DAILY NEWS

Daily News – 21st February 2017

Top Story

Budget takes firm aim at Singapore’s future economy
Singapore on Monday unveiled a Budget to decidedly realign its economy with medium-term restructuring plans, while soothing near-term worries and shoring up social support measures to tackle demographic challenges. In his 90-minute speech to Parliament, Finance Minister Heng Swee Keat sharpened his focus on future challenges that Singapore will face. With economic growth surprising on the upside last year, Singapore’s Budget 2017 looks ahead by earmarking S$2.4 billion to roll out multi-year schemes in response to proposals from the recent report of the Committee on the Future Economy (CFE).
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/budget-takes-firm-aim-at-singapores-future-economy
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/businesses-to-get-s14b-boost-cit-rebate-extended-to-ya2018
http://www.straitstimes.com/singapore/a-budget-for-today-and-tomorrow?login=true
http://www.straitstimes.com/business/fund-to-boost-innovation-in-construction-sector
http://www.channelnewsasia.com/news/singapore/budget-2017-five-key-economic-and-social-measures/3534844.html
http://www.todayonline.com/singapore/decisive-action-needed-re-position-singapore-future-heng-swee-keat
https://www.bloomberg.com/news/articles/2017-02-20/singapore-s-2017-budget-in-five-charts-shows-growth-challenge

Higher grants for first-time buyers of HDB resale flats
A young couple buying a resale HDB flat for the first time will be enjoying higher subsidies of up to S$50,000 from today. And piling on the additional CPF Housing and Proximity Housing grants would mean the couple getting up to S$110,000 in subsidies. Announcing this in his Budget statement yesterday, Finance Minister Heng Swee Keat said this measure, which helps to keep Singapore “a great place for families”, is expected to cost the government an additional S$110 million a year.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/higher-grants-for-first-time-buyers-of-hdb-resale-flats
http://www.businesstimes.com.sg/real-estate/singapore-budget-2017/enhanced-grants-expected-to-lift-resale-hdb-market
http://www.straitstimes.com/singapore/resale-flats-first-time-buyers-get-higher-subsidies
http://www.straitstimes.com/business/hdb-households-to-get-extra-help
http://www.todayonline.com/singapore/higher-cpf-housing-grant-more-childcare-places-support-families

Singapore Economy

Q4 domestic wholesale trade stays flat
Singapore’s domestic wholesale index remained flat in the fourth quarter of 2016 compared to a year ago, data released by the Department of Statistics showed on Monday. With petroleum stripped out, domestic wholesale trade fell 3.7 per cent. Overall, domestic wholesale trade declined 7.4 per cent year-on-year after adjusting for price changes. Compared to the third quarter of 2016, domestic wholesale trade grew a seasonally-adjusted 10.3 per cent in the fourth quarter of 2016, partly due to higher prices of petroleum and chemical products. Excluding petroleum, domestic wholesale trade rose 5.3 per cent.
http://www.businesstimes.com.sg/government-economy/q4-domestic-wholesale-trade-stays-flat
http://www.straitstimes.com/business/domestic-wholesale-trade-grows-by-103-in-q4

Breathing life into CFE strategies
Finance Minister Heng Swee Keat said on Monday that the government has earmarked S$2.4 billion to put into action the strategies of the Committee on the Future Economy (CFE) in the next four years. While not all seven of the CFE’s strategies are targeted directly at it, they all in one way or another support the key recommendation to get Singapore more plugged into the global economy. In presenting the government’s Budget 2017 statement, Mr Heng said the S$2.4 billion will be “over and above” the S$4.5 billion put aside last year for the Industry Transformation Programme. The latter will get another S$1 billion injection this year through a S$1 billion top-up in the National Productivity Fund.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/breathing-life-into-cfe-strategies

Road maps to transform 17 industries on the way
Industry transformation was one of the centrepieces of last year’s Budget, and Singapore is not dropping the pace of such efforts this year. Over the next 12 months, 17 industry-specific blueprints will be released, outlining the Republic’s jobs and growth strategy for various clusters. These will target the marine and offshore, construction, transport, healthcare, education, financial services and professional services sectors, among others. “The industry transformation maps are integrative platforms, bringing together various stakeholders – trade associations and chambers, unions, and Government – so as to align our efforts around a common plan to transform each sector,” said Finance Minister Heng Swee Keat in his Budget speech yesterday. “We will keep this going at a good pace.”
http://www.straitstimes.com/business/road-maps-to-transform-17-industries-on-the-way?login=true

New co-investment fund to help businesses go overseas
Up to S$600 million in government capital will be co-invested with Singapore-based enterprises in a new International Partnership Fund (IPF) to help them scale up and internationalise, Finance Minister Heng Swee Keat said on Monday. The amount will be managed by Heliconia Capital Management, a subsidiary of state investment company Temasek Holdings. With a focus on Asian markets, the joint investment would enable local firms to partner other Asian companies to either extend product lines, brands or value chains, or to gain access to markets, channels and technologies.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/new-co-investment-fund-to-help-businesses-go-overseas

No wealth taxes yet; govt looking at new or higher taxes
There were no wealth taxes announced in Monday’s Budget, but observers say it’s likely to come, just a matter of when, as Singapore spends more on healthcare and infrastructure. Indeed Finance Minister Heng Swee Keat said his ministry is studying new taxes or raising tax rates. “Domestically, we will also face rising expenditures over the longer term as we invest more in healthcare and infrastructure,” he said.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/no-wealth-taxes-yet-govt-looking-at-new-or-higher-taxes

Big emitters face carbon tax from 2019
Singapore will impose a carbon tax of between S$10 and S$20 on each tonne of greenhouse gas emitted by power generation plants and other large emitters from 2019. Announcing this on Monday, Finance Minister Heng Swee Keat said that the final carbon tax and exact implementation schedule will be decided after industry and public consultations, as well as further studies. “(A carbon tax) will help us to achieve our commitments to reduce emissions under the Paris Agreement, do so efficiently and at as low a cost to the economy as possible,” he said. “This may also spur the creation of new opportunities in green growth industries such as clean energy.”
http://www.businesstimes.com.sg/government-economy/singapore-budget-2017/big-emitters-face-carbon-tax-from-2019

Singapore Real Estate

Strong demand for 5-room BTO flats in Punggol
It is his fifth time applying for a Build-To-Order (BTO) flat but the chances of Mr Ang Teck Peng, 44, getting his desired five-room unit in Punggol are slimmer than before. Five-room flats at Punggol Northshore Cove had the highest demand as of 5pm yesterday, with 878 applicants vying for just 170 units. This works out to more than five hopeful buyers for each unit.
http://www.straitstimes.com/singapore/housing/strong-demand-for-5-room-bto-flats-in-punggol

Ex-property agent pocketed $220,000
A former freelance property agent, who conned four victims into investing money in overseas properties or a business in Dubai, was sentenced to three years and two months’ jail yesterday for cheating and forgery. Shakir Khan, 56, an undischarged bankrupt, was also fined a total of $23,000 or 11 weeks’ jail in default for unlicensed and unregistered estate agency work. He faced 17 charges under the Penal Code for cheating the victims of $224,240, and five under the Estate Agents Act.
http://www.straitstimes.com/singapore/ex-property-agent-pocketed-220000

Companies’ Brief

AVJennings’ H1 FY2017 earnings drop 14.4%; revenue down 16.6%
Australian residential property developer AVJennings on Monday reported a 14.4 per cent drop in net profit to A$14.1 million (S$15.3 million) for the six months ended Dec 31, 2016, as revenue took a hit. The net profit for H1 FY2017 also included a net A$3.5 million release of impairment provision predominantly driven by projects in New South Wales and South Australia, which was moderately higher than the impairment released in the first half of financial year 2016.
http://www.businesstimes.com.sg/companies-markets/avjennings-h1-fy2017-earnings-drop-144-revenue-down-166

GLP secures new leases with third party logistics firms in China
Mainboard-listed logistics facilities provider GLP on Tuesday said that it has signed 106,000 sq m (1.1 million sq ft) of new leases with third party logistics companies in China over the past two months. The customers are serving domestic distribution demand from the express delivery and less-than-truckload sectors, it said in a filing to the local bourse. With these leases, GLP establishes a new customer relationship with Yimidida, while extending partnerships with three existing third party logistics customers, including Best Logistics.
http://www.businesstimes.com.sg/companies-markets/glp-secures-new-leases-with-third-party-logistics-firms-in-china
http://www.straitstimes.com/business/companies-markets/glp-signs-106000-sqm-of-leases-with-service-providers-in-china

Oxley CEO and deputy CEO terminate loan agreement with IHC
International Healthway Corporation (IHC) has had its convertible loan facilities from Oxley Holdings and its chief executive and deputy chief executive terminated, after the duo sold their stakes to developer OUE. In a filing on Singapore Exchange on Monday evening, IHC said it had received a letter from all three parties on Feb 19 to terminate the term sheet for the loan with immediate effect in view of the takeover offer from OUE.
http://www.businesstimes.com.sg/companies-markets/oxley-ceo-and-deputy-ceo-terminate-loan-agreement-with-ihc

Saizen Reit’s manager stresses proposed RTO not done deal
The board of directors of Japan Residential Assets Manager Limited, manager of Saizen Reit (real estate investment trust), on Monday told unitholders that there is no certainty that a circular containing information of its proposed reverse takeover (RTO) would be issued. In October 2016, the Reit had gone into an implementation agreement for the proposed acquisition of industrial properties in Australia, as well as a RTO of the Reit by Sime Darby Property Singapore Limited.
http://www.businesstimes.com.sg/companies-markets/saizen-reits-manager-stresses-proposed-rto-not-done-deal

Views, Reviews & Forum

Building capacities for the future
The 2017 budget presented in parliament yesterday by Finance Minister Heng Swee Keat was widely expected to be a follow-up to the recent report of the Committee of the Future Economy (CFE), of which Mr Heng was the co-chair. It has delivered on that promise. At its core, it is a budget aimed at building some of the capacities needed for Singapore’s economic transformation, and it ticks many of the boxes consistent with that goal. It is also very SME-focused – which is appropriate, as these are the companies that most need help to transform and grow in a changing economy.
http://www.businesstimes.com.sg/opinion/singapore-budget-2017/building-capacities-for-the-future

Budget 2017: A clear shift towards targeted measures
Those expecting “big-bang” tax policies in Budget 2017, on the back of a report issued by the Committee on the Future Economy (CFE) may have been disappointed. From a tax perspective, the most notable change appears to be the introduction of a patent box regime to incentivise intellectual property income which is in line with the substance-driven and development-linked approach introduced under the OECD Base Erosion and Profit Shifting (BEPS) Project.
http://www.businesstimes.com.sg/opinion/singapore-budget-2017/budget-2017-a-clear-shift-towards-targeted-measures

Singapore builders could be the next cause for bank pain
Investors bemoaning Singapore banks’ fraught relationship with oil-services companies may be overlooking another brewing area of trouble – building and construction firms. Property developers in the city-state seem fine but their contractors are hurting after almost five years of real-estate curbs. Suppliers are getting worried.
http://www.businesstimes.com.sg/companies-markets/singapore-builders-could-be-the-next-cause-for-bank-pain

In a class of its own
Land scarcity, a high population density, growing household wealth and limited supply are the primary reasons that make landed property a coveted asset in Singapore. Over the past five years, the number of landed residential properties has increased by 3.6 per cent to 72,501 units, comprising less than one third of the stock of non-landed properties. Good Class Bungalows (GCBs) represent the apex of the landed segment. The Urban Redevelopment Authority defines a GCB as land that is 1,400 square metres (approximately 15,000 square feet) or more, and located in any one of 39 GCB areas gazetted by the government.
http://www.businesstimes.com.sg/magazines/wealth-february-2017/in-a-class-of-its-own