Thursday, February 22, 2007

Singapore Stocks Performing Well, More Developments

The Singapore Stock Market hit a record on Wednesday and our Singapore Fund holding (NYSE: SGF) is one of the few stocks that are up in face of today's slide in the stock market. The proposed reduction in corporate taxes are expected to have very positive implications for corporate profitability. There is also news that a Consortium has exercised its option to develop the second phase of Singapore's Downtown. They are expected to build office and high-end residential components in the new phase.



With only 692.7 sq km in the entire country of Singapore, residential and commercial building is scarce. The relaxation of the corporate tax and the building of a casino industry in Suntec City should attract a business migration into Singapore - or at least this is what the government hopes will happen. Singapore does stand a chance with its english speaking diverse nation and pollution free business friendly environment.



What does mean? We continue to be very bullish on all things Singapore, including the Singapore dollar, the Singapore fund and Singapore real estate.



Here is a picture of the downtown area in development courtesy of Channel NewsAsia

Tuesday, February 20, 2007

Singapore Becoming Southern California?

When we think about Southern California, we tend to think about beautiful waterfronts, huge homes, warm weather and a relaxing atmosphere. We are not alone since such pleasant thoughts are shared by many West Coasters who have chosen to vacation and live in Southern California. This optimism has become so extreme that it has created a bubble in the housing market.

Today, Singapore wants to become Southern California. Sentosa which is 15 minutes away from the center of Singapore is being built to be just that. The 1230 acre island has a gated community with luxury homes and a yacht marina and is the annual host of the Singapore open. A casino has been approved to be build in Sentosa, which should drive a huge wave of construction that will include the usual luxuries like hotels, spas and shopping malls.

After a slow start, property in Sentosa is selling like "hot cakes" according to the director of property for the Sentosa Leisure group.

"Sentosa Cove is the only place in Singapore where non-permanent residents can buy land; 60% of buyers are foreign — almost all from Asia — and the rest are local. (Local law bars foreigners from buying land in Singapore unless they can show assets of $13 million and deposit at least $3 million in a Singapore bank.)"

To learn more about Singapore's quest to become a main tourist destination, read on!

http://www.latimes.com/travel/la-tr-sentosa18feb18,1,1441729.story?coll=la-travel-headlines

Singapore to Engineer the Strongest Currency in 10 Years?

According to the International Herald Tribune, ING Bank is predicting sharp gains in the Singapore dollar this year as improving growth and inflationary pressures force the Monetary Policy of Singapore to tighten the eonomy by increasing the value of the currency.

Interestingly enough, the MAS manages the Singapore economy using the currency instead of exchange rates.

Article

http://www.iht.com/articles/2007/02/19/bloomberg/sxasia.php

Singapore is doing alot to spur growth. Last week, they announced plans to cut corporate taxes by 2 percent to compete with the corporate tax rate offered in HK

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_OKhcsDKFQU&refer=home

Monday, February 19, 2007

Macau - The Quest for Casino Space

Macau is a mere 50 minute boat ride or 16 minute helicopter from HK, the gateway to China. Their proximity to the Asian Giant has made the former Portuguese territory a hot investment destination for foreign companies that are craving a piece of the casino business. In fact, even companies that have never dabbled in the casino industry like the Virgin Group have expressed plans to develop a casino in Macau.

Unfortunately their plans have fallen through but they havent given up.

Perhaps they will end up collaborating with casino mogul Stanley Ho who lost his hold on the Macau gaming industry when China deregulated the casino industry in 1999 after they took over the colony. Ho use to be the sole owner of the casinos in Macau but he may be branching out though as recent donations to Australia's Labor Party suggests that he may want to start developing casinos in Australia.

"Star City Casino in Sydney was given exclusivety for 12 years when it opened in 1995. That exclusivety runs out in six months time."

Ho's political donations have sparked casino rumors

Friday, February 16, 2007

Vietnam - Big Goals for 2007

The Ministry of Trade in Vietnam has big goals for 2007. They expect export growth to rise by a minimum of 17.4 percent this year and are actually aiming for growth in excess of 20 percent. Strong exports are good for GDP and the government has set a 2007 GDP growth rate of 8.5 percent.

In an interview with VietNamNet Bridge Minster of Trade Truong Dinh Tuyen explains where he expects to see export growth to come from:

http://english.vietnamnet.vn/biz/2007/02/665055/

In a nutshell:

He expects exports of the following products to rise -

1) Industrial and mechanical products like small engines and boats
2) Apparel Exports
3) Seafood and Farm Produces

And exports of these products to fall -

1) Crude Oil
2) Coals
3) Rice

But be careful of capital controls!

There have been reports today that Vietnam may want to impose capital controls to tame the roaring stock market and the hot speculative capital that is rushing into the country. The stock market rallied 144 percent in 2006 and is up 46 percent this year. The government's fear is that local investors will be burned in the market pulls back.

Although total foreign participation in the [Vietnamese] stock market is still about one-third, most of the in-demand and big-cap stocks are approaching or at their respective foreign investor limit" of 30 percent or 49 percent, depending on the sector, Credit Suisse said. In addition, average daily equity trading volume tripled in the past two months, it said.

From:
http://www.chicagotribune.com/business/yourmoney/chi-0702160145feb16,0,2159215.story?coll=chi-business-hed

If Vietnam opts to follow in the footsteps of Thailand who imposed penalties on foreign investors withdrawing assets within a year this past December, we could see a pullback in Vietnamese stocks. When Thailand announced the capital control, the Bangkok stock index fell 15 percent in one day.

If this happens, I will be looking for cheap investments!

Thursday, February 15, 2007

The DOs and DON'Ts of doing business in Vietnam

From Purchasing.com

DOs and DON'Ts to doing business in Vietnam

Do

• Expect to drink a lot of coffee and tea (some sources say turning down a beverage offer is considered impolite).

• Prepare for working lunches and dinners.

• Expect very difficult traffic on the streets.

• Plan for logistics delays or longer leadtimes when shipping product out of Vietnam.

• Expect air and noise pollution in major cities.

• Bring more business cards and copies of materials than you expect to need. Many businesspeople report meeting more contacts than they expected to in Vietnam.

Don’t

• Put your Vietnamese colleagues in a position where they may lose face.

• Talk about the Vietnam War (they refer to it as the American war) in business relationships. In fact, avoid politics altogether in conversation.

• Rent a car. Find someone else to drive you, at least for your first visit.

• Expect to find access to raw materials in Vietnam.

Link to full article

http://www.purchasing.com/article/CA6414448.html?industryid=2161

Vietnam - Defying Misconceptions

To many, Vietnam may still seem like a third world nation that is leap years behind countries like China and Singapore. However this common misconception is usually from people who have never visited the country. First hand looks at production and manufacturing facilities reveal that Vietnam is more modernized than many of us can imagine:

From Purchasing.com:

Whatever you think you know about business in Vietnam, forget it. The economic and business environment in today’s Vietnam surprises most U.S. buyers that visit the country in search of low-cost, high-quality suppliers.

“My personal image—as well as those of most of my associates—prior to visiting Vietnam, was one of manufacturing facilities with dirt floors and sweat-shop type atmospheres,” says James Malch, senior supply chain manager for Pacific Scientific’s Electro-Kinetics division in Carpinteria, Calif., which buys alternator parts from Vietnamese suppliers. “But after visiting several different suppliers in various industries such as stamping, PCB assembly, machining, and wiring and harness assembly, I was very impressed. Once I was inside the building, I could not tell I was in a foreign country."

This only scratches the surface, to read more from other supply chain managers, check out this article:


http://www.purchasing.com/article/CA6414448.html?industryid=2161

A mixed year for Asian residential property in 2006

The winners: Singapore, South Korea, and the Philippines

Singapore experienced Asia’s highest residential property price increases during 2006, with 9.5% real (inflation-adjusted) house price rises.

There were also 9.3% real house price increases in South Korea, and 9.1% real house price increases in the Philippines. These were seen in The Global Property Guide House Price Indices, the biggest collection of residential property price indices.

Read more on Global Property Guide

Barrons Calls Singapore the Safest Route to Asia's Riches

Barrons has caught onto the opportunity in Singapore and subscribers of the WSJ or Barrons can access the article here

http://online.barrons.com/article/SB117107263446404444.html?mod=barrons_yahoo_hs&ru=yahoo

According to Felix Zulauf, head of Zurich-based Zulauf Asset Management and a member of Barron's Roundtable: "I think it will become the offshore financial center of Asia." He picked the Singapore ETF as "a classic way to play the rise of Asia, and the mania I see coming"

There are 2 ways I have found to invest in Singapore right now, if you find others, please share.

This is through the Singapore Fund (NYSE: SGF) and the MSCI Singapore Fund (NYSE: EWS). they are up huge already with EWS rallying 42% in 2006 and SGF rallying 64%. I am long SGF and still liking it, especially after hearing Zulauf say "Although the ETF's recent surge makes it vulnerable to a short-term correction, it has the potential to roughly double by 2010."

There is alot more in the Barron's article and I encourage you to read it.

Other promising signs of growth:

After expanding by 7.9 percent last year, Singapore raised its GDP forecast to the range of 4.5 to 6.5 percent this year. Read about it here:

www.taipeitimes.com/News/worldbiz/archives/2007/02/15/2003349158

To help boost the economy even more, Singapore has announced plans to cut their corporate tax rate by 2 percent to 18%

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/258756/1/.html

This has pushed the Singapore fund to a new 52 week high today

http://www.google.com/finance?q=SGF

What is Emergasia?

The world is obsessed with China. With over a billion people and an economy that has a double digit growth rate, the reasons are obvious. However the China story is getting tired. The country has been booming for over 3 years now and those who wanted to capitalize on it, already have. China's main focus right now is on limiting foreign investment, capping gains in their currency and trying to take air out of the hot speculative bubble.

At this time, investing in China is no longer easy money. For people such as myself who still want to invest in Asia, the places to look at are Singapore, Vietnam and Macau.

Why?

Singapore: The tiny country is the Switzerland of Asia. With English being the predominant language, Singapore has long been one of the region's key financial hubs. In 2006, Singapore grew by 7.9 percent, behind only China and Vietnam. Looking ahead, one of the biggest opportunities that I see is in the Casino industry. The country has plans to build a bunch of integrated resorts with casinos, hotels, malls and convention center. Tourism was already up 14.5 percent last year and their goal is to grow that by even more. A stronger tourism industry means more jobs and GDP growth, which is why the outlook for Singapore is so promising.

Vietnam: China needs to move over and make room for Vietnam. Having just joined the World Trade Organization in January, Vietnam has plenty of room to grow. The recent strength of the Chinese Yuan has made having production facilities in China far less attractive to the point where companies like Intel have already announced plans to triple their investment in production facilities in Vietnam to $1 billion. More companies are slowly moving into Vietnam and this blog will explore more about the country's opportunities.

Macau: Having just surpassed Las Vegas as the biggest gambling capital revenue wise in the world, the new Sin City of Asia is booming just as Las Vegas has over the past few years. With Sands Corporation predicting gambling growth to double in the next 3 years, the economy as a whole should benefit. This includes the real estate sectors and other businesses catering to the tourism and casino industry.

This blog will follow the economic opportunities and developments in these 3 countries. Their stock market has already taken off, so care needs to exercised when looking for investments.