TR EMERITUS

Written by Our Correspondent Despite all the media hype about Sentosa IR being off to a "good start" as proclaimed by the Straits Times, officials from Las Vegas Sands (LVS) which will operate Singapore's second casino Marina Bay Sands scheduled to open on April 27 appeared to be guarded about its prospects. LVS president and chief operating officer Michael Leven told the Reuters Travel and Leisure Summit: "We are not disappointed in what we're seeing in Genting, but it's too early to assess". LVS is still seeking to refinance about US$5 billion of US loans this year and it is counting on LVS's performance to clear the convenants. Leven said LVS will need to generate at least US$400 million in EBITDA from Marina Bay Sands in a bid to meet debt covenants. "We're accumulating cash ... the only risk is if Singapore doesn't do well. We have to do $400 million in EBITDAR to clear covenants. If we don't do that, we've made a bad investment in Singapore," he added. Chief Financial Officer Kenneth Kay said on a conference call last week LVS had US$11 billion in long term debt as of December 31, 2009, with an average weighted interest rate of four percent. (EBITDAR definition: Earnings Before Interest, Taxes, Depreciation, Amortization and Rent. An approximate measure of a company's operating cash flow based on data from the company's income statement. Calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, amortization, and rent. Similar to, but less common than, Earnings Before Interest, Taxes, Depreciation, and Amortization.) Leven's remarks, which was reported widely by Reuters, Bloomberg and Macau Daily, was not covered by the Singapore media which continues to mislead Singaporeans with its inaccurate portrayal of the situation on the ground. As early as September last year,an analyst from Citicorp Anil Daswani expressed doubts about the profitability of Singapore’s two integrated resorts. She said that assuming MBS contributes 20 per cent of LVS’s total EBITDAR in its first full year, every eligible Singaporean will have to go to the casino five times a year and spend more then the average visitor to Macau. However, a hefty entry fee of $100 is likely to put off some Singaporeans. Furthermore, unlike Las Vegas or Melbourne, Singapore has a small population of only 5 million people. Ronnie Chan, chairman of Hang Lung Properties Ltd., Hong Kong’s fifth-biggest developer by market value, said recently in a Bloomberg Forum in Hong Kong that the two casino-resorts in Singapore will fail because they won’t be able to attract high-rollers: “The big rollers are what make money in casinos, they will never come to Singapore, it’s a family entertainment” location. You think big-rollers will go to Singapore where they have teeth and fangs coming out sideways? There are too many rules. I was in Sentosa island, I really think that it’s going to be a flop…..The whole integrated entertainment industry, I’m worried for them. The good thing about Singapore is that if you flop, you’re given a second chance,” he said. A few years ago, the state media gave extensive publicity to the opening of the now defunct Tang Dynasty Village in Jurong, but its name is not dead and buried. The Sentosa IR, opened for more than two weeks ago had seen more foreign workers than high-rollers so far. If the situation does not improve, there is a chance that the two IRs may become "white elephants" in the middle of Singapore's Central Business District.      Read More →

Dear Prof Yu and Prof Tu, I refer to the commentary you wrote for Straits Times that was published on 27 Feb 2010. Dominance of public housing in Singapore You first pointed out that the HDB is the dominant housing provider in Singapore, accounting for 82% of the population's homes.  This in turn makes Singapore unique compared to other cities where normally, private housing dominates instead. What you could have also pointed out is the passing of the Land Acquisition Act in 1966 which allowed the government to buy land as cheaply as $1 in the name of national development.  The forcible acquisition of land at dirt cheap prices is normally referred to as expropriation in other countries and is normally illegal too. Furthermore in Hong Kong, when mortgages of public flats are fully paid for, the flats can be traded in the open market and are classified as private instead.  If we were to adopt this definition, more than half of our flats would have been classified as private already. Public home ownership in Singapore is for 99 years only You next pointed out that only Singapore has significant home ownership when it comes to public housing.  But you omitted to say that public home ownership in Singapore is for 99 years only which is comparable to long tenure or even perpetual rental contracts in other countries. We are compared to expensive Hong Kong and London but not Sydney. While your study began with the comparison of four cities, Sydney was dropped when it came to actually comparing housing price to income ratio, leaving only notoriously expensive Hong Kong and London to be compared with Singapore.  If affordable housing in Singapore can only be established in comparison with the most expensive cities in the world, doesn't it say something about how expensive Singapore really is? Wrong to consider expensive Hong Kong Island only Your figures show that Hong Kong's housing price to income ratio is almost four times those of Singapore's.  But the calculated ratio of 19.8 for Hong Kong is ridiculously high and dubious. Using only the figures provided in Table 2 of your commentary, we can work out Hong Kong's median housing price to be HK$ 74,593.93 per square metre which matches very closely with the average per square metre price of private residential units in Hong Kong Island as given on Page 7 of "Housing in Figures 2009", a source quoted in your commentary. However, we know that Hong Kong doesn't comprise of Hong Kong Island only and that the latter is much more expensive than Kowloon and the New Territories.  Considering the housing prices in Hong Kong Island only is like considering the housing prices in Bukit Merah, Toa Payoh and Marine Parade only while ignoring those in Woodlands and Jurong West.  You'd invariably end up with a distorted pricing picture.  In fact, the same source you quoted showed housing prices in Kowloon and New Territories to be 71% and 54% that of Hong Kong Island respectively. Furthermore, the same source also shows that housing on Hong Kong Island forms only 10% of all housing which makes it all the more distortionary if we were to base housing prices on Hong Kong Island only.  In other words, your supposed median housing price for Hong Kong is more like the price of the top 10% of housing in Hong Kong. Wrong to compare Singapore's public housing to Hong Kong's private housing Next, we need to consider the fact that the median housing in Singapore is actually public housing so when we compare with Hong Kong, we cannot ignore Hong Kong's public housing.  The median housing price cannot be based on private housing only.  Since 55% of all housing in Hong Kong is private, the median price of housing in Hong Kong ought to correspond quite closely with the cheapest forms of private housing in Hong Kong.  That would have more than halved the ratio you worked out for Hong Kong to less than 9.9 easily. Still, there is no denying that housing price to household income ratio is higher for Hong Kong than for Singapore.  This can easily be reconciled with the the fact that Hong Kong's liveable space per person is less than half that of ours as shown in Table 2 of your commentary.  Thus, Hong Kong's higher housing price is due to they being more overcrowded than us.  The lesson we must glean from this is that the more we choose to overcrowd ourselves, the more expensive our housing will become. Public housing omitted for Greater London Area Similarly, you have omitted to take public housing into account which makes up 23% of all housing in Greater London Area.  In order for an apple to apple comparison, we need to apply Singapore's situation to London and consider what happens when the 23% of Londoners staying in rental housing are forced to buy their houses using their retirement money and leaving them with little or no money for retirement much like what is happening in Singapore.  These 23% public housing would automatically be counted for in the computation of housing prices and will significantly reduce London's median housing price. Is Singapore housing much affordable? Hence, contrary to what you claim, there is no empirical evidence that housing in Singapore is very much affordable by any standard.  Since the empirical evidence you provided is highly flawed, the only standard by which Singapore can be ajudged to be affordable is one that is twisted and that which omits all but the most expensive cities.  Therefore, it is not true that Singapore has achieved a lower housing to income ratio.  If interpreted correctly, your figures do not reveal that our housing system delivers affordable housing to the majority of Singaporeans. Thank you Ng Kok Lim  Read More →

Written by Our Correspondent Following our publication of news of Chinese Premier Wen Jiabao chatting online with anonymous netizens last Saturday which was not mentioned by the state media, we receive a deluge of comments from Singapore readers praising him and expressing disappointment at their own leaders at the same time. The event, titled “I have a question to ask the Premier”, conducted jointly by the central government and Xinhua News Agency was telecast live on CCTV Channel 4. Many Singaporeans were impressed by Premier Wen taking time off to engage netizens directly and openly without any airs and by his humble attitude. Though there were some criticisms and brickbats hurled at him and his administration, Premier Wen did not lose his cool and answered the questions posed to him to the best of his ability. He promised to tackle the problems raised by the netizens after the dialogue. LIE KY opined that Communist China is more "democratic" than Singapore. "Communist China imposes death sentences for their corrupted govt officials while PAP either covers up case or gives a slap on the wrist(or excuse it’s a honest mistake). Recently the Chinese leaders insist that all govt officials must inform the State of their family members’ overseas place of stay,school or business so as to keep track of their financial standing lest they use their spouses or children as proxies to stash their corrupted wealth. PAP ministers or MPs never declare their assets or their family’s businesses either local or abroad. So, without measures to keep track of PAP guys,how can we know if corruption takes place? Looks like Communist China is more democratic than our MIWs!!!" Ah Beng concurred: "As I said before many times, unless you go to Shanghai and see for yourself, there are more personal freedom. The Shanghaiese told me in the past they just criticize CCCP policy, now they are allowed to discuss on Human Rights. There are so many Singaporean over there you felt like home." Sinkapore added: "Premier Wen is someone who I have 101% respect for, not forgetting the late President Ong. I recalled a few years back when China was experiencing its worst Snow Storm (close to Lunar New Year) and millions of commuters and workers were stuck without train to return home. Due to the storm, powerlines were severed, water was frozen and MILLIONS were in dire straits. Premier Wen in front of LIVE TV, visited the VARIOUS train stations and addressed the commuters and APOLOGISED for HIS GOVERNMENT’s ‘inadequacy’ and PROMISED to do everything HE CAN to ensure that those having problems WILL BE addressed asap. Again in the EarthQuake in SzeChuan, Premier Wen was there ON SCENE within the 1st hour and stayed for 4 SOLID DAYS ensuring that Rescue Operation continues AROUND THE CLOCK." Frankie contrasted the remarks made by Premier Wen to that of PM Lee: "Chinese Premier Wen Jiabao said “he was determined to tame the “wild horse” of the country’s soaring housing market and to keep the prices at a reasonable level within his term as Premier.” Singapore Prime Minister Lee Hsien Loong said “there is nothing much his administration can do to control the prices of HDB flats.” If you compare the size of both countries i.e. China and Singapore, and their population, I am very disappointed by our PM LHL’s remarks. Obviously, PM LHL is not interested at all and worst, he allows nature to take its course." Mask summed it up succinctly: "Despite China being a communist country. It leaders at least are moving along with the time. Singapore leaders are actually moving backward." Though Singapore is the most wired country in the world, its leaders appear to be unwilling to utilize the New Media fully to engage netizens. There is little interaction between the government and citizens except through the official REACH forum where comments posted by netizens are often stone-walled. Unlike Premier Wen who addressed the Chinese netizens lovingly as "friends", the PAP regards anonymous netizens are "pests" and often attack and discredit them via the state media. In a recent article published on the Straits Times, Rachel Chang attacked netizens as promoting hatred and xenophobia which was echoed by YPAP leader Sear Hock Rong who called on the authorities to take action against these netizens on his blog.  Read More →