Singapore firms ahead in keeping foreign talent on local terms: PwC

Singapore firms ahead in keeping foreign talent on local terms: PwC

By JAMIE LEE AND CHOW PENN NEE

SINGAPORE-BASED firms find it easiest to keep foreign talent here on local terms compared with other Asian countries, a survey by PricewaterhouseCoopers (PwC) showed.

And with the expected economic slowdown, many companies also anticipate that foreign talents are now likely to take up ‘local- plus’ terms - which are less attractive than expatriate terms - as the job market could come under threat, said PwC yesterday.

PwC interviewed human resource professionals of 105 Singapore-based companies between March and July this year.

Of these, 59 per cent have their regional headquarters in Singapore, while 24 per cent have their global headquarters in Asia.

These include home- grown firms such as Temasek Holdings, CapitaLand, Neptune Orient Lines and Keppel Corporation, as well as multinational companies such as 3M Singapore, ING Bank’s Singapore branch and Philips Electronics Singapore.

Some 79 per cent of these firms said they considered Singapore the easiest place to localise foreign talent in the survey released yesterday.

PwC defined localisation as changing an expatriate remuneration package to one that is similar for a local hire.

This is known sometimes as ‘local-plus’ terms and could mean removing benefits for education and housing that expatriates receive, said James Clemence, partner of PwC’s International Assignment Services, which conducted the survey.

‘It’s a halfway house between expatriate and local’ packages, Mr Clemence told reporters at a media briefing.

PwC said this was testament to Singapore’s drive to attract foreign talent through government initiatives such as the Personal Employment Pass and Singapore’s competitive personal tax rates and concessions.

About half of all the companies surveyed said that they anticipated more localisation taking place.

With the financial markets starting to sour, employers could wield more bargaining power, said Mr Clemence.

‘It’s very difficult to move someone from an expatriate package down to a local package. Take away the housing, the schooling, it’s a difficult task to persuade employees to stay.’

But with the slowdown, particularly in the financial services segment, ‘the employer is going to become the one in the driver’s seat’ if the crisis continues, he said.

But companies also faced challenges such as monitoring the benefits of cross-border moves. Just 9 per cent of respondents said that they tracked the return-on-investment of cross-border moves.

Source : Business Times - 15 Oct 2008

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Still more losses to come, says Volcker

Still more losses to come, says Volcker

Ex-Fed chief says slew of rescue measures distasteful but necessary

By ANNA TEO

(SINGAPORE) Back in 2005, when the US and global economies were fairly booming, former US Federal Reserve chairman Paul Volcker warned of ‘disturbing trends: huge imbalances, disequilibria, risks’ under the placid surface.

MrVolcker: ‘I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one.’
‘Altogether, the circumstances seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot,’ he had said at a conference at Stanford University, and warned of an impending financial crisis.

‘What really concerns me is that there seems to be so little willingness or capacity to do much about it,’ he added.

There is now the capacity - and, given the state of affairs today - greater willingness, if not anxiety, to deal with what has indeed become a full-blown crisis.

Said the 81-year old right off the bat at a talk here yesterday: ‘I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one.’

While previous financial crises might have passed without inflicting too much harm beyond the financial sector, ‘this crisis is an exception’, he said. ‘I don’t think we can escape damage to the real economy.’

The United States and European economies face serious recession, he told his audience who packed the University Cultural Centre Hall at the National University of Singapore.

US home prices are still falling, with ’still more losses’ to come. A quick strong recovery would be ‘beyond reasonable expectation’, he added.

Now chairman of the trustees of the Group of Thirty, a global body of central bankers, leading economists and finance specialists, Mr Volcker was speaking at a talk organised by the Lee Kuan Yew School of Public Policy.

The top priority in tackling the credit crisis is to stabilise the financial system - which he described as likely to remain in ‘intensive care’ for some time - even if it means heavy government intrusion, he said.

And ongoing measures by US and European governments to pump billions of dollars to shore up beleaguered banks will boost investor confidence and help mitigate the effects of the economic downturn.

‘These kinds of measures - government guarantees and interventions - are distasteful,’ said Mr Volcker. ‘However distasteful, I’m afraid they’re necessary in this emergency to restore some sense of stability and confidence.’

Asked during question time if the huge infusion of liquidity could lead to inflation or stagflation, he said: ‘It’s not going to be a problem in the short run. Inflation doesn’t flourish in the face of recession. It’s something we have to worry about when we get out of this recession.’

Known as Inflation Slayer for defeating double-digit inflation in the US during his Fed tenure from 1979 to 1987, Mr Volcker took a dig at himself, saying: ‘I just made a speech without mentioning the word inflation! That would be one of the first times in my life!’

As to why the Wall Street brainies failed to see the crisis coming, especially after his clear warning in 2005, he said: ‘They were so busy making money!’

The audience obviously regarded him as a Mr Know-All wise man, not just on the global economy and finance but a little beyond, it seems. They queued to ask him all manner of questions, from ’should governments identify housing bubbles’, the whys and wherefores of China’s privatisation policy, to the impact of the financial crisis on social cohesion, and how should Singapore deal with recession. As well too, his assessment of successor Alan Greenspan’s job performance, and the Fed’s role in the making of the crisis. Most of which he deftly skirted.

When pressed to elaborate on what he meant by serious recession in US and Europe, how deep and how long, he replied: ‘I believe we are entering a recession of unknown duration.’

Source : Business Times - 15 Oct 2008

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Microsoft has last laugh over Yahoo

Microsoft has last laugh over Yahoo

(SEATTLE) Microsoft chief executive officer Steve Ballmer said that he was disappointed that Yahoo refused a takeover offer that went as high as US$47.5 billion back in May. Now, he looks lucky.

Yahoo closed last week with a market value of US$17 billion, so Mr Ballmer’s failure to seal the purchase saved the biggest software maker from a writedown that could have rivalled the industry’s most vilified deals. Yahoo ended on Oct 10 at US$12.29 on the Nasdaq Stock Market.

Mr Ballmer ‘might be the luckiest guy in the software industry’, said analyst Charles Di Bona at Sanford C Bernstein in New York. ‘One of the guys here just looked at Yahoo’s share price and said to me, ‘Nice miss by Microsoft’.’

In addition to escaping the financial blow, the 52-year-old CEO saved himself some goodwill with shareholders.

Microsoft first offered US$31 a share for Yahoo, the No 2 Internet search engine operator, and went as high as US$33 in last-ditch talks with Yahoo CEO Jerry Yang - a price that investors such as Kim Caughey at Fort Pitt Capital Group decried as too high at the time.

‘People would have been pretty ticked off if they had done a deal at US$33 and then had to write down a large portion of it almost immediately,’ Ms Caughey, whose Pittsburgh-based firm owns Microsoft shares, said.

Mr Di Bona also credited Mr Ballmer’s unwillingness to ‘do the deal at all costs’ for saving Redmond, Washington-based Microsoft from overpaying. When he scrapped the bid on May 3, Mr Ballmer said that Mr Yang had demanded US$37.

Even if the deal had been completed, Microsoft probably would have included a clause that enabled it to renegotiate the price if Yahoo shares declined substantially, Mr Di Bona said.

But now, the tables are turned. Yahoo’s attempt to strike a deal to outsource some of its Internet ad sales to Google is falling apart, and meanwhile, its shares have reached a five-year low. — Bloomberg

Source : Business Times - 15 Oct 2008

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MAS monitoring impact on Singapore banks

MAS monitoring impact on Singapore banks

(SINGAPORE) The Monetary Authority of Singapore (MAS) said that it is assessing the impact of extraordinary measures taken by central banks elsewhere and will make sure that banks here are not disadvantaged by the moves.

Yesterday, the Hong Kong Monetary Authority (HKMA) said that it will use its foreign exchange reserves to guarantee bank deposits, shoring up confidence in lenders. It also said that the government will set up a fund from which banks can access additional capital if needed. Observers say that Singapore banks may lose out if some anxious depositors transfer their funds to Hong Kong banks, comforted by the guarantee from the HKMA. Singapore has deposit insurance but only up to $20,000.

When Ireland gave a blanket deposit guarantee early this month - the first European country to do so - British banks found that some of their deposits flowed to Irish banks.

A spokeswoman for MAS said last night that over the past week, various jurisdictions have announced extraordinary measures to bolster confidence in their financial systems. ‘In Singapore, our financial system remains stable and robust. Financial institutions here are sound and are operating normally,’ she said. ‘We have not had to take any exceptional measures.’

‘Nonetheless, MAS is assessing the impact of the extraordinary measures taken elsewhere,’ she said. ‘We will take the necessary steps to ensure that banks in Singapore are not disadvantaged and are able operate on an equal footing with other banking systems internationally.’

Source : Business Times - 15 Oct 2008

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US buys stakes in 9 banks, stems panic

US buys stakes in 9 banks, stems panic

Maximum sum of US$25b invested in Citigroup, JPMorgan, Wells Fargo; others take US$2-12.5b

By ANDREW MARKS

NEW YORK CORRESPONDENT

THE United States Treasury Department, in its boldest move yet to shore up embattled banks, and prevent the collapse of the credit markets and the US economy, is set to undertake steps to directly invest up to US$250 billion in banks, and to guarantee new debt issued by banks for the next three years.

Yesterday morning, before the opening bell on the New York Stock Exchange (NYSE), President George W Bush formally announced the US government’s latest effort to stabilise the financial system, ensure the solvency of major US banks and get them lending to one another and businesses again.

Mr Bush said that the proposal, similar to the steps taken by several European governments on Monday, is ‘designed to defend free enterprise, not destroy it . . . This is an essential short- term measure to ensure the viability of the American banking system’.

He said that the measures - which will be carried out by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation - will include taking a temporary equity stake in banks, insuring new bank debts and non-interest-bearing deposits.

Shortly after the president spoke yesterday morning, Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson elaborated on the plan at a joint news conference, saying that the recapitalisation plan is open to participants only until Nov 14. It has a maximum of US$25 billion for any one institution. The government will get preferred stock for its equity stake, but without voting rights, which it can redeem after three years.

The preferred stock that each bank will have to issue will pay special dividends, at a 5 per cent interest rate that will be increased to 9 per cent after five years. The government will also receive warrants worth 15 per cent of the face value of the preferred stock.

Half of the US$250 billion, which will come from the US$700 billion bailout approved by Congress, has already been spoken for, with nine major US banks receiving the first US$125 billion. The nine are: Citigroup, JPMorgan Chase and Wells Fargo - US$25 billion apiece; Bank of America and Merrill Lynch - US$12.5 billion each; Goldman Sachs and Morgan Stanley - US$10 billion apiece; and Bank of New York and State Street Bank each received US$2-3 billion.

‘Government owning a stake in any private US company is objectionable to most Americans - me included,’ said Mr Paulson. ‘Yet, the alternative of leaving businesses and consumers without access to financing is totally unacceptable.’

Mr Bernanke said too that the Federal Reserve would become the buyer of last resort for commercial paper, launching a measure that will help businesses get the money they need for day-to-day operations.

Word of the impending US plan first reached Wall Street early Monday afternoon in the midst of what was already a powerful rally based on the coordinated moves from European central banks and governments to guarantee bank debt and prop up financial institutions with billions in taxpayer money.

When the news that Mr Paulson had summoned the heads of the nine largest US banks to his New York City office to explain the terms of the plan reached traders at around 1pm on Monday, the Dow had already registered gains of about 550 points following announcements that the French and German central banks were planning their own multi- billion-dollar efforts to inject capital into the global financial system, along with the announcement that Mitsubishi Bank was going ahead with its US$9 billion investment in Morgan Stanley.

By the end of Monday trading, the Dow had soared 936 points - its biggest absolute gain ever - while its 11.1 per cent jump was the fifth-biggest day ever and the largest percentage advance since 1933. The S&P 500’s nearly 12 per cent leap on Monday, matched by the Nasdaq Composite’s advance for the day, was its fourth biggest percentage gain in history. Morgan Stanley alone rose a stunning 85 per cent.

At yesterday’s opening bell, investors seemed intent on continuing the rally, as bluechip stocks soared 277 points or 3 per cent in the opening minutes. By 10am New York time, the Dow had pulled back to a gain of 190 points to 9,577.4, which was 1,690 points above its Friday intraday low of 7,882, while the S&P 500 was up 17.14 points, or 1.71 per cent to 1,020.5. The Nasdaq Composite was off 12 points, or 0.67 per cent.

Market strategists said that, at the least, the worst of the panic was over, but cautioned that the market’s enthusiastic reaction to the events of the last two days doesn’t mean that stocks are set to recover all or even most of the losses they’ve been bludgeoned by over the past six weeks.

Source : Business Times - 15 Oct 2008

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$5m facelift for seafarers’ apartments

$5m facelift for seafarers’ apartments

By Ang Yiying

Guests taking a tour of the renovated serviced apartments at its official reopening yesterday.

AT 87 PER CENT, it has an occupancy rate that is the envy of hotels and cheaper rates to boot. Except you need a special identity card that identifies you as a seafarer to check in.
The mariners-only lodgings took in 6,000 visitors last year, and that was before the more than 20-year-old premises got its first major facelift.

Since the Singapore Mariners’ Club (SMC) serviced apartments in Cantonment Road reopened for business on July 1, it has received 1,600 seafarers.

Accommodation for those who sail at sea is not common and those that exist are usually run by seafarers’ missions rather than port authorities. Singapore’s is run by the Maritime and Port Authority (MPA) which spent $5 million on refurbishing the 46 apartments.

They are intended for those in transit but seafarers on holiday or study here can also apply for a unit, which is slightly smaller than a three-room HDB flat.

It consists of a sitting room with a wall-mounted 32-inch LCD television offering cable television channels, a pantry-cum-dining area, a bedroom and a bathroom.

The apartments are a step above what they used to be, boasting a brighter colour scheme, with the maroon carpeting changed to beige. While the layout remains the same, the 80s-style furniture and bathroom fittings have been replaced by a more modern look.

According to Mr Shahid Ahmed, 34, a chief officer of a ship, they are several notches above those available in Hong Kong, which do not have attached toilets. Mr Ahmed, from Pakistan, who had also stayed in the apartments before their renovation, said: ‘I was not expecting it to be this much better.’

His one gripe, though, was the lack of cooking facilities.

With better furnishings, come higher room rates. It almost doubled to $95 for a single and $110 for a double, and went up by 50 per cent to $120 for a triple. This is comparable to or cheaper than lower-end hotel room rates in town which range from $120 to $180.

The 12-storey building has a restaurant, which is open to the public but offers discounted rates for seafarers. Residents can also use the lounge and games room. It even houses a 24-hour clinic.

At the reopening ceremony yesterday, Minister in the Prime Minister’s Office and labour chief Lim Swee Say gave out hampers to representatives of some of the ships which called at Singapore’s port, a practice which started in 2003.

The ceremony is one of the activities during the Singapore Maritime Week which is on till Sunday.

To kick off Maritime Week, MPA’s Singapore Nautical Run last Friday raised a total of $333,000 - $222,000 for the President’s Challenge and $111,000 for The Straits Times School Pocket Money Fund.

Source : Straits Times - 15 Oct 2008

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Robust demand for recent Singapore HDB launches

Robust demand for recent Singapore HDB launches

Two offerings of wide range of flats attract more than 10 applicants per unit

By Elizabeth Wilmot

DEMAND has been red hot for two recent launches from the Housing Board, with over 10 times more applicants than flats available.
An offering of 150 smaller flats - studios to three-roomers - was swamped with 2,426 applications in the space of just a week.

And, last Friday, the half-yearly sale of three-room premium, four-room and bigger flats achieved an extraordinary response: 7,036 applications have been submitted for 683 units, yet the offer runs until Thursday.

The launch of the smaller units featured three-roomers, two-roomers and studios in estates across the island, including Bukit Merah, Geylang, Jurong East, Sengkang, Ang Mo Kio and Marine Parade.

There were 582 applications for studios and 1,844 for two- and three-roomers combined in the offer from Oct 2 to 8.

Studio prices range from $62,900 to $116,400. A two-roomer goes for $74,000 to $106,300, while a three-room flat will set you back $134,500 to $275,200.

PropNex chief executive Mohamed Ismail was not surprised at the robust demand. He said: ‘HDB prices, although subsidised, have gone up. Lower-income households are left with not much choice but to turn to three-room flats as a starting platform.’

Three-roomers also provide the highest rental yields in the long term, he added, making them profitable for buyers.

Such flats are offered to lower-income households. Studio applicants must be 55 or older and their gross monthly household income must not exceed $8,000.

The gross monthly household income for applicants for three-room flats must not exceed $3,000. The limit for those hunting for a new two-roomer is $2,000 .

This month’s launch shows some changes from the previous small-flat offering held in July. Then, 103 two-room flats and 97 three-roomers were offered, attracting 1,809 applications.

Two-roomers were priced from $72,800 to $99,800 while three-room flats went for $99,000 to $211,000, far lower than this month’s offering.

Demand is also robust for HDB flats at the other end of the price spectrum.

A total of 9,083 applications came in for 992 homes offered in a balloting exercise held between Sept 26 and Oct 9.

Four-roomers at the Pinnacle@Duxton, for example, are priced from $457,000 to $555,000 and attracted 2,291 applicants; 825 people applied to buy five-room units at the same development priced from $545,000 to $646,000.

Source : Straits Times - 15 Oct 2008

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Just one bid for Mohamed Sultan Road office site

Just one bid for Mohamed Sultan Road office site

By Joyce Teo

A TENDER for a transitional office site - aimed at easing the office squeeze in Singapore - in Mohamed Sultan Road has closed with just one bidder, and at a far lower-than-expected offer of $4.65 million.

The price for the 6,176 sq m plot, which has a 15-year lease, works out to $46.67 per sq ft of gross floor area. It came from local firm RSP Architects Planners & Engineers.

‘The bid is only one-fifth of the average land prices of the two Scotts Road sites which were awarded in April and May this year,’ said Knight Frank’s director of research and consultancy Nicholas Mak.

‘It is very conservative so there is a good likelihood that it may not be awarded.’

When the site was launched for tender in mid-August, Mr Mak had expected the bids to come in at between $10 million and $13 million. Another consultant had expected even higher bids of up to $18 million.

However, consultants generally agree that interest in such office sites will be subdued, given the poor market sentiment and the large supply of office space expected in 2010.

A building on the Mohamed Sultan site could be built in around a year, which is near the time when more office supply from buildings such as Marina Bay Financial Centre will pour into the market.

The Urban Redevelopment Authority will announce its decision at a later date, after it has evaluated the bid.

Earlier this year, the URA rejected the only bid - at $7.8 million or $38.35 per sq ft of gross floor area - submitted for a transitional office site in Aljunied Road because it was too low.

This Mohamed Sultan site is one of three commercial plots slated for sale through the confirmed list in the second half of the year. Confirmed list sites go up for tender on scheduled dates, regardless of developer interest.

The tender for a second transitional office site on the list, in Mountbatten Road, was launched last month and will close on Nov 18.

Source : Straits Times - 15 Oct 2008

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Singapore banking system not in trouble, assures Tharman

Singapore banking system not in trouble, assures Tharman

By S Ramesh,

SINGAPORE: Singapore’s banking system is not in trouble and the Monetary Authority of Singapore’s response to the current financial crisis has been a measured one.

Finance Minister Tharman Shanmugaratnam also says there is no need to provide guarantees for local lenders.

He was speaking on the sidelines of an event at the Hwa Chong Institution on Wednesday.

He declined to comment if there would be off-budget measures to manage the economic downturn.

The global financial market is facing two big problems, said Mr Tharman.

These are the lack of capital in the banking systems and the lack of liquidity as the wholesale funding market is frozen.

But, he said, confidence is still high in Singapore’s financial system.

Mr Tharman said: “Our banks have enough capital and they are not dependant on the wholesale funding market, unlike banks in some other countries. So we have not had to respond with major actions domestically.

“But we have been very alert and vigilant to make sure that the financial system continues to function in an orderly fashion so as to make sure that the economy as a whole is able to go through this crisis without too much damage.”

He said it is not necessary for Singapore’s central bank to follow other Asian countries in providing guarantees for local lenders.

“There is no lack of confidence in our system, and that is something that the market acknowledges. But we are studying the implications of Hong Kong and a few other countries having moved this way,” said Mr Tharman.

Turning to the recent protest by several investors at the Speakers Corner, Minister Tharman said the Monetary Authority of Singapore has laid down its approach on this matter.

The key is to provide avenues of recourse for these investors. These could be either through the legal route or preferably through mediation.

Mr Tharman said: “Each of the banks has set up a panel headed by an independent person, respected individuals so as to make sure this is a fair and serious process. This is not whitewashing. It is a serious process of mediation.

“Customers who feel that they have been unfairly treated or their products are mis-sold can bring their complaints to the panel who will evaluate them objectively. I think that’s the best approach.”

Questions on Singapore’s response to the economic downturn have been tabled for Monday’s sitting of Parliament.

And, Mr Tharman warned it is not going to be a short-term slowdown.

- CNA/ir

Source : Channel NewsAsia - 15 Oct 2008

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Investors look to physical gold as safe haven

Investors look to physical gold as safe haven

By Rachel Kelly,

SINGAPORE : Gold continues to glitter as an investment option while global equity markets face continued volatility and turmoil.

The price of gold is holding steady at the US$850-per-ounce mark, but experts said it could rise to as much as US$1,200 in the next six months.

The precious metal has long been regarded as a safe haven investment compared to options such as shares or currencies. And investors are seeking out physical gold instead of shares in bank-owned gold.

William Kwan, bullion director, Gold Capital Management, said: “In the first place, there is a divergence between the physical gold market and the paper gold market. A lot of consumers are already converting their unallocated holdings from paper gold to physical gold allocated, because they find that it is safer for them to hold physical that is more tangible.

“That is why recently there is a short supply of gold coins around the world. A lot of consumers are queuing up outside of bullion dealer shops to buy gold coins and gold bars.”

Industry players have noted a two to three-year low in gold paper trading. And for those investors looking to get their hands on some physical gold, such coins cost in the region of S$1,500 per ounce.

United Overseas Bank (UOB) in Singapore is one lender that trades in gold coins, and has noted a significant increase in demand for physical gold, gold bars and coins.

However, UOB also said that high gold prices have deterred jewellers and goldsmiths from buying gold bars.

That said, while there has been interest by investors, it is costly to invest in physical gold as GST and gold holding fees will be incurred.

UOB expects the demand for physical gold to subside over time when there is more stability in the global financial markets.

Jewellers in Singapore have also noticed an increase in demand for gold for investment.

Charles Ho, president, Singapore Jewellers Association, said: “In the past one to two weeks, there (has been) an increase of 15 to 20 per cent in enquiries, in particularly gold bars. If (they are buying gold) purely (for) investment, then most of the customers will look for gold bars…but gold bars are not wearable, so the best choice may be to buy some gold jewellery where you can touch it and feel it everyday.”

Experts also recommend stocking up on gold with higher carat values as these make better investments. - CNA/ms

Source : Channel NewsAsia - 15 Oct 2008

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