Top Reads this Week (19 July)


Rounding up top reads from around the web, including articles shared by fellow investors in the Financial Horse Facebook Group.

Singapore real estate investment trusts ESR and Sabana propose to merge (CNA)

Singapore’s ESR-REIT has agreed to buy Sabana Shari’ah Compliant Industrial REIT in a deal that will create the country’s fifth-largest industrial real estate investment trust by assets, adding to a wave of consolidation in the sector. Each Sabana unitholder will receive 94 new ESR-REIT units for every 100 Sabana Units held, the companies said in a joint statement on Thursday (Jul 16). The merged entity will have total assets worth about S$4.1 billion, they said. ESR-REIT is backed by Asian logistics developer e-Shang Redwood (ESR) – a venture of private equity firm Warburg Pincus and global investors. e-Shang Redwood also owns shares in Sabana.

“With ESR as a developer-sponsor, the enlarged REIT will also have access to a pipeline of assets worth over US$22 billion in a market where quality logistics properties are increasingly scarce. This better positions us to capitalise on further expansion opportunities and participate in the continued growth of the industrial sector as the global economy emerges from the COVID-19 pandemic,” added Mr Donald Han, CEO of the Sabana REIT manager. Other recent REIT mergers in Singapore include OUE Commercial REIT buying OUE Hospitality Trust.

Singapore’s economic situation remains dire, with recovery likely to be ‘slow and uneven’: MAS (CNA)

Even though growth rates are set to pick up in the second half of 2020, Singapore’s economic situation “remains dire” and the recovery will be a “slow and uneven” one, said the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon on Thursday (Jul 16). The recovery will be “weighed down by renewed outbreaks of infection here or abroad”, he said, with economic activities expected to remain below pre-crisis levels “for quite a while”. Mr Menon also said that unemployment and corporate bankruptcies will likely increase in the coming months. The priority for authorities is to keep the numbers on both fronts as low as possible, he added.

China says its economy grew 3.2% in the second quarter this year, rebounding from coronavirus (CNBC)

  • China reported that the country’s economy grew by 3.2% in the second quarter of the year, compared to a year ago.
  • Economists polled by Reuters expected gross domestic product to have grown modestly at 2.5% in the April to June quarter.

New Singapore private home sales surge to 998 in June, more than double May’s volume (Business Times)

DEVELOPERS in Singapore sold 998 new private homes in June, 105 per cent more than May’s 486, on pent-up demand and an increase in foreign buying as show galleries reopened. Despite the surge, buyers are choosing to remain prudent, with affordable homes making up over 90 per cent of units sold.  

Singapore, Malaysia targeting to start cross-border travel from Aug 10 for some residents, business visitors (CNA)

Singapore and Malaysia have set Aug 10 as the target date to start cross-border travel between the two countries for some residents and business travellers. Both countries have agreed to implement two schemes – the Reciprocal Green Lane and Periodic Commuting Arrangement, said a joint statement issued on Tuesday (Jul 14) by Singapore’s Foreign Affairs Minister Vivian Balakrishnan and his counterpart Hishammuddin Hussein. The Reciprocal Green Lane will allow travel between Singapore and Malaysia for “essential business and official purposes”. Eligible travellers will have to abide by the prevailing COVID-19 prevention and public health measures agreed upon by both countries, including swab tests. They will also have to submit a “controlled itinerary” to the receiving country, and adhere to this itinerary during their visit, the statement said. 

Resorts World Sentosa to retrench staff amid ‘devastating impact’ of Covid-19 pandemic (Straits Times)

Integrated resort operator Resorts World Sentosa (RWS) is laying off a significant number of employees as it grapples with the “devastating impact” the coronavirus pandemic has had on the tourism industry. RWS said on Wednesday (July 15) the retrenchment exercise was a “one-off workplace rationalisation” and that the company has managed to retain the vast majority of its local staff. It is understood that about 2,000 employees were laid off, but when asked, RWS did not want to confirm any figure.

Singapore GDP shrinks a record 41.2% in second quarter (FT)

Singapore fell into recession for the first time since the global financial crisis, with gross domestic product contracting by 41.2 per cent in the second quarter after the city-state imposed a lockdown to battle coronavirus. The quarter-on-quarter squeeze in gross domestic product was the largest on record, according to preliminary figures from the trade and industry ministry, following a 3.3 per cent contraction in the first quarter. 

Pumping more money into Singapore economy may not help amid global uncertainty (SCMP)

  • Trade and Industry Minister Chan Chun Sing says the contraction in global demand for the city state’s goods and services is a big challenge
  • His comments come as Singapore’s economy plunged into recession in the second quarter amid curbs to control the spread of the coronavirus

Singapore’s fourth desalination plant in Marina East begins operations (Straits Times)

Singapore’s fourth desalination plant, which can produce about 30 million gallons of fresh drinking water per day, has begun commercial operations, said national water agency PUB on Tuesday (July 14). This amount of water can meet the demands of about 200,000 households, and accounts for about 7 per cent of Singapore’s daily water demand of 430 million gallons. The Keppel Marina East Desalination Plant, which officially started operations on June 29, is the Republic’s first large-scale plant able to treat both fresh water and seawater.

Coronavirus: Singaporeans getting the travel bug again (Straits Times)

Although there are more than 13 million Covid-19 cases worldwide with over 570,000 dead because of the disease, travel agencies here are still seeing customers keen on travelling in December and next year. Dynasty Travel’s communications director, Ms Alicia Seah, told The New Paper last Thursday (July 9) that it has had more than 200 inquiries to nearby destinations such as Thailand, Japan, and China over the past two months. Ms Seah said most travellers are opting for private group tours and want to stay in less crowded resorts.

Coronavirus: Singapore to churn out ventilators (Straits Times)

Singapore has started churning out ventilators to meet the global shortage as Covid-19 cases worldwide surged past the 13 million mark. Home-grown medical device company Advanced MedTech, which is wholly owned by Singapore’s Temasek, has received emergency approval from the Health Sciences Authority for its Alpha ventilator.

Singapore GE2020: ELD to thoroughly review what went wrong on Polling Day (Straits Times)

The Elections Department (ELD) on Monday (July 13) said it will conduct a thorough review of what went wrong on Polling Day last Friday that slowed down the voting process. Long queues had formed at some polling stations from the morning, and polling hours were eventually extended from 8pm to 10pm so that all voters could cast their votes. The ELD again apologised for the inconvenience caused to voters, especially to senior citizens, and acknowledged that measures put in place to protect the health of voters, candidates and officials had “reduced the efficiency voters were used to in previous elections”. Head of ELD Koh Siong Ling was responding to a forum letter published on Monday in The Straits Times. The writer, Mr Dennis Tan Seow Koon, said that he and his 89-year-old mother took about an hour to cast their votes at Jing Shan Primary School after they arrived there at about 9.30am.

Frasers Property brings in capital partner for Northpoint City (South Wing) (Business Times)

FRASERS Property has brought in a strategic capital partner for Northpoint City (South Wing), it announced on Tuesday. TCC Prosperity (TCCP), through its wholly-owned subsidiary Bright Bloom Capital, has subscribed for 50 per cent of units of North Gem Trust (NGT), which owns the property. The transaction values Northpoint City (South Wing) at S$1.1 billion and allows the group to recognise a gain of S$50 million over the asset’s last audited book value as at Sept 30, 2019.

Asia Pacific stocks dip as China says its second-quarter GDP grew 3.2%; SMIC soars more than 200% in Shanghai debut (CNBC)

  • China on Thursday reported that the country’s GDP grew by 3.2% in the second quarter of this year as compared to a year ago. That was higher than expectations of a 2.5% growth in the April to June quarter by economists in a Reuters poll.
  • Meanwhile, retail sales in June fell 1.8% on-year, falling short of expectations of a 0.3% growth by analysts in a Reuters poll.
  • China’s largest chipmaker SMIC saw its shares surge 245% at the pen on its first day of trade in Shanghai on Thursday. 

US banks warn of much more economic pain ahead (CNN)

The biggest US banks are setting aside billions of dollars to deal with toxic loans as support from the government falls off in the months ahead, a sign that some of the worst economic damage from the pandemic is still to come. What’s happening: JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) said Tuesday that they earmarked nearly $28 billion to cover credit losses last quarter, wiping out a huge chunk of profits made between April and June. JPMorgan, the largest US bank, reported a 51% plunge in second-quarter profit, citing the need to prepare for “increased uncertainty in the macroeconomic outlook.” Wells Fargo reported its first quarterly loss since the Great Recession.

The 12 most overlooked truths of money and life ‘no one teaches you in school,’ says financial psychology expert (CNBC)

You can learn a lot from people you disagree with. The ability to empathize with those who disagree with you is one of the most underrated skills. When your opinions don’t land on the same page as someone else, it’s much easier to ask, “Why would anyone ever think that?” But you’ll get farther by asking, “What have they experienced in life that I haven’t that would cause them to think that?”

Self-knowledge is overrated. According to psychologist and economist Daniel Kahneman, the idea that what we don’t see might refute everything we believe just doesn’t occur to us. And he’s right. Human reason, which can easily be overwhelmed by lazy biases, is more feeble than many of us would like to admit. Take this seriously and you’ll realize that few things matter more than being open-minded and surrounding yourself with people of different backgrounds and experiences.

Trump says he is ‘not interested’ in trade talks with China (CNA)

“I’m not interested right now in talking to China,” Trump replied when asked in an interview with CBS News whether Phase 2 trade talks were dead. “We made a great trade deal,” Trump said, of the Phase 1 agreement signed in January. “But as soon as the deal was done, the ink wasn’t even dry, and they hit us with the plague,” he said, referring to the novel coronavirus, which first emerged from the Chinese city of Wuhan.

China pledged to increase purchases of US farm and manufactured goods, energy and services by US$200 billion over two years as part of the Phase 1 trade deal, but Trump has said the pandemic changed his views on the agreement. At the White House, Trump announced that he signed legislation and an executive order to hold China accountable for the “oppressive” national security law it imposed on Hong Kong.

Coronavirus Hastens the Rise of the Cashless Economy (Bloomberg)

Across the globe, Covid-19 is fueling the rise of  the cashless economy as employees and consumers alike worry that the direct handling of paper currency could spread the coronavirus. (Medical and public health experts say there is currently little data to support this, and that cash is safe to use as long as people wash their hands.) 

Despite these concerns, shelter-at-home orders sparked an “online shopping revolution,” as Bloomberg News reported, both in the U.S. and overseas as even the most reluctant of consumers shopped remotely for essential items. Big-name companies like Lululemon and Nordstrom will fully adopt cash-free payments when they reopen, while Starbucks’ CEO recently said in a memo that it would “shift toward more cashless experiences” in anticipation of its mobile app becoming the dominant form of payment. Even U.S. casinos are pushing for digital payment options.

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