Government to take over SMRT’s rail assets
SMRT will transfer its rail assets to the government for S$991 million or S$1.06 billion after GST, subject to shareholder approval. After discussions began in 2011, the Land Transport Authority (LTA) has arrived at an agreement with SMRT Trains on the New Rail Financing Framework (NRFF) to transfer the ownership of the North-South and East-West Lines, the Circle Line and the Bukit Panjang LRT; the operating assets include the trains, signalling system and maintenance equipment. Under SMRT Trains’ new NRFF licence, it will operate the above lines for 15 years from Oct 1, 2016 with the possibility of a five-year extension – much shorter than the original 30 to 40 years.
Box traffic set to dip in Singapore
Not everyone can be a winner when the world becomes smaller or flatter. The opening of the newly expanded Panama Canal makes possible shorter voyages for large ships servicing Asia-US East Coast trade. Yet, this would see cargoes being diverted from competing trading routes, including those via the Suez Canal. What may follow from the rationalisation of cargo flows is a dip in container throughput for Asia-USEC trade at the Singapore port, according to analysts.
Motor sales power May’s retail sales growth to 3%
Singapore retail sales for the month of May rose 3 per cent from a year ago, said the Department of Statistics (DOS) on Friday. The total retail sales value in May 2016 was estimated at S$3.7 billion, higher than the S$3.6 billion in the year before. However, if motor vehicles – which recorded another double-digit increase in sales (35.9 per cent) – are stripped out, retail sales slumped by 3.3 per cent. Economists are not particularly shocked by the negative figure, given that consumers have tightened their purse strings amid an uncertain economic outlook.
CEOs appointed for two new statutory boards
The government on Friday announced the appointments of the two men who will lead two new statutory boards – SkillsFuture Singapore (SSG) and Workforce Singapore (WSG) – when these organisations are established later this year. Ng Cher Pong, the current chief executive of the Singapore Workforce Development Authority (WDA), will be the chief executive officer of SSG. SSG will be under the purview of the Ministry of Education (MOE). The Council for Private Education, which regulates Singapore’s private-education sector, will be subsumed under SSG.
Good response for urbanisation forum
The three-in-one mega urbanisation forum which ended on Thursday met with good response from exhibitors, sponsors, mayors and delegates, who praised the event for being professionally organised, forward-looking and offering very current and relevant discussions and ample opportunities for networking. Across the three events – World Cities Summit (WCS), Singapore International Water Week (SIWW) and CleanEnviro Summit Singapore (CESS) – smart technology also featured strongly, this being the first event since Singapore rolled out its Smart Nation vision in November 2014. Together, more than 21,000 participants from 115 countries attended – more than 2014’s attendance of over 20,000.
Singapore Real Estate
New sales of private homes up 10% in H1
Developers’ new private home sales halved to 536 units in June from 1,058 units in May as new launches dried up amid the June school holidays. However, some market watchers gleaned several positive signals from the Urban Redevelopment Authority’s data released on Friday, lending support to their view that the market is close to bottoming out. The June sales figure is 42.9 per cent higher than a year ago, signalling a more positive outlook, said JLL national director Ong Teck Hui.
ION Orchard ups its F&B game
With so much food-and-beverage competition, ION Orchard is ramping up its efforts by refurbishing its food court with new F&B options to make the mall a stronger dining destination. To satisfy the appetites of Singapore’s food lovers, the renovated Food Opera continues to offer local favourites like Pepper Lunch, but it also introduces exclusive menu items such as the Singapore Chilli Crab Pepper Rice, which is available only at ION Orchard.
FCT declares 3.04 cents for Q3 DPU
Notwithstanding a decline in revenue amid headwinds in the retail sector, Frasers Centrepoint Trust (FCT) still declared a distribution per unit (DPU) of 3.04 Singapore cents for the third quarter ended June 30, 0.1 per cent higher than a year ago. The distribution to unitholders includes S$2.1 million from cash retained in previous quarters. Net property income (NPI) slipped 5.1 per cent to S$31.2 million on the back of lower gross revenue, which fell 4.4 per cent to S$45 million during the quarter.
SPH Q3 profit falls 46.4% on impairments in magazines
Singapore Press Holdings’ (SPH) net profit fell 46.4 per cent to S$52.7 million, or three Singapore cents per share, for its fiscal third quarter after the group made significant impairments due to a weak magazine business. For the nine months ended May 31, net profit was down 20.7 per cent at S$237.2 million, or 12 cents per share, the media and property group announced after the market closed on Friday. SPH is the parent company of The Business Times. SPH shares closed at S$4.07 on Friday, up one per cent or four cents, before the results were announced.
Director buying falls, selling stays low
Buying fell for the second straight week while selling among directors remained low based on filings with the exchange from July 11 to 15. A total of eight companies recorded 17 purchases worth S$0.92 million versus two firms with two disposals worth S$1.24 million. The number of companies and trades on the buying side were down from the previous week’s four-day total of 12 firms and 18 acquisitions. The buy value, however, was up from the previous week’s purchases worth S$0.76 million. On the selling side, the number of companies and trades were not far off from the previous week’s two firms and three disposals while the sell value was sharply down from the previous week’s sales worth S$2.66 million.
Views, Reviews & Forum
So you want to go en bloc…
When Chinese developer Qingjian Realty signed a conditional contract to buy the 358-unit Shunfu Ville for $638 million in May, some believed this could herald the dawn of a new wave of collective sales in Singapore. Under Section 84A of the Land Titles (Strata) Act (LTSA), if the sale en bloc is supported by 80 per cent of the development’s owners (in terms of both share value and strata area) and the development is at least 10 years old, owners can receive an order of sale from the Strata Titles Board or the High Court. But owners should be mindful of the salient issues before launching such a sale.
E-commerce putting heat on hotels, real estate market
Singapore has too many shopping malls in an age of rising e-commerce, and the changing nature of employment is threatening the office space market. So far, the only property segment that has not been “disrupted” is residential, says investment group CLSA. In fact, the rise of room-rental booking site Airbnb has “dislocated value away from hotel assets towards residential assets”, noted CLSA head of Singapore research Jonathan Galligan. “Airbnb is a very good example of how disruption is dislocating asset values,” he said, because when hotel room rates get displaced by short-term rents, hotel and residential yields change. While CLSA expects a regulated short-stay market here to have very little impact on the residential property market, it believes Airbnb and Airbnb-like websites pose a clear threat to hotels and hotel owners.
Do more to ensure safety of buildings
The recent case of a row of glass panels falling off the fifth floor of a relatively new condominium (“Loud shattering sound as condo pool’s glass panels crash down”; last Saturday) raises concerns about the standard of buildings in Singapore. As more small developers sprout up here and foreign players enter the industry, what has been done to ensure that their developments adhere to the safety standards? Who ensures that developers do not cut costs at the expense of safety to maximise their margins? Currently, the Building and Construction Authority (BCA) has the Quality Mark and Conquas to assess the quality standard of developers. However, both schemes are voluntary, and many developers do not apply to be assessed.
Riding on the Belt and Road Initiative
As announced in 2013 by Chinese President Xi Jinping, the Belt and Road Initiative brings together the strength of the economies within its frames and has made great strides with mutual development. In 2015, Singapore contributed more than 80 per cent of the total investment from the Belt and Road countries to China, and was also one of the largest destinations for China’s investments. The bilateral relations between Singapore and China has entered into a new phase, a partnership of all-round cooperation.
Private estate residents say unfair to introduce paid parking outside their houses, but others say roads are public spaces
Pay to park outside their landed homes? Not fair, said most of the residents who spoke to The Sunday Times. The issue over whether landed home owners should pay for parking their cars on public streets outside their houses has come up again after it was announced last month that public car park rates were set to rise from December. Short-term parking fees will go up from $1 to $1.20 an hour outside the restricted zone (RZ) in the city area.
Is Singapore Inc destroying value?
Some Singapore-listed companies have faced declining returns on assets and invested capital since 2010, with returns reaching their lowest level in over a decade last year, a new report has found. This raises the question of whether these companies may be destroying value rather than creating it, said a report by CLSA, a brokerage and investment company. “The compression of returns on invested capital has now reached a stage where Singapore companies are generating returns below their weighted-average cost of capital, which implies they have been destroying value,” Mr Jonathan Galligan, head of Singapore research at CLSA, told The Straits Times earlier this month.
Asean – the new growth frontier
The modest two-storey facade of Fassler Gourmet’s food factory in Woodlands Terrace belies the home-grown seafood and soup manufacturer’s reputation as one of the largest suppliers of smoked seafood in Singapore. For more than 20 years, the company, set up in 1991, had been content to cater solely to the domestic market. It counts among its customers all major hotels here, along with big-name restaurants and supermarkets such as Cold Storage and NTUC FairPrice. But last year, it made the move to sell its products outside Singapore – to countries such as Brunei, Cambodia, Indonesia and Malaysia – and that has opened up a world of possibilities.
MAS lowers capital provisions for insurers
Insurers here have succeeded in persuading the industry regulator to relax, somewhat, the capital requirements contained in a proposed revised framework applying to the sector. The Monetary Authority of Singapore (MAS) said the recalibration downwards of the capital requirements is in line with industry feedback – and more accurately reflects risks to insurers. “Insurers in Singapore are well capitalised,” said Mr Chua Kim Leng, MAS assistant managing director of banking and insurance. “The review is not to raise regulatory capital requirements but to ensure that our framework for assessing capital adequacy better reflects an insurer’s activities and risk profile,” he added. The move was among key revisions to the Risk-Based Capital (RBC) framework for insurers proposed by the MAS in its third consultation paper published yesterday following industry feedback.
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