Archive for November, 2011|Monthly archive page

Still relevant today

In Financial competency, Financial planning on 30/11/2011 at 5:46 am

This interview with Jack Bogle appeared in 2007. He makes points that are still relevant today.

What the news of the numbers of PRs owning HDB flats (and how it was reported) tells us

In Political economy, Political governance, Property on 29/11/2011 at 6:31 pm

(I waited eight days after the data on PRs owning HDB flats came out because I wanted to see if the local MSM would give a favourable-  to the government- spin on the data, which the MSM could reasonably do. The MSM was silent.)

Last Tueday, BT reported that  S’pore permanent residents (PRs) owned some 48,700 HDB flats as at September 2011 , according to the Ministry of National Development. It was answering a PAP MP’s question. According to this, there were approximately 1,038,473 flats as of May 201o.

This means that 4.7% of HDB flats are owned by PRs. So those lurid figures (over 20%, if I remember correctly) claimed by TR are not true.

It was also reported that 39,100 units in the 3rd Quarter 2011, are rented out. Assuming that the rentees are all FTs (PRs and other foreigners), a not unfair assumption, this means only 8.5% of the flats are occupied by FTs. Again, nothing near what TR claimed (over 30% from memory). 

Now as PRs are 13.9% of the resident population or 10.2% of the total population*, and PRs and other FTs 37.1% of the total population, these HDB numbers indicate that PRs and other FTs cannot be a major cause of HDB price rises. If  the 8.5% of the flats are occupied by FTs were 30- 40% (in line with their share of the population), then they would be a major cause of price rises. So Mah was right to he said that PRs and other FTs had no or little effect on public housing prices?

The way to look at this piece of data in relation to all the data made available is that FTs  have an effect (disproportionate perhaps?) because the supply was not keeping pace with demand given the influx of FTs. Khaw’s programme of building a surplus buffer is an admission that there was insufficient supply when the FTs were flooding in, courtesy of the government that we voted in in 2006.

No surprise then that the government and PAP spin doctors, and ST and MediaCorp staff missed telling us shumething important. This piece of info shows that Minister Mah did not know the numbers, or was fibbing when he said that PRs and FTs had no or little effect on public housing prices. They had an effect because he goofed, and then was in denial.  Hence the silence when the local MSM or spin doctors could have rubbished TR’s assertions, and the belief that FTs are the the major cause for HDB price rises?

This piece of information helps give some perspective to the ongoing (often heated and irrational on both sides) debate on public housing and immigration. Yet it only appeared in BT, which is behind a pay wall most of the day. Later Yahoo! reported it. This reminds me of what David Boey in a letter to Voices wrote, ” [R]elevant information is sometimes unavailable to the public or is not presented in a consistent format to facilitate analysis.”

How true and sad. Can fix this lack of info or not, PM? Will be a test of your promise of more openness, and change.


*”Singapore’s total population stood at 5.18 million as at end-June 2011. There were 3.79 million Singapore residents, comprising 3.26 million Singapore citizens and 0.53 million permanent residents, and 1.39 million non-resident foreigners, ” Department of Statistics report released on September 28th 2011.

“Singapore’s total population stood at 5.18 million as at end-June 2011. There were 3.79 million Singapore residents, comprising 3.26 million Singapore citizens and 0.53 million permanent residents, and 1.39 million non-resident foreigners.”


The intolerance of those calling for tolerance

In Wit on 29/11/2011 at 8:33 am

Femininists mockingly call themselves “sluts” as a means of fighting “for the right to express our sexuality free from shame, hate and abuse” (a most worthy cause that even I cannot find fault with), but when TNP mocks them, they rant and rave.

If you mock yrselves, you are fair game for others..

What next gals? Only wimmin can comment critically on feminist issues? For others to criticise or mock, will be “insensitive” and “hurful to wimmin”? Ask for the sedition law to be amended so that articles like what TNP wrote can land the editors and journalists in jail?

You are right to demand for tolerance (” the right to express our sexuality free from shame, hate and abuse”), but why are you intolerant of the right of others to make fun of you?

DBS bullish on China infrastructure play MIIF

In China, Infrastructure on 29/11/2011 at 6:19 am

In a note dated 25 November 2011, DBS is bullish on MIIF. Interesting as there is current net cash of about S$115 m and  prospective yield of about 10.5% assuming mgt is correct. My previous post in January this year reflects my concerns about this stock. But it could be I’m wrong, and DBS is correct. Anyway, nearly a year has passed.

International Infrastructure Fund (MIIF) is now leaner, fitter and wholly Asia-focused … MIIF has divested its non-Asian assets, and repaid corporate level loans with the sale proceeds … a cleaner balance sheet with current net cash of about $115 million.

The sale of stakes in other funds also eliminated the black-box problem (assets with limited financial visibility) and the fund now focuses purely on key Asian infrastructure assets.

MIIF’s three key investments

Taiwan Broadband Communications (TBC), the third largest cable TV network in Taiwan;

— Hua Nan Expressway (HNE), a 31 km urban toll road in Guangzhou, China; and

— Changshu Xinghua Port (CXP), a multipurpose port in the Yangtze River Delta region of China.

We visited these …  impressed by the management and operations … fairly confident of steady organic dividend growth from CXP and TBC, though traffic growth at HNE could face some near-term roadblocks. MIIF [has] used its surplus cash (from the sale of prior investments) to increase its stake in TBC from 20 per cent to 47.5 per cent …  higher dividend receipts from TBC.

MIIF paid out a three-cent dividend for FY2010. After restructuring its portfolio, MIIF is now guiding for a dividend per share of 5.5 cents for FY2011, based on expected cash flow generation plus existing cash reserves (2.75 cents already declared for H1 2011). We expect this is achievable and given the healthy implied yield of close to 10.5 per cent at current prices, we are reinstating coverage with a ‘buy’ call and TP of S$0.64, based on a discounted cash flow valuation of underlying assets. The share buyback programme … provides further support …

EuroLand Trojan Horse in US financial system?

In Banks, Economy on 28/11/2011 at 6:00 am

Or how the Germans can force the US to bailout the Eurozone by allowing Deutsche Bank to  “fail”. Taunus Corp is the U.S.’s eighth-largest bank holding company. Taunus is the North American subsidiary of Germany’s Deutsche Bank.

Think I’m looney?. The Germans are already playing one big game of “chicken” with investors and the people of  PIIGS (Not that these investors and people deserve our sympathy.) Waz another bloodless variation of this game to the nation whose leaders in the 20th century started two world wars in the hope of global domination, or at least European domination.

And the IMF has in what appeared to be an attempt to help countries such as France and Spain stave off the crisis, the IMF said that member countries with a track record of implementing “sound policies” could access up to 10 times their contributions to the fund. It did not say which countries it meant but said it was establishing a flexible liquidity line which would act as “insurance against future shocks and as a short-term liquidity window to address the needs of crisis bystanders”.

Why TJS never got invited for tea and biscuits

In Political governance on 27/11/2011 at 5:47 am

(As I recently wrote about an RI boy, I tot I might as well write about another RI boy, especially one very, very proud to be from RI. So proud that it annoyed me.)

The JBJ Memorial event five weeks to the day yesterday (Saturday), entitled “Heroes in Our Hearts”, turned out to be more than a tribute to JBJ. What has gone uncommented (until now) is that a speech there solved a puzzle.

During the May GE campaign, Tan Jee Say told us that he had been told when he was a civil servant (in the early 1980s presumably?) that the PAP had considered him as a possible candidate-MP. But nothing happened and he never heard about the matter again. (Three other scholars born in the same year as him, 1954, Teo Chee Hean (in 1992), Lim Hng Kiang (in 1991) and George Yeo (in 1988) were tapped to become MPs and ministers.)

During the same election, his ex-boss, Goh Chok Tong, said that TJS was not gd enough to be a Permanent Secretary, and so he left government service.  TJS denies this. More details.

TJS’s speech at the JBJ Memorial tells us that he openly cheered in the 80s for JBJ at JBJ’s public appearances and rallies.

That he openly showed his support for a non-establishment figure and knowing the views that the PM of the day, one LKY, held abt JBJ, it is very clear (to me at least) why TJS was never invited to a tea-party, and why he couldn’t ever be a Permanent Secretary. He was “unsound”, likely to be unreliable when the call came to close ranks against the “enemies of the state”, and other trouble makers.

That he rose to be the Principal Private Secretary of the then Deputy Prime Minister (and PM in waiting), despite such open support for JBJ, speaks well of the system of meritocracy in the admin service in the 1980s, and how decent a man Goh Chok Tong was. (Regular readers will know I am usually no fan of GCT or of his policies.) 

Yes, yes, I know that a cynic should say that there is only TJS’s word that he attended and cheered at JBJ’s rallies. But I’m willing to give him the benefit of the doubt even though I know people who were his senior in Morgan Grenfell Asia in 1991, who are annoyed that he claimed the credit for MGA winning the privatisation mandate from SingTel, three months after he joined MGA: “He makes S’pore sound like Indonesia”; “MGA had been cultivating SingTel for years”; and “What else did he win?”.

(Reminding me of what George Orwell in All Art Is Propaganda: Critical Essays wrote,  “A man who gives a good account of himself is probably lying, since any life when viewed from the inside is simply a series of defeats.” A good reminder why not to boast.)

My one criticism of his speech is that the speech came across as more about TJS* than about JBJ. But then brave men often have big egos, witness JBJ.

TJS is brave, not because of what he said he did 27 odd years ago, but because at age 57, he decided to do something very different and difficult, and which doesn’t pay well most of the time (he is out-of-pocket by at least S$127,000: enter politics on the side that always gets thrashed badly, like our national teams in sepak takraw, weightlifting, archery, basketball, footie, golf, dragon boat,  petanque, shooting, fencing and silat.

At the very least, even if he is an opportunist, he loves a challenge like Ulysses in Tennyson’s poem of that name which ends:

Though much is taken, much abides; and though

We are not now that strength which in old days

Moved earth and heaven, that which we are, we are—

One equal temper of heroic hearts,

Made weak by time and fate, but strong in will

To strive, to seek, to find, and not to yield.

What the poem does not tell us is that Ulysses was drowned when a wave hit his ship and he was washed overhead. Heroes do not have the luxury of dying peacefully in their beds.

Finally, if anyone knows when he joined and left Standard Chartered, his designation(s) there, or whether he was in investment banking, fund management, or whatever there, please drop me an email. I know nothing of this period except that he was in StanChart. Likewise for his stint in Peregrine. BTW, interestingly, between 1991- 1997, he worked for  three different firms. I only worked for one.  

*It reminded me of LKY’s eulogy of Dr Goh Keng Swee. There was a credible rumour that some members of Dr Goh’s family were upset that the speech seemed more abt LKY than Dr Goh.

Remember you voted twice this year

In Political governance, Wit on 26/11/2011 at 6:29 am

And that

— the next opportunity is a few years away; and

— an economic slowdown is coming. 

So something like this can happen to voters here.


A PAP MP is murdered by his FT mistress and her PRC lover in his China mansion so that she can claim on a 20-million life insurance policy. The MP’s soul arrives in heaven and is met by St. Peter at the entrance.

“Welcome to heaven,” says St. Peter . “Before you settle in, you have you spend one day in hell and one in heaven. Then you can choose where to spend eternity.”

And with that, St. Peter escorts him to the elevator and he goes down, down, down to hell. The doors open and he finds himself in the middle of a green golf course. In the distance is a clubhouse and standing in front of it are all his friends and other politicians who had worked with him.

Everyone is very happy. They run to greet him, shake his hand, and reminisce about the good times they had while getting rich at the expense of the people.

They play a friendly game of golf, then dine on lobster, sharks’ fin and champagne, and play high stakes poker.

Also present is the Devil, who really is a very friendly guy who has a good time dancing and telling jokes. They are having such a good time that before he realises it, it is time to go.

Everyone gives him a hearty farewell and waves while the elevator rises…

The elevator goes up, up, up and the door reopens on heaven where St. Peter is waiting for him.

“Now it’s time to visit heaven,” St Peter says.

So, 24 hours pass with the MP joining a group of contented souls moving from cloud to cloud, playing the harp and singing. They have a good time and the 24 hours in heaven passes by and St Peter returns.

“Well, you’ve spent a day in hell and another in heaven. Now which will you choose for your eternity?” St Peter asks.

The MP reflects for a minute, then he answers, “Well, I never would have thought it before, I mean heaven has been delightful, but I think I would be happier and better off .. in hell.”

So St. Peter escorts him to the elevator and he goes down, down, down to hell.

Now the doors of the elevator open and he’s in the middle of a barren land covered with waste and garbage.

He sees all his friends, dressed in rags, picking up the trash and putting it in black bags as more trash falls from above.

The Devil comes over to him and puts his arm around his shoulder.

“I don’t understand,” stammers the MP. “Yesterday I was here and there was a golf course and clubhouse, and we ate lobster and sharks’ fin, drank champagne, and danced and had a great time. Now there’s just a wasteland full of garbage and my friends look miserable. What happened?”

The Devil looks at him, smiles and says, “Yesterday we were campaigning … Today you voted.”


Wonder if PM will be telling this joke at the next National Day rally?

Update on 27 November at 8.45 am

Err I could be wrong

Looks like the PAP is still campaigning for the  middle class and working class votes.  

In defence of SPH

In Uncategorized on 25/11/2011 at 8:36 am

So SPH is suing Yahoo!. Doesn’t surprise me. I had seen various pieces in Yahoo! over the past 12 months that looked close, very close to pieces that had appeared in ST or Today.

Two weeks ago (before I knew of the existence of an issue between SPH and Yahoo!), I was telling my friends about one piece from Yahoo! that was in my view very, very close to a Today piece. I was speculating openly why Yahoo! was doing this.

Well should be gd for SPH if it wins. Might relook at my decision not to own the shares despite the gd dividend. 
Coming back to Yahoo!. Reuters is always quoting from WSJ and FT (behind pay walls), but it has yet to be sued.

“Our editorial business model of acquired, commissioned and original content proven,” says Yahoo!. What does “acquired” mean? It surely can’t mean taking out a subscription to ST or any other SPH publication,  then cutting and pasteing stuff, and then slapping Yahoo!’s name onto the rejigged artcles? Even such a dysfunctional organisation like Yahoo! would realise that it is so easy to be caught out. SPH can ask the court for Yahoo!’s Words docs and trace changes to the originals. If an original document was an ST article … Balls-up time at Yahoo! again.

HEHEHE. Nothing new there. Think the bid by Microsoft, the problems with Jack Ma or the sacking of its CEO. Only Yahoo! could do these things.


Why moving ministers around or out is gd for everyone cont’d

In Economy, Political economy, Political governance, Uncategorized on 24/11/2011 at 6:02 pm

(This piece is a continuation of Let me be clear: My analysis of the u/m minister’s performance is based on publicly available data. I am drawing reasonable inferences by connecting the dots. Nothing personal against the minister. In fact, the minister is a better example than Tan Jee Say, of a poor boy made gd under the system in place in the 70s and 80s. BTW, he and TJS were both born in 1954 and were in RI. )

There is still one cabinet minister who underperformed twice, possibly thrice and who is still in the cabinet. 

Lim Hng Kiang was HDB minister from 1994 to 1999, and has to take part of the blame that there was oversupply in the early noughties, something that Mah is blamed for. Mah took the lesson to heart and proceeded to build too few flats resulting in a world first: public housing prices rising in a recession.

He then became Health minister and told us complacently that we had to accept that people had to die in the SARS epidemic. Rumour is that one LKY did not buy into this when his wife fell ill and it was feared she might have contracted SARS. In August 2003 (after the worst of the epidemic had passed), Khaw became health minister and started reforming the public health system.

Lim Hng Kiang has been the Trade & Industry minister since 2004. S’pore is once again facing an economic slowdown , the second in three years because two of our main drivers of growth are not diversified. The exports of pills and electronics tend to move in the same direction.

Is the failure to develop new and diversified drivers of growth partly his fault? We had a recession in 2008- 2009 and a looming slowdown today because the main drivers were correlated. Whatever happened to the plans articulated by then DPM Lee Hsien Loong in the early noughties to have less correlated drivers of growth?

As he has been in the ministry for about seven years, how come we are seeing no changes in the drivers of growth?

And remember the wikileak cable from the US embassy here,  “The MPs, who were all members of the ruling People’s Action Party (PAP), indicated that Island could not rely on MTI (and EMA) to stand up to Temasek because MTI Minister LIM Hng Kiang is “weak” and not part of the PAP “inner circle,” Reading claimed.”

So why is he still in the cabinet? PM should follow his dad’s policy of ruthless execution of underperformers, not his successor’s and his (pre May 2011) tolerance of underperformers.  His dad must be aware of what  Bertolt Brecht, the famous Marxist and German playwright, meant when he wrote, “The finest plans have always been spoiled by the littleness of them that should carry them out. Even emperors can’t do it all by themselves.”

If you are reading this M John, please realise that the best RI boys are not necessarily those with high academic credentials like yrself, Goh Chok Tong, Hng Kiang, Raymond Lim or Tan Jee Say, who then become highly paid ministers like Goh and the Lims. Think rather of self-made billionaires like Peter Lim and A Hussain. One juz has an ordinary degree and the other never went to university. They are the people who do RI proud, not the scholars turned civil servants/ soldiers turned ministers who one can reasonably (but nastily) argue are effectively on state welfare from age 18 until they die.

It is sad that according to a junior minister 60% of the poor who need help don’t want welfare. Yet there are underperforming millionaires, living off the state.

Higher standards expected from BTimes and a Temask-linked group?

In Corporate governance, Media, Temasek on 24/11/2011 at 5:49 am

Recently, K-Reit Asia succeeded in getting unitholder approval for its plan to buy 87.5%  of Ocean Financial Centre (OFC), a prime Grade A Raffles Place office building, and raise some S$976 million through a rights issue (17 for 20) to fund part of the cost. It needs S$1.57 billion to buy from parent company Keppel Land a 99- year lease of the OFC office building. KepLand will see a net gain of about S$492.7 million from the sale. Meanwhile despite the massive rights issue, K-Reit will have leverage of around 42% by end of 2011, more than the Reit sector average of 36%. This at a time of a looming slow down.

Some unitholders questioned

— the price and timing of the deal what with a recession looming;

— that while the building in Raffles Place has a tenure of 999 years with 850 years remaining on the lease, but KepLand is only selling a 99-year lease;

— why K-Reit is paying its manager (which is owned by KepLand) an acquisition fee, though it is buying the asset from its parent company;

— the independence of the manager.

But dissenting unitholders have to accept much of the blame in allowing K-Reit an easy ride at the EGM when resolutions were passed with a show of hands. The chairman of K-Reit rejected a call to call for a poll at the EGM presumably because there was no five-member call for a poll or a request by unitholders controlling 10% voting rights. 

If dissenting unitholders are not prepared to stand up and be counted, they deserve to be bullied.

Business Times decided to raise a stinker, “This isn’t the first time – and probably it won’t be the last – that issues like these arise at a Reit. For some time now there has been growing disquiet among corporate watchers about weaknesses in the corporate governance structures in Singapore Reits where the Reit sponsor wholly owns the Reit manager, and also holds a large stake in the Reit.” Well BT should remember that there is a bear market, and issues abt corporate governance always rise when investors lose money.

“[C]ases of sponsors selling properties to Reits have raised concerns about conflict of interest, and unitholders have often questioned the purchase of these assets and how they were priced”. BT does not point out that

— it is public knowledge that here the Reit sponsor wholly owns the Reit manager, and also holds a large stake in the Reit; and

 — in the K-Reit deal and other deals involving possible conflict of interests, the selling unitholder has by law to abstain from voting; and

— there have to be independent valuations.  

“There is also the need to have more transparent structures to pay Reit managers and to tie these more closely to performance”, according to BT. It’s not as though these are hidden from investors or made retrospective. They are publicly available info.

Sorry BT. A piece of rubbish.  

Having said all this, a Temasek-linked group like Keppel should set an example for others to follow. At the very least, K-Reit should have allowed a poll on the resolutions, rather than a show of hands. After all, the law is likely to be changed to make polls mandatory at general meetings. “Justice must not only be done, but seen to be done” and “Caesar’s wife must be above suspicion”.

And K-Reit chairman Tsui Kai Chong’s comment that “Our father organisation, Keppel Land, is only willing to sell it to us for 99 years”, tells me that, at the very least, he has an “attitude” problem: deferring to his KepLand where  he is an independent director.

Why shareholders must vote

In Corporate governance on 23/11/2011 at 6:21 am

Or why a founder of a business who wants to control 51-75% of a company after it goes public is daft.  He should aim for a decent float.

Company law says ownership of 50% plus one share entitles an investor to take control of a company. In practice, the picture is often much less clear. A simple majority can be achieved with much less, so long as some investors can be relied upon not to cast their votes. The UK experience

In S’pore, in early November 2011, the chairman of K-Reit rejected a call to call for a poll at an EGM, presumably because the law didn’t compel him to because there was  no five-member call for a poll or a request by unitholders controlling 10% voting rights. Some minority unitholders objected to a deal* betwen K-Reit and its sponsor Keppel Land. But not enough turned up at an EGM to demand a poll?


*Details tomorrow in another posting on corporate governance.

Why moving ministers around or out is gd for everyone

In Political governance on 22/11/2011 at 6:23 pm

Last Wednesday, it was reported  that Environment and Water Resources Minister Vivian Balakrishnan said the PUB is studying the possibility of a new diversion canal off the Stamford Canal in Orchard Road, or the need for a retention pond in the area, which saw two “once in a century” floods last year, within weeks of each other. He also said that “Singapore is at a point where it needs to develop a long-term plan for flood control infrastructure”, effectively admitting that his predecessor* was talking rubbish, and incompetently complacent.

Well the minister* who said a flood was “once in a century”, is now the minister for propaganda, responsible for handling the Internet tsunami. Netizens should hope he remains as incompetent and complacent in his new job as he was in his previous job, given that the government wants to clean out the “cowboy towns” of the Internet territory.

The water ministry isn’t the only place where a change of ministers has resulted in new measures being introduced where previously there was only denial and spin, angering many S’poreans.

Take the change in public housing minister. Minister Mah retired after presiding over a world first: public housing prices went up in a recession. He had also redefined affordability and argued that lowering land costs were “raiding the reserves”. His successor, Khaw, is not in denial, and has taken steps to increase supply and contain costs, all without “raiding the reserves”.

There is a new transport minister (Lui) who unlike his retired predecessor** takes to the trains. He too has introduced new measures to lessen public anger.

And finally there is the welfare department over which VivianB presided. At the very least now, the ministers (“Kee Chui” and Halima) there are talking the talk of compassion, whereas VivianB did not hide his contempt for those in need what with his snide, hurtful and irrelevant comments.

So PM, moving ministers around and out when they underperform is a good idea. Don’t leave it for too long. If Mah had been moved around or out after presiding over the oversupply (150,000 units) in the early noughties, HDB prices may not have risen in a recession in 2009. And the PAP might have got more than 6o% of the popular vote.

Follow yr dad’s policy of ruthless execution of underperformers, not his successor’s and your (pre May 2011) tolerance of underperformers. He must be aware of what  Bertolt Brecht, the famous Marxist and German playwright, meant when he wrote,“The finest plans have always been spoiled by the littleness of them that should carry them out. Even emperors can’t do it all by themselves.”

Back to VivianB, “We’re not trying to hide anything.” Err how come you never released the report on food poisoning that occurred at the Kiddie Games? You had promised to release the report. Still secret leh?

And Yes, there is still one more underperforming minister who is still in the cabinet, drawing millions. More on him soon.


*I’m deliberately not mentioning his name lest zealous members of his ethnic or religious community, make a police report accusing me of sedition, or denounce me via TOC of being anti-something or other.

**Not naming him deliberately so as not to bring shame to RI.

Think you know it all financially, read this

In Financial competency, Financial planning on 22/11/2011 at 9:56 am

A US financial planner messes up his finances. Could be any S’pore property “owner” with a mortgage.

The experience has changed just about everything about how I do financial planning and the advice I give in public … I’ve … learned some things about risk. Risk is an arbitrary concept, until you experience it. And I’ve noticed myself focusing more on the consequences of something going wrong than just the probability of that happening. As a result, I tend to urge my clients to make decisions that err on the side of caution.

… For one thing, I am less quick to judge other people’s financial behavior. I’m also more inclined to take into account personal factors that determine how people behave around money.

… The process of making financial decisions is about more than building a spreadsheet to calculate the answer, because life rarely fits cleanly into a spreadsheet. Our decisions often appear irrational until we understand the whole story.

I have a friend who is going through a tough time financially. He has a high income, but is burdened by debt from a few real estate deals that went south. He continues to take fairly expensive ski trips. That would seem irresponsible in his situation, and maybe they are.

But I now realize that it is not that simple. Maybe those trips are keeping the guy alive, or saving his marriage or keeping him sane enough to work.

I have another good friend who borrowed against his house to pay for a therapist. Unless you were walking in his shoes you might think that was stupid, but it saved his life and changed his career. It ended up being one of the best investments he ever made.

Not expecting perfection, minister

In Infrastructure on 22/11/2011 at 7:46 am

Responding to Mr Giam’s question on whether the authorities plan ahead of time, Mrs Teo said that “there is advance planning but projecting demand and ridership is tricky business and hard to get 100-per-cent right.”

Err minister, going by the transport ministry’s and LRT’s track record, no-one is expecting them to get things 100% right. They, after all, makes whoppers like underestimating the traffic on the newly opened Circle Line by 100%.  If analysts in the private sector makes such misjudgements, they’d be sacked immediately, not given another chance ofto goof up.

No, minister, we expect them to make simple correlations. For example if the population of S’pore grows by a factor of X, expect overcrowding by a factor of A in W years, if no new trains are ordered, or signaling improved, and plan accordingly.

All we want is some common sense.

Update on 22 November 9.45am. Corrected misspelling. Apologies.


2008 all over again?

In Economy on 22/11/2011 at 6:01 am

Business sentiment is worse now than on the eve of the financial crisis in 2008, according to The Economist/FT survey of over 1,500 senior executives conducted by the Economist Intelligence Unit.

And in the UK last week, sterling London Interbank  Rates (LIBOR) reached their 2009 levels.

Reits: A blast from the past

In Property, Reits on 21/11/2011 at 7:11 am

Our constructive, nation- building media are promoting Reits as “safe” investments, so maybe it’s time to read or reread “Initially, I wanted to title this post “The Disastrous Singapore REITs Model” but decided otherwise”, written late last year?

It analyses what went wrong in the S-Reit sector in the period up to massive rights issues in 2009.

In a report issued last Thurday, CIMB identified K-Reit Asia, Frasers Commercial Trust (FCOT), Ascott Residence Trust (ART) and Suntec Reit as those likely to engage in equity fundraising in the near future. “The first signs of more cash calls to come have surface.”

The Reit industry is stronger than it was three years ago, CIMB said. Across the sector, the proportion of short-term debt to total debt stood at 8%  in September, much lower than the 38% in June 2008. With reduced pressure from short term liabilities, Reits are less likely to make cash calls, even if the industry’s average gearing did climb to 36%  (from 34% in 2008). But some Reits -(especially those in the office sector) could be vulnerable to asset devaluation as a downturn looms. Lower property values push up gearing ratios.

According to CIMB K-Reit, ART and Suntec Reit had gearings of 42%, 41% and% respectively at end-Sept, higher than the average of 36%.

The risk of a cash call is greatest for K-Reit. Its aggregate leverage remains high despite a massive rights issue (17 for 20) now underway to fund the purchase of Ocean Financial Centre from parent Keppel Land, and 20% of its debt is due for refinancing next year.

 ART not only has high leverage but its European assets could see a devaluation, raising its leverage- a vicious cycle. But if it divests Somerset Grand Cairnhill, which has provisional approval for redevelopment into a residential and hotel project, a near-term cash call could be avoided.

Suntec Reit  may not need a cash call until it is ready to acquire Phase 2 of Marina Bay Financial Centre and its capital expenditure needs could be partly met by proceeds from selling Chijmes.

FCOT is  a potential candidate for a rights issue because of  its relatively high leverage of 37%  and low interest coverage ratio. Also, all of its debt is maturing next year. But it could divest KeyPoint. Given F&N as its “big brother”, it could refinance its debt at lower interest rates.

But CIMB believes that Reits are still safe, maintaining its ‘overweight’ call on the sector.

Why do PAP activists say the dumbest things?

In Uncategorized on 20/11/2011 at 7:12 am
Oops, the Young PAPayas did it again.  The clownish antics of Young PAP members like Jason Neo do nothing to assure S’poreans about the quality of PAP activists. (Incidentally, the SDP’s and NSP’s holier-than-thou attitude will come back to haunt them. The local MSM will make sure of that, given that there must be people like Jason Neo in these parties.)
One of the things that makes many S’poreans disbelieve the PAP narrative that PAP MPs are chosen with the greatest care are the verbal gaffs that they make: Blunderland Tin’s “I don’t know what to say”; Foo(l)’s, “Trying to fool me, is it?”; Puthu’s comments on equating saving babies with doing NS, or telling us that his views on the ISA are secret (the government arrested dad using the ISA); and Dr Lim Wee Kiah’s comment that he does not respect those earning less than he does.
The dumb comments of PAP MPs and other activists have been put down to stupidity, elitism, arrogance, brown-nosing, or not knowing how the common folk live, or any combination of these.  
I have just finished rereading “1984” and can add two more explanations.
George Orwell wrote, “Doublethink means the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them”. The PAP needs MPs and other activists who can hold “two contradictory beliefs in one’s mind simultaneously, and accepting both of them”. Examples: believing that one can be compassionate to the poor by stripping them first of their dignity, or that public service entitles one to high pay.
He also wrote,“Even the humblest Party member is expected to be competent, industrious, and even intelligent within narrow limits, but it is also necessary that he should be a credulous and ignorant fanatic whose prevailing moods are fear, hatred, adulation, and orgiastic triumph.”
Likewise, the PAP needs as an activist a person who is not only intelligent and hardworking but also who “should be a credulous and ignorant fanatic.” In October last year when Madam Kwa Geok Choo died, minister Khaw wrote on his blog “if everyone were to be like Mrs Lee, this planet would be heaven”. I have the greatest respect for Mrs Lee Kuan Yew, but Khaw’s tribute is just plain silly, coming from an otherwise intelligent man. And remember Blunderland Tin telling us that she couldn’t think of a government policy that could be improved?  Wasn’t that plain silly, especially in the light of PM’s apology and the rethink in public housing, transport and healthcare policies?
The kind of people the PAP wants (intelligent and hardworking but capable of doublethink and credulous) makes them inherently mentally unstable: the kind of people who say or write the silliest things.
But let’s be fair to the PAP and remember that the WP was once the party of bicyle thieves and other petty criminals. And remember that one of RP’s founding members was extradicted to the US because he was wanted by the US government on two terrorism-related charges and brokering an arms deal with the Liberation Tigers of Tamil Eelam.
Let the final word go to Bertolt Brecht, the famous Marxist and German playwright, “The finest plans have always been spoiled by the littleness of them that should carry them out. Even emperors can’t do it all by themselves.” So PM beware.

HDB: Oversupply again by next GE?

In Property on 19/11/2011 at 6:40 am

The housing market in Singapore is heading for a prolonged downturn and overall private home prices are forecast to fall between 22 and 26%  in the next three years, Daiwa Research said. “We believe the residential property market could remain depressed for several years, triggered initially by a likely forthcoming gross domestic product slowdown (in 2012) and lingering global economic uncertainty.” (If you think this is bad, Barclays predicts a 45% decline in HK.)

Daiwa downgraded its view of Singapore’s property sector to “Negative” from “Neutral”, adding that “it is hard for us to see the developer shares outperforming the Straits Times Index over the next six months” despite their underperformance in the year to date.

From late next year, Daiwa said, structural issues such as the rapid build-up in unsold inventory in the primary market and vacant rental units will take centre stage and keep home prices and rents in check for several years. The mass-market segment will hold up slightly better than high-end properties, supported by better affordability and the resilience in the resale prices of HDB flats.

Err what happens if because of

— less FTS,

— slower economic growth or even a recession, and

— Khaw’s promise to build, build,

kiasu young S’poreans decide not to take up the HDB flats that are being built because they think prices will tank?

Remember that Mah overbuilt by more than 150,000 units in 2003, and was beaten up by the Opposition and netizens. For housing, the simple answer was the electorate demanded it, if you could recall the daily outcry in 2001 – 2003 by the opposition as well as members of publc on wastage of public funds on the more than 150,000 units left empty:  ajohor, a poster, on my blog pointed out recently.

(BTW can you blame him for then being super cautious and getting a reputation as the man who made public housing prices go up in a recession? No can win. But he got millions in the bank to console him, so no need to cry for him.)

Final tots. If there is an overhang of HDB flats, what will the Opposition and netizens then say? And how will the voters vote? For or against PAP? Hmm maybe PM deserves his global benchmark breaking salary? Salary review committee pls note.

Where are friends when you need them?

In Wit on 18/11/2011 at 6:10 am

The private equity investor J. Christopher Flowers used to be friends with Jon S. Corzine, whom he picked to run MF Global. They were both partners in Goldman Sachs, where the latter was also co-CEO. But the $47.8 million loss that Mr. Flowers’s company could suffer on the brokerage’s bankruptcy has strained relations between the two, the Wall Street Journal reported late last week.

Isn’t there a saying. “A friend in need, is a friend indeed”?

Why are trains overcrowded, but not the port or airport?

In Infrastructure, Political economy, Political governance on 17/11/2011 at 6:21 pm

When I read on Wednesday that Singapore is improving the International Cruise Terminal with the aim of seeing the number of berths double by the second quarter of next year, it reminded me of the constant planning and work that goes into upgrading S’pore’s links with the rest of the world, which I contrasted with the reasons (excuses?) given for the overcrowding on our trains, which according to a media report on Sunday would take up to 2018 to resolve, and which led to the usual howls from netizens that there was bad planning by a government that didn’t care about commuters comfort.

I remembered a few years ago analysing how forward looking was S’pore when it came to developing the airport. S’pore was always planning to grow the airport so that it would never get congested. This was unlike Thailand. A few months after the new airport was finally open a few years back after failing to be completed on time, the new airport was working beyond its planned maximum capacity, resulting in congestion and delays.

I remembered remarking in a report that this could never happen here. S’pore was always expanding capacity, knowing that it took time to build infrastructure. It never wanted the airport to look like a congested, overcrowded slum. It gave a bad impression to visitors.

Likewise the port.  It is  always expanding capacity and erring its projections on the side of overcapacity rather than congestion. And it’s doing the same for the cruise terminal. Singapore is investing heavily in cruise infrastructure to ensure the industry becomes a driver of growth for the tourism sector.

If the government errs, it errs on the side of overcapacity, not undercapacity. It feels that the demand would be there, and even if it didn’t materialise as planned, the spare capacity would attract demand.Contrast this spending with what happened in public housing and trensport. In this Donald Low explains why the government became wary of building more public train lines and public housing. It all has to do with projections that went wrong in the 1990s.

The contrast in the spending patterns seem to show that comfort and well-being of S’poreans are not as important to the government as securing the engines of economic growth? In the name of latter, building to meet possible demand seems to be in order, but not when it comes to the former? Why not?

Note that the plans for development of the rail, sea and air transport links are made within the transport ministry, whose spending plans are scruternised by the finance ministry. Yet the approach seems different between domestic and international links.

SEA Games: Juz wondering

In Uncategorized on 17/11/2011 at 7:54 am

I read yesterday that a S’pore shooter complained that her concentration was spolit by a photographer taking shots too close to her comfort zone. Today I saw an ad by Canon featuring two amateur photographers and their SEA Games’ photos.

Couldn’t help wondering if one of these photographers caused problems for the shooter.

From hero to zero in three months

In Uncategorized on 17/11/2011 at 6:22 am

Investors bought US$325 million in senior notes MF Global (which is now in Chapter 11) sold in August 2011. The securities contain a “key man” provision that would increase the interest rate by 1 percent if Mr. Corzine were nominated to a White House cabinet position before July 2013, an unlikely prospect now. The notes have lost nearly half their value in just three months since their issuance, so buyers are going to be looking to recover a portion of their losses possibly by suing Corzine.

Euro crisis in a nutshell

In Uncategorized on 16/11/2011 at 5:55 am

Best concise explanation I’ve read.

What changed is not … political or economic fundamentals but how investors perceive … debt. For most of the euro era, investors considered euro-zone sovereign bonds to be risk free. Prices and yields would fluctuate but anyone who held an Italian bond to maturity assumed they would get back 100 cents on the dollar (or euro), as they would for a US Treasury or British gilt. This was always something of an illusion. Risk-free can only apply to the debt of country that controls the currency in which it borrows. A holder of its bond knows he can always sell it to someone else, in the last resort the central bank. As Chris Sims of Princeton points out, such bonds may have inflation risk but not counterparty risk.

That has never been true of a euro-zone member country, but investors happily ignored the fact, thanks in part to the European Central Bank which treated all sovereign bonds equally in its refinancing operations. (See our analysis here.) It no longer can. Investors who once classified their sovereign bonds as risk free must now treat them the way they might a bond issued by a railway company or an electric utility (i.e. as “credit”) and have concluded they own too much.

A staggering amount of debt must now migrate from the portfolios of investors who want only risk-free debt to those of investors comfortable treating it as credit. That is why yields on Greek, Portuguese and now Italian bonds have shown only fleeting responses to multiple bail-outs, austerity programmes and rounds of buying by the European Central Bank. Investors have treated the dip in yields that follow each announcement as an opportunity to lighten up.

Ministers’ Salaries & Pensions

In Political governance on 15/11/2011 at 7:20 pm

Or “Stream of consciouness of a wondering mind” or how one tot lead to another.

When I read yesterday that NSP was organising a forum on ministers’ salaries, I tot of the story in the Chinese media last week that junior ministers’ starting salaries would be around the S$300,000 mark rather than the present (suspended) S$1m mark. and wondered how much would cabinet ministers and the president draw under the revised scheme?

I then wondered why the opposition MPs and NCMPs did not ask what our ministers and president are drawing pending the salary review report? The PM had said in May that any changes would be effective from the date he announced the review. So are they meanwhile paid their millions, with a clawback provision? Aka like investment bankers. And if so, what happens if a minister pleads poverty? Will he get the chance to pay back in instalments? If so, how long and at what interest?

Our WP MPs and NSMPs more interested in playing on same team as PAP? Like in footie?

Then I was reminded of what “moretothepoint” posted on TOC last Saturday


At a social gathering of prominent ladies today, Mrs Yu-Foo Yee Shoon {former MP and junior minister) was askedrepeatedly how much her ex-MP cum MoS pension was.

She tried to avoid the question by going on about the basis of how ministerial salaries were determined.

One insistent member of the floor kept asking and she finally replied that she gets 40% of her last drawn package of $500,000 p.a.

So that’s about $20K a month for doing nothing.

The audience let out a murmur when the numbers sunk in.


All these, for some unknown reason, reminded me of this passage in “Animal Farm” : “Comrades!’ he cried. ‘You do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. I dislike them myself. Our sole object in taking these things is to preserve our health. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers. The whole management and organisation of this farm depend on us. Day and night we are watching over your welfare. It is for your sake that we drink the milk and eat those apples.”― George Orwell

Qantas dispute: What PM and our local MSM are not telling us

In Airlines, Media on 15/11/2011 at 6:30 am

Yesterday, a piece in MediaCorp’s freesheet by an NTU academic reminded me of the narrative that the PM and our “constructive”, “nation-building” local media are trying to tell us about the Qantas dispute, strikes, lock-out and all.  It is about a struggling airline trying to cut costs to compete but its unionised workers are prepared to bankrupt it if their demands are not met.

 There is truth to this narrative. What the unions fear most is a plan announced in August that would cut 1,000 jobs and some long-haul routes while setting up a new premium airline based somewhere in Asia and forming a joint venture to operate a low-cost carrier in Japan. The unions want guarantees of job security. Qantas says that these and other demands risk destroying its commercial viability.

What you won’t hear, from the PM or the local media or the NTU academic, is that it could be possible that Qantas could be more generous to the workers, and still remain competitive. 

If the dispute goes to arbitration (what Qantas wants and which is now likely to happen), the eventual ruling may not be in Qantas’s favour overall, Australian analysts are saying. Since its domestic routes are highly profitable, the arbitrator may decide it can afford to be more generous to workers than it claims.

“Trust No One” especially our local reporters and editors, and local academics writing in the local media. But let’s be fair to our local media. Writing before World War II, George Orwell observed, “Early in life I had noticed that no event is ever correctly reported in a newspaper”. He was referring to the British press.

And “The Truth Is Out There”.

MBS: Behaving like the PAP?

In Casinos on 14/11/2011 at 6:21 am

When I read On Saturday that Marina Bay Sands (MBS) had finally decided to concede, I wondered whether the initial refusal to pay was because the person in question was a lady,  a hawker, and a S’porean? Was MBS trying to take advantage of her?

 I then wondered if he or she (an FT perhaps?) picked up this attitude because of the perception among may S’poreans and FTs that the governing PAP is forever trying to put one over S’poreans, especially the less educated and well-off? Finally, I wondered if there were lessons for the PAP too in this PR disaster for MBS?

Mdm Choo had visited MBS casino on 18 October and won a jackpot of S$416,742.11. The casino told her that the machine had malfunctioned. She was offered a sports car worth S$258,962 and S$50,000 in cash instead. She refused the offer because there was CCTV camera footage and witnesses (including casino staff) to support her account.

It was reported on Saturday that an MBS spokesperson said in a statement, “Marina Bay Sands regrets any confusion over the numbers displayed when Madam Choo Hong Eng won the Lotus Evora slot jackpot in our casino … After carefully reviewing this matter, [MBS] will pay the patron the amount that was displayed on the slot machine … We deeply regret the inconveniences caused.”

The difference was S$107780.11, “peanuts” in money-terms to the casino. Granted the difference was 26%, but management should have paid up on the spot, or soon thereafter to avoid bad publicity: “Customers can come to lose but not win any money” was the message that the Heartlanders got. MBS can be assured that Chinese punters from neighbouring Malaysia will get the same message.

Now now only did it admit that the machine had displayed what the lady had claimed, thereby suffering more adverse publicity; but the Casino Regulatory Authority is investigating whether MBS broke the law.

MBS is in triple jeopardy for trying to take advantage of a lowly educated lady S’porean hawker? Come the next general election, will the PAP pay a heavy price if the less educated and well- off S’poreans still think that they are being taken advantage of by the PAP? 

Finally why the does local media keep calling the lady a hawker juz because that’s her occupation is beyond me. The reporters and editors see her no “ak”? Or juz envious of her gd luck?

Bad luck continues to dog Genting Singapore.

In Casinos on 13/11/2011 at 7:33 am

RWS should free the doplhins because bad luck continues to dog Genting Singapore.

In what Genting Singapore called a prudent move in the face of a slowing global economy and tightening credit conditions in China, the company raised its bad debt provisions to S$56.9 million for the third quarter, up from S$23.5 million a year ago.

That equates to 8.5% of its gaming revenue, higher than the average of 3% the past six quarters, Citigroup wrote.

‘However, this is in contrast to Marina Bay Sands, which has not shown higher provisioning, so we wonder if Genting Singapore’s decision was driven by its aggressive credit extension that was seen in the first half of the year,’ Macquarie Equities Research analysts wrote.

There are concerns that its flagship casino, Resorts World Sentosa (RWS), continued to cede market share in both VIP and mass gaming segments to rival MBS.

“Genting Singapore lost significant gaming market share in 3Q11 and also did not see any ramp-up in non-gaming,’ the Macquarie report said. ‘We believe the VIP market share loss is more driven by lack of a competitive product relative to MBS.”

‘We find it interesting that notwithstanding Genting Singapore adding more table game capacity, slots and electronic table games (ETGs) (quarter-on-quarter), mass market failed to ramp and showed 2 per cent QoQ growth. This essentially means that table, slot and ETG yields all declined QoQ – at a time when there was available hotel room capacity,” the Macquarie report said.

The scheduled opening of Bayfront MRT at MBS may also shift some mass-market players away from RWS, it said.

Err maybe freeing the dolphins will help dispel the bad luck?

BTW, Morgan Stanley and OCBC are bullish on the stock.

Related posts:

SPP: Changing of the guard?

In Political governance on 13/11/2011 at 7:07 am

(Update: Didn’t go to plan. On 2 February 2012:

The six former Singapore People’s Party (SPP) Central Executive Committee members who resigned from the party last week have acknowledged the response given by its former secretary-general Chiam See Tong on Wednesday night.

Following Chiam’s clarification that the SPP had received legal advice to confirm the constitutional legitimacy of its Central Executive Committee (CEC) election at the party’s Ordinary Party Conference (OPC) last Sunday, the group said on Thursday morning that his clarification and accountability “bodes well for the SPP’s credibility”.

The six, which consist of the party’s former first and second assistant secretary-generals Wilfred Leung and Benjamin Pwee, organising secretary Ting Sze Jiang, Malay/Muslim affairs head Mohamad Hamim bin Aliyas, his wife and businessmen affairs head David Tan, made clear in their statement that their differences held with the party over leadership styles had never been with Mr Chiam.–maintains-continuity.html

It seems that Mrs Chiam managed to persuade her husband not to go allow new blood to reinvigorate the party. Not that he needed much persuading going by his track record. Wilfred Leung’s decision to leave after long years of service shows how bad things have become.)

Sometime back, ST reported that Singapore People’s Party (SPP) chairman Sin Kek Tong is retiring. He told ST that he is stepping down and will not be running in the next central executive committee (CEC) election, due to be held at the party’s conference in late November.

Speculation is growing among SPP members and supporters that secretary-general Chiam See Tong will decide to run for the chairmanship. Under the SPP constitution, the secretary-general is the most powerful office bearer. So if Chiam becomes chairman, it means he will be giving up much of his formal power. It will also show that he is serious about “renewal”.

As usual, the Chiams are not saying anything.

If Chiam moves on, then either Benjamin Pwee or Wilfred Leung, both currently assistant secretary-generals, will run for the secretary-general post. I understand that Leung has a full-time job in Shanghai, so this may be an obstacle in him standing given that the duties and responsibilities of the post require the holder to be based here. So it is likely to be Pwee, if Chiam decides to move on to be chairman.

If Pwee gets the post, it would be a most a meteoric rise.  By his own admission, he only got to know Chiam only a few weeks before the May GE. He would therefore have outshone fellow scholars Tan Jee Say (presidential candidate), and Hazel and Tony (NSP CEC members, with the former being secretary-general), in rising so quickly to the top in Opposition politics. In the NSP, the president, not the secretary-general, is the most powerful official, while TJS has no organisation to take advantage of the votes he got in the presidential election (25%).

Someone who has had dealings with Pwee recently says as befits a scholar and ex-admin service person, he is analytical and methodical. He also has gd inter-personal skills. He is a charismatic speaker as I can testify having heard him speak at TOC’s dinner honouring Chiam.  Tan Cheng Bock, as earlier reported, is believed to be advising Pwee and other SPP members who helped him in his recent presidential campaign. He is helping them plan the transition from brand Chiam, and how to get support in Western S’pore, his territory.

Note that Chiam has a liking for brainy people. Remember his going out on a limb trying to help unproven, untested newbie Kenneth Jeyaretnam of the Reform Party takeover the Singapore Democratic Alliance? Even after KennethJ proved himself bereft of management and EQ skills, I was told, he offered KennethJ a place on his Bishan Toa Payoh team. KennethJ declined as it would mean resigning from RP (where he was in charge of a deserted, sinking ship sampan) to become an ordinary SPP member. It seems he insisted on being made a CEC member if he joined SPP.

I don’t know much about Leung except that he has walked the Long March with the Chiams and other SPP members since 2005, so I can’t comment on his abilities.

Note that in typically S’porean fashion, there will be only one candidate each for the chairman’s and secretary-general’s post. There will be the usual back-room deals in the name of “unity”. Some things never change.

Non-Constituency MP Lina Chiam is likely to remain as second vice-chairman. But “new faces” are likely to run for key positions.

Let’s wish the SPP well.

S’poreans can do “rational discourse”and “reasoned and constructive debate”

In Political governance on 12/11/2011 at 6:32 am

Below are three letters to MediaCorp’s Voices that show how two S’poreans react when someone wants more rules to cure a “social evil”.

In the first, a man wants it to be made mandatory for transport companies to ensure that passengers occupying  “priority seats” give them up to elderly, pregnant women and disabled persons. And that students must “give up their seats to any adult passenger when all seats are occupied since students are paying a concessionary fare”.

Sounds like an extreme example of the traditional way of doing things that would make even Hitler, Mao or Stalin cringe. Make rules and force people into complying with these rules for some “greater good” as defined by the rule maker. And it ain’t only the government and its agencies. Think of the rules when it comes to set or “special offer” meals. I still have problems (admittedly less often nowadays) when I ask for a “diet” soda in place of the regular sugery stuff on the set or offer menu, even if I’m willing to pay extra.  In HK, this issue never arises if one is willing to pay a bit more.

There were two replies. One pointing out

— [E]ven if students are paying concessionary fares, this does not make them any less of a commuter … the elderly pay concessionary fares but are considered priority passengers. The amount of fare paid does not determine one’s commuting status.

[S]tudents have to keep track of whether all seats in the bus or train are full and, if so, they have to act on it. I am unsure as to how many students would then want to take a seat on public transport, given such “duties”. Also, would we fine students if this is to be mandatory?

While it is easy to complain about not being offered a seat, instead of shifting the responsibility to others, the question is whether passengers in need of one make the request.

The other I reproduce almost in full

… “Ensuring priority passengers get seats”  … and its simplistic solutions to the problem of priority passengers not getting seats.

One suggestion was for transport operators to be held liable for accidents if they did not find seats for these passengers. This would open a can of worms. Firstly, how would these passengers be identified?

Not all elderly people look their age, not all pregnant women show a bump and not all would choose to identify themselves. Would these unidentified passengers be allowed to sue transport operators if they get into an accident while standing?

In addition, SMRT staff, at the request of some priority passengers or otherwise, already do ask passengers to give up their seats.

Secondly, if a passenger were to refuse a seat, say, for the simple reason that he will be alighting soon, would transport operators still be held liable if there is an accident?

The letter writer also suggested that students, who pay concession fares, give up their seats to adults, who pay full fares. In the case of a pupil carrying a heavy bag and an elderly couple taking transport to a nearby park for a walk, who is more deserving of a seat?

More importantly, who has the discretion to judge which is the more deserving party? If a wrong judgement is made, and if any of these passengers get into an accident, who would be responsible?

Moreover, it is common to see a toddler or child below the height of 0.9m occupying a whole seat. Being free riders, literally, are they not less deserving of a seat compared to students, if we go by the writer’s argument?

We should not make a mountain out of a molehill by introducing drastic measures when the problem could be solved easily. The onus should be on priority passengers, responsible adults who can decide for themselves if they need a seat.

It does not cost anything to ask nicely for one or to enlist the help of transport staff to do so. And if rejected by one passenger, ask another. Someone giving up his seat is a bonus, not a right.

What the two replies show that S’poreans can engage in “rational discourse”, and “reasoned and constructive debate”, even when dealing with someone who hasn’t bothered to think through the implications of his ideas.

Now this is accountability

In Commodities, Corporate governance, Logistics on 11/11/2011 at 5:56 am

Commodities supply chain manager Noble Group (based in HK but listed here) announced on Wednesday the resignation of its chief executive only hours after reporting a surprise US$17.5-million (S$22.5-million) net loss in the third quarter from a net profit a year earlier. It blamed volatile market conditions and mark-to-market losses.

CEO Ricardo Leiman will remain as an adviser to the group after resigning “for personal reasons”, Noble said.

Chairman Richard Elman was appointed acting CEO, “We are taking this opportunity … to realign our goals and strategies to adapt to the many challenges that exist in the prevailing market conditions … It goes without saying that we are very unhappy with this performance even if it does just cover a very short period … things happen’ which are out of our control … remains very healthy and strong”.


Best NMPs: Jos Yeo and Terry Lee?

In Political governance on 10/11/2011 at 1:25 pm

Among the outgoing Nominated Members of Parliament (NMPs), sociologist Paulin Straughan spoke 75 times, the most. Former national swimmer Joscelin Yeo spoke seven times. Unionist Terry Lee spoke 10 times. The nine NMPs spoke a total of 247 times, a simple average of about 27 times each. The median number of speeches was 24. (Median is the middle value of the given numbers or distribution for those bad at maths.)

As NMPs get a monthly allowance of about S$2,000, you could have concluded that Jos and Terry were the tuang queen and king among the NMPs, skiving while collecting S$2,000 monthly. Assuming they were paid for 20 months, they would have been paid S$40,000 each. This works out to more than S$5,700 per speech in Jos’s case and S$4,000 in unionist Terry’s case.

Or were the salaries “peanuts”, so that they didn’t bother to open their mouths more often?

Well, there is actually a S’porean who implies that they did the right thing, by skiving.  This was published in Today’s Voices as follows:

NMPs reduce the time for elected MPs to debate issues
Letter from Anton L S Chan
HOW effective were the Nominated Members of Parliament (Nov 9)? My answer is, they were neither effective, necessary nor required. Parliament is a place for elected Members of Parliament to contribute and debate on every Bill. This is a necessary role of our elected MPs, People’s Action Party or Opposition. It is required from them to be seen and heard by the constituents. It will be effective because elected MPs are the voice of the people. Why do we need NMPs to speak for us? It also does not make sense that NMPs can effectively represent Opposition voices. The allowance of S$2,000 a month is a waste of taxpayer money. Professor Paulin Straughan spoke 75 times – the highest among her peers. We do not need the professor to speak for us. We need and want our own elected MPs to do the job, to discuss and debate on the Bill that affects the people of Singapore. On the contrary, NMPs who speak in Parliament reduce the time for elected MPs to speak and contribute to the debate.If the NMPs are so passionate and capable of speaking for the people of Singapore, they should take the step and contest the General Election. Otherwise let the elected MPs be heard and seen by the people of Singapore. The time in Parliament allocated to the NMPs should be given to the Non-Constituency MPs. At least they still represent the voice of their constituents.

 OK, I exaggerated his support of Jos and Terry.
Me? Jos and Terry should be ashamed they took tax-payers’ money and gave so little in return. Emulating some ministers and PAP MPs? Hoping to become PAP MPs is it?
Actually Jos ain’t that bad. Unlike Terry, who is a unionist (unionists are supposed to be dedicated to serving the workers), she is juz one of us ordinary S’poreans, albeit one who won medals for S’pore, at a time when winning such medals didn’t do much for her finances. So maybe she thinks it was payback time when she became NMP?

Police still investigating after 14 months

In Financial competency on 10/11/2011 at 6:24 am

Profitable Plots has been the subject of a probe by the Commercial Affairs Department (CAD) since August last year. In court on Tuesday, the case was adjourned for the fourth time after District Judge Chay Yuen Fatt granted the CAD another four months to complete its investigations.

Deputy Public Prosecutor Christopher Ong told the court that an adjournment was needed to review the experts’ reports on the case, submitted late last month. He added that this was likely to be the last adjournment of the case.

Gee, if the alleged victims and their champion Tan Kin Lian, the People’s Voice, were to be believed in early 2011, it was easy to prove that they were cheated. That it has taken 14 months to investigate and yet no charges are laid show that they were misrepresenting the facts.

 If the CAD drops its case because of insufficient evidence, I hope Profitable Plots will sue the complainants for damages.

The complainants must realise that there is a cost for unreasonably alleging “cheating” after losing money in an investment, and thereby wasting public funds and the authorities’ time. It would be nice if the government would bill the complainants for the time and money wasted. But since that won’t happen, let’s hope Profitable Plots will take them to the cleaners.


Why stock markets are 10% higher

In Economy on 09/11/2011 at 6:45 am

You will not have noticed, but global equity markets have risen well over 10% in general over the past four or five weeks – and are significantly higher even on European markets.

There has been some good news. Recent statistics show that the US is further from recession than was widely feared it would be although growth is sluggish and unemployment stubbornly high. Capital spending of American companies hit a high in the third quarter not seen since 2008. Expenditures rose 24% to US$43.3 billion in the third quarter for 140 non-financial companies in the Standard & Poor’s 500 that had released such data as at Nov 4. And leading US industrial and consumer companies are still posting better than expected profits.

As for China, the economy is slowing, but not yet in trouble . Jim O’Neill of Goldman Sachs (a bull on China), wrote over the weekend that if Chinese CPI inflation drops to 5.5/5.6% or so, that would be “comforting to those expecting a ‘soft landing'” even though China’s critics see evidence of a coming Chinese property crash and banking crisis.

Blame the Greeks and Italians for all the jitteriness. The Germans should send their panzer divisions and occupy these countries, loot them of their portable treasures, sell off the Greek and Italian islands to the rich Chinese and Indians, then bail the Greeks and Italians out.

But it may be wrong to read too much into this bounce because trading has been relatively thin.

Selective Courage and other PM’s tales

In Political governance on 09/11/2011 at 6:43 am

On 30 October 2011, MediaCorp reported the PM as saying,” [T]o dare to stand up and say something which is true but may be difficult, spiky, which the population may not wish to hear … that takes courage … as Government, it’s our responsibility to speak the truth to Singaporeans …  it’s the Opposition’s responsibility also to acknowledge the truth and to speak it, whether or not it’s politically advantageous to them.”

Fair point but PM, don’t you think that it also takes courage to admit that the government, cabinet, minister, ministry or civil servant has goofed, is sorry, and will take steps to remedy the situation? Whatever Wong Kan Seng may have done, he is the only minister to have taken responsibility for a goof-up by his ministry (the escape of a “terrorist”). Usually tai-chi is practicised.

Think minister Mah, who defended his policy of allowing the prices of public housing to rise in a recession. Or of Raymond Lim for threatening to impose GST on transport fares, while doing nothing to ease congestation on public transport?

Or of VivianB for getting his numbers wrong wrong on the new national stadium and the Kiddie Games, and insisting that he was right to be wrong. Or berating the poor for wanting hawker or restaurant food.

Or the Home ministry allowing  a violent and dishonest shop assistant; and hawkers to become PRs. Or the minister failing to apologise for not recapturing a physically handicapped “terrorist” before he swam out of S’pore.

Or Yaacob talking of “once in a century’ flood, when there was a flood a month. Or of the entire cabinet in allowing immigrants in by the truck-load without thinking of the consequences on the public infrastructure and social fabric.

You were also quoted as saying parliament was for “serious discussion, not just criticism”. It is wrong to try to distinguish “serious discussion” from “criticism”. “[C]riticism” is part of “serious discussion”. Go ask any Cambridge academic.

You said that Parliament is not just a place to hold either the government or Opposition to account … both sides should participate in solving problems together, or Singapore would be worse off for it.

What about giving out more information so that the public can know what is happening? If local academics got beaten up by the then Manpower minister, a few years ago, for using data from a government website, surely there is a problem somewhere? And it’s not with the academics. How can publicly available info be misleading? But that minister is now one of your most trusted ministers.

“Academics, economists and sociologists are demanding more than the “pledge to share more information.” They want the raw data, instead of the ad hoc releases from the official propaganda machine,” notes S’pore Notes some time ago.

This brings me back to your “acknowledging the truth” comment. The truth can only be established by evidence, so make more raw data available.

Your comments seem nothing more than your father’s “style of single-party governance: long-term decisions made by an inner circle, without the distractions of a substantial opposition or the time pressures of electoral deadlines. “Public debate can make issues “harder to solve,” you said sometime back, so it’s reasonable to assume that you would rather avoid informed public debate of any kind.

In his book “Golden Fetters”, Barry Eichengreen argued that one reason the gold standard failed to work after the first world war was that most states had become democracies; regular doses of austerity were needed to ensure sound money. But that was politically impossible once the working classes had the vote, especially as politicians were worried about the threat of communist revolution. [Took this from Buttonwood’s Notes, an Economist blog.]

S’poreans are rich

In Economy, Political economy on 08/11/2011 at 4:20 pm

Wonder why!/FabricationsAboutThePAP or YPAP or SDP don’t tell us things like these? Don’t know economics or money not enough?

SMRT: CEO stupidity discount?

In Infrastructure on 08/11/2011 at 6:00 am

Wonder if analysts will be building into their models, the assumption that SMRT chief executive Saw Phaik Hwa will continue making stupid remarks that upset commuters, thereby making it harder for SMRT (and Delgro) to get their desired fare rises? Will they also make the assumption that such gaffes reflect her inability to manage a public transport company?

In a recent ST report, the SMRT CEO commented that the MRT system is “still reliable compared with other systems” and “I don’t see anything significant” in the number of disruptions and delays.

She attributed the train breakdowns to higher service frequency, new trains that “need to break in”, and more rainy days in Singapore. She cites the newly installed platform screen doors at surface stations, which need to synchronise with train doors, as another factor in train disruptions.

Maybe by M’sian Chinese standards (she refuses to become a citizen, preferring to be a PR), comparisons with third world cities and even NY, London and Tokyo are in order. But she should not forget that she is the CEO of a transport company in a city that has aspirations to be a leading edge global city. If our ministers can set the global bench-mark paywise, SIA for premier service or or our local banks for solid balance sheets,  why can’t she set the global city benchmark disruption-wise when it comes to MRT systems?

Her other verbal gaffes: The SMRT chief had annoyed commuters last year when

— the issue of overcrowding was raised, “People can board the train, it is whether they choose to”; and

— she told commuters that they had a role in ensuring that trains were properly secured when there was a break-in at a train depot. She want us to volunteer to guard her train carriages.

Too many Black Swans

In Investments on 07/11/2011 at 7:00 am

Gd piece explaining that the term “Black Swan” is often misused, even by the coiner of the term.

Even the birds and suicides flock to WP constituencies

In Media, Wit on 06/11/2011 at 3:36 pm

Yes I’m being insensitive but couldn’t help thinking the above when I read in today’s SunTimes that birds are flocking to Hougang creating problems for the residents, while another body was found in Bedok Reservoir, the sixth since the May GE, when the area voted for WP.

Wah, WP that popular leh? Even the birds and suicides support them?

Think again. The PAP  via the local MSM may want you to think that

— Hougang is fast becoming a slum (waste food and other rubbish are not being collected, attracting the birds) since Yaw became MP  because there are only a few competent people in the WP to manage a constituency and Yaw’s not one of them; and

— voters in Kaki Bukit are repenting of voting WP (as per LKY’s prediction earlier this year) by killing themselves.

Accounting tricks that are still around

In Accounting on 06/11/2011 at 6:59 am

MF Global may have engaged in “window dressing,” reducing its level of debt before reporting its finances each quarter so as to appear less risky to investors, according to an analysis by the Wall Street Journal.

Despite all the laws enacted since Enron and Lehman Brothers, this trick is still being used. Other tricks still in use:

— accelerating revenues;

— delaying expenses;

— accelerating expenses preceding an acquisition;

—  “Non-Recurring Expenses”;

— “Other” income or expense;

— off-balance-sheet items; and

— synthetic leases.

More details on above

The financially savviest PE candidate of them all

In Financial competency, Political governance on 05/11/2011 at 4:08 pm

With the PM’s talk of a global financial crisis worse than that of 2008; and with three of the four presidential canidates having financial credentials (one an ex- banker, finance minister and SWF executive director; another an actuary and retired insurance CEO, and the third an “investment adviser”, I tot it would be fun to analyse their presidential election performance in terms of one indicator of financial savviness: see table below).

Tan Jee Say (the “investment adviser”, previously a senior civil servant with a background in economic policy, investment banker and fund manager, who, when he first entered politics this year, called himself an “investor”) was the most effective campaigner in $ terms in the presidential election. But among the four candidates, he flunked badly the first rule of high finance: “use other people’s money”. He had the most self-funding to do percentage-wise, 78.41%. He only got donations amounting to 21.59% of what he spent. TJS had the courage to spend what it takes to run an effective campaign, but he sure is no expert in using other people’s money.

The People’s Voice ,Tan Kin Lian (actuary and retired CEO of an insurer), wanted $2m a year in presidential salary, but was only willing to spend other people’s money, not his own to campaign. He was even trying to get donors to fund his deposit (Knew would lose deposit?).  But he ended up in second place to TJS when it came to self-funding, percentage-wise. Right attitude, incompetent execution.

Tony Tan has his presidential salary to console himself for having to spend the most (in absolute terms)  from his own pocket,$165070. His many endorsements (especially from the unions) didn’t result in much money. Could this show the meanness and insincerity of those S’poreans who “endorsed” him? Or that they are a bunch of cheap skates?

Tan Cheng Bock MD can console himself for his very narrow loss by congratulating himself for doing better than the financial experts. He outspent everybody else by a big margin, but did it largely on other people’s money. He spent $60424.65 of his own money, only 10.33% of his total campaign expenses. TKL spent more of his own money (in absolute terms) than TCB.

“Tan Cheng Bock Ho Say Le”.  Read the rest of this entry »

S’poreans get justice in US?

In Investments on 04/11/2011 at 7:37 am

A US court has decided that it would hear a lawsuit brought by Pinnacle Notes’ investors (see below for extract of BT report).  It ruled that “generalised warnings of risk and of the possibility of adverse interests” between Morgan Stanley and the Pinnacle Notes investors were not sufficient to protect Morgan Stanleyagainst all allegations of fraud.

Meanwhile the S’pore court of appeal has told DBS High Notes 5 investors to bugger-off: “In view of our decision in this appeal, we think it apposite and timely to remind the general public that, under the law of contract, a person who signs a contract which is set out in a language he is not familiar with or whose terms he may not understand is nonetheless bound by the terms of that contract … The principle of caveat emptor applies equally to literates and illiterates.”

Wonder why the investors never alleged fraud by DBS? The S’porean legal system (like that of the English) requires a very high standard of proof if the plantiffs’ allege fraud. And if they fail to prove fraud, the consequences for the plaintiffs can be very serious in monetary terms. The US system is a lot more lax.

Poor DBS HN5 investors: their Hongkie cousins were treated better by DBS

Read the rest of this entry »

Three cheers for TR

In Media, Wit on 04/11/2011 at 6:44 am

Discriminatory practices have no place in S’pore: Tan Chuan-Jin.

When I first read this local MSM headline, I raised my tea-cup to toast Dr Joseph Ong and the other unnamed and unsung boys and gals of the Wayang Party, Temasek Review or Temasek Review Emeritus or whatever they decide to call themselves, next. 

Whatever their faults (and they are many), they were very aggressive in publicising the names and contact numbers of companies (local and MNCs), managers and employment agents discriminating against true blue S’poreans. I’m sure that the postings (and readers’ comments) helped “rational discourse”, and “reasoned and constructive debate” on this topic, forcing the government to admit that the problem exists, and is extensive. Mr. Tan said that employers’ mindsets must be changed to tackle the problem, implying that the problem exists, and is extensive. And, in the words of MediaCorp, that  Singaporeans remain at the core of the workforce is the objective of a revised set of guidelines by the Tripartite Alliance for Fair Employment Practices.

TRE is said to be planning a comeback by mid-November at the latest) and that the core team will identify themselves publicly (trying to copy TOC is it?).

Looking forward to the return of TRE: lies, misrepresentations, rants, astroturfing, and the occasional good analysis (think Grey Hippo) and accurate sliming.

What Is A Cash Flow Statement?‏

In Accounting on 03/11/2011 at 8:45 am

The next bubble

In Investments on 02/11/2011 at 7:44 am


Amy Khor’s favourite website and internet regime?

In Media, Political governance on 01/11/2011 at 2:07 pm

“Online engagement will increasingly become more important with the growing number of digital citizens. It is simply impossible to engage on all sites. The government could engage on sites which allow for reasoned and constructive debate and gain traction. Netizens themselves who desire rational discourse should support such sites or else start them. They should not be afraid of being labelled ‘pro government,'” so said Amy Khor of REACH, the government’s feedback unit, and a junior minister,  in parliament recently.

Funny, she didn’t mention!/FabricationsAboutThePAP?sk=wall

But then looking at what is posted there by the founder and friends, there isn’t the need the need for the government to engage this site. All they do is put up stuff from government websites. Bit like the SPH and MediaCorp publications, channels, stations and websites who take stuff from government media releases. But at least the local MSM edits the stuff they get, adds some context and commentary, and pretends to do shume analysis. This site gives the government stuff raw.

So why engage the site? It agrees 100% with the government, in the government’s own words. Add no value leh.

Maybe the government should engage the site by funding it so that the people running it can get more active (“passionate”) in engaging their follow S’poreans in “rational discourse”, and “reasoned and constructive debate”? They should be originating original material, things that this site (hopefully), TOC, Yawning Bread, Singapore Notes, Diary of A Singaporean Mind etc etc regularly do. Or at least editing or putting into context what the government says.

Maybe like our ministers (I’m talking here about the public perception), they need serious money to motivate them to try harder? The founder should have the time. According to an ST report,he  is a young unemployed S’porean who claims he is not fronting for the PAP. I believe him because the PAP would never use an unemployed person for anything (“Can’t get a job, what kind of person is this?”)

Maybe this will happen here?  Remember the addenda to the President’s Address from the Ministry of Law and the Ministry of Information, Communications and the Arts?

China is intensifying restrictions on internet use after official reports revealed that three people have been “punished for spreading false rumours” online.

Authorities say they are carrying out inquiries into other suspected cases.

The news comes just over a week after Communist Party leaders agreed a list of “cultural development guidelines”.

They include increased controls over social media and penalties for those spreading “harmful information”.

The Xinhua news agency quotes regulators as saying that efforts will be stepped up “to stop rumours and punish individuals and websites spreading rumours”.

Finally, came across this definition of “objectivity”. “Objectivity”, Richard Taflinger of Washington State University has termed as “the detached and unprejudiced gathering and dissemination of news”.

Bond funds are not BONDS

In Investments on 01/11/2011 at 6:43 am

There is an ad from a very reputable fund manager advertising its Asian bond fund. If you find the idea of buying into a bond fund attractive, read u/m which I posted some time ago on the difference between buying a bond fund and a bond.


In search of safe and non-volatile returns, retail investors globally have invested heavily in bond funds, often thinking they are as safe as investing in individual bonds: with the added advantages of diversification (of interest rates, maturities, and default risks); and lower investment costs.

Sadly, they are not the same.

When you invest in a bond, you know the interest rate and the duration (maturity date) of the bond. When interest rates go up, the value of a bond goes down. But you will  get the promised interest and if you  hold the bond until it matures, you will  get your principal back. Bit like a fixed deposit.

You will only lose your principal if you decide to sell it before it matures.

But a bond fund doesn’t work that way because it invests in many bonds, hundreds, possibly thousands. There are many different interest rates and maturities (durations).  So you don’t have a defined interest rate or a maturity date. You have an average interest rate and average duration for all the bonds in the fund.

This may seem an esoteric difference, but believe me, when interest rates rise you will regret not knowing the difference earlier.

You could lose serious money because for any percentage point change in interest rates, the value of the fund will change by the amount of the duration. This sounds complicated but the following illustration will make clear the inconvenient truth.

If the fund holds bonds with an average duration of 10 years, and 10-yr interest rates go up by one percentage point in the capital markets, the value of your fund will drop by 10%. If the fund before the interest rate rise was worth $100m, after the rise, the fund is only worth $90m. BTW, the longer the average duration in the fund, the bigger should be the loss. If the average duration was 40 yrs, the loss would be 40%. Buying shares is safer neh?

Going online to complain to Tan Kin Lian or protesting at Hong Lim Green claiming that you have been cheated is a waste of time. It’s yr fault.

So think twice about investing in a bond fund, if you want safe, steady returns. It may not work out that way.

Finally, came across this interesting quote. “People would rather overpay for bonds than underpay for stocks,” says David Kelly, a strategist for J. P. Morgan Funds. “It’s a function of years of very miserable stock returns. And just a general fog of gloom over the country right now.”