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Asian market in downward spin
The Government of Singapore Investment Corp (GIC) has said that the U.S. sub-prime crisis is beginning to hurt Asian property markets such as Japan and Australia. “The contagion effects of the crisis can potentially accelerate the downward spin of the current property cycle,” Seek Ngee Huat, president of GIC Real Estate, said . “Some market weakening is being sensed in Asia, particularly in Japan and in Australia.”
The comments came after Dubai World, the investment firm of the Dubai Government, said the U.S. housing crisis has slowed its investment decisions this year, but it is still holding on to U.S. real estate assets. Seek said that he saw opportunities amid the wreckage, but added there would be competition from other institutional players. “As always, weak markets favour those with the capacity to take strategic positions, and so the sub-prime meltdown presents threats as well as opportunities.” He said GIC started out investing in developed markets and only started to focus on emerging markets in Asia in the mid-1990s. Singapore, which saw private home prices jump 31 per cent in 2007 in the largest rise in eight years, is witnessing a slowdown as sales volumes slumped in the first quarter to the lowest since the 2003 SARS epidemic. — Reuters
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