Malaysia Property Market Outlook 2012

 

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Ho Chin Soon presenting his talk on "Property Market Outlook 2012 & Why You Should Buy NOW"at Star Property Fair 2011.

Rapid speed transportation linking key growth areas of Malaysia will propel demand for properties in locations currently deemed less desirable or accessible.
Speaking on “Property market outlook 2012” and “Why you should buy now,” at the recent Star Property Fair in Kuala Lumpur, well-known map maker, research consultant and author Ho Chin Soon pointed out key indicators to detect locations where demand for properties would likely to go up.
The foreseeable and probable factors that could affect the property market next year, include:
-the proposed high speed rail link between Greater KL to the southern tip of the peninsula
-the proposed MRT link between Singapore and Malaysia
-the stock market
MRT link
Ho highlighted the Entry Point Project (EPP) under the Economic Transformation Programme ( ETP) which will focus on new MRT lines and MRT stations.
With the completion of such transport facilities, residents will have access to almost every major development site of Greater KL where you are not able to enjoy for the time being.
The proposed MRT line will not just pass through major residential developments to your work place but will also be connected to major commercial and entertainment centres such as 1Utama shopping centre. However, such details have yet to be confirmed.
This development will be made possible when MRT Co, a government-linked company under the Ministry of Finance - overseeing the proposed MRT line - finalise details.
Citing from his book, Greater KL: The Rise of Bukit Bintang, Ho was optimistic of the further growth of Bukit Bintang, due in part to the proposed MRT stations to be built at:
Bukit Bintang-Pudu (West Bukit Bintang )
Pavilion (East Bukit Bintang)
and most importantly, an interchange station in the Kuala Lumpur International Financial district.
According to Ho, with a more convenient mode of transportation, property prices in those areas will be “healthy”.

High-speed rail
Another key factor under the Entry Point Project is the reduction in travelling time to Singapore from Greater KL via the high-speed rail. Ho envisaged that with a train travelling up to 350km per hour, one would be able to reach Johor Baru in 70 minutes.
He said high speed rail transportation will be crucial in the development of a mega region comprising Greater KL, Iskandar Malaysia in Johor and Singapore. Such a region will have a combined population that could reach 20 million. Formerly known as the Iskandar Development Region and South Johor Economic Region, the Iskandar Malaysia site is the main southern development corridor in Johor.
With charts to illustrate cross-border traffic data, Ho pointed out that up to 126,000 vehicles cross the Johor-Singapore Causeway daily where 70% of them are Singapore-registered cars.
He highlighted the fact that Singaporeans own up to 40% of the properties being constructed in Iskandar Malaysia.
Malaysia will likely experience greater spillover effects from Singaporeans travelling here, especially when the proposed rapid transit system linking Tanjung Puteri in Johor Baru to Singapore commences operations in 2018.
Compound Annual Growth Rate
On determining property value, Ho said a useful tool would be the Compound Annual Growth Rate (CAGR) calculator, essentially to calculate the annual growth rate of an investment over a period of time.
Using the calculator and the housing price index spanning 10 years - provided by Valuation and Property Services Department - Ho concluded that the best Compound Annual Growth Rate last year was surprisingly registered in Sabah with 8.06% and not Kuala Lumpur, which only came in second place, with 4.75%.
The lowest growth rate tabulated was in Johor, with minus 0.2% due to an oversupply situation in the south which depressed property prices.
In Sabah and Sarawak, it was a different scenario because people there benefited from their respective state government policy that emphasised cultivating agricultural land that brought good returns. Another factor was due to the increase in palm oil prices, and astute Sabahans used the money to invest in property.
Crash
On the price levels for various types of property in Malaysia, Ho found that condominium prices were mostly flat and stable due to ample supply. But landed property prices continued to increase and if this situation continues in 2012 then a crash in landed property prices could likely occur.
Ho said property prices would normally be on the rise if the stock market was doing well and vice versa, citing the 1997 Asian Financial crisis as an example

(source : starproperty)

Cities With The Fastest Internet Speeds

Brent Radcliffe, On Friday 14 October 2011, 0:28 SGT

The 20th century was the age of the computer, and nothing shaped the last two decades as much as the Internet. Nearly every facet of life in advanced economies now interfaces with the web at some point each day, from cell phones and computers to transport systems and energy grids. With telegraphs a distant memory, the postal service struggling to find a way to stay relative and more of our day-to-day lives spent interacting with smart technology, it's hard to image a time in which we didn't have the Internet as part of our lives.

The McKinsey Global Institute estimates that the Internet accounted for 21% of GDP growth in developed countries over the past five years (it reviewed 13 countries), with most of the economic gains coming from outside of technology industries. Efficiencies created by a shift from traditional accounting and recording methods to ones supported by the Internet have eliminated some jobs, but estimates are that 2.6 jobs are created for every job lost in economies in which firms were modernizing.
In an age in which high-tech industries and financial firms rely on faster and faster Internet speeds to outpace the competition, countries are finding that they have a need for speed if they plan on keeping innovative firms happy. Even small and medium-sized businesses – the sort of companies that politicians talk about fostering – are becoming more and more reliant on online technologies.
While the United States captures the lion's share of Internet-based revenue and profits, other countries are seeing rapid growth rates in Internet usage. According to the International Telecommunication Union, an agency that is part of the United Nations, the United States had more than 83 million broadband Internet subscribers in 2010 (behind only China), the number of subscribers as a percentage of the overall population was below many western European countries, Canada, South Korea and Hong Kong.
A recent study by Akamai found that the top 10 countries in terms of download speeds were South Korea, Hong Kong, Japan, Netherlands, Romania, Czech Republic, Latvia, Switzerland, Belgium and Ireland. The United States ranked 14th.
Top 10 Average Connection Speeds (World)
1. Tokai, Japan
2. Shimotsuma, Japan
3. Kanagawa, Japan
4. Seocho, South Korea
5. Asahi, Japan
6. Yokohama, Japan
7. Urawa, Japan
8. Ilsan, South Korea
9. Nagano, Japan
10. Hiroshima, Japan
The first city outside Japan or South Korea to make the list was Hong Kong (29), and the first city outside of Asia was Lyse, Norway (33). The United States made its debut with Riverside, Calif. (39).
Top 10 Average Connection Speeds (United States)1. Riverside, Calif.
2. Staten Island, N.Y.
3. San Jose, Calif.
4. Fremont, Calif.
5. Boston, Mass.
6. Jersey City, N.J.
7. Marietta, Ga.
8. Anaheim, Calif.
9. Traverse City, Mich.
10. Hollywood, Fla.
Adoption of broadband Internet has increased across the world in recent years. The United States has a 77% adoption rate, far below the 90% plus of Hong Kong and many European countries.
The Bottom LineImproving Internet speed requires a long-term commitment to investment in infrastructure, enough industry competition to prompt innovation and efficiencies and pricing models that allow a broader swath of a country's population to have access. The more far-flung a country's population is, the more difficult (and expensive) it may be to wire them in. But with so much riding on integrating more people into the web, both the developed and the developing world cannot afford to sit by as rival countries modernize

(source : Yahoo)

Major Banks in the US

17 Major Banks in the US get sued

Published: Friday, 2 Sep 2011 | 5:12 PM ET

A U.S. regulator sued a number of major banks Friday over losses on more than $41 billion in subprime mortgage bonds, which may hamper a broader government mortgage settlement with banks.

The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, came as a surprise to the market and weighed on bank shares.

The FHFA accused major banks, including Bank of America [BAC 7.25 -0.66 (-8.34%) ] , its Merrill Lynch unit, Barclays [BCS 10.60 -0.88 (-7.67%) ] , Citigroup [C 28.40 -1.60 (-5.33%) ] and Nomura Holdings of selling bonds backed by mortgages that should have never been packaged into securities.

The other banks are: Ally Financial (formerly GMAC), Countrywide Financial, Credit Suisse, Deutsche Bank, First Horizon National, General Electric, Goldman Sachs, HSBC North America, JPMorgan Chase, Morgan Stanley, The Royal Bank of Scotland Group and Société Générale.

THE BANKS

BAC

 

BCS

C

      

CS

    

DB

    

FHN

          

GE

GS

    

HBC

    

JPM

    

MS

    

RBS

  

The litigation against banks is hurting share prices in the sector because investors feel unable to estimate the ultimate scope of a given bank's legal liabilities.

Bank of America, for example, had intended its proposed $8.5 billion settlement in June with investors in Countrywide mortgage securities to resolve most litigation tied to its disastrous 2008 takeover of that home loan provider.

American International Group is suing Bank of America for $10 billion

Other banks also face mortgage lawsuits. In May, the U.S. Justice Department sued Deutsche Bank [DB 36.27 -2.33 (-6.04%) ]

The FHFA's lawsuits follow an initial lawsuit in July against UBS [UBS 13.80 -0.55 (-3.83%) ] seeking to recover $900 million of losses incurred on $4.5 billion of debt.

Copyright 2011 Thomson Reuters.

From Japan Past Experiences to US Rerating Impact

What would United States lose its "AAA" credit rating mean for investors?

Photo: Bryan Jones

In a bid to understand the ramifications of such a cut, Barry Knapp, the head of U.S. equity strategy at Barclays Capital, has researched back as far as 1998 in order to look at the effect that Moody’s downgrade of Japanese debt had on that nation following the collapse of Long Term Capital Management (LTCM).

Knapp said using the Japanese example to understand the possibilities for the U.S. are “fraught with peril,” but his observations still make for interesting reading.

“Macroeconomic fundamentals were the major drivers of asset prices, rather than the ratings downgrade,” said Knapp in a research note on Wednesday.

1.....“At first blush, we were struck by the massive underperformance of JGBs (Japanese Government Bonds) relative to German Bunds and sharp steepening of the 2-year and 10-year JGB yield curve, which implied that the downgrade did have a significant impact on longer-term yields,” Knapp said.

While yields rose, so did the Nikkei and yen, according to Knapp, who noted that a rebound in Japanese industrial production began in 1998 that dragged Japan out of recession by early 1999.

As a result, the move in Japanese bonds was in Knapp’s opinion due to Fed easing following LTCM’s collapse and Japan’s emergence from recession.

“The initial reaction for Japanese equities in the two weeks following the downgrade was positive, underscoring how other factors were driving the markets. However, within a couple of weeks, equities were struggling, again, likely because it was becoming clear that the first round of bank recapitalizations (in early 1998) were insufficient, setting the stage for a second round (in early 1999),” he said.

Banking stocks weighed on the Nikkei until the recovery took hold and the second round of bank recapitalizations had occurred.

“Once the recession ended and the second round of bank recapitalizations occurred, the yen was right back to where it started before the downgrade,” Knapp said.

With the S&P refusing to take fright at the debt talks in Washington and trading in a range between 1250 and 1350 Knapp has been fielding a lot of questions about why the U.S. equity market has remained so resilient.

“Our answer is that earnings season is off to a good start. We do not think this will last, but not because of the political risks. Instead, we expect the macroeconomic fundamentals to again become the primary driver of stocks, bonds, and the dollar, perhaps as soon as the GDP report, followed by Friday’s July employment report,” said Knapp

“Our expectation on the debt negotiations is a compromise solution that avoids default but not a downgrade. So, if Congress falls short of $4 trillion and S&P sticks to its words, after a brief muted market reaction, the direction of the markets will be highly leveraged to the data with expectations of a second-half rebound in economic activity hanging in the balance.”

(source : CNBC)

China Second-Quarter GDP Rises 9.5% From Year Ago

Published: Tuesday, 12 Jul 2011 | 10:02 PM ET

By: Reuters

China's annual gross domestic product growth eased to 9.5 in the second quarter of 2011 from 9.7 percent in the previous quarter, the National Bureau of Statistics said on Wednesday.

But the growth rate was stronger than market expectations of 9.4 percent.

AP Shanghai Skyline

China's GDP in April-June was up 2.2 percent from the first quarter of 2011 on a seasonally adjusted basis, the statistics agency added. It marked a deceleration from the 2.1 percent recorded in the first quarter of this year.

Industrial output rose 15.1 percent in June from a year earlier.

(Source CNBC)