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Asian Real Estate Market Continues Growth


26 June 2006

Real estate markets in Asia are set for another busy year and Japanese fund-manager Yoshiaki Murakami has been indicted for breaking share trading laws.

Credit ratings agency Standard and Poor's says growing urbanization and the development of real estate investment trusts, or REITS, will drive Asia's long-term property market.

John Bailey, the company's managing director in Hong Kong, says property markets in the region attracted a lot of investor interest in 2005. And he says long-term prospects remain rosy as Asian economies are expected to continue their rapid growth.

But Bailey says in some countries the sector has structural deficiencies, and there are really two separate real estate markets in Asia. He says mature markets such as Singapore, Hong Kong and Japan have relatively transparent legal and regulatory environments.

"But there are also the less developed markets such as China, India, Indonesia, which are less transparent and more susceptible to irregularities," Bailey said. "Growth patterns can be temporarily derailed by political risks. These sorts of events will override economic fundamentals occasionally and need to be closely monitored."

Japan's best-known fund-manager, Yoshiaki Murakami, was indicted for insider trading. Prosecutors said Murakami obtained advance knowledge of Internet giant Livedoor's plan to buy a stake in Nippon Broadcasting System.

Based on that information, they said, funds run by Murakami bought almost two million shares of the Japanese broadcaster for close to $90 million, in a bid to gain huge profits.

Japan's trade surplus widened for the first time in 17 months, jumping 35 percent in May compared with a year earlier. The surge was mainly fueled by car exports to the United States.

McDonald's is cashing in on the fast-growing car ownership in China. The U.S. fast-food giant announced a partnership with China's largest gasoline station operator Sinopec to start a chain of drive-through outlets.

Currently, McDonald's operates 760 restaurants in China, but only three are drive-through. The company plans to open at least 200 new restaurants before the 2008 Beijing Olympics, many of which will be drive-through outlets at gas stations.

Singapore and China have signed a memorandum of understanding to step up bilateral economic, trade and investment ties. The M.O.U. also covers health care, information technology and transport.

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