Up there with the Nigerians in scamming
Up there with the Nigerians in scamming
Nomura says Indonesia, Malaysia and India could be next to implement capital controls.
As Apple “rages” over its13bn euros tax demand from the European Commission, the US Treasury is warning that the ruling against Apple “could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the EU and US”.
Earlier this yr NYT Dealbook reported
Why the World Is Drawing Battle Lines Against American Tech Giants. European efforts to rein in the largest American tech companies are only a taste of what countries like Brazil, India and China are likely to do.
I got the above impression after reading the Indian’s (Sorry TISG”S) description of IT at SGX. Go to “New people taking over SGX’s IT systems” http://theindependent.sg/2-senior-tech-fts-left-sgx-end-of-last-year/
We can only hope this won’t tuen out to be like this A*STAR, NTU fiasco where FT “Kena stripped of PhD. Boss at NTU and A*STAR who is also a foreign talent, contract kena terminated” http://retractionwatch.com/2016/07/13/harvard-researchers-phd-revoked-former-group-earns-three-more-retractions/
The trio at the centre of the scandal are Professor Ravi Kambadur, 54, who was with the Nanyang Technological University (NTU); Dr Mridula Sharma, who was associate professor at the National University of Singapore’s (NUS) Yong Loo Lin School of Medicine; and former NTU researcher Sudarsanareddy Lokireddy. (ST)
Truly the T stands for Trash. All relared to IDA’s Nisha?
Maybe our homegrown Indian talents (People like Dr Paul, the CEO of DBS, the CJ, the AG, Tharman, P Ravi and Shanmugam; though not s/o JBJ, Pritam Singh and M Ravi) can help MoM and Home Team to profile the characteristics of ethnic Indian talent rather than ethnic Indian trash? Then we can get the right kind of Indian talent.
NYT Dealbook explains Uber’s biz model of sunsidising the rides of Chinese and Indian customers to starve its competitors of biz:
WHY UBER KEEPS RAISING MILLIONS It feels like almost every other week there is a new headline about Uber raising more money, Andrew Ross Sorkin writes in the DealBook column.
If you add up all the money the company has raised since it started in 2009,it is on its way to amassing $15 billion and has a valuation of $68 billion – all while remaining a private company.
When Amazon went public in 1997, it had raised $54 million and was valued at $438 million.
Uber has to finance its efforts to grab market share in China and India, butit is also trying to mark its territory. Every time Uber raises another $1 billion, investors find it less attractive to back one of Uber’s rivals: Didi Chuxing, Lyft, Gett, Halo, Juno. It is a war of attrition, to starve the competition of cash.
Uber’s efforts seem to have had the opposite effect so far, spawning a long list of rivals, but as the smaller competitors run out of cash, venture capitalists should be less inclined to put up more money.
This arms race comes against the backdrop of falling valuations and there is a rush to take the money while it is still available. Bill Gurley, a venture capitalist who has a stake in Uber and sits on its board, warned investors about unicorns seeking funds: “You are not being invited to a special dance, you are being approached because you are the lender of last resort.”
The question is whether investors will look at Uber’s balance sheet and throw up the white flag. It still has formidable competition from Didi, the market leader in China, which just raised $7 billion. And some of the same investors that have backed Uber are also backing Didi, including BlackRock and Tiger Global. (Some may be hoping that Uber might one day merge its Chinese operation with Didi.)
Uber’s most recent fund-raising effort – focused on the leveraged loan market – aims to avoid diluting the current base of shareholders and having to sell itself at an even higher valuation. It will have to pay up for the financing, but if its valuation continues to grow, it would be a bargain compared with the value of the equity. Uber is hoping to sell debt with a yield of 4 or 4.5 percent.
The question between now and the probable initial public offering in a few years is whether it will have starved all of its competitors along the way.
Shares in Standard Chartered plunged on Tuesday after the Asia-focused bank revealed a $1.5bn (£1.1bn) loss.
The bank will take a $4bn charge on writing down the value of its loans, driven by falling commodity prices and deterioration of Indian markets.
Shares in the bank tumbled by 4% to a record low of 418.7p.
CEO said: “It rips at our soul every time we look at these numbers and we don’t ever want to have to stand up and tell this story again.”
And that’s not all.
StanChart faces accusations over ‘dirty debt’. It bought a $100 million “dirty debt” from a M’sian bank and used it to demand compensation from the Tanzanian government despite knowing that the loan had been part of an embezzlement scheme, according to claims in a legal row in Tanzania. The debt was originally owed to the M’sian bank by a M’sian company, Mechmar.
Update qt 7.00am: HoHoHo woild endorse this spin Sir John Peace, Standard Chartered’s outgoing chairman, said: “While our 2015 financial results were poor, they are set against a backdrop of continuing geo-political and economic headwinds and volatility across many of our markets as well as the effects of deliberate management actions.”
Don’t blame us. World’s in bad shape. We juz reflecting it.
People and assets.
HSBC’s so-so results prompts th=hs analysis. Results fr 2015 were flat after an expected US$1,9bn 4Q pre-tax profit turned into a loss of US$858m.
As at August 2015, Asia accounted for 69% of HSBC’spre-tax profits. And HK, China is where the money is minted.
Well these show that ang mohs and Indians: people and assets are lazing in the sun.
Yes India is in Asia but look at the number of Indians employed, more than the Honkies. HK is the place that HSBC makes its money, not india but there are more Indians working for HSBC than Hongkong people.
Related post: StanChart’s very own Little India.
Update at 10.45 am: http://blogs.reuters.com/breakingviews/2016/02/22/hsbc-shares-weighed-down-by-fear-of-future/
Update at 4.30pm; From NYT Dealbook: HSBC’S FOURTH-QUARTER LOSSES HSBC, Britain’s largest bank by assets, posted a loss of $1.33 billion for the three months ending Dec. 31,Chad Bray reports in DealBook. It had posted a profit of $511 million in the fourth quarter of 2014. Before taxes, the bank posted a loss of $858 million.
The bank also revealed in its earnings statement that it was under investigation by the Securities and Exchange Commission over its hiring practices in Asia. Several banks are under scrutiny after the commission opened an inquiry into whether JPMorgan Chase hired the children of powerful officials to help win lucrative business contracts.
HSBC did not give any further details on the investigation.
Its results were weighed down by restructuring costs, provisions for legal and regulatory matters, loan impairment charges and provisions for credit risk.
The bank is in the process of reshaping its operations, shedding tens of thousands of jobs, selling underperforming businesses and shrinking its global investment banking business.
“China’s slower economic growth will undoubtedly contribute to abumpier financial environment, but it is still expected to be the largest contributor to global growth,” Douglas Flint, the HSBC chairman, said in a news release.
This lumps together Vietnam, India, Indonesia, and the Philippines for their similar economic and demographic prospects. It serves as a catchall for a number of relative bright spots in Southeast Asia as investors into the region look beyond China’s long shadow.
They cut and paste ang moh ideas. Works in Animal Farm but not in India
“The draft masterplan for Amaravati was prepared by planners from the Singapore government as part of an agreement between the state of Andhra Pradesh and Singapore,” explained Srikant Nagulapalli, commissioner of theAndhra Pradesh Capital Region Development Authority (APCRDA). “But when the first draft arrived, we realised that it would not work.”
According to Nagulapalli: “Global town planning principles do not take Vaasthuinto consideration. But the people of Andhra Pradesh have a deep-rooted belief and will not buy any property that is not north- or east-facing. We had to send [the draft plan] back to the master planners and ask them to rework it taking these principles into account. The whole capital city project would have had no buyers if the initial draft had been implemented,” he said.
“The master planners with the Singapore government were puzzled,” Nagulapalli said. “They wanted to know what Vaasthu was and who wrote it. We were stumped. After some rather frantic research, we found that the Indian scholar Varahamihira had written it in the 6th century. We have learnt a lot during the process of building this capital.”
Amaravati was envisioned as a world-class smart city, the first to be part-funded by the Indian government. The new city will be built at an expected cost of 1 trillion rupees (£10.7bn) on 217.23 square kilometres of land on the banks of the Krishna river, and is expected to generate jobs to sustain a population of 9-12 million people in the surrounding capital region.
The Andhra Pradesh government signed a pro-bono agreement with Singapore in December 2014 to plan the new capital. In all, the government of Singapore, along with private agency Surbana Jurong, committed to preparing three masterplans – the last of which, the “seed capital masterplan” for the core of the city (which will house the Central Business District and the state’s new government offices) was only submitted last week.
Tech-heavy Taiwan, India, China and Korea are the new darlings of the fund mgrs managing emerging mkts funds. Brazil, Russia and South Africa are history. They produce now unwanted commodities.
India loves to blow its trumpet whenever it “beats” China. So it’s strange that it’s so silent when it trashes China.
Standard Chartered has to hope that a quarter of its top brass really aren’t very good at their jobs. That is the portion of the UK-listed emerging markets bank’s 4,000 most senior staff who will find themselves surplus to requirements, Reuters reported on Oct. 9. Although StanChart could gain from a big cull, it’s a risky move.
So should HoHoHo and us S’poreans.
Will ang mohs or Indians get terminated? Not many Chinese to sack despite 50% of revenues related to China business. (Related post: StanChart is Little India)
More for HoHoHo to ponder when she returns to work
— StanChart’s shares have underperformed the European peer group by 30 percentage points this year. The bank’s 7.7 percent return on equity in 2014 was unacceptable, especially as it was earned on a relatively low 10.7 percent Basel III capital ratio.
— Some bearish analysts reckon Winters should completely cover the bank’s $8.7 billion of non-performing loans to better match Asian peers like DBS. That would cost $4 billion, more than StanChart’s expected $3.1 billion of forecast 2015 pre-tax profit.
From NYT Dealbook:
Skeptics of HSBC Dividend Are in for a Surprise The bank’s prospective dividend yield of about 6.5 percent is high, but investors worried about its payout shouldn’t fret much, Paul J. Davies writes in the Heard on the Street column.
FT reported that India is so impt to StanChart that it’s planning to set up a subsidiary so that it can expand its branch network there. A wag commented: “In Singapore there is an area known as “Little India” (I had lunch in the area yesterday). Go into the offices of StanChart’s regional office here and any S’porean would think that “Little India” has expanded into the Marina Bay area.”
Switzerland has been ranked the happiest country in world.
Singapore is ranked 24th But is tops in Asean and region. Thailand is placed at 34, Taiwan (38), Japan (46), South Korea (47), Malaysia (61), Hong Kong (72), Indonesia (74) and PinoyLand (90). China and India are found lower down the scale at 84 and 117 respectively
Morgan Stanley is recommending going long on the US dollar against the Singapore dollar, the Thai baht and the South Korean won and a long position in the rupee against the Singapore
Of course MS’s assumption is that US raises rates. Didn’t happen lasy yr when that was conventional wisdom.
But India looks pretty good: As Rivals Falter, India’s Economy Is Surging Ahead Long considered a laggard, India is seeing a lift in its stock market as multinational companies look to expand operations there or start new ones, The New York Times reports.
And according to Credit Suisse, India is a major bet for global EM managers these days. Funds on average hold over 15% of their portfolios in Indian companies, double the benchmark weighting. Gd for them: in USD terms, India’s up 41%
The Indian rupee, the Philippine peso, Thai baht and Taiwanese dollar have strengthened against the US dollar, making repayment of dollar debt easier in these places.
Btw, still long Ascendas India Trust.
Decent yield too.
Also A Singapore consortium of two firms has been appointed as master planners for the new capital city of Andhra Pradesh state in India.
Singapore is assisting with the development of the city and its surrounding areas. Surbana International Consultants and Jurong International will be the firms responsible for how the capital will shape up. Second Trade and Industry Minister S Iswaran announced this on Monday (Jan 12) during a trade mission to India. CNA
But no need to panic or curse Temasek*: Standard & Poor’s says bank is going through times but it still among world’s most creditworthy commercial lenders.
It has some big exposures to heavily indebted clients, such as India’s Ruia brothers, who control the Essar Group, and Indonesian billionaire Samin Tan.
But the facts won’t stop Philip Ang, TOC’s and TRE’s star analyst, from cursing and ranting: he’s so bad that in a piece on a GIC, London investment, he left out the rental yields out of his calculation because he said that the income was “peanuts” (my word, not his). Well commercial property yields are a gd 6%, and have been as high as 8% in some yrs recently.
Since the start of last year emerging-market stocks have trailed their rich-world peers. Currencies are falling. Worst-hit is the Russian rouble, which has fallen by 30% against the dollar this year. The currencies of other biggish emerging markets, such as Brazil, Turkey and South Africa, have also weakened. For such economies growth is harder to come by. The IMF recently cut its forecasts for emerging markets by more than for rich countries. But India is a notable exception to the general pessimism. Its stockmarket has touched new highs. The rupee is stable. And the IMF nudged up its 2014 growth forecast for India to 5.8%. That figure is still quite low: growth rates of 8-9% have been more typical. But in comparison with others it is almost a boom. Why is India doing better than most emerging markets?
In part optimism about India owes to its newish government.
The other reason is that The currents that sway the global economy presently—the dollar’s strength; slowdown in China; aggressive money-printing in Japan; stagnation in the euro zone and falling oil prices—are less harmful to India than to most emerging markets.
I’ve had exposure to India via the Ascendas India biz trust since 2008. It’s been a ride but the payouts are very decent. Chk it out as you too may like it. http://aitrust.listedcompany.com/newsroom/20140710_170824_CY6U_ANGLIE824Z3T5WVH.1.pdf
Note that some results have been annced since the above presentation.
Conventional wisdom is that the next GE will be held after the 50th anniversary celebrations of S’pore’s independence which will be a celebration of all things PAP. So the Oppo parties are not gearing up for an early GE (end of this yr or before Aug 9 next yr.)
And this piece of news doesn’t disturb the narrative:With the January 2017 deadline for the next General Election looming closer, the Elections Department (ELD) has been calling up public servants for training to be election officials, as part of the electoral process … , the ELD said in an emailed statement: “ELD prepares and organises the Public Service to conduct elections in Singapore. Amongst other work, ELD selects and trains public officers on an ongoing basis to perform election duties during an election.” (CNA 17 October)
There have been early training sessions before with no elections following. The conducting of training sessions is a lousy leading indicator.
But think about the economic prospects of S’pore and the training could be a sign of early elections.
No govt wants to hold a general election in a recession or when a a recession is likely. Already the growth rates for this yr and next yr have had to be trimmed because the global economy isn’t doing too well.
And things could get worse: The global economy is in a woeful state [Skip the next few paras if pressed for time or an illiterate in finance and economics]. The euro zone, fully 17% of global GDP, is predicted to expand just 0.8% in 2014 according to the IMF. China and Japan, together 25% of global GDP, are slowing. Emerging markets are floundering: a report on the synchronised slowdown from the Fund puts much of it down to weak trading partners (a sort of trade contagion). As the world slows, America seems a prudent place to park cash. Chinese and Japanese holdings of US Treasury bonds—now $2.5 trillion—have doubled in five years, according to the TIC data.
… the euro area. Inflation is just 0.3% and the area is already awash with unemployed workers … end up with both fiscal and monetary policy being relatively tight.
What would happen next? American exporters would get hit twice—first by weak demand from abroad, then as their goods get pricier for foreigners to buy as the dollar continues to rise. But since America is a relatively closed economy, the impact abroad could be bigger. The big risk is that a runaway dollar topples emerging-market economies just as it did in the 1980s and 1990s. A pessimist would argue that many of the conditions now are exactly as they were then. Many emerging markets borrow by issuing bonds in dollars, rather than their own currency. Appetite for these higher-yielding dollar bonds has been strong in recent years: in January 2014 Indonesia issued its largest dollar bond since 1998; according to its Finance Ministry data, India has dollar debts of around $273 billion (15% of GDP). As the dollar rises, the local-currency cost of these debts goes up.
Floating exchange rates make things a little different when compared to the Asian crisis, but would not help that much. Take a country like Brazil, which has inflation of 6.75% (see the WSJ on this) and yet an economy in recession. If its currency continues to depreciate against the dollar then inflation builds up further. The central bank ends up in a bind: raise rates to cut inflation and stem the depreciation, or keep rates low to get the economy back on track. Both paths would be risky, and could cause a wider stress if the contagion of previous emerging-market crises is any guide.
With any luck none of this will happen. But it all could happen. And if you are in the business of forecasting and stress testing, you should prepare for the worst.
So what about the fact that oil prices are close to US$80 from US$105 a few weeks ago
[M]ajor Asian economies, though, will look at falling oil prices less as a stimulant and more as a signal that global growth is faltering. For export-dependent Asia, lacklustre worldwide demand could end up being highly disinflationary.
That’s a big worry for the likes of China, Hong Kong and Singapore. These economies have all seen private credit rise rapidly since the 2008 crisis and need tolerably healthy inflation to help bring down the real value of debt. But China’s 1.6 percent inflation rate is now the lowest since February 2010, while the annual rate of increase in Singapore’s consumer prices has slipped below 1 percent. South Korea, which has historically had a problem of high household debt, can’t afford to allow its meagre 1.1 percent inflation rate to slide further.
So I wouldn’t be surprised if 50th anniversary celebration events come fast and furious early next yr: to remind S’poreans of the role of the PAP in S’pore’s development from the second largest port in Asia to a global city state, with property prices to match those of global cities like NY and London.
But I’d be surprised if the PAP reminded us one LKY said in 1959,”we must go about our task (of building up a nation) with urgency … of integrating our people now and quickly”, because he said this when revealing that only 270,00 out of the 600,000 voters were born here.
*Btw two countries where I have investments will benefit: The big exceptions are India and Indonesia. Both governments supply gasoline and diesel to their consumers at fixed, affordable rates. For them, the 25 percent slide in the price of a barrel of Brent crude over the past four months translates into significant budgetary savings, which could be channelled into much-needed infrastructure investment.
Examining recent price trends, India has stabilized in dramatic fashion following its dismal performance in 2013. With superior demographics, a skilled work force, and pro-business leadership, India could prove to be an excellent growth engine over the coming decade. However, investors should also bemindful of the higher than normal price volatility and look to hold any new investment with a long-term viewpoint.
Circling the globe and focusing in on to the Pacific Rim, Indonesia has had a stellar year following a major decline of over 20% in 2013. The Market Vectors Indonesia (IDX) is currently up 26.5%, yet appears to still have a lot of room to run to reach its all-time highs. This ETF is weighted primarily towards large and mid-cap financials, consumer staples, and consumer discretionary stocks.
Indonesia stands to build on excellent GDP growth rates that exceed 5% on a year over year basis. Two thirds of their economy is driven by domestic consumption, which could continue to perform well given their stable democracy and large middle class. Indonesia also boasts one of the lowest debt to GDP percentages in greater Asian region, which should allow the government to continue its key investments in infrastructure.
Finally, stocks in the Philippines are beginning to show signs of life, with a year to date return of 23.4%. The iShares MSCI Philipines (EPHE) is dominated by 42 large cap stocks primarily centered around the financial, industrial, and telecom sectors.
Although the Thai protests last year pushed the region into a state of disarray, the Philippines has managed to overcome those fears and has held up relatively well. The Filipino economy is poised to continue its 2014 run on the back of robust economic growth, increased tourism, and a strong fiscal balance sheet.
In addition, the Filipino peso has been very strong relative to the U.S. dollar and other emerging market currencies. As a result, GDP growth has exceeded 6.5% over the last two years. These two factors bolster EPHE’s chances of trending higher in the near-term, even despite the country’s moderate levels of wage inequality and foreign investment restrictions.
Three-month flows into Singapore exchange-traded funds (ETFs) are on course to reach the most since Markit Ltd began tracking the data in 2009. Investors took money out of the stock and bond funds for five straight quarters through June, the Markit data show. The benchmark Straits Times Index has rebounded 13 per cent from this year’s low on Feb 5 and Singapore’s sovereign debt returned 3 per cent this year.
Singapore shares are the most attractive among Asia ex-Japan and emerging-market equities, beating Hungary, Chile and China, according to a Morgan Stanley study using measures from earnings to corporate governance and technical indicators. The investment bank predicts companies in the South-east Asian city-state will beat consensus earnings forecasts after the economy expanded at a quicker-than-expected pace in the second quarter.
“The Singapore market is somewhat undervalued for a pretty strong growth environment with positive earnings revisions,” said Jonathan Garner, Hong Kong-based head of Asia and emerging-market strategy at Morgan Stanley. “We also like the fact that the market scores very highly in terms of our political risk and corporate governance model.” BT on Tuesday)
When I saw the above table, I tot of the Deaf Frog’s “Cheaper, Better, Faster”. There is always somewhere cheaper as above from FT article shows. And MNCs will move there: now moving from Jakarta and Vietnam to central Java. (Btw, $ + US$)
“Cheaper, Better, Faster’
The apologist version of what he meant by a website funded by a organisation headed by one Philip Yeo after being approached by one BG Yeo (taz the rumour). With credentials like these how not to believe meh?
In 2007, Lim coined the phrase to exhort Singaporean companies to increase their competitiveness.
Companies have to be cheaper and better than their competitors internationally, because those who used to be cheap (China) are now getting better, and those that used to be good (United States) are now getting cheaper as well. Hence, Singaporean companies have to be cheaper and better than them, and yet turnaround faster.
He obviously didn’t do an MBA: it’s accepted wisdom that one cannot have all three, only two. Attempts to have all three results in failure. This should cheer on TRE posters: Swee Say is urging a policy doomed to failure.
By 2050, elderly (65 and over) almost 40% of population
Next to Japan only. But no robots here, only FTs.
Japs smarter than us in avoiding the problems that FTs bring, like pushy Pinoys, wanting to change PM from Prime Minister to Pinoy Minister and SPF to S’pore Pinoy Force. But then they have friends like William wan, Kirsten Han, AWARE and Maruah. Their only public opposition is Gilbert Goh and Goh Meng Seng.
The govt should remember that when the Pinoys burnt our flag in the 1990s and it protested, the Pinoy govt gave the S’pore govt the finger, telling it nothing wrong with burning our flag.
Recently PM said the problems S’pore were facing were the results of success*. Here I asked: Success what success? Real wages grew by only 0.4% while GDP grew by 5.9% . while the prices of public housing apartments went up in a recession.
Meanwhile, many new media warriors (posters on TRE; Heart Truths, near relation to Hard Truths; Han Hui Hui, an FT turned new citizen, who is proof that the Bumis in M’sia are right not to trust the local Cina: Uncle Chua etc) are always full of how hard life is for the average S’porean.
This so-called suffering doesn’t chime with what I observe in shopping malls, restaurants, or even hawkers’ centres or coffee shops, or what my friends, relations or biz connections tell me: S’poreans are feeling more confident of confident of their prospects, and hence are spending more. Note, I’m not saying that there are no S’poreans suffering, but I take issue that the majority of S’poreans are suffering.
Well a recent Nielsen survey** of 501 S’poreans seems to confirm my view: that things are OK and improving, but not as great as PM is spinning. After all he got a GE to win.
Consumer confidence in Singapore is at its highest level in 10 consecutive quarters, with people remaining upbeat about personal finances and being more willing to spend.
According to the latest consumer confidence index released by Nielsen, Singapore recorded an index score of 99 in the first quarter, up two notches from 97 in the previous quarter … but still shy of the 100 baseline, has yet to reach optimism. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. [If things are as great as what PM, his ministers and their trumpeters*** in the constructive, nation-building media saying, shouldn’t the score be 150 and rising?]
The head of Nielsen Financial Services in Singapore and Malaysia was quoted as saying “The positive outlook on the economy and personal financial circumstances is starting to trickle down to consumers’ spending intentions: we notice an increase in the number of Singaporeans who are willing to spend money on discretionary expenses . . . if these intentions materialise, they could act as a further stimulus to the economy.”
So am I, Nielsen and those S’poreans spending more living in the same S’pore as our PM, or the people complaining via new media? Who is more reflectively of the reality of life in S’pore? PM and Heart Truths and friends are aliens that landed here on UFO Goh Meng Seng, the scourge of Pinoy Pride here?
Jokes about aliens and GMS aside, maybe
— PM and his ministers are out of touch, what with their huge salaries? Yesterday, I wrote “Of course Mah Bow Tan http://www.tremeritus.com/2014/05/01/netizens-agog-at-mah-bow-tans-fortune/and other millionaire ministers (present and retired) are not among these ‘lesser mortals”” in a piece of EFTs that mimic the strategies of hedge funds.
— It’s these new media warriors who are the suffering underclass and they think that they are representative S’poreans? Or they are fruscos who think that they should have been talent-spotted by the PAP? They are always claiming that the suffering is always the fault of the PAP govt, never an issue of personal responsibility or sheer bad luck, so maybe they have personal grievances against the PAP? BTW, I exclude TRE’s Richard Wan as he knows he has a comfortable living, and knows it.
My serious point is that whatever new media or PAP media or anyone says about any topic, those of us who are rational have to ask ourselves,”Chime with what I observe?”. Don’t get carry away with the views of others. They could have agendas, delusions to propagate.
BTW, more details from BT (1 May) on the Nielsen survey:
— Some 54 per cent of respondents from Singapore consider their finances to be “good” or “excellent”, unchanged from the previous quarter.
— There is an uptick in Singaporeans who intend to invest in stocks and mutual funds, up six percentage points at 32 per cent … continue to be prudent with their money. Some 70 per cent would channel their spare money into savings, up six percentage points compared to the previous quarter and well above the global average of 47 per cent … more Singaporeans intend to increase their discretionary expenditure on a vacation and new clothes. Some 54 per cent intend to spend their spare cash on a holiday, while 37 per cent would spend it on new clothes, a quarterly increase of five and 11 points, respectively.
Interestingly, two of the three countries with the highest consumer confidence levels are in Asean Indonesia (124), and the Philippines (116). BTW, India (121) is in between.
*Singapore’s economy has fared better than expected over the last decade, but the country’s success also brought about its own set of challenges. PM Lee made this point in a wide-ranging discussion with regional newspaper editors recently.
He said the country had paid the price of this fast growth, as infrastructure wasn’t able to keep up with the rapid development.
Mr Lee was asked about Singapore’s success during his time as Prime Minister and if anything exceeded his expectations.
He said yes, the country had done economically better than expected and grown faster — attributing it to favourable conditions.
As investments poured in, the government had put in resources and brought in foreign labour needed to grow. As a result, developments at the Marina Bay area sprung up in within a decade, instead of the expected 20 to 30 years.
He said that in terms of infrastructure, the country had not been able to catch up and had paid a price, and added that the government had been working hard over the past three to four years trying to come back up to speed.
He said that if the government had been able to foresee the outcome, it would have acted sooner.
But that, he said, was with the benefit of “20-20 hindsight”.
“We succeeded more than we expected, and so in terms of the infrastructure, we were not able to catch up — our public transport, building houses,” said Mr Lee. “And we paid a price.”
“We have spent the last three, four years working hard to try and come up back to speed. I wish we had been able to foresee this outcome, and then we would have acted sooner.
“But that’s 20-20 hindsight.”
Mr Lee also emphasised that it’s important for Singaporeans to feel they have a sense of belonging to the country — and that is something that is still a work in progress.
But Mr Lee acknowledged that this growth had come with a cost.
**The survey, conducted from mid February to early March this year, polled more than 30,000 online consumers in 60 countries,
***These public grievances [on healthcare costs immigration, ministerial salaries] and expert doubts did appear in the media; they were not completely blacked out. But, they were always toned down and set in a context that ensured that the government’s voice remained dominant. When there was undeniable distance between public opinion and the government’s position, leaders required the press to work towards a consensus by shifting the ground rather than nudging the government.
By dampening doubts and dissent, by allowing government to operate in an echo chamber, the media gave yesterday’s policy makers an easier ride. But, today’s policy makers are paying the price. There is now more for them to undo as they move their frame of reference back to the centre-left. Furthermore, a lack of responsiveness resulted in lower levels of trust, which now make it harder for the government to persuade the public when it needs to.
The flawed media policy is behind the current government’s biggest failure – its inability to sell its Population White Paper, which by its own reckoning was a vitally important strategic blueprint for the future. Because it had been unwilling to subject its immigration policies to even the gentle probing of friendly national media in the past, it lost touch with public sentiment and lost precious political capital. Today, it is unable to carry the ground on immigration issues.
Even when it speaks sense – like when the Prime Minister chided Singaporeans for their irrational, tribal response to the upcoming Philippine Independence Day celebration – it meets a wall of cynicism and hostility.
Author is hubby of ST’s editor.
In the space of a few days, the govt is facing or is likely to face uncomfortable questions from other govts about its activities: activities that the usual suspects, could reasonably argue, show the two-timing nature of the PAP govt that they (they the usual suspects) detest and wish it all the ill-will in the world.
Malaysia said it will summon Singapore’s high commissioner today to respond to allegations of spying which risk damaging improved political and business ties between the Southeast Asian neighbors.
Indonesia and Malaysia have been key targets for Australian and U.S. intelligence cooperation since the 1970s, facilitated in part by Singapore, the Sydney Morning Herald reported yesterday, citing documents leaked by former U.S. intelligence contractor Edward Snowden. Malaysia’s foreign ministry said it was “extremely concerned” and had already acted against earlier claims of espionage by the U.S. and Australia.
The reports could also spur friction between Singapore and Indonesia, Tan said. “The Indonesians would probably be concerned whether the information is also being shared with Singapore intelligence, besides the Australians*.”
As SingTel was singled out for mention by the Oz newspaper**, and as it has extensive mobile operations in Indonesia and Thailand, and a major stake in a major Indian telco, it could face problems in these countries.
Then there is the issue of how European and US cos are using S’pore to avoid taxes, at a time when there is growing resentment among politicians and voters that these cos are not paying their fair share of taxes. The Indian, Japanese, Taiwanese and Korean govts will also not be too happy too with S’pore’s corporate tax-regime if they read the Economist.
“Taxing times for Singapore as corporate strategy faces scrutiny” was a Reuters headline on 24 November 2013 (BT and Today carried the report too). It gave details of how Apple used S’pore as a tax-saving centre and went on, “Companies justify booking significant amounts of revenue and profits in Singapore by the fact they often run key business functions such as finance and operations, hold intellectual property rights there or base regional executives in the city.”
The chart below (via the Economist) shows a hypothetical scenario where a company moves its headquarters from Singapore (a very low-tax economy) to another country. http://www.economist.com/blogs/schumpeter/2013/11/corporate-tax-rates
S’pore very cheap place (tax wise) esp compared to Japan. Minister Zorro must be happy: juz as happy as looking as his monthly CPF statement.
The Reuters article went on: Singapore has so far largely stayed out of the debate raging in Europe and the United States about the ways multinationals try to lower their tax bills.
But revenue-hungry governments are looking to impose tougher rules on so-called transfer pricing that could make it harder for firms to trade goods, services or assets between their Singapore and overseas entities.
As a result, accountants warn that the city-state will need to review the level of transparency in its tax incentive schemes and get stronger justifications from companies on their transfer pricing arrangements to fend off challenges from other jurisdictions.
“Singapore’s challenge is to ensure that it stands ready to adequately address any kind of unilateral tax action taken by other countries,” said Abhijit Ghosh, a partner at PricewaterhouseCoopers in Singapore.
“In this brave new world of fiscal competition for the tax dollar, dispute resolution will be on the increase and Singapore will need to focus more resources on enforcing and defending its principles of value creation in international forums.”
The city-state’s government says it is against artificially contrived arrangements constructed “solely for the purpose of flouting or exploiting loopholes in tax rules”, according to a spokeswoman from the Ministry of Finance.
However Singapore is also arguing that it should not be singled out because it has low tax rates.
“We must guard against new forms of protectionism masquerading as tax harmonisation,” the spokeswoman said. “We should avoid converging on high taxes globally as this would only hurt growth and jobs.”
Looks like the owl that visited PM was a harbinger of bad news for PM.
Seriously, the “usual suspects” could reasonably argue, if they tot about it, that the “chickens are coming to roost”.and that while moralising on adultery, the PAP govt helps the ang mohs spy on our neighbours, while helping ang moh and other Asian cos avoid tax. And PritamS wants the WP to be in coalition with the PAP?
*Remember that Indonesia suspended military co-operation with Australia, after allegations emerged of Australian spies bugging the phones of the president and his inner circle.
**Access to this major international telecommunications channel***, facilitated by Singapore’s government-owned operator SingTel, has been a key element in an expansion of Australian-Singaporean intelligence and defence ties over the past 15 years.Read more: http://www.smh.com.au/technology/technology-news/new-snowden-leaks-reveal-us-australias-asian-allies-20131124-2y3mh.html#ixzz2lkSC0P8c
***SEA-ME-WE-3 cable as well as the SEA-ME-WE-4 cable that runs from Singapore to the south of France.
KL property owners, an estimated 10-16 per cent of whom are foreigners, are facing sharply higher assessment payments of up to 300 per cent following the latest move by City Hall (DBKL) to boost its coffers. http://www.businesstimes.com.sg/premium/top-stories/kl-homeowners-facing-sharp-assessment-hikes-20131119
But otherwise M’sia’s looking pretty gd
— ECONOMISTS have turned more bullish on the Malaysian economy as a result of its unexpectedly strong showing in the third quarter.
They have upgraded their forecasts, and one has even dismissed the second quarter’s sharply reduced current account surplus on the balance of payments as an “abnormal”, one-off glitch.
Malaysia’s growth accelerated to 5 per cent in the third quarter, above the street’s 4.7 per cent, and sharply higher than the 4.4 per cent posted in the second quarter. The expansion was largely driven by domestic demand and a turnaround in exports.
The figures suggest that, despite criticism from rating agencies such as Fitch and an uncertain global economy, the Malaysian economy remains resilient, and continues to maintain steady economic growth.
— THE ringgit is undervalued as it has underperformed its peers since Prime Minister Najib Razak’s Budget almost a month ago, a British bank said.
In a report yesterday, Barclays Bank said the currency’s underperformance stemmed from doubts over the country’s “fiscal credibility”. But it said any such doubt should now be “diminished” after international rating agency Moody’s raised Malaysia’s sovereign outlook to “positive” from “stable” in a report released on Wednesday.
The news should boost Mr Najib’s credibility as a finance minister; he has been flayed by critics who have accused him of going on a profligate spending spree to boost the Barisan Nasional coalition’s popularity. In the run-up to the May 5 general election, government debt had ballooned to more than 54 per cent of GDP, just a whisker away from the legally mandated debt ceiling. Although the BN won, it did so with a weaker mandate.
In July, global rating agency Fitch had affirmed Malaysia’s investment-grade sovereign rating but cut its outlook to “negative” from “stable”. That raised the level and intensity of the criticism against Mr Najib.
(Excerpts from BT)
But M’sia (like Thailand) is doing less than Indonesia to prepare for tapering: Indonesia has raised short-term interest rates and India has attracted deposits from its large diaspora. Both are now accumulating foreign-exchange reserves to help prepare them for the eventual end of quantitative easing. So are South Korea and Taiwan.
Malaysia and Thailand are not taking the same precautions. Neither country has managed to recoup the reserves it lost in August. That’s a worry, considering foreigners own 28 percent of Malaysia’s sovereign bond market. Pending the implementation of a goods and services tax from 2015, the country’s public finances remain shaky. At the peak of the summer turmoil, the cost of insuring against default on Malaysian government bonds was slightly higher than for Philippines debt, which carries a lower credit rating. The gap has widened since.
Finally, debt is soaring. In Thailand, bank loans to individuals have jumped 20 percent in the first nine months of the year, higher than last year’s 18 percent growth. Meanwhile, the Thai economy has lost momentum, the politics has become unstable, and the current account has tipped into a deficit. Instead of easing, Asia’s fear of the Fed is spreading wider.
(I hope readers don’t mind my flow onto LionsXII at the end)
One of the bloggers, I was concerned about here that might get a stroke or a heart attack, last week blogged that there are more FT Indians, than local Indians here. He didn’t give his source but used the statistic as the basis of prophesying doom and gloom for our minorities and society. It would have been nice if he had given his reasons, rather than assuming that we all know why.
Assuming he is correct about the FT Indian population being bigger than the local Indian population, there is possibly a gd, sound economic reason for it:- Our local Indians are not the “right” kind of Indians S’pore needs?
He may not be aware that S’pore’s an offshore hub of India, along with Dubai and Mauritius.
The largest hub for Indian trade is probably Singapore. It is the centre for investment banking, which thrives offshore, owing to the tight regulation of India’s banks and debt markets. Reflecting this, the global exposure to India of Citigroup and Standard Chartered, the two foreign banks busiest in India, is 1.9 times the size of their regulated Indian bank subsidiaries.
Fund managers running money in India are often based in Singapore. India’s best financial newspaper, Mint, now has a Singapore edition. At least half of all rupee trading is offshore, says Ajay Shah of the National Institute of Public Finance and Policy in Delhi. Investors and firms do not like India’s fiddly rules and worry that the country may tighten capital controls if its currency falls too far, says one trader in Singapore. He denies, though, that the rupee’s fall is mainly the work of speculators abroad. “The onshore guys have as much of a role,” he says.
Indian e-commerce firms often get their data crunched in Singapore, using web-hosting and cloud-computing firms, such as Google and Amazon. Amitabh Misra, of Snapdeal, says bandwidth costs less, technology is better and you avoid India’s headaches—such as finding somewhere to work, coping with state-run telecoms firms and having to wait to import hardware.
Singapore is also a centre for legal services. International deals involving India often contain clauses which state that disputes be arbitrated outside India, with its clogged courts. Singapore, along with London and Paris, has become the preferred jurisdiction. “The level of comfort Indian companies get from Singapore is unmatched,” says Vivekananda N of the Singapore International Arbitration Centre.
When India’s economy thrived, in 2003-08, so did its offshore hubs. Singapore’s service exports to India tripled. Yet these centres may sometimes be a reverse barometer. If things improve in India, activity should shift to the mainland, and vice versa. By gradually improving its ports, for example, India has convinced more shipping lines to make direct stops.
The government wants to attract activity back to create jobs and boost foreign earnings. Pride plays a role, too—it is unbecoming for a potential superpower to have outsourced vital economic functions. India has far less control over Dubai and Singapore than China does over Hong Kong. Plenty of policy statements in recent years argue that India should become a global hub for aviation, legal arbitration, diamond trading and international finance.
So are TRE posters who regularly complain about Indian FTs are DRUMS saboing S’pore? Though two-timing new citizen Raj who has publicly boasted that his son will avoid NS, and get PR (here and here) is not exactly a poster boy for Indian FTs or the govt’s “We love FTs” policy: more for GG and friends who hate FTs.
Finally, those of us (self-included) who love to regularly grumble about or mock ESM “Peanuts” should remember that he initiated the “Look to India” to differentiate himself from one LKY who wanted S’pore to be plugged into China’s sphere. So three cheers for him, for initiating the move that resulted in S’pore becoming a major offshore hub of India? Or should it be only two cheers for then allowing the likes of new citizen Raj in?
BTW, Mindef should be trying to close the loop-holes that allow those bums like new citizen Raj to boast that their sons can avoid NS, and then get PR, rather than make it difficult for our young Lions http://www.goal.com/en-sg/news/3880/singapore/2013/10/13/4321556/zainudin-hints-at-restrictions-for-sundram-departure: In his two-year tenure with the LionsXII, one of Sundram’s biggest bugbear had been the unavailability of players. A slim squad that was frequently decimated by injury lay-offs was further shorn of players due to National Service (NS) call-ups.
Players in NS who had used up their annual leaves to play for the LionsXII were often unable to find release from their active duties. Shakir Hamzah was most infamously found guilty of going AWOL from duties in June, after linking up with the LionsXII for an away game, and was handed a four-day sentence in the detention barracks.
BTW2, Our media has been 200% behind Fandhi’s attempt to be the new LionsXII coach (Of course, he would deny he is campaigning to be coach: he would wouldn’t he?); but would temperamental Fandhi have put up with Sundram’s frustrations. I doubt he would. Likely, he would have walked out. Don’t anyhow support Fandhi. He willingly collaborates with our MSM, wanted to sue SDP and failed as coach of a free-spending Johor team (think Sity, think Johor). He was a good, and honest footballer but he isn’t exactly god’s gift to LionsXII. He’s god’s gift to our constructive, nation-building media who use him to sell papers and try to make us forget that the media here in part of the Dark Side.
This chart from Reuters shows the vulnerability of major Asian economies to Fed policy of tapering
S’pore is vulnerable
Slowing GDP: Most vulnerable
Growing Public Debt : Second most vulnerable
Uncompetitive Currency: Second most vulnerable
Growing Credit Intensity: Fourth most vulnerable. Another view: Banks with large property loan portfolios will face higher risks when interest rates start to rise — this as highly-leveraged households begin to have difficulty paying their mortgages.
Economists said this could lead to credit tightening by banks, and a hard landing for the property sector.
If that happens, DBS Bank said Singapore and Hong Kong will be hardest hit within Asia.
In other Asean round-up news
surpluses of Thailand, Hong Kong and Malaysia have narrowed even more since the second half of 2007. However, this is partly because Thailand and Malaysia have boosted domestic investment, which lifts imports.
Malaysian and Indonesian companies are grappling with a margin squeeze: The two commodity-producing economies have witnessed the biggest rise in their real cost of capital. The Philippines has the opposite problem: Falling inflation-adjusted returns for savers.
Rightly or wrongly, though, the sovereign debt issued by developed countries is perceived as safe. Malaysia is not in the same league, and it is pruning petrol and diesel subsidies to control its growing public debt problem.
Unlike in 1997, most Asian countries have relatively straightforward choices. Malaysia can introduce a goods and services tax to control the 14 percentage point increase in its sovereign-debt-to-GDP ratio since 2007. Indonesia can raise interest rates to tame 9 percent inflation. The main problem is India, with its cocktail of slumping growth, high inflation, a creaking banking system, reckless fiscal policies and political uncertainty. Other Asian nations can’t take rising U.S. interest rates lightly, but they are far from a crisis.
Indonesia’s central bank raised its benchmark interest rate 25 basis points Thursday afternoon in a move that defied market expectations and continued a swift phase of tightening efforts as the nation’s economic growth showed signs of stumbling.
The interest rate increased to 7.25 percent, the fourth hike in as many months, as Bank Indonesia moved to stabilize the increasingly volatile rupiah while controlling inflation and the widening trade deficit.
The danger of capital controls in Asean (Note this is new link and chart, not the one originally posted)
Asean trade with China (FT charts)
The irony is the opposition made gains where there is almost full employment, the country peaceful and prosperous.
(http://www.pressrun.net/weblog/2013/08/singapore-prime-ministers-and-election-results.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rana+%28pressrun.net%29 I commend this blogger who usually has interesting, unpredectible perspectives. Not one of the usual suspects, whose rants can be surmised even without reading their articles: juz scan the titles.)
The govt in Norway is expected to lose an election on 9th September, even though eonomic growth was at 2.6% year-on-year in the second quarter and unemployment at just 3.4%, while the current-account surplus is huge: nearly 14% of GDP.
One could argue that because things are so gd, people are willing to take risks, experiment.
When times are bad, if the ones suffering badly are a smallish minority, and the majority, while unhappy, are fearful of what can happen, the majority of voters will opt for “Better the devil we know” We saw that in 2001 when an election was called after 9/11. If Islamic terrorists could successfully attack Metropolis, which place was safe? And if there was a resulting global recession, who better than the PAP to handle it for S’pore? Certainly better than JBJ’s lot, even though the WP had juz kicked JBJ out as leader.
But the classic example was UK during the early yrs of Thatcher’s tenure. Despite massive unemployment she won a second term (helped by winning a war). The unemployed voted against her, but those with jobs trusted her govt more than they did the opposition Labour party, which was seen as incompetent economically (strikes, IMF loan when it was governing).
Connected with the issue of experimentation when times are gd, is that people get tired of the same govt. The present Norwegian govt has been in power since 2005. As the PAP has been in power since 1959 (UMNO and allies in M’sia since 1957), it’s a testament to their tenacity and public goodwill that the PAP and UMNO are still in power. Even the LDP in Japan has lost power for two spells before regaining it.
The author of the above quote puts the unpopularity of the S’pore govt to the internet:
The internet seems to have been a game-changer. In the first post-Twitter general election, in 2011, the People’s Action Party (PAP) won only 60.1 per cent of the vote, its lowest share since independence, while the opposition secured six seats, more than ever before. (Twitter was launched only in 2006.)
He has a point because the internet
… proved a real pest,
Critics online all the time,
How do you make ‘em toe the line?
But let’s not forget. In the last GE 60% voted for the PAP. Taz a gd majority by any standard except that of the PAP itself and S’poreans. Remember, we used to give it 70-over % of the popular vote, and all the seats in parliament in the 70s.
True the PAP’s “preferred” candidate won the PE by a very short nose. But the man that nearly became president was someone that for many S’poreans (self included) exemplified what many S’poreans liked about the PAP Old Guard: principled, meritocratic, technocratic, smart (academically and street-wise), no wayang, no pretensions and compassionate: not sneering, complacent, privileged, incompetent and self-serving snob. Even the PAP’s preferred candidate belonged to the Old Guard, even if he had a privileged background: in fact many of the Old Guard had privileged backgrounds, they juz didn’t behave like a certain sneerer. Tony Tan juz didn’t get my vote because he was the “preferred” candidate. But if it had been between him, TJS and TKL (ex-PAP too), I’d voted for Tony Tan.
The next candidate, TJS, had only 25% of the vote. This is in line with the hard core opposition vote that emerges in any constituency an opposition candidate appears, even a looney one.
What the internet has allowed, is to give amplification to the voices of the hard core opposition supporters. They were never silent but the exclusion of their voices from the constructive, nation-building local media meant that they could only communicate in a less than effective way most of the time to other die-hards and ordinary S’poreans.
Ordinary S’poreans now realise that these voices are not demon voices because like the hard core opposition voters, they too have grievances, doubts etc. They now know, they are not alone.
The power of the internet and the govt’s concern that it is losing the commanding heights of public communications are best illustrated by P Ravi’s reposting on Facebook about the availability of the masks: that the public were not going to get it despite repeated govt assurances to the contrary, and the govt’s heavy-handed reaction. This reposting was enough to get him accused of spreading misinformation.
P Ravi’s defence when the govt accused him spreading misinformation about the distribution of masks, was that he sharing with his Facebook friends (1000 over if you must know), giving the govt feedback, and seeking clarification from the govt: rather contradictory assertions. Why the govt didn’t ridicule these contradictions is beyond me. Instead, Yaacob, a civil servant and the constructive, nation-building media beat the drums to the tune of RAVII*, making him a hero and martyr to the hostiles on the internet and, in particular on social media. My posts on this
So nope, the desire to experiment when things are gd, isn’t unique to S’pore. Nor is the internet the cause of the unpopularity. Even when the PAP had 70ish % of the popular vote, the balance voted for the opposition.
And 35% of the population like the values of the PAP Old Guard, they juz don’t like the way the PAP has developed in the 1990s and noughties. All this means that those who want change cannot afford to be complacent esp as there is going to be a party that’s going to be gd for the Party i.e. the PAP.
*Recriminations, Accusations, Vilifications, Insinuations & Insults. Minister Shan talks of criticising ministers n the “right” way (E-Jay’s take). Well, what Yaacob and a civil servant did to Ravi, and what VivianB did to various people including the elderly poor doesn’t set gd examples for the public, do they?
In its latest set of results announced a few weeks ago, the profit contribution from regional associates climbed 14% to S$552 million in the quarter on higher results from Indonesia, Thailand and India, the company said.
SingTel gets 12% of its profit before tax from India and 22% from Indonesia, with those earnings in future likely to take a hit when translated back into Singapore dollars. Remember too the weakish A$, Baht, and Filipino peso will affect its earnings.
Other Asean round-up news
At an emergency meeting on Aug. 29, the monetary authority raised its benchmark and overnight deposit rates. It’s a decision Bank Indonesia should have made at its last official gathering less than two weeks ago. An obsession with economic growth stayed its hand. http://blogs.reuters.com/breakingviews/2013/08/29/currency-markets-rude-wakeup-call-stirs-indonesia/
Politics is back on the streets in Thailand, after a relative lull of more than two years, with a protest over the weekend. It underlines the persistence of divisions in Thailand and raises the prospect of a return to the political turmoil that left more than 90 people dead in Bangkok in 2010.
Thousands of demonstrators gathered in a vacant lot in Bangkok on Saturday, as speakers threatened to “overthrow” the government.
The acrimony between the Democrats and the government of Prime Minister Yingluck Shinawatra centres on a number of legislative issues, chiefly an effort by the government to pass an amnesty law for those involved in the 2010 protests.
The Democrats oppose the Bill, saying it might also apply to those who insulted the monarchy or committed serious crimes.
But the broader conflict appears to stem from their feeling of powerlessness in the face of the resurgence of Thaksin Shinawatra, Ms Yingluck’s brother, who sets the broad policy lines for the government and the Pheu Thai Party despite living abroad since 2008 in self-imposed exile to escape corruption charges.
The weekend protests followed another peaceful one earlier this month involving some 2,500 supporters of the Democrat Party and royalist groups at Bangkok’s Lumpini Park, throwing fresh light on Thaksin’s divisive influence in Thailand.
(Extract from NYT)
Malaysia‘s government is exploring the possibility of hiking the real property gains tax to rein in rising housing prices and curb speculation in the market. Bernama quoted Housing Minister Abdul Rahman Dahlan as saying that current property tax levels had failed to stabilise house prices with the house price index continuing to rise.
Malaysia’s GST will take 14 months to implement if announced in the budget in October, a ministry official said
The Philippines posted better-than-forecast economic growth, fuelled by its services sector and higher consumer and government spending. Its economy grew 7.5% in the April to June quarter, from a year earlier. It is the fourth quarter in a row its economy has expanded by more than 7% – defying a regional trend which has seen growth slow down in many countries. The Philippines’ 7.5% second-quarter growth matched that of China but is higher than Indonesia, Vietnam or Malaysia,
However, the country has been hurt in recent weeks by investors pulling out of the region’s emerging economies. This despite under emerging mkts, given the follow of remittances from workers overseas, it will not have to worry about investors’ outflows unlike other mkts.
Japan’s All Nippon Airways has said it will acquire a 49% stake in Asian Wings Airways, an airline based in Burma..
The Japanese airline will pay 2.5bn yen (US$25m) for the stake.mIt is the first time a foreign carrier has invested in a Burmese-based commercial airline. It currently operates domestic flights to all major tourist destinations in Myanmar.It t plans to “extend its wings to regional destinations through scheduled flights as well as chartered ones”.
Indonesia has overtaken China as a preferred investment destination for small and medium-sized enterprises (SMEs), This was a key finding of the Singapore Chinese Chamber of Commerce and Industry (SCCCI) SME Survey 2013, which polled 516 companies in June and July.
Of the 63% SMEs which are venturing into markets abroad, 39.9% favour investing in Malaysia and 28.1% Indonesia, a hair’s breadth more than the 27.2% looking towards China.
One reason given is that as the Chinese economy develops and wages rise, Indonesia could stand to position itself as an undertapped source of low-cost labour. As I blogged here, a few days back, LKY said that SMEs would flee S’pore if FTs were not allowed in by the cattle-truck load: they want cheap labour. The survey indicates that securing cheap labour is all that SMEs care about?
Other Asean-round up news:
Express link to KL
M’sia should talk to billionaire inventor Elon Musk. He wants to build a Hyperloop that would cut travel time between SF and LA to 35 minute. 12 minutes to KL based on the 35 minutes time
THe US Commerce Department declined to set duties on shrimp imports from Thailand and Indonesia. It has imposed duties on shrimp imports from five nations.
The ruling applies to about US$2bn of shrimp imports, from India, Ecuador, China, Malaysia and Vietnam. The Commerce Department found that those nations had been subsidising their shrimp producers.
Malaysia faces the highest duties of up to 54.5%, the lowest were set for Vietnam which faces duties of up to 7.8%.
A final approval is needed by another government body, the International Trade Commission (ITC), before the duties can take effect, The ITC will consider whether US producers have been threatened by the imports and make its decision in September.
Fighting inflation the Indon way
Bit like the way they fight the haze: wayang all the way.
Indonesia’s central bank held its benchmark interest rate on Thursday and took steps to contain loan expansion to battle inflation without taking any more steam out of slowing economic growth.
Many economists do expect another rate hike later this year but the central bank faces a tricky combination of surging prices, a falling rupiah, a stubborn current account deficit and slowing economic growth.
I laughed when I read the following:
Law and Foreign Affairs Minister K Shanmugam said one of the biggest risks for Singapore is a populist government that spends increasing amounts of money to succeed.
Already, he noted, there are other challenges facing the nation, such as an ageing population, a shrinking workforce and rising healthcare costs.
Mr Shanmugam said: “There’s always something else on which money can be spent. But every time the government agrees and puts down a programme, you must remember it’s hard-coded, very difficult to take it back.
“Whenever we put down a programme today to spend money, I think the biggest risk for Singapore is a populist government that decides that the way to succeed is to spend more and more money. Every programme that you put down money (for), today, would just mushroom in 10, 15 years.
“So the impact will not be seen in the next five years. Next 10 years will be okay, but after that, how are we going to afford it? How sustainable is it going to be?”
Mr Shanmugam was speaking at the National University of Singapore U@live forum on [12th June 2013]. (CNA)
— the govt has junior civil servants more money (Singapore’s 80,000 civil servants will get a mid-year Annual Variable Component of 0.4-month. In addition, Division IV officers will receive a wage increase of $70 per month and Division III officers a pay rise of $40 per month.)
— NTUC is pushing for cleaning companies to give each of their workers $60 a month more.
And what about these?
— In 2011 or 2012, the govt funded a rise in the salaries of doctors, and I think, other health professions in public service. There were assurances that the fees we pay to use SingHealth services would not be raised.
— CPF interest rates are maintained despite the yields on 10-yr govt bonds collapsing.
— The injection of $1.1bn into the public transport system, a system which the former transport minister tot was perfect. Remember, he threatened a GST increase because he said commuters were asking for too much comfort.
— The accelerated HDB building programme despite constant govt grumbles that it loses money. A previous HDB minister even implied that by building more HDB flats, S’pore was raiding its reserves. Yes, yes he actually didn’t say this but I didn’t say he said this. I’m putting a reasonable spin on what he said.
So one could reasonably argue that this govt is doing the very thing it decries. It spends increasing amounts of money to succeed or to make sure it’s share of the popular vote doesn’t fall further in the next GE. A few years ago, when LKY was still in the cabinet, and believed to have a veto over cabinet decisions, I had lunch with some economists. One of them wondered if LKY would die if the govt spends one more cent of our money to make life a bit more comfortable for S’poreans. Wonder how LKY feels about all the above spending? Would he think it is “populism” at work?
The continuing good news for “P” (for “political”) netizens, and the opposition is that so long as VivianB is in the cabinet, the PAP will have very serious problems being perceived as a populist, compassionate party, no matter how much of our money the govt throws at us. It also undercuts the gd work that Kee Chui is doing. When social welfare workers praise him, he must be doing something gd. Or at least “populist’.
The Mitsubishi UFJ Financial Group “is among banks considering a purchase of TPG Capital’s $1.6 billion stake in Indonesia’s PT Bank Tabungan Pensiunan Nasional, two people with knowledge of the matter said,” Bloomberg News reports.
A bid by Malaysian low-cost carrier, AirAsia, to set up an airline in India has won approval from the Indian government.
It would be the first foreign company to try to capture the rising demand in India’s aviation sector.
AirAsia India would be a joint venture with the well-known Tata Group, based in Chennai in South India.
India’s aviation industry, which has suffered major losses, was opened to foreign investment last year.
The government now allows foreign companies to own up to 49% of a local airline.
AirAsia, which is Asia’s largest low-cost carrier, will make an initial investment of 800m rupees ($15m; £10m) and will own 49% of the new airline, while Tata Sons will have a 30% stake. Part of BBC report
New finance minister in India. Previous one became president. What a country. Mismanaged the country’s finances (high inflation, falling foreign direct investment, retrospective taxes etc) but moved onto the highest post in the land.
Bit like S’pore? Tony Tan as executive director of GIC presided over purchase of “two 30-yr” investments (UBS and Citi) that tanked within months of purchase. He became president.
Seriously, the actions of new Indian finance minister is gd news for stale Indian bulls like self.
Err Tharman for president? We could do with a finance minister given our problems with inflation:
— Inflation has accelerated, fueled by rising housing and private transportation costs … The monetary authority last month estimated consumer-price gains will average 4 percent to 4.5 percent this year, compared with the 3.5 percent to 4.5 percent range it forecast previously.
— DBS says S’pore facing stagflation with one of highest inflation rates in region
Good fun and graphics
Artist is from India, not noted for its Olmpic prowess even in hockey. Kinda appropriate. ))))
Don’t worry, amounts only “peanuts”.
GIC increased its holding in Reliance Industries from 1.06% to 1.22% in the three-month period ended June 30, 2012 while other foreigners were selling.
So “Prime Minister Lee Hsien Loong said Singapore is prepared to share its experience in building industrial parks with India … Mr Lee believes there is potential for building such parks in India, following Singapore’s experience with such parks in countries like Indonesia and Vietnam … Singapore has been talking to several states in India about such projects … acknowledged that it would take some time, as land has to be acquired and approval has to be obtained. Support from the state government is also needed … if these hurdles can be cleared, Singapore will be able to build the parks faster and contribute to India in a strategic direction [such parks can help to boost the manufacturing sector in India which he says India needs. India also needs a substantial amount of manufacturing investments he claims] … the Indian economy is at a stage where it needs a considerable amount of investments, especially in infrastructure. Singapore companies have capabilities to handle some of these projects.”
But despite his bullishness (see here for the CNA report), Rohit Sipahimalani, co-chief investment officer of Temasek, told The Economic Times: “There’s a lot of uncertainty, but times like these also create opportunities. We will take advantage of the uncertainty, but will remain cautious.”
Can’t blame Temasek, given things like this in India http://www.reuters.com/article/2012/05/18/india-buyout-idUSL4E8G318Y20120518
(Or “The Achars are coming”)
First, there is IHH expected to list in July. Intetegrated Healthcare Holdings is the healthcare arm of Malaysia’s state investor. Its assets include Turkish hospital group, Singapore’s Parkway Holdings, India’s Apollo Hospitals Enterprise and Malaysia’s Pantai Hospitals and International Medical University. It presses all the right buttons: Turkey, India, M’sia and S’pore.
The listing of IHH in Singapore and Malaysia is expected to be the fourth-biggest initial public offering in S’pore’s history and Malaysia’s second-largest this year after the planned listing of Malaysian plantation group Felda Global Venture Holdings.
International Financial Corp, part of the World Bank Group, is planning to take part in the planned US$1.5 billion listing of IHH. Another cornerstone investor is the Pru’s Asian funds arm. UK’s Pru or the US Pru. I’m sure GIC or Temasek will be another cornerstone investor.
For those interested in Indian healthcare and yield there will be Religare Health Trust. India’s Fortis Healthcare, which is seeking to expand its clinical operations and cut debt, plans to raise about 20bn rupees (S$459m) by listing its hospital business in Singapore. Its listing is expected to be later than that of IHH.
“We are looking at this listing to de-leverage the balance sheet,” its CEO said anning the IPO last week. Fortis, which has about 15 hospitals and clinics that are part of this business, has a consolidated net debt of 50bn rupees, the CEO said. The company is looking to add about 2,500 hospital beds in three to four years, he added. Fortis, India’s No 2 hospitals chain after Apollo Hospitals Enterprise, said consolidated net profit jumped 41.34% to 415.4bn in its fiscal fourth quarter ended March.
Religare Health Trust has a mandate to invest in medical and healthcare assets and services in Asia, Australasia and emerging markets.
The IPO would be the second by an Indian company in Singapore after Indiabulls Properties Investment Trust raised US$165m (S$210.8m) in 2009. This has been a dog of a stock.
Reliance Communications is also planning to raise US$1 billion through a Singapore listing of its undersea cable business.
http://sreit.reitdata.com/2012/05/02/a-itrust-dbsv/ (Ya I know technically it’s not a Reit, but it looks like one.)
So am I. )))). BTW, the Indian rupee has strengthened after the government said on Monday that it would delay proposed laws targeting tax avoidance by one year.
Why MNCs and int’l investors are giving India a miss while still liking the other “I”: Indonesia.
Seven international trade associations have written to Indian Prime Minister Manmohan Singh criticising a new tax proposal under which even 50-year-old corporate deals could be scrutinised.
The proposals were announced as part of India’s federal budget last month.
The associations warned that the firms they represent could reconsider their business ventures in India.
And the cancellation of telecoms’ licences doesn’t help.
London-based, Asia-focused Standard Chartered Bank (Temasek owns 19%) has reported that pre-tax profits for the first six months of the year were $3.6bn (£2.2bn), up 17% from last year.
Profits grew in all the regions where Standard Chartered operates, except for its biggest market, India, where profits fell by 5%.
Profits grew by 23% in Hong Kong, 34% in Singapore, 14%in South Korea and 19% in China.Income from the Middle East grew 4%, in Africa it grew 10% and in the Americas and Europe it grew 11%.
It blamed rising interest rates, growing competition and regulatory changes for falling profits in India. It made a big bet in India financing takeover details. Will be interesting to see if these give the bank the same death-defying experiences as it gave some Wall Strret banks in the 1980s and 1990s. https://atans1.wordpress.com/2010/09/10/stanchart-getting-too-aggressive/
Indonesia is the best place for entrepreneurs to start a business, a BBC survey suggested. The US, Canada, India and Australia are seen as among the next best countries at supporting new businesses.
So head south to Indonesia or Oz, young entrepreneurs.
The M’sian experience.
The moral of the story: there are always consequences to any policy.
On all four counts* … India scores badly. New Delhi has already seen street rallies protesting rising food prices. And if India needs higher subsidies, its weak and cash-strapped coalition government – dented anew by last week’s WikiLeaks claims – seems powerless to deliver them. The sovereign most exposed to an oil shock could be the least well prepared to deal with it.
*a country’s oil intensity (how much oil it takes to produce a unit of output), its energy trade balance, its current level of price inflation, and the government’s fiscal position. The first two give an indication of a country’s exposure to higher prices; the latter two suggest how much scope it has to absorb and defray them through fuel, electricity and food subsidies.
According to BarCap, the big losers are South Korea, Thailand, Taiwan and India. US$120 oil would drag both Korea and Thailand into current account deficit (in Korea’s case, so would $110 crude). In Taiwan it would drag 4.3 ppts off the current account as percentage of GDP.
Once upon a time, India deemed GIC and Temasek to be one entity and there was a 10% on the joint holdings of both in Indian companies. The Comprehensive Economic Co-operation Agreement (CECA) which was signed in 2005 provided that Temasek and GIC were to be recognised as separate entities, i.e. each is entitled to each own up to a 10% stake in a company.
There is a report in an Indian newspaper that the Securities and Exchange Board of India (SEBI) has ordered that both Temasek and GIC could only own up to a combined 15% stake in a company, or takeover rules would be triggered.
Can you blame one MM for once being sceptical abt investing in India?
Is Standard Charterd (which like HSBC) had a good crisis taking on too much risk? We shld care as Temasek owns 18% of StanChart, and StanChart is one of its best performing investments.
Ranked 14th among merger advisers in India in 2009, StanChart is now number two (and could be soon Numo Uno) by financing takeovers in the world’s second-fastest growing major market for M&A deals, Bloomberg reports.
The problem is that in the 1980s and 1990s, major US investment banks and European universal banks got into serious trouble by financing takeovers in the US. The deals went sour when the economy collapsed. The banks had tot financing takeovers was a gd way (“no brainer”) of getting into the lucrative M&A game. They forgot that these loans are margin financing by another name.
Is StanChart repeating the same mistake? Maybe it thinks India’s economy may never collapse. But never take for granted anything about a country that needs “divine help” to get ready for the October Commonwealth Games.
Some analysts and accounting experts (among the latter Lynn Turner), a former chief accountant at the Securities and Exchange Commission, say Citi must set aside funds to cover US$50bn of deferred taxes.
These assets are important to Citi. At the end of the second quarter, deferred tax assets made up more than a third of Citi’s tangible equity. So if he had to set aside funds, this would reduce its capitalratios and weaken its balance sheet.
To avoid setting aside funds, Citi has to be confident it will earn US$99bn in taxable income during the next two decades. It says it can.
However as its pre-tax losses in 2008 and 2009 topped US$60bn, these critics ask why it should be trusted. They have a point, while between 2002-2006 period Citi had annual pre-tax profits of at least US$20bn, this got wiped out by the recent losses.
Err so will this “30-yr” investment be around in 30 yrs time, let alone make money for GIC, as MM predicted? Remember Temasek cut loss on its Merrill Lynch investment, after doubling down, and juz before market turned.
Thinking of starting to invest seriously in emerging markets? Standard Chartered warns of bubble in emerging markets. Extract from Guardian article:
Gerard Lyons, chief economist at Standard Chartered, said Asia was the main recipient of western capital, but there was also evidence of speculative activity in Latin America, Eastern Europe and Africa.
A combination of a prolonged period of low interest rates in the west and strong growth in emerging markets meant the money would continue to flow in. “The size of the flows could become more significant,” he added. “There is a significant risk, even though it is a consequence of economic success.”
The report noted that many countries did not have the capacity to absorb the capital inflows, with the result that the money boosted share and property prices, adding to inflationary pressures.
“The longer it takes to address this, the bigger the problem will be. Just as excess liquidity contributed to problems in the western developed economies ahead of the financial crisis, excess liquidity has the potential to cause fresh economic and financial problems across the emerging world.”
Massive flows of capital from emerging economies, especially those in Asia, helped to inflate the asset bubbles in the west that led to the financial crash of 2007. Standard Chartered said global liquidity flows had now reversed, with emerging economies now on the receiving end. Recipients included countries with current account surpluses such as China, and those running current account deficits such as Vietnam and India.
Lyons said China was the emerging economy investors were looking at for signs of trouble. “China is not a bubble economy but it is an economy with bubbles.” But he added that the problem was not confined to Asia, and that hedge funds were now looking at “frontier markets” in Africa.
While emerging markets needed foreign direct investment to help them grow, Standard Chartered said the influx of hot money was a big worry. “Although hot money is regarded as temporary, it persists until the incentive to speculate is eliminated.”
Oh and there is the Greek crisis. 2008, here we come again?
He should ensure that any acquisition in Indonesia, India, Malaysia and Thailand, the countries where DBS says it would look for acquisition opportunities is disciplined in terms of valuation, strategic fit and execution. Investors still remember the Dao Heng fiasco, overpaying and having to take billion dollar impairement charge. And the purchase of POSB was not such a gd deal as anti-government subversives like to imply that it is.
Better still he shld relook at the rationale for these M&A activities.
DBS is Singapore and Hong Kong centric. But, in February, it said it was aiming to have 30 per cent of its revenue from South and South-east Asia, excluding Singapore, 30 per cent from Greater China and 40 per cent from Singapore within five years.
Morgan Stanley estimates that DBS would have to grow at a compounded annual growth rate of 40 per cent a year in South and South-east Asia to achieve its stated target in that region i.e. it would have to grow via acquisitions.
BTW last Friday BT reported that DBS’s CEO had said DBS had identified unnamed acquisition targets in Indonesia which shld worry investors.
Previous post on topic
He shld be relooking at FT policy — both in principle and execution.
Last sat ST reported that analysts were saying that Standard Chartered will be forced to relocate its CEO into Asia in imitation of HSBC.
If it does, it will be a test of Temasek protestations that it does not interfere with the commercial decisions of its investee companies. Remember it is the single largest shareholder in SC (195 ), and all the other big shareholders are “peanuts” as Mrs SM might put it.
The logical place for the CEO is to base himself in HK, SC’s biggest market and which is part of China: it and HSBC are targeting China as the biggest driver for growth.
But could Temasek or its shareholder resist the temptation to have SC’s CEO here. Singapore is way behind HK in IPOs, hedge fund HQs (Soros prefers HK as his Asia HQ), fund mgt, and in wealth mgt where S’pore wants to be a global player, the head so HSBC and JP Morgan’s private bank are basing themselves in HK, or thaz what reports are saying.
Already the private bank’s and PE’s global HQs of SC are here, giving SC the perfect excuse for relocating its CEO here.And S’pore’s nearer India, another big driver for SC’s future growth. As to HK and China, he can fly there on SIA, not Cathay, of course.
And relocating here will give our MSM the excuse they need to exult the merits of this government before the expected early general elections. Hard for the MSM to laud the government given the growing inability of ministers to avoid contradicting one another.
Note the news that SC’s CEO will also donate his bonus to charity, came only after it was reported that HSBC’s CEO would donate his. SC is always playing catch up to HSBC. At one time they were the same size, but one is a global player, the other is 19% owned by Temasek. But then OCBC was once on par with HSBC.
I’m a shareholder of HSBC for over 25 yrs.
BTW the relative sizes of both and how both had a gd crisis:
“The ranking three years ago and for most of the preceding few years saw HSBC as the biggest bank, Barclays and Royal Bank of Scotland chasing its tail, Lloyds some way behind that and Standard Chartered as the enthusiastic, fast-growing puppy.
‘Today HSBC isn’t just the biggest British bank. Its market value of more than £120bn is more than that of all the other four added together. It’s in a league of its own.”
“Today the market value of Standard Chartered, at an almost unbelievable £32bn, is only £2bn less than Lloyds’ and £5bn less than Barclays. And it is £11bn more than RBS (although that’s to ignore all the “B” shares that RBS has flogged to taxpayers).”
and if you want to read why HSBC and SC did so well a gd read.
I read a media report that some analysts were querying when it didn’t invest in Africa direct, rather than allow Bharti to buy Zain’s African assets. My tot,” what weed are these analysts on?”
Well for starters, the Indian govt would not be impressed with SingTel, Temasek and the S’pre govt if SingTel used its32% in Bharti to flow Bhart’s African ambitions which have the Indian govt’s blessing. Remember India thinks it has to counteract China’s grow influence in Africa.
And Bharti wants Africa. It made two attempts to merge with MTN,Africa’s largest telco.
If SingTel tried to use its 32% stake in Bharti to kill Bharti’s African ambitions, SingTel, Temasek and the S’pore govmin would be the losers, just like us footie fans because the EPL bid has caused FIFA to raise the price of World Cup footie for us.
Then also SingTel’s mgt expertise is in developed couuntries — Little Red Speck and the Lucky Country. Its ventures in India, Indonesia, Thailand, the Philippines, and Bangladesh: countries which once in trlco terms are like Africa today are thru associates where mgt are in the hands of experienced local mgrs who are not SingTel employees. Zain is selling out partly because it can’t make serious $ in Africa. Africa generated about 45% of group revenues in the first nine months of last year but only 10% of net profits. Its managerial experience like that of SingTel is in developed telco mkts.
And would straight-laced, conservative SingTel be able (or want to or would we want it) to deal with cowboys in chaos. Example: The privatisation of Nitel, Nigeria’s former state telecoms monopoly, is in a mess. The Nigerian government found itself arguing with some of the preferred bidders over whether they had, in fact, bid at all. China Unicom – named as part of the winning consortium – said “it had not started any negotiations with respect to any substantive and legally binding agreements. It said its unlisted parent had not had any direct discussions with parties to the proposed privatisations. It said the European arm had been “in contact with potential bidders” for Nitel but did not name them,” according to the FT. At first, Unicom said it knew nothing of the bid.
Nope better for SingTel to let Bharti do the work. With all its experience, its share price is 11% down since the annc. of the Zain deal. Clearly there is some concern.
If we don’t get to see the World Cup, SingTel will have a massive PR crisis on its hands in its home mkt. It doesn’t need Africa to add to its woes.
After twice failing to merge with MTN, Bharti (32% owned by SingTel) has finally found a way into Africa: by buying the African assets of Zain.
At US$10.7bn in cash, this is not cheap. Zain’s African businesses are expected to earn US$1.3bn this year before interest, tax, depreciation and amortisation; Bharti has offered about eight times that. Vodafone paid a similar multiple for South Africa’s Vodacom. Eight times EBITA seems to be the norm where telco services are underdeveloped but with potential: Vivendi paid this multiple for a stake in a Brazilian telco last year.
Why buy? Africa is undeveloped and poor: Bharti knows how to run a low-cost, high-growth business. More importantly, India’s biggest mobile phone operator needs a new driver for earnings: in India, it has 11 competitors and price wars.
So why is Zain a seller? The usual reasons that allow a deal to be made
Some of Zain’s shareholders need the money.
The Kuwaiti company cannot make serious wagga in Africa. Africa generated about 45% of group revenues in the first nine months of last year but only 10% of net profits.
Bharti’s shareholders are nervous, with prices falling 9% on Monday, afraid that despite its experience in India, Bharti will fail in Africa.
But for SingTel, it will have via Bharti a presence in Africa: a place with potential for explosive growth.
Tony Tan, deputy chairman of GIC is optimistic about Asia’s prospects and expects it to enter a ‘Golden Age’ in the next decade.
So if you believe him (remember MM Lee, GIC’s chairman, talked of something similar just before the global credit crunch and subsequent global recession), what to buy leh?
Just as CapitaLand is a “no-brainer” China play, maybe this is “no brainer” for dummies to get global exposure?
“[W]ill continue to outgrow America over the coming years. Already 60% of its sales are overseas, and its bridgehead into China and India looks more robust than most.”
Of course you could buy an ETF that invests in a global index.