Citigroup has come out to clarify that Singapore will not be significantly affected by the group’s global layoffs.
At a news briefing on Friday, it said that as far as Singapore is concerned, it expects the attrition rate to stay normal.
No bonus cuts are expected and staff will still be paid salary increments.
Citigroup said that overall, Asia including Singapore is positioned for good growth.
Like most big financial names in the US, Citigroup has been hit by the sub-prime mortgage crisis - taking billions of dollars in write-downs.
Citigroup said earlier this week that it was going to cut 4,200 jobs. That sparked speculation that it would reduce headcount in Singapore, but the group stressed that those fears are unfounded.
Piyush Gupta, Country Officer of Citi Singapore, said: “The truth is the large part of this reduction is likely to be in the Western world because growth in Asia has been spectacular and growth in Singapore particularly has been very strong.”
Citi employs close to 375,000 staff worldwide - which means the cuts will affect only about one per cent of its global headcount.
It saw a 33 per cent jump in revenue from the Asia-Pacific in 2007, with profits climbing 46 per cent to US$4.6 billion.
For Singapore alone, revenue rose 35 per cent, while headcount increased by five per cent to 9,000 people. Citi said it is expecting to see growth rates of 20 per cent in Singapore in 2008. - CNA/vm
Source : Channel NewsAsia - 18 Jan 2008
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Tuesday, January 22, 2008
Asian economies face a challenging year in 2008 but as a group they are still expected to show growth of 10 to 12 percent.
Asian economies face a challenging year in 2008 but as a group they are still expected to show growth of 10 to 12 percent.
This is the forecast from HSBC in its latest report on the region.
However, a recession in the US could knock off a few percentage points off Singapore’s economic growth.
With a US recession on the horizon and the US sub-prime mortgage crisis still taking its toll, HSBC is predicting a difficult year for Asia in 2008.
Economies such as Japan and Taiwan are expected to be most cyclically sensitive to the US slowdown. But emerging ones - led by China and India - are forecast to continue booming along.
Garry Evans, Pan-Asian Equity Strategist, HSBC, said: “Well, it’s going to be a difficult year, there is no doubt about that. We’ve got the US slowing - credit crunch out there, everyone is focused on the bad news.
“I don’t think it’s going to be quite as bad as that though because governments are going to react to this bad news. The Fed is going to cut rates in the US - we’ve going to have a fiscal stimulus package there and I think Asian countries are going to grow reasonably stronger this year.
“You’re not going to see that much of a slowdown, particularly in China and India - and if you do see a slowdown, governments here have also got room to cut rates and increase spending.
“So I actually see the Asian markets going up this year - ultimately 10 to 12 percent or something like that. I don’t’ see a bear market but I think it’s going to be a year of ups and downs - your probably going to have to be a little patient to get a return.”
Mr Evans added that inflationary pressure will settle.
He said: “Well, ultimately if we’re seeing global growth slowing, then I think you’re going to see inflation becoming less of a worry during the year. In general, in most places, inflation is still a food phenomenon, and it’s not really showing much signs of coming though to any other areas in the economy.
“We’re all a bit worried about inflation at the minute. Certainly the most worrying scenario is when you have high inflation and slowing growth - in a so called stagflation - and if we have that then we could be in for a very tough ride. But I think generally as growth slows, inflation will come off the radar scene as being a problem.”
Here in Singapore, HSBC says the financial and property sectors will remain positive, but exports will remain susceptible to a US slowdown.
Peter Morgan, Chief Economist, Global Research Asia Pacific, HSBC, said: “Well we are fairly optimistic on Singapore - we think that the strength in loan growth and the strength in the property sector is having a positive impact.
“Growth in Singapore is likely to slow, and Singapore is still a fairly export sensitive country and if the US looses a couple percentage points of growth than that could knock off maybe 3 percentage points on Singapore’s growth.”
HSBC is forecasting the Singapore economy will grow 7.3 percent in 2008. - CNA/ch
Source : Channel NewsAsia - 18 Jan 2008
This is the forecast from HSBC in its latest report on the region.
However, a recession in the US could knock off a few percentage points off Singapore’s economic growth.
With a US recession on the horizon and the US sub-prime mortgage crisis still taking its toll, HSBC is predicting a difficult year for Asia in 2008.
Economies such as Japan and Taiwan are expected to be most cyclically sensitive to the US slowdown. But emerging ones - led by China and India - are forecast to continue booming along.
Garry Evans, Pan-Asian Equity Strategist, HSBC, said: “Well, it’s going to be a difficult year, there is no doubt about that. We’ve got the US slowing - credit crunch out there, everyone is focused on the bad news.
“I don’t think it’s going to be quite as bad as that though because governments are going to react to this bad news. The Fed is going to cut rates in the US - we’ve going to have a fiscal stimulus package there and I think Asian countries are going to grow reasonably stronger this year.
“You’re not going to see that much of a slowdown, particularly in China and India - and if you do see a slowdown, governments here have also got room to cut rates and increase spending.
“So I actually see the Asian markets going up this year - ultimately 10 to 12 percent or something like that. I don’t’ see a bear market but I think it’s going to be a year of ups and downs - your probably going to have to be a little patient to get a return.”
Mr Evans added that inflationary pressure will settle.
He said: “Well, ultimately if we’re seeing global growth slowing, then I think you’re going to see inflation becoming less of a worry during the year. In general, in most places, inflation is still a food phenomenon, and it’s not really showing much signs of coming though to any other areas in the economy.
“We’re all a bit worried about inflation at the minute. Certainly the most worrying scenario is when you have high inflation and slowing growth - in a so called stagflation - and if we have that then we could be in for a very tough ride. But I think generally as growth slows, inflation will come off the radar scene as being a problem.”
Here in Singapore, HSBC says the financial and property sectors will remain positive, but exports will remain susceptible to a US slowdown.
Peter Morgan, Chief Economist, Global Research Asia Pacific, HSBC, said: “Well we are fairly optimistic on Singapore - we think that the strength in loan growth and the strength in the property sector is having a positive impact.
“Growth in Singapore is likely to slow, and Singapore is still a fairly export sensitive country and if the US looses a couple percentage points of growth than that could knock off maybe 3 percentage points on Singapore’s growth.”
HSBC is forecasting the Singapore economy will grow 7.3 percent in 2008. - CNA/ch
Source : Channel NewsAsia - 18 Jan 2008
FUND managers across the world have turned “super-bearish”
FUND managers across the world have turned “super-bearish” over the last month, abandoning hope that Europe and Asia can escape contagion from the United States housing crisis.
A Merrill Lynch survey found that a fifth of big investors now expect an outright global recession, an occurrence not seen since the 1930s. Some think the world is already in recession.
“The period of denial may be over,” said Mr David Bowers, who put together the closely-watched report.
“This month’s survey is the first in which investors have really started to recognise that the ‘credit crunch’ could lead to a major recession.
The vast majority expect profit margins to shrink in 2008.”
The report said global cash balances had jumped to 32 per cent of the average portfolio from 20 per cent as recently as November, with both bonds and equities falling out of favour. The survey covers 195 funds managing US$671 billion ($964 billion) across the three main regions.
The asset managers no longer want firms to take on more debt or pay out bigger dividends — the twin abuses at the height of the credit bubble.
They increasingly want them to batten down the hatches for a long storm by using cash flow to repair balance sheets.
What is striking is the broad perception that the US is no longer the sole epicentre of the crisis.
Indeed, most now think the US dollar is poised to rally as the trouble shifts increasingly to Europe.
A net 55 per cent view the euro as “overvalued”, and a net 61 per cent think the sterling is too high.
Asia is turning pessimistic as well. A net 29 per cent think China’s economy will slow and most are now underweight Chinese equities — preferring the Hong Kong stocks, which offers arbitrage opportunities against over-inflated Shanghai.
None of the regional managers thinks China’s growth rate will rise this year.
The Asian investors expect the region (excluding Japan) to face an unhealthy drift into stagflation, with growth slowing and price pressures rising at the same time. They are massively underweight on autos and media, but like staples and oil.
A net 50 per cent expect emerging markets around the world to deteriorate. A fifth seem to expect the bubble to burst altogether.
Bank and financial firms are the new pariahs.
Merrill Lynch’s credit strategist Barnaby Martin said the banks now faced much the same plight as telecom companies in 2002. “Their efforts to de-leverage will be bad for shareholders, but good for bondholders,” he said.
One glimmer of light is the rising — if small — number who think a fresh cycle of global growth is already beginning, despite the near-panic mood among their peers.— THE DAILY TELEGRAPH
Ambrose Evans-Pritchard has covered world politics and economics for a quarter of a century
Source : Today - 19 Jan 2008
A Merrill Lynch survey found that a fifth of big investors now expect an outright global recession, an occurrence not seen since the 1930s. Some think the world is already in recession.
“The period of denial may be over,” said Mr David Bowers, who put together the closely-watched report.
“This month’s survey is the first in which investors have really started to recognise that the ‘credit crunch’ could lead to a major recession.
The vast majority expect profit margins to shrink in 2008.”
The report said global cash balances had jumped to 32 per cent of the average portfolio from 20 per cent as recently as November, with both bonds and equities falling out of favour. The survey covers 195 funds managing US$671 billion ($964 billion) across the three main regions.
The asset managers no longer want firms to take on more debt or pay out bigger dividends — the twin abuses at the height of the credit bubble.
They increasingly want them to batten down the hatches for a long storm by using cash flow to repair balance sheets.
What is striking is the broad perception that the US is no longer the sole epicentre of the crisis.
Indeed, most now think the US dollar is poised to rally as the trouble shifts increasingly to Europe.
A net 55 per cent view the euro as “overvalued”, and a net 61 per cent think the sterling is too high.
Asia is turning pessimistic as well. A net 29 per cent think China’s economy will slow and most are now underweight Chinese equities — preferring the Hong Kong stocks, which offers arbitrage opportunities against over-inflated Shanghai.
None of the regional managers thinks China’s growth rate will rise this year.
The Asian investors expect the region (excluding Japan) to face an unhealthy drift into stagflation, with growth slowing and price pressures rising at the same time. They are massively underweight on autos and media, but like staples and oil.
A net 50 per cent expect emerging markets around the world to deteriorate. A fifth seem to expect the bubble to burst altogether.
Bank and financial firms are the new pariahs.
Merrill Lynch’s credit strategist Barnaby Martin said the banks now faced much the same plight as telecom companies in 2002. “Their efforts to de-leverage will be bad for shareholders, but good for bondholders,” he said.
One glimmer of light is the rising — if small — number who think a fresh cycle of global growth is already beginning, despite the near-panic mood among their peers.— THE DAILY TELEGRAPH
Ambrose Evans-Pritchard has covered world politics and economics for a quarter of a century
Source : Today - 19 Jan 2008
Asia is now less dependent on the US economy
Asia is now less dependent on the US economy
(BANGKOK) Asia would be able to weather any recession in the United States, analysts say, because rising trade and investment within the region make it less dependent on the US economy than in the past.
While a severe downturn in the US would drag on Asian growth by eroding demand for exports, a rapidly growing middle class is fuelling orders for cars, electronics and housing - much of which will be supplied from Asia itself.
Voracious demand for oil, iron ore and other commodities to build roads, sewage systems, and office buildings - especially in the booming economies of China and India - will also help sustain the region through any US slowdown.
‘The US economy is not that important anymore,’ Hans Timmer, a World Bank economist, said in Singapore earlier this month.
Excluding Japan, 43 per cent of Asia’s exports go to other nations in the region, Lehman Brothers calculates - up from 37 per cent in 1995.
‘China and India represent a bigger presence on the world stage than just a half dozen years ago,’ said David Cohen, director of Asian forecasting at Action Economics in Singapore.
A drop of one percentage point in US economic growth would shave 1.3 percentage points from China’s growth rate due to lower exports, Citigroup estimates.
Since China is growing so fast, that isn’t likely to make much of a dent. China’s economy will still expand 11 per cent this year, slightly slower than in 2007, Citigroup projects.
Lehman Brothers forecasts 2008 growth will drop to 9.8 per cent, still remarkably strong.
Most regional projections show some drop-off from 2007, but still reflect healthy expectations.
The UN Economic and Social Commission for Asia and the Pacific said 38 developing economies in the region - including China and India - will expand an overall 7.8 per cent this year, slightly lower than growth of 8.3 per cent in 2007.
Global growth, meanwhile, will moderate to 3.3 per cent in 2008 from 3.6 per cent last year, with any slowdown in the US largely offset by growth in developing countries, the World Bank projects.
But Rajeev Malik, an economist with JPMorgan Chase in Singapore, cautioned that growth in China and India could not make up all the slack of a US downturn.
‘Demand in industrial countries is still pretty important for the rest of Asia,’ Mr Malik said. ‘While China, and to some extent India, offer some offsetting demand, there will still be some downshifting in activity if the US goes into recession.’
If the US economy does contract, India’s growth will likely slow to 7 per cent from the current rate of about 9 per cent, he predicted.
Asian stock markets have tumbled in recent weeks amid worries that a slowdown in the US will hurt exporters’ profits.
Still, some analysts say some stocks appear oversold and the drop may present a buying opportunity given the region’s growth potential.
Japan, the world’s second-largest economy, may suffer the most from a US contraction.
Ryutaro Kono, chief economist at BNP Paribas in Tokyo, predicts the nation’s economic growth will drop this year to about half of the 2 per cent it has marked in recent years.
Lower demand for exports could even have a silver lining for China by restraining inflation, which has soared to the highest level in more than a decade.
‘If China’s exports slow down significantly, you definitely will see lower prices rather than inflation,’ said Minggao Shen, an economist with Citigroup in Beijing.
But he did warn that weaker export demand could leave Chinese manufacturers with overcapacity problems. — AP
(BANGKOK) Asia would be able to weather any recession in the United States, analysts say, because rising trade and investment within the region make it less dependent on the US economy than in the past.
While a severe downturn in the US would drag on Asian growth by eroding demand for exports, a rapidly growing middle class is fuelling orders for cars, electronics and housing - much of which will be supplied from Asia itself.
Voracious demand for oil, iron ore and other commodities to build roads, sewage systems, and office buildings - especially in the booming economies of China and India - will also help sustain the region through any US slowdown.
‘The US economy is not that important anymore,’ Hans Timmer, a World Bank economist, said in Singapore earlier this month.
Excluding Japan, 43 per cent of Asia’s exports go to other nations in the region, Lehman Brothers calculates - up from 37 per cent in 1995.
‘China and India represent a bigger presence on the world stage than just a half dozen years ago,’ said David Cohen, director of Asian forecasting at Action Economics in Singapore.
A drop of one percentage point in US economic growth would shave 1.3 percentage points from China’s growth rate due to lower exports, Citigroup estimates.
Since China is growing so fast, that isn’t likely to make much of a dent. China’s economy will still expand 11 per cent this year, slightly slower than in 2007, Citigroup projects.
Lehman Brothers forecasts 2008 growth will drop to 9.8 per cent, still remarkably strong.
Most regional projections show some drop-off from 2007, but still reflect healthy expectations.
The UN Economic and Social Commission for Asia and the Pacific said 38 developing economies in the region - including China and India - will expand an overall 7.8 per cent this year, slightly lower than growth of 8.3 per cent in 2007.
Global growth, meanwhile, will moderate to 3.3 per cent in 2008 from 3.6 per cent last year, with any slowdown in the US largely offset by growth in developing countries, the World Bank projects.
But Rajeev Malik, an economist with JPMorgan Chase in Singapore, cautioned that growth in China and India could not make up all the slack of a US downturn.
‘Demand in industrial countries is still pretty important for the rest of Asia,’ Mr Malik said. ‘While China, and to some extent India, offer some offsetting demand, there will still be some downshifting in activity if the US goes into recession.’
If the US economy does contract, India’s growth will likely slow to 7 per cent from the current rate of about 9 per cent, he predicted.
Asian stock markets have tumbled in recent weeks amid worries that a slowdown in the US will hurt exporters’ profits.
Still, some analysts say some stocks appear oversold and the drop may present a buying opportunity given the region’s growth potential.
Japan, the world’s second-largest economy, may suffer the most from a US contraction.
Ryutaro Kono, chief economist at BNP Paribas in Tokyo, predicts the nation’s economic growth will drop this year to about half of the 2 per cent it has marked in recent years.
Lower demand for exports could even have a silver lining for China by restraining inflation, which has soared to the highest level in more than a decade.
‘If China’s exports slow down significantly, you definitely will see lower prices rather than inflation,’ said Minggao Shen, an economist with Citigroup in Beijing.
But he did warn that weaker export demand could leave Chinese manufacturers with overcapacity problems. — AP
Sunday, December 23, 2007
United States economy is unlikely to slip into recession
The United States economy is unlikely to slip into recession, Abby Joseph Cohen, chief investment strategist at Goldman Sachs, said in remarks published yesterday.
‘That does not mean that the probability of a recession is zero. We just think that a slowing in growth is more likely than a recession,’ Ms Cohen told Germany’s Sueddeutsche Zeitung newspaper.
‘The Federal Reserve has shown in recent weeks that it is paying attention and that it wants to boost people’s confidence,’ she added.
While there was weakness in US housing construction and some areas of private consumption, this would be offset by export growth and corporate investment, she said. Goldman expected US economic growth of 1.8 per cent next year, weaker than other institutions are predicting, she said, adding that the bank nonetheless viewed shares as undervalued.
Some finance companies would report terrible earnings figures for the fourth quarter but Goldman still expected single digit profit growth for next year overall.
The ‘fair value’ for the Standard & Poors 500 Index of top US companies for the end of 2008 was 1,675 points, up from around 1,460 now, Ms Cohen said.
The Dow Jones industrial average would be around 14,750 at the end of next year, compared with just over 13,000 now, she estimated.
Ms Cohen told the paper that the trend in US inflation would remain moderate. Central banks did not have to worry about wage increases and could concentrate on the current problems on financial markets.
‘It’s true that over the past week there was some confusion among investors over the Fed’s communication but you have to look to the longer term,’ she said.
‘The decisive factor is that central banks have acted in close cooperation and that is an enormously important signal to the markets as to the availability of liquidity. I am increasingly optimistic: when we are into 2008 everyone will see that the central banks did the right thing.’ - Reuters
Source : Business Times - 22 Dec 2007
‘That does not mean that the probability of a recession is zero. We just think that a slowing in growth is more likely than a recession,’ Ms Cohen told Germany’s Sueddeutsche Zeitung newspaper.
‘The Federal Reserve has shown in recent weeks that it is paying attention and that it wants to boost people’s confidence,’ she added.
While there was weakness in US housing construction and some areas of private consumption, this would be offset by export growth and corporate investment, she said. Goldman expected US economic growth of 1.8 per cent next year, weaker than other institutions are predicting, she said, adding that the bank nonetheless viewed shares as undervalued.
Some finance companies would report terrible earnings figures for the fourth quarter but Goldman still expected single digit profit growth for next year overall.
The ‘fair value’ for the Standard & Poors 500 Index of top US companies for the end of 2008 was 1,675 points, up from around 1,460 now, Ms Cohen said.
The Dow Jones industrial average would be around 14,750 at the end of next year, compared with just over 13,000 now, she estimated.
Ms Cohen told the paper that the trend in US inflation would remain moderate. Central banks did not have to worry about wage increases and could concentrate on the current problems on financial markets.
‘It’s true that over the past week there was some confusion among investors over the Fed’s communication but you have to look to the longer term,’ she said.
‘The decisive factor is that central banks have acted in close cooperation and that is an enormously important signal to the markets as to the availability of liquidity. I am increasingly optimistic: when we are into 2008 everyone will see that the central banks did the right thing.’ - Reuters
Source : Business Times - 22 Dec 2007
Monday, November 19, 2007
The S&P 500 narrowly averted a third straight week of losses as bargain-hunting lifted the beaten-down technology sector while shares of oil companies
The S&P 500 narrowly averted a third straight week of losses as bargain-hunting lifted the beaten-down technology sector while shares of oil companies advanced on buoyant crude prices.
After see-sawing through most of the day as the market was buffeted by worries over the housing slump and the credit crisis, major indexes mounted a swift upturn in the last half-hour of trade as investors bid up shares of technology companies such as BlackBerry maker Research In Motion and computer and printer maker Hewlett-Packard Co.
Plans for an additional US$10 billion (S$14.5 billion) share repurchase by network equipment maker Cisco Systems also buoyed sentiment in tech shares, helping the Nasdaq to snap a two-day losing streak.
‘I am buying here,’ said Mr Jeffrey Kleintop, who helps to oversee about US$163 billion as chief market strategist at LPL Financial Group in Boston. ‘It’s very hard to push this market down.’
Investors also bought up shares of companies seen as better positioned to withstand an economic slowdown, such as consumer products maker Procter & Gamble Co, helping to underpin the broader market.
But shares of financial services companies, including Citigroup Inc, fell on persistent worry that losses from mortgage defaults and the housing slump may worsen.
The Dow Jones Industrial Average rose 66.74 points, or 0.51 per cent, to close at 13,176.79. The Standard & Poor’s 500 Index gained 7.59 points, or 0.52 per cent, to end at 1,458.74. The Nasdaq Composite Index added 18.73 points, or 0.72 per cent, to finish at 2,637.24.
For the week, the Dow gained 1.03 per cent while the S&P 500 and the Nasdaq each ended 0.35 per cent higher.
Among tech companies, shares of Research In Motion, Garmin, Apple, Cisco and digital map maker Tele Atlas NV rose; while among energy company shares, Chevron Corp was a winner.
Among financials, Citigroup Inc, the No. 1 US bank and a Dow component, fell 1.7 per cent to US$34.
Source: Reuters (The Sunday Times 18 Nov 07)
After see-sawing through most of the day as the market was buffeted by worries over the housing slump and the credit crisis, major indexes mounted a swift upturn in the last half-hour of trade as investors bid up shares of technology companies such as BlackBerry maker Research In Motion and computer and printer maker Hewlett-Packard Co.
Plans for an additional US$10 billion (S$14.5 billion) share repurchase by network equipment maker Cisco Systems also buoyed sentiment in tech shares, helping the Nasdaq to snap a two-day losing streak.
‘I am buying here,’ said Mr Jeffrey Kleintop, who helps to oversee about US$163 billion as chief market strategist at LPL Financial Group in Boston. ‘It’s very hard to push this market down.’
Investors also bought up shares of companies seen as better positioned to withstand an economic slowdown, such as consumer products maker Procter & Gamble Co, helping to underpin the broader market.
But shares of financial services companies, including Citigroup Inc, fell on persistent worry that losses from mortgage defaults and the housing slump may worsen.
The Dow Jones Industrial Average rose 66.74 points, or 0.51 per cent, to close at 13,176.79. The Standard & Poor’s 500 Index gained 7.59 points, or 0.52 per cent, to end at 1,458.74. The Nasdaq Composite Index added 18.73 points, or 0.72 per cent, to finish at 2,637.24.
For the week, the Dow gained 1.03 per cent while the S&P 500 and the Nasdaq each ended 0.35 per cent higher.
Among tech companies, shares of Research In Motion, Garmin, Apple, Cisco and digital map maker Tele Atlas NV rose; while among energy company shares, Chevron Corp was a winner.
Among financials, Citigroup Inc, the No. 1 US bank and a Dow component, fell 1.7 per cent to US$34.
Source: Reuters (The Sunday Times 18 Nov 07)
Asean economies may be booming, but trade among member countries has fallen as a proportion of their total exports.
THE 10 Asean economies may be booming, but trade among member countries has fallen as a proportion of their total exports.
This casts a worrying shadow on the region’s long-standing ambitions to become a unified economic market by tearing down trade barriers and cooperating more closely.
The finding, in a new report, provides food for thought for Asean leaders meeting in Singapore from tomorrow to Thursday at the 13th Asean Summit.
The overly slow removal of non-tariff barriers by Asean countries, as well as China’s phenomenal economic growth, are to be blamed for the decline, said the Economist Intelligence Unit (EIU) report.
Last year, exports to other Asean nations by the region’s six biggest economies made up 20.9 per cent of their total exports, down from 22.4 per cent in 2000, the study found, using United Nations data.
In Singapore, the share of exports to other Asean nations fell to 21.2 per cent from 26.7 per cent.
‘This doesn’t augur well for Asean’s aspirations to become a single trading bloc,’ said EIU Asia-Pacific editorial director Charles Goddard.
‘Some non-tariff barriers are still not broken down. There are still significant hurdles to trade within Asean,’ he said at a press conference.
Sponsored by DHL, the report was published yesterday, to coincide with the start of the Asean business and investment summit that the express delivery giant also sponsored.
‘This report makes clear that governments of Asean nations must redouble their effors to reduce trade barriers in their own backyards,’ said DHL Asia-Pacific chief executive Dan McHugh. ‘Intra-Asean trade still has great potential to provide economic opportunity and raise living standards.’
In absolute terms, intra-Asean trade is up, but it has been eclipsed by the even faster growth of exports to China.
Its economic rise and its role as the world’s final assembly centre have made China an increasingly popular destination for Asean component makers. Exports to China account for 7.3 per cent of total Asean exports, up from 3.8 per cent seven years ago.
Citibank economist Chua Hak Bin said: ‘Ultimately, the size of trade flows is dependent on the pace at which external markets grow. The strongest markets have been China and India, which have surpassed Asean in growth.’
Still, Asean can do more to boost a greater exchange of goods within the region, said DHL South-east Asia head Yasmin Khan. While Asean has harmonised customs regulations, she said, differences in implementation still cause delay in some countries.
Asean’s plans to create a single market by 2015 will address some issues, Mr Goddard said. ‘But to be honest, quite a lot more needs to be done - and quickly.’
Economists say the dismantling of trade barriers has been slower than planned.
‘Nationalist sentiment among some Asean members is still strong,’ said Citibank’s Dr Chua. ‘There have been instances where investments from neighbouring countries were viewed with suspicion.’
Asean is unlikely to achieve a European Union-level of integration, as differences in economic development and wealth are too wide, Fortis Bank Asia market strategist Joseph Tan said.
‘I don’t think there’s sufficient political will to push towards the 2015 goal. Many member countries have more immediate domestic challenges to worry about.’
Source: The Straits Times 17 Nov 07
This casts a worrying shadow on the region’s long-standing ambitions to become a unified economic market by tearing down trade barriers and cooperating more closely.
The finding, in a new report, provides food for thought for Asean leaders meeting in Singapore from tomorrow to Thursday at the 13th Asean Summit.
The overly slow removal of non-tariff barriers by Asean countries, as well as China’s phenomenal economic growth, are to be blamed for the decline, said the Economist Intelligence Unit (EIU) report.
Last year, exports to other Asean nations by the region’s six biggest economies made up 20.9 per cent of their total exports, down from 22.4 per cent in 2000, the study found, using United Nations data.
In Singapore, the share of exports to other Asean nations fell to 21.2 per cent from 26.7 per cent.
‘This doesn’t augur well for Asean’s aspirations to become a single trading bloc,’ said EIU Asia-Pacific editorial director Charles Goddard.
‘Some non-tariff barriers are still not broken down. There are still significant hurdles to trade within Asean,’ he said at a press conference.
Sponsored by DHL, the report was published yesterday, to coincide with the start of the Asean business and investment summit that the express delivery giant also sponsored.
‘This report makes clear that governments of Asean nations must redouble their effors to reduce trade barriers in their own backyards,’ said DHL Asia-Pacific chief executive Dan McHugh. ‘Intra-Asean trade still has great potential to provide economic opportunity and raise living standards.’
In absolute terms, intra-Asean trade is up, but it has been eclipsed by the even faster growth of exports to China.
Its economic rise and its role as the world’s final assembly centre have made China an increasingly popular destination for Asean component makers. Exports to China account for 7.3 per cent of total Asean exports, up from 3.8 per cent seven years ago.
Citibank economist Chua Hak Bin said: ‘Ultimately, the size of trade flows is dependent on the pace at which external markets grow. The strongest markets have been China and India, which have surpassed Asean in growth.’
Still, Asean can do more to boost a greater exchange of goods within the region, said DHL South-east Asia head Yasmin Khan. While Asean has harmonised customs regulations, she said, differences in implementation still cause delay in some countries.
Asean’s plans to create a single market by 2015 will address some issues, Mr Goddard said. ‘But to be honest, quite a lot more needs to be done - and quickly.’
Economists say the dismantling of trade barriers has been slower than planned.
‘Nationalist sentiment among some Asean members is still strong,’ said Citibank’s Dr Chua. ‘There have been instances where investments from neighbouring countries were viewed with suspicion.’
Asean is unlikely to achieve a European Union-level of integration, as differences in economic development and wealth are too wide, Fortis Bank Asia market strategist Joseph Tan said.
‘I don’t think there’s sufficient political will to push towards the 2015 goal. Many member countries have more immediate domestic challenges to worry about.’
Source: The Straits Times 17 Nov 07
Friday, November 2, 2007
Singapore has overtaken Japan to become the most competitive economy in Asia, according to a World Economic Forum (WEF) report.
Singapore has overtaken Japan to become the most competitive economy in Asia, according to a World Economic Forum (WEF) report.
The Global Competitiveness Report (GCR) 2007-2008, which was released yesterday, ranks Singapore at No 7 in the world - an improvement from its eighth spot last year. In contrast, Japan slid from its fifth place last year and is now ranked No 8 in the list of competitive economies. Overall, the United States emerged first, followed by Switzerland and Denmark.
In all, there are another seven Asia-Pacific countries - including South Korea, Hong Kong and Malaysia - that found their way into the top 30. China and India continue to lead the way among large developing economies, WEF said. Several countries in the Middle East and North Africa region are in the upper half of the rankings, led by Israel, Kuwait, Qatar, Tunisia, Saudi Arabia and the United Arab Emirates. In sub-Saharan Africa, only South Africa and Mauritius feature in the top half of the rankings, with several countries at the bottom. In Latin America, Chile is the highest ranked country, followed by Mexico and Costa Rica.
‘The Asia region encompasses the entire gamut in our ranking, from highly competitive countries to the most challenged, drawing an extremely heterogeneous picture with respect to the levels of growth and development achieved in the region,’ said Fiona Paua, head of Strategic Insight Teams at the WEF.
For example, nine Asia-Pacific countries are among the top 30, ‘while Mongolia, Bangladesh, Cambodia, Nepal and Timor-Leste are all positioned at the very bottom of the rankings’, she added.
The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of partner institutes, including research institutes and business organisations in the countries covered. This year, over 11,000 business leaders were polled in a record 131 countries.
The survey is designed to capture a broad range of factors affecting an economy’s business climate.
The study also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform. ‘Economic policy, especially at the microeconomic level, needs to set priorities that reflect the most important constraints to competitiveness in each country,’ said Michael Porter, professor at Harvard Business School and co-director of the report.
‘The GCR enables countries to move beyond abstract theoretical policy debates and identify the specific tasks ahead of them. In an uncertain global financial environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.’
Source : Business Times - 1 Nov 2007
The Global Competitiveness Report (GCR) 2007-2008, which was released yesterday, ranks Singapore at No 7 in the world - an improvement from its eighth spot last year. In contrast, Japan slid from its fifth place last year and is now ranked No 8 in the list of competitive economies. Overall, the United States emerged first, followed by Switzerland and Denmark.
In all, there are another seven Asia-Pacific countries - including South Korea, Hong Kong and Malaysia - that found their way into the top 30. China and India continue to lead the way among large developing economies, WEF said. Several countries in the Middle East and North Africa region are in the upper half of the rankings, led by Israel, Kuwait, Qatar, Tunisia, Saudi Arabia and the United Arab Emirates. In sub-Saharan Africa, only South Africa and Mauritius feature in the top half of the rankings, with several countries at the bottom. In Latin America, Chile is the highest ranked country, followed by Mexico and Costa Rica.
‘The Asia region encompasses the entire gamut in our ranking, from highly competitive countries to the most challenged, drawing an extremely heterogeneous picture with respect to the levels of growth and development achieved in the region,’ said Fiona Paua, head of Strategic Insight Teams at the WEF.
For example, nine Asia-Pacific countries are among the top 30, ‘while Mongolia, Bangladesh, Cambodia, Nepal and Timor-Leste are all positioned at the very bottom of the rankings’, she added.
The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of partner institutes, including research institutes and business organisations in the countries covered. This year, over 11,000 business leaders were polled in a record 131 countries.
The survey is designed to capture a broad range of factors affecting an economy’s business climate.
The study also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform. ‘Economic policy, especially at the microeconomic level, needs to set priorities that reflect the most important constraints to competitiveness in each country,’ said Michael Porter, professor at Harvard Business School and co-director of the report.
‘The GCR enables countries to move beyond abstract theoretical policy debates and identify the specific tasks ahead of them. In an uncertain global financial environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.’
Source : Business Times - 1 Nov 2007
Wednesday, October 24, 2007
Foreigners living in Singapore make up 30 per cent of the city-state’s population, up from 14 per cent in 1990
Foreigners living in Singapore make up 30 per cent of the city-state’s population, up from 14 per cent in 1990, following a decade-long policy of attracting people to boost economic growth, according to government figures released on Monday.
Minister for Home Affairs Wong Kan Seng said Singaporeans accounted for 3.2 million, or 70 per cent, of the city-state’s 4.5 million population as of mid-2006, in a response to queries from opposition Member of Parliament Sylvia Lim.
Foreigners with permanent residency status accounted for 10.3 per cent of the population, while people from overseas on work passes or study visas and their dependents made up 19.5 per cent.
Singaporeans accounted for 86 per cent and 74 per cent of the total population in 1990 and 2000 respectively, Mr Wong added.
Singapore - one of the most densely populated countries with a land area of about 704sq-km - said earlier this year it wanted to boost its population to 6.5 million in coming decades to further broaden its economy. — REUTER
SSource : Business Times - 22 Oct 2007
Minister for Home Affairs Wong Kan Seng said Singaporeans accounted for 3.2 million, or 70 per cent, of the city-state’s 4.5 million population as of mid-2006, in a response to queries from opposition Member of Parliament Sylvia Lim.
Foreigners with permanent residency status accounted for 10.3 per cent of the population, while people from overseas on work passes or study visas and their dependents made up 19.5 per cent.
Singaporeans accounted for 86 per cent and 74 per cent of the total population in 1990 and 2000 respectively, Mr Wong added.
Singapore - one of the most densely populated countries with a land area of about 704sq-km - said earlier this year it wanted to boost its population to 6.5 million in coming decades to further broaden its economy. — REUTER
SSource : Business Times - 22 Oct 2007
Friday, October 19, 2007
Malaysians Remain Bullish On Investment Outlook
Malaysians Remain Bullish On Investment Outlook
Taken from Bernama
17 Oct 07
Despite fears that the U.S subprime crisis will spread to wider global economy, 60 percent of Malaysians have a positive investment outlook and investor sentiment remains robust in most Asian countries, according to a study by ING Asia Pacific.
The ING Investor Sentiment Tracking Study which surveyed 13 markets across Asia with a total 1,308 mass affluent respondents, showed investors in the two `hottest' Asian economies - China and India - are the most bullish, with over 70 percent respondents there believing the economic situation in their home country will improve in the next three months.
Malaysia followed closely behind at 60 percent, with a majority of Malaysians believing government policies will favour investment growth, making them the second most confident in their government market in the region, after India.
"Malaysian investors are very optimistic in their investment outlook which can be partly explained by an expectation of Gross Domestic Product (GDP) growth of more than five percent for 2007.
"The government's development plans, including the five-year Ninth Malaysia Plan and the Iskandar Development Region, could also be contributing factors to the high level of investor confidence," said ING Funds chief executive officer Steve Ong in a statement, here Tuesday.
Research firm TNS conducted the study in July and August this year through online and face-to-face interviews with investors in Malaysia, Australia, China, Hong Kong, India, Indonesia, Japan, Korea, New Zealand, the Philippines, Singapore, Taiwan and Thailand.
While local stocks emerged as the most popular choice of investment in Asia as chosen by more than half of the countries surveyed, the study revealed that 81 percent of Malaysian investors chose cash/deposits as their most preferred investment tools.
The study also revealed that Malaysians generally invest more for wealth accumulation (41 percent), followed by retirement (23 percent), capital preservation (19 percent) and education (16 percent).
Japanese investors were found the least optimistic amongst the 13 markets, with only 26 percent respondents believing their economic will improve in the next three months, which may be reflecting the country's political changes.
Taken from Bernama
17 Oct 07
Despite fears that the U.S subprime crisis will spread to wider global economy, 60 percent of Malaysians have a positive investment outlook and investor sentiment remains robust in most Asian countries, according to a study by ING Asia Pacific.
The ING Investor Sentiment Tracking Study which surveyed 13 markets across Asia with a total 1,308 mass affluent respondents, showed investors in the two `hottest' Asian economies - China and India - are the most bullish, with over 70 percent respondents there believing the economic situation in their home country will improve in the next three months.
Malaysia followed closely behind at 60 percent, with a majority of Malaysians believing government policies will favour investment growth, making them the second most confident in their government market in the region, after India.
"Malaysian investors are very optimistic in their investment outlook which can be partly explained by an expectation of Gross Domestic Product (GDP) growth of more than five percent for 2007.
"The government's development plans, including the five-year Ninth Malaysia Plan and the Iskandar Development Region, could also be contributing factors to the high level of investor confidence," said ING Funds chief executive officer Steve Ong in a statement, here Tuesday.
Research firm TNS conducted the study in July and August this year through online and face-to-face interviews with investors in Malaysia, Australia, China, Hong Kong, India, Indonesia, Japan, Korea, New Zealand, the Philippines, Singapore, Taiwan and Thailand.
While local stocks emerged as the most popular choice of investment in Asia as chosen by more than half of the countries surveyed, the study revealed that 81 percent of Malaysian investors chose cash/deposits as their most preferred investment tools.
The study also revealed that Malaysians generally invest more for wealth accumulation (41 percent), followed by retirement (23 percent), capital preservation (19 percent) and education (16 percent).
Japanese investors were found the least optimistic amongst the 13 markets, with only 26 percent respondents believing their economic will improve in the next three months, which may be reflecting the country's political changes.
THE average high net worth individual (HNWI) in Singapore has US$4.9 million of investible assets, slightly more than the regional and global average
THE average high net worth individual (HNWI) in Singapore has US$4.9 million of investible assets, slightly more than the regional and global average, the Merrill Lynch-Capgemini Asia Pacific Wealth Report has found.
Globally, HNWIs have investible assets of about US$3.9 million, while the regional average at end-2006 was US$3.3 million.
Singapore’s wealthy allocated most of their investible funds - 36 per cent - to real estate. This was second only to South Korea, where the wealthy invested 42 per cent in property.
Other allocations by Singaporeans were 18 per cent cash and 26 per cent equities.
On real estate, Merrill Lynch Asia-Pacific investment strategist Stephen Corry told reporters yesterday the region’s property cycle is ‘closer to the bottom than to the top’.
A recent report by the firm found the boom is still in its early stages and said prices do not appear excessive relative to income. Asian property prices have also lagged global prices.
But Mr Corry said there are two exceptions: ‘High-end Hong Kong and Singapore properties are looking expensive. I actually see good value in the mass residential side. The price gap between high-end and lower-end property has reached unprecedented levels.’
The Merrill Lynch-Capgemini Asia-Pacific wealth report aims to give a detailed profile of the region’s HNWIs and their investment preferences.
The report found that Singapore has about 928 ultra HNWIs, comprising 1.39 per cent of the population.
These are people whose investible assets exceed US$30 million, as opposed to ‘ordinary’ HNWIs whose qualifying threshold is US$1 million.
The number of ultra HNWIs in the region grew 12.2 per cent to 17,500 at end-2006, said Gregory Smith, Capgemini Australia’s vice-president for wealth management.
‘We are seeing a sharp rise in the number of ultra HNWIs,’ he said. ‘This is particularly evident in China, where that country’s phenomenal economic growth is reflected in a high concentration of ultra HNWIs.’
The study found that more than 28 per cent of the region’s ultra HNWIs are in China.
In terms of the sources of Singaporeans’ wealth, 36 per cent was derived from businesses and 22 per cent inherited. In total, wealthy Singaporeans’ assets are estimated at US$320 billion, giving them a 4 per cent share of the Asia-Pacific’s total wealth pie.
About 43 per cent of HNWIs in Singapore are aged 41 to 55 and 39 per cent aged 56 to 70. Merrill Lynch market managing director (South Asia) Kong Eng Huat said: ‘(Singapore) individuals tend to be more active investors and are continuing to build their wealth. They are also actively planning or in the process of transferring wealth to their beneficiaries and children.’
‘Those with inherited wealth tend to have a more complex portfolio structure and restrictions. They tend to focus on capital preservation.’
The Merrill Lynch-Capgemini report expects the wealthy in the region to diversify into fixed-income and alternative investments and to increase their international exposure. At the moment, 51 per cent of their assets are invested in the Asia-Pacific.
Source : Business Times - 19 Oct 2007
Globally, HNWIs have investible assets of about US$3.9 million, while the regional average at end-2006 was US$3.3 million.
Singapore’s wealthy allocated most of their investible funds - 36 per cent - to real estate. This was second only to South Korea, where the wealthy invested 42 per cent in property.
Other allocations by Singaporeans were 18 per cent cash and 26 per cent equities.
On real estate, Merrill Lynch Asia-Pacific investment strategist Stephen Corry told reporters yesterday the region’s property cycle is ‘closer to the bottom than to the top’.
A recent report by the firm found the boom is still in its early stages and said prices do not appear excessive relative to income. Asian property prices have also lagged global prices.
But Mr Corry said there are two exceptions: ‘High-end Hong Kong and Singapore properties are looking expensive. I actually see good value in the mass residential side. The price gap between high-end and lower-end property has reached unprecedented levels.’
The Merrill Lynch-Capgemini Asia-Pacific wealth report aims to give a detailed profile of the region’s HNWIs and their investment preferences.
The report found that Singapore has about 928 ultra HNWIs, comprising 1.39 per cent of the population.
These are people whose investible assets exceed US$30 million, as opposed to ‘ordinary’ HNWIs whose qualifying threshold is US$1 million.
The number of ultra HNWIs in the region grew 12.2 per cent to 17,500 at end-2006, said Gregory Smith, Capgemini Australia’s vice-president for wealth management.
‘We are seeing a sharp rise in the number of ultra HNWIs,’ he said. ‘This is particularly evident in China, where that country’s phenomenal economic growth is reflected in a high concentration of ultra HNWIs.’
The study found that more than 28 per cent of the region’s ultra HNWIs are in China.
In terms of the sources of Singaporeans’ wealth, 36 per cent was derived from businesses and 22 per cent inherited. In total, wealthy Singaporeans’ assets are estimated at US$320 billion, giving them a 4 per cent share of the Asia-Pacific’s total wealth pie.
About 43 per cent of HNWIs in Singapore are aged 41 to 55 and 39 per cent aged 56 to 70. Merrill Lynch market managing director (South Asia) Kong Eng Huat said: ‘(Singapore) individuals tend to be more active investors and are continuing to build their wealth. They are also actively planning or in the process of transferring wealth to their beneficiaries and children.’
‘Those with inherited wealth tend to have a more complex portfolio structure and restrictions. They tend to focus on capital preservation.’
The Merrill Lynch-Capgemini report expects the wealthy in the region to diversify into fixed-income and alternative investments and to increase their international exposure. At the moment, 51 per cent of their assets are invested in the Asia-Pacific.
Source : Business Times - 19 Oct 2007
Sunday, October 14, 2007
Early signs of Americans spending less, US exports picking up
Early signs of Americans spending less, US exports picking up
October 13th, 2007 · No Comments
Data shows retailers’ sales rising a mere 1.7% and August trade gap declining
ECONOMISTS have been predicting that consumers would slow their spending but that the damage would be cushioned as American businesses sold more products abroad.
This week, there was evidence that both are starting to happen.
The United States trade deficit fell to US$57.6 billion (S$84.3 billion) in August, and major retailers’ sales at stores open at least a year rose a meagre 1.7 per cent last month from a year earlier, two reports said.
Monthly results can be volatile, and economists caution against reading too much into what could turn out to be mere blips. But taken together, they are indicators of an economy in transition.
The weak housing market is making consumers spend their money more carefully. That, in turn, means that retailers import fewer goods from abroad, lowering the trade deficit.
Simultaneously, the slower US economy and lower interest rates mean that the greenback is less valuable compared with other currencies than it was a few months ago.
That makes US goods cheaper and exporters more competitive than they have been in recent years, creating a source of growth that will ease the pain of the housing crunch.
‘Trade is providing a pretty big offset to the drag of housing,’ said Mr Brian Bethune, an economist with consulting firm Global Insight. ‘It’s not totally offsetting housing, but it is a buffer.’
The gap between what the US imported and exported was US$1.4 billion less than in July - a bigger drop than forecast and the lowest monthly trade deficit in five years when adjusted for inflation, according to the Commerce Department.
Other countries bought more American soybeans, chemicals and steel, and the US imported fewer foreign cars.
The export sector could create a bounce for the nation’s gross domestic product, the broadest measure of how the economy is doing, of which net exports is a major component.
Economists from Bank of America and Morgan Stanley increased their projection for how much US output grew in the third quarter to more than a 3 per cent annual rate.
September retail sales growth of 1.7 per cent is probably not enough to keep up with inflation; analysts expect the consumer price index for last month, to be released next week, to show a 2.8 per cent annual increase.
Some analysts say the disappointing gain is an early hint that consumers are making spending decisions more carefully. Mr Bethune said: ‘It takes a lot more cajoling in terms of discounts and incentives to get them to spend.’
Source: WASHINGTON POST (The Straits Times 13 Oct 07)
October 13th, 2007 · No Comments
Data shows retailers’ sales rising a mere 1.7% and August trade gap declining
ECONOMISTS have been predicting that consumers would slow their spending but that the damage would be cushioned as American businesses sold more products abroad.
This week, there was evidence that both are starting to happen.
The United States trade deficit fell to US$57.6 billion (S$84.3 billion) in August, and major retailers’ sales at stores open at least a year rose a meagre 1.7 per cent last month from a year earlier, two reports said.
Monthly results can be volatile, and economists caution against reading too much into what could turn out to be mere blips. But taken together, they are indicators of an economy in transition.
The weak housing market is making consumers spend their money more carefully. That, in turn, means that retailers import fewer goods from abroad, lowering the trade deficit.
Simultaneously, the slower US economy and lower interest rates mean that the greenback is less valuable compared with other currencies than it was a few months ago.
That makes US goods cheaper and exporters more competitive than they have been in recent years, creating a source of growth that will ease the pain of the housing crunch.
‘Trade is providing a pretty big offset to the drag of housing,’ said Mr Brian Bethune, an economist with consulting firm Global Insight. ‘It’s not totally offsetting housing, but it is a buffer.’
The gap between what the US imported and exported was US$1.4 billion less than in July - a bigger drop than forecast and the lowest monthly trade deficit in five years when adjusted for inflation, according to the Commerce Department.
Other countries bought more American soybeans, chemicals and steel, and the US imported fewer foreign cars.
The export sector could create a bounce for the nation’s gross domestic product, the broadest measure of how the economy is doing, of which net exports is a major component.
Economists from Bank of America and Morgan Stanley increased their projection for how much US output grew in the third quarter to more than a 3 per cent annual rate.
September retail sales growth of 1.7 per cent is probably not enough to keep up with inflation; analysts expect the consumer price index for last month, to be released next week, to show a 2.8 per cent annual increase.
Some analysts say the disappointing gain is an early hint that consumers are making spending decisions more carefully. Mr Bethune said: ‘It takes a lot more cajoling in terms of discounts and incentives to get them to spend.’
Source: WASHINGTON POST (The Straits Times 13 Oct 07)
Thursday, October 11, 2007
Singapore’s central bank said on Wednesday it would maintain its policy of a ‘gradual and modest appreciation’ in the Singapore dollar
Singapore’s central bank said on Wednesday it would maintain its policy of a ‘gradual and modest appreciation’ in the Singapore dollar, a decision widely expected by the market, but said it would slightly increase the slope of its policy band.
‘MAS will continue with the policy of a modest and gradual appreciation of the S$NEER policy band in the period ahead.
However, we will increase slightly the slope of the S$NEER (Nominal Effective Exchange Rate ) policy band,’ the Monetary Authority of Singapore (MAS) said in a twice-yearly monetary policy statement.
The move effectively lets the Singapore dollar appreciate further against the US dollar. The Singapore dollar hit a 10-year high on the news.
All economists polled by Reuters had expected the MAS to maintain its three-and-a-half-year-old moderately tight monetary policy to keep a lid on inflation as asset prices spiral higher in a booming economy and after a sales tax increase in July.
However, some economists polled last week believed the central bank’s meeting in April next year could bring a policy change, citing concerns over inflation and the possibility of the economy overheating.
Singapore’s gross domestic product expanded at an annualised rate of 14.4 per cent in the second quarter, its fastest growth in two years.
The MAS said it expected inflation in a 1.5 to 2 per cent range in 2007, up from its previous forecast of 1 to 2 per cent.
The annual inflation rate reached 2.9 per cent in August, its highest in 12 years.
Singapore’s central bank conducts policy through the exchange rate, steering the Singapore dollar within an undisclosed band against a trade-weighted basket of currencies, rather than by adjusting interest rates like most central banks. — REUTERS
‘MAS will continue with the policy of a modest and gradual appreciation of the S$NEER policy band in the period ahead.
However, we will increase slightly the slope of the S$NEER (Nominal Effective Exchange Rate ) policy band,’ the Monetary Authority of Singapore (MAS) said in a twice-yearly monetary policy statement.
The move effectively lets the Singapore dollar appreciate further against the US dollar. The Singapore dollar hit a 10-year high on the news.
All economists polled by Reuters had expected the MAS to maintain its three-and-a-half-year-old moderately tight monetary policy to keep a lid on inflation as asset prices spiral higher in a booming economy and after a sales tax increase in July.
However, some economists polled last week believed the central bank’s meeting in April next year could bring a policy change, citing concerns over inflation and the possibility of the economy overheating.
Singapore’s gross domestic product expanded at an annualised rate of 14.4 per cent in the second quarter, its fastest growth in two years.
The MAS said it expected inflation in a 1.5 to 2 per cent range in 2007, up from its previous forecast of 1 to 2 per cent.
The annual inflation rate reached 2.9 per cent in August, its highest in 12 years.
Singapore’s central bank conducts policy through the exchange rate, steering the Singapore dollar within an undisclosed band against a trade-weighted basket of currencies, rather than by adjusting interest rates like most central banks. — REUTERS
Singapore Prime Minister Lee Hsien Loong said that he did not believe the Republic’s economy was overheating
Singapore Prime Minister Lee Hsien Loong yesterday said that he did not believe the Republic’s economy was overheating, with inflation under control despite firm economic growth.
‘This year, we expect 7-8 per cent growth. It’s a good figure but at the same time inflation is well under control,’ Mr Lee said.
He acknowledged that property prices had increased rapidly and that there were shortages in office space, which the government was trying to solve by, for example, building interim office space.
‘In the medium term, we will have enough supply but in the short term there is a problem because so many businesses want to set up in Singapore,’ Mr Lee said after officials from the two countries signed cooperation agreements on economic, scientific and educational matters.
Mr Lee also described the situation in Myanmar - where the government has violently suppressed pro-democracy protests - as ’serious’, saying international powers needed to work on bringing together the two sides of the conflict - the ruling military and the opposition groups.
‘What is necessary is to find reconciliation and an agreement amongst the parties in Myanmar on the way forward,’ he said after meeting his Hungarian counterpart, Ferenc Gyurcsany. ‘There’s no easy way forward . . . It is not simply a matter of regime change,’ Mr Lee added.
‘I think that if you look at Iraq, you know that regime change is a slogan but may not be a policy.’ - AP
Source : Business Times - 10 Oct 2007
‘This year, we expect 7-8 per cent growth. It’s a good figure but at the same time inflation is well under control,’ Mr Lee said.
He acknowledged that property prices had increased rapidly and that there were shortages in office space, which the government was trying to solve by, for example, building interim office space.
‘In the medium term, we will have enough supply but in the short term there is a problem because so many businesses want to set up in Singapore,’ Mr Lee said after officials from the two countries signed cooperation agreements on economic, scientific and educational matters.
Mr Lee also described the situation in Myanmar - where the government has violently suppressed pro-democracy protests - as ’serious’, saying international powers needed to work on bringing together the two sides of the conflict - the ruling military and the opposition groups.
‘What is necessary is to find reconciliation and an agreement amongst the parties in Myanmar on the way forward,’ he said after meeting his Hungarian counterpart, Ferenc Gyurcsany. ‘There’s no easy way forward . . . It is not simply a matter of regime change,’ Mr Lee added.
‘I think that if you look at Iraq, you know that regime change is a slogan but may not be a policy.’ - AP
Source : Business Times - 10 Oct 2007
Friday, September 28, 2007
For the second year in a row, Singapore was ranked the world’s easiest place to do business, followed by New Zealand and the United States
For the second year in a row, Singapore was ranked the world’s easiest place to do business, followed by New Zealand and the United States, the World Bank’s annual ‘Doing Business’ report said on Wednesday.
The report showed that while China and India are making progress in implementing business-friendly reforms, several East Asian countries are falling behind the pace of reforms in much of the rest of the world.
Cambodia, Hong Kong, the Philippines, Singapore and Taiwan recorded no net improvement in any of the 10 areas studied by the report, compared to Egypt, the top reformer, which made progress in five areas, according to the International Finance Corporation, the bank’s private sector arm.
‘What we’re seeing here is a region that continues to do quite well economically but perhaps runs the risk of being left behind simply because it’s not keeping up with the pace of business reform,’ said Justin Yap, an author of the report, which compares business regulations in 178 economies.
Rounding out the rest of the top 10 in ease of doing business, the report ranked Hong Kong fourth, followed by Denmark, the United Kingdom, Canada, Ireland, Australia and Iceland.
The countries considered least business-friendly were, from the bottom, the Democratic Republic of the Congo, Central African Republic, Guinea-Bissau, Republic of Congo, Burundi, Chad and Venezuela.
Singapore topped the list again for its efficient procedures, many of which can be done online, Mr Yap said.
‘It’s also a country that seems to require relatively few interactions with government, for example, with the use of one-stop shops,’ he said. ‘Generally things are seen to run quite smoothly, take a short time and not cost very much.’
Several Eastern European countries, including Croatia, Macedonia, Georgia and Bulgaria, dominated the list of top reformers, with some of the region’s countries surpassing Western European economies in making regulations conducive to business, the bank said.
Estonia, the most business friendly of the former socialist bloc, ranks 17, and together with Georgia, 18, is ahead of Belgium, 19, Germany, 20, the Netherlands, 21, France, 31, Spain, 38, and Italy, 53.
Egypt topped the list of reformers by cutting minimum capital requirements by 98 per cent and halving the startup time and cost.
In China, reforms included a new property law that put private property rights on equal footing as state property rights and expanded the range of assets that can be used as collateral. A new bankruptcy law gives secured creditors priority to the proceeds from their collateral. Construction became easier with electronic processing of building permits reducing delays by two weeks.
Overall, the country is in 83rd place for ease of doing business.
India also was speeding up its reforms, enabling online submissions of customs declarations and payment of customs fees, reducing the time it takes to meet all administrative requirements to export from 27 days in 2006 to 18 as well as expanding the credit bureau to include payment histories on businesses as well as individuals. India was ranked 120th in the overall list.
Indonesia and Vietnam strengthened investor protections while Turkey cut its corporate income tax from 30 per cent to 20 per cent, among other changes.
The ‘Doing Business’ report tracks a set of regulatory indicators related to business start-up, operation, trade, payment of taxes and closure by measuring the time and cost associated with various government requirements.
It does not track variables such as economic policies, quality of infrastructure, currency volatility, investor perceptions or crime rates.
A global trade union group criticized the report, saying that a section on employing workers asserts wrongly that the elimination of workers’ protection rules creates higher economic growth and job creation.
The group said that a number of countries known for repeated violations of workers’ rights scored well in the IFC report. — AP
The report showed that while China and India are making progress in implementing business-friendly reforms, several East Asian countries are falling behind the pace of reforms in much of the rest of the world.
Cambodia, Hong Kong, the Philippines, Singapore and Taiwan recorded no net improvement in any of the 10 areas studied by the report, compared to Egypt, the top reformer, which made progress in five areas, according to the International Finance Corporation, the bank’s private sector arm.
‘What we’re seeing here is a region that continues to do quite well economically but perhaps runs the risk of being left behind simply because it’s not keeping up with the pace of business reform,’ said Justin Yap, an author of the report, which compares business regulations in 178 economies.
Rounding out the rest of the top 10 in ease of doing business, the report ranked Hong Kong fourth, followed by Denmark, the United Kingdom, Canada, Ireland, Australia and Iceland.
The countries considered least business-friendly were, from the bottom, the Democratic Republic of the Congo, Central African Republic, Guinea-Bissau, Republic of Congo, Burundi, Chad and Venezuela.
Singapore topped the list again for its efficient procedures, many of which can be done online, Mr Yap said.
‘It’s also a country that seems to require relatively few interactions with government, for example, with the use of one-stop shops,’ he said. ‘Generally things are seen to run quite smoothly, take a short time and not cost very much.’
Several Eastern European countries, including Croatia, Macedonia, Georgia and Bulgaria, dominated the list of top reformers, with some of the region’s countries surpassing Western European economies in making regulations conducive to business, the bank said.
Estonia, the most business friendly of the former socialist bloc, ranks 17, and together with Georgia, 18, is ahead of Belgium, 19, Germany, 20, the Netherlands, 21, France, 31, Spain, 38, and Italy, 53.
Egypt topped the list of reformers by cutting minimum capital requirements by 98 per cent and halving the startup time and cost.
In China, reforms included a new property law that put private property rights on equal footing as state property rights and expanded the range of assets that can be used as collateral. A new bankruptcy law gives secured creditors priority to the proceeds from their collateral. Construction became easier with electronic processing of building permits reducing delays by two weeks.
Overall, the country is in 83rd place for ease of doing business.
India also was speeding up its reforms, enabling online submissions of customs declarations and payment of customs fees, reducing the time it takes to meet all administrative requirements to export from 27 days in 2006 to 18 as well as expanding the credit bureau to include payment histories on businesses as well as individuals. India was ranked 120th in the overall list.
Indonesia and Vietnam strengthened investor protections while Turkey cut its corporate income tax from 30 per cent to 20 per cent, among other changes.
The ‘Doing Business’ report tracks a set of regulatory indicators related to business start-up, operation, trade, payment of taxes and closure by measuring the time and cost associated with various government requirements.
It does not track variables such as economic policies, quality of infrastructure, currency volatility, investor perceptions or crime rates.
A global trade union group criticized the report, saying that a section on employing workers asserts wrongly that the elimination of workers’ protection rules creates higher economic growth and job creation.
The group said that a number of countries known for repeated violations of workers’ rights scored well in the IFC report. — AP
Saturday, September 15, 2007
ECONOMIC growth will take a hit across the major G7 economies this year, apart from the UK, as the credit crisis puts a brake on expansion
ECONOMIC growth will take a hit across the major G7 economies this year, apart from the UK, as the credit crisis puts a brake on expansion, Reuters polls showed yesterday.
The monthly polls of around 250 economists, carried out September 7-13, showed the US, Japanese and euro zone economies bearing the brunt of a global credit market squeeze that has not yet abated.
Economists now see around a 30 per cent chance of a US recession happening in the next 12 months should the effects of a housing market slowdown continue to ripple into the wider economy.
Growth of just 2.1 per cent is predicted this year in the United States, down from the 2.2 per cent recorded last month.
Japanese growth is also expected to be sluggish, coming in at 1.8 per cent in fiscal 2007/2008, well down on the 2.3 per cent seen last month.
Forecasts for Japan were taken before the sudden resignation of Prime Minister Shinzo Abe on Wednesday, which unsettled markets further.
The UK bucked the trend, with analysts upgrading their calls for the economy, predicting growth of 2.9 per cent up from 2.8 per cent last month.
"We have lowered our third and fourth quarter GDP forecasts for the United States on the assumption that business confidence will temporarily retreat in response to the credit crunch," said Michael Englund at Action Economics.
Revised growth forecasts come in tandem with expectations for the US Federal Reserve to lower interest rates, with a rate cut seen as soon as next week, and another to come by the end of the year.
Rates are seen on hold 2008 at 4.5 per cent after another cut by March.
"We now assume that the Fed will feel compelled to lower the Fed funds rate target to end the credit crisis," said Englund.
The main scenario for the United States is for growth to hit a low of 2.0 per cent in the final three months of the year, then creep up through subsequent quarters to average 2.5 per cent in 2008.
This will mark a turnaround against other G7 economies, with growth forecast to slip to 2.3 per cent in the UK and euro zone.
Reuters
The monthly polls of around 250 economists, carried out September 7-13, showed the US, Japanese and euro zone economies bearing the brunt of a global credit market squeeze that has not yet abated.
Economists now see around a 30 per cent chance of a US recession happening in the next 12 months should the effects of a housing market slowdown continue to ripple into the wider economy.
Growth of just 2.1 per cent is predicted this year in the United States, down from the 2.2 per cent recorded last month.
Japanese growth is also expected to be sluggish, coming in at 1.8 per cent in fiscal 2007/2008, well down on the 2.3 per cent seen last month.
Forecasts for Japan were taken before the sudden resignation of Prime Minister Shinzo Abe on Wednesday, which unsettled markets further.
The UK bucked the trend, with analysts upgrading their calls for the economy, predicting growth of 2.9 per cent up from 2.8 per cent last month.
"We have lowered our third and fourth quarter GDP forecasts for the United States on the assumption that business confidence will temporarily retreat in response to the credit crunch," said Michael Englund at Action Economics.
Revised growth forecasts come in tandem with expectations for the US Federal Reserve to lower interest rates, with a rate cut seen as soon as next week, and another to come by the end of the year.
Rates are seen on hold 2008 at 4.5 per cent after another cut by March.
"We now assume that the Fed will feel compelled to lower the Fed funds rate target to end the credit crisis," said Englund.
The main scenario for the United States is for growth to hit a low of 2.0 per cent in the final three months of the year, then creep up through subsequent quarters to average 2.5 per cent in 2008.
This will mark a turnaround against other G7 economies, with growth forecast to slip to 2.3 per cent in the UK and euro zone.
Reuters
THE US dollar hit a 15-year low against a basket of major currencies for the fifth consecutive day
THE US dollar hit a 15-year low against a basket of major currencies for the fifth consecutive day yesterday as investors braced for an expected Federal Reserve interest rate cut next week.
The greenback which also set record lows versus the euro and three-decade troughs against the Canadian dollar has been under pressure since Friday, when an unexpectedly weak US jobs report fuelled speculation that the Fed may cut rates by as much as 50 basis points on September 18 from the current 5.25 per cent.
The unexpected fall in US employment levels suggested that the US economy may be hit more than previously expected by the turmoil in financial and credit markets, which spiralled out from troubles in the US sub-prime mortgage sector.
Dollar weakness "has been the strong trend for the past few days, ever since we got the payrolls number. The market is now pricing in the fact that what we are seeing in financial markets ... is probably going to be a lot more negative for the US economy than economies elsewhere," said Adarsh Sinha, currency strategist at Barclays Capital.
"We think that further (dollar) weakness is likely ahead."
By 1058 GMT, the US dollar index had fallen to 79.302 its lowest since 1992, when it had set an all-time trough of 78.19. It last traded at 79.529.
The euro set a record high of US$1.3927, according to Reuters data, before easing back to US$1.3886.
The US dollar was down a third of a per cent at C$1.0334, just off an earlier 30-year low at C$1.0316.
One exception though was the yen, which lost ground broadly, including against the US dollar.
Analysts cited short-term positions adjustments as well as political uncertainty after Prime Minister Shinzo Abe's shock announcement on Wednesday that he will step down.
The yen was down 0.4 per cent against the euro at 159.41 . It fell 0.6 per cent versus the US dollar to 114.76.
The Swiss franc was steady versus the euro ahead of a Swiss National Bank rate decision. Most economists expect the SNB to hold rates at 2.5 per cent, but a sizeable minority are expecting a 25 basis point hike.
"We believe the SNB will indeed tighten, which given the uncertainty over the outcome, could see Swiss franc gains," ING said in a research note for clients.
The high-yielding Australian and New Zealand dollars both slipped yesterday, partly after data showed retail sales in New Zealand were flat in July from a month earlier compared with forecasts for a 0.2-per cent increase.
The report followed the Reserve Bank of New Zealand's decision to keep rates on hold at 8.25 per cent, the highest among developed economies, with the central bank acknowledging signs of slowing demand but saying inflation remained a worry.
Elsewhere, sterling fell to a six-month low against the euro as weak UK housing data added weight to expectations that UK interest rates have peaked.
Reuters
The greenback which also set record lows versus the euro and three-decade troughs against the Canadian dollar has been under pressure since Friday, when an unexpectedly weak US jobs report fuelled speculation that the Fed may cut rates by as much as 50 basis points on September 18 from the current 5.25 per cent.
The unexpected fall in US employment levels suggested that the US economy may be hit more than previously expected by the turmoil in financial and credit markets, which spiralled out from troubles in the US sub-prime mortgage sector.
Dollar weakness "has been the strong trend for the past few days, ever since we got the payrolls number. The market is now pricing in the fact that what we are seeing in financial markets ... is probably going to be a lot more negative for the US economy than economies elsewhere," said Adarsh Sinha, currency strategist at Barclays Capital.
"We think that further (dollar) weakness is likely ahead."
By 1058 GMT, the US dollar index had fallen to 79.302 its lowest since 1992, when it had set an all-time trough of 78.19. It last traded at 79.529.
The euro set a record high of US$1.3927, according to Reuters data, before easing back to US$1.3886.
The US dollar was down a third of a per cent at C$1.0334, just off an earlier 30-year low at C$1.0316.
One exception though was the yen, which lost ground broadly, including against the US dollar.
Analysts cited short-term positions adjustments as well as political uncertainty after Prime Minister Shinzo Abe's shock announcement on Wednesday that he will step down.
The yen was down 0.4 per cent against the euro at 159.41 . It fell 0.6 per cent versus the US dollar to 114.76.
The Swiss franc was steady versus the euro ahead of a Swiss National Bank rate decision. Most economists expect the SNB to hold rates at 2.5 per cent, but a sizeable minority are expecting a 25 basis point hike.
"We believe the SNB will indeed tighten, which given the uncertainty over the outcome, could see Swiss franc gains," ING said in a research note for clients.
The high-yielding Australian and New Zealand dollars both slipped yesterday, partly after data showed retail sales in New Zealand were flat in July from a month earlier compared with forecasts for a 0.2-per cent increase.
The report followed the Reserve Bank of New Zealand's decision to keep rates on hold at 8.25 per cent, the highest among developed economies, with the central bank acknowledging signs of slowing demand but saying inflation remained a worry.
Elsewhere, sterling fell to a six-month low against the euro as weak UK housing data added weight to expectations that UK interest rates have peaked.
Reuters
OIL edged lower yesterday, but kept within sight of the previous day's all-time high above US$80, as investors stayed locked into the market
OIL edged lower yesterday, but kept within sight of the previous day's all-time high above US$80, as investors stayed locked into the market for the long haul.
Their enthusiasm has grown thanks to a backward-dated market structure, where oil prices nearby are higher than those further forward, which produces favourable returns for investors.
The nearly two-month "backwardation" has been encouraged by the belief by analysts and consumer nations that Opec will not pump enough oil to satisfy demand for fuel this winter.
US crude traded six US cents lower at US$79.85 a barrel by 1125 GMT, after hitting a record of US$80.18 on Wednesday. London Brent crude shed 22 cents to US$77.46.
"Modest demand growth combined with no significant supply increases has caused oil inventories to decline sharply, creating 'backwardation' in the oil forward curve, which is a very bullish signal," said Jeffrey Currie of Goldman Sachs.
The Organisation of the Petroleum Exporting Countries agreed on a modest supply increase on Tuesday in a bid to soothe consumer concern that soaring oil costs may slow economic growth.
But analysts said Opec's pact to raise output by 500,000 barrels per day (bpd) from November 1 was not enough to reverse a rally that has lifted prices by 31 per cent this year.
Though quadruple the levels of 2002, the price of oil when adjusted for inflation is below the US$90-a-barrel peaks of the Iranian Revolution in 1979 and the start of the Iran-Iraq War the following year.
"There are so many things that affect the price of oil," Hasan Qabazard, director of Opec's research division, told reporters yesterday.
"We have a storm working its way to American facilities. We have an economic crisis, so many things are affecting...prices."
Hurricane Humberto yesterday hit the Texas coast, a major oil-producing and gasoline-refining area, though industry officials expect little impact on operations.
Reuters
Their enthusiasm has grown thanks to a backward-dated market structure, where oil prices nearby are higher than those further forward, which produces favourable returns for investors.
The nearly two-month "backwardation" has been encouraged by the belief by analysts and consumer nations that Opec will not pump enough oil to satisfy demand for fuel this winter.
US crude traded six US cents lower at US$79.85 a barrel by 1125 GMT, after hitting a record of US$80.18 on Wednesday. London Brent crude shed 22 cents to US$77.46.
"Modest demand growth combined with no significant supply increases has caused oil inventories to decline sharply, creating 'backwardation' in the oil forward curve, which is a very bullish signal," said Jeffrey Currie of Goldman Sachs.
The Organisation of the Petroleum Exporting Countries agreed on a modest supply increase on Tuesday in a bid to soothe consumer concern that soaring oil costs may slow economic growth.
But analysts said Opec's pact to raise output by 500,000 barrels per day (bpd) from November 1 was not enough to reverse a rally that has lifted prices by 31 per cent this year.
Though quadruple the levels of 2002, the price of oil when adjusted for inflation is below the US$90-a-barrel peaks of the Iranian Revolution in 1979 and the start of the Iran-Iraq War the following year.
"There are so many things that affect the price of oil," Hasan Qabazard, director of Opec's research division, told reporters yesterday.
"We have a storm working its way to American facilities. We have an economic crisis, so many things are affecting...prices."
Hurricane Humberto yesterday hit the Texas coast, a major oil-producing and gasoline-refining area, though industry officials expect little impact on operations.
Reuters
Saturday, August 25, 2007
Inflation rose at the fastest pace in 12 years last month
If it seemed to you that seeing the doctor or eating out is becoming more expensive of late, you were spot on.
Inflation rose at the fastest pace in 12 years last month — as the Goods and Services Tax (GST) hike kicked in, food costs rose and rents soared.
The Consumer Price Index (CPI) rose 2.6 per cent from a year earlier after rising 1.3 per cent in June, the Department of Statistics said yesterday. The rise was the fastest since January 1995.
Compared to a year ago, gains were the sharpest for healthcare, as more expensive Chinese herbs and higher medical consultation fees pushed the category up by 5.7 per cent.
Food, which has the largest weightage in the CPI, increased 2.9 per cent from a year ago, as the costs of cooked food, fruits, fish and milk powder went up — the last due to higher global prices.
July also marked the first month the surge in real estate prices finally hit headline inflation. While housing prices went up by 0.7 per cent from a year ago, it crept up by 4.9 per cent compared to June as electricity prices climbed and rents increased.
Public housing rents — which hit a 10-year high last month — is included in the CPI’s housing component, unlike private rents.
The Monetary Authority of Singapore expects inflation this year to be at the upper half of its 0.5- to 1.5-per-cent range, before rising to about 2 per cent next year.
But private-sector economists expect full-year inflation to exceed 1.5 per cent this year. UOB economist Alvin Liew, whose forecast is 1.8 per cent, said the impact of the GST hike would be “felt for the next 11 months”.
Also, bad weather in the region has led to supply disruptions that may continue to bolster food costs, CIMB-GK economist Song Seng Wun told Dow Jones Newswires.
Source : Today - 24 Aug 2007
Inflation rose at the fastest pace in 12 years last month — as the Goods and Services Tax (GST) hike kicked in, food costs rose and rents soared.
The Consumer Price Index (CPI) rose 2.6 per cent from a year earlier after rising 1.3 per cent in June, the Department of Statistics said yesterday. The rise was the fastest since January 1995.
Compared to a year ago, gains were the sharpest for healthcare, as more expensive Chinese herbs and higher medical consultation fees pushed the category up by 5.7 per cent.
Food, which has the largest weightage in the CPI, increased 2.9 per cent from a year ago, as the costs of cooked food, fruits, fish and milk powder went up — the last due to higher global prices.
July also marked the first month the surge in real estate prices finally hit headline inflation. While housing prices went up by 0.7 per cent from a year ago, it crept up by 4.9 per cent compared to June as electricity prices climbed and rents increased.
Public housing rents — which hit a 10-year high last month — is included in the CPI’s housing component, unlike private rents.
The Monetary Authority of Singapore expects inflation this year to be at the upper half of its 0.5- to 1.5-per-cent range, before rising to about 2 per cent next year.
But private-sector economists expect full-year inflation to exceed 1.5 per cent this year. UOB economist Alvin Liew, whose forecast is 1.8 per cent, said the impact of the GST hike would be “felt for the next 11 months”.
Also, bad weather in the region has led to supply disruptions that may continue to bolster food costs, CIMB-GK economist Song Seng Wun told Dow Jones Newswires.
Source : Today - 24 Aug 2007
Insurer NTUC Income sees tide turning
Insurer NTUC Income sees tide turning
By Cheow Xin Yi, TODAY | Posted: 21 August 2007 0954 hrs
Photos 1 of 1
Chief executive Tan Suee Chieh
SINGAPORE: The bloodletting was substantial — a net loss of 303 insurance agents over the past four years.
But the tide has turned for insurer NTUC Income, which saw a net gain of 100 full-time agents as of July.
"The bleeding has stopped," chief executive Tan Suee Chieh told an audience of 1,200, mostly insurance agents, at the Ritz Carlton hotel yesterday, even as he announced a 500-day "Cultural Revolution" focused on NTUC Income employees.
The revamp will include a change in the formal designation of its 560 full-time insurance agents, from "Development Officers" to "Financial Consultants". Mr Tan also announced financial incentives for part-time agents to join the firm full-time.
While he did not offer reasons for past losses, reportedly, many departures over the past year were due to agents' unhappiness over the setting up of a direct sales force with a fixed salary — an initiative by former CEO Tan Kin Lian. Some saw the move as cannibalising the efforts of the mobile agency force.
The direct sales force is still in operation, but is just one out of five channels of sale, including the Internet, the insurer told Today.
Yesterday, Mr Tan — who had embarked on a bold rebranding of the company after taking over in February — said that while the overhaul would carry through to the end of next year, in actuality, "culture change" was an ongoing process. "We are very good in teamwork and execution, but not so good in terms of creativity, taking ownership and expressing our independence of thoughts," he said.
The insurers' general managers will gather for a three-day Sentosa retreat to come up with the blueprint for the transformation. Mr Tan also spoke of expanding recruitment and hinted at possible management changes, with "the acquisition of talent to continue on a vigorous pace".
Income has launched a new insurance product, Revosave. Touted as a hybrid that combines traditional endowment plan features with an investment-linked component, it aims to achieve sales of least $20 million over 12 months, or 16 per cent of the target market share. - TODAY/fa
By Cheow Xin Yi, TODAY | Posted: 21 August 2007 0954 hrs
Photos 1 of 1
Chief executive Tan Suee Chieh
SINGAPORE: The bloodletting was substantial — a net loss of 303 insurance agents over the past four years.
But the tide has turned for insurer NTUC Income, which saw a net gain of 100 full-time agents as of July.
"The bleeding has stopped," chief executive Tan Suee Chieh told an audience of 1,200, mostly insurance agents, at the Ritz Carlton hotel yesterday, even as he announced a 500-day "Cultural Revolution" focused on NTUC Income employees.
The revamp will include a change in the formal designation of its 560 full-time insurance agents, from "Development Officers" to "Financial Consultants". Mr Tan also announced financial incentives for part-time agents to join the firm full-time.
While he did not offer reasons for past losses, reportedly, many departures over the past year were due to agents' unhappiness over the setting up of a direct sales force with a fixed salary — an initiative by former CEO Tan Kin Lian. Some saw the move as cannibalising the efforts of the mobile agency force.
The direct sales force is still in operation, but is just one out of five channels of sale, including the Internet, the insurer told Today.
Yesterday, Mr Tan — who had embarked on a bold rebranding of the company after taking over in February — said that while the overhaul would carry through to the end of next year, in actuality, "culture change" was an ongoing process. "We are very good in teamwork and execution, but not so good in terms of creativity, taking ownership and expressing our independence of thoughts," he said.
The insurers' general managers will gather for a three-day Sentosa retreat to come up with the blueprint for the transformation. Mr Tan also spoke of expanding recruitment and hinted at possible management changes, with "the acquisition of talent to continue on a vigorous pace".
Income has launched a new insurance product, Revosave. Touted as a hybrid that combines traditional endowment plan features with an investment-linked component, it aims to achieve sales of least $20 million over 12 months, or 16 per cent of the target market share. - TODAY/fa
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