Bankers plan new pay code to curb overly risky bets

Bankers plan new pay code to curb overly risky bets 
 
TOP investment bankers are proposing new guidelines on pay and bonuses, to head off a growing political backlash against a system that has rewarded bankers for the very risk-taking behaviour that has helped cause today’s credit crisis.
The Financial Times (FT), in a report on its website yesterday, said the Institute of International Finance (IIF), a global association of banks, was seeking to create a code of best practice that would discourage banks from giving incentives to traders taking excessively risky bets while failing to censure them should these turn sour.

The proposal, which was to be discussed privately at an IIF meeting in Rio de Janeiro yesterday, is the first such move by banks to voluntarily regulate pay in the financial sector, said the paper.

Ideas being floated include bonuses being deferred until the full impact of a strategy is clear, to prevent bankers from benefiting from short-term, high-risk bets that subsequently turn sour, said the report.

An alternative idea would have bankers who lost money for their businesses having to earn it back before they secured new bonuses, it added.

Senior Wall Street executives said, however, the new ideas would not work as it was highly unlikely Wall Street banks would agree to any kind of uniform compensation rules for fear of giving up a competitive advantage.

‘Compensation is their incentive for taking risks. That is really what risk management has to change,’ Mr Josef Ackermann, the chief executive of Deutsche Bank, told the conference.

‘The big problem with compensation is how do you create a culture where people suffer jointly and win jointly? Unfortunately, competitors do not allow that,’ he said.

Nevertheless, some bankers hope an IIF code could pave the way towards a broader industry shift, and they warn that the sector risks a serious clampdown if it does not take proactive steps, the FT said.

Source : Straits Times   - 06 March 2008

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Keppel Fels to build $285m rig for Vietnam firm

Keppel Fels to build $285m rig for Vietnam firm 
 
KEPPEL Offshore and Marine yesterday announced that its unit will build a jack-up drilling rig worth US$205 million (S$285 million) for a subsidiary of a Vietnamese firm.
It will be the third rig the unit Keppel Fels will build for the company. It is scheduled to be delivered in the fourth quarter of next year. This is an extremely early delivery date in a tight market where orders can typically be delivered in three years’ time.

Keppel Fels is offering to deliver the rig to the subsidiary of PetroVietnam Drilling & Well Services early because it is a ‘premium customer’, said a spokesman.

PetroVietnam chief executive Do Van Khanh said in a statement that the company wants to position itself to capture the market for specialised oil and gas services. ‘It is estimated that there will be 900 exploration wells in Vietnam over the next 15 years,’ he noted.

He added that after working with Keppel Fels on several projects, PetroVietnam has found the company a ’strong and reliable’ partner that ‘can deliver projects punctually, within budget and without incidents’.

PetroVietnam intends to make capital investments of about 27.4 trillion dong (S$2.43 billion) from now until 2015 to build and operate a fleet of 11 offshore and onshore rigs.

Keppel Fels said the deal is not expected to have any material impact on the earnings per share of parent company Keppel Corp for this financial year.

Source : Straits Times   - 06 March 2008

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UOL unit unveils luxury serviced suites in Singapore Somerset

UOL unit unveils luxury serviced suites in Singapore Somerset 
By Michelle Tay 
EXTRA PERKS: The Pan Pacific Serviced Suites will come with additional luxury perks, like round-the-clock personal assistants. — PHOTO: PAN PACIFIC
 
IT HAS been 28 years since Singapore’s listed UOL Group launched its last serviced apartment property, the Parkroyal Residences at Beach Road.
Now, it is entering the luxury extended-stay business with the launch of its new property, Pan Pacific Serviced Suites, at 96 Somerset Road.

The new property is similar to serviced apartments but has additional luxury features such as round-the-clock personal assistants who can provide guests with local connections to business and social events.

The property is the first of five planned serviced suites that UOL is also planning in China, Vietnam, Malaysia and Thailand over the next three years, said Mr Gwee Lian Kheng, group president and chief executive of UOL yesterday.

UOL’s wholly-owned unit Pan Pacific Hospitality, which owns the Pan Pacific Hotels and Resorts group of hotels, yesterday unveiled the luxury serviced suites.

The 16-storey building next to the Somerset MRT Station houses 120 one- or two-bedroom suites and six penthouses, ranging from 527 sq ft to 1,689 sq ft in size.

UOL believes demand for luxury serviced suites will rise as the number of international visitors to the region increases.

According to the Pacific Asia Travel Association, the Asia-Pacific region saw 361.7 million visitors last year, a jump of 7.9 per cent from the year before.

Mr Gwee expects another 6 to 7 per cent rise this year.

He also said some demand should be generated from a spillover effect of the current shortage of hotel rooms in Singapore.

There are at least 26 serviced residences in Singapore with about 3,500 units in all, compared with more than 37,000 hotel rooms.

According to CB Richard Ellis, the occupancy rate for serviced apartments in Singapore was 91.2 per cent in the fourth quarter of last year, an increase of 7.5 per cent from the same period in 2006.

Mr Gwee hopes the suites, constructed at a cost of $150 million, will see an occupancy rate of at least 90 per cent after the first six months.

The suites will launch early next month, and rates will range from $10,000 to $25,000 per month, or from $420 to $1,070 per day for a minimum stay of one week.

This is at a premium of 20 to 25 per cent over the market rate, said Mr Kam Tin Seah, UOL’s senior general manager of investment and strategic development.

Pan Pacific Hospitality plans to launch its second serviced suite in Bangkok a year from now. As a group, UOL also plans to roll out between 15 and 20 new hotels and serviced suites over the next three years.

Source : Straits Times   - 06 March 2008

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DBS sells China unit to Temasek for $44.5m - Singapore

DBS sells China unit to Temasek for $44.5m  - Singapore
By Fiona Chan 
 
DBS Bank has sold off one of its subsidiaries, a China investment company, to a unit of Temasek Holdings for US$32 million (S$44.5 million).
The lender, South-east Asia’s largest, yesterday said it agreed to sell DBS (China) Investment to Temasek’s Edgefield Investments.

This comes after DBS last year obtained a licence to sell yuan-denominated investment products directly to Chinese customers. It got the green light to offer savings, call deposits, time deposits, mortgages and general insurance products.

With this, DBS no longer has a need for the investment company, which was meant to hold investments and liaise with customers and prospects. It was set up in December 2005 in Beijing under the Ministry of Commerce with a registered capital of US$30 million.

A DBS spokesman yesterday said it was ‘appropriate’ to divest itself of its investment in DBS (China) Investment now that the bank had obtained the China licence.

Yesterday, Temasek also confirmed that it had acquired the China company. In response to queries on why it had done so, a Temasek spokesman said the purchase would provide Temasek with ‘another platform to explore investment opportunities in China’.

China is ‘a market we continue to believe has good potential and which we remain interested in’, the spokesman added.

Temasek will pay cash for the deal, which takes into account DBS (China) Investment’s net tangible assets and operating expenses.

As at Dec 31 last year, the book value of the firm was about US$30 million and the net tangible assets were about US$31.26 million.

The deal is expected to be completed on May 30. It is not material in the context of the operations of DBS’ holding company DBS Group Holdings, the bank said in a statement.

Source : Straits Times   - 06 March 2008

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Why tension over foreign workers will continue - Singapore

Why tension over foreign workers will continue  - Singapore
 
SOME MPs asked if the constraints on hiring foreign workers could be relaxed. Others called for the screws to be tightened.
The opposing questions, raised in Parliament during the current Budget debate, were emblematic of the tensions within Singapore society on the issue of foreign workers, said Manpower Minister Ng Eng Hen yesterday.

‘There are some who advocate making it rigid so that Singaporeans have an easier chance of finding jobs,’ he observed.

‘But those who are…involved in business say: Relax so that businesses can grow.’

It was a tension that is not likely to go away for many years to come, he said during the debate on his ministry’s budget.

So the Ministry of Manpower’s (MOM) job was to ‘maintain a tightly tuned balance to make sure our economy grows’.

‘And I think, as our result showed us last year, that we’ve sort of got the balance right,’ he said, in a likely reference to recent reports that showed that, while six out of 10 new jobs went to foreigners, Singaporeans got the majority of positions for ‘professionals, managers, executives and technicians’.

Indeed, the tension can be seen in the questions the MPs posed before and after the minister’s reply.

Ms Lee Bee Wah (Ang Mo Kio GRC) asked: ‘In view of the acute manpower shortage in the construction industry, will there be any relaxation on the employment of foreign workers and professionals?’

Dr Ng replied that MOM would continue to monitor the situation.

Ms Irene Ng (Tampines GRC) followed, calling for the balance to tilt towards Singaporeans. A constituent of hers in his late 60s lost to a China national when competing for a job as a coffeeshop assistant.

He wanted to work seven hours a day for $1,200 a month - what he needed to support his family. But the China national was willing to work 12 hours a day for $900.

‘So can I ask the minister what assurance can he give to Singaporeans, especially the older ones, who feel it’s an almost impossible task to compete with the foreign workers who are cheaper,’ she said.

Dr Ng replied: ‘Employment rate has increased overall, so more of those…who were vulnerable had found jobs.’

On exploitation of foreign workers, he said MOM’s strategy is to explain to the workers their rights, and create communication channels for them.

Senior Parliamentary Secretary for Manpower Hawazi Daipi added that MOM prosecuted 229 employers last year for illegal deployment of foreign maids, and helped to recover more than $270,000 in unpaid salaries for 276 maids.

There are 500,000 foreign workers here, leading to unhappiness among some Singaporeans about living near them.

In response to Mr Ong Ah Heng (Nee Soon Central), Mr Hawazi said police statistics show foreign workers are no more likely to commit crimes than Singaporeans.

‘We need to balance the housing and recreational needs of foreign workers with the concerns of Singaporeans.

‘This will require Singaporeans to adapt and accept foreign workers within our society. We have to recognise this and not take a ‘not in my backyard’ attitude.’
Source : Straits Times   - 06 March 2008

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Panel issues guidelines to protect low-wage contract workers - Singapore

Panel issues guidelines to protect low-wage contract workers  - Singapore
 
A COMMITTEE studying benefits for low-wage workers has issued guidelines aimed at protecting vulnerable contract workers from unscrupulous employers.
It sets out the practices that responsible employers should adopt, including making Central Provident Fund (CPF) contributions for contract workers and hiring them for at least six months so they can qualify for annual leave and other benefits under the Employment Act.

The guidelines are targeted at contract workers such as cleaners or security guards, who are hired by agencies to provide services for companies.

The Tripartite Committee on CPF and Work Related Benefits for Low-wage Workers issued six guidelines for companies that use the services of contract workers:

Require the agencies that hire these workers to comply with employment laws.

Ask the agencies to provide workers with written employment contracts that state working hours, pay and benefits.

Conduct financial checks on the hiring agencies before awarding the contract to minimise the chances of defaults on workers’ salaries.

Award contracts based on performance instead of headcount or number of workers hired.

Retain experienced contract workers.

Ask the agencies to hire workers for at least six months so that they qualify for benefits such as paid sick leave under the Employment Act.

Last year, the Manpower Ministry fined or prosecuted 35 employers for failure to comply with the Employment Act, up from 18 the year before.

The CPF Board also charged 181 employers for flouting the CPF Act last year.

But MPs such as Ms Jessica Tan (East Coast GRC) and Mr Zainudin Nordin (Bishan-Toa Payoh GRC) yesterday asked for greater protection for contract workers.

In response, Minister of State (Manpower) Gan Kim Yong said the new guidelines should help ensure better employment terms for these workers.

In a separate press statement, Mr John De Payva, president of the National Trades Union Congress, called the guidelines a good initiative to ensure protection of contract workers’ employment rights.
 
Source : Straits Times   - 06 March 2008

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46,900 low-wage workers sign up as Singapore CPF members

46,900 low-wage workers sign up as Singapore CPF members 

They can now get Workfare payouts if they put money into Medisave

By Sue-Ann Chia 
 
MORE low-wage workers are signing up as Central Provident Fund (CPF) members and are on their way to gain from a new scheme to top up their incomes.
Since January, 46,900 low-wage informal workers and self-employed people have registered with the CPF Board.

That is close to one in two of the 100,000 low- wage earners who, as of early this year, were in danger of missing out on the Workfare Income Supplement (WIS) because they had no CPF accounts.

Next, these 46,900 workers have to contribute to their Medisave Accounts. Only then can they receive the WIS payouts.

But at least they are now within the CPF system, Minister of State for Manpower Gan Kim Yong said yesterday.

Efforts by the Government, unions and business groups to educate this vulnerable group of workers on their employment rights are also starting to show results.

So far, 10,000 of these informal workers - who neither contribute to CPF nor receive CPF payments from their employers - have joined the CPF system and received the WIS.

The CPF Board also continues its action against errant employers who fail to pay their workers’ CPF.

Last year, it took 14,000 such cases to court.

One case involved a labour supplier which classified its workers as ‘independent contractors’ when they were in fact employees.

The board recovered $47,500 in CPF contributions for 51 employees, with 47 of them subsequently getting WIS payments as formal employees, he said.

Mr Gan, however, stood firm in the face of requests from MPs to be more flexible with the WIS income ceiling of $1,500 a month.

He said the CPF Board would recover January’s advance WIS payouts to workers whose income last year exceeded the ceiling because of the bonuses they received.

‘It is only fair that we should recover WIS paid,’ he said.

But the Government will be flexible when recovering the money, he added.

The CPF portion of WIS will be withdrawn from these workers’ CPF accounts, but the cash payouts will be offset against future WIS payments.

Ms Jessica Tan (East Coast GRC), however, urged the Government to reconsider and to show ‘goodwill’ by not recovering the WIS payments, given that the scheme is still new and not well-understood.

Mr Gan also said that income from overtime work will continue to be included when deciding whether a worker qualifies for WIS.

‘Whether a worker’s income is in the form of basic salary or overtime pay, they are both income that will help support the worker and his family,’ he said.

He also said no to Dr Ahmad Magad’s (Pasir Ris- Punggol GRC) suggestion that part of the WIS payouts to informal workers be in the form of cash.

Explaining his stand, Mr Gan said: ‘Given the increasing importance of the CPF system in providing for workers’ medical and retirement needs, we should encourage self-employed and informal workers to put more into their CPF, not ask for their contributions to be reduced or waived.’
 

Source : Straits Times   - 06 March 2008

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Sports Council ‘detached from reality’ - Singapore

Sports Council ‘detached from reality’  - Singapore
 
HER speech was short and her voice mellow, but Nominated MP Jessie Phua pulled no punches when taking the Singapore Sports Council (SSC) to task in Parliament yesterday.
At one point, she told the SSC point-blank: It’s time to get your house in order.

Ms Phua criticised the SSC for reducing its financial support for athletes even as Singapore was facing rising living costs.

She said a top athlete such as bowler Remy Ong, who won three Asian and two SEA Games gold medals, could get up to $8,000 a year under the Training Assistance Grant in 1999. This has been reduced to $7,200.

Ms Phua, the president of the Singapore Bowling Federation, said that while the amount from GLOW (or Grant for Loss of Wages) had remained unchanged since 2000, the qualifying criterion for a top athlete had risen from a SEA Games gold to an Asian Games or a world championship medal.

She noted wryly: ‘Isn’t it amazing how, on the one hand, the bar has been raised for qualification but, on the other hand, the funding for training has remained constant or even been reduced?’

Ms Phua said the SSC was either ‘very detached from reality or, even worse, knows but chooses to do nothing’.

She added: ‘Can we really, in good faith, entrust the SSC with the development of our athletes?’

She urged the SSC to keep up with the times and one area it should start was in the people it employed. She said she understood that staff turnover at the SSC was ‘very high’.

She offered one possible reason: job dissatisfaction. ‘Many get disillusioned by an oversized portfolio, a multi-layered decision-making process and little empowerment,’ she said.

For example, she said the SSC had only one sports psychologist on its payroll to meet the needs of athletes from the 60 national sports associations (NSAs) here.

Mr Teo Ser Luck, Parliamentary Secretary for the Ministry of Community Development, Youth and Sports, agreed that there were problems in the SSC.

It would have to work closely with the NSAs to identify the problems and close the gaps, he said.

‘There’s still room for improvement. These are how organisations are run with day-to-day challenges. We should not give up but continue to give support.’
Source : Straits Times   - 06 March 2008

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S’pore ‘won’t be trading hub of foreign athletes’

S’pore ‘won’t be trading hub of foreign athletes’ 
By Kor Kian Beng 
 
FOREIGN athletes are here to stay: They help put Singapore on the world map through their sporting achievements.
Mr Teo Ser Luck, Parliamentary Secretary for the Ministry of Community Development, Youth and Sports, cited two China-born athletes - swimmer Tao Li and table tennis player Gao Ning - who won four and three gold medals respectively at the 2007 SEA Games in Thailand.

Foreign sports talents like them contributed 34.9 per cent of Singapore’s 43 gold medals at the event, even though they made up only 7.6 per cent of the 423-strong contingent, he noted.

He was responding to concerns raised in Parliament by Nominated MP Jessie Phua and Mr Seah Kian Peng (Marine Parade GRC) over the foreign talent scheme.

Ms Phua, who is president of the Singapore Bowling Federation, recalled that out of 97 foreign sports talents, 54 had been granted citizenship. But only 37 of these citizens are still in active training.

Noting the high drop-out rate, Ms Phua said: ‘It is certainly not a case of a few bad apples. There are some real issues to be addressed.’

Mr Seah noted that some national sports associations (NSAs), such as bowling and sailing, have successfully groomed local talents to world-class standards, while others like badminton and table tennis have justified their reliance on foreign talents.

He asked if any assessment had been done on the cost-effectiveness of the foreign talent scheme, which was initiated in 1998, and if the results were satisfactory.

In response, Mr Teo said the foreign athletes, who comprise 5.6 per cent of the total number of carded athletes here, receive 23.8 per cent of the total direct athlete support grants given out by the Singapore Sports Council.

This is because most of them are in the higher carding categories and current policy is ‘to focus limited resources on top athletes’, said Mr Teo.

The carding system determines the amount of funding that athletes get from the sports council. He tried to allay concerns of over-reliance on the foreign talent scheme.

‘(It) is part of the system in order to do well internationally. But we’re not prepared for any NSA or even Singapore to be a trading hub of foreign athletes.’

Source : Straits Times   - 06 March 2008

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Singapore Private schools hail stricter guidelines

Singapore Private schools hail stricter guidelines 

By Liaw Wy-Cin & Esther Tan 
 
PRIVATE schools have welcomed news that the Government is planning strict new guidelines designed to rein in the growing number of shady operators here.
The rules, broached on Tuesday, will set clear standards for the booming private education sector and prevent students from getting cheated by degree mills and unaccredited schools, insiders believe.

‘It’s good to have more transparency and higher standards, so that we can improve our reputation,’ said Mr Kannappan Chettiar, chairman of Stansfield Group, one of the larger private education firms here.

His comments came a day after the Education Ministry announced plans for a new law, called the Private Education Bill, to govern Singapore’s more than 300 private commercial, IT, fine arts and language schools.

The law is still in its early stages and is expected to come into force next year. But it would give the planned Council for Private Education teeth to impose fines and other penalties on private schools that offer sub-standard courses, teachers and facilities.

The head of the new council, Mr Lin Cheng Ton, said private schools will have to renew their registrations periodically. Now, registration is a one-time affair.

‘This will help to ensure that standards are consistently maintained,’ he said.

‘Penalties will deter private schools from violating the conditions of registration, by matching the penalties to the seriousness of the offences.’

For the operators of some private schools, tighter regulation of the industry has been long in coming.

‘We welcome the stringent checks that will be implemented because it will further protect the rights of students,’ said Mrs Joyce Fashanu, administrative director of Bradford-Rex School of Hospitality and Management, which is located at Peace Centre.

The international reputation of the private education scene in Singapore has taken a beating in recent years. Several sudden closures left scores of foreign students unable to get their money back. There have also been complaints of poorly qualified teachers, unsatisfactory teaching material and dubious educational programmes.

That hurt even reputable private schools, for whom foreign students are a cash cow. Singapore also has ambitions to host 150,000 foreign students by 2015.

Even four schools highlighted in a recent Straits Times report for their shortcomings welcomed the move and said they would try to apply for new accreditation through the council.

While schools lauded the move, most said the added work could force them to raise tuition fees.

Chief executive officer of Boston International School S.W. Teo remained positive about the increased costs, saying his school would try to absorb additional costs.

‘The school will fork out the additional money for as long as it is able to. We hope that we will earn the trust of the students with better programmes and they will keep coming back to us.’

While details are still up in the air, the 10 private schools that spoke to The Straits Times mentioned several things they would like to see in the new guidelines.

Among them was allowing foreign students to work part-time to help them with school fees and living costs.

A minimum standard for the academic qualifications of owners and principals of private schools was also mentioned.

Perhaps the loudest cheers to the news of the tighter guidelines came from the students, whom these changes are intended to benefit.

Said first-year business administration diploma student Lu Zeyun, 22, from China: ‘At least there will be a greater sense of responsibility to students and we can be more assured of better quality.’

Source : Straits Times   - 06 March 2008

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