Finanical Crisis..

It looks like the financial crisis has finally overflowed into the economy. Althought there was wide spread talk of the crisis, it was contained to mostly financial firms for the past few months. Right now, in what is a sure sign of the spillover, the "Big Three" carmakers in the US are appealing for government bailout.

It seems this financial crisis is going to overshadow the Asian economic crisis in 1998. And it's exactly 10 years on. Talk about financial cycles. Job cuts have been creeping into the news lately too. DBS have started slashing 900 jobs, Citigroup is cutting a near-record 50,000 jobs worldwide. It is predicted that this will get worse going into 2009. I'm still a student but I can feel the fear in the air. This crisis is bringing back memories of 1998. Things were really bad then and I can't imagine it is going to be worse next year.

Already, the STI has free-falled to 1,665 points, that's more than half it's value slashed from early last year. I remember reading in the papers then that analysts were saying it would breach the 4,000 mark by this year. In just one year, things have changed so drastically.

But admist all the gloom and doom, there is always good news. Especially for the uninvested. Now is a good time to start picking up stocks. Of course, do the due calculations first and pick up the discounts. There is always some people who would say that the stocks will continue to fall. But if you are already buying at a (huge) discount, what's there to fuss about? The stock market is awash with prizes now. Certainly wished I had the capital to pick some up. Well, anybody out there wants to invest in my mutual fund?

Understanding Plastic Recycling and HDPE!

Plastic recycling is essentially the collection of waste or scrap plastic and turning them into useful products again. Take note that the products might be totally different from its’ original state, an example would be a plastic bottle being recycled into toys, etc.

All plastic that can be recycled has a resin identification code and one of the most common forms of recycled plastic is High Density Polyethylene (or HDPE) which as a resin code of 2.

HDPE can be used for a wide variety of applications such as containers (think Tupperware, milk jugs, laundry detergent bottles, etc), folding tables and chairs, plastic bags, natural gas distribution pipes, snowboard rails/boxes and refillable bottles.

In the process of recycling HDPE, scrap HDPE is produced. Scrap HDPE comes in many different forms and can also be used for many different purposes. Unfortunately, post-consumer HDPE (which is HDPE that has already been used as consumer goods and have been discarded) are being wasted every year by the thousands of tons. This is very detrimental to the environment, not to mention a perfect waste of a useful manufacturing material. Fortunately, there are companies out there which purchases scrap HDPE for further recycling.

If you’re interested to learn more about plastic recycling and HDPE, please visit HDPE Material.

DRE Public Talk: The Potential and Challenges of the Real Estate Funds Business!

Wednesday (26/03/2008) 12pm at LR423.

Mr Jonathan Yap gave a presentation on his views regarding the real estate business and gave specific insights on how Ascendas India Trust (a-iTrust) is run. I was priviliaged enough to be able to attend his talk. Below is a brief outline of what he covered.

Changing Market Dynamics
Investments into Asia have grown over the years. Surprisingly, this is actually due to the greying of the world's population. Currently, 11% of the world's population is >60 years old and that number is expected to hit 22% by 2050. This leads to retirement/pension money increasing and thus more money have been pumped into investments in developing economies, including Asia. With the globalisation of sources of funding, the accessibility of funds have gone from local to global with the interest in cross-border transactions increasing (think SWFs and foreign investors, etc). In Asia, REIT IPOs have generally been oversubscribed and currently, Asia REITs distribution yields have substantial spreads above 10-year government bonds. Just in Japan and Singapore alone, the REITs market cap have grown by almost 3 times to S$60 billion over 2005 to 2007.

Tapping on Real Estate Funds
There are several key advantages in tapping into REITs. First of all is the streamline operations of these funds. Real estate funds bring their niche expertise to the table, including development expertise, management expertise and local deal sourcing expertise. In addition, there is an add-on for capital market capabilities including fund structuring, capital raising and fund management.

The Ascendas Business Model
Ascendas employes a three-pringed strategy to provide maximum shareholder value. They are creating assets, enhancing asset value and finally unlocking the asset value. Ascendas manages about 7 funds (2 public and 5 private) including a-reit and a-iTrust as their public funds. The key investment highlights of a-iTrust include a high quality portfolio managed to international standards, strong growth potential, unique three-pronged acquisitions growth strategy, exposure to the booming Indian economy and Ascendas sponsorship and strong corporate governance.

a-iTrust closed up 2 cents to S$1.04 per share yesterday (Friday, 28/03/2008).

About the Speaker

Mr Jonathan Yap is Executive Vice President, Real Estate Funds Business, where he focuses on the formation of new private funds for Ascendas across the Asia region and developing business synergy across these funds.

Mr Yap is concurrently CEO of India Funds, overseeing Ascendas' India-focused funds business, including the Ascendas India Development Trust (private fund) and and the award-winning Ascendas India Trust (listed on SGX-ST).

About DRE Public Talks
These talks are organised by the Department of Real Estate and are opened to members of the public, students and staff of SDE. If you're interested in finding out how to attend these talks, drop me a message and I'll forward the registration links to you the next time there is a talk.