Raphael Stevens

Rents for private home climbed 4.2% in the first quarter of this year, compared to a rise of 2.6% in the previous quarter, according to the Urban Redevelopment Authority.
To be clear, interest from Hong Kong is just one piece of the puzzle. Rental prices in Singapore were already moving higher during the pandemic due to demand from various sources.
There are signs that rental demand has grown further.
Co-living start-up Hmlet saw a 25% increase in bookings in January 2022 from December 2021, while serviced apartments managed by Far East Hospitality saw a spike in inquiries and bookings around the end of February.

Stifled by strict Covid restrictions in Hong Kong, residents from the financial hub are continuing to move to its rival, Singapore.
Roslan Rahman | AFP | Getty Images

SINGAPORE — After eight years in Hong Kong, Jonathan Benarr is giving up that city for a new set of attractions — in Singapore.
“Hong Kong was always the fun place to be,” he told CNBC. “Singapore was where you went if you were a bit boring or you had a family.”

“Well, fast forward [two years], Singapore is a shining light,” he said. “You’ve just reopened the bars and the clubs, and people are being treated like adults.”
Stifled by strict Covid restrictions in Hong Kong, some residents from the Chinese financial hub have moved to Singapore, and there are signs that rental demand has gone up.
Private home rents climbed 4.2% in the first quarter of this year, compared to a rise of 2.6% in the previous quarter, according to the Urban Redevelopment Authority.
“Anecdotally, we know that perhaps there are some of those based in Hong Kong looking to relocate to Singapore, and this is contributing to the increase in rents,” said Leonard Tay, head of research at real estate agency Knight Frank Singapore.
To be clear, interest from Hong Kong is not the only reason for rising rents. Rental prices in Singapore were already moving higher during the pandemic due to demand from various sources, including young adults moving out of their parents’ homes and people looking for interim housing because of construction delays.

Hong Kong vs. Singapore travel rules

In Hong Kong, people arriving need to quarantine for at least seven days in a hotel and take multiple Covid tests. Singapore, however, has gradually dropped quarantine requirements since September. From Tuesday, vaccinated visitors will no longer need to take any Covid tests.
“[Hong Kong] just feels backwards,” said Benarr, who is group director of real estate at hospitality company The Mandala Group.
“What was once a progressive city, just feels like it’s no longer interested in being part of the international conversation,” he said.
The Briton is currently packing up his apartment in Hong Kong and moving to Singapore permanently.
In response to CNBC’s request for comment, Hong Kong’s Information Services Department pointed to a speech by Chief Executive Carrie Lam in late March, where she said Hong Kong needs to balance between virus risks and Covid measures.
This is to “enable the city to continue addressing the social and development needs of Hong Kong and the individual circumstances of our people,” she said.
“We couldn’t be too harsh with our people and the people’s tolerance has always been one of the factors that we need to consider in devising the best public health measure for Hong Kong.”

Surge in arrivals from Hong Kong

Visitor arrivals from Hong Kong to Singapore nearly doubled from January to February this year, according to Singapore’s tourism board.
That figure rose further in March, jumping more than 110% from February, official data shows.
Some of those arrivals intend to settle down in Singapore and have turned to co-living spaces or serviced apartments, according to industry players.
Singapore-based co-living start-up Hmlet said there was an “exponential” increase in bookings in January 2022, “which we attribute to demand from Hong Kongers anticipating the imminent tightening of public health protocols.”
Inquiries from Hong Kong jumped 25% from December 2021 to January 2022, Hmlet said.
“Booking pace from Hong Kong has dipped slightly in February and March but remained higher than previous months,” said Giselle Makarachvili, the company’s chief executive officer.
Hong Kong has a dynamic zero strategy for Covid and imposed strict measures from January in a bid to slow the spread of the virus, which included a ban on dining in from 6 p.m. daily.
The city tightened restrictions further in February, though they were eased slightly last Thursday.
Serviced apartments managed by Far East Hospitality also saw a spike in inquiries and bookings around the end of February, though that has since slowed, the company told CNBC.

Permanent relocation?

Some arrivals from Hong Kong are making bookings for as short as two weeks, while others are intending to stay for 12 months, according to data from Hmlet and Far East Hospitality.
“Based on our observation, most bookings from Hong Kong are for permanent relocation to Singapore,” Hmlet’s CEO said.
“Interestingly, we also noted a group of members whose original travel intent was for business but eventually converted to permanent stays,” Makarachvili added.
Around 70% of bookings from Hong Kong at Hmlet Homes were for three-month stays, the minimum required. The remaining 30% of bookings were for longer-term stays of between six and 12 months.
Some 80% of Hmlet Homes’ customers from Hong Kong are families with young children, the CEO added.

This indicates that while guests may relocate for work, they are looking to bring their families along as well.

Tan Chia Hui
head of operations for hotels and serviced residences, Far East Hospitality

Far East Hospitality has received a mix of bookings — from both travelers and businesses looking for interim accommodation for their employees, according to Tan Chia Hui, head of operations for hotels and serviced residences.
The corporate bookings are typically for a period of one to three months, and for bigger units with between two and four bedrooms, she added.
“This indicates that while guests may relocate for work, they are looking to bring their families along as well,” she said.
Co-working firm WeWork said its Singapore locations saw a nearly 13% jump in sales and inquiries from Hong Kong-based companies in the fourth quarter of 2021 compared to the third quarter.
JustCo said it hasn’t observed a substantial increase, but that international financial institutions in Hong Kong are seeking flexible workspaces in Singapore.

Returning Singaporeans

Singaporeans based in Hong Kong have made extended trips back home in recent months, citing the relative freedom that people in the Southeast Asian city now enjoy compared with Hong Kong.
“The main thing was the restrictions,” said a Singaporean who works in the banking industry, who requested anonymity as he did not have permission to speak to the media.
He remained in Singapore for about a month, where he said there was “some degree of normalcy.”
“There’s not much evolution in how [Hong Kong] is handling it, and therefore it doesn’t really give us much hope … that there will be any form of reform or change in the government’s strategy,” he said.
Another Singaporean, who wanted to be known only as Leung, said he bought a one-way ticket to Singapore when Hong Kong announced in February that it planned to test its entire population for Covid three times.
He said that at that point, he felt “the government [had] totally lost it, I have to get out of here.”

In the past, maybe I could have entertained … staying long enough to be a Hong Kong PR, but for now, I think with the current situation, it’s unlikely that I will do so.

Singaporean who works in banking

Some Singaporeans were also motivated to return to visit their home country to see family and friends.
One Singaporean, who works in finance in Hong Kong and declined to be named, said it was a good opportunity to visit loved ones, especially when the Covid situation in the Chinese city worsened earlier this year.
She said her friends used Singapore as a base for short-term business or personal trips to the U.S. and Europe since Singapore doesn’t require fully vaccinated travelers to be quarantined.
Leung regularly crosses the border into Malaysia to visit family, which would not be possible if he were in Hong Kong.

Too little too late?

As of Thursday, Hong Kong began allowing groups of four to gather at any one time, and restaurant operating hours were extended to 10 p.m.
But that’s “not something to celebrate,” said Leung, who works in a financial institution and returned to Hong Kong in April.
In Singapore, limits on social gatherings have been scrapped and social distancing is no longer required. Authorities also recently lifted the 10.30 p.m. cut-off for alcohol sales, and allowed bars and karaoke lounges to reopen again.
It’s great that Hong Kong’s rules are going to be less extreme, but there’s still a long way to go, said Leung.
“If this continues on in Hong Kong for, I don’t know, the next year or so, I think it will be a strong enough reason to leave,” he said.

The Singaporean who works in banking and remained in Singapore for a month said he doesn’t plan to leave Hong Kong immediately, but Covid and political upheaval in the city have made him think about his long-term plans to stay.
“In the past, maybe I could have entertained … staying long enough to be a Hong Kong [permanent resident], but for now, I think with the current situation, it’s unlikely that I will do so,” he said.
Similarly, Leung said he is not in a rush to move back to Singapore, but is open to the idea.
“If something comes along, the numbers are right, it aligns with my career goals, why not right? It’s a good time to move,” he said.

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Commodity prices continued to be a headwind for Ford Motor, CEO Jim Farley told CNBC’s Jim Cramer on Wednesday, but the company has managed to offset them through its pricing strategy.
“We had a couple of really bad commodities that held up our most profitable units and we think that’s an area where we have upside in second quarter, second half,” Farley said in an interview on “Mad Money.”

Commodity prices continued to be a headwind for Ford Motor, CEO Jim Farley told CNBC’s Jim Cramer on Wednesday, but the company has managed to offset them through its pricing strategy.
“The commodity pressure, the premium freight we’re seeing, I mean it’s really real. … The good thing is, our pricing has offset all of that. I believe we’re underearning as a company, so we have more costs to do this year, next year, next couple years,” Farley said in an interview on “Mad Money.”

Some of the commodities where Ford has seen higher costs include steel, aluminum, nickel, cobalt and lithium, according to Farley.
“We had a couple of really bad commodities that held up our most profitable units and we think that’s an area where we have upside in second quarter, second half,” he added.
Farley’s comments come as Wall Street fears that higher costs and supply chain snarls will strain General Motors’ and Ford’s earnings this year.
The chief executive also said that the company plans to take further pricing action, particularly on its electric vehicles. Farley told CNBC on Tuesday that he believes the company will be able to produce 150,000 F-150 Lightning EVs within the next year or so, even in the face of supply chain woes.
Ford reported better-than-expected revenue and earnings in its first quarter on Wednesday. Shares of Ford climbed about 1% after hours.

Disclosure: Cramer’s Charitable Trust owns shares of Ford.
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Arnold Donald’s decision to step down as Carnival CEO follows some investor pushback over his compensation package, CNBC learned.
Current COO Josh Weinstein, 48, has been picked to be new chief executive.
The leadership change comes as the cruise industry looks for a broader reset following the dark days of the Covid pandemic.

Carnival’s announcement Tuesday that Arnold Donald would step down as CEO of the world’s biggest cruise line came after some investors pushed back at a shareholders meeting earlier this month on metrics tied to the 67-year-old’s 2021 compensation package of $15 million, sources familiar with the situation told CNBC.
“End of an era,” said one investor who asked not be named. The company was not available to respond to a request for comment.

Donald — who will become vice chair, effective Aug. 1 — took the helm as chief executive nine years ago, two of which were spent keeping Carnival afloat during the Covid-19 pandemic by raising billions of dollars in debt and stock.
While Donald no doubt played a leading role in resurrecting the cruise industry from the depths of the pandemic, shares of Carnival have struggled to keep pace with rivals like Royal Caribbean, which about four months ago saw industry veteran Richard Fain step down as CEO after more than 33 years. The 72-year-old remains chairman.

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Carnival shares are down nearly 13% in 2022, slightly more than the 11.5% decline for the S&P 500 during the same year-to-date period, and they are off more than 35% over the past 12 months. In contrast, Royal Caribbean shares are up almost 3% on the year and down only roughly 9% over the past 12 months.
The leadership changes at both Carnival and Royal Caribbean will see a new guard step in to navigate the cruise giants through their next stages of recovery. At Carnival, current COO Josh Weinstein, 48, has been picked to be the new CEO. At Royal Caribbean, former CFO Jason Liberty, 46, stepped into the top job at the beginning of year.
“Change can be a good thing,” Stifel analyst Steven Wieczynski wrote in a recent note to clients.

In the coming weeks, shareholders will want to hear from Weinstein, who has been at Carnival for 20 years, about his game plan for the cruise line and how it may differ from Donald’s approach.
“He’s younger, he should bring in new energy,” Wieczynski told CNBC.

Arnold Donald, CNBC, Carnival Corp.
Scott Mlyn | CNBC

As the head of the world’s largest cruise operator, Donald quickly became the face of the industry at the height of the pandemic when numerous ships with Covid-infected guests and crew were left stranded on board for days on end.
When the Centers for Disease Control and Prevention fought hard to keep its no sail order in place, Donald played a leading role in driving discussions with lawmakers, industry leaders and the White House in trying to change the course of that order.
As the economy started to rebound in 2021, the outlook for cruising remained bleak. But Donald, one of the few Black CEOs on Wall Street, remained defiantly optimistic about the industry.
At CNBC’s Evolve Global Summit last summer, Donald was asked if he ever doubted whether Carnival could make it through the storm. He said at the time, “I never doubted that we’d make it through, but … it was excruciating.”
At the time of Seatrade’s annual conference in the fall 2021, Carnival ships were slowly getting back to sea after a 15-month suspension. “We know where the road is headed, and the road is headed toward a very bright future,” Donald said during a panel discussion at the event. Fain, then-CEO of Royal Caribbean, was also on the panel and expressed similar optimism.
The pandemic wasn’t Donald’s first crisis. He joined Carnival in 2013, the year a fire knocked out power on the Carnival Triumph’s sanitation system, stranding more than 4,200 passengers and crew members at sea for days in miserable conditions. The previous year, one of Carnival’s ships, the Costa Concordia, capsized off the coast of Italy, killing 32 people.

Getty Images

In the five years of Donald’s tenure as CEO, Carnival’s stock price nearly doubled, reaching an all-time high of $72.70 per share in January 2018. Since then, shares have retreated due in part to the pandemic, trading at $17.41 per share as of Wednesday’s close.
However, demand for cruising is rebounding with Carnival revealing three weeks ago that it saw a record week of bookings in the company’s history.
“Demand for cruises is very strong in the back half of this year, and into 2023. Those who haven’t cruised for two years, they are ready to go,” Wieczynski said.
New data from the Cruise Lines International Association trade group also conveys people’s intent to cruise now exceeds pre-pandemic levels.
As bookings rebound, Carnival has brought back nearly 75% of its ships, while also letting go of older, less fuel-efficient ships.
Analysts and investors are waiting to see when the cruise lines will become cash flow positive. Executives from both Carnival and Royal Caribbean have said that would happen sometime in the next few months.

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Vale SA: “Too late. That was a good time on one time, but not now.”

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CNBC’s Jim Cramer on Wednesday offered his thoughts on whether companies that recently reported their quarterly earnings are investable, leaning on his newly introduced grading system.
“There are tons of stocks that can rally now that they’ve come down hard from their highs, but we need to figure out what can make those rallies possible,” the “Mad Money” host said.

CNBC’s Jim Cramer on Wednesday offered his thoughts on whether companies that recently reported their quarterly earnings are investable, leaning on his newly introduced grading system.
“The chief reason this market has become so difficult is that we finally have not-so-hot earnings, yet Wall Street’s not adopting its usual posture of buying stocks that issue NABAF results — that’s ‘not as bad as feared,’ ” the “Mad Money” host said. 

“Six months ago, you could get away with NABAF all the time. Forgiveness reigned within two or three days. Not anymore,” he added.
To keep up with this new market, Cramer created a new method of grading the stock of companies that recently reported their quarterly earnings.
“There are tons of stocks that can rally now that they’ve come down hard from their highs, but we need to figure out what can make those rallies possible,” he said.
Here is Cramer’s three-tiered system of grading stocks:

Exclamation point (!): This symbol represents “good news, meaning the stock’s entitled to go up despite the broader sell-off,” Cramer said.
Question mark (?): This means the stock is “going down pretty much no matter what,” he said.
Asterisk (*): “The earnings get an asterisk if there’s something away from the company that went wrong, something you can easily explain away. … So maybe the stock is worth buying here because it could get forgiven later,” Cramer said.

“Exclamation point? Yes. Question mark? No. Asterisk, maybe, just maybe, and that’s where the money can be made after the earnings, because they’re the decent ones that haven’t run yet,” Cramer said.

Here are the stocks he chose to highlight and his grade for each of them:

Visa: !
Microsoft: !
Meta: !
Boeing: ?
Texas Instruments: *
Alphabet: *

Disclosure: Cramer’s Charitable Trust owns shares of Alphabet, Boeing, Meta and Microsoft.

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Ford posted first-quarter results Wednesday that were in line with Wall Street’s expectations, though its net profit was dragged down by a stake in electric vehicle maker Rivian.
Rivian stock shed about 52% of its market cap during the first quarter, bringing the value of Ford’s stake down from $10.6 billion to $5.1 billion.
Despite increased costs and supply chain problems, Ford reaffirmed its pretax adjusted earnings forecast of between $11.5 billion and $12.5 billion for the year.

DETROIT – Ford Motor posted first-quarter results Wednesday that were in line with Wall Street’s expectations, though its net profit was dragged down by a stake in electric vehicle maker Rivian Automotive and reduced vehicle production.
Ford reported an unadjusted net loss of $3.1 billion, including a loss of $5.4 billion on the company’s 12% stake in Rivian. That’s compared with a net profit of $3.3 billion during the same period a year ago.

Rivian stock shed about 52% of its market cap during the first quarter, bringing the value of Ford’s stake down from $10.6 billion to $5.1 billion.
Ford executives declined to comment during the company’s earnings call on when, or if, the company plans to exit Rivian after a lock-up period for pre-IPO investors ends on May 8. Rivian’s stock has fallen roughly 60% since its IPO on Nov. 9.
“We’re not going to comment on Rivian,” Chief Financial Officer John Lawler said Wednesday during the call.
Despite increased costs and supply chain problems during the quarter, Ford reaffirmed its pretax adjusted earnings forecast of between $11.5 billion and $12.5 billion for the year.
Shares of Ford were up nearly 2% during after-hours trading to about $15.10 a share. The stock closed at $14.85 a share, up roughly 1%.

Here’s how Ford did compared with what Wall Street expected:

Adjusted EPS: 38 cents vs. 37 cents, according to Refinitiv consensus estimates
Automotive revenue: $32.1 billion vs. $31.13 billion, according to Refinitiv consensus estimates

Lawler described Ford’s first-quarter results as “mixed,” citing supply chain problems and an adjusted pretax profit of $2.3 billion that, even excluding the Rivian hit, came in lower than the $3.9 billion it reported a year ago.
Strong vehicle pricing and expectations for production to increase throughout the year allowed the company to maintain its guidance, Lawler said. He reconfirmed that the automaker expects wholesale volumes, which are closely correlated with production, to increase by 10% to 15% compared to 2021.

Ford F-150 Lightning trucks manufactured at the Rouge Electric Vehicle Center in Dearborn Michigan.
Courtesy: Ford Motor Co.

Ford’s wholesale volumes were down 9% during the first quarter from a year earlier to 966,000 units.
For the quarter, Ford earned $1.6 billion from its North American operations, a significant decline from the $2.9 billion it made in that market a year ago. Its European operations reported a $207 million pretax profit compared with $341 million a year earlier. Losses from its operations in China widened from $15 million a year ago to $53 million.
Ford’s stock has been under pressure this year, down about 30% this year. It was the top growth stock among automakers in 2021.
The company’s first-quarter results come a day after its crosstown rival, General Motors, easily beat Wall Street’s earnings expectations. GM also surprised analysts by maintaining its adjusted pretax profit guidance of $13 billion to $15 billion for 2022, despite the litany of supply chain issues and increased costs.

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Boeing has lost a total of $1.1 billion so far on costs associated with a deal to modify two 747 jumbo jets to serve as Air Force One.
CEO Dave Calhoun said Boeing “probably shouldn’t have taken” risks from the deal for the planes, which was negotiated with then-President Donald Trump in 2018.
Boeing reported a net loss of $1.2 billion for the first quarter of 2022, with a charge of $660 million associated with delays and higher costs for the Air Force One program.
Boeing’s deal for Air Force One, which was cut by then-CEO Dennis Muilenburg requires the company, not the federal government, to eat the costs of any overruns on the contract.

Boeing disclosed Wednesday that it has lost a whopping $1.1 billion in costs related to its deal with the Trump administration to modify two 747 jumbo jets to serve as Air Force One — and CEO Dave Calhoun admitted the aviation giant “probably” should not have cut the deal in the first place.
Even more losses on the Air Force One contract could be coming in future quarters, Boeing warned in a regulatory filing.

Air Force One is the official designation for any plane carrying the president of the United States.
“Air Force One I’m just going to call a very unique moment, a very unique negotiation, a very unique set of risks that Boeing probably shouldn’t have taken,” Calhoun said on a call with analysts.
“But we are where we are, and we’re going to deliver great airplanes,” Calhoun said, shortly after Boeing reported a loss for the first quarter of 2022.
“And we’re going to recognize the costs associated with it.”
Boeing on Wednesday disclosed a net loss of $1.2 billion for the first quarter, with a charge of $660 million associated with delays and higher costs for the Air Force One program.

U.S. President Donald Trump arrives from a day trip to Georgia aboard Air Force One at Joint Base Andrews, Maryland, U.S. July 15, 2020.
Jonathan Ernst | Reuters

The company said the first-quarter charge on the Air Force One program brings the total loss tied to it to more than $1.1 billion.
“Risk remains that we may be required to record additional losses in future periods,” Boeing said in a securities filing.
Boeing’s deal for the Air Force One jets was cut by then-CEO Dennis Muilenburg and then-President Donald Trump in February 2018.
It requires Boeing, not the federal government, to eat any overruns in the cost of modifying the two Boeing 747 jets.
Under that fixed-price contract, Boeing is being paid about $4 billion for the work. The first of the two planes was set to be delivered in 2024, but an Air Force budget proposal from earlier this month doesn’t expect that until 2026.

CNBC Politics

Read more of CNBC’s politics coverage:

Trump in 2018 bragged that “Boeing gave us a good deal. And we were able to take that.”
Four years ago, Boeing spoke favorably about the move.
“Boeing is proud to build the next generation of Air Force One, providing American Presidents with a flying White House at outstanding value to taxpayers,” it tweeted in February 2018. “President Trump negotiated a good deal on behalf of the American people.”
Trump also told CBS News that the planes would get rid of Air Force One’s traditional baby blue color scheme in favor of “red, white and blue, which I think is appropriate.”
“Air Force One is going to be incredible,” Trump said at the time. “It’s going to be top of the line, the top of the world.”
A month after being elected president in November 2016, Trump had griped on Twitter about the “out of control” costs of Boeing’s then deal to build a new Air Force One.
“Cancel order!” Trump tweeted at the time.

He later boasted that his negotiations with Muilenburg saved $1.5 billion for taxpayers.
Boeing fired Muilenburg as CEO in December 2019 for how he handled two crashes of the company’s 737 Max jets that killed 346 people.
He was denied a severance package, but received $60 million in pension benefits and company stock, Boeing said a month after he was ousted.

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