atans1

Jan- Jun 2015: Hibernate unless mortgaged to eyeballs

In Economy, Financial competency, Financial planning, Property on 07/01/2015 at 11:40 am

(Updated on 9 January 2015 to include bit about clueless “consultant”.)

2015 is likely to begin in a merited atmosphere of gloom …

“Lowflation”, basically stable prices, is set to make everything worse. The already heavy debt loads of both consumers and governments will become more burdensome as nominal GDP growth slows down. The sharp fall in commodity prices may increase spending power in some countries, but it could turn lowflation into outright deflation.

http://blogs.reuters.com/breakingviews/2014/12/16/this-is-as-good-as-global-recovery-gets/

But if mortgaged yr eyeballs …. https://atans1.wordpress.com/2014/12/16/why-oil-price-falls-bad-for-mortgagees/ and

A key interest rate that housing loans in Singapore are pegged to rose sharply for a second day, indicating home owners may face higher mortgage payments.

Bloomberg data showed the three-month Singapore Interbank Offered Rate (Sibor) was fixed at 0.62052 per cent at 11.30am on Tuesday (Jan 6), up from 0.57762 per cent on Monday.

Sibor is the rate at which banks lend to one another and is a widely used measure of the cost of funds. The three-month Sibor had been creeping up previously, rising from around 0.4 per cent in October to around 0.45 per cent at the end of last week.

Many housing loans are pegged to three-month Sibor. Oversea-Chinese Banking Corp (OCBC), for example, is currently offering home loans at three-month Sibor plus 0.85 percentage points for the first three years, according to its website.

The lending rate is reviewed every three months.

Assuming mortgage rates in Singapore rise to 2 per cent from around 1.5 per cent currently, a home buyer with an outstanding loan of S$500,000 and 20 years remaining will need to pay around S$2,530 a month, up from S$2,410. Should the rate rise to 3 per cent, the monthly payment will increase to S$2,770.

(CNA yesterday)

But here’s one mortgagee who lives in lala land. She obviously is not into finance.

New home owner Huang Sijia, 26, who took out a Sibor floating loan last year, is sticking to her package for now. “I am not too worried because the interest rates have been quite stable for the past three years,” said the consultant.

http://business.asiaone.com/property/news/mortgage-payment-hike-likely-key-rate-rises

S’pore’s prospects

3% this yr 3.1% next yr from 3.3% and 3.7% respectively say the worse than fortune tellers forecasters

Private sector economists are less upbeat about the growth outlook for the Singapore economy this year, and have moderated their growth expectations for almost all sectors, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Dec 17).

The economists polled in the survey said they expect Singapore’s economy to grow by 3 per cent this year, down from their median forecast of 3.3 per cent in the previous survey in September.

The latest estimates are in line with the official growth forecast of 2.5 to 3.5 per cent, which was announced in August.

The lower forecast comes after gross domestic product (GDP) growth in the third quarter was weaker than expected. The economy expanded by 2.8 per cent during the quarter, lower than the median forecast of 3.2 per cent in the previous survey.

Manufacturing is now expected to grow by 3.5 per cent this year, down from the 4.2 per cent in the previous survey. Construction is now expected to grow by 3.4 per cent, down from 4.7 per cent. The forecast for wholesale and retail trade has been revised to 2.4 per cent from 2.6 per cent, while the forecast for accommodation and food services has been revised to 1.2 per cent from 1.5 per cent.

Finance and insurance was the only sector that had its forecast revised upwards. The sector is now expected to expand by 7.3 per cent, up from the 5.5 per cent in the previous survey.

INFLATION LIKELY TO SLOW

Inflation is expected to slow, with the economists forecasting the consumer price index (CPI) to come in at 1.1 per cent for the full year, down from the 1.8 per cent forecast in September. Core inflation – which excludes accommodation and car prices – is expected at 2 per cent, down from 2.2 per cent in the previous survey.

Looking ahead, economists expect GDP will expand by 3.1 per cent in 2015, down from the 3.7 per cent in the September survey. Headline inflation and MAS core inflation are forecast to be 1.1 per cent and 1.9 per cent, respectively.

The MAS Survey of Professional Forecasters is conducted every quarter after the release of detailed economic data for the preceding three months. The median forecasts in the latest report were based on the estimates of 22 economists

(CNA late last yr)

The final sign of winter: lemmings have made M&A deals

 Michael J. de la Merced writes in DealBook. Some 40,298 transactions ‒ worth nearly $3.5 trillion ‒ were announced worldwide in 2014, according to Thomson Reuters. It was the biggest year in deals since 2007. Goldman Sachs and the law firm Skadden, Arps, Slate, Meagher & Flom led the global M.&A. tables for financial and legal advising.

Sure, debt financing was cheap and stock prices were climbing. But perhaps the biggest change, deal makers say, is that corporate boards and management teams realized that their ability to expand their companies on their own had become more difficult. And with some semblance of predictability in the markets, boards now feel more comfortable taking the plunge, Mr. de la Merced writes. The busiest sectors for the year have been the oil and gas industry and the pharmaceuticals industry. But the biggest deals of the year, including the assumption of debt, have been takeovers in the telecommunications industry, including Comcast’s $45 billion proposal to buy Time Warner Cable.

“The question now is whether the confluence of factors that enabled the merger revival will carry over into 2015,” Mr. de la Merced writes.

  1. No worries man. Markets have not reached peak yet. Golden times ahead. 2015 will be like 2007. Still can make good money.
    Btw still hoping for major deflation one of these days, hopefully sooner rather than later, coz this is the only way to get rid of the 2 million foreign trashies.

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