Resorts World to build new $80m bridge to Singapore Sentosa

Resorts World to build new $80m bridge to Singapore Sentosa

RESORTS World at Sentosa (RWS) yesterday announced the award of a $80 million contract to Australian-based engineering and construction company McConnell Dowell to build a new vehicular bridge to Sentosa.
Work on the bridge begins this week and is expected to be completed by end-September 2009.

The 710-metre three-lane bridge will connect Singapore to Sentosa and provide visitors with a smooth and convenient entry into Sentosa and RWS. It will be built parallel to the present four-lane Sentosa bridge. When the new link is completed, the two bridges will be merged.

RWS anticipates 15 million visitors calling on its $5.2 billion resort when it opens in early 2010. ‘This is the first vehicular bridge infrastructure of this scale built by a private developer in Singapore,’ said RWS’s senior director of projects Michael Chin. ‘We are committed to provide our visitors with a once-in-a-lifetime holiday experience, and that includes hassle-free access to the resort,’ he added.

According to Sentosa Leisure Group executive director for special projects, planning and development Low Tien Sio, the new link is ’set to take on up to four times more traffic when it opens . . . and will not only facilitate travel to RWS, but also drive traffic smoothly to Sentosa’s popular destinations and give our Cove residents a welcome ride home’.

To help ease congestion near the Telok Blangah junction, the existing admission booths to Sentosa will be relocated on the island along Gateway Avenue and by April, Gateway Avenue will be diverted to make way for the development of RWS.

From the vehicular bridge, drivers will then travel along Gateway Avenue, before the road fans out into seven lanes to expedite island admission.
Source : Business Times - 25 Jan 2008

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Singapore 79 Anson Rd stake sold for 3rd time in 2 years

Singapore 79 Anson Rd stake sold for 3rd time in 2 years

SEB Asian Property Fund pays $215m for 55% stake
By KALPANA RASHIWALA

TRADING office buildings continues to be flavour of the month in the real estate market. A 55 per cent stake in the freehold 79 Anson Road has changed hands for the third time in about two years. The latest deal involves a fund managed by Ferrell Asset Management selling the space to an SEB Asset Management fund for $215 million.
Ferrell’s fund, FAM Maximilian Real Estate Investment Fund, last year bought the space - spread over 12 floors of the 23-storey building, for $149 million from two parties, at least one of which is linked to the Lippo group.

Pramerica Asia had sold the property to Lippo entities for over $90 million in early 2006.

The latest acquisition, by SEB Asian Property Fund SICAV-FIS, for $215 million works out to about $1,937 per square foot based on a lettable area of 110,976 sq ft.

The fund, which was launched in late-August last year, invests in Asia only. The plan is to develop a broad-based portfolio, primarily in China, Japan, South Korea and Singapore, over the coming months.

This is not the German group’s first acquisition in the Singapore office sector. It made at least two purchases last year.

In September, SEB bought 12 floors at Springleaf Tower nearby for $2,088 psf of net lettable area. And a few months before that, in April, the group bought SIA Building for about $526 million or $1,783 psf from TSO Investment, a fully owned subsidiary of a property fund managed by CLSA Capital Partners.

TSO had purchased the office block from Singapore Airlines in June 2006 for $343.88 million, or about $1,165 psf.

A Ferrell-SEB joint release yesterday said the space transacted at 79 Anson Road is currently about 98 per cent occupied. Major tenants include Kellogg Brown & Root, Mitsubishi Chemicals, interTouch and Infor Global Solutions.

Ferrell Group managing director David Lee said the group will keep searching for development and investment opportunities in the commercial property sector.

SEB Immobilien-Investment managing director Choy-Soon Chua said the group expects to capitalise on the ‘extremely positive growth prospects’ in the Singapore office sector due to rising demand and limited supply.

The remaining 45 per cent of 79 Anson Road is owned by the Central Provident Fund Board.
Source : Business Times - 25 Jan 2008

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Staff costs, inflation major issues this year - Singapore

Staff costs, inflation major issues this year - Singapore

By CHUANG PECK MING

SINGAPORE’S economy is strong enough to weather the fallout of a US recession this year, while escalating staff costs will be the top problem bosses have to grapple with in 2008, human resource practitioners were told at a conference yesterday.
Speaking at the SHRI Outlook 2008 conference, Hui Cheung Tai, regional economist at Standard Chartered Bank, said the robust domestic demand which drove Singapore’s growth last year will continue in 2008. And this will help soften the blow of a US recession.

But Mr Hui dismissed the ‘decoupling’ notion that a booming Asia, including Singapore, has acquired its own dynamism to escape a US recession without a scratch. China may now have become the largest export market for many trade-dependent countries in the region, but many of the exports to China - half by Stanchart’s reckoning - eventually end up in the US or the EU, he said.

By that measure, Mr Hui finds Hong Kong to have the biggest exposure to a US downturn, followed by Singapore. China, Indonesia and India are the least exposed. So Stanchart is projecting the Singapore economy to expand by 4.5 per cent this year - at the lower end of the official forecast of 4.5-6.5 per cent. The economy rose 7.5 per cent in 2007.

Mr Hui warned that a US recession would not be followed by a quick bounce-back - it would be a U-shaped rather than a V-shaped recession. According to him, a US downturn is likely to last for about two quarters. The subsequent pick-up would be ‘prolonged’, stretching into 2009.

Meanwhile, Mr Hui noted, inflation has made its comeback and has become a hot issue in the region. Everywhere, including in Singapore, people are complaining that price increases are higher than what the official figures reflect. Stanchart expects the inflation rate in Singapore to rise to around 5.0 per cent in the first half of the year, before easing to 4.0 per cent in the second half.

While inflation has reared its ugly head as the economy slips into slower gear, the job market is likely to remain tight. ‘It will still be a challenge to fill vacancies,’ Mr Hui said.

A panel led by David Ang, executive director of the Singapore Human Resources Institute, picked escalating pay, fanned by job-hopping, to be the number one headache for employers.

Jacqueline Streimer, employment law editor at CCH Southeast Asia, one of the region’s leading professional publishing companies, said employees in the banking and finance sector get as much as a 50 per cent increase in pay when they jump ship to sign on with another bank. Such turnover leads to a spiral in wage costs because the employer who loses a staff member will then have to pay to advertise for a replacement, suffer downtime and lost productivity as well as need to offer a premium in higher salary to secure a new employee, Ms Streimer said.
Source : Business Times - 25 Jan 2008

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Sustainable development a priority for Singapore: PM Lee

Sustainable development a priority for Singapore: PM Lee

A top-level panel of ministers has been formed to chart the way forward, he says
By ANNA TEO
IN DAVOS
PURSUE economic growth, but with an eye on the Earth.

Green call: The need to be environmentally friendly is patently clear, PM Lee said in Davos yesterday
Going forward, sustainable development will be a priority for Singapore - and a top-level panel of ministers has been formed to chart the way forward.

On the sidelines of the World Economic Forum, where he will today take part in a key session on climate change, Prime Minister Lee Hsien Loong told Singapore reporters that an Inter-Ministerial Committee on Sustainable Development will be looking into drawing up a holistic sustainable development strategy for Singapore.

The need to be environmentally friendly is patently clear, ‘but at the same time, we don’t want to have to sacrifice economic growth’, he said. Hence the premise and promise of sustainable development - to ‘grow in an environmentally friendly way, where you build into your whole development strategy an awareness of the environment, of conservation, of efficiency, so that your buildings use less energy for air conditioning, your public transport is convenient and people use public transport instead of driving cars’.

While there are no plans to levy any carbon tax, Mr Lee would not rule it out entirely, but emphasised the need to be mindful about cost and competitiveness, particularly in imposing any regulatory requirements that effectively add to business costs.

The committee is co-chaired by Minister for National Development Mah Bow Tan and Minister for the Environment and Water Resources Yaacob Ibrahim. Other members include Finance Minister Tharman Shanmugaratnam, Transport Minister Raymond Lim and Minister of State for Trade & Industry S Iswaran.

A joint statement by MND and MEWR says the committee will, for a start, ‘articulate a clear national framework and strategy to achieve a sustainable and high-quality living environment that is consistent with economic growth’.

It will also seek to build new competencies and encourage mind-share across the public, private and people sectors to develop Singapore as an ‘Eco-Hub’ - ‘an innovative thought-centre and hub for urban and environmental sustainability’.

Noting that Singapore is already a model of urban planning, Mr Lee said that if Singapore’s efforts on sustainable development are successful, it will spell one more area of expertise that it can share with other countries.

Mr Lee arrived in Davos on Wednesday afternoon from Paris, where he had been on a three-day official visit. In Davos yesterday, he had a busy day of meetings with various people, including US Deputy Secretary of Treasury Robert Kimmitt; former US Secretary of State Henry Kissinger, Harvard professor Larry Summers, as well as UBS chairman Marcel Ospel and Google chairman Eric Schmidt.
Source : Business Times - 25 Jan 2008

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Singapore SIA proves luckier than smart by losing China Eastern deal

Singapore SIA proves luckier than smart by losing China Eastern deal
(SINGAPORE) Singapore Airlines may have won by losing.
While SIA’s failure to secure a 24 per cent stake in money-losing China Eastern Airlines Corp thwarted CEO Chew Choon Seng’s plan for a Shanghai hub, it has US$3 billion in cash and two new fuel-saving Airbus SAS A380 aircraft - and gets 40 per cent of sales from business-class passengers. The combination gives SIA, the world’s most profitable carrier, an edge over competitors such as Australia’s Qantas Airways Ltd as fuel costs rise.

Saying ‘nothing is a must-have’, Mr Chew, 61, pledged last month not to raise his HK$3.80-a-share bid for China Eastern (CEA), which the airline made jointly with parent Temasek Holdings. Minority stockholders vetoed the offer on Jan 8 after China National Aviation Holding Co (whose Air China is the nation’s biggest international carrier) said on Jan 6 that it would offer at least HK$5 a share.

‘The investment would not have added to earnings in a year or two,’ said Tan Teng Boo, who oversees about US$300 million at Capital Dynamics Asset Management in Kuala Lumpur. ‘You have to deal with cultural differences and the management of staff.’ SIA posted record earnings last fiscal year amid rising Asian air-travel demand. It fell 19 per cent in three months amid speculation that the HK$7.16 billion (S$1.3 billion) CEA deal would fall apart and is now priced lower than most peers.

Of 14 analysts tracked by Bloomberg, 13 recommend buying SIA shares. The carrier may rise 49 per cent from Wednesday’s closing price of S$15.58, to S$23.29, according to the survey. Even Citigroup Inc’s Corrine Png, the only one who recommended selling, expects the stock to reach S$18.90, a 21 per cent increase.

With CEA behind him, Mr Chew can concentrate on extending a record of earnings every year since his company went public in 1985. Its 14.7 per cent profit margin, or the percentage of sales remaining after operating costs, is the widest among Asia’s 10 biggest airlines, according to data compiled by Bloomberg.

The airline boosted net income 72 per cent to S$2.13 billion last fiscal year - the highest of any carrier in the world. It may report earnings of S$1.86 billion in the year ending March, based on analyst estimates compiled by Bloomberg.

SIA is luring business-class travellers with free champagne and seats as wide as 76cm, the equivalent of two economy-class seats. ‘They have a niche market in premium travel and that’s not going to go away,’ said Rohan Suppiah, an analyst at Kim Eng Securities Pte in Singapore, who recommends buying the stock. ‘As a result, they are able to charge premium pricing and able to offset the increase in jet fuel prices with surcharges.’

A one-way business-class ticket on SIA costs S$4,126, including taxes and fees, for travel from its home base to Sydney on the Airbus A380. That compares with Qantas’s fare of S$3,849 on the same route, according to company websites. SIA filled an average of 80.7 per cent of seats last year even after raising fuel surcharges five times. That compares with 78.4 per cent in 2006, according to Bloomberg calculations based on figures released by the airline.

The company is the first to fly the A380 superjumbo, the world’s biggest commercial aircraft. It ordered 19 of the double-deckers, worth at least US$304.4 million each at list prices, and has received two. SIA will have four in service before Airbus delivers any to competitors including Qantas. On average, more than 90 per cent of the 471 seats on the first A380, which began flying between Singapore and Sydney last Oct 25, are filled, said SIA spokesman Stephen Forshaw.

Passengers flying ’suite’ class pay at least 20 per cent more than those in first class on Boeing 747-400s used on the same route, SIA said last October. The newer jets use less fuel than the 747-400, adding to profitability.

The company has had little success with past investments. It took a S$266.9 million loss on a 25 per cent stake in Air New Zealand in 2001 and saw the shareholding trimmed to 6.3 per cent as part of a 2002 government bailout of the Auckland-based company. The remaining shares were sold for about NZ$62 million (S$68 million) in 2004.

Mr Chew said last July that he’s ‘exploring options’ for SIA’s 49 per cent interest in Virgin Atlantic Airways, bought in 1999 for £pounds;600 million (S$1.7 billion). ‘The investment in Virgin Atlantic has not paid a financial dividend,’ Mr Forshaw said.

After passing on China Eastern, Mr Chew will still need a strategy for the world’s most populous country, where traffic rose 15 per cent in 2006, according to the General Administration of Civil Aviation. CEA lost money in 2005, 2006 and the first half of last year. ‘Looking at profit and loss at China Eastern, it certainly doesn’t make sense to buy into the carrier,’ said Louis Wong, who helps manage US$40 million at Phillip Securities Ltd in Hong Kong and doesn’t own SIA shares. ‘Raising the bid too high would have made it a risky investment.’

Mr Chew may still try to build a foothold in Shanghai to challenge Air China and Hong Kong affiliate Cathay Pacific Airways. He may start talks with Shanghai Airlines or China Southern Airlines, Raymond Yap, an analyst at CIMB Bhd in Kuala Lumpur, wrote in a Jan 9 note to clients.

CEA accounted for 31 per cent of scheduled service from Shanghai Pudong International Airport and nearly 37 per cent from Hongqiao Airport in 2006, according to a November report by Bear Stearns Cos.

‘SIA basically lost out in a very big market,’ said Desmond Tjiang, who manages US$1.3 billion in Asian equities at Fortis Investment Management in Hong Kong. ‘They should have looked at it at a more strategic level, rather than just at the price.’ The failure to land CEA has left SIA undervalued, according to analysts. It has a price-earnings ratio of 8.38, compared with 12.45 for Qantas and 13.57 for Cathay Pacific. ‘Singapore Air has been punished for not letting that deal come through,’ said Christoffer Moltke-Leth, head of Asia sales trading at Saxo Capital Markets Pte in Singapore. The stock ‘has come down 20 to 25 per cent. That’s a buying opportunity.’ - Bloomberg
Source : Business Times - 25 Jan 2008

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Singapore Robinson CEO throws weight behind Lippo

Singapore Robinson CEO throws weight behind Lippo

Says the board is fully committed to the brand and expansion strategy
By MICHELLE QUAH
(SINGAPORE) Robinson CEO John Cheston has refuted recent allegations that the company’s major shareholder, Indonesia’s Lippo Group, doesn’t cherish the Robinson brand in Singapore.

Mr Cheston: Current board is behind aggressive move to enlist new brands
Speaking to The Business Times at the company’s headquarters in Orchard Building yesterday, Mr Cheston explained that Lippo, along with the current board of directors, have always fully supported the management’s growth strategy and its efforts to preserve the value of the brand here.

‘Lippo - as is the entire board of Robinson’s - is fiercely supportive of management’s strategy; 100 per cent supportive,’ Mr Cheston said.

And that’s come in the form of backing the management’s plans to bring in more lucrative retail brands to the Robinson fold, open more stores and increase the group’s retail floor space in Singapore - to expand its reach and influence.

‘We had three brands under the previous board: Robinsons, John Little and Marks & Spencer. Now, we have eight brands, having added on River Island, Fat Face, Coast, Trucco and Principles,’ Mr Cheston said.

Adding more brands to its stable - and only ‘hot’ brands, at that - is what the Robinson CEO believes is crucial to the group’s growth and continued profitability.

‘We don’t have real estate, we don’t own buildings, so we’re at the mercy of the landlords from whom we lease our space. As such, we have no choice but to seek growth in other areas - by bringing in new brands to boost our profitability and growth. This helps us to manage the rising rentals which eat into our earnings, and the threat of one day being booted out of our retail space,’ he said.

And he explains that it was Robinson’s current board - formed after Lippo became a major shareholder in 2006 - that has been behind Robinson’s aggressive strategy to recruit new brands.

Under the new board, the retailer has also more than doubled the number of its stores in Singapore and Malaysia to a total of 34. Its retail floor space has gone up to 670,000 square feet, from 444,000 sq ft under the previous board.

Its capital expenditure has shot up exponentially: from an average of just $4 million being spent every year, between FY2003 and FY2006, Robinson increased its spending to $28 million in FY2007 alone. For the first quarter of FY2008, it’s already spent $19 million.

Bolstering the Robinson stable is the group’s way of preserving the 150-year- old Robinson brand - a sentimental and sensitive matter for some Singaporeans.

And Lippo is very much a strong supporter of that, Mr Cheston says. ‘While the management and the current board are very much behind a regional expansion for the group, our focus is still Singapore. We want to grow a strong business here first and preserve the brand.’

Lippo has come under some form of scrutiny, after the Al-Futtaim Group made an offer this week to take over Robinson.

Tecity, a significant shareholder of Robinson’s, has offered to sell its stake to Al-Futtaim - believing the Middle-East group will better cherish the Robinson brand. That’s led some to question Lippo’s commitment to the same.

Lippo’s decision to set up a department store chain in China, called ‘Robbinz’, has also raised concerns about what this will do to the integrity of the Robinson brand here.

When asked, Mr Cheston said he could not comment on the effect the Robbinz chain would have on Robinson.

‘I can only talk about what I do know - which is the Robinson business here. I can tell you that we have no plans to go into China, only to South-east Asia, and I’ve not heard any plans from the board about merging the Robbinz and Robinson brands. As far as I know, the concept for the Robbinz chain is a very different one.’

He also said it’s business as usual at the company, with staff not being affected by news of Al-Futtaim’s offer. ‘If anything, they see it as an affirmation that we’ve been doing the right thing all along,’ he said.
Source : Business Times - 25 Jan 2008

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Top hedge fund manager sets up Singapore office

Top hedge fund manager sets up Singapore office

Outlook for Asia still bright despite US woes: research head
By GENEVIEVE CUA
(SINGAPORE) The US is in recession and equity markets are in bear territory, said Thomas Della Casa, head of research at Man Investments, one of the world’s largest hedge fund managers, yesterday.
‘We’re in a tough market. Equity markets are trying to find a bottom and eventually won’t. People might lose more money than they thought. It’s a good opportunity for us,’ he said.

Rising volatility and the prospect of muted or negative returns are likely to put hedge funds back on investors’ radar screens. This is because a number of hedge fund strategies strive for low volatility and stable returns, which tend to underperform in bull markets.

‘In 2008, we expect that equity investors will have a tough time; bond investors will also have a tough time. Getting a return of 10 per cent or close to it is not a bad proposition,’ he said. The Hedge Fund Research Index of hedge funds’ performance showed a 10 per cent return over the 12 months to end-December, compared to 3.73 per cent for the MSCI World Index.

Man Investments, the asset management arm of London-listed Man Group, has set up a Singapore office in a clear nod to Singapore’s growing role as an asset gathering base.

Man Investments has about US$70 billion in assets under management, of which 15 per cent or US$10.5 billion is sourced from Asia. Singapore is the booking centre for 80 per cent of the funds sourced from the South-east Asian region. Previously, business sourced out of Singapore had been serviced from the Hong Kong office.

Tim Rainsford, Man Investments managing director for Asia Pacific, said the Singapore office was a direct response to the growing demand for alternative investments. ‘Singapore is by no means a new market for us. We have been working closely with clients in Singapore for more than 10 years. However the growth of our business as well as the growth of the hedge fund sector (here) and in South-east Asia means that the time is right to set up shop here so we might serve our clients better.’

In a press briefing yesterday, Mr Della Casa also spoke about the market outlook. ‘The US is in recession. The question is not hard landing or soft landing. The question is how long it will last and how they will get out of it.’

Historically, trouble in the US housing market often leads to a prolonged recession, he said. The US savings and loan crisis in the 1980s resulted in a nine-year recession.

Asia would lead global growth, thanks to ongoing infrastructure investments, he added. ‘The outlook for Asia is still very, very bright. China and India will hold up the global economy.’ Among hedge fund strategies, he expects an ‘improved opportunity set’ for fixed income, credit and convertible bond arbitrage given the increased volatility, varying opinions and yield curve moves. He sees opportunities in distressed securities as well, and is neutral on the outlook for equity-hedged strategies.

Source : Business Times - 25 Jan 2008

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Bumper prices fetched by Singapore HDB flats fuel condo demand

Bumper prices fetched by Singapore HDB flats fuel condo demand

High cash over valuation provides ‘filter-up’ demand for private homes
By UMA SHANKARI
(SINGAPORE) More Housing Development Board flats in prime locations are now being sold for more than half-a-million dollars each, and the trend is pushing up the asking prices for mass market condominiums and adding to demand for entry-level private homes.

Data compiled by property firm ERA showed that 269 HDB flats were sold for $500,000 or more in the fourth quarter of 2007 - a 69 per cent increase over the 159 flats sold for more than $500,000 each in the previous quarter.

While most of such flats in the fourth quarter of 2007 went for between $500,000 and $599,999, 50 were sold at $600,000 to $699,999.

And 12 changed hands at $700,000 or higher.

Anecdotal evidence also suggests that larger HDB flats in Singapore’s central locations are fetching more money than before.

For instance, a 21st-storey executive flat along Mei Ling Street in Queenstown sold for a record $890,000 earlier this month.

Last November, another executive flat along the same street went for a then-record $780,000.

The sellers of such flats will now have the capacity to buy entry-level private homes, said ERA assistant vice-president Eugene Lim.

New homeowners could also look at private homes for their first property purchases, rather than at resale HDB flats in the more central parts of Singapore.

‘HDB flats provide the support for entry-level types of private housing,’ said Mr Lim.

‘If HDB prices keep moving up, people will begin to look at private properties.’

CB Richard Ellis executive director Joseph Tan pointed out that the recent surge in HDB prices has narrowed the price gap between public housing and private homes.

Many of the pricier flats are being sold for high amounts of cash-over-valuation (COV), which means that sellers will have cash on hand to make the downpayment when they purchase private properties.

‘The HDB sellers now have greater purchasing power, especially with the high COVs, which can be used for downpayments on private properties,’ said Nicholas Mak, director of research and consultancy at Knight Frank.

HDB statistics show that the median COV for executive flats in Bukit Timah rose to $137,500 in the third quarter of 2007.

In Marine Parade, the COV for five-room flats hit $84,000 in the same quarter.

The massive growth in COV for larger flats in central districts can largely be attributed to homeowners that have sold their properties through en bloc sales and are now moving into HDB flats.

But the reverse also applies now, analysts said. Sellers of these flats are starting to upgrade to mass market private homes with spare money fetched from the high COVs of their old flats.

Property agents told BT that sellers of HDB flats with cash on hand are looking mostly at mass market condominiums in the resale market as they need replacement properties to move into.

New mass market homes, by contrast, are not as popular.

But eventually, this ‘filter-up’ demand will cause mass market property prices to climb, analysts said, which could once again put private homes out of reach of HDB upgraders.

Property agents also report that sellers of mass market private homes are upping their asking prices as they see HDB prices in prime locations head skywards.

‘Sellers are seeing five-room and executive HDB flats fetching $700,000,’ said one property agent.

‘So they think, I can ask for $1 million for my four-room private home.’

The agent said that at least two sellers of mass market homes that he is representing have recently upped their asking prices, even though the new prices are not ‘realistic’, in his opinion.

Knight Frank’s Mr Mak agreed. ‘Word gets around that HDB prices are going up, and quite quickly, sellers (of mass market private homes) start upping their asking prices.’

Source : Business Times - 25 Jan 2008

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Lees take on Tans for $2b crown jewel - SIngapore

Lees take on Tans for $2b crown jewel - SIngapore

Two families, linked by history, vie for Straits Trading Co as Lees make a counter-bid
By CONRAD RAJ

(SINGAPORE) Two illustrious local business families, whose ties go way back, are pitted against each other in a bid to wrest control of one of the island’s oldest outfits: the Straits Trading Company (STC).
Barely a fortnight after the family of the late banker Tan Chin Tuan made a general offer through The Cairns, a subsidiary of their holding company Tecity, the Lee family has come back with a slightly better counter-offer for the property and tin smelting company. The Lees, whose group of companies are the single largest shareholders in Straits Trading, have bid $5.76 a share compared to Tecity’s $5.70. Yesterday, Straits Trading closed unchanged at $5.71, giving it a market value of $2 billion.

It sets the stage for an intriguing tussle between the Lee family and the family of their former employee Tan Chin Tuan, who made his fortune working at OCBC Bank, in which the Lees are the largest shareholders.

Mr Tan spent almost half-a-century with OCBC, going on to become its managing director and chairman. He was both its youngest and oldest managing director and credited as the man who made it one of the best capitalised banks in the world. He was also chairman of Straits Trading. But while he was the empire builder, the Lees owned a large part of that empire.

The late Lee Kong Chian, patriarch and philanthropist, managed OCBC from 1938 to 1964, only to hand over the reins to Mr Tan from 1964 to 1983.

The two families are now trying to take control of the company from which Mr Tan retired as chairman only in 1992, at the age of 84. Straits Trading has interests in property, hotels and one of the world’s largest tin smelters.

The Lee family’s offer was triggered off after they recently bought more than one per cent of STC’s shares in the open market, through Knowledge Two Investment Pte Ltd, a wholly-owned subsidiary of Lee Latex, founded by Mr Lee Kong Chian. The offer extends to all shares, including those of the OCBC and Great Eastern Life groups, other than those owned by the Lee family and their companies.

The Knowledge offer price is 16 per cent more than the last traded price before Tecity’s offer, but only 0.9 per cent over yesterday closing price of $5.71 a share. It is 6.2 per cent over the volume-weighted average price of $5.43 over the last month.

It also represents a premium of 13.6 per cent over the unaudited net asset value per share of $5.07 as at the end of last September and 45.5 per cent higher than the audited NAV of $3.96 per share as at end- 2006. But many observers feel the assets are grossly undervalued, especially with prime properties like The Straits Trading Building in Raffles Place and Specialist Centre in Orchard Road, being redeveloped. It also owns and/or manages a group of about 20 hotels in the Asia-Pacific region, including Australasia under the Rendezvous and The Marques brands.

As at July 24, 2007, Knowledge and its concert parties held 105.49 million STC shares or about 32.37 per cent of the target company’s outstanding shares. Between that date and yesterday, they acquired another 3.37 million shares or about 1.03 per cent of STC’s outstanding shares.

The bulk of the concert parties’ shares - just under 20 per cent of STC - are owned by the Great Eastern Life group of companies. The Lee family and their companies own 6.23 per cent while OCBC Bank and its subsidiaries own the rest.

The Lees, like the Tans, want to acquire their shares free from all claims and encumbrances with the right to all dividends and other distributions, including those to be made for the financial year ended Dec 31, 2007.

Knowledge was incorporated in October 2000 and has a paid-up capital of $20 million while Lee Latex incorporated in 1947 has a paid-up capital of $30 million. The directors of Lee Latex are Lee Seng Wee, Lee Seng Gee, Lee Seng Tee, Lee Yuen-Shih, Lee Han-Shih (alternate to Lee Seng Gee), Lee Shih Hua (alternate to Lee Seng Tee) and Huang Thiay Sherng.

STC earned over $300 million in net profit for the nine months ended September 2007, on revenue of $727 million. Net profit more than tripled over the corresponding period last year, helped mainly by fair value surpluses amounting to over $220 million in the second quarter, due to revaluation of properties in Malaysia. For the third quarter of 2007, earnings were a more modest $9.8 million, on revenue of nearly $270 million.

When contacted, Tecity said they had no comment on the Lees’ offer at the moment.

Source : Business Times - 25 Jan 2008

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New foreign investment projects will create slew of skilled jobs -Singapore

New foreign investment projects will create slew of skilled jobs -Singapore
By Nicholas Fang

THOUSANDS of jobs in exciting, cutting-edge industries, such as new medical technology and solar energy, are in the offing as a result of a boom in new foreign investment projects in Singapore.
Last year, Singapore attracted a record $16.1 billion of foreign fixed capital spending in the manufacturing sector - and another record is expected this year.

Economic Development Board (EDB) managing director Ko Kheng Hwa said the next few years are likely to be exciting ones for job-seekers, especially in the precision engineering and biologics sectors.

Biologics are drugs made up of complex molecules derived from the cells of mammals, bacteria and yeast. These drugs have become increasingly popular.

In an interview yesterday, Mr Ko said: ‘We hope to send a message to Singaporeans to be prepared for the new wave of quality jobs that will come onstream in the next five years based on the investment projects and growth strategies of various sectors.’

‘Precision engineering is likely to need 5,000 skilled professionals; the pharmaceutical and biologics sector, 2,000,’ he said. The semiconductor, chemicals and solar industries will each need 1,000 professionals.

Precision engineering professionals must be able to handle computers and complex manufacturing and measuring processes. They will need to carry out measurements of things narrower than a human hair.

EDB announced the figures on Monday, adding that a record 28,600 jobs was created last year, of which 65 per cent were for professional and skilled occupations.

For this year, EDB expects fixed asset spending of up to $19 billion and the creation of 16,000 to 19,000 skilled jobs. About 23,000 students graduated from science and technology courses at Singapore’s institutions of higher learning in 2006.

Typically, a manufacturing engineer in precision engineering can earn up to $3,500 a month while a biomedical engineer can pull in over $4,900 a month, said the Singapore Workforce Development Agency website.

Mr Ko believes such skilled jobs can be challenging and rewarding, and can offer good prospects in terms of salary and career. ‘They require creative minds and smart hands.

‘I was at a robotics competition for young students recently, and I saw thousands of them building sophisticated robots that could do things like wrestle and play football.

‘Singaporeans already have the technical and mechanical skills to excel at the skilled jobs that will come online soon, and we should definitely try to leverage on this.’

Source : Straits Times - 25 Jan 2008

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