Daily Briefing: Income gap could be pushing home prices up; Singapore to benefit from surge of private equity deals

And here’s why the Uber-Grab deal could beat competition rules.

From iCompareLoan via Yahoo! Finance:

Worries of a widening income gap in Singapore are growing, and many think current policies are not enough to address it. According to iCompareLoan, the implications of growing income inequality could be seen in higher home prices.

“When the income of the wealthier increases at a pace which is faster to the rest of the segments, they tend to go on a spending spree and this cascades down to those on the lower levels of the economic scale, setting new standards for them. Frank argues that the housing market is a good indicator of this ‘spending cascades.’

One study made in the year 2008 (titled: ‘Income Inequality in Singapore: Causes, Consequences and Policy Options’) suggests that Frank’s analysis was represented in the real-estate boom Singapore was experiencing at that time. The study said, ‘with HDB prices shooting through the roof, even the middle income group is having a difficult time funding their haven (HDB homes).’”

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From AFP via Yahoo! Finance:

The Competition Commission of Singapore (CCS) said the the sale of Uber's Southeast Asian business to Singapore-based rival Grab may have infringed competition rules. As a result, it enforced limits on the deal whilst it carries out an investigation.

“The sale announced on Monday ended a bruising battle between the ride-hailing behemoths and marked the US firm's latest retreat from international markets.

But the Competition Commission of Singapore (CCS) said both companies would face interim measures as it probes concerns Grab will have a virtual monopoly on the ride-hailing market -- the first time such a directive has been issued in the city-state.

Under rules which take effect immediately, the companies will not be allowed to integrate their operations until the CCS investigation is finished.”

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From Deal Street Asia:

According to Singapore-based Partner at KPMG Stephen Bates, the deals related to private equity (PE) firms and sovereign wealth funds in the Asia Pacific is set to grow by 10%-15% in 2018. Singapore is set to benefit from the surge of these deals.

“With a large un-banked population, a growing middle class and low penetration levels for most financial services, deal activity is increasing in the region, ‘driven by the macro trends and a lot of fund flow from North Asia — China and Japan– into South East Asia and Australia,’ Stephen Bates, a Singapore-based Partner at KPMG deal advisory for financial services, told DEALSTREETASIA in an interaction recently.

In Asia Pacific, the number of deals in the segment grew around 7-8 per cent in 2016-17.

A report from KPMG itself earlier had predicted that going forward, M&A activity in fintech and payments will continue to grow across the region, with opportunities arising from the development of more sophisticated payments infrastructure and fintech businesses. Further, Singapore and China will be a large source of innovation in the financial services sector, it had noted.”

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