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February 2010 was a somewhat interesting month, as troubles continued with PIGS (Portugal, Italy, Greece and Spain) amid talks of a potential bailout by Germany and France. Stock markets globally were on jitters due to fears of the potential fallout from these 4 countries, and the Euro currency was also threatened as people dumped it in favour of the USD as the Euro zone countries were perceived to be having numerous problems. There were even some calls for these countries to drop the Euro to prevent it from sliding further against the Greenback. Greece did get a little incensed at the Germans because Germany had implied that Greece had been imprudent with their finances, which led them into their current predicament. In retaliation, Greece demanded for more war reparations from Germany, citing the fact that Germany had yet to fully account for the atrocities they committed during World War II! This mud-slinging is likely to carry on for a while but Germany and France are unlikely to stand idly by and watch Greece sink, as a lot of their banks’ debts are also tied to Greek banks, so if Greece fails, the chain reaction would be catastrophic.
China also gave much cause for concern when it raised its reserve ratio twice within one month, reasons being possible overheating of its economy and also its frothy property market. Since China has remained the “bastion of strength” throughout the entire global financial crisis, managing to grow by a breakneck rate of 8-9% even amidst a global slump, many observers saw the tightening measures as a possible derailment to the global economic recovery. If China were to put the brakes on their red-hot growth, what would the impact be on other nations which are still struggling to overcome the effects of the deep recession?
There are also lingering doubts on the sustainability of the global economic recovery as the data coming out from USA points to a more prolonged slump than originally envisioned. The US Federal Reserve has also hiked up a key lending rate it charges banks on short term loans from 0.5% to 0.75%, signalling that they may be withdrawing their fiscal stimulus much earlier than anticipated.
In Singapore, the Government made a surprising announcement on February 19, 2010 to cool the property market, and implemented two measures to curb speculation and dampen housing prices in the private property sector before they turned into a bubble. The first was to impose a seller’s stamp duty on all sales of property made within 1 year of purchase. Previously, stamp duty was only applicable to the purchase of a property and not its sale. The second measure was to limit the Loan-To-Value (LTV) ratio to 80%, down from 90% previously. What this means is that a buyer is allowed to finance up to a maximum of 80% of the value of the property, instead of the previous allowance of up to 90%. I view these measures as being progressive but probably inadequate to address the red-hot property market, as there are still droves of people heading off to showflats and snapping up expensive high-end condominiums priced at $1,600 to $2,000 psf. I also doubt this will deter those with holding power and the HDB upgraders, who will probably still continue to purchase mass-market condos.
In the Budget Announcement for 2010 (delivered by Mr. Tharman Shanmugaratnam our Finance Minister on February 22, 2010), measures were introduced to help businesses as well as families, with more focus on businesses to grow during the recovery phase. More of the details can be found by visiting the Singapore Budget 2010 Website.
My own portfolio remained fairly dormant as no changes have been made to it since January 2010’s divestment of China Fishery and purchase of Kingsmen Creative. I have been building up on my cash reserves to wait for opportunities to purchase more shares of stable, well-run and growing companies; and hopefully these funds can be suitably deployed in the near future. Read more...[caption id="attachment_4480" align="alignright" width="150" caption="Musicwhiz Portfolio "]
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February 2010 was a somewhat interesting month, as troubles continued with PIGS (Portugal, Italy, Greece and Spain) amid talks of a potential bailout by Germany and France. Stock markets globally were on jitters due to fears of the potential fallout from these 4 countries, and the Euro currency was also threatened as people dumped it in favour of the USD as the Euro zone countries were perceived to be having numerous problems. There were even some calls for these countries to drop the Euro to prevent it from sliding further against the Greenback. Greece did get a little incensed at the Germans because Germany had implied that Greece had been imprudent with their finances, which led them into their current predicament. In retaliation, Greece demanded for more war reparations from Germany, citing the fact that Germany had yet to fully account for the atrocities they committed during World War II! This mud-slinging is likely to carry on for a while but Germany and France are unlikely to stand idly by and watch Greece sink, as a lot of their banks’ debts are also tied to Greek banks, so if Greece fails, the chain reaction would be catastrophic.
China also gave much cause for concern when it raised its reserve ratio twice within one month, reasons being possible overheating of its economy and also its frothy property market. Since China has remained the “bastion of strength” throughout the entire global financial crisis, managing to grow by a breakneck rate of 8-9% even amidst a global slump, many observers saw the tightening measures as a possible derailment to the global economic recovery. If China were to put the brakes on their red-hot growth, what would the impact be on other nations which are still struggling to overcome the effects of the deep recession?
There are also lingering doubts on the sustainability of the global economic recovery as the data coming out from USA points to a more prolonged slump than originally envisioned. The US Federal Reserve has also hiked up a key lending rate it charges banks on short term loans from 0.5% to 0.75%, signalling that they may be withdrawing their fiscal stimulus much earlier than anticipated.
In Singapore, the Government made a surprising announcement on February 19, 2010 to cool the property market, and implemented two measures to curb speculation and dampen housing prices in the private property sector before they turned into a bubble. The first was to impose a seller’s stamp duty on all sales of property made within 1 year of purchase. Previously, stamp duty was only applicable to the purchase of a property and not its sale. The second measure was to limit the Loan-To-Value (LTV) ratio to 80%, down from 90% previously. What this means is that a buyer is allowed to finance up to a maximum of 80% of the value of the property, instead of the previous allowance of up to 90%. I view these measures as being progressive but probably inadequate to address the red-hot property market, as there are still droves of people heading off to showflats and snapping up expensive high-end condominiums priced at $1,600 to $2,000 psf. I also doubt this will deter those with holding power and the HDB upgraders, who will probably still continue to purchase mass-market condos.
In the Budget Announcement for 2010 (delivered by Mr. Tharman Shanmugaratnam our Finance Minister on February 22, 2010), measures were introduced to help businesses as well as families, with more focus on businesses to grow during the recovery phase. More of the details can be found by visiting the Singapore Budget 2010 Website.
My own portfolio remained fairly dormant as no changes have been made to it since January 2010’s divestment of China Fishery and purchase of Kingsmen Creative. I have been building up on my cash reserves to wait for opportunities to purchase more shares of stable, well-run and growing companies; and hopefully these funds can be suitably deployed in the near future. Read more...
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February 2010 was a somewhat interesting month, as troubles continued with PIGS (Portugal, Italy, Greece and Spain) amid talks of a potential bailout by Germany and France. Stock markets globally were on jitters due to fears of the potential fallout from these 4 countries, and the Euro currency was also threatened as people dumped it in favour of the USD as the Euro zone countries were perceived to be having numerous problems. There were even some calls for these countries to drop the Euro to prevent it from sliding further against the Greenback. Greece did get a little incensed at the Germans because Germany had implied that Greece had been imprudent with their finances, which led them into their current predicament. In retaliation, Greece demanded for more war reparations from Germany, citing the fact that Germany had yet to fully account for the atrocities they committed during World War II! This mud-slinging is likely to carry on for a while but Germany and France are unlikely to stand idly by and watch Greece sink, as a lot of their banks’ debts are also tied to Greek banks, so if Greece fails, the chain reaction would be catastrophic.
China also gave much cause for concern when it raised its reserve ratio twice within one month, reasons being possible overheating of its economy and also its frothy property market. Since China has remained the “bastion of strength” throughout the entire global financial crisis, managing to grow by a breakneck rate of 8-9% even amidst a global slump, many observers saw the tightening measures as a possible derailment to the global economic recovery. If China were to put the brakes on their red-hot growth, what would the impact be on other nations which are still struggling to overcome the effects of the deep recession?
There are also lingering doubts on the sustainability of the global economic recovery as the data coming out from USA points to a more prolonged slump than originally envisioned. The US Federal Reserve has also hiked up a key lending rate it charges banks on short term loans from 0.5% to 0.75%, signalling that they may be withdrawing their fiscal stimulus much earlier than anticipated.
In Singapore, the Government made a surprising announcement on February 19, 2010 to cool the property market, and implemented two measures to curb speculation and dampen housing prices in the private property sector before they turned into a bubble. The first was to impose a seller’s stamp duty on all sales of property made within 1 year of purchase. Previously, stamp duty was only applicable to the purchase of a property and not its sale. The second measure was to limit the Loan-To-Value (LTV) ratio to 80%, down from 90% previously. What this means is that a buyer is allowed to finance up to a maximum of 80% of the value of the property, instead of the previous allowance of up to 90%. I view these measures as being progressive but probably inadequate to address the red-hot property market, as there are still droves of people heading off to showflats and snapping up expensive high-end condominiums priced at $1,600 to $2,000 psf. I also doubt this will deter those with holding power and the HDB upgraders, who will probably still continue to purchase mass-market condos.
In the Budget Announcement for 2010 (delivered by Mr. Tharman Shanmugaratnam our Finance Minister on February 22, 2010), measures were introduced to help businesses as well as families, with more focus on businesses to grow during the recovery phase. More of the details can be found by visiting the Singapore Budget 2010 Website.
My own portfolio remained fairly dormant as no changes have been made to it since January 2010’s divestment of China Fishery and purchase of Kingsmen Creative. I have been building up on my cash reserves to wait for opportunities to purchase more shares of stable, well-run and growing companies; and hopefully these funds can be suitably deployed in the near future. Read more...
