CMG's Reax To Off-Budget Measures
CMG looks at the impact of the extra measures introduced to boost the economy.
by CMG First State Investments
LAND & PROPERTY-RELATED MEASURES Land and property related measures including property tax rebates amounting to $880 million and commercial rental rebates amounting to $103m. The biggest beneficiaries appear to be property companies especially those with commercial property. The removal of the three-year cap on capital gains may attract longer term buyers with property investments in mind. However, the last two years have seen capital values of residential property declining and we expect the short-term impact to be minimal. Longer term, however, the suspension of land sales will likely cap supply and help in alleviating the current large stock of inventory. CORPORATE TAXES & INFRASTRUCTURE PROJECTS Corporate tax rebates of $570m. We expect the corporate tax rebates to boost market earnings by a marginal 1.5%. Injection of $3.5 billion in the form of infrastructure projects. We expect well-capitalised companies such as SembCorp Industries to benefit from the accelerated infrastructure spending. IMPACT The impact of the package is unlikely to be felt in the short term. While the government is putting money into the hands of the people with measures such as the personal tax rebates and the New Singapore Share scheme, consumer spending is unlikely to see a big boost given the economic uncertainties of the current environment. We expect these measures to help alleviate short-term pains for corporates. Longer term, it is companies that have a well-crafted strategy that will survive. Our Singapore investment strategy continues to focus on well-managed companies with strong balance sheets that will weather them through the current crisis.
CMG'S REAX TO OFF-BUDGET MEASURES 
CMG First State Investments views the S$11.3 billion off-budget package announced this afternoon as a wide-reaching and generous relief package especially for individuals.
CMG First State Investments is part of the Commonwealth Bank of Australia, an international financial services company listed on the Australian Stock Exchange. The Commonwealth Bank Group is the largest fund manager in Australia by external funds under management. It has total assets held and funds under management of USD155.956 billion (AUD307 billion)*. The active fund management arm of the Group, CMG First State Investments, has funds under management of USD31.75 billion (AUD62.5 billion)*. In Singapore, CMG First State Investments offers a range of retail unit trusts that includes The award-winning CMG First State Singapore Growth Fund and CMG First State Regional China Fund. * Exchange rate: AUD 1: USD 0.508 as at 29 June 2001.