THE CHINESE PROPERTYmarket looks likely to weaken because the government has indicated it wants prices to fall. So says Zong Qinghuo, China’s third richest man according to Bloomberg and chairman of beverage company Hangzhou Wahaha Group Co. Zong is also expecting economic growth to slow in the second quarter. In January, the Chinese government re-imposed a sales tax on homes sold within five years of their purchase. Since the start of the year, the People’s Bank of China twice increased the banks’ reserve ratio requirements (the proportion of deposits banks must set aside as reserves) to reduce lending. According to a report by Cushman and Wakefield, real-estate investment in China doubled to US$156 billion ($218.8 billion) last year.

UNITED OVERSEAS BANK (UOB), Singapore’s third biggest bank, announced 4Q2009 and FY2009 profits that came largely within expectations. Street consensus was $504 million for 4Q, and the actual number came in at $522 million. Unlike the other two local banks that were buoyed by non-interest income and their trading book, UOB’s results were driven by mundane growth in net interest income and an improving credit cycle. For FY2009, UOB reported a net profit of $1.9 billion and operating profit of $3.3 billion.

NOBLE GROUP FELL short of expectations when it reported a 39% year-on-year fall in 4Q09 net profit to US$85 million ($120 million), coming in 9% below the forecast by DMG & Partners. However, its quarterly performance was affected by the company’s 87.7%-owned subsidiary Gloucester Coal which announced earlier a profit decline due to a drop in the price of coal. Gloucester will be sold to MacArthur Coal in a deal announced just before Christmas. Under the agreement, Noble will end up with a 24% stake in MacArthur, the largest independent coal producer of Australia. 

LAST FRIDAY, Singapore market players woke to a 25- basis point hike to 0.75% in the US Federal Reserve’s primary discount rate. The Fed described the move as a “further normalisation of [its] lending facilities”, adding that its actions “should not lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for policy”. But try telling that to the markets. Last Friday, Hong Kong’s Hang Seng Index dived 528 points or 2.6% to 19,894 following the announcement, while Tokyo’s Nikkei fell 212 points or 2% to 10,123.