The condominium is located at River Valley Grove and not St Thomas Walk. The number of units sold earlier was not 10, but six.

BT also understands that the developer, Novelty Group, purchased the site for around $27 million ($450 psf per plot ratio) and not $76 million, as reported. This brings down its breakeven price to a fairly low level, making it possible for the developer to offer some discounts if it decides to do so, while still keeping the project profitable. In fact, other projects in the area have also been strategically lowering their prices. In that sense, the lower prices could simply be a reflection of weaker market conditions and not of the developer. We are sorry for the errors.

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The bank, which is struggling in the sub-prime crisis and whose shares slumped to a new all-time low on Monday, also said UBS Chairman Peter Kurer, its CEO Marcel Rohner and other executive board members would not get any bonuses this year.

Starting from 2009 UBS top managers’ bonuses will be blocked for at least three years instead of being paid immediately.

Managers will receive variable compensation if UBS results warrant.

‘UBS takes the shortfalls of its current incentive system seriously and is revising its variable compensation model for the 2009 fiscal year,’ the bank said in a statement.

‘UBS is fully committed to taking its responsibilities seriously and correcting previous errors.’

Bankers’ pay at Switzerland’s top banks UBS and Credit Suisse Group AG has been the subject of hot debate in the country and almost a thousand people took to the streets of Zurich on Saturday to protest against what they see as bankers’ inflated salaries.

Some major European players like Deutsche Bank AG have already said they will cut bonuses this year.

HISTORIC LOW
UBS shares were down 4.4 per cent at 1048 GMT at 13.88 Swiss francs (US$11.63), slightly underperforming that DJ Stoxx index of European banks, which was down 3.5 per cent.

The stock had earlier dropped to a new historic law of 13.81 Swiss francs as pressure mounted over a US tax fraud investigation and investors grew increasingly concerned about money outflows.

‘The shares are coming under pressure because of the continuing US tax probe,’ a Zurich-based trader said. ‘Also, customers are annoyed and people are worried that the bank won’t be able to stem money outflows quick enough.’

UBS said last week Raoul Weil, head of wealth management and a board member, would step aside after US authorities charged him with conspiring to help rich Americans avoid paying taxes.

UBS shareholders will vote on the new pay scheme at an extraordinary shareholder meeting on Nov 27, which also has to approve a government-sponsored rescue package allowing UBS to offload the vast majority of its illiquid assets while getting a 6 billion Swiss franc cash injection from the state.

Pay will not be capped but the new system will make it practically impossible for UBS to pay out bonuses running to tens of millions while the company is losing money.

If it becomes apparent over time that the company’s profits were unsustainable or an individual’s performance was only short-lived, the manager’s pay could be cut, or even reduced to zero.

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Thaksin and his wife Pojaman Shinawatra, who married in 1976, divorced at the Thai Consul General Office in Hong Kong on Friday, the English-language Nation and Bangkok Post newspapers reported.

The stories could not be independently verified with the consulate, which is closed through the weekend, and repeated phone calls to Thaksin confidants were not answered.

Ministry of Foreign Affairs deputy spokesman Thanee Thongpakdi said on Saturday the ministry does not comment on individual cases.

‘We received a report that they went to the consulate to file for a divorce but it was not officially confirmed since it’s personal business and not a matter of the state,’ another foreign ministry official said on condition of anonymity because he was not authorised to speak to media.

Thaksin’s spokesman in Thailand, Pongthep Thepkanjana, said he could not confirm the reports.

Thaksin’s close political ally Jakrapob Penkair confirmed on Friday that the former prime minister was in Hong Kong, but he gave no details. Mr Jakrapob served as government spokesman while Thaksin was prime minister.

Thaksin was sentenced in absentia by a Thai court in October to two years in prison for violating a conflict of interest law while he was prime minister. Britain revoked his visa last week while he was travelling.

The Bangkok Post cited an unidentified political observer as saying the divorce could have been motivated to protect the couple’s assets, which are mostly held in the name of Pojaman.

Thaksin and his family declared assets of 15.12 billion baht (then worth US$406 million) when he took office in 2001, according to the National Anti-Corruption Commission.

Thaksin was prime minister until September 2006 when he was toppled in a bloodless military coup. He still wields influence with the government, and protesters have occupied the main government office in Bangkok for the past three months seeking to force his allies from power as well. — AP

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Much has been made of the selling of the past year, with some observers believing that markets have capitulated and that a bottom has been reached which, for the Dow Jones Industrial Average is around the 8,000 level, for the Hang Seng Index is around 12,000 and for the Straits Times Index (STI) is around 1,600. How plausible is this?

For the STI, the 1,600 level represents a loss of about 2,200 points or just under 60 per cent from all-time high, roughly equal to its fall during the regional crisis of 1997-98.

If you believe the present crisis presents conditions that are no worse than they were ten years ago because Asia is relatively well-insulated from events in Europe and the US, then there is a good chance that the local market is close to a bottom and that further downside, although still very likely, is limited from here on.

We’re not really qualified to pass judgement on the Hang Seng; suffice to say that its loss from an all-time high of about 31,600 to 12,000 is 62 per cent - not dissimilar to the STI’s fall over the same period. So again, although downside is still likely, chances are good that it would be limited.

However, while it is possible to argue that stocks in Singapore and Hong Kong (and most of Asia) may have capitulated as per the definition above, the same cannot be said of Wall Street, which, as the source of the world’s problems, remains overly optimistic, stubbornly reliant on the same investment bank model that has failed spectacularly over the past year and is very possibly still overvalued.

At 8,000, the Dow’s fall from an all-time high of 14,100 is only 43 per cent (its present loss at Friday’s close of 8,500 is under 40 per cent), which is significantly less than any of the world’s other major markets.

Consider for instance, that Japan, which has grappled unsuccessfully with deflation for almost 20 years, has seen its Nikkei lose almost 80 per cent from its own pre-housing crash all-time high of about 39,000.

As we have pointed out many times before in this and other columns, earnings estimates are still way too high in the US - Bloomberg’s summary gives the S&P 500 as trading at a historic earnings per share of US$47 and a forward figure of US$76. How likely is it that Corporate America will report such amazing earnings growth in the months ahead when the economic numbers are only expected to worsen?

On this note, research outfit Ideaglobal said of Friday’s US October retail sales fall - which was the worst monthly fall on record - that it reveals a terribly weak picture of the consumer, signalling a weak holiday season.

‘This is admittedly significantly worse than we anticipated which was for a more gradual decline in the wake of weakness posted in September..it remains difficult to assume that consumer spending will be supportive in the coming quarters. The combination of job concerns on behalf of many, the debilitating credit crunch and the multiyear correction in housing has helped bring the economy to a halt. Personal consumption should remain weak in the months ahead as consumers rein in on discretionary spending. This could be only the early stages of considerable declines in the months ahead’.

The bottom line is that that although markets everywhere may be close to capitulation, the same cannot be said of the source of the world’s problems, Wall Street.

Even if the US market does not correct by as much as others like say Hong Kong or Singapore, it would be reasonable to expect at least a 50 per cent loss from all-time high, given the magnitude of the country’s problems. If this does occur, the Dow would fall to just above 7,000.

So until investors see definite signs of Wall Street capitulating - or valuations coming down to more realistic levels - the advice would remain the same it’s been for this entire year - sell into strength and be selective about buying the dips.

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Dubai rental market on the rise

Concern about the credit crunch has created a movement in the Dubai property market away from sales towards rentals, according to industry experts.

More and more properties are being marketed for rent rather than being sold on. ‘Speaking to brokers, we have noticed a shift in the market. Now that more and more properties are being completed, property owners are looking to rent their properties to manage mortgage repayments,’ said property event director Pooja Rajani.

The trend has also been noticed by Riad Kamal, the chief executive of construction giant Arabtec Holding. He said that more developers would become more reliant on income from property rents as the housing sales market continued to slow.

‘There is a huge demand for rented accommodation and that’s what is escalating the rent prices. What we are going to see is a healthy correction as more accommodation becomes available, helping to reduce the rents which today are just very unreasonable,’ he added.

However not everyone is reporting property falls. ‘Contrary to popular belief not all property prices are falling in Dubai. We see a very clear end-user market emerging both in terms of rental, investors for buy to let and owner occupiers in projects that are completed or close to handover,’ said Vincent Easton, sales director at Sherwoods Property Consultants.

‘The fundamentals and dynamics of both living and working in Dubai are still strong meaning the medium to long term outlook for real estate investment remain sound,’ he added.

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Economic growth next year would hit the 3.5 per cent official target, with policies in place to contain the fallout from the global slowdown, Bank Negara Governor Zeti Akhtar Aziz was quoted as saying by The Star newspaper.

‘We are not in a recession and we don’t expect to be in one,’ Ms Zeti said. ‘In our case, we took action very early so there is the potential for containing the severity of the crisis.’

She said the central bank was ready to adjust monetary policy to support growth.

‘We have said that we would take swift action to support the economy,’ she said when asked where interest rates were headed. ‘If it is necessary, certainly we have the flexibility to do so.’

The fast-growing Southeast Asian economy has been bolstered by rocketing crude oil and palm oil prices in recent years but some analysts say a sharp slowdown is round the bend due to the economy’s heavy reliance on trade. Malaysian bank RHB has forecast domestic economic growth at just 1.5 per cent in 2009.

Malaysia’s official interest rate has been at 3.50 per cent for more than two years putting it among Asia’s lowest and Ms Zeti reiterated an earlier assessment that inflation had peaked and said it would ease to below 3 per cent in the second half of 2009.

She also repeated a pledge to ensure an orderly foreign exchange market.

‘In the near term, we are going to see volatility but the medium term underlying trend should be a gradual appreciation,’ she said, referring to the ringgit currency’s movements.

‘What is key to us is that the market remains orderly. The central bank will be there to ensure orderly conditions.’

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Speaking at a conference in Frankfurt, US Federal Reserve Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet said close cooperation would continue and central bankers had not exhausted all their policy options.

Central bankers also saw room for countries to act together with targeted spending programs to support growth, although formal fiscal coordination was unlikely.

‘The continuing volatility of markets and recent indicators of economic performance confirm that challenges remain,’ Mr Bernanke said in his address to the conference.

‘For this reason, policymakers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant.’

Mr Trichet said the spirit of intimate cooperation built up among central bankers as the financial crisis intensified was a major asset for the present and the future.

‘The world can count on a continuation of this fruitful cooperation among central banks and it can also count on the fact that this cooperation occurs fully in line with our respective mandates,’ he said.

On Oct 8, central banks cut rates globally in their first broadly coordinated policy action in history, as fears of a deep recession pushed aside worries over inflation.

The Fed has cut rates 4.25 percentage points since September 2007 to 1 per cent to counter the credit crisis and support the faltering economy. The ECB has cut by 1 percentage point since Oct 8 to 3.25 per cent, and both are expected to cut by another half a point at their December policy meetings.

The 15-nation euro zone economy shrank 0.2 per cent for the second quarter in a row, official data showed, signalling the bloc has fallen into its first recession since its creation in 1999.

US retail sales fell a record 2.8 per cent in October, the government reported on Friday, in the latest sign of the heavy toll the credit crunch is taking on US economic activity.

Mr Bernanke said he hoped leaders of the Group of 20 developed and emerging countries, meeting in Washington to try to find ways to tackle the crisis, would produce results.

‘What we should look for is for the leaders to establish some general principles, indicate a direction and to set a timetable for discussions for all of us in the central banks and finance ministries in other forms like the Financial Stability Forum to execute. I hope to see positive results,’ he said.

Fiscal cooperation
As the crisis bites, countries around the world have announced close to US$5 trillion in for bank bailouts and other public spending to support their economies.

China’s deputy central bank governor Su Ning said the country’s budget would fund a quarter of the four trillion yuan (US$586 billion) economic stimulus package and he hoped other countries would do their share.

‘Out of the four trillion yuan investment package, there is one trillion coming from the central government budget so in the next two years we are expecting an enormous fiscal deficit,’ Mr Su told the conference. ‘So I sincerely hope that all the countries across the world could cooperate.’

Mr Bernanke said formal global cooperation on fiscal spending was unlikely but since combined action was more effective than individual efforts, covergence was likely - a point also made by Bank of Israel governor Stanley Fischer.

‘There is no formal policy co-ordination around the world but there is the invisible hand of the intellectual climate,’ Mr Fischer said, while warning that extra spending was not appropriate for all countries.

‘It becomes respectable to expand fiscally much more than it was acceptable before, so I think there will be significant simultaneous action but not formal coordination.’

Mr Bernanke said steps that central banks have taken to ease liquidity strains and ensure short-term dollar funding around the world have led to improvements in credit market functioning, although he described those gains as ‘tentative’.

‘Financial markets remain under severe strain,’ he said.

The central banks of the United States, the euro zone, Britain, Switzerland, Canada and Sweden all lowered official rates by a half-percentage point.

Mr Bernanke said on Friday that the Oct 8 joint action had been motivated by an easing of inflationary pressures and increased indications of economic slowing in each country.

‘The coordinated rate cut was intended to send a strong signal to the public and to markets of our resolve to act together to address global economic challenges,’ he said.

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More than 6,200 advisors accepted a retention package offered by BOA that was targeted at the top-producing brokers, a spokesman for Merrill said.

Of the brokers bringing in US$1.75 million and more in fees and commissions, 99.3 per cent accepted a package that gives them a loan up-front equivalent to those fees and commissions and which BOA will pay down over a seven-year period.

In all, about 6,600 advisors who brought in more than US$500,000 for Merrill were eligible for a retention package.

Merrill expects most of its remaining 10,000 brokers who were not offered bonuses will also join BOA, the spokesman said.

BOA has said it will complete its purchase of Merrill by the end of the year. Shareholders of both companies are scheduled to vote on the merger on Dec 5.

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However, the monetary authority warned that growth in Southeast Asia’s biggest economy next year will be far less than its forecast of 6.5 per cent in line with the weakening global economy.

‘I would reiterate again that the country’s banking sector remains steady and solid, and is capable of serving the people at its best,’ central bank governor Boediono told a news conference.

‘Bank Indonesia is ready to meet the demand of cash from the banking system to meet customers’ demand. Bank Indonesia has also reinstated the short-term facilities to support the need for liquidity from the banking sector, especially under special circumstances,’ he said, without elaborating.

Later on Friday evening, the central bank held another news conference where officials repeated that none of the banks in the country faced liquidity problem.

Bank Indonesia Deputy governor Siti Fadjrijah said on Friday there has been rumours that two lenders in the country, PT Bank Danamon Tbk and PT Bank Artha Graha Tbk, faced liquidity problem.

‘These two banks have been rumoured to have liquidity problems. That is not true,’ she said, flanked by senior bank executives, including from Artha Graha and Danamon.

Danamon’s vice president director Jos Luhukay later also told reporters that Danamon did not face liquidity problems and had not requested liquidity assistance from the central bank.

‘These rumours, including on Danamon, if not treated properly could be very dangerous. I urge people not to pass on the rumours to others, and mobile phone text messages about the rumours,’ Mr Luhukay said.

The central bank said on Thursday a small lender, PT Bank Century Tbk, was having problems in settling interbank payments due to technical problems.

Bank Indonesia said operations in Bank Century had returned to normal on Friday and there was no threat to the banking sector.

Separately, Senior Deputy Governor Miranda Goeltom said economic growth in Indonesia would be lower than expected.

‘Our economic growth forecast of 6.5 per cent (for 2009) is no longer realistic. It will be far slower than that,’ Ms Goeltom told the news conference.

Last week Bank Indonesia said it would be tough for the country’s economic growth to top 6 per cent next year given current global economic conditions.

Indonesia’s quarterly economic growth has been averaging about 6 per cent since the end of 2006 and the government is targeting full-year growth of 6.4 per cent this year, despite the global credit crisis, in a bid to help reduce poverty and unemployment.

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Analysts say Hong Kong’s economy is heading for recession within the next six months, after four years of robust growth averaging 7.3 per cent annually.

Government revenues already appear to be falling with the government posting a HK$48.6 billion deficit for April-September, eight times last year’s HK$5.6 billion deficit for the same period.

A full-year deficit of HK$80 billion would reverse a record HK$123.7 billion surplus for 2007/08. It would also top a HK$63.3 billion deficit in 2001/02 when the government was suffering the effects of the bursting of the global dotcom bubble.

Deloitte said the government would remain in the red in 2009/10, forecasting a deficit of HK$20 billion, compared with the government’s forecast HK$49.2 billion surplus for 2009/10.

However, Yvonne Law, tax partner at Deloitte, said two consecutive deficits should be manageable because the government had huge fiscal reserves, totalling HK$444.3 billion at the end of September.

Volatile fiscal balances are a feature of Hong Kong’s government finances thanks to a small tax base - salaries tax is a flat 15 per cent and there are no sales or capital gains taxes. Two years ago the government proposed a goods and services tax to expand the tax base but was forced to abandon the plan in the face of public opposition.

‘The structural problem of a small tax base means that during an economic downturn (government) income falls but expenditure remains static,’ Ms Law said.

Government income will be hit by a 50 per cent drop in the stock market this year as well as falling property prices and worsening corporate profits.

Deloitte said contributors to its estimated HK$80 billion deficit would include a HK$29 billion decline in land premiums; HK$20 billion from falling stamp duty revenue; and HK$15 billion from a drop in corporate profits tax. Salaries tax would decline by HK$6 billion, it said.

Government expenditure, meanwhile, is rising as the government offered HK$40 billion worth of temporary tax concessions and handouts in its annual budget in February when the economy was still strong. In the summer it provided HK$11 billion in relief for the elderly and low-income groups to cope with rising inflation, which peaked at 6.3 per cent in August.

Chief Executive Donald Tsang said last month that the government faced a ‘huge’ fiscal deficit for the year ending March 2009 as a result of the global financial crisis but the government has yet to revise its initial forecast for a HK$7.5 billion deficit.

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