Singapore Economic News

[karlmarx]

honestbee seeks court protection for over US$180m of debt; lays off 38 staff

https://www.businesstimes.com.sg/garage/...f-38-staff

===

I was shocked to find out that this 'little outfit' owes so much money. How much do the other start-ups and fintechs owe? Another $180m for Redmart?

In another thread, specuvestor predicted the downturn of private-equity funds. Maybe this is what he was referring to.   

[BlueKelah]

Exclusive: Bearing brunt of trade war, Singapore chipmakers cut jobs
https://www.reuters.com/article/us-singa...SKCN1UJ0PW

IMO, the S'pore manufacturing sector employs mostly FT / PRs compared to citizens, and thus, the impact of retrenchment to the economy may not be severe. Perhaps, there may be some trigger down effects in terms of consumer spending or the rental market.

While more people renew their COE in recent years, Singapore's private home prices rose to a 5-year high in 2Q2019. Refernce : https://www.channelnewsasia.com/news/bus...y-11676188

Other than many cash rich en bloc-ers in recent years, the current mortgage rates can be as competitive as 2% for the 1st 6 years which translates to a mthly payment of around $3200 for a 25 years $750,000 loan.  Reference : https://www.mortgagewise.sg/mortgage-rates/

On the other hand, the household median income is ard $9,300(abt 3x current monthly repayment), and has been increasing through the past few years. Reference : https://blog.seedly.sg/average-singapore...ome-stand/

Unless the mortgage rate  rises, e.g. 4% for the 3rd year and beyond, I don't think there will be any real pain in the property mkt and leading to a dampening mood in the economy or a real (non-technical) recession.

The increased trade tariff to 25% only start in May. This started impacting China PMI which has been negative 3 months now, though latest month seems to be less negative. 
The GDP number of 0.1% YoY growth was only for 2Q19. I expect a recession starting in 3Q19. Affected chinese companies were able to adjust to the 10% tariffs but an increase to 25% will definitely be a drag on global trade, which will affect us.

https://www.singstat.gov.sg/
Singstat shows for 2Q19 both manufacturing and trade are already down ~7% YoY.

Property prices should be trending down soon as they are usually a lagging indicator. By the way, FT/PR may not be buying property, but when they lost job and leave, who is going to pay the rent? get vacancy rate rising fast?? Investors will then have to sell and that will push prices down.

Stock market is usually leading indicator for economy, but i suspect this year prices have really been dictated more by trade deal and interest rate drop expectations rather than earnings.

[specuvestor]

Exclusive: Bearing brunt of trade war, Singapore chipmakers cut jobs
https://www.reuters.com/article/us-singa...SKCN1UJ0PW

IMO, the S'pore manufacturing sector employs mostly FT / PRs compared to citizens, and thus, the impact of retrenchment to the economy may not be severe. Perhaps, there may be some trigger down effects in terms of consumer spending or the rental market.

While more people renew their COE in recent years, Singapore's private home prices rose to a 5-year high in 2Q2019. Refernce : https://www.channelnewsasia.com/news/bus...y-11676188

Other than many cash rich en bloc-ers in recent years, the current mortgage rates can be as competitive as 2% for the 1st 6 years which translates to a mthly payment of around $3200 for a 25 years $750,000 loan.  Reference : https://www.mortgagewise.sg/mortgage-rates/

On the other hand, the household median income is ard $9,300(abt 3x current monthly repayment), and has been increasing through the past few years. Reference : https://blog.seedly.sg/average-singapore...ome-stand/

Unless the mortgage rate  rises, e.g. 4% for the 3rd year and beyond, I don't think there will be any real pain in the property mkt and leading to a dampening mood in the economy or a real (non-technical) recession.

The increased trade tariff to 25% only start in May. This started impacting China PMI which has been negative 3 months now, though latest month seems to be less negative. 
The GDP number of 0.1% YoY growth was only for 2Q19. I expect a recession starting in 3Q19. Affected chinese companies were able to adjust to the 10% tariffs but an increase to 25% will definitely be a drag on global trade, which will affect us.

https://www.singstat.gov.sg/
Singstat shows for 2Q19 both manufacturing and trade are already down ~7% YoY.

Property prices should be trending down soon as they are usually a lagging indicator. By the way, FT/PR may not be buying property, but when they lost job and leave, who is going to pay the rent? get vacancy rate rising fast?? Investors will then have to sell and that will push prices down.

Stock market is usually leading indicator for economy, but i suspect this year prices have really been dictated more by trade deal and interest rate drop expectations rather than earnings.

With lower expected interest rate, currency devaluation and trade war, people will flock to safe assets. And SGD is AAA asset which is why SGD could be too strong vs NEER

so ironically I think SG properties will be resilient, which is why you hear the headline news of record breaking penthouse and GCB sales

[fanobell]

The record breaking penthouse is a gimmick. Tanjong pagar's housing market is in terrible condition, that's why they made up a story that Dyson bought a unit there. Ang mo will never pick noisy business area as their home...
After they made up the story about the $100m house of Dyson, newspaper post another story saying Dyson bought another one in Bukit Timah

He probably got the pagar unit for free. Or they just borrow his name to do some marketing.

[dreamybear]

Despite headwinds in the economy, property seems to be still "hot" with S'poreans. ECs are supposed to cater to the "sandwich" middle class — “too rich” to apply for public housing, but still can’t quite afford a private home.

Given the qualifying criteria for EC : household income < $14k(higher than the median household income), I wld assume the buyers wld have some understanding of the current economic conditions and wld have done their calculations before committing to a big ticket purchase.

Long term thinking or FOMO ?

It wld be interesting to read the impending 2Q2019 results of Apac & Propnex to have a sense of property mkt conditions.

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Piermont Grand achieves 46% sales on first weekend
July 28, 2019 8:48 PM SGT

On the first weekend of its public launch, Piermont Grand, the sole executive condo (EC) project launched this year, achieved sales of 375 units as at 6pm on Sunday, July 28. The 820-unit project is therefore 46% sold.....

Average price achieved for units sold was $1,080 psf. “Based on the fact that this is the priciest EC to be launched, selling more than 40% is a credible performance under current market conditions,” notes PropNex’s Gafoor.....

More details : https://www.edgeprop.sg/property-news/pi...st-weekend

[fanobell]

Stagflation? by cutting down the supply, the developer managed to raise price... If the market is good, they should have sold all 820 units in 1 go.

[dreamybear]

Employment situation stable ....

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'Premature to speculate' about downturn support: Josephine Teo
6 Aug 2019 - 12:58

IT is premature to speculate what kinds of support measures should be introduced if Singapore enters a prolonged slowdown, said Manpower Minister Josephine Teo in Parliament on Tuesday.

Noting that Singapore's current economic situation and outlook are very different from those of recent downturns such as the Global Financial Crisis, Mrs Teo said that the government's approach is to assess the causes of any downturn: whether they are cyclical, structural or both.

The strategies taken will be different depending on circumstances, she added.

Earlier, responding to Member of Parliament Desmond Choo, Mrs Teo had highlighted the difference between the manpower situation during the Global Financial Crisis and the "completely different" situation today.

In the first half of 2009, there were over 19,000 retrenchments, compared to the typical full-year figure of 15,000. In the second quarter of 2019, retrenchments were still "fairly low" at 2,300.

For the full year of 2009, some analysts estimated job losses at 100,000. In contrast, in Q2 2019, "employment growth slowed but it did not stall", noted Mrs Teo

.....

More details : https://www.sgsme.sg/news/government/pre...ephine-teo

[dreamybear]

Bank fixed deposit rates are now close to 2% p.a..

Does an investment property which generates similar gross yields, still make sense?

Agree - furthermore, the hassle of being a landlord doesn't justify the extra 0.5%-1% if any.

But I think the current property investors are also eyeing asset appreciation besides the rental yield. Well, there are always those who are of the view that land in SG is limited, and properties can only go up in the long run.

I found this old video which Minister Grace Fu talks abt property appreciation in the good old days - I cannot put it across better than her.    https://www.youtube.com/watch?v=aCJjdLhDjFs

[dreamybear]

Long article from The Edge SG ....

What will it take for Singapore to succeed in its next lap?
Manu Bhaskaran 12/08/2019, 1:39pm

SINGAPORE (Aug 12): This year, Singapore celebrates roughly 720 years since it first emerged as trading centre for the region. It is also 200 years since Raffles re-established Singapore as a regional port, and the 60th anniversary of self-government. The latter enabled Singapore to strike out on its own, eventually emerging as a uniquely successful and independent nation as well as one of the pre-eminent global hubs of commerce and finance......

Three big changes that threaten Singapore’s position :

First, the global political and economic arrangements that protected Singapore and provided it with the opportunities to soar are being undermined:....

Second, the simultaneous emergence of many new technologies — from artificial intelligence and robotics to renewable energy, bio-medical advances and new technology platforms in social media and other areas — offers grand new possibilities but also much disruption:.......

Third, as we discussed in an earlier column, Singapore could be a disproportionate loser from climate change....

Can Singapore adapt sufficiently to overcome these challenges?
......

What would we like to see being done?
......

Conclusion: An inhospitable world environment leaves us no choice but to make decisive changes
......

More details : http://www.theedgesingapore.com/news/pri...s-next-lap

[dreamybear]

RHB released a research report on 23 Aug 2019 titled : "Remaking Singapore: a Never-Ending Process"
( https://research.rhbinvest.com.sg/Upload...23_RHB.pdf ) I was surprised to find out that 26.5% has below secondary education & another 17.8% has secondary education(pg 11).

On the other hand, S'pore is ranked 7 in per capita GDP ( https://en.wikipedia.org/wiki/List_of_co...per_capita ) and has a reputation of being a world leading financial center, 1st world country, world class, etc. Maybe I shd read up on economic concepts, it's just that I find it difficult to reconcile between the two contrasts.

Over the weekend, Lim Tean has released a video (https://www.youtube.com/watch?v=Js_F-WmUEp4) talking about the origin of meritocracy. I find it interesting because it is kind of opposite from what I have always thought abt meritocracy. I believe this is the book mentioned in the video : https://www.amazon.com/Rise-Meritocracy-...B074CG5936.