What's up?

Singapore looks likely to be the Asian economy that is set to be worst affected by a US recession said economist. This is because it has one of the most open economies around and to add to that, a large manufacturing base. But so far, the impact of a US recession on Singapore is less significant than in previous downturns. This may be attributed to the more aggressive, more proactive policy steps taken by the US government and to a large degree, co-ordinated response from a couple of key economies.

On Singapore's side, the government has taken a few key steps: a brake on its land sales program, more help for its SMEs.. so on. Most of these government schemes involve the government risk-sharing with banks on loans to Singapore companies..all these to shore up confidence in our banking system. Manufacturing remains the worst hit. Sentiment driven sectors such as financial and real estate will be affected by the continued weakness in investor confidence, as will tourism and hotel industries.

However, there is still alot of money going around capitalising on the down turn. If the unemployment problem is kept under control, with its vast savings, the economy is expected to ride this out smoothly.

Meantime, there are areas where HDB flats are softening in price. They remain a good catch. For those who own HDB flats, consider renting them out. A couple of companies are making pretty good acquisitions, YTL, Capitaland etc.. Capitaland for example is sitting on a healthy balance sheet and cash hoard of almost $4billion. What can we learn here? According to CapitaLand boss Liew Mun Leong, "Crises are the best time to build up your relative combat power. In good times, prepare for bad. And in bad times, prepare for good." Meanwhile, quoting US economist Paul Romer, "A crisis is a terrible thing to waste."