Meet the man who became Singapore's guru of property by accident

FEB 1, 20167:26 AM

[SINGAPORE] Steve Melhuish knew practically nothing about the real estate market in Singapore when the condo he was renting was put up for sale in 2006. Now he dominates the industry.

The British-born Melhuish and his wife had just moved to the city-state 18 months earlier and they were surprised at how difficult it was to find new housing. Decade-old sites like Realtor.com, popular in the US, hadn't reached Southeast Asia, and most real estate advertising still appeared in newspapers with only basic information like price and a building name.

He founded PropertyGuru Group in 2007 to let people search more efficiently online and now controls the largest Internet real estate website in the region with 14 million users a month.

Mr Melhuish, 47, raised S$175 million from investors including TPG Capital and Indonesia's Emtek Group for expansion, the second-largest amount by a tech company in Southeast Asia last year.

Still, PropertyGuru faces challenges to its position as one of the region's hottest startups from giants such as Rupert Murdoch's News Corp and newcomer 99.co, backed by Facebook Inc co-founder Eduardo Saverin and Sequoia Capital.

"We typically have one or two new competitors every year, it keeps us on our toes," Melhuish said.

MARKET DOMINANCE

PropertyGuru's website lets users search for properties based on location, type and price, and see photos of interiors along with floor plans. They save time compared with the traditional approach of newspapers and agents, and often save money because they can more easily sift through many options.

PropertyGuru makes money by charging agents a fee to use its platform and by selling advertising online and in printed newsletters. In Singapore, the startup holds about 90 per cent of the market, more than the next four rivals combined.

"PropertyGuru has become a common portal to go to for anyone searching for a property to buy or rent," said Ong Teck Hui, National Director of Research at property broker Jones Lang LaSalle Inc in Singapore. "They have managed to create a brand a bit like Coke when you want to drink. When you want to find a property, you go to PropertyGuru."

REGIONAL EXPANSION

Mr Melhuish has taken versions of the site and applications into Indonesia, Malaysia and Thailand, which along with Singapore represent a US$140 billion annual market for property transactions. Last month, PropertyGuru agreed to buy Ensign Media in its largest deal yet, adding magazines and websites about luxury properties and architectural content.

"We want to build depth and strength in existing markets," Mr Melhuish said. "Being a strong integrated player in the marketplace is very important."

PropertyGuru's fundraising last year was the largest amount in the region after ride-hailing service GrabTaxi Holdings Pte, the rival to Uber Technologies Inc. in Southeast Asia. Mr Melhuish declined to discuss PropertyGuru's valuation and said he has no immediate plans for an IPO now that he has additional capital.

Mr Melhuish credits the company's growth to paranoia, as numerous rivals have emerged and disappeared in the past eight years. Two months before he teamed with partner Jani Rautiainen to start PropertyGuru, three competitors entered the market, including iProperty Group. In November, iProperty agreed to be bought by REA Group Ltd, a News Corp unit which owns real estate websites in Australia, China and Europe.

EMERGING RIVALS

PropertyGuru also competes with startups and even banks. With an Airbnb-like interface, 99.co, founded by Singapore entrepreneur Darius Cheung, aims to appeal to users who want an easy-to-use search experience. DBS Group Holdings Ltd, Southeast Asia's largest lender, has developed an app that helps customers buy a home by listing past transactions and providing a mortgage calculator.

Mr Cheung, 35, said the real difference between 99.co and PropertyGuru is "under the hood."

Traditionally, property websites are about whoever pays more gets listed on top. "This is why you get wrong data sometimes and this is a problem I wanted to fix," Mr Cheung said. His two-year-old startup takes a "Google approach" of relevant search, where marketers of properties only pay when somebody actually makes an inquiry about the property. "That makes people want to put more accurate, quality information."

CONSUMER SHIFT

Mr Melhuish said PropertyGuru has adopted a similar approach with higher quality agent listings ranked higher, regardless of whether they pay or not.

To keep up with the consumer shift to mobile phones and tablet computers, PropertyGuru has started 15 mobile apps in Southeast Asia for consumers and agents in the four countries, doing everything from allowing prospective buyers to search for property "near here" and enabling agents to upload listings.

Unlike many entrepreneurs who are inspired to create businesses to pursue a dream, Mr Melhuish only became a devotee of real estate after he took the plunge into his startup.

"Many people think that you need to be passionate to start a business, but I was clueless," he said. "My two pieces of advice for wannabe entrepreneurs is choose a large market and an industry that you'll become passionate about."

BLOOMBERG

    
 

Over 10,000 migrant children missing: Europol

[THE HAGUE] Over 10,000 unaccompanied migrant children have disappeared in Europe, the EU police agency Europol said Sunday, fearing many have been whisked into sex trafficking rings or the slave trade. 

PHOTO: REUTERS

FEB 1, 20166:52 AM

[THE HAGUE] Over 10,000 unaccompanied migrant children have disappeared in Europe, the EU police agency Europol said Sunday, fearing many have been whisked into sex trafficking rings or the slave trade.

Europol's press office confirmed to AFP the figures published in British newspaper The Observer, adding that they covered the last 18-24 months.

The agency's chief of staff Brian Donald said the vulnerable children had disappeared from the system after registering with state authorities following their arrival in Europe.

"It's not unreasonable to say that we're looking at 10,000-plus children," Donald said, adding that 5,000 had disappeared in Italy alone.

"Not all of them will be criminally exploited; some might have been passed on to family members. We just don't know where they are, what they're doing or whom they are with." Mr Donald said there was evidence of a "criminal infrastructure" established over the last 18 months to exploit the migrant flow.

The Observer reported that Europol found evidence of links between smuggling rings bringing people into the EU and human trafficking gangs exploiting migrants for sex and slavery.

"There are prisons in Germany and Hungary where the vast majority of people arrested and placed there are in relation to criminal activity surrounding the migrant crisis," Donald said.

Over one million migrants and refugees, many fleeing the Syria conflict, crossed into Europe last year.

"Whether they are registered or not, we're talking about 270,000 children," Mr Donald told the paper.

"Not all of those are unaccompanied, but we also have evidence that a large proportion might be," he said, adding that the 10,000 is likely to be a conservative estimate.

He said many of the children are "visible", and not "spirited away and held in the middle of forests".

Raffaela Milano, Save the Children's Italy-Europe programme director, said that "unaccompanied minors who travel without adults are the most vulnerable group of the migratory flow".

"Many minors, in fact, make themselves 'invisible' to the authorities to enable them to continue their journey in Europe, for fear of being sent back," she said.

The UN children's agency UNICEF also voiced alarm and urged European countries to do more to protect migrant children who are on their own.

"We urgently call for a plan within Europe for unaccompanied and separated children covering family reunification, relocation and other alternatives so that children do not end up being abused and exploited by smugglers and traffickers," it said in a statement.

Many children arrive first on the Greek islands before making the journey to relatives across Europe.

Laura Pappa, president of the Greek charity Meta-Action, a group accompanying children who travel without relatives, said they "face a destiny that is worse than that of the rest of migrants waiting to be relocated".

She said they often have to wait for around seven months to be reunited with relatives, and that procedures can be slow and complicated.

"There are some people that present themselves as uncles and take the children. It's not easy in this mess to cross check the identity of the 'uncle'." Ms Pappa said the group has helped 3,000 children reach family, but that it "is not enough".

Britain is one country that has said it will take in migrant or refugee children who have been separated from their parents.

Despite the constant risk of death and deportation, migrants continue to stream into Europe, risking their lives to escape poverty, repression and conflict.

Many children are among the refugees and migrants who have lost their lives making the perilous crossing in the Mediterranean.

In the latest tragedy, the Turkish coastguard recovered the bodies of women and children were washed up on a beach after their boat sank, leaving at least 37 people dead.

Tensions are escalating across the continent over the increasing numbers of migrants, with many right-wing groups calling for more immigration restrictions and tighter borders.

On Saturday, Swedish police said dozens of masked men believed to belong to neo-Nazi gangs gathered in Stockholm and handed out leaflets calling for attacks against young migrants.

And anti-fascist and far-right protesters clashed in a southern German town where unknown assailants threw a hand grenade into a refugee shelter on Friday, as the country scrambles to integrate the over one million asylum seekers it welcomed last year.

AFP

    
 

Update: 'Brexit' talks in London extended to clinch deal

FEB 1, 20167:23 AM

[LONDON] No deal was reached between British Prime Minister David Cameron and European Union President Donald Tusk Sunday in talks to agree changes to Britain's membership of the bloc ahead of an in-or-out referendum.

"No deal yet. Intensive work in next 24 (hours) crucial," Mr Tusk wrote on Twitter following a working dinner of salmon, beef and vegetables in Mr Cameron's Downing Street office in London.

Mr Cameron is pushing to exclude European Union migrants from benefits such as income top-ups for low-paid workers until they have paid into the British system under a so-called "emergency brake" system.

A spokeswoman for Cameron said that "much progress" had been made since a Friday meeting with European Commission chief Jean-Claude Juncker.

The Commission has indicated that Britain's "circumstances meet the criteria for triggering the emergency brake" - which would require countries to argue that their welfare system was under strain.

"This is a significant breakthrough, meaning the prime minister can deliver on his commitment to restrict in-work benefits to EU migrants for four years," the spokeswoman said.

"But there are still areas where there is more to do and both agreed it was therefore worth taking the extra time to make further progress."

The Conservative leader has vowed to secure reform in four key areas to address the concerns of British people with doubts about EU membership, before campaigning to remain within the 28-member bloc in a referendum due by 2017.

The EU source said that Mr Tusk would "assess the situation" after 24 hours before deciding whether or not to take the deal to other EU countries for consideration.

British officials hope that a final deal can be nailed down at a Brussels summit on February 18 and 19, which Mr Cameron would then use to campaign for Britain to stay in the bloc.

An agreement at that time would open the door to a referendum in June, but Mr Cameron insists he is willing to hold out for as long as it takes to secure the right package of reforms, if necessary delaying the referendum until September or even next year.

Underlining the challenges ahead, France warned Britain that it would block a separate proposal to allow one country about to be overruled in a vote the ability to pause the process.

"To French officials, any provisions giving non-euro countries power to indefinitely stall eurozone votes are unacceptable," the Financial Times reported, saying that France would refuse any "backdoor veto" for the City of London finance hub.

The talks in London were to cover all four areas in which Mr Cameron wants reform: migrant benefits, safeguards against more political integration in the EU, protection of countries such as Britain which do not use the euro currency and boosting economic competitiveness.

According to government sources Mr Cameron is prepared to accept the "emergency brake" in place of a previously proposed four-year curb on EU migrants claiming benefits, which other countries had objected to as discriminatory and which could require a treaty change.

"The prime minister intends to leave Tusk in no doubt that he will not do a deal at any price," a senior government source said.

Mr Cameron wants the "emergency break" to come into force immediately after a referendum in favour of membership, in a bid to reduce what the British government considers a "pull factor" encouraging Europeans to come to the UK in search of work.

The number of European job seekers has become a hot political issue in Britain and key driver of anti-EU sentiment.

Mr Cameron is under increasing pressure from his own centre-right Conservative party, which has a strong eurosceptic contingent, to come back with a robust deal.

Opinion polls currently suggest that Britons would vote to leave the EU in a so-called "Brexit" by a small margin.

Reflecting domestic pressure on Mr Cameron, the co-chair of the anti-EU Conservatives for Britain group dismissed the talks as "synthetic" and a "farce".

"It is not going to answer the concerns of the British people. We need the power in our own parliament to determine what our migration policy is," he told Sky News.

AFP

    
 

As currency war simmers, Aussie dollar a poster child for market forces

[SYDNEY] The Australian dollar's plunge to a seven- year low is turning out to be a blessing as China steers its slowing economy away from the heavy industries that helped fuel a mining boom Down Under. 

PHOTO: BLOOMBERG

FEB 1, 20167:27 AM

[SYDNEY] The Australian dollar's plunge to a seven- year low is turning out to be a blessing as China steers its slowing economy away from the heavy industries that helped fuel a mining boom Down Under.

It's more than four years since a record-high Aussie threatened to destroy manufacturing and hamstring the economy. Instead, the currency's steepest three-year slide since it was floated in 1983 is working its magic - a weaker local dollar has spurred record tourist arrivals and education income. And it's tempered the drag from iron ore's plunge to unprecedented lows while making the nation home to the world's lowest-cost miners.

Australia stands out in getting the currency boost it needs at a time when economies the world over are grappling with exchange rates considered undesirable. The Aussie is in line with economic fundamentals, after being 25 per cent or more overvalued in 2013.

China is struggling to curb yuan declines and Saudi Arabia is burning through reserves to maintain its peg to a strengthening greenback. Policy makers in Europe and Japan have pushed interest rates below zero, risking accusations of competitive devaluations.

"The fall in the Australian dollar has helped support the recovery and restructure the economy, so it is a good example of how a floating exchange rate should act," said Greg Gibbs, director of Amplifying Global FX Capital in Breckenridge, Colorado, who has spent over two decades in the currency markets including stints at the Reserve Bank of Australia and with lenders in Sydney, New York, London and Singapore.

RBA Governor Glenn Stevens stopped calling for a weaker currency in August and subsequent declines drove the Aussie closer to fair value than at any time since the global financial crisis, according to a measure of purchasing power parity based on producer prices.

Mr Stevens pointed in December to new opportunities for growth as Asia's middle class demands more services, energy and food, filling the economic vacuum left by a contraction in mining investment.

The impact of the Aussie's decline has been particularly apparent in the "sizable contribution" of services exports to growth, the RBA said in November, acknowledging the labour- intensive sector's role in helping to push unemployment to a two-year low. 

The currency has also absorbed much of the impact of a more than 60 per cent slide in prices for iron ore and coal from their 2011 highs. Earnings from goods shipments fell just 14 per cent till November from a peak two years earlier, also aided by rising volumes of Australia's main resources as the mining boom's bounty comes on line.

"In many ways Australia has proven to be unbelievably lucky once again," said Klaus Baader, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. The Aussie was high when the country needed to import capital goods to build new mines and now it's fallen "very significantly, which helps to contain production costs and it's contributed to making Australia very competitive even at lower prices."

Australia's dollar was at 70.84 US cents as of 9 a.m in Sydney on Monday, having fallen 36 per cent from a post-float record of US$1.1081 reached in July 2011 at the height of the mining bonanza. It averaged more than $1 for three years to the middle of 2013, spurring Stevens to signal the need for currency depreciation - and to cut interest rates - to wean the economy off a dependence on resource-sector spending. Forecasters see it at 69 cents by year-end, according to estimates complied by Bloomberg.

The Aussie is 1.2 per cent overvalued according to the PPP measure. It reached about fair value at the end of September from being about 30 per cent overvalued as recently as three years ago.

While the RBA's battle with foreign-exchange traders appears to have ended, China's has just begun.

The Asian nation has run down reserves, squeezed traders in Hong Kong with 67 per cent overnight borrowing costs and used state media to warn speculators, including billionaire investor George Soros, to deter bets on rapid yuan depreciation.

Saudi Arabia, the world's largest oil exporter, used 16 per cent of its currency stockpile last year to defend the riyal while Mexico's shrank to a two-year low in November amid intervention to bolster the peso.

Central bankers in Europe and Japan are meanwhile wary of strengthening currencies as they struggle to spur inflation and economic activity. Japan's central bank on Friday surprised markets by introducing negative rates, weakening the yen as much as 2.4 per cent.

European Central Bank President Mario Draghi, already using negative policy settings, on Jan. 21 signaled a further expansion of unprecedented accommodation.

The actions hint at the type of race to the bottom known as a Currency War, said John Kanas, chief executive officer of Miami Lakes, Florida-based BankUnited Inc., speaking on Bloomberg Television after the BOJ's decision.

In Australia, the currency boost to activity will help the economy expand 2.6 per cent this year, up from 2.3 per cent in 2015, the fastest pace among 11 developed economies after Sweden. It will also help drive a 7.2 per cent gain in exports, up from 6.3 per cent last year, analysts forecast.

"Net trade is likely to remain a key growth driver over the next few years," Rick Harrell, an analyst at Loomis, Sayles & Co. in Boston, wrote in an e-mailed response to questions.

"This also means the Australian economy has become increasingly fragile and hostage to demand from emerging Asia and the broader global economy." Mr Harrell said he expects that dependence to keep the Aussie in a lower trading range given the weakness in Asian economies and in commodity prices, while also driving greater currency volatility.

As Australia's export profile improves, at home it faces the risks of a slowing housing construction boom, record low wage growth and the potential for a slump in consumer spending. That's prompted markets to maintain pricing for the central bank to cut its record low 2 per cent benchmark rate at least once this year.

Australia's transition toward non-mining activity is synchronized with China's move toward consumer-driven growth, opening up opportunities for the nation's most populous states New South Wales and Victoria, which had been at the periphery of the mining boom, Treasurer Scott Morrison said in a Bloomberg Television interview last month.

The Aussie's drop "makes us far more competitive," he said. "Our economy is broadening, it's diversifying and this is very important. Our economy in the future, and even now, will be less dependent on one market, one commodity, one part of what we do."

BLOOMBERG

    
 

HSBC to freeze salaries, hiring in 2016: sources

[LONDON] Europe's largest lender, HSBC, is imposing a hiring and pay freeze across the bank globally in 2016, two sources familiar with the matter told Reuters. 

PHOTO: BLOOMBERG

JAN 31, 201611:43 PM

[LONDON] Europe's largest lender, HSBC, is imposing a hiring and pay freeze across the bank globally in 2016, two sources familiar with the matter told Reuters.

An email was sent to staff on Friday detailing the latest cost-saving measures, according to the sources who spoke on condition of anonymity.

Like numerous other global banks, HSBC is in the midst of a cost-cutting drive to boost profitability and returns to shareholders, and is pushing through with plans for annual cost savings of up to $5 billion by 2017.

Europe's biggest bank said in June that it planned to slash nearly one in five jobs and shrink its investment bank by a third in response to sluggish economic growth and tighter global regulation of bank balance sheet risk. "As flagged in our Investor Update we have targeted significant cost reductions by the end of 2017," a spokeswoman for HSBC told Reuters, confirming the content of the staff email.

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JPMorgan launches blockchain trial project: FT

[NEW YORK] JPMorgan Chase is partnering with start-up Digital Asset Holdings to launch a trial project using blockchain technology that could reduce the cost and complexity of trading, the Financial Times reported on Sunday. 

PHOTO: REUTERS

FEB 1, 20167:10 AM

[NEW YORK] JPMorgan Chase is partnering with start-up Digital Asset Holdings to launch a trial project using blockchain technology that could reduce the cost and complexity of trading, the Financial Times reported on Sunday.

The agreement comes as another sign that blockchain, which is best known as the basis of the digital currency Bitcoin, has wide-ranging applications for some of Wall Street's biggest banks.

One potential use for the technology is addressing liquidity mismatches in some of JPMorgan's loan funds, the Financial Times said. "To sell a loan is a very cumbersome, time-consuming process; settlement can take weeks," Daniel Pinto, head of JPMorgan's investment bank, told the Financial Times. It "makes all the sense in the world" to explore blockchain's potential to improve that process.

Digital Asset Holdings is run by Blythe Masters, JPMorgan's former head of commodities.

REUTERS