OUE Prices Hospitality Trust IPO at S$0.88 to Raise S$600 million
by Admin on Jul 18, 2013 • 7:41 pm
by Ernie B. Calucag
Singapore property firm Overseas Union Enterprise Ltd (OUE) has priced Thursday the initial public offering of its hospitality and retail assets at S$0.88 per stapled security, at the low end of the indicative range of S$0.88 to S$0.90 each.
According to the prospectus, OUE Hospitality Trust will offer 434,598,000 stapled securities, consisting of an international placement of 383,462,000 stapled securities and 51,136,000 stapled securities to the public in Singapore.
The offer also includes 247,220,000 stapled securities to cornerstone investors such as Credit Suisse AG, Goldhill, Mr Gordon Tang, Lucille Holdings Pte Ltd and Splendid Asia Macro Fund.
OUE Hospitality Trust is expected to raise S$600.0 million from the offering. At S$0.88 each, the trust is offering a yield of 7.46 per cent based on fiscal 2014 projections, according to the prospectus.
The trust will comprise a real estate investment trust and a business trust. OUE said it will initially inject two assets in the trust- the Mandarin Orchard hotel and the Mandarin Gallery mall along Orchard Road.
Also, a business hotel next to Changi Airport and two hospitality assets in China may be offered to OUE Hospitality Trust, according to the IPO prospectus. The properties, which have a total valuation of S$413.0 million as at 31 December 2013, could potentially double the number of hotel rooms owned by the trust, according to the document.
Led by Indonesian tycoon Stephen Riady, OUE revived plans for the REIT listing soon after it lost the battle to buy Fraser and Neave to Thai billionaire Charoen Sirivadhanabhakdi.
OUE also owns hotel properties outside Singapore, including Meritus Pelangi Beach Resort & Spa Langkawi in Malaysia and Meritus Mandarin Haikou and Meritus Shantou in China.
The share sale was managed by Credit Suisse Group AG, Goldman Sachs Group Inc. and Standard Chartered Plc.
The retail tranche of the offering opens Thursday while listing will be on July 25.
OUE’s IPO follows that of media group Singapore Press Holdings (SPH)’s REIT offering, priced at S$0.90 per unit Wednesday.
SPH said the final price, at the top end of the indicated range, was settled after seeing strong institutional investor response during the bookbuilding process, amounting to approximately 42 times the number of units offered under the placement tranche.
The media group is expected to raise S$504.0 million on offering of 308.9 million units to institutional and public investors, and 251 million units to cornerstone investors such as Great Eastern Life Assurance Company, Hong Leong Asset Management and Morgan Stanley Investment Management Company.
At S$0.90 per unit, SPH REIT offers a yield of 5.58 per cent and 5.79 per cent for the forecast period 2H2013 and projection year 2014, respectively.
The SPH REIT’s assets will include the luxury Paragon mall in the prime shopping district of Orchard Road and the suburban Clementi Mall.
REITs and business trusts were the biggest fundraisers in Singapore’s initial public offering market in the past year, accounting for US$4.16 billion of the US$6.2 billion of stock priced, according to data compiled by Bloomberg.
The biggest share sale was the S$1.6 billion raised by Mapletree Greater China Commercial Trust, a REIT that owns assets including the Festival Walk shopping mall in Hong Kong and an office complex in Beijing.
The citystate lists 23 REITs and is the largest REIT market in Asia ex-Japan. Singapore-listed REITs have a combined market capitalisation of S$52.0 billion. Together the 23 REITs provide a diverse mix of local and international property assets that house industrial, commercial, retail, residential and specialised tenants.
More good news coming?
- wong chee tat :)
Thursday, July 18, 2013
Greece austerity push to cost thousands of jobs
Greece austerity push to cost thousands of jobs
POSTED: 18 Jul 2013 1:36 PM
Greek deputies narrowly approved another wave of lay-offs and wage cuts affecting thousands of public sector workers Thursday, hours ahead of a rare visit to the country by the German finance minister.
ATHENS, Attica: Greek deputies narrowly approved another wave of lay-offs and wage cuts affecting thousands of public sector workers Thursday, hours ahead of a rare visit to the country by the German finance minister.
The sweeping bill of reforms, tied to the country's next tranche of EU-IMF loans, was passed despite days of street protests.
It gives thousands of civil servants -- including teachers and municipal police -- eight months on reduced salaries to find new posts elsewhere, or accept those offered to them.
Otherwise, they will lose their jobs.
Hundreds of protesters had gathered outside parliament for the late-night vote, a day after thousands had demonstrated in a general strike called against the reform.
The coalition government's majority carried most of the tougher articles by a vote of 153 to 140, the parliament speaker said.
It was a close call for the coalition, which has a five-seat majority in the chamber.
Two government deputies did not attend the vote, and a third had to be brought out of hospital to cast his ballot, reports said.
The bill's approval will enable Greece to receive its next instalment of 6.8 billion euros ($8.9 billion) in rescue funds cleared by eurozone finance ministers.
The vote came just hours before German Finance Minister Wolfgang Schaeuble was to make a rare visit to Athens Thursday, reportedly to help set up a support fund for struggling businesses.
His visit poses another challenge for authorities. Schaeuble is seen by some in Greece as a champion of the tough austerity policies that have gripped the country like a vice for the past four years.
A large security cordon will be thrown around Athens to ward off possible protests during his visit.
Greece has been forced to implement a series of painful reforms over the past four years in exchange for 240 billion euros in rescue funds put up by the European Union and International Monetary Fund.
The sweeping job, pay and pension cuts have hit Greeks hard, sparking mass protests and general strikes.
Overall, Greece must redeploy 25,000 civil servants and fire another 4,000 by the end of the year.
About 4,200 state staff are already due to be redeployed by the end of July.
The main opposition Syriza leftists have called the measure "human sacrifice", and said the country's creditors were motivated by "hatred" for demanding it.
Prime Minister Antonis Samaras on Wednesday defended the unpopular measure.
"Better days will come for our people," he said in a televised address hours before the vote.
"We will not let up. We will climb uphill and reach the end, which is not far."
He also announced a 10-percent drop in restaurant sales tax to boost the tourist season.
Samaras has been under heavy pressure this past month to hold his government together after losing one of his coalition allies in June in the wake of an earlier round of job cuts affecting state broadcaster ERT.
The bill also covers a partial overhaul of the tax system, including the introduction of new criteria for taxable income and the adjustment of tax thresholds.
Some 52 specialities taught at public vocational schools will also be abolished from next week according to the bill, which leading union GSEE has called a "tombstone" for Greek workers.
About 4,000 civil servants, according to a police source, staged a sit-in on Wednesday in Athens' central Syntagma square near the parliament to protest against the vote.
The orange jackets of school caretakers mingled with the khaki uniforms of municipal police officers.
"They have destroyed our dreams," said municipal worker Nekatorios Chargidis, in tears. "What are we going to be able to tell our children?"
Municipal employees have been on strike since Monday, with garbage piling up in the streets as a result.
On Tuesday, more than 20,000 people protested in Athens and Greece's second city Thessaloniki during a general strike called by the main unions.
Now in its sixth year running of recession and with the unemployment rate at a record 27 percent, Greece is not expected to post growth before 2014.
- AFP/ac
- wong chee tat :)
POSTED: 18 Jul 2013 1:36 PM
Greek deputies narrowly approved another wave of lay-offs and wage cuts affecting thousands of public sector workers Thursday, hours ahead of a rare visit to the country by the German finance minister.
ATHENS, Attica: Greek deputies narrowly approved another wave of lay-offs and wage cuts affecting thousands of public sector workers Thursday, hours ahead of a rare visit to the country by the German finance minister.
The sweeping bill of reforms, tied to the country's next tranche of EU-IMF loans, was passed despite days of street protests.
It gives thousands of civil servants -- including teachers and municipal police -- eight months on reduced salaries to find new posts elsewhere, or accept those offered to them.
Otherwise, they will lose their jobs.
Hundreds of protesters had gathered outside parliament for the late-night vote, a day after thousands had demonstrated in a general strike called against the reform.
The coalition government's majority carried most of the tougher articles by a vote of 153 to 140, the parliament speaker said.
It was a close call for the coalition, which has a five-seat majority in the chamber.
Two government deputies did not attend the vote, and a third had to be brought out of hospital to cast his ballot, reports said.
The bill's approval will enable Greece to receive its next instalment of 6.8 billion euros ($8.9 billion) in rescue funds cleared by eurozone finance ministers.
The vote came just hours before German Finance Minister Wolfgang Schaeuble was to make a rare visit to Athens Thursday, reportedly to help set up a support fund for struggling businesses.
His visit poses another challenge for authorities. Schaeuble is seen by some in Greece as a champion of the tough austerity policies that have gripped the country like a vice for the past four years.
A large security cordon will be thrown around Athens to ward off possible protests during his visit.
Greece has been forced to implement a series of painful reforms over the past four years in exchange for 240 billion euros in rescue funds put up by the European Union and International Monetary Fund.
The sweeping job, pay and pension cuts have hit Greeks hard, sparking mass protests and general strikes.
Overall, Greece must redeploy 25,000 civil servants and fire another 4,000 by the end of the year.
About 4,200 state staff are already due to be redeployed by the end of July.
The main opposition Syriza leftists have called the measure "human sacrifice", and said the country's creditors were motivated by "hatred" for demanding it.
Prime Minister Antonis Samaras on Wednesday defended the unpopular measure.
"Better days will come for our people," he said in a televised address hours before the vote.
"We will not let up. We will climb uphill and reach the end, which is not far."
He also announced a 10-percent drop in restaurant sales tax to boost the tourist season.
Samaras has been under heavy pressure this past month to hold his government together after losing one of his coalition allies in June in the wake of an earlier round of job cuts affecting state broadcaster ERT.
The bill also covers a partial overhaul of the tax system, including the introduction of new criteria for taxable income and the adjustment of tax thresholds.
Some 52 specialities taught at public vocational schools will also be abolished from next week according to the bill, which leading union GSEE has called a "tombstone" for Greek workers.
About 4,000 civil servants, according to a police source, staged a sit-in on Wednesday in Athens' central Syntagma square near the parliament to protest against the vote.
The orange jackets of school caretakers mingled with the khaki uniforms of municipal police officers.
"They have destroyed our dreams," said municipal worker Nekatorios Chargidis, in tears. "What are we going to be able to tell our children?"
Municipal employees have been on strike since Monday, with garbage piling up in the streets as a result.
On Tuesday, more than 20,000 people protested in Athens and Greece's second city Thessaloniki during a general strike called by the main unions.
Now in its sixth year running of recession and with the unemployment rate at a record 27 percent, Greece is not expected to post growth before 2014.
- AFP/ac
- wong chee tat :)
My First Skool to implement measures to reassure parents amid alleged abuse case
My First Skool to implement measures to reassure parents amid alleged abuse case
POSTED: 18 Jul 2013 8:01 PM
My First Skool, which is embroiled in an alleged childcare abuse case, said it has put in place measures across all its centres to provide further reassurance to parents.
SINGAPORE: My First Skool, which is embroiled in an alleged childcare abuse case, said it has put in place measures across all its centres to provide further reassurance to parents.
On Wednesday, My First Skool was informed by the Early Childhood Development Agency through a warning letter that the licence tenure of its childcare centre at Blk 192 Toa Payoh would be cut from 24 months to six months with immediate effect.
The measures are aimed at improving its communications with parents, enhancing the incident review process, reinforcing the importance of proper care of children and stepping up support for teachers.
To improve parent communications, parents can direct their queries to its headquarters via a newly-set up email address (feedback@myfirstskool.com). Calls can also be made to its customer service team at 6634 9989.
My First Skool's management said it will see to the closure of all feedback.
As for improving the incident review process, it said all cases of injury, accident or mishandling reported through its principals or HQ are investigated thoroughly and promptly.
It added that complex cases will be assessed by an independent review panel with the aim to give parents greater assurance of transparency and accountability of the incident review process.
In terms of proper care for children, My First Skool said it will encourage staff to report questionable practices to their supervisors.
It wants its staff to escalate their feedback under its whistle-blowing policy should the issues not be satisfactorily attended to.
My First Skool said whistle blowing is done through an independent channel which reports to the board audit committee.
As for support for teachers, My First Skool said it will also deploy additional resources over time to assist teachers in managing classes that require more support.
- CNA/xq
- wong chee tat :)
POSTED: 18 Jul 2013 8:01 PM
My First Skool, which is embroiled in an alleged childcare abuse case, said it has put in place measures across all its centres to provide further reassurance to parents.
SINGAPORE: My First Skool, which is embroiled in an alleged childcare abuse case, said it has put in place measures across all its centres to provide further reassurance to parents.
On Wednesday, My First Skool was informed by the Early Childhood Development Agency through a warning letter that the licence tenure of its childcare centre at Blk 192 Toa Payoh would be cut from 24 months to six months with immediate effect.
The measures are aimed at improving its communications with parents, enhancing the incident review process, reinforcing the importance of proper care of children and stepping up support for teachers.
To improve parent communications, parents can direct their queries to its headquarters via a newly-set up email address (feedback@myfirstskool.com). Calls can also be made to its customer service team at 6634 9989.
My First Skool's management said it will see to the closure of all feedback.
As for improving the incident review process, it said all cases of injury, accident or mishandling reported through its principals or HQ are investigated thoroughly and promptly.
It added that complex cases will be assessed by an independent review panel with the aim to give parents greater assurance of transparency and accountability of the incident review process.
In terms of proper care for children, My First Skool said it will encourage staff to report questionable practices to their supervisors.
It wants its staff to escalate their feedback under its whistle-blowing policy should the issues not be satisfactorily attended to.
My First Skool said whistle blowing is done through an independent channel which reports to the board audit committee.
As for support for teachers, My First Skool said it will also deploy additional resources over time to assist teachers in managing classes that require more support.
- CNA/xq
- wong chee tat :)
OUE's hospitality trust IPO priced at bottom of range
OUE's hospitality trust IPO priced at bottom of range
By Wong Siew Ying
POSTED: 18 Jul 2013 5:47 PM
Hotel and property group Overseas Union Enterprise (OUE) will raise about S$600 million in an initial public offering (IPO) of its hospitality trust.
SINGAPORE: Hotel and property group Overseas Union Enterprise (OUE) will raise about S$600 million in an initial public offering (IPO) of its hospitality trust.
OUE Hospitality Trust plans to sell its units at 88 Singapore cents each which is at the bottom of its indicative range.
This comes a day after Singapore Press Holdings priced an IPO of its retail-centric REIT.
OUE said the offer price translates to a projected yield of 7.46 per cent for 2014.
OUE Hospitality Trust's initial asset portfolio will comprise retail mall Mandarin Gallery and hotel Mandarin Orchard Singapore.
The developer is selling about 434.6 million units to institutional and retail investors.
Another 247.2 million units are set aside for five cornerstone investors.
The IPO will be launched at 6pm on July 18.
OUE said the public offer closes on July 23 and trading is expected to start on July 25.
- CNA/fa
- wong chee tat :)
By Wong Siew Ying
POSTED: 18 Jul 2013 5:47 PM
Hotel and property group Overseas Union Enterprise (OUE) will raise about S$600 million in an initial public offering (IPO) of its hospitality trust.
SINGAPORE: Hotel and property group Overseas Union Enterprise (OUE) will raise about S$600 million in an initial public offering (IPO) of its hospitality trust.
OUE Hospitality Trust plans to sell its units at 88 Singapore cents each which is at the bottom of its indicative range.
This comes a day after Singapore Press Holdings priced an IPO of its retail-centric REIT.
OUE said the offer price translates to a projected yield of 7.46 per cent for 2014.
OUE Hospitality Trust's initial asset portfolio will comprise retail mall Mandarin Gallery and hotel Mandarin Orchard Singapore.
The developer is selling about 434.6 million units to institutional and retail investors.
Another 247.2 million units are set aside for five cornerstone investors.
The IPO will be launched at 6pm on July 18.
OUE said the public offer closes on July 23 and trading is expected to start on July 25.
- CNA/fa
- wong chee tat :)
Sex bloggers plead not guilty to sedition charge
Sex bloggers plead not guilty to sedition charge
POSTED: 18 Jul 2013 4:36 PM
Malaysia's infamous sex blogging couple on Thursday pleaded not guilty in the district court for posting insensitive Ramadan comments on their Facebook page and pornographic pictures in their blogs.
KUALA LUMPUR: Malaysia's infamous sex blogging couple on Thursday pleaded not guilty in the district court in Kuala Lumpur to three charges related to their action in posting their insensitive Ramadan greeting on their Facebook page and pornographic pictures in their blogs.
The charges against Alvin Tan Jye Yee, 25, and Vivian Lee May Ling, 24, were read before Judge Murtazadi Amran.
The couple were denied bail and will be jailed pending trial, said a court official. The next court date has been set for August 23.
Sedition is punishable by up to three years in jail.
In the first charge, they were jointly accused of making a seditious posting on their Facebook page by uploading a photo of themselves eating bak kut teh (a Chinese herbal pork soup) with a caption "Selamat Berbuka Puasa" - a Malay greeting for breaking fast.
They allegedly committed the offence at 10.48pm between July 11 and 12.
They were charged under subsection 4(1)(c) of the Sedition Act 1948 which is punishable under subsection 4(1) of the same Act and read together with Section 34 of the Penal Code.
For the first offence, they face a fine up to RM5,000, an imprisonment up to three years or both, and imprisonment up to five years for subsequent offence.
The couple later apologised in a video on YouTube for the posting, which sparked widespread anger. Their Facebook page is no longer accessible.
Prime Minister Najib Razak criticised the couple on Wednesday while discussing implementing a new law to replace the colonial-era sedition act, which has been slammed by critics as a tool to crack down on dissent.
"The insolent and impudent act by the young couple who insulted Islam showed that freedom of expression and irresponsible opinion can jeopardise the community," he was quoted by The Star as saying.
Last year Lee, a kindergarten teacher, and Tan, who is currently unemployed and a former law student at the National University of Singapore, sparked outrage in Malaysia and Singapore by posting erotic photographs and videos of their lovemaking as well as close-ups of their genitals on a blog.
The duo, who said they aimed to destigmatise sex, shut down the blog because of family pressure in the conservative countries, where pornography is illegal.
- BERNAMA/AFP/fa
- wong chee tat :)
POSTED: 18 Jul 2013 4:36 PM
Malaysia's infamous sex blogging couple on Thursday pleaded not guilty in the district court for posting insensitive Ramadan comments on their Facebook page and pornographic pictures in their blogs.
KUALA LUMPUR: Malaysia's infamous sex blogging couple on Thursday pleaded not guilty in the district court in Kuala Lumpur to three charges related to their action in posting their insensitive Ramadan greeting on their Facebook page and pornographic pictures in their blogs.
The charges against Alvin Tan Jye Yee, 25, and Vivian Lee May Ling, 24, were read before Judge Murtazadi Amran.
The couple were denied bail and will be jailed pending trial, said a court official. The next court date has been set for August 23.
Sedition is punishable by up to three years in jail.
In the first charge, they were jointly accused of making a seditious posting on their Facebook page by uploading a photo of themselves eating bak kut teh (a Chinese herbal pork soup) with a caption "Selamat Berbuka Puasa" - a Malay greeting for breaking fast.
They allegedly committed the offence at 10.48pm between July 11 and 12.
They were charged under subsection 4(1)(c) of the Sedition Act 1948 which is punishable under subsection 4(1) of the same Act and read together with Section 34 of the Penal Code.
For the first offence, they face a fine up to RM5,000, an imprisonment up to three years or both, and imprisonment up to five years for subsequent offence.
The couple later apologised in a video on YouTube for the posting, which sparked widespread anger. Their Facebook page is no longer accessible.
Prime Minister Najib Razak criticised the couple on Wednesday while discussing implementing a new law to replace the colonial-era sedition act, which has been slammed by critics as a tool to crack down on dissent.
"The insolent and impudent act by the young couple who insulted Islam showed that freedom of expression and irresponsible opinion can jeopardise the community," he was quoted by The Star as saying.
Last year Lee, a kindergarten teacher, and Tan, who is currently unemployed and a former law student at the National University of Singapore, sparked outrage in Malaysia and Singapore by posting erotic photographs and videos of their lovemaking as well as close-ups of their genitals on a blog.
The duo, who said they aimed to destigmatise sex, shut down the blog because of family pressure in the conservative countries, where pornography is illegal.
- BERNAMA/AFP/fa
- wong chee tat :)
My First Skool in Toa Payoh gets licence tenure cut
My First Skool in Toa Payoh gets licence tenure cut
By Kimberly Spykerman
POSTED: 18 Jul 2013 12:32 PM
The childcare centre involved in the alleged child abuse case has had its licence tenure cut from 24 months to six months.
SINGAPORE: The childcare centre involved in the alleged child abuse case has had its licence tenure cut from 24 months to six months.
Earlier this month, a teacher there was arrested after CCTV footage showed her allegedly dragging a three-year-old boy across the floor and pushing him to the floor with force.
The Early Childhood Development Agency (ECDA) said that it conducted its investigations at My First Skool in Toa Payoh and found that there were certain aspects that required improvements.
This means that ECDA will conduct more frequent checks at the centre and it will have to demonstrate its compliance with certain conditions. This includes providing better support and training to its teachers to handle difficult situations, clearer standard operating procedures for reporting incidents, and improving its programmes.
Acting Minister for Social and Family Development Chan Chun Sing added that following the alleged abuse incident, the priority is to strengthen processes within the sector, as well as build trust between parents, teachers and operators.
He said this on Thursday on the sidelines of a visit to teacher training programmes and pre-schools under the Crestar Education Group.
Mr Chan said: "Over the next six months we fully expect NTUC My First Skool to work closely with ECDA to comply with the regulations so that they can up their standards necessary. And then we will review the situation after six months."
- CNA/ac/xq
- wong chee tat :)
By Kimberly Spykerman
POSTED: 18 Jul 2013 12:32 PM
The childcare centre involved in the alleged child abuse case has had its licence tenure cut from 24 months to six months.
SINGAPORE: The childcare centre involved in the alleged child abuse case has had its licence tenure cut from 24 months to six months.
Earlier this month, a teacher there was arrested after CCTV footage showed her allegedly dragging a three-year-old boy across the floor and pushing him to the floor with force.
The Early Childhood Development Agency (ECDA) said that it conducted its investigations at My First Skool in Toa Payoh and found that there were certain aspects that required improvements.
This means that ECDA will conduct more frequent checks at the centre and it will have to demonstrate its compliance with certain conditions. This includes providing better support and training to its teachers to handle difficult situations, clearer standard operating procedures for reporting incidents, and improving its programmes.
Acting Minister for Social and Family Development Chan Chun Sing added that following the alleged abuse incident, the priority is to strengthen processes within the sector, as well as build trust between parents, teachers and operators.
He said this on Thursday on the sidelines of a visit to teacher training programmes and pre-schools under the Crestar Education Group.
Mr Chan said: "Over the next six months we fully expect NTUC My First Skool to work closely with ECDA to comply with the regulations so that they can up their standards necessary. And then we will review the situation after six months."
- CNA/ac/xq
- wong chee tat :)
Canada central bank maintains key lending rate at 1%
Canada central bank maintains key lending rate at 1%
POSTED: 17 Jul 2013 10:57 PM
Canada's central bank on Wednesday held its key interest rate at 1.0 per cent, while downgrading its global economic forecast.
OTTAWA: Canada's central bank on Wednesday held its key interest rate at 1.0 per cent, while downgrading its global economic forecast.
The Bank of Canada pointed to a struggling European economy and a slowdown in China, offsetting recent gains in Japan and the United States
"Global economic growth remains modest," the bank said in a statement.
It also hinted it would maintain for the foreseeable future its near historic low rate, which has been in place since September 2010.
"As long as there is significant slack in the Canadian economy, the inflation outlook remains muted, and imbalances in the household sector continue to evolve constructively, the considerable monetary policy stimulus currently in place will remain appropriate," it said.
The bank noted that US economy is growing at a "moderate pace," with continued strengthening in private sector demand partly offset by the impact of fiscal consolidation.
Meanwhile Japan's recent stimulus has led to "a rapid recovery in economic growth," the bank said.
However, Europe's economy "remains weak" and economic growth in China and other emerging nations "has slowed, exerting downward pressure on global commodity prices."
"As a consequence, the bank has downgraded slightly its global growth forecast," it said, adding that the global economy is still expected to pick up in 2014 and 2015.
In Canada, growth is expected to be "choppy in the near term, owing to unusual temporary factors," the bank said.
Despite ongoing competitiveness challenges, Canadian exports are projected to "gather momentum," which in turn will boost confidence and lead to more business investment, it said.
The Canadian economy will also be supported by continued growth in consumer spending, while a bit less is expected to be spent on new homes.
- AFP/fa
- wong chee tat :)
POSTED: 17 Jul 2013 10:57 PM
Canada's central bank on Wednesday held its key interest rate at 1.0 per cent, while downgrading its global economic forecast.
OTTAWA: Canada's central bank on Wednesday held its key interest rate at 1.0 per cent, while downgrading its global economic forecast.
The Bank of Canada pointed to a struggling European economy and a slowdown in China, offsetting recent gains in Japan and the United States
"Global economic growth remains modest," the bank said in a statement.
It also hinted it would maintain for the foreseeable future its near historic low rate, which has been in place since September 2010.
"As long as there is significant slack in the Canadian economy, the inflation outlook remains muted, and imbalances in the household sector continue to evolve constructively, the considerable monetary policy stimulus currently in place will remain appropriate," it said.
The bank noted that US economy is growing at a "moderate pace," with continued strengthening in private sector demand partly offset by the impact of fiscal consolidation.
Meanwhile Japan's recent stimulus has led to "a rapid recovery in economic growth," the bank said.
However, Europe's economy "remains weak" and economic growth in China and other emerging nations "has slowed, exerting downward pressure on global commodity prices."
"As a consequence, the bank has downgraded slightly its global growth forecast," it said, adding that the global economy is still expected to pick up in 2014 and 2015.
In Canada, growth is expected to be "choppy in the near term, owing to unusual temporary factors," the bank said.
Despite ongoing competitiveness challenges, Canadian exports are projected to "gather momentum," which in turn will boost confidence and lead to more business investment, it said.
The Canadian economy will also be supported by continued growth in consumer spending, while a bit less is expected to be spent on new homes.
- AFP/fa
- wong chee tat :)
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