Holistic View on Car Loan Curb

 

MAS had introduced new car loan curb to raise financial awareness of aspiring car owners.

The new car loan curbs will allow aspiring car owners to weigh the pros & cons of buying and having a car.

Although COE had limit the amount of cars on the roads but it had lost it's effectivness due to current credit market,loans could be easily obtained at a low interest rate which fuel the demand for cars.The result is ever increasing COE price which show no sign of receding demand for car ownership.

From individual point of view,car ownership have become a luxury that only the cash rich or well to do people could possess it.

However from national interest point of view,it will benefit the country in the long run in terms of productivity.

The number of cars on the road will determine how congested the roads will be during peak hours and which in turn affect the productivity of a Nation.For example the new NSE(North-South Expressway ) will be build to reduce travel time from Yishun to city approx 10 minutes.Let do the math for a year.Assuming a person drive a car and commute to & fro from Yishun to city .

One Day : Save 20 min
One Year: Save 5000min (250 days x 20min)

That will translate into 83 hours of time that can be use for more productive usage;spending more time with familiy,more personal time,more innovate ideas to generate or more time to rest instead wasting it on road congestion.

Let say 50,000 people use the NSE to commute to & fro .

One Day :Save 1000000 min (20 min x 50000)
One Year:Save 250000000 min(1000000 x 250 days )

The mutiple effect is astonishing.Imagine for 10 years,the amount of time we can save is converted into more meaningful purposes.This will no doubt benefit our country in terms of real productivity.

STX OSV

 

The chart for STX OSV look promising;it broke above the trend line and move above the 10d MA with decent voulme.

This break through seems to coincide with the 3 new orders that STX OSV had announced on the late night of 14 Feb 2013.

For traders,it will be a long punt for intra day trading.However for investors who intend to hold long for this stock should start to evalute this stock due to several reasons:

-The Oz parties who have 12% of STX OSV had gradually reduce it's holding to approx 8%
-The 3 new orders are meant for 2014 to 2015 order book.The order book from 2014 seem to lag behind the previous 3 year

FY 2011                  - 23 ships
FY 2012                  - 24 ships
FY 2013                  - 24 ships
FY 2014                  - 13 ships
FY 2014 - FY2016  -10 ships

The crucial date to take note will be 26 of Feb which STX OSV will announced it's full year result .

Investors should keep a close look out on it's order book for this year as it is a gauging meter on how it's business is doing for the next few years.
 

Singapore Economy Time Bomb

The Government had introduced the latest property cooling measure few days ago and is the 7th measure since 2009.

The intention is not to crash the property market but to stablise and normalise the current situation.
The governement approach is obvious:using needle to deflate the hot air ballon instead of shooting it down.

We are in a similar situation as America,the collapse of housing price is one of the main factor that triggered the Sub Prime crisis and in the first place no one will ever believe housing price in America will drop, just like in Singapore.No one will believe housing prices for Singapore will drop too.Many people believe when the interest rate start to rise,we can start to see correction in property prices,however i believe when the prices of the property start to decline and stop raising ,that will be the start of the nightmare.

When the property price start to decline, people will be force to sell thier property away because when the market price of the property drop below the outstanding loan amount, the banks will do a margin call, requesting you to top up cash as collateral.If you cant pay,the banks will seize the property.Coupled with huge supply of property,the falling price can be fast and furious.

This time the cooling measure had included industrial property,we refer to the chart and the price index for industrial property had spike up from 2009,whereas the remaining year from 2000 to 2009 the prices is relatively stable.Obviously speculation is at work,this concide with the Governement measure to curb housing property price since 2009 and forced investors & speculators to move into industrial segment.Please refer to property price index chart.

http://www.singstat.gov.sg/stats/charts/econ.html

I strongly support the government move in curbing the property price and in a greater context,this will benefit our whole economy as the destablising factor will be remove thus bringing stability to our economy.