Singapore's CPI is up 5.4% on year!
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1148618/1/.html
Yet at this point in time our exports are weakening due to strong Singapore Dollar. I have mentioned it before, we need a change from our exchange rate policy. Basically we do not interfere with interest rates. We combat inflation by strengthening our Singapore Dollar. Yet interest rates are at an all time low! Finance Minister are you listening? Of course not, I'm a nobody to him. Perhaps I should go to my elected president to air my views?
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Wednesday, August 24, 2011
Tuesday, August 23, 2011
Luxury home prices in S'pore down 1.7% in Q2
Interesting report...
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1148502/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1148502/1/.html
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Friday, August 19, 2011
Singapore is NOT immune to a global crisis
I've had really stubborn people saying that Singapore is immune to any external shocks especially with regards to any impending financial crisis. Me being a real estate practitioner, I get this comment often from sellers of properties who ask for ridiculous prices for their properties. They often have the notion that Singapore is a land scarce city state with fundamentals so sound that even a slight correction in property prices is unthinkable. Instead, they see the pace in the increase of prices moderating. ie. prices will still rise in the short, medium and long term but at a slower rate.
Then comes a reality check.
Singapore is the fifteenth largest trading partner of the United States.
Source:
http://en.wikipedia.org/wiki/Economy_of_Singapore
What this means is that even though we think that the rise of China and India can shield us from any slowdown from the United States, it is important to note the vast size of the US consumerist economy.
The US makes up 28.90% of the world's consumer market
Source:
http://www.rediff.com/business/slide-show/slide-show-1-worlds-25-largest-consumer-markets/20110729.htm
In contrast, China makes up 5.29% and India makes up 2.12%. What this means is that the US is almost 4 times as large a consumer than both China and India combined!
Will there be a scenario whereby the United States and Europe go into a recession and Singapore continues to boom? I do not think so.
Then why the huge rise in asset prices the last three to four years? My answer would focus on three main reasons.
1) The extremely low interest rates made it very attractive for home buyers as most buyers calculate "monthly payments" rather than use a "what if interest rates were much higher" analysis before committing to a propety.
2) Excess foreigners due to lax government policy
3) (HIGHLY OVERLOOKED) Window dressing of the economy before a very important general election for Singapore in May 2011. Usually in the year or two before a general election, especially when the ruling party requires to garner support, money will be pumped into the economy so that everyone is doing well and the feel good factor will contribute to populist support for the government. I believe that if this was not done, we may have had an even bleaker election result for the ruling People's Action Party.
Recession soon? Possibly. Correction in asset prices in Singapore soon? Most probably.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Then comes a reality check.
Singapore is the fifteenth largest trading partner of the United States.
Source:
http://en.wikipedia.org/wiki/Economy_of_Singapore
What this means is that even though we think that the rise of China and India can shield us from any slowdown from the United States, it is important to note the vast size of the US consumerist economy.
The US makes up 28.90% of the world's consumer market
Source:
http://www.rediff.com/business/slide-show/slide-show-1-worlds-25-largest-consumer-markets/20110729.htm
In contrast, China makes up 5.29% and India makes up 2.12%. What this means is that the US is almost 4 times as large a consumer than both China and India combined!
Will there be a scenario whereby the United States and Europe go into a recession and Singapore continues to boom? I do not think so.
Then why the huge rise in asset prices the last three to four years? My answer would focus on three main reasons.
1) The extremely low interest rates made it very attractive for home buyers as most buyers calculate "monthly payments" rather than use a "what if interest rates were much higher" analysis before committing to a propety.
2) Excess foreigners due to lax government policy
3) (HIGHLY OVERLOOKED) Window dressing of the economy before a very important general election for Singapore in May 2011. Usually in the year or two before a general election, especially when the ruling party requires to garner support, money will be pumped into the economy so that everyone is doing well and the feel good factor will contribute to populist support for the government. I believe that if this was not done, we may have had an even bleaker election result for the ruling People's Action Party.
Recession soon? Possibly. Correction in asset prices in Singapore soon? Most probably.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Monday, August 15, 2011
London Riots
Recently there has been absolute anarchy in England. Riots everywhere. Good thing Singapore is not such a country whereby hooligans ply the streets. Whatever the reason, it is plain stupid to use violence to solve matters. Japan was devastated by an earthquake, England is being devastated by it's own people.
Click on link to view scenes of the violence...
http://www.cnbc.com/id/44059635?slide=1
It is fortunate to be living in Singapore...
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Click on link to view scenes of the violence...
http://www.cnbc.com/id/44059635?slide=1
It is fortunate to be living in Singapore...
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Thursday, August 11, 2011
Proud to be Singaporean...
Weird... Watching the national day parade actually makes me feel really proud to be Singaporean. I have always reiterated the point to my fellow Singaporeans that this is home. I could not picture myself living anywhere else.
Majulah Singapura!!!
Anyway, I found a really cute kid reciting the Singapore pledge in Mandarin... Future member of parliament?
Oh yes, and for the benefit of those who need to know the English version.
Just some comic relief to take the heat of an ever falling stock market.Happy Birthday Singapore! Let's move forward together!
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Majulah Singapura!!!
Anyway, I found a really cute kid reciting the Singapore pledge in Mandarin... Future member of parliament?
Oh yes, and for the benefit of those who need to know the English version.
Just some comic relief to take the heat of an ever falling stock market.Happy Birthday Singapore! Let's move forward together!
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Friday, August 05, 2011
Crazy buyers
I am really shocked at how Singaporeans spend their money. It is not just the everyday items like buying clothes or spending on posh restaurants. It is the fact that many Singaporeans are paying ridiculous amounts of money for big ticket items like cars and property. A brand new 1.8 litre Honda costs about $130,000 today when I paid $70,000 for the same car 4 years ago. Public housing or HDB flats are going for insane cash over valuations (COV). Sellers are commanding COV premiums and yet buyers are forking out what the sellers are asking. It is now rather normal to have a Sengkang flat commanding in excess of $60,000 COV and yet there will be takers for the flat.
This then brings me to think carefully. Are Singaporeans that rich? Are businesses doing that well that everyone's pay has gone up by such a large amount to be able to afford such prices? I look around and then I just don't get it. Everyone seems to be making about the same amount of money 3-4 years ago. Businesses are doing better than in 2008 but are perhaps at pre-recession levels. Why then the abnormal level of optimism? Why is everyone so sure that incomes will remain at this level? That property prices will only continue to increase. Cars can only get more expensive. I am not trying to be a wet blanket but I do not believe that this boom can continue forever.
So where did this huge wave of money come from? To understand what is happening in the world, I would suggest reading and watching this article and video from CNBC.
http://www.cnbc.com/id/43268061
It is about "quantitative easing" in the US. This basically translates to flooding the economy with money to try to jump start a dead economy. Basically it applies to the US because their economy is in a very bad shape right now but then it should have no business with places like Singapore when we are seeing our economy skyrocket and everything is getting more expensive. However, because our economies are interlinked, money that is being pumped into the US economy is inadvertently being pumped into ours. What can we do? Nothing much. Is there a problem with this? I believe so. Because of the large amounts of money sloshing about in our economy, banks are lending at insanely low rates. At times with interest rates of as low as 0.2% per annum!
What I am trying to tell everyone is that the boom may be induced by the west. Their economies are doing poorly and money is being pumped into the system. It is merely flowing over to us. Is the stock market overpriced? Most probably so. Companies are doing well because money is coming in for investments. Everywhere you turn there are construction cranes, road works, cabling, upgrading and development of buildings. Why should companies not turn a huge profit? Is the Singapore property market overheated? Most probably so. There are Singaporeans committing to properties as though it is a sure way of making money. Quite a good number hold more than one property. The common excuse? "For investment". Like any investment, there are risks involved. Property investments are risky if you buy in at a historical high and that is where we are currently.
Recently the stock market has not been too kind. Stocks have been falling. I have a few remisier friends who still believe that the market can be played. My advice to the rest is that if you do not know what is going on, best thing to do is to shut yourself out from the stock market. The stock brokers will not want to hear this. They are like doctors prescribing you medicine wanting you to feel better but not curing you forever. They want you to visit the market often as they make money from activity.
There is still money to be made but I do not know when and where is the peak. Truth be told, I think we are in the midst of a bubble. I just do not know when it will pop.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
This then brings me to think carefully. Are Singaporeans that rich? Are businesses doing that well that everyone's pay has gone up by such a large amount to be able to afford such prices? I look around and then I just don't get it. Everyone seems to be making about the same amount of money 3-4 years ago. Businesses are doing better than in 2008 but are perhaps at pre-recession levels. Why then the abnormal level of optimism? Why is everyone so sure that incomes will remain at this level? That property prices will only continue to increase. Cars can only get more expensive. I am not trying to be a wet blanket but I do not believe that this boom can continue forever.
So where did this huge wave of money come from? To understand what is happening in the world, I would suggest reading and watching this article and video from CNBC.
http://www.cnbc.com/id/43268061
It is about "quantitative easing" in the US. This basically translates to flooding the economy with money to try to jump start a dead economy. Basically it applies to the US because their economy is in a very bad shape right now but then it should have no business with places like Singapore when we are seeing our economy skyrocket and everything is getting more expensive. However, because our economies are interlinked, money that is being pumped into the US economy is inadvertently being pumped into ours. What can we do? Nothing much. Is there a problem with this? I believe so. Because of the large amounts of money sloshing about in our economy, banks are lending at insanely low rates. At times with interest rates of as low as 0.2% per annum!
What I am trying to tell everyone is that the boom may be induced by the west. Their economies are doing poorly and money is being pumped into the system. It is merely flowing over to us. Is the stock market overpriced? Most probably so. Companies are doing well because money is coming in for investments. Everywhere you turn there are construction cranes, road works, cabling, upgrading and development of buildings. Why should companies not turn a huge profit? Is the Singapore property market overheated? Most probably so. There are Singaporeans committing to properties as though it is a sure way of making money. Quite a good number hold more than one property. The common excuse? "For investment". Like any investment, there are risks involved. Property investments are risky if you buy in at a historical high and that is where we are currently.
Recently the stock market has not been too kind. Stocks have been falling. I have a few remisier friends who still believe that the market can be played. My advice to the rest is that if you do not know what is going on, best thing to do is to shut yourself out from the stock market. The stock brokers will not want to hear this. They are like doctors prescribing you medicine wanting you to feel better but not curing you forever. They want you to visit the market often as they make money from activity.
There is still money to be made but I do not know when and where is the peak. Truth be told, I think we are in the midst of a bubble. I just do not know when it will pop.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Tuesday, August 02, 2011
A survey on real estate sentiment
S'pore property prices may continue climbing: survey
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1144363/1/.html
Interesting how such a trivial survey can make the news. Well, we live in a media saturated society. I believe market will be flat with a very small upside to prices. I too agree that the economic downturn later in 2011 will not materialize. Just a guess.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1144363/1/.html
Interesting how such a trivial survey can make the news. Well, we live in a media saturated society. I believe market will be flat with a very small upside to prices. I too agree that the economic downturn later in 2011 will not materialize. Just a guess.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Where has all the money gone to?
The rich poor divide is getting wider...
Now where did all that money go to?
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
TAAA DAAA!!!!!!!!!!!!
I used to hold Las Vegas Sands shares. It is traded on the US stock exchange under the symbol LVS. I bought it at about USD$9 and sold it off for USD$42. It netted me a very handsome profit. Why did the stock run up so significantly? Basically Las Vegas Sands runs a couple of casinos, namely one in Las Vegas itself, Macau and most prominently, Singapore.
The gaming market is huge in Asia. LVS eanrs about 95% of it's income from the Asian market and Singapore is poised to profit from this, apparently...
http://www.reuters.com/article/2011/07/27/sands-earns-idUSL3E7IQ50L20110727
Or will we actually...
If setting up a casino was as simple as we made it out to be. Personally I do not think we were and we currently are still not ready for two casinos. The social problems will far outweigh the economic benefits that come attached to setting up the two integrated resorts. Now what actually happened?
1) The building of the casinos actually caused an unreal spike in building activity. This caused a spike in construction costs across the board. Manpower was being directed to the building of not one but two very major integrated resorts. Let us be clear on this. This was something Singapore had never embarked on before. I do not think many Singaporeans understand the magnitude of what happened.
2) The building of the casinos caused an acute shortage of raw materials such as steel and sand. Thus pushing up prices of such raw materials. Since building residential properties also required similar raw materials, this escalated the costs of developing buildings and what developers did was to pass on the costs to the end buyers since they could command prices in a country whereby there was an acute housing shortage due to the lenient immigration policy.
3) The building of the casinos caused a huge wave of extreme optimism in the region. Singapore was seen as the darling of Asia. Not just South-East Asia but the whole of Asia. It was the "in" place to be. Property prices were expected to escalate after the completion of the casinos and thus sellers demanded more, developers increased their prices, buyers rushed in. Just to jump on the bandwagon before prices escalated even further.
The news read that Singapore achieved record economic growth. The reality is that the negative aspects of the two casinos will not be fully felt by our community till a much later date. We are already suffering from the highly inflated economy and historically high property prices. I would like to reiterate what Senior Minister of State (Information, Communications and the Arts and Environment and Water Resources) Grace Fu had commented.
Grace Fu voices concern over effects of casinos
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1143734/1/.html
I have a couple of people whom I know who have a gambling problem. Increasing the entry fee will not be much of a deterrence to them. The $100 will only stop those who are interested to go in and take a look "for fun".
Mercenary as it may seem, we cannot do much to right the wrongs of such a drastic policy to welcome two casinos into our country. Money was made from the casinos. The gambling addicts got poorer, the poor are still poor, the middle income people are not any richer in terms of real income.
Only the super rich have made significant increases in their wealth.
Oh and did I leave someone out?
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1103967/1/.html
Sorry PM Lee, I support you wholeheartedly but I just do not agree with going the low road of setting up two casinos in our beloved Singapore.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
Now where did all that money go to?
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
TAAA DAAA!!!!!!!!!!!!
I used to hold Las Vegas Sands shares. It is traded on the US stock exchange under the symbol LVS. I bought it at about USD$9 and sold it off for USD$42. It netted me a very handsome profit. Why did the stock run up so significantly? Basically Las Vegas Sands runs a couple of casinos, namely one in Las Vegas itself, Macau and most prominently, Singapore.
The gaming market is huge in Asia. LVS eanrs about 95% of it's income from the Asian market and Singapore is poised to profit from this, apparently...
http://www.reuters.com/article/2011/07/27/sands-earns-idUSL3E7IQ50L20110727
Or will we actually...
If setting up a casino was as simple as we made it out to be. Personally I do not think we were and we currently are still not ready for two casinos. The social problems will far outweigh the economic benefits that come attached to setting up the two integrated resorts. Now what actually happened?
1) The building of the casinos actually caused an unreal spike in building activity. This caused a spike in construction costs across the board. Manpower was being directed to the building of not one but two very major integrated resorts. Let us be clear on this. This was something Singapore had never embarked on before. I do not think many Singaporeans understand the magnitude of what happened.
2) The building of the casinos caused an acute shortage of raw materials such as steel and sand. Thus pushing up prices of such raw materials. Since building residential properties also required similar raw materials, this escalated the costs of developing buildings and what developers did was to pass on the costs to the end buyers since they could command prices in a country whereby there was an acute housing shortage due to the lenient immigration policy.
3) The building of the casinos caused a huge wave of extreme optimism in the region. Singapore was seen as the darling of Asia. Not just South-East Asia but the whole of Asia. It was the "in" place to be. Property prices were expected to escalate after the completion of the casinos and thus sellers demanded more, developers increased their prices, buyers rushed in. Just to jump on the bandwagon before prices escalated even further.
The news read that Singapore achieved record economic growth. The reality is that the negative aspects of the two casinos will not be fully felt by our community till a much later date. We are already suffering from the highly inflated economy and historically high property prices. I would like to reiterate what Senior Minister of State (Information, Communications and the Arts and Environment and Water Resources) Grace Fu had commented.
Grace Fu voices concern over effects of casinos
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1143734/1/.html
I have a couple of people whom I know who have a gambling problem. Increasing the entry fee will not be much of a deterrence to them. The $100 will only stop those who are interested to go in and take a look "for fun".
Mercenary as it may seem, we cannot do much to right the wrongs of such a drastic policy to welcome two casinos into our country. Money was made from the casinos. The gambling addicts got poorer, the poor are still poor, the middle income people are not any richer in terms of real income.
Only the super rich have made significant increases in their wealth.
Oh and did I leave someone out?
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1103967/1/.html
Sorry PM Lee, I support you wholeheartedly but I just do not agree with going the low road of setting up two casinos in our beloved Singapore.
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
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