Asian markets rise on stronger US housing starts

Asian markets rise as stronger US housing starts suggest economy might be picking up

By Joe Mcdonald
BEIJING (AP) — Asian stock markets were mostly higher Wednesday after a jump in U.S. housing starts suggested the world’s biggest economy is picking up speed.

Shanghai, Seoul and Sydney all rose after major U.S. indexes gained Tuesday on news that November home resales jumped 7.4 percent, above a forecast 2.5 percent.

The housing figures, which came after upbeat earnings and forecasts from technology companies and more corporate dealmaking, countered gloom about third quarter economic growth being revised lower.

“It’s being driven by sentiment out of the U.S. and the fact that U.S. markets continue to hold up in the face of rather mixed data,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong.

China’s benchmark Shanghai Composite Index rose 12.70 points, or 0.5 percent, to 3,064.29, while Sydney’s S&P/ASX added 0.6 percent to 4,731.8. Tokyo was closed for a holiday after the benchmark Nikkei 225 added 1.91 percent on Tuesday.

Hong Kong bucked the regional trend, with its Hang Seng Composite Index shedding 10.21, or 0.1 percent, to 21,081.83.

Investors were closely watching U.S. markets in the absence of major Asian developments.

“The market realizes that as long as China remains strong, Asia is going to benefit, and as long as the U.S. doesn’t hit a major bump in the road, Asia will remain stable,” Daley said. However, he said that after recent strong gains, “I don’t think there will be a significant push higher.”

China’s government is forecasting full-year 2009 growth of 8.3 percent following a rebound driven by Beijing’s 4 trillion yuan ($586 billion) stimulus. Private sector economists expect growth of up 9.4 percent.

The Shenzhen Composite Index for China’s smaller second exchange added 11.10 points, or 1 percent, to 1,120.53.

Elsewhere, Seoul’s Kospi was up 0.2 percent at 1,658.3, while Singapore added 0.5 percent and Taiwan’s Taiex gained 0.6 percent.

Tuesday on Wall Street, the Dow Jones industrial average rose 50.79, or 0.5 percent, to 10,464.93 following the housing report by the National Association of Realtors.

The Standard & Poor’s 500 index rose 3.97, or 0.4 percent, to 1,118.02, while the Nasdaq composite index rose 15.01, or 0.7 percent, to 2,252.67. Both the S&P 500 and the Nasdaq are at their highest levels since last October.

That came despite a government report revising down U.S. third-quarter gross domestic product growth. The Commerce Department’s new reading showed a growth rate of 2.2 percent, down from the previous estimate of 2.8 percent. The growth, while smaller than originally believed, still managed to break a record four straight quarters of decline.

Oil fell 4 cents to $74.36 in electronic trading on the New York Mercantile Exchange.

In currencies, the dollar rose 0.1 percent to 91.69 yen. The euro was down slightly at $1.4248.

source: yahoonews

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Home sales likely rose again in November

Home sales likely rose in November to highest level since February 2007, spurred by tax credit
By Alan Zibel, AP Real Estate Writer
WASHINGTON (AP) — Home resales are expected to have risen to their highest level in nearly three years in November, as an extraordinary level of federal support has pulled the housing market back from the worst downturn since the Great Depression.

Economists project home sales rose 2.5 percent to a seasonally adjusted annual rate of 6.25 million, up from 6.1 million in October, according to Thomson Reuters. If accurate, it would be the third-straight increase and the best month for home sales since February 2007.

The National Association of Realtors’ report is scheduled for release Monday at 10 a.m. EST.

“Things are stabilizing,” said Pete Flint, chief executive of real estate Web site Trulia.com. “There is a significant amount of buyer interest out there.”

One encouraging sign, at least for sellers, is that prices are stabilizing and rising in some areas. About one in five sellers who listed their homes at the start of December cut their prices at least once, down from about one in four during most of the year.

Buyers last month were racing to finish their sales before the original expiration date of a tax credit. It was originally scheduled to expire on Nov. 30, but Congress decided last month to renew and expand it.

In addition to a credit of up to $8,000 for first-time buyers, homeowners who have lived in their current properties for at least five years can now claim a tax credit of up to $6,500 if they relocate. To qualify, buyers must sign a purchase agreement by April 30.

But now that the deadline pressure has lifted, many analysts expect sales to drop during the winter months and recover in the spring.

“Buyers have no sense of urgency now,” said Gary DeRosa, an agent with ZipRealty Inc. in Seattle.

And many experts caution that the pain for the housing market isn’t over. A record 14 percent of homeowners with a mortgage are either behind on their payments or in foreclosure.

Home prices are likely to start falling again as foreclosures make up a larger share of sales during the winter months, when sellers generally keep their homes off the market.

Prices fell 0.7 percent from September to October, according to a report released Monday by real estate data company First American CoreLogic. The company forecasts prices in large cities will fall about 4 percent before hitting bottom in March.

AP Real Estate Writer Alex Veiga contributed to this report from Los Angeles.
source:yahoonews

Don’t Buy Real Estate in December 2009

Washington Report: New Consumer Financial Protection Agency

by Kenneth R. Harney

Congress took a major step last week toward eliminating what has been a painful thorn in the side of home sellers, Realtors, home builders, mortgage brokers and appraisers for months.

As part of its financial and mortgage industry reform bill, the House voted to terminate the controversial Home Valuation Code of Conduct (HVCC) once a new Consumer Financial Protection Agency begins operations.

The new agency would assume primary federal responsibility for equal opportunity in credit, real estate settlement procedures, financial disclosures to borrowers, plus unfair and deceptive marketing in mortgages and other financial products.

The giant bill, nearly 1,300 pages long, now heads to the Senate, which is working on its own version.

But tucked away in the depths of the House bill is a section that provides unusually detailed instructions to the director of the new Consumer Protection agency. The legislation requires the director to quickly come with new national appraisal rules and standards covering all transactions.

On the day the new rules are adopted, Fannie and Freddie will be prohibited from using their much-maligned home valuation code.

Fannie’s and Freddie’s rules have been criticized for producing lowball, inaccurate valuations; cutting appraisers’ fees to the point where the most experienced professionals refuse to accept low-pay assignments; plus encouraging the use of inexperienced appraisers unfamiliar with local markets – and a long list of other problems.

The National Association of Realtors and the National Association of Home Builders have fought the code since it was first imposed last spring. Mortgage brokers and appraisers have circulated petitions asking Congress to ban it or impose a moratorium. One petition reportedly pulled in more than 100,000 signatures.

Now the House is on record as favoring the code’s termination.

Under the legislation, the consumer agency’s rules would require lenders to compensate appraisers their full fees, rather than splitting them with management companies and pocketing part of the money themselves.

It would also allow mortgage brokers and loan officers who are state licensed and registered under the federal “SAFE” law to order valuations and discuss them with appraisers, which they are not allowed to do under the Fannie-Freddie code.

The bill also permits home sellers, buyers and Realtors to ask appraisers to consider alternative market data and comparables without such requests being treated as “interference.”

Whether the Senate ultimately goes along with creation of the consumer protection agency won’t be know until next year.

But the House bill should be a warning shot to Fannie and Freddie that their controversial appraisal code may have a very limited lifespan.
source:realtytimes

Dubai World poised to press for loan extensions

By Rachna Uppal and Nicolas Parasie

DUBAI (Reuters) – Debt-ridden conglomerate Dubai World is expected on Monday to ask key creditors for more time to pay off its loans, but leave them none the wiser concerning their prospects of being paid back in full.

Saddled with a $22 billion debt pile and in need of restructuring, the Gulf Arab emirate’s flagship company is expected to formalise a request for a payment standstill at a meeting with some 90 creditors at Dubai’s World Trade Center complex.

Though important, the gathering will probably mark only an intermediate step in a lengthy process, with banking sources anticipating no detailed proposals on the terms of the potential standstill to be discussed.

“Providing clarity is clearly the number one priority,” said Raj Madha, banking analyst at EFG-Hermes. “Obviously a standstill is not ideal. But a standstill with visibility of when payments will be received or the extent of these payments would be sufficient to call it a result.”

Dubai sent shockwaves through global markets on Nov. 25 when it requested a standstill on $26 billion of debts linked to Dubai World and its two property units Nakheel and Limitless.

A $10 billion lifeline from neighbouring Abu Dhabi last week — the third to Dubai this year — helped it stave off default on a $4.1 billion Islamic bond, or sukuk, from Nakheel.

A local newspaper said on Sunday that Dubai may still repay lenders in full, citing unnamed sources.

The National daily said two top Dubai officials, on a confidence-building mission to Britain and the United States in recent days, told financial leaders in London that repaying all bank loans in full “was discussed as a medium-term possibility”.

Sheikh Ahmed bin Saeed al-Maktoum, head of Dubai’s Supreme Fiscal Committee and the uncle of Dubai’s ruler, and Mohammed al-Shaibani, deputy head of the committee, met officials in London last week.

“They made clear there were a number of options the government of Dubai saw as feasible and desirable for Dubai World and repayment in full was one of them,” the newspaper quoted a person who attended the talks as saying.

RUBBER-STAMPING?

But a full repayment seems the most unlikely of available options and bankers expect Dubai World to propose the extension of maturities for at least a year or more while paying interest.

“The top lenders have probably already agreed to a standstill, the local banks will just be expected to turn up and sign,” said a Dubai-based banker.

A steering committee of Dubai World’s largest lenders met the company on Dec. 7.

The committee consists of London-listed Standard Chartered, HSBC , Lloyds and Royal Bank of Scotland, and local lenders Emirates NBD and Abu Dhabi Commercial Bank.

Lenders will take Dubai World’s requests back to their credit committees, which are expected to agree the standstill request early in the New Year, several bankers said.

“A lot of banks will get information and background to the group (on Monday),” said a Dubai-based lawyer. “There will be a lot of questions asked but I don’t think that many will be answered.”

Speculation, meanwhile, continues to mount over which assets Dubai Inc., the network of government-owned companies, is willing to sell to help pay off its debt obligations.

One such asset, luxury hotelier Jumeirah Group, is not for sale, its owner Dubai Holding said.

“Jumeirah and Dubai Holding are part of each other and Jumeirah is not going anywhere,” the group’s chairman told a local newspaper.

(Editing by John Stonestreet)

source:yahoonews

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