Over 100 property agencies closed shop, over 3,500 agents left the industry: CEA

By

Lynette Khoolynkhoo@sph.com.sg@LynetteKhooBT

As a reflection of current property market conditions, a total of 104 property agencies closed shop and 3,573 real estate agents left the industry, following the latest licence renewal exercise with the Council for Estate Agencies (CEA). 

ST PHOTO: ALICIA CHAN

JAN 21, 201611:25 AM

AS a reflection of current property market conditions, a total of 104 property agencies closed shop and 3,573 real estate agents left the industry, following the latest licence renewal exercise with the Council for Estate Agencies (CEA).

As of Jan 1, the CEA has licensed 1,369 estate agents and registered 29,262 salespersons.

In the past year, there were 1,299 new salespersons who joined the industry. This is a decrease from the 3,006 new salespersons in 2014.

"This could be a reflection of the property market sentiments," said Heng Whoo Kiat, director for planning and licensing at the CEA.

He pointed out that salespersons are also probably mindful of the cost of being in the industry.

Under CEA's regulatory framework, salespersons are obliged to commit time and resources to meet the continuing professional development requirements for annual renewal of their registration. As for new entrants to the industry, they have to complete a course and pass a qualification examination.

    
 

Thai bargain hunters join Asian gold-buying spree as prices drop

Along Bangkok's bustling Yaowarat Road, where Chinese traders haggled over gold with Siamese merchants more than a century ago, customers crowd the counters of jewelry shops looking for bargains.

PHOTO: BLOOMBERG

JAN 21, 20169:11 AM

[SINGAPORE] Along Bangkok's bustling Yaowarat Road, where Chinese traders haggled over gold with Siamese merchants more than a century ago, customers crowd the counters of jewelry shops looking for bargains.

Like the rest of Asia, which accounts for more than 60 per cent of the world's gold buying, the people of Thailand are snapping up necklaces, bracelets and ingots at the start of the year, adding to demand from Western investors who are buying bullion as a haven from financial turmoil.

Business is brisk for shop owners like Sathira Phuakpraphun, especially after global prices fell last month to the lowest in more than five years. He needed a new supplier because the old one ran out just as demand picked up before Chinese New Yearin February.

"Gold is cheap," said 35-year-old Sathira, after ordering 10kg of bars and jewelry for his new shop near the airport. "I'm buying now because I expect prices to increase before the New Year."

Demand is accelerating in Thailand, where people have long considered gold a valued gift and a way to preserve wealth, no matter how small. Rising imports by Southeast Asia's top consumer underscore the flow of bullion from west to east that helped make China and India the biggest users. Switzerland was a net exporter in November for the first time in a year, with 37 per cent of shipments going to China and Hong Kong and 48 per cent to India, UBS Group AG has said.

CHEAPER BULLION

Gold has declined for three years and slumped more than 40 per cent from its record in 2011 as equity markets rallied and the prospect of rising US borrowing costs eroded the appeal of an asset that doesn't pay interest. Holdings in exchange-traded funds fell to the lowest in almost seven years.

Now bullion is climbing. Prices have added more than 4 per cent since they touched US$1,046.44 an ounce on Dec 3, the lowest level since February 2010. Turmoil in global financial markets has boosted demand for a haven and investors have increased assets in exchange-traded funds by more than 3 per cent since the start of January, data compiled by Bloomberg show.

Before prices strengthened, Thailand was already stocking up. Purchases expanded 7 per cent from a year earlier to 172 metric tons in the first 11 months of 2015, while sales overseas totaled 120 tons, government data show. Consumption in India and China rose 13 per cent in the third quarter from a year earlier, according to data from the London-based World Gold Council.

EXPANDING IMPORTS

Thailand's biggest buyer, YLG Bullion International Co, will boost purchases by about 25 per cent to 160 tons this year, Chief Executive Officer Pawan Nawawattanasub said in an interview in Bangkok on Jan 13. MTS Gold Group, another top importer, will increase shipments by more than 40 per cent to 50 tons, Managing Director Golf Hirunyasiri said. Both companies also export gold.

The country's people have proved persistent bargain hunters. When global prices dropped 6.8 per cent in November, the most in more than two years, MTS imported as much as 1.5 tons a week to meet surging demand, Mr Golf said.

"Thai people love gold because this is our culture," Ms Pawan said. "Everyone holds some gold, no matter how big or how small."

Gold stores and goldsmiths are found throughout the country. Golf from MTS estimated there are about 7,000 shops, including pawn and mom-and-pop outlets. That's approaching the number of 7-Eleven convenience stores, which total around 8,600, according to CP ALL Pcl, the operator in Thailand.

GOLDEN CULTURE

Newborns often receive gold pendants with the sign of the zodiac, and bullion is a popular wedding gift, Ms Pawan said. Shoppers tend to buy when prices fall and big investors stock up when there's a rally, she said. Gold can be kept as a store of family wealth to hand down to the next generation.

"It's a good way to create value for my money - better than a savings account," Jiraporn Thongchuenjit, a 25-year-old woman who runs a small restaurant in Bangkok, said after buying a necklace in a Chinatown store. "I've been buying gold regularly for about two years and will continue to buy it."

The national love of gold is used increasingly to market other products. MTS, an abbreviation of Mae Thong Suk, which roughly means Madam Glittering Gold in the Thai language, says it has about 60 per cent of the deals to supply the bullion used by companies in prizes for consumers.

"If you give out cash, people don't like it," Mr Golf said. "You give out a car, people don't like it. You give out gold, people are very happy."

BLOOMBERG

    
 

China to allocate US$4.6b to shut 4,300 coal mines: Xinhua

JAN 21, 20161:00 PM

[BEIJING] China will allocate 30 billion yuan (S$6.56 billion) in funds over the next three years to support the closure of small and inefficient coal mines and redeploy around 1 million workers, state media reported on Thursday.

The Chinese government is determined to reduce the share of coal in its overall energy mix as part of efforts to cut smog and greenhouse gas emissions, but it also looking to secure a soft landing for a sector that employs around 6 million people.

Total raw coal output fell 3.5 per cent to 3.68 billion tonnes last year, according to official data, the second annual decline in a row. Prices fell by about a third during the year, causing heavy losses in the industry.

The Economic Information Daily, a newspaper run by official news agency Xinhua, said that the National Development and Reform Commission, China's state planning agency, is currently soliciting opinions from the industry ahead of the release of a plan to tackle chronic overcapacity in the coal sector.

It said China will aim to close 4,300 mines and cut annual production capacity by 700 million tonnes over the next three years.

The central government will also ban new mine approvals for the next three years, but the move is unlikely to make much of a dent in a production capacity surplus said to amount to more than 2 billion tonnes a year, over half the country's total output.

Citing the China National Coal Association, the report said China still had around 11,000 coal mines in operation by the end of 2015, with a total capacity of 5.7 billion tonnes.

Analysts at Shenwan Hongyuan Securities estimate that the funds required to tackle overcapacity in the coal and steel sectors could reach 200 billion yuan, 70 per cent of which would be needed for coal.

According to the National Energy Administration, coal consumption amounted to 64.4 per cent of China's total energy mix in 2015, down 1.7 percentage points compared to the previous year. China aims to cut the rate to 62.6 per cent this year.

REUTERS

    
 

IMF starts selection process for next managing director

The International Monetary Fund is starting the search for its next managing director, pledging the candidate can be from any of its member nations and the selection process will be completed by early March. 

PHOTO: REUTERS

JAN 21, 20167:49 AM

[WASHINGTON] The International Monetary Fund is starting the search for its next managing director, pledging the candidate can be from any of its member nations and the selection process will be completed by early March.

IMF Managing Director Christine Lagarde's term expires on July 5.

Aleksei Mozhin, dean of the fund's executive board, said in an e-mailed statement Wednesday that the board aims to reach a decision by consensus. Individuals can be nominated by a fund governor or executive director through Feb 10, the Washington-based institution said.

An IMF spokeswoman said that if Ms Lagarde wishes to serve a second term as managing director, her formal nomination would be required.

The executive board has adopted an open, merit-based, and transparent process for the selection of the managing director, similar to the one used in the previous round," Mr Mozhin said.

BLOOMBERG

    
 

US banking regulator says debt rule for big banks could lead to instability

A high-ranking official of the top US banking regulation agency said on Wednesday that a proposal to raise the level of long-term debt big financial companies should issue to help cope with possible failure could reduce financial stability. 

PHOTO: BLOOMBERG

JAN 21, 20167:20 AM

[WASHINGTON] A high-ranking official of the top US banking regulation agency said on Wednesday that a proposal to raise the level of long-term debt big financial companies should issue to help cope with possible failure could reduce financial stability.

Instead, Federal Deposit Insurance Corp Vice Chairman Thomas Hoenig said regulators should tailor debt and equity requirements, as well as resolution plans, to the unique conditions of the banks, deciding if additional debt is useful on a company-by-company basis.

Last year, the international Financial Stability Board completed its Total Loss-Absorbing Capacity standard, a minimum requirement for the instruments and liabilities a bank should have available if it needs to "bail in." It was part of a global framework for how banks deemed too big to fail could resolve a crisis without damaging the financial system or requiring vast sums of public aid.

The US version of the rule proposed by the Federal Reserve in October would also require globally systemically important banks to keep long-term debt, which could be converted to equity, at their holding companies to be used during the resolution of a bankruptcy filing. The Fed is accepting comments on the proposal through Feb. 1. "Mandating increased levels of debt as part of a broad, prescribed resolution strategy has potential effects that, paradoxically, may undermine the very financial stability being sought," Mr Hoenig said in a speech.

He said the proposal would force banks to issue hundreds of billions of dollars in new debt and encourage them to acquire riskier, higher-yielding assets or expand into non-bank activities to cover costs.

The proposal "offers no assurance that the amount of debt required would prove sufficient to avoid a failure or panic," he added.

Mr Hoenig joined the Federal Deposit Insurance Corp board in 2012. He previously was president of the Federal Reserve Bank of Kansas City for 20 years and had a front-row seat for the massive financial crisis that came to a boil in 2008 and led to rules on how to resolve a failure.

REUTERS

      

Greece to sell 67% of Piraeus port to China's COSCO for 368.5m euros

Greece's privatisation agency announced on Wednesday it had accepted a 368.5 million-euro (S$576.2 million) bid for 67 per cent of the Port of Piraeus by China's COSCO. 

ST PHOTO: ALPHONSUS CHERN

JAN 21, 20167:39 AM

[ATHENS] Greece's privatisation agency announced on Wednesday it had accepted a 368.5 million-euro (S$576.2 million) bid for 67 per cent of the Port of Piraeus by China's COSCO.

"HRADF's Board of Directors evaluated the improved economic offer, taking into account the two existing valuations for (the Piraeus Port Authority) and decided to declare COSCO (Hong Kong) Group Limited as the preferred investor," the privatisation agency said in a statement.

It called the deal, which also includes 350 million euros of investment into the port plus revenues of 410 million to go to the state, "a very important milestone" in the Greek government's privatisation programme.

The China Ocean Shipping Company was the only bidder for the majority stake in the port, Greece's largest and one of the busiest in Europe.

Denmark's APM and International Container Terminals Services of the Philippines had also expressed interest in Piraeus, but did not submit bids.

COSCO through a subsidiary manages the two main container terminals at the port under a 35-year concession signed in 2008, with the objective of making Piraeus a key port of entry for Asian goods into Europe.

The privatisation of the port has been postponed several times in recent years, with the arrival of the leftist government of Prime Minister Alexis Tsipras putting it on ice last year.

But as part of an 86-billion bailout last year needed to keep Greece in the eurozone, Mr Tsipras agreed to move forward on the privatisation of a number of companies.

Workers at the port have recently gone on strike and demonstrated against the sale at what they feared would be too cheap a price.

The Greek government plans to keep a stake in the port, which is listed on the Athens stock exchange.

AFP

    
 

Some Shanghai banks said to curb individual forex purchases

Some Shanghai banks have asked their branches to strictly control the sale of foreign exchange to individuals, according to people familiar with the matter, as regulators vowed to step up monitoring of illegal currency transactions. 

PHOTO: REUTERS

JAN 21, 201612:52 PM

[SHANGHAI] Some Shanghai banks have asked their branches to strictly control the sale of foreign exchange to individuals, according to people familiar with the matter, as regulators vowed to step up monitoring of illegal currency transactions.

The banks asked several branches to closely check whether individuals sent money abroad by breaking up foreign exchange purchases into smaller transactions, and to take punitive actions if violations are discovered, said the people, who asked not to be identified because the move hasn't been announced.

Two of the people said their bank was ordered by the State Administration of Foreign Exchange to report its latest data on foreign-exchange transactions.

The tightening moves in Shanghai, China's financial hub, come amid risks that households' currency stashes may join the outflows of capital that threaten to destabilize the nation's economy as businesses and individuals bet against the yuan.

More than US$840 billion exited the country in the first 11 months of last year in an unprecedented exodus, according to a Bloomberg gauge.

"With expectations for yuan to fall further, there's still pressure for outflows," said Liu Dongliang, a Shanghai-based analyst at China Merchants Bank Co. "Capital controls have tightened. The door was widening before, and now it's leaving little room."

In a fresh sign of heightened scrutiny, the 21st Century Business Herald reported Thursday that regulators will now review any outbound direct investments of more than US$50 million by companies in Shanghai's free-trade zone before allowing the foreign currency for the transaction to be bought.

Previously, currency purchases for investments less than US$300 million weren't reviewed, the newspaper said. The regulator didn't immediately respond to a faxed inquiry about the report.

In a Jan 20 statement outlining its focus for the year, SAFE's Shanghai branch said it would use its systems to conduct off-site inspections as it pledged to "severely crack down on illegal foreign transactions such as underground banking" to curb cross-border capital flows.

Analysts at JPMorgan Chase & Co said this month that outflows have the potential to become "practically boundless" as they broaden, citing examples such as greater foreign direct investment by China and overseas investors exiting the nation's equities and bonds.

"As the economy slows and the yuan drops, whether it's individual or corporates, they will surely have ways to take out their money," China Merchants Bank's Liu said. Measures such as the banks' clampdown on foreign-exchange purchases "will have an effect, but it's impossible to completely block outflows."

BLOOMBERG

    
 

China's stock regulator says market circuit breaker not appropriate: CNN

JAN 21, 20161:34 PM

[BEIJING] The suspended stock market circuit breaker mechanism was not an appropriate policy for China, the deputy head of the country's securities regulator told CNN, two weeks after the mechanism was halted. "The circuit breaker is a standard practice in a lot of Western markets, so we thought that perhaps it could work in China as well," Fang Xinghai, the vice chairman of China's Securities Regulatory Commission (CRSC) said in an interview with CNN on the sidelines of the World Economic Forum in Davos. "But of course you know, in our market, dominated by small investors, coupled with the risk of the depreciation of the currency and downward pressure of a lot of emerging markets, there is a lot of pressure for selling." On Jan 8, Beijing ditched the circuit breaker - which halts trading when the market plunges by a certain level - only three days after it came into effect.

The introduction of the circuit breaker had "stopped liquidity" Fang said in the interview, which was posted on CNN's website late on Wednesday. "It was not an appropriate policy for China and the regulator admitted it," he told CNN. "We should give regulators credit for admitting the mistake."

REUTERS

    
 

PBOC injects most cash in 3 years in open-market operations

The People's Bank of China injected the most cash in almost three years in its open-market operations, helping ease a cash squeeze as the coming Chinese New Year holiday spurs demand for funds at a time when capital outflows are mounting. 

PHOTO: BLOOMBERG

JAN 21, 201610:59 AM

[SHANGHAI] The People's Bank of China injected the most cash in almost three years in its open-market operations, helping ease a cash squeeze as the coming Chinese New Year holiday spurs demand for funds at a time when capital outflows are mounting.

The central bank said it conducted 110 billion yuan (S$24 billion) of seven-day reverse-repurchase agreements and 290 billion yuan of 28-day contracts. That compares with 160 billion yuan of contracts that matured and resulted in a net cash injection of 315 billion yuan for this week's two auctions. Other lending tools were used to add about 700 billion yuan this week for terms ranging from three days to a year.

China is trying to hold borrowing costs down to support its economy without spurring an exodus of funds that drove the yuan to a five-year low this month. Gross domestic product rose last year at the slowest pace in a quarter century and intervention to prop up the exchange rate led to a record US$513 billion plunge in the nation's foreign-exchange reserves. The Chinese New Year holiday - a period for feasting and exchanging gifts - will shut China's financial markets throughout the week starting Feb 8.

"The market is a bit nervous and liquidity is also needed to cover the Chinese New Year," said Frances Cheung, Hong Kong- based head of rates strategy for Asia ex-Japan at Societe Generale SA. "The fact that they are going for longer tenors on reverse repos and its MLF does add to market expectations for a delay in a reserve-ratio cut, which in itself could be linked to the currency market performance." The central bank injected 410 billion yuan into the banking system via three- and 12-month loans under its Medium-Term Lending Facility this week, while Short-term Liquidity Operations were used to add 55 billion yuan of three-day loans on Monday and another 150 billion yuan of six-day funds on Wednesday. The PBOC also auctioned 80 billion yuan of treasury deposits on behalf of the Ministry of Finance this week.

The overnight repurchase rate fell two basis points to 2.11 per cent as of 10:01 am in Shanghai, a weighted average from the National Interbank Funding Center shows. The comparable rate for 14-day loans between banks dropped 50 basis points to 2.80 per cent, after jumping 48 basis points on Wednesday.

An estimated US$843 billion of capital flowed out of China in the 11 months through November, according to a Bloomberg estimate, and policy makers are having to add funds to the financial system to prevent interest rates rising as money exits. Standard Chartered Plc says lenders' reserve-requirement ratios will need to be cut to free up funds, even after this week's cash injections.

"A RRR cut is still inevitable," said Ding Shuang, chief China economist at Standard Chartered in Hong Kong. "The capital outflows have been going on for months, it's not a short-term issue."

BLOOMBERG