Economic News

[PuteriWorld]

Singapore overtakes Tokyo to bag top spot in Asia, third globally in 'Business of Cities' ranking. The Business of Cities study ranks Singapore in third place worldwide, behind New York and London, and also names it the No. 1 city globally for business friendliness. - See more at: http://www.straitstimes.com/news/bu...spot-asia-third-globally#sthash.j4YMkwDo.dpuf

However, economist Song Seng Wun noted that one needs to be careful with such comparisons as London and Tokyo have a hinterland, unlike Singapore.

Song Seng Wun's point seems to suggest that hinterland is important. If so, I can only see Singapore seeking to integrate itself even more seamlessly with Iskandar, which could then develop into what may be S'pore's 'hinterland'. I suppose this is what S'pore is already trying to do when it re-affirmed its support for Iskandar at the recent leaders' retreat.

Actually we all know initially Singapore govt is very anti-iskandar.. however after a few years of holding on which resulted in the PAP govt almost kena booted out due to overcrowding population and FT issues and overpriced factories and residences etc, they got no choice but to look into Iskandar as a hinterland and thats why Capitaland & big shots like Ascendas entered the foray.

In fact one of my Taiwanese cilent was looking to buy a semi d factory in Singapore. After sourcing around, a 25 year leasehold factory of that type cost S$3 million. Eventually I bought him to I-Parc @ PTP where he was simply impressed and blown away. So near to 2nd link and its spacious and new. Price? S$660,000 freehold. 5 times cheaper than Singapore. I helped him saved $2.5 million and he rewarded me with a nice watch as as gift.

 

[enjoylife77]

All of my friend's property investment in Iskandar back in 2009 recession are now sitting on paper loss of at least 10% with difficulty finding buyer. If one's financial circumstances deteriorate and need cash, it is a tough market.

 

[Manhattan]

Whether a cheap factory buy is a good buy is something to be seen. After securing a good buy for factory space, the boss need to make sure he can find the skilled workers and the goods he produced can moved efficiently to his customers. Oh, also need to ensure the other infrastructure (water, electricity, internet, proximity to his raw material suppliers, etc) in the untested industrial park can be up to mark. In iskandar, nothing can be taken for granted.

 

[PuteriWorld]

There are always people who are afraid to leave their comfort zone for a place overseas.

When I broached the idea of having a house in JB some years ago before snapping up a house for a whopping RM 700K when most semi ds are RM 400k, many of my colleagues were stunned. I wasnt looking for investment, but a place to retire and relax.. plant some trees for fruits which I had done when I was a boy staying in a Kampung

They were worried about safety.. they were worried about whether the house has water or internet or whether one can procure items cheaply and in nearby area. They were worried about the bumis asking you to balik kampong or chanting racists slogan into your cina face ( We later found out the bumis are really the friendiest race in Malaysia+Singapore combined )

I agree I had some difficulties in securing internet lines as TM Unifi was not even launched. I have to make do without any internet for a few years. However, freeing up the internet surfing time allowed me to take leisurely rides to Tanjong Piai, Kukup, Desaru, Sungei Reggit etc for short makan and relaxing scenic views of the ocean. I go for cheap massage weekly. All these I did it alone while driving around in a decent S-plate new car. No robberies, no kidnap. Nothing.

I always warn my friends around me who has been envying me for my life in Malaysia not to venture there if they are taking things for granted and if they think the power supplies or internet will be spoonfed into your face. This is not how Malaysia ( or the real world ) works.

I am happy for my friend. S$660k Vs S$3 million. By freeing up RM 6.3 million for him, I have done my part as a friend and if he wants to gripe about finding labour, finding internet, finding water etc, then he has himself to blame as the Malaysia firms are facing the same issue, same shortage. Even the Singapore firms are facing serious foreign labour issues.

But of course being a typical non-Singaporean businessman, these big problems perceived by Singaporeans suddenly become non-issues to my friend.

 

[Jetstream]

After 2 tragic air disasters last year and with the hiring of a new Angmoh CEO this month, Malaysian Airlines will be totally revamped to restart the airline as a new startup.
According to the report, all the staff except the CEO will be first fired and then rehire but out of the original 20,000 staff strength, only 2/3 will be hire back and on new terms.
That means that suddenly about 7,000 staff across the board will be out of job!
This is really a piece of bad news especially when the govt's recent announcement on freezing new employment, who will be able to absorb that many?
Worse, the govt will be trimming down the current bloated staff strength under the guise of improving productivity, so more unemployment are expected.
Massive unemployment for a longer period will always be the beginning of more depressing thing to come like car repro, home loan default, and more.........

Don't worry, Fly Mojo will mop them up. U may have read this is a new airline startkng up with Senai as its hub. That means more activity down south

 

[Valdez]

All of my friend's property investment in Iskandar back in 2009 recession are now sitting on paper loss of at least 10% with difficulty finding buyer. If one's financial circumstances deteriorate and need cash, it is a tough market.

Not everyone who bought lose money. Got a friend who bought a 1 acre bungalow lot in 2008 and made a profit of more than rm2 million last year.

 

[cow138]

If buying for own stay with the sliding currency and bad economic outlook then it should be OK. Unlikely for the Banks to raise interest rates under such conditions. But for flippers then it's gonna be a whole different ball game.

 

[PuteriWorld]

All of my friend's property investment in Iskandar back in 2009 recession are now sitting on paper loss of at least 10% with difficulty finding buyer. If one's financial circumstances deteriorate and need cash, it is a tough market.

I am having a difficulty time helping my friends to source for firesale units. Horizon Residence, which many bought @ RM 300k and now the fire sales are going @ RM 450k and my friend budget is RM 300k

HH semis of which many bought @ RM 700-RM800k are still shouting @ RM 1.5m and above whereby my friend budget is RM 800k. The new houses of Semis are worse as we visited the sales office and was offered RM 2.8 million. When will it ever drop to RM 700k for a semi D man.

For those PH Imperia owners, if you are planning to sell your units, I might have friends who are willing to buy for their retirement @ 10 -20% below your SPA price. Pls do share with me... estimated RM 500-RM 600psf.

 

[Manhattan]

I am having a difficulty time helping my friends to source for firesale units. Horizon Residence, which many bought @ RM 300k and now the fire sales are going @ RM 450k and my friend budget is RM 300k

HH semis of which many bought @ RM 700-RM800k are still shouting @ RM 1.5m and above whereby my friend budget is RM 800k. The new houses of Semis are worse as we visited the sales office and was offered RM 2.8 million. When will it ever drop to RM 700k for a semi D man.

For those PH Imperia owners, if you are planning to sell your units, I might have friends who are willing to buy for their retirement @ 10 -20% below your SPA price. Pls do share with me... estimated RM 500-RM 600psf.

You mean imperia was selling at approx. RM 700 PSF? wow. That was good price.

 

[snowbird]

Don't worry, Fly Mojo will mop them up. U may have read this is a new airline startkng up with Senai as its hub. That means more activity down south

This new startup Fly Mojo is only operational by year end and its only a little airline company using a few little planes flying to few regional places can only take in few people.
Those retrenched are those who fell thru the sieving and of the lower productive people so may not even fit the requirement.
And what an awful name for the new airline - FLY MOJO.
In Cantonese it sound like 飞 冇 咗! （Fly Lost, Fly Gone or Fly No More)

 

[Vohkster]

Were there rumors saying that CIMB is the next company up for restructuring? Est 8,000 jobs on the line.

Sigh.i wouldn't want to be robbed by a former tea lady one day when times are really bad.

 

[cow138]

CIMB undergoing restructuring.?
That's a bad sign. Nowadays hear like a lot of such restructuring going on. Looks like the economy is losing a lot of steam.

 

[PuteriWorld]

Singapore Standchart also went thru a major "revamp" and they are still kicking now. Nothing much to worry

 

[cow138]

Not so worried about the company in question but more on the fact that there seems to be more problem with the economy slowing down.

 

[PuteriWorld]

Actually I received more than 20 pm from sellers who would like to sell their houses. I posted this because there are people here who were talking about prices moving south or crashing etc so I try to help my friends to source for cheap firesales which are 20% or so below the SPA price.

So far no avail. The lowest price I got was a big unit in PH @ RM 720psf.. this is not firesale leh

Seems likely we need to wait for another 1-2 year for prices to really come down

 

[cow138]

Current situation still don't warrant a fire sale yet. With the weakening ringgit, cost of ownership is getting slightly lower.

 

[snowbird]

MALAYSIA'S central bank is unlikely to reinstate the exchange-rate peg it imposed during the Asian financial crisis, even though the ringgit is sliding fast to levels seen against the greenback then, economists said yesterday.
The currency slid to a nine-year low of 3.7745 to the United States dollar on Monday - only slightly above the 3.80 peg introduced in 1998 - on the back of unexpectedly robust US jobs data.
The ringgit did claw back some ground yesterday, rising to 3.7464 against the greenback.
"Unless there is a significant upward pressure beyond that, we do not think that Bank Negara will consider going back to a peg as it would undermine investors' confidence in the country," said United Overseas Bank economist Ho Woei Chen. The ringgit is also struggling against the Singdollar, hitting 2.7772 yesterday - the lowest level since 1981 - and down from 2.7689 on Monday.

Bank Negara governor Zeti Akhtar Aziz told Bloomberg on Monday the ringgit is trading at levels that are "not reflective of the fundamentals of the Malaysian economy".
Some analysts say the currency could weaken to 3.90 to the US dollar if Malaysia's sovereign credit rating is downgraded by Fitch Ratings by the end of the month.
Fitch has put Malaysia's rating under review with a negative outlook, citing concerns over the country's worsening trade balance and mounting troubles at heavily indebted state investment fund 1Malaysia Development Berhad (1MDB).
Jitters over the 1MDB issue have already triggered foreign fund outflows that have pressured the ringgit further, said IG market strategist Bernard Aw.

Talk of a peg is an unwelcome reminder of the crisis in the late 1990s.
Malaysia pegged the ringgit at 3.80 to the greenback in September 1998 after its currency fell 35 per cent in 1997.
It maintained the peg for almost seven years. Credit Suisse economist Michael Wan believes the Malaysian central bank will "aim at smoothing volatility as we move towards 3.80, rather than defending that level".
That is because the exchange rate move is partly driven by the US dollar rally, which is affecting the whole region and not just the ringgit, he added.
"We expect Bank Negara to be prudent with its forex reserves. Reinstating the peg would probably result in a huge drawdown in forex reserves, unless the peg is accompanied with draconian capital controls," Mr Wan said. http://business.asiaone.com/news/ringgit-unlikely-return-rate-peg



Bank Negara governor Zeti had kept saying that the 1 MDB scandal will not affect the financial market but she refused to admit what is involved is not just that RM42 billion in question but the country's integrity!
If MY's sovereign credit rating get downgraded by Fitch Ratings and worse, if coupled with massive foreign funds outflow, the RM will be greatly affected and all can look forward to rates @2.8 soon after!
While she had announced the investigation of the dealings in 1MDB only just recently, people are having doubts on her ability to do so and why so late!
1MDB involves the PM, the Finance Minister and the signature authority in 1MDB is the same person, so how can she be able to investigate her immediate boss and big boss which is again the same person!
Is she aware of all the shady Billion RM dealings in 1MDB or she was sleeping on her job or she was covering up for her boss - What was the Central Bank doing all the while?
She is actually in a very tight spot.

 

[RedsYNWA]

Most people in this forum should be loving the ringgit drop right? Unless one paid up fully in cash, i cant see why anyone wont be loving this drop, especially since Bank Negara's hands are tied if they want to raise interest rates to combat the currency drop.

 

[snowbird]

Most people in this forum should be loving the ringgit drop right? Unless one paid up fully in cash, i cant see why anyone wont be loving this drop, especially since Bank Negara's hands are tied if they want to raise interest rates to combat the currency drop.

Its not so simple. You're just talking about the benefit to several SG home buyers here.
If the RM do , the repercussion and shock waves will be alarming.
Worse hit will be the importers and borrowers transacting in USD.
The famous 1MDB debt of RM42 billions will become almost RM50 billions overnight.
Developers may get their profit margin reduced or worse, totally wiped out.
For the regular Malaysians, its a currency devaluation, everything will be much more expensive.
Those with children studying overseas will be paying more.
The budgeting for the HSR, RTS may need to be revised, etc...............the list goes on.

 

[Tekkun]

Replay of 1997 financial crisis:

1. When credit rating was downgraded, the cost of borrowing goes up. Would you believe at that time I had a FD certificate with an interest rate of 10%?
2. Business loan interests went as high as 17%. Banks literally went around cancelling all trade lines and OD facilities that are not utilised.
3. Businesses crashed and many people were jobless. Factories remained shut and rentals subsidised mortgage repayments.
4. As a result, there's a glut of unsold properties that lasted 3 years before it picked up and then crashed again in 2003.