Saturday, December 10, 2011

財事專題.慧眼識真金(第1篇) 股市動盪貨幣貶 亂勢造黃金投資熱潮

財事專題.慧眼識真金(第1篇) 股市動盪貨幣貶 亂勢造黃金投資熱潮
Source/转贴/Extract/Excerpts:中 國報
Publish date:10/12/11

中出手相助‧歐峰會有進展‧美股勁揚186點

中出手相助‧歐峰會有進展‧美股勁揚186點
Created 12/10/2011 - 18:38

(美國‧紐約10日訊)歐洲峰會有進展,歐盟同意擴大紓困基,加上路透引述北京消息,中國官方已批准中國人民銀行籌建新的外匯投資機構,初始資本規模約達3千億美元,以“華美”及“華歐”兩大基金,進軍歐美市場,美國股市受激勵,道瓊斯工商指數收漲186.56點或1.55%,報12184.26點。

美國股市週五漲勢凌厲,標準普爾500指數週線連2紅,歐洲領袖同意擴增援助基金規模,美國消費者信心優於預期,成為帶動盤勢的兩大利多。

標普500指數收漲20.84點或1.69%,報1255.19點,本週計漲0.9%;以科技股為主的那斯達克綜合指數收漲50.47點或1.94%,報2646.85點。費城半導體指數收漲4.54點或1.22%,報375.67點。

歐股勁揚

歐洲股市週五收紅,週線跌幅收斂,主因歐元區領袖就建立財政同盟形成共識,加上報導傳出中國人民銀行將設立規模3000億美元的基金,大舉投資海外。

道瓊歐洲600指數收漲2.80點或1.18%,報240.51點,4個交易日來首見紅盤。在決策人士齊聚布魯塞爾峰會共商歐債危機對策之際,這項指數本週週線跌幅縮減至不到0.1%。

西歐18家主要股市中共計15家以紅盤作收。

英股FTSE-100指數收漲45.44點或0.83%,報5529.21點;法股CAC-40指數收漲76.86點或2.48%,報3172.35點;德股DAX-30指數收漲112.27點或1.91%,報5986.71點。

中國此舉被市場解讀為將分頭對歐美兩大市場出手救市,以3千億美元投資基金買進歐美資產,協助歐美度過不穩的債務危機。

美12月消費信心大起

而受此刺激,原本走勢遲緩的歐洲股市精神一振,全面翻揚,美股也告大漲,密西根大學12月消費者信心指數,意外升至67.7,創6月以來新高,也有助漲勢。

美國12月消費者信心升幅超乎預期,登上6個月高點。

湯森路透/密西根大學消費者信心指數初值,從11月終值64.1攀升至67.7,彭博社訪查73名經濟師的預測中值為65.8。



Source/转贴/Extract/Excerpts: 星洲日報
Publish date: 10/12/11

西南证券张刚:2012年沪指高点3800点

西南证券张刚:2012年沪指高点3800点
2011-12-10 11:14:21 来源: 网易财经
网易财经12月9日讯 西南证券今日召开2012年投资策略会,主题为挖掘政策分红。

西南证券首席策略分析师张刚认为,大盘在2300点附近为有效底部,而2012年上行目标位3800点附近。

张刚称,从历史上十六个底部形成前后的日均成交金额看,除了1996年的第一次底部、2006年的一次底部和2007年的两次底部,由于处于牛市阶段,底部前后的日均成交金额对比不明显外,其余八个底部的日均成交金额差异都很大,形成底部后的二十个交易日的日均成交金额一般是之前的1.5倍,最高接近10倍。


历史数据统计显示,在有效底部确立后,随后的上升波段累计升幅60%多的幅度居多。假设1665点附近的政策底能够成为关键性重要底部,即有效时间能够持续8个月以上,在后势的回升阶段就需要日均成交金额放大至1500亿元以上,若达到这一要求可被视为2012年上半年的重要支撑位。

“按照65%的幅度计算,上升目标位为3795点,约3800点附近。”张刚称,预计为2012年的高点。相反,若后续日均成交无法持续放大,上升只可被看做弱势中的反弹,而下跌处于千亿元附近,则是筑底阶段。2011年的高点,也是密集成交区3000点附近将成为上升阶段重要的阻力位。

责任编辑:NF058(本文来源:网易财经 )

Source/转贴/Extract/Excerpts: 网易财经
Publish date:10/12/11

馬航將推頂尖設備航線‧昆達士航空:無阻雙方合作

馬航將推頂尖設備航線‧昆達士航空:無阻雙方合作
Created 12/10/2011 - 19:23

(吉隆坡10日訊)澳洲昆達士航空公司(Qantas)強調,馬航(MAS,3786,主板貿服組)計劃在2012年中推出頂尖設備航線,並不會影響雙方聯營在大馬設立“高級頂尖航空業務”的最初計劃。

昆達士航空行政官艾倫左依斯接受媒體採訪時指出,有關聯營洽談工作仍持續進行中,並不受馬航轉虧為盈計劃影響。

“聯營頂級航線行程,是從澳洲將乘客接送來大馬,然後再轉機至歐洲,我們對這項合作計劃持有非常大的熱誠,不受馬航最新宣佈影響。”

馬航近期宣佈為期兩年的轉虧為盈計劃,當中提及會在2012年設立新頂尖航線,導致該公司與昆達士航空原訂聯營計劃出現疑點。有報導稱,上述聯營計劃將如期在明年2月開跑。

國際航空運輸協會(IATA)早前估計,亞太區受危機影響的程度雖低於其他地區,但在最糟的情況下,亞太區航空公司依然可能面臨超過10億美元(31億4千萬令吉)虧損,昆達士航空與馬航此時合作推出新航線,前景或充滿挑戰。




Source/转贴/Extract/Excerpts: 星洲日報
Publish date: 10/12/11

担心解体 外移保本 南欧大企业北逃

担心解体 外移保本 南欧大企业北逃
Created 12/10/2011 - 17:23

(布鲁塞尔10日讯)欧债阴霾浓得化不开,欧元区各大型企业为求保命,纷纷研拟应急方案,包括削减投资,转移资金至经济相对稳健的德国避风头,把位于南欧的企业总部往北迁,甚至关门歇业。

西班牙的Wi-Fi无线网路营运商Gowex集团,由于预期该国将会退出欧元区,正把资金转移到德国。

执行长贾西亚直接了当指出:“我不相信西班牙将留在欧元区,我们把现金和存款挪到德国,因为西班牙将重新使用旧币比塞塔(peseta)。”

西国文件管理公司SPS则表示,为因应欧元区可能解体,考虑把总部由巴塞罗那移往英国或北欧。

只能随机应变

2000年,欧洲企业为迎接欧元上路,大手笔砸下数十亿美元做准备工作。但才不过11年光景,面对欧元可能解体的冲击,德国成为这些企业保住老本的避风港。

据德国央行上月9日发布的经常帐统计分析,9月的非银行登记资本流入额为113亿欧元。拜此之赐,原本八月逆差达473亿欧元的其他资本流入额,在9月时得以转为顺差7亿欧元。

在希腊可能遭逐出欧元区,意大利十年期公债殖利率飆破7%后,欧洲企业只能随机应变。

德国的机械制造商GEA集团,为存放在单一银行的金额设定上限,以免遭到体质脆弱的欧元区银行业拖累。

欧元区外也难置身事外

德国最大碳酸钾供应商K+S集团也采取同样做法,以分散风险。

荷兰金融服务巨擘科威集团(Wolters Kluwer)执行长麦金斯崔女士坦言,董事会已投入更多时间进行情境规划:“几星期前,我压根没想到会讨论欧元消失的可能性。”

瑞士的工业集团ABB执行长霍根说,一旦爆发危机,公司自有对策:“近几星期来,我们不断更新因应计划,并使其更加详尽。”

全球最大豪华房车制造商德国宝马汽车,则强化2009年金融危机期间的应变方案,如果金融市场暴跌,就会采取行动。财务长艾希纳指出,方式包括最多减产30%。

欧元区外的企业为免遭拖累,也无法置身事外。欧洲最大的DIY连锁集团,英国Kingfisher执行长契薛尔指出,公司已考量欧元区崩解的可能性,未来将著重现金增值业务。



Source/转贴/Extract/Excerpts: 南洋商报
Publish date:10/12/11

CNBC的2012年预言

1. 美国银行放弃美林证券
美国银行在融资失败后将世界最大的零售经纪商美林证券挂牌出售。美国银行在2008年金融危机顶峰期以487亿美元证券交易的价格收购了美林证券。美林证券的经纪人们欢欣雀跃,而加拿大道明银行和皇家银行正在谨慎考虑这一收购。
—加里•凯明斯基

2. 奥巴马冲击税法
不管奥巴马总统是够能够成功连任,其将在2012年12月废除布什富人减税方案。投资者们将在2013年1月1日资本收益税率从15%重返20%前聚集抛售盈利资产。为了缓和经济的不确定性,议会领袖将会一如既往地反对该措施,以避免2013年1月导致消费水平大幅下降。

3. 再见,贝兰克梵
贝兰克梵将卸任高盛总裁。自2006年6月成为高盛的董事长兼首席执行官以来,他疲心竭虑。他经受住了2007年的信用泡沫,金融危机,公司转型。很多人认为高盛需要后危机时期的领导人—如果贝兰克梵在明年同他们达成一致,我将不会吃惊。
—约翰•卡尼

4. 脸书收购奈飞
奈飞股价大跌,奈飞总裁里德•哈斯廷斯担任董事会成员的脸书趁机收购奈飞。
—赫布•格林伯格

5. 汽油价又涨
汽油零售价已经超过4美元一加仑,临近2008年的历史最高价。原油价格的上涨是根据,但是汽油价可能还将会因为其自身情况而上升。多于石油的汽油远期合约刺激了加油站的油价上升。石油价一般在第四季度跌底,而在三五月间达到高峰,由于精炼厂维修,已经从冬季级石油换成夏季级石油。此外,费城附近一家大型炼油厂的关闭,德拉瓦河沿岸可能也会关闭两家炼油厂,这将加剧汽油价格上涨的趋势。
—莎伦•爱普森

6.美元胜出欧元
欧元将在年底与美元平价。欧洲央行要拯救银行和破产迫在眉睫的国家除了印刷欧洲外别无他法,而这通常又会导致欧元下跌。
—布赖恩•沙利文

7. 黄金热的冷却
我不觉得黄金将突破2,000美元/盎司。黄金价格已经到了顶点,甚至有点估值过高了。接下来人们应该是会炒股而不是炒黄金了。我对股市很有相信,所以我自己是不会买黄金了。
—拉里•库德罗

8. 印度危机
印度愈演愈烈的经常账户赤字问题将持续影响其经济发展。再加上连绵不绝的腐败丑闻,整个形势不容乐观。印度的通胀和利率将继续攀升,而经济发展步伐却渐行渐缓。民众将通过选举的手段表达他们对执政党的不满。政府可能将对此应接不暇,年底的时候,印度将会迎来新的总理。
—迪潘·巴格其

9. 白宫与华尔街之战
奥巴马总统将会继续他对华尔街的强硬手段,以此赢得2012年大选。
—吉米•克莱姆

10. 安卓大战
安卓的市场份额巨大,情况到了2012年应该出现些许变化:那就是一个分裂的安卓市场要诞生了。Google将借助刚收购的摩托罗拉重新定义安卓市场。而亚马逊手机的出现将会使整个市场复杂化。2012年将有很多安卓。
—约翰·佛德



Source/转贴/Extract/Excerpts: CNBC
Publish date: 10/12/11

下调存准率能否终结熊市?

下调存准率能否终结熊市?

作者:Deepanshu Bagchee CNBC亚洲 来源:CNBC.com 发表于:CNBC.com 2011年12月8日

上周四,在中国央行宣布降低所有银行的存款准备金比率50个基点后,低迷了几个月的中国股市防范吃了一剂兴奋剂。

香港恒生指数大涨5.8%,沪指上涨3.5%,尽管疲弱的制造业数据在11月出现了近3年来的首次下滑。

分析师说,要确定中国市场的反弹是否继续,还得看央行下一步的行动:这是一次性的措施,还是3年的货币紧缩政策正发生变化。

巴克莱银行专家表示,此次降低存准率将给银行体系增加约620亿美元的流动资金。巴克莱方面认为,该行动是一个宽松周期的开始,并预测在2012年中期之前,还有三次降息。

汇丰中国股票研究负责人孙瑜(Steven Sun)也预计,货币政策正开始全面变化。但他补充说,这一行动对股市的长期影响尚不清楚。 “市场反弹要想持续下去,我们仍然需要看到更多的增长前景证明以及金融行业的改革,”他说。

孙瑜指出,中国的问题不是缺乏资金流动性,而是在诸如房地产等领域资金过度集中。需要确保流动性到达正确的地方。而这需要通过金融部门的改革来实现。

具有讽刺意味的是,这种改革可能会导致利率上升,一些分析家指出。太长时间以来,中国一直依靠提高存款准备金率和实行贷款限额来控制信贷。更加市场化的信贷体系可能会要求利率上升,目前6.56%的水平被普遍认为过低了。

香港对冲基金Central Asset Investments的首席投资官埃迪•潭(Eddie Tam)说,2012年更有可能出现的情况是,央行将加息而不是降息。

“一个数据点还不能构成趋势,”他谨慎地表示。

投资亚洲的国内成长型股票

巴黎百富勤亚洲证券研究副主管欧文•圣夫特(Erwin Sanft)表示,2012年将是中国以及整个地区股票市场的一个好年景。

“我们正在对明年的估值进行研究,发现其处于历史交易区间的底部,”他说。“显然,我们已经看到中国的政策正向宽松的立场转变,在印度政策紧缩已经结束。”

圣夫特建议投资者下注于亚洲的国内成长型股票。在本周早些时候发给客户的研究报告中,圣夫特列出了亚洲12只大型股的名称,认为即使在发达世界的增长持续低迷之际它们的表现也将很好。

他首选的中国股票包括煤炭生产商中国神华和保险公司平安。他也看好三星电子、现代汽车、新加坡电信和雅虎日本。

圣夫特说,该公司选中的股票篮子中,其平均市盈率刚刚超过10倍,但他承认,由于投资者担心经济增长问题,现在要说服人们购买股票非常艰难。



Source/转贴/Extract/Excerpts: CNBC亚洲
Publish date: 08/12/11

Daryl Guppy: Food for thought in China

FOOD IS NEVER far from thought in China, perhaps a legacy of famine years. In an increasingly fast moving world, food falls into two categories. There is the slow formal business or family meal with friends and colleagues. An example of this was a lunch I recently enjoyed at Beijing’s upmarket Da Dong Roast Duck Restaurant in Nanxincang with friends and embassy colleagues.

Lunch could also be a quick affair — a bowl of knife-cut Shaanxi noodles with some country-style tofu gan grabbed on the fly at a small café. The Xiao Bu hotpot restaurant and HanNaShan Korean BBQ usually have a long waiting line. These are domestic restaurant chains. The younger crowd, meanwhile, prefers McDonald’s and KFC.

The fast-food segment is growing to meet the demands of an increasingly fast-paced society. In the evening, many more people are choosing to eat outside the home. Domestic chains such as Xiao Bu are opening new stores at breakneck speed.

The foreign brands, McDonald’s and KFC, are also expanding successfully. Even XingBaKe — Starbucks — is having success switching a nation of tea drinkers to coffee. This is an opportunity for investors who want to ride the China boom via Western companies with business in China.

However, the path to success for foreign companies working in China is not smooth. I was talking with a business registrar in Xi’an and she noted that around 70% of foreign companies fail within the first two years of business registration.

KFC was the first quick-service restaurant chain to enter China in 1987. The Yum! China Division has grown to be one of the most important divisions of Yum!’s global network. KFC is the largest and fastest-growing restaurant chain in mainland China, with nearly 3,500 restaurants in more than 700 cities. It has a 40% market share compared with 16% for McDonald’s, according to Euromonitor.

Yum! succeeds because of localisation. It hired Chinese managers and built strong partnerships with local companies. It also adjusted the menu offerings. I dropped by a KFC outlet on Banjing Road in Haidian recently and was confronted by a choice of beef, seafood, rice dishes and noodles in addition to the usual fried chicken.

Localisation and the ability to work with Chinese managers is the key to success for foreign businesses in China. As my Shaanxi friend implied, 70% of foreign companies do not pass this test. Buying the China story for a foreign company must include due diligence research. It’s more than just about a good product or a great idea. It must include the ability to work in the Chinese environment. Get the research correct and companies such as Yum! offer a profitable slice of the China growth story.

The current Shanghai Index behaviour shows one of the bumps in the overall soft landing process for the Chinese economy. The drop in the Purchasing Managers Index (PMI) from 51 in October to 48 in November will push the market lower. But this news has a positive side — it increases the probability of monetary easing, which in turn will assist in the turnaround already evidenced on the Shanghai Index chart.

The location of the support areas on the Shanghai Index provides a guide to the limits of the current market retreat. The retreat follows the fast rally from 2,307 to 2,534. The retreat is also a reaction away from the resistance level created by the long-term downtrend line.

The long-term trend line starts on April 18, with the high at 3,067. The second anchor point for the trend line is on July 18 at 2,826. The cluster of highs around 2,524 is the third anchor point for the trend line.

This retreat shows the long-term downtrend line is a very significant resistance feature. In the future, a close above this downtrend line will be a very powerful trend reversal signal. This is a weekly close seen on a weekly chart.

The first support level was near 2,430. This was a weak support level created by the rally rebound behaviour in October. This level has failed. The strongest support level is near 2,300. This acted as a support level in July 2010 and as resistance and support in February and March 2009.

A fall and rebound from support near 2,300 will show the development of a very powerful long-term rebound pattern. This creates a triple bottom pattern. The market has already developed a narrow double bottom reversal pattern. This was the low near 2,318 on Oct 12 (point A) and then the second low near 2,307 on Oct 24 (point B). The height of this pattern is approximately 118 index points. The target for this pattern is calculated by measuring the distance from the lows to the peak of the rally and projecting this value upwards to give a target of 2,548. This target was not achieved because resistance from the long-term downtrend line was too powerful.

Target calculations for a successful triple bottom pattern are calculated with the same method. The third rebound point is somewhere near point C. If support near 2,300 is successful, then the distance to the peak of the most recent rally in November at 2,530 is approximately 230 index points. This value is projected above the peak of the rally at 2,530 and gives a long-term target near 2,760.

The most powerful double bottom and triple bottom patterns develop when the time between the bottom points is large. The wider the separation between the rebound lows in the double and triple bottom pattern, the stronger the pattern rebound. The first double bottom pattern between 2,318 and 2,307 developed over nine days. This suggested a weak breakout pattern. The time between the first point in the triple bottom pattern on Oct 12 and the possible third point in the triple bottom pattern is already more than seven weeks. This makes the triple bottom pattern much stronger and increases the potential for a stronger downtrend breakout

Daryl Guppy: Food for thought in China
Wednesday, 30 November 2011

Source/转贴/Extract/Excerpts: www.theedgesingapore.com
Publish date:30/11/11

China / Hong Kong Market: Sustainable re-rating if fiscal policies persist (DBSV)

China / Hong Kong Market Focus
Market Strategy
HSI: 19,002
Recommendation highlights
Sector Recommended stocks
Financials (+) ICBC, CCB, Ping An, COLI
Energy (O) Shenhua, Sinopec
Telecom / Tech (O) China Telecom, Comba
Utilities / Infra. (-) CK Infrastructure
Cyclicals (-) CNBM
Consumer (N) Golden Eagle, Luk Fook

Sustainable re-rating if fiscal policies persist

• Market has been de-rated by a FAI-driven growth model and easy credit which have, ironically, led to slower money circulation and cash flow problems for some industries

• After 4-years of de-rating, there is now limited downside for the China/HK market; we expect the HSI and HSCEI to gain 13% and 17% by end-2012

• Rerating would be sustainable only if the government continues with proactive fiscal policies while pursuing selective credit easing

• Strategy: Corporate earnings growth will be slow in 2012 in tandem with the GDP growth. Buy consolidation leaders and economic growth proxies that are undervalued. Overweight Financials and Telecom. Avoid high growth-high PE stocks

RRR cuts without increasing loan quota is not easing.
Growth concerns and slower hot money inflows justify the latest RRR cut. Expect a cumulative 300 bp cut in the RRR by end-2012, but this is merely operational and not a sign of broad-base easing. FAI will only slow down gradually to ease corporate pains. Flexible credit allocation should help transition to a service-oriented economy.

Lower property prices will help consumption.
During periods of rapidly rising property prices, potential homebuyers would have to save more, which means consuming less. Hence, the government’s restrictive property policies should eventually promote consumption. And fiscal measures to promote IT, new industries, logistics, services and SMEs should ensure broad-base economic growth.

Municipal bonds: killing three birds with one stone.
If the program succeeds, it will resolve revenue expenditure mismatch in local government projects, provide a source of income for households, and improve the vitality of the banking system. Long-term positive.

Investment summary
China / HK had been one of the worst performing major markets over the last 12-18 months. We forecast a re-rating next year, but that would be sustainable only if the government continues with proactive fiscal policies while pursuing selective credit easing. When consumption starts to fuel economic growth rather than investments in FAI and properties, market PE should be re-rated to where it was when FAI share of GDP was much lower. For now, the market will remain range-bound, although the current low valuations suggest the major indices should trade at higher levels by end- 2012. We expect the Hang Seng Index to end 2012 at about 21,500, which translates into 13% upside from here. Our target for the HSCEI is 12,030, 17% above current levels.

RRR cuts may not be followed by rate cuts
Despite the latest RRR cut, we do not expect the central bank to cut interest rates next year as real deposit rates will remain negative even if the CPI drops below 4%. Going into 2012, we expect the overall liquidity situation to be able to support 24% urban FAI growth. On the other hand, a smaller trade balance could slow the rate of Rmb appreciation, which should help Chinese businesses to adjust to a slower growth path.

Besides broad-base monetary tools, the government will likely use fiscal incentives and encourage bank lending to support the IT, logistics, transportation and other domestic- oriented services industries. Job creation in the services industry coupled with better social care benefits will reduce the need for precautionary savings, and encourage households to spend more.

Money in circulation fell in a FAI-driven economy
The FAI-driven growth model has not only reduced industry returns on assets, but also money in circulation in the banking system. The Rmb4tn stimulus package in 2009/10 has weakened the link between credit growth and economic growth, which contributed to the sharp de-rating of the market relative to the rest of Asia since late 2010. The global market sell-off in 2H11 has pushed down China/Hong Kong shares to their lowest PE multiples in 10 years, based on consensus forward PE estimates.

Long term gains, short term pains
The central government has shifted its focus, and is promoting the domestic services industry using primarily fiscal incentives rather than broad monetary tools. In the transition towards a consumption-led economy, wages are expected to rise faster than revenue growth, which means profit growth would be slower than GDP growth. Thus, there is no meaningful rerating catalyst for the market in the near term.

Recent targeted easing measures suggest that the Chinese government is fine-tuning its macro-policy for small- and medium-size enterprises (SMEs) to reduce their pains in the economic adjustment. If the adjustment is successful, the Chinese economy will become more diversified, more serviceoriented, and less credit-driven. In the medium term, the market should trade at much higher valuation multiples, and the resulting valuation gain should more than offset the impact of lower nominal growth.

Reality check
We have lowered China’s 2012 forecast GDP growth to 8.5% from 9.0%. Slower GDP growth, especially in nominal terms, would have implications for market earnings. Before deciding on individual sector weightings, we had to first determine whether market forecasts for sales, margins, and returns on investments, are realistic given changes to the macro environment. Comparatively high revenue forecasts for the Auto, Software/Internet, China Properties, Pharmaceuticals and Gaming sectors are worth special attention. The earnings and valuation risks (both upside and downside) are important factors to consider when judging whether these sectors merit an overweight, neutral or underweight in a typical fund manager’s portfolio. A summary of the consensus sales and earnings forecasts is found on page 11.

China properties; cheap, but be selective
18 months after implementation, the restrictive property policy is starting to work. Price corrections and lower sales volumes should enable individual cities to set their own mortgage credit terms, to support purchases by genuine homebuyers. However, we believe most of the anti-speculation restrictions will remain for another six months. And to promote further industry consolidation, credit allocation should remain relatively tight for property developers. Current valuations have priced in most of the negatives, although lower ROA outlook would remain an overhang for some counters in this sector. We recommend investors keep a neutral position in Chinese Properties, and limit exposure to SOE developers like COLI, which offer steady earnings growth and stable ROA. We also like Country Garden for larger exposure to Tier III and Tier IV cities.

Transport & Industrials: Underweight
Given the uncertain global market outlook, cyclical sectors, including Industrials and Transportation, could see further profit downgrades. We recommend to heavily underweight Shipping, Steel and Industrials. Cement is the only overweight call among the cyclicals. Improved demand-supply balance and pricing discipline should enable cement companies to enjoy healthy margins. Margins should drop in 1H12, but improve from 2H and volume growth becomes the key earnings driver. Top pick: China National Building Material.

Like F&B & Retailers; but cautious about autos & gaming We recommend a neutral position in Consumer & Healthcare. In Consumer, we like F&B companies, which could see improving margins and secured earnings streams. Sugar, soybean, and certain packaging materials recorded the largest price declines in Nov11, which is positive for beverage companies and edible oil players. We are concerned some retailers may be unable to sustain high growth rates in 2012, but remain comfortable with sector majors like Golden Eagle and Luk Fook. We are cautious about China auto companies in the near term. High-growth gaming stocks that are still trading at high PE multiples could be more vulnerable to profit downgrades. There will be more attractive entry points for these stocks in 1H12. Buy on weakness: Galaxy and Sands China.

Buy Chinese Banks, Telcos and coal producers
We would overweight the Telco sector, especially China Telecom in anticipation of solid growth and reasonable valuations. We are positive on Chinese banks given strong preprovision profit growth. We see limited downside risks in Chinese banks because the shortfall in collateral values is wellprotected by low loan-to-valuation ratios for property developer loans and mortgages (c.50%). Their high loan loss reserve coverage should also mitigate the impact of rising NPLs. We are Neutral on Energy/Commodity stocks, but would overweight coal stocks. Our top pick here is China Shenhua, the vertically-integrated coal/power/transport company. Increase exposure in Insurance, cut HK Utilities and Chinese Power

We also shift weighting from HK Utilities and Chinese IPP to Chinese Insurance for more exposure to Chinese financials. Lower investment yields and the sharp drop in top-line growth have suppressed the performance of the Chinese Insurance since late 2010. Ping An, which is ahead of the competition in terms of distribution, is our favourite in the sector.


Explaining the myth: more loans, less liquidity
China’s inflation (CPI) has finally slowed to 5.5% from a peak of 6.5% in July. The continued drop in inflation has led the market to expect credit loosening and an increase in loan quota. Given the payment difficulties observed in the construction and some manufacturing industries, the public’s call for a general easing is understandable. But in many cases, the tightness reflects the mismatch of cash flows of recent years’ investments rather than the government’s macro-policy. This situation can only be alleviated, not resolved, by more lending.

The results of China’s credit-led growth model were encouraging in the early 2000s. However, the link between credit growth and GDP was weakened since 2006. A higher amount of finance was required to generate similar GDP growth between 2007 and 2010. Most of the Rmb4tn stimulus in 2009/10 went into infrastructure and construction sectors, which did boost the economy by expanding its investment share of GDP. However, many of these projects appear to have a lower multiplier effect on domestic GDP compared to infrastructure spending in the early 2000s.

Higher import content and milder second-round impact
The sharp rise in the cost of imported raw materials partly explains the lower GDP multiplier. The other is lower secondround effect of fixed asset investments, which reflects underutilization of the new facilities, be it a toll road or regional airport. For low payback projects with multi-year negative cash flows before reaching breakeven, investments in the second, third or even fourth years still require significant loan inputs before construction is completed. As a result, money in circulation in the banking system has dropped, even though money supply and outstanding loans are growing rapidly.

The next chart shows the 1-year lagged effect of credit creation on nominal GDP growth. For example in 2000, the Rmb564bn increase in net loans contributed to Rmb1.04tn nominal GDP growth in the following year, translating into high effective return of 132%. But after peaking in 2001 at 185%, returns dropped to only 64% in 2009, when the Rmb9.6tn increase in net loans only resulted in a Rmb6.03tn rise in nominal GDP in 2010.

The Rmb4tn stimulus package in 2009/10 has created structural imbalances by weakening the link between credit growth and economic growth. This partly explains the China/Hong Kong market de-rating since late November 2010, when Korea and most other ASEAN markets remained buoyant even though the outlook was the same for the entire region. The global market sell-off since June 2011 has finally pushed down China/Hong Kong shares to their lowest PE multiples in 10 years, based on market consensus forward PE estimates.

Fiscal incentives rather than monetary loosening
We think it is premature to expect the central government to provide additional liquidity to support the financial market. An analysis of the previous easing cycle shows that a broad base easing is not imminent. Credit tightening was usually maintained until the CPI dropped below one-year deposit rate, currently at 3.5%. The notable exception was in 2008, when exports tumbled in the aftermath of the collapse of Lehman Brothers.


Note that despite the recent deceleration in the money supply to 13% currently, which is slightly below the long-term average, total social financing, including lending facility, created by the issuance of wealth management products, is still growing at 15% YoY. Thus, the system’s credit supply is not tight. Industry-specific liquidity issues must be tackled by the borrowers, though the government has favoured the use of selective easing actions to support SMEs by encouraging banks to lend to smaller companies. On the fiscal front, the VAT threshold was also reduced to assist the transportation and services sectors.

Going forward, we believe the government may use a preferential tax policy rather than broad base monetary easing to promote the priority industries mentioned in the 12th Five Year Plan, such as IT, environmental protection, and high-end manufacturing.

And unless the EU debt crisis develops into a full-blown financial crisis, the government will continue to emphasize the use of fiscal measures to fine-tune its macro-policy. Targeted fiscal measures have two advantages over monetary easing. First, a cut in interest rates would increase the risk of igniting another bout of general or property asset inflation. Second, broad monetary easing will help underperforming industries such as steel, but that would perpetuate the over-capacity problems instead of encourage industry rationalisation.

RRR should be viewed as an operational tool
We forecast a 3 ppt cut in the required reserve ratio (RRR) between December 2011 and end-2012, but that does not mean an aggressive easing.

The reserve requirement is one of the tools the central bank uses to mop up liquidity that is flooding the mainland’s financial system through trade surplus and other capital inflows, including hot money. The current 21.5% RRR is high by historical standards, being 4 ppt above the level a year ago and 6 ppt higher than two years ago. Looking into 2012, a shrinking trade balance and likely reduction in hot money inflows should lead to slower industry customer deposits growth. This would pave the way for a cut in the RRR, and
lower the portion of deposits banks have to place with the central bank.

But as long as loan growth remains the same as the original target, the RRR cut should not be seen as a general easing measure for the economy, although it would help banks by reducing the portion of lower yielding reserves.

Lower property prices will help consumption
18 months after implementation, the restrictive property policy is starting to work. A reduction in property transaction volume has had an impact on fixed asset investment (FAI) growth, and there are increasing signs that the weaker property prices are beginning to be felt in sales of discretionary items such as autos.

Making properties more affordable has always been a hot media topic. Most comments, including some brokerage reports, focus on the government’s social objectives – to address social discontent or wealth inequality issues. Our analysis, which is based on economic data, suggests an economic logic behind the property tightening in China. By bringing down property prices to more affordable levels, the saving rate should drop and consumption should increase. However, it could take several years for the economic adjustment to be completed.

To understand the relationship between real estate prices and consumption, one has to first look at the historical correlation between household savings ratio and real estate prices.

Although income growth in China had accelerated in recent years, the high cost of living and even larger increases in property prices are causing public discontent. If we believe happiness is correlated to consumption, then it would not be difficult to see why most people are unhappy.

Save more as property prices inflate and interest rates stay low Household savings is defined as the difference between household income and consumption. The household savings ratio is total household savings expressed as a percentage of disposable income. During periods of rapidly rising property prices, an average middle income household which aspires to buy commodity housing would have no choice but to increase its savings ratio every year, which means consuming less. And the aggregate behaviour of households who wish to buy (or upgrade) properties would inhibit consumption growth in the economy.

The decline in real interest rates also contributed to an increase in savings since 2010. Assuming a household’s savings is below target, it may end up having to save more and as a result, consume less.

Once property prices have deflated to manageable levels, possibly by 10-20%, we believe the property measures will be gradually relaxed. However, the anti-speculation measures will likely remain in place for now, and a stable market would make it easier for households to meet their savings targets. Over the long term, it would require a comprehensive financial sector reform, including expanding the domestic bond market and increasing social spending, to reduce the household savings ratio.

Negative wealth effect should be temporary
A by-product of the current economic restructuring process is a reduction in property-related wealth for home-owners. However, homeowners are predominantly those in the upper income bracket. They would have enjoyed above average income growth in recent years, and with that expected to continue, the dampening effect of negative property wealth may only have a temporary impact on consumption.

That said, the consumer discretionary sector could see more earnings downgrades as competitive marketing strategies for certain items such as cars, could pressure profits further when sales volumes slow down.

Municipal bonds: killing three birds with one stone
Most local governments are keen to boost infrastructure in their respective jurisdictions. But cash flow mismatch arising from massive long-term investments has inhibited their ability to borrow more, which has led to fears of a system-wide increase in non-performing loans.

Matching long-term funding needs
To address these financing needs, the central government has allowed trial bond issuance programs for four local governments, namely Shanghai, Zhejiang, Guangzhou and Shenzhen. For municipals with low outstanding borrowings relative to their GDP, debts can be sold in the market and issued based on their own credit standings rather than relying on the central government’s implicit guarantee or other forms of support.

The central government is leading the formulation of a longterm debt issuance strategy. In addition to coordinating the issuance timetable, the central government could assign preferential tax incentives to certain types of bonds. Fiscal incentives, when used appropriately and in conjunction with central bank monetary operations, could be used to give an initial boost to market development. For instance, market development could accelerate once a market-sensitive benchmark yield curve is reached, based on the highest quality local government instruments. The initial scale of the issuance, while tiny compared to the total outstanding LGFV, should be seen as the first step of a long term plan to rationalise local governments’ financing.

Help households to find savings instruments
A successful development of the domestic bond market also requires financial intermediaries to educate the public about the comparative merits and risks of various bond instruments. The enormous scale of underground lending (estimated at RMB3-4tn in Jun 2011) and the popularity of wealth management products until the recent clamp down, suggest that demand for income-generating savings products is huge. Currently, most households believe there are few “safe” alternatives other than cash deposits or investing in physical properties.

Banks: more room to grow, trade at higher multiples
From an investor’s perspective, we hope to see more initiatives in this area as the asset quality of commercial banks is tied to the speed at which their exposure to LGFVs can be reduced. If the local municipals’ bond issuance is successful, more banking system loans can be diverted to support the manufacturing and service industries, and enhance the commercial orientation of the system.

In summary, the successful development of the domestic bond market would enable China to address three issues: (i) revenueexpenditure mismatch of local government’s infrastructure projects, (ii) provide a source of income for general households, and (iii) improve the vitality of the banking system by removing riskier lending so that banks can redirect lending to more commercial activities. In other words, China would be able to kill three birds with one stone.

Easing SME lending would help transition into a consumption Economy
In anticipation of diminishing returns on FAI over the longer term, it makes sense for the government to gradually shift spending from investment to social spending, and increase the role of private consumption. Based on the policy adjustments discussed above, China will be able to shift from an investment or property-led growth model to a domestic, consumptiondriven economy.

From the perspectives of long term savings-investment balance, the recent easing for selected SMEs should reduce the number of individuals and small enterprises that are facing credit constraints. And this should reduce the need for precautionary savings for medical care and other household needs.

Screening for outliers amid slower growth
The successful sales of local government bonds in Shanghai, Zhejiang and Guangdong recently have important implications for the entire system. Repayment of loans by LGFVs to banks would enable them to relend to other areas. The slower trade growth would reduce foreign capital inflow and justify the latest RRR cut. Coupled with recent fiscal measures to support SMEs, these should ease corporates’ financial burden and reduce risks of bankruptcies. Assuming the loan quota is maintained at about Rmb8tn, banks should be able to grow their loans by 14-15% in 2012.

We also lowered China’s 2012 forecast GDP growth to 8.5% from 9.0%. Before deciding on individual sector weightings, we had to first determine whether market forecasts for sales, margins, and returns on investments, are realistic given changes to the macro environment. We looked at consensus estimates for total revenue, EBIDTA margins, net earnings and ROAs. If we exclude forecasts for the oil & gas and banking sectors, the derived 13.7% topline growth for 2012 is consistent with our nominal GDP growth projection. This is premised on the assumption that corporate asset turnover does not deteriorate. This may be applicable to most sectors, but there would be some risks in certain sectors.

Aggressive growth forecasts for Brilliance and ZhengTong Sales in the Auto sector, including distributors and parts suppliers, are forecast to grow 25.7%. This seems aggressive given that industry sales volume growth is likely to be only single digit next year, at 7-8%. But most of the growth reflects the market’s bullish view on Brilliance and the positive outlook for auto distributors as they grow their operations aggressively through acquisitions. Market forecasts for China ZhengTong and Brilliance are especially aggressive relative to ours.

Using 2012 data, expectations for four other sectors are also comparatively high: Software/Internet (sales +30%, net profit earnings +26%), China Properties (+29%, +24%), Pharmaceuticals (+28%, +25%), and Gaming (+20%, +27%). Slowdown in China property sales may only be apparent in 2013 (+23%) as 30-50% of 2012 sales were booked in 2011.

Pharmaceuticals: key issue is working capital
Pharmaceuticals should continue to register strong revenue growth. The major obstacles here would be drug pricing pressure and tight cash flow at some customers at provincial levels. These could result in cash flow uncertainty and increased need for working capital financing.

Gaming: uncertainty
Gaming has a relatively short listing history in HK/China, implying limited visibility of the determinants of gross gaming revenue. Nevertheless, experiences in other markets suggest we could see a sudden drop in gaming revenues amidst the current slowdown in China’s economic growth.

Retailers: forecasts are realistic
Surprisingly, sales expectations for retailers are only moderately high, at 17% for each of 2012 and 2013. These growth rates are achievable given China’s wage increases, and they are similar to our top-down retail sales forecast for 2012. Market concerns of a hard landing for China may be somewhat exaggerated; there will be negative wealth effect on high-end consumption in the near-term as property prices start to drop, but consumption should grow over the longer term along with wage increases.

The latest same-store sales growth (SSSG) performance of selected retailers signals a gradual normalization, from extremely high levels in earlier months. For example, Luk Fook saw >30% SSSG in Hong Kong for the rest of Oct 2011 after >50% SSSG during October Golden Week. Results of other surveys are shown on the retail sector appendix page 35-36. Overall, sales trends are within our expectations. Maintain overweight for Retailers. Top picks are Golden Eagle and Luk Fook.

IPPs, Coal, Oil and other cyclicals
NDRC reforms: news is out, take profit on IPPs
The National Development and Reform Commission (NDRC) announced on Nov 30 the long-awaited tariff hike and temporary interference in spot coal prices to stabilise coal supply to the power industry in winter. First, the on-grid power price will increase by Rmb0.026 /kwh. Second, the NDRC will cap Qinhuangdao (QHD) price at RMB800/t (5500 kcal). Third, contract prices would be allowed to increase by 5%. The latter two will have little overall impact on coal producers’ ASP. China IPPs will be the direct beneficiaries of the potential hike in power tariff, but we believe this has been priced in by the market. We recommend taking profit on IPPs after the announcement. Underweight Chinese IPPs.

Coal and Energy: Buy Shenhua and Sinopec
The latest NDRC reforms do not change our positive view on China Shenhua. With its unique vertically-integrated model that include rail and port infrastructure, Shenhua has a significant advantage over other pure plays. Its power assets will also benefit from the tariff hike and geographical proximity to its own coal mines. Hence, Shenhua offers the best quality earnings in a sector that is known for volatile earnings. A lower spot price exposure (50% vs 70-80% for Yangzhou Coal) will cap earnings volatility in an economic slowdown.

Among the oil majors, we continue to like Sinopec. As long as Brent oil prices stay at USD95-115, the stock offers the best risk-adjusted reward as swings in oil price would lead to higher earnings, either through higher E&P profits or lower refinery losses. Despite the uncertain global economic outlook, oil remains a relatively safe bet. We recommend a neutral
weighting in this sector.

Other cyclicals: prefer Cement
We have an underweight call for global cyclicals like shipping. Despite the cut in RRR, it is too early to buy domestic cyclical since railway investments are only expected to rebound slightly and property-related FAI could slowdown further in 2012. Among the cyclicals, we prefer cement for the ongoing consolidation in the sector. With double-digit volume growth,
China National Building Material (CNBM) offers strong earnings and margin upside in the medium term as it consolidates local players in Sichuan, Yunnan and Guizhou.

Comparatively, the Chinese steel sector historically demonstrates less discipline in capacity management than cement. Chinese steel companies are trading at very cheap valuations based on P/BV or replacement cost metrics. Despite this, we cannot make a positive call on the sector because of overcapacity. The lack of product quality differentiation (unlike Korean firms) also means that any short-term margin improvements would be unsustainable.

Properties: minimal downside to 2012F/13F margins
The property curbs have had some effect, with large-scale price cuts in the major cities. Still, Chinese developers were able to maintain strong volume growth and high profitability this year, and some have even locked in 40-50% of their 2012 profits. Thus, from an investor’s perspective, the trend to watch is analysts’ forecast profit margins and ROA for 2013.

The average EBITDA margin of Chinese developers in our universe would drop from an estimated 32.9% in 2011, to 31.9% in 2012 and 30.3% in 2013, based on consensus estimates. And using a conservative set of assumptions, we estimate EBITDA margin would average 29%, slightly above the 28.4% recorded during the Global Financial Crisis in 2008. These suggest possible further downside to analysts’ forecasts, but the magnitude would be limited.

We believe most of the anti-speculation restrictions will remain for another year. And to promote further industry consolidation, credit allocation should remain relatively tight for property developers. However, this would be balanced by selective relaxation of home mortgages by individual cities, which should ease the progression of credit transfer from developers to the household sector.

Current valuations have priced in most of the negatives. There is still meaningful upside, albeit lower than during the previous rebound cycle given the lower longer-term ROA outlook (5.6% based on consensus) compared to 2006-07 period (7-8%). Depending on how long property and land prices can sustain at current levels, potential land bank write-downs would be another overhang for companies that had been less-disciplined in accumulating landbank near the peak of the cycle.

Strong companies: COLI and Country Garden
We recommend investors keep a neutral position in China’s Property sector, and gain exposure only through COLI which offers steady earnings growth and stable ROA. We also like mass market developer Country Garden. With prudent cash flow management and disciplined acquisition, it should continue to outperform in 2012 due to larger exposure to Tier III and Tier IV cities.

Overweight Chinese banks
We expect Chinese banks to perform well in 2012 under most policy scenarios. We believe current valuations have discounted a sharp jump in NPL, which is inconsistent with our soft landing scenario. For banks, the current mix of selective credit easing and fiscal support for SMEs and local governments are already sufficient to ensure a soft landing, which would result in small and manageable increases in NPL.

For most corporates and SMEs, the current policy mix should help to lift some burden, but the current loan growth target may not be sufficient to help industrial and construction firms resolve payment problems and other working capital funding issues. Although both banks and cyclical sectors are trading at depressed valuations, the market does not seem to realise that there is a much higher certainty of banks achieving their operating profit targets than most other cyclical sectors.



NPLs can be absorbed by strong pre-provision profits Chinese banks recently saw increases in NPLs and special mention loans, which reflects deteriorations in SME and real estate lending. However, profitability remains strong with preprovision profits equal to 3-3.8% of average gross loans. Such high profitability would enable banks to absorb a possible jump in credit costs without reporting losses or raising new capital. We prefer large banks like Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB), which face little constraints to grow loans due to their low loan-to-deposit ratios (LDR) and strong deposit franchises. We recommend buying these counters now, despite potentially higher credit costs. Even without further easing, these banks are forecast to have solid pre-provision profit and ROA/ROE.

HK banks: concerns over rising HKD LTD ratios In comparison, we are less excited about Hong Kong banks. Our 2.0% GDP growth forecasts for Hong Kong for 2012 is premised on a mild recession in Europe and slow growth in the US (c.2%) and our 8.5% forecast for China GDP growth. Hong Kong’s economy will be hurt by sluggish trade growth, with real goods and services projected to grow 2.1% and 2.2%, respectively, next year. Private consumption will be hit by weak local consumer confidence. Chinese tourist spending will eventually decline as the mainland’s economic growth decelerates.

Meanwhile, a rising loan-to-deposit ratio (LTD) for HKD assets and liabilities has raised concerns among regulators and bankers. From an investors’ perspective, we think the relevant issues are management of NIM and growth outlook of listed banks. While the HKD funding mismatch is itself an issue, there are some mitigating factors

First, consider a deceleration in the Chinese economy. This would eventually reduce Chinese corporate borrowings through Hong Kong. And coupled with weaker domestic loan demand in Hong Kong, total HKD loan demand would eventually decline. China’s slower growth rate would also change expectations that the RMB/HKD is a one way bet, and the amount of HK dollar savings converting into RMB deposits should also decrease. Thus, the uptrend in the HKD LTD ratio may not be sustainable, and may be eventually stabilized as the markets adjust to a slower growth environment.





Underweight HK banks: real issue is lack of growth
Funding cost is rising because of upward pressure on deposit rates, in some cases even exceeding home mortgage rates. In a decelerating economy, bad debt could rise rapidly, especially those in the SME sector. Although many of the negatives have been priced in and valuations seem cheap, Hong Kong banks lack a positive catalyst for sustained performance. Underweight. Gain exposure through large banks with liquid balance sheets, such as BOCHK.

Insurance: Neutral
Assuming China's benchmark interest rate stays at the current high levels, we are neutral on insurance. Over the long-term, agency force should be the key premiums growth driver. But near-term, solvency concerns and volatile equity markets are major risk factors. Within the sector, we prefer Ping An, which is in a better position to benefit from the channel transition in both the life and non-life sectors.

Hang Seng Index: Forecast to reach 21,500 by end-2012
We expect the HSI to end 2012 at the 21,500 level, which translates into 13% upside from current levels. Our new target is equivalent to 10.7x 2012 earnings. China/HK market earnings should bottom out in 2012 with 6.9% growth, followed by an 11% increase in 2013 (Bloomberg’s HIS consensus estimate could be more volatile than ours, as the former includes revaluation gains/losses). Our market earnings are premised on several economic assumptions, including a cumulative 300 bps cut in the RRR between now and Dec 2012, and the official interest rates remaining at current levels.

Although the HSI reacted positively to the first RRR cut by gaining more than 1,000 points, it is unlikely to be a sustained rally beyond 20,500 in the near term. The main downside risks we should be worried about, especially in 1H2012, include possibility of a deepening Europe recession and potential loan repatriation by European banks under de-leveraging exercises. For the HSCEI, our target is 12,030 based on 8.9x PE which is slightly above the current 8.2x. Our end-2012 target represents 17% upside from current levels.




Source/转贴/Extract/Excerpts:
Publish date:

China's Next Obstacle




Source/转贴/Extract/Excerpts: CNBC
Publish date: 09/12/11

经济师:降温措施虽带来调整 私宅价格不致大跌

新的房地产降温措施出台,经济师预计我国的住宅房地产价格将有所调整,但不至于“大跌”。

  巴克莱资本亚太区除日本外策略主管兼董事德斯巴勒思(Olivier Desbarres)昨天在一个亚太区经济展望记者会上回答媒体问题时表示,有足够资金购买房地产的买家,不会因为额外印花税而打消购买房地产的念头。

  他指出,海外买家仍积极在本地买楼,显示他们对我国的经济还是信心十足。

  巴克莱资本在新加坡的经济师巴加利亚(Rahul Bajoria)则指出,新加坡是亚洲区首选的避风港,因此政府控制房地产价格的做法是明智的。

  他也认为,本地房价料会逐步回落,但类似1996年到1998年的暴跌情况相信不会重演,这是因为住宅需求仍然强劲,而且政府的出发点是稳定房地产市场,若情况急转而下,政府可能会取消一些降温措施。

  由于可大量 借贷买房,德斯巴勒思不认为新的降温措施会促使投资者将原本计划拿来购买房地产的资金转入股票、债券或其他资产类别。

  在经济前景方面,巴加利亚指出,多数亚洲经济体料在明年上半年见底。

  他指出,我国经济明年的增长料将放慢至3%,比今年5.2%的增长预测低,上半年的增长步伐将比下半年来得缓慢,主要因为佳节期间过后的电子与药剂产品需求将放慢。

  巴克莱资本预料我国经济在本季度将萎缩2%(年率化),巴加利亚认为,药剂领域可能没有办法维持上个季度的强劲增长,而随着贷款业务增长放慢,金融服务领域也将放缓,其他经济周期敏感度较高的领域也将受影响。

在通货膨胀方面,巴克莱资本预计我国明年的通胀率将放慢至3.1%,比今年全年的约5%来得低。巴加利亚说,这主要是因为底线效应(base effect)较高,而住房成本、租金以及拥车证价格相信不会出现大幅增长。
  针对我国的人力市场展望,巴加利亚指出,新加坡目前的失业率为2%,明年的新增工作涨幅相信将放慢,不过大规模的裁员活动相信不会发生。

  他说,政府在确保人力市场维持紧缩状态这方面扮演着重要角色,若经济局势转恶劣,他相信政府将推出类似“雇用补贴计划”的措施,而在明年的财政预算案,他相信政府会继续实行同提高生产力相关的政策。

  巴加利亚相信,亚洲经济体包括新加坡接下来将采取财政政策,如展开基础设施项目来刺激经济与人力市场。他指出,这是因为本区域经济体多数的公共债务对国内生产总值比例并不高,因此有足够财务能力实施财政政策,而财政政策也比货币政策更快见效。

  在明年4月份的政策会议上,巴加利亚预计金融管理局将维持让新元逐步升值的政策。

  对于欧洲银行去杆杠化(deleveraging)的行动,德斯巴勒思指出,新加坡和香港对欧洲银行贷款的曝险主要来自英国,而英国银行目前也仍在继续扩大在本区域的贷款业务,因此我国受影响的程度并不大。

  德斯巴勒思强调,和2008年不同的是,目前本区域的贸易活动虽然已经放慢,不过还算强劲。他指出,有了2008年环球金融风暴的经验,政策决策者将更有经验应付任何突发状况。



巴克莱资本在新加坡的经济师巴加利亚认为,本地房价料会逐步回落,但类似1996年到1998年的暴跌情况相信不会重演,这是因为住宅需求仍然强劲,而且政府的出发点是稳定房地产市场,若情况急转而下,政府可能会取消一些降温措施。



Source/转贴/Extract/Excerpts: 联合早报
Publish date: 10/12/11

More acquisitions seen for A-Reit

Published December 10, 2011

More acquisitions seen for A-Reit
Trust still in comfortable debt position after latest purchase of two properties, say analysts


By JAMIE LEE


ASCENDAS Real Estate Investment Trust (A-Reit) is poised to hunt for further acquisitions given its comfortable debt position, analysts said yesterday.


Their comments came after A-Reit completed the acquisition of two properties on Thursday that analysts said should deliver a net property income (NPI) yield of 7 per cent.

The office-property trust had bought two buildings in Singapore for $179 million in total: Corporation Place, a building in the Jurong industrial estate, and 3 Changi Business Park Vista.

Corporation Place has an occupancy rate of 80 per cent, while that of 3 Changi Business Park Vista is 95 per cent.

The acquisitions are expected to have an annualised pro forma financial effect of an additional 0.1 cent per unit on the distribution per unit for the fiscal year ended March 31, 2011, A-Reit said.

'Corporation Place is located at the fringe of the Jurong Lake District, which the government has earmarked to develop into a commercial hub,' said RBS analyst Bryan Lim.

'We share the management's optimism in its ability to improve the property's occupancy rate in the near term.'

'Small but accretive,' said DBS Vickers analyst Derek Tan yesterday in a client note, and kept his 'hold' call.

'While we remain cautious on the outlook of business parks/high-tech space performance in the immediate term, we acknowledge the longer term benefits of having an increasing exposure in these two established hubs. This allows A-Reit to offer new/existing tenants a variety of space choices in these locations,' he added.

RBS's Mr Lim - who has a 'buy' call on the Reit - said the purchase should give an NPI yield of 7 per cent, which he sees as healthy.

By analysts' estimates, the latest purchases - which are funded by debt - will push the group's aggregate leverage to about 36 per cent from under 32 per cent.

They note that A-Reit can borrow an additional $350-$400 million to fund acquisitions before it hits the 40 per cent mark in leverage terms.

'Given A-Reit's strong acquisition track record, we see future expansion plans as a strong catalyst for the stock,' said Mr Lim.

A-Reit units closed trading 0.78 per cent lower at $1.905 yesterday.





Source/转贴/Extract/Excerpts: www.businesstimes.com.sg
Publish date: 10/12/11

Divided views over buyer stamp duty effect

Business Times - 10 Dec 2011


Divided views over buyer stamp duty effect

While foreigners are seen turning to the leasing market, consultants differ over direction of rent movements

By MINDY TAN

WHILE consultants think that the additional buyer's stamp duty (ABSD) imposed earlier this week is expected to drive foreigners to the leasing market, they remain divided over next year's rent trend.

According to research by Savills Singapore, the leasing market is likely to benefit in the short term; it posited that total leasing volume this year could hit a new high of between 44,000 and 45,500 transactions. Leasing demand for Q4 is expected to reach between 10,000 and 10,500 transactions.

However, rentals may correct by a further 1-2 per cent next year. Savills attributes this to 'more private homes being completed in the coming months and expatriate housing budgets shrink(ing) in tandem with cost-cutting measures adopted by more and more multi-national companies'.

Credo Real Estate executive director Ong Teck Hui agreed, saying that 2012 would see increased downward pressure on rents and the leasing market.

'Rental demand comes mainly from expatriates and foreigner workers, and this is expected to moderate in 2012 when the economy slows,' he said.

Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, too cited an increase in the supply of homes as one of the factors stabilising rents.

It would fall on the shoulders of new expatriates coming into Singapore to see how much rental rates increase, he said.

'There might be an increase in transaction volume in 2012, but the impact will not be immediate because those who have rented units will continue to rent,' he said.

According to Mr Lee, both transaction volumes and rental rates should stay stable next year, increasing by up to 5 per cent.

Png Poh Soon, head of research at Knight Frank Singapore, too held the view that prices would remain stable, with the possibility of a slight increase.

'Notwithstanding a possible increase in leasing queries and demand, we will not expect the rates to increase significantly as new supply coming on stream next year and year after next will result in offsetting effects on rentals,' he said.

If the economic performance next year is within expectations (growth of 1-3 per cent), we can expect rents to improve by up to 3 per cent for 2012; conversely, rentals might fall by some 3-5 per cent under a pessimistic scenario, he added.

In its report, Savills noted that by region, rental growth of non-landed properties in the core central region rose by 4 per cent year-on-year to $4.56 psf per month in October.

Rental growth in non-landed properties in the rest of central region, and outside central region rose by 7 per cent and 11 per cent respectively, to $3.40 psf per month, and $2.92 psf per month.

The total transaction value for all properties hit a record $186 million over the first 10 months of the year. Estimated average monthly rent of high-end non-landed residential properties was $5.27 psf per month in Q4, dipping 2 per cent q-o-q.





Source/转贴/Extract/Excerpts: www.businesstimes.com.sg
Publish date: 10/12/11

Latest property steps not a drag on foreign investors, talent

Business Times - 10 Dec 2011


Latest property steps not a drag on foreign investors, talent

Analysts say that there are far more salient factors that weigh on foreigners' decisions to live and work here

By TEH SHI NING

WITH the most biting of the latest round of property market cooling measures aimed at the foreign buyer, questions have been raised over whether this might taint Singapore's reputation for being foreign investor and talent friendly, especially at a time when immigration policy is being tightened.

Those who think not say that there are far more salient factors that weigh on foreigners' decisions to live and work here than the additional buyer's stamp duty (ABSD) of 10 per cent on any foreigner's first real estate purchase here. These include the 'job opportunities and the vibrancy of the market here', says OCBC economist Selena Ling.

Joanne Chua, manager of human resources and supply chain at recruitment firm Robert Walters Singapore, says that her firm sees many individuals moving away from uncertainty in the West in search of better career prospects now. 'People know that there are many opportunities here and that Asia is a focus for companies and this could translate into a good career move.

'Also, Western currencies have generally depreciated against Asia currencies and the cost of a move combined with generally lower tax rates make Asia an attractive place to work currently.'

She thinks that such factors 'would definitely weigh on job seekers' and potential foreign investors' minds much more'.

Barclays Capital economist Leong Wai Ho says: 'I don't think there is any question that we will remain open for business and talent.'

Credit Suisse economist Wu Kun Lung agrees. He views this macro-prudential measure as an effective way to adjust demand in the property market and help avoid the risks of a big correction in property prices in the future, which is positive for asset quality.

There is also the question of the proportion of foreign talent here who will actually 'buy a permanent abode unless they are in for the long haul', says Ms Ling. This could skew preferences in favour of the rental market. But she does sees 'incremental impact' on 'the perception of how attractive Singapore is as a global city and location to live, work and play'.

Citigroup economist Kit Wei Zheng was concerned about the message this might send about Singapore's openness, especially since immigration inflows have been tightened in the past two years.

'Notwithstanding all attempts to limit the fallout, this is still an important symbolic step that may risk endangering Singapore's foreign investor friendly reputation, not to mention the question of timing with respect to the unfavourable cyclical outlook,' Mr Kit says.

The government has tried to curb any such fallout by not imposing ABSD on permanent residents purchasing their first property here. 'The message is that if you are a top talent PR, you are still welcome to buy property to live in, but not for investment,' he says.

But top talent entering Singapore on an employment pass will not be able to purchase property, and with the sharp slowdown in the approval of applications for permanent residency, it may also be harder for foreigners to 'circumvent the rule by becoming PRs', he says.

Singapore International Chamber of Commerce chief executive Phillip Overmyer said that it was still 'too early to understand how this would play out among the various companies' and their ability to bring in foreign talent.





Source/转贴/Extract/Excerpts: www.businesstimes.com.sg
Publish date: 10/12/11

Residential curb spells boon for alternative assets

Published December 10, 2011

Residential curb spells boon for alternative assets

By UMA SHANKARI


INVESTMENTS into strata-titled office, retail and industrial units in Singapore, as well as overseas homes, are set to pick up as investors search for alternative assets to buy following fresh government measures to cool the residential market here.




Analysts expect to see a sharp drop in demand from foreigners and corporations for private homes in Singapore, which will lead to a moderate drop in overall demand. Liquidity could instead flow into other asset classes, the analysts said.

The government on Wednesday announced fresh measures to curb demand for private homes, including an additional buyer's stamp duty of 10 per cent for foreigners and corporations on top of the existing buyer's stamp duty of up to 3 per cent.

'The latest measure could divert activity to other segments, such as strata-titled commercial and industrial sectors, since these are not affected by the additional stamp duty,' said DBS Group Research.

Nicholas Mak, head of research at SLP International, likewise noted that interest in small strata-titled industrial and office units could pick up.

Interest in such properties began to slow down in August, when negative news from the eurozone started to adversely affect local investment sentiment. Prices of small industrial units have also climbed by about 30 per cent year-on-year, making them less attractive to investors. But now, interest could pick up again as cash-rich investors look for assets to soak up liquidity.

'There could be a small percentage of buyers who may shift from buying a home in the core central region (CCR) to buying industrial properties,' said Mr Mak, noting that 'most property investors are still unfamiliar with the industrial property market'.

Small retail shops (sometimes as small as 150 square feet) have also started to appear on the market of late, market watchers said. They could find more takers going forward.

Interest in overseas properties could also heat up. In addition to foreigners who will now look elsewhere, Singaporeans - who now have to pay an additional buyer's stamp duty of 3 per cent when they buy their third and subsequent residential properties - might also look abroad.

'As the latest measures by Singapore government would turn away funds for property investment from foreigners, some of these funds could find their way to other overseas markets, such as those in countries with transparent rules and large Asian migrant communities,' said Mr Mak.

'These countries include Australia, Canada, UK, New Zealand and the US coastal cities.'

Camilla Dell, a managing partner at UK-based property consultancy Black Brick Property Solutions, said that her firm is already starting to see an increase in the level of enquiries from Asian and other overseas investors who were previously considering investing in the Singapore property market, but have now changed their mind because of the tax hikes.

In addition to the additional buyer's stamp duty, investors in Singapore have to pay a seller's stamp duty of between 4 and 12 per cent if they re-sell their units within four years of purchase, she pointed out.

'All of this makes Singapore far less attractive for property investors, and London is bound to benefit as a result, where the tax system is far more favourable, particularly for overseas investors who pay no sellers tax or capital gains tax if they are a UK non-resident,' Ms Dell said.

'Stamp duty can also be significantly reduced in the UK as if the property is owned in a company name, buyers pay very little or no tax on the acquisition.'

Analysts also noted that most of the demand for strata-titled commercial and industrial units and overseas properties will mostly shift from the prime CCR area, which includes the prime districts 9, 10 and 11, Marina Bay and Sentosa Cove.

According to data compiled by SLP International, foreigners and corporations bought 36 per cent of all homes sold in the CCR from January to November 2011.

'A foreign buyer of a private home here in Singapore will have to take a very bold move in investing amidst the global crisis and a grim economic outlook in 2012,' said PropNex Realty chief executive Mohamed Ismail.

In contrast, in the outside central region or OCR (which is a proxy for suburban mass market locations), foreigners and corporations accounted for just 16 per cent of all sales in the first 11 months of this year, according to SLP's analysis of caveat data from URA Realis.

Singaporeans bought 71 per cent of all home sold in the OCR, and demand from this buyer segment is expected to hold somewhat.





Source/转贴/Extract/Excerpts: www.businesstimes.com.sg
Publish date: 10/12/11

Markets swallow fudged eurozone deal

Published December 10, 2011

Markets swallow fudged eurozone deal
Britain in shock decision to stay out of fiscal compact that includes the 17 euro members


By NEIL BEHRMANN
IN LONDON


EUROPEAN bond, stock and currency markets were mixed after all 27 European leaders failed to reach agreement on a new treaty to end the eurozone crisis. After a fractious meeting, the 17 eurozone members and six non-euro countries - Denmark, Poland, Latvia, Lithuania, Bulgaria and Romania - have agreed to a separate pact to unify fiscal controls.


After words were exchanged between French President Nicholas Sarkozy and British Premier David Cameron, Britain exercised its right to veto and withdrew from the proposed European Union treaty. Hungary joined Britain and Sweden and the Czech Republic will consult their parliaments before deciding if they want to be involved. Having fallen to a weekly low of under 1.33 against the US dollar, the euro recovered to US$1.34. Italian and Spanish bond prices, however, were weak.

Markets were slightly more confident after European Council president Herman van Rompuy announced that the eurozone central banks would provide up to 200 billion euros (S$345 billion) to the International Monetary Fund. The IMF would then use the money to help Greece, Portugal and other stricken countries finance their fiscal deficits. According to sources, eurozone central banks would provide around 150 billion euros of this money, but it wasn't clear which other European central banks would provide the remaining 50 billion euros. Britain is reluctant to bail out the eurozone.

The leaders agreed that the European Stability Mechanism (ESM) will replace the European Financial Stability Facility (EFSF), the current bailout fund, by July 2012. In the meantime, the hope is that by March the EFSF will have a further 500 billion euros for any rescues.

Mr Sarkozy sharply criticised the 'unacceptable' conditions that Britain had wanted to impose, in return for its consent to the European Union (EU) treaty.

'We would have preferred a deal for all the 27 members,' he said. 'That wasn't possible taking into account the position of our British friends.'

As part of the deal for joining the treaty, Mr Cameron had insisted that Britain could opt out of a proposed tax on financial services and EU-controlled financial regulation. He said that such measures would drive business away from the City of London, the nation's financial services centre. The British economy is highly dependent on financial services as the manufacturing sector has been run down.

'I came here with one of two outcomes in mind: safeguards that made a treaty within a treaty . . . or if we could not have that, allowing others to go off in a treaty on their own and ensuring that the EU is maintained as a single market,' Mr Cameron said. 'I had to pursue very doggedly what was in British national interest. It is not easy when you are in a room where people are pressing you to sign up to things because they say it is in all our interests.'

After coming under intense pressure from Mr Sarkozy and German Chancellor Angela Merkel, Mr Cameron told EU leaders in the early hours of yesterday morning that without the safeguards, he could not ask British MPs to agree to a change in the treaty.

Swedish Prime Minister Fredrik Reinfeldt agreed with Mr Cameron. 'It seems a bit odd because the whole text is written to make eurozone members submit to certain restrictions and do certain things,' he told Sweden's TT newswire. 'Sweden, which isn't a member of the euro, does not want to tie itself to rules which are completely tailored for the eurozone.'

In a move that appeared to be aimed at punishing and isolating Britain and other dissenting nations, Ms Merkel and Mr Sarkozy have invited all 23 members of a new 'Euro Plus' economic pact to their own monthly summits. Mr Sarkozy said that the new 'Euro Plus' pact should be sealed by March and further details were being discussed when The Business Times went to the press.

'We will create a new fiscal union which is also a stability union,' Ms Merkel said, adding that it would include loan restrictions and automatic sanctions for countries that break the budget rules.

An intergovernmental treaty between the 17 eurozone countries and six other EU countries could be put into action more quickly than an amendment to the EU treaties, European Council president Van Rompuy added. Lawyers warned however that there could be a legal minefield as a 'Euro Plus' accord should not contradict existing EU treaties.

Mr Van Rompuy said that banks and other private creditors will no longer have to share losses resulting from a 'haircut' or reduction in the value of depressed eurozone bond investments. Private investors had been forced to agree to write down 50 per cent of their holdings of Greek sovereign bonds and this ruling had unsettled markets.

Ratings agency Moody's downgraded the debt of BNP Paribas, Societe Generale and Credit Agricole citing deteriorating liquidity and funding conditions. Moody's cut its ratings on the long-term debt of BNP and Credit Agricole by one notch to Aa3. Societe Generale's long-term debt was cut by one notch to A1.

Despite the euro rally, the fudged deal does not solve the fundamental euro crisis of excessive debt, economists warned. They expect Greece, Portugal, Spain and Italy to remain under pressure in the New Year.




Source/转贴/Extract/Excerpts: www.businesstimes.com.sg
Publish date: 10/12/11

改革是保八的关键

改革是保八的关键

2011年12月5日
来自瑞银的中国策略专家和Fat Prophets的资产管理总监在接受CNBC采访时提出了中国在未来五年内继续保持8%以上增长所要面临的挑战以及应对措施。




Source/转贴/Extract/Excerpts: CNBC
Publish date: 05/12/11

Undervalued MIIF seeks more recognition with share buybacks and higher dividends

Undervalued MIIF seeks more recognition with share buybacks and higher dividends

Over the past year, Macquarie International Infra-structure Fund (MIIF), the first infrastructure fund tolist on the Singapore Exchange, has outperformed the broader market. As at Dec 1, the fund was just over 2% down year-to-date, compared with the Straits Times Index’s 13% drop in the same period. Yet, John Stuart, CEO of Macquarie Infrastructure Management (Asia) Pty Ltd, manager of the fund, is not particularly thrilled.

During the last financial crisis, the fund — listed in May 2005 as a collection of assets ranging from nursing homes in Canada and airportsin Europe to stakes in various other funds run by the Macquarie group —had to cut payouts. The stock sank from a peak of $1.23 in June 2005 to a low of 23.5 cents when the overall market was at its darkest in March 2009. It has since recovered to close at 55 cents on Dec 1.

Since the crash, Stuart and his colleagues have been busy trying to win back investors. In a series of transactions, they sold most of their stakes and used the proceeds to sharpen the fund’s focus on only Asian assets. The half-yearly payouts, which had to be cut to 1.5cents from more than four cents at the peak, have since been raised to 2.75 cents. Although MIIF has not promised to raise dividends back to pre-crisis levels, Stuart has assured that 2.75 cents is sustainable, which will translate into a current yield of about 10%. Furthermore, the fund’s very active share buyback programmehas seen it snap up 7% of its issued shares so far from the market since approval was given by shareholders at the last AGM in April.

“Certainly, our view was that these strategies would have a far more positive impact on the share price than seen today, and we are naturally disappointed. Yes, we have outperformed the market quite significantly this year, but we are not satisfied with the share price today,”says Stuart in an interview with The Edge Singapore.

Unlike some pre-crisis counters that have faded into oblivion, the investment community has not forgotten MIIF. In a report issued on Nov 25 reinstating coverage of the fund, DBS Vickers analyst Suvro Sarkar describes the current MIIF as “leaner, fitter and wholly Asia-focused”. He notes that some key negatives have been removed. For example, MIIF has sold its stakes in other funds, taking away the so-called “black box problem” of limited visibility on how well the underlying assets are doing, as there are extra layers of ownership in between. Besides Sarkar, who has a price target of 64 cents on MIIF, other analysts covering the fund include Kenneth Lui of SIAS Research, who deems it worth 68.5 cents, and Angelia Phua of NRA Capital, who values it at 60 cents.

Resilient assets
Currently, the fund holds stakes in three key assets: Taiwan Broadband Communications (TBC), Changshu Xinghua Port (CXP) and Hua Nan Expressway (HNE). It also has full ownership of a relatively small asset, Miaoli Wind Co. While there are worries that the ongoing economic downturn will inevitably translate in to lacklustre operating performance of these infrastructure assets, Stuart points out that each of the three key assets is resilient against bigger macro trends in its own way. For the ninemonths to Sept 30, MIIF reported a 32% y-o-y increase in net income to $50 million and a net asset value of 79 cents per share.


The higher numbers reported were driven mainly by TBC, the third-largest cable-TV operator in Taiwan, serving nearly 750,000 households in the five regions where it holds the sole operating licence: South Taoyuan, Hsin-Chu, North Miaoli, South Miaoli and Taichung. Besides offering more than 150 channels, TBC, like many broadband network owners worldwide, also provides voice and Internet access services.

MIIF has raised its initial 20% stake in TBC, which accounts for just overhalf the fund’s asset value, to 47.5%in a series of transactions, funded using disposal gains from other assets. Stuart believes that cable TV, at least in Taiwan, is practically a type of utility service and not a discretionary want. Referring to the recent global financial crisis of 2008/09, when export-oriented Taiwan was badly hit, TBC managed to post low, but stable, growth in its subscriber base. Meanwhile, the icing on the cake is“non-regulated” types of offerings such as premium digital-TV channels, which are seeing what Stuart calls “dynamic” growth.

“Regardless of whether the economic outlook for Taiwan is positiveor negative, we expect a solid performance from TBC, as had been demonstrated historically. Performance this year has exceeded our expectations. We are very happy with that additional investment that we made in TBC earlier this year,” says Stuart.

HNE, MIIF’s second-largest holding, contributes just over a quarter of the fund’s asset value. There are concerns that this 31km-long express-way linking Guangzhou, the capital of the prosperous Guangdong province, will suffer from a slowdown in economic activities in the Pearl RiverDelta region, famous for its high concentration of export-oriented manufacturing activities.

Stuart points out that HNE is mainly a commuter highway, with 60% of revenue coming from small passenger vehicles instead of cargo-carrying trucks. “Even with the slowdown back in 2008/09 in that region of China, we still saw very robust growthin vehicle ownership,” he says. Also,the rapid growth in vehicle numbers has caused heavy congestion in other competing, non-tolled thorough-fares. Thus, HNE stands out as oneof the few unclogged arteries leading in and out of Guangzhou city, he says.

The third asset, CXP, is a port operator majority-owned by Pan-United Corp. While the port, located along the Yangtze River, can handle both containers and bulk cargo, its business is more in the latter, particularly steel, logs, and pulp and paper. Asthe port is not entirely immune to the slowing economy, Stuart concedes that operating profit growth for CXP might decline from the 19% posted so far this year.

“[Nevertheless,] we’ve seen phenomenal improvement, not driven by containers, but driven by our ability to win market share in logs, and continuing improvement in pulp and paper,” says Stuart. “So, if the economyis to suddenly boom or contract, it won’t feed through specifically into those items. There are other dynamics. We look at risks around, for example, the demand for logs, rather than a simple GDP type of relationship for our port.”

Sarkar of DBS Vickers is convinced that these three assets will be ableto increase dividend contribution back to the fund, lending support to the guide of a 5.5-cent payout for the full year. “We believe the fund ......




Source/转贴/Extract/Excerpts: http://www.theedgesingapore.com / No 501
Publish date: 05/12/11

CapitaLand rides into Chongqing

CapitaLand rides into Chongqing
Chaotianmen, where the Yangtze and Jialing rivers meet, has bustled with activity for centuries. Located at the southeast tip of Chongqing, it was where the city received the decrees of China’s emperors during the Ming Dynasty. It was also a burgeoning river port in the early 1900s. These days, tourists visit the area for its spectacular views of the water ways. And, within the next five years, it will become the site for possibly the most exciting commercial property development in Chongqing.

Designed by architect Mo she Safdie and occupying a 9.2ha site, the property will include a shopping mall, offices, serviced apartments,hotels and residences. “It will be integrated with a metro station, bus interchange, ferry terminal and cruise centre,” says Liew Mun Leong, CEO of CapitaLand, which is spear-heading the project. He adds that he first visited the site in April, and was immediately sold on the idea. “I loved the site,” he says.“It has such a good topography, and a good feeling of feng shui.”

The land cost is $1.28 billion, or RMB8,000per sq m and development cost will likely be a further $2.8 billion. Since the plot ratio is 8.9 times, the total floor area is 817,000 sq m (ornine million sq ft). The total cost is estimated at $4.1 billion, or RMB21.1 billion, which works out to RMB25,800 psm on gross floor area (GFA). This includes the cost of the land and construction as well as things such as taxes, fees and interest expense.

Liew reckons this was an attractive price.“We paid $1.32 billion for the ION Orchard site five years ago,” he says. “This cost less than the ION site, but we can produce [a development] 10 times the size of ION in terms of GFA. It is a very attractive buy.”

Some analysts think otherwise, though. Tricia Song, an analyst at Credit Suisse, says: “We believe land does not appear cheap, and visibility of accretion is limited now.” Meanwhile, a research report by CLSA notes that Ying Li International Real Estate, a Main-board-listed commercial property developer, acquired a mixed-development site for only RMB4,300 psm in Jiefangbei, which is Chong-qing’s current CBD.

Yet, officials at CapitaLand figure the group has the financial muscle and management chops to turn its development at Chaotian-men into a new centre of commercial activity. For one thing, the group will own and manage the shopping mall and offices at the development after completion, giving it control over the type of tenants that come in. Moreover, its two tallest towers will be more than 70 storeys, dwarfing the older and mostly strata-titled office buildings in Jiefangbei.

The CapitaLand group has also proven itself to be highly adept at securitising and selling assets it acquires, and quickly recovering any capital it commits. For instance, in the wake of the recent financial crisis, it acquired the property portfolio of Orient Overseas Development for $3.1 billion. Within a year, it had recycled $1.5 billion of its investment by selling assets and allocating them to different vehicles. The group also holds its seven Raffles City developments in China under the Raffles City China Fund rather than in its own balance sheet. In all, the CapitaLand group operates six real-estate investment trusts (REITs) andat least 17 property funds.

Now, the commercial property project in Chongqing, which is yet to be given a name, appears to be the next challenge it has set for itself. “We will be able to deliver something iconic for the city and that is profitable for us,” says Arthur Lang, chief financial officer at CapitaLand. “That is where we stand out versus our competitors.”

Building another icon
CapitaLand isn’t backing the Chaotianmen project by itself. The group will have a 50% stake in the development. That will be equally split between its wholly owned unit CapitaLand China Holdings and its 65%-owned, Mainboard-listed CapitaMalls Asia. Singbridge, a unit of Temasek Holdings, will take up a further 30% interest in the project, while 20% will be held by undisclosed private investors.

CapitaLand says it was one of six bidders for the Chaotianmen site, and that it eventually won out because of its superior design. The development will consist of eight towers and a four-storey shopping mall. The two tallest central towers will house the hotels above the deck and offices. There will be four office and residential towers behind the central towers linked by a sky garden which connects to the top floors of the two central towers. In addition, two standalone towers will house just residential units

And it is no coincidence that the sky garden would seem familiar to Singaporeans. The architect Safdie also dreamt up the Marina Bay Sands, and its SkyPark is a design patented by him.

Besides the design, the transport links embedded in the development are expected to be a draw for home buyers and tenants. The metro interchange will be positioned on the third level of the retail podium, while a bus interchange will be located in one of the basement levels. A cruise centre and ferry terminal will also be incorporated into the development.

The retail offering will be similar to ION Orchard and Raffles City, targeting the upper-middle-income and high-end shoppers. The residential units will take up about 41% of the 817,000 sq m of gross area, while the offices and shopping mall will account for 21% and 27% respectively, with hotel and serviced residences occupying the rest. The land tenure for the commercial segment is 40 years, while the tenure for the residential component is 70 years.

Despite the high cost of RMB25,800 psm for the property, officials at CapitaLand figure they will be able to earn a decent return, as it is being targeting at the very top end of Chongqing’s property market. LimMing Yan, chief operating officer of CapitaLand, notes that high-end residential units in Chongqing are being transacted at close to RMB30,000 psm. “It’s not a very big market at this point,” he concedes. “We believe a few years down the road, this will be the top end of the market.”

Lim Beng Chee, CEO of CapitaMalls Asia, figures that the office space at the development will also be the best in Chongqing, and consequently command a premium. “If you go to Jiefangbei today and look at the offices, you won’t see quality that’s good enough for MNCs. Most of them are strata-titled and yet they’re selling at about RMB25,000 psm.” CapitaLand plans to hold on to its office space and shopping mall at Chaotianmen through one of its funds or REITs. At rents of RMB200 psm per month, Beng Chee says the retail and office space ought to be able to generate a 9% yield on cost.

According to CLSA, these targeted rentals are aggressive. “Our channel checks indicate that the asking rents for Grade-A office and retail space in Chongqing CBD are RMB120 to RMB150 psm per month and RMB150 to RMB-200psm per month respectively,” the research house says in a recent report. “On the residential market, high-end properties are transacted at RMB30,000 psm.”

Yet, the CapitaLand group already has some experience in operating shopping malls in Chongqing. The group opened the Jiulongpo mall in 2005, Beng Chee notes. “Three months after we opened, all the tenants ran away because they didn’t know how to run the business and we had to release the space,” he says. “Now, every year, we’re seeing sales grow.” The group then went on take over a shopping mall called Shapingba that “was not done properly”, according to Beng Chee. “This projectis now getting close to 18% yield on investment, though it’s a small project.”

Beng Chee adds that he has a team of morethan 100 on the ground in Chongqing. “My team of people have been here since 2005 and have gone through very difficult times. They are still with us, and that gives us the confidence todo this project [in Chaotianmen].”

Chongqing express
The city of Chongqing is something of a hot growth area in China. With a population of some 32 million, it is the largest municipality in China.

As the gateway to China’s western interior, the city is also less dependent on exports than the country’s coastal commercial hubs. Now, its expanding transport links are making it a magnet for investment. Notably, the Chongqing-Xinjiang-Europe railway or the New Silk Road, operational since the start of this year, has cut travel time to Europe from 36 days by container ship to just 13 by train. The over land route also cuts red tape as shipments only have to clear international customs once.

With so much change going on, officials at CapitaLand are confident that the Chaotian-men project will be able to draw commercial tenants even though it isn’t located within the traditional CBD of Jiefangbei. “There is sufficient interest from major financial institutions— banks and insurance companies — to take up significant space in the western part of China. We are looking at these office occupiers as well as some MNCs,” says Ming Yan.

By the time the project is completed in2016, officials at CapitaLand expect the project to generate an internal rate of return of 13%to 14%.

For now, however, the project isn’t making analysts any more eager to recommend CapitaLand’s shares to investors. Chris Gee, head of research at JP Morgan, figures that the Chaotianmen project isn’t going to immediately boost the company’s net asset value(NAV) per share by more than two cents. He has a fair value of $2.80 for the stock, a 44% discount to its revalued NAV of $4.96.

For CapitaLand’s CEO Liew, however, the deal enables him to further entrench the company in one of the hottest growth areas in China. By the time the development at Chaotian-men is completed, China will make up 42% to 45% of CapitaLand’s NAV. Moreover, the scale of the Chaotianmen project and its iconic nature could enhance CapitaLand’s brand name in China. “You need some greenfield projects, where you can really be the chef and cook it up,” says Liew




Source/转贴/Extract/Excerpts: http://www.theedgesingapore.com / No 501
Publish date: 05/12/11
Warren E. Buffett(沃伦•巴菲特)
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