DAILY NEWS

Daily News – 3rd, 4th and 5th March 2018

Singapore Economy

Recent market volatility unlikely to derail IPO gravy train
The market volatility of the past two months is unlikely to put pause to the favourable initial public offering (IPO) outlook for the Singapore Exchange this year, with investment bankers seeing companies from the healthcare, food and beverage, infrastructure and Reits sectors in the pipeline. Besides the resilient nature of these businesses, the rosy outlook for the global economy would support equity markets, they say.
http://www.businesstimes.com.sg/companies-markets/recent-market-volatility-unlikely-to-derail-ipo-gravy-train

Manufacturing expands for 18th straight month, but pace slows
The pace has eased a touch, but the manufacturing sector is still powering along after a rousing start to the year. The key Purchasing Managers’ Index (PMI) – an early indicator of factory activity – came in at 52.7 for last month – the 18th consecutive month of improvement, with more tipped to come.
http://www.straitstimes.com/business/economy/manufacturing-expands-for-18th-straight-month-but-pace-slows
http://www.businesstimes.com.sg/infographics/manufacturing-expands-for-18th-straight-month-in-february-but-pace-of-growth-slows

That S$4.5b MAS contribution
An unusually large contribution from the Monetary Authority of Singapore lifted the nation’s 2017 Budget to a bumper surplus. How did that outsized contribution come about?
http://www.businesstimes.com.sg/infographics/that-s45b-mas-contribution

Reserves cannot be further tapped for healthcare: PM
Singapore cannot draw more from its reserves to fund healthcare spending in the future, as this will quickly deplete its nest egg, said Prime Minister Lee Hsien Loong. The needs of an ageing society are beyond those of “a rainy day”, he said. “It is an ‘everyday need money’ day. We will need to spend more on healthcare every year, year after year, for many years to come.
http://www.straitstimes.com/singapore/reserves-cannot-be-further-tapped-for-healthcare-pm

Singapore Budget 2018: Productivity Solutions Grant to cover six sectors first
An initial S$110 million will be set aside over the next three years for the new Productivity Solutions Grant (PSG), which supports selected productivity solutions in line with Industry Transformation Maps (ITMs). For a start, the grant will cover sector-specific solutions in the retail, food, logistics, precision engineering, wholesale and landscaping industries, the Ministry of Trade and Industry said in a statement yesterday.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2018/singapore-budget-2018-productivity-solutions-grant-to-cover
http://www.straitstimes.com/business/economy/110m-for-new-grant-to-fund-productivity-solutions-in-industries

Singapore Budget 2018: Pact scheme to include tie-ups among SMEs
Partnerships among small and medium enterprises (SMEs) and start-ups will qualify for the integrated Pact programme from April 1, removing the existing requirement for such tie-ups to be between large organisations and SMEs. For this new Pact, the government has allocated S$100 million over the next three years, Minister for Trade and Industry (Industry) S Iswaran said in his ministry’s Committee of Supply debate yesterday.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2018/singapore-budget-2018-pact-scheme-to-include-tie-ups-among

Singapore Budget 2018: Infrastructure Office to be launched in October
As a leading financial centre, Singapore is uniquely placed to address the problems involved in financing infrastructure projects in Asia, said Senior Minister of State for Law Indranee Rajah, explaining the role of the Infrastructure Office which will be launched in October 2018.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2018/singapore-budget-2018-infrastructure-office-to-be-launched
http://www.straitstimes.com/business/economy/a-key-role-in-developing-financing-projects-in-asia

Singapore Budget 2018: No ‘test balloons’ on GST tax hike, says Swee Keat
Finance Minister Heng Swee Keat has asked whether Workers’ Party chairman Sylvia Lim is ready to apologise and withdraw her allegation that the government had floated “test balloons” about the need to raise the Goods and Services Tax (GST). Refuting Ms Lim’s allegation in a statement issued on Friday, Mr Heng maintained that the government has consistently indicated “it has enough money for its current term office, but beyond that, it needed to provide for increased expenditure, especially on healthcare, with increased taxes”.
http://www.businesstimes.com.sg/government-economy/singapore-budget-2018/singapore-budget-2018-no-test-balloons-on-gst-tax-hike-says

Employers to get more flexi-work help: Josephine Teo
Job sharing and other forms of flexible work are set to get a boost here, under an enhanced programme to support family-friendly workplaces. The government will set aside S$30 million over the next two years for the updated WorkPro Work-Life Grant, Minister in the Prime Minister’s Office Josephine Teo said on Sunday.
http://www.businesstimes.com.sg/government-economy/employers-to-get-more-flexi-work-help-josephine-teo

Singapore to pursue deeper ties with EU as Asean chair
The time is right for Asean and the European Union (EU) to pursue greater region-to-region integration, said Minister for Trade and Industry (Trade) Lim Hng Kiang on Friday. In his opening remarks at the 16th Asean Economic Ministers-European Union Trade Commissioner consultations, he said that as Asean chair this year, Singapore will seek to broaden and deepen the region’s engagement with external partners – even as anti-trade sentiments rise around the world and as governments come under pressure over globalisation and free trade.
http://www.businesstimes.com.sg/government-economy/singapore-to-pursue-deeper-ties-with-eu-as-asean-chair
http://www.businesstimes.com.sg/government-economy/eu-hopes-trade-deal-with-singapore-will-enter-into-force-this-year

Singapore Real Estate

FEC Properties snags Hollandia collective sale site for S$183.4m
The sale price for Hollandia translates to a land rate of S$1,703 per square foot per plot ratio (psf ppr), said its marketing agent Savills Singapore. In a regulatory filing with the Hong Kong stock exchange, Far East Consortium said it plans to redevelop the site into a high-end residential development with a total gross floor area (GFA) of about 10,000 sq m.
http://www.businesstimes.com.sg/real-estate/fec-properties-snags-hollandia-collective-sale-site-for-s1834m
http://www.straitstimes.com/business/property/fec-properties-buys-hollandia-in-collective-sale-for-1834m

Savills’ new MD sees 10% rental growth for AAA office buildings
Bells are ringing for landlords amid a shortage in supply in the core Central Business District area and increased demand from various industry groups, Savills Singapore’s new managing director Marcus Loo told The Business Times last week.
http://www.straitstimes.com/business/property/savills-new-md-sees-10-rental-growth-for-aaa-office-buildings

3,330 singles handed keys to BTO flats since 2013
When she received her queue number to buy a Build-To-Order (BTO) flat in Punggol, design consultant Felicia Chan did not think she stood a high chance of getting one. “It was quite a high number, considering the number of available units,” said the 40-year-old who applied for the flat in 2014. “I thought I wouldn’t get it.”
http://www.straitstimes.com/singapore/housing/3330-singles-handed-keys-to-bto-flats-since-2013

Companies’ Brief

Surbana Jurong guns for S$3.8b in fees in 3-5 years; eyes two architectural firms
The goal posts for Surbana Jurong have just moved by a notch, after initial targets were exceeded earlier than planned on the back of successive acquisitions. Still on a prowl for more acquisitions, the urban and infrastructure consultancy is now aiming for S$3.8 billion in revenue and 20,000 employees globally in the next three to five years.
http://www.businesstimes.com.sg/companies-markets/surbana-jurong-guns-for-s38b-in-fees-in-3-5-years-eyes-two-architectural-firms
http://www.straitstimes.com/business/companies-markets/surbana-eyeing-2-architectural-firms-in-expansion-drive

Impact of World Bank’s sanction on SMEC muted, says Surbana Jurong
The World Bank’s sanction on Australia-based SMEC Holdings, a company owned by Surbana Jurong, will not have a major impact on SMEC as its “dependence on World Bank’s business is small”. But the group is implementing measures to prevent any future wrongdoings, said Surbana Jurong chief executive Wong Heang Fine.
http://www.businesstimes.com.sg/companies-markets/impact-of-world-banks-sanction-on-smec-muted-says-surbana-jurong
http://www.straitstimes.com/business/companies-markets/no-major-impact-from-world-banks-sanction

SingHaiyi aims to build branding as a Singapore company
Singapore-listed SingHaiyi Group is well-aware of industry perception of the group as a foreign-owned developer and hopes to change that with its upcoming residential projects on the collective sale sites that it recently secured.
http://www.businesstimes.com.sg/companies-markets/singhaiyi-aims-to-build-branding-as-a-singapore-company

Frasers Property’s Thai unit prices 3 more debenture offerings totalling up to 5b baht
Frasers Property said on Friday that its subsidiary, Frasers Property Holdings (Thailand), is making three more offerings under its 25 billion Thai baht (S$1.05 billion) debenture programme. They are expected to be issued on March 7.
http://www.businesstimes.com.sg/companies-markets/frasers-propertys-thai-unit-prices-3-more-debenture-offerings-totalling-up-to-5b-0

GIC marks 30 years in Japan with pledge to boost partnerships
GIC recently celebrated the 30th anniversary of its Japan office with the commitment to strengthen partnerships in areas such as specialised manufacturing, technology, infrastructure and real estate. Its chief executive officer Lim Chow Kiat said: “GIC established our on-the-ground presence much earlier than other foreign investors.
http://www.straitstimes.com/business/economy/gic-marks-30-years-in-japan-with-pledge-to-boost-partnerships

Views, Reviews & Forum

The Singapore way of calculating budget balances
Budget 2018 is consistent with the “Singapore way”, namely being sustainable, pro-active and forward looking. The “Singapore way” to ensure fiscal sustainability is to monitor our finances over both the near term and long term. This departs from conventional budgetary accounting laid out in the International Monetary Fund’s (IMF) Government Finance Statistics, a point picked up by some on social media.
http://www.straitstimes.com/opinion/the-singapore-way-of-calculating-budget-balances

Impact of hike in development charge rates
Developers may face greater pressure on margins given the latest hikes in development charges (DC). While this should keep future land bids in check, it could also have an impact on the prices of future projects, if developers are able to preserve their profit margins by launching projects at higher prices.
http://www.straitstimes.com/business/property/impact-of-hike-in-dc-rates

Prepare for supply avalanche as ageing HDB flat owners die
Our rapidly ageing population is very much in the news, with the ongoing debate in Parliament on the Budget and the impact of an ageing society on public finances. Singapore reaches a population milestone in 2018: The total number of senior citizens at 65 years and older equals the number of young people at 15 years and younger.
http://www.straitstimes.com/opinion/prepare-for-supply-avalanche-as-ageing-hdb-flat-owners-die

Funding airport development jointly
Reactions to higher departure fees to be charged by Changi Airport, to help fund its expansion, appear to have clouded the strategic imperative of its large-scale development. That is not to imply the cost concerns of passengers (the charges they face will rise from $34 to $62.30 by 2024) and airlines (they also face fee hikes) are not important.
http://www.straitstimes.com/opinion/st-editorial/funding-airport-development-jointly

Pay as you build
This week’s topic: How do you see Singapore’s infrastructure funding plans? What are the pros and cons of government borrowing to finance long-term mega projects? Is there a role for the private sector?https://www.businesstimes.com.sg/views-from-the-top/pay-as-you-build

How Singapore can gain from Silk Road project
It has been touted as one of the most ambitious plans of the 21st century so far. China’s Belt and Road Initiative has not only gained attention because it spans Asia, Africa and Europe and covers 60 per cent of the world’s population, but also because the participating countries cover around a third of the world’s gross domestic product and world trade.
http://www.straitstimes.com/asia/east-asia/how-spore-can-gain-from-silk-road-project