Regional markets surge on Obama’s stimulus plans

Regional markets surge on Obama’s stimulus plans

By Goh Eng Yeow

STOCK markets across Asia kicked off the year with a sharp rally yesterday, driven by hopes that the global economy will be on the mend later this year.
Investors across the region, bruised from the mauling they took in 2008, stepped back into the game to snap up battered shares.

The rises were striking, given the sour mood of late: Singapore managed more than 5 per cent while Thailand went north of 6 per cent.

It was largely fuelled by hope - something sorely lacking late last year - that the huge spending package and tax cuts proposed by the United States will finally revive that nation’s devastated economy.

‘Hopes are building up on the potential economic stimulus which will be taken by incoming US President (Barack) Obama and this is encouraging investors to rebuild their stock portfolios,’ said Mr Loh Hoon Sun, Phillip Securities’ managing director in Singapore.

But while traders are not expecting share prices to rise in a straight line, they hope the worst of the stock market carnage is behind them.

In Singapore, the benchmark Straits Times Index jumped 95.16 points or 5.2 per cent, to 1,924.87 - its highest close in almost three months. This brought its gains since Monday last week to a robust 144.3 points, or 8.1 per cent.

All in, the STI has climbed a dazzling 30 per cent after massive sell-offs triggered by fleeing hedge funds brought it to Oct 29’s intra-day low of 1,473.77. Some reason to cheer, for sure, but it is still halfway below the all-time high of 3,865.75 reached in October 2007.

STI’s advance was matched by equally dramatic surges on other battered bourses. Thailand’s SET Index jumped 6.4 per cent, Indonesia’s Jakarta Composite Index leapt 6.1 per cent and Malaysia’s Kuala Lumpur Composite Index gained 2.9 per cent.

Farther afield, Hong Kong’s Hang Seng Index was up 3.5 per cent while Japan’s Nikkei-225 added 2.1 per cent and China’s Shanghai Composite Index advanced 3.3 per cent.

Many traders said yesterday’s exuberance showed that the record falls last year meant markets had already priced in the hit corporate earnings will be taking from slowing business in the coming months. Any moves to stimulate demand though tax cuts or handouts would be a signal to traders of better days ahead - both here and elsewhere like the US.

So every economic stimulus move by President-elect Obama, such as his proposed US$300 billion (S$442 billion) of tax cuts, has been greeted with glee by traders. Such measures promise increased consumption, which should prevent the world slipping into a ‘liquidity’ trap.

This is where the fear of taking risk is so great that individuals simply hoard money while banks refuse to lend, even to prime customers, preferring to park their money in ultra-safe assets like US government bonds.

Across the region, investors made huge wagers yesterday that banks will reap enormous benefits as economies regain their footing.

Gainers here included DBS Group Holdings, which rose 73 cents to $9.42, and United Overseas Bank, up 42 cents to $13.80, while HSBC Holdings rose 50 HK cents to HK$77.50 in Hong Kong.

Even Israel’s assault on Gaza was viewed in a positive light, as traders recalled the huge rallies experienced by global stock markets after the first Gulf War in 1991 and the 2003 invasion of Iraq by US-led forces.

The resurgence in oil prices amid rising Middle East tensions has sent prices up of other commodities such as palm oil, energising plantation stocks and rig-builders in the process.

The sharp gains have raised hopes that regional markets are unlikely to test the dismal levels hit in late October.

But memories of previous rallies that ended in tears as stock prices resumed their downward spiral have served as painful reminders for traders to treat any upswing with caution.

‘It is hard to tell whether the run-up is merely a short-term rally. It is better to just buy good companies and take a long-term view,’ said Mr Peter Hames, Aberdeen Asia’s investment director.

Source : Business Times - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Gaza battles intensify, truce calls unheeded

Gaza battles intensify, truce calls unheeded

Diplomatic efforts make no headway as Israel, Hamas vow to fight on

GAZA: - Israeli tanks, planes and ground forces continued pounding Gaza yesterday, as Jerusalem dismissed international calls for a ceasefire and said the offensive would continue until Israel was safe.
But defiant Hamas militants in the Palestinian enclave vowed to fight on, with a spokesman saying ‘thousands of mighty fighters’ awaited Israeli forces, as he unveiled a map of Israel showing areas hit by its rockets and areas it intends to hit.

Efforts to secure a ceasefire continued, with French President Nicolas Sarkozy and Middle East special envoy Tony Blair in the region, but they seemed able to offer little beyond words. Meanwhile, the death toll in besieged Gaza rose to at least 530 people, many of them civilians.

The Israeli army said ‘many dozens’ of Islamist fighters had been killed since ground troops went in on Saturday in a bid to stop Hamas firing rockets into southern Israel.

‘Hamas has so far sustained a very heavy blow from us, but we have yet to achieve our objective and therefore the operation continues,’ Israeli Defence Minister Ehud Barak said.

A Hamas official said a delegation from the Islamist group would head for talks in Egypt, which has also opened contacts to achieve a ceasefire.

But senior Hamas political leader Mahmoud Zahar urged Hamas forces to fight on ‘in the name of God’. ‘They legalised for us knocking down their synagogues when they hit our mosques, they legalised for us knocking down their schools when they hit our schools,’ he said in a speech broadcast in Gaza.

Gun battles intensified in eastern Gaza City and in the north of the strip, as militants fired mortars, detonated mines, and claimed to have hit a troop carrier.

They were also trying to lure Israeli soldiers into built-up areas, witnesses said.

An Israeli military spokesman said the air force bombed more than 30 targets, including homes of Hamas members used as weapons depots, tunnels and a suspected anti-aircraft rocket launcher.

Israel launched its offensive with an air blitz on Dec 27 to curtail the rocket attacks from Hamas-ruled Gaza before an Israeli national election next month. Four Israelis have been killed by salvoes fired into Israel since the offensive began.

But Israel’s advances into Gaza have carved the 40km-long coastal territory, home to 1.5 million people, into two zones and forces have surrounded its largest urban area, Gaza City.

Gaza residents were in dire need of food, medical supplies and other aid but the hostilities were hampering relief efforts, aid agencies said.

Former British prime minister Blair, envoy for a major powers group called the Quartet, said after meeting Palestinian President Mahmoud Abbas in the West Bank: ‘We are doing everything we possibly can to bring about an end to a situation of immense suffering.’

But the United States, Israel’s closest ally, has looked all but sidelined by the pending transfer of its presidency.

And Czech Foreign Minister Karel Schwarzenberg, heading an EU peace mission, admitted: ‘We do not have a specific plan for a ceasefire because the ceasefire as such must be concluded by the involved parties.’

REUTERS, ASSOCIATED PRESS

Source : Business Times - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Survey shows most firms still hiring fresh graduates

Survey shows most firms still hiring fresh graduates

By Hoe Yeen Nie,

SINGAPORE: Thousands of fresh graduates are expected to enter the Singapore job market this year, flooding a labour pool that is seeing more retrenchments. Industries that are still hiring include accounting, engineering and sales.

Josh Goh, senior manager, Corporate Communications, The GMP Group, said: “The situation has changed. Fresh grads need to prepare themselves. They need to dress appropriately; they need to portray a very enthusiastic, willing-to-learn attitude.”

Recruitment agencies said preparation, experience and presentation will help give applicants a winning edge, so internship and knowledge about the company and job matter.

One also has to be prepared to accept a salary range that is on average about 5 to 15 per cent lower than last year.

Despite widespread hiring freezes, a recent survey of some 120 firms by the National University of Singapore (NUS) showed that 90 per cent of these companies will take in fresh graduates. The survey covered industries such as manufacturing, finance, transport and the public sector.

The Singapore Management University (SMU) said some students are delaying their graduation to explore more internships. More have also gone to career service centres for advice, especially those who are hoping to find a job in banking or finance.

Universities, in turn, have revved up their outreach activities.

Loh Pui Wah, director, Career and Attachment Office, Nanyang Technological University (NTU), said: “We are approaching companies such as new and emerging industries that traditionally do not hire fresh graduates. We are also targeting the SMEs, so we are aggressively going out to them to discuss employment opportunities and inviting them to NTU.”

Some students, however, remain unfazed about the challenges ahead. Economics major Lim Wensi, who is graduating from SMU in July, is feeling upbeat about getting a job in the tourism sector.

He said: “I’m not overly anxious about not getting a job because I feel there are still jobs out there, especially in the tourism industry. I’m also prepared to do contract work, part-time work during this time until the economy picks up. Well, the back-up plan would be to go overseas to do a Masters.”

Observers said contract work can build up crucial job experience until a permanent position comes along.

- CNA/so

Source : Channel NewsAsia - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Obama picks Leon Panetta as CIA head

Obama picks Leon Panetta as CIA head

WASHINGTON - US president-elect Barack Obama has chosen former lawmaker and White House chief of staff Leon Panetta to head the Central Intelligence Agency, a Democratic Party official told AFP Monday.

The official, asking to remain anonymous, confirmed media reports that Panetta, who was White House chief of staff for former president Bill Clinton, was the incoming president’s choice to head the agency under scrutiny for its conduct in the fight against international terrorism.

Presidential transition aides have said that retired admiral Dennis Blair is Obama’s choice for director of national intelligence to oversee the country’s sprawling intelligence system.

A former commander of US forces in the Pacific from 1999 to 2002, Blair will be only the third director of national intelligence.

The position was created by Congress in 2004 after investigations revealed that turf-sensitive intelligence agencies failed to share information that might have averted the September 11 attacks. That failure was followed by US intelligence’s fateful error on Iraq’s weapons of mass destruction.

The DNI’s main mission was to break down the barriers between the agencies, and make them operate more collaboratively.

- AFP /ls

Source : Channel NewsAsia - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Israeli troops fight in Gaza City as truce calls shunned

Israeli troops fight in Gaza City as truce calls shunned

GAZA CITY : Israel ignored growing international demands for a ceasefire and took its war against Hamas into Gaza’s main city on Monday as dozens more bodies were taken to the enclave’s hospitals.

As bitter combat raged in Gaza City, French President Nicolas Sarkozy led new calls for a halt to the conflict which medics say has left 555 Palestinians dead. But Israeli ministers vowed the offensive to end militant rocket fire will go on.

Explosions and heavy gunfire rocked the Shejaiya neighbourhood of eastern Gaza City as night fell, residents said. Flares lit up the skies over the blacked-out neighbourhood and assault helicopters buzzed overhead.

Hamas said its fighters unleashed missiles on seven tanks in Shejaiya and killed several Israeli soldiers. Israeli military sources confirmed heavy clashes in the district but refused to comment on possible Israeli casualties.

The Islamic Jihad group, an ally of Hamas, said several of its fighters were killed in the battle.

At least 12 children were among 50 bodies taken to Gaza hospitals on Monday after air and tank attacks across the territory, medics said.

Almost 100 children are among the 555 Palestinians killed since Israel started air raids on December 27, Gaza’s emergency services said. More than 2,700 people have been wounded.

But as Israel intensified Operation Cast Lead, Foreign Minister Tzipi Livni rejected European calls for an immediate ceasefire.

“We are fighting with terror and we are not reaching an agreement with terror,” Livni declared after talks with an EU ministerial delegation led by Czech Foreign Minister Karel Schwarzenberg.

Israel acted to change a situation where “Hamas targets Israel whenever it likes and Israel shows restraint,” she said. “This is no longer going to be the equation in this region. When Israel is being targeted, Israel is going to retaliate.”

The French president arrived later to reinforce the ceasefire campaign.

After a meeting in Ramallah with Palestinian Authority leader Mahmud Abbas, Sarkozy said he would tell Israeli leaders that “the violence must halt”.

In Jerusalem, Sarkozy said: “We, Europe, want a ceasefire as soon as possible. Time is working against peace. The weapons must be silenced and there must be a temporary humanitarian truce.”

The French president called the Hamas rocket attacks on Israel “irresponsible and unforgiveable”, which brought a retort from the Islamists that he was “totally biased” toward Israel.

Russian President Dmitry Medvedev called for an immediate ceasefire after telephone talks with Abbas earlier, the Kremlin said.

But US President George W. Bush said any Gaza truce must ensure Hamas militants can no longer fire rockets on Israeli towns.

“I understand Israel’s desire to protect itself and that the situation now taking place in Gaza was caused by Hamas,” Bush said.

Israeli fighter jets carried out more than 40 air strikes during the day. The military said they hit a mosque “where arms were being stored” as well as houses and tunnels that they said were used as arms caches.

Naval ships off the coast also bombarded targets to help the ground offensive launched on Saturday night.

A couple and their five children were killed by one navy shell, medics said. Three children were killed by a tank shell in Zeitun in the Gaza City suburbs and two were killed in Shati by a naval strike, they said.

Israel says dozens of Hamas fighters have been killed while one Israeli soldier has been reported dead and 55 wounded since Saturday.

Defence Minister Ehud Barak said the war will go on. “We have hit Hamas hard, but we have not yet reached all the goals that we have set for ourselves and the operation continues,” he told a parliamentary committee.

Three civilians and one soldier have been killed by rockets fired from Gaza since Israel’s operation started. More than 30 rocket and missile attacks were reported on Monday. One hit a kindergarten which was closed because of the crisis.

Hamas, which has ruled Gaza since breaking with Abbas and seizing power in the densely populated Mediterranean coastal strip in June 2007, remained defiant.

“Victory is coming,” the movement’s senior leader in Gaza, Mahmud Zahar, said in a television address in which he praised “the most beautiful performances” of the group’s armed wing.

“They (Israel) have legitimised the murder of their own children by killing the children of Palestine,” he said. “They have legitimised the destruction of their synagogues and their schools by hitting our mosques and our schools.”

Israel faces intense international pressure to ease the suffering of the 1.5 million Gaza population, which has no power or water supplies and endures a daily struggle to get food, according to aid agencies.

Eighty truckloads of food and fuel were allowed to cross into Gaza after long delays while aid agencies organised transportation on the Gaza side.

- AFP /ls

Source : Channel NewsAsia - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

A business continuity plan is vital

A business continuity plan is vital

Avoid the following common mistakes if you want to keep your business up and running if disaster strikes, writes NICHOLAS TAN

A BUSINESS continuity plan is like life insurance. You hope you never have to use it, but if you do, it’s invaluable. For small or mid-market enterprises, the stakes at risk could well be the entire outfit. We say, don’t tempt fate. Smaller companies tend to avoid planning for disaster. It’s human nature. But stop and think about what it would cost your small or mid-size business to be without power or IT systems for 24 hours.

Yes, it makes good business sense to plan for the worst. And to keep your business up and running if disaster strikes, you need to avoid the following common mistakes.

1. Put it off until tomorrow

With the amount of day-to-day ‘fire-fighting’ that most growing businesses do, it’s easy to procrastinate on ‘less urgent’ projects like disaster recovery and security planning.

A recent study by IBM of more than 1,200 mid-size companies confirms this. Almost 70 per cent said IT disaster recovery capabilities are essential, but less than 25 per cent are confident that what they have today is complete.

The good news is that today’s affordable and feature- rich software, server and storage technologies mean that businesses can start small, establish a base level of disaster recovery, and build on it over time.

2. Only big companies can afford it

Not true. Business continuity planning is not a luxury that only mega-businesses can afford. Without any business continuity structure in place, a small or mid-size business risks losing revenue it really can’t afford to lose. One area often overlooked is continuous data access. Without it you can’t serve your customers or partners.

Backup storage at your primary place of business is a good place to start. But if there’s a power outage, you can still ensure continuous availability as long as you have replicated information in an off-site location, ideally far away from where you do business. Today’s new hosting models and cost-effective off-site backup and recovery systems mean peace of mind is available for companies of any size.

3. It’s an IT problem

Protecting your data and getting your systems on line again is crucial. But don’t forget about the people who use those systems. If a tornado strikes or a blackout shuts down the city, employees need to know what to do.

Make sure your plans address employee communications, working remotely and prioritising the employees that need access to your core business systems first.

4. Plan only for natural disasters

People often picture big, headline-making events like floods or hurricanes when they think of disaster recovery. But a complete business continuity plan also anticipates malicious disasters and productivity killers like spam, computer viruses or data theft.

A regional manufacturer found itself inundated with spam and e-mail viruses that took each employee an average of 20 minutes a day to remove. With only minor modifications to its e-mail servers and firewalls, the manufacturer took advantage of an e-mail filtering solution hosted off-site.

Now spam and virus e-mail no longer reach the company’s network, giving the company back an estimated 2,500 hours of labour per year.

5. You have to do it yourself

Only if you want to. You can start by carrying out a basic risk assessment and appointing an employee to write a simple, common sense policy. However, if you find the whole subject too overwhelming or time-consuming, get help.

Bring in a local service provider such as your IBM business partner to help you develop and implement a plan and any processes or IT capabilities you need.

Stop for a minute and think about how your business would fare in a disaster. At IBM General Business, we can’t emphasise enough that you should be prepared, not sorry.

Nicholas Tan is general manager of IBM Singapore’s general business division

Source : Business Times - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

New bank bailout not on the cards: Brown

New bank bailout not on the cards: Brown

Govt working with banks to step up loans to businesses

(LONDON) The British government is talking to lenders about stepping up loans to credit-starved companies, but a second bailout of banks is not the preferred option, Prime Minister Gordon Brown said on Sunday.

‘I don’t think that’s the first thing that anybody would think about at the moment,’ Mr Brown said in a BBC television interview, when asked if the government planned a second recapitalisation of the banks.

In October, the government said it would pump £pounds;37 billion (S$79 billion) into three major British banks - Royal Bank of Scotland, and HBOS and Lloyds TSB, which are merging.

The banks have been hit by the credit crunch, which is now sending the British economy spinning into recession.

The BBC and The Times both reported on Saturday that the government was considering a second bailout because measures taken so far had failed to get banks lending again.

But Mr Brown said: ‘We’ve got other means by which we will try to get liquidity and cash into the system.’ He said the government was urgently talking to the banks about solving problems that companies faced in obtaining funding and wanted a solution over the next few weeks.

Finance Minister Alistair Darling told the BBC that banks were not lending as much as he would like them to do but said recapitalisation was ‘not your first port of call.’ Mr Darling noted that RBS, HBOS and Lloyds TSB had agreed to maintain lending to homeowners and small firms at 2007 levels.

He said the government was working with the other banks ‘to make sure these banks are strong enough in the first place - in other words to help that recapitalisation process - but we also have to ensure that there is enough money in the system.’

Mr Brown said some players had disappeared from the lending market so ‘the existing institutions are going to be expected over time to do more.’ Britain nationalised two mortgage lenders while some other overseas lenders have collapsed or withdrawn from the market.

Surviving institutions will be expected to step up lending to fill the gap. To help them do so, the Treasury is considering a scheme to insure British banks against some of the losses they could incur on new lending, the BBC reported on Sunday.

The Times said on Saturday that options the government was looking at to boost lending included cash injections, offering banks cheaper state guarantees to raise money privately or buying up so-called toxic assets.

A Bank of England survey on Friday showed the credit squeeze for British families and businesses may intensify in 2009.

That could deepen the recession and swell job losses, reducing Mr Brown’s chances of winning the next general election, which he must call by mid-2010. The opposition Conservatives consistently lead Mr Brown’s Labour Party in the polls.

Mr Brown also announced plans on Sunday for a 1930s US-style public works programme to ease the pain of recession by creating around 100,000 jobs. He said the jobs would be created through capital investment in schools, hospitals, environmental work, transport and infrastructure. — Reuters

Source : Business Times - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

US financial regulators in for major overhaul - WASHINGTON

US financial regulators in for major overhaul - WASHINGTON

Fed, Treasury, SEC, FDIC top agencies under scrutiny of Obama reformers

(WASHINGTON) President- elect Barack Obama and Democrats in Congress will take over the government this month with big plans to overhaul US financial regulation and a surge of momentum behind them.

From the mortgage meltdown to the Bernard Madoff scandal, the financial system is in crisis. Critics are hammering the federal bureaucrats who are supposed to manage the economy, police Wall Street and protect investors.

Some of the agencies under fire have familiar names - the Fed, Treasury, SEC, FDIC; some less so - CFTC, OCC, OTS.

All are under scrutiny by reformers who are talking about shutdowns, combinations and reshaping basic missions.

‘We’re going to have a significant shake-up,’ said Norman Ornstein, a resident scholar at the American Enterprise Institute, a Washington, DC, policy think tank.

Mr Obama, who will be sworn in on Jan 20, has moved quickly in nominating a new Treasury secretary and chiefs for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

He has called for adoption of ‘new common- sense rules of the road that will protect investors, consumers and our entire economy from fraud and manipulation by an irresponsible few.’ The early signals point to ‘a very new and different and activist era,’ Mr Ornstein said.

Of course, Mr Obama is not the first president to target this issue. The streets of Washington are littered with bold blueprints to reform the financial oversight bureaucracy.

Past efforts have crumpled, victims of agency turf battles and attacks from industry lobbyists defending the status quo.

Even 2002’s post-Enron Sarbanes-Oxley reforms mainly confined to limited corporate governance and auditing issues.

This time around, more basic changes look likely.

Americans dealing with a deep recession are looking back on years of business scandals and soaring pay packages for a corporate elite that seems detached from economic reality.

The government is greatly expanding its role in the economy. By bailing out the billionaire financiers who drove the financial system to the edge of disaster, the Bush administration and Congress are giving all taxpayers a stake in the financial services industry and its supervision.

Banking giants once emblematic of free-wheeling capitalism, such as Goldman Sachs, are now voluntarily seeking to become more tightly regulated bank holding companies.

Over just a few months in 2008, the balance of power at the economy’s financial heights seemed to shift away from New York’s plutocrats and to Washington’s politicians.

If that lasts, Mr Obama and the Democrats just might push through meaningful reforms, say some policy analysts.

More than 15,000 federal employees, scattered across seven primary agencies, regulate the banks, the economy, financial markets and corporations, often with limited success.

The White House is at the system’s centre, but presidents historically delegate much responsibility to agency heads.

Banks are supervised by a patchwork of agencies including the Treasury Department and two of its units - the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) - as well as the Federal Reserve, the Federal Deposit Insurance Corp and state governments.

The government also regulates markets for stocks, bonds, commodities, futures and options. These jobs are done chiefly by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The patchwork quilt of oversight represented by these seven agencies and a few smaller ones is badly torn at the seams where duties have been unclear and abuses have accumulated.

From sub-prime mortgage-backed securities to collateralised debt obligations, the financial system innovated and exploded in size in recent years amid political zeal for deregulation.

Reform attempts have frequently focused on centralising oversight. Some have suggested steps such as merging the SEC and CFTC, and closing the OTS.

Vital to any new approach will be the Fed. Months ago, Treasury Secretary Henry Paulson proposed transforming the Fed from a monetary policy centre into a kind of super-guardian against ’systemic risk’ in the economy.

Since then, the Fed has nearly become just that. In trying to fix the markets, it has extended billions of dollars in credit to banks and businesses, making it the lender of last resort for large swathes of the entire economy.

Dealing with the Fed’s expanding scope will be key to any reform. Chances are good that more bank oversight will centralise under the Fed now that Mr Obama has tapped New York Fed president Timothy Geithner to replace Mr Paulson at Treasury.

Other issues are what to do about mortgage market giants Fannie Mae and Freddie Mac, both now under government control, and the outlook for insurers and credit card companies.

Yesterday, the House of Representatives Financial Services Committee was scheduled to hold a hearing on the Madoff scandal and how the SEC missed it, with two more hearings later in the week on the ongoing financial bailout programme and on mortgage brokers. — Reuters

Source : Business Times - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Projects melt, Jurong Island feels the heat

Projects melt, Jurong Island feels the heat

Investments put on hold as demand starts drying up

By RONNIE LIM

(SINGAPORE) As major investors postpone their mega projects on Jurong Island, the knock-on effect is making matters worse.

Generating companies like Sembcorp Utilities and Tuas Power have responded by holding back their own multi-billion-dollar cogeneration investments that would have used innovative fuels to supply power and steam to the industry there.

Sources say Tuas Power (TP), which is owned by China Huaneng group, has delayed plans for a S$2 billion clean coal/biomass cogeneration plant by 6-12 months as potential customers like Germany’s Lanxess put off new projects for up to a year.

Lanxess’s planned S$828 million plant to produce synthetic rubber for tyre inner-tubes and liners was aimed at the Chinese market, which is now in decline, while Jurong Aromatics Corporation has delayed its US$2.4 billion petrochemical investment due to financing hiccups.

‘There is uncertainty about new demand for utilities on Jurong Island, so we have to proceed with caution,’ a TP source said. ‘There may be a bit more clarity in the next six months or so. But right now it’s a chicken-and-egg situation.’

TP, which announced its new cogeneration plant on Jurong Island last September, has been negotiating with contractors but has not awarded any tenders.

The planned plant will be fired by coal, which is cheaper than piped natural gas from Malaysia and Indonesia or liquefied natural gas (LNG); so TP’s postponement is not due to fuel prices. ‘It’s more of a demand factor,’ the source said.

BT understands also that Sembcorp is holding back on its plan to build a second cogeneration plant on Jurong Island. ‘We have to temper our plans because our approach is to build in tandem with customer demand,’ a source said.

Sembcorp said in April last year that it planned an innovative cogeneration plant on Jurong Island using innovative alternative refuse-derived fuel and heavier fuel oil. Its current 815 megawatt plant there is 100 per cent gas-fired.

PowerSeraya, which was sold recently to Malaysia’s YTL Corp, has started building an S$800 million 1,500 megawatt (MW) cogeneration plant on the island to produce electricity, steam and cooling water for industry there. This remains on schedule for completion late this year or early next year, a spokeswoman confirmed.

But amid the economic downturn, there has been no update on Power- Seraya’s plan to build a second desalination plant and a booster plant to extend the reach of its cogeneration units to petrochemical plants farther away on the island.

BT reported yesterday that Singapore Petroleum Company (SPC) is also deferring its ‘green’ gasoline project and a planned 60-70 MW cogeneration plant because of the downturn.

The one bright spot is that construction of two new giant petrochemical crackers - by Shell for US$3 billion and ExxonMobil for US$5 billion-plus - remains on track. Completion is expected by late 2009/early 2010 and early 2011 respectively.

But this will not mean new business for utility companies. ExxonMobil is building a 220 MW cogeneration plant - its second after an earlier 150 MW unit - to meet all of its in-house needs. Likewise, Shell has sufficient in-house cogeneration capacity to meet its needs.

Source : Business Times - 06 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Israeli tanks, troops advance into Gaza

Israeli tanks, troops advance into Gaza 
Ground assault ups political and military stakes for Jewish state 

GAZA: - Israeli soldiers and Palestinian militants battled in Gaza yesterday after Israeli troops and tanks invaded the coastal enclave in the most serious fighting in the conflict in decades.
More than 30 Palestinians, most of them civilians, were killed as Israeli shells slammed into houses and Hamas-ruled Gaza’s main shopping district. Israel said one of its soldiers was killed, 30 others wounded.

The ground operation launched on Saturday night is the second phase in an offensive that began as a week-long aerial onslaught aimed at halting Hamas rocket fire that has reached deeper and deeper into Israel, threatening major cities and one-eighth of Israel’s population.

The offensive’s stated aim is to destroy the militants’ rocket-launching infrastructure, Israel said, indicating it has no intention to reoccupy the Gaza Strip.

But at least 32 rockets were fired at Israel yesterday, one hitting a house in Sderot and wounding a woman.

The Israeli ground assault brings new risks and the prospect of many new casualties on both sides in a confrontation that had already cost the lives of more than 500 Palestinians and four Israelis.

Israeli officials said the offensive could last many days.

‘The government did everything before deciding to launch the operation. This is an unavoidable operation,’ Israeli Prime Minister Ehud Olmert said.

While the air offensive presented little risk for Israel’s army, sending in ground troops is much more dangerous. Hamas is believed to have some 20,000 gunmen and has had time to prepare.

‘There is a bigger strategic opportunity here to undermine Hamas,’ said analyst Mark Heller at the National Institute Of Strategic Studies in Tel Aviv.

‘It’s a gamble though, because, if the operation goes bad, or international intervention spurred by heart-rending pictures from Gaza forces Israel to cut the operation short without achieving its aims, it will boomerang and end up undermining Israel’s deterrent credibility.’

The fighting also holds significant political risks for Israeli leaders before national polls on Feb 10, especially if its forces take heavy casualties in street fighting.

Israeli tanks and troops virtually cut Gaza in half in a night-time advance on Saturday, and yesterday were ringing Gaza City, Palestinian witnesses said.

A foreign Red Crescent doctor in a Gaza hospital called the situation a nightmare. ‘Civilians are being killed…shells are severing people’s legs, shrapnel is going into people’s bodies and into people’s homes. Everyone is terrified,’ she said.

Calls for a ceasefire from the United States, Israel’s staunch backer, other foreign governments and the United Nations failed to gain traction over disagreements about its terms.

Israeli Defence Minister Ehud Barak said the ground push was to protect southern Israel from Hamas rocket attacks. ‘It won’t be easy. It won’t be short,’ said Mr Barak.

Hamas said Israeli troops faced death or capture. ‘The Zionist enemy must know his battle in Gaza is a losing one,’ said Hamas spokesman Abu Ubaida.

In Gaza City, streets remained deserted yesterday after frantic families fled as tanks rumbled into the area accompanied by Israeli infantry.

The plight of Palestinian civilians was growing more desperate as humanitarian agencies warned that water, food and medical supplies were running short.

Heavy civilian casualties are likely to increase international pressure on Israel to halt its biggest operation in the Gaza Strip in four decades.

A spokesman for Palestinian President Mahmoud Abbas condemned the Israeli attack as ‘a vicious aggression’.

The US said a ceasefire should take place as soon as possible but must guarantee an end to Hamas rocket strikes.

Former British premier Tony Blair, envoy for powers sponsoring Middle East peace talks, was to meet Mr Barak yesterday. France, whose President Nicolas Sarkozy is due in Jerusalem today, condemned the Israeli invasion and Hamas rocket fire.

Israel’s assault on Gaza also drew cries of alarm across Asia yesterday , with Pakistan, China and Singapore calling for it to end and angry Muslims in Indonesia urging war against the Jewish state.

REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERG

 
Source : Straits Times - 05 Jan 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com