Monthly figures for Singapore’s Global Trade (in thousands S$)
Trade
Apr 2009
Apr 2010
Apr 2011
Total Trade#
58,824,527
77,042,151
80,727,271
Sgpr’s Imports
27,638,753
36,492,397
38,143,266
Sgpr’s Exports#
31,185,774
40,549,754
42,584,005
Sgpr’s Domestic Exports
15,515,514
21,601,127
23,022,721
Sgpr’s Re-Exports
15,670,260
18,948,627
19,561,284
Cumulative figures for Singapore’s Global Trade (in thousands S$)
2007
2008
2009
2010
Jan-Apr2010
Jan-Apr 2011
Total global Trade
846,607,420
927,654,759
747,417,400
902,062,584
286,855,108
315,452,086
%change y-o-y
4.46%
9.57%
-19.43%
20.69%
27.97%
9.97%
Singapore's Imports
395,979,700
450,892,588
356,299,229
423,221,839
136,407,365 27.19%
148,219,676
%change y-o-y
4.50%
13.87%
-20.98%
18.78%
27.19%
8.66%
Singapore's Exports
450,627,720
476,762,172
391,118,171
478,840,745
150,447,742
167,232,410
%change y-o-y
4.42%
5.80%
-17.96%
22.43%
28.68%
11.16%
Sgpr’s Domestic Exports
234,903,097
247,617,959
200,003,141
248,609,828
77,898,238
90,234,053 15
%change y-o-y
3.31%
5.41%
-19.23%
24.30% 22.57%
33.85%
15.84%
Singapore’s Re-Exports
215,724,623
229,144,213
191,115,030
230,230,917
72,549,504
76,998,356 6.13
%change y-o-y
5.65%
6.22%
-16.60%
20.47%
23.55%
6.13%
Cumulative figures for India and Singapore Bilateral Trade (In thousands S$)
2007
2008
2009
2010
Jan-Apr2010
Jan-Apr2011
Total Bilateral Trade
23,860,242
28,756,963
21,585,714
30,667,496
9,307,231
12,743,973
%change y-o-y
19.78%
20.52%
-24.94%
42.07%
28.40%
36.93%
Singapore's Imports
8,814,189
11,922,381
8,156,459
12,566,133
3,979,170
6,236,550
%change y-o-y
13.65%
35.26%
-31.59%
54.06 %
36.34%
56.73%
Singapore's Exports
15,046,053
16,834,582
13,429,255
18,101,363
5,328,061
6,507,423
%change y-o-y
23.68%
11.89%
-20.23%
34.79%
23.04%
22.13%
Sgpr’s Domestic Exports
6,191,148
7,515,094
5,677,674
7,693,906
2,327,423
2,999,690
%change y-o-y
21.52%
21.38%
-24.45%
35.51%
28.67%
28.88%
Singapore’s Re-exports
8,854,905
9,319,488
7,751,581
10,407,457
3,000,638
3,507,734
%change y-o-y
25.23%
5.25%
-16.82%
34.26%
19.00%
16.90%
Singapore’s Total Global Trade in April 2011
Singapore’s Total global trade in March 2011 expanded by 15% on a year-on-year basis, after the 6.2% increase in the previous month.
Total exports increased by 13%
Total imports increased by 17%
Non-oil domestic exports (NODX) increased by 10%.
Electronic NODX contracted by -14%
Non-electronic NODX increased by 25%
Oil domestic exports increased by 44%
Non-Oil Re-Exports (NORX) increased by 2.6%.
Electronic NORX increased by 0.3%
Non-electronic Re-Exports increased by 5.4%
PART – II INTERNAL
ECONOMY
S'pore economy on track despite Japan, M-E crises
Singapore's economy is still on track to grow at the projected 4-6 per cent this year - and inflation stay relatively tame at 3-4 per cent - despite the earthquake-tsunami-nuclear meltdown triple whammy that hit Japan and the unrests in the Middle East. The fallout from the natural disasters in Japan and the political upheavals in the Middle East have not made a big dent on Singapore's supply chain and tourism trade, nor on oil supply, according to the Ministry of Trade and Industry's (MTI) preliminary estimates. 'Less than 10 per cent of our electronics imports - mainly components and parts - are from Japan,' Minister for Trade and Industry Lim Hng Kiang told Parliament. 'Feedback from precision engineering firms also suggests that they have sufficient inventory buffers to tide over any supply disruptions for a few months.' Similarly, Japan accounted for around 5 per cent of the total number of tourists visiting Singapore last year. But Mr Lim, who was replying to questions raised in the House, said MTI doesn't see significant impact for now. 'Barring any further deterioration in events in Japan and the Middle East and North Africa region, Singapore's economic outlook remains positive,' he said. Minister added that with energy constraints expected in the future, Singapore must go for a portfolio approach and have a range of energy options. While the impact on Singapore has been small, Mr Lim said the spike in oil prices sparked by political unrests in the Middle East will result in higher business cost and also dampen global economic growth, and affect us indirectly.' Minister noted that higher oil prices have already led to an increase in electricity prices here but, thanks to a strong Singapore dollar and the competition in the local electricity market, the blow has been softened. The switch from oil-fired steam plants to more cost-efficient ways of generating electricity, pushed by competition since 2001, has also been a big help.
Strong Sing dollar tempers high power costs
OIL prices, which have been rising since the fourth quarter, will continue to exert upward pressure on electricity prices here, especially with power demand expected to increase this quarter as the Singapore economy revs up from its seasonally slow Q1 start but a strong Singapore dollar has helped to reduce the impact. The price of West Texas Intermediate crude - which bears a close correlation with high sulphur fuel oil (HSFO) prices on which the gencos here base their feedstock cost - has gone up by over 10 per cent in just three months to US$94 in Q1, from US$85 in Q4. But, the Sing dollar has also gone up by 8 per cent versus the greenback, on which oil prices are pegged, with this helping reduce the impact of higher HSFO prices, he said. The Sing dollar is expected to stay strong, with market watchers reportedly expecting the Monetary Authority of Singapore to tighten its policy by recentring the band to the prevailing rate and then defend the new limits.
Surprise Q1 GDP spurt paves way for strong year
Against expectations, the pace of economic activity surged in the first quarter, and is now expected to remain robust through the year, although Q2 may see a temporary dip. While the official growth forecast for 2011 remains 4-6 per cent, the Monetary Authority of Singapore (MAS) - said full-year GDP growth is 'likely to be at the upper end' of the range. According to the Ministry of Trade and Industry (MTI), flash estimates based on only the first two months' data show a strong, broadbased 8.5 per cent GDP expansion. While this is below the preceding Q4's 12 per cent rate, it is well above market forecasts of around 6 per cent. In sequential terms, the economy grew 23.5 per cent in Q1 from Q4 2010 - a big jump from Q4's 3.9 per cent pace, and powered by an 80 per cent surge in manufacturing output. The electronics and precision engineering clusters were key drivers, with increased business investment in the region, MTI said. The market's earlier bearish forecasts for Q1 reflected concerns over the impact of the recent spike in oil prices and even the calamity in Japan. But MAS said that despite the increased uncertainty, the global economy would likely grow at a moderate pace in 2011. Noting the 'step-up in the level of economic activity in Q1', the central bank expects Singapore's economic output to be sustained at a high level across the board for the rest of the year, even as the underlying growth momentum eases. Going by MAS's remarks in its policy statement yesterday and its latest moves on the Sing dollar, it's apparent that inflation - rather than any short-term growth concern - remains the focus. It expects the headline inflation rate to stay elevated, moderating 'only gradually' to around 3 per cent by Q4 2011. For the full year, MAS continues to expect inflation to come in at the upper half of its 3-4 per cent forecast.
Exchange rate policy band shifted up but slope and width unchanged
The Monetary Authority of Singapore (MAS) tightened monetary policy by shifting the exchange rate policy band upwards, intensifying its fight against inflation as advance estimates show the economy surging in the first quarter. The Singapore dollar rose to yet another high against the greenback on the news, reaching S$1.2516 on 15th April, 2011 in the afternoon. In its half-yearly monetary policy statement, MAS signaled further appreciation for the Sing dollar, saying that it will move the exchange rate policy band upwards and re-centre it below the prevailing level of the Singapore dollar nominal effective exchange rate (S$NEER). It left the band's slope and width unchanged. 'Economic activity is likely to be sustained at a high level for the rest of the year, even as the underlying growth momentum moderates,' MAS said. According to official estimates, the economy grew 8.5 per cent year on year in Q1, well above market consensus. 'With factor markets tight, domestic cost and price pressures will remain firm,' the central bank said. It expects headline inflation to 'stay elevated' and moderate gradually to around 3 per cent by Q4. For the whole year, consumer price index (CPI) inflation could be in the upper half of the 3-4 per cent forecast range, it added. CPI inflation was 5.2 per cent in the first two months of the year, largely driven up by rising COE premiums and imputed rentals. According to MAS, high oil and food prices, coupled with wage pressures, will be factors to watch next
Inflation seen easing to 3% by Q4, falling from Q1's 5.2% peak
Singapore economy is likely to grow at the higher end of the official 4-6 per cent forecast this year, the Monetary Authority of Singapore (MAS) said in its latest half-yearly macroeconomic review. It arrived at this view after having assessed that there is sufficient momentum for the global economy to grow at a moderate pace in 2011. The further good news is that the de facto central bank sees inflation easing to around 3 per cent by the fourth quarter, after it peaked at 5.2 per cent in Q1 2011. 'Supported by a gradual improvement in the labour market and accommodative fiscal measures, the US economy should continue on its recovery path,' noted the MAS Economic Policy Group. 'In Asia ex-Japan, resilient household spending and a pick-up in business investment are expected to underpin growth.' Against this backdrop, the domestic economy should remain supported by broad-based expansions across most sectors in the quarters ahead, said MAS. However, Singapore's economic activities may be dampened in the months ahead as temporary interruptions in manufacturing production and trade-related services filter through from the supply-side disruptions in Japan following the massive earthquake and tsunami that struck in March. But unless there is greater-than-expected collateral damage arising from a full-blown nuclear disaster, there is likely to be a rebound in domestic activity once some normalcy is restored in Japan. Of the various sectors, manufacturing will be supported by the moderate turnaround in the global information technology industry. The marine & offshore engineering industry is likely to see a comeback, following two years of declines in output. Similarly, the aerospace segment should witness an upturn in activity. The chemical and pharmaceutical industries will also register continued growth, while trade-related services and tourism-related industries will be underpinned by regional demand. So too the financial sector, which is increasingly seeing the emergence of the Asean region, in addition to existing markets like China, as a source of growth opportunities. Asia has evolved from producing consumer goods to becoming a significant exporter of capital goods, in line with the rising sophistication of the region's export mix. As for inflation, MAS noted the number would ease due to base effect. Still, the continued rise in the cost of private road transport, excluding petrol, and cost of accommodation will contribute more than one percentage point each to CPI inflation in 2011. Meanwhile, oil-related items would add more to inflation with the recent spike in oil prices. Services and food inflation, on the other hand, will rise moderately
Wages to go up amid tight labour market, says MAS
WAGE pressures are on the rise, said the Monetary Authority of Singapore (MAS) in its half-yearly Macroeconomic Review. This is because job creation continued to be firm, while supply is limited given that the resident labour force participation rate is already at a historical high, and the government has tightened its policies on immigration and low-skilled foreign workers. The number of permanent residencies granted in 2010 was half that in 2009. 'In view of the tight labour market, wage pressures will build up further in 2011,' said MAS. Wage growth could come in slightly lower than the 5.6 per cent in 2010, although significantly stronger than the historical average of about 3.3 per cent. Higher wage growth, coupled with the rise in foreign worker levy and the employers' central provident fund contribution rate later this year, will add to firms' labour costs. This will, however, be partially offset by the corporate income tax rebates and small and medium sized enterprise cash grants introduced in the recent budget. 'Nevertheless, companies will need to make structural improvements to productivity to mitigate the higher labour costs in the economy,' said MAS. Services, which make up around two-thirds of the economy, will account for more than three quarters of total employment gains this year. Within services, the tourism-related and financial services sectors are anticipated to increase employment strongly. Given that the Singapore Tourism Board has forecast a record number of visitor arrivals this year, more jobs are likely to be created in this sector. Likewise, buoyant growth across a range of financial services, such as wealth management and corporate banking, will require more highly skilled workers. The strong performance of these two sectors will also have positive spillovers on job creation in other services such as business services and information and communications. In manufacturing, hiring sentiment in the transport equipment industry has improved as order books have strengthened in the last six months. The electronics segment should also expand employment on the back of firm global information technology demand, although the pace is likely to be more moderate compared to 2010. In petrochemicals, however, there could be some further job losses in view of the global supply overhang. Overall, manufacturing employment will increase modestly after declining sharply in 2009 and falling slightly in 2010. Within the construction sector, hiring sentiment is likely to be subdued following the slowdown in private residential construction demand from the record volume in 2010 and the gradual moderation in on-site construction activity, said MAS.
Big push to productivity growth in building, construction sector
SINGAPORE'S building and construction industry has upped the ante in its drive to increase productivity within the industry, starting with the launch of the inaugural BuildTech Asia 2011. Touted as South-east Asia's premier construction trade fair, it will be held at the Singapore Expo as part of the Singapore Construction Productivity Week. BuildTech Asia 2011 presents the most up-to-date technologies across diverse segments of the building and construction industry, with a strong focus on technologies and tools to enhance efficiency and effectiveness in building and construction. This push comes amid the revelation that the construction industry, a key engine of Singapore's economic growth, had a paltry productivity growth rate of 0.4 per cent annually between 2000 and 2009 as compared to the national average productivity growth of one per cent during the same period. Therefore, the Building and Construction Authority (BCA) has unveiled a slew of measures, including regulatory changes and an expanded range of trade tests to improve manpower quality. Singapore is also promoting the use of technology in the Building Information Modelling (BIM) system, which will better integrate the construction value chain.BCA and the Ministry of National Development have launched a $250 million Construction Productivity and Capability Fund (CPCF) to mitigate the high transitional costs that may put off the adoption of new technologies by firms. More than 500 firms have applied for the CPCF, of which two-thirds are SMEs. These efforts to increase labour-efficiency also come at a time when soaring commodity prices are driving construction costs sky-high. BIM, for example, will be pivotal in tempering the effects of rising costs as it 'gets things right from day one', minimising wastage of resources on-site. Singapore has also diversified its sources of raw material imports to eliminate price fluctuations arising from supply shocks.
EMPLOYMENT
Unemployment at 3-year low, hiring ramped up
SINGAPORE'S overall unemployment rate fell to a three-year low in March as companies ramped up hiring amid a strong economy. In a reflection of the tight labour market, the overall unemployment rate (seasonally adjusted) fell to 1.9 per cent in March this year from 2.2 per cent in December last year, according to a report released by the Ministry of Manpower (MOM). Among the resident labour force, the unemployment rate declined over the same period from a seasonally adjusted 3.1 per cent to 2.7 per cent. The resident unemployment rate is also the lowest in three years. On a non-seasonally adjusted basis, unemployment in March stood at 1.8 per cent overall and at 2.6 per cent for resident unemployment, lower than in March and December last year. Meanwhile, employment creation in the first quarter was 'fairly strong', MOM said. Preliminary estimates show that total employment grew by 23,700 in the first quarter, though the increase was lower - as expected - compared to the seasonal high of 33,900 in the fourth quarter and 36,500 in the first quarter last year, bolstered by the economic recovery and hiring from the two integrated resorts. Unless there is a significant relaxation of foreign worker inflows later this year, the number of new jobs created in 2011 is likely to be in the region of 100,000 to 120,000, which could translate to higher unit labour costs on the back of higher wages, higher foreign levies and the hike in employer CPF contribution. The majority of employment gains in the first quarter stemmed from services, which added 22,800 jobs. Construction added 1,100 workers and manufacturing employment fell by 500, though this narrowed from the contraction of 1,200 in the fourth quarter of last year. Where redundancy is concerned, preliminary estimates reveal that 3,000 workers were made redundant in the first quarter of this year - 2,600 workers were retrenched and 400 had their contracts terminated prematurely - which is slightly lower than the 3,190 redundancies in the fourth quarter last year. More than half (1,600) of redundancies came from the manufacturing sector. Services laid off 1,000 and construction, 400 workers.
3-5% growth to create 50,000 jobs a year: SM
SINGAPORE's economy, should it meet the target of expanding 3-5 per cent annually over the next decade, will help generate two jobs for every one local that enters the workforce each year. The government is forecasting that 50,000 new jobs will be created every year during that period, which would be twice the net number of Singaporeans and permanent residents joining the labour force, said Senior Minister Goh Chok Tong yesterday. And as many as four in 10 of these new jobs will be in 'high-end manufacturing and modern services' positions, covering areas such as finance, business infocomm, arts and lifestyle businesses, he said in a speech during a dialogue titled 'What is Singapore's Future?' organised by the Singapore Polytechnic Graduates' Guild. 'We will grow real incomes by 30 per cent. By 2020, Singapore's per capita GDP will reach around US$55,000, from US$43,900 now. We will be one of the top 10 richest countries in the world,' he told his over 300-strong audience, largely comprising the polytechnic's staff, alumni, student leaders and guild members. Mr Goh said that all Singaporeans would benefit from this growth as the population continues to aspire to have higher wages and better jobs
BANKING
Bank lending rose 1.6 per cent in February to $334.1 billion, as business loans continued to expand rapidly even as consumer home loans grew more slowly. Compared to a year earlier, the total amount of Singapore-dollar bank loans outstanding at the end of February was up 17.3 per cent, the biggest increase since November 2008. Loans to businesses, which make up over half of all Sing dollar bank lending here, rose 2.3 per cent over the month to $179.3 billion at end-February. That's the same rapid pace of growth as in January. It's also another sign that lending to businesses has returned to normal and that companies can borrow readily from banks to fund their expansion without government backing. Since Feb 1, the government has reduced its financial assistance for businesses through various loan-guarantee and credit-insurance risk-sharing schemes that it introduced during the recent financial crisis. The growth in business loans was broad-based, with lending to most major industry segments rising over the month. Loans to the building and construction sector led the increase, rising 3.6 per cent to $55.5 billion. That's the biggest jump since June 2008, though the data isn't seasonally adjusted and the monthly changes are volatile. Loans to non-bank financial institutions - a broad category that includes fund management companies and real estate investment trusts - also grew strongly during the month, rising 2.7 per cent to $40.2 billion. General commerce loans, the third-biggest segment of business loans, grew 2.4 per cent to $33.4 billion. Lending to firms in manufacturing; transport, storage and communication; and business services also grew over the month, as did business loans to individuals. The only industry segment that recorded a drop in business lending was the agriculture, mining and quarrying category, which accounted for just $277 million, or less than 0.2 per cent of the total business loans outstanding at the end of February.
Citic Bank Int'l officially opens S'pore branch
CITIC Bank International (CBI), a Hong Kong-based subsidiary of China Citic Bank, officially opened its Singapore branch on 8th April, which will provide wholesale banking services and yuan products. This will also serve as a platform to growing its business in the South-east Asian region. Through a rebranding exercise last year, Citic Ka Wah Bank changed its name to Citic Bank International (CBI) as it takes on the role of speeding up the parent bank's offshore expansion. Since then, the bank registered a significant jump of 2.5 times in cross-border businesses, with approved facilities reaching HK$30 billion (S$4.85 billion). This follows in the footsteps of major Chinese banks that go international. Bank of China's international arm, BOC International, was incorporated in Hong Kong in 1998 while ICBC first snapped up an initial stake in a Hong Kong-based bank in 1993 and this subsidiary, now wholly owned, has been renamed ICBC International. In its international push, CBI will leverage on the branch network of its parent bank, China Citic Bank, which has over 700 branches in mainland China and tie-ups with banks in over 100 countries. It also seeks to be a major player in renminbi internationalisation by looking beyond mere yuan deposits in Hong Kong. To that end, it has launched the inaugural offshore renminbi Certificate of Deposit and is slated to play an active role in Hong Kong's first yuan IPO as a joint bookrunner for Hui Xian Reit, the property flagship controlled by Hong Kong billionaire Li Ka-shing.
DBS banks on factoring services in Asia
DBS Group is expanding its export factoring business to cater to greater demand for such services as Asia's exports to the rest of the world continue to grow. During the recent financial crisis, many exporters switched from open-account trading - popular when the risk of their customers defaulting was considered small - to using conventional trade-financing products such as letters of credit or LCs, through which banks underwrite the risk of a buyer defaulting on payment, for a fee. But with the rapid recovery of Asia's economy and a rebound in world trade, businesses that import from Asia are again pressing for their suppliers to trade with them on an open-account basis, and generous trade credit terms of up to 90 days before payment is due. That means factoring - where companies sell their rights to future cash payments from their customers to a bank or other factoring company at a discount, for cash now - is back in favour. This has several benefits for companies, particularly exporters: The bank takes over the risk that a buyer might default, and provides the company with immediate cash. And because the credit risk has been transferred to the bank, the company can expand its sales further, without increasing its credit exposure. Last year, total factoring volume in Asia surged 69 per cent to 355.6 billion euros (S$637 billion. Over the past seven years, factoring volume in Asia has more than tripled, from just 111.5 billion euros in 2004, driven by rapid growth in mainland China, Hong Kong and Taiwan. That includes domestic factoring - which still makes up the bulk of factoring volumes in most markets, except Hong Kong and Korea - as well as cross-border factoring. In Singapore, factoring volume has more than doubled in the past seven years, rising from 2.6 billion euros in 2004 to 5.8 billion euros last year. It grew even in 2009, during the financial crisis, rising 17.5 per cent to 4.7 billion euros. DBS is betting that demand for factoring services in Asia will rise rapidly, in tandem with the region's economic growth. Last month, DBS introduced export factoring in Indonesia, where it is now the only bank offering such services. In January, DBS obtained FCI membership in India, which allows it to expand its factoring services there. The bank also offers factoring services in Singapore and Hong Kong, where it is a major player, as well as China and Taiwan. It is now looking to expand its factoring business elsewhere, including Vietnam.
TRADE & INVESTMENT
SGX third in global IPO activity for Q1
SINGAPORE has come in third among world exchanges in terms of total capital raised globally, according to Ernst & Young's Q1 2011 Global IPO update. In the first three months of this year, the Singapore Exchange (SGX) raised US$5.6 billion (12.2 per cent) of the total capital. Coming in first was New York Stock Exchange, which raised US$13.8 billion (29.8 per cent), followed by Shenzhen Stock Exchange, which raised US$11.2 billion (24.3 per cent). In Q1, global IPO activity saw 290 deals worth US$46.1 billion, down 14 per cent by capital raised compared to the same period last year. 'In Singapore, the listing of Hutchinson Port Holdings, the largest global IPO for Q1 at US$ 5.5 billion boosted the SGX's standing. The IPO came amid an upturn in global trade and container traffic after the global financial crisis. The second-largest IPO in Asia - and the fifth-largest globally - was the US$1.4 billion Shanghai listing of clean energy company, Sinovel Wind Group Co Ltd. Asia issuers remained in the lead not only in terms of capital raised, but also by number of deals. China and Hong Kong issuers lead global IPO activity with 110 deals, which represent 38 per cent of total deals globally.
Buzz over first yuan-denominated IPO comes to S'pore
CHEUNG Kong's Hui Xian Real Estate Investment Trust (Hui Xian Reit) brought its roadshow to Singapore amid investor excitement over the launch of the world's first renminbi (RMB)-denominated equity initial public offering (IPO). This international and public offering will comprise two billion units in Hui Xian Reit at a projected offer price of between RMB5.24 and RMB5.58 per unit (S$1-1.07). It drew strong interest from investors, particularly those in Hong Kong, London and Singapore. This groundbreaking IPO gave a rare chance for investors keen to tap the appreciation potential of the undervalued yuan, with offshore RMB deposits totalling a staggering RMB400 billion in 12 months.
EDUCATION
MicroVision to open an R&D centre in NTU
MicroVision, a leader in innovative ultra-miniature display technology, has signed a Memorandum of Understanding with Nanyang Technological University (NTU) to open a research and development (R&D) centre on its campus. Described by both parties as a 'marriage', the centre - which was first proposed in July 2010 - will focus on developing innovative breakthrough products using MicroVision's PicoP technology. This R&D facility is MicroVision's first outside of the United States. Up to 25 engineers, comprising almost 30 per cent of the company's R&D force, will collaborate with NTU to research on key areas such as Micro-Electro Mechanical Systems (MEMS), augmented reality and laser physics. Students from NTU's School of Electrical and Electronics Engineering and School of Physical and Mathematical Sciences can look forward to hands-on involvement in a customised laboratory at NTU's Innovation Centre. Singapore was chosen over countries such as Taiwan and India due to her central location that will position MicroVision closer to its suppliers and 40 per cent of its customers.
MISCELANEOUS
Singapore's first National Equestrian Park opens5.8
ha park will house over 250 horses and ponies
EQUESTRIAN sports are set to get a leg-up in Singapore after the nation's first National Equestrian Park was opened by President S R Nathan. The 5.8 ha park - which will be home of the Equestrian Federation of Singapore (EFS) - includes an 'Equestrian Zone' that houses over 250 horses and ponies. The President also launched the park's new programmes, including Team Singapore Equestrian scholarships and EQUAL (Equine-Assisted Learning), which will bring 160 students from Northlight and Assumption Pathway schools to the park for equestrian-centred exercises. Activities at the Jalan Mashhor park, off Thomson Road, will 'cater to all levels of the sport, from physiotherapy for the disabled, to family and weekend riders, pre-schoolers to teenagers, as well as older riders'. The EFS has developed the park in association with the Singapore Polo Club, which has financed and managed the entire $6 million development. In addition, there will be an Equestrian Satellite Centre sponsored by the Singapore Sports Council. The centre will hold a Pony Programme for youths aged six to 16 and a Pony Roadshow, which brings ponies to visit children in community centres, schools and shopping centres.
S'pore online shopping set to hit $4.4b by 2015
SINGAPORE'S online shopping market was worth $1.1 billion last year and this is expected to quadruple to $4.4 billion by 2015, says online payments facilitator PayPal. In a recent survey, PayPal noted that while 1.2 million Singaporean online shoppers above the age of 18 had an average spend per head of $1,492 over the past year, about two-thirds of this was by the middle-income and above group. This shows that the Republic's online shoppers, who are among the Asia-Pacific region's most affluent and sophisticated, find value in shopping on local websites, according to PayPal. Singaporeans shopped online mainly in the travel category (28 per cent) while other significant categories included fashion/beauty and entertain- ment/lifestyle at 13 per cent each. Nearly 40 per cent of the total purchases was spent on local websites on things like movie or event tickets and general insurance. According to PayPal, Singapore merchants can benefit from the growth in domestic online spending, and may consider offering a wider selection of goods rather than compete solely on price to increase their market share. The survey also showed that enhancement of security can boost online spending since almost half the respondents indicated that current credit or debit card security measures for online transactions are inadequate. Furthermore, greater security will convince nearly six in 10 people to spend more online. The survey also showed that mobile shopping - that is online purchases using mobile phones and other handheld devices - is still in its infancy, even though it has significant growth potential. About $43 million was spent by Singaporean online shoppers via their mobile devices last year, mainly on low-priced items such as mobile applications. Nearly 60 per cent of the high- income group, who accounted for more than half of the mobile expenditure last year, indicated their interest in making purchases using their mobile phones.
Singapore to be positioned as a hub for S Asian diaspora
SINGAPORE could be positioned as a regional hub for commercial and social interaction among the South Asian diaspora. That is what the organisers of South Asian Diaspora Convention 2011 hope their event will help achieve. 'We hope that the conference will help the diaspora look at Singapore as a convenient venue where they can meet, interact and use as a base for future activities,' explained Ambassador Gopinath Pillai, chairman of the Institute of South Asian Studies (ISAS), which is organising this conference. 'The conference would project Singapore as a modern city, Asian in its outlook, where the South Asian diaspora can fit in comfortably,' he added. According to Ambassador Pillai, who is also the chairman of the organizing committee of the convention, this is the key takeaway of the event in addition to 'genuinely achieving the objective of linking the diasporas of South Asia, which is the overall theme of the conference'. This optimism of positioning Singapore as a hub for the South Asian diaspora was emphasised by Sanjiv Aiyar, the president of the Singapore chapter of the prestigious Indian Institute of Management (IIM) alumni association. 'Singapore has close to 1,000 IIM alumni here, which is the largest amount in any single city around the world outside of India,' said Mr Aiyar, who is the chief executive officer of SingTel Global Offices. 'We will be looking to host the global convention of IIM alumni in Singapore too,' he explained. The organisers of the South Asian Diaspora Convention 2011 highlight the support shown by the Singapore government towards this event as testimony to its importance. 'We are strongly supported by government organisations including Ministry of Foreign Affairs (MFA), Ministry of Trade and Industry (MTI), International Enterprise (IE) Singapore, Singapore Tourism Board (STB), Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS),' Ambassador Pillai stated. 'This shows the importance the government gives to this event.' Besides the support of government agencies, Singapore's senior government leaders will also be involved in the convention. Prime Minister Lee Hsien Loong will deliver the opening address at the convention, while President S R Nathan will be the Guest-of-Honour and Senior Minister Goh Chok Tong a Special Guest at the gala dinner. President Nathan will be launching a book written by the late Dr Balaji Sadasivan, on the Indian diaspora, at a special session. The convention will also include a dialogue session with Minister Mentor Lee Kuan Yew. The South Asian Diaspora Convention 2011 will be held from July 21-22 at the Resorts World Sentosa.
Tiger Airways' passenger tally up 23% at 6m
TOTAL passenger numbers on Tiger Airways grew 23 per cent to six million in the April 2010-March 2011 year, from 4.9 million passengers in the preceding 12 months. Average load factor for the 12-month period to March 2011 rose to 86 per cent, an increase of one percentage point year on year. For the month of March 2011, Tiger Airways carried 576,000 passengers, an 18 per cent increase compared to the same month last year. The average load factor across Asia and Australia for the month was 85 per cent.. The airline is awaiting final approval from the Thai authorities for its joint venture budget carrier with Thai Airways. In the Philippines, it inked a memorandum of understanding to buy a 32.5 per cent stake in privately owned South East Asian Airlines (SeAir) for US$6 million. Tiger is also growing seat capacity by 41 per cent in the Northern Summer 2011 programme, with increased frequencies to key destinations such as Bangkok, Chennai, Hanoi, Ho Chi Minh City and Kuala Lumpur to be rolled out progressively.
APPOINTMENTS
Changi Airports Int'l names new chief exec
Lim Liang Song has been appointed the new chief executive of Changi Airports International (CAI) with effect from May 3, replacing outgoing CEO Wong Woon Liong. Mr Lim, 51, joins CAI from Indigo Partners, where he was a principal for the US-headquartered venture capital company whose primary interest is in aviation. Indigo was one of the founding partners of Tiger Airways, but sold down its stake to under 5 per cent after the listing of the budget carrier. Lim Chin Beng, chairman of CAI, noted that the new CEO brought with him 'invaluable experience in the area of aviation investments, including the development and management of a portfolio of aviation assets.' It is a skill which is much needed at CAI, the international arm of the Changi Airport Group focused on airport-related equity investments and management consultancy projects around the world. After clinching a slew of projects in Russia, Europe, Middle East, India and China between 2006 and 2009, the company has gone somewhat silent of late, noted industry observers. Prior to joining Indigo Partners in 2005, Mr Lim held various management positions at Singapore Airlines.
PART III EXTERNAL
SATS buys 40% stake in Saudi in-flight caterer
GROUND-handler SATS has - via wholly owned subsidiary SATS Investments - acquired a 40 per cent stake in Saudi-based Adel Abuljadayel Flight Catering Company (AAFC) for US$18.5 million. Established in 1982, AAFC - which is now an associated company of SATS - is a specialised in-flight caterer, serving mainly private jets and Hajj charters. It also serves international carriers such as Cathay Pacific Airways and Malaysia Airlines. It has two catering facilities located at King Abdulaziz International Airport in Jeddah and King Khalid International Airport in Riyadh, with a total production capacity of 8,000 meals daily. The caterer chalked up revenues of about US$11 million last year. 'The acquisition of a meaningful minority stake in 'Given AAFC's presence in Saudi's two busiest airports which have a combined traffic exceeding 30 million passengers and 270,000 flights, SATS will be able to access Saudi's private jet, Hajj and airline catering services market and potentially develop new service opportunities with our key customers at more locations.' As part of the agreement between the shareholders, SATS has appointed three executives for the key positions of chief executive officer, chief financial officer and executive chef in AAFC. The acquisition was paid for in cash, using internal resources. It recently acquired a 50.7 per cent stake in Japan-based TFK Corporation from Japan Airlines International Co Ltd for 7.8 billion yen (S$117 million).
PROJECTS
2 S'pore officials to be seconded to Tianjin Eco-City project
REFLECTING strong support for the Tianjin Eco-City project, the Singapore government will be seconding two senior officials to Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC). Both are part of the 'Suzhou Alumni', having had extensive experience in the bilateral flagship project Suzhou Industrial Park. Former JTC Corporation director Tang Wai Yee will take over as deputy CEO at SSTEC in charge of physical planning and building development, while Chua Kay Chuan, group director (China) from IE Singapore, will join SSTEC as deputy CEO in charge of strategic planning, economic promotion, business development and marketing. They join the pool of government officers who have been seconded to the project from various agencies.
PUB, Hyflux unit seal $890m 25-year water deal
PUB and Tuaspring, a Hyflux subsidiary, yesterday signed a 25-year water purchase agreement (WPA) for Singapore's second and largest desalination plant. The plant will start its operations in 2013, adding 318,500 cubic metres of desalinated water to Singapore's daily water supply. This project will cost $890 million. The desalination plant will be built beside the existing SingSpring plant in Tuas, which has a capacity of 136,000 cubic metres per day. It will be built under a design, build, own and operate model, and is expected to start in the fourth quarter. The first-year price for the desalinated water is set at $0.45 per cubic metre, which works out to $52.3 million a year. Tuaspring will provide desalinated water to PUB until 2038.
SGX ASX deal is dead
AUSTRALIAN Treasurer Wayne Swan officially announced the death of the A$8.7 billion (S$11.5 billion) ASX takeover by Singapore Exchange (SGX), but not without dragging the country's financial system into an impending review. Mr Swan - who has been the face of the Australian authorities analysing the deal - also plucked the central bank and the Australian Securities and Investments Commission from the background, disclosing that they, too, had objections. 'It was a no-brainer that this deal was not in Australia's national interest,' Mr Swan told reporters in Australia. 'At the end of the day, this takeover was more about growing Singapore's financial sector than Australia's,' said Mr Swan. He also dismissed the idea that this would be a merger of equals - an argument SGX had backed up by offering more board seats to Australians under a revised proposal in February. Because SGX operates a smaller equities markets, the Treasurer said merits of the deal did not warrant a 'loss of sovereignty'. 'This isn't a merger - it's a takeover that would see Australia's financial sector become a subsidiary to a competitor in Asia. This takeover would not enhance our access to global financial markets,' Mr Swan said three days after abruptly signalling that he would side with Australia's foreign investment watchdog in blocking the bid. 'The claims made by the applicants didn't stack up. I had no hesitation in rejecting it.' Top authorities, including the Reserve Bank of Australia, have also blocked the bid amid concerns over regulatory oversight, said Mr Swan, adding that 'substantial regulatory change in this country for systemic financial stability' would be needed once a foreign entity was put in charge.
IM Flash Technologies opens US$3 billion S'pore plant
IM Flash Technologies (IMFT) has reopened its Singapore plant. By next year, the US$3 billion facility will churn out half the supply for its parent company, IMFT, a joint venture between silicon giants Intel and Micron. IMFT initially formed IM Flash Singapore in 2007. However, plans were shelved and 800 Singapore employees retrenched the next year because a financial crisis hit. Speaking at the plant's official opening on Thursday, Prime Minister Lee Hsien Loong said that the US$3 billion is one of the largest investments in Singapore, and is expected to bring significant spin-offs to supporting industries here. The semiconductor industry is the fastest-growing segment of the electronics cluster, expanding 64 per cent last year, he said. Out of the plant's 1,200 workers, two-thirds of managerial level staff are Singaporeans, with the remainder foreign workers. This proportion will be reversed for the technicians, where Singaporeans make up a third.
PART – IV BILATERAL
$1m boost for Tamil language body
THE Ministry of Education will be providing up to $1 million to the Tamil Language Learning Promotion Committee over the next five years, to support the committee's efforts in promoting the learning and use of the Tamil language, announced S Iswaran, Senior Minister of State for Education and Trade & Industry yesterday.
Tata Chemicals invests in Olam Gabon plant
Tata Chemicals will pump in US$290m for a 25% stake in the US$1.3b facility
OLAM International yesterday announced that Tata Chemicals will pump in US$290 million for a 25.1 per cent stake in the US$1.3 billion ammonia- urea fertiliser plant that the Singapore-listed commodity supplier group is working on with the Republic of Gabon. Tata Chemicals' participation will reduce Olam's shareholding in the project to 62.9 per cent from 80 per cent. The Gabon government, which originally had a 20 per cent stake, will now have a 12 per cent shareholding. Correspondingly, Olam's share of the total equity investment in the project - which amounts to 35 per cent of its entire cost - will drop to US$146 million from US$346 million. The fertiliser plant is one of two projects that Olam announced in November last year that will see it collaborate with Gabon's government. The other project will see it invest US$236 million over seven years in a 300,000 hectare oil palm and rubber plantation in the central African state. Olam yesterday provided an update on the project, saying that it had already done 'considerable work for firming up the critical project inputs including the feedstock gas, land, and water'. It is now carrying out environmental studies to ensure that the fertiliser project meets international standards. 'Evaluation of technology and selection of EPC (engineering, procurement, and construction) contractor is in progress,' said the firm. Last month, the group reported an 8.4 per cent drop in net profit for its second quarter from a year ago on a fall in one-off gains. The group reaped $145.4 million in earnings for the three months ended Dec 31, 2010, as compared with $158.9 million a year ago. Earnings per share were 6.84 cents, against 7.95 cents a year earlier. Excluding such gains, net profit grew 65.6 per cent to $112.2 million from $67.8 million a year earlier, said Olam. Revenue surged 45.4 per cent to $4.1 billion for the October-December period, which was 'characterised by sharply rising commodity prices with several agricultural commodities reaching historical or lifetime highs', said Olam. Yesterday, Olam's shares fell 2.1 per cent, or six cents, to $2.87.
Visit of Minister of Urban Development
Minister of Urban Development, Shri Kamal Nath visited Singapore from 27-29 April. He was the chief guest at the National Convention of the Confederation of Real Estate Developers’ Associations of India (CREDAI).
ISRO launches Singapore’s satellite
Singapore's first locally built satellite was successfully launched into orbit on board ISRO’s PSLV-C16 on 20 April. The nano satellite, called X-Sat, was built by Nanyang Technological University (NTU) in collaboration with DSO National Laboratories. Weighing 106kg, it will be used for taking photographs to measure soil erosion and environmental changes on Earth. The successful launch of the satellite makes Singapore the first South-east Asian country to have its own locally-built satellite in space.
WHEREAS the story of China's economic boom is 30 years old, the 'India story' is relatively recent, but is set to get even better, according to the country's chief economic adviser Kaushik Basu. As savings and investment ratios rise and infrastructure improves, it is quite plausible that India's GDP growth rate will surpass China's in the coming years, he said. Mr Basu, who has taught economics at Harvard, Princeton, the London School of Economics and Cornell University (from which he is on sabbatical), was speaking at a forum on disinvestment yesterday. He pointed out that especially in the last five years, India's economy has risen in a way quite unthinkable 20 years ago. For three consecutive years from 2005 onwards, India's growth rate exceeded 9 per cent, the fastest among any major economy other than China. During the financial crisis of 2008/09, India's growth dipped to 6.4 per cent, but thereafter recovered. For the fiscal year (FY) ended March 31, 2011, growth was 8.6 per cent and the government forecasts 9 per cent for the current year. Among the main drivers of India's economic expansion, Mr Basu pointed to its rising rates of saving and investment, which provide the financial wherewithal for growth. Whereas in 1969, India's savings rate was a modest 12 per cent of GDP, it gradually rose to 22 per cent by 1979. By 2003, it crossed 30 per cent and now stands at 33 per cent of GDP, while investment comprises 36 per cent - equivalent to that of many countries in East Asia. Over the medium term, India's growth will further benefit from the 'demographic dividend', he said. The proportion of its working age population is projected to rise over the next 20 years, yielding still more savings. 'So, another driver for growth is falling into place.' However, he added that for the demographic dividend to kick in, people would need to be productive. And here, India faces challenges in raising its literacy levels, as well as standards of education. Another challenge is inflation, which at just under 9 per cent is among the highest in Asia. Mr Basu explained that India's inflation stems partly from the fact that it pulled out of the global economic crisis faster than most other economies. 'So inflation came to India earlier,' he said, and in fact hit 11 per cent in early 2010. With liquidity creation magnified by loose monetary policies being practised by many countries, inflation has since spread to other emerging markets as well. Mr Basu pointed out that although India's inflation is now coming down, '8 per cent plus is unacceptable to us'. To deal with the problem, the central bank has been hiking interest rates. But the government is also determined to rein in its fiscal deficit, which came in at 4.6 per cent of GDP in 2010/11. 'Fiscal consolidation is No 1 on our agenda,' he said, adding that public debt, which stands at 74 per cent of GDP, is also projected to fall to less than 65 per cent within three years. 'So the medium term looks very good for India and there is every reason to believe we will get right back to the path we were on in 2005.' It is also 'entirely possible' that India's growth rate will surpass China's in the coming years, even if China's economy does not slow down, said Mr Basu. But that is understandable, he added. 'China has been growing fast for almost 30 years. But we've only been doing it since 2005.'
India to speed up listings of public sector companies
The Indian government is stepping up its drive to list its public sector companies, according to the Secretary of the Department of Disinvestment in India's Ministry of Finance, Sumit Bose. Speaking at a forum on Disinvestment in India, Mr Bose pointed out that the government's current policy is to list unlisted public sector companies (known as central public sector enterprises, or CPSEs) which have no accumulated losses and have been profitable for the three years preceding the listing. The Indian government will, however, retain a minimum of 51 per cent shareholding as well as management control. At the forum, which was organised by the Indian High Commission and attended by bankers and investment managers, among others, Mr Bose indicated that India has 217 CPSEs in which the government has invested a total of about $130 billion. Of these, only 50 have been listed so far. Many of them are quite large; their collective market capitalisation is US$338 billion, equivalent to about 22 per cent of the total market cap of the Bombay Stock Exchange. Three of the CPSEs - the Oil and Natural Gas Corporation (ONGC), Coal India and the National Thermal Power Corporation - are in the top 10 Indian companies by market value. Divestment of India's public sector companies began in 1991, when the government, then embarking on economic reforms, agreed to sell up to 20 per cent of its equity stakes in selected CPSEs to mutual funds and institutional investors. Thereafter, the process picked up, with equity norms being liberalised and the investor base broadened to include individuals and other minority shareholders. Mr Bose pointed out that sales of CPSEs to minority shareholders (as opposed to other CPSEs and strategic investors) accounted for about 80 per cent of the total divestment proceeds of US$232 billion realised thus far. He added that in 2010-2013, an additional US$86 billion can be raised if unlisted CPSEs are listed and government holdings in those already listed are reduced to 51 per cent. Forthcoming divestments, according to the department's website, include additional stake sales in Power Finance Corp Ltd, ONGC, the Steel Authority of India and Hindustan Copper. Mr Bose said that the proceeds from divestment will be channelled towards improving India's rural and urban infrastructure as well as irrigation projects and development of the power sector. He added that divestments have other positive effects. Studies show that listing CPSEs leads to better corporate governance as well as increased sales, profits and labour productivity. The CEOs of listed CPSEs also have better prospects in the private sector post-retirement. In addition, CPSE sales also help to broaden and deepen India's capital markets. 'There is a spurt of trading accounts being opened prior to IPOs of CPSEs,' Mr Bose said. Foreign institutional investors (FIIs) are also active participants in India's divestment programme, he added, noting that in some cases, they have bought as much as 70 per cent of the shares put up for sale. 'The FII interest has been very encouraging for us.' Mr Bose pointed out that in addition to CPSEs, India has some 1,100 state-level public sector companies with total investments of US$83 billion. Only six of these have been listed so far. 'There are many state-level PSEs which are profitable and ready for listing.'
Source: Commercial Section, Embassy of India, Singapore
