posted the biggest loss in its 196- year history in the fourth quarter of 2007 after rising defaults on home loans forced the company to write down $18 billion of subprime mortgage investments. The bank cut its dividend for the first time after reporting a loss of $9.83 billion, or $1.99 a share.
Charles ``Chuck'' Prince stepped down as chief executive officer and was replaced by Vikram Pandit, who promised a thorough review of the bank's operations. Pandit eliminated 4,200 jobs, or about 1.1 percent of the workforce, at the end of the year and plans more cuts as he completes his cost review in April.
Citigroup is also selling $14.5 billion of preferred stock to investors including the government of Singapore to raise capital.
Pandit, 51, plans to tell shareholders in the next seven weeks how he intends to rebuild Citigroup after it lost more than $150 billion of market capitalization since the start of 2007.
Citigroup shares have declined 24 percent this year, valuing the bank at $116 billion.
New Home Sales Fall, Factory Orders Drop
Wednesday March 26, 10:25 am ET
By Martin Crutsinger, AP Economics Writer
New Home Sales Fall to a 13-Year Low, Underscoring Housing's Steep Slump; Factory Orders Fall
WASHINGTON (AP) -- Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low as the steep slump in housing continued.
The Commerce Department reported Wednesday that new home sales dropped 1.8 percent last month to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The decline was slightly worse than expected.
The median price of a home sold last month dropped to $244,100, down 2.7 percent from the level of a year ago.
The prolonged slump in housing has dragged down overall economic activity. Many analysts believe the slump could combine with a multitude of other problems including a severe credit crunch, soaring energy prices and plunging consumer confidence, to push the country into a full-blown recession.
The number of unsold homes on the market at the end of the month represented a 9.8 months' supply at the February sales pace, the same as in January. That was the highest inventory level in more than 26 years and reflects the fact that increased numbers of mortgage foreclosures are dumping even more homes on an already glutted market.
Sales dropped the most in the Northeast, falling by 40.6 percent. Sales were also down in the Midwest, dropping by 6.4 percent, but posted gains in the South of 5.7 percent and 0.7 percent in the West.
Many analysts believe that the slump in housing, which began in 2006, could last into 2009. It was reported on Tuesday that the Standard & Poor's/Case-Shiller index of home prices fell nearly 11 percent in January from a year ago, the biggest year-over-year decline in the history of the index.
Analysts said that housing is being hurt currently by tighter lending conditions as banks react to soaring mortgage defaults and the reluctance of prospective buyers to make a decision, fearing that prices have further to fall.
In other economic news, orders to factories for big-ticket manufactured goods fell 1.7 percent in February, a second consecutive decline and further evidence of the economic troubles gripping the country.
The declines in orders for durable goods, items expected to last at least three years, showed up in a number of areas. Demand for manufacturing equipment plunged by 13.3 percent, the largest amount on record, while orders for nondefense capital goods excluding aircraft, the category that is seen as a good proxy for business investment, fell by 2.6 percent, the biggest decline in four months.
Economic growth slowed to a barely discernible 0.6 percent in the final three months of last year, and many economists believe the gross domestic product will turn negative in the current quarter, signaling the start of a recession.
The 1.7 percent drop in orders for durable goods, items expected to last at least three years, was worse than the 1 percent increase that many economists had expected.
The weakness came even though orders for transportation equipment rebounded with a 0.6 percent rise in February after a big 12.6 percent plunge in January. The swing in both months reflected changes in demand for commercial aircraft, which rose 5.4 percent in February following a 30.2 percent plunge in January. Orders for motor vehicles fell by 2.7 percent in February as U.S. automakers continued to face weak demand, reflecting the weak economy and soaring energy prices.
Excluding transportation, orders fell by 2.6 percent in February, representing the fourth decline in the past five months.
Economists believe that if the country does slip into a recession, the downturn may not be as severe in manufacturing, which is being helped by continued strong growth overseas, which is bolstering U.S. exports.
Japan February trade surplus up 0.9%
Associated Press
Tokyo, Japan
Wednesday, 26 March 2008, 2:55 PM Japan Time
Japan's trade surplus in February rose 0.9% from a year earlier, marking the first increase in four months, the Finance Ministry said Wednesday.
The surplus rose to 970 billion yen ($9.69 billion), the ministry said, coming in less than the 16.8% rise to 1.123 trillion yen ($11.2 billion) expected by economists surveyed by Dow Jones and Nikkei.
The rise was due to strong exports of automobiles and steel to Asia and machinery shipments to Europe and Asia, the ministry said. The surplus was weighed down, though, by a sharp drop in car and auto parts exports to the U.S., and high oil prices.
Overall imports rose 10.1% to 6.01 trillion yen ($60.06 billion), while exports rose 8.7% to 6.98 trillion yen ($69.76 billion).
Japan's trade surplus with the U.S. fell 13.3% to 696.9 billion yen ($6.96 billion), marking the sixth straight month of decline.
The trade surplus with Asian nations including China jumped 104.8% to 922.2 billion yen ($9.22 billion), rising seven months in a row.
Japan's deficit with China turned into a small surplus in February at 1.3 billion yen ($13.0 million). Exports to China rose 14.9% to 1.02 trillion yen ($10.1 billion), while imports dropped 15.1% to 1.014 trillion yen ($10.1 billion).
A food poisoning scare linked to imported frozen dumplings from China appear to have taken a toll on food imports from the neighboring export giant. Shipments of food plummeted 28% to 55.3 billion yen ($552.7 million).
Oh it is much worse than thought before..
That's nothing compared with the Yishun site sold a few days ago for a whopping $350 psf ppr!
Imagine this site is in the outlying area (measured by its distance from Orchard Road or Chinatown) in the Lentor area and yet the new flats are projected to sell at between $830 to $900 psf.
Billion Rise must be laughing all the way to the bank since the West Coast Crescent is a much more desirable location measured by its proximity to the IR/town, the NUS, NUH, Vivocity in the south, IMM and the Bird Park in the north. Comparatively, WCC should command at least $1,200 psf for the top three floors in the new 36-storey condo as it has the panoramic view of the west coast and the lush Clementi Park.
So who says the market is going downhill? Sour grapes getting more acidic by the day.
I used to be an eastern living by the seaside in Katong in the good old days until......
the prisioners broke out of jail....
the aeroplanes gathered at the new Changi Airport with the consequential noise pollution....
the east coast sea was reclaimed and the beach vanished.....
........ the others are too sensitive to mention.
So my family sold off the house and we started moving from place to place over the next decade looking for a place to replace our good old Katong house.
The west never appealed to us as it was supposed to be a fishing village with Malay kampongs on stilt houses and sampans parked underneath the house in Pasir Panjang.
But when NUS moved from Bukit Timah to Clementi, things started to change.
The sea also vanished, but HDB flats sprouted in the Hong Leong/Clementi West Area, while houses and condos mushroomed in the Pasir Panjang/South Buono Vista area.
When we went looking for our new home about 20 years ago, Chwee Chian Garden was the only modern building with the surrounding more like some virgin forests and plenty of wooden houses. And the folks in Chwee Chian actually kept chickens with the cocks crowing at 5 am!
Today, Chwee Chian becomes the Treasure Place and there is no more kampong spirit.
West coast has over taken east coast with all the amenities minus the noise pollution -- NUH, Alexandra Hospital, Jurong Hospital, NUS, two polys, SIM, numerous JCs, etc., etc.
It is now 10 mins drive to Vivocity and the IR.
Yes, west coast is going beautiful and no regret for migrating from east to west since 1987.
Oh it is much better than thought before..
Japan February trade surplus up 0.9%
Associated Press
Tokyo, Japan
Wednesday, 26 March 2008, 2:55 PM Japan Time
Japan's trade surplus in February rose 0.9% from a year earlier, marking the first increase in four months, the Finance Ministry said Wednesday.
The surplus rose to 970 billion yen ($9.69 billion), the ministry said, coming in less than the 16.8% rise to 1.123 trillion yen ($11.2 billion) expected by economists surveyed by Dow Jones and Nikkei.
The rise was due to strong exports of automobiles and steel to Asia and machinery shipments to Europe and Asia, the ministry said. The surplus was weighed down, though, by a sharp drop in car and auto parts exports to the U.S., and high oil prices.
Overall imports rose 10.1% to 6.01 trillion yen ($60.06 billion), while exports rose 8.7% to 6.98 trillion yen ($69.76 billion).
Japan's trade surplus with the U.S. fell 13.3% to 696.9 billion yen ($6.96 billion), marking the sixth straight month of decline.
The trade surplus with Asian nations including China jumped 104.8% to 922.2 billion yen ($9.22 billion), rising seven months in a row.
Japan's deficit with China turned into a small surplus in February at 1.3 billion yen ($13.0 million). Exports to China rose 14.9% to 1.02 trillion yen ($10.1 billion), while imports dropped 15.1% to 1.014 trillion yen ($10.1 billion).
A food poisoning scare linked to imported frozen dumplings from China appear to have taken a toll on food imports from the neighboring export giant. Shipments of food plummeted 28% to 55.3 billion yen ($552.7 million).
Don't worry, the sour grapes have already come up with the conclusions that:
1. The $350 psf ppr bid by MCL Land for the Yishun site represents only one developer's, i.e. MCL Land, rosy outlook of the property market, and does not represent general consensus in developers' outlook.
2. The $305 psf ppr bid by Li Kashing's Billion Rise for the West Coast site represents only one developer's, i.e. Billion Rise, rosy outlook of the property market, and does not represent general consensus in developers' outlook.
3. The $850 psf ppr bid by Pramerica Real Estate Investors (Asia) for the Serangoon Site next to the MRT represents only one developer's, i.e. Pramerica Real Estate Investors (Asia), rosy outlook of the property market, and does not represent general consensus in developers' outlook.
I think if they (sour grapes) are not dogmatic and wicked ie wishing bad things to happen to Singapore and its economy so that they can realise their aspiration of owning a condo, forumers will be more gracious and forgiving. Sad but true that such Singaporeans exist in our midst. Shame on you.
Wow! Old Money!
Katong bungalow facing the sea ... how romantic ...
After reading the first few sentences of your post, I initially thought you are a member of OCBC's Lee family.
I think they also had a Katong bungalow facing the sea ... at a time when the hoi polloi were too busy struggling to earn their next meal to worry about going for weekend barbecues by the sea.
Later the socialist government reclaimed the land and spoilt all the frontings of these bungalows.
Recently I read that Lee Seng Gee and his wife Della Lee bought a sea-fronting bungalow plot at Sentosa Cove.
I believe it's to relive the good old days of sea-front bungalow living that's no longer available on the Singapore mainland.
I don't think the sour grapes wish bad things to happen to Singapore in order to realise their aspiration of owning a condo.
There were many opportunities to own a condo between 1998 to 2004, a span of almost 8 years when prices were low and the market was dead. If they had wanted to buy a condo, they would have bought one during those 8 years.
It also doesn't mean that if you want to stay in a condo, you must stay a multi-million condo right in the middle of Orchard Road.
Even in today's highly-priced market, there are still some older condos going very cheaply for around $600,000.
Hillview Regency at Bukit Batok had been advertising in the Straits Times for the past 10 years and a few 904 sf units are still being transacted at a reasonable price of between $560,000 (Dec 2007) and $600,000 (Jan 2008).
But missed already so get sour lor.
If now buy, they got no face mah. So don't buy lor.
But don't buy means missed more, so get even more sour lor.
There will be a few more strong bids for government land sales during 2Q by developers. This will convince would be buyers that they should stop speculating and buy based on affordability. If t is out of reach, scale down your expectation. Be a happy person, it is perfectly OK to live in a resale HDB flat rather than be a bitter gourd or sour grapes.
Any complaints please PM me
March 28, 2008
West Coast condo site awarded to Cheung Kong-linked firm
THE Urban Redevelopment Authority (URA) has awarded the tender for the residential site at West Coast Crescent to Cheung Kong Holdings-linked Billion Rise.
The company submitted the highest bid of $110.44 million - or $305 per sq ft per plot ratio - for the 99-year leasehold condominium site facing West Coast Park and overlooking the sea.
Billion Rise's bid was just 1.4 per cent higher than the next highest offer of $301 psf by Far East unit Tian Hock Properties. MCL Land was next with $103.5 million or $286 psf.
The tender, launched on Jan 23 and which closed on March 19, drew 12 bids from firms defying signs of a property slowdown. The bidders included major and mid-sized developers and contractors.
The West Coast Crescent site can be built up to about 36 storeys.
Some high-floor units would enjoy good views of the ocean and West Coast Park as surrounding buildings are mostly low- to medium-rise, he said.
This tender also reflects the current market situation as some bids came in
relatively low. Industry sources say a few developers were trying their luck with opportunistic bids.
The lowest bid of $50 million, from Teambuild Construction's Scantech Development, works out to just $138 psf.
Other bidders included Sim Lian Land ($236 psf), Hoi Hup Realty ($235 psf), Frasers Centrepoint ($210 psf) and Allgreen Properties ($186 psf). City Developments' Sunny Vista Developments and TID also put in a bid of $180 psf.
Consultants said the top bid of $305 psf will translate into an estimated break-even price of $680 psf to $720 psf for new condos. Units could be sold at between $750 and $800 psf.
Units at nearby Blue Horizon were sold at about $750 psf in the resale market in January and February, while sub-sales of units in Varsity Park and Clementi
Woods were done at $680 psf to $750 psf, according to CBRE Research.
Wah! That was fast.
Re: West Coast condo plot draws whopping 12 bids
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In general, what you comment on sour grape is true. In their opinion, property price cheong too high already. So, even there is any reasonable asking around, they still feel overpriced.
Yes I agree. Sour grapes won't buy even when prices drop 40% in the coming few months and remain there for the next 8 years.
Sour grape = NATO = No Action Talk Only!
Don't be distracted by these noisy folks.
What crap is this?
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