Sell Hong Kong, buy Singapore

oxford mushroom SG

UNITED States investment bank Merrill Lynch is advising clients to sell Hong Kong office landlords in favour of Singapore's, saying the city's air pollution will drive professionals to move further south.

'The investment response is clear: Buy (shares in) Singapore office landlords, sell Hong Kong office landlords,' it said in a report released late on Tuesday.

The report forecast a 5 per cent decline in Hong Kong office rents next year and downgraded the city's largest landlords, including Hongkong Land, Great Eagle and Hysan Development.

Its Singapore picks included City Developments, Suntec Reit and CapitaCommercial Trust.

Merrill Lynch's 'sell' advice is the first time that a big investment bank has spelt out how worsening pollution could undercut Hong Kong's competitive edge.

With 70 per cent of the pollution coming from manufacturing centres in the Pearl River Delta in southern China, the report said aggressive, direct action with Beijing was the only solution.

'The government in Hong Kong is relatively powerless to address the true causes until Beijing gets tough. It could be a long and choking wait that many could choose not to endure.'

The report predicted that mass immigration would help double Singapore's population in the next decade, with a steady flow of financial service professionals expected to come from Hong Kong.

'Hong Kong's loss is, to a large extent, Singapore's gain,' it said.

The report came days after the Council on Sustainable Development estimated that it would cost HK$51 billion (S$10.2 billion) to clear Hong Kong's air pollution if drastic measures were taken immediately.

It also took a swipe at the methodology on calculating the city's pollution index which has been criticised by environmentalists as 'outdated'. While the air was getting poorer, it said, the index did not show pollution was getting worse.

In recent months, international chambers of commerce in Hong Kong have warned that their member businesses are pulling out of the city or deciding not to locate there because of the health implications for their families and staff.

Business leaders in Hong Kong also called on the government to act against rising pollution, or risk losing the territory's status as a major finance hub. -- REUTERS, AFP

(Straits Times 22 Nov)

Yet another reason to prevent the haze from coming back...

Hogzilla SG

Are we always gaining something through other's demise?

We gain loads of foreign investment during the beginning our independence because the Cultural Revolution is going on in China, and that scares away the investors. Now, we gain something again from other's problem.

Nah, it may be just 146th's garble.

Atobe SG

Rich investors are in for the long term, pollution cannot possibly worsen when the PRC Government is already awaken to the damages done to the environment.

Can we trust Merrill Lynch - a shark - in its recommendation ?

With a rush to exit the Hong Kong property market, Merrill Lynch will be the first one to snatch the artificially depreciated properties and hold out till the next cycle.

Only the simple minded - with a liitle wealth and little knowledge - will succumb to such an idiotic speculative call.

The support from Merrill Lynch - in its call to buy into Singapore - is even more dubious, considering the recent business partnership that it had with the Singapore Government and the fact that its Chairman is also working closely with the Singapore Government.

Can we believe such simplistic propaganda that blow so much warm air about Singapore, and drenched Hong Kong's prospects with cold water ?

bozo43 SG

I can see the logic of ML being long on S'pore. Short on China, ok but only medium/mid-long term, immediate and long term I'ld still call a long.

S'pore will always be relevant as SEA fin hub, I don't see anyone challenging that position for decades to come. Not it's fast becoming the premier global private banking haven. IRs will cement Spore as home for SEA riches

HK will track China fortunes. Unless they deal effectively with infrastructure/regulatory issues early on, I think correction can be really painful, reminds me of Indonesia in the mid 90. Go go for as long as concept in play but downturn will be very painful, cap evaporation will be unprecedented

bozo43 SG

Also tax structure for REIT in Spore more competitive vis-a-vis HK.

lionnoisy SG

see how HONG KONG http://www.mingpao.com/'s Editoral
says the BIG THREE PROBLEMS facing HK.

A.Shortage of land,leading to high property prices and displacements of
industries.
B.shortage of talents,affecting economic development
C.marginalisation by other cities in PRC.

Ming Pao are read by many highly educated in HK.

It is great MING PAO point out the problems on 01.01.2007.

2.However,many ,incl HK Government,are happy that HK

become the 7 th
market capitalisation in share in the world and 2nd IPO after London.

Many just think HK can survive on financial services and
look down on manufacturing.

LazerLordz SG

The fact that it is coming out of ML, shows that this is probably closer to a hard-selling article rather than anything else.

Look at the level of collaboration that ML has with the Singapore govt, and one will smell some trout. Is there any other news source that can coroborrate this?

Anything that has the ST as it's only source, has to be taken with a pinch of salt, especially where the country to benefit in question, is the owner of the media that reports it.

RaTtY8l SG

can we trust ML advice? can we have the full forecast report?

sunny6110 SG

I think HK will go together wif SG… Maybe SG can outperform HK slightly… But any drastic changes to HK will hv the same impact in SG

lionnoisy SG

many may admire HK.But look at how big is their public housing flats,
like Sg HDB.

Selling prices are from $981,500 to $1,896,700, with saleable areas ranging from 39.2 to 55 square metres.

2.how many sporeans can stay in tiny flats?
Sg 4 room type flat(3 bed rooms) from 80 to 100 m2(old flats),90 m2 for new flats.
3 room type(2 bed rooms)from 60m2.

3.Sg latest old folk flat for age above 55 is 45 m2.

4.Why HK flats are so small??

lionnoisy SG

101 gangsters caught in Tsim Sha Tsui

hk always promote freedom ,democracy and rule of laws as the selling points.

See how the gangsters assembly in Tsim Sha Tsui,the tourist hot spots,
prepares to board a coach together with 7 cars.

They are going to ''influence '' election of villagers represetatives.

101 gangsters
caught in Tsim Sha Tsui

kilua SG

Originally posted by lionnoisy:
many may admire HK.But look at how big is their public housing flats,
like Sg HDB.

2.how many sporeans can stay in tiny flats?
Sg 4 room type flat(3 bed rooms) from 80 to 100 m2(old flats),90 m2 for new flats.
3 room type(2 bed rooms)from 60m2.

3.Sg latest old folk flat for age above 55 is 45 m2.

4.Why HK flats are so small??[/b]

367 units with saleable areas of 47 to 60.4 square metres are offered. Selling prices are from $563,900 to $932,400.

563 900 Hong Kong dollars = 111 219.181 Singapore dollars

I found this from the article as well. You quoted the higher end housing ignoring those cheaper ones. Propaganda isnt it? Very Happy

lionnoisy SG

2.you are right.some are cheap.

3.let us compare Investments of two cities:

Spore 2005 Investment Commitment Indicators
Indicator............................................2004.....2005........2005
..............................................................actual.....forecast.....actual
Total VA per annum generated
from projects (S$ billion)...................10.4..........10.0......10.8
FAI from manufacturing (S$ billion) ......8.3 ......8.0......8.5
TBS from services (S$ billion) ...........2.3 ...........2.4........2.5
Total employment creation ..........21,800.......18,000.......26,000
Skill profile (professional and skilled jobs)70% ...min70% .....61%

4.HK investments in 2006 creates about 8000 new jobs when investemnts are fufilled
and in the coming 2 years.Total HK$10b or S$2b.

AndrewPKYap SG

High office rents means we all suffer. Less salaries, less bonus, pay higher prices for goods and services...

The rich benefits. Who is the one if not pushing up property prices, allowing the prices to go sky high?

Property Prices Rise at our expense - By Andrew PK Yap
Columns By Andrew PK Yap
Author of Insights Into Casino and Stock Market
When property prices go up, it benefits the few at the expense of the majority.

The unchecked and unnatural rise in the price of property in Singapore over the past years and in the coming years will harm the poor for the benefit of the rich.

Construction costs will rise due to inflation. If property prices are allowed to rise over and above this increase; would the rising be considered as an unnatural rise? Should the finger be pointed at the biggest land owner and property developer with a virtual monopoly of the real estate market?

A fast rate of increase in property prices is the one item that does the most damage to the majority of Singaporeans. Property price increases benefit mainly the following groups. Those who want to migrate. Those who want to cash in on the price increases by selling their extra properties.
Those who invest (gamble) in property prices hoping to hit the jackpot. Foreigners.

The rest suffers. Everybody else suffers. The increase in property prices will cause a rise in rental rates and mortgage rates and mortgage amounts; among numerous other things.

AndrewPKYap SG

Sell Hong Kong, buy Singapore is a call for the rich to come here and exploit us, the working class.