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Will Singapore survive a suffering export market?

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.''

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.

Should Singaporean exporters already consider downsizing as foreign markets dwindle?

High Inflation, High Cost of Operations, High Prices. Is There A Way To Fight This Vicious Cycle?

Singapore's consumer price inflation likely hit a new 26-year high in April as food and energy prices showed no signs of cooling.

A poll of economists forecasts the consumer price index to have risen 7.0% from a year earlier. In March, the CPI rose 6.7%.

Forecasts for the data, due Friday at 0500 GMT, ranged from 6.7% to 7.3%.

Economists said rising energy prices led to higher pump and utilities prices, while a global rice shortage caused the price of the grain to surge.

"Petrol companies raised pump prices by three and five cents a liter for petrol and diesel respectively," said Leon Hiew, an economist at Citigroup in Singapore.

Global rice costs have risen by 80% over the past three months, added Hiew. World Bank Managing Director Juan Jose Daboub said recently that prices are unlikely to fall soon unless an additional million tons of rice is released into the global market in the near term.

According to Hiew, inflation is unlikely to cool until the second half of the year.

"We expect CPI to stay within the 6.5% to 7% range in the second quarter before moderating to average around 4.5% in the second half," Hiew said.

The poll also forecasts the CPI to have risen 0.6% from March in seasonally adjusted terms, after rising 0.3% the previous month.


Will the Singapore Government Step And Introduce Policies to Combat the Inflation?

Are the Record Oil Prices the Sole Reason for SIA’s Dip in Profits?


Singapore Airlines Ltd., the world's second-largest airline by market value, dropped to the lowest in two weeks on the city's stock exchange amid concerns that record oil prices will damp profit.

The carrier fell 1.7 percent to S$15.52 in Singapore trading, closing at its lowest since April 24.

Singapore Airlines, Cathay Pacific Airways and other Asian carriers face shrinking margins as an economic slowdown crimps demand and jet-fuel costs surge in line with rising oil prices. Crude oil climbed 1.4 percent to $123.53 a barrel in New York yesterday, the highest close since trading began in 1983.

“Jet-fuel costs may get the better of Singapore Airlines in the coming financial year,” Citigroup analyst Robert Kong said in a note. This is especially likely ‘if softer traffic growth and lower load factors later in the year weigh on passenger yields.’

The Singaporean carrier yesterday said that it will raise surcharges as much as $20 a flight next week in bid to offset surging fuel costs. Jet fuel accounted for almost 37 percent of its costs in the quarter ended Dec. 31.

Cathay Pacific, Hong Kong's biggest airline, yesterday said it may raise its ticket levies further. Cathay Pacific rose 0.1 percent to HK$16.24 in Hong Kong after falling as much as 1.4 percent earlier.

Air China Ltd., the world's biggest carrier by market value, dropped 2.2 percent to HK$5.72 in Hong Kong trading. China Southern Airlines Co., the country's biggest airline by sales, slipped 2 percent to HK$4.97 in the city.


Will Raising Surcharges Indeed Help Offset the Cost of Operations, or Will it Cause Air Travellers to Switch to other Airlines?

How Long Will Emerging Markets Be Able to Contribute to ST Engineering’s Bottomline?


Singapore Technologies Engineering, Asia's biggest aircraft maintenance company, said first- quarter profit rose 13 percent as it serviced more planes and increased sales of defense and specialty vehicles.

Net income increased to S$122.5 million ($90 million), or 4.10 Singapore cents a share, from S$108.8 million, or 3.68 cents, a year earlier, the company said in a statement to Singapore's stock exchange. Sales climbed 8 percent to S$1.32 billion.

Economic growth in China and India is making air transport more affordable for passengers, prompting airlines such as AirAsia and Singapore Airlines to add flights and aircraft. Orders at Singapore Technologies' aerospace division, its biggest business, rose as carriers farmed out maintenance services to cut costs and converted passenger aircraft to cargo planes.

“We have the order book to help us grow our business,” Chief Executive Officer Tan Pheng Hock said. “We want to rationalize our business so we'll come out stronger next year.”

ST Engineering's orders reached S$9.19 billion at the end of March, according to the company. The company adjusted its order book to eliminate a contract received from Skybus Airlines after the U.S. low-fare carrier filed for bankruptcy in April, Tan said. Orders were S$9.49 billion at the end of 2007.

The company expects a “modest growth in turnover and profit before tax this year,” Tan said.

Pretax profit at the aerospace division rose 4 percent to S$82.6 million in the first quarter, while the land systems business gained more than a third to S$32.9 million.

ST Electronics had a pretax profit of S$20.1 million, 9 percent less than a year earlier. ST Marine, which counts the U.S. Navy and the U.S. Coast Guard among its customers, posted a 10 percent decline in pretax profit to S$17.4 million.

ST Engineering closed unchanged at S$3.21 before the earnings announcement. The stock has fallen 14 percent this year, compared with a 6.3 percent decline in the Singapore benchmark Straits Times Index.


Will the price of ST Engineering’s share bounce off and increase in light of the positive news?

Catalist: Too little, too late?

Apparently timing is not everything. Despite the turmoil in the financial markets, the Singapore Exchange has pressed ahead with Catalist, the new board that now replaces SGX’s junior board SESDAQ. Emulating the flexible regulatory system of London’s Alternative Investment Market (AIM), Catalist is part of SGX’s strategy to provide growing firms with a viable Asian listing and an alternative to the AIM.

The big question though is, how attractive will Catalist ultimately be? Will the looser regulatory standards put off firms and investors? Catalist’s forerunner, AIM had been criticized for its lax regulation and advisor conflicts of interest, the very freedom that attracted companies to it in the first place. Notably, US securities regulator Roel Campos said that “I’m concerned that 30% of issuers that list on AIM are gone in a year. That feels like a casino to me and I believe that investors will treat it as such.”

According to corporate finance lawyer Robson Lee, “At the start, Catalist aspirants may be confused by the different standards imposed by different houses, and this could pose challenges to the integrity of Catalist when listing candidates may flock towards houses which are more lax in their requirements.”

Good Signs

There are reasons to look on the bright side though. Initial response, according to Mr Lawrence Wong, Executive Vice President and Head of Listings SGX, has been good, “we have received numerous enquires from potential listed companies about Catalist”.

In London, AIM has raised more than 35 billion pounds for the 2500 companies that have listed there since 1995, and has attracted strong institutional interest- 56% of all investors in 2007 were institutional investors. The AIM market appears to be sustainable too, with more than 40% of the money that has ever been raised coming through further issues.

Catalist has the tools to compete with, not merely emulate, AIM. Besides the lighter regulatory touch that means an easier listing process and lower compliance costs for the companies, Catalist offers listing fees that are at least 33% lower than AIM, starting at $15,000 and capped at $50,000. Also, a Catalist company has the market facility to raise more funds than in AIM—up to 100% of its original share capital on a rights basis. Catalist’s biggest advantage, however, is that most trading interest in Asian stocks has stayed in Asia, and Singapore is in the same time zone as most investors, unlike AIM in London. The faster listing time in Catalist (6 weeks) compared to 17 weeks previously on SESDAQ can only be a further plus.

And going back to the issue of regulatory standards, SGX seems confident of maintaining market quality, with SGX chief Hsieh Fu Hua emphasizing that companies on the new board would be held to the same standards as those on the main board and that SGX “retains the power to discipline and ultimate accountability”. As Mr Lee commented, “There’s no water tight regulatory system” but “in Singapore, you have a balance; regulation with a lighter touch but strict enforcement.”

Will Catalist strike the right balance?

Will BMW overcome its CleanEnergy hurdle?

BMW recently flexed its ‘renewable muscle’ by bringing in five Hydrogen 7 cars into Singapore as part of an ongoing world tour. The cars, endorsed by celebrities like Madonna and Arnold Schwarzenegger, rely on liquid hydrogen as fuel, which BMW contends is the only way of achieving mobility ideally free of carbon dioxide emissions.

“We want to share this technology with Singapore because the country has a very clear vision of the central importance of clean energy in the overall national development plan,” said Roland Krueger, Managing Director of BMW Asia.

Performance wise, the cars boast an acceleration from zero to 100 kilometres in ten seconds, with a top speed limited to 230 kilometres, but not everyone is impressed.

Are these cars viable?

Ron Tan, Global Marketing Director at Infernofuel Global bristles when asked if these alternative forms of transport will help Singapore realise its dreams of zero carbon emissions by 2020.

“What is the point of having a hydrogen-powered car when the infrastructure is not in place,” he retorts. For the launch, BMW brought in a mobile refuelling station, complete with support crews as there is only one hydrogen fuelling station in Singapore supporting BMW’s technology. Tan also questions their affordability.

“How many Singaporeans can buy a BMW 7 Series car running on hydrogen?” Instead, he believes motorists need to address fuel efficiency by using good air filters and low resistance tyres. “Those measures will allow cars to get more mileage out of every litre of fuel used.”

Michael Meurer, who heads BMW’s CleanEnergy Programme admits that a complete change from a fossil fuel infrastructure to a hydrogen economy will take time, but points out that the advantages cannot be ignored.

“The BMW Hydrogen 7 emits nothing but vapour, which allows the cycle to repeat itself. This means that sustainable mobility without using fossil fuel resources can become a reality,” he said.

And according to Meurer, unlike fossil fuels, hydrogen is readily available. “It can be obtained from water and renewable energy such as the sun, wind or hydropower.”

Temperatures are rising
Tan believes that BMW’s intentions are admirable but unrealistic. He points to a recent report by the Intergovernmental Panel on Climate Change (IPCC), which states that global temperatures will increase by almost two degrees by 2020. “At best, people can only contain the problem, not solve it,” said Tan.

Sticking to its guns

Understandably, Tan’s views are not shared by BMW, which continues to remain passionate about its CleanEnergy programme, believing that it will open up a new era for automobiles with alternative drive technologies.

“Broad market penetration will require many more years of commitment from all partners in business, politics and industry. It’s a marathon, not a sprint,” said Krueger.

Will broad market penetration eventually become a realistic goal?

Why is Wyeth bucking the trend of manufacturing leaving Singapore?

Wyeth will spend $96 million to expand a factory in Singapore for producing infant formula and milk powder, completing a $500 million capital improvement program in Asia.

The expansion will increase capacity at Madison, New Jersey-based Wyeth's Singapore plant by 50 percent, the company said in a statement distributed by PRNewswire. The factory will make the Progress and Promise brands of infant formula and milk products for sale in Singapore and the Asia-Pacific region, where sales climbed 20 percent last year, said Tom Mulqueen, vice president of global operations for Wyeth's nutrition unit.

“The demand is being driven by the economic emergence of developing nations that we're dealing with,” Mulqueen said by phone. Sales in China climbed 38 percent last year, he said.

The sale of fake milk formula in some of China's poor areas, combined with the increasing affluence of the world's most populous nation, has contributed to a surge in China's milk formula market, which may almost double in the five years through 2009, according to a report published by Euromonitor International in 2005.

Wyeth is also spending $280 million building a factory in China to make its infant formula, milk powder and nutritional products, it said in a March 10 statement. It's spending about $120 million more on a factory in the Philippines, Mulqueen said.

Mulqueen said he expects to increase staff at the Singapore plant by about 40 percent, adding about 100 more employees. The factory will start full commercial production by November next year, he said.

Sales outside the US and UK, including Asia, increased to $9.68 billion last year, representing 43 percent of Wyeth's revenue.

With a US recession looming, will Asia sales help Wyeth to pull through?

Will CapitaLand’s focus on China work?

CapitaLand Chief Executive Officer Liew Mun Leong will take a more direct role in the company's China and residential units as Southeast Asia's largest developer focuses on those markets to bolster growth.

Lim Ming Yan, CEO of the company's China business, and Patricia Chia, head of its Singapore residential unit, will report directly to Liew from April 1, CapitaLand said in a statement to the Singapore stock exchange. Lui Chong Chee, to whom Lim and Chia had reported, will become head of financial services. Lui's former position as CEO of residential is no longer needed with the “flattened organizational structure.”

CapitaLand's fourth-quarter earnings jumped 49 percent as it sold more homes in its three biggest markets -- China, Singapore and Australia. The developer, which has properties in more than 90 cities worldwide, is turning to faster-growing markets outside Singapore, where home prices may struggle to match last year's 31 percent increase.

“It's a reflection of how quickly the business of China and Singapore homes have grown and how important they have become,” Vikrant Pandey, an analyst with UOB Kay Hian in Singapore.

“I view this as a positive signal in the sense that they are putting the emphasis on fast-growing segments.”

Pua Seck Guan, CEO of the company's retail unit, will relinquish his role as co-chief of the financial services unit and focus on expanding the group's mall business in Singapore and abroad, CapitaLand said. The company expects to open 20 shopping malls in China this year and build as many as three properties in the country under its Raffles City brand.

How will the current credit crunch affect Capitaland’s plans?

Is Creative in big trouble?

Creative Technology, which makes accessories for Apple's iPod, forecast the lowest sales in almost five years and said it will lose money on operations in the current third quarter.

Revenue may drop 18 percent to $150 million in the three months ending March 31, lower than an unspecified target, the Singapore-based company said in a statement. Creative said it expects to have an operating loss, or sales minus the cost of goods sold and administrative expenses, because currency exchange rates resulted in higher-than-expected expenses.

Chief Executive Officer Sim Wong Hoo, 52, has cut prices of the Zen digital music players by as much as half to revive sales amid waning consumer demand. Creative said it's also selling its headquarters in Singapore for S$250 million ($179 million) and other investments in a bid to boost profit.

“It's not surprising that the quarter is weak but it's even weaker than expected,” said Tan Ai Teng, a Singapore-based analyst at DBS Group Research, who has a “hold” rating on Creative. “It doesn't look particularly hopeful going forward and it's still going to be challenging.”

Creative reiterated it expects to be profitable in the third quarter. The maker of Muvo digital music players posted a net loss of $23.6 million on sales of $183.8 million a year earlier.

The company expects the sale of the headquarters to result in a S$200 million gain, which will be amortized and recognized over five years. Creative said it will rent the property from the unidentified buyer.

Will this one-off gain really help Creative in the long run?

Will the offer keep on going up?

The Al-Futtaim Group raised its offer for Robinson by 12 percent as it seeks to expand its Middle East franchise of Marks & Spencer stores to Singapore.

ALF Global Private, a unit of Al-Futtaim, raised its bid to S$7 a share from the January offer of S$6.25, it said in a statement to the Singapore exchange. The price, which values Robinson at S$601.6 million ($434 million), is 3.1 percent higher than the last traded price of S$6.79 before the midday break.

Al-Futtaim, which operates nine Marks & Spencer stores in the Middle East, hopes to gain control of Robinson's seven clothing stores operating under the brand in Singapore as well as its department-store chains.

“This revision represents a full price for the business and a compelling opportunity for shareholders to realize value,” James Gillespie McCallum, director of ALF Global, said in the statement.

Al-Futtaim said it has secured acceptances for 26.7 percent of Robinson's stock, compared with 23.2 percent when it first made the offer. The bid is conditional upon ALF receiving acceptances for 50 percent of the stock, it said in January. The buyer also reiterated the April 3 deadline for the bid to close.

Indonesia's Lippo Group owns 29.9 percent of Robinson after paying S$203 million for the stake from Oversea-Chinese Banking and Great Eastern Holdings in 2006. Oversea-Chinese still owns 6.05 percent, according to Robinson's annual report

Standard Chartered Plc is advising ALF Global in its bid for Singapore's oldest retailer.

Eventually, will Al-Futtaim secure the required number of acceptances?

Is this a sign that Singapore’s biomedical sciences push is paying off?

British pharmaceutical giant GSK opened its first and only pilot plant in Singapore.

With the opening of this 82-million-U.S. dollar pilot plant, GSK's operations in Singapore has spanned the entire value chain of activities, including drug discovery, clinical research, manufacturing and regional headquarters, S. Iswaran, Singapore's Minister of State for Trade and Industry, said at the opening ceremony.

"The pilot plant will facilitate the design of manufacturing processes, to bring the latest drugs discovered at GSK into commercial production for the first time," said the minister.

It will involve new process development, process scale-up to handle large-scale drug production.
"Hence, this pilot plant is an important addition to GSK's manufacturing capabilities here, enabling it to transcend traditional manufacturing excellence into the realm of manufacturing innovation," he added.

Many pharmaceutical companies in Singapore are increasingly placing greater emphasis on manufacturing innovation by establishing pilot plants here to complement their commercial-scale manufacturing facilities.

Last year, biomedical sciences (BMS) manufacturing output reached a high of 24 billion Singapore dollars, with a value add of 13.4 billion Singapore dollars. This amounts to almost a quarter of the country's total manufacturing value added.

Will this innovation push spread to other industries too?

Will City Developments continue exceeding expectations?

City Developments, Singapore's second-largest developer, said 2007 profit more than doubled after home prices rose to an 11-year high in the city state.

Net income climbed to S$725 million ($519 million), or 76 cents a share, from S$351.7 million, or 36.6 cents, in 2006, the company said in a statement to the Singapore stock exchange.

That's higher than the average estimate of S$616.6 million complied by Bloomberg from eight analysts. Sales rose 22 percent to S$3.11 billion from S$2.55 billion.

City Developments and rivals CapitaLand and Keppel Land may face declining demand in Singapore this year amid concerns the economy could fall into a recession. Singapore property prices may climb 8 percent to 10 percent this year, after surging 31 percent last year, London-based real estate consultant Savills said.

“Moving forward, the performance of the property market will largely depend on how the sub-prime crisis pans out and its impact on global economies,” the company said in the statement.

“Transaction volume and rental increase have slowed down in the fourth quarter.”

City Developments last year sold 1,655 homes worth S$3.38 billion, with 95 percent of these sold in the first nine months.

In 2006, it sold 1,337 units worth S$2.77 billion. The company may offer 427 homes for sale in the first half of this year.

“Compared to Keppel Land and CapitaLand, they have a larger exposure to Singapore,” Fera Wirawan, an analyst with ABN Amro NV in Singapore, said of City Developments. “They have traditionally held a pretty big land bank in the city.”

ABN Amro expects the luxury segment of the market to decline 10 percent to 20 percent by the end of the year. The lower end and mass-market will climb 10 percent, Wirawan said.

Developers have announced plans or are already building 65,400 private homes as of the third quarter, with about 41,600 units scheduled for completion by 2010, the Urban Redevelopment Authority, the government agency in charge of real estate, said Jan 2. About 58 percent of those projects, or 38,000 homes, haven't been sold, the authority said.

City Developments is also benefiting from a pickup in the global travel industry. The company controls about 53 percent of Millennium & Copthorne Hotels, the Horley, England-based chain that owns 110 hotels worldwide, including the Biltmore in Los Angeles.

The hotel operator said that fourth-quarter profit rose 36 percent as customers paid more for rooms in New York and Singapore. It also made a gain from selling three properties to a real estate trust in Singapore.

So will the property market optimism in Singapore hold up?

Capitaland expanding in Vietnam?

CapitaLand, Southeast Asia's biggest developer by sales, said it will form a $300 million fund to invest in Vietnam property and plans an alliance with Nam Thang Long Investment Joint-Stock to expand in the nation.

CapitaLand plans to take a 30 percent stake in the fund, its first in the Southeast Asian nation, and has signed a preliminary agreement with Citi Private Bank for the fund, it said in a statement to the Singapore stock exchange.

“We see vast opportunities in the Vietnam real estate market, driven by the country's strong macro-economic growth and rapid urbanization,” Chief Executive Officer Liew Mun Leong said in the statement. “Our aim is to deepen CapitaLand's presence in Vietnam to become a significant long-term real estate player.”

Vietnam's economy expanded 8.5 percent in 2007, the fastest pace since 1996, after the country joined the World Trade Organization last year. CapitaLand is turning to Vietnam, Liew said in a interview with Bloomberg Television, as growth slows in its home market of Singapore,

The Singapore-based developer also signed an agreement with Nam Thang Long to jointly develop residential and so-called mixed- used properties in Vietnam, the statement said.

Will these plans enable Capitaland to grow in the long term?

Will optimism of Indian property developers continue?

The Indian developer DLF is still working on listing a $1.5 billion property trust in Singapore and expects the initial public offering to be made in the second quarter of 2008, despite bruising market conditions.

DLF, India's most valuable property firm, had hoped for an offering for its real estate investment trust, or REIT, in the first three months of this year, bankers have said, although volatile markets led some to predict a delay.

Investor nerves have derailed two planned IPOs in India in the past week: a $1.64 billion deal by the developer Emaar MGF and an offering by Wockhardt Hospitals. According to Thomson Financial, 21 offerings worth a total $6.3 billion were pulled in January worldwide.

Singapore's property trust market, whose share prices slid last year amid global credit problems, appears equally hostile. But DLF's chief financial officer, Ramesh Sanka, said his firm expected a go- ahead for the offering from market regulators within a month.

“The process of creating a REIT is going on, but we haven't got all the approvals in place,” Sanka said from New Delhi. “We should be getting approvals in a month, then we will have to take the next step.”

When asked if the initial public offering would be made in the second quarter of this year, he said: “I think so.”

Indian developers are eager to raise funds for expansion by selling buildings into property trusts, in which they would retain a controlling stake. The trusts, which pay most of their rent as dividends, should then become willing buyers of buildings as the developers roll out new projects.

The Indians have been watching the success of Singapore's REIT market, which has grown to almost $19 billion.

India does not yet allow such a security, although regulators issued draft guidelines in December. Analysts expect next month's budget to give some indication of when India will get its own REIT market.

Although REITs are usually regarded as defensive investments, trusts across the world suffered in the second half of 2007 as the U.S. subprime crisis unfolded and hit commercial property markets in the United States and Europe. Singapore's REIT index has fallen 16 percent already this year.

Will the prospects for the Singapore property market improve?

China Eastern retries the Singapore Airlines' bid, will they eventually succeed?

China Eastern Airlines said on Jan 28 that the company is striving to hold another shareholder meeting with the purpose of gaining shareholders’ support for the tie-up with Singapore Airlines, according to the company's chairman Li Fenghua.

There is no detailed meeting schedule yet, as it is still in a preliminary stage. Last year, Singapore Airlines and parent Temasek Holdings offered to buy 24% of China Eastern Airlines at a price of HK$3.8 per share, totalling HK$7.16 billion in order to expand their businesses in China's booming aviation market.

However, the bid was rejected earlier by China Eastern's shareholders while China National Aviation Corporation (Group) Limited (CNACG), the parent group of Air China offered to take the bid at a higher price and establish strategic partnership with China Eastern. China Eastern later refused to respond to CNACG's proposal, saying the offering was incomplete, insincere and lacked legal validity.

Singapore Airlines and its parent Temasek Holdings refused to raise the bid as they found "nothing is a must to get".

So what does the future bode for these companies?

Will the governments “hands off” approach benefit GIC and Temasek Holdings?

Tharman Shanmugaratnam, Singapore's minister of finance, said the government will take a "hands off" approach to the investments of its sovereign wealth funds Temasek Holdings and Government of Singapore Investment. He made these comments to lawmakers in Parliament.

Temasek and GIC have invested about $23 billion in UBS AG, Citigroup and Merrill Lynch since mid-December as the banks turned to investors after record write downs and losses.

“Let me first state that GIC and Temasek make their investment decisions independent of each other, and of the government. They make these decisions for commercial reasons, based on their own calculations, free of any influence from government.”

GIC has explained the reasons why it made a major investment in UBS, and more recently in Citigroup. Likewise, Temasek has stated why it invested in Merrill Lynch. The U.S. subprime crisis has resulted in several global financial institutions facing large write downs of their assets, and requiring fresh capital. This presents opportunities for investors that are liquid, and able to take a long-term view. GIC and Temasek were among those approached.

“They assessed the proposals rigorously. In each instance, GIC and Temasek concluded that these were good, long-term investments and valuable additions to their overall portfolios. They considered each of the banks as having a strong business franchise and good long-term growth potential, across multiple businesses and multiple locations. Hence they negotiated terms which protected their interests and made financial sense, and entered into the deals.”

When asked to comment on the risks involved, they referred to the large investments as with all commercial investments, there will be some downside risk. It is up to GIC and Temasek to assess this risk, and decide if it is acceptable. Their responsibility is to accept prudent risks in order to earn good returns on their overall portfolios.

“It is not the government's role to comment on or second guess whether it was timely for GIC and Temasek to have made these two investments. It does not judge the performance of GIC and Temasek by their individual deals. Nevertheless the government is assured that both GIC and Temasek had thoroughly assessed the risks of each of these investments, and had made hard-headed commercial decisions after careful assessment of the risks and the prospects for returns over the long term.”

Albeit the government is assured, will GIC and Temasek actually manage to live up to what their expected of?

What are some of the main factors for Singapore’s economic freedoms?

Singapore is catching up to Hong Kong in terms of economic freedom and could soon surpass the SAR. That was the message delivered at the Washington-based Heritage Foundation's 2008 Index of Economic Freedom. It shows Hong Kong's freedom decreasing and Singapore's increasing compared to last year's scores.

"The gap between Hong Kong and Singapore is shrinking," Heritage Foundation vice president Kim Holmes said. If the Singapore government lowers its amount of intervention in the banking industry, it "could very well end up giving Hong Kong a real competition," Holmes said.

Bank of East Asia chief economist Paul Tang Sai-on called the report "a wake-up call for Hong Kong."He added: "I think, for regulators as well as the SAR government, they should look into the report and see what areas we can further strengthen our lead."

Hong Kong was ranked first in the American think tank's ranking of economic freedom for the 14th year in a row. Singapore was second again. In its report, the Heritage Foundation criticized the Hong Kong government for the Scheme of Control regulation of electricity prices as well as the regulation of prices for public transport and some residential rents.

A government spokesperson explained the transportation price controls seek to "balance the interests of the public and the operators" and said affordable electricity is "vital." Singapore is already ranked higher than Hong Kong in terms of business, monetary and labor freedoms.

"We are determined to uphold Hong Kong's position as the freest economy in the world," said Financial Secretary John Tsang Chun-wah. "We see the role of the government as that of a facilitator."

Points were taken off Hong Kong's trade freedom score because of "restrictive" pharmaceuticals regulation, market access restrictions for legal services, limited import licensing, and issues involving intellectual property rights that add to the cost of trade.

Do differences in economic freedoms result in large differences in economic growth and prosperity, and why?

Is it rivalry that made Singapore Airlines fail to investment in China Eastern Airlines?

Singapore Airlines (SIA) quickly expressed its disappointment over the shareholders' rejection of its investment in China Eastern Airlines (CEA). The Singapore flag carrier said in a statement that “Singapore Airlines is disappointed that the proposed transaction involving an equity stake in China Eastern Airlines did not receive the required level of support from independent shareholders EGM (extraordinary general meeting)."

CEA's minority shareholders voted against selling 24 percent stake for 7.2 billion Hong Kong dollars (about 923 million U.S. dollars) at 3.8 Hong Kong dollars per share to SIA and Temasek Holdings, Singapore's government-related investment firm. The China Eastern-SIA deal has been baffled by another Chinese airline giant Air China. Its parent company China National Aviation Holding Company, announced before the shareholders' meeting that it will make a counter-offer at least 32 percent higher than that of SIA's.

SIA maintained in the statement that its offer represents a “full and fair value for the equity injection to recapitalize the airline", and noted that the transaction “has also been approved in accordance with relevant laws and regulations." It reiterated, "The proposal is for a long-term strategic relationship with a willing partner." And its proposal would have brought international expertise from SIA's board and management to China Eastern, which, SIA said, would have helped CEA meet future challenges in a competitive aviation environment in China.

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.

What are the future plans that Singapore Airlines look forward to?

How long will Singapore take to recover from it’s slowing economy performance?

Singapore's economy unexpectedly contracted last quarter as factory output slowed, suggesting Asia's export-dependent markets may face increased risks from slower global growth. Gross domestic product shrank an annualized 3.2 percent after adjusting for inflation, the first decline in 18 quarters, and followed a revised 4.4 percent expansion in the third quarter, the trade ministry said. Economists were expecting a 3.1 percent gain. Singapore's figures give economists an insight into how turmoil in global markets and the subprime-mortgage crisis in the U.S., the region's biggest export destination, may affect Asia's expansion.

“We definitely should expect to see more softness in exports in the next couple of quarters, and that's bad news for electronics-heavy Asian economies,'' said Kit Wei Zheng, an economist at Citigroup in Singapore. “That means slower growth for Singapore and the rest of Asia.''

The Singapore dollar rose 0.1 percent to S$1.4406 per U.S. dollar as of 1 p.m. in Singapore. The benchmark Straits Times Index fell 0.8 percent to 3,453.15. China, South Korea and the Philippines are due to report fourth-quarter GDP numbers later this month, while Japan, Taiwan and Malaysia are scheduled to release theirs in February.

Manufacturing climbed 0.5 percent in the last three months of 2007 from a year earlier, the smallest increase in 4 1/2 years. Output growth slowed from a revised 10.3 percent in the July-September period as pharmaceutical plants produced fewer drugs, the trade ministry said.

The Asian Development Bank last month said growth in emerging East Asia in 2008 will be 8 percent, half a percentage point lower than last year. The region is twice as reliant on exports as the rest of the world, with 60 percent of overseas sales ultimately destined for the U.S., Europe and Japan.

From a year earlier, Singapore's $132 billion economy grew 6 percent in the fourth quarter after gaining a revised 9 percent in the previous three months. Economists were expecting 7.7 percent growth.

“There's no imminent turnaround in electronics and we're unlikely to see a recovery in the next six months,'' said Irvin Seah, an economist at DBS Group Holdings in Singapore. “Pharmaceuticals, a key support for manufacturing, has been losing steam.''

Singapore's electronic exports have dropped each month since February, mired in the worst slump in five years. South Korea yesterday lowered its growth forecast for 2008, pointing to the likelihood of slowing exports. Taiwan is also predicting an easing in overseas shipments this year which it said will make its growth target “highly challenging.''

Singapore's services industry climbed 8.3 percent from a year earlier, matching the growth rate in the previous three- month period. Economists said demand for financial services probably eased as the rout in global credit markets increased risk aversion and the city-state's government implemented measures to cool the property market.

Global stock markets have lost $1.6 trillion in value since October and the collapse of the subprime-mortgage market in the U.S. triggered more than $80 billion in writedowns among the world's largest banks.

“Singapore's financial services industry has been affected by the shadow of the subprime problem,'' Seah said. “Investors are more cautious and that has slowed down activity.''

The island's burgeoning construction industry prevented a wider contraction in the economy last quarter as companies such as Exxon Mobil set up new plants and property developers build new office towers and condominiums. Southeast Asia's fourth-largest economy reported a record S$16 billion ($11 billion) in fixed-asset investments last year. Construction surged 24.4 percent from a year earlier, after a revised 19.2 percent gain in the three months ended September.

The economy advanced 7.5 percent in 2007, easing from a 7.9 percent rate of expansion the year before. The government expects growth to be between 4.5 percent and 6.5 percent in 2008.

Singapore's growth had raised concern the economy is overheating, with consumer prices rising at the fastest pace in more than 25 years. Policy makers expect inflation to be between 3.5 percent and 4.5 percent this year, accelerating from a forecast average of 2 percent in 2007.

Will Singapore government implement strategies to overcome the slow growing economy?

Is the Singapore Airlines deal set to collapse?

Li Fenghua, Chairman of China Eastern Airlines, the nation's third-largest airline, comments on its share price and the possibility of minority shareholders voting against a deal with Singapore Airlines. China Eastern plans to sell a 24 percent stake to Singapore Airlines and parent Temasek Holdings, pending an approval of minority shareholders including Air China’s parent. The parent of Air China, a larger rival of the Shanghai-based China Eastern, may consider voting against the deal on Jan. 8 with a 10 percent stake in the company.

On Air China's possible bid: “I understand some company is trying to keep its own monopoly in the market and cause some misunderstanding in media and public. It's not practical to raise the so-called bidding plan without government approval first. Plan with details is surely different from illusion. “The deal with Singapore Airlines and the government is fair and I believe our brother company won't vote against it for the interest of the industry. The government will have control on Air China's move finally. Air China parent will vote for the plan.”

On share price: “I'm confident that our shares will catch up with those of Air China and China Southern Airlines after the capital injection helps improve our business. If the deal fails to get minority shareholder's approval, short-term investors will surely lose, as we need even longer time to go through all these procedures once again.” On consolidation of China's Big Three airlines: “For a certain period of time, the government would like to see the Big Three operate in the nation's three aviation hubs. Cooperation and competition should exist for healthy development of the industry and customers.”

Will there be repercussions for Air China in their possible bid?

Is Singapore turning into a regional hub for foreign companies to open their companies here?

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?

Why is ComfortDelGro revising its taxi fare structure?

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.

And the CBD surcharge will go up from the existing $1 to $3. Many drivers are reluctant to enter the city area during the evening ERP hours on an empty cab as they are not willing to pay the charges. To provide drivers with the added incentive to do so, ComfortDelGro will give all drivers who are unable to get a passenger within 15 minutes of entering the ERP zone an ERP rebate. This is possible through the use of ComfortDelGro's Escalade and location tracking system.

For travel from midnight till just before 6am, instead of the gradual buildup in surcharge, it will be simplified to a flat 50 per cent of the metered fare. However, the booking fee during peak hours will be reduced by $0.50 to $3.50. The booking fee remains at $2.50 for non-peak hours. As an example, ComfortDelGro says a 9-kilometre trip off-peak will cost $8.40 (a 10% increase from the current $7.65) while a trip of the same distance during peak hours will cost $11.40 (a 49% increase from the current $7.65).

ComfortDelGro says the fare changes are the result of an in-depth review of the industry by the Group, which took into account suggestions and feedback from the public. The changes also took into account feedback from taxi associations, taking into consideration the higher operating costs of taxis. Also, it addressed commuters' concern on the difficulty in getting a cab in the city in the evening while encouraging call bookings to better match the demand and supply of taxis. ComfortDelGro says it will not raise rental fees for its taxis, following the fare adjustment.

The Taxi Operators' Associations, in its response, called the fare revision fair and timely. This is in view of the rapidly rising operating cost, especially the price of diesel and the increase in the Goods and Services Tax. It believes that overall taxi metre fare should reflect the operating cost of the taxi business, and the primary consideration is the income stability of the taxi drivers when fare adjustments are made. TOA urges the other taxi companies to adjust their taxi fares as soon as possible.

How will these new changes affect the consumers' hip-pocket?

Is Singapore the new melting pot for international research and development?

With more than 2,700 Indian firms operating in the country, Singapore has emerged as the favourite destination for Indian domestic corporates looking to internationalize their business. While bilateral trade between the two nations has gone up as expected post-Comprehensive Economic Cooperation Agreement (CECA) in 2005, it is Singapore's might as a leading hub for innovation and research and development (R&D) that has attracted Indian companies to set up shop there.

"Singapore is increasingly being used as a platform for Indian companies looking to internationalize their business, with the number of Indian companies venturing there growing at an annual rate of about 10 percent," said International Singapore Economic Development Board Director (Asia Pacific) Aylwin Tan, "The number has more than doubled in just five years from 1,100 in 2001 to more than 2,800 companies as of the third quarter in 2007, making India the fourth largest contingent of foreign companies in the city nation."

Most of the companies that have invested there are either Information Technology (IT) companies or manufacturing firms largely dependent on technology. Some of the Indian prominent companies that have invested there include Tata Consultancy Services (TCS), Tata Steel, Tata Precision (TPI), Satyam Computers, NIIT Technologies, Tech Mahindra and Godrej.

The surge in bilateral trade and the fact that India-Singapore is the first and so far the only fully operational CECA has helped increase investor confidence. Bilateral trade has tripled in the past five years from 6.9 billion U.S. dollars (186 billion Indian rupees) in 2001 to 19.9 billion U.S. dollars (537 billion Indian rupees) in 2006.

India has emerged as the fastest-growing trading partner for Singapore and is now its 12th largest trading partner. Singapore was India's third largest export destination and fourth largest investor in 2006, with cumulative investments of 1.56 billion U.S. dollars (61 billion Indian rupees) since August 1991. In 2006 alone, Singapore's total investments amounted to 620 million U.S. dollars (24,462 million Indian rupees), comprising 5.6 percent of all FDI into India.

Singapore's free trade agreements (FTAs) with other countries are an added bonus. The U.S., Japan, Australia and South Korea are among the 13 countries it has FTAs with and another is being negotiated with China. "For four decades, Singapore has been the gateway for international companies, especially those from the United States, Europe and Japan to venture into Asia. Now it is playing that role also for Asian companies internationalizing. As a result, more than 12,000 U.S., European and Japanese companies, and more than 14,000 from India, China, the ASEAN and Australia are here. They represent interests and opportunities from all corners of the world," Tan said.

What price will Singapore pay in becoming the hub of all things important?

Has Temasek’s move undermined Bank of China’s credibility?

Bank of China posted its biggest drop in more than three weeks in Hong Kong trading after Singapore's Temasek Holdings sold part of its 4.6 percent stake in China's third-largest bank. Singapore's state-owned Temasek is selling 1.08 billion Bank of China shares at HK$4.09 to HK$4.12, according to investors, raising up to HK$4.46 billion ($573 million).

Temasek is trying to “reduce the exposure in financial holdings and not to be a substantial shareholder of any big company,'' said Ronald Chan, who manages $3 billion of Asian equities at Fortis Investment Management in Hong Kong.

Bank of China has gained 36 percent in Hong Kong and more than doubled in Shanghai since its debut in 2006, catapulting its market value to $196 billion, more than that of Citigroup Industrial & Commercial Bank of China, China Construction Bank and Bank of China are among the world's top four banks by that measure as the nation's economic growth fuels demand for loans while global peers suffer from the U.S. subprime meltdown.

The sale will reduce Temasek's stake to 4.1 percent. Financial services companies made up 38 percent of Temasek's portfolio of more than $100 billion at the end of March, compared with 35 percent a year earlier. The Singapore investment company confirmed the number of shares it's selling, declining to provide details on the price.

Temasek, which owns its BOC stake through its unit Asia Financial Holdings, now known as Fullerton Financial Holdings, is Bank of China's fourth-largest shareholder after Central Huijin Investment, HKSCC Nominees and Royal Bank of Scotland Group.

“We review our portfolio from time to time and may rebalance it against new opportunities,'' Yap Chwee Mein, Temasek's managing director of investment and China said. “We remain optimistic on China's long-term potential.''

Will other companies buy the shares that Temasek sold as China’s economy pick up quickly?

Are Indonesia’s capricious policies going to cost them their transoceanic investors?

Singapore investment company, Temasek Holdings is required to sell its indirect stake in either PT Telekomunikasi Selular (Telkomsel), or PT Indosat Tbk (Indosat) within two years. Telkomsel and Indosat are the leading and second ranking cellular operators in Indonesia, with subscriber market shares of 56% and 26% respectively at end-June 2007. Singapore Telecommunications (Singtel) is 56.1% owned by Temasek, and which in turn holds a 35% stake in Telkomsel. Temasek's stake in Indosat is held through its wholly-owned subsidiary ST Telemedia, which holds 75% in Asia Mobile Holdings, which in turn holds 40.8% in Indosat.

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 Indonesia, on the grounds of its ownership in two companies that control over 50% of their market segment. The ruling also implied allegations of price-fixing, stating that Telkomsel had abused its dominant market position by charging excessively high tariffs. A fine of IDR25 billion or around USD2.7 million each has been levied on Temasek and Telkomsel, as well as eight Temasek affiliates named in the case. In addition, Telkomsel has been ordered to reduce cellular tariffs by 15%.

The aforementioned ruling and associated penalties are not legally binding until endorsed and upheld by a superior court in Indonesia. Temasek and other named parties has seeked for an appeal against the ruling, and in this regard, there is a precedent of Indonesian courts moving to invalidate KPPU decisions. For example, in March 2006, the KPPU charged PT Semen Gresik (Persero) with violation under the same law, levying a fine of IDR1.0bn. The company subsequently filed an appeal in the Surabaya District Court, which accepted the objection and ruled to cancel the KPPU's decision. As the matter stands, the case is pending judgment on a counter-appeal filed by the KPPU in the Supreme Court of Indonesia.

Moreover, and as the above example illustrates, the legal process tends to be protracted in Indonesia, and it could take a year or more before a final and binding decision is reached. In the interim, a negative reaction to the KPPU's ruling by the Indonesian financial and/or political community, reflecting concerns over the potential impairment of foreign direct investment flows into the country, could influence the outcome of the process in a more positive direction for the various companies affected by the ruling.

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?

Is Singapore trying to hop onto the China’s fast-growing economy?

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?

Will DBS bid for TMB resemble what happened between Temasek and Shin Corporation?

Will DBS bid for TMB resemble what happened between Temasek and Shin Corporation?

Deutsche Bank and DBS Group Holdings made a counter offer for new shares being sold by TMB Bank, the Thai bank said, in an attempt to trump a bid by ING Groep NV.

TMB's board is reviewing the joint proposal and may identify the winning bidder today, Chairman Somchainuk Engtrakul said by phone from Bangkok. The bank, Thailand's fifth-largest, is planning to sell 35 billion baht ($1 billion) of new shares to stakeholders, an amount almost equivalent to TMB's market value.

ING and DBS are vying for the stake as TMB rebuilds its capital and adds more branches and services. TMB, formerly known as Thai Military Bank, also needs the funds as it sets aside more for bad loans after Thailand's consumer confidence fell to a five-year low following a military coup last year.

“TMB may not be a strong bank in Thailand, but it's not terrible,'' said Korawut Leenabanchong, who helps manage the equivalent of $2.5 billion at UOB Asset Management (Thai) in Bangkok. “It has branches to build banking services on.'' ING spokeswoman Karen Williams, Deutsche Bank's Mike West and Eileen Lau from DBS declined to comment.

DBS is TMB's second-largest shareholder with a 16.1 percent stake, and Thailand's Finance Ministry is the biggest investor. The stock purchase is a reversal of DBS's decision to hold back on additional investments in TMB, as Singapore's biggest bank seeks greater control. It will also give Deutsche Bank, Germany's largest, a presence in Thailand's commercial banking industry.

TMB asked the Stock Exchange of Thailand to suspend its share while its board considers a bid from an unidentified group of investors. The board will make a decision and the bank will hold a press conference, Thai Finance Minister Chalongphob Sussangkarn said. “It's not necessary for the board to choose only one partner,'' he said. “It can be mixed. This is up to the board.''

The minister said Oct. 8 that ING, the largest Dutch financial-services company, will invest in TMB after DBS said it won't pump in more funds. DBS said Sept. 19 it decided not to invest further after failing to get assurances that it would have “sufficient management control.''

DBS said in an Oct. 26 statement it took a S$38 million ($26 million) so-called impairment charge on its TMB investment. The Thai bank had posted its biggest quarterly loss in seven years. TMB Bank rose 1.9 percent to 1.58 baht. The stock has fallen 36 percent this year, compared with a 21 percent gain in Thailand's SET Banking Index.

If DBS does win the bid, will the bad blood left behind between the Temasek & Shin Corp saga be factor in its success in Thailand?

Are there enough people for Singapore's workforce?

Singapore's unemployment rate in September fell to a seasonally-adjusted 1.7 percent, a decade low, while employment continued to grow strongly as the economy maintained its rapid expansion, the government said.

Figures from the Ministry of Manpower (MOM) show that the economy created 57,600 jobs in the third quarter, substantially higher than the increase of 43,000 in the same quarter last year but lower than the record gains of 64,400 in the previous quarter. This brought the total employment gains for the first three quarters of this year to 171,500, which is close to the 176,000 for the whole of last year.

The seasonally adjusted overall unemployment rate fell to 1.7 percent in September from 2.3 percent in June, "as more of the unemployed found jobs in the rapidly growing economy," said the MOM.

Compared to a year ago, the unemployment rate has fallen by a full percentage point from 2.7 percent in September of last year. Services continued to lead the employment gains, adding 34,500 workers in the third quarter. The manufacturing sector posted gains of 11,800. Driven by the growth in building activities, construction raised its workforce by 10,800, continuing the rapid increase of the previous quarter.

On retrenchment, the MOM report said initial findings showed that 1,700 workers were laid off in the third quarter. The majority of the workers retrenched were from manufacturing (1,200), another 500 workers were laid off from the services industries, it said.

After growing 7.9 percent last year, Singapore's economy in the first half of this year got a better-than-expected growth of 7.6 percent, and grew 9.4 percent in the third quarter. Singapore's growth forecast for the whole year by the government is between 7 and 8 percent.

Will the local's booming economy allow more foreign companies to come Singapore to take advantage of the booming economy?

Why is Singapore Airlines Delaying its Virgin Sale?

Why is Singapore Airlines Delaying its Virgin Sale?

Singapore Airlines has postponed the sale of its 49 per cent stake in Virgin Atlantic because of turbulence in the financial markets.

Sources close to the company have confirmed that the recent credit crunch in world banking would delay a decision on offloading the stake, which could be worth up to £1 billion.

Singapore Airlines bought the stake from Sir Richard Branson in 1999 for £600 million, but said three months ago that it was considering whether to remain a shareholder in the British airline. Sir Richard is thought to have a preemptive right to buy back the shares, but Singapore has also considered selling to a private equity firm or even another airline.

Because of the turmoil in financial markets the airline is thought to be concerned that it will not get the best price for its stake. It will remain a shareholder in Virgin, therefore, until early next year, at least. Industry sources suggested that Singapore Airlines may choose to drop the sale completely as it focuses on expanding in Asia.

The company bought its stake in Virgin because it wanted access to the transatlantic route between Heathrow and New York. As a Singaporean company, it could not offer its own service between Europe and the United States. However, two weeks ago the British and Singaporean governments agreed to remove restrictions on air travel, which will allow Singapore to offer services from London to New York.

Analysts had been speculating that Singapore Airlines would drop the Virgin stake once this agreement was in place and launch its own transatlantic service.
Singapore Airlines, regularly voted one of the world’s best airlines, is particularly focused on growing in China and has taken a 24 per cent stake in China Eastern Airlines.

Singapore Airlines was not available for comment. A spokesman for Virgin said: “They have been a valuable shareholder and any decision on their stake is a matter for Singapore Airlines.”

Is turbulence in the financial market the only reason why Singapore Airlines is delaying the sale of its stake in Virgin Atlantic?