Financial Turmoil

Each day brings a surprise...

and here is the exchange rate over 1-year period:

9KM Scenic Walk

The two recently-added pedestrian bridges, Henderson Waves and Alexandra Arch, complete a 9KM chain of greenery in the Southern Ridges, which consist primarily of three hill parks (Mt. Faber, Telok Blangah Hill & Kent Ridge Parks).

Henderson Waves, of 36m height and 274m across Henderson Rd, is Singapore's highest pedestrian bridge.

The Southern Ridges now boast the Forest Walk, a 1.3KM long elevated walkway at Telok Blangah Hill Park.

With 20 theme gardens, HortPark is South-east Asia's first one-stop gardening and lifestyle hub. The 23ha park has been open since Dec last year.

On paper, it would take about 2.5 hrs to complete the 9KM trail from HarbourFront MRT station to West Coast Park. But realistically, one probably needs about 5 hrs considering stops for drink and views. First-timers are advised to stick to the more scenic walk, from Marang Trail to HortPark.Bring along water, snacks and insect repellent. Parking lots may be limited (try Kent Ridge carpark B).

Condos at West Coast

I've been monitoring a few condos at West Coast area. Their transacted prices had risen by 15%~20% in the first 3 quarters last year; however they seem stabilized or even slightly declined since 4Q'2007.

The dotted line in the above figure means there are too few transactions in that month to draw a reliable curve.

Botannia by CDL & Capitaland was launched in May last year and now there are still 30~40 units on sale at the developer's showflat. It fetched the median psf of $864 in Oct '07, or 27% rise from its launch price. But the sales have slowed down since then: the URA data shows that only 3 and 8 units were sold in Nov & Dec, with the median price $855 & $839 respectively.

Right next to it are Carabelle by Sim Lian, Infiniti by Frasers Centrepoint and Monterey Park by CDL. The below assembles the cluster of condos over there (not to-scale).

Clementiwood (by Frasers Centrepoint) is a low-rise development at the further east of the above condo cluster and near NUS. The 99-yrs LH project was launched in early 1Q '2007 and was the benchmark for the property boom in the westward extension of the city area.

Stocks fall sharply

Global stock markets continue to plunge, extending yesterday's steep decline.

STI lost another 141 points by 13:30pm, followed yesterday's fall of 187 points (or nearly 6%), now at only 2776 down from its recent peak of 3876 on 11 Oct. last year.

Insurance for retirement

Longevity risk and retirement planning have been a hot topic since PM Lee Hsien Loong indicated in his NDP Rally Speech 2007 that the government intends to introduce some kind of mandatory annuity out of one's CPF min sum.

CPF savings currently earn 2.5% & 4% interest rate on ordinary account (OA) and Special, Medisave & Retirement accounts (SMRA). The first $60K earn an extra interest of 1% so the min CPF interest rates for 2008 & 2009 are 3.5% (OA) and 5% (SMRA) for most people. Setting aside the CPF min sum fully in cash, one will receive a monthly payment of $790 from his age 62 for about 20 years.

However, the available products on the market disappoint me, most using the 5.25% yield ONLY for illustration -- this figure is as good as nothing because it is by no means the company's commitment (not even its best estimate) but rather a cap yield imposed by MAS regulation. Buying annuity products from participating insurance company with the CPF min sum usually gets the insured much less than the CPF's $790 though it extends the monthly payment for life. But how many think that they will live significantly longer than age 82?

NTUC Income offers two relevant products:

Growth Plan is a single premium endowment plan with the initial investment and declared bonuses fully guaranteed at maturity. It can be purchased with cash, CPF or SRS.

• Projected yield* ranges 4.04% ~ 4.48% for the term of 10 to 30 years
• 125% of the premium together with bonus is payable in one lump sum upon death or total / permanent disability
• the sum assured is doubled if the death or disability is a direct result of bodily injury by accidents

*note: the actual returns on 10-yr term were 4.92% (1996-2006), 4.98% (1995-2005), 5.23% (1994-2004).

Classic Annuity ensures a regular and growing income stream for life. Investing the CPF min. sum ($99,600 as of 7/2007) at age 55 guarantees $523 plus a non-guaranteed bonus component of $633 ~ $1247 at age 62 & 87 respectively (assuming 2.75%).

Tan Kin Lian's blog on this subject is interesting and worth reading...

Great Eastern offers the following relevant products:

Endowment 5 is a five-year premium plan with policy term 10~20 years.

• Projected yields range from 3.29% for 10-yr term to 4.05% for 20-yr term.
• Optional protection against 30 major illnesses is available at extra premium.

Choice Investment is a single premium endowment plan.

• Projected annual returns range from 2.9% (6-yr) to 4.34% (25-yr)
• It attaches a 125% of the one-time savings amount as guaranteed life insurance.

Lifetime Income Plan is its annuity product. Investing the same CPF min. sum guarantees $535 monthly starting from age 62. In exchange of the bonus payout, it includes the death benefit being a lump sum of $104,948 minus what one has withdrew monthly.

The Canadian-based provider, Manulife Financial, recently launches a variable annuity product in Singapore, Secure Retirement Plan (US$).

• Over up to 10 yrs, the Guaranteed Withdrawal Benefit (GWB) increases from 100% to 150% of the subscription (i.e. 5% pa)
• Potential step-up on every 5th policy anniversary up to age 80 if the market value of the portfolio has risen & higher than GWB.
• By electing Income For Life at age 65 or older, a 5% pa of the GWB is receivable for life.

note: although the insured enjoys a guaranteed and relatively handsome 5% return for the initial 10 yrs, he may lose any investment yield over the subsequent 20 yrs while his drawing annually. The step-up mechanism makes up at certain extends but the chances are limited to every 5th policy anniversary. The insured will unlikely benefit unless the market steadily goes up over the period.

Taxi fare hikes

The recent taxi fare hikes raised the price of a cab ride by 5~35%. The Straits Times yesterday gave a 10KM taxi fare comparison table, together with the equivalent number of McDonald's Big Macs.

The fare in Singapore is U$6.2 (non-peak) / U$8.35 (peak), still lower than that in Taipei (U$9.20) and Hong Kong (U$10.20) but higher or much higher than fares in other Asia cities e.g. Beijing (U$3.40), Bangkok (U$2.00), Jakarta (U$2.10~2.65) or Kuala Lumpur (U$4.00~6.00).

The revised taxi fare is summarized below (for major companies e.g. Comfort, CityCab, SMRT and Yellow-top):

• Flagdown fare $2.80 for <=1 KM
• Booking fee $2.50~5.20 depending on if advanced or busy hours
• Meter fare $0.20 per 385m / 330m (>10KM) or 45sec. waiting
• Peak hours (0700-0930 & 1700-2000) 35% of metered fare
• Late nights (0000-0559) 50% of metered fare
• Other surcharge $1 ~ $5 for holiday, CBD or locations e.g. airport

Although cab companies are optimistic that the recent fare changes will raise drivers' incomes, cabbies complain that passengers are disappearing during morning and evening rush hours due to the 35% surcharge. A story on today's newspaper said that some cabbies waive the peak hour surcharge attempting to attract more passengers. They display "Not 35% surcharge for peak hours" or yell out "Taxi, taxi, no surcharge" while touting at bus stops.

Prime Taxis (Tel: 6778 0808) has not raised the taxi fare so far. Their peak hour surcharge remains at $2 for now.

Phuket, Phi Phi island

I made the second trip this year to Phuket and still much enjoy it. See photos of some beautiful scene...

The return airfare by Tiger Airways costs S$140 plus various taxes & surcharges of $146 -- nowadays the hidden "extra" for taxes & surcharges exceeds the airfare itself, especially when it comes to budget airlines and short-distance flights. Probably due to the peak season, it is more expensive than my previous trip in March, when the Jetstar airfare was only S$76 + taxes & surcharges $123.

I stayed with the same hotel, Patong Beach Lodge, at US$82 per night per room of 2 adults incl. breakfast. It was US$53 last time in March. The hotel is conveniently located in the short walking distance to Patong beach and to the main street for bars & massage houses. Though not as elegant as the near-by Holiday Inn, it is pretty clean, cosy and non-expensive...

Taxi fare from airport to Patong is standard, at 550 Baht per cab payable at a counter inside terminal; the driver does not take cash payment. Our driver drove very fast (probably... rude :) and took less than 45min dropping us at the hotel. He said he usually does as many as 7 round-trips a day in peak season.

The Phi Phi island day tour is at 1400 Baht, picking up at hotel lobby at 8am and back around 6pm. The ticket is available in many tour desks along the street, with list-price ranging from 2500 to 2800 Baht. It includes drinks & fruits on board, a buffet lunch and about 6 places / activities for sight-seeing, relaxing on beach and snorkeling, among them are Maya bay / beach, Phi Phi lay, Khai Nui Island... I'm also impressed by the tour guide who is friendly and caring and thanks everyone for coming back after the tsunami.

Among the two local beers, Chang and Singha, I prefer Chang beer as it is stronger and tastes like Carlsberg at some extends.

I can't remember the street name that is full of good bars and night activities, it faces the Fantasea at its east end and links the beach and the main commercial road (Raj-U-Thid Rd). It is the place that one shouldn't miss... Sitting in a bar by the street or walking along the street seeing people at the bars are both of fun and form an interesting scene for each other parties.