Warren Buffett’s 3 Top Golden Trading Advises

Source : http://takimag.com/article/the_orifice_of_omaha

Source : http://takimag.com/article/the_orifice_of_omaha

Warren Buffett’s 3 Top Golden Trading Advise

Thanks to one of my friends whom direct me to this source.(listed at the end of this article) And i found a few important pointers from one of the greatest financial brain in our times, Warren Buffett, which can be applied to  Trading.


1) Invest Trade unemotionally.

Stock Market are influenced by Greed and Fear. And these two are the main forces for some of the spectacular Bull and Bear home run. And in order to trade successfully in a consistent manner, a thorough study of human psychology is need. Human brain is hardwired to focus on survival, and as such, it make trader more likely to chase stock to the when it gap up, later to realize the stock suffer from slow death. Or holding on to the losing trade till it is 80% into red, sell it off and watch in horror when the stock turn northward from there. Learn how emotions lead to cognitive errors, and avoid those common errors.

2) Be patient.

Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient Patient. Did you get impatient after realize i been typing so much of this word “Patient”? There are a lot of times where trader rush and quickly get into trading position for fear of missing out(FOMO) and end up winding up the position. Be patient and be disciplined with your own trading criteria and setup. You do not need to trade every single day, instead let the trade come to you!

3) Be selectively contrarian.

Warren Buffett’s saying of “fearful when others are greedy, and greedy when others are fearful” speaks strongly for his contrarian style. I will also say, that saying summarize up what human psychology is all about. Based on “fearful when others are greedy, and greedy when others are fearful”, should you dive in when the stock gap up or perform a panicky sell when it gap down? Be a contrarian but in a selective manner.


Source : http://www.businessdictionary.com/article/896/investing-lessons-of-warren-buffett/

Source : http://channel.nationalgeographic.com/brain-games/articles/you-are-hardwired-to-survive/

The New Normal Abnormal – Negative Rates

The New Normal Abnormal – Negative Rates

Source : https://app.hedgeye.com/insights/49038-crash-boom-bang-global-central-planners-can-t-stop-the-selloff

With Bank of Japan being the latest country joining the Negative Rate group, there are a total of 5 countries having the “normal” rates. And i just wonder which country will be next to follow?

Source A: http://www.bloomberg.com/news/articles/2016-02-02/rates-less-than-zero-is-bank-stress-fed-wants-to-test-in-2016
Source B : http://www.cnbc.com/2016/02/12/next-country-with-negative-rates-could-be-canada.html

Central banks that have gone negative: (Source B)

  • Bank of Japan: Rate is minus-0.1 percent for some reserves
  • Danish National Bank: Deposit rate is minus-0.65 percent
  • European Central Bank: Deposit rate is minus-0.3 percent
  • Swedish National Bank: Main interest rate is minus-0.5 percent
  • Swiss National Bank: Main interest rate is minus-0.75 percent

Start of abnormal being the normal?

Only US has raised the rate back last year. And in my view, there is a worrying trend where more and more countries adopted negative rate. They are competing with each other on driving down their rate! As such the FED said that in 2016, it will assess each big banks’ resilience, on what if when the three-month U.S. Treasury bill stays below zero for a prolonged period!

Impact of BOJ’s negative rate

BOJ’s negative rate has only intensified the already volatile currency market and set to kick up more of it. Her intention was to devalue it’s currency, increase inflation and to make export more attractive, but it has backfired on her!

After 29 Jan 2016, it dropped from 121 to the lowest of 111 on 11 Feb 2016. It was just another example of the currency wars that we are in, where negative rate driving currency wild.

Wild Ride USDJPY Feb2016

Wild Ride USDJPY Feb2016



Infographic: How the global economy played out in 2015

Came across this Infographic by StraitTimes that describe how global economy had played out in year 2015. There being a series of major milestones and events that being play out, and in my option, the most important event should be the first Interest Hike by US  Federal Reserve back in Dec 2015.

And which do you think have been the most important event in 2015?

Infographic: How the global economy played out in 2015

Infographic: How the global economy played out in 2015 (http://www.straitstimes.com/business/economy/infographic-how-the-global-economy-played-out-in-2015)

Bubbles bubbles bubbles of Bond markets

Photo : http://hdwpics.com/images/046451906A53/Bubbles-High-Resolution.jpg

One of the articles from ChannelNewsAsia, have caught my attention. It on one of the Singapore corporate bonds by PT Trikomsel Oke(Sing-dollar) that could faces default. If it really happen, it will be the first in Singapore Corporate Bonds overpast 6 years.

Standard & Poor’s Asia Pacific Director of Corporate Ratings Xavier Jean, said : “Between 2010 and today, companies across the region, whether it’s Malaysia, Indonesia, or even Singapore, have taken the opportunity to raise so much debt, because it was so cheap. When things slow down, as a result, they have to service bigger debt amounts.”

Besides that, Credit Suisse AG announced that they will stop being a market maker for government bonds across Europe since last week, due to a higher cost of wholesaling debt resulting from a tighter regulations.

“This could be the beginning of a wider trend,” said Gianluca Minieri, head of trading at Pioneer in Dublin, which oversees $242 billion. “Banks stay in a business only if it’s profitable, but the regulations expected in coming years are not envisaged to loosen capital requirements for banks. It could be the opposite.”

In my view, there is way too much easy money out in the Bond Market due to various governments carry out QE, First from USA, follow by Japan, China(China have a different approach with their QE), and with EU joining the “Fun Party” in March of this Year. Government issue bond and in return buy up bond with the printed money that they injected. There is no real demand for bond. And what all these easy money really meant is that a certain level of bubble are building up in Bond Market. Open out both your eye and ear for tell tale sign!

Photo : http://www.bbc.com/news/business-30933515


Links :



What you need to change to become wealthy

subconsciousI kinda of find this article interesting, as it touch on the core element that oneself need to have or to improve along your wealth creation journey.

The original article, by Michael Yardney, can be found on http://www.smartcompany.com.au/finance/48777-why-you-need-to-change-to-become-wealthy.html.

Why is change difficult for many of us?

Sometimes we love change and sometimes we hate it. In fact, some of us love to change and others fear it.

Because change makes us move out of our comfort zones. It takes courage to leave something familiar and try something new.

One of the jobs of our subconscious mind is survival – to protect us. It likes to keep things the same preferring safety and security over the untested and unproven. Haven’t we all heard people say “better the devil I know than the devil I don’t know.”

We tend to believe that if we stick with what we know, with what is familiar, then we won’t get hurt.

The problem is that in terms of wealth creation, it’s not what we know that’s holding many of us back. It’s what we think we know, that actually isn’t so, that is holding us back.

Many people are not totally happy and successful. They are not as far advanced with their wealth creation as they would like to be. They haven’t developed the financial freedom they deserve. Yet they continue to do the same things over and over hoping somehow things will be different.

Think about it… if you keep doing the things you always did, you are going to keep getting the results you always got. If what you’ve been looking for was where you’ve been looking, chances are you’d have already found it!

Doing more of the same even harder and longer is not usually the answer. Being willing to change will usually create better results.

So what holds most of us back? It’s our Wealth Operating System – our financial blueprint – the programming we received as a child.

This was initially described by Wallace Wattles in The Science of Getting Rich and more recently by T. Harv Eker in his great book Secrets of the Millionaire Mind (a must-read for all property investors).

Your thoughts lead to your feelings – Your feelings lead to your actions and your actions lead to your results.

It is no coincidence that your inner world creates your outer world. The programming you received, usually as a child, leads to your thoughts, your fears and your limitations about wealth creation today.

So one of the first steps in changing your outcome is changing your thoughts.

How do you think about money, success and prosperity?

What do you say to yourself?

What is that little voice in your head saying?

For many of us our thoughts revolve around fear, scarcity and limitation. The problem is that what you focus on expands. If you think about fear, scarcity and limitation – what do you achieve?

Remember: Your thoughts lead to your feelings – Your feelings lead to your actions and your actions lead to your results.

Many of us need to intentionally change our way of thinking. We need to start thinking about prosperity, abundance and success to enable us to attract those very things.

So why are we scared of change? Why do we find it hard to change our way of thinking when change is natural? In fact, the only constant in the world, the only thing you can absolutely count on, is change itself.

It’s because of our programming, our wealth operating system.

Yet most successful people all share one critical characteristic – the trait of adaptability. They embrace change. They look for opportunities to expand and learn.

Another common characteristic of successful people is that they have a mentor and they belong to a mastermind group. If you continue to do the things you have always done, you will continue to get the results you have always achieved.

I believe it was Einstein who said “The definition of insanity is doing the same thing over and over again, but expecting a different result.”


Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property. Subscribe to his Property Update blog.

71 Resources on Singapore Savings Bonds

Recently I just apply for BOC bank account on their multi currency saving promotion. And if you have been observant enough, you will notice Bank Saving Interest Rate has creeping up since my last article on Saving Bank Account, besides that, there is another new kid on the block which is the Singapore Savings Bonds.

From these few tell tale signs, the Banks in Singapore looking to beef up the currency ratio, even Singapore Government is looking to fortify as well. Well, what it does is to lock in fund and to minimize the volume of outgoing currency flowing out of the country when we hit Economy Crisis. But i do believe that in Stock Market, the Bull should have another last leg northward and it will be a brilliant one before it all come down to the earth.

And for those whom prefer the safer journey, I glad to have the permission to post the following article on “71 Resources on Singapore Saving Bonds“, from one of the highly finance savvy blogger GiraffeValue of http://www.giraffevalue.com. A easy to read article, that cover A to Z on the Saving Bond, and enjoy reading!

(Exposed) 71 Resources on Singapore Savings Bonds to Up Your Knowledge before 1/Sept

Singapore Savings Bonds

You heard it.

People are talking about it.

You afraid to think about it as you feel guilty that you couldn’t quite comprehend what Singapore Savings Bonds is. You know what a savings accounts is, but bonds…Oh man, what exactly is that?

You didn’t major in finance, or maybe you did, either ways you are still an educated person. But speaking of the word “bonds”. You are completely clueless. You wonder how true is that the government is borrowing money from the public to build the rumored “underground city”? Maybe that’s why the fancy word “bonds” was used so to get away from the public?

Well, maybe that’s just a conspiracy theory that you couldn’t quite bother.


How about the part where you could receive bi-yearly interest payments? Or the part where you could withdraw all your money just like your savings accounts without being penalized for early withdrawal fee and yet getting bank-beating interest, or the part where the word “guarantee” works exactly the way it says since the government is the guarantor.

I bet these turn you on.

However, you have questions and doubts, and knowing that reading one-sided story isn’t enough, I’m referring to the news and websites that ended with .gov. You may have questions like how about SSB vs fixed deposit, or SSB vs OCBC360, or am I suitable for investing SSB as I just entered the workforce. Those are the questions that left unanswered. And what the heck is step-up interest rate?

You may have tried to google it but information always seems to be everywhere. Searching it needs time, filtering it needs time and reading it needs time. And time is what you don’t have. Or at least you don’t think is worth spending on on your valuable Saturday and Sunday.

And if that’s so, I think I’m able to do you a little favor. I have curated all the information I could find on webs and categorized it in a manner that you won’t have to second guess what’s the link is about or wasting time reading information that isn’t relevant to you.

Remember we’re living in one of most busiest city in the world. Your time should be spent on reading not searching. Adding, not finding – information.

So here you go.

Table of Content

GiraffeValue Facebook page: Like my Facebook page, where I shared my casual thoughts and writings.

Official Facts and Webs

Official Facts and Webs.

Warning: Some of the materials here will make you sleep. We have more interesting articles and sources on the below.
Recommended-read: #1

    1. Singapore Savings Bonds Official Web | Singapore Government Securities
    2. Launch of the Singapore Savings Bond Programme | MAS
    3. Singapore Savings Bonds for Individual Investors | MAS
    5. [PDF Factsheet]Singapore Savings Bonds Product Factsheet | MAS
    6. Eligibility of Charities or IPCs to buy Singapore Savings Bonds | MAF

Singapore Savings Bonds How To Apply

 How To Apply?

You may apply it on the ATM of DBS/POSB, UOB and OCBC. Only DBS/POSB allows application via Internet Banking. You also need a Central Depository Securities Account(CDP) which you probably have it if you have a stock brokerage account(Standard Chartered brokerage account doesn’t come with a CDP account).
Recommended-read: #2 & #1

  1. 4 simple steps to your first Savings Bond | Singapore Savings Bonds
  2. Singapore Savings Bonds Max Holding Limit is $100,000 for now. Apply via DBS, OCBC, UOB ATM | Investment Moats – Stock Market Investing
  3. MAS on how to apply for Singapore Savings Bonds | Channel NewsAsia

Banks(UOB doesn’t have a web page for SSB):

  1. Singapore Savings Bonds | DBS/POSB
  2. User Guide on how to apply for Singapore Savings Bonds via OCBC ATMs

Singapore Savings Bonds The Only All You Need To Know

The Only All You Need To Know

Actually there aren’t so many things you need to do. Just pick 1 or 2 over here you are good to do, most of the contents below are overlapping.
Recommended-read: #1 & #1 and #2 on “10 more..”

5 You Need to Know of What-You-Need-To-Know

  1. Singapore Savings Bonds: What you should know | The Straits Times
  2. All You Need to Know about the Singapore Savings Bonds | DrWealth
  3. What You Need to Know About Singapore Savings Bonds | Martin Lee
  4. 5 Things You Should Know About Singapore Savings Bonds (SSBs) | BondSuperMart

9 More You Still Need to Know :(

  1. Singapore Savings Bonds (SSB) to start issuing in September | Investment Moats – Stock Market Investing
  2. The name is Bond, Singapore Savings Bond. | A Singaporean Stocks Investor (ASSI)
  3. Singapore Savings Bonds – More Details | Invest Openly
  4. Singapore Savings Bonds – A Good Alternative to Fixed Deposits | Karen Life
  5. Singapore Savings Bonds: New govt bond offers rising rates | If Only Singaporeans Stopped to Think
  7. Update on Singapore Savings Bonds (Applications open on 1st September 2015) | The Tale Of Azrael
  8. Singapore Savings Bonds | Money Lobang
  9. What Is The Singapore Savings Bond All About? | The New Age Parents

Singapore Savings Bonds SSB vs Fixed Deposit & Foods For Thought

SSB vs Fixed Deposit & Foods For Thought

This is where you start to think about comparing SSB vs other financial products such as fixed deposit, OCBC 360 and more. Or wonder what are other financial bloggers opinion about SSB.
Recommended-read: #1,2,3 and on “foods for thought..” is hard to pick there are too many good read.
SSB vs Fixed Deposit

  1. A chat on FDs, SSBs, OCBC 360 and CPF Top Ups. | A Singaporean Stocks Investor (ASSI)
  2. More details of the Singapore Savings Bond. Looks like my Emergency Fund now | Investment Moats – Stock Market Investing
  3. Singapore Saving Bonds VS Fixed Deposit | Singapore Online Trading
  4. Singapore Saving Bonds Or Great Eastern Guaranteed Saver | Dollars And Sense
  5. Singapore Savings Bond, Your New Savior? | Big Fat Pillar
  6. The name is Bond, Singapore Savings Bond (Part 3). | A Singaporean Stocks Investor (ASSI)

Foods For Thought To Level Up Your Knowledge

  1. Singapore Savings Bonds – Yay or Nay? | The Establishment Post
  2. Singapore Savings Bonds – How Can We Benefit From It | Epsilon Luxe
  3. Singapore Savings Bonds – Why They are Almost Exactly Like Your Friendly Fixed Deposit Accounts | Big Fat Purse
  4. MAS Singapore Savings Bonds: The End of Endowment Plans? | SengBingYang
  5. Will Savings Bonds really save the day? | THE BUSINESS TIMES
  6. The name is Bond, Singapore Savings Bond (Part 2). | A Singaporean Stocks Investor (ASSI)
  7. Singapore Savings Bond (Part 4): Good or not? | A Singaporean Stocks Investor (ASSI)
  8. Singapore Savings Bonds Inflation Protection Abilities | Investment Moats
  9. My Thoughts on the Singapore Savings Bond | Got Money, Got Honey
  10. Singapore Savings Bonds, Retail Investor Apathy, and Insurance | Lepak Investor
  11. Bonds – Fifty Shares of Grey for the Retail Investor? | Lepak Investor
  12. Singapore Savings Bonds – A Game Changer | SG Money Matters

Singapore Savings Bonds 12 Must-Read on Why You Need To Buy Singapore Savings Bonds

11 Must-Read on Why You Need To Buy Singapore Savings Bonds

The articles below are not exactly reasons on why you need to buy SSB, but rather their personal opinion whom are favor of getting SSB than other financial products.
Recommended-read: #1, #2 & #3

  1. 4 Reasons Why You Should Be Buying The Singapore Savings Bonds | Dollars And Sense
  2. Singapore Savings Bonds: A.K.A. LKY Bonds? | My 15 Hour Work Week
  3. How best to utilize the Singapore Savings Bond? | bullythebear
  4. Singapore Savings Bonds(SSB) Details Out – Will Buy Sure Buy Confirm Must Buy! | Stock Broker Plays PokerSingapore Savings Bond – A Risk Free Investment Option | Sugar, Spice, Everything Nice
  5. Analysis of Singapore Saving Bonds | The IFA
  6. Singapore Savings Bonds – more updates about the programme released | Retire by 50
  7. Are Singapore Savings Bonds really worth buying?| The Middle Ground
  8. 2-3% Principal Guaranteed Investment | SG Young Investment
  9. This Singapore Savings Bonds: Liquidity, Higher Returns and Government Backing. Dream? | Investment Moats
  10. Should You Buy Singapore Savings Bonds For Investment? | GET.com
  11. Singapore Savings Bond – As safe as it can be [updated] | Lizardo Realm

The Impacts of Singapore Savings Bonds

The Impacts of Singapore Savings Bonds

This section is not for you if you only want to read about SSB in the perspective of personal finance. However if you would like to know the economic impacts of SSB to the market, you might consider picking up one or two of the following.
Recommended-read: All are great, just pick the headline that appeal to you most.

  1. Savings bonds may put fixed deposits at risk | BT Invest
  2. Banks offering higher fixed deposit interest rates amid Singapore Savings Bonds competition. Will housing loan rates go up? | Investment Moats – Stock Market Investing
  3. Singapore Savings Bond: Cost to outweigh Benefit? | aloypro
  4. Singapore’s new savings bond comes with good intent, bad timing | reuters
  5. Singapore Savings Bonds have an unexpected and risky downside for local banks | Singapore Business Review
  6. Singapore Savings Bonds: What Fixed Deposits Need To Do To Up Their Game | MoneySmart.sg

Singapore Savings Bonds Opinions & Conspiracies Theories

Opinions & Conspiracies Theories

Ah… this is where the exciting part comes. From underground city in Singapore to speculations about the bankruptcy of Temasek Holdings and GIC! How about the MAS insistence of being non transparent – “It is not in our national interest to publish the full size of our reserves.” To the action of continual increase of CPF min. sum, withdrawal age and etc.

  1. Severe consequences for a PAP majority with its underground city for 10m population | The Online Citizen
  2. Will Singapore Savings Bonds be used to finance an “underground city”? | Singapore Government
  3. Singapore Government in need of more money from new Singapore Savings Bond | States Times Review
  4. Debate on Government Securities (Amendment) Bill – NCMP Yee Jenn Jong | The Workers’ Party

Singapore Savings Bonds 7 Forums to Visit For Discussion of SSB

7 Forums to Visit For Discussion of SSB

Join in the fun of discussion in one of the forums. And according to the poll(#3.), 33% of the forumers will not apply for SSB and 20% will apply on amount ranging from $20K-$50K. And yes, even SammyBoy forums has a thread on SSB.

  1. Singapore Savings Bonds |Hardware Zone Forums
  2. (Breaking) Details on savings bonds for individual investors released | Hardware Zone
  3. Poll On SSB (Singapore Savings Bond) | Hardware Zone Forums
  4. Singapore Savings Bonds impact on FHR based Home Loan | Condo Singapore Forums
  5. Singapore Savings Bonds will be issued on Oct 1, apply from Sep 1 | Redit – Singapore
  6. Singapore Saving Bond | Hua Sing Forums
  7. Singapore Savings Bonds: 8 things you should know SammyBoy Forums

Singapore Savings Bonds I Got YouI got you!

You are scrolling all the way down without even visit one of the above.

You are just not in the right mood to read, I do understand that.
Alright this is what you could do. First you bookmark it. Second you read it while you are commuting, or you could schedule a 1 hour reading time on either this coming Saturday or Sunday.

It’s just about more than a week left prior to the launch of the first subscription of SSB(1/Sept).

Oh… if you think this post is practically useful do share this post because it makes my day. No, not just me, but also the person who is reading it. At least give them the chance to say thanks for sharing.

And happy reading!

Time to train more and upgrade your skill

trainingWith the stock market turmoil kick up by a poorer China economy result, local headhunter expected hiring freeze in 2016. I am not actually not shocked at the news, which you can get more detail from http://www.straitstimes.com/business/economy/headhunters-expect-hiring-freeze-next-year

Given a forward thinking to the situation ahead, it is only wise for us to pick up or to upgrade our skill and get trained. And i managed to catch up and conduct a much privilege interview with a niche course provider, Desmond Chua, that combined both training and consultation together. And here is the interview extract.


Fredrick : As usual, always been looking forward to chat with you, and so much we can learn from you. So what have you been up recently?

Desmond Chua : Hello Fredrick, I am very well and thank you for inviting me to be your guest for this interview. For the last few months, I am designing several workshops for the public program. The first one is about managing career challenges which would likely takes place in mid October this year. The one that is Live now is the “Keep Calm and Carry On Selling” program.


Fredrick : Wow, now you are into conducting of course! I guess your student will benefit a lot from it! Do shares with us on your course detail.

Desmond Chua: Well, I spent more than 20 years of my life in the corporate, having the opportunity to serve both local SMEs and regional posting overseas. And one thing that strikes me is many are unhappy at their work. This unhappiness can be due to the remuneration, the job responsibilities (some want less and others want more), work/life balance (bosses are giving laptops and mobile phones to staff) and many more reasons.

Since many of us spent a large part of our lives at work, surely it must make sense that we are doing what we love at work. On the contrary, many are not and that bothers me to dig deeper and find ways to resolve it.

Dream Jobs come true is not another career talk but one that can truly transform a person destiny if he puts in the required effort during the workshop. There will be many activities that we will be introducing to the participants, an atmosphere of fun-filled learning and interaction for all.

For registration, please contact Safra Jurong at 6686 4333 or email jrclub@safra.sg (Safra will be updating this program on their website, please check back soon)


Fredrick : What makes your course different from others in the market?

Desmond :  That is a great question! There is no lack of training out there and every trainer has its own strength and areas of expertise. I have been coaching clients  for the last 5 years in their relationship problems – from being singles, divorce cases to single parents and often career challenges is a big part of it. For example, guys who are single tend to think woman need man with financial stability and would not commit to a relationship till he thinks his career is “stable” (which can take tens of years for some). Then, there are couples who struggled financially because one of the partner is retrenched or in the midst of switching job or unemployed.

I had also been on both sides of the table, being an interviewee looking for jobs and interviewing candidates as well. When I was in sales, I spent a lot of time going for networking events and would seize opportunity to talk to headhunters, direct employers and those who are looking for jobs. This knowledge has served me well in the course of communicating with my clients.

At Eimi Group, we work with trainers/consultants who are passionate about impacting lives, they are lifelong learners and exudes traits of responsibility, positive attitude and humility. The bible has a saying ; ”Do to others whatever you would like them to do to you” Matthew 7:12.

Because of our collective experience, we design workshops with the needs of our participants in mind and we keep a close tab on the current economy, industry changes and trends.

Also, we believe everyone has a different learning style, some pick up oncepts fast  from hearing the speaker while others may reach their own “AHA” moments through participating in games-based activities. And that is important to us, because we want our participants to be happy, to learn something and apply when they go back to the office and not get hyped up and back to normal after the course. That defeats the purpose and go against our mission.


Fredrick : Thank Desmond on sharing so much with us and all the best to your course!

Desmond Chua : Thank you and God bless you and family!


Singapore Industrial Property

One of my great friend Paul Ho has written a comprehensive article on Singapore Industrial Properties. And for those whom are interested on getting Commercial Property, it will be a great introduction article to read up on. With his permission, i glad to have this article posted on my blog which has been featured on TheEdgeProperty.

Evolving Nature of Singapore Industrial Properties

Singapore’s owes its industrial transformation and modern day success to Dutch economist Dr. Winsemius who in 1960 led the United Nations team to examine Singapore’s potential in Industrialization. Dr. Winsemius presented a 10-year development plan to transform Singapore from an already successful entrepot into a centre of manufacturing and industrialization. With his help, Singapore also attracted Shell and Esso to establish refineries here and Philips to set up manufacturing. He continued to work as Chief Economic Advisor from 1961 to 1984 working hand-in-hand with Goh Keng Swee, Lee Kuan Yew and Goh Chok Tong to develop Singapore into the economic success it is. (Reference 1: Wikipedia)

Early stages of industrialization was focused on labour intensive industries and increasingly move upstream into higher value-added industries and eventually with the advent of electronics, moved into High technology. (Reference 2: EDB)

The early part of the industrialization was located in Jurong. Comparing the 2014 Master plan versus the 2003 master plan, Industrial B2 zone has spread out into the North East region and also added new zoning in the West region, north of Jurong. This is in line with the aim of Urban planning to bring jobs closer to homes and to reduce commuting time.



Map 1: Master plan 2014, (Source: URA)



Map 2: Master plan 2003, (Source: URA)



Map 3: Legend of Master plan (Source: URA)

The largest Industrial Business 2 (B2) zone is concentrated in Jurong with some scattered in other areas, such as Woodlands and near the airport. Certain businesses (industries) that are deemed a potential disturbance to residents are subjected to a 50m nuisance barrier and placed under B2 zones.

Blurring of Lines between Industry and Commercial

The restructuring of industries across the world shifts from heavy industries to a focus on light industries such as Information and Telecommunication, knowledge industry and cloud computing. The definition of “industry” is changing. Production no longer simply meant having people sit beside lathe machines milling precision parts. A modern day “Industry” could also mean having teams of people tapping profusely into the laptop doing programming and coding. There is a blurring of lines between these industries and that of other commercial activities, and development to be used for offices.

Commercial zones are defined by URA as “…Area used or intended to be used mainly for commercial development.”
Such as developments to be used for: –

  • Offices
  • Mixed Uses (e.g. Office/Shopping/Cinema/Hotel/Flat)
  • Convention/Exhibition centre, commercial school
  • Bank
  • Market/Food centre/Restaurant
  • Cinema
  • Entertainment
  • Foreign Trade mission/Chancery
  • Recreation club.

Is Commercial A Premium Compared To Industrial Zone?

Commercial zones are premium and concentrated in Central Business District (CBD), there are also commercial zones located outside of category 1 where rentals are cheaper.


Table 1: URA, Commercial Offices – category 1 median rentals are ~$107 psm or about ~ $10.09 psf. Q2 2014, Q1 2015.

Category 1 (refers to city core), https://www.ura.gov.sg/realEstateIIWeb/comm/rentalOffice/submitSearch.action

Category 2 (refers to properties outside of category 1) median rentals (Appendix 1) are in the range of $47 to $70 psm or about $4.37 to $6.5 psf.

We randomly selected District 3 and 5 for comparison. The Industrial median rentals in the city fringe Queenstown, Tiong Bahru, Clementi New Town comes in at $19.87 to $32.82 (Level 2 or higher) psm or $1.85 to $3.05 psf.


Postal Districts:
03 – Queenstown, Tiong Bahru,
05 – Pasir Panjang, Hong Leong Garden, Clementi New Town,

Table 2: JTC, 2015Q1 Median rentals in city fringe District 3 and District 5


There is no real apple-to-apple comparison. For the purpose of this study, we assume that Category 2 (fringe area) of commercial zoneswould be a rough approximation to Industrial B1 properties in D3, D5, one of whichis in the city fringe.

Commercial properties still command a premium rental of $4.37 to $6.5 psf compared to industrial B1 properties at $1.85 to $3.05.


Chart 1: Commercial offices category 1, 2, and Industrial Fringe (District 3, 5) rental price (per square feet)

(Source: URA, JTC, iCompareLoan.com)


Table 3: Rental table of commercial offices category 1, 2 and Industrial fringe District 3 and 5 prices factored with ancillary use (Source: URA, JTC, iCompareLoan.com)

As industrial properties can only have 40% of the space for ancillary use, hence we computed an implied rental based on only 40% of ancillary usage for Industrial properties.

Between Commercial Cat 2 – Upper versus Industrial Fringe – Upper range
• A comparable $6.5 versus $7.625 psf of rental

Between Commercial Cat 2 – Lower versus Industrial Fringe – Lower range
• A comparable $4.37 versus $4.625 psf of rental

If you compare only the usable ancillary space allocated for office use, the industrial properties are almost on par with commercial offices, in fact industrial property is slightly more expensive if we did not factor the other usable 60% space for industrial use.

However Industrial B1 properties confer the advantage of using the rest of the 60% space for designated industry use. This pretty much lowers the cost of the overall space.

Commercial Activities Redefined As Industrial Use

Industrial B1 zones are scattered across Singapore interspersed amongst commercial and residential areas.

In the past, industrial buildings are dreadful looking with dirt, grime and noise.

Newer industrial buildings such as those by Ascendas are well built with many amenities.

Some E-business activities have been regarded as Industrial uses and can be considered as part of the 60%.


Table 4: E-Business Activities regarded as Industrial use (Source: URA, Non-resi-handbook, Reference 3)

As a result of this classification, many banks and insurance company’s call centres, IT centres, Data centres have been moved to Business Parks, Industrial B1 and B2 zones such as those in Kaki Bukit, Changi business parks. Many of these activities were previously considered supporting office functions of Banking and Finance are now considered “Industry”.

With these new definitions, it eases business cost pressures on such commercial activities, but shifted demand into Industrial properties.

Demand From Commercial Activities Diverted To Industrial Properties

Many newer industrial properties sitting on Business 1 (B1) zones are increasingly sophisticated and looking like Commercial buildings. In fact you might not even tell them apart unless you refer to the URA Zoning Master Plan.

Since industrial B1 zones are better located nearer to housing estates or regional centres and no longer mainly in Jurong, there is substantial advantage to break the zoning rules.

In 2009, retailer Mustafa has been issued with a writ of summons for operating a supermarket in the warehouse in Kallang Pudding road. Due to the rental price differential between retail and warehouse zoning, there is a lot of temptation to break these zoning rules.

In 2012, CEA issued a circular (Reference 4) to property agencies and Key executive officers warning agents against misleading marketing of Industrial properties in which agents purportedly talked up the potential of using the industrial properties.

In fact, many such breaches would never be found, as inspection would be costly and time-consuming. On top of that, the lines are greyed between commercial activities and industrial activities, meaning that it can be debatable whether there is an actual real breach or not. There is huge benefit to arbitrage the difference in rental yields, hence a lot of incentive to breach the zoning rules, softly or blatantly.

And in the URA circular issued to KEOs on CEA Practice (Reference 4), where URA stated, “However, URA recognises that certain non-industrial activities, such as ancillary offices1, staff canteens and showrooms are needed to support the predominant industrial uses.”

And in this circular, URA clarifies that it allows Showrooms to support predominant industrial uses. Hence giving Industrial B1 properties the legality to become commercial showrooms. The rental prices are even better for commercial showrooms. Allowing for showrooms in Industrial B1 zoned properties will significantly enhance the valuation for such industrial properties, especially those at level 1. Many showrooms tends to have on-the-spot retail functions, which are of course not allowed.


• E-businesses activities are being reclassified as Industry use and allowed in Industrial B1 zone. Many banks and financial institution’s back office, call centres, IT centres, data centres have moved to Industrial B1, B2 and business parks in search of lower rental. In essence this moves some of the commercial demand to industrial.

• There would be no benefit for a business to use only 40% of the space for ancillary use such as an office if they do not have a significant industry component to use up the 60% of the space. For example, there may be some industry where their Industry component may only use up 20 to 30% of the Industry space, while the office is 40%. Therefore there would not be substantial rental savings.

• Businesses such as IT, programming and info-communication would benefit the most as these industries would use up the full 60% for industry and 40% for offices. In fact you would walk into an such a factory/unit and you would not even feel its an “Industry”, rather there would be neat rows of office partitions and people working on their computers, just like another other commercial offices.

• As Industrial B1 zones are spread out across the island and no longer concentrated in Jurong (which is generally regarded as inconvenient location), there is a growing benefit to arbitrage the rental yield whether legally or illegally. The fact that URA sees a need to issue a Circular to all property Key executive offices (KEOs) as well as developers (Reference 3) attests to this growing segment of Commercial looking Industrial properties.

• Allowing for Showrooms within Industrial B1 properties will indirectly compete with Commercial retail zones. This creates a bigger arbitrage opportunity as Commercial retail has even higher rental compared to Commercial Offices.

• Now that Singapore has become the world’s costliest city, perhaps with these rules in place, Singapore could in time become the place where you see the most beautiful industrial buildings. Ascendas REITs, Mapletree logistics and various large scale industrial property owners are likely beneficiary of these policies with rents generally around $3 to $5 per square feet.

URA has an unenviable task of managing Master plan zones as it will not be easy. URA has done a great job in urban planning and zoning and I believe will continue to do so in the future. It just has to gradually tweak the rules to ensure that there is not too great an arbitrage opportunity between commercial zones and industrial zones. Enforcement may be an option, but unlikely to be economical.

References: –

1. Wikipedia, Albert Winsemius (1910-1996),https://en.wikipedia.org/wiki/Albert_Winsemius

2. EDB,

3. URA, Non-Resi-handbook, Some aspects of e-businesses considered as industrial,

4. URA,Circular No: CEA Practice Circular 3/12 URA/PB/2012/08-DCG, Misleading Marketing of Industrial properties
, 20 Jun 2012, http://www.ura.gov.sg/uol/circulars/2012/jun/dc12-08.aspx
Extract: “To ensure that limited industrial land is used mainly for industrial uses, the URA requires at least 60% of the total floor area of an industrial development to be used for core industrial activities. However, URA recognises that certain non-industrial activities, such as ancillary offices1, staff canteens and showrooms are needed to support the predominant industrial uses. Hence, such supporting non-industrial uses, together with other ancillary areas (e.g. lift lobbies and circulation spaces) are allowed to occupy up to 40% of the total floor area of an industrial development.”


1. URA, Fringe area, Category 2 Median Rental for Periods Q1, 2013 to Q1, 2015. (https://www.ura.gov.sg/realEstateIIWeb/comm/rentalOffice/submitSearch.action)


Category 1 refers to office space in buildings located in core business areas in Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area. Category 2 refers to the remaining office space in Singapore which are not including in Category 1.

2. URA Zoning description


What does iCompareLoan.com do?

www.iCompareLoan.com is a Loan Portal and a Mortgage & Loan broker, helping property buyers and home owners to get the best fit home loan and business owners obtain Business loans for business expansion.

Home Loan Report ™ is Singapore’s first Cloud based Home Loan Report ™ platform to be used by Property agents, financial advisors as well as other Mortgage brokers to prepare reports for their customers.

Home Loan Report ™ – Enterprise allows a property agent’s website to immediately add a loan section. Improve your Google Ranking, let’s viewers increase Time-on-site. Property or Finance sites that deployed Home Loan Report ™ – Enterprise loan section sees viewers stay on their site longer by between 30% to 350% after 4 to 8 weeks of installing the Embedded Loan Plugins.

About PAUL HO:

Paul holds an a B.Eng(Hons) Aberdeen University (UK) and a Masters of Business Administration (MBA) from a Macquarie Graduate School of Business (MGSM) Australia. He also serves as current President of Macquarie University Alumni Association of Singapore and Hon. Secretary of British Alumni.

He is founder of www.iCompareLoan.com, his articles have been syndicated/featured on STproperty, iProperty, BTInvest, TheEdgeProperty, Propwise, Propquest, Yahoo and TheOnlineCitizen amongst many other sites.

He has also given speeches, guest speeches, trainings and/or seminars at NUH Lunch time talk, iProperty, David Poh and Associates, Getty Goh’s Ascendant Asset property, NTU (Guest Lecture on SEO), Panel discussions at GPS Alliance, C&H, Skillup just to name a few.

He is passionate about helping people enhance their wealth and in making money work harder for them.

China $550 Billion Stock Wipeout Reminds Traders of 2007 Catastrophe

SSEHotTemperatureWith the ever increasing temperature of the China Stock Market, are you aware of the pitfall or the potential bargain?

Read on the following article for more detail. Just take note, never ever place all in one shot, instead timed and break it up into 3 entry which applied for both taking up position and profit taking.



The rout wiped out about $350 billion of market value in a week on the Shanghai and Shenzhen exchanges. It so traumatized traders that eight years later they still refer to the decline by the date it began: the 5/30 catastrophe.The milestone for the modern Chinese stock market, which began in 1990, started on midnight, May 30, 2007, with Hu Jintao’s government unexpectedly announcing it would triple a tax on stock trading. The plunge sparked by the pronouncement had followed a breathless rally, making it eerily similar to last week’s events.

On Thursday, stocks erased almost $550 billion in value after surging 143 percent on the Shanghai Composite Index over the past year. Traders could be forgiven for a wave of deja vu mixed with a dollop of dread: In 2007, stocks recovered from their May losses only to drop more than 70 percent over the next 12 months from an October peak.

The Shanghai Composite gained 1.9 percent at 10:30 a.m. local time Monday.

Here’s a look at the similarities and differences between China’s markets then and now.

What’s similar:

* Timing of declines: Both selloffs followed rallies that sent the benchmark index up more than 100 percent in just months.

Thursday’s tumble in Chinese stocks came after brokerages tightened lending restrictions and the central bank drained cash from the financial system. The Shanghai Composite shed 6.5 percent and fell another 0.2 percent in volatile trading on Friday.

On May 30, 2007, the Shanghai gauge also tumbled 6.5 percent after the government raised the stamp tax to 0.3 percent from 0.1 percent. The measure aimed to cool the stock market after it doubled in about six months and almost quadrupled from the end of 2005.

By June 4, the benchmark had lost 15 percent. The market then started to stabilize and rose another 66 percent to an all-time high in October 2007 before tanking again as the global financial crisis raged.

* Rookie traders: The two stock rallies were fueled by record amounts of new investors, increasing fluctuations.

About 29 million new stock accounts have opened this year through May 22, almost as many as in the previous four years combined, according to the China Securities Depository & Clearing Corp. Margin debt on the Shanghai exchange has soared more than 10-fold in the past two years to a record 1.35 trillion yuan ($220 billion) on Thursday.

In the first five months of 2007, more than 20 million stock accounts opened, four times the amount in all of 2006. Margin trading, or investing with funds borrowed from brokerages, wasn’t allowed then.

* Initial public offerings: In both instances, a flood of new companies came to the market to take advantage of rising share prices. More than 120 newly listed companies have started trading so far this year, almost matching the total for all of 2014.

In 2007, PetroChina Co.’s 67 billion yuan ($11 billion) IPO was “one of the catalysts” pricking the “bubble,” Hao Hong, the chief China strategist at Bocom International Holdings Co. in Hong Kong, wrote in a note on May 28.

What’s different:

* Monetary policy: China’s economy was booming in 2007, prompting the central bank to extend a policy of raising interest rates for a third year. Higher borrowing costs eventually helped cool the market.

This time, policy makers are cutting interest rates as the economy slows, bolstering stocks. The People’s Bank of China lowered its benchmark for the third time in six months to 5.1 percent on May 11. The central bank will further cut it to 4.85 percent by December, according to economists surveyed by Bloomberg.

* Valuation: While stocks have become more expensive, price-to-earnings ratios are still lower than in 2007. Trading at around 18 times forward profit, the Shanghai benchmark is about 60 percent cheaper than at its at peak of 2007, data compiled by Bloomberg show.

* Liquidity: Unlike in 2007 when the Chinese market was largely off-limits to foreign investors, authorities have recently accelerated the accessibility of stock trading, luring more overseas funds.

A link between the Shanghai and Hong Kong exchanges established in November allowed international investors greater access to the local market. A similar program between Shenzhen and Hong Kong is due to start this year. Global funds investing in China added more than $4 billion in the week through May 27, more than double the previous record set in 2008, according to data provider EPFR Global.

* Government support: Policy makers repeatedly warned investors of risks in the stock market in 2007. This time, they’ve voiced their support. As the government tries to lower corporate debt levels, the equity market has become a more important venue for companies to raise funds, according to Andrew Sullivan, head of sales trading at Haitong International Securities Group in Hong Kong.

By moving money away from the “shadow banking” system, it makes investments “more controllable,” Sullivan said on Bloomberg Television.

“That’s where they want to keep it,” he said.

Mortgage Interest Rates – Key Factors that Impacts it

With the ever increasing chances of a climbing interest rate, it make much sense to switch from floating to fixed interest rates. Click on the following links which could helping you, to make comparison between different banks loan.

Bank Loan
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And i will like to share this article by Paul Ho, on the key factors that may impact mortgage interest rates from http://iCompareLoan.com.


best-mortgage-interest-rates-01Mortgage Interest Rates  – Key Factors that Impacts it

Interest Rate

Interest rate charged is the reward for taking the risk on the capital. Interest rate is often referred to as the “cost of funds” or hurdle rate.

Risk to Capital

If the lender perceives a higher default risk on capital lent out, the higher the interest demanded. The causes to credit risks can come from shocks to the financial system from within the country or beyond. As the world’s financial systems are increasingly interlinked, any credit event far away can increase potential default risk.

Demand for funds

The increased demand for funds when it outstrips the supply will also cause interest rates to rise. Genuine demand of funds comes from the industry’s need for investment. Industry will borrow money for investments if they think their investments returns can better the interest rate. This type of capital demand can help a country increase its productive capacity.

The other types of demand are for household consumption such as housing mortgages, car loans, renovation loans or personal consumption.

Supply of funds

The supply of funds varies in each country. The supply of funds can come in local currency or foreign currency. The supply of funds generally comes from the banks. The banks in turn receive their funds from equity and depositor’s funds. These funds are then lent out to borrowers, less off capital reserves requirement such as BASEL III to maintain the stability of the banks via a capital adequacy ratio.

Financial institution having excess capital may then lend these funds to other financial institution other on an over-night basis, 1 month, 3 months, 6 months and so on. This is referred to as the interbank rate or benchmark interest rate. In Singapore it is referred to as the Sibor rate, in London, it is referred to as the Libor rate, in the USA it is referred to as the Federal Funds Rate (overnight rate).

The supply of funds in a country depends on the money supply and the amount of depositor’s funds within a financial system. And in recent decades, the availability of credit (Debt) also increases the supply of funds, and is further complicating the issue of funds availability. The effect of credit (Debt) on the supply of funds is not yet fully understood.

Government Intervention

A regulator or central bank usually intervenes in the overnight funds market. The effects of intervention then filters through to the rest of the tenures of the interbank lending rate.

If there has been a major project within a country, and this entity is borrowing huge amount of funds within a short period of time. And assuming that the financial institution then borrow from the interbank market, that may cause overnight funds rate to spike for several days to distort the interest rates. In such cases, the bank’s treasury department may then file a notice/report to the regulator informing the regulator of such a transaction. The regulator may decide to intervene by pumping in funds to smooth out the volatility.

Core Inflation and headline inflation

Core inflation measures the more constant inflation over a longer period, This helps any regulator to avoid knee jerk policy reaction. Headline inflation measures the current inflation and can be impacted by short-term supply and demand imbalances, causing temporary spikes and troughs in pricing. Every country varies in their measurement of inflation.

When Core Inflation is on an uptrend, it can start to erode purchasing power and real growth. Rise in Core Inflation primarily caused by the economy overheating may lead to intervention via increasing interest rates.

Core inflation can rise when a nation is approaching full employment. Two main factors that contribute to the increase in disposable income are, higher total employment, the other reason is potentially higher wages due to labour crunch.

More disposable incomes can push up prices of goods and material. “Full employment” seems to be around 4% for the US economy. Interest rates may have to rise to cool down the economy.


Chart: USA & UK Unemployment Rate 1990 to 2015, (Source: Trading Economics)

GDP growth

When a country’s total gross domestic production grows too quickly, it can cause Core Inflation to rise. For example, if a country’s GDP grows by 5% and inflation grows by 6%, this means that the country have negative real growth. When an economy grows at a fast rate, it is usually accompanied by a higher inflation rate as industry clamour for limited supplies of raw materials, and pushes production toward or beyond capacity. If income does not keep pace with inflation, this can cause social unrest. A regulator may hence pull the brakes on the economy by increasing interest rates to cool down the economy. Generally interest rates should somewhat track inflation, i.e. high inflation leads to high interest rates. However interest rates can be kept artificially at a certain level for extended duration of time through intervention.

Note: Many factors are at play and another chapter needs to be devoted to this topic.

Cross border Interest Rates

As the world’s major economies are increasingly interlinked, policies and regulations in other countries may affect another country. If for instance the global environment is rising in interest rates and going on a reduced risk appetite mode, then all connected economies will be affected competitively. Funds may then move away to seek higher returns via higher interest rates (all factors being equal).


Chart: USA Overnight Fed funds rate Vs Sibor overnight rate (Source: iEconomics)

By observation at the Chart of USA overnight fed funds rate versus Sibor overnight rate, we can somehow see that these two economies have a somewhat correlated interest rates movement. It is hard to assess whether it is a matter of competitive pricing, Funds flows or purely some form of pegging. If these two markets are highly correlated, then it would be interesting to know which is the leading indicator and which is a lagging indicator.

Funds Flows and Exchange Rate

The movement of capital across the globe has implications on each country’s economy. Some developing countries have higher percentage of corporate and household debt denominated in foreign currency and therefore at a greater risk from sudden funds arrival and withdrawal from their markets. Money supply in local currency may also suffer from withdrawals of deposits and repatriation of profits to foreign markets.

Exchange ate plays an important part for investors parking their funds in any country. If the investment currency is expected to weaken significantly against the investor’s base currency, investors may then decide to withdraw their funds from the invested currency.

(However do note that investors do not park all their funds in a local currency, they can park their funds in other currencies, usually in USD.)

Interest rates may have to rise when funds become scarce. Alternatively some country’s regulator or banks may have mechanisms to react preemptively to raise interest rates to cushion against a weakened currency by increasing interest rates.

Usually, it is assumed that the regulator works closely with the financial institutions to set interest rates via the following methods: –

  • Morally persuade Financial Institutions to alter interest rates. (Moral persuasion)
  • Suck up excess liquidity or provide liquidity. (Market intervention)
  • Enact policies to encourage or discourage caution. (Regulatory policy levers)

Many countries regulate the economy by varying the interest rates to regulate the speed of the economy. These monetary policy levers are effective for countries with a large domestic economy relative to trade, such as the USA where trade accounts for 13.5% of the GDP in 2013 (World Bank)

Some countries such as Singapore where trade is 2 to 3 times the GDP, import prices contribute a higher percentage towards inflation relative to domestic prices (Reference 1). Singapore manages its exchange rate to manage import inflation. Hence there may be less impetus for intervening in the interest rates, except as a preventive measure to stabilize exchange rate movements. (Note: While MAS is believed to maintain stability to reduce interest rates volatility through intervention, it is only a presumption that MAS intervenes in the market to set interest rates by itself or via proxies.)

Shocks to the Financial System

Shocks to the financial system (systemic risks) may cause bankruptcies and defaults.

There are many possible shocks to the financial system, just to name a few: –

Exchange Rate Volatility via Quantitative Easing

Quantitative Easing (Printing money) leads to currency devaluation. A currency which is devaluing may need to raise interest rates to slow down its devaluation as compensation to investors for holding the currency. Financial institutions and fund houses with un-hedged cross currency borrowings may end up bankrupt leading to a cascade of possible defaults. (A case being the recent unexpected de-pegging of the Swiss franc to the Euro, which caught many by surprise)


 Chart: Euros per 1 CHF 2010 to May 2015 (Source: XE)

As a result of this de-pegging of the Swiss francs to Euros, the Swiss Francs appreciated a lot versus the Euros. As a result, the Swiss National Bank set its interest rates to -0.75% (Reference 2) to discourage people from holding Swiss Francs and to try to weaken the Swiss Franc. Investors (with base currency in Euro) will bear with negative savings rates if they expect the Swiss Francs to strengthen more than the negative deposit interest rates.

Sovereign Debt Defaults

Slow economic growth and high sovereign debt especially in European nations are risky. Budget deficit causes potential defaults. Any possible risk of default or downgrade of the economy could cause interest rates to swing upwards further escalating risks. Sovereign bonds could become worthless causing a cascade of asset losses and bankruptcies for investors.

Other Troubled Assets and Toxic Assets

Banks typically hold very little equity and are over-leveraged. Hence asset depreciation or write-downs (in the form of loss of asset value) could make the banks insolvent. Hence the Basel Accord was formed to mandate minimum reserve liquidity in the world’s banking systems (Reference 3). Increase in the minimum capital adequacy ratio (CAR) means that the banks will have less capital to lend out and hence banks may demand higher interest rates.


The above are some of the key factors that affect interest rate movements. It is inherently hard to decipher and predict the time frame of interest rate movement. Many more credit events and unexpected shocks await which could severely impact interest rates.


References: –

  1. Singapore’s nominal GDP, USD $298 billion (2013). Total imports SGD $362 billion in 2015. Total Exports SDG $449 billion in 2015. (Source: Trading Economics.com)
  1. Press release – Monetary policy assessment of 19 March 2015

(www. snb.ch/en/mmr/reference/pre_20150319/source/pre_20150319.en.pdf_)

The Swiss National Bank (SNB) is leaving the target range for the three-month Libor unchanged at between –1.25% and−0.25%. The interest rate on sight deposits with the SNB remains at –0.75% and the exemption thresholds remain unchanged. Negative interest helps to make it less attractive to hold investments in Swiss francs. Overall, the Swiss franc is significantly overvalued and should continue to weaken over time. The SNB will continue to take account of the exchange rate situation, and its impact on inflation and economic developments, in formulating its monetary policy. It will therefore remain active in the foreign exchange market, as necessary, in order to influence monetary conditions.

The SNB’s conditional inflation forecast has been adjusted substantially downwards compared to the December forecast. Together with the sharp fall in oil prices, the appreciation of the Swiss franc since the minimum exchange rate was discontinued moves inflation further into negative territory for a short period. For 2015, the SNB has revised its inflation forecast downwards by 1% percentage point to −1.1%. Inflation reaches its low point in the third quarter of 2015, at –1.2%. Thereafter, forecast inflation rises more rapidly than in the December forecast, due to the interest rate reductions since the last monetary policy assessment. Nevertheless, in 2016, inflation will amount to –0.5%, which is 0.8 percentage points lower than in the December forecast. Not until 2017 will inflation move into positive territory again, at 0.4%. The conditional forecast assumes that the three-month Libor remains at –0.75% over the entire forecast horizon, and that the Swiss franc weakens.

In December, the SNB expected annual growth of some 2% for 2015. With the appreciation of the Swiss franc since mid-January, this forecast has had to be revised. A noticeable weakening in the economy may be expected, particularly in the first half of the year. For the year as a whole, the SNB now only expects real GDP to increase by just under 1%. Given this weakening, appreciable underutilisation of production capacity may be expected in the short term. Unemployment is likely to increase moderately. The anticipated strengthening in the global recovery will have a supportive effect.

  1. Understanding of Basel III. (Source: vimeo.com/59895335)

About PAUL HO:

Paul holds an a B.Eng(Hons) Aberdeen University (UK) and a Masters of Business Administration from a Macquarie Graduate School of Business (MGSM) Australia and has distinctions in finance and economics. He also serves as current President of Macquarie University Alumni Association of Singapore.

He is founder of www.iCompareLoan.com, his articles have been syndicated on STproperty, iProperty, BTInvest, Propwise, Propquest and Yahoo amongst many other sites. He is passionate about helping people enhance their wealth and in making money work harder for them.