Dear Friends,

I have migrated my blog from this free site to a hosted site.

Thanks for all the support for this wordpress blog of mine!

You will continue to find great information about achieving financial freedom at my new blog here:-

http://www.financially-free-advisor.com

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Dear Friends,

The Financially Free Advisor is proud to present Millionaires Goal Setting Forum 2008!

Come meet these good friends of mine, they have taken time off to share their secrets of success!
All of them made at least ONE MILLION US DOLLARS.
(Mr Li Xiao Wen from Taiwan being the exception…He made 5 MILLION US DOLLARS!!!)
You’ll gain REAL insights from REAL MILLIONAIRES!

Who Should Attend?

1. People who wants to develop the millionaire mindset
2. People who are entrepreneurs or planning to be one
3. People who wants more out of their life in 2008 than in 2007

When and Where?
Date: 22 Dec (Sat)
Time: 12 pm – 4 pm
Venue: Pan Pacific Hotel, Pacific Ballroom

Call/SMS/Email to Book:
+65 9382 9082
willylim74@gmail.com

Booking Fee:
S$20 ONLY (1st 20 attendees get FREE Wealth Creation VCD worth $20)
(The fee is just to cover our training venue & equipment rental.)

Payment mode:
1) Paypal: willylim74@gmail.com
(just send us an email & we’ll send you the payment email, all major credit cards accepted)
2) Wire: POSB 120-46285-7

100% MONEY-BACK GUARANTEE:
We GUARANTEE that you’ll learn something that will change your financial future or YOUR MONEY BACK!

Come join us to Learn from NOT ONE BUT FOUR DYNAMIC USD-Millionaires!

P.S. $20 for the Secrets of 4 millionaires…this is better than the Great Singapore sale! This is probably the best Christmas present you can give yourself (or your friends!)

P.P.S As we have very limited seats for the training, we regret that we are unable to reserve a seat unless a booking is made and the booking fee is received.

Your Financially Free Advisor,
Willy Lim

About the Financially Free Advisor:
http://financiallyfreeadvisor.wordpress.com/about/

“ More than half of mainland China’s investment managers have less than two years’ experience, according to Beijing-based research firm TX Investment Consulting Co. A third have been managing funds for no more than a year.”

 

It really cringe me to see the low quality of investment managers in China. The China equity market bubble will burst, and I think it will be sooner than most people think.

 

Yours Financially Free,

Willy Lim

 

 

Published December 13, 2007

Market’s dive tests China’s fund managers

More than half have less than 2 years’ experience; a third, not even one year

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(SHANGHAI) Zhao Zifeng helped investors double their money in his first six months of managing the Sitico Morgan First Growth Fund. The streak ended in October as a six-week market drop erased more than 20 per cent of the fund’s value.

‘I’m feeling the heat,’ said Mr Zhao, 37, who was promoted in March from head of research to run the US$1.6 billion mutual fund for Shanghai-based China International Fund Management Co. ‘As a newcomer, I still need to accumulate the experience dealing with a falling market.’

More than half of mainland China’s investment managers have less than two years’ experience, according to Beijing-based research firm TX Investment Consulting Co. A third have been managing funds for no more than a year.

They had it easy until November, when the CSI 300 Index fell 17 per cent, the steepest monthly decline in its two-year history. The index had risen almost six-fold until then.

While the CSI 300 has rebounded 7.8 per cent in December, investment strategists at New York-based Morgan Stanley and Goldman Sachs Group expect more losses. History suggests they may be right.

The Shanghai Composite Index fell 20 per cent from its peak in October to Nov 30. The past five times that the index dropped 20 per cent or more, losses deepened to an average 35 per cent before the market stabilised.The Shanghai index plunged more than 50 per cent from June 2001 to July 2005.
‘A prolonged stock market decline will provide a real test for China’s fund managers,’ said Tiger Tong, an analyst at China Knowledge Pte Ltd in Singapore. ‘Most of them are momentum investors who just go with a rising market.’

Fifty-nine investment management companies in China oversaw US$422 billion at the end of September, up from 17 companies in December 2001, according to China’s securities industry regulator.

The US has 630 companies managing US$4.3 trillion in diversified equity mutual funds, according to US research firm Lipper Inc.

‘Given the sharp increase in number of fund management companies and products, it’s only to be expected that the average experience in the industry will decline,’ said Peter Alexander, principal at Z-Ben Advisors Ltd in Shanghai.

Li Shuo, who started managing a US$134 million fund in Shenzhen a month ago, said that he’s reading up on the Internet bubble of the late 1990s and the end of Japan’s boom in the 1980s to prepare for a slump.

‘Fund managers have so far been able to deliver returns quite easily with the bull market, but I think that’s about to change,’ said Mr Li, 36. He asked that his company’s name be withheld because of concern over censure from the securities regulator.

‘Though I’ve seen market ups and downs as an analyst, it’s still my first time managing so much of other people’s money,’ said Mr Li, who’s buying shares of companies that report stable earnings growth. He declined to identify them.

For Luca Frontini, chief executive officer of Lombarda China Fund Management Co in Shanghai, hiring and keeping experienced professional investors has been a major challenge amid the boom.

‘The pool of talent is limited,’ he said. ‘There’s strong competition for fund managers and it’s extremely difficult to hire and retain good managers.’

Analysts including Morgan Stanley’s Jerry Lou foresee tougher times for Chinese fund managers. The CSI 300’s decline may result in companies posting investment losses in the fourth quarter, which could be the ‘final push on the snowball to start its roll downhill and crush the biggest equity bubble in the world today’, Hong Kong-based Lou wrote in a Nov 20 note to clients. — Bloomberg

Will be interesting to see how this will affect Asian markets.

Yours Financially Free,
Willy Lim

Published December 7, 2007

US house prices to slide 30% before crisis is over: Moody’s Email this article (NEW YORK) Housing markets from Punta Gorda, Florida, to Stockton, California, will crash and suffer price drops of more than 30 per cent before the housing crisis is over, a report from Moody’s Economy.com said yesterday. On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics. The report paints a worsening picture of the hard-hit housing sector, which is in the midst of its worst downturn since World War II. While activity will stabilise in 2009, it will not be until 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said. House prices are forecast to fall 13 per cent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 per cent, the report said. Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the US, with price declines from peak-to-trough forecast at 35.3 per cent and 31.6 per cent, respectively. These markets have been hard hit due to several reasons, namely the exiting of investors from the areas, a fair amount of subprime mortgage loans causing an increase in foreclosures and overbuilding by home builders, Mr Zandi said. Home sales, however, should hit a bottom in early 2008, which will mark a 40 per cent drop from peak-to-trough. ‘The housing market’s most fundamental problem is it is awash in unsold inventory,’ the report said. In addition, the housing downturn will take a large toll on the rest of the economy. During the height of the boom in 2004-05, housing contributed nearly a percentage point to annual real gross domestic product, or GDP, growth. In the current downturn, housing will subtract more than one percentage point from US economic growth this year, and a percentage point and a half in 2008, with the effect on growth seen most pronounced next spring and early summer. ‘The intensifying housing recession is expected to weigh on the broader economy, but not break it,’ the report said. The Moody’s Economy.com’s report, titled ‘Aftershock: Housing in the Wake of the Mortgage Meltdown,’ said that when house prices hit their nadir, some 80 of the nation’s 381 metropolitan areas will experience a double-digit peak-to-trough price decline. Price declines, however, will vary in degree throughout the nation, with more than a 15 per cent peak-to-trough expected around Washington and Detroit. Significant declines are also expected throughout most of Arizona, California, Florida and Nevada. During the housing market’s heyday, speculative activity was rampant in these areas, causing prices to surge much higher than other regions. The Northeast corridor, and markets such as Boise, Idaho, along with Denver and Salt Lake City, will experience between 5 per cent and 15 per cent declines. In the rest of the industrial Midwest and parts of the Mountain and Pacific Northwest, prices will fall more modestly. While some point to rising default rates in the subprime mortgage market, which caters to borrowers with poor credit histories, as the root cause of the problems plaguing the housing market, Moody’s Economy.com said an unwieldy supply of unsold homes is the prime factor. — Reuters

“I don’t trust this phenomenal rise in the A share market and now the H share market at all.‘ Both markets are in a bubble, and ‘like all bubbles, it will end in tears,”

“It is quite possible that China’s market may decline by 70 per cent”

- Mr van Agtmael, Chief Investment Officer of Emerging Markets Management

 

If China stock market goes down by 70%, the rest of the Asian stock markets won’t be spared either. Mr Market is playing according to his old script that he uses during every market cycle.

Yours Financially Free,
Willy Lim

 

 

Published December 6, 2007

China stocks in waning stages of bubble: mutual funds

Funds pulling money out of China shares but some still find buys in H shares

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(NEW YORK) Mutual fund managers have had a good run with Chinese stocks, but some are now backing off, saying China’s market is a bubble that will burst sooner rather than later.

The Chinese market appears to be in the ‘later, waning stages of a bubble,’ said Justin Leverenz, manager of the nearly US$13.5 billion Oppenheimer Developing Markets Fund. The fund is now ‘extraordinarily lean’ in exposure to Chinese stocks, he said.

Mr Leverenz, who looks to double his investment over a three-year, four- year or five-year time period, said he expects that ‘a significant contraction’ in the valuation of Chinese equities will play out much more rapidly than that.

He noted that China’s domestic A shares have risen nearly 500 per cent over the last two years. ‘2008 will be an incredibly difficult year for Chinese equities.’

Other fund managers agree and are pulling money out of Chinese shares, though a few said they are still finding buys in select H shares, those of China-registered companies listed on Hong Kong’s stock exchange.

Antoine van Agtmael, chief investment officer of Emerging Markets Management, said China’s booming economic story is real, but its stock markets have been bought up in a mania.

Mr van Agtmael said he reduced his investments in China quite a while ago, likely a mistake because it was too early. Though he still believes China’s story is a good one, he said, ‘I don’t trust this phenomenal rise in the A share market and now the H share market at all.‘

Both markets are in a bubble, and ‘like all bubbles, it will end in tears,’ said Mr van Agtmael. ‘I believe this is going to be sooner rather than later.’

Uri Landesman of ING Investment Management agreed that China is a great long-term story, but said ‘it’s a great long-term story with a lot of volatility.’

One sign of the froth: six of the 10 top-performing mutual funds this year through Nov 30 have China in their names, according to Morningstar. Among them are AIM China A, which has a total return of 86.12 per cent in the period; Nationwide China Opportunities A, which has gained 83.43 per cent in the period; and Matthews China, which has gained 75.83 per cent, according to Morningstar.

But the mania appears to be waning. Brad Durham, managing director at Boston-based fund tracker EPFR Global, said that inflows to dedicated China funds and greater China funds, which can invest in mainland China, Hong Kong and Taiwan companies that are doing most of their business in China, have not been as excessive as they were last year.

The China-dedicated equity funds that the firm tracks – which don’t include the domestic mutual funds in China open only to Chinese investors – had outflows of US$3.43 billion this year through Nov 28, while Greater China funds had inflows of US$2.95 billion in the period, Mr Durham said. The Greater China funds are a bit more diversified, which likely makes investors more comfortable, he said.

Mr van Agtmael said there are fundamental concerns. China’s economic growth, which had been about 8 per cent to 10 per cent on average for the last 20 years, is now above 11 per cent, an unsustainable level, he said.

Inflationary pressures are being seen, he said, noting that consumer prices rose more than 6 per cent in August and September.

It is quite possible that China’s market may decline by 70 per cent, said Mr van Agtmael. — AP

Dear Friends,

ST Cashflow Club will be organising a Cashflow training!
Click the links below to find out more:-

a. Introduction Video about Cashflow Training
b. Robert Kiyosaki’s Interview on BTV
c. Newspaper Interviews ST Cashflow Club Founder
d. Photos of our previous Cashflow Training

When and Where?
Date: 8 Dec (Sat)
Time: 1:45 pm – 4:45 pm
Venue: KH Kea Building #07-00
(beside Bras Basah Complex, above Mcdonalds)

Call/SMS/Email to Book:
+65 9382 9082
willylim74@gmail.com

Booking Fee:
S$20 ONLY (FREE Wealth Creation VCD)
(The fee is just to cover our training room & equipment rental.)

Payment mode:
1) Paypal: willylim74@gmail.com (just send us an email & we’ll send you the payment email)
2) Wire: POSB 120-46285-7

MONEY-BACK GUARANTEE:
We GUARANTEE that you’ll learn something that will change your financial future or YOUR MONEY BACK!

Come join us and learn How to Retire with Time & Money, and have fun at the same time! Limited to only 18 pax!

P.S As we have very limited seats for the training, we regret that we are unable to reserve a seat unless a booking is made and the booking fee is received.

Your Financially Free Advisor,
Willy Lim

Interesting article that argues that you are either born with the investor instinct or you are not. While I don’t fully agree with the writer that these 7 traits cannot be learnt, I do agree that not many ordinary people possess these winning traits and that is why most ordinary people lose money in investments.

Yours Financially Free,
Willy Lim

Published November 17, 2007

Reading this won’t make you great Mark Sellers, founder of a Chicago-based hedge fund, argues that the best investors are born with particular psychological traits that others can never learn By TEH HOOI LING SENIOR CORRESPONDENT Email this article WHAT makes someone a great investor? It’s something you have to be born with, said Mark Sellers, founder and managing member of Sellers Capital LLC, a long/short equity hedge fund based in Chicago. Apparently, it’s not about your IQ, the education you’ve had, the books you’ve read, or the experience you’ve accumulated. ‘If it’s experience, then all the great money managers would have their best years in their 60s and 70s and 80s, and we know that’s not true,’ he said in a speech to a class of Harvard MBA students. Intelligence and learning are obviously necessary too, and are sources of competitive advantage for an investor, but there are structural assets some possess that cannot be copied or learnt by others. ‘They have to do with psychology and psychology is hard wired into your brain. It’s part of you. You can’t do much to change it even if you read a lot of books on the subject,’ said Mr Sellers. He said that there are seven traits great investors share that are true sources of advantage because they cannot be learned. You are either born with them or you aren’t. The seven traits are: One, the ability to buy stocks while others are panicking, and the ability to sell at a time when other investors are euphoric. ‘Everyone thinks they can do this, but then when October 19, 1987, comes around and the market is crashing all around you, almost no one has the stomach to buy,’ Mr Sellers said. ‘When the year 1999 comes around and the market is going up almost every day, you can’t bring yourself to sell, because if you do, you may fall behind your peers. ‘The vast majority of the people who manage money have MBAs and high IQs and have read a lot of books. By late 1999, all these people knew with great certainty that stocks were overvalued, and yet they couldn’t bring themselves to take money off the table because of the ‘institutional imperative’, as Buffett calls it.’ Two, the great investor has to be obsessive about playing the game and wanting to win. ‘These people don’t just enjoy investing; they live it. They wake up in the morning and the first thing they think about, while they’re still half asleep, is a stock they have been researching, or one of the stocks they are thinking about selling, or what the greatest risk to their portfolio is and how they’re going to neutralise that risk. ‘They often have a hard time with personal relationships because, though they may truly enjoy other people, they don’t always give them much time. Their head is always in the clouds, dreaming about stocks. Unfortunately, you can’t learn to be obsessive about something. You either are, or you aren’t. And if you aren’t, you can’t be the next Bruce Berkowitz.’ (Berkowitz was a managing director of Smith Barney and set up his fund Fairholme Capital Management in 1999. Since inception, Fairholme Fund has returned 18.7 per cent annually on average.) The third trait of a great investor is the willingness to learn from past mistakes. ‘The thing that is so hard for people and what sets some investors apart is an intense desire to learn from their own mistakes so they can avoid repeating them. Most people would much rather just move on and ignore the dumb things they’ve done in the past. ‘I believe the term for this is ‘repression’. But if you ignore mistakes without fully analysing them, you will undoubtedly make a similar mistake later in your career. And in fact, even if you do analyse them it’s tough to avoid repeating the same mistakes.’ A fourth trait is an inherent sense of risk based on common sense. ‘Most people know the story of Long Term Capital Management, where a team of 60 or 70 PhDs with sophisticated risk models failed to realise what, in retrospect, seemed obvious: they were dramatically overleveraged. They never stepped back and said to themselves, ‘Hey, even though the computer says this is OK, does it really make sense in real life?’ ‘The ability to do this is not as prevalent among human beings as you might think. I believe the greatest risk control is common sense, but people fall into the habit of sleeping well at night because the computer says they should. They ignore common sense, a mistake I see repeated over and over in the investment world.’ Five, great investors have confidence in their own convictions and stick with them, even when facing criticism. ‘Buffett never get into the dotcom mania, though he was being criticised publicly for ignoring technology stocks. He stuck to his guns when everyone else was abandoning the value investing ship and Barron’s was publishing a picture of him on the cover with the headline ‘What’s Wrong, Warren?’. Of course, it worked out brilliantly for him and made Barron’s look like a perfect contrary indicator.’ Mr Sellers said that he is amazed at how little conviction most investors have in the stocks they buy. ‘Instead of putting 20 per cent of their portfolio into a stock, as the Kelly Formula might say to do, they’ll put 2 per cent into it. Mathematically, using the Kelly Formula, it can be shown that a 2 per cent position is the equivalent of betting on a stock which has only a 51 per cent chance of going up, and a 49 per cent chance of going down. Why would you waste your time even making that bet?’ The Kelly Formula arose from the work of John Kelly at AT&T’s Bell Labs in 1956. His original formulas dealt with the signal noise of long-distance telephone transmission. It was then adapted to calculate the optimal amount to bet on something in order to maximise the growth of one’s money over the long term. Six, it is important to have both sides of your brain working, not just the left side – the side that’s good at maths and organisation. ‘In business school, I met a lot of people who were incredibly smart. But those who were majoring in finance couldn’t write worth a damn and had a hard time coming up with inventive ways to look at a problem,’ said Mr Sellers. ‘I was a little shocked at this. I later learned that some really smart people have only one side of their brains working, and that is enough to do very well in the world but not enough to be an entrepreneurial investor who thinks differently from the masses. ‘On the other hand, if the right side of your brain is dominant, you probably loathe math and therefore you don’t often find these people in the world of finance to begin with.’ So finance people tend to be very left-brain oriented – and Mr Sellers said that that is a problem. A great investor needs to have both sides turned on, he said. ‘As an investor, you need to perform calculations and have a logical investment thesis. This is your left brain working. But you also need to be able to do things such as judging a management team from subtle cues they give off. ‘You need to be able to step back and take a big picture view of certain situations rather than analysing them to death. You need to have a sense of humour and humility and common sense. And most important, I believe you need to be a good writer.’ He cited Warren Buffett as one of the best writers ever in the business world. ‘It’s not a coincidence that he’s also one of the best investors of all time. If you can’t write clearly, it is my opinion that you don’t think very clearly,’ Mr Sellers said. And finally the most important, and rarest, trait of all: the ability to live through volatility without changing your investment thought process. This, said Mr Sellers, is almost impossible for most people to do; when the chips are down they have a terrible time not selling their stocks at a loss. They have a really hard time getting themselves to average down or to put any money into stocks at all when the market is going down. ‘People don’t like short-term pain even if it would result in better long-term results, he said. Very few investors can handle the volatility required for high portfolio returns. They equate short-term volatility with risk. ‘This is irrational; risk means that if you are wrong about a bet you make, you lose money. A swing up or down over a relatively short time period is not a loss and therefore not risk, unless you are prone to panicking at the bottom and locking in the loss. ‘But most people just can’t see it that way; their brains won’t let them. Their panic instinct steps in and shuts down the normal brain function.’

If monkey see monkey do can deliver a market beating return twice the return of S&P 500, I would also want to be that monkey

Yours Financially Free,
Willy Lim

Published November 17, 2007

Even a monkey can get 24% with this investment formula Investors could beat the S&P 500 just by imitating Warren Buffett’s trades Email this article (NEW YORK) Buying whatever billionaire Warren Buffett bought, often months after his share purchases, delivered twice the return of the Standard & Poor’s 500 Index during the past three decades. Investors would have earned an annual return of 24.6 per cent by buying the same stocks as Mr Buffett after he disclosed his holdings in regulatory filings, sometimes four months later, according to a soon-to-be-released study by Gerald Martin of American University in Washington and John Puthenpurackal of the University of Nevada, Las Vegas. The S&P 500 rose 12.8 per cent a year in the same period. ‘A monkey would have beaten the pants off the S&P 500 by following Warren’s buying and selling,’ said Mohnish Pabrai, who manages US$600 million at Pabrai Investment Funds in Irvine, California. Mr Pabrai and a friend paid US$650,100 this year in an annual charity auction to lunch with the 77-year-old Buffett. Mr Buffett’s stock picks outperformed his Omaha, Nebraska-based Berkshire Hathaway Inc from 2002 to 2006 when Berkshire shares advanced at a yearly rate of 7.8 per cent. By comparison, Berkshire holding USG Corp, the biggest maker of gypsum wallboard in North America, increased about 1,140 per cent and PetroChina Co, China’s largest oil producer, soared eight-fold. Mr Buffett built Berkshire Hathaway during the past four decades into a US$200 billion company with businesses ranging from ice cream and bricks to insurance and corporate jet leasing. Berkshire had US$77.9 billion invested in stocks at the end of September, according to a filing with the US Securities and Exchange Commission. The company’s shares closed on Thursday at US$135,300, the highest price on the New York Stock Exchange. Berkshire disclosed a new stake in CarMax Inc, the biggest US used-car dealer, in a regulatory filing on Nov 14, sending shares of the Richmond, Virginia-based company 7.6 per cent higher on Thursday. Berkshire held 14 million shares as of Sept 30, according to the quarterly filing. Mr Martin said he and Mr Puthenpurackal initiated their study because they wanted to know whether it was better to purchase the stocks that Mr Buffett was buying or invest in Berkshire. The market-beating returns on copycat investing are based on buying and selling at the end of the month following disclosure over 31 years. ‘Over the past five years, people haven’t been attributing enough of the value Buffett adds to Berkshire,’ Mr Martin said. ‘They’re missing his managerial expertise and how that makes his business grow.’ Mr Buffett’s biggest successes include Washington Post Co. Berkshire invested US$11 million in 1973, attracted by the newspaper’s management team. He also decided the company was in a business with high barriers to would-be competitors. Berkshire’s stake was worth US$1.3 billion at the end of 2006. Pasadena, California- based Wesco Financial Corp, which has insurance and furniture rental businesses, returned about 200 times the investment over 31 years, according to the study. The researchers included dividends in calculating gains of stocks and indexes. Mr Buffett bought US$488 million of PetroChina stock after reading the Beijing-based company’s annual report and concluding the company was worth more than three times its market value given rising oil prices and Chinese consumption. Berkshire started selling shares in the third quarter and said last month that it made about US$3.5 billion. The stake was disclosed in 2003. TXU Corp, the Texas power company purchased this year by a buyout group led by Kohlberg Kravis Roberts & Co, more than tripled in the time that Mr Buffett held the shares. — Bloomberg

November 16, 2007, 10.30 am (Singapore time)

US slowdown could hit Chinese growth

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BEIJING – China’s exports will shrink in response to any slowing of US growth, making downside risks to global growth the biggest challenge for Chinese policy makers next year, the Commerce Ministry said in a report published on Friday.

If US demand for Chinese goods slows, China’s economy could hit a turning point in 2008, the official China Securities Journal reported, citing a report by the ministry.

‘The slowdown in US growth, the risk of credit tightening, the escalating turbulence in the emerging financial markets and the increasing uncertainty in the global economy will drag down China’s exports,’ the paper paraphrased the report as saying.

The growth of China’s exports to the United States has slowed in the first three quarters of this year, the commerce ministry noted.

In July to September, exports to the United States grew 12.4 per cent from a year earlier, down from 15.6 per cent in the second quarter and 20.4 per cent in the first three months.

The World Bank said in a report on Thursday that a slowdown in Chinese exports might not be such a bad thing, as it would help trim the country’s gaping trade surplus and moderate growth, which hit an annual 11.5 per cent in the third quarter.

The ministry also said the widening interest rate spread between the two countries would offset part of China’s efforts to curb domestic inflation and asset bubbles, thus increasing the difficulty for its policy makers in steering the economy.

Meanwhile, global capital could take China as a safe haven, creating new challenges for financial regulators, it said. — REUTERS

“we are opportunistic and won’t pay current values because our costs would be too high“
- Lim Ee Seng, CEO Frasers Centrepoint Group

Even the developers themselves thinks that current property prices in Singapore are too high. People looking to buy a property in Singapore, perhaps should adopt a wait-and-see attitude

Yours Financially Free,
Willy Lim

Property

Published November 15, 2007

S’pore home price gains set to slow Buyers holding back purchases on US sub-prime fears, says Frasers CEO Email this article (SINGAPORE) Singapore’s home prices will probably increase at a slower pace as buyers hold back their purchases amid the US subprime crisis, said Lim Ee Seng, chief executive officer of Frasers Centrepoint Group. Losses related to US housing mortgages have sapped consumer confidence, Mr Lim said. Some buyers returned apartment units bought at the Singapore-based company’s new project, Soleil@Sinaran near the city’s downtown, forfeiting initial deposits, he said in an interview late on Tuesday. The outlook among homebuyers may also slow land purchases by developers including Frasers, one of the biggest buyers of older apartments in the city-state’s downtown, where they’re torn down for new home developments through so-called en bloc sales. The developer is a unit of Fraser & Neave Ltd, the city’s biggest beverage maker. ‘The sub-prime crisis has shaken investors’ confidence,’ he said. ‘We are still looking to boost our land bank, but we are opportunistic and won’t pay current values because our costs would be too high,’ he added, referring to the purchase of existing apartment buildings to increase its land holdings. Singapore’s home prices have climbed 14 consecutive quarters since 2004, soaring to a 10-year high this year as the island- state’s economy posted its longest economic expansion since 1991. The developer’s outlook for property sales also indicates its appetite may ease for new land purchases. The price gain has helped the developer on earlier purchases of existing apartments, which are sold at a profit. An example is the St Thomas Suites development in the city’s downtown, where apartments were recently sold at $2,189 a square foot. For a 2,605-square-foot apartment, the latest sale recorded by the government, the price was $5.7 million. ‘We bought the site of St. Thomas Suites at $600 per square foot,’ Lim said. ‘But nearby properties put up for en bloc sales are asking over $1,800, and a developer has to sell at at least $2,500 to cover costs.’ – Bloomberg