Chinese firm buys Singapore Tuas Power for $4.2b

Chinese firm buys Singapore Tuas Power for $4.2b 

Temasek gets well above $3b valuation for sale of the first of three energy firms

By Michelle Tay 
HUGE DIVESTMENT: The sale of Tuas Power marks Temasek’s largest divestment in dollar terms and the biggest acquisition of a Singapore company since 2001. — PHOTO: TUAS POWER
 
TEMASEK Holdings has sold Tuas Power to a Chinese company for $4.24 billion - well above its initial valuation of $3 billion five months ago.
The deal with SinoSing Power, the wholly owned subsidiary of Chinese power company China Huaneng Group, is expected to be completed by March 24, said Temasek in a statement yesterday.

It will mark the end of the bidding process that began last October, when Temasek announced its plan for the sale of the first of its three wholly owned power generation companies (gencos).

Mr Wong Kim Yin, Temasek’s managing director of investments, said yesterday: ‘China Huaneng is an established player with a strong track record in the power business. Its proposal through

SinoSing was the most attractive.

‘It emerged as the winner based on clear considerations of price and acceptable commercial terms.’

WINNING BID
‘China Huaneng is an established player with a strong track record in the power business…It emerged as the winner based on clear considerations of price and acceptable commercial terms.’
MR WONG, on why Temasek picked China Huaneng
 
Analysts said the sale marks Temasek’s largest-ever divestment in dollar terms and the biggest acquisition of a Singapore company since 2001.

Sources close to the deal told The Straits Times that the $4.24 billion price tag is testament to the strength and stability of the Singapore economy and an endorsement of the growth potential of electricity demand in the Republic.

Tuas Power has a capacity of 2,670 megawatts (MW) and accounts for over a quarter of Singapore’s electricity generation. This means it is worth $1.6 million per MW it generates.

Temasek plans to sell off the two remaining power plants by the first half of next year.

Analysts speculate that Power- Seraya, which has a licensed capacity of 3,100 MW, may be worth $4.96 billion, while Senoko Power, with 3,300 MW, may be worth $5.28 billion.

The state-owned investment company has not indicated which will be sold next.

The plants were transferred from the state to Temasek between 1995 and 2001, on the understanding that it would eventually sell all three companies.

Selling the three gencos is a key step in freeing up the domestic energy market and has been in the pipeline for six years.

Power generation is considered to be a part of the energy market; competition is viewed as healthy for this sector and should be introduced. Private ownership of the gencos should ensure a competitive market and more players can be expected to enter the market as Singapore’s power needs grow.

For the moment, market watchers say that a change in ownership will not affect electricity prices because the three gencos have been operating independently, competing against each other.

Beijing-based China Huaneng is the largest power generation company in China and also owns a 50 per cent stake in Australian power generation joint-venture firm OzGen. It has an installed capacity of 71,000 MW and total assets for the group exceed US$45 billion.

China Huaneng vice-president Huang Long said the transaction was a major step for his company ‘in its goal to diversify its assets across geographies and technologies’.

Source : Straits Times - 15 March 2008

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International school big on Chinese - Singapore

International school big on Chinese  - Singapore

By Ho Ai Li 
 
IT IS an international school catering mainly to Australian and British pupils, but it is not uncommon to hear Mandarin being spoken in the classrooms at Avondale Grammar School.
About eight in 10 students in this private school in Toa Payoh, which runs on an Australian curriculum, take Chinese. A second language is compulsory, and French is the other option.

School headmistress Fran Hazell said at the school’s official opening yesterday: ‘People are very open to learning new things… and they want to absorb almost everything. It’s going to be a language that is going to be used a lot.’

Having led the school through its set-up in the last year, she is taking her leave, and will be replaced by Mr Martin Tait. Under his watch, the school will bump up its enrolment, just like what other international schools here are doing, on the back of an influx of expatriates coming here to work.

The Australian International School, for example, has a waiting list with hundreds of names.

Avondale, which started taking in pupils last July, now has 106 aged five to 11. It will start taking in students aged 12 and above in two years; enrolment will go up to 250 eventually.

Ms Hazell said the school started out with plans for a ’smaller’ campus: ‘We feel for young children; it is very important that they have a smaller environment so they can identify with and feel that they belong in our community.’

The teacher-pupil ratio is 1 to 11 for pre-school, and 1 to 24 for primary levels.

Just over six in 10 pupils are Australian and another two in 10, Britons. Four Singaporeans attend its pre-school.

Two teachers from China take the children through daily Chinese lessons lasting 20 to 45 minutes each.

Housewife Tracy Maclean, 33, who moved here from Sydney with her husband and children last year, was keen for son Joshua, seven, and daughter Amy, five, to learn Chinese.

She said: ‘We are going to be here for at least three years. We want the kids to be part of the country. To be part of the country, obviously they’ll have to learn the language.’

Parents pay $4,725 a term, or almost $19,000 for four terms a year.

Source : Straits Times - 15 March 2008

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Singapore PM’s worry: Families who live beyond their means

Singapore PM’s worry: Families who live beyond their means 

They often turn to MPs for help; community groups can help promote sound values: Mr Lee

By Zakir Hussain 
AWARD FOR LONG-TIME VOLUNTEER: PM Lee presents the Outstanding Dedication to Service award to Mr Boimin Wakiman, 72, at the Malay Youth Literary Association’s 60th anniversary charity dinner. Looking on is its president Izzuddin Taherally. — ST PHOTO: BRYAN VAN DER BEEK
 
SINGAPOREANS who spend beyond their means and have to go to their MPs for help were placed under the spotlight by none other than Prime Minister Lee Hsien Loong yesterday.
He noted that as MPs, ‘we often see families who have over-committed themselves financially’ - for instance those who have been ‘extravagant in doing up their homes using renovation loans’, or ‘bought expensive furniture or large-screen TV sets on hire purchase’.

‘The ones with the most serious problems have bought homes which are larger than they can afford, and taken mortgages which they are then unable to pay,’ he said.

Mr Lee was speaking at the 60th anniversary dinner of the Malay Youth Literary Association (popularly known by its Malay acronym 4PM), a community welfare organisation that helps young Malays.

While families who live beyond their means come from all races, ‘quite a few are Malay families’, he noted.

‘It is a sensitive matter to raise, but all MPs and social workers know that it is a real issue that needs to be tackled,’ he added.
Contacted by The Straits Times, Tampines GRC MP Masagos Zulkifli said he sees at least one such case a week - for example, a family living in a flat it cannot afford, or one that needs help preventing its TV or stereo sets from being repossessed. Some come with the latest mobile phones, a clear sign they have wrong priorities, he said.

Another MP contacted, Hong Kah GRC MP Zaqy Mohamad, sees young families who need help staving off illegal moneylenders or servicing credit-card debt or car loans.

Mr Lee said Malay-Muslim organisations like 4PM play a critical role in shaping the young.

They could promote sound personal values like living within one’s means and planning for the future, as well as the right attitudes towards race, religion and national issues.

Another important area they should work on: leadership renewal.

More successful young Malay professionals were setting up their own groups or joining multiracial ones rather than the traditional Malay-Muslim organisations, he noted.

While this was to be encouraged, it also meant that the latter have to ‘move more boldly to put promising ones into leadership positions’, he said.

This is because these organisations are a training ground for Malay leadership at the national level, he said, citing senior parliamentary secretaries Hawazi Daipi - a former honorary general secretary of 4PM and now its adviser - and Masagos Zulkifli, who ran Perdaus and started its humanitarian offshoot Mercy Relief.
Malay-Muslims groups can help
Promote sound values
MMOs can help to promote sound personal values and attitudes. One of these is, of course, the importance of education. But another, not so often discussed, is the importance of living within one’s means and planning for the future.

Financial planning and discipline are critical life skills, but unfortunately, they do not come naturally to everyone. As MPs, we often see families who have over-committed themselves financially, run into serious trouble, and then come to the MPs’ Meet-the-People sessions for help. Some have been extravagant in doing up their homes using renovation loans. Others have bought expensive furniture or large-screen TV sets on hire purchase. The ones with the most serious problems have bought homes which are larger than they can afford, and taken mortgages which they are then unable to pay.

These families belong to all races, but quite a few are Malay families. It is a sensitive matter to raise, but all MPs and social workers know that it is a real issue that needs to be tackled.

It is natural, and good, that families aspire to upgrade their lives. But it is also important to be frugal. We should not spend beyond what we can afford, or spend today without thinking enough about how we will pay for it tomorrow.

We should always try to put aside something for the future, especially to invest in the education of our children, and to have enough for our medical expenses and old age. If we save too little for a rainy day, and a storm hits us unexpectedly, the consequences can be devastating.
Move boldly on leadership renewal

MMOs are not just part of our civic society, but also a training ground for Malay leadership. They provide avenues for people to step forward, take up issues they feel passionately about, and make a useful contribution to the community.

By proving themselves and earning the respect of their peers, they emerge as leaders, not just within the Malay-Muslim community, but eventually on the national stage too.

Many of our Malay MPs have come up through this process, like Mr Hawazi Daipi who was 4PM’s honorary secretary-general, and is still its adviser, and Mr Masagos Zulkifli, who ran Perdaus, and later started and then spun off Mercy Relief.

To sustain this flow of new leaders, MMOs must make a continuing effort to attract talent, groom and nurture them. This is a top priority for Singapore’s national leadership, but it is also important for community organisations.

With steady social and educational progress, each successive cohort of Malays contains more well-educated and successful professionals, and more who can and want to contribute to the community.

Instead of joining existing MMOs, these younger Malays are increasingly getting together on their own to set up their own associations and do projects. But they are not only forming new Malay groups; they are also participating in multiracial voluntary welfare organisations and community groups.

This is to be encouraged, but it also poses a challenge to the existing MMOs. Therefore, existing MMOs must make a conscious effort to induct these professionals, and move more boldly to put promising ones into leadership positions.

Source : Straits Times - 15 March 2008

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January retail sales rise 7.8% - Singapore

January retail sales rise 7.8% - Singapore

By MATTHEW PHAN

SINGAPORE’S retail sales in January rose 7.8 per cent year on year, the Department of Statistics said yesterday.
 
Points of brisk business: Sales at supermarkets jumped 19.1 per cent in January, while department stores saw a 20.9 per cent year-on-year rise in sales 
It added that retail sales rose just 1.5 per cent if adjusted for inflation.

This is ‘hardly consistent with booming consumption’, said HSBC economist Robert Prior-Wandesforde.

‘Growing concern about inflation, unevenly distributed income gains and the weakness of the equity market could be other explanations for the softness in spending, although surprisingly soft retail sales has been a feature of the Singapore economy for at least 18 months now,’ he said in a note.

At 7.8 per cent, the January jump was still stronger than the 4.3 per cent and 1.9 per cent falls in real terms seen in November and December 2007 respectively, Mr Prior-Wandesforde noted.

Excluding motor vehicles, retail sales in January were 15.1 per cent higher.

The strongest increases were seen in sales of petrol, food and beverages, and at department stores and supermarkets.

Petrol sales rose 41.1 per cent, though this was clearly due to the effect of prices, as petrol sales rose only 5.5 per cent in real terms, according to the SingStat release.

Department store sales were up 20.9 per cent, an increase HSBC described as ‘huge’, while supermarket sales were up 19.1 per cent.

In real terms, they were up 15.9 per cent and 12.8 per cent respectively.

Food and beverages saw a year-on-year rise in retail sales of 20.5 per cent, or 14.7 per cent after accounting for inflation.

Meanwhile, retail sales in other segments, like motor vehicles and recreational goods, declined.

Motor vehicle sales fell by 5.3 per cent, or by 10.1 per cent in real terms, while sales of recreational goods dipped 1.7 per cent, or 3.9 per cent in real terms.

After adjusting for inflation, sales of jewellery and at provision and sundry shops also dipped slightly.

The good news for the economy is that exports and manufacturing production bounced back very strongly in January, following the distortions of the fourth quarter, and it is ’still realistic to expect a very strong bounce in first-quarter Singapore GDP’, said Mr Prior-Wandesforde.

The Republic could even see a double-digit quarter-on-quarter seasonally adjusted annualised rise in first quarter GDP, he said.
Source : Business Times - 15 March 2008

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CAI targets global portfolio of 10 airports-Singapore

CAI targets global portfolio of 10 airports-Singapore

By VEN SREENIVASAN

CHANGI Airports International (CAI) expects to have a global portfolio of about 10 airports and investments of US$1 billion in airport equity in about five years.
Chow Kok Fong, the international airport boss of the Civil Aviation Authority of Singapore (CAAS), said yesterday: ‘That will be a good size and it will allow us to grow to a level where we can achieve economies of scale as a global airport player.’

Indeed, CAI appears to be already getting that recognition. Yesterday, the company was named the 2008 Asia-Pacific Airport Investment Company of the Year at the Frost & Sullivan Asia Pacific Aerospace & Defence Awards ceremony.

And CAI’s parent CAAS was itself named Airport of the Year at yesterday’s ceremony for ‘demonstrating world-class efforts in meeting the demands of all its end-users’.

Mr Chow said he was pleased with the award. ‘Some may see this as just a beauty contest, but it is an important recognition of our achievement and standing,’ he said.

Indeed, CAI has been aggressively expanding its footprint across the Middle East, India, Russia, Vietnam and China.
 
In India, which has some 80 airports, CAI has been aggressively sniffing out airport planning, management or investment projects at Tier 2 and Tier 3 cities with half a million to three million air passengers a year.

‘We are confident of establishing a strong presence in India over the next 10 years,’ Mr Chow said.

Last month, CAI joined forces with a private consortium, Bengal Aerotropolis Projects, to clinch a technical services agreement at India’s first private airport, the US$2.5 billion Durgapur Aerotropolis project. CAI hopes to eventually upgrade its involvement to that of an investor.

Just days earlier, it signed a memorandum of understanding with the Middle Airports Authority of Vietnam to invest in, develop and operate Phu Bai International Airport in the city of Hue - the first time a foreign investor will work exclusively with Vietnam’s aviation authority.

In China, CAI invested some US$100 million to buy a 29 per cent stake in Nanjing Lukou International Airport in Jiangsu province. It is poised to participate in at least half a dozen second-tier airports in southern and central China.

In the Middle East, where its operations management contract at Abu Dhabi International Airport ends soon, it is looking to invest in the project.

CAI is a preferred bidder to manage and operate Saudi Arabia’s King Fahd International Airport in Damman. It is also drawing up the masterplan for the King Hussein International Airport at Aqaba, Jordan.

Back in India, it is exploring more modernisation contracts for airports such as Navi Mumbai, Greater Noida, Kannur and the 24 non-metro airports initiated by the Airport Authority of India.

Mr Chow sees huge potential in the Indian government’s plan to build 400 private airports in the next decade. ‘We are very confident of establishing a strong presence in India over the next 10 years,’ he said.

Together with its partner, the Tata group, CAI recently submitted bids for the state-controlled Amritsar and Udaipur airports which are undergoing privatisation. The successful bidder will be announced next month.

Last year, the two partners clinched a deal to develop Nagpur Airport in Maharashtra state into a passenger and cargo hub.

According to Mr Chow, more opportunities are opening up in the Central Asian republics and eastern parts of Russia. CAI is currently exploring opportunities at St Petersburg.

What does CAI offer which gives it an edge over the competition?

‘We don’t provide plain vanilla airport solutions which depend purely on landing fees and passenger service charges,’ Mr Chow said.

‘Our value proposition lies in our innovative proposals and our ability to bring along with us investors and industries which can create a whole airport community. This includes providing more air links, and building up MRO (maintenance, repair and overhaul) operations capabilities, logistics hubs and other new revenue streams.’
Source : Business Times - 15 March 2008

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Economy scores top marks in Bertelsmann ranking - Singapore

Economy scores top marks in Bertelsmann ranking - Singapore

German non-profit group ranks S’pore most successful among 125 nations
By LEE U-WEN

SINGAPORE’S economy has been ranked the most successful among 125 countries worldwide, easily outperforming all its Asian counterparts.
 
 
The ranking, released yesterday by German non-profit organisation Bertelsmann Foundation, put Taiwan in fifth spot, while South Korea just made the top 10 in ninth place.

Somewhat surprisingly, the two fastest-growing Asian economies - India and China - came in 42nd and 51st.

Bertelsmann’s latest Transformation index ranked 125 states on the basis of development, management and market economy.

Singapore, however, fared poorly when measured solely against the criteria for constitutional democracy. It was placed 72nd - on par with Russia.

Bertelsmann’s country report for Singapore highlighted the Republic’s economic growth of 7.7 per cent in 2006, noting that the volume of imports and exports grew 13 per cent to US$810 billion that year.

‘Singapore, a highly-developed and successful free-market economy, enjoys a remarkably open and corruption-free environment, stable prices and a per capita GDP equal to that of the four largest western European countries,’ the report said.

It added: ‘With regard to the quality of social market economics, only Singapore has managed to reach the peak in a regional comparison with China and India, closely followed by South Korea and Taiwan.’

Bertelsmann was critical of Singapore’s ‘authoritarian style of government’ and the country’s low ranking of 140th on the latest Reporters Without Borders press freedom index.

It said: ‘Political opposition continues to be restricted to what the government refers to as a ‘lunatic fringe’ that often plays only to a foreign gallery.’

In terms of management performance, Singapore was 32nd for its political decision-making, an improvement of four places from the last study conducted two years ago.

On the topic of sustainability, the report made mention of how Singapore’s political leadership ‘has been very concerned about environmental problems such as industrial and urban pollution’.

Touching on race and religion, the report said: ‘The government takes pains to prevent any disruption of religious and ethnic peace and harmony by strictly implementing rules and regulations drawn up for this purpose.’

Taking into account all the various criteria, such as economic growth and overcoming poverty, the report ranked Singapore third in Asia, just behind Taiwan and South Korea.

Internationally, it ranked 23rd, with the Czech Republic leading the pack.
Source : Business Times - 15 March 2008

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SC Global is title sponsor for F1 support race - Singapore

SC Global is title sponsor for F1 support race - Singapore

It will also field a car in this year’s Porsche Carrera Cup Asia series
By SAMUEL EE

(SINGAPORE) Luxury residential property developer SC Global Developments is zooming into the motorsports arena by fielding a car in this year’s Porsche Carrera Cup Asia series and becoming the title sponsor of the Singapore round of the race.
 
Days of thunder: Christer Ekberg (left), Porsche Asia Pacific MD, and Simon Cheong, SC Global chairman and CEO, at the Padang yesterday. The event will be called the ‘Porsche SC Global Carrera Cup Asia - Singapore 2008′ 
As a result, the September event will be officially named the ‘Porsche SC Global Carrera Cup Asia - Singapore 2008′ and it will take place before the inaugural 2008 Formula 1 SingTel Singapore Grand Prix as a support race.

‘The attention of motorsports fans around the world will undoubtedly be focused on Singapore later this year when it stages its first Formula 1 Grand Prix and the first ever Formula 1 night race,’ said SC Global chairman and CEO Simon Cheong yesterday in a speech to announce the sponsorship.

‘SC Global is proud to contribute to what will be both an enormously successful event, and one which will put the spotlight firmly on this dynamic city.’

SC Global will be the title sponsor for only the Singapore race, not the whole series, which begins with next weekend’s F1 race in Sepang, Kuala Lumpur, and ends with the Macau Grand Prix in November.

This means that during the Singapore race, all 18 Porsche cars in the competition will have the SC Global name plastered on the front windscreen - considered the most prominent spot on the car. In the other races, only the Porsche name will occupy that position.

No mention was made of the sponsorship amount, with Porsche Asia Pacific citing confidentiality agreements. But within motorsports circles, a title sponsor is understood to typically pay a six-figure sum for what is the highest level of sponsorship. In this case, it is expected to be more than 100,000 euros (S$213,703) but likely to be less than 500,000 euros.

In addition, SC Global will be paying up to 300,000 euros for running a team for the season total of seven race weekends.

This includes the Porsche 911 GT3 Cup car (under 130,000 euros), a services package (about 65,000 euros), parts and tyres, as well as travel and accommodation costs.

It was also announced at yesterday’s press conference that DBS would be the official financial services partner for the Porsche Carrera Cup Asia 2008 season. Like SC Global, Singapore’s largest bank’s sponsorship will also have a ’special focus’ on the race in Singapore.

SC Global and DBS will be joining international names such as Mobil, Michelin and adidas, among others, as Carrera Cup sponsors.

Meanwhile, the Porsche Centre Singapore has donated $50,000 each to the Mainly I Love Kids (MILK) Fund and The Straits Times School Pocket Money Fund.

Karsono Kwee, executive chairman of the Eurokars group of companies, ceremonially handed over the cheques yesterday at the Porsche Pit Stop Singapore held at the Padang.

S Iswaran, Minister of State for Trade and Industry, who attended the function said that preparation for September’s Formula One race was in ‘advanced stages’, with the completion of road works and the pit building expected by end May and end June respectively.

With additional reporting by Lim Wen Juin

Source : Business Times - 15 March 2008

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Jewellery prices climb at blinding speed-Singapore

Jewellery prices climb at blinding speed-Singapore

50% hike over past year in price of gold and some diamonds; sales still holding firm
By UMA SHANKARI
(SINGAPORE) Diamonds are forever - it’s just that they cost much more than they did a year ago. This has not stopped many from digging into their deep pockets to snap up rare gemstones and fabulous jewellery.
 
Top rock: This 72.22-carat pear-shaped diamond is expected to fetch up to US$13m when it is auctioned by Sotheby’s in Hong Kong next month 
Industry players here estimate that diamond prices have gone up by as much as 50 per cent over the past year, depending on the cut and quality.

Similarly, the price of gold has also climbed more than 50 per cent over the same period. For the first time in history, the price of the yellow metal rose above US$1,000 an ounce on Thursday.

And the price of the other precious metal in demand by jewellers, platinum, has also soared more than 70 per cent over the past 12 months.

On the back of this, jewellery too can now cost 50 per cent more compared to a year ago, although many jewellers are choosing not to pass on all of the cost increases to their customers.

Analysts say that rapid economic growth in Asia and a fall in the US dollar have pushed up commodity prices - including that of top quality diamonds, gold and platinum - to record highs in recent months.

In Singapore, Mondial, which deals only with the highest grade of diamonds, told BT that the prices of its gems have increased by around 20-30 per cent in the last 12 months.

Other retailers report that diamond prices have gone up anywhere between 10 and 50 per cent over the same period.

‘Major diamond suppliers control prices and they increased prices, which in turn increases the prices for polished diamonds,’ said a spokesman for Mondial Rare Jewels. ‘Supply is also going down and diamonds and diamond mines are harder to find.

Gold prices, on the other hand, are up mainly because of macroeconomic factors.

Bank Julius Baer’s head of investment research for Asia-Pacific and the Middle East V Anantha-Nageswa-ran attributes the increase in part to the weakening US dollar and inflation.

Investors who might previously have bought US dollars are now stocking up on gold instead. Gold also is seen as a hedge against oil-led inflation.

‘Investors’ risk appetites have changed,’ said Dr Anantha-Nageswaran. ‘In general, commodity prices have all been going up, including gold.’

But despite the steep price increases, customers - particularly those in Asia - are still forking out to own some bling, industry players say.

The rapid growth of emerging economies such as China, India and the oil-rich Middle East states has multiplied the number of high net worth individuals in this part of the world.

The trend holds true for Singapore, where higher wages and increasing tourist numbers mean that the demand for gemstones and jewellery is growing stronger.

Aspial-Lee Hwa Jewellery’s assistant branding director Kean Ng said that demand for jewellery at its company’s outlets is strong on the back of Singapore’s strong economic growth.

‘Unemployment rate is at a 10-year low and our currency has been on the rise against the depreciating US dollar,’ Mr Ng pointed out. ‘All these factors combine to keep the demand for precious stones and metals quite stable.’

Mondial similarly said that demand for its precious gems has not taken a hit despite the higher prices.

‘There will always be demand as diamonds are very rare, especially when it comes to high grades and cuts like what we have,’ Mondial’s spokesman said.

With the huge influx of tourists into Singapore, Aspial-Lee Hwa has also seen more tourists buying from its stores. The trend is particularly evident in its airport and city stores, it said.

The retailer, which is not passing on the price increases to consumers at the moment, said it will monitor price movements closely.

Industry players expect that demand will take a hit at some point if prices keep climbing. But in the meantime, customers can be expected to continue picking up gems and jewellery, especially in Asia.

For example, an extremely rare 72.22-carat diamond is expected to fetch up to US$13 million - or a whopping US$180,005 per carat - when it goes on auction next month at Sotheby’s in Hong Kong.

If the price is met, it would make it the most expensive diamond ever sold at an auction in Asia.

With additional reporting by Lim Wen Juin and Sara Lim
Source : Business Times - 15 March 2008

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