Singapore PM Lee says international co-operation needed to counter non-traditional threats

Singapore PM Lee says international co-operation needed to counter non-traditional threats

By S. Ramesh,

 
PM Lee says international co-operation needed to counter non-traditional threats

SINGAPORE: Prime Minister Lee Hsien Loong has identified food shortages and natural disasters as non-traditional security threats. In his speech, he said that these can be tackled only if the international community works together.

Mr Lee was speaking at the annual Asia Security Summit, which is also known as the Shangri-La Dialogue, on Friday. The event was also attended by Minister Mentor Lee Kuan Yew.

The Shangri-La Dialogue brings together defence ministers, top military personnel and security analysts from around the globe.

Highlighting food security as an immediate concern, PM Lee said the recent sharp rise in food prices, particularly rice, has led to unrests in several developing countries.

And to avert a serious problem, PM Lee said that a multilateral co-operative effort is needed.

He said: “International agencies like the World Bank and the UN Food and Agriculture Organisation need to promote R&D in agro-technologies, to develop higher-yielding and climate-resistant crop varieties, using the full power of modern bioscience, including genetic modification techniques.”

Another area that needs international co-operation is providing humanitarian aid and disaster relief. This was a point brought out in relation to Myanmar’s Cyclone Nargis and China’s Sichuan earthquake.

PM Lee continued: “This is a China the world has never seen before - a sympathetic view of a country in transition, confronting enormous problems, but also mustering huge energies and unexpected capabilities, as well as displaying a shared humanity.

“The Sichuan earthquake showed how much China has changed and offered a glimpse of its future: a more open and self-confident nation. The political aftershocks from this defining moment in China’s history will be felt long after the ground has ceased to tremble.”

Over in Myanmar, PM Lee said that the government’s response following Cyclone Nargis is regrettable. Till today, the government continues to decline offers by many countries to deploy military equipment and personnel for relief operations.

PM Lee said: “From the humanitarian standpoint, every day lost means more avoidable casualties, more unconscionable human suffering. The frustration of the international community at Myanmar’s refusal to let them act faster and do more is completely understandable.

“But from the perspective of Myanmar’s domestic politics, the actions of the government should come as no surprise. Myanmar’s partners in ASEAN have all been deeply concerned by the massive suffering of the victims, which a more rapid international relief operation could have minimised.”

Prime Minister Lee added that in addressing these global challenges, America’s leadership continues to be indispensable. But a major question is who the next American president will be.

Mr Lee said Asia is following the campaign trail closely. He added that Singapore has no votes but has its wish list. And that includes, having the new US president actively cultivate America’s interests in the Asia Pacific, especially in Southeast Asia. - CNA/vm

 
Source : Channel NewsAsia - 31 May 2008

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No one centre of power will dominate world: Singapore PM

No one centre of power will dominate world: Singapore PM

Asia shifting power balance, but growth of continent is not a zero-sum game
By LEE U-WEN
(SINGAPORE) Powerful as China and India may be today and in the years to come, Prime Minister Lee Hsien Loong believes that the future of the world belongs to neither of them alone.

Addressing global issues: Mr Lee at the opening of the annual Shangri-La Dialogue last night, the largest defence and security dialogue among Asian nations 
Instead, he drove home the point that the world is a big place, and Asia could not be regarded as ‘all of it’, although it is an important part nonetheless.

The best outcome for countries in Asia is to not take sides with either China or India, but rather to also work with the US and Europe as well so that everyone, including smaller countries like Singapore, could prosper in the long run, he said.

Mr Lee was speaking at a question-and-answer session at the annual Shangri-La Dialogue last night, which is the largest defence and security dialogue among Asian nations.

‘The US will play an important role. It is a powerful economy and will continue to be so for decades to come. Europe ought to play an important role, the potential is there, but it depends on how the European enterprise fares in becoming more coherent and in developing a strategic view of its position in the international system,’ he told his audience of nearly 300 delegates from 27 countries.

Earlier in his speech, Mr Lee said that even as the emergence of Asia is shifting the balance of power in the world, the continent’s growth is not a zero-sum game.

Even as the mood among developing countries towards Asia is a defensive one, Asia’s growth over the next 25 years will contribute to ‘a doubling of the world economy’, and open up many opportunities around the world.

‘It’s in the vital interest of the developed world to accommodate a rising Asia, and engage the region constructively. For their part, as Asian countries become more interlinked with the world, they will have bigger stakes in the international system and greater responsibilities in global affairs,’ said Mr Lee.

While calling for the emerging powers in Asia to have ‘greater stakes’ in the existing international order, he said that international cooperation would be key to tackling non-traditional, ‘trans-border’ security threats such as food shortages or natural disasters. Globalisation, however, has its downsides too, especially in developed nations where income inequality is worsening, said the Prime Minister.

‘Even those not personally affected feel uneasy that closer inter-dependence may mean becoming vulnerable to foreign powers that may not be benign, hence the angst and debate about sovereign wealth funds. All this is fuelling deep discontentment with globalisation, and provoking nationalistic and protectionist sentiments around the world,’ he said.

Mr Lee also spoke of how the US would continue to play a crucial role in engaging a rising Asia and integrating it into the global system. This is why the election of the next US President - to be elected this November - has taken on greater prominence, he said. ‘We in Asia are following the campaign closely because the critical issues of war and peace, and of prosperity and scarcity, all hinge on its outcome,’ he said.

While Singapore does not have any votes, Mr Lee shared his ‘wish list’ for the US president, including the hope that he or she would pursue constructive relations with China and other major powers, continue to fight terrorism and take a long-term approach towards Iraq and Afghanistan.

During the question-and-answer segment, a delegate asked Mr Lee about the issues around the world that kept him awake at night.

‘Something could go bump elsewhere in the world, such as in the Middle East. That can certainly affect us . . . Something could go bump within the Asian region, such as in North Korea.’

He also did not rule out problems related to terrorism or globalisation. On the latter, Mr Lee said: ‘If attitudes towards globalisation change, if America becomes inward-looking and protectionist, if Europeans decide they don’t have a stake in rising Asia. Therefore, instead of rising economies integrating peacefully into the Asian system, they force their way in. That’s big trouble.’

The Prime Minister also devoted a significant portion of his address to another global issue - rising food prices and shortages.

‘Over the next year, food prices may moderate with better harvests. In the longer term, the trends towards tighter supplies and higher prices will likely reassert themselves. This has serious security implications,’ he said, warning of how the impact of a chronic food shortage would be most keenly felt by poor countries.

‘The stresses from hunger and famine could result in social upheaval and civil strife, exacerbating conditions that lead to failed states. Between countries, competition for food supplies and displacement of people across borders could deepen tensions, and provoke conflict and wars,’ said Mr Lee.

He called for a multi-lateral cooperative effort where individual countries do their part to boost productivity and infrastructure in their farm sectors.

The three-day dialogue continues until Sunday, with US Secretary of Defence Robert Gates scheduled to make a speech this morning on challenges to stability in the Asia-Pacific region.

Source : Straits Time - 31 May 2008

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Property analysts say muted property market situation is temporary

Property analysts say muted property market situation is temporary
By Ng Baoying,
 
SINGAPORE: Investors have been cautious about the property sector amid expectations that the muted residential property market will weaken further. However, some property consultants are taking a slightly more positive stance, saying that this situation is temporary.

Transaction volumes for private homes have been thin, with developers holding back launches or cutting prices. And recently, there have been a slew of bearish reports from the likes of JP Morgan and Nomura, which are further dampening sentiment.

They said that private home prices could drop by as much as 35 per cent in the upper-end segments of the private residential property market by 2010 due to excess supply and poor sentiment.

They argue that marginal speculative sellers are likely to drive prices lower amid low transaction volumes and higher unsold pre-sale inventories.

Lower rental expectations and a large increase in supply are also seen compounding the situation in the longer term. Some also said the middle and low-end segments will not be spared.

But there are some property consultants who said that while things are slow now, dynamics will change going forward.

While the consensus view is that prices will continue to remain under pressure for the rest of the year and into 2009, some consultants said that the main reasons for falling prices are external.

Chua Chor Hoon, Senior Director, Research, DTZ Debenham Tie Leung, said: “It’s mainly the external factor, because of what’s happening in US, so sentiments are really weak now.

“(It’s also) partly because prices have gone up quite a lot last year - especially after the deferred payment scheme has been removed that made buyers more cautious. It’s a combination of factors, but I believe it’s the US economy that has a greater impact.”

She believes that prices will continue falling for the rest of this year and even into the year ahead, but a glimmer of hope exists.

Ms Chua said: “Prices are likely to fall for the rest of this year and they could continue to fall next year depending on how the US economy pans out.

“But we have a lot of good things coming up in 2010 - Youth Olympics, integrated resorts. So our fundamentals are quite strong. When the US economy picks up, I believe sentiments will follow suit.”

And some point out that the bearish reports are due to an over-estimation of supply numbers.

Ku Swee Yong, Director, Marketing & Business Development, Savills (Singapore), said: “The differences arose because of variance in the interpretation of a very basic set of data - the supply numbers - how many apartments will be completed in the next three years.

“We believe that the supply numbers have been overstated because there have been many projects filed and we know that these projects have been delayed.”

What is clear though is that shares in property developers have been taking a hit amid concerns over the property outlook. Most of them closed lower on Wednesday. - CNA/vm

 
Source : Channel NewsAsia  - 30 May 2008

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Singapore Raffles Hotel won’t be sold after all

Singapore Raffles Hotel won’t be sold after all 

Consortium that inked in-principle deal declines to say why sale fell through
WHAT A PITY: ‘This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel.’ - SPOKESMAN FOR THE CONSORTIUM, expressing disappointment over the failure to buy Raffles Hotel (above) — ST FILE PHOTO
 
A PLAN to sell the historic Raffles Hotel again has fallen through.
The Business Times (BT) yesterday reported that a consortium led by former Credit Suisse banker Mark Pawley, which had inked an in-principle deal to buy the hotel earlier this month, was ‘very disappointed’ with the outcome.

Its spokesman confirmed that the deal was off.

‘This would have involved an assured distinct identity for Raffles Hotel as a flagship for Singapore in the international hospitality industry and a rejuvenation of the hotel,’ the paper quoted her as saying.

Citing confidentiality clauses, she declined to give reasons why the deal soured.

But she denied that there was any issue with the source of the funding, which is believed to be a family trust linked to a European family.

If the deal had gone through, the 121-year-old historic hotel and its adjoining shopping arcade would have changed hands for the second time in three years.

The agreed price was reportedly about $650 million - more than triple the $200 million paid by its American and Middle Eastern owners in 2005.

This was seen as a reflection of the strong boost in demand for hotel space in Singapore in recent years, with the country’s fast-growing visitor arrivals.

Mr Pawley is the chief executive of Singapore-based Oxley Capital Group, a private investment house focusing on real estate and private equity.

While he was head of the Asian real estate, gaming and lodging business at Credit Suisse Investment Banking in Asia, he was involved with the $1.7 billion sale of the entire Raffles Holdings’ hotel portfolio - including Raffles Hotel in Singapore - to United States-based private equity firm Colony Capital in 2005.

Colony later merged that portfolio with Fairmont Hotels & Resorts’ assets to create Fairmont Raffles Hotels International (FRHI). Colony reportedly holds about a 40 per cent stake in FRHI, while Saudi Prince Alwaleed bin Talal’s Kingdom Hotels International owns the rest.

On May 8, FRHI announced that it had reached an in-principle agreement to sell off Raffles Hotel. But as with its past real estate transactions, any hotels sold would continue to be part of the company’s hotel collection.

FRHI’s hotel management arm, Raffles Hotels & Resorts, also secured a long-term management contract to manage the hotel, reportedly for 40 years.

Market watchers told BT that most existing hotel groups would think twice about buying a hotel with a long-term management contract from the seller. They speculated that this clause might have scuppered the deal.

Source : Straits Time - 31 May 2008

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Property analysts say muted property market situation is temporary

Property analysts say muted property market situation is temporary
By Ng Baoying,
 
SINGAPORE: Investors have been cautious about the property sector amid expectations that the muted residential property market will weaken further. However, some property consultants are taking a slightly more positive stance, saying that this situation is temporary.

Transaction volumes for private homes have been thin, with developers holding back launches or cutting prices. And recently, there have been a slew of bearish reports from the likes of JP Morgan and Nomura, which are further dampening sentiment.

They said that private home prices could drop by as much as 35 per cent in the upper-end segments of the private residential property market by 2010 due to excess supply and poor sentiment.

They argue that marginal speculative sellers are likely to drive prices lower amid low transaction volumes and higher unsold pre-sale inventories.

Lower rental expectations and a large increase in supply are also seen compounding the situation in the longer term. Some also said the middle and low-end segments will not be spared.

But there are some property consultants who said that while things are slow now, dynamics will change going forward.

While the consensus view is that prices will continue to remain under pressure for the rest of the year and into 2009, some consultants said that the main reasons for falling prices are external.

Chua Chor Hoon, Senior Director, Research, DTZ Debenham Tie Leung, said: “It’s mainly the external factor, because of what’s happening in US, so sentiments are really weak now.

“(It’s also) partly because prices have gone up quite a lot last year - especially after the deferred payment scheme has been removed that made buyers more cautious. It’s a combination of factors, but I believe it’s the US economy that has a greater impact.”

She believes that prices will continue falling for the rest of this year and even into the year ahead, but a glimmer of hope exists.

Ms Chua said: “Prices are likely to fall for the rest of this year and they could continue to fall next year depending on how the US economy pans out.

“But we have a lot of good things coming up in 2010 - Youth Olympics, integrated resorts. So our fundamentals are quite strong. When the US economy picks up, I believe sentiments will follow suit.”

And some point out that the bearish reports are due to an over-estimation of supply numbers.

Ku Swee Yong, Director, Marketing & Business Development, Savills (Singapore), said: “The differences arose because of variance in the interpretation of a very basic set of data - the supply numbers - how many apartments will be completed in the next three years.

“We believe that the supply numbers have been overstated because there have been many projects filed and we know that these projects have been delayed.”

What is clear though is that shares in property developers have been taking a hit amid concerns over the property outlook. Most of them closed lower on Wednesday. - CNA/vm

 
Source : Channel NewsAsia  - 30 May 2008

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Pacific Star increases stake in Prime REIT to 50% - Singapore

Pacific Star increases stake in Prime REIT to 50% - Singapore
SINGAPORE : Singapore-based real estate investment house Pacific Star Group has agreed to buy the 25 percent stake held by MEAG Munich Ergo Asset Management in Prime REIT Management Holdings.

Prime REIT owns 100 percent of listed Macquarie Pacific Star Prime REIT Management. It is also the sole owner of Macquarie Pacific Star Property Management, which is the property manager of MMP REIT.

The purchase will increase Pacific Star’s interest in Prime REIT to 50 percent. Pacific Star’s existing stake in Prime REIT is held through its associated company Investmore Enterprises.

Pacific Star said the purchase reaffirms its commitment to the growth of the REIT industry in Singapore. - CNA /ls

Source : Channel NewsAsia  - 30 May 2008

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Singapore Sentosa launches fund to further marine cause

Singapore Sentosa launches fund to further marine cause
RESORTS World at Sentosa (RWS) yesterday launched a fund to sponsor education, research and conservation efforts related to marine life in a bid to further the marine conservation cause.
The RWS Marine Life Fund will disburse up to S$100,000 each year in 2008 and 2009, and up to S$1 million each year from 2010 when the Resort opens.

‘We hope to see some good applications for the Marine Life Fund. What’s exciting for us is that this fund is not reserved only for established conservation groups, but it has a pocket solely devoted to kids,’ said RWS’s Communications head Krist Boo.

‘We hope it will encourage children to learn about the ocean, and to love it. The online application process is easy for all.’

The new initiatives launched are an extension of the Resort’s conservation efforts. In 2006, RWS undertook the initiative to relocate corals and other marine life around the northern coastline affected by reclamation works that were carried out as part of the Resort’s construction.

 
 
To encourage and cultivate an interest for the oceans, besides researchers and NGOs, the Fund is also open to schoolchildren. 25 per cent of this Fund will be set aside for kids working on school projects related to marine conservation. There is no cap on the applied funding, and projects could span anything from fieldwork to classroom models. All applications will be assessed by a RWS committee which oversees the Fund, and for applications for funding above $20,000, an independent reviewer will be included in the assessment.

 
Source : Business Times - 30 May 2008

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Singapore HDB resale price growth expected to remain low

Singapore HDB resale price growth expected to remain low

Moderate 4-10% growth seen for 2008: Knight Frank
By ARTHUR SIM

THE rate of price increase of Housing and Development Board (HDB) resale flats will further decelerate in the next six to nine months, resulting in a relatively moderate 4-10 per cent growth for the whole of 2008.
Knight Frank director (research and consultancy) Nicholas Mak added: ‘If the local economy were to slip into a recession in 2008, overall prices of HDB resale flats could vary between a 2 per cent contraction and a 3 per cent growth for the year.’

Knight Frank’s projections are based on HDB’s resale price index, which increased in Q1′08 by 3.7 per cent over the previous quarter. But Mr Mak explained that price movements in the resale market are difficult to project because data on average valuations are not available even if median prices, which is likely to include cash-over-valuation (COV), is.

As such, Mr Mak expected that median COV of all resale flats, which fell to $21,000 in Q1′08 from $22,000 in Q4′08, could continue to fall this year.

Another possible cause for lament is that potential HDB upgraders - a significant factor in private mass market housing - could disappear in sync with falling HDB resale transactions.

In Q1′08, transactions fell about 6 per cent to 6,358 units from 6,748 units in Q4′07.

 
 
Knight Frank also believed that HDB upgraders have been supporting the private secondary market, which saw 3,521 units transacted in Q4′07.

While it did not have precise numbers of HDB upgraders buying into the secondary market, it noted that in Q4′07, the greatest number of private secondary market transactions occurred in the Outside the Central Region (OCR), and was ‘attributable to the HDB upgraders bracket’.

And Knight Frank believed that there could be an emerging resistance to swelling home prices.

In January, Knight Frank noted that City View @ Boon Keng, under HDB’s Design, Build and Sell Scheme (DBSS), pushed prices to $727,000 for a five-room unit. While the launch generated a lot of buzz, at end March 2008, 250 of the 714 flats available were still unsold.

‘The issue that arises is the validity of the pricing of such DBSS flats. Keeping in mind that there are more of such developments proposed in places like Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok, and given that they are still bound by public housing rules such as the income ceiling of buyers, one could begin to wonder about the intrinsic affordability of public housing initiatives,’ Mr Mak said.

 
Source : Business Times - 30 May 2008

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Singapore NTUC Income rules out option to stay in old bonus scheme

Singapore NTUC Income rules out option to stay in old bonus scheme

By GENEVIEVE CUA
IN his plainest statement yet on a controversial bonus cut, NTUC Income chief executive Tan Suee Chieh said yesterday the move is the right decision and policyholders will not be given an option to remain in the old bonus scheme.

Mr Tan Kin Lian: Disagrees with Income’s view that the old bonus rate is unsustainable 
Income announced last month that it would cut its annual bonus payouts for participating plans from 2.3 to 1.3 per cent and raise its special or terminal bonus rates from 25 per cent to between 30 and 120 per cent.

That move has raised the ire of its former chief executive Tan Kin Lian, whose postings in his blog have galvanised other policyholders.

News reports this week said Mr Tan Kin Lian was calling a truce in his protest. But a letter from him in The Straits Times yesterday said he disagreed with Income’s view that the old bonus rate was unsustainable. He said the actual yield earned by the life fund was higher than the projected yields at point of sale.

In a statement yesterday ahead of Income’s annual general meeting, Mr Tan Suee Chieh said Income’s board has ‘recognised’ that its financial position had to be strengthened since August 2006. The issue was ‘extensively discussed’ last year.

He said an appointed actuary’s opinion was that under the old structure, Income would be less likely to meet policyholders’ payouts and would end up with a weaker financial position.

‘The old structure was not sustainable and would undermine our ability to deliver total returns, which are ultimately more important to policyholders,’ Mr Tan Suee Chieh said. ‘There is now a better chance for NTUC Income to not only deliver returns as illustrated to policyholders, but to deliver even better returns.’

He also said the new bonus structure will reduce the likelihood of bonus cuts in the future.

While Income’s life fund has generated a total annualised return of about 7.8 per cent over the past 10 years, that is understood to comprise income and capital gains. The fund is understood to generate a running yield of between 2 and 3 per cent.

It is also understood that the old structure would have needed a running yield of 4.5 per cent a year to sustain the old bonus rates.

The new bonus structure is expected to release some $70 million of capital. This is expected to grow to $400 million over a few years to give Income greater flexibility in terms of investments.

Under the risk-based capital regime, high bonus rates will require high capital reserves, as bonuses once declared are guaranteed. Income has a capital adequacy ratio of about 180 per cent. And while well above requirements, it is one of the lower ratios in the industry.

Nick Dumbreck, president of the UK Institute of Actuaries, who also acted as consultant to Income, said: ‘Most policyholders’ main concern is with what they get back from the policy when it matures or is surrendered. The level of guarantee is secondary.

‘The level of guarantees has to be managed so that the exposure to equities can be sustained. That may mean cutting the annual bonuses. It is better to take action in advance of a problem arising. Once investment conditions become difficult, it can be too late to do anything.’

Mr Dumbreck said the ‘normal’ practice in the UK is to adjust the level of the final bonus and the annual bonus remains stable. ‘Normally the level of the regular bonus is set with reference to interest rates and bond yields,’ he said.

‘If bond yields remain stable, equity returns shouldn’t influence the annual bonus level. Normally you’d expect the final bonus to vary rather more from year to year to reflect the level of equities subject to smoothing.’

Source : Business Times - 30 May 2008

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Singapore could be gas pricing hub

Singapore could be gas pricing hub

Deregulated market, LNG trading make case for country, says consultant
By RONNIE LIM
ALREADY a major international oil pricing hub, Singapore has the credentials to become an international gas pricing hub too, according to a consultant who has helped advise the Republic on its gas code.
‘All eyes are on Singapore, which in July this year will launch its liberalised gas market,’ London-based Tony Taylor, lead consultant with energy consultancy Tri-Zen International, told a regional gas conference here yesterday.

That will make Singapore the only country in the Asia-Pacific with such a deregulated gas market, he said.

With this, the Energy Market Authority will introduce a Gas Network Code governing market players’ behaviour and licences for importing, shipping, retailing and transporting gas. The Gas Act has been modified to legalise this process.

The result will be open, third-party access to gas infrastructure, including the four natural gas pipelines - two from Malaysia, one from Sumatra and the last from West Natuna - and the liquefied natural gas (LNG) terminal that will be operational on Jurong Island in 2012, Mr Taylor said.

Apart from ensuring security and diversity of gas supply - instead of relying only on piped supplies from Malaysia and Indonesia - Singapore also aims to use the LNG terminal to trade gas regionally.
There was talk of Indonesia and Malaysia also wanting to do this with terminals in Batam and Tanjung Pelapas, but that seems much further down the road, Mr Taylor said.

He was sceptical at first about Singapore’s LNG trading plan, but now reckons that despite its small market size, Singapore will change the LNG landscape, being well-positioned for East-West trade.

Current global LNG pricing hubs include the Henry Hub in the US, the National Balancing Point in the UK and Japan Crude Cocktail, Mr Taylor said. And now ‘there is a case for Singapore setting an international market price for LNG’.

Singapore is already a major international oil refining and oil trading centre, and the market has become familiar with oil prices quoted on the Singapore spot market.

In gas, the Republic currently has four natural gas pipeline contracts with gas prices indexed to that of high sulphur fuel oil. It also has a legal, corporate governance and financial structure equal to those in centres like New York and London.

With Singapore imposing an import control policy on piped gas to ensure viability of the LNG terminal, this could effectively cause piped gas and LNG prices to converge, thus providing elements of pricing transparency.

‘If and when Singapore gains liquidity in LNG trades, a marker price may then be linked to an average price of Singapore LNG trades,’ he said.

But unlike crude and oil products that can be easily stored and traded, he said that LNG lacks fungibility, so LNG trades here will likely involve ‘displacement trades or paper trades’.

BG Asia Pacific - previously part of British Gas - was chosen last month as the sole LNG buyer for Singapore and has started negotiating supply and purchase contracts with potential buyers here, he said.

The $1 billion Singapore LNG terminal will build up throughput from an initial 1 million tonnes a year in 2012 to 3 million tonnes by 2018, with plans for an eventual doubling in capacity to 6 million tonnes.

 
Source : Business Times - 30 May 2008

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