Anaemic Growth & Soaring Inflation To Hit S’pore?
The Monetary Authority of Singapore (MAS) has planted several red flags around the Singapore economy citing a possible “double whammy” of a slowing growth rate as well as higher inflation. MAS said that if global economic conditions were to falter drastically, Singapore could experience sub 1 percent growth for the year. While MAS has kept its current 1-3 percent growth outlook, it says the outlook is predicated on assumptions that the global economy does not experience shocks in the form of a US recession, Eurozone debt crisis escalation or a hard landing of the Chinese economy. Singapore’s gross domestic product has begun to see momentum slowing as 2Q12 growth figures declined 1.1 percent. Already, the republic is facing sky-rocketing inflation rates (5.3 percent in June) with the MAS adjusting the lower bracket of its inflation forecast to 4-4.5 percent from 3.5-4.5 percent. MAS continues to expect “tightness in the housing rental market especially in the HDB segment where more time will be needed for increased supply to come on-stream.
Significance: With the statements, MAS seems to be gearing up the population for a worst case scenario. Apart from the current policy of exchange rate-centred monetary policy, tackling the high inflation will be difficult as it is mainly driven by domestic pressures and policy adjustments.
SingTel’s Optus In A$6m Acquisition Of Eatability
SingTel’s Australian subsidiary, Optus is following in its parent’s footsteps with a A$6 million acquisition of Eatability, one of Australia’s leading restaurant and review websites. In its communiqué, Optus said that the acquisition was central to its “strategy of providing more localised digital content and services for the Australian market and will be a strong foundation for future transaction-based business and mobile services in the lifestyle category”. With more than 235,000 restaurant reviews and 37,000 restaurant listings, Eatability is a popular website for Australian diners looking for recommendations on where to eat out. Loo Cheng Chuan, head of SingTel’s digital lifestyle division said that the acquisition will bring the Eatability to the next level by extending it to smartphones and making it personalised and contextually relevant.
Significance: This acquisition comes on the heel of SingTel’s purchase of HungryGoWhere in Singapore and will form part of the group’s overall strategy to build a stable of local digital services across the region.
MCT Exceeds Expectations With 1Q13 DPU
Mapletree Commercial Trust (MCT) has exceeded expectations for its 1Q13 distribution per unit (DPU). Its DPU for 1Q13 stood at $0.01537, beating its initial DPU forecast of around $0.01274 by 20.6 percent. The higher-than-forecasted DPU was underpinned by a 20.7 percent jump in distributable income over forecasts. MCT has its portfolio anchored in properties such as Vivocity, Bank of America Merrill Lunch HarbouFront and PSA Building. It was listed in April last year and thus, does not have historical comparative figures for 1Q13. Amy Ng, chief executive officer of MCT’s manager said that the trust had “made good progress in leasing and will continue to focus on driving organic growth for the portfolio”. On its capital management side, MCT said that 85 percent of its total debt has been fixed by way of interest swaps and caps to convert the floating rate debt to fixed rate debt. This would be able to give MCT more visibility regarding its financing and interest expenses.
Significance: On most counts, MCT has exceeded its pro forma figures stated in its prospectus a year ago. As signs of improving incomes from its properties show, MCT’s FY13 performance could in turn exceed initial market expectations.