Singapore Condo sold out in 1 day

March 26, 2010

Reasonable pricing and small unit sizes could be reasons for its popularity

The 76 Shenton condominium in the Central Business District sold out in one day during its preview. -- PHOTO: HONG LEONG HOLDINGS

THE 76 Shenton condominium in the Central Business District sold out in one day during its preview as hundreds of buyers made a beeline for the prime project yesterday.

There were so many people vying for one of the 202 units that balloting was needed to sort out who got first crack.

The Straits Times understands that there were about 300 names in the ballot, with the buyers mostly Singaporean investors and permanent residents.

The Hong Leong Holdings project has nothing over 1,000 sq ft: 134 one-bedroom units from 592 sq ft to 624 sq ft and 68 two-bedroom units of 968 sq ft to 975 sq ft. One-bedroom units were priced between $1,600 and $2,600 per sq ft (psf), or about $1.2 million, while two-bedroom units went for between $1,600 and $2,300 psf. That is about $2 million.

Hong Leong credited the strong sales to the development's 'prime location, its attractive pricing, a solid design and healthy pre-launch interest'.

Sources said property agents were apparently collecting cheques from keen buyers even before the project's launch.

By Esther Teo


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W brand residences makes S'pore debut


A NEW upscale condominium that is part of the trendy 'W' boutique hotel brand has made its debut in Singapore.

The Residences at W Singapore Sentosa Cove, which boasts 228 apartments, will be priced from $2,500 to $3,000 per sq ft (psf), said City Developments (CDL) at the launch yesterday.

The record in the gated island enclave is held by Seven Palms, where nine units went for $3,100-$3,430 psf late last year. Prior to that, the record was held by Lippo Group's Marina Collection, where units fetched a median price of $2,734 psf in late 2007.

Buyers keen on W will have to pay at least $3.4 million for the smallest unit of the seven, six-storey blocks. There are two- to four-bedroom units and penthouses, all with 99-year leases, with sizes from 1,227 sq ft to 6,297 sq ft. About 40 per cent of these are two-bed and the smaller three-bed.

The development forms part of an integrated project that comprises a 240-room W Singapore Sentosa Cove hotel and 86,000 sq ft of gross commercial space for restaurants and shops. The W residences will open first, followed by the hotel and then the shops, probably by 2012.

CDL, which is releasing 60 units for the current soft launch, was behind the branded St Regis Residences in Cuscaden Road, also a collaboration with Starwood Hotels & Resorts Worldwide. CDL managing director Kwek Leng Joo said that W was targeted at 'global jetsetters'.

The firm's group general manager, Mr Chia Ngiang Hong, said the project will be marketed overseas - in Hong Kong, Shanghai and Jakarta.

There are now nine completed W residences worldwide, eight of which are in the United States. Another 13 are in the process of being developed, said Starwood asia-pacific president Miguel Ko, with four being built in Asia, including the one at Sentosa.

Elsewhere on Sentosa, Ho Bee began the preview for its Seascape condo yesterday, and Lippo is relaunching the Marina Collection today at a price of around $2,500-$2,700 psf.

JOYCE TEO

For every 10 Singaporeans you meet more than one will be a millionaire of USD.

Singapore and Malaysia

The Boston Consulting Group, one of the leading global management consulting firm has just last week released its Annual Wealth Report and found Singapore to be amongst the top 20 countries with the most millionaires households.

Singapore, (once a part of Malaysia) is a tiny nation of 5.1 million population is ranked at no. 18 with the most numbers of millionaires and rank the highest in terms of density with 11.4 percent of the total households being a millionaire in USD (US Dollar). That is about 3.3 million Malaysian Ringgit. And this is of liquid asset which does not include the value of property owned.

(Most Millionaires Countries)

That means for every 10 Singaporeans you meet more than one will be a millionaire of USD.

Malaysia? of course is not in the list but i will try to check the most corrupt millionaire household list, maybe we are there.

As i remembered in the late 70s to early 80s before Mahathir became PM, Malaysia has one of the highest per capita income in Asia and was way ahead of countries like South Korea and Taiwan.

The Singapore dollar exchange rate was at parity with the Malaysian dollar back than at 1 for 1 and after Mahathir became PM we saw the other Asian countries race way ahead and today the Singapore exchange rate is at about RM2.33 for one Singapore Dollar.The Hong Kong dollar back than was about 3 for one Ringgit.

Singapore is today a fully developed country and an advanced nation  of which Malaysia is only still aspiring to become. Singapore enjoys a per capita income of more than USD 37 thousand whereas Malaysia is at less than USD 7 thousand which is way way off the mark being a leader in the region some 30 years ago.

Singapore is the fourth leading financial centre of the world and the fourth richest nation in terms of GDP Purchasing Power Parity per capita.

Singapore is a fine example of a sound and efficient economic management and governance with one of the highest ratings by Transparency International for being clean and the least corrupt.

On the other hand Malaysia will show you how corruption can impoverished its people and after years of progressive corruption has now become terminal and rotted to the core. Malaysia is now a sad story although blessed with rich and abundant natural resources, has 57.8% of its total household of 5.7 million earning a meager income of below 3000 Ringgit a month with an average household size of 4,5 person per household. And more than two third of the Malaysian household earns less than RM4 thousand a month at 70.7%.

(Click on Image to Enlarge)

We could have been like Singapore and we would have been a prosperous nation only if than we had selected our leaders wisely and carefully but instead we had to pick the most wicked and corrupt that has plundered our resources and divided our spirits.

My comment:

The recently announced 10th MP confirmed the demise of the NEM and the continuation of pre-existing policies.  This does not bode well for the future.  As a prudent and frugal investor, your asset allocation should be 90% foreign and 10% local.

Lessons from Malaysia: Why Singapore needs a strong and stable government

Lessons from Malaysia: Why Singapore needs a strong and stable government
June 2nd, 2010 | Author: Your Correspondent
OPINION

When Law Minister Shanmugam spoke about the need for Singapore to have a “strong and stable” government which makes “quick and effective” decisions a few months ago in Parliament, he was greeted with a dose of cynicism and derision by some netizens who saw it as another lame attempt to justify the PAP’s dominant position in Singapore politics.

The latest developments in neighboring Malaysia have provided us ample lessons on why it is important for Singapore to have a strong government and a weak opposition in order not to hamper the decision-making process for the greater good of the nation.

For over 50 years, Malaysia is governed by the ruling Barisan Nasional coalition (formerly known as the Alliance) which enjoyed two-thirds majority in the Dewan Rakyat (Malaysia’s Parliament) till the 2008 elections when the opposition won an unprecedented 82 out of 222 seats in Parliament and lost control of 5 states including the two richest states of Penang and Selangor. (the number is now reduced to 72 after a spate of defections and resignations of MPs from Parti Keadilan Rakyat)

Malaysia used to be an attractive investment destination for MNCs, but the political uncertainty has made a dent on foreign investment with net portfolio and direct investment outflows reaching US$61 billion in 2008 and 2009. Little money has also flowed into equities, according to central bank statistics.

Investments into the opposition-controlled states have slowed down too as investors are unsure if the state governments will survive till the next election after the Perak fiasco which saw Barisan wrestling control of the state back from the Pakatan Rakyat following the “defection” of three lawmakers.

The recent spate of resignations of PKR MPs from the states of Kedah and Selangor have spooked potential investors who are left wondering if business deals signed with the present state governments will be honored in the event that there is a change in government.

At the Federal level, the resurgent opposition has kept the Malaysian government on its toes, preventing it from implementing much needed reforms to liberalize the economy.

Malaysia spent 15.3 per cent of total federal government operating spending on subsidies in its 2009 budget when its deficit surged to a 20-year high of 7 per cent of GDP.

A Minister warned recently that unless Malaysia cut back on the subsidies, it will become bankrupt in 2019.

Prime Minister Najib Razak, an economist by training, has proposed the New Economic Model (NEM) to replace a four-decades old Malay affirmative policy known as the New Economic Policy (NEP) which gave a wide array of economic benefits to the “bumiputras” or ethnic Malays sometimes at the expense of other races.

Investors have long complained that abuse of the policy spawned a patronage-ridden economy, promoted corrupted practices, retarded Malaysia’s competition and causing foreign investors to favour Indonesia and Thailand.

Najib’s moves to roll back the NEP have met with stiff opposition from Malay rights group Perkasa which rejected the NEM outright and called on the NEP to be preserved.

Though cutting back on subsidies will have an immediate impact on low-income Malaysians, it will benefit the country in the long run leading to increased competitiveness and foreign direct investment.

Unfortunately, many analysts believe that the proposed reforms will be delayed, watered down or even abandoned altogether to avoid losing votes.

With the ethnic Chinese firmly behind the opposition Pakatan Rakyat, Barisan needs the votes of the Malays to shore up its flagging support base.

Rolling back the NEP at such a crucial juncture will definitely cause Barisan to lose the support of the Malays which may cause it to be voted out of office in the next general election due to be called by 2013.

Najib’s hands are tied out of political considerations to the detriment of the entire nation.

Malaysia will not be in such a conundrum if it had a strong and stable government like Singapore as well as a weak and non-existent opposition to create trouble for the ruling party.

Unpopular policies which are beneficial to the nation can be implemented swiftly on the ground without the lingering fear of losing votes in the next election.

Singapore’s economy took off between the years 1968 – 1980 when the PAP controlled all the seats in Parliament without a single opposition member.

Critical and sometimes painful decisions are made and policies implemented quickly and efficiently with no opposition from other parties.

For example, the Chinese language and vernacular schools were closed down and replaced by national schools during this period of time.

In Malaysia, this archaic system of education divided by language has remained because no Malaysian Prime Minister has the courage or determination to deal with the expected outcry from Malay rights groups and Chinese clans.

As such, Malaysia’s standard of education continues to lag behind Singapore to this very day.

Singapore does not have any natural resources like Malaysia to fall back on. That is why we need a strong and stable government to make quick and effective decisions for the good of the nation.

The present system has served us well for the last fifty years and has delivered unprecedented economic success and prosperity to our nation. Let us not go down the slippery slope of multi-party partisan politics which have ruined our neighbors like Thailand, Philipines and Malaysia.


http://www.temasekreview.com/2010/06/02/lessons-from-malaysia-why-singapore-needs-a-strong-and-stable-government/

Singapore's GDP rockets 39% as Asian trade soars

Singapore's GDP rockets 39% as Asian trade soars
May 20, 2010 - 12:26PM

Singapore's economy expanded at a faster pace than initially estimated last quarter as rising global demand boosted manufacturing and the opening of the island's first casino spurred tourism.

Gross domestic product grew an annualised 38.6 per cent from the previous three months in the first quarter, compared with an April estimate of 32.1 per cent, the trade ministry said in a statement today. That was more than the 33.4 per cent increase economists were expecting.

From a year ago, the economy expanded by 15.5 per cent, the highest quarterly growth on record. Singapore's economy shrank by 1.3 per cent last year, revised data shows after a previously reported contraction of 2 per cent.

Officials said the strong rebound from its worst-ever recession last year will be helped by a broad-based recovery in the United States and buoyant growth in large Asian economies such as China.

"The data from Singapore and around the region underscore that so far, the rebound in exports and production has been much better than what people have been expecting," said David Cohen of Action Economics.

Mr Cohen predicts the economy could grow up to 10 per cent this year, above the government's forecast of 7-9 per cent and notwithstanding the risks from the debt troubles in Europe.

Bubble risks

However, the government warned of risks from asset price bubbles in Asia and the fallout from Europe's debt crisis.

If asset prices correct too sharply in China, it could have "negative spillover'' effects on regional economies, Ravi Menon, permanent secretary at the trade ministry, told reporters in Singapore today.

"Should investor sentiments wane or if more monetary tightening measures are introduced, sharp asset price corrections could follow,'' the ministry said. "If these risks materialise, they could affect the global recovery and negatively impact Singapore.''

Singapore private home prices rose 5.6 per cent in the first quarter from the last three months of 2009 despite government policies such as higher down payment requirements for mortgages.

Ong Chong Tee, deputy managing director at the Monetary Authority of Singapore, the city-state's central bank, indicated the government will use administrative rather than broad measures to curb runaway property prices.

"It is much better not to use monetary policy, which is a blunt instrument, but to use much more targeted, preventive, administrative or even fiscal measures to address this," he said.

Japan, Malaysia

Growth is also accelerating in other parts of Asia. Japan said today its economy expanded at the fastest pace in three quarters in the period ended March 31 as an export-led recovery spreads to consumer and business spending. Neighboring Malaysia last week reported a first-quarter expansion that was the quickest in a decade.

Singapore's non-oil domestic exports will probably gain between 15 per cent and 17 per cent in 2010, from a previous projection of as much as 12 per cent, the trade promotion agency said today.

Singapore's government expects the economy to grow as much as 9 per cent this year.

The Monetary Authority of Singapore, which uses the currency instead of interest rates to conduct monetary policy, said April 14 it will "re-centre the exchange rate policy band at the prevailing level'' of the Singapore dollar, shifting to a stronger range for the currency to trade in. The central bank guides the Singapore dollar against a basket of currencies within an undisclosed band.

The Singapore dollar, which rose as much as 1.2 per cent on the day the new currency stance was announced, has since weakened amid the European debt crisis. It traded at $US1.3977 against its US counterpart in early trade, falling 2.1 per cent this month.

Manufacturing and tourism

Manufacturing, which accounts for about a quarter of Singapore's economy, climbed 32.9 per cent from a year earlier last quarter, after gaining 2.2 per cent in the three months through December. That compares with the April estimate of 30 per cent.

Singapore's visitor arrivals are surging as resorts run by Las Vegas Sands Corp. and Genting Singapore Plc attract tourists to their roulette tables, shops and hotels. The Singapore Tourism Board expects to lure as many as 12.5 million visitors this year.

The island's services industry grew 10.9 per cent last quarter from a year earlier, after climbing a revised 3.7 per cent in the previous three months. The construction industry gained 13.7 per cent, compared with a revised 11.5 per cent increase in the fourth quarter.

Bloomberg News, Reuters

Inflation may check Singapore bank profits

Inflation may check Singapore bank profits
May 05, 2010


SINGAPORE, May 5 — Singapore banks are mostly set to post double-digit rises in quarterly earnings as loans grew and bad debts declined, but rising inflationary pressures are raising medium-term concerns that higher rates may squeeze margins.

The city-state’s banks are benefiting from a strong recovery in the domestic economy, which is projected to expand as much as 9 per cent this year, its best annual performance since 2004. Singapore’s economy shrank 2 per cent last year.

But inflation — which is expected to hit a two-year high in the fourth quarter — is also posing a risk to short-term interest rates, which hit rock bottom during the financial crisis as Asian economies battled the global financial crisis.

“The main risk is an interest rate risk — a sharp repricing of the short-end of the curve which would result in a narrowing of net interest margins,” said Peter Elston, a strategist at Aberdeen Asset Management Asia.

“That repricing of the short end would be the result of a sudden change in inflationary expectations,” said Elston. Aberdeen owns OCBC and UOB in Singapore and Public Bank in Malaysia.

Analysts are bullish about bank earnings as strong capital markets and higher trading in currencies and bonds have helped lift results at global banks that are recovering from the credit crisis.

“The market will be looking for evidence of revenue recovery and that the earnings uplift from lower loan impairments is now largely a foregone conclusion,” Natasha Midgley, an analyst at Standard Chartered, said in a note. “In light of recent newsflow, we see scope for revenue-driven earnings’ upgrades.”

NEW STRATEGY

Banks will also benefit from a strong recovery in investor demand for mutual funds and insurance products, boosting fee income.

Analysts are also looking for clues from DBS chief executive Piyush Gupta on the progress he has made in implementing his new strategy that aims to widen the Singapore bank’s reach in Asia.

JPMorgan’s Harsh Wardhan Modi said Gupta has made a promising start, but he would like to see more progress in improving DBS’s Hong Kong business and gaining bigger market share in the segment serving small-and-medium enterprises as Asian economies recover.

In Malaysia, where most analysts do not provide quarterly forecasts, Macquarie Research expects banks will report on average a 43 per cent growth in net profit for Jan-March from a year ago, amid lower bad-debt charges.

Maybank’s earnings are set to outperform this year after its last financial year was marred by big writeoffs linked to acquisitions in Indonesia and Pakistan. — Reuters

Singapore retail investors back as volume surges

Retail investors appear to have returned to Singapore market, judging from today’s robust trading volume, says Dow Jones.

More than 2.76 billion shares changed hands so far vs 1.59 billion for whole of yesterday, clearing 2 billion mark for first time since February. Activity driven mostly by penny stocks, led by GMG Global (5IM.SG), Advanced Systems Automation(520.SG), United Fiber System (P30.SG).

While STI +8.2% since beginning March, run-up so far not accompanied by substantial volume. Still, value of all shares currently traded on SGX not much higher than yesterday’s $1.17 billion, last at $1.52 billion, as penny shares main volume driver.

Whether coming sessions can attract equally robust volume remains to be seen, especially with investors expected to be watchful when Singapore earnings season begins next week. STI +0.5% at 2,990.59.

http://www.theedgesingapore.com/the-daily-edge/business/14190-singapore-retail-investors-back-as-volume-surges.html

Mid-Week Comment March 10: Asian REITs outperform

Mid-Week Comment March 10: Asian REITs outperform

WRITTEN BY GOOLA WARDEN
THURSDAY, 11 MARCH 2010 10:08


SO FAR, Asian stock markets have been going nowhere this year. Year-on-year though, the STI has almost doubled, the S&P500 is up 69%, and the FTSE All-World Index up 75% in US$ terms. Not surprising then that after such a performance, markets are taking a breather.

It is also not surprising that analysts are now recommending REITs over developers as investors shift their attention to yield. That is not to say that REITs have underperformed stocks. In a recent report, Ernst & Young points out that Asian REITs as a group have outperformed in terms of total returns. Singapore and Hong Kong REITs posted 85.6% and 64.5% returns respectively in 2009 with Malaysia (38.6%) and South Korea (28.4%) also performing strongly. Returns for Japan’s REITs grew just 6.68%, with Australia’s REITs performing slightly better at 10.4% growth in returns in the same full-year period. The largest single REIT market in the world, the United States, witnessed almost 28% returns.

In a report dated March 8, DBS Group Research points out that Singapore’s property sector is becoming increasingly segmented because of government policy. The recent measures are aimed at keeping public housing affordable.

“The policy road ahead is likely to remain focused on the mass-end of the housing market,” the report states. “We believe these rule changes were widely anticipated, given the frequent allusions by key political figures in recent months, on the need to address issues of affordability and social cohesion in the public housing arena,” says DBS. “This is likely to filter up to greater pricing resistance in the mass-end private housing segment, in line with our call to place bets on the high-end developers instead.” Its favourite plays in the property market are Ho Bee Investment and Wheelock Properties because of their focus on the high-end, and diversified players such as Capitaland and United Overseas Land.

DBS also prefers REITs such as CDL Hospitality Trusts, Ascott Residence Trust and CapitaMall Trust to developers.

CHART VIEW: BLUE CHIPS COULD DRIVE STI HIGHER
This week, the STI (2,862) has managed to move above its 50-day moving average at 2,812. The 21-day RSI has broken above a resistance and its equilibrium line, indicating that near term, prices are set to rise. Quarterly momentum is turning up from its equilibrium line, and the DIs have turned positive. Resistance stays at the 2,900-2,913 range. Volume has picked up a trifle, but remains below the levels when the market peaked in January.

Instinctively, if the STI attempts to break out, it will do it with the help of index stocks. The stronger ones are Sembcorp Marine, Sembcorp Industries, Neptune Orient Lines, the Jardine group of companies, Singapore Airlines and Singapore Telecommunications. SIA ($15.94) has moved up by $1 since the start of the month, and has been an important contributor to the STI’s strength. Technically, it is emerging from a bull flag, and looks set to move above $16. But, after such a strong surge, a pull-back should not be unexpected.

Singtel ($3.15), on the other hand, peaked last July, and has been entrenched within a trading range for the past six months. If it breaks out — and indicators are strengthening — it could well re-test the $3.50 level. That in turn would trigger the STI’s own break above 2,900, indicating a new upside target.

http://www.theedgesingapore.com/blog-heads/goola-warden/13373-mid-week-comment-march-10-asian-reits-outperform.html

India’s Fortis Healthcare to acquire 24% stake in Parkway Holdings for $959m

India’s Fortis Healthcare to acquire 24% stake in Parkway Holdings for $959m

WRITTEN BY THE EDGE
THURSDAY, 11 MARCH 2010 18:28

Fortis Healthcare, India’s fastest-growing healthcare company, has announced the acquisition of a 23.9% strategic stake in healthcare service provider Parkway Holdings from TPG Capital (formerly Texas Pacific Group).

Parkway has a network of 16 hospitals having 3,400 beds spread over six countries, including India. The deal size is estimated to be about US$685.3 million ($959.4 million).

Fortis has entered into a definitive agreement with TPG Capital, one of the world’s leading private investment firms, to acquire its 23.9% stake in Parkway.

Fortis intends to seek four seats on the board of directors of Parkway and also to nominate Malvinder Mohan Singh (current Chairman of Fortis Healthcare) as the Chairman of the Board of Directors of Parkway.

http://www.theedgesingapore.com/the-daily-edge/business/13410-indias-fortis-healthcare-to-acquire-24-stake-in-parkway-holdings-for-959m.html

Singapore: Property developers, Wilmar, UOB, Cerebos, Raffles Medical, Midas

March 1: Property developers, Wilmar, UOB, Cerebos, Raffles Medical, Midas


Written by The Edge
Monday, 01 March 2010 08:46


Wilmar International (WLIL.SI), the world’s largest palm oil planter, is likely to be in the spotlight on Monday after reporting a better-than-expected 18% rise in its fourth-quarter results.

Benchmark Straits Times Index (.FTSTI) inched 0.06% higher to end at 2,750.86 points last Friday.

US stocks rose last Friday, capping their best monthly advance since November as data showed the economy grew a tad better than expected in the fourth quarter.

Property developers: The government said it will raise the cost of residential land development starting March 1. Non-landed residential charges will rise 8% on average, while charges for landed homes will increase 12% on average, it said in an e-mailed statement today. Charges for commercial land development will decline an average of 2%.

Wilmar International (WLIL.SI), the world’s largest palm oil planter reported on Sunday a better-than-expected 18% rise in fourth-quarter net profit as a global economic recovery drove commodities prices higher. It also said it would continue to seek attractive investment opportunities to support future growth.

United Overseas Bank (UOBH.SI) , Singapore’s third-biggest bank, expects high single-digit loan growth in 2010 and is trying to maintain loan margins for corporate customers, CEO Wee Ee Cheong told a news conference.

Singapore-listed health supplement manufacturer Cerebos Pacific (CERE.SI) said last week it is aiming for a 10–20% revenue growth over the next three years as it steps up its presence in China, Indonesia and Vietnam.

Raffles Medical Group, the private healthcare provider in Singapore and the region, says profit after tax for the group increased 20.1% from $31.7 million in 2008 to $38 million in 2009.

Midas Holdings, the manufacturer of aluminium alloy extrusion products for China’s railway sector, announced a 14.9% rise in net profit to $37.5 million for the financial year ended December 31, 2009 (FY2009).

Abterra, the supply chain manager of resources and minerals, managed to swing back into the black with a net profit of $13.3 million for the financial year ended 31 December 2009 (FY2009) largely due to a gain from the revaluation of a mining asset.

Yongnam Holdings, the structural steel contractor and specialist civil engineering solutions provider, announced a record profit before tax of $48.8 million for its full year ended December 31, 2009 (FY2009) on the back of a 2.7% increase in revenue to $346.8 million.

China Sports International, the sports fashion footwear and apparel company based in China, reported net profit decreased by 33.7% to RMB122.6 million ($25.3 million) for the full year ended 31 December 2009 (FY09) from RMB184.9 million in FY08 as the result of lower average selling prices for footwear products.

Delong Holdings, the manufacturer of hot-rolled steel coils (HRC) in China, says it posted a net profit after tax of RMB 248.4 million and RMB 416.9 million ($86 million) for the fourth quarter (4Q2009) and full year (FY2009) respectively, reversing net losses of RMB 637 million and RMB 370.4 million recorded in 4Q2008 and FY2008 respectively.

Synear Food Holdings, the China-based producer of quick freeze food, today posted a more than two-fold surge in net profit to RMB40.7 million ($8.4 million) for the three months ended December 31, 2009 (4Q09), due mainly to lower selling and distribution expenses and lower income tax expense. Revenue for the quarter rose 1.1% to RMB507.1 million.

Food Empire Holdings, the manufacturer of instant beverage products, frozen convenience food, confectionery and snack food, says profit before tax fell 86.2% to US$3.2 million ($4.5 million) while revenue fell 39.3% to US$134 million and for the year ended 31 December 2009.

Apex-Pal International, which operates the global chain of Sakae Sushi restaurants, today reported a net profit before tax of $3.3 million for the fiscal full year ending on 31 December 2009.

Techcomp (Holdings), the China manufacturer and distributor for analytical and life science instruments, posted a 139.4% year-on-year rise in net profit attributable to shareholders to US$7.4 million ($10.4 million) for the 12 months ended 31 December 2009 (FY2009). Revenue increased 29.3% to US$104.8 million fuelled by Asia’s increasing demand for analytical and life science equipment.

http://www.theedgesingapore.com/the-daily-edge/business/13008-march-1-property-developers-wilmar-uob-cerebos-raffles-medical-midas.html

Wilmar says Q4 net profit up 18% to US$442m

Wilmar says Q4 net profit up 18% to US$442m

Tags: Wilmar | Wilmar International
Written by Thomson Reuters
Sunday, 28 February 2010 18:05


Wilmar International (WLIL.SI), the world’s largest palm oil producer, reported today a better-than-expected 18 percent rise in fourth quarter net profit as a global economic recovery drove commodities prices higher.

The company, which has a presence in 20 countries across Southeast Asia, China, India, Europe and Africa, said it would continue to seek attractive investment opportunities to support future growth.

Malaysia’s benchmark palm oil price (KPOc3) rose nearly 60% in the quarter compared with the previous year.

The firm derives about half of its total sales from China, and owns oil palm plantations and runs crushing and refining plants in Indonesia and Malaysia.

“We will persist with on-going efforts to further improve our operational efficiency through greater integration and economies of scale, and seek attractive investment opportunities to continue growing our group,” said Chief Executive Kuok Khoon Hong in a statement.

The company did not elaborate on its future investment plans, but it has previously said it was planning to invest at least US$1 billion ($1.4 billion) in Indonesia, China, and Africa.

Wilmar posted a net profit of US$442 million, up from US$373.6 million a year earlier, ahead analysts forecasts of US$333.5 million.

The quarterly results took the full year net profit to US$1.88 billion, higher than ThomsonReuters I/B/E/S estimates of US$1.65 billion.

On the outlook, Wilmar, which has a market capitalisation of $41.5 billion, said that although economic recovery appeared to have started, the global business environment is expected to be volatile.

However, the company said Asian economic activity would continue to remain robust, especially in China, India and Indonesia.

Wilmar’s shares have risen around 1% since the start of the year, outpacing a 5% drop in the broader Straits Times index (.FTSTI).

http://www.theedgesingapore.com/the-daily-edge/business/13007-wilmar-says-q4-net-profit-up-18-to-us442m.html

Golden Agri-Resources price target raised

Golden Agri-Resources price target raised to 68 cents by OSK

Tags: Golden Agri-Resources
Written by The Edge
Monday, 01 March 2010 17:03

OSK has raised Golden Agri-Resources’ (E5H.SG) target price to 68 cents from 63.5 cents, based on 15x FY10 P/E, after increasing FY10 earnings forecast 8.3% to assume higher palm oil prices on back of lower fertiliser costs.

The broker says the change to bottomline estimate also reflects lower corporate tax rate of 25% vs 30% previously. Cites high fertiliser cost as one key factor weighing on FY09 profitability (earnings down 56.1% at US$607 million ($854 million)), but notes highly-priced fertiliser has since been used up.

It adds that production is also back on track, rising 13% last year after being hit by adverse weather in previous three years.

Tips production to grow 10% in 2010 on back of improving age profile.

Keeps “trading buy” call.

Shares +1.9% at 54 cents.


http://www.theedgesingapore.com/the-daily-edge/business/13045-golden-agri-resources-price-target-raised-to-68-cents-by-osk.html

Some Singapore Property stocks, Genting, NOL, SPH, Wilmar

Feb 22: Property stocks, Genting, NOL, SPH

Written by The Edge
Monday, 22 February 2010 08:24

Last Friday, the Straits Times Index dropped 0.4% to 2,757.14.

Asian investors are likely to be wary ahead of the opening of Shanghai shares on Monday after a week-long holiday for the Lunar New Year, but last week’s gains on Wall Street could offset any negative sentiment.

The following companies may have unusual price changes in trading today. Prices are from Friday’s close.

Property stocks could be hit after the government imposed a new stamp duty on homes sold within one year of purchase and capped the maximum housing loan at 80% of the property value, measures aimed at cooling the property market.

CapitaLand (CAPL SP), Southeast Asia’s biggest developer, lost 0.5% to $3.90. City Developments (CIT SP), the island-nation’s second-biggest developer, dropped 1.5% to $10.82. Keppel Land (KPLD SP), the developer part-owned by Keppel Corp. (KEP SP), declined 1.8% to $3.37.

Palm-oil suppliers: Crude palm oil for May delivery dropped 0.2% in Kuala Lumpur on Feb. 19, taking losses in the past two days to 1.2%. Golden Agri-Resources (GGR SP), the world’s second-biggest palm oil producer, slid 0.9% to 54.5 cents. Wilmar International (WIL SP), the world’s biggest palm oil trader, gained 1.3% to $6.39.

Genting Singapore Plc. (GENS SP): The owner of Singapore’s first casino said its net loss doubled to $277.6 million last year from $124.8 million in 2008 as gambling revenue in London declined and staff costs increased. Genting fell 1.1% to 94 cents.

Neptune Orient Lines (NOL SP): Southeast Asia’s biggest container carrier said its APL unit will raise rates on intra-Asian routes from March 1. NOL slipped 0.6% to $1.66.

Singapore Press Holdings (SPRM.SI) announced early today it was setting up a $1 billion multi-currency notes programme and will sell at least $300 million of five bonds via lead manager OCBC (OCBC.SI).

Bulk carriers: The Baltic Dry Index, which measures the cost of shipping commodities, gained 0.4% in London on Feb. 19, extending a four-day rally to 5.8%. Cosco Corp. Singapore (COS SP), a China-based shipbuilder that also operates bulk carriers, was unchanged at $1.27. STX Pan Ocean Co. (STX SP), South Korea’s biggest bulk carrier, dropped 1.3% to $13.80.

http://www.theedgesingapore.com/the-daily-edge/business/12720-feb-22-property-stocks-genting-nol-sph.html

Singapore winds down economic stimulus in budget

Singapore winds down economic stimulus in budget
Written by Thomson Reuters
Monday, 22 February 2010 19:37

Singapore today announced a smaller budget deficit for 2010/11, as governments across Asia start to unwind the stimulus policies introduced at the height of the financial crisis last year.

The government halted income and property tax rebates introduced last year and said it will phase out subsidies paid to employers to hold onto staff amid a strengthening labour market.

But the government will raise spending to boost productivity, which lags developed economies such as the United States, Japan and Hong Kong.

“The economy is improving here and around the world and so is the business activity,” said David Cohen, an economist at Action Economics. “Maybe the government feels it’s time to tighten up their fiscal largess as the economy can afford it.”

Finance Minister Tharman Shanmugaratnam expects a basic budget deficit of $7.2 billion, or 2.6% of GDP, for the fiscal year beginning April 2010, down from an estimated S$8.5 billion, or 3.3% of GDP, this fiscal year.

Singapore last week raised its economic growth forecast for 2010 to 4.5% to 6.5% from 3% to 5% after reporting better-than-expected fourth-quarter GDP.

The overall budget balance for FY2010/11 is an estimated deficit of $3 billion, or 1.1% of GDP.

The basic budget deficit excludes transfers by government to various endowment and retirement funds as well as the net investment returns from the country’s massive reserves.

Singapore last year tapped its reserves for the first time and introduced a $20.5 billion “resilience package” on top of its regular budget to save jobs and help businesses.

The government originally expected a $14.9 billion basic budget deficit in 2009/10 but the shortfall turned out to be smaller as the economy recovered in the second half of 2009 and the boom in the residential market boosted stamp duties.

India, which will announce its 2010/11 budget on Friday, is likely to announce a narrower deficit of 5.5% of GDP, Citigroup predicts. Hong Kong, which will unveil its budget on Wednesday, may dole out income and property tax waivers given the government’s strong finances.


Also read:
http://www.theedgesingapore.com/blog-heads/manu-bhaskaran/12348-manu-bhaskaran-new-directions-for-singapores-economy.html

Dealers say one of the biggest casualties of the margin calls is Resorts World at Sentosa operator Genting Singapore PLC.

Mid-Week Comment Jan 27: Margin calls, S-chip woes drag down STI

Tags: China Milk Products Group | China Printg & Dyeing Hldg | Delong Holdings | Ferrochina | Genting Singapore Plc | Ks Energy Services | New Lakeside Holdings | Sunshine Holdings
Written by Goola Warden
Thursday, 28 January 2010 09:16

ON WEDNESDAY, ‘forced selling’ by local traders on margin calls hit the market and drove the benchmark Straits Times Index down a further 34 points to close at 2,706.26. In all, the STI has fallen 187 points since last Wednesday, and 227 points from its Jan 11 high of 2,933.

Dealers say one of the biggest casualties of the margin calls is Resorts World at Sentosa operator Genting Singapore PLC. Its share price is down almost 20% since the start of the year. According to a report by DBS Group Research, there could be a potential share overhang from the “mandatory conversion of remaining $321 million Convertible Bonds 2 at 95 cents (338 million shares) on Feb 9”.

Separately, KS Energy Services, the offshore oil & gas and marine services and support company run by Indonesian millionaire Kris Wiluan, announced it plans to issue $50 million in principal amount of 3% convertible bonds due 2015 at an issue price of 89.34% of the principal. The $44.67 million raised will be used to refinance existing debts. The initial conversion price is $1.60 per share, representing a 30% premium to its last traded price of $1.23. KS Energy may also undertake a further issue of convertible bonds worth up to $57 million if required.

According to OCBC Investment Research, the funds are likely to be used because bondholders of the previous tranche of convertible bonds issued in 2007 might opt for early redemption. The bonds issued to Stark funds were at a conversion price of $4.05. “Early redemption would require a yield to maturity of 5.5% for Stark, and we therefore estimate KS Energy would need about $113 million ready,” OCBC says. The report believes that KS Energy could come to the market with new shares “at any time, given the capital-intensive nature of its business” and has a “hold” recommendation.

Convertible bonds have been a poisoned chalice of sorts for some stocks, particularly S-chips. On Monday, the South China Morning Post said six of 11 S-chips which sold convertible bonds between 2005 and 2008 have insufficient funds to repay their convertible bondholders. The S-chips named were China Milk Products Group, steel coil maker Delong Holdings, property developer Sunshine Holdings, China Printing & Dyeing Holding, waste treatment services provider Sino-Environment Technology Group and steel group FerroChina.

Meanwhile, a local broker report says S-chip New Lakeside Holdings, the producer of apple concentrate, could be insolvent, following the company’s decision to make an RMB22.75 million ($4.7 million) provision for its liability to Bank of China. This may also force the other two principal bankers China Construction Bank and ICBC to demand immediate repayment of RMB14.5 million and RMB10 million. As a result of these claims, the company’s liabilities will exceed its assets.

To be sure, Singapore stocks weren’t the only ones being sold down. Markets everywhere in Asia reeled, largely because of China’s credit-tightening measures. According to a Citigroup Research report dated Jan 25, Asian fund inflows were down 94% week-on-week to US$29 million ($40.7 million) last week. Month-to-date, net inflows to Asian funds barely rose above US$670 million, the report says. This is much smaller than average inflows of US$2.1 billion in the month of January between 2004 and 2007. Asian fund inflows were dampened by China tightening and the strong dollar, the report says.

CHART VIEW
The market is becoming increasingly “oversold” based on short-term oscillators. For the STI, the 21-day RSI is at 34% and the 14-day RSI at 24%. These are at their lowest levels since March last year. Support appears in the 2,700 area which was tested several times before the index eventually broke out. On the flip side, the STI is below its still rising 100-day moving average now at 2,748 and the 200-day moving average at 2,539. With support appearing soon, and indicators — including the five-day stochastics — at extreme lows, the market should attempt a rebound at resistance level to 2,748. A stronger upmove would only develop after a series of positive divergences, which would take four to five weeks to develop.

http://www.theedgesingapore.com/blog-heads/goola-warden/12036-mid-week-comment-jan-27-margin-calls-s-chip-woes-drag-down-sti.html

Singapore’s rich optimistic on property prices, survey finds

Singapore’s rich optimistic on property prices, survey finds
Written by Bloomberg
Thursday, 03 December 2009 15:27
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Singapore’s rich are among the most optimistic of global investors on real estate, expecting the value of their property holdings to rise in the next two years, according to a survey.

Fifty-three percent of Singapore investors forecast prices to increase, more than the 49% of respondents globally, the survey by Barclays Wealth and the Economist Intelligence Unit found. The survey of 2,000 people with investable assets of more than US$800,000 ($1.1 million) was taken in August and September.

Home prices in Singapore rose 15.8% in the third quarter, the first increase in more than a year, according to the Urban Redevelopment Authority. Transactions declined since peaking in July, and private home sales slowed for a third straight month in October, the authority said.

“While it can be tempting to seek refuge in property as a safe haven, investors must be careful to avoid overexposure to an asset class that has traditionally proven to be susceptible to economic cycles,” said Didier von Daeniken, chief executive of Barclays Wealth Asia Pacific, in a statement released today with the survey.

Singapore has said it will sell more land sites and ban interest-only mortgages for uncompleted homes as part of measures to prevent excessive price swings. Last month, its central bank said it may be “necessary” to implement more measures to counter real-estate market speculation.

Singapore investors said they plan to raise their property investments from the current average of 25% of their portfolio, the survey stated.

Investors from India and Canada were the most optimistic, according to the survey, with 56% and 55%, respectively, expecting price increases.

Prime Minister Lee Hsien Loong's National Day Message

Prime Minister Lee Hsien Loong's National Day Message

08:10 PM Aug 08, 2009

My fellow Singaporeans,

Singapore has had a turbulent and challenging year. In January, dark clouds had gathered all around us. Our economy was hit by the worst storm in our history. Exports went down by a third, and manufacturing too declined sharply, since we produced for world markets. Given this backdrop, we projected GDP to shrink this year by 6% to 9%.

We couldn't have avoided the storm, but we didn't passively resign ourselves to fate. Instead, we mobilized Singaporeans to tackle the crisis together. We brought the Budget forward to January, implemented a Resilience Package, and drew on past reserves to help fund the Special Risk Sharing Initiative and the Jobs Credit.

We are now in a stronger position. The global economic situation has somewhat stabilised. Our measures have cushioned workers from the worst of the storm. Our economy was amongst the worst hit, and yet we still have one of the lowest unemployment rates in the world. Singaporeans too have responded resolutely and cohesively. These factors helped the Singapore economy to bounce back strongly in the second quarter. As a result, growth in the first half of the year was -6.5%, a very significant contraction, but less bad than we had feared. Hence we have revised up our growth projection for 2009. Our economy will still shrink, but only by between 4% and 6%.

But it's too early to celebrate. The outlook remains clouded. The advanced economies aren't expected to bounce back soon. Our exports remain much lower than last year, and companies like SIA are still facing very tough conditions. We might see another wave of retrenchments later in the year. So we must stay on guard for more challenges to come.

Beyond this year, we expect the global situation to remain difficult for some time. But the adverse external environment doesn't mean that Singapore cannot grow. We can and must look for new ways to develop and prosper. Opportunities still exist, especially in Asia, but we need all our ingenuity and resourcefulness to find them and exploit them.

Businesses and workers are already adjusting to the new world. Many firms are changing their business processes, finding innovative ways to cut costs and generate revenues, and aggressively seeking out new markets. Workers are taking advantage of the SPUR programme to upgrade their skills and retrain for new fields. The unions are cooperating closely with employers to adapt to the changed conditions, instead of resisting change. We must keep this up.

In the midst of recession, as we tackle the immediate challenges, we must also look to the future. The Economic Strategies Committee is studying how we can transform our economy. The Committee will examine how Singapore can find new opportunities, build new capabilities, sustain balanced growth and overcome our constraints. We are involving the private sector, to gather the best ideas that can enable us to prosper. I am confident the Committee will have good proposals when it reports next year. Our responses in this crisis will ensure that once the US and Europe emerge from their troubles, and the world economy recovers, Singapore will forge ahead again in a dynamic Asia.

Up close, our current difficulties may appear daunting; but we should see them against a longer perspective. It's been 50 years since we attained self-government in 1959. Over this half century, Singapore has encountered many serious challenges - racial riots in the 60s, oil shocks in the 70s, a major recession in the 80s, the Asian Crisis in the 90s, the 9/11 attacks and SARS in this decade. Each time our people have rallied and prevailed, and hence Singapore has continued to thrive and prosper, and has arrived here today.

We didn't start out as one people. Our forefathers were different peoples from different lands, who had come to Singapore to seek better lives for themselves and their children. But our formative years fighting for independence, then striving as a new nation to survive against the odds, brought us all closer together. Each time we were challenged, we responded as one, everyone pulling together and working for the common good. And each success further cemented our cohesion, and helped us to meet the next challenge.

We are doing this again in this crisis. Everyone of us - government and people, employers and unions - is working together, keeping companies viable and competitive, preserving jobs and livelihoods, and enhancing social safety nets like Workfare and ComCare. This crisis may be a severe test, but our history and record give us confidence that we will once again turn it into an opportunity to strengthen our social compact, and upgrade our economy.

We've responded to the outbreak of Influenza A(H1N1) in the same way. We worked hard to delay and slow down the spread of the new virus in Singapore. Our efforts depended not only on the healthcare system and professionals, but also on citizens being vigilant and socially responsible. We bought ourselves precious time to learn more about the virus and gear up our defences.

Whether fighting the recession or the flu, we made sure every Singaporean knows he's not alone, but that the community and country are behind him. So long as you make the effort and do your best, the rest of us will help you to pull through.

This unity is key to our success in many fields. We must work hard to strengthen it, and to bridge potential divides within our society, be it between Singaporeans and new arrivals, between rich and poor, or most fundamental of all, between the different races and religions. We often see ethnic strife and religious conflicts in other countries. This last year alone, we've witnessed the Mumbai terrorist attacks, and the recent bombings in Jakarta. In Singapore we have to respect each other's cultures, practices and beliefs, build trust and harmony between our communities, and gradually enlarge the secular common space which all groups share. In this way, we can become one people, one nation, one Singapore.

We are well placed to deal with these challenges. We are not just pursuing economic growth, or strengthening our society, or remaking our city, but creating a new Singapore.

We are improving our living environment, and developing better amenities for the community, more green spaces and park connectors. We are creating more avenues for students to advance and opening up more opportunities to go to university. We are building new hospitals, improving step-down care, and making healthcare more accessible and affordable to all. We are also revitalising the city - upgrading housing estates all over the island, refreshing our downtown into a premier shopping and entertainment venue, and creating a new skyline around Marina Bay, which is taking shape day by day.

My fellow Singaporeans, in the half century since we attained self-government, we've been tested many times, but we've also created many possibilities for ourselves. Let us stand shoulder-to-shoulder, so that whether it rains or shines, we can work together and achieve the best results for Singapore. This is how we build a better and more vibrant nation, and make Singapore a special place that we are all proud to call our home.

I wish all Singaporeans a very Happy National Day.

Singapore’s rich list takes a beating

Singapore’s rich list takes a beating
SINGAPORE, June 26 — Singapore’s rich were not spared the effects of the global financial meltdown last year, with the number of millionaires here shrinking 22 per cent to 61,000 people.

A year earlier, Singapore boasted one of the world’s top 10 fastest-growing millionaires’ clubs, with a 15.3 per cent expansion to 78,000.

A millionaire is defined as a person having net assets of at least US$1 million (RM3.52 million), excluding his main residence and everyday possessions.

Observers say the sharp drop is probably because the well-heeled here were invested heavily in equities and real estate, both of which have suffered in the crisis.

The figures emerged in the 13th annual World Wealth Report released yesterday by banking group Merrill Lynch and research firm Capgemini.

On average, Singapore’s ‘high net worth individuals’ were worth about US$3 million each, said Kong Eng Huat, managing director and head of South Asia advisory at Merrill Lynch Global Wealth Management.

“A lot of these (individuals) are in the US$1 million to US$5 million range. So that’s why you find a greater drop in terms of the high net worth population because...when the market comes down and they have invested heavily in equities then they would not be a high net worth individual any more,’ he added.

Globally, the number of people in the millionaires’ club fell by about 15 per cent to 8.6 million, which is below the figure in 2005. North America, Europe and the Asia-Pacific registered the largest declines.

The total wealth of these individuals fell to US$32.8 trillion, also below the levels in 2005. However, this is forecast to recover in all regions by 2013, with Asia-Pacific leading the growth.

More than half of the world’s millionaires last year came from three countries — the United States, Japan and Germany. The proportion is a slight increase from the year before.

China climbed one rung to become the country with the fourth largest millionaires’ population of 364,000.

The World Wealth Report also indicated that the millionaires have reacted to the crisis by moving more of their assets into cash and fixed-income securities — and away from equities.

A larger proportion of wealth was allocated to art collections and jewellery, gems and watches. This category hit 47 per cent last year, up from 38 per cent in 2006.

Bhalaji Raghavan, Capgemini’s banking solutions leader for Asia-Pacific, said: “One of the reasons is that people believe that (these items) over a long period of time increase in value, so it’s a lot safer than putting their money in financial markets.”

Giving to charity was forecast to be on the decrease on average across the globe this year, especially in North America, but increasing in the Asia-Pacific region.

Private banks contacted by The Straits Times said their clients are now staying away from high-risk investment products.

“Currently, it is back to basics of investment, and we have seen that cash positions in portfolios are high,” said Rajesh Malkani, Standard Chartered Private Bank’s head of Southeast Asia.

Raj Sriram, RBS Coutts’ head of private banking in Singapore, agreed: “From a private bank perspective, the main challenge is that clients have become more risk averse due to volatility in the markets...Clients today largely prefer simpler, liquid investments.” — The Straits Times

http://www.themalaysianinsider.com/index.php/business/30586-singapores-rich-list-takes-a-beating

What will happen in more politically unstable Asian countries

From The TimesApril 15, 2009

And if it can happen in Singapore...

With more bad economic news out of the city state, the worry is what will happen in more politically unstable Asian countries

David Wighton: Business editor's commentary


They are not talking about green shoots in Singapore, at least not economic ones.

The city state's central bank effectively devalued its currency yesterday as figures showed that the economy shrank by an extraordinary 11.5 per cent in the first quarter compared with a year earlier.

The Government revised its forecast for the full year to a slump of between 6 and 9 per cent.

So successful for so long, Singapore is heavily exposed to sectors hardest hit in the current downturn - finance, shipping and manufacturing. Exports were down 17 per cent in the first quarter.

The very modest devaluation will not help much - at least until export markets pick up - and the authorities will be wary of a bigger depreciation of the currency in case it undermines the confidence of international investors.

Analysts believe the downturn may prompt an exodus of expatriate workers undermining the efforts to encourage immigration and turn Singapore into a finance hub for South East Asia.

The worry is that where Singapore goes, other less politically stable Asian countries may follow.

http://business.timesonline.co.uk/tol/business/columnists/article6094612.ece

High returns not sustainable in global crisis: Singapore GIC

Agence France-Presse - 2/2/2009 8:47 AM GMT

High returns not sustainable in global crisis: GIC

High returns obtained for 20 years by one of Singapore's sovereign wealth funds will not be seen during the global credit crisis, the firm's deputy chairman said in remarks published Monday.
The Government of Singapore Investment Corp (GIC), one of the world's largest sovereign wealth funds, announced in September that its nominal annual rate of return over the past 20 years was 7.8 percent in US dollar terms.
However, deputy chairman Tony Tan Keng Yam said the firm, which has bailed out international financial institutions hit by the economic turmoil, said the economic environment had made such profits very unlikely.
"I do not expect GIC or any other large investor to be able to reproduce the type of high returns which GIC was able to deliver in the last 20 years," Tan was quoted as saying in an interview with the Straits Times.
"It's now a completely different economic and financial environment which all investors, all companies have to deal with -- and this will last for quite some time," Tan said.
In late 2007 and early last year GIC injected billions of dollars into Swiss bank UBS as well as US banking giant Citigroup, which suffered massive losses from US subprime, or higher-risk, mortgage investments.
Subprime troubles later evolved into the worldwide financial slowdown.
Governments and central banks have stepped in with stimulus packages and other measures to confront the crisis. If these measures work, the world's economy could start to recover later this year, Tan said in the interview.
A recession that lasts into 2010, however, could be a sign of "systemic change in the world economy," he said.
In a weekend speech to the World Economic Forum of global leaders in Davos, Switzerland, Tan said sovereign wealth funds and other institutional investors will play an important role in the stabilisation and eventual recovery of asset markets.
"Such institutions, with their long-term investment horizons could be important sources of demand for undervalued assets.
"This would contribute to stabilising financial and household sector losses, thereby helping to restore both credit creation and demand in the real economy," said Tan, whose speech was released by GIC.

http://news.my.msn.com/regional/article.aspx?cp-documentid=2315533

Singapore coping with recession

The Star Online > Focus
Saturday October 18, 2008

Rainbow at the end of the crisis

INSIGHT DOWN SOUTH
By SEAH CHIANG NEE

Singapore is confident that it can emerge from the current world financial crisis along with several others, including Hong Kong, Tokyo, Dubai and Shanghai, to form a new global financial bloc.

HOW do Singaporeans who have lived a sheltered life cope with the current recession and global dislocation? Answer: Surprisingly well!

Judging by the sentiments expressed both in the new and old media, this new generation appears to show a sharp awareness of the potential trouble.

If anything, the worries sometimes border on the exaggerated as though the end of world order is nigh, but most of the time Singapo­reans are well-informed and realistic.

A Singaporean Web surfer sums up the preparatory mood when he says: “I will repeat, I will reduce and reuse, I will recycle and I will repair.”

“I will not buy on impulse, always buy one item less and save that extra dollar,” he adds.

“We are in very severe times. All are suffering.”

Another surfer says: “The downturn will come in waves and will last at least three years. Deflation may be on the card.”

The biggest victims so far are investors who have rapidly lost billions of dollars in stock and property trading and even on structured bank papers.

There are good reasons for Singapo­reans’ preparedness. The SARS-induced crisis, for one, serves as a good teacher.

Another could be the frank, open reporting €“ and discussions of the bad news €“ by Cabinet ministers and the mainstream media, which surprisingly pulled few punches.

Thirdly, Singapore became the first major economy to fall foul of recession (the United States, France and Germany followed days later), and it signalled businesses to put in place budget-freezing or cost-cutting measures.

The Internet plays a fast information role.

“Every time I read the news, I could feel my hands going cold,” said a retired teacher.

“It would only show my life savings dropping by a few thousand dollars, or my daily necessities €“ like transport or food or utilities €“ becoming more expensive,” he lamented.

The crisis is making its way in almost every part of the economy - from exports to shipping, from financial services to tourism, and a whole lot in between.

Even Singapore’s tycoons are not spared.

According to Business Times calculations, 13 of the island’s richest men (and women) have lost €“ at least in value €“ more than S$6.7bil (RM16bil) since the start of the year. The report said: “They aren’t living hand to mouth just yet, but it must feel like it.” Each has lost almost 55% on average.

Another high-profile casualty is sports. The building of the S$1.87bil (RM4.46bil), 35-hectare Kallang Sports Hub, the biggest sports project, has been postponed for two years until 2012. The government had earlier postponed several large billion-dollar projects.

Consumer spending, which was very high only months ago, is declining.

With tourism also down, retail shops and restaurants have reported sales declines of 10% to 20%, and expensive Orchard Road is the hardest hit (down by up to 50%). Nightclubs are also feeling the impact of austerity.

So far, there have been no big retrenchments or pay cuts, but new employment is relatively low. Jobs will be the biggest concern of middle class Singaporeans and foreign professionals here.

Management graduate Hanees Mohamad told a reporter that she had been sending out an average of 20 resumes daily since she graduated two months ago, so far hearing from only half of them.

“I’m getting frustrated. I didn’t think it would be this difficult,” said the 24-year-old.

Company hardship, if it exists, is low-level and takes form of things like cheaper wines or no-frills executive meals. Financial institutions are, of course, the worst hit.

Banks have started to reduce expat packages or do away with allowances for spouses. Other firms are letting go contract workers and reinstituting multi-task duties.

However, this time around, Singa­poreans have a better cushion against job losses.

With the general election coming in 2010 or 2011, the government has assured its citizens that, in an emergency, foreigners will be the first to go, all else being equal.

Because of their long historical immersion into the work-force, Malaysians have rarely been regarded as “foreigners” like mainland Chinese or Indians. Many have been Permanent Residents for decades.

The uncertain global dimension of the crisis is making it hard for people to really tell how deep €“ or long lasting €“ the recession will last.

Trying to inject a more balanced sentiment into an excessively worried populace, Government of Singapore Investment Corporation deputy chairman Dr Tony Tan said:

“In these difficult times, I think one has to have a sense of perspective. This is not the end of the world. This is not the end of the US as an investment market, we believe, not only would the US eventually recover from the financial crisis.”

“We will all survive,’’ added Dr Tan.

Some analysts, in fact, see a rainbow at the end of it with Singapore playing a bigger banking role to the world financial €“ if it manages things well.

Last month, Singapore overtook Hong Kong to rank third in the world in global finance, behind London and New York. Now despite the republic’s troubles, it gained 26 points in the index €“ or more than any other top-20 centres.

While London and New York have lost some of their financial influence, Singapore €“ with its large reserves and strict banking governance €“ could benefit from the chaos.

It could even emerge along with several others €“ including Hong Kong, Tokyo, Dubai and Shanghai €“ to form a new global financial bloc.

The British, American and Euro­pean banking capitals will continue to play major a global role, but some of their luring attractiveness could drift eastwards.



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http://thestar.com.my/news/story.asp?file=/2008/10/18/focus/2291167&sec=focus