I have extracted an article, written in chinese and translated to english, by Dr CY Chan, a program director in City University of Hong Kong. He is a well known figure as an advisor to many enterprises and a frequent public speaker about world economics:
3 March 2011
"Dear Friends
The stock market fell heavily for the first two months in 2011. Many small punters did not believe the the market would fall andwent in, hoping the market would rebound. Indeed there was no logical reason why the market should fall. Singapore economy is doing well and the government in its budget is paying out financial goodies to the people. US stocks keep rising to two years’ new high. There is no reason for Singapore stock market to fall. In my opinion, the only reason for the market to fall because too many people think there is no reason for it to fall.
Thus, many individual short term punters gamble on market’s rebound, gamble on derivative instruments in particular, hoping to have good returns with small capital outlay. But we cannot deny the big punters with their financial backing are able to
press the stocks until the small punters to surrender and give up. I believe in fundamental analysis. The fundamentals did not turn sour during the past two months. I cannot guess and do not want to guess the market’s short term fluctuations. Now is best to patiently wait for the corporate results which support the stock prices. Listed companies are going to announce their corporate results; those companies with good improved profits would make their stock prices look cheap as PE ratio would be much lower to attract investment interest. The Jasmine Revolution that started in Tunisia has spread like wild fire, engulfing North Africa and all the Arab countries in the Middle East. Tunisia is still in turmoil since the president stepped down. Egypt is under the control of military junta. Oil producing Libya is out of control. German and British oil companies have begun to evacuate their staff. In other word, oil production has stopped. Peoples of Iran, Bahrain, Yemem and Jordan demonstrate to overthrow the governments. Midde East and North Africa countries can be grouped into oil and non oil producing ones. US only concerns with who is who governing the oil producing countries. North Africa and Middle East cooutries can also be grouped into pro US and anti US. US, under the internal pressure of own people will oppose pro US governments to use force to surpress the demonstrations; therefore chances of these pro US regimes being overthrown are greater. Anti US groups will surely use force to clamp down the demonstrations; these regimes will not collapse without bloodshed. Many years ago the fanatic Gaddafi openly financed and supported Muslim extremists. Then one day US fighters flew over Lybian sky and started bombing with intent to kill him. Gaddafi, escaped and his life spared, became tamer since. Later when US invaded Iraq, Gaddafi got scared, and began to communicate with Western countries. There are US and European oil companies exploring Lybian oil fields today.
The unrests in Middle East and North Africa give US headaches. The locality is the largest global oil export region. Rising oil price will lead to price hike in other commodities. US is now in the wake of economic recovery and can ill afford continuous rising oil price that may lead to what the economists termed stagnation.
What is stagnation? It is where vicious inflation and recession happen at the same time. It happened in the 70s of the last century once due to certain rise in oll price. A price rise is either due to demands increase or supplies decrease, a simple economic concept. If the price rise is due to increase in demands, the issue is not so crittcal as it signifies economic prosperity; people have more money to spend
(though it may be due to printing of currency notes). People do not grumble that much if inflation is due to booming economy. In this case, only the less competitive and weaker group needs to be taken care of. If the price rise is the result of short supplies, then except for a few hoarders, most people whose income remains static will suffer as income lags behind rising prices. Consumption and expenditure will be cut, and economic recession follows. Should US economic recovery is hindered by rising oil price, global stock markets will be adversely affected. More frequent turbulences they are in Middle East the better it is for China. The 911 attack in 2001 was the watershed for China. President Bush’s all out efforts to counter terrorism altered his foreign policy. China became the world factory during Bush’s 8 years tenure. In order to have China against terrorism, Bush supported China’s entry to World Trade Organisation, thus opened up US market to China. As a result not a single US factory that originally rolled out cowboy jeans remaind in business. When Obama was elected, US foreign policy changed again. US is trying to woo Muslin countries, getting ready to pulll out from Iraq, liken China as an adversary. Nontheless, America had to ceremoniously welcome China’s Hu Jing Tao on his visit to US in return for financial aids. Inspite of this, the US foreign strategy to contain China has been formulated. Should the dictatorship Middle East regimes collapse one after another and these regimes ruled by Muslim fundamentalists, US foreign policy may yet change again. Obama is now trying to find a suitable pro US candidate to govern Egypt. Obama has no more energy to trade waring with China. The 20 nation finance minister forum on global inbalnce is over. It is conspicuously a meeting of tussle between Western fully developed nations and newly developing nations. Western fully developed nations have gathered some evidences to accuse the newly developing nations for causing the economic inbalance to prosperity at the expense of the fully developed nations. In other word the fullty developed nations are using all kinds of pretexts to blame the newly developing nations for their economic woes. Will the developing nations keep quiet? Not so. Yet to ignore the accusations means each goes its own way. Fully developed nations will exercise protectionism. As a compromise, Chinese finance minister suggested using trade accounts in lieu of exchange rates and foreign reserves as the benchmark. The G20 meeting was an important meeting that would have far reaching consequences to China’s government policy to avoild being accused as the chief culprit of economic inbalance. In short, China will have to increase imports by lowering import tariff to counter her strong exports. The moment when the G20 meeting ended, rumours had it that China would be lowering the import tariff for cometics and milk powder. Take a note of it."
Thursday, March 3, 2011
Wednesday, February 16, 2011
Singapore Entrepreneur - Asian Market Savage
You might have noticed or became a victim of the recent heavy selling in the stock market since the end of Jan. This is not only happening to Singapore market, but all Asian markets, except Japan, which suffered heavy losses too. As mentioned before, Asian markets had a good run in 2010, mainly due to their exceptional recovery from the global crunch in 2008 and hot money pouring from the US and Europe. Now, fund managers are re-considering their exposures in Asia, amid escalating inflation in the region. Authorities in China and South Korea are scrambling to impose higher interest rates to curb the problem. Such measures usually spook investors and they start wondering if the authorities would be able to be in control of the situation. Meanwhile, while Asian governments are scratching their heads over the next measure to impose, fund managers decide to withdraw their funds and plough back into the US and European markets, where there are still sweet growth story. Advanced economies grew 3% in 2010, less than half the pace of Asian economies which grew at 7.1%. Most fund managers think it is catch-up time for these economies. Over the last 3 weeks, these fund managers withdrew a staggering US$7.02B out Asian markets. The movement started out with an excuse to pull the stock market down during the Egypt crisis. After a false rally, the fund managers then started their concerted actions to continuously sell down the market. This amount to date, is the largest fund withdrawal in 3 years. Looking the today's stock market, the music does not seem to have stopped yet. It is expected to last for another few weeks. So, don't get trapped again by any false rally or rebound in coming weeks. A false rally is detected by low volume of transaction pushing up the prices. It will then be followed by heaving selling after that. Fund managers are professionals and have large funds under their control. If they want to sell their shares in the market, they have to get the best value out of them. After selling down the market for a few days, they will start buying them back to create a false rally. Other investors who see it as a market recovery, may follow to buy up the shares. When the price is right again, the fund managers would start selling them again to unwitting investors.
Nonetheless, to be a savvy investor, you need to know the happenings in the market. Opportunities lie out there every day. Don't despair on the performance of the market. The market will never die and whatever goes down will come up. If you have the power to hold, look out for oversold stocks. Stay in the sidelines if you are unsure. These companies are still operating healthily and still collecting their profits. Their shares are just being manipulated in the meantime. When investors start to realize their true value of these companies, buying sentiment would then start. In the wider perspective, Asian markets will start attracting back investors once they are convinced that the governments are still on top of their steering wheels. Moreover, the next round of QE2 from FED is expected to pour into the market again. But do keep in mind, if hot money comes in easily, be prepared that it exits also easily too; a phenomenon that is happening exactly now.
Thursday, January 27, 2011
Singapore Entrepreneur - Hot Money, Easy Money?
We have all seen a phenomenal growth in 2010, especially in the East Asia region. Stock market rallied, jobs created, cash registers kept ringing, and countries' GDPs in healthy numbers. It was all a stark contrast comparing with previous years of 2008 and 2009. The recovery was literally a sharp V-shape.
Most of us who have held on our jobs, operating a business, or even invested in the equity market, would have been rewarded by good bonuses, profits or capital gains in 2010. Those who had invested in properties during the downturn would be handsomely rewarded from a rise in property prices.
From a gloom and doom year in 2009 to a stellar year in 2010, who had made all these possible? Are we still going to continue enjoying such healthy growths?
In this article, I am going to describe the phenomenon and analyse the possible scenarios unfolding.
The Great Recession
I am sure you are aware of the 2 big engines of the world economy; the US and China. The US, for all mother nature's sake, was the main cause of the Great Recession of the century. It started in with a thing called Sub-Prime credit crisis. (For more understanding, you can read my previous blogs in the link.) When Mr Barrack Obama just came on board as the US 44th and first black president in Jan 2009, lucky or not, he inherited his country's and the world's largest problem. Within months, he managed to push through a legistration of a US$1.7 Trillion stimulus package to help the faltering US economy. This amount helped bail out some of the world's biggest banks from the brink of collapse. These banks went through major restructuring and cut down their exposures in toxic assets in the US and turned their heads to Asia. European banks, also largely affected by the American crisis, followed suit.
China as the darling of Asia, has been enjoying relentless growth of double-digit GDP for years. Money started pouring from the US into China, seen as the next hope to help the world out of the great mess. The rest of Asia, seen as emerging economies, enjoyed the overflow from investments in China. So in the whole year of 2010, the Asia region was enjoying an influx of 'hot money' from the US and Europe. The US stimulus package spending (called quantitative easing 1 or QE1) officially ended in March 2010.
So did the QE1 help US and the world?
QE1 spending helped the US economy from collapsing further by saving the banks. It contributed significantly Asia's unprecedented growth. However, it is still far from effective in bringing US back to its pre-crisis level. Unemployment figures, albeit decreasing, are still hovering at record high levels. Home prices are still stagnating.
Quantitaive Easing 2 (QE2)
The FED decided to inject another $600 Billion to further stimulate its economy. The amount will be spent from 2nd quarter of 2011. It will be used to purchase Treasury issued bonds from banks like Goldman Sachs and JP Morgan. These money will be used by the banks to loan out or seek further investments for returns. Such money would be expected to again spill into the Asia region as most investors are still hedging on its phenomenal growth.
Where on earth does US get so much money from?
US, being the largest economy in the world does not mean that it has a mountain of savings in its bank. It is like a large business centre which has a big capability in earning money. But all the money invested in its business are borrowed from the world. It issues Treasury bonds, like IOU, to foreign countries like China, who lends it a lot of money in return for interest. This is one way how US raises money to spend. Alternatively, it can simply print money out of mere paper. This is in the case of QE2, where $600 Billion are printed money. The effect of this, is a devaluation of the US currency. The government, however, does not see it as a problem because devaluation of the US dollars would invite higher exports of its products.
How would the QE2 unfold?
The US, for several years, has been complaining about China's stance in artificially devaluating its reminbi. China has, however, repeatedly denied this and is not succumbing to pressure from the US to appreciate its currency. For a long time, China has an unfair advantage of being the world's largest factory where most businesses from the US are outsourcing their production, tapping on its low labour cost. US has no qualms in going ahead with printing $600 Billion out of thin air to save its economy. This has a double effect of devaluing its dollar, thus making US businesses think twice about purchasing China goods with their weaker dollar. China may embark a tit-for-tat action by further supressing its yuan to maintain its currency value against the US dollar. Other major economies, fearing for their higher cost of goods with the weaker dollar may follow suit by printing more of their own currency. This is already evident in Brazil when its government started buying up all US dollars with its Real. When there was not enough, it started printing more of its own notes. If this continues, a major currency war would emerge. The world would be flooded with increasingly worthless currencies and inflation would rocket. Prices of precious metal like gold would also shoot through the roof when people scramble to find safer reserves. Governments around the world would start imposing high interest rates to curb inflation. When this day happens, a major economy apocalypse would have arrived. This time, much worse than the recent global recession.
But before we see the D day, let us see how the $600 Billion would affect us, people from Asia. Again, hot money would start pouring from the US. We may see further gains in the stock markets and other assets. But do remember that Asia has seen a sharp growth in 2010. Investors may start to see limited upside for Asia's growth in 2011. As hot money has entered into the Asia so easily, it may also exit easily to find better investments outside Asia.
Let us look at the charts below and analyse the behaviour of the equity markets in recent months. The first chart is the Dow Jones Industrial Average (DJIA), second is the Hang Seng Index (HSI) and the third is the Straits Times Index (STI). Each blue eclipse highlights the trading period between Oct 2010 and Jan 2011. The DJIA shows a clear uptrend, while the HSI and STI show sideway trend. In recent trading days, HSI and STI have also been lacklustre in performance despite DJIA seeing several days of rally. These patterns may be exhibiting some early signs of what I have mentioned; hot money exiting Asia and going back to the US. DJIA performance has lagged behind Asia's indexes by more than 20% in 2010 and it may be a catch-up time now. Moreover, this year's hot topic in Asia is about rising inflation, which may put off many investors.
So going forward, while we continue to enjoy the economic growth in 2011, let's not be complacent and always keep a watchout for any sudden market change. Happy investing!
Most of us who have held on our jobs, operating a business, or even invested in the equity market, would have been rewarded by good bonuses, profits or capital gains in 2010. Those who had invested in properties during the downturn would be handsomely rewarded from a rise in property prices.
From a gloom and doom year in 2009 to a stellar year in 2010, who had made all these possible? Are we still going to continue enjoying such healthy growths?
In this article, I am going to describe the phenomenon and analyse the possible scenarios unfolding.
The Great Recession
I am sure you are aware of the 2 big engines of the world economy; the US and China. The US, for all mother nature's sake, was the main cause of the Great Recession of the century. It started in with a thing called Sub-Prime credit crisis. (For more understanding, you can read my previous blogs in the link.) When Mr Barrack Obama just came on board as the US 44th and first black president in Jan 2009, lucky or not, he inherited his country's and the world's largest problem. Within months, he managed to push through a legistration of a US$1.7 Trillion stimulus package to help the faltering US economy. This amount helped bail out some of the world's biggest banks from the brink of collapse. These banks went through major restructuring and cut down their exposures in toxic assets in the US and turned their heads to Asia. European banks, also largely affected by the American crisis, followed suit.
China as the darling of Asia, has been enjoying relentless growth of double-digit GDP for years. Money started pouring from the US into China, seen as the next hope to help the world out of the great mess. The rest of Asia, seen as emerging economies, enjoyed the overflow from investments in China. So in the whole year of 2010, the Asia region was enjoying an influx of 'hot money' from the US and Europe. The US stimulus package spending (called quantitative easing 1 or QE1) officially ended in March 2010.
So did the QE1 help US and the world?
QE1 spending helped the US economy from collapsing further by saving the banks. It contributed significantly Asia's unprecedented growth. However, it is still far from effective in bringing US back to its pre-crisis level. Unemployment figures, albeit decreasing, are still hovering at record high levels. Home prices are still stagnating.
Quantitaive Easing 2 (QE2)
The FED decided to inject another $600 Billion to further stimulate its economy. The amount will be spent from 2nd quarter of 2011. It will be used to purchase Treasury issued bonds from banks like Goldman Sachs and JP Morgan. These money will be used by the banks to loan out or seek further investments for returns. Such money would be expected to again spill into the Asia region as most investors are still hedging on its phenomenal growth.
Where on earth does US get so much money from?
US, being the largest economy in the world does not mean that it has a mountain of savings in its bank. It is like a large business centre which has a big capability in earning money. But all the money invested in its business are borrowed from the world. It issues Treasury bonds, like IOU, to foreign countries like China, who lends it a lot of money in return for interest. This is one way how US raises money to spend. Alternatively, it can simply print money out of mere paper. This is in the case of QE2, where $600 Billion are printed money. The effect of this, is a devaluation of the US currency. The government, however, does not see it as a problem because devaluation of the US dollars would invite higher exports of its products.
How would the QE2 unfold?
The US, for several years, has been complaining about China's stance in artificially devaluating its reminbi. China has, however, repeatedly denied this and is not succumbing to pressure from the US to appreciate its currency. For a long time, China has an unfair advantage of being the world's largest factory where most businesses from the US are outsourcing their production, tapping on its low labour cost. US has no qualms in going ahead with printing $600 Billion out of thin air to save its economy. This has a double effect of devaluing its dollar, thus making US businesses think twice about purchasing China goods with their weaker dollar. China may embark a tit-for-tat action by further supressing its yuan to maintain its currency value against the US dollar. Other major economies, fearing for their higher cost of goods with the weaker dollar may follow suit by printing more of their own currency. This is already evident in Brazil when its government started buying up all US dollars with its Real. When there was not enough, it started printing more of its own notes. If this continues, a major currency war would emerge. The world would be flooded with increasingly worthless currencies and inflation would rocket. Prices of precious metal like gold would also shoot through the roof when people scramble to find safer reserves. Governments around the world would start imposing high interest rates to curb inflation. When this day happens, a major economy apocalypse would have arrived. This time, much worse than the recent global recession.
But before we see the D day, let us see how the $600 Billion would affect us, people from Asia. Again, hot money would start pouring from the US. We may see further gains in the stock markets and other assets. But do remember that Asia has seen a sharp growth in 2010. Investors may start to see limited upside for Asia's growth in 2011. As hot money has entered into the Asia so easily, it may also exit easily to find better investments outside Asia.
Let us look at the charts below and analyse the behaviour of the equity markets in recent months. The first chart is the Dow Jones Industrial Average (DJIA), second is the Hang Seng Index (HSI) and the third is the Straits Times Index (STI). Each blue eclipse highlights the trading period between Oct 2010 and Jan 2011. The DJIA shows a clear uptrend, while the HSI and STI show sideway trend. In recent trading days, HSI and STI have also been lacklustre in performance despite DJIA seeing several days of rally. These patterns may be exhibiting some early signs of what I have mentioned; hot money exiting Asia and going back to the US. DJIA performance has lagged behind Asia's indexes by more than 20% in 2010 and it may be a catch-up time now. Moreover, this year's hot topic in Asia is about rising inflation, which may put off many investors.
So going forward, while we continue to enjoy the economic growth in 2011, let's not be complacent and always keep a watchout for any sudden market change. Happy investing!
Tuesday, January 18, 2011
Singapore Entrepreneur - Latest Property Cooling Measures
Ok. The Singapore government is really coming down hard this time on property speculation. Let us swallow and digest the facts here and analyse what are the possible consequences.
The overwhelming response from the latest launch at Loft@Holland, just before the news was released, evidently showed that the previous 3 rounds of cooling measures had not dampened the mood of property investors. It averagely attracted 3 keen buyers to 1 unit, which resulted in a fully sold project within 2 hours after balloting.
There was a knee jerk reaction from the market after the news release. Many buyers retracted from deals almost signed on the dotted line or even forfeited the option fees. They are expecting a fall in prices in the following months with the slew of tough changes.
For a $1M purchase of a private home, if it were to be a 2nd (or more) property, the maximum loan approved by bank would be 60%, or $600,000. This means that you have to fork out a minimum of $400,000 upfront in both CPF and cash. For middle income earners, this is a sheer amount not to be trifled with. If you intend to let go within a year after the purchase, the Seller's Stamp Duty (SSD) will be 16% of purchase price, which equates to $160,000. This means that you need sell at least 20% above your buying price just to break even, not forgetting other costs like Buyer's Stamp Duty, legal fees and bank early redemption charges.
For a small property investor like me, it is certainly coming on me from all corners. One thing for sure, I will be out of the game for now.
The new rules are certainly going to put a hard brake on price and sales volume. The mass to mid-level market private condominiums and landed properties are going to be the worst affected. For the following months to come, it will be a stage of tough standoff between buyers and sellers. Sellers have the ability to withhold their properties with their financial abilities. Buyers have cash but will hold on to see if prices start to fall further. Property developers, who are keen to letting go their new projects may start the ball rolling by offering perks to potential buyers. But since the government measures are slated, developers have already long factored in their costs and would unlikely compromise in their selling prices anytime soon. For the following months to come, prices are expected to be flat while transaction volumes coming down sharply.
Slowing sales volume in the private sector would likely have a trickle down effect on HDB sales. Cash-over-valuations (COV) would be expected to ease further while prices would continue to hold.
On the other end of the market, which comprises high end condominiums and landed properties, would be the least impacted from the measures. This sector, not restricted to foreign buyers, often attract sophisticated overseas investors with high net worth. Prices would likely continue to grow at a healthy level with a lot of money pumped into the Asian region. Comparatively, Singapore property prices are still lower compared to properties in cities like Hong Kong and Shanghai.
In summary, the Singapore government's agenda is to encourage first-time buyers or upgraders, weed out property speculators and invite foreign investments into the local market. Afterall, its primary interest is to protect the people from being blinded by low interest rates and ever increasing property prices, resulting in a property bubble burst. The consequence would be unimaginable.
The overwhelming response from the latest launch at Loft@Holland, just before the news was released, evidently showed that the previous 3 rounds of cooling measures had not dampened the mood of property investors. It averagely attracted 3 keen buyers to 1 unit, which resulted in a fully sold project within 2 hours after balloting.
There was a knee jerk reaction from the market after the news release. Many buyers retracted from deals almost signed on the dotted line or even forfeited the option fees. They are expecting a fall in prices in the following months with the slew of tough changes.
For a $1M purchase of a private home, if it were to be a 2nd (or more) property, the maximum loan approved by bank would be 60%, or $600,000. This means that you have to fork out a minimum of $400,000 upfront in both CPF and cash. For middle income earners, this is a sheer amount not to be trifled with. If you intend to let go within a year after the purchase, the Seller's Stamp Duty (SSD) will be 16% of purchase price, which equates to $160,000. This means that you need sell at least 20% above your buying price just to break even, not forgetting other costs like Buyer's Stamp Duty, legal fees and bank early redemption charges.
For a small property investor like me, it is certainly coming on me from all corners. One thing for sure, I will be out of the game for now.
The new rules are certainly going to put a hard brake on price and sales volume. The mass to mid-level market private condominiums and landed properties are going to be the worst affected. For the following months to come, it will be a stage of tough standoff between buyers and sellers. Sellers have the ability to withhold their properties with their financial abilities. Buyers have cash but will hold on to see if prices start to fall further. Property developers, who are keen to letting go their new projects may start the ball rolling by offering perks to potential buyers. But since the government measures are slated, developers have already long factored in their costs and would unlikely compromise in their selling prices anytime soon. For the following months to come, prices are expected to be flat while transaction volumes coming down sharply.
Slowing sales volume in the private sector would likely have a trickle down effect on HDB sales. Cash-over-valuations (COV) would be expected to ease further while prices would continue to hold.
On the other end of the market, which comprises high end condominiums and landed properties, would be the least impacted from the measures. This sector, not restricted to foreign buyers, often attract sophisticated overseas investors with high net worth. Prices would likely continue to grow at a healthy level with a lot of money pumped into the Asian region. Comparatively, Singapore property prices are still lower compared to properties in cities like Hong Kong and Shanghai.
In summary, the Singapore government's agenda is to encourage first-time buyers or upgraders, weed out property speculators and invite foreign investments into the local market. Afterall, its primary interest is to protect the people from being blinded by low interest rates and ever increasing property prices, resulting in a property bubble burst. The consequence would be unimaginable.
Thursday, January 13, 2011
Singapore Entrepreneur - Latest 2011 Property Cooling Measures
"The government has announced on Thursday (13 Jan 2011) the fourth round of property cooling measures to 'maintain a stable and sustainable property market'.
They include:
1) Increasing the holding period for imposition of Seller's Stamp Duty (SSD) from the current three years to four years;
2) Raising the SSD rates to 16 per cent, 12 per cent, 8 per cent and 4 per cent of consideration for residential properties which are bought on or after Friday, and are sold in the first, second, third and fourth year of purchase respectively;
3) Lower the Loan-To-Value (LTV) limit to 50 per cent on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals
4) Lower the LTV limit on housing loans granted by financial institutions regulated by the Monetary Authority of Singapore from 70 per cent to 60 per cent for property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase.
The measures will take effect on Friday. "
Copyright © 2010 Singapore Press Holdings. All rights reserved.
----------------------------------------------------------------------------------------
The news is finally released after some long anticipation. It is going to be a hot topic for the next few days. I am rather surprised that they are releasing it so early and implementing it almost immediately. It looks like the government is really hot behind the heels of property speculators. It is certainly going to irritate some investors and put off many people out of the property market. But, it's better to do it now then later. Remember, it's a year of the General Election. This is expected to be held after the 2nd half of the year. It is understandable for the government to impose the rule early to allow negative sentiments to subside in 6 months. Afterall, people would start to realize and appreciate that their dear government is doing it for everyone's good.
If you have been picking up the newspapers daily for the last couple of months, you would have realized that many pleasant news and plans are being published. Big plans like rejuvenating old heartlands like Hougang and Balestier, new MRT extension to Tuas area and big Budget surplus to benefit most lower income people. In my neighbourhood, there are ongoing sprucing up of roads and pavements, and even the HDB blocks around getting a new fresh coat of paint after 5 years.
I guess everyone should know what to do when the time comes, right? Who else can we choose...?
They include:
1) Increasing the holding period for imposition of Seller's Stamp Duty (SSD) from the current three years to four years;
2) Raising the SSD rates to 16 per cent, 12 per cent, 8 per cent and 4 per cent of consideration for residential properties which are bought on or after Friday, and are sold in the first, second, third and fourth year of purchase respectively;
3) Lower the Loan-To-Value (LTV) limit to 50 per cent on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals
4) Lower the LTV limit on housing loans granted by financial institutions regulated by the Monetary Authority of Singapore from 70 per cent to 60 per cent for property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase.
The measures will take effect on Friday. "
Copyright © 2010 Singapore Press Holdings. All rights reserved.
----------------------------------------------------------------------------------------
The news is finally released after some long anticipation. It is going to be a hot topic for the next few days. I am rather surprised that they are releasing it so early and implementing it almost immediately. It looks like the government is really hot behind the heels of property speculators. It is certainly going to irritate some investors and put off many people out of the property market. But, it's better to do it now then later. Remember, it's a year of the General Election. This is expected to be held after the 2nd half of the year. It is understandable for the government to impose the rule early to allow negative sentiments to subside in 6 months. Afterall, people would start to realize and appreciate that their dear government is doing it for everyone's good.
If you have been picking up the newspapers daily for the last couple of months, you would have realized that many pleasant news and plans are being published. Big plans like rejuvenating old heartlands like Hougang and Balestier, new MRT extension to Tuas area and big Budget surplus to benefit most lower income people. In my neighbourhood, there are ongoing sprucing up of roads and pavements, and even the HDB blocks around getting a new fresh coat of paint after 5 years.
I guess everyone should know what to do when the time comes, right? Who else can we choose...?
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