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Singapore's industrial production unexpectedly declined in April, the biggest drop in 10 months, as drug companies and electronic manufacturers reduced output.
Manufacturing, which accounts for a quarter of Singapore's economy, fell 5.7 percent from a year earlier, following a revised 18.1 percent gain in March, the Economic Development Board said today. Analysts predicted a 6 percent increase. Economists have warned that manufacturers in Singapore and across Asia face easing demand amid signs of a slowdown in the U.S., the region's largest export market. Singapore's trade promotion agency last week lowered its forecast for export growth this year to between 2 percent and 4 percent, from an earlier range of 4 percent to 6 percent.
"External demand is still weak and that doesn't bode well for Singapore's production in coming months,'' said Alvin Liew, an economist at Standard Chartered Plc in Singapore. "Manufacturing is likely to be badly hit.''
Should Singaporean exporters already consider downsizing as foreign markets dwindle?
Industrial production fell a seasonally adjusted 16.2 percent in April from the previous month, after a revised 0.4 percent gain in March, today's report said. Economists were expecting a 5.5 percent decline. Pharmaceutical output fell 27.9 percent in April from a year earlier, after more than doubling the month before. Drugs make up around 22 percent of Singapore's manufacturing and electronics account for about 30 percent. Singapore's industrial output tends to fluctuate from month to month because of swings in production by drug companies which shut plants for cleaning before making different products.
Electronics production dropped 5.1 percent last month from a year earlier, following a revised 3.4 percent decline in March. The island's electronic exports have declined for 15 months.
Computer chip production in Singapore fell 7.4 percent in April from a year ago, from a revised decline of 6.7 percent the month before. Transport engineering output, which makes up more than a 10th of total manufacturing, gained 7.7 percent in April from a year earlier after advancing a revised 7.3 percent in March. Singapore's marine engineering companies such as Keppel Corp. and smaller rival SembCorp Marine Ltd. have won contracts worth billions of dollars for ships and oil rigs as record crude prices encourage companies to increase exploration. Oil prices reached $135.09 a barrel this month, and prices have doubled in the past year.
Production at marine and offshore engineering companies rose 15.1 percent, while aerospace-related output gained 1.7 percent last month.
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However, SIA said it respected the shareholders' vote and will continue to support the building of a relationship with China Eastern. On its part, Temasek Holdings said it remains open to future opportunities which make commercial sense, and that fall within Temasek's overall investment framework.
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Intertek, the world's leading provider of testing and inspection services, has opened a new petroleum laboratory inside the Universal Terminal on Jurong Island. Universal Terminal is Asia's largest commercial oil storage facility and is co-owned by Singapore Oil Trading Firm, Hin Leong and PetroChina.
The new Intertek laboratory provides important quality testing and inspection services to customers of the large storage complex, complementing the extensive expertise and laboratory testing capabilities provided by the nearby Intertek Singapore Technical Centre laboratory.
Marc Hoffer, President for Intertek Oil, Chemical & Agri in Asia Pacific, said, "Singapore is a key petroleum hub for the region. Our new facility at Universal Terminal is a strategic investment for Intertek, increasing support available to key petroleum clients and supporting their business needs across the region."
Occupying 8,000 sq feet, the new Intertek Universal Laboratory provides comprehensive laboratory testing services to support Universal Terminal Tenant needs as well as Intertek regional customers. Intertek is the only third-party independent laboratory in the terminal. Intertek provides support services such as fuel quantity and quality inspection, petroleum testing, bunker fuel testing to ISO 8217, bunker fuel quantity surveying, In-line Automatic Sampling, along with fuel oil and gasoline blending. Additional services include fuel and logistical consultancy, marine services, and storage tank calibration.
The new laboratory operates on a 24/7 basis and operates with a new state-of-the-art information management system (LIMS). Singapore customers also benefit from Intertek's fast on-site sample-pick-up system, FastLab. It is expected that the new laboratory will be ISO 17025 accredited by 2008.
Will the opening of the new Intertek Petroleum Laboratory help improve further Singapore’s Petroleum research?
ComfortDelGro, the largest operator of taxis in Singapore, has overhauled its fare structure which it says will better meet the demand for and supply of taxi services at different times of the day. Flagging down a Comfort or CityCab will cost $0.30 more at $2.80. The metered fare has also been adjusted. It will cost $0.20 per 385 metres of travel for the first 10 kilometres. This will go up to $0.20 per 330 metres for journeys beyond 10 kilometres. It will cost $0.20 for every 45 seconds of waiting time. Instead of the $2 surcharge for peak hour travel, there will now be a premium levied. It will be 35 per cent of the metered fare.
On November 20, 2007, the Komisi Pengawas Persaingan Usaha (KPPU) ruled that Temasek had breached anti-trust regulations, specifically Article 27(a) of Law No.5/1999 of
The aforementioned ruling and associated penalties are not legally binding until endorsed and upheld by a superior court in
Moreover, and as the above example illustrates, the legal process tends to be protracted in
However, if under any circumstances Temasek is required to divest its stake in the telecommunications companies, it would more likely to sell its stake in Indosat, given its weaker market position compared with Telkomsel. If Temasek were to divest its Telkomsel stakes, negative pressures would be inflicted on the outlook of Telkomsel and Singtel. In Telkomsel's case, Singtel's strategic shareholding and influence has provided comfort in rating the company above the sovereign local currency rating. Conversely, Telkomsel is a star performer and key growth driver in Singtel's overseas asset portfolio.
Other conditions within the KPPU ruling appear unusually onerous for both Temasek and Telkomsel. The requirement that the forced divestment by Temasek would allow no buyer of the divested business to acquire more than 5% of the entire divested stake means that the shares must be placed with at least 20 different investors. This is extremely likely to be challenged by Temasek.
Is there an autonomous driving force being KPPU’s wheel of action?
China and Singapore have agreed to strengthen cooperation in several areas, including the China-Singapore Free Trade Agreement (FTA). The two sides also agreed to set up an "Eco-City" in China. The agreement was reached between Chinese Vice-Premier Wu Yi and her Singaporean counterpart Wong Kan Seng at the 4th China-Singapore Joint Council for Bilateral Cooperation (JCBC) meeting in the city-state.
Wu is on a four-day visit to the city-state at the invitation of Vice-Premier Wong. The proposal for the "Eco-City" project had come from Singapore's Senior Minister of the Prime Minister's office Goh Chok Tong during his visit to China in April. He had said the proposed project could transform a city beset by water problems into an environmentally friendly, self-sustaining place, where housing units for lower-and middle-income groups could be built. Singapore suggested having a China-Singapore FTA last year that Beijing accepted, even though it had a "1+10" FTA plan with the Association of Southeast Asian Nations (ASEAN).
After the meeting, several memorandums of understanding on bilateral cooperation in human resources development, health, taxation and environmental and water resources were also signed.
"Total trade between China and Singapore reached $40.85 billion last year, accounting for one-fourth of China's trade volume with ASEAN countries. Singapore has become the sixth largest investment source of China," Wu said. The two vice-premiers co-chaired the ninth meeting of the Joint Steering Committee of Suzhou Industrial Park (SIP), a high-tech industrial base launched in East China's Jiangsu Province in 1994.
In the past three years, the park has approved 1,500 foreign-invested projects, with actual investment of $6 billion. The two governments have said before that they would strengthen their joint efforts to make the industrial park as competitive as possible. The committee decided to optimize the second 10-year target for the park, adjust its structure and reduce its energy consumption to the level of developed countries.
Wu met with Singapore Prime Minister Lee Hsien Loong, the city-state's founding father Lee Kuan Yew and Goh Chok Tong. It will bolster China's ties not only with Singapore, but also with other ASEAN member countries.
Zhai Kun, a senior researcher on Southeast Asia with the China Institute of Contemporary International Relations, attaches great importance to the FTA. "It will enable Singapore to become the window to China in Southeast Asia and the world," he said. The "Eco-City" project, Zhai said, reflects Singapore's creative economic strategy when participating in China's development.
Will Singapore ever be the first largest investment source in China?