Low crime rate, ease of setting up business and timely emergency services

THERE’S no lack of Starbucks or Zara here, and certainly not sunshine, but still Singapore has slipped three rungs to 21st in a global ranking of the most liveable cities.

European cities, led by Munich, took the top spots in the latest quality-of-life survey by UK magazine Monocle, which goes beyond hard economic indicators in assessing the attractiveness of a city.

The poll includes ‘soft’ factors such as hours of sunshine and other attributes of urban appeal, such as the number of cinema screens and yes, the number of Zara and Starbucks outlets in town.

These are ‘often-overlooked factors that can bring happiness and ease to everyday life’, says the London-based lifestyle and global affairs magazine.

Singapore was rated highly for its low crime rate, ease of setting up a business – which takes about 15 minutes online – and prompt emergency services.

‘However, high stress levels, a relatively high cost of living and a sense of self-censorship present room for improvement,’ says Monocle.

Germany’s Munich beat Zurich, which slipped from first place last year to third this year, while Copenhagen hung on to the second spot.

Munich’s connectivity, cultural investment and abundance of green space helped it win top position, says Monocle. This is the second time the German city has been ranked number one since the survey started four years ago.

A growing commitment to embed environmental awareness in every aspect of urban planning was cited by Monocle as a key strength of the top three cities.

Several new metrics were introduced for this year’s survey, including the amount of outdoor seating available, accessibility of green spaces, response time for emergency services and ease of starting a business.

These new attributes place a higher premium on small-scale neighbourhoods than on over-developed expatriate cities, says Monocle.

The 2010 top 25 list remains largely unchanged from 2009, with only Amsterdam dropping out and Northwestern US city Portland joining the league.

‘There was a noticeable lack of reshuffling in 2010, in part because the economy saw many large-scale improvement projects put on hold,’ says Tyler Brule, Monocle’s editor-in-chief.

‘But there were enough shifts, including Geneva, Madrid and Portland, to ensure no mayor should be resting on last year’s performance.’

Tokyo, which dropped one spot to fourth position this year, was lauded for its connectivity and easily accessible transport system.

Other regional cities that made the top 25 list were Melbourne (9), Sydney (12), Fukuoka (14), Auckland (20) and Kyoto (23).

Source: Business Times, 21 Jun 2010

Strong Sing$ pushes it up 5 rungs to become 67th priciest city to live in

A STRONGER currency has pushed Singapore to the 67th most expensive city to live in, five places higher than its 72nd position last year, according to the latest rankings provided by ECA International.
Among Asian cities, Singapore gained one level to ninth place. This makes Singapore a more pricey place to live in as compared with South Korean’s Busan and Ulsan, and Taipei in Taiwan. It is, however, still cheaper than Chinese cities Hong Kong and Shanghai, as well as Japan’s Tokyo – which snagged the spot as the world’s most expensive place to live in. Singapore’s rise in the cost of living rankings come on the back of a strengthened local currency, which ‘has been strong relative to other major currencies in the region’, said ECA.

It added that prices of goods and services commonly bought by international assignees have also risen at much faster rates here, as compared with other developed cities regionally.

Said ECA’s regional director for Asia, Lee Quane: ‘Singapore’s rise continues a long-term trend. In recent years, we have witnessed the city’s gradual move up our rankings. The cost of living differential between the city state and Hong Kong has become smaller and smaller.

‘This is a double-edged sword,’ he said.

On the one hand, companies here will now see lower cost of living allowances when they send staff out of Singapore. On the other hand, for companies bringing staff to Singapore, allowances will carry on increasing as Singapore continues to move up the ranking table.

Worldwide, Norway’s Oslo came in after Tokyo to rank as the second-most expensive city to live in. Rounding up the top five list are Luanda in Angola – where many regularly used items are expensive due to the country’s war-damaged infrastructure – and Japan’s Nagoya and Yokohama. In Asia, the Japanese city of Kobe and South Korea’s capital city, Seoul, joined Tokyo, Nagoya and Yokohama at the top.

ECA’s cost of living study is done based on surveys carried out in March and September every year using a basket of day-to-day goods and services such as meat, fresh fruit, vegetables, clothing and electrical goods. The data for its latest survey was collected in March this year, and was compared with information taken in the same month last year.

Source: Business Times, 15 Jun 2010

Their support of own property firm’s projects keeps investors assured

CAPITALAND disclosed recently that its group president and chief executive officer Liew Mun Leong had paid about $3.74 million for a penthouse on the 23rd level of The Interlace, a development at the junction of Depot Road and Alexandra Road.

Having directors of property firms snap up units is not unusual. Many transactions are not picked up in media reports even though the property companies have disclosed the purchase on the Singapore Exchange website.

Property consultants see such purchases by directors and interested persons as a vote of confidence in the project.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said: ‘When the market is hot, directors and their immediate family members usually get onto the VVIP list and are able to pick the choice units.’

He added: ‘On the other hand, when the market is slower, or the sale of the project is not progressing as fast as expected, some directors may buy units, and sometimes even at a bullish price, to give confidence to buyers and investors.’

Under Singapore Exchange listing rule 910, the sale of a unit developed by a listed company to its own director must be disclosed, partly because directors may get a discount. The disclosure of the purchase will inform shareholders about the terms a director has received.

In essence, such disclosures and the review of the purchase terms by the company’s audit committee are to show that the sale has not hurt the interests of the minority shareholders or the company, for example, by the sale of a unit at a rock-bottom price to the director.

Indeed, companies generally disclose fairly detailed information nowadays: the name of the purchaser, the relationship to the director if it is not the director making the purchase, and the price, terms and even the unit number of the project.

At the expense of an even greater loss of privacy for directors, more disclosure in this area could well be something to consider.

For instance, what about when a director sells a unit?

Currently, no such disclosure is required. The rationale is that these are open market transactions with no impact on the company involved.

However, disclosure advocates argue that in a hot market, if a director sold a unit a few months after making the initial deposit, shareholders would be none the wiser unless they had taken various tedious steps to check if the unit had been sold.

So consider this: Shareholders or other buyers might pile into the project, thinking it must be a good buy, based, at least in part, on the disclosure that a company director had bought a unit.

But in the meantime, the director or his immediate family members could well be pocketing a tidy profit, having quietly exited the project.

And they have a strong incentive for trying to sell, as the directors usually get the best pickings of the units on offer – which are likely to yield the best selling prices.

Of course, there are arguments for why disclosure of a director’s sale would be going over the top.

For instance, if the unit is sold to an unrelated third party as is usually the case, the sale has no direct bearing on the listed company which is what minority shareholders would be concerned about.

Another argument is that the unit could be sold for strictly personal reasons, such as the need to raise cash. The public or investors, unaware of these personal factors, might read too much into a director selling off a unit he had just bought a few months ago.

Also, since each purchase involves large sums, it is unlikely that any one director could commit himself to many transactions, which tends to diminish the force of the case for public disclosure.

But with many of these purchases, the same group of directors is likely to be involved. As property firms have a pipeline of projects, these same buyers are likely to feature over and over again so their buying patterns would be of some interest to investors.

The sale of properties soon after purchase at the time of a launch could be seen as analogous to the sale of shares by key shareholders soon after an initial public offering.

These disclosure questions give rise to another possible change that would offer greater certainty to shareholders: encouraging companies to put a moratorium on sales by their directors until the property obtains a temporary occupation permit.

That would offer a clear assurance to investors that directors who make purchases are committed to the project.

Source: Straits Times, 14 Jun 2010

A survey has ranked Singapore as the ninth most expensive location in Asia to live in.

According to human resources consultant ECA international, Singapore’s currency has been strong relative to other major currencies in the region.

Furthermore, it said prices of goods and services commonly purchased by expatriates have risen at much faster rates here than in other developed locations.

Globally, Singapore has gained six places in ECA’s global rankings and is now in 67th position, overtaking locations such as Guangzhou and Shenzhen.

ECA International said Singapore’s rise up the list continues a long term trend.

In addition, the cost of living differential between Singapore and Hong Kong has become smaller and smaller, said ECA International’s regional director (Asia), Lee Quane.

This, he said, is a double-edged sword: on the one hand companies sending staff out of Singapore need to pay lower cost of living allowances for an employee to maintain their standard of living on assignment.

On the other hand, for companies bringing staff into Singapore, allowances will carry on increasing as Singapore continues to rise on the ranking table.

Tokyo has regained its status as the world’s most expensive city for the first time in five years.

ECA said the Japanese yen, which has gained in value by about 30 per cent against the US dollar in the past three years, has contributed to the Japanese capital’s position at the top of the ranking.

Joining Singapore and Tokyo in Asia’s top ten are the Korean cities of Seoul and Busan as well as Hong Kong, Beijing and Shanghai.

ECA International said currency fluctuations continue to be the main factor impacting the ranking of Asian locations.

The strengthening of Asian currencies over the past year, on the back of strong economic performance, has contributed to the higher costs.

Conversely, locations in mainland China have become cheaper, with Shanghai falling 18 places and Beijing dropping 29 places.

This is due mainly to the pegging of the Chinese yuan to the weakened US dollar.

Shanghai is China’s most expensive city followed by Beijing and Guangzhou.

Norway’s Oslo is the second most expensive city in the world and the most costly European nation.

ECA International said the strengthening of the krone against major currencies, an upward trend in oil prices and a short-lived recession contributed to its rise.

Source: Channel News Asia, 14 Jun 2010

11% of households in S’pore have investable assets of over US$1m

SINGAPORE added millionaires at a faster rate than anywhere else in the world last year, despite a recession that decimated wealth in many nations.

The millionaire club grew by 35 per cent here, putting Singapore just ahead of second-placed Malaysia, with a 33 per cent gain, and Slovakia on 32 per cent and China on 31 per cent.

In absolute numbers, the United States still has by far the most millionaire households at 4.7 million, followed by Japan and China. But you are more likely to bump into a millionaire here.

An annual study by Boston Consulting Group (BCG) showed that Singapore had the highest concentration of millionaires, as in 2008. A total of 11.4 per cent of households here own more than US$1 million (S$1.4 million) – defined as those with investable assets of over US$1 million, exclusive of property and items like art. BCG did not provide the number of millionaire households in Singapore.

Hong Kong was next in terms of concentration, followed by Switzerland, Kuwait, Qatar, the United Arab Emirates and the US.

Singaporean T.J. Thang, who belongs to the elite group, did not fare too badly during the downturn. ‘Some of my stocks fell in value during the recession, but I was still getting attractive property rental yields, and hence my cash grew,’ said the 49-year-old businessman.

Economists and wealth managers cite a number of factors as to why Singapore is leading the way in the growth of millionaire households. One is the increasing number of property owners reaping profits from en bloc sales.

‘I had a few friends who benefited from the en-bloc windfall and they parked their money in stocks and bonds,’ said Mr Richard Wee, chief executive of private bank Lombard Odier Darier Hentsch & Cie (Singapore).

People here are also more likely to capitalise on their familiarity with the region by investing in shares in fast-growing Asia. The MSCI index of Asia-Pacific stocks traded outside Japan rose nearly 70per cent last year – its best performance since 1993 – far outpacing expected gains of just over 20per cent in US and European stocks.

Then there is Singapore’s ‘liberal admissions policy’ to attract talent and the well-heeled, said CIMB Research economist Song Seng Wun.

Today, virtually every big-name private bank which caters to the well-heeled has made Singapore its regional hub.

What this latest report means is, ‘for all the private bankers who are here, it confirms that this is the right spot to be’, said Mr Rolf Gerber, chief executive of LGT Bank in Liechtenstein (Singapore).

BCG told The Straits Times yesterday: ‘Part of the reason for high wealth is that Singapore has a much higher savings rate than a lot of countries with higher average incomes.

‘In terms of the ‘average Singaporean’, the majority of households in Singapore (about 60 per cent) have bankable assets worth between US$250,000 and US$1 million, with more at the lower end of the range than the higher end.’

Another factor could have been the strength of the Singapore currency against the US dollar.

The sharp rise is also likely taking place from a low base. A Merrill Lynch Cap Gemini report last year reported that the number of millionaires in Singapore had fallen 21 per cent to 61,000 in 2008 due to the financial crisis.

Separately, the latest figures from Singapore’s taxman show that there were 3,838 taxpayers who earned more than $1 million in 2007.

BCG’s study reviewed the assets under management covering 62 markets representing around 99 per cent of global economic output.

————————————————
Top of the list
Country growth in millionaire households
Singapore: 35%
Malaysia: 33%
Slovakia: 32%
China: 31%
Morocco: 28%
South Korea: 28%
United Arab Emirates: 23%
Germany: 23%
Indonesia: 21%
Algeria: 21%

Source: Straits Times, 12 Jun 2010

Singapore stands out, with such households rising by 35% last year

THE rebound in asset markets last year has buoyed the global wealth market by 11.5 per cent to US$111.5 trillion, with Singapore making its mark yet again as the market with the highest growth in millionaire households.

Singapore’s millionaire households rose 35 per cent in 2009, says the Boston Consulting Group (BCG) in its latest Global Wealth Report. Singapore also had the highest concentration of millionaire households at 11.4 per cent, followed by Hong Kong at 8.8 per cent.

These comprise households with at least US$1 million in assets under management (AUM). BCG’s data cover liquid assets and exclude property.

But while asset growth may look robust, there are sobering aspects to the business. Wealth managers’ average profitability fell to 22 basis points, from 27 basis points in 2008.

The survey of 114 wealth-management institutions worldwide found that revenues fell despite the fact that assets under management of the firms surveyed increased by an average of 14.3 per cent. Revenue margins – measured by return on assets – slipped by an average 12 basis points to 83 basis points. While managers’ costs fell, it was not enough to offset the fall in revenues. Cost-to-income ratio hence rose to 74.4 per cent from 72.3 per cent previously.

BCG says in its report: ‘The recovery in AUM masks significant and lasting challenges to the industry’s profitability. In most regions, wealth managers face the prospect of persistently low revenues and revenue margins, along with stubbornly high costs.’

It adds: ‘Wealth managers must not allow the surge of global wealth to lead to a sense of complacency or a lack of urgency when it comes to addressing (the) challenges. They must focus on quality, precision and service delivery – as well as on truly understanding the client.’

The average cost-to-income ratio in Asia actually rose 24 percentage points between 2007 and 2009. This is a greater magnitude than the global average increase of five percentage points in the same period.

What’s more, global assets in 2009 remained in a state of flux. This was driven, says BCG, by a couple of trends: Clients moved assets out of global institutions, spreading them among multiple banks. And, regulatory pressure led to a repatriation of assets from offshore centres to clients’ home markets.

Still, net new assets – the difference between asset inflows and outflows excluding market performance – rose by an average of just 1.5 per cent globally. Asia-Pacific saw net new money of 6.2 per cent.

The outlook for Asia and the emerging markets, however, remains bright. BCG expects global wealth to grow at an annual clip of nearly 6 per cent from end-2009 to 2014. Asia’s growth is expected to be nearly twice the global rate.

BCG partner Tjun Tang, who also co-authored the report, said: ‘There is no doubt that wealth will continue to grow faster in emerging markets, fuelled by strong economic growth. We expect Asia-Pacific, including Japan, to grow at nearly twice the global rate, raising its share of global wealth from 15 per cent in 2009 to almost 20 per cent in 2014.’

Switzerland remained the largest offshore wealth centre with US$2 trillion or 27 per cent of global offshore wealth. BCG lists Singapore and Hong Kong’s combined share at US$700 billion or about 9.4 per cent of total offshore AUM of US$7.4 trillion.

In Asia and Europe, market values and increased savings played an equal part in the AUM rise. In the United States, market values accounted for 70 per cent of the rise in AUM. While Europe remained the largest wealth region with US$37 trillion in AUM, the largest absolute gain in wealth was seen in North America. Asia registered the greatest percentage gain in wealth of 22 per cent to US$3.1 trillion.

Clients’ asset allocation remained fairly conservative in 2009. Globally, allocations to cash rose declined from 51 per cent in 2008 to 48 per cent last year. But the latter is still higher than the 2007 cash allocation of 44 per cent.

Equities’ share was 30 per cent. Here lies part of the reason for wealth managers’ lower margins as clients still preferred simpler products. This is in addition to the pressure of fewer transactions and tougher price negotiations.

Tongjai Thanachanan, a core member of BCG’s South-east Asia asset and wealth management practice, said: ‘Investors have started moving assets out of safe havens, but they still have a lot of wealth parked in basic, low-margin products.

‘Their asset allocations tend to be more conservative than their actual risk profiles. In addition, the use of discretionary mandates is down, as investors remain wary of signing over control of their wealth.’

Source: Business Times, 12 Jun 2010

Analysts expect drop in transactions

The local property market is in for a correction in the coming months, said industry players, citing tell-tale signs like a plateau in home prices and a drop in transaction volumes.

The Singapore Institute of Surveyors and Valuers (SISV) said there were only 899 caveats lodged for condominiums in the first three weeks of last month. There were 3,060 for the whole of April.

And although new condominium projects are still doing well, property agents said homes sales in the secondary or resale market have dropped by up to 20 per cent recently.

Dennis Wee Group said buyers are becoming more cautious going by last month’s sales figures.

“Instead of seeing a 30 per cent increase in transactions as in the month before, I only saw a marginal 3.5 per cent increase,” said Mr Chris Koh, director at Dennis Wee Properties.

“A lot of buyers are pulling their handbrakes. What they feel today is that the seller is asking for too high a price and ‘if I am not in a hurry, why not sit and wait?’” he added.

Industry data from SISV showed sales falling across various districts as of the middle of last month.

The prime districts of 9, 10 and 11 recorded a 76 per cent drop, while the downtown city area saw the sharpest decline of 88 per cent.

Analysts also expect transaction volumes to fall by 5 to 10 per cent due to the World Cup which begins tomorrow.

Meanwhile, ECG Property said it now takes longer to close a transaction. It used to be about 45 days before, but is now up to 80 days.

Industry players expect the market correction to last between three and six months, and some said home prices could trend down by 3 to 5 per cent on average during this period.

“Some of these prices are over book-keeping value where some banks may not even match some of the asking prices today,” said Mr Eric Cheng, chief executive officer of ECG Property.

“That also shows that these prices could be a speculation price instead of a true reflection price. I think the market is going through a slight correction,” he said.

Analysts said prices may also be capped by more land supply due to be released by the Government. Other risk factors include volatile stock markets and the European debt crisis.

Source: Today, 10 Jun 2010

Industry players have said Singapore’s property market is in for a correction in coming months.

Tell-tale signs include a plateau in home prices and a drop in transaction volumes.

The Singapore Institute of Surveyors and Valuers said there were 899 caveats lodged for condominiums in the first three weeks of May.

This compares with 3,060 for the whole of April.

New condominium projects are still doing well. But property agents said home sales in the secondary or resale market have dropped by up to 20 per cent recently.

Dennis Wee Group said buyers are becoming more cautious, going by sales figures in May.

Chris Koh, director, Dennis Wee Properties, said: “Instead of seeing a 30 per cent increase in transactions as the month before, I only saw a marginal 3.5 per cent increase. A lot of buyers are pulling their handbrake, what they feel today is that the seller is asking for too high a price, and if I am not in a hurry, why not sit and wait.”

Industry data from the Singapore Institute of Surveyors and Valuers showed sales falling across various districts as of mid-May.

The prime districts of 9, 10 and 11 recorded a 76 per cent drop, while the downtown city area saw the sharpest decline of 88 per cent.

Analysts also expect transaction volumes to fall by 5 to 10 per cent due to the upcoming World Cup season, which begins on June 11.

Meanwhile, ECG Property said it now takes longer to close a transaction. It was about 45 days before, but it takes up to 80 days now.

Industry players expect the market correction to last between three and six months, and some said home prices could trend down by 3 to 5 per cent on average during this period.

Eric Cheng, CEO, ECG Property, said: “Some of these prices are over book keeping value, whereby some banks may not even match some of the asking price today. That also shows that these prices could be a speculation price instead of a true reflection price. I think the market is going through a slight correction.”

Analysts said prices may also be capped by more land supply due to be released by the government.

Other risk factors include volatile stock markets and the European debt crisis.

Source: Channel News Asia, 9 Jun 2010

Where do you see this?

In estate planning and home ownership articles.

What does this mean?

Homeowners have two ways to specify how they share a property – as joint tenants or tenants-in-common.

When a couple hold a property under joint tenancy, ownership goes to the surviving party when one owner dies. If, say, the wife dies first, the property will belong solely to the husband.

But if the couple holds the property as tenants-in-common, their shares will go to their respective estates on their deaths.

Why is it important?

It is important to be clear on the holding status of your property as it will have a bearing on what happens to it when one owner dies.

This is especially so if one party has paid a larger share in buying a property and wants to have a bigger say on who should benefit from it when he dies.

Let’s assume you paid more for your matrimonial home and it was bought in joint tenancy with your spouse. You discover he has an affair and file for a divorce.

It may be prudent at this point to change the holding status to that of a tenants-in-common so that you can will your share of the property to your children. If you fail to do so and you die before the property is split, ownership will go completely to your spouse, even if your will states otherwise.

So you want to use the term. Just say…

‘My apartment is held by my sister and I as joint tenants. So if I should die first, she will get the entire property.’

Source: Sunday Times, 6 Jun 2010

SINGAPORE retained its ranking as the Asian city with the best quality of life, while Hong Kong lags behind rival financial hubs as it struggles with air pollution, according to a survey by Mercer Consulting.

Singapore ranks 28th among 221 cities, Tokyo is 40th and Hong Kong is placed 71st, the list shows. Hong Kong also trails behind New York City (No. 49), and smaller Japanese cities such as Kobe and Yokohama (tied for No. 41), Osaka (No. 51) and Nagoya (No. 57), according to the list.

The cities are rated on 10 factors including infrastructure, political and social environment, and access to medical care. Hong Kong scored poorly on health concerns, said Ms Cathy Loose, a Tokyo- based Mercer officer who helped compile the list.

‘The government hasn’t done very much to introduce green measures or reduce pollution,’ Ms Loose said in an interview. The list serves as a compensation guide for expatriate relocation.

Hong Kong’s score of about 94 points is little changed, which leaves it 5 points above the level at which Mercer says hardship allowances should be paid to workers who relocate. For cities including Beijing and Mumbai, a 10 per cent allowance is suggested, while an allowance of up to 28 per cent is suggested for Phnom Penh.

Hong Kong’s air pollution was its worst on record during the past two quarters, sparking regular government health warnings. To address the problem, the government introduced a Bill last month proposing a ban on idling vehicle engines, among other measures.

Said HK Environmental Protection Department spokesman Eva Wong, in an e-mailed response to questions from Bloomberg: ‘To tackle local emissions, we have been implementing very stringent control measures which are equivalent to those required by other advanced countries.’

The government is working with local bus companies and neighbouring cities in southern China to curb air pollution, and is investing HK$300 million (S$54.5 million) to develop low-carbon transport technology to cut roadside emissions, she said.

Singapore lags behind Hong Kong only on measurements of personal freedom and media censorship, said Ms Loose. Mercer is a unit of Marsh and McLennan.

In a Mercer statement, Ms Loose said: ‘In addition to quality of living, this year’s ranking also identifies the cities with the best eco-ranking based on water availability and drinkability, waste removal, quality of sewerage systems, air pollution and traffic congestion.’

For Asia, Kobe (No. 9) came out on top in eco city ranking, followed by Singapore (No. 22), while Dhaka (No. 220) ranked the lowest, she added.

Hong Kong’s effort to cut pollution and protect the environment trails behind that of Havana and ranks just above Damascus, the list shows. Overall, Vienna retains the top spot as the world’s best city to live in.

BLOOMBERG

Source: Straits Times, 27 May 2010