best property network

According to SCMP story by Wong Ka-chun on today (Jul 28, 2008) the property developer is to test waters in two-week pre-marketing.

Longfor Properties is a Chongqing-based property developer.  Hong Kong’s South China Morning Post (SCMP) claims Longfor is proceeding with its Hong Kong initial public offering to raise at least US$1 billion, even with market sentiment showing no signs of significant improvement citing ’sources’.

This comes after a report last month Longfor and another developer were considering delaying the listing:

Thomson Financial News
China’s Longfor Properties, Fineland Group may delay Hong Kong IPOs - report
06.09.08, 10:06 PM ET

HONG KONG (XFN-ASIA) - Longfor Properties and Fineland Group, two mainland-based property developers, are considering delaying their Hong Kong initial public offerings (IPOs) following the weak debut of Central China Real Estate here last week, The Standard reported, without identifying its source.

Longfor had planned to raise about 7.8 bln hkd from the Hong Kong IPO, while Guangzhou-based Fineland Group planned to raise up to 200 mln usd.

Central China Real Estate ended nearly 3 pct below its IPO price on its trading debut last Friday.

Bangkok - The Thai government on Tuesday announced an economic stimulus package amounting to an estimated 1.4 billion dollars in reduced fuel taxes, slashed utility bills and free transport for the poor.

Prime Minister Samak Sundaravej announced six measures aimed at cutting costs for the poor including reduced excise taxes on diesel and bio-diesel fuels, a price freeze on liquified petroleum gas (LPG) for household use, slashed water and electricity utility bills for households using minimal amounts, free transport on 800 buses servicing Bangkok and free tickets on third-class seats in the government-owned train service nationwide.

Samak said the measures, which will go into effect on August 1 and last for six months, would cost the government 46 billion baht (1.37 billion dollars) in lost revenues. The tax cuts on diesel and bio-diesel will start on July 25.

As a result of skyrocketing world oil prices and food costs, Thailand’s inflation hit 8.9 per cent year-on-year in May and could reach double digits this year.

Thailand announces stimulus package aimed at helping the poor

Bernanke gloomy on housing, economy

CNN Money

Hearing eyes Fannie, Freddie and banking crisis - Jul. 15, 2008

I’m sure the fact the the US President and the US’ top two financial officers come on TV to pass us the message that everything is under control and there’s nothing to worry about means we can put our heads in the sand.

No, there is inflation, and the economy is clearly down.

So what’s safe? I’m no economist, but if banks are potentially unstable over $100k, there’s commodities, silver, gold, and maybe … property?

But only property bought in the right place, location, location, location - remember.

And at the right price. In many businesses, you often make your money when you buy. I think the same could be true of property at this juncture.

Sell at the peak, buy when the prices start going up again, or when there’s blood on the streets - let’s hope we can avoid the latter.

MADRID (Thomson Financial) - Leading Spanish property group Martinsa-Fadesa said on Tuesday that it was declaring itself insolvent, having failed to raise a loan as part of a refinancing package.

The company said that a board meeting late on Monday had decided to make a request to be declared in breach of payments.

This would prevent its crisis from becoming ‘irreversible and having grave repercussions on creditors and the interests of all shareholders.’

Martinsa-Fadesa, which is quoted on the Madrid stock market, is a leading property group in Spain.

The group said that despite many attempts, it had been unable to obtain a loan of 150 million euros needed as the basis for refinancing.

On Friday, the group had requested an extra delay to raise the loan as part of a plan to refinance debt of 4.0 billion euros.

Martinsa-Fadesa has assets which were estimated to be worth 10.8 billion euros, and it employs 880 people.

Source : Thomson Financial

Spanish property group Martinsa-Fadesa says it is insolvent - Forbes.com

Fears about the extent of the economic problems facing Spain intensified yesterday when the country’s largest property developer filed for bankruptcy.

Martinsa-Fadesa, whose interests span apartment buildings, hotels and golf courses, said that it had been unable to secure a €150 million (£119 million) loan from the banks and creditors that hold its €5 billion of debt.

But remember the back-drop - a financial crisis caused by tightening, almost halt in lending:

More than 700,000 houses were built in Spain in 2006, more than Britain, Germany and France combined, but the market ground to a halt last year amid rising interest rates and tighter lending conditions from banks worried about the sub-prime crisis in the United States. House prices in the country are falling at the fastest rate for a decade.

Spain’s largest property developer collapses - Times Online

Freddie Mac, Fannie Mae are safe, so are bank deposits (up to US$100,000, the federal deposit insurance limit.)

In announcing the the two companies are somewhat akin to offspring of the government, the government also said they could not let these two fail as between them they hold or guarantee approximately 50% of all US (residential) mortgages.

Their collapse would likely lead to many more collapses at best and systemic failure, total collapse of the financial markets at worst.

Not to be underestimated.

Of course over the weekend, we also saw another US Bank fail : IndyMac which reopened under US Fed management.

News commentators of course ask, who pays the bill, answering themselves ‘US taxpayers.’

I think, however, they forget, that the result will be more money printing and therefore affect anyone holding US-dollar instruments - causing losses due to devaluing of the currency.

Of course anything denominated in US Dollars should go up as the effect of inflation hits. In real terms this may be preserving wealth, not making a profit, but I’d rather that than lose.

That’s why people are buying gold and silver.

And property could be another attractive investment to preserve wealth, potentially generate cash-flow or at least as a place you can live in.

Afterall, you can’t live in share certificates, or gold (unless you build a house out of it I suppose.)