'Leadership position' helped SingTel snag iPhone contract | ||
| Telco rings up $3.96b in full-year gains despite challenging environment | ||
| By Chua Hian Hou | ||
The telco's chief executive for Singapore, Mr Allen Lew, told a conference on its results yesterday that the 'leadership position' its 2.57 million mobile customers here had conferred on it had definitely 'contributed to the iPhone deal'. SingTel announced on Monday that it will launch the iPhone later this year, ending months of speculation about whether Singapore would ever get the device. Rival telcos StarHub and M1 remain in discussions with Apple. StarHub has indicated that it was confident of securing distribution deals. Mr Lew told the conference that the company intends to ensure that its pole position in the market is 'maintained and unchallenged'. It reiterated this stance in a statement accompanying its results, where it noted the focus in Singapore is on gaining market share. SingTel underlined its strength by unveiling a solid set of numbers yesterday. Net profit for the year to March 31 was $3.96 billion, up 4.8 per cent from the year before, with revenue rising 11 per cent to $14.8 billion. Earnings per share for the year was 24.9 cents, up from 23.25 cents, while group net asset value per share rose to $1.32, from $1.312. The firm declared a final dividend of 6.9 cents per share for a total payout of 12.5 cents per share. It will revise its dividend payout ratio, from 40 per cent to 50 per cent of underlying earnings, to 45 per cent to 60 per cent. Group chief executive Chua Sock Koong said 'all our businesses are performing well and the group's fundamentals are strong' despite a challenging environment, especially in Singapore and in Australia. The results marked her first year at the helm of the Asia-Pacific's largest telecommunications group. While the company maintained its double-digit earnings growth target, Ms Chua warned that the uncertain macroeconomic environment was likely to have an impact on future growth. The chief executive for SingTel's international operations, Mr Lim Chuan Poh, said the global credit crisis had impacted the company in another way. Tighter credit meant fewer competitors for deals but also fewer deals as potential sellers pulled back, worried that they would not get a good sale price in such a climate. In the last 15 years, SingTel has spent about $18 billion acquiring stakes in foreign, high-growth telcos such as India's Bharti Airtel and Indonesia's Telkomsel. In a report issued after the results were released, DBS Vickers maintained its 'hold' rating on SingTel and set a price target of $3.98. While SingTel had shown 'strong results', said analyst Sachin Mittal, its 6.9 cent dividend 'fell short of our expectations of 15 cents'. SingTel shares fell two cents to $3.73. now my two cents worth: HAH. our blog is seriously becoming some econs bulletin. and 26 posts in like 3 days is just crazy. i don't know if the deadline's over (dr siva said 18th may but SMB says 23rd May) but whatever it is, this article was pretty interesting to me. like OKAY doesn't everyone just want an iphone! :D:D:D anyways, to make some sense out of this ECONOMICALLY, it seems monopoly (or oligopoly here) has it's advantages :D and this is just a fine example of internal (financial) EOS. except instead of the "easier to obtain loans" thing, now it's "easier to secure contracts". Is this still counted under FINANCIAL EOS then? uhh i think not right? but it's SOME kind of internal EOS. No idea what it's called though. :D:D:D but i'm glad for it anyways, since it means the IPHONE IS COMING TO SINGAPORE SOOOOOOON! | ||
Wednesday, May 21, 2008
IPHONE
Monday, May 19, 2008
America's property crisis
The hammer drops
Oct 4th 2007 MAPLE HEIGHTS AND SAN BERNARDINO
From The Economist print edition
America's houses are being repossessed at a record rate. What comes next?
Illustration by Satoshi Kambayashi
America's houses are being repossessed at a record rate. What comes next?
Illustration by Satoshi Kambayashi
AT FIRST sight, Maple Heights, just outside Cleveland, looks much like any other ageing suburb in the industrial mid-west: a patchwork of small colonial-style houses built after the second world war, with leafy streets and mown lawns. Up close, it is a community in collapse.
Every twelfth house stands empty, repossessed after its owner defaulted on a mortgage. There are no boarded windows (a local ordinance forbids them) and the city council cuts the grass around vacant homes. But the cracked panes, crumbling paint and rotting porches are hard to hide. Countless more homes sport “For Sale” signs as the remaining owners try to flee to better areas. With so many houses vacant, the property tax base has crumbled. Since 2003, the local government has laid off 35% of its staff.
As America's housing bust grows ever deeper, the big question is how far Maple Heights is a harbinger of things to come. Nationally, people are defaulting on mortgages at a faster pace than at any point in recent decades. According to the Mortgage Bankers Association, some 5% of all mortgages are delinquent and the share rises to almost 15% for “subprime” mortgages—those lent to people with shaky credit histories. In the second quarter of 2007, almost 3% of subprime loans entered foreclosure (the process of default and repossession). RealtyTrac, a company that tracks foreclosures, reckons up to 1.5m households will enter the process this year (see chart), double last year's figure. And with some 2.5m adjustable-rate mortgages resetting to higher rates before the end of 2008, everyone knows there is much worse to come.
The pain will probably be concentrated in two main areas. One, typified by Maple Heights, is the Midwest—states such as Ohio and Michigan, where the subprime bust is battering an industrial economy already in long-term decline. The other is quite different: booming states, such as Florida and California, where the subprime bonanza fuelled the biggest housing bubbles. Until recently, the highest default rates were in the industrial heartland. But that is changing fast. More than a third of all adjustable subprime loans are in California, Nevada, Arizona and Florida. California alone has 17% of them, and the numbers are soaring. In Riverside and San Bernardino counties, two sprawling counties east of Los Angeles that comprise an area called the “Inland Empire”, 1,900 houses were repossessed in August. It was 31 a year earlier.
The good news is that high default rates may be less painful in places whose sub-prime problem sits atop an economic boom. Cleveland has been losing inhabitants for years. In contrast, almost 800,000 people piled into the Inland Empire between 2000 and 2006, swelling the population by a quarter. The area is the main distribution hub for Chinese imports, and it has added 50,000 jobs in the past year.
The bad news, though, is that foreclosure is costly and high rates of it can cause plenty of collateral damage. In Cleveland, lenders incur legal fees and other costs of around $25,000, or 25% of the value of a typical subprime loan. The process of repossession takes a year or more, during which delinquent borrowers have little reason to look after their homes. A glut of repossessed houses dampens prices, and not just by adding to the supply of homes for sale. Thanks to high commodity prices, vacant homes in poorer neighbourhoods are quickly stripped of their aluminium sidings and copper fixtures. Marginal houses become uninhabitable; crime rises; whole areas are blighted.
Add these costs to the human toll of people being turfed out of their homes, and it is no surprise that America's politicians are scrambling for ways to stem the foreclosures. (All the more so because hardest-hit areas include election swing states such as Ohio and Florida.) So far, the focus is on low-cost intervention: encouraging borrowers to seek counselling and lenders to show forbearance. The Senate has appropriated $100m to help community groups advise delinquent borrowers. A national foreclosure hotline offering free advice gets 2,000 calls a day.
These efforts will help. A rough estimate is that half the people who are likely to face foreclosure in the coming months could service a renegotiated loan. But Cleveland's experience suggests the process is not easy. According to Lou Tisler, head of Neighbourhood Housing Services of Greater Cleveland, a local community group, mortgage lenders are becoming more willing to renegotiate loans. But most people seek advice only after they have been in default for months. Many are only days away from the sheriff's sale at which their home is formally lost.
Cleveland's experience also shows the limits of the small-scale public bail-outs to help “victims”. Politicians have a weakness for such schemes. Ohio's state government was the first to set up an explicit foreclosure rescue fund: it has promised $4.6m to help distressed homeowners who earn up to 125% of their county's median income. The state will put up to $3,000 towards mortgage refinancing. Some 250 people have been helped thus far; the goal is 1,500. But with 150,000 Ohio mortgages resetting over the next 12 months, the bail-out is a drop in the bucket. The only type of rescue that would prevent a surge in foreclosures would be a huge federal bailout which no politicians (as yet) are contemplating.
And the hard truth is that in many cases preventing foreclosure is a bad idea. Not all defaulting borrowers are suffering families. In the bubbliest property markets, many mortgages are held by investors, who were speculating on higher prices. In Florida, a quarter of all defaulting loans are held by non-residents. Even in Cleveland, many subprime borrowers are in houses that they cannot—and will not be able to—afford. Foreclosure is, unfortunately, the right outcome for perhaps half of America's problem mortgages.
That suggests politicians should put more emphasis on making the process more efficient. Already there are vast differences between states. In New York it takes at least 15 months for a house to be repossessed, according to Rick Sharga of RealtyTrac; in California it takes at least four months, while in Texas delinquent homeowners can lose their house less than a month after receiving a formal notice of default. That is extreme, but relatively speedy repossessions might at least reduce some of the collateral damage.
All told, the biggest unknown about America's subprime bust is how quickly, and how far, house prices will have to sink. Nationally, house prices have fallen by some 3%, while the glut of unsold homes has risen to ten months' supply. In the areas hardest-hit by defaults, the glut is far bigger. But rather than prices adjusting further, sales have simply dried up. In the Inland Empire the number of houses sold has halved in the past year. Michael Ciaravino, the mayor of Maple Heights, points out that only three houses have sold in the past two months, compared to a monthly total of between 15 and 50 a few years ago. Once prices halve, he reckons, the market will clear, new families will come in and his suburb will recover. The question, for Maple Heights and America, is how much damage is done in the meantime.
Qiao Yue
A very expensive drop of petrol...
Crash and burn situation...
Soon, i guess...Credit Crunch Nearing End
Economists see credit crisis nearing end
That's the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known by its acronym NABE. It will take time for any rays of light to poke through the economic clouds, though.
A growing number of economists believe the country is on the brink of a recession or in one already, dragged down by all the problems in housing, credit and financial markets. Now 56% of the economists think the economy has started or will enter a recession this year. That's up from 45% in a survey in February. If there is a recession, it probably will be short and shallow, economists said.
Forecasters downgraded their projections for economic growth. They now predict the economy, which grew by 2.2% last year, will slow to 1.4% this year. That's lower than the 1.8% growth projected in February. If the new figure proves correct, it would mark the weakest growth since the last recession in 2001.
Next year, the economy should grow by 2.3%, less than previously forecast and a pace that is still considered subpar.
"Although housing and credit markets will gradually loosen their grip, U.S. economic growth is expected to only slowly return to health," said Ellen Hughes-Cromwick, president of NABE and chief economist at Ford Motor Co.
Given the outlook for sluggish overall economic activity, companies are likely to remain cautious in their spending and hiring.
The unemployment rate, which averaged 4.6% last year, will move higher. Forecasters predict the jobless rate will hit 5.3% this year and 5.6% next year.
Forecasters are hopeful that the housing slump - in terms of home sales - will hit bottom this year. However, economists were divided over whether the low point would be reached in the second, third or fourth quarters of this year. House prices, though, are still expected to drop this year and next.
On the credit front, economists predict conditions will improve in the second half of this year.
"The economy is still going to be weak in the very near term, but the worst is likely to end this year with respect to the housing decline and the credit crunch," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group, who was involved in the NABE survey. The survey of 52 forecasters was conducted April 17 through May 1.
Weakness in housing was cited as the factor most responsible for the economy's troubles. That was closely followed by credit problems and high energy, food and commodity prices.
With food prices marching upward, gasoline prices closing in on $4 a gallon nationwide and oil hitting a record high near $128 a barrel, inflation should rise. Consumer prices will increase 3.6% this year, up from a previous forecast of a 3% rise. Next year, prices should calm down a bit, with the inflation rate clocking in at 2.4%.
To bolster the economy, the Federal Reserve has been cutting a key interest rate since last September. However, when the Fed last lowered rates, in April to 2%, policymakers signaled that their rate-cutting campaign may be drawing to a close. Fed policymakers are concerned that moving rates lower could aggravate inflation. At the same time, they are hopeful that their powerful rate cuts plus the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses will lift the country out of its slump.
The forecasters believe the Fed will hold its key rate steady at 2% through the rest of this year. However, they predict the Fed will start bumping up rates next year to ward off inflation. They believe the Fed's key rate will rise to 3% by the end of 2009.
Economists, meanwhile, had mixed thoughts about the extent to which tax rebates will be spent this year. The more spent, the more energizing effect they will have on the economy. Roughly 35% thought households will spend 26 to 50% of the rebates, while a quarter believe 25% or less would be spent. Thirty-one percent thought 51 to 75% would be spent.
"We're likely to see the boost from tax rebates fading later in the year," Reaser predicted. "The recovery is expected to be quite muted."
First Published: May 19, 2008: 4:54 AM EDT
Source : CNNMoney.com
Where Big Is Best
The rise of megacities has created slums and chaos elsewhere, but in China, they are cleaner and more efficient.
By Diana Farrell, Janamitra Devan, and Jonathan Woetzel NEWSWEEK
As China continues to boom in the coming decades, it would be well advised to think big. Big cities, that is. So far the migration from rural areas that has driven China's growth has fed the rise of many cities, and this scattered pattern is magnifying the key problems of urbanization: pollution, environmental destruction and the dislocation of farmers from land around cities, which is producing a growing number of agrarian protests. The development of megacities—which, granted, have produced chaos in other countries—would in fact produce a cleaner, more socially stable and faster-growing economy in China. Bigger is better for China due to its unique development pattern. Some foreign observers assume that China has urbanized successfully, so far, because it has a strong central government that can impose conformity even in the smallest village. And that was true in the past. However, after China began to embrace economic reform and openness after 1978, it relaxed the internal passport system called hukou to ensure a plentiful supply of labor in economic hot spots. To this day, China's economic liberalism has gone hand in hand with a policy of unleashing local dynamism, and explicitly encouraging entrepreneurial city leaders.
No single factor has been more powerful in driving urban expansion than the freedom cities have had to buy and sell land. That feature helps to explain why China has largely so far escaped the slums that have disfigured rapidly expanding cities elsewhere in the world. In other countries, from Brazil to India, an influx of migrants to cities has come first; local governments have then relied on the tax system to play catch-up in building the urban infrastructure.
In contrast, Chinese cities have been able to finance a "build it and they will come" approach, partly because of central-government transfers from China's prodigious savings and partly because of local land transactions. Until recently, China's city leaders have had carte blanche to acquire surrounding countryside cheaply and then sell this land, still at steep discounts, to incoming businesses and real-estate developers, using the proceeds to boost competitiveness and job creation and to build the urban infrastructure. The MGI estimates that over the past decade land sales have accounted for up to 60 percent of annual revenues in some cities. The jobs created by incoming businesses have then acted as a magnet to migrants. Since 1990, China's urban population has doubled, but its urban land area has grown by 150 percent.
The golden goose of land acquisition and sale may now have its wings clipped. Concerned by social unrest among displaced farmers, China's central government has instituted new controls on this practice. Local mayors may no longer rely on this source of revenue and will thus find it far harder in future years to finance urban construction. Yet the demands on the public purse will be growing inexorably. China's cities need to find the money to extend social coverage to its huge migrant populations (which, in many cities, will account for more than 40 percent of their populations by 2025) at a cost MGI estimates will reach an additional 1.5 trillion renminbi by 2025 (about $215 billion at today's exchange rate), or almost 2.5 percent of urban GDP. At the same time, cities need to fund the continuing buildup of infrastructure and mounting bills for tackling the dark side of urbanization: pollution and congestion.
Over the past 17 years, more than 100 million people have moved from the countryside to rapidly expanding urban centers. So far urbanization has followed a dispersed pattern, with many cities scattered across inland to coastal China and from north to south, all growing in parallel. In 2005, according to MGI's assessment, China had 858 cities and, following current trends, this will reach 939 by 2025. All are jostling for resources and historically have focused largely on a rush for GDP growth.
By 2025 we will have seen China's city populations swell by 350 million people—more than the population of the United States today—of which more than 240 million will have moved from rural areas. Urban China's demand for energy and water will double over the next 20 years compared with today. Under all circumstances, pollution will be severe. Today almost 60 percent of China's river water is already below international potable standards, and it is quite possible that urban water pollution could quintuple by 2025. Air pollution, in particular nitrous oxide, could reach critical levels in larger cities. Congestion is already compromising the smooth running of cities—Shanghai could outstrip its road capacity by a factor of three. Dispersed urbanization scenarios would result in a loss of up to 20 percent of China's available arable land.
The question now is whether the current approach will prove sustainable. MGI's research concludes that China would benefit substantially by shifting to a more concentrated urbanization pattern. One model of concentration could see China favoring the growth of 15 supercities in 2025 with average populations of 25 million people. The second could spur the further development of 11 urban "networks" of cities, linked by strong economic ties, with combined populations of 60 million-plus each on average. We have seen both models play out in some form internationally. There are supercities such as New York, London and Tokyo. And dynamic city networks have emerged including the system centered on Seoul.
MGI is not arguing that bigger cities are always the most successful. However, big may well be best for China, given both its unique history and the sheer magnitude of its population and the share of that population moving into cities. China's cities already account for 75 percent of China's gross domestic product; by 2025, that figure will have risen to more than 90 percent. But they will be richer cities if they are big. Both of the concentrated scenarios would deliver yield per capita GDP in 2025 of about 75,000 renminbi, or about $10,700 at today's exchange rate, or 20 percent higher per capita GDP than more dispersed urbanization scenarios, largely due to the productivity and efficiency advantages that have been true of larger cities in China.
How China manages its transformation will not only shape the nation but exert a powerful influence around the globe. As the world watches China's progress, there is little doubt that the sheer scale of change is impressive. But the ingenuity of city managers, their efficient use of resources and a strategic approach centered on concentrated growth and urban productivity will be the yardsticks of long-term success.
Wei Lin
By Diana Farrell, Janamitra Devan, and Jonathan Woetzel NEWSWEEK
As China continues to boom in the coming decades, it would be well advised to think big. Big cities, that is. So far the migration from rural areas that has driven China's growth has fed the rise of many cities, and this scattered pattern is magnifying the key problems of urbanization: pollution, environmental destruction and the dislocation of farmers from land around cities, which is producing a growing number of agrarian protests. The development of megacities—which, granted, have produced chaos in other countries—would in fact produce a cleaner, more socially stable and faster-growing economy in China. Bigger is better for China due to its unique development pattern. Some foreign observers assume that China has urbanized successfully, so far, because it has a strong central government that can impose conformity even in the smallest village. And that was true in the past. However, after China began to embrace economic reform and openness after 1978, it relaxed the internal passport system called hukou to ensure a plentiful supply of labor in economic hot spots. To this day, China's economic liberalism has gone hand in hand with a policy of unleashing local dynamism, and explicitly encouraging entrepreneurial city leaders.
No single factor has been more powerful in driving urban expansion than the freedom cities have had to buy and sell land. That feature helps to explain why China has largely so far escaped the slums that have disfigured rapidly expanding cities elsewhere in the world. In other countries, from Brazil to India, an influx of migrants to cities has come first; local governments have then relied on the tax system to play catch-up in building the urban infrastructure.
In contrast, Chinese cities have been able to finance a "build it and they will come" approach, partly because of central-government transfers from China's prodigious savings and partly because of local land transactions. Until recently, China's city leaders have had carte blanche to acquire surrounding countryside cheaply and then sell this land, still at steep discounts, to incoming businesses and real-estate developers, using the proceeds to boost competitiveness and job creation and to build the urban infrastructure. The MGI estimates that over the past decade land sales have accounted for up to 60 percent of annual revenues in some cities. The jobs created by incoming businesses have then acted as a magnet to migrants. Since 1990, China's urban population has doubled, but its urban land area has grown by 150 percent.
The golden goose of land acquisition and sale may now have its wings clipped. Concerned by social unrest among displaced farmers, China's central government has instituted new controls on this practice. Local mayors may no longer rely on this source of revenue and will thus find it far harder in future years to finance urban construction. Yet the demands on the public purse will be growing inexorably. China's cities need to find the money to extend social coverage to its huge migrant populations (which, in many cities, will account for more than 40 percent of their populations by 2025) at a cost MGI estimates will reach an additional 1.5 trillion renminbi by 2025 (about $215 billion at today's exchange rate), or almost 2.5 percent of urban GDP. At the same time, cities need to fund the continuing buildup of infrastructure and mounting bills for tackling the dark side of urbanization: pollution and congestion.
Over the past 17 years, more than 100 million people have moved from the countryside to rapidly expanding urban centers. So far urbanization has followed a dispersed pattern, with many cities scattered across inland to coastal China and from north to south, all growing in parallel. In 2005, according to MGI's assessment, China had 858 cities and, following current trends, this will reach 939 by 2025. All are jostling for resources and historically have focused largely on a rush for GDP growth.
By 2025 we will have seen China's city populations swell by 350 million people—more than the population of the United States today—of which more than 240 million will have moved from rural areas. Urban China's demand for energy and water will double over the next 20 years compared with today. Under all circumstances, pollution will be severe. Today almost 60 percent of China's river water is already below international potable standards, and it is quite possible that urban water pollution could quintuple by 2025. Air pollution, in particular nitrous oxide, could reach critical levels in larger cities. Congestion is already compromising the smooth running of cities—Shanghai could outstrip its road capacity by a factor of three. Dispersed urbanization scenarios would result in a loss of up to 20 percent of China's available arable land.
The question now is whether the current approach will prove sustainable. MGI's research concludes that China would benefit substantially by shifting to a more concentrated urbanization pattern. One model of concentration could see China favoring the growth of 15 supercities in 2025 with average populations of 25 million people. The second could spur the further development of 11 urban "networks" of cities, linked by strong economic ties, with combined populations of 60 million-plus each on average. We have seen both models play out in some form internationally. There are supercities such as New York, London and Tokyo. And dynamic city networks have emerged including the system centered on Seoul.
MGI is not arguing that bigger cities are always the most successful. However, big may well be best for China, given both its unique history and the sheer magnitude of its population and the share of that population moving into cities. China's cities already account for 75 percent of China's gross domestic product; by 2025, that figure will have risen to more than 90 percent. But they will be richer cities if they are big. Both of the concentrated scenarios would deliver yield per capita GDP in 2025 of about 75,000 renminbi, or about $10,700 at today's exchange rate, or 20 percent higher per capita GDP than more dispersed urbanization scenarios, largely due to the productivity and efficiency advantages that have been true of larger cities in China.
How China manages its transformation will not only shape the nation but exert a powerful influence around the globe. As the world watches China's progress, there is little doubt that the sheer scale of change is impressive. But the ingenuity of city managers, their efficient use of resources and a strategic approach centered on concentrated growth and urban productivity will be the yardsticks of long-term success.
Wei Lin
Whats written on the yellow book in the cartoon: Critics who say that biofuels take more energy to produce than to yield.
My interpretation: Mortage crisis is weighing the stock market down/causing the stock market to sink. As the anchor suggests, the mortage crisis could be possibly a dead weight that would be the main reason that hinders any upward movement of the stock market.
My interpretation: The dilemma for the US congress over green and expensive fuel(ethanol) or potentially polluting but cheap fuel(oil) However the irony is that both produces Carbon dioxide, but ethanol apparently produces 'GOOD C02' while oil apparently produces 'BAD CO2' when we know that CO2 regardless of its source, is a greenhouse gas and can increase the rate of global warming. Hence I feel that the cartoonist's tone is mockery when he drew the US congress as 'not the same difference!' (when apparently they are the same difference)
Please correct me if I'm wrong!
Thats all :D
Cartoons are from:
http://images.google.com.sg/imgres?imgurl=http://www.ocee.org/Graphics/comics_clip_image001.gif&imgrefurl=http://www.ocee.org/comics.htm&h=425&w=600&sz=53&hl=en&start=17&um=1&tbnid=RsRje5a4sW0DaM:&tbnh=96&tbnw=135&prev=/images%3Fq%3DEconomic%2Bcartoons,%2Boppurtunity%2Bcosts%26um%3D1%26hl%3Den%26sa%3DG
http://www.sundancechannel.com/UPLOADS/blog/treehugger/blogpost_data/07_31_07/ethanol-cartoon.jpg
Sunday, May 18, 2008
Many banks in Singapore are shutting the door on small depositorsby raising the minimum amounts required to open savings orfixed deposit accounts.
Reason: they are too costly to administer and not worth the trouble.The regional economic troubles and general belt-tightening haveforced banks to do more to tackle rising operational costs.
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