DAILY NEWS

Daily News – 2nd November 2016

Top Story

Economy’s slowing, but S’pore not in a crisis: PM Lee
Singapore’s economy is running slow, but the country is not in a crisis, Prime Minister Lee Hsien Loong said on Tuesday night. And what is needed now is not an emergency package, but a longer-term strategy for growth, he told 300 labour movement leaders in a closed-door dialogue held in the NTUC Centre in Marina Boulevard. He said that the 2009 financial crisis called for a big rescue package to cut business costs and protect jobs, but this time around, the problem is structural: “It’s not an infection that can be cured with one course of antibiotics, but something that we have to work at over the long term.”
http://www.businesstimes.com.sg/government-economy/economys-slowing-but-spore-not-in-a-crisis-pm-lee
http://www.channelnewsasia.com/news/singapore/singapore-not-in-a-crisis-longer-term-strategy-needed-for-growth/3252426.html
http://www.todayonline.com/singapore/spore-not-crisis-long-term-strategy-structural-problem-place-pm-lee

Singapore Economy

Economists lower growth forecasts for Singapore amid dimming outlook
Following surprisingly downbeat growth figures in the third quarter, a number of economists have cut back their expectations for Singapore’s economy, with DBS being the latest to do so. In a report released on Tuesday (Nov 1), Mr Irvin Seah, a senior economist at DBS Bank, wrote that he now expects the city-state to log economic growth of 1.2 per cent this year, down from a previous forecast of 1.5 per cent. For 2017, Singapore’s gross domestic product (GDP) will likely expand 1.3 per cent, given that the sequential decline in the latest GDP figures has lowered the growth trajectory, wrote Mr Seah. This is another marked downgrade from the economist’s long-standing forecast of 1.9 per cent.
http://www.channelnewsasia.com/news/business/singapore/economists-lower-growth-forecasts-for-singapore-amid-dimming/3251872.html

Private banks lacking scale exit Singapore
Just like real estate is about location, location and location, private banking is about scale, scale and scale – it is what’s needed to cope with the high cost of the business, say industry players. Monday’s surprise move by DBS Bank to snap up most of ANZ’s wealth and retail business in Asia for a bargain-basement price of S$110 million, or 0.5 per cent of the S$23 billion of assets under management, once again hammered home the point that scale is needed to run a private bank.
http://www.businesstimes.com.sg/banking-finance/private-banks-lacking-scale-exit-singapore

Singapore companies have improved risk transparency: ISCA-KPMG study
There have been significant improvements in corporate governance disclosures in Singapore companies since 2013, a study has found, though it underlined the need for more attention to be paid to disclosure on areas not stated in the guidelines. Areas for improvement in disclosure include strategic risk, cyber risk, risk tolerance and fraud risk management, according to the study of over 200-listed companies by the Institute of Singapore Chartered Accountants (ISCA) and KPMG.
http://www.businesstimes.com.sg/companies-markets/singapore-companies-have-improved-risk-transparency-isca-kpmg-study
http://www.straitstimes.com/business/companies-markets/improving-risk-governance-but-culture-still-not-in-place-survey

Singapore Real Estate

S-Reits stay shy of M&A route to growth
Merger and acquisition (M&A) activity in mature real estate investment trust (Reit) markets around the world has picked up through 2015 and 2016, an EY report said on Tuesday. But this trend is less discernible in Singapore, the sixth-largest market globally by market capitalisation. And this has to do with the fact that Singapore Reits (S-Reits) tend to be mostly sponsor-backed and externally managed, unlike in other jurisdictions such as Australia and the US where Reits are more likely to be independent and internally managed.
http://www.businesstimes.com.sg/real-estate/s-reits-stay-shy-of-ma-route-to-growth

GSH Corp said to have bought the top floor of GSH Plaza for S$31m
Sam Goi’s GSH Corporation is understood to have bought up all the nine strata office units on the top floor of the 28-storey GSH Plaza, which is situated next to Republic Plaza in Raffles Place. The company is paying nearly S$31 million, which works out to an average price of S$3,192 per square foot (psf) on a strata area of 9,709 square feet. This is slightly higher than the S$3,055 psf fetched for the 10 strata units that make up the building’s 26th level in June 2015.
http://www.businesstimes.com.sg/real-estate/gsh-corp-said-to-have-bought-the-top-floor-of-gsh-plaza-for-s31m

Tg Pagar Centre game-changer for GuocoLand
GuocoLand, controlled by Malaysian tycoon Quek Leng Chan, recently completed Guoco Tower – the office component of its integrated mixed-development project, Tanjong Pagar Centre, on a 99-year leasehold site above Tanjong Pagar MRT Station. The mainboard-listed property group has announced that 80 per cent of the 890,000 sq ft net lettable area of office space has been committed, that is either leased or subject of advanced leasing discussions. Guoco Tower obtained Temporary Occupation Permit (TOP) in September.
http://www.businesstimes.com.sg/companies-markets/tg-pagar-centre-game-changer-for-guocoland

Lapses by AHTC exposed millions in public funds to improper use: KPMG
Failures in governance at Aljunied-Hougang Town Council (AHTC) exposed millions of dollars in public funds to improper use and application, and could amount to criminal conduct if deliberate, independent auditor KPMG said in a report on the town council’s accounts released on Tuesday. Payments with a total value of at least S$23 million were approved by town council members with a conflict of interest, raising questions on whether they were fully justified. Improper payments totalling some S$1.5 million were also identified, of which at least S$600,000 ought to be recovered, KPMG added.
http://www.businesstimes.com.sg/government-economy/lapses-by-ahtc-exposed-millions-in-public-funds-to-improper-use-kpmg
http://www.straitstimes.com/singapore/governance-lapses-by-ahtc-exposed-millions-in-public-funds-to-improper-use-kpmg-finds
http://www.straitstimes.com/singapore/ahtc-failed-to-address-conflicts-of-interest-says-independent-auditor-kpmg
http://www.channelnewsasia.com/news/singapore/kpmg-notes-serious-flaws-in-ahtc-s-governance/3251878.html
http://www.todayonline.com/singapore/ahtc-made-millions-improper-payments-some-shortcomings-if-deliberate-could-amount-criminal

Companies’ Brief

OUE C-Reit Q3 DPU buoyed by One Raffles Place stake
Office landlord OUE Commercial Reit (OUE C-Reit) posted a 29.4 per cent year-on-year jump in distribution per unit (DPU) to 1.32 Singapore cents for the third quarter ended Sept 30, buoyed mainly by the contribution from its majority stake in One Raffles Place. Net property income and gross revenue more than doubled from a year ago – from S$15.56 million to S$35.33 million, and from S$20.61 million to S$44.18 million respectively. Higher property operating expenses were incurred due to the inclusion of One Raffles Place’s expenses, which were partially offset by lower property tax at OUE Bayfront and lower leasing commissions at Lippo Plaza.
http://www.businesstimes.com.sg/companies-markets/oue-c-reit-q3-dpu-buoyed-by-one-raffles-place-stake

Frasers Logistics & Industrial Trust posts DPU of 1.84 Singapore cents, exceeding forecast
Frasers Logistics & Industrial Trust (FLT) posted a distribution per unit (DPU) of 1.84 Singapore cents for the period June 20 to Sept 30, exceeding its own forecast of 1.79 cents. The newly listed real estate investment trust (Reit) recorded gross revenue of A$43.1 million (S$45.8 million) for the quarter, against forecasts of A$42.7 million, as a tenant was found for the vacant Lot 5 Kangaroo Avenue in April, and two call option properties (Indian Drive and Pearson Road) were acquired one month ahead of forecast.
http://www.businesstimes.com.sg/companies-markets/frasers-logistics-industrial-trust-posts-dpu-of-184-singapore-cents-exceeding
http://www.straitstimes.com/business/companies-markets/in-maiden-results-frasers-logistics-industrial-trusts-dpu-of-184-cents

Views, Reviews & Forums

No guarantee long-term tenants are more considerate
I hope the authorities will approve the short-term rental of homes, facilitated by companies such as Airbnb (“Home sharing still up in the Airbnb“; last Thursday, and “Regulated homestays offer valuable experience” by Mr Francis Zhan; last Friday). I am currently staying in Montreal, Canada, and found my accommodation through Airbnb. “Staying local” has provided a unique experience that no hotel or commercial lodging can match.
http://www.straitstimes.com/forum/letters-in-print/no-guarantee-long-term-tenants-are-more-considerate

Home sharing just a variation of hotel industry
I don’t see how restricting short-term rentals to real estate developments built for this purpose risks turning them into another motel or hostel (“Home sharing still up in the Airbnb“; last Thursday, and “Regulated homestays offer valuable experience” by Mr Francis Zhan; last Friday). The causal link between “home sharing” and tourism growth and cultural exchanges is tenuous at best, especially in a city with an ample supply of quality hotels and serviced apartments, like Singapore. In essence, home sharing is no more than a variation of hotels targeted at tourists.
http://www.straitstimes.com/forum/letters-in-print/home-sharing-just-a-variation-of-hotel-industry