Thursday, December 26, 2013

Singapore"s manufacturing output grows 4% on-year in Nov


Singapore’s manufacturing output grew at a slower-than-expected pace of 4 per cent on-year in November, dragged down mainly by lower output from the biomedical and chemicals sectors.




An integrated solar manufacturing facility in Singapore. (AFP/Roslan Rahman)



SINGAPORE: Singapore’s manufacturing output grew at a slower-than-expected pace of 4 per cent on-year in November, dragged down mainly by lower output from the biomedical and chemicals sectors.


Economists had expected November’s manufacturing output to grow at about 5.7 per cent, compared to the 8.3-per cent growth recorded in October.


Excluding biomedical manufacturing, output increased 5.5 per cent, according to data from the Singapore Economic Development Board (EDB).


The electronics cluster’s output expanded 11.0 per cent on-year in November, led mainly by gains in the other electronics modules components (22.7 per cent), computer peripherals (17.9 per cent) and semiconductors (17.8 per cent) segments.


Output of the transport engineering cluster increased 6.3 per cent on-year, supported by higher contributions from aircraft engine repair jobs and rig building projects.


Meanwhile, output of the biomedical manufacturing cluster contracted 2.1 per cent on-year in November, attributed mainly to a 3.2 per cent drop in pharmaceuticals output.


The chemicals cluster’s output also fell 2.7 per cent on-year in November, hit largely by a 17.2-per cent contraction in the petroleum segment as throughput was affected by weak refining margins.


On a month-on-month basis, manufacturing output contracted 2.8 percent in November.


Excluding biomedical manufacturing, output fell 4.7 per cent.  




Singapore"s manufacturing output grows 4% on-year in Nov

Singapore"s industrial output grows at slower pace in November

SINGAPORE: Singapore’s manufacturing output expanded at a lower-than-expected pace in November, which economists say could weigh on fourth-quarter economic growth.


But beyond the year-end sluggishness, most economists see better growth prospects for Singapore in 2014, helped by a recovery in the advanced economies.


Dragged down by lower output from the biomedical and chemicals sectors, Singapore’s manufacturing output growth slowed to 4.0 per cent in November, lower than economists’ expectation of 5.7 per cent growth and down from the 8.3 percent growth in October.


Economists say the weakness in November’s production numbers is likely to weigh on fourth-quarter GDP growth.


“We do expect a marginal correction in fourth-quarter GDP. We’ve pencilled in minus 2.0 per cent quarter-on-quarter for the fourth quarter, and that will imply 4.5 per cent year-on-year growth for the fourth quarter,” said Michael Wan, analyst for Asia Ex-Japan Economics at Credit Suisse.


“Moving into 2014, with US growth picking up, and with Europe continuing its move towards recovery from recession, we do expect growth to improve in 2014.”


In November, electronics output expanded 11.0 per cent on-year.


Transport engineering output increased 6.3 per cent, supported by higher contributions from aircraft engine repair jobs and rig building projects.


Meanwhile, biomedical output contracted 2.1 per cent, mainly due to lower pharmaceuticals output.


Chemicals output fell 2.7 per cent, hit largely by a 17.2 per cent contraction in the petroleum segment.


Still, most economists see better growth prospects next year, in line with signs of recovery in the US, the eurozone and Japan. Trade-dependent economies like Singapore are expected to benefit.


“Singapore should see some improvement in manufacturing output next year,” said Rajiv Biswas, Asia-Pacific chief economist at IHS.


“We’re forecasting quite a significant upturn for Singapore manufacturing output, from growth of only about one per cent this year, to about four per cent next year. So that’s quite a big recovery for Singapore manufacturing in the year ahead.”


Research firm IHS expects world growth to rebound to 3.3 per cent next year, from 2.5 per cent this year. It is also forecasting world trade to pick up to 4.7 per cent in 2014, up from 2.0 per cent this year. 



Singapore"s industrial output grows at slower pace in November

Schroeders to Julius Baer Avoid Singapore: Southeast Asia

Schroders Plc and Baring Asset

Management Ltd. are avoiding Singapore stocks, the cheapest in

Southeast Asia, as slower economic growth in the region and cuts

to Federal Reserve stimulus drive capital outflows.


The fund managers expect property to lead declines in

Singapore amid a real-estate slump and the prospect of higher

interest rates. The Straits Times Index was the worst-performing

developed market in 2013, dropping 9.5 percent since Fed

Chairman Ben S. Bernanke said in May that bond purchases may be

reduced on signs of sustainable U.S. recovery.


Capital has been fleeing Southeast Asia as investors seek

higher returns in North America. The market value of Singapore

shares fell 5.6 percent to $567 billion this year as of Dec. 23

as 10-year U.S. bond yields climbed to a two-year high in

September, making dividends from the city-state’s real-estate

investment trusts less attractive. The Standard Poor’s 500

Index rose to a record after the Fed announced on Dec. 18 it was

cutting stimulus, citing optimism about the labor market.


“Property companies will do badly, particularly in

Singapore where there’s a perceived housing bubble,” Lee King Fuei, a Singapore-based fund manager at Schroders, which

oversees about $420 billion. “If higher bond yields cause

property prices to fall, there’s an immediate impact on

earnings. Cost pressure on banks will also increase as bond

yields rise.”


The Singapore’s STI traded at 1.38 times book value as of

Dec. 24, according to data compiled by Bloomberg. That compares

with 2.49 for the Philippine’s PSEi Index, 2.37 for Indonesia’s

Jakarta Composite Index, 2.34 for the FTSE Bursa Malaysia KLCI

Index, and 2.07 for the Stock Exchange of Thailand, the data

showed.


Quantitative Easing


The Federal Open Market Committee said after its Dec. 17-18

meeting it will cut its $85 billion in monthly purchases of

Treasuries and mortgage-backed bonds, also known as quantitative

easing, to $75 billion in January.


The central bank will reduce asset buying in $10 billion

increments over the next seven policy meetings before ending the

program in December 2014, according to the median forecast in a

Bloomberg survey of economists on Dec. 19. The STI surged 94

percent from when the Fed lowered its benchmark interest rate in

December 2008 to this year’s peak in May.


Real estate and financial companies account for 47 percent

of the STI, according to data compiled by Bloomberg. Singapore’s

biggest property companies were among the worst performers in

2013, with City Developments Ltd. plunging 25 percent and

CapitaLand Ltd. falling 18 percent. Jardine Cycle Carriage

Ltd. (JCNC)
, an automotive distributor that gets about 89 percent of

sales from Indonesia, fell 27 percent to lead declines on the

benchmark equity gauge.


Slower Growth


The International Monetary Fund lowered its growth target

for Indonesia, Southeast Asia’s biggest economy, to between 5

percent and 5.5 percent this year and next after 6.2 percent

expansion in 2012. Singapore’s GDP is expected to grow 3.9

percent in 2014 after an estimated 3.8 percent rise this year,

according to a quarterly survey released by the Monetary

Authority of Singapore this month.


“Singapore’s neighbors have not been doing so well,

particularly Indonesia, where many of the property buyers in the

city come from,” said Khiem Do, Hong Kong-based head of Asian

multi-asset strategy at Baring Asset Management Ltd., which

oversees about $60 billion. “The Singapore government has also

been implementing tough property measures because they don’t

want housing prices to go through the roof.”


Housing Bubble


Singapore home prices increased at the slowest pace in six

quarters in the three months ended Sept. 30 after the government

introduced new curbs to cool prices in Asia’s second-most

expensive property market.


“There’s no driver to spur investor interest in

Singapore,” Baring’s Do said. “The recent penny stock crash

isn’t really helping the case for investing in Singapore.”


About $6.9 billion was wiped from the market value of three

commodity companies over three days in October, prompting an

investigation by the monetary authority and Singapore Exchange

Ltd. The average value of shares traded daily on SGX in the

three months through December fell to S$1 billion ($790

million), compared with S$1.24 billion a year ago, according to

data compiled by Bloomberg.


Penny Stocks


Blumont Group Ltd., which invests in minerals and energy,

soared more than 1,000 percent this year through the end of

September to lead gains on the FTSE Straits Times All-Share

Index. The stock plunged from an all-time closing high of S$2.45

on Sept. 30 to 7.8 Singapore cents on Dec. 24.


Asiasons Capital Ltd., the second-best performer, slumped

96 percent from its record close of S$2.83 on Oct. 1 through

Dec. 24. LionGold Corp. tumbled 91 percent from its S$1.725 peak

on Aug. 29 after deals to acquire gold assets fell through. The

plunge in shares prompted the bourse to seek approval to

establish circuit breakers to minimize market volatility.


The world economy is primed for its fastest expansion in

four years, with the U.S. driving output gains, economists at

Goldman Sachs Group Inc., Deutsche Bank AG and Morgan Stanley

said this month. Global growth will accelerate at least 3.4

percent in 2014 from less than 3 percent this year as the euro

area recovers from recession and China and other emerging

markets
stabilize.


“Singapore would be one of the markets that would be

favored in Southeast Asia,” said Haren Shah, Singapore-based

chief strategist for Asia-Pacific at Citigroup Inc.’s wealth

management division, which oversees $210 billion. “Singapore,

along with the North Asian markets, is looking cheap and most

likely will benefit as we see recovery in the global economy.”


The Straits Times Index is trading at 14.7 times estimated

earnings, compared with 16 times for the MSCI World Index,

according to data compiled by Bloomberg News.


Trade Falling


Even as the external environment is improving, Singapore is

exporting less to the West, according to Alan Richardson, whose

Samsung Asean Equity Fund outperformed 97 percent of peers

tracked by Bloomberg during the past three years. The city-state

gets about 22 percent of export revenue from the U.S. and Europe

as of November, compared with 37 percent a decade ago, according

to data from International Enterprise Singapore.


“Singapore being a very property- and banking-centric

country means it hasn’t benefited from global economic recovery

because of the government’s tightening policy on the property

market,” Richardson said.


To contact the reporters on this story:

Jonathan Burgos in Singapore at

jburgos4@bloomberg.net;

Jasmine Ng in Singapore at

jng299@bloomberg.net


To contact the editor responsible for this story:

Sarah McDonald at

smcdonald23@bloomberg.net



Schroeders to Julius Baer Avoid Singapore: Southeast Asia

Wednesday, December 25, 2013

Singapore Looks for Innovative, Affordable Transport Solutions

In Singapore, it’s hard to find a taxi when you need it. Taxi fares are rising and waiting times are getting longer.


Residents have started looking for cheaper alternatives to get from one place to another. The newest one is Lompang – a social media app that connects passengers to riders. Each ride costs just five Singapore dollars ($4).


Three out of six taxis in Singapore are not available during peak hours, according to the Land Transport Authority. As if the long wait wasn’t enough, fares are also on the rise.


Last week, SMRT, a company that operates underground trains, buses and taxis in Singapore, raised fares for some taxis by 30 percent.


The basic fare for taxis starts from S$3 ($2.40), but surcharges are added. There are additional charges for peak hours, driving into the city and taking a ride after midnight.


Residents are becoming frustrated by the daily commute to and from work.


“The MRT is extremely crowded during office hours,” says Asim Saeed, who works for a foreign bank in Singapore. “Buses are too infrequent and booking a taxi always fails.”


As of this year, there are 27,516 taxis on the island state, catering to 5.4 million people. Other forms of transportation include underground trains and buses.


So why do taxis still fail to meet demand?


Statistics show that it’s not a numbers issue. The problem lies in managing taxis.

Taxis are doing fewer trips and changing shifts at the same time. Drivers are also choosy and refuse passengers going to certain locations.


Lompang, which became available on December 21st, helps people get to work on a scooter. People identify where they want to be picked up from and their destination using their handset’s Global Positioning System (GPS). Then they check for and choose riders they want to hitch a ride with. Passengers get to rate their riding experience at the end of the journey.


Initially the app will only work for commuters in the Central Business District of Singapore, which is the most crowded area during peak hours. This will encourage people working for banks and financial institutions to hitch a ride during rush hours.


All rides, regardless of distance or traffic, have a fixed S$5 ($4) cost. For every ride, the driver gets S$4 ($3.20) and the rest is deducted as a service fee. The transactions are cashless and work on a credit system.


Lompang – derived from the Malay word tumpang, which means to piggyback – is the brainchild of Erfi Azhar, a student at the National University of Singapore, and his friend Aaron Fu, who works for a foreign bank.


The two men, who are in their twenties, told the Straits Times that their app is not for commercial purposes. The charge is to cover insurance and petrol costs.


Although Lompang is the first of its kind in Singapore, ride sharing apps have been making waves in the U.S. for a while. What sets Lompang apart from its U.S. counterparts is that it uses scooter sharing rather than car-pooling.


A popular one called Uber that lets you car pool is putting taxis out of business. In Los Angeles, 200 taxi drivers protested against the apps in June this year, labeling them as illegal.


Founders of Lompang held networking events before the launch to introduce drivers to passengers. They have also used social media to market their app and spread awareness.


However, not everyone is excited about ride sharing. Some people are uncomfortable about sharing a ride with a stranger. Others think that scooter rides won’t work in a tropical country.


“I would prefer to car pool,” says Pia Anthony, who works as an Accounts Manager at Hewlett Packard in Singapore. “It’s either too hot or is raining, so a scooter ride doesn’t seem like a practical option.”



Singapore Looks for Innovative, Affordable Transport Solutions

For Valencia, Help May Come via Singapore


Barça’s was the great escape of the season. The Catalan giant was rocking in Getafe. It was two goals down Sunday inside a quarter of an hour, and it had no Messi or Neymar to conjure up goals, no Xavi to control the midfield and no Puyol or Victor Valdés to steady the defense.



No stars, no problem. The solution lay, as it so often does, with products of Barcelona’s academy. First Pedro stepped up to strike three goals in nine minutes, goals comparable to many that Lionel Messi has fired in the past. Then Cesc Fàbregas scored twice, both with input from the irrepressible Pedro.



At 5-2, Barça called a truce and stopped punishing Getafe’s temerity in exposing its defensive frailty. It will be interesting to see whether Barcelona, backed by money from Qatar and Nike, shops in January to buy some defensive backbone, because the rest of the team isn’t doing badly.



It stands atop the league by virtue of having scored more goals than the second-place team. That, for the moment, is Atlético Madrid, whose greater defensive grit, together with 19 goals from Diego Costa, has allowed it to match Barcelona’s record of 15 wins, one draw and one defeat so far.



Real Madrid? Five points off the pace, and perhaps distracted by Real’s obsession with attempting to bring home the Champions League trophy for an unprecedented 10th time. Cristiano Ronaldo continues to accumulate goals, scoring 27 times in 19 league and cup matches this season.



Gareth Bale, not yet at peak fitness, has nine goals. Karim Benzema, Isco and Ángel Di Maria also contribute goals.



Nevertheless, Real had a bit of luck Sunday in winning, 3-2, at Valencia, where Ronaldo’s goal should have been ruled offside.



But Valencia might reflect the true situation in Spanish soccer. It is mired in debt. It plays in a stadium that has long been considered unfit for modern times, yet it cannot afford to finish the new one that stands half-built nearby.



Such are its liabilities to the bank and to the autonomous Valencia regional authority that it has had to sell off its finest players. One by one, David Villa, David Silva, Jordi Alba and others have departed, and the fees barely cover the interest on debts that rise rather than fall each year.



Even the European Commission is pushing to outlaw government aid to Spanish clubs. The commission claims that seven clubs — including Barcelona, Real Madrid, Valencia and the Basque clubs Osasuna and Athletic Bilbao — contravene European regulations by being propped up with regional government loans, bank guarantees or favorable taxation.



It seems the European Union is all for foreign investment pumped into top English clubs, but it wants to stop Spain’s regional assistance to soccer.



And in that light, Valencia made an announcement before Sunday’s game at the old Mestalla Stadium. The club president, Amadeo Salvo, told reporters that the Singaporean billionaire Peter Lim had made an offer that would wipe out the 300 million euros in debt it owes, inject immediate cash for the team to buy players in January and give €130 million, or about $175 million, to finish building the Nou Mestalla stadium.



Salvo said he and his fellow directors had trawled Asia and the Middle East trying to find a backer. The president stopped short — just — of suggesting that Valencia has found its Santa Claus in Singapore.



“Mr. Lim called us and came to Valencia to meet with the board, the vice president, and the foundation,” Salvo said, referring to the Valencia Foundation, which owns 70 percent of the club’s shares.



“He promises,” Salvo continued, “to get rid of the debt and build a competitive team by investing an important amount. Before we accept the offer, which is among the biggest two or three in the world of club football, we need to hear from the bank.”



Bankia, the club’s main creditor, asked for four to six weeks to evaluate the bid. Lim, who is estimated to be worth about $1.6 billion, asked for a decision by Jan. 15.



His haste is soccer related. Lim bid in the past to buy Liverpool and showed interest in Glasgow Rangers, and he understands that Europe’s soccer allows trading of top players only in the summer months or in the January window.



“Peter Lim’s aim is to build a competitive team to fight for titles in Spain and Europe,” Salvo said to reporters in Spain on Sunday. “He wants Valencia to play in the Champions League. It’s a historic opportunity. It will solve all of Valencia’s problems.”



The clock is ticking. The Singaporean, 60, said he was ready to commit between €30 million and €50 million for new players in the final two weeks of January if the takeover is finished by the middle of the month.



By then, the league will be back up and running after the Christmas and New Year break. Oh, and Valencia will have a new coach and new technical director responsible for hiring new players.



Valencia hired a Serbian coach, Miroslav Djukic, last June and fired him Dec. 16. Another short-term appointment. Another couple of million euros added to the debt once he is paid off. Another ramification in the downward spiral of a club that 10 years ago was the last outsider to break the hegemony of Barcelona and Real in the league.



The prospective new coach, Juan Antonio Pizzi, and the new technical director, Roberto Ayala — both Argentines who once played for Valencia — should be introduced later this week, once they agree to contracts.



Pizzi first has to extricate himself from his current employment. He had just managed San Lorenzo, the Buenos Aires team supported by Pope Francis, to win the Argentine league. There presumably is a buyout clause that will enable Pizzi, the former striker, to take his leave, and he was in Valencia on Sunday, watching, no doubt already aware of what awaits him in 2014.


98c4e meter GIC agrees £1.7bn Broadgate deal



For Valencia, Help May Come via Singapore

Singapore Fights Image As Swiss Banker of Asia

Tuesday, December 24, 2013

GIC agrees £1.7bn Broadgate deal

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GIC agrees £1.7bn Broadgate deal