Retail rents: S’pore keeps 4th spot in Asia

Retail rents: S’pore keeps 4th spot in Asia

By Joyce Teo

SINGAPORE is still the fourth most expensive centre for retail rents in Asia, though its global ranking has slid a couple of notches given faster rises elsewhere, a new survey has found.
The Republic fell to 16th position globally from 14th last year, according to the survey by consultancy Cushman & Wakefield.

Rents in Orchard Road, Singapore’s premier shopping belt, rose 9.3 per cent in the year ended June 30 from $42 per sq ft per month to $45.90.

But because of US dollar movements, that is reflected in the survey as a 25 per cent jump from US$325 psf per year to US$405.

CB Richard Ellis put out a similar report yesterday, which placed Singapore in 22nd spot in the world’s fastest growing destinations for retail rents.

The market today, however, is changing fast in the light of the global financial crisis. Singapore is seeing lower tourist arrivals. Retail sales, excluding motor vehicles, have started to dip.

A number of factors will determine the rate of rental changes for the rest of the year and next year, said Ms Letty Lee, director of retail services at CBRE.

‘The full impact of the financial meltdown on the job market is still unknown. Meanwhile, consumers will remain cautious and may cut spending as a result,’ she said. ‘The financial turmoil will also impact tourism arrivals, which will affect consumer spending. Landlords may be pressured to reduce rentals as a result.’

Still, Cushman & Wakefield’s managing director Donald Han believes that Orchard Road prime rents will be flat next year despite new supply as it is still the first stop for new brands here.

But suburban malls will see a softening of rents, he said.

‘While the weakening economic environment has started to pass through to retail rentals towards the fourth quarter, we believe that the rentals would remain well supported in the medium term by the comparatively undershopped characteristic of the Singapore market,’ said the Cushman & Wakefield report.

Source : Straits Times - 20 Nov 2008

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Singapore is 4th best place to invest in: Poll

Singapore is 4th best place to invest in: Poll

Republic pips rival HK in KPMG’s survey of 260 leading global firms
By Robin Chan

THE global economy may be slowing, but Singapore has been rated as one of the top four places in the world to invest in during these turbulent times.
A survey by accounting giant KPMG of 260 leading global companies, conducted in September and October across 12 economies, has placed Singapore behind mainland China, the United States and India next year as well as in five years’ time.

The Republic edged out Hong Kong, a long-standing rival for investments.

Among the key factors attracting prospective investors to Singapore are the political stability, the impartial rule of law, a friendly tax regime as well as access to new customers.

Mr Owi Kek Hean, KPMG’s head of tax services in Singapore, said: ‘We wanted to compare and contrast what businesses would like to see from the countries when deciding where to locate their operations.’

This is the first survey by KPMG on the importance of tax and demographics in influencing corporate decisions on location. It also tracked investment intentions of firms over the next five years.

The survey included responses from 20 multinational corporations based in Singapore, each with a turnover of US$1 billion (S$1.5 billion).

Mr Phillip Overmyer, the chief executive of the Singapore International Chamber of Commerce, said of the results: ‘That people are saying this is not earth-shattering, but the importance is in the timing of it.’

He said what is important is that MNCs indicated their intention to invest in the middle of the financial crisis, over the next few years, and also the places they are most inclined to invest in.

‘It confirms that people think Asia is the market of the future, that it will recover very early and it reinforces very strongly that Singapore will play a critical role in this development in Asia as the crisis starts to resolve itself.’

Mr Overmyer said that compared to the three top-rated nations in the survey, Singapore’s standing at No.4 is impressive, given the Republic is not a large market in itself but because of its ‘tremendous capability to support activities on a wide regional basis of MNCs in Asia’.

Mr Owi, who was speaking to The Straits Times on the sidelines of KPMG’s Asia-Pacific Tax Summit at the Ritz-Carlton, Millenia Singapore, said the survey reinforced a few things about what companies want.

‘Businesses would like to see more tax incentives from the government and they also want the government to attract more foreign talent to these shores.’

He said that this is no surprise as Singapore moves from a manufacturing-based economy to a high value-added service- based economy that needs more and more skilled workers.

He added that compared to Hong Kong, Singapore’s headline corporate tax rate is higher, but because the government has targeted tax incentives for various sectors, the effective corporate tax rate for a company could actually be lower than Hong Kong’s.

The survey found that 70 per cent of respondents said the tax regime is an important factor in choosing where to locate their business. Also, half of all respondents indicated that the tax policy of a country is more important than an educated workforce in deciding where to locate their business operations.

The survey also found that 65 per cent of respondents here look to the government to work with them to attract foreign talent. This is unlike in Europe, where companies feel attracting foreign talent is their own responsibility.

Mr Owi said: ‘This shows that the expectation here is for a partnership between the government and companies to bring in foreign talent.’

Bayer Schering Pharma’s Asia-Pacific regional head Chris Lee said: ‘Lower taxes and immigration barriers are only part of a number of factors that make people decide on one place or another.’

He added: ‘Many cities are vying now for talent and offering attractive incentives, so it is important for Singapore to distinguish itself.’

Source : Straits Times - 20 Nov 2008

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BANGKOK Thaksin rejoins political fray

BANGKOK Thaksin rejoins political fray

His plans for an active return to politics spells more turbulence ahead

By Nirmal Ghosh, Thailand Correspondent

BANGKOK: Thailand is headed for choppy political waters, with ousted Prime Minister Thaksin Shinawatra set to announce his active return to politics next month, in an address to supporters at a stadium here.
Thaksin, who faces jail following his recent conviction over a land deal, has been pulling strings and sniping at his political foes from abroad.

Now, it appears that he will come back fighting, overtly and aggressively.

Mr Jatuporn Promphan, a legislator from the ruling pro-Thaksin People Power Party (PPP), was quoted by The Nation yesterday as saying: ‘Thaksin will no longer wait to be attacked, he will fight back by all means, particularly with an eye-for-an-eye strategy, from now on.

‘Thaksin now believes that the only way for him to survive…is to fight for his name. (He) will announce…that he will return to politics to defend his name.’

Thaksin, now in Dubai, indicated last week that he would make a longer speech than the one he made in a previous phone-in on Nov 1, and that this time he would start ‘naming names’.

Like the Nov 1 event at Rajamangala stadium in Bangkok, which drew 70,000 people, the upcoming address - slated for Dec 13 or Dec 14 - will be held under the banner of the pro-government ‘Truth Today’ TV programme.

The venue will be the 35,000-capacity National Stadium in downtown Bangkok, close to Siam Square.

The wheels for Thaksin’s comeback appear to be set in motion.

The announcement this week of Thaksin’s Building a Better Future Foundation - whose stated aim is to bring together Asia’s brightest financial brains to help struggling poor nations - is seen as a way to rehabilitate his image, which has been battered by a string of court cases.

The new foundation is linked to the Bangkok-based Thaicom Foundation, the offices of which Thaksin had used in the past to give media interviews.

Mr Jatuporn also reinforced the view that the former premier’s divorce from his wife Pojaman last week was a tactical one, to give him greater leeway to engage in political combat and keep his family out of harm’s way.

‘Thaksin and his wife had decided earlier, after the coup d’etat in 2006, that they would separate if he decided to return to politics. It’s a promise between them,’ said the MP.

In a potential curtain-raiser, a pro-government TV station will hold a gathering at Buddhist temple Wat Suan Kaew on the outskirts of Bangkok on Sunday. Thaksin may phone in and address that gathering as well.

These developments have led many Thais to worry that there is no peaceful way out of the stalemate between pro-Thaksin forces and those against him, such as the People’s Alliance for Democracy (PAD).

Already, the Thai government has moved next month’s Asean Summit, originally scheduled to be held in the capital, to Chiang Mai in the north - Thaksin’s hometown.

It cited the potential for disruption in Bangkok as a reason for the switch.

There is also concern that the PAD - whose members have taken over government buildings and marched in massive street protests - will step up pressure to force the government to resign or the military to intervene.

Mr Sanguan Pongmanee, a PPP Member of Parliament from Lampun province, told the daily Matichon that Thaksin’s return to politics would give the PPP better direction.

But he also warned that the conflict in Thailand had the potential to escalate to the point that the kingdom could eventually break up, like the former Soviet Union.

Chulalongkorn University political science professor Panitan Wattanayagorn, however, downplayed the fears, saying the MP was being alarmist and that ‘the PPP will break up before Thailand does’.

But he conceded that Thailand would be left debilitated by the continuing political battles.

ON THE OFFENSIVE
‘Thaksin will no longer wait to be attacked, he will fight back by all means, particularly with an eye-for-an-eye strategy.’

Mr Jatuporn Promphan, a legislator from the ruling pro-Thaksin People Power Party

Source : Straits Times - 20 Nov 2008

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Motor groups want COE supply cut

Motor groups want COE supply cut

In petition to Govt, they say plunging COE prices will cause the used-car market to collapse

By Christopher Tan, Senior Correspondent

MOTOR trade associations representing hundreds of car dealers are doing the unthinkable: petitioning the Government to cut certificate of entitlement (COE) supply in the wake of plunging prices.
The Singapore Vehicle Traders Association and the Automotive Importers and Exporters Association said nosediving COE prices - which culminated in a crash yesterday - will drive down the cost of new cars, killing the market for second-hand vehicles.

Mr Neo Nam Heng, president of both trade associations, said the sector is heavily reliant on used car sales and reducing the number of COEs is necessary to ’save the industry from collapse’.

He said motor traders attended an emergency meeting yesterday and agreed to petition ‘all relevant ministries, as well as the Prime Minister’ to reduce COE supply.

While they acknowledge that reducing COE numbers means lower new car sales, Mr Neo said ‘it’s a worthwhile sacrifice’.

‘If the used-car trade collapses, we won’t be able to sell new cars,’ he said, explaining that buyers usually have a used vehicle to trade in.

Yesterday, the COE premium for cars up to 1,600cc crashed to $2, down some $10,000 from the last round two weeks ago.

The price is the lowest since the quota system was introduced in 1990.

The COE price for cars above 1,600cc plunged to $4,889 while that for the open category COE, used predominantly for cars, landed at $6,889. Both are sharply lower than the year’s average of around $14,000 as the worsening financial crisis shakes consumer confidence.

The two trade associations, which have about 450 member companies, are proposing cutting the car COE supply by 25 per cent, to make bidding more competitive and to help stabilise premiums at $10,000 to $15,000.

The associations want the cut to be immediate and last for six months.

Asked why they could not wait till next April, when COE supply is expected to shrink anyway, Mr Neo said: ‘It will be too late.’

Used-car dealers hold an estimated 3,000 vehicles in total.

The two motor trade associations are making a few other appeals as well.

One is to reduce the goods and services tax to 3 per cent, from the current 7 per cent.

They suggested that the reduction last one year to help stimulate buying.

They also suggested making the transfer fee the Government charges each time a car changes hands ‘fairer’.

The fee is now a percentage of the vehicle’s estimated market price, which Mr Neo said works out to $3,000 to $4,000 for a Mercedes E-class.

He said basing the fee on the car’s open-market value - its price before registration taxes and COE - is better.

‘A car is already taxed when it is first registered. Why tax the taxes when it is resold?’

Another proposal is to allow cars less than three years old to be used as taxis.

This would help lift the used-car trade as well as ‘let Singapore have taxis that are cleaner than the diesel cabs we have’.

LINKED TO NEW CAR SALES
‘If the used-car trade collapses, we won’t be able to sell new cars.’

Mr Neo Nam Heng, president of the Singapore Vehicle Traders Association and the Automotive Importers and Exporters Association. He explained that buyers usually have a used vehicle to trade in.

Source : Straits Times - 20 Nov 2008

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Singapore is No 22 globally in retail rent rise

Singapore is No 22 globally in retail rent rise

Average super-prime Orchard Road rental up 5.2% at $54.40 psf per month in Q3

By KALPANA RASHIWALA

(SINGAPORE) The Republic is among the top 25 cities for rising retail rents, according to the latest global survey by CB Richard Ellis (CBRE).

The average super-prime Orchard Road rent of $54.40 per sq ft (psf) per month in the third quarter of this year was 5.2 per cent higher than $51.70 psf in Q1.

This made Singapore the 22nd fastest-rising retail rent city over the six-month period in local currency terms. In top spot was Tel Aviv, with a 33.3 per cent increase, followed by the Portuguese city of Oporto, Abu Dhabi, Valencia and Lyon. China’s Guangzhou ranked seventh, with a 16.3 per cent rise in rent, Shanghai, ninth with a 12.9 per cent increase and Hong Kong 10th with an 11.1 per cent rise.

In terms of most expensive global retail rents, Singapore inched up from 19th in the Q1 2008 ranking to 17th in the latest ranking. CBRE’s rankings are based on annual retail rents in US dollars psf.

A separate survey by Cushman & Wakefield, also released yesterday but covering a different study period, shows Singapore slipping two positions to emerge as the world’s 16th most expensive location for retail rents in June this year, from 14th in June 2007. The rankings are based on annual rents in US dollars psf.

In Singapore-dollar terms, the monthly Orchard Road rental appreciated 9.3 per cent from $42 psf in June 2007 to $45.90 psf in June this year, said Cushman & Wakefield Singapore’s managing director Donald Han. He predicts that the June figure next year will be flat at around $44-46 psf.

Mr Han acknowledged that competition for tenants is growing, with the expected completion of new Orchard Road malls next year including Ion Orchard, Orchard Central and 313 @ Somerset.

‘The days of new malls here achieving 100 per cent occupancy at least one year before completion are probably behind us,’ he said.

Despite growing competition for tenants, Orchard Road rents will continue to be supported because ‘it is the obvious target for new retail demand, for instance, for new brands entering Singapore’, Mr Han said.

New York’s 5th Avenue retained top spot in Cushman’s latest June 2008 ranking, with annual rent of US$1,850 psf. Hong Kong’s Causeway Bay, with rent of US$1,784 psf, kept its No 2 ranking, followed by Avenue des Champs Elysees in Paris at US$1,134 psf. CBRE’s ranking placed New York, Hong Kong and Moscow in the top three spots.

Source : Straits Times - 20 Nov 2008

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Singapore URA gives sales details for 2 Reserve List sites

Singapore URA gives sales details for 2 Reserve List sites

Dakota Crescent plot is for residential project, Seletar Rd site for mixed development

By ARTHUR SIM

(SINGAPORE) The Urban Redevelopment Authority (URA) has released sales details for two Reserve List sites - at Dakota Crescent and Seletar Road.

The Dakota Crescent plot is for a residential development. The Seletar Road site is for a mixed commercial and residential development.

The 1.7 ha Dakota Crescent plot is near the future Singapore Sports Hub and the Dakota Crescent MRT station, which is under construction.

The 2.1 ha Seletar Road site is within the established residential area at Seletar Hills and near the future Seletar Aerospace Park.

Knight Frank expects that at today’s auction the Dakota Crescent site could fetch bids of $170-$200 per square foot per plot ratio (psf ppr) and the Seletar Road could see interest at $120-$150 psf ppr.

But Knight Frank’s head of research and consultancy Nicholas Mak said: ‘Even with the favourable location, the probability that developers will trigger the Dakota Crescent site for tender is slim.

If triggered and launched for sale, it is expected that the launch price for the proposed development will be $650-$680 psf.’

Mr Mak reckons there will be limited interest in the Seletar Road site. ‘Developers are generally very cautious and are seeking well-located sites with significant growth potential,’ he said.

A nearby comparable for the proposed development is Seletar Springs Condominium. Mr Mak believes the average selling price for new units in a future condominium could be $530-$570 psf if launched in 2009 or later.

Several Government Land Sale sites have not been awarded this year, reflecting poor market sentiment. Sites at Tampines Avenue 1/Avenue 10, Ten Mile Junction and Westwood Avenue were not awarded because bids were too low. More recently, an executive condominium site in Punggol failed to attract a single bid.

DTZ Research senior director Chua Chor Hoon said: ‘The property market has worsened a lot more since the Lehman Brothers’ collapse. It is unlikely there would be any trigger for these sites until sentiment improves and the tight credit situation eases.’

Savills Singapore director of marketing and business development Ku Swee Yong said he does not expect to see any site triggered until Q2 2009 when the global credit crunch could start to ease.

‘Developers who are still keen would need to be backed up by banks with credit for the land, and then the projected construction cost,’ he said.

Source : Straits Times - 20 Nov 2008

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Singapore Marina Bay Sands to help MICE industry’s growth

Singapore Marina Bay Sands to help MICE industry’s growth

By NISHA RAMCHANDANI

DESPITE the gloomy economic climate, Marina Bay Sands will help spur the local MICE industry and intends to work with Singapore’s tourism players to achieve this growth.

Ideal location: Singapore’s geographic location and the large number of companies based here stand the island in good stead to host more corporate meetings
‘While there is some belt-tightening, many exhibitors will still attend trade shows. I am confident we will widen the portfolio of trade shows here,’ says Wolfram Diener, vice-president of conventions and exhibitions for Marina Bay Sands. Operations in Macau can act as a springboard to bring new trade shows to Singapore, he reckons.

Mr Diener says the Marina Bay Sands MICE facilities are on target to open at end-2009, but the company will forego major MICE events until the first quarter of 2010 to allow sufficient time to be ‘ready to deliver service excellence’.

He believes Singapore’s geographic location and the large number of companies based here stand the island in good stead to host more corporate meetings.

Additionally, trade shows and corporate meetings may encourage business travellers to return as leisure travellers, he feels.

However, he acknowledges that the corporate meetings segment is likely to soften in the short term, especially as clients such as those in the financial services look to cut costs in trying times.

While corporate meetings are unlikely to come to a standstill, since they serve as both an incentive and a source of education for staff, Mr Diener thinks companies will instead shorten the duration of meetings and shave spending on them about some 20 per cent.

As costs in Singapore are higher than elsewhere in the region, the island has to work to communicate its strengths - efficiency, transparency and reliability - to win business.

However, this has to be done hand in hand with the rest of the tourism industry, he says. ‘We need to work together to keep Singapore strong as a MICE and travel destination.’

Mr Diener was speaking yesterday at the inaugural seminar of Ngee Ann Polytechnic’s new Centre of Excellence in Business Tourism.

Ngee Ann’s School of Business and Accountancy will offer a new diploma in international business from next year.

Source : Straits Times - 20 Nov 2008

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China now biggest holder of US Treasuries-WASHINGTON

China now biggest holder of US Treasuries-WASHINGTON

It has increased its holdings by US$43.6b to US$585b

(WASHINGTON) China surpassed Japan in September to become the biggest foreign holder of US Treasuries, as foreign investors sought the relative safety of government debt as stocks plunged 9.1 per cent that month.

Total net purchases of long-term equities, notes and bonds increased a net US$66.2 billion in September from US$21 billion the previous month, the Treasury said on Tuesday in Washington. Including short-term securities such as stock swaps, foreigners bought a net US$143.4 billion, compared with net buying of US$21.4 billion the month before.

China led all foreign official investors in September by posting a net increase in US Treasuries for the sixth month in the past seven, bringing its total ownership close to US$600 billion. Japan was a net seller of Treasuries for the fourth month in the past six.

‘The details of the report paint a much more positive picture of cross-border investments than expected,’ said Michael Woolfolk, a senior currency strategist at Bank of New York Mellon Corp. ‘China, along with others, is showing more demand than anticipated for US assets.’

Economists predicted that international investors would buy a net US$27.2 billion of long-term securities in September, based on the median of seven estimates in a Bloomberg News survey.

China leapfrogged Japan, increasing its Treasury holdings by US$43.6 billion to US$585 billion, the report said. Japan, now the second-largest foreign owner of US government debt, reduced its holdings by US$12.8 billion to US$573.2 billion.

China’s ownership of US government debt has doubled since July 2005, while Japan’s holdings are down from a peak of US$699 billion in August 2004.

Foreign demand for Fannie Mae, Freddie Mac and other US agency debt increased from a month earlier. Purchases of long-term agency debt totalled a net US$6.2 billion, compared with net sales of US$8.7 billion in August.

The Treasury’s figures include both agency debt and mortgage-backed securities and are not restricted to Fannie Mae and Freddie Mac bonds. Mortgage- backed securities of Ginnie Mae and corporate debt of the Federal Home Loan Bank System are also included in the report.

Stocks plunged and Treasuries rose in September as Treasury Secretary Henry Paulson negotiated for two weeks with Congress over a US$700 billion plan to address the worst financial crisis in 70 years.

International purchases of US stocks totalled a net US$11.5 billion, compared with net sales of US$982 million in August. Foreigners sold a net US$7.6 billion of corporate bonds, compared with net sales of US$13.1 billion a month earlier.

Net purchases of Treasury notes and bonds increased to a net US$88.9 billion, compared with US$30.6 billion a month earlier. Net foreign official buying of Treasury bonds and notes totalled a net US$4.9 billion, after net purchases of US$4.8 billion the previous month.

The Treasury’s reporting on long-term securities captures international purchases of government notes and bonds, stocks, corporate debt and securities issued by US agencies such as Fannie Mae and Freddie Mac, which buy mortgages.

The US dollar rose 1.9 per cent in September after a 4.5 per cent gain the previous month, according to a trade-weighted index of major currencies. The Standard & Poor’s 500 Index in September had its worst month since 2002, falling for the fourth time in five months.

The yield on the benchmark 10-year note averaged 3.68 per cent, compared with 3.88 per cent in August. Treasuries returned 1.8 per cent in September, the most since a 2.5 per cent gain in January, according to Merrill Lynch & Co’s US Treasury Master index.

The UK, which through London acts as a transit point for international investors, especially those in the Middle East, bought US$30.3 billion of Treasuries, bringing holdings to US$338.4 billion.

The US trade deficit shrank in September by 4.4 per cent to US$56.5 billion, the smallest in almost a year. The gap narrowed as a weakening economy restricted demand for foreign goods such as cars and televisions. — Bloomberg

Source : Straits Times - 20 Nov 2008

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New exchange may be Singapore SGX’s friendly rival

New exchange may be Singapore SGX’s friendly rival

Chi-X targets big funds and hopes to collaborate and compete with SGX

By CHEW XIANG

(SINGAPORE) Chi-X, which operates a pan-European equities trading platform that has already captured a 20 per cent share of trading in FTSE 100 stocks, is looking to open an electronic stock exchange here as early as mid-2009.

It is targeting big funds and institutions and is likely to offer trading in large cap index component stocks for a start, Chi-X Global chief executive officer Tony Mackay told BT yesterday on the sidelines of the TradeTech Asia 2008 conference.

‘We’ve had a series of meetings with the (Monetary Authority of Singapore) and the (Singapore Exchange), we’ve made some good progress. They’ve been very responsive and open-minded but so far they haven’t committed to anything,’ he said.

However, talks over regulatory concerns are going ’smoothly’, he said. Chi-X is now preparing its application to the MAS and if all issues are ironed out soon, Singapore’s second stock exchange could be operating by mid-2009, he said.

It may eventually allow investors to trade Asian or even European and American stocks through its platform, he added.

Chi-X, launched in Europe in March 2007, now offers trading of equities from 12 European countries on the same platform. It also operates an electronic exchange in Canada and is one of three companies that have applied for a market licence in Australia. It is reportedly in talks with authorities in Hong Kong and Japan as well.

An MAS spokesperson said that ‘we welcome private sector innovations and initiatives to enhance the competitiveness of our capital market, as long as a fair, orderly and transparent market is maintained’ but pointed out that ‘the US and European experience has shown that a proliferation of platforms may lead to lower trading costs, but it may also increase inefficiencies due to greater market fragmentation.’

Mr Mackay said he was open to first starting up a dark pool here, before moving into operating a full-fledged exchange. Dark pools are off-exchange venues for matching trades without market impact. A number, including CLSA’s BlocSec and Liquidnet, are already operating here.

Chi-X differs from traditional exchanges in that it focuses entirely on trading, especially that of esoteric order types used by algorithmic traders. Mr Mackay said it would not be competing for new listings and would also not take on any supervisory role. It is also not targeting retail investors directly.

‘We are competing but also cooperating with the local exchange. What we’re doing is to support a small part of the market, the algorithmic, automated type of trading that needs very quick execution and low trading costs,’ he said.

‘Our platform can enable them to operate on very thin margins,’ he said. Trading fees, for instance, can be substantially lower than that charged by traditional exchanges. And unlike SGX, it does not charge membership fees.

But Chi-X is also looking to collaborate with SGX, for example, by ensuring that live best prices are shared across both platforms, which is not the case in London, Mr Mackay said. It is also hoping to use SGX’s clearing facilities and has no plans to set up a clearing house of its own.

Chew Sutat, executive vice-president and head of market development at SGX, told BT that any benefits from growth in market liquidity from dark pools or alternative trading systems should benefit the whole marketplace, not just the large cap stocks.

‘It will be positive for some investors but may not be so for all, especially if there is a potential fragmentation of the market. We will be happy to support (them) as long as it adds breadth and depth to the capital markets and benefits all our customers, including issuers and retail investors. Issues such as pre-trade search costs, timely post-trade reporting, and differential access for some investors also need to be properly addressed.’

Source : Straits Times - 20 Nov 2008

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Alternatives for bosses before they make that cut

Alternatives for bosses before they make that cut

By CHUANG PECK MING

(SINGAPORE) Try out these measures before you wield the axe on workers, employers were told by the Ministry of Manpower (MOM) when it issued a revised set of tripartite guidelines on managing excess manpower yesterday.

These measures include making use of the Skills Programme for Upgrading and Resilience (Spur) to send workers for training; redeploying workers to alternative jobs; implementing a shorter workweek; temporary layoff; flexible work schedule; and managing wage costs through the use of a flexible wage system.

‘The tripartite guidelines strongly encourage companies to manage their excess manpower and consider retrenchment only as a last resort,’ said a joint statement released by the ministry, Singapore National Employers’ Federation (SNEF) and the National Trades Union Congress (NTUC).

‘These tripartite guidelines provide companies with various measures to save jobs,’ said SNEF president Stephen Lee. ‘I strongly urge companies to use these guidelines to map out various options to retain their employees as far as possible.’

Added NTUC deputy secretary-general Heng Chee How: ‘These tripartite guidelines will help companies to manage excess manpower in a strategic and flexible way, while being fair and socially responsible to their workers.’

Ong Yen Her, MOM’s divisional director for labour relations and workplaces, said that where retrenchment is inevitable, employers should talk it out with unions, if they are unionised, to ensure the exercise is carried out responsibly and smoothly.

‘Companies should also notify MOM as soon as possible of any impending retrenchment,’ he said. ‘This would enable the ministry and the relevant agencies to help affected workers find alternative employment expeditiously and/or to provide them with relevant training for enhanced employability.’

Still, the guidelines urge employers to take a long-term view of their manpower needs.

The joint statement said: ‘Instead of retrenchment, you should consider several alternatives to better manage your excess manpower:

make use of the Spur programme to send workers for training;

redeploy workers to alternative areas of work within your organisation;

implement a shorter workweek, temporary layoff, flexible work schedule or other flexible work arrangements;

if you have a flexible wage system in place, use it to adjust your wage cost.’

According to the guidelines, the prevailing norm for retrenchment benefits is two weeks to a month’s salary per year of service, depending on the company’s financial position.

Source : Straits Times - 20 Nov 2008

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