1. society
2. work
3. unemployment

weekend
the business times
www.businesstimes.com.sg | JANUARY 31-FEBRUARY 1, 2015 | S$1.00 | MCI (P) 052/08/2014 |
the raffles conversation
MIT PRESIDENT
RAFAEL REIF | 8-9
labour
Redundancies on the rise
RESTRUCTURING pains continue to bite,
with more workers laid off in 2014 than the
year before. | 2
finance
KL tycoon extends RM2b loan
ANANDA Krishnan is understood to have
agreed to lend 1MDB as much as RM2
billion to a debt that falls due on Jan 31. | 3
media
Singtel forms streaming JV
IT teams up with Sony Pictures Television
and Warner Bros Entertainment to offer
regional video streaming service. | 6
equities
January market cap rises 2.2%
THE value of Singapore’s stock market is up
for the third month in a row with low-oil
beneficiaries and real estate counters
leading the way. | 10
technology
Google spending spree takes a toll
IT ramps up spending on new technologies
even as its Web-advertising business falls
short of estimates. | 19
LIVING
Time’s
a-changing
L2-4
|
OPINION
The business of creative
industries | 26-27
|
WEALTH
Asia’s hot, young
hedge funds | 28-29
Dec bank loans growth
slows to near 5-yr low
Hit comes from a sharp 6.4 per cent fall in manufacturing loans compared to a month ago
By Jamie Lee
[email protected]
@JamieLeeBT
Singapore
B
ANK lending in December
grew at 5.9 per cent from a year
ago – the slowest pace since
March 2010 – preliminary data
from the Monetary Authority
of Singapore showed on Friday.
Compared to November, it actually stagnated amid weak business loans, which
have been contracting for most of the second half of 2014.
Loans through the domestic banking
unit – which mainly reflect Singapore-dollar lending – stood at S$608 billion in December.
Business loans, which have shown clear
weakness in the later part of last year, contracted 0.4 per cent to S$372 billion in December compared to a month ago. This reversed from the 0.8 per cent growth posted
in November.
The hit in December came from a sharp
6.4 per cent fall in manufacturing loans
compared to a month ago, reversing from
slight gains made in November. Trade
loans also declined for the fourth straight
month. On a yearly comparison, trade-loan
growth eased to a four-year low.
SOFT MARKET
Sustainable
improvement in
consumer and
housing loans
looks doubtful.
FILE PHOTO
While construction loans – which make
up the single-largest part, or about a quarter, of all business loans – were up 0.9 per
cent in December, this was weaker than the
1.6 per cent growth posted in November.
On a yearly comparison, business loans
grew just 6.4 per cent – a level not seen
since August 2010.
“Key drivers of business loans are facing
more subdued growth prospects going
ahead,” said Selena Ling, head of treasury
research & strategy at OCBC Bank.
Consumer loans edged up slightly by 0.5
per cent from a month ago to S$236 billion
in December. This mostly reflects higher
housing loans, which make up three-quar-
ter of loans to individuals. The gain compared with a 0.4 per cent lift in November.
With analysts’ expectations for further
softness in the domestic property market
amid cooling measures and the rising interest rate environment, Ms Ling said it may
be premature to conclude a sustainable improvement in consumer and housing loans
is on the cards.
For 13 months now, year-on-year
growth in consumer loans has been in single-digit territory, reflecting the raft of cooling measures introduced by the government. The total debt servicing ratio, which
limits borrowings to 60 per cent of a
person’s gross monthly income, was put in
place in 2013.
Cortina Watch pushes ahead with expansion plans
By Chuang Peck Ming
[email protected]
Singapore
CORTINA Watch is not taking a breather, even after
opening the world’s biggest Patek Philippe boutique in
Taiwan. Neither is the Swiss currency shock or a soft
market going to slow it.
The Singapore-listed watch retail chain is pushing
ahead with expansion plans this year, which includes
opening a giant Rolex flagship shop in Marina Square
and a multi-brand boutique in Capitol Building as well
as expanding its existing Patek Philippe boutique in ION
and multi-brand outlet in Paragon.
The Rolex shop will be the single biggest project, involving 5,500 square feet of space for watch displays and
events. Renovation costs alone could work out to
around S$4 million, according to Cortina’s chief operat-
ing officer Jeremy Lim.
The shop, which will probably be the biggest Rolex
boutique in Singapore, is likely to be ready by year-end.
The multi-brand boutique at the luxury hotel and
shopping development at The Capitol is about 3,000 sq
ft. It will incur renovation costs of probably S$2 million.
The Patek Philippe boutique at ION will triple its
present 800-square-feet size to about 2,900 square feet
in July. Renovation is estimated to cost around S$2.5 million to S$3 million. Meanwhile, the Paragon store, which
carries brands like Vacheron Constantin, Omega,
Longines and Jaeger LeCoultre, will grow from 2,000 sq
ft to 2,800 sq ft, Mr Lim said, adding that Cortina may
also refurbish its multi-brand outlet at Raffles City.
Continued on Page 5
45 Cortina’s
>>
S$4m investment pays off, Page 5
TOP WATCHMEN
From left: Jeremy Lim; Anthony Lim, chairman and CEO of Cortina;
Thierry Stern, president of Patek Philippe; Raymond Lim, deputy
chairman and deputy CEO of Cortina
2 top stories
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
CONTENTS
NEWS
Top Stories
2-7
Raffles Conversation
8-9
Companies & Markets 10-14
Real Estate
15-16
Banking & Finance
17
Energy & Commodities 18
Technology
19
Consumer
20
Transport
21
Govt & Economy
22-25
Opinion
26-27
Wealth
28-30
Life & Culture
31
MARKETS
LIVING
Watches
Dining
Design
L2-5
L6-9
L10-11
HSTI
STOCKS
3,391.20 (-27.85)
HSTI FUTURES
3,390.00 (-29.00)
HSIMSCI
380.23 (-2.50)
HSIMSCI FUTURES
Home & Garden
Motoring
Sports
L12-13
L14-15
L16
380.20 (-2.80)
Friday Change
KL COMP
NIKKEI 225
HANG SENG
SET
JAKARTA
MANILA
KOSPI
SHENZHEN B
MUMBAI IND
1,781.26
17,674.39
24,507.05
1,581.25
5,289.40
7,689.91
1,949.26
1,070.04
29,182.95
-0.92
+68.17
-88.80
-5.15
+26.69
+72.61
-1.76
+3.48
-498.82
11am EST
Change
DOW
NASDAQ
17,318.65
4,664.79
-98.20
-18.61
More redundancies in
2014 due to restructuring
Increase in layoffs stems primarily from the services sector
By Kelly Tay
[email protected]
@KellyTayBT
Singapore
RESTRUCTURING pains continue to bite, with more workers
laid off in 2014 than the year before. Still, labour market conditions remain tight – unemployment averaged just 2 per cent for
the whole of last year.
Wage pressures persist as
well, with Singapore’s real median income rising by 1.4 per cent
in 2014. The pace of growth, however, was slower than 2013’s “exceptionally high increase” of 4.6
per cent (when bigger increments likely kicked in due to the
Wage Credit Scheme).
So said the Ministry of Manpower (MOM) on Friday in its
25-page Employment Situation
2014 report, which revealed that
12,800 workers were made redundant in 2014 – up from 11,560 in
2013 – amid ongoing business restructuring.
The increase in layoffs
stemmed primarily from the services sector, which made up
more than half (7,100) of all redundancies last year (compared
to 5,430 in 2013). Layoffs from
the construction sector also rose
to 1,500 from 1,120, while redundancies in manufacturing declined to 4,200 from 5,000.
Despite the increase in layoffs, recruitment experts remain
unfazed. Said Femke Hellemons,
country manager, Adecco Singapore: “We see an increase in layoffs but it’s nothing too concerning. The job market remains
healthy and employment is still
growing strongly.”
MOM’s preliminary estimates
showed that the overall seasonally adjusted unemployment rate
declined from 2 per cent in September to 1.9 per cent in Decem-
ber – even lower than the consensus expectation of 2 per cent.
For the whole of 2014, unemployment stayed low, averaging 2
per cent overall, 2.7 per cent for
residents, and 2.9 per cent for citizens – broadly unchanged from
2013.
Meanwhile, employment
growth among locals rose over
2014 as foreign employment
growth continued to moderate.
The services sector (118,600)
formed the bulk of employment
gains, followed by construction
(14,500). Manufacturing jobs,
however, fell by 4,600.
MOM said the employed pool
is estimated to have grown by
129,000 over the entire year of
2014 – lower than the 136,200 in
2013 and similar to the 129,100 in
2012.
Said Nomura research analysts Euben Paracuelles and Brian Tan: “As hiring locals becomes more challenging, employ-
ment growth will likely fall further. Unless policymakers ease restrictions on foreign labour, the
burden of driving GDP growth
will increasingly fall on productivity growth, which has been disappointing so far.
“The pressure to see more visible results from the productivity
drive is therefore rising, and we
expect Budget 2015 to announce
another fiscal deficit of 0.3 per
cent of GDP to support the restructuring agenda of boosting
productivity.”
OCBC economist Selena Ling
also noted that the slower employment growth “may suggest
that labour force growth through
the return of housewives and retirees may have peaked”.
In a separate report by MOM,
also released on Friday, data
showed that Singapore’s labour
force participation rate for residents rose to a new high of 67 per
cent in 2014, driven by continued
PRIME RATES
FOREX
SINGAPORE
MALAYSIA
HONG KONG
INDONESIA
TAIWAN
JAPAN
KOREA
BRITAIN
US
CANADA
SWITZERLAND
INDIA
5.35
6.85
5.00
14.424
5.036
1.475
9.33
0.50
3.25
2.85
0.50
14.75
Source: Bloomberg
US$
S$
US$ (S$ per US$)
– 1.350
£ (US$/S$ per £) 1.507 2.036
EURO (US$/S$/€ ) 1.134 1.531
Foreign currency per US$
YEN
RM
HK$
BAHT
RUPIAH
RENMINBI
INDIAN RUPEE
A$
NZ$
S$
117.90
3.625
7.752
32.71
12,650
6.248
61.79
1.286
1.374
87.30
2.684
5.740
24.22
9,367
4.626
45.76
0.952
1.017
More layoffs
Redundancies by sector
25,000
(Number of workers)
20,000
15,000
Total
10,000
Services
Manufacturing
5,000
Construction
0
2006
Total
13,090
Manufacturing 8,860
Construction 490
Services
3,670
2007
2008
2009
2010
2011
2012
8,590
5,500
70
2,990
16,880
10,430
540
5,870
23,430
13,640
980
8,720
9,800
4,490
1,350
3,960
9,990
4,460
1,050
4,430
11,010
4,050
650
6,300
2013 2014*
11,560
5,000
1,120
5,430
12,800
4,200
1,500
7,100
*2014 figures based on preliminary estimates
Source: Labour Market Survey, MOM
increases for women and older
residents.
Coupled with the fact that the
labour market stayed tight with
low unemployment, the employment rate of residents aged 25 to
64 rose to another high of 79.7
per cent, up from 79 per cent in
2013 and 72.3 per cent in 2004.
There was also a sustained
growth in incomes over the last
five years; from 2009 to 2014, the
median income increased by 10
per cent or 1.9 per cent per an-
num after adjusting for inflation.
But higher consumer prices
meant that this was lower than
the gains of 13 per cent or 2.5 per
cent per annum in the earlier five
years.
As for lower-wage workers at
the 20th percentile of full-time
employed residents, the income
increase over 2009 to 2014 (after
adjusting for inflation) was 12
per cent or 2.4 per cent per annum. MOM said this was faster
than the gains of 3.4 per cent or
0.7 per cent per annum from
2004 to 2009.
latest us data |
Q4 GDP growth slows on weak business spending
Washington
US economic growth slowed
sharply in the fourth quarter as
weak business spending and a
wider trade deficit offset the fastest pace of consumer spending
since 2006.
Gross domestic product
(GDP) expanded at a 2.6 per cent
annual pace after the third
quarter’s spectacular 5 per cent
rate, the Commerce Department
said in its first GDP snapshot on
Friday.
The slowdown, which follows
two back-to-back quarters of
very strong growth, is likely to be
short-lived given the enormous
tailwind from lower petrol prices.
Most economists believe that fundamentals in the United States
are strong enough to cushion the
blow on growth from weakening
overseas economies.
Even with the moderation in
the fourth quarter, growth remained above the 2.5 per cent
pace, which is considered to be
the economy’s potential. Economists had expected the economy
to expand at a 3 per cent rate in
the fourth quarter.
For all of 2014, the economy
grew 2.4 per cent compared with
2.2 per cent in 2013. The report
came two days after the Federal
Reserve said that the economy
was expanding at a “solid pace”,
an upgraded assessment that
keeps it on track to start raising
interest rates this year.
Consumer spending, which
accounts for more than
two-thirds of US economic activity, advanced at a 4.3 per cent
pace in the fourth quarter – the
fastest since the first quarter of
2006 and an acceleration from
the third quarter’s 3.2 per cent
pace.
According to government data, petrol prices have plunged
43 per cent since June, leaving
Americans with more money for
discretionary spending. A
strengthening labour market, despite sluggish wage growth, is also a boost.
The strong pace of consumer
spending, however, was overshadowed by a drop in capital expenditure. Business spending on
equipment fell at a 1.9 per cent
rate. Reuters
top stories 3
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Malaysian tycoon to help 1MDB repay loan
Ananda Krishnan is said to have agreed to lend firm RM2b to settle its debt obligation to Maybank and RHB Bank
By Anita Gabriel
[email protected]
@AnitaGabrielBT
Singapore
THE deal that was trumpeted as a mark of
Malaysian tycoon Ananda Krishnan’s corporate prowess when he unloaded his ageing power assets at a hefty price of RM8.5
billion (S$3.16 billion) to state-owned 1Malaysia Development Bhd (1MDB) three
years ago appears to be causing him distress of late.
Mr Krishnan, Malaysia’s second richest
man who owns a sprawling empire of media, telecommunications, real estate and
oil and gas businesses, is understood to
have agreed to lend 1MDB as much as
RM2 billion to settle the latter’s debt obligation to Maybank and RHB Bank which
falls due on Jan 31.
That outcome – the details are still being worked out and yet to be finalised – is
an “interim solution”, says a source, for a
sticky situation that arose from the billionaire having provided a RM2 billion “contingent equity support” or guarantee – as
requested by the lenders Maybank and
RHB Bank – for a RM6.17 billion bridging
loan provided to 1MDB in 2012 to fund
the purchase of the power assets.
In turn, a deal was struck then for
Mr Krishnan to either subscribe for new
shares in 1MDB’s energy firm or receive
MR KRISHNAN
Insiders say he may have agreed to
guarantee the loan as it had seemed like a
straightforward case. PHOTO: THE STAR
cash settlement.
The bridging facility was in fact rolled
over in May last year when it fell due and
was restructured into two tranches –
RM3.5 billion to be repaid over 10 years
and RM2 billion to be settled by last November. It is the latter tranche that 1MDB
appears to be facing difficulties paying up
as it has since been rolled over twice –
from November to December last year
and once again to end of January this
year.
Insiders say that 1MDB is pushing for a
“broader deal” for Mr Krishnan to pick up
a stake in the energy firm, whose initial
public offering has been delayed but is
still on the cards. The businessman, however, has yet to warm up to the deal while
the clock is ticking on the controversial
fund’s RM2 billion debt due.
“AK’s advisers are scratching their
heads as he is caught between a rock and
a hard place. The loan amount is high as
the assets were acquired at a high price
and he is unlikely to want to take up a
stake at such a valuation. On the other
hand, there’s this huge liability that’s outstanding,” says a market watcher.
Insiders say Mr Krishnan may have
agreed to guarantee the loan as it had
seemed like a straightforward case –
1MDB would float its energy assets, raise
the much-needed funds and repay the
loan. But it didn’t play out that way – the
stock offering slated for second quarter
last year has been delayed with no fixed
timeline for now and 1MDB, which forked
out a hefty RM2.4 billion in finance costs
in fiscal 2014 alone, may now be in a bind.
“Usually, the seller would want a clean
break but this was done on a fairly convoluted structure. It didn’t help that the
speed of which things have changed (for
1MDB) has caught everyone by surprise.
There was always the notion that there
would be support from the forthcoming
IPO but now, AK is left carrying the baby,”
said an observer.
More than Mr Krishnan’s quandary,
the latest development highlights the financial dilemma of 1MDB whose borrowings have ballooned to RM41.9 billion in
2014; the fund suffered losses of RM665
million over that period.
The fund’s newly-appointed chief Arul
Kandasamy had reportedly said in early
January that the fund was a “responsible
borrower”. “We need to manage the use
of our cash in the most efficient way for
the company,” he had explained in response to concerns over 1MDB’s move to
seek an extension to settle its debt.
But observers find that hard to swallow
now. “What is efficient about managing
cash when the fund has to borrow from a
private businessman to repay a debt?”noted a source.
Insiders say that 1MDB had sought a
third extension from its lender over the
week but was turned away, which could
have led to the eleventh-hour loan deal
struck with Mr Krishnan.
“1MDB needs to resolve this outstanding payment and the loan by Ananda is
supposed to address that while it works towards a long-term agreement,” said a
source.
AirAsia X plans rights issue,
overhauls management
By Nisha Ramchandani
[email protected]
@Nisha_BT
Singapore
LONG-HAUL budget carrier AirAsia X –
which is planning to raise some
RM395 million (S$146.97 million) via a
rights issue – has appointed new senior
management, confirming reports earlier
this week that chief executive Azran
Osman-Rani was on his way out.
AirAsia X announced that AirAsia director Kamarudin Meranun has been made
AirAsia X’s group chief executive; and
named AirAsia’s former head of corporate
development and investor relations, Benyamin Ismail, as AirAsia X’s acting chief executive.
Mr Azran steps down as chief executive
effective Jan 30 due to “mutual separation”, AirAsia X said in an announcement
to the Bursa Malaysia.
Meanwhile, the budget carrier plans to
use the proceeds from the rights issue –
Correction
IN “Tuan Sing’s Q4 profit dips 4% to
S$24.3m” (BT, Jan 30), we wrongly reported that Tuan Sing’s share of results of equity accounted investees was a bigger loss of
S$20 million, from 2013’s S$14.8 million.
It should be a bigger profit. We are sorry
for the error.
which will come together with free warrants – to repay borrowings and to fund
general working capital. This comes after
it was reported in November last year that
the budget carrier was having trouble
meeting wage payments for staff salaries
and allowances.
As group chief, Mr Kamarudin will oversee strategy for the AirAsia X group, which
also includes AirAsia X Thailand and Indonesia AirAsia X, as the beleaguered carrier
seeks to turn itself around.
Mr Kamarudin said: “Over the past few
months, we saw the company facing challenges in a difficult environment. After a
thorough review, a decisive turnaround
plan was initiated to put the company on
substantially better financial footing to ensure we bring back confidence to the market.”
He added: “With this robust plan in
place, AirAsia X will advance to the next
chapter of growth and uphold its leadership position in the long-haul, low-cost
market.”
Shares in AirAsia X were suspended
from trading, ahead of the announcement.
For the quarter ended Sept 30, 2014,
AirAsia X posted a net loss RM210.85 million, its third straight quarter of losses as
the bottom line was hit by steeper operating expenses and higher forex losses. In
the corresponding quarter a year earlier, it
registered a net profit of RM26.44 million.
MR AZRAN
Will step down as
chief executive
effective Jan 30
due to “mutual
separation”.
PHOTO: BLOOMBERG
4 top stories
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Manufacturing, services firms
downbeat on H1 outlook
Companies in the transport engineering cluster were the least optimistic
By Prisca Ang
[email protected]
Singapore
THE recent slump in global oil prices has
weakened expectations of many manufacturing firms as they anticipate a fall in revenue.
According to results of the latest government surveys released on Friday, a net
weighted balance of 3 per cent of manufacturers expect business conditions to deteriorate from the fourth quarter of last year.
The net balance is calculated by deducting the proportion of those with negative
business expectations from those with positive expectations.
Firms in the transport engineering cluster were the least optimistic about prospects for January to June 2015, with a net
weighted balance of 20 per cent expecting
poorer business. In particular, the marine
and offshore engineering segment foresees declining orders as oil and drilling
firms cut back on capital expenditure due
to falling oil prices.
Employment in the sector is also set to
decline, with all except the biomedical
manufacturing and transport engineering
clusters expecting to hire fewer workers in
the first quarter of 2015.
However, other manufacturing firms
have a more rosy outlook for H1. A net
weighted balance of 12 per cent of firms in
the chemicals cluster, for instance, expect
improved business conditions due to lower operating costs as crude oil and feedstock prices decline.
OIL SHOCK
The marine and
offshore
engineering
segment
foresees
declining
orders as oil
and drilling
firms cut back
on capital
expenditure.
FILE PHOTO
The positive sentiment of the general
manufacturing industries cluster is fuelled
by expectations of rising domestic demand during the Chinese New Year season, especially in the food, beverage and
tobacco segments.
Similar to manufacturers, firms in the
services sector are also sceptical about
business prospects in the months ahead.
A net weighted 4 per cent of firms in the
services sector expect poorer business in
the six-month period ending June 2015.
Firms in the real estate industry experienced an especially sharp decline in business confidence for H1, citing a slew of
government measures including the Additional Buyer’s Stamp Duty (ABSD) and To-
tal Debt Servicing Ratio (TDSR) as the primary reasons for their negative sentiments.
“Interestingly, although the real estate
sector remains in the doldrums for overall
business outlook and operating receipts,
its employment forecast has actually improved due to increased demand for management services of residential, commercial and industrial properties,” said economist Selena Ling, head of Treasury Research and Strategy at OCBC bank.
On the other hand, the accommodation and food & beverages services industries expect to reduce hiring, anticipating
lower business activity in the first quarter
of 2015 after the year-end holidays.
in parliament |
Bill passed to ban late-night alcohol sale, consumption
By Malminderjit Singh
[email protected]
@MalminderjitBT
Singapore
PARLIAMENT passed a law on Friday to
ban the sale and consumption of alcohol
in public areas between 10.30pm and 7am
to control the negative consequences of
public consumption of alcohol in Singapore.
Second Minister for Home Affairs S
Iswaran revealed that in 2014 alone, there
were 47 cases of rioting and 115 cases of
serious hurt, including stabbings, linked
to the consumption of liquor.
“In other words, on average, there was
one rioting incident and two cases of serious hurt each week that was liquor-related,” Mr Iswaran said.
Nine out of 10 of these cases occurred
after 10.30pm, he added, responding to
queries from some MPs during the second
reading of the Liquor Control (Supply and
Consumption) Bill, who asked why this
time period had been chosen for the ban.
In his wrap-up speech in Parliament,
Mr Iswaran said the data had shown that
action needed to be taken, which his parliamentary colleagues have agreed to in
principle. “After all this granularity, data
sharing and fine-tuning, I think we need
to come to a consensus. Is there a need to
take action with regard to this matter? I
think the spirit of the debate in this House
has been to confirm that there is a need to
do so. The question then arises: how do
we go about it?”
Mr Iswaran explained that the
government’s guiding principles in approaching this issue have been two-fold.
“The first is to make sure that we minimise the disamenities and threats to public order that would arise from public consumption of liquor. Second, in terms of
our approach, we have endeavoured to be
balanced, trying to reconcile quite diverse
views and interests, in order to achieve a
pathway forward where we can all commit to and achieve some level of unanimity and take steps according to that.”
He reiterated that the Ministry of
Home Affairs had consulted widely on the
Bill, including with all stakeholders, and
that it is based on the operational needs of
the ground.
MPs Foo Mee Har and Baey Yam Keng
were among those who asked if the public
consumption ban could not be restricted
to only a few areas instead of being island-wide. Mr Iswaran explained that a geographic ban may be counter-productive,
as it may be difficult to enforce and could
also exacerbate displacement effects.
“Dividing up a typical area which has
residential units, some common areas
such as void decks, playgrounds and
neighbourhood parks, and some F&B and
commercial outlets, into multiple finely
drawn liquor control zones (LCZs) would
lead to confusion and make compliance
and enforcement more difficult,” Mr
Iswaran explained.
“The displacement is real and can be
difficult to manage. So having a series of
LCZs will simply exacerbate the problem
in housing estates. The greater the gradient of measures in different locations, the
greater the propensity for displacement.”
Govt will
help but
SMEs must
actively seek
growth
opportunities
By Mindy Tan
[email protected]
@MindyTanBT
Singapore
THE government will continue to provide
strong support for restructuring. Meanwhile, companies have to actively seek
growth opportunities through innovation
and internationalisation.
Speaking at the 28th annual Singapore
1000, SME 1000, and Singapore International 100 Awards Ceremony on Friday
night, Minister of State for Trade and Industry, Teo Ser Luck, noted that there are
“positive” signs that firms are seeking
these growth opportunities.
They have also actively tapped on government grants and schemes to help them
stay ahead.
To date, more than 22,000 companies
have benefited from the productivity initiatives introduced by the National Productivity Council (NPC), which has supported
the training and
upgrading of
workers, and the
adoption of technology and infocomm solutions.
In
2013,
53,000 companies took advantage of the Productivity and Innovation Credit
(PIC) to help
them defray the
costs involved in MR TEO
capability up- 75 per cent of SMEs
grading.
are pursuing
Citing DP In- innovation, with an
formation
increasing proportion
Group’s 2014 investing in technology
SME Development Survey, Mr
Teo noted that 75 per cent of SMEs are
pursuing innovation of some form, with
an increasing proportion of SMEs investing in technology.
The same survey also found that the
proportion of SMEs planning to expand
overseas rose from 14 per cent in 2013 to
20 per cent in 2014, indicating increasing
interest in internationalisation.
“Singapore celebrates our 50th year of
independence this year. We have thrived
and prospered as a nation in large part because of the ingenuity and ‘can-do’ spirit
of our entrepreneurs. As we continue on
our journey of economic restructuring, I
have faith that this ‘can-do’ spirit will see
us through to a successful conclusion,”
Mr Teo said.
The awards are ranked and published
by DP Information Group, and co-produced with EY. The key sponsors are ANZ
Singapore and DHL Express Singapore.
top stories 5
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Cortina wows with S$4m investment
Its Patek Philippe boutique in Taipei is the world’s biggest, with China tourists the main target
By Chuang Peck Ming
[email protected]
Singapore
IT cost Cortina Watch around S$4 million
and nearly two years of planning to get
the world’s biggest Patek Philippe boutique up and running, according to Raymond Lim, Cortina’s deputy chairman
and deputy chief executive officer.
The luxury watch boutique is located
in Taiwan and Mr Lim had to travel there
often to supervise its opening. It’s huge,
easily twice the size of Cortina’s biggest
Patek Philippe boutique at Marina Bay
Sands in Singapore.
“It’s the first time I see something that
big for Patek,” exclaimed Thierry Stern,
president of the Swiss family-owned Patek
Philippe, at the opening of the 4,500
square feet boutique last month in Taipei
101, a landmark building at the heart of
Taiwan’s capital.
“It’s fantastic (that) we could do it,” he
said. “(It’s) not only about the watches but
also the right partner. You get somebody
you can trust, very professional and willing to invest to do something like this.”
Taipei 101, which houses most of the
high-fashion brands and luxury watch
boutiques, was the world’s tallest building
before the appearance of Burj Khalifa in
Dubai in 2010. But it remains a must-see
tourist attraction. Bus-loads of tourists
from mainland China are seen to stop by
at Taipei 101 daily.
Chinese tourists in fact were very much
MEGA MALL
The 4,500 sq ft
boutique carries
some of Patek
Philippe’s latest
and most
desirable models
in Cortina’s mind when it moved to open
the Patek Philippe boutique there, where
it once had a multi-brand watch shop, Mr
Lim said.
The Chinese are the biggest spenders
on luxury timepieces in recent years.
While they have cut back demand at
home, Mr Lim said the Chinese are still
buying big-time when they travel overseas.
Patek Philippe is arguably the biggest
name in upscale watches and Cortina’s
new boutique in Taiwan carries some of
Cortina Watch pushes ahead
with expansion plans
<< Continued from Page 1
The retail chain, which made an after-tax
profit of S$19 million in its last financial
year ending March 2014, could easily
spend up to S$10 million or more upfront
this year for expansion.
Mr Lim said Cortina has already secured the leases for the new outlets and
the added space for expansion.
The expansion comes at a challenging
time, but Mr Lim said these are long-term
commitments and cyclical swings in the
market as well as day-to-day currency fluctuations – including the unexpected surge
in the Swiss franc two weeks ago – should
not disrupt Cortina’s plans.
He thinks customers, fanned by media
reports, have over-reacted when they
rushed to buy watches in the wake of the
rise in the Swiss currency. They had
feared prices of luxury Swiss timepieces
would also increase, but Mr Lim said this
has not happened – and his Swiss suppliers have assured him they have no intentions of raising prices in Asia.
As for the economic uncertainty, which
affects spending, he said Cortina’s current
expansion reflects a more proactive and
targeted approach which the retail chain
is taking to draw customers into its shops.
“We can’t just open the door and wait
for them to come in anymore,” Mr Lim
said.
The bigger boutiques will give Cortina
space to hold watch events for invited
guests and soft sell directly to big spenders and wealthy customers.
“The advantage of this is we get to
know more people and, hopefully, they
get to know us,” Mr Lim said. “The disadvantage is more work for backend people
and we got to have a separate budget for
it.”
Cortina has adopted the approach at
the multi-brand shops but found its effort
“diluted” by too many brands, which
could cause distractions. It decided to do
it in its single-brand boutiques instead.
The problem was these were small.
The Patek Philippe boutique at Marina
Bay Sands was big enough for functions –
and they proved to be successful. But Mr
Lim said the location was not popular
with the local customers.
Thus the move to expand the Patek
Philippe boutique in ION and open a big
Rolex flagship store in Marina Square.
its most desirable models. At its grand
opening last month, the boutique unveiled the 6002G Sky Moon Tourbillon, a
rare and artistic complication that’s very
much in demand.
It also introduced several new Patek
Philippe creations, including the Multi-Scale Chronograph launched to celebrate the brand’s 175th anniversary last
October.
The boutique, designed in consultation
with Patek Philippe, features iconic materials like Birdseye maple wood and Indian
rosewood, combined with modern brass
in vintage burnished finishes. There’s an
exclusive Patek Philippe chandelier and table lamps which were built in collaboration with Baccarat.
“The boutique is further accentuated
with custom-made accessories such as
the Calatrava Cross panels, floor rugs,
timeline exposition and identifiable visuals that help facilitate the organisation of
the sales area while enhancing the luxurious intimacy of the VIP room,” said a statement issued by Patek Philippe.
6 top stories
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
FIRM FAVOURITES
Hooq will have more than 10,000
movies and TV series in its catalogue,
including (from far left) Harry Potter,
Friends and Spider Man
Singtel sets up streaming video venture
It partners Sony Pictures Television and Warner Bros Entertainment; regional rollout to start from this quarter
By Amit Roy Choudhury
[email protected]
@AmitRoyCBT
Singapore
SINGTEL has teamed up with
Sony Pictures Television and
Warner Bros Entertainment to establish a startup that will stream
the best of Hollywood and regional entertainment on any device
of the consumer’s choice and at
their chosen time.
Aptly named Hooq, the startup promises to be a regional Netflix kind of service but Singaporeans will have to wait a while before getting hooked, maybe till
the later part of this year.
Hooq will offer over-the-top
(OTT) video service in Asia and
will be rolled out progressively in
the Singtel group’s Asian footprint, including Indonesia, the
Philippines, India and Thailand,
from the first quarter of 2015.
OTT refers to the delivery of
rich media content, such as movies and TV shows, over the Internet without the involvement of
the Internet Service Provider
(ISP). Singapore will get the service after this rollout.
Speaking to The Business
Times, Jonathan Auerbach, chief
executive officer of Singtel Group
Digital L!fe, said that the telco
has a 65 per cent stake in Hooq
with Sony and Warner Bros each
holding 17.5 per cent. While the
studios will provide their premium content and know-how, Singtel will provide market access –
its customer base through its regional subsidiaries and partners.
Mr Auerbach noted that Hooq
is an important part of Singtel’s
digital strategy. “We have unique
assets that give us a right to play
in this space, and with our partnership with Sony Pictures Television and Warner Bros Entertainment, we will achieve our vision
to be the largest OTT video service in the region.”
He added that demand for
OTT video has been growing and
is poised for even higher growth
in the targeted markets, fuelled
by better data networks and the
growing supply of affordable devices.
“There is a more than S$1 billion opportunity in our markets.
With Hooq, we are bringing together key elements of technology, service and content to deliver
the full Internet experience to
customers.”
He added: “We have 500 million subscribers across our associate markets. We have a real understanding of those customers
and what are the services they really like and where they want to
go in the types of things they
want to do with the Internet.
“We also see mobile Internet
growing enormously and we are
incredibly well positioned in that
regard. And customers increasingly want to watch video over
mobile networks and that’s why
we believe this is a natural business for us to grow into.”
He said that Singtel was prepared to make the necessary initial investment to succeed in this
venture. “We will be investing in
the early years to build out the
service and make it available to a
billion-and-a-half potential customers in these markets. And we
see this as a value-creating business for us over time after the
first few years.”
Peter Bithos, CEO of Hooq,
said that the company would
have more than 10,000 movies
and TV series in its catalogue including blockbusters such as Spider Man and Harry Potter as well
as TV favourites such as Friends
and Gossip Girl.
“Customers can also look forward to an extensive selection of
regional content. We have approached local content providers
and we will launch with regional
content agreements in place. We
are combining the best of Hollywood with the best of the local
markets.”
Mr Bithos added that Hooq
would be available on every single screen, from smartphones,
tablets to TVs. “We will have Aps
for every major mobile OS (operating system) and will be present
in devices such as Chromecast.”
Hooq will also extensively use
data analytics to provide recommendations to users.
On the pricing front, the
Hooq chief noted that global
OTT services such as Netflix usually charge in the region of US$10
a month.
“This will not work in the
emerging markets that we are targeting. In order to make it affordable, you need to charge only a
few dollars a month and have innovative pricing models such as
pay by the day or weekly packages. When we roll out, we will do
that as we have been able to get
content to provide affordability.”
Hooq will also have various
payment options, ranging from
credit cards to scratch cards and
pre-paid phone cards to
post-paid bills.
“At launch, we are going to
have a wide range of different
payment types, we will seek to
plug in as many billing options as
possible,” Mr Bithos said.
He added that as an independent OTT company, Hooq will
strike a billing relationship with
each partner on a commercial basis.
Thomas Gewecke, chief digital officer and executive vice-president for strategy and business
development at Warner Bros Entertainment, said: “We’re thrilled
to partner Singtel and Sony Pictures Television to help grow the
OTT video business across Asia.
The combination of Singtel’s expertise and our world-class content is a winning combination for
entertainment fans in the region.”
George Chien, executive
vie-president, networks, Asia-Pacific for Sony Pictures Television,
added: “Consumers expect premium entertainment content to
be available to them at their convenience and as a result, OTT delivery has become an important
part of our business. Through
this partnership, we hope to create a service to meet that demand as it grows in Asia.”
SIT, SMF ink pact to upgrade
manufacturing manpower capabilities
By Mindy Tan
[email protected]
@MindyTanBT
Singapore
THE Singapore Institute of Technology (SIT) and
the Singapore Manufacturing Federation (SMF)
have signed a Memorandum of Understanding
(MOU) to enhance SIT students’ career opportunities and upgrade manpower capabilities in the
manufacturing sector.
Under the terms of the MOU, SMF will provide
more opportunities through SIT’s Integrated Work
Study Programme (IWSP). This will be in the form
of increased IWSP opportunities in 10 companies
under SMF’s umbrella. In addition, SMF will extend 10 positions in its Business Immersion Programme for SIT students.
SIT has also agreed to partner SMF to identify
gaps in national manpower skills in the manufacturing industry and to collaborate on productivity
enhancement projects.
“There is a need to be more focused on applied
learning and technical skills,” said Douglas Foo,
SMF president. “Through this MOU, we will facilitate better alignment of the supply of and demand
for skills in the manufacturing sector, and will also
help to draw in new talents to the industry.”
SIT has actively engaged the various associations and federations in Singapore to reach out to
its members. In November last year, it signed an
MOU with the Association of Small and Medium
Enterprises (ASME) to boost the technology and
management capabilities of Singapore’s SMEs.
top stories 7
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Japan Dec jobless rate falls to lowest since ’97
Tightening labour markets point to upward pressure on wages and inflation
By Anthony Rowley
[email protected]
Tokyo
JAPAN’S unemployment rate fell
last month to its lowest level
since 1997, while job availability
rose to its highest level in 22
years as labour markets continued to tighten at an increasingly
rapid pace, pointing to upward
pressure on wages and inflation.
Even though the economy as
a whole has been slow in picking
up, labour shortages are becoming acute in a number of sectors
such as construction and service
industries, putting upward pressure on wages in parts of the
economy. This pressure is expected to become more intense and
widespread from March onwards
as the country’s business in gen-
eral responds to strong pressure
from the government and labour
unions to raise basic pay scales
in the world’s third-largest economy. That in turn, analysts say,
should put upward pressure on
inflation, which is running at only half the target level of 2 per
cent annually.
Core consumer prices meanwhile rose by 2.5 per cent nationwide in December from their level a year earlier – slightly slower
than predicted by economists.
But price rises are expected to accelerate in the second half of fiscal 2015 as the impact of the dramatic drop in oil prices, which began around June last year, works
it way through the system.
A lack of upward pressure on
wages has been a major factor in
restraining inflation pressures despite two rounds of aggressive
monetary easing by the Bank of
Japan since Haruhiko Kuroda
took over as governor of the central bank in March 2013.
Nearly two decades of continuing deflation up to that time
had made Japanese firms reluctant to raise basic pay, or even eager to cut pay scales. Company
employees and trade unions
have been equally reluctant to demand higher pay, for fear of losing their jobs.
But with a steady, if slow, pick
up in the economy and with
Prime Minister Shinzo Abe’s government actively pushing firms
to raise basic pay scales by
around 2 per cent annually at the
spring round of national wage
bargaining in March, wage infla-
M’sian business sentiment down
on falling ringgit, rising costs
By Pauline Ng
[email protected]
Kuala Lumpur
DENTED by the sharp depreciation in the ringgit and additional
operating costs, Malaysia’s business confidence has gotten a bit
wobbly.
Increasing worries were made
worse by the government’s recent move to introduce mandatory online services for the recruitment of unskilled foreign labour
and the extension of work permits.
Indeed, the weaker sentiments were already evident in Q4
when the Malaysian Institute of
Economic Research’s (MIER)
business conditions index (BCI)
registered a score of 86.4, a 9.5
percentage point drop from the
95.9 mark in the quarter before.
The Q4 score – significantly
lower than the 100 point threshold – was last registered for Q1
2009 triggered by the global financial crisis.
In truth, the BCI would likely
drop a notch in the current quarter given the unhappiness over recent outsourcing to the private
sector – moves the authorities
maintain will simplify procedures and tighten up the screening process for unskilled foreign
workers, but businesses contend
only adds to their burden.
On Wednesday, 30 business
associations and chambers of
commerce decried the concessions given to private companies
My EG Services Bhd to handle
permit renewals for foreign workers, and privately held Bestinet
Sdn Bhd for the processing of
work visas and biometric health
checks.
Given the country’s near total
dependency on unskilled foreign
labour – there are an estimated
two to three million registered unskilled foreign workers and likely
as many unregistered – the concessions are seen to be extremely
lucrative.
Allegations of cronyism have
surfaced since the concession
companies appear politically
linked and the contracts were
not open to tender. Opposition
politicians also contend private
companies should not be in possession of such extensive data.
Attempts to justify various fee
increases – biometrics has to be
introduced for instance – has
seen little buy-in.
Rumblings have also been felt
in two of Malaysia’s biggest
source countries for unskilled
workers. According to a report by
The Star, Indonesia and Nepal
have threatened to stop the flow
of workers to Malaysia as they
say the significant hikes in visa
processing and medical
check-up fees will invariably be
borne by their citizens.
Anger at not being consulted
aside, perhaps what rankles the
most with the business community is the absence of alternatives.
“What is the purpose of having
the Malaysian Competition Act if
the government endorses such a
monopolistic situation?” queried
the Associated Chinese Chambers of Commerce and Industry
deputy secretary-general Teo Chiang Kok.
Bursa Malaysia-listed My EG
is a concessionaire for the
government’s e-services which
“builds, operates and owns the
electronic channel to deliver services from various government
agencies” to Malaysians and businesses.
Following the brouhaha, the
home ministry suspended
Bestinet’s foreign workers centralised system and biometric health
checks on Friday. As no explanation was offered, the reprieve
could be temporary.
MIER’s survey indicated prices for local products are likely to
rise in the current quarter, despite higher inventories and a
slow-down in most manufacturing activities.
The ringgit is at a six-year low;
over the past six months, it has
depreciated by 15 per cent
against the US dollar. More challenges lie ahead, including the
next minimum wage review and
a 6 per cent Goods & Services Tax
in April.
tion should pick up soon, analysts say.
Job availability in Japan rose
in December to its best level in
22 years, while the unemployment rate improved to 3.4 per
cent, suggesting that companies
are willing to hire more workers
as corporate profits recover, official sources said on Friday.
The ratio of employment offers to seekers climbed for the
third straight month to 1.15, the
highest level since March 1992,
from 1.12 in November, the Ministry of Health, Labour and Welfare said, according to Kyodo
news service.
As a result of the improved
trends, unemployment rate fell
0.1 point from 3.5 per cent the
previous month to the lowest level since August 1997, the Ministry
of Internal Affairs and Communications said in a preliminary report.
The number of unemployed
people was a seasonally adjusted
2.28 million, down 0.4 per cent
from the previous month, while
the number of people holding
jobs increased 0.7 per cent to
63.88 million. Japan’s job market
“has continued picking up”, an
official at the ministry said.
In December, the jobless rate
for men was 3.6 per cent and that
for women was 3.2 per cent, the
ministry added.
By industry, the information
and communications industry
and the healthcare and welfare
sector added jobs, but the transport and postal service industry
and the manufacturing sector reduced jobs.
4 appointed to MPA board
By Jacquelyn Cheok
[email protected]
@JacCheokBT
Singapore
FOUR new members have been
appointed to the Maritime Port
Authority of Singapore (MPA)
board by Transport Minister Lui
Tuck Yew, the Ministry of Transport (MOT) said on Friday. They
are:
45 Carl Krogh Arnet, chief executive officer, BW Offshore;
45 Luke Goh, senior director,
PS21 Office, Public Service Division, Prime Minister's Office and
institute director (Institute of
Governance and Policy), Civil Service College;
45 Kam Soon Huat, general secretary and chief operating officer,
Singapore Organisation of Seamen; and
45 Quek Bin Hwee, vice-chairman (markets and industries),
Asia Pacific Clients and Markets
Leader, PricewaterhouseCoopers.
Their appointments will be
for a period of three years and
will effect from Feb 2, save for
Mrs Quek, who according to
MOT, will serve as board member from April 1, 2015 to Feb 1,
2018.
Jude Benny, senior partner at
law firm Joseph Tan Jude Benny
and a current board member of
MPA, will have his appointment
extended to March 31, 2015, so
as to facilitate closure of the MPA
2014 annual accounts and a
smooth handover of the chairmanship of the Audit Review
Committee.
Meanwhile, the following
board members will be stepping
down on Feb 2, 2015:
45 Thomas Tay, emeritus general secretary, Singapore Maritime
Officers’ Union;
45 James Wong, deputy secretary (policy), Public Service Division, Prime Minister’s Office; and
45 Robert Yap, executive chairman, YCH Group.
The MPA board – chaired by
Lucien Wong, chairman and senior partner at Allen & Gledhill – is
responsible for providing strategic direction to help develop Singapore as a premier global hub
port and an international maritime centre.
Ex-navy chief to take over reins at CPF Board
By Jacquelyn Cheok
[email protected]
@JacCheokBT
Singapore
NG Chee Peng, currently deputy
secretary (special projects) at the
Ministry of Manpower, will take
over as chief executive of the Central Provident Fund Board from
March 15, 2015.
He will succeed Yee Ping Yi,
who had assumed the role in January 2011. Mr Yee will return to
the civil service where he will assume another leadership position, MOM said on Friday.
Mr Ng was the Chief of Navy
before joining MOM. He holds a
Bachelor of Arts (Honours First
Class) in Philosophy, Politics and
Economics from the University
of Oxford, as well as a Master of
Public Administration from Har-
vard University. In the course of
his career, he has held, among
others, the appointments of director (policy) in the Ministry of Defence, chief of staff-naval staff,
and chief of staff-joint staff in the
Singapore Armed Forces.
MOM, via its permanent secretary Loh Khum Yean, expressed
its deep appreciation to Mr Yee
for his contributions during his
tenure at CPF Board.
8 raffles conversation
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015 ●
raffles conversation 9
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015 ●
ings, and they learn to overcome the silly
biases they have that they grew up with.”
How to
do well by
doing good
Ahead of the game
As president of the Massachusetts Institute of Technology,
Rafael Reif upholds a firm belief in using one’s huge talents
for a larger purpose. By Kenneth Lim
W
HAT is better? When you have the power to influence one of the world’s most concentrated populations of geniuses, that philosophical question
takes on some very real consequences. Professor
Rafael Reif is the president of the Massachusetts
Institute of Technology (MIT), where some of the
most intelligent students in the world mingle with
astronauts and Nobel Prize winners along infinite
corridors. That wealth of talent compels Prof Reif
to direct his charges toward doing better. And so,
back to the original question: What is better?
For Prof Reif, doing better means fearlessly embracing oversized ambitions and attacking some of the most daunting, pressing and challenging problems of our times.
But above all, better is knowing the difference between doing well and doing good.
“Personally, I always felt that it’s better to try to do good with whatever talents you
have,” Prof Reif says. “If you do something good, it’s almost permanent. When you accomplish something good and society benefits, it’s not going to go back, or typically
doesn’t go back. If you try to do well for yourself, maybe I’ll be more comfortable, instead of having two cars I’ll have three or four cars or maybe a yacht or something. But
it doesn’t bring any irreversible benefit to society. So I prefer the doing good part.”
Born in 1950 to Jewish refugees in Venezuela, Prof Reif was the youngest of four
brothers. The family was not well off – Prof Reif’s father made ends meet by taking on a
variety of menial jobs. But Prof Reif, following in the footsteps of his elder brothers,
bucked the neighbourhood norm and enrolled in high school and eventually college in
Venezuela. Electrical engineering was his degree of choice.
“Like anybody who comes from a poor family, I need to get a job. So I got a degree in
engineering, which I chose as a career because I thought it was something practical.
You could get a job as an engineer at the time,” says Prof Reif.
But after experiencing the actual work of an engineer during his practical training
stint, Prof Reif decided that while the work was interesting, it was not quite his cup of
tea. So he tried teaching at a local university in Venezuela.
“I enjoyed that, I enjoyed being with students, I enjoyed teaching, I enjoyed doing
projects with them. So I thought very quickly, if I wanted that as a career, I’d better get a
graduate degree. And I thought that the way to secure that was to get a PhD. A master’s
probably would not be enough to get me a very good, steady job in Venezuela.”
Prof Reif found himself at Stanford University in California on the West Coast of the
United States. He completed his master’s degree and received his doctorate, and was
all set to head back to Venezuela to resume his teaching career there when a chance
reunion with a former colleague who had moved to MIT set off a recruitment campaign
by the East Coast institution.
“At the end of the day it was a very intense recruitment period,” he recalls. “I was
initially uninterested. But I went to visit MIT and I just saw a place that I didn’t know
existed. I didn’t think that such a place, really, could be on this Earth. And when I saw
that I said, I got to try being here for two or three years. I didn’t go back to Venezuela
and I never went back.”
The MIT DNA
MIT is a most peculiar place. In just over 150 years of history, the university has produced or hired 80 Nobel Laureates, or one every two years; 56 National Medal of Science winners; 43 MacArthur “Genius” Fellows; and 28 National Medal of Technology
and Innovation winners. The school received almost 19,000 undergraduate freshman
applications in 2013 and accepted only 1,548, or less than a twelfth.
But those numbers are just the symptoms, the signs that something special is happening. How those numbers came to be, and what won Prof Reif over, is the culture
PHOTO: MIT
L RAFAEL REIF
President, Massachusetts Institute of Technology
1950 Born Aug 21 in Venezuela
1973 Bachelor’s degree in electrical engineering, Universidad
de Carabobo, Valencia, Venezuela
1979 Doctorate in electrical engineering, Stanford University
1978-1979 Visiting associate professor, electrical
engineering, Stanford University
1980-1983: Assistant professor of electrical engineering,
Massachusetts Institute of Technology (MIT)
1983-1988 Associate professor of electrical engineering, MIT
1985 Earned tenure at MIT
1988 to date Professor, MIT
2004 Named Fariborz Maseeh Professor of Emerging
Technology
2004-2005 Head of the department of electrical engineering
and computer science
2005-2012 Provost, MIT
2012 to date President, MIT
other milestones
1984 United States Presidential Young Investigator award
1993 Fellow of the Institute of Electrical and Electronics
Engineers (IEEE)
2000 Aristotle Award, Semiconductor Research Corp
that drives life at MIT.
Ingenuity and smarts are celebrated.
University lore is not filled with outstanding athletes or graduates who struck it
rich, but with “hacks” – anonymous, complex pranks, the more complicated the better. And as long as you had the goods, it
did not matter where you came from.
“I knew quite a few universities, where I
got my PhD and a few others in the area,
so I knew them very well,” Prof Reif says.
“It was relatively homogenous in terms of
the kind of people you would see, the kind
of professors you would see. It almost gave
you the idea that if a professor behaves this
way or looks this way, that’s what’s being
smart. And then I go to MIT, which I’d only
heard of – I was scared of MIT, MIT had
this reputation of unachievable smartness
– so I go there and I just meet these professors who’d interviewed me. I meet everybody, everything. People from Turkey,
from India, from Pakistan, from Greece,
from – you name it – from China.
“When I saw all these people, then I realised, this is it. This is meritocracy. Because they don’t look alike, they don’t behave alike, they had completely different
cultures, and they’re working with each
other, and all of them very humble.
They’re all people with reputations. I studied from their books, I studied from their
papers, I thought they lived on pedestals. I
meet them and they’re just regular people, and they’re all culturally different. I
could not believe that there was a place
like that in the world.
“And I said, this is where I want to be.”
But beyond the intelligence and the diversity, there is also a strong sense of civic
duty that permeates the walls of MIT, a
sense that one has a responsibility to put
one’s skills to use for a larger purpose.
It is in explaining that culture that Prof
Reif raises the distinction between doing
well for oneself versus doing good for all.
“In many institutions, in a subtle way
or more obvious way they teach students
to figure out how to do well in society,” he
says. “The MIT kids, by and large, what
they want is to do good. They want
to do something impactful. They
realise their talent and they want
to work with others to do something good.
“If by doing something good
they do well, so much the better,
but the driving force is to do something good. That’s also a big, big,
big difference. And I don’t know if
that’s an aspiration of other colleges, but that is unavoidable. That’s
the DNA of the place.”
When people serve a greater
purpose, they appreciate others
based on their ability and willingness to contribute to that goal, and
so they learn to move past the old
way of judging people.
“There are so strong ethnic biases, and people in one society from one
country may not like that other society because of something that happened a thousand years ago,” Prof Reif says.
“We have lots of that problem in the
world, which is really unfortunate. You
throw these people at MIT, you put to
them a problem that is much bigger than
themselves, that is important for the
world, and they work together. And they
learn to recognise each other as human be-
Of course, Prof Reif’s challenge is not simply finding feel-good projects of scale. Strategically, the projects also need to be relevant, and must help MIT to retain its reputation as an institution at the cutting edge
of innovation and technology.
“You have to imagine where we’re going, where the future is going to be in 10
years and 20 years and be prepared to get
us there. And that is a good chunk of my
job, to get us there,” he says.
Prof Reif believes that MIT rests on
three pillars: Education, innovation and research. The school needs to teach its students well, it needs to be creative, and it
needs to seek answers to big problems.
Online education has become Prof
Reif’s way of uniting those three aspects of
the school. He led the development of
MITx and edX, initiatives that offer full
courses from MIT and other universities
for free on the Internet, and in the process
challenged the traditional residential model of universities where students have to
live and take classes around a campus.
The basic idea behind online courses
was to improve access to the knowledge at
MIT. The school’s limited capacity on campus means that many worthy candidates
do not get to become MIT students.
“If you’re in a high school in a little
town in the middle of nowhere, and another 40 or 50 kids in your class, you may be
one of the smartest kids in the class in the
way you learn material, but you don’t
know how smart you are,” Prof Reif says.
“You have no idea. But if you take a
course that is global, one of these MITx
courses that are very high quality, and you
do well, all of a sudden you realise you get
a whole lot of self-confidence. You are as
good as the best, and the sky is the limit
for you. You don’t think that way if you
are in a small little town without access to
much. Those are the kind of things that I
want to empower.”
Offering good-as-being-there courses
online for free would seem to be self-defeating from a business perspective, but it
your school’s culture as Prof Reif, that
seems like an ideal arena in which to play.
“By sharing our content and making it
available, that creates a baseline,” Prof
Reif says.
“If you’re a professor and you teach a
course that is on MITx, you have two
choices. Either come up with a better one,
or use ours. So that’s a baseline. Nothing’s
going to be worse than that. So that’s what
I wanted to do. Why not share it?
“But once you have that, what do you
do with it? If you and I have the same material now, because we make it available, I
can use that in a classroom in a different
way. I can have a discussion with a student in a different way. That’s my value
added. You may use a different value added. And then we compete in the value added game, but we have the same base structure, and that’s what I wanted.”
Doing and seeing big
Beyond online education, Prof Reif has also picked a few major areas of focus for
the university. “The easiest one to identify
in my mind that I would like us to do
more work on, is basically the health of
the planet,” he says, highlighting fresh water and food security as particular areas of
interest.
“We only live in this one planet. I heard
a speech by Elon Musk at MIT, the founder of SpaceX and the Tesla Motor, and he
was saying that we have to start thinking
about colonising Mars just in case something happens with Planet Earth, and
that’s a grandiose idea, but I’d rather we
stay fixed on Planet Earth and not have to
go and colonise Mars.”
Healthcare and healthcare costs are also being looked at closely, as is using innovation to create jobs.
Looking at such big-picture issues as
an administrator is a far cry from Prof
Reif’s days as a teacher and researcher.
“I do miss doing research in that I do
enjoy very much working with students,”
he says.
“It’s the refreshing part. Students are always asking questions and making your
brain be young. So I miss that part, but at
the same time I still work with students, but
I work in different kinds of challenges with students, and I still am surrounded by them and they still
come to my office and they still refresh me with thoughts and they’re
still very candid with me and I enjoy
that. So I do miss the research part,
but...with the position that I have
now, I can just influence things in a
much bigger way.”
Prof Reif admits that his work
leaves him with little spare time
for recreation.
“I still try to work out and go jogging and on occasion I try to swim,
but I haven’t found a way to do it
in a regimented way so that I know
on Monday, Wednesday, Friday I
can do this,” Prof Reif says. “That
has not been possible. I’m not
complaining, I love what I’m doing, but
that’s part of my personal life that hasn’t
been fixed.”
Is all that work worth it? Without a
doubt, according to Prof Reif.
“To be leading a place that can do so
much good, with the people of MIT, and
to try to channel all that tremendous talent to do something good for the world is
an amazing privilege,” he says.
“People in one society from one
country may not like that other
society because of something that
happened a thousand years ago.
You throw these people at MIT,
you put to them a problem that
is much bigger than themselves,
that is important for the world,
and they work together. And
they learn to recognise each
other as human beings.”
is in fact a rather shrewd strategic move,
whether by coincidence or design.
By providing universal access to lessons from the top universities, MITx and
edX have made it tougher for lesser colleges to attract students with lessons that are
of lower quality.
Universities will now have to compete
on their intangibles, the stuff that they offer to students beyond simply a lecture on
calculus. And when you feel as good about
[email protected]
@KennethLimBT
10 companies & markets
Market cap summary
As at Jan 31, 2014
biggest $ gainers
JMH USD
Singtel
HongkongLand USD
JSH USD
Keppel Land
Prudential USD
SIA
ThaiBev
CapitaLand
ComfortDelGro
gain (s$ m)
4,021.4
2,868.1
2,484.8
2,267.6
1,729.8
1,480.4
1,259.9
753.3
727.4
579.5
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Total
S$978.1b
biggest $ losers
UOB
DBS Grp
Sembcorp Marine
Golden Agri-Res
Noble
Pan Ocean
Keppel Corp
Sembcorp Ind
OCBC Bank
CityDev
+2.2% m-o-m
loss (s$ m)
-2,179.7
-2,007.2
-543.2
-513.5
-507.2
-330.3
-272
-250.5
-239.5
-200
M&A, low-oil winners lift
January market cap by 2.2%
Price changes were the main factor, with no new listings so far
By Kenneth Lim
[email protected]
@KennethLimBT
Singapore
THE value of Singapore’s stock
market rose for the third month
in a row with low-oil beneficiaries and real estate counters leading the way.
The total market capitalisation of Singapore-listed stocks increased by 2.2 per cent to
S$978.1 billion on Friday as January ended in positive territory. It
was the third month-on-month
increase in a row, and represented a 12 per cent year-on-year
gain.
Price changes were the main
factor during the month, with no
new listings so far in 2015.
Sectoral themes were more
pronounced during the month,
with the continuing slump in oil
prices playing a major part in
guiding stock prices.
The major rigbuilders, Keppel
Corp and Sembcorp Marine,
were among the biggest losers in
January. Keppel’s market cap fell
1.7 per cent, or S$272 million, to
S$15.8
billion
while
SembMarine’s market valuation
dropped 8 per cent, or S$543.2
million, to S$6.3 billion.
On the other side of the oil
equation, fuel-consuming air carrier Singapore Airlines gained 9.1
per cent, or S$1.3 billion, in market cap to a worth of S$15.2 billion. Shipping company Neptune
Orient Lines added S$441.2 million, or 20.2 per cent, to lift its
market cap to S$2.6 billion.
Tech manufacturer Venture
Corp also benefited from the
Monetary
Authority
of
Singapore’s surprise easing of
monetary policy earlier in the
week as investors expected exporters to gain from a less aggressively appreciating Singapore dollar. Venture’s market cap rose 3.3
per cent, or S$71.7 million, to
S$2.2 billion.
“We’ve told people that other
than just shorting the losers of
low oil, you can also buy winners
of low oil,” UOB KayHian head of
research Andrew Chow said.
Beyond the oil plays, mergers
and acquisitions also helped to
lift the property counters as Keppel Corp mounted a takeover bid
for Keppel Land. Keppel Land’s
market cap jumped 32.7 per
cent, or S$1.7 billion, to hit S$7
billion in January.
“There are some slight
themes for people to nibble on,”
Mr Chow said. “In terms of M&A,
after Keppel Land, there’s a lot of
excitement and people looking at
other potential targets.”
Beyond industry segments,
larger companies also tended to
do better than the smaller ones.
The market cap of the largest 10
per cent of companies gained 2.2
per cent, easily outpacing the 4.3
per cent decline among the smallest 10 per cent of counters.
“For the small and mid-caps,
firstly confidence hasn’t returned
post the Asiasons, Blumont, LionGold fiasco (from 2013),”
Mr Chow said.
“Secondly, among the small
and mid-cap companies in play,
a lot last year was driven by interest in the oil and gas sector, and
that one has taken a big beating,”
he said.
Mr Chow expects the market
to be volatile in the months
ahead.
“Investors should carefully
buy into good quality big caps,
but don’t write off the small
caps,” he said. “Some of them
that have been sold off so much,
I think some of them are interesting now.”
Investors seek 8.2%
returns but raise
cash holdings: survey
By Genevieve Cua
[email protected]
@GencuaBT
Singapore
SINGAPORE investors expect average investment returns of 8.2
per cent in 2015, but they risk disappointment as they continue to
hold high levels of cash, a survey
by Manulife has found.
Although investors expect equities to be the top performing asset class, they also say they will
“invest” more in cash than in any
other asset in the next six
months. The findings are part of
the latest Manulife Investor Sentiment Index.
Nine out of 10 respondents
said they held cash as an investment, and the proportion in cash
has climbed steadily in recent
quarters. The allocation to cash
averages 36 per cent of the total
asset allocation, excluding their
home. This is equivalent to 46
months of income, which is significantly higher than the Asian
average of 24 months.
Naveed Irshad, president and
chief executive of Manulife Singapore, said: “With interest rates
likely to remain low in 2015, cash
deposits will not give investors
the returns they hope for. Portfolio diversification will be critical
so that investors aren’t overly exposed to unexpected market
events, or to a single asset class
or market that can’t outperform
given the current economic conditions.’’
About two-thirds of respondents were not happy with their
2014 performance. Of these more
than half said this was because of
unexpected market events. Almost a third said they took too
much risk and a quarter said they
failed to seek professional advice.
After cash, the second most
popular asset class for the next
six months was equities. Twentyone per cent of investors aimed
to raise their holding. About 8
per cent intended to invest more
in fixed income.
Saving more continued to be
a top financial goal this year,
even though Singaporeans are already saving 17 per cent of their
income on average. The main
purpose of saving was for retirement which was named as the
top financial goal.
Mr Irshad said: “Investors often think, at their peril, that saving alone is the bullet to a comfortable retirement. Long term retirement planning is multi-dimensional, and depending on
an individual’s circumstances,
could entail wealth creation,
healthcare needs and preserving
wealth.’’
Investors also believe that it’s
not a good time to invest in an investment property, with sentiment down five points to minus
two in the last quarter. The reasons cited were that prices were
too high and a correction was expected in 2015. Property, however, is third highest on the list of
top performing assets, and third
on the list of assets to invest
more in this year.
Jill Smith, Manulife Asset Management (Singapore) senior managing director, said that while
cash may be seen as a safe haven, investors do not necessarily
have to sacrifice returns as the
price for defensive positioning.
“A multi-asset investment solution comprising a mix of equities and bonds and diversified exposure to a range of markets can
provide a degree of insulation
from market volatility while also
potentially generating returns in
excess of cash or even delivering
a recurring income stream,” she
said.
Perennial leads consortium to acquire AXA Tower for S$1.17b
By Lynette Khoo
[email protected]
@LynetteKhooBT
Singapore
PERENNIAL Real Estate Holdings Limited (PREH) has syndicated a consortium of investors to
acquire AXA Tower at a property
purchase price of S$1.17 billion,
translating to S$1,735 per square
foot (psf) of net lettable area.
PREH’s 31.2 per cent equity investment in the property
amounts to about S$117.9 million. Its major shareholder Kuok
Khoon Hong, a Singapore busi-
ness tycoon who is also Wilmar
International’s chairman and
CEO, will take up another 10.1
per cent interest in AXA Tower.
The transaction between the
consortium and the seller BlackRock is expected to be completed
by April.
MGPA Fund II, which came
under BlackRock in 2013, bought
the office tower (then known as
Temasek Tower) in March 2007
for S$1.039 billion or S$1,550 psf
of net lettable area.
Pua Seck Guan, PREH chief executive officer, noted that there
is “strong upside potential” in
this asset.
AXA Tower, a 50-storey
Grade-A office tower with some
retail space in Singapore’s Central Business District, enjoys
three major frontages along Shenton Way, Anson Road and Maxwell Road.
The property has a total net
lettable area of about 674,000 sq
ft and a total current gross floor
area of about 1.03 million sq ft
with over 610 car park lots. It has
a 99-year lease from 1982.
Currently, AXA Tower has unu-
tilised plot ratio that translates to
an additional GFA of over
212,000 sq ft. The property is also
allowed to house medical suites
amounting to no more than
32,000 sq ft.
The consortium comprising
PREH, Mr Kuok and some other
investors will explore options to
utilise the additional GFA and
permissible medical suite usage
to maximise the value of the asset. The strata-sale of the office
space in the property will also be
explored, PREH said on Friday.
In conjunction with the pro-
posed investment, PREH will be
appointed as the asset manager,
property manager and project
manager of the property. This
will provide an additional stream
of management fee income for
the group.
“In addition, the prime asset
presents a unique opportunity to
maximise and create value for
shareholders through the execution of asset enhancement initiative and potential strata-sale strategy,” Mr Pua said.
PREH will fund its share of the
acquisition through existing and
new borrowings.
companies & markets 11
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
stocks|
GAINERS
Reits retreat as Fed
statement raises rate fears
R Sivanithy
[email protected]
@RSivanithyBT
Senior
Correspondent
T
HERE were two
events this week
worth discussing –
the US Federal
Reserve’s first Federal
Open Market Committee (FOMC)
meeting of 2015 and the Monetary
Authority of Singapore’s (MAS’s)
move on the currency front to reduce the slope of its policy band
that has led to the Singapore dollar
(SGD) weakening.
However, although both were in
theory negative for stocks, the
Straits Times Index managed to
hold reasonably firm during the
week, falling first on Monday after
news that Greece’s parliamentary
elections had been won by the Syriza party and on Friday, probably in
anticipation of Wall Street weakness.
That latter selloff was notable as
it involved many Reits, instruments
that are less attractive if interest
rates are expected to rise. The selling took the Straits Times Index
down 27.85 points or 0.81 per cent
to 3,391.20, resulting in a loss for the
week of 20 points.
Many in the Reit sector ended
lower in high volume – CapitaCom
Trust, CapitaMall Trust, Suntec Reit
and Ascendas Reit all featured in
the top volume list, all ending weaker.
The selling suffered by the segment meant that Friday’s turnover
was the best in many months at 1.5
billion units worth S$1.8 billion.
Earlier in the day the index actually managed a rise to an intraday
high of 3,432, sentiment was probably helped by Wall Street’s Thursday bounce, though reasons for that
Analysts have scrambled
throughout the week to
work out which sectors
and stocks will benefit or
lose from the MAS move.
rise were unclear – some reports attributed it to firmer oil prices, others
to corporate earnings.
Whatever the case, there is no denying that markets are becoming increasingly concerned about what
might occur once the Fed starts raising interest rates, especially since its
post-FOMC statement this week
used more hawkish language than
markets would have liked, such as
dropping of the phrase “for a considerable time’’ when describing the
Singapore banks able to
hold up against
property correction: Fitch
By Jamie Lee
[email protected]
@JamieLeeBT
Singapore
THE property market correction
in Singapore may place modest
pressure on banking system loan
quality but the three domestic
banks – OCBC, DBS and UOB –
should be able to withstand this,
Fitch Ratings said in a report on
Friday.
“Fitch expects Singaporean
banks’ potential losses from
mortgages to be minimal due to
relatively healthy household balance sheets and adequate collateralisation,” the credit rating
agency said.
“The government’s macroprudential policies over the past
few years included measures to
strengthen mortgage underwriting practices at local banks.”
Prices of private properties
have fallen 4 per cent from a year
length of time rates would stay low.
Lisa Hornby, Schroders’ US fixed
income portfolio manager said in
her comments that she expects FOMC statements to become gradually
less dovish.
“Although officials are signalling
that they will be ‘patient in beginning to normalise the stance of monetary policy’, a June 2015 hike is still
on the table,” said Ms Hornby.
“We believe that the Fed is aware
of the risks to financial stability of
keeping policy too accommodative,
especially in the face of an unemployment rate of 5.6 per
cent and core inflation of 1.4
per cent. Today’s removal of
the ‘considerable time’ verbiage is evidence of this gradual
shift in stance.”
The other occurrence was
the MAS’s move which many
have said should mean a
weaker SGD in the near-term. Coming just a week or so after the Swiss
central bank lifted its cap on the
franc/euro exchange rate and the
European Central Bank’s trillion-euro bond-buying announcement, it
clearly indicates that 2015 looks to
be the year in which central bank action will be crucial to how markets
and economies perform.
Analysts have scrambled
throughout the week to work out
which sectors and stocks will benefit or lose from the MAS move.
ago, latest data from the Urban
Redevelopment Authority (URA)
showed. Prices of HDB resale
flats also fell 6 per cent.
This is the first time since
2001 that both public and private
home prices have fallen over a
full year.
Mortgage delinquencies remain extremely low in both Singapore and Hong Kong – with
Singapore’s delinquency rate for
housing loans at 0.36 per cent at
end-September, and that of
Hong Kong at 0.02 per cent for
the same period.
Fitch added that the Monetary Authority of Singapore
(MAS) is expected to remain vigilant for signs of stress.
“The agency remains watchful of potential second-order effects of the housing slowdown,
such as weaker private consumption and rising construction company defaults.”
SPDR DJIA US$
CLOSE
UP
%
BY CENTS
52w high/low
17416
345.7
1.5
18046/15450
DBXT S&P500 US$
3389
29.7
0.7
3490/2880
DBXT MSMSIA US$
1329
25.7
1.5
1598/1310
IS Asia BND US
1078
21.6
1.5
1078/1004
870
21.0
2.5
870/815
Kep Corp.ES.1501
CLOSE
%
BY PERCENTAGE
52w high/low
UP
ChasenHldg W170320
4
48.1
1.3
UniFiber System
1
42.9
0.3
2/0.5
Novo
32
39.1
9.0
32/12
Amplefield
0.8
33.3
0.2
2.2/0.5
Advanced Systems
0.5
25.0
0.1
1.3/0.4
LOSERS
CLOSE
DOWN
%
8.1/2.3
BY CENTS
52w high/low
GLD US$
12102
-253.8
-1.5
13341/10892
DBXT Nifty US$
14612
-189.0
-0.9
14752/9759
JMH USD
6407
-166.1
-1.9
6788/4934
JSH USD
3503
-106.7
-2.2
3810/3006
DBXT Chia50 US$
3370
-33.8
-0.7
3480/2577
CLOSE
TopGlobal W150929
%
DOWN
BY PERCENTAGE
52w high/low
0.1
-50.0
-0.1
0.4/0.1
3
-21.1
-0.8
10.7/2.5
Elektromotive
0.4
-20.0
-0.1
2.3/0.4
NKY 19000MBeCW150313
3.3
-19.5
-0.8
8.5/2
Chinese Global
0.5
-16.7
-0.1
1.5/0.5
Tritech Group W19032
MOST ACTIVE
VOLUME
Pacific Andes
181,981,900
IHC
61,810,600
Golden Agri-Res
61,393,600
Tigerair
60,916,700
Genting Sing
31,862,700
Market volume
1,764,696,000
Market value
150,101,790
120,161,729
102,612,100
100,363,386
96,216,150
1,766,728,000
VALUE ($)
DBS Grp
SingTel
Keppel Corp
OCBC Bank
UOB
Tax writeback boosts Global Premium’s Q4
By Kenneth Lim
[email protected]
@KennethLimBT
Singapore
GLOBAL Premium Hotels undid
previous years’ over-provisioning for taxes in the fourth quarter, helping the hotel developer
to post a 61 per cent gain in net
profit despite a slowdown at an
operational level.
Global Premium, which runs
the Fragrance chain of economy
hotels, reported net profit of
S$8.4 million, or 0.80 cents per
share, for the three months ended December.
But that was after recording a
credit of S$3.4 million, from a
S$774,000 expense a year earlier,
from writing back provisions for
taxes from previous years.
Excluding tax, operating profit
fell 17.2 per cent to S$4.9 million
despite revenue increasing by 7.2
per cent to S$16 million.
For the whole of 2014, net
profit rose 9.7 per cent to S$21.2
million, or 2.02 cents per share.
The impact from the tax provi-
Global Premium Hotels
q4 fy14
q4 fy13
(S$million)
Revenue
Net profit
EPS (cents)
DPS (cents)
16.0
8.4
0.80
0.50
sion writeback had a similar impact for the full year. Profit before tax for 2014 fell 11.4 per cent
to S$20.8 million.
The company is recommending a final dividend of 0.5 Singapore cent per share.
Global Premium Hotels stock
closed at 35.5 Singapore cents on
Friday, higher by 1.4 per cent or
half a Singapore cent before the
results were announced.
The company said most of the
revenue increase during the quarter came from a S$2.6 million
contribution from Parc Sovereign Hotel – Tyrwhitt, which
opened in mid-2014.
The overall average occupan-
15.0
5.2
0.49
0.26
y-o-y %
change
7.2
61.0
cy rate, however, worsened to
81.4 per cent in the fourth quarter, from 88.3 per cent a year ago.
Revenue per available room decreased by about 6 per cent to
S$86.80 from S$92.30.
Global Premium Hotels is
“cautiously” optimistic for the
year ahead, citing fiercer competition as a new supply of hotel
rooms further depresses occupancy and room rates.
The company, however, noted that positive press for Singapore tourism and major events
such as the South-east Asian
Games and the 50th year of independence for Singapore could
help to lift tourist arrivals.
12 companies & markets
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
securities trading scoreboard
STI STOCKS
Stock name
Close
Ascendas Reit
CapitaLand
CapitaMall Trust
CityDev
ComfortDelGro
DBS Grp
Genting Sing
Global Logistic
Golden Agri-Res
HPH Trust USD
HongkongLand USD
JMH USD
JSH USD
Jardine C&C
Keppel Corp
Noble
OCBC Bank
Olam Intl
SGX
SIA
SIA Engineering
SPH
ST Engineering
Sembcorp Ind
Sembcorp Marine
SingTel
Star Hub
ThaiBev
UOB
Wilmar Intl
Change
246
348
209 xd
1005
287
1979
108
253
42
US71.5
US741
US6407
US3503
4230
870 cd
106.5
1040
197.5
777
1265
436
413
336
431
300
408
418
72
2318
322
-3
-6
-2
-17
-7
-17
+0.5
-7
-1
-1
-7
-123
-79
+17
+16
+1
-7
-0.5
-7
-15
-7
unch
-3
+3
+2
+1
-2
-1
-19
-6
Day high/low
248/243
355/348
215/209
1018/1005
294/285
1993/1979
108.5/107
260/253
43/42
73.5/71.5
756/741
6530/6407
3610/3503
4243/4201
873/862
107.5/106
1057/1040
199/197.5
791/777
1291/1264
444/436
415/412
340/336
443/431
302/300
412/408
420/418
74/72
2354/2318
330/321
52w high
263
364
226
1118
295
2067
143.5
297
61.5
76
830
6788
3810
4901
1120
148
1057
269
805
1291
515
435
400
559
418
412
432
77
2472
356
52w low
206
268
180
860
189
1565
99
239
41
61.5
584
4934
3006
3330
791
92
878.3
142.5
666
941
391
394
314
405
285
342
400
50.5
1940
292
PE
Div yield
17.4
13.6
23.1
13.2
22.4
13.9
13.7
14.7
15
12.6
13
8.4
24.8
13.7
8
24.7
41.3
18.3
16.5
17.9
9.4
11.3
17.8
19.4
24.9
12.6
12.4
5.8
2.3
5.2
0.8
2.4
2.9
0.9
1.6
2.6
7.4
2.4
2.2
0.7
3.2
5.5
1.1
3.3
3.8
3.6
3.6
5.7
5.1
4.5
3.9
4.3
4.1
4.8
2.3
3.2
2.5
Mcap
6219.7
14869
7248.7
9138.5
6143.3
49062.8
13240.3
12244.5
5391.8
6228.4
17434.3
44257.6
39254
14894.8
15829.9
7203.8
41526.5
4923.5
8326.7
15178.3
4887.9
6610.7
10487.8
7711.8
6267.7
65008.5
8129.2
18079.2
37425.1
20619
SGX ETFs Most Active
Fund
Last sale
+/-
(‘000)
Day high/low
52w high/low
Buy/Sell
IS ASIA HYG US$
US1059
+8
1233
1062/1059
1119/1013
1052/1059
STI ETF
341 xd
-4
482
344/341
349/298
340/341
-
IS MS India US$
US797
-9
430
810/794
1000/541
796/797
99.6
IS Asia BND US
US1078
+16
90
1078/1071
1078/1004
1070/1080
-
219
-
58
220/218
238/140
218/219
68.4
DBXT MSINDO us$
US1440
+2
57
1441/1436
1600/1150
1440/1443
-
DBXT MSPHILS US$
US218
-2.5
48
221.1/218
223/163.5
219.6/220.4
17.4
345
-2
30
348/345
422/300
344/345
8.3
US217
-7
24
217/217
261/217
216/221
23.2
Multi Ind
Manufacturing
Commerce
Tpt/Stor/Comms
Finance
Construction
Properties
Hotels/Rsts
Services
Elect/Gas/Water
Agriculture
Mining/Quarry
BLW
REIT
TOTAL
GLOBALQUOTE
Up
MAIN
Down
Unch
Up
CATL
Down
Unch
Up
TOTAL
Down
Unch
9
47
18
14
12
9
26
3
29
0
1
1
32
3
204
0
3
47
21
13
10
11
19
3
32
1
4
4
38
10
216
0
4
38
21
11
4
7
11
4
23
1
0
0
11
5
140
0
0
7
6
1
1
0
1
1
11
0
0
1
0
0
29
0
0
6
2
1
0
3
1
0
13
0
0
5
2
0
33
0
0
14
8
0
0
3
0
1
12
0
0
1
2
0
41
0
9
54
24
15
13
9
27
4
40
0
1
2
32
3
233
0
3
53
23
14
10
14
20
3
45
1
4
9
40
10
249
1
4
52
29
11
4
10
11
5
35
1
0
1
13
5
181
1
Active counters with no volume for today are not included.
securities trading turnover
Multi Ind
Manufacturing
Commerce
Tpt/Stor/Comms
Finance
Construction
Properties
Hotels/Rsts
Services
Elect/Gas/Water
Agriculture
Mining/Quarry
BLW
REIT
TOTAL
GLOBALQUOTE
MAIN
VOLUME (‘000)
CATL
TOTAL
MAIN
43,769
360,612
83,007
193,725
35,044
31,462
99,928
5,101
238,769
796
65,646
1,847
247,140
119,836
1,526,682
-
55,467
40,440
242
20
6,904
276
104
109,150
22,007
3,404
238,014
-
43,769
416,079
123,447
193,967
35,064
38,366
100,204
5,205
347,919
796
65,646
23,854
250,544
119,836
1,764,696
661
181,288
131,910
112,710
308,770
371,711
4,531
244,121
3,826
112,533
468
31,574
913
21,901
203,547
1,729,803
-
VALUE (‘000)
CATL
TOTAL
3,991
2,888
77
5
659
9
17
25,594
3,601
82
36,923
-
181,288
135,901
115,599
308,847
371,716
5,189
244,130
3,844
138,128
468
31,574
4,514
21,983
203,547
1,766,728
294
Mcap
Sing & foreign $ stocks. Value calculated using Monday's exchange rates.
UETF SSE50China
Nikko AM STI ETF
Lyxor CRBNonEny US$
DBXT MSMSIA US$
US1329
+19
22
1329/1323
1598/1310
1329/1330
-
-
VOL CLOSE($) CHANGE
UniFiber System
0.010
+0.003
+42.86
440.3
0.320
+0.090
+39.13
Amplefield
14,851.0
0.008
+0.002
+33.33
Hoe Leong
7,381.2
0.063
+0.006
+10.53
Novo
Jan 30
(S$)
1 mth
2 mths
3 mths
6 mths
9 mths
12 mths
PNE Micron
Epicentre
0.60685
0.67088
0.73482
0.86601
SWAP - Offer rates
Chinese Global
(S$)
1 mth ....................................................0.65589
3 mths ..................................................0.68698
6 mths ..................................................0.73158
Jan 30
CLOSE
+/-
13,833.2
Techcomp
SIBOR
OTHER SINGAPORE INDICES
UNUSUAL ACTIVITY
22.5
0.235
-0.015
-6.00
30,214.6
0.053
+0.004
+8.16
231.0
0.150
+0.016
+11.94
60.0
0.005
-0.001
-16.67
Pacific Andes
181,982
0.061
+0.006
+10.91
Loyz Energy
4,902.0
0.090
+0.007
+8.43
BT OB/OS
BT CADI
BT 10-day MA
FTSE ST Mid Cap
FTSE ST Small Cap
FTSE ST All Share
FTSE ST China Top
FTSE ST China
FTSE ST Catalist
FTSE ST Maritime
SIMSCI
SIMSCI Futures
TR/SGX SFI
Shows the stocks with the highest combination of price change and of
daily activity relative to the three-month average volume
VALUE
+/-
401.00 +160.00
-80837.00
-8.00
-80965.00 +40.00
783.39
-2.89
504.34
-0.54
817.18
-5.74
196.24
-1.18
233.62
-3.13
742.71
-4.53
249.91
-1.38
380.23
-2.50
380.20
-2.80
121.50
+0.42
Source for FTSE ST Indices: Interactive Data
Source: Thomson Reuters
BT SHARE INFORMATION SERVICE
For week beginning Jan 26
SUBSTANTIAL SHAREHOLDER/DIRECTOR TRANSACTIONS
Stock
Rex Intl
AIMS AMP Capital Ind
Far East Grp
Golden Agri-Resources
Huan Hsin
LionGold Corp
Rex Intl
Swissco
Swissco
Religare Health Tr
Tee Intl
A-Sonic Aerospace
KS Energy
KS Energy
KS Energy
KS Energy
Rex Intl
Tee Intl
Wilton Resources
A-Sonic Aerospace
Hong Fok
Hwa Hong
IEV Hldgs
Intl Healthway
Intl Healthway
Tee Intl
A-Sonic Aerospace
A-Sonic Aerospace
Trans
Date
26-Jan-15
23-Jan-15
23-Jan-15
23-Jan-15
23-Jan-15
23-Jan-15
23-Jan-15
23-Jan-15
23-Jan-15
22-Jan-15
22-Jan-15
21-Jan-15
21-Jan-15
21-Jan-15
21-Jan-15
21-Jan-15
21-Jan-15
21-Jan-15
21-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
20-Jan-15
19-Jan-15
19-Jan-15
Substantial
Shareholder/
Director
FIL Ltd
JF Asset Mgmt Ltd
Leng Chee Keong
Silchester Intl Investors
Unionmet (S) Ltd
Moi Hsien Hur
FIL Ltd
Tang Kheng Guan Kelvin
Tan Fuh Gih
FIL Ltd
Phua Chian Kin
Janet LC Tan
Kris Taenar Wiluan
Richard James Wiluan
Pacific One Energy Ltd
Rija Holdings Ltd
FIL Ltd
Phua Chian Kin
Chong Thim Pheng
Janet LC Tan
Cheong Sim Eng
Ong Kay Eng
Christopher Nghia Do
Jong Hee Sen
Jong Hee Sen
Phua Chian Kin
Irene Tay Gek Lim
Janet LC Tan
Buy
Sell
Conv
*Buy
Sell
Buy
*Buy
Buy
Sell
*Sell
Buy
Buy
*Sell
Buy
*Buy
*Buy
*Buy
Buy
*Buy
*Buy
Buy
Buy
*Buy
Buy
*Buy
Buy
Sell
Buy
Buy
Buy
*Buy
No of
Shares
'000
721
542
150
7391
1931
59459
455
50
100
883
100
53
118
118
118
118
650
250
866
185
55
204
34
8000
8000
200
47
20
Price
Per
Shr $
0.39
1.47
0.17
0.42
0.03
0.02
0.38
0.49
0.49
1.01
0.27
0.08
0.42
0.42
0.42
0.42
0.38
0.27
0.07
0.08
0.84
0.32
0.12
0.28
0.28
0.27
0.08
0.08
———
Before
('000)
100957
31623
6324
1023467
39919
105000
101412
0
96420
63768
267699
6081
299610
299610
299610
299610
100810
267449
43860
5896
93322
13939
23475
34303
26303
267249
4354
5876
SHAREHOLDING
%
7.99
5.06
5.83
7.97
9.98
8.59
8.02
0.00
14.36
8.02
53.41
0.85
58.41
58.41
58.41
58.41
7.97
53.36
2.01
0.82
11.79
2.13
12.41
2.10
1.61
53.32
0.61
0.82
————
After
('000)
101678
31081
6474
1030858
41850
45541
100957
50
96520
62885
267799
6134
299728
299728
299728
299728
101460
267699
44726
6081
93377
14143
23509
26303
34303
267449
4401
5896
%
8.04
4.97
5.97
8.03
10.46
3.73
7.99
0.01
14.38
7.91
53.43
0.86
58.43
58.43
58.43
58.43
8.03
53.41
2.05
0.85
11.80
2.16
12.43
1.61
2.10
53.36
0.62
0.83
Stock
CH Offshore
CH Offshore
CH Offshore
CH Offshore
CH Offshore
CH Offshore
CH Offshore
Fu Yu Corp
Fu Yu Corp
G.K. Goh Hldgs
G.K. Goh Hldgs
G.K. Goh Hldgs
GSH Corp
GSH Corp
IEV Hldgs
Intl Healthway
Intl Healthway
Noble Grp
Noble Grp
Noble Grp
Noble Grp
Noble Grp
Noble Grp
Noble Grp
OLS Enterprise
Renewable Energy Asia
Trans
Date
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
19-Jan-15
Substantial
Shareholder/
Director
Chuan Hup Hldgs Ltd
3P Pte Ltd
Qing Shan Pte Ltd
TMF (Cayman) Ltd
Beamsbury Ltd
Peh Kwee Chim
Peh Siong Woon Terence
Ng Hock Ching
Foo Say Tun
GKG Investment Hldgs P L
Goh Geok Khim
Goh Yew Lin
Lippo Capital Ltd
Lanius Ltd
Christopher Nghia Do
Jong Hee Sen
Jong Hee Sen
Orbis Hldgs Ltd
Orbis World Ltd
Orbis Hldg Trust
Orbis Asset Mgmt Ltd
Orbis Trust
Orbis Investment Mgmt
Orbis Invest Mgmt (BVI)
Koo Ah Seang
Zheng Lei
* Deemed Interest; IP: Investment Purposes ; SA: Share Allotment;
OE: Option Exercise ; PL: Placement Shares
Buy
Sell
Conv
Buy
*Buy
*Buy
*Buy
*Buy
*Buy
*Buy
*Sell
Sell
Buy
*Buy
*Buy
*Buy
*Buy
Buy
Sell
Buy
*Buy
*Buy
*Buy
*Buy
*Buy
*Buy
*Buy
Buy
Sell
No of
Shares
'000
6388
6388
6388
6388
6388
6388
6388
5504
93
45
45
45
6300
6300
30
10000
10000
41530
41530
41530
41530
41530
41530
41530
15000
250
Price
Per
Shr $
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.10
0.11
0.91
0.91
0.91
0.08
0.08
0.12
0.28
0.28
1.19
1.19
1.19
1.19
1.19
1.19
1.19
0.01
0.03
———
Before
('000)
SHAREHOLDING
167553
167553
167553
167553
167553
167553
167553
109427
1000
185127
185127
185127
488807
488807
23445
34303
24303
432176
432176
432176
432176
432176
432176
432176
0
250
%
23.76
23.76
23.76
23.76
23.76
23.76
23.76
14.53
0.13
58.57
58.57
58.57
4.94
4.94
12.39
2.10
1.48
6.42
6.42
6.42
6.42
6.42
6.42
6.42
0.00
0.03
————
After
('000)
173941
173941
173941
173941
173941
173941
173941
103923
907
185172
185172
185172
495107
495107
23475
24303
34303
473706
473706
473706
473706
473706
473706
473706
15000
0
%
24.67
24.67
24.67
24.67
24.67
24.67
24.67
13.80
0.12
58.59
58.59
58.59
5.01
5.01
12.41
1.48
2.10
7.03
7.03
7.03
7.03
7.03
7.03
7.03
1.35
0.00
ST: Share Transfer; B/R: Bonus/Rights Issues ;
Compiled by BT
companies & markets 13
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
COMMODITY FUTURES
Jan-29
Price Net change
% change Last Trade
Agricultural
Jan-29
CBOT Soybeans (US cents/bu)
CBOT Soybean Oil (US cents/lb)
CBOT Wheat (US cents/bu)
968.25
-2.00
-0.21%
13/03/2015
29.54
-0.80
-2.64%
13/03/2015
507.75
2.50
0.49%
13/03/2014
Straits Times Index
STOCK MARKETS
3,400
Hang Seng Index
3,300
3,200
Jan-29
LIFFE Cocoa (£/tonne)
1900.00
-2.00
-0.11%
16/03/2015
LIFFE Coffee (US$/tonne)
1921.00
-42.00
-2.14%
30/01/2015
384.60
-7.30
-1.86%
13/02/2015
LIFFE White Sugar (US$/tonne)
Metals
3,391.20
(-27.85)
3,100
24,507.05
(-88.80)
24,500
PE: 10.40
23,500
PE: 13.88
3,000
22,500
Jan-29
COMEX - Gold (100 oz)
1254.60
-31.30
-2.43%
25/02/2015
16.78
-1.31
-7.26%
25/02/2015
Aluminium, 99.7% purity
1819.00
-31.00
-1.68%
-
Copper, Grade A
5395.00
-89.00
-1.62%
-
COMEX - Silver (US$/troy oz)
LME 3-Mths Contracts (US$/MT)
Jan-29
Lead
1860.00
-28.50
-1.51%
-
Nickel
14900.00
-150.00
-1.00%
-
Tin
19175.00
-70.00
-0.36%
-
Zinc. Sp High Grade
2090.00
-28.00
-1.32%
-
Energy and Oil
Jan-29
Mar
May
July
Sept
Nov
YTD change: +0.77%
52-week high: 3,419.15 on Jan 28, 2015
52-week low: 2,960.09 on Feb 5, 2014
Jan
Source: Bloomberg
Last
Sale
Vol Conv
+or- ('000) Ratio
1
Exer
Price
Prem
Expiry
Disc Gear- Mths
%
ing
Left
Rowsley Ltd W161003
4.1
0.2 22585
18
-
-
21
OCBC Bk MB eCW150413
6.2
-0.1 5179
0.2 1060
-
-
3
DBS MB eCW150602
8.7
-0.2 4811
0.1
0
-
-
5
DBS MB ePW150402
8.8
0.2 3821
0.2 1910
-
-
3
KepCorp MB eCW150602
9.2
1.4 3619
0.2
900
-
-
5
47.95
-0.79
-1.62%
-
11.3
-1.2 3606
0.0 *****
-
-
4
Crude Oil - WTI (Near Mth)
44.56
0.25
0.56%
-
UOB MB eCW150415
6.9
-0.2 3149
0.1 2480
-
-
3
Crude Oil - Dubai (1-Mth F)
46.57
0.41
0.89%
-
SHS Holdings W191216
7.7 unch 2915
9 3.31
59
NIKKEI225 17000 MB ePW150313
6.4
0.1 2450
0.0 20090
-
-
2
4
0.1 2435
0.2
215
-
-
8
FTSEChinaA50 12500 MBeCW150528
1
20
Crude Oil - Tapis Blend
49.78
0.38
0.77%
-
Crude Oil-Indonesia Minas FOB
45.28
0.38
0.85%
-
Top Global Ltd W150929
0.1
-0.1 2427
-
-
-
-
-
Naphtha Singapore Spot FOB
46.94
-0.45
-0.95%
-
Capitaland MB eCW150701
5.4
-0.7 2110
0.2
360
-
-
6
Jet Kerosene-FOB Singapore
63.53
-0.23
-0.36%
-
KepCorp MB eCW150701
16.6
2.1 1636
0.2
850
-
-
6
Opec Oil Basket Price
43.88
-0.20
-0.45%
-
50
Naphtha (CFR Japan)
438.00
-4.00
-0.90%
Gas Oil EEC (CIF Cargoes NWE)
468.50
-5.00
-1.06%
3
-0.8 1500
1
20
-
-
GloballogisticpropMBeCW151001
3.9
-0.4 1270
0.2
275
-
-
9
-
KepCorp MB eCW160601
6.5
0.6 1250
0.1 1100
-
-
17
-
OLS Enterprise W170825
0.2 unch 1005
71 3.50
31
Source:Thomson Reuters
palm oil
Jan 30
KLCE PALM FUTURES (RM/MT)
Delivery
Month
Opening
Range
Feb 15 2117.0
Mar 15 2121.0
Apr 15 2118.0
May 15 2107.0
Source: Bursa Malaysia
Sett
Price
Av
Price
High
Low
Vol
Done
Open
Position
2154.0
2150.0
2146.0
2132.0
-
2144.0
2155.0
2148.0
2135.0
2117.0
2115.0
2106.0
2091.0
249
2639
31536
11349
1874
21156
71908
33335
GOVERNMENT SECURITIES
Jan 30
GOVERNMENT BONDS
Issue
code
Coupon
rate (%)
Maturity
Close
Bid
Day's
High
Low
2-Year
N710100Z
2.375
01-Apr-17
103.3
103.37
103.35
5-Year
N514100H
1.625
01-Oct-19
101.14
101.30
101.20
10-Year
NY09100H
3.000
01-Sep-24
109.78
110.15
109.72
15-Year
NY14100E
2.875
01-Jul-29
108.01
108.35
108.08
20-Year
NZ13100V
3.375
01-Sep-33
116.6
117.12
116.90
30-Year
NA12100N
2.750
01-Apr-42
107.39
108.00
107.25
Note: Based on latest issue
Source: Monetary Authority of Singapore
interbank currency rates
Against S$
Bid
Currencies
Offer
Jan 30
Against US$
Bid
Offer
S$/US$ to one unit of foreign currency:
Australian dollar
Canadian dollar
Euro
NZ dollar
Sterling pound
US dollar
1.0495
1.0678
1.5303
0.9824
2.0349
1.3502
1.0508
1.0687
1.5312
0.9836
2.0362
1.3507
0.7773
0.7912
1.1334
0.7276
1.5071
-
0.7780
0.7908
1.1336
0.7282
1.5075
-
21.6205
20.5699
17.42
2.19
0.0107
1.1458
0.1235
37.28
4.2882
17.2837
3.0642
35.9276
16.3335
145.6280
4.1306
16.0044
15.2267
12.8989
1.6181
0.0079
0.8482
0.0912
27.5748
3.1691
12.7895
2.2681
26.5851
12.0882
107.7586
3.0572
16.0069
15.2290
12.9006
1.6186
0.0079
0.8483
0.0914
27.5976
3.1748
12.7961
2.2686
26.5993
12.0926
107.8167
3.0581
S$/US$ to 100 units of foreign currency:
Chinese renminbi
Danish krone
Hong Kong dollar
Indian Rupee
Indonesia rupiah
Japanese yen
Korean won
Malaysian ringgit
New Taiwan dollar
Norwegian krone
Philippine peso
Saudi riyal
Swedish krona
Swiss franc
Thai Baht
21.6091
20.5591
17.42
2.18
0.0107
1.1453
0.1232
37.23
4.2789
17.2684
3.0624
35.8953
16.3215
145.4957
4.1278
Singapore Post MB eCW150907
Source: OCBC
Tritech Group Limited W190329
1
1
KepCorp MB ePW150603
11
-2
975
0.2
820
-
-
5
FTSEChinaA50 15000 MBeCW150730
8.6
-1.1
920
0.0 *****
-
-
6
STI 3200 MB ePW150430
3.1
-0.1
905
0.0 *****
-
-
3
morgan stanley capital int’l indices
Jan 29
World Preliminary
‡EAFE Preliminary
Europe Preliminary
Pacific
Far East
EM Far East
Australia
Austria Preliminary
Belgium Preliminary
Canada Preliminary
Denmark Preliminary
* Finland Preliminary
France Preliminary
Germany Preliminary
Greece Preliminary
Hong Kong
India
Indonesia
Ireland Preliminary
Israel Preliminary
Italy Preliminary
Japan
Korea
* Malaysia
Netherlands Preliminary
* New Zealand
Norway Preliminary
Pakistan
* Philippines
Portugal Preliminary
Singapore
Singapore Free
Spain Preliminary
Sweden Preliminary
Switzerland Preliminary
* Taiwan
* Thailand
UK Preliminary
USA Preliminary
In local curr
In S$
In US$
% dy
% yr
% dy
% yr
% dy
% yr
Index Change
Change Change Change Change Change
1270.8
1019.9
1442.8
857.6
1001.1
623.0
1137.4
379.8
1188.4
1855.5
6895.6
653.9
1636.0
946.5
120.8
14402.
1090.1
6249.5
194.4
309.7
727.6
868.9
548.4
623.3
1325.6
119.6
2536.9
569.4
1297.0
82.3
1779.7
382.7
964.8
11990.
1094.8
349.0
540.1
2000.6
1911.1
-0.1
-0.1
0.3
-0.7
-1.0
-1.0
0.4
-0.6
0.5
-0.5
-0.1
-2.3
0.4
0.2
5.4
-0.5
0.1
-0.3
0.6
-2.4
0.5
-1.2
-0.7
-0.8
0.7
-1.5
-0.1
-0.1
-0.5
0.7
0.1
0.1
0.6
0.6
1.5
-1.2
-0.3
-0.3
-0.2
-0.4
3.3
4.4
1.4
0.9
2.3
2.9
-1.6
12.3
-0.8
9.9
8.5
8.6
9.4
-23.5
5.6
7.3
0.8
4.0
-0.4
7.8
0.3
2.2
1.1
7.7
5.4
4.4
6.9
4.3
9.0
0.5
0.5
1.2
7.7
-6.3
1.7
3.4
3.6
-2.7
May
July
Sept
Nov
Jan
Source: Bloomberg
BONDS, WARRANTS, PREFERENCE SHARES
Jan 30
Most active
Company
21,500
Mar
Crude Oil - Brent/blend (1-Mth F)
Period
25,500
-0.4
0.4
-0.7
3.0
-0.2
2.9
-1.5
3.1
-1.3
4.1
-1.4
4.4
-1.9 -0.2
-0.7 -5.9
0.4 7.3
-1.6 -6.7
-0.2
5.0
-2.4
3.7
0.3 3.8
0.1 4.5
5.3 -26.9
-0.6
7.7
-0.7 11.7
-1.0
1.3
0.5 -0.6
-2.2
0.7
0.4 3.0
-1.5
3.8
-1.6
4.8
-1.2 -0.7
0.6 2.9
-3.8
0.3
-0.5
2.3
-0.4
8.4
-0.7
7.9
0.7 4.2
0.1 0.5
0.1 0.5
0.5 -3.3
0.3 4.2
-0.1
3.3
-1.7
4.4
-0.8
6.1
-1.0
2.1
-0.2 -0.8
-0.4 -1.6
-0.6
1.0
-0.2
0.9
-1.4
1.1
-1.3
2.1
-1.4
2.3
-1.8 -2.1
-0.6 -7.8
0.5
5.2
-1.5 -8.6
-0.1
3.0
-2.3
1.7
0.4
1.8
0.2
2.5
5.3 -28.3
-0.5
5.6
-0.6
9.5
-0.9 -0.7
0.6 -2.5
-2.1 -1.3
0.4
1.0
-1.5
1.8
-1.5
2.7
-1.1 -2.6
0.7
0.9
-3.8 -1.7
-0.5
0.3
-0.3
6.3
-0.6
5.8
0.7
2.1
0.1 -1.4
0.1 -1.4
0.6 -5.1
0.4
2.1
0.0
1.3
-1.7
2.4
-0.8
4.1
-1.0
0.1
-0.2 -2.7
Copyright© 1991 Morgan Stanley Capital International
YTD change: +3.82%
52-week high: 25,317.95 on Sept 3, 2014
52-week low: 21,182.16 on March 20, 2014
Shanghai Stock Exchange Composite
3,400
3,210.36
(-51.94)
PE: 15.62
3,000
2,600
2,200
Mar
May
July
Sept
Nov
Jan
Source: Bloomberg
YTD change: -0.75%
52-week high: 3,383.18 on Jan 26, 2015
52-week low: 1,993.48 on March 20, 2014
Nikkei 225
18,000
1,7674.39
(+68.17)
17,000
PE: 20.67
16,000
15,000
14,000
Mar
May
July
Sept
Nov
Jan
Source: Bloomberg
YTD change: +1.28%
52-week high: 17,935.64 on Dec 8, 2014
52-week low: 13,910.16 on April 14, 2014
Dow Jones Industrial Average
18,000
17,500
17,000
16,500
17,416.85
(+225.48)
16,000
PE: 15.61
15,500
Mar
May
July
Sept
Nov
Jan
Source: Bloomberg
YTD change: -2.28%
52-week high: 18,053.71 on Dec 26, 2014
52-week low: 15,372.80 on Feb 3, 2014
(Chart shows Thursday’s index closing)
14 companies & markets
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Ascott makes first foray into Turkey
It clinches deal to manage the 159-unit Somerset Maslak Istanbul, slated to open in 2016
By Jacquelyn Cheok
[email protected]
@JacCheokBT
Singapore
THE Ascott – CapitaLand’s wholly owned serviced residence business unit – on Friday said it has
secured a contract to manage its
first serviced residence in Turkey, marking its first foray into
the country.
This latest entry will expand
its footprint – as the world’s largest global serviced residence owner-operator – to 90 cities across
25 countries, The Ascott said.
Slated to open in 2016, the
159-unit Somerset Maslak Istan-
bul will be part of an integrated
development – Maslak 1453 –
that comprises a 1,453-metre
long shopping promenade and
24 towers of commercial, residential, dining and recreational facilities.
Maslak is one of Istanbul’s
main business and leisure districts comprising major banking
and financial institutions, as well
as key educational institutions
such as the Istanbul Technical
University.
The Ascott has been awarded
the management contract for
Somerset Maslak Istanbul by real
estate company Maslak Konakla-
ma, an affiliate of the Saudibased Abduljawad Group of Companies.
“Turkey is an attractive market for foreign investors and we
see significant growth opportunities for international branded serviced residences. The country is
amongst the world’s top 20 largest economies ... has a strategic
location at the crossroads of Europe, Middle East and Asia, a
large domestic market and stable
policy environment. As the financial hub of the country, Istanbul
is a natural choice for multinational corporations setting up
headquarters in Turkey,” said
Lee Chee Koon, Ascott’s chief executive officer.
He added: “Tourism is also a
significant contributor to the
country’s GDP. Visitor numbers
have been seeing double-digit
growth in the past three years
and tourism revenue has been increasing steadily.”
In 2014, Ascott added eight
new cities to its global portfolio:
Greater Sydney in Australia; Taiyuan, Yinchuan and Changsha in
China; Bali in Indonesia; Vientiane in Laos; Yangon in Myanmar; and Busan in South Korea,
said Mr Lee.
“We expect strong demand
Feels like dot-com days again: Fidelity
By Cai Haoxiang
[email protected]
@HaoxiangCaiBT
Singapore
AS capital continues to gain an
edge over labour and profit margins stay high, the bull market in
stocks, notably the US, shows no
sign of stopping, said Dominic
Rossi, Fidelity’s global chief investment officer for equities.
The danger is that stocks will
rise sharply, he said at a press
briefing on Friday. “It’s another
dot-com era. This feels like the
1990s. That’s my biggest worry ...
that equity markets will melt up,
not melt down.”
Mr Rossi remains bullish on
the US stock market, saying it
has several more years to run.
Despite profit margins being
at historic highs, they can go
much higher.
“Organised labour doesn't
have the power that it had in the
past. Profit margins are structurally higher, not cyclically higher
... the distribution of wealth between capital and income is favouring capital,” he said.
The US dollar will stay strong
because the economy is improving on both its trade and fiscal positions. The trade-weighted US
dollar is still low by historical
standards, he said.
While the strong US dollar will
keep commodity prices low, he
said markets will eventually recognise this as a positive, especially as consumer confidence picks
up.
Earnings multiples will get
pushed up further as domestic
savings pile into stocks, like what
happened in the late 1990s, Mr
Rossi said.
The oil price crash and the
weak euro will benefit European
stocks, he added.
Meanwhile, bonds might have
another year of positive returns
despite yields at record lows, said
Andrew Wells, Fidelity’s global
chief investment officer for fixed
income, real estate and solutions.
The 2014 trends of low inflation and accommodative central
banks have not changed, he noted. “Don’t expect the US to raise
rates until end-2015 or early 2016
unless wage inflation picks up,”
he said.
In Europe, government bond
yields continue falling as the European Central Bank unleashed a
bond-buying programme earlier
this month to support its economy.
Yet Fidelity continues to get
mandates from Asian and European investors to invest in European investment-grade corporate bonds, Mr Wells said.
This is because they expect
government bonds to trend towards zero yields, he said. Falling
government bond yields mean
wider spreads with corporate
bonds, resulting in more leeway
for capital gains.
In fact, investors are even buying sovereign bonds that yield
negative rates – essentially paying to lend money to governments.
Swiss government bond
yields turned negative after the
central bank removed the Swiss
franc’s ceiling against the Euro.
Investors still bought them be-
cause they can get gains on the
Swiss currency that far exceed
the negative yields, Mr Wells explained.
“As soon as you get your mind
over the fact that you can go
through (zero yields) substantially, there’s clearly a lot of value
still left,” Mr Wells said.
“As a fixed income investor
you always get taught when
you’re very young, you don’t
fight central banks, they tend to
be more powerful than the individual investor. They desire to
get to zero, they’ll do everything
in their power,” he said.
Mr Wells sees opportunities in
inflation-linked bonds and
emerging market high-yield
bonds.
Ultimately, markets are in a
strange situation because too
much capital is chasing too little
income growth, said Mr Rossi. As
a result, returns on capital will decline.
“This is a curious world where
bond investors are investing for
capital returns and equity investors are investing for income.”
letter to the editor |
Shareholder nod not needed in Keppel Corp bid: SGX
WE refer to Andrea Soh’s article,
“Better if Keppel has shareholders’ nod for KepLand bid: observers” (BT, Jan 27).
The article contained an inaccuracy which the Singapore Exchange (SGX) would like to correct.
This is with respect to the
mention that “SGX has, however,
granted Keppel Corp exemption
from the requirement to obtain
shareholders’ consent”.
On the contrary, SGX did not
grant Keppel Corp an exemption
from any rule.
What SGX advised – and
which Keppel Corp duly said on
Jan 23 in its announcement on
“Voluntary Unconditional Cash
Offer for Keppel Land Ltd” – was
that the requirement for the offer
to be approved by shareholders
of Keppel Corp under Rule
1014(2) of the Listing Manual
was not applicable.
Listing Rule 1014(2) requires
an issuer to convene an extraordinary general meeting to obtain
shareholders’ approval for a major acquisition.
Shareholder approval was not
required in this instance as the
acquisition of Keppel Land is an
expansion of Keppel Corp’s existing core business. This is provid-
ed for in SGX’s Practice Note
10.1.
Keppel Corp’s offer does not
change the risk profile nor the
main business of the Keppel
Corp Group. This position was affirmed by Keppel Corp’s board in
the abovementioned announcement.
June Sim
Head, Listing Compliance
Singapore Exchange
from expatriates and business
travellers for our first serviced residence in Turkey and will continue to bring Ascott’s signature hospitality to more places around
the world.”
On Monday, Ascott announced that it has secured contracts to manage three more
properties in Beijing and Hong
Kong. The company revealed in
early January that its target is to
open more than 20 properties in
China, India, Indonesia, Korea,
Malaysia, Vietnam, Oman, Saudi
Arabia and the Philippines this
year.
On Friday, CapitaLand shares
closed six cents lower at S$3.48.
Ezra bags
deals worth
more than
US$65m
By Malminderjit Singh
[email protected]
@MalminderjitBT
Singapore
OFFSHORE services provider
Ezra Holdings announced on Friday that its subsea services division, EMAS AMC, has secured
multiple contracts from various
energy companies valued at
more than US$65 million (including options).
The awards, which Ezra said
came from independent oil majors and contractors globally, are
off the back of a strategic subsea
construction contract from
Apache Energy, taking the total
worth of work won across the
group since the beginning of
2015 to more than US$355 million.
The scope of work for the contract wins announced on Friday
includes project management,
engineering, and transportation
and installation works for a floating production storage offloading (FPSO) vessel in Africa, as
well as various engineering and
offshore construction support
contracts. Work on the various
project activities has commenced with offshore execution
taking place in 2015 and 2016.
“Despite the current headwinds faced by the oil and gas industry, our tendering activities remain healthy,” said Lionel Lee,
Ezra’s group CEO and managing
director. “We sit in the value
chain where it is more resilient.”
Ezra shares closed half a cent
lower at S$0.53 on Friday.
real estate 15
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Park Ave to get first new tower in decades
Norman Foster-designed skyscraper more than double the height will replace existing one at prime New York site
New York
SOME time next week, a metal frame will
go up around the blocky brick tower at
Manhattan’s 425 Park Ave, designed to
protect pedestrians from falling objects.
It’s a prelude to the building’s demise.
In about three years, if all goes according to plan, the site will have a
new Norman Foster-designed skyscraper
more than twice the height of the existing
one. The replacement would be the first
new office building in almost four decades
on what the developer, David Levinson,
called New York’s “grand boulevard of
commerce”.
The 272-metre tower will rise amid
Manhattan’s biggest rush of skyscraper
construction since the 1980s, with millions of square feet of offices in such
projects as Hudson Yards on the far west
side and the World Trade Center downtown. Mr Levinson is building “on spec”,
meaning without any tenants signed up.
It’s a gamble on the staying power of
today’s accelerating demand for space,
and a practice that’s had a chequered history in the city, said Lawrence Longua, a
retired real estate professor at New York
University.
“Obviously, when you begin one of
these large New York office buildings, the
market is there when you begin it,” said
Mr Longua, now an adjunct at Baruch
College’s Newman Real Estate Center.
“But the market may not be there when
you complete it.”
The new Park Avenue skyscraper, between East 55th and 56th streets, will be
narrower than the existing 1950s-era building, and have about the same 670,000
square feet of floor space. The developers
are touting it as a 21st century answer to
the neighbouring Seagram Building,
which was hailed as an architectural masterwork upon its 1958 completion.
Plans call for the existing 425 Park, a
commonplace stack of white-brick boxes,
to be replaced by a 47-storey glass tower
with three distinct sections. Slanted glass
will mark the transitions between the base
and the middle, and middle and top sections. The bottom floors will extend over
the 45-foot-high lobby, creating offices
that will seem to float over Park Avenue.
“Our view in terms of mitigating the
risk of building a building on spec is to
build the best building we can,” said Mr
Levinson, chief executive officer of
developer L&L Holding Co. “If the market
is weak, if you have the best building,
you’ll still get a premium.”
Skyscrapers at 1633 Broadway, near
Times Square, and 1166 Avenue of the
Americas, north of Bryant Park, failed as
substantially spec projects in the 1970s,
when the office market suffered as the city
flirted with default, according to Mr
Longua.
More recently, 11 Times Square, in development when the credit crisis hit in
2008, didn’t get its first tenant until the
building was one month from completion. The following year, developer Harry
Macklowe lost control of 510 Madison
PRICIER
The developer will seek over US$200 psf for the uppermost floors of the new skyscraper
which will rise on the site of the current 425 Park Ave building (centre). PHOTO: BLOOMBERG
Ave, a speculative building designed with
boutique financial firms in mind.
In a sign of the market’s resurgence, 7
Bryant Park, a 471,000 sq ft tower rising on
Avenue of the Americas at 40th Street, is
under contract to be sold for US$600 million to Bank of China, which intends to occupy the property. Houston-based Hines
and a unit of JPMorgan Chase & Co are
the developers and sellers.
Asking rents in Midtown top-quality
skyscrapers climbed to US$99.58 per
square foot (psf) at the end of last year, the
highest since 2008, according to a report
by brokerage Jones Lang LaSalle Inc. The
vacancy rate for such buildings was 8 per
cent, down from the peak of 12.1 per cent
in late 2012.
“Tenants may want to prepare for similar growth in 2015, particularly on preferred floors in the best buildings,” Cynthia Wasserberger, a managing director at
Jones Lang, said in the report.
Manhattanwide, 97 leases were signed
for more than US$100 psf last year, exceed-
ing a previous high of US$91 psf in 2008,
the brokerage said. The Seagram Building
led the market with 14 such deals.
Mr Levinson said he’s looking to fill 425
Park Ave with hedge funds, money-management firms and family offices. He
plans to seek more than US$200 psf for
the uppermost floors, or 10-15 per cent
more than the highest current asking
rents in the Plaza District. Towers in the
submarket – Midtown’s priciest and
named for its proximity to the Plaza Hotel
– are prized for their views of Central Park.
“This is a very rare occurrence,” Mr Levinson said. “You have a mid-century office
building being torn down in Midtown.
There’s not going to be another new building on Park Avenue in my lifetime.”
The lack of construction is partly tied
to an ordinance governing the area since
1961 that requires developers to build a
smaller property if they want to completely replace the current one. L&L is getting
around that by making it a redevelopment
rather than a new building from scratch. It
intends to strip the existing tower down to
its steel skeleton and use about 25 per
cent of the frame for the new skyscraper.
The project was scaled back after the
City Council in 2013 scrapped an effort led
by then-mayor Michael Bloomberg to allow building of taller towers in east Midtown, where the average office property is
70 years old. The former mayor is the
founder and majority owner of Bloomberg
News parent Bloomberg LP.
Mayor Bill de Blasio is expected to consider new east Midtown zoning recommendations, which probably will emerge
in the next several months from the office
of Manhattan Borough president Gail
Brewer, said Rachaele Raynof, spokeswoman for the Department of City Planning.
Mr Levinson said he shaved 90,000 sq
ft from the design for 425 Park to comply
with current rules.
Also dropped was an early design calling for open space in front of the tower to
display public art, similar to the Seagram
Building, because required city easements
weren’t available, according to Mr Foster.
The architect, who designed London’s
“Gherkin” skyscraper and Hearst Tower
on Manhattan’s Eighth Avenue, won the
commission over such fellow Pritzker
Prize winners as Zaha Hadid and Rem
Koolhaas. In a telephone interview, he
called Park Avenue “a kind of sacred area”
that must be approached with respect.
“It’s mobbed by extraordinary monuments of the modern movement”, such as
the Seagram Building, designed
by Ludwig Mies van der Rohe,
and Gordon Bunshaft’s Lever House, he
said. Even the avenue’s less showy buildings have an understated elegance, according to Mr Foster.
Supporters of the initial east Midtown
rezoning plan clashed with people who
wanted certain older buildings near
Grand Central and along Park Avenue
spared. No one has stepped up to save the
tower now standing at 425 Park, said Simeon Bankoff, director of New
York’s Historic Districts Council, a preservationist group.
While it was designed by a noted architect, Ely Jacques Kahn – whose credits include the Squibb Building near Central
Park and the arch-roofed Municipal Asphalt Plant on the Upper East Side – it’s
not one of his important works, Mr
Bankoff said.
“I know some Ely Jacques Kahn partisans, and they’ve never mentioned this
building to me,” said Mr Bankoff. “The
council had identified a number of buildings of concern in the east Midtown area,
and 425 Park Ave was never one of them,
even on the most advanced lists.”
The site is catty-corner from the condominium tower nearing completion at 432
Park Ave, where a penthouse is under contract for US$95 million. That building has
become a symbol of the rising dominance
of the global elite, about the audience Mr
Levinson is trying to lure to his project, Mr
Bankoff said.
“So you can just zip-line from your condo to your office,” Mr Bankoff joked. “Maybe have a gondola.” Bloomberg
16 real estate
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Househunt PROPERTY TRANSACTIONS FOR SELECTED DISTRICTS WITH CONTRACT DATES BETWEEN DEC 17 AND DEC 23, 2014
PROJECT NAME/
STREET NAME
PROP
TYPE
CONTRACT
DATE
TENURE BUILT-IN/LAND PRICE
AREA*(SQ FT) (S$'000)
PSF
(S$)
District 11
NON-LANDED
Montebleu
Suites @ Surrey
LANDED
Chancery Lane
Apt
Apt
17/12/2014
23/12/2014
FH
FH
1475
893
2065
1230
1400
1377
X-Det
23/12/2014
FH
23933
25389
1061
Apt
Apt
Apt
Apt
Apt
Apt
Apt
23/12/2014
20/12/2014
23/12/2014
22/12/2014
23/12/2014
17/12/2014
19/12/2014
FH
FH
FH
99
99
999
FH
1281
1227
883
936
1195
947
1292
1250
1170
950
1248
1460
1140
1300
976
953
1076
1333
1222
1204
1007
X-Ter
X-Det
19/12/2014
19/12/2014
FH
FH
1652
9880
2200
8500
1331
860
District 12
NON-LANDED
Ava Twr
Ava Twr
Balestier Point
Eight Riversuites
Eight Riversuites
Riverbay
Scenic Ht
District 13
LANDED
Jln Riang
Wolskel Rd
District 14
NON-LANDED
Camellia Lodge
Cosmo
Esta Ruby
Guillemard Suites
Le Reve
Starville
Tre Residences
Tre Residences
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
19/12/2014
19/12/2014
22/12/2014
17/12/2014
23/12/2014
22/12/2014
22/12/2014
22/12/2014
FH
FH
FH
FH
FH
FH
99
99
1206
398
1130
570
861
581
1711
420
975
610
1530
828
1050
680
2062
707
809
1532
1354
1451
1219
1170
1205
1684
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
23/12/2014
23/12/2014
17/12/2014
19/12/2014
17/12/2014
17/12/2014
19/12/2014
17/12/2014
FH
FH
99
99
99
99
FH
FH
1313
1690
1518
786
1507
2540
1163
452
1980
2150
2000
1083
2500
4400
1370
600
1508
1272
1318
1378
1659
1732
1178
1327
X-Det
18/12/2014
FH
4918
7525
1530
District 15
NON-LANDED
8m Residences
Amber Point
Riveredge
Sanctuary Green
Silversea
Silversea
Spring @ Katong
Suites @ Katong
LANDED
Poole Rd
District 16
NON-LANDED
Bayshore Park
Bedok Residences
Casa Merah
Optima @ Tanah Merah
The Glades
LANDED
Guan Soon Ave
Peakview Estate
Apt
Apt
Apt
Apt
Apt
23/12/2014
18/12/2014
17/12/2014
23/12/2014
17/12/2014
99
99
99
99
99
1173
1507
1389
1249
678
1130
1893
1470
1525
1019
963
1256
1059
1221
1503
X-Ter
X-Ter
18/12/2014
18/12/2014
FH
FH
1652
1723
2330
2750
1410
1596
District 17
NON-LANDED
Azalea Park Cdo
Ferraria Park Cdo
Apt
Apt
19/12/2014
19/12/2014
999
FH
1335
1023
1150
928
862
908
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
22/12/2014
19/12/2014
19/12/2014
18/12/2014
22/12/2014
18/12/2014
17/12/2014
17/12/2014
19/12/2014
17/12/2014
17/12/2014
22/12/2014
17/12/2014
19/12/2014
99
99
99
99
99
99
99
99
99
99
99
99
99
99
1130
1378
2928
904
1539
1378
1399
1270
1270
1270
1076
527
1033
1141
938
1363
2526
937
1296
1330
1182
1335
1185
1150
1100
589
918
1260
830
989
863
1036
842
965
844
1051
933
905
1022
1117
888
1104
District 18
NON-LANDED
Changi Rise
Coco Palms
Coco Palms
Coco Palms
Coco Palms
Coco Palms
Coco Palms
D'nest
Livia
Livia
Ripple Bay
The Santorini
Vue 8 Residence
Waterview
District 19
NON-LANDED
PROJECT NAME/
STREET NAME
PROP
TYPE
CONTRACT
DATE
TENURE BUILT-IN/LAND PRICE
AREA*(SQ FT) (S$'000)
PSF
(S$)
Boathouse Residences
Jewel @ Buangkok
Jewel @ Buangkok
Jewel @ Buangkok
Jewel @ Buangkok
Riversound Residence
Sunglade
The Quartz
The Scala
The Scala
The Springbloom
The Springbloom
LANDED
Highland Close
Jln Kurnia
Serangoon Gdn Estate
Serangoon Gdn Estate
Serangoon Gdn Estate
Serangoon Gdn Estate
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
Apt
19/12/2014
22/12/2014
18/12/2014
17/12/2014
17/12/2014
23/12/2014
19/12/2014
19/12/2014
22/12/2014
17/12/2014
23/12/2014
18/12/2014
99
99
99
99
99
99
99
99
99
99
99
99
624
463
517
775
721
1292
1378
1141
893
850
1302
1119
665
670
716
962
901
1250
1320
1170
1200
1200
1350
1180
1065
1448
1385
1241
1249
968
958
1025
1343
1411
1037
1054
X-Ter
X-Ter
X-Sd
X-Sd
X-Ter
X-Ter
22/12/2014
18/12/2014
19/12/2014
23/12/2014
23/12/2014
18/12/2014
FH
FH
999
FH
999
999
2114
1647
2377
2894
1840
1841
1950
2400
3000
3550
2300
3100
922
1457
1262
1226
1250
1684
Apt
Apt
Apt
Apt
Apt
22/12/2014
22/12/2014
23/12/2014
19/12/2014
23/12/2014
99
99
99
99
99
1550
1948
1238
1259
1044
1400
1380
930
1200
1445
903
708
751
953
1384
X-Sd
19/12/2014
FH
4046
5180
1280
Apt
Apt
19/12/2014
23/12/2014
FH
FH
1496
1733
1440
2680
962
1546
X-Ter
23/12/2014
FH
2169
1800
830
Apt
Apt
Apt
Apt
Apt
Apt
19/12/2014
19/12/2014
18/12/2014
23/12/2014
18/12/2014
22/12/2014
99
99
99
99
99
99
560
969
1227
1055
872
1163
751
1210
1070
950
988
1030
1342
1249
872
901
1133
886
X-Ter
23/12/2014
FH
2550
2330
914
Apt
Apt
Apt
Apt
Apt
Apt
22/12/2014
18/12/2014
22/12/2014
19/12/2014
17/12/2014
17/12/2014
99
99
99
99
99
99
1281
463
517
1302
915
1012
1088
650
713
1010
800
1234
849
1404
1381
775
874
1220
X-Ter
18/12/2014
999
1616
2380
1473
X-Ter
23/12/2014
99
1889
1700
900
Apt
Apt
19/12/2014
19/12/2014
FH
99
1270
1216
1140
855
898
703
X-Det
19/12/2014
99
5471
5900
1078
Apt
Apt
22/12/2014
22/12/2014
99
99
1119
1206
1231
1280
1100
1062
X-Ter
X-Sd
23/12/2014
22/12/2014
FH
FH
2102
3150
2400
3950
1142
1254
District 20
NON-LANDED
Bishan Park Cdo
Far Horizon Gdn
Far Horizon Gdn
Grandeur 8
Thomson Three
LANDED
Wellington Park
District 21
NON-LANDED
Highgate Cdo
The Creek @ Bukit
LANDED
Hoover Park
District 22
NON-LANDED
Lakeville
Lakeville
Parc Oasis
Parc Vista
The Centris
The Mayfair
LANDED
Yunnan Gdn
District 23
NON-LANDED
Guilin View
Hillion Residences
Kingsford Hillview Peak
Maysprings
Maysprings
The Skywoods
LANDED
Cashew Villas
District 25
LANDED
Oakwood Grove
District 27
NON-LANDED
The Sensoria
Yishun Sapphire
LANDED
Wak Hassan Dr
District 28
NON-LANDED
Rivertrees Residences
Rivertrees Residences
LANDED
Seletar Gdn
Seletar Hills Estate
Note: Data extracted on Jan 26, 2015
*Applies to landed property
Information is provided by SISV Services Pte Ltd. SPH gives no warranty as to the accuracy of the
information and disclaims all liability for any loss or damages that may arise from its use.
banking & finance 17
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
RBI urges companies to hedge FX exposure
India’s central bank seeks to shield the rupee, Asia best performing currency, from global financial seismic shifts
Mumbai
INDIA’S central bank is making extra efforts to spur the country’s corporates to
more actively hedge their foreign exchange exposure, in order to fortify the
country’s defences against any risk of currency turmoil.
The efforts reflect the Reserve Bank of
India’s fear of being held hostage to global
developments, especially as the US Federal Reserve is widely expected to start raising interest rates this year, which could
spark potential selling in emerging markets.
“Corporates are not hedging enough,”
said a senior policy maker aware of the
central bank’s thinking. “Many things can
go wrong when the US starts raising rates.
RBI and the government can only improve fundamentals, but corporates need
to increase their hedge ratios to be better
prepared for any turmoil in the exchange
rate.”
As a result, the RBI is seeking to bring
down the cost of currency protection by
reducing its own dollar buying in forward
markets, making it more affordable for
companies to buy forward cover.
The RBI’s dollar buying had pushed up
the cost of hedging for companies to
10-12 per cent. The premium has now fallen to around 6 per cent, according to Reuters data.
The RBI has also told banks to regularly report quarterly data for corporate
customers’ positions, including estimates
of unhedged foreign currency exposure.
The rupee’s buoyancy over the past
year had become a disincentive to hedge.
SHORING UP
The Reserve Bank of India wants corporates to increase their hedge ratios to be better
prepared for turmoil when the US decides to raise interest rates. PHOTO: BLOOMBERG
And the RBI wants to prevent complacency developing in a country that is enjoying
easing inflation, a narrowing current account deficit, and the leadership of a government intent on introducing ambitious
economic reforms.
The rupee is Asia’s best performing currency so far in 2015, with a nearly 2 per
cent gain against the dollar, helped by net
foreign inflows of US$5.25 billion into
debt and stocks after US$42.37 billion in
purchases last year.
Nonetheless, the RBI is keen to avoid a
repeat of the turmoil seen in 2013, when
fears about US rate hikes led to the
rupee’s worst crisis in more than two decades.
India closely shepherds the rupee –
which is convertible on the trade account,
but only partially convertible on the capital account – while letting the markets determine trends.
The RBI has typically intervened to
dampen excessive speculation, or to sup-
Deutsche Bank back in the black in Q4
Frankfurt
DEUTSCHE Bank, the largest German
bank, said on Thursday that it returned to
profit in the fourth quarter of 2014, as revenue in the investment banking unit rose
and the bank set aside less money to cover legal problems.
Shares of Deutsche Bank rose 2.5 per
cent after it reported a fourth-quarter net
profit of 441 million euros (S$677 million), after a loss of 1.4 billion euros in the
period a year earlier. Analysts polled by
Reuters had forecast a loss for the latest
quarter.
Although the earnings were better
than expected, Deutsche Bank managers
acknowledged they were still far from
meeting their goals.
“We have not delivered to investors
the return which they rightfully expect,”
Anshu Jain, the bank’s co-chief executive,
said during a conference call.
One of the last European banks that is
still a major presence on Wall Street, Deutsche Bank has been struggling with a combination of stricter government regulation, low interest rates and legal costs
stemming from accusations of past misconduct.
The profit for 2014, while better than
the year before, amounted to a pretax return on equity of 5 per cent – well behind
the ratio of 25 per cent that Deutsche
Bank and many other large banks aimed
for before the financial crisis that began
in 2008. Return on equity is a common
measure of bank profitability.
Revenue in the quarter rose 19 per
cent, to 7.8 billion euros, Deutsche Bank
said, in part because of increased uncertainty in global financial markets, which
prompted clients to do more trading and
generated fees for the bank.
For the full year, Deutsche Bank reported net profit of 1.7 billion euros, compared with a profit of 681 million euros in
2013.
Under pressure from regulators as well
as shareholders, Deutsche Bank has been
trying to increase the proportion of its
own money that it uses to do business, as
opposed to borrowed money. Nevertheless, the bank’s common equity Tier 1 ratio, a measure of its ability to absorb losses, fell to 11.7 per cent at the end of 2014,
compared with 12.7 per cent a year earlier.
Deutsche Bank, however, said it had increased its leverage ratio, often consid-
ered the best measure of a bank’s ability
to withstand a crisis, to 3.5 per cent at the
end of 2014 from 2.4 per cent a year earlier. The minimum leverage ratio in Europe
is 3 per cent. Regulators are expected to
raise the minimum further in years to
come.
“In 2014, Deutsche Bank became a
stronger, safer and better balanced bank,”
Mr Jain said in a video statement.
The bank said its costs from fines or legal fees fell 1 billion euros in the fourth
quarter, but it cautioned that “a number
of major litigation cases have yet to be settled”. Deutsche Bank is among a group of
banks under investigation on suspicion
that employees manipulated benchmark
interest rates used to set rates on mortgages and many other loans. It also faces inquiries into foreign exchange trading and
lawsuits related to sales of securities in
the United States and transactions with
countries under international sanctions.
“We’re doing everything we can to
bring legal disputes to a conclusion,” Jürgen Fitschen, the other co-chief executive, said during the conference call. But
he said it was impossible to predict when
cases would be resolved and how much
they would cost. NYT
ply dollars on days when there is heavy demand from importers to meet payments.
With a weather eye on the Fed’s intentions, the RBI has bought dollars aggressively, and foreign exchange reserves
climbed to a record US$322.14 billion this
month.
But the lack of corporate hedging remains a weak point in India’s currency
market defences, according to central
bankers.
RBI Deputy Governor HR Khan said in
October the hedge ratio for overseas loans
and foreign convertible debt had halved
to around 15 per cent in July-August from
the previous fiscal year.
In recent weeks, the spot rupee-dollar
rate has fluctuated more on days of heavy
volumes, according to traders, as the RBI
has abstained from draining or supplying
as many dollars as it has done in the past.
Some analysts interpreted that as a
warning to companies to hedge more,
and to foreign investors to refrain from
playing off a stable spot rate to speculate
in offshore forward markets. “RBI will allow a bit of volatility in the rupee as it
wants neither the corporates nor FIIs (foreign institutional investors) to believe that
it will continue to protect the rupee in a
tight range,” said Samir Lodha, managing
director at QuantArt Market Solutions, an
advisory firm for companies.
Some corporate treasurers saw the
RBI’s efforts paying off. “The various measures being taken by the RBI has certainly
helped and the hedge books of companies
are at much higher levels than what they
were last year,” said Mradul Dubey, head
of treasury, Electrosteel Castings and Srikalahasthi Pipes Ltd. Reuters
RBS reviewing
global footprint
Dubai
ROYAL Bank of Scotland (RBS) plans to
sell or close its corporate debt and debt
capital markets business in the Middle
East and Africa, the latest pullback by the
state-controlled lender from emerging
markets to focus on its domestic business.
The lender, 81 per cent owned by the
British government, has been reviewing
its global footprint as it seeks to rebuild
its reputation after one of the biggest bailouts in British history during the global financial crisis.
“Part of the strategy set out by (chief
executive) Ross McEwan in February
2014 was to make RBS a smaller, more focused bank. As part of that strategy, we
have taken the decision to exit our corporate debt and debt capital markets business in the Middle East and Africa,” RBS
said in a statement on Thursday.
Banking sources told Reuters that RBS
was attempting to sell its corporate banking business across the Middle East but
had been unable to offload it in one
chunk. Two of the sources said the bank
was now selling off its assets piecemeal
to different buyers. Reuters
18 energy & commodities
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Shell ‘optimistic’
on US refinery
contract talks
Investors lured
back to gold after
surprise rally
New York
GOLD’S longest rally in two years is spurring investors to return to precious metals
just as signs emerge that the gains may be
petering out.
US exchange-traded products backed
by precious metals took in US$1.9 billion
this month through Jan 28, the first inflow
since July and the biggest since September 2012, data compiled by Bloomberg
show. Gold prices dropped 2.4 per cent
on Jan 29, cutting this month’s rally to 6.5
per cent, and Goldman Sachs Group said
this week it expects the metal will fall over
the next year.
After shunning gold for two straight
years, investors are coming back to the
metal as officials in Europe and Asia fight
stagnating economies with more stimulus. Weaker foreign expansion had also increased bets that the Federal Reserve
would delay raising interest rates. This
week’s statement from the policy makers
that cited “solid” US growth damped that
speculation, and bullion on Thursday
capped the biggest decline since 2013.
“While the gold market is viewing the
Fed statement as negative and the US
economy is getting stronger, one cannot
ignore the economic stress in Europe and
China,” Jeff Sica, the president of Circle
Squared Alternative Investments said in a
telephone interview on Jan 29 from Mor-
Union not as optimistic, prepared for possible strike
BOTTOMED?
Bullion tumbled 29 per cent in the
previous two years. PHOTO: REUTERS
ristown, New Jersey. “I don’t think investors will abandon gold now as a lot of easy
money is getting added to the system.” Futures in New York climbed for three
straight months, the longest rally since
September 2012, and January’s advance is
still poised to be the largest since February 2014. Hedge funds and other speculators have the biggest net-bullish bet on
gold in two years, US government data
show. Assets in global ETPs backed by the
metal are heading for the biggest monthly
increase since 2011.
Bullion tumbled 29 per cent in the previous two years as the American economy
improved.
“It looks like gold has bottomed,” John
Apruzzese at Evercore Wealth Management in New York, said. “We think that
there is a distinct possibility that the Fed
may delay raising rates. We are considering going back to gold.” Bloomberg
Houston
LEAD industry negotiator Royal Dutch
Shell Plc said on Thursday that it was “optimistic” a new three-year agreement
could be reached with a union representing hourly workers at 63 US refineries that
account for two-thirds of US refining capacity.
In a message to members, the United
Steelworkers union (USW) did not share
Shell’s optimism, pointing to the approaching expiration of the current
three-year agreement at 12.01 am on Sunday in the time zone where each refinery
is located.
“Still no new offer from the industry,”
the USW message read. “Clock is ticking.
Day of action was a huge success and Oilworkers are ready to stand up and fight
back.”
USW locals carried out protests in support of the union’s contract proposals in
front of refineries across the country on
Wednesday. The union and refineries
have both prepared for a possible strike,
which the union signalled on Monday
may be needed to win concessions from
the oil companies. The last nationwide refinery workers strike was in 1980 and lasted for three months.
Shell is leading the talks on behalf of
companies that own US refineries including majors such as Exxon Mobil Corp and
BP Plc and smaller companies such as HollyFrontier Corp and Delek.
“We remain optimistic that a mutually
satisfactory agreement can be negotiated
with the USW,”said Shell spokesman Ray
Fisher in a statement issued on Thursday
night.
The USW is seeking annual pay raises
double those of the last agreement. It also
wants work that has been given in the past
to non-union contractors to start going to
USW members, a tighter policy to prevent
workplace fatigue, and reductions in
members’ out-of-pocket payments for
healthcare.
The USW has rejected two contract proposals from oil company negotiators since
talks began on Jan 21. At least five contract
proposals were rejected during the talks in
2012 for the current agreement. Reuters
China private oil firms hit by SOE probes
Singapore
CHINA’S private oil service companies are paying the price in the bond
market for graft probes involving
state energy giants.
The yield on the 2018 US dollardenominated bonds of Anton Oilfield Services Group Ltd, which helps
drill oil wells, has almost doubled to
25 per cent this year. The yield on the
2019 notes of Honghua Group Ltd,
the world’s largest land rig maker,
jumped to a record 34.3 per cent this
month. That contrasts with the 44 basis point decline to 3.39 per cent for
the 2024 securities of state-owned
CNOOC Ltd, China’s biggest offshore
oil and gas producer.
Chinese President Xi Jinping’s
campaign to catch “tigers and flies”
for graft had its highest profile case
with the arrest of former security
chief Zhou Yongkang and probes into a network of associates that he
built up during his time as chairman
of China National Petroleum Corp
(CNPC). The fallout from the probe,
and similar cases involving property
developers and securities brokerages, is affecting companies without
powerful state benefactors as
projects are frozen, contract awards
scrutinised and investors ask who
will be targeted next.
“We are seeing Chinese oilfield
services companies feeling a little bit
of revenue and profit pressure, especially this year, which I believe is partially related to the graft probe issues,” said Leo Hu, an analyst at
Standard & Poor’s in Hong Kong.
“This, we believe, has decreased the
national oil companies’ propensity
of engaging third-party oil services
companies.”
The corruption probes are adding
to pressure on issuers of riskier
bonds as prices for oil, coal, metals
and property slide amid a slowing
economy. The Bloomberg commodities index touched the lowest since
2002 on Jan 29, after a government report showed that US crude inventories advanced to the highest level in
at least 30 years. The price of Brent
crude, the benchmark used by most
of the world, has slid 57 per cent to
US$49 a barrel from its high last year
in June of US$115.
Chinese exploration and production projects have been delayed
amid the government’s investigations into state-owned oil and gas
companies, Fitch Ratings Co said in
September.
Anton Oilfield expects that profits
may slump more than 140 per cent
for a net loss due to “the adjustment
in the domestic market and decrease
in international oil price”, it said in a
Jan 18 filing. That prompted Fitch
Ratings to cut its credit score to
“BB-”, and Moody’s to reduce its
ranking to “Ba3”. Both ratings are
three steps below investment grade.
Honghua, based in the
south-western city of Chengdu, said
in a November filing that profit for
2014 “will decrease significantly”.
Moody’s downgraded it to “B2”, five
levels below investment grade.
Drilling contracts from major
state-owned oil producers have
slumped due to the anti-corruption
campaign, which has hurt
Honghua’s business, according to a
company spokeswoman who asked
not to be identified.
MIE Holdings Corp, an energy
contractor, issued a profit warning in
July, and sold its subsidiary PanChina Resources for US$83.2 million
in August. The company operates oilfields in the Jilin oilfield in
north-western China owned by
PetroChina Co, a company controlled by CNPC whose former chairman
Jiang Jiemin has been charged with
corruption.
“There are some companies that
reduced their capital expenditures
very quickly and sold some assets
and have a reasonably strong cash
balance,” said Nish Popat, portfolio
manager for Neuberger Berman
Group LLC in the Hague. The firm
had US$250 billion under management as at Dec 31, 2014. Bloomberg
technology 19
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Spending spree,
strong dollar
weigh on
Google results
Share of the online-ad market under pressure
San Francisco
GOOGLE Inc is ramping up
spending to invest in new technologies and fend off competition on mobile devices, even as
its maturing Web-advertising
business posted quarterly profit
and sales that fell short of estimates.
Fourth-quarter profit, excluding some items, was US$6.88 a
share on revenue of US$14.5 billion, Google said in a statement
on Thursday, compared with
analysts’ average projections for
US$7.11 and US$14.7 billion. Expenses jumped as Google added
more staff and real estate, while
currency fluctuations dented revenue.
While Facebook Inc and other
Internet companies are seeking
to lure away users and advertisers on tablets and smartphones,
Google’s shares were buoyed in
late trading amid signs of
strength in the search provider’s
main businesses and optimism
that the company will use its
cash pile to enter new markets to
secure future growth.
“They didn’t do anything that
was dramatically inconsistent
with what they’ve been doing,”
said Brian Wieser, an analyst at
Pivotal Research Group. “You’ve
got top-line growth that overall is
reasonably solid and you have
margin erosion, largely due to diversification.” Foreign currency
fluctuations also weighed on results. Google said total revenue
would have been higher by
US$541 million from the prior
quarter without the impact of a
stronger dollar, which reduces
the amount of overseas income
that can be counted back home.
Marketers also paid less for mobile ads, driving down the average price of spots by 3 per cent in
the quarter.
The shares of Google rose in
extended trading. The stock advanced less than one per cent to
US$513.23 at the close in New
York and was down 5.4 per cent
in 2014, compared with an 11 per
cent gain in the Standard &
Poor’s 500 Index.
Chief Executive Officer Larry
Page stepped up spending, as
Google invests in areas outside of
the company’s main search-ad
business, from high-speed Internet service and driverless cars to
digital-payments systems and
Web-linked glasses.
Operating expenses, which include engineering and sales staff,
reached US$6.78 billion in the
fourth quarter, a 35 per cent increase from a year earlier. That
compares with quarterly operating expenses of US$5.5 billion at
Apple Inc, whose revenue was
more than five times greater than
Google’s in the same period.
“In many ways, 2014 was a
year of significant investment
growth,” Patrick Pichette, chief financial officer, said on a conference call. “We’ll continue to seek
a healthy balance between
growth and discipline.” While Mr
Pichette said there are many
promising areas for future
growth, he also pointed to Glass
as an example of how the company can also be ready to pull back
on a project.
“In those situations where
they don’t have the impact we
hope for, we do make the tough
calls,” the CFO said.
Mr Pichette also said in the
conference call that Google
would be willing to “throw a little
back” when the company
reached a limit on how much it
could invest in operations.
“We do review this issue on a
regular basis,” Mr Pichette said
when asked whether Google was
closer to returning cash to shareholders. “I just have nothing to
announce today.” Fourth-quarter net income rose 41 per cent
to US$4.76 billion, or US$6.91 a
share, from US$3.38 billion, or
US$4.95, a year earlier.
Revenue from Google’s own
sites, including the key search engine, rose 18 per cent to US$12.4
billion. Other revenue, which includes the mobile Play app store
and hardware such as the
Chromecast streaming device,
rose 19 per cent in the quarter
compared with a 50 per cent gain
in the prior period.
Google’s share of the online-ad market is coming under
pressure as more users spend
time on smartphones and tablets. The company, which has introduced services encouraging
marketers to use its mobile features, saw its share of global mobile-ad revenue decline to 41 per
cent in 2014, from 47 per cent in
2013, while Facebook’s rose to 18
per cent from 17 per cent, according to EMarketer Inc. Bloomberg
Amazon Q4 profit beats estimates
despite aggressive spending
San Francisco
AMAZON surprised the market
with a quarterly profit far better
than anticipated for the online
giant known for pouring money
into projects such as original video programmes and delivery
drones.
“Amazon beat estimates even
though Jeff Bezos is moving at a
paranoid pace; pretty much
spending money as fast as it
comes in and going flat out as if
there were somebody right on
his heels chasing him,” said independent analyst Rob Enderle of
Enderle Group in Silicon Valley.
“When a competitor does
emerge they won’t have a chance
of catching him. It’s the most aggressive growth strategy for such
a long period of time that I have
ever seen.”
Amazon posted earnings of
US$214 million for the fourth
quarter as sales jumped 15 per
cent to US$29.3 billion, swinging
to profit after two consecutive losing quarters. For the full year
2014, Amazon on Thursday posted a net loss of US$241 million
on sales of US$89 billion.
Amazon has faced pressure
from shareholders to deliver profits even as founder Jeff Bezos has
invested in a vast array of
projects – from online video to its
own smartphones and delivery
drones to business e-mail.
“I see Amazon creating lots of
experiments to change from being a giant Web mall to being a
much more diverse company,”
said Forrester analyst Frank Gillett.
Mr Bezos said the company is
reaping benefits from “Amazon
Prime”, an online subscription
service. Last year, the price was
raised to US$99 annually for US
MOVING FAST
Amazon has embarked on such a rapid growth strategy that any
competitor that does emerge will find it hard to catch up. PHOTO: AFP
customers and membership
grew 53 per cent, according to
Amazon.
“Prime is a one-of-a-kind,
all-you-can-eat, physical-digital
hybrid – in 2014 alone we paid billions of dollars for Prime shipping and invested US$1.3 billion
in Prime Instant Video,” Mr Bezos said.
A Prime subscription gives
members unlimited video and
music streaming and, in some locations, offers same-day delivery
on groceries.
Amazon managed the profit
even as it ramped up its video offerings to compete against Netflix and others.
At the same time, Amazon has
been working to boost sales from
its traditional online marketplace
and a large cloud services operation for businesses.
Mr Bezos last month publicly
acknowledged missteps which
have cost the tech giant billions,
but said that is the price for tak-
ing “bold bets”. “I’ve made billions of dollars of failures at Amazon.com,” he told a New York
conference sponsored by the
news website Business Insider.
In addition to the smartphone, Amazon last year unveiled an upgraded line of Kindle
tablet computers and introduced
a streaming media player.
The Seattle-based company
bolstered its online gaming presence with a US$970 million acquisition of the game platform
Twitch, and expanded its “Amazon Fresh” grocery delivery service.
Mr Bezos has said he hopes to
move forward on plans to use
drones for delivery of goods, but
has said this could be delayed by
red tape.
Shares in Amazon shot up
more than 12 per cent to
US$349.93 in after-hours trading
following the release of earnings
figures that eclipsed Wall Street
forecasts. AFP
Apple recruiting workers in six Chinese cities
San Francisco
APPLE Inc, aiming to more than
double its stores in China, is advertising openings for retail workers in six cities where it currently
doesn’t have any shops.
The Cupertino, California-based company is recruiting
store workers in Chengdu,
Guangzhou, Shenyang, Tianjin,
Nanjing and Dalian, advertisements posted on Thursday on
the company’s website showed.
Amy Bessette, a spokeswoman
for Apple, declined to comment
beyond saying: “We haven’t announced stores in those areas.”
The push is part of Apple’s efforts to move beyond Hong
Kong, Beijing and Shanghai,
where the company already has
the bulk of its China stores. Chief
executive officer Tim Cook has
said he expects China will eventually overtake the US to become
its largest market. The company
doubled iPhone unit sales in
mainland China in the final three
months of last year.
“When I look at China, I see
an enormous market where
there are more people graduating into the middle class than
any nation on earth in history,
and just an incredible market
where people want the latest
technology and products that
we’re providing,” Mr Cook told
analysts during an October con-
ference call. “And so we’re investing like crazy in the market.”
Apple has said it plans to
open 25 more stores in Greater
China by mid-2016, including
five before the Chinese New Year
holiday in February. Apple ended
last year with 15 stores in mainland China and Hong Kong, according to its website.
Two new ones have since
opened in Zhengzhou and
Hangzhou, and a second Chongqing location is set to open on
Saturday.
While Apple hasn’t said where
the final two stores will be located, it began looking for store
managers for Tianjin and Shenyang in June. Bloomberg
20 consumer
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Hershey craves more
consumers’ attention
Lost impulse buys have slowed sales below expectation last year
Washington
ONLINE shopping, curbside
pick-up and self-checkout aisles
have made it quicker and easier
than ever for Americans to buy
the things that they need. That is
a huge problem for the candy
and chocolate industries, which
have made billions over the years
off waits at the register – and
customers’ last-minute impulse
buys.
Those lost “instant consumable” sales, combined with “a
more competitive snacking environment”, helped slow Hershey
Co sales last year below expectations, the sweets company said
on Thursday.
So to get Americans splurging
again, the country’s biggest chocolate maker is investing heavily
on technology that would spread
its temptations far beyond the traditional checkout lines, trying to
re-inspire a sweet tooth that
might expand the company’s bottom line.
“Impulse, in an indulgent
business, is really important . . .
But shopping is changing, and
impulse is under threat,” said
Frank Jimenez, Hershey’s senior
director of retail evolution.
“What happens if and when the
checkout goes away?”
Shoppers moving too quickly
to crave has become a worrying
trend for the five “power” sectors
of the supermarket checkout:
sweets, snacks, drinks, magazines and health-related flotsam,
such as lip balm. Though tiny,
the grab-and-go items are incredibly lucrative: Checkout areas account for one per cent of a typical supermarket’s merchandising
space but 4 per cent of its profit,
Mr Jimenez said.
Yet few companies are leading the charge to win back impulse buys like Hershey, whose
Reese’s, Kit Kat, York, Almond
Joy and namesake bar account
for the biggest chunk of
America’s US$17.7 billion chocolate market.
At a meeting of retail executives in New York this month,
Hershey senior manager of
front-end experience Chris Witham outlined some of the ways
that the company planned to win
back “unplanned purchases”,
with tests starting this year.
For curbside grocery
pick-ups, Hershey could upgrade
kiosks or add menu boards to allow buyers one final candy grab
before finishing their order. At
self-checkout machines, shoppers could find a special dispenser that spits out chocolate bars
on demand. The company could
also dispatch an army of vending
machines to grab shoppers outside the store, including, potentially, looking to “some dispensing opportunities around (petrol)
pumps”, Mr Witham said.
Hershey has sponsored research into what makes the
world’s shoppers reach for choco-
EAT ME
Hershey has sponsored research into what makes the world’s shoppers
reach for chocolaty gratification. PHOTO: REUTERS
laty gratification, and Mr Jimenez said that the company created
what it calls the “Eight Human
Truths of Impulse” to explain
why people succumb to little
checkout-aisle urges. The goodies can delight, indulge, recharge
or “rescue”; they can spoil (“I
worked hard today”) or charm
(“That’s a great idea”); they can
lead shoppers to aspire (as with
food or fitness magazines); or
they can simply convince buyers
that they have scored on a good
deal.
With chocolate, “people come
to the category as a ‘reward me’
category”, said Hershey chief executive John Bilbrey said on a
call with analysts last summer.
“They know it’s indulgent. It’s
not a food group.”
Perhaps the most egregious
curtailer of the impulse buy has
been self-checkout aisles, which
supermarkets first turned to for
lower labour costs and now account for about 40 per cent of all
mass retailer sales. The supermarket world, and the providers of its
treats, have lost billions of dollars
on impulse opportunities since
the largely unadorned selfcheckouts first beeped in 1992,
Mr Jimenez said. WP
Coach goes more full-price, less
discount; Q2 profit tops forecast
New York
COACH Inc has posted second-quarter profit that exceeded analysts’ estimates as the struggling handbag maker worked to increase sales of
full-priced items and reduce discounts as part of its turnaround plan.
Excluding restructuring costs,
earnings were 72 cents a share, the
New York-based company said on
Thursday. Analysts had estimated 66
cents, on average. North American
same-store sales fell 22 per cent, compared with the 24 per cent drop predicted by analysts tracked by Consensus Metrix.
Coach, the largest US luxury handbag maker, is trying to curb its reliance on discounts, which had hampered profit growth in recent years.
It’s also revamping stores and collaborating with new designers to try to
recapture market share lost to competitors such as Kate Spade.
“This is the first time they’ve said
anything positive about the business,
and it gives people hope that maybe
the product is taking hold,” Brian Yarbrough, an analyst at Edward Jones &
Co in St Louis, said. He has a buy rating on the shares.
Coach rose 6.8 per cent to
US$38.94 at the close in New York,
the biggest gain since April 2013. The
stock tumbled 33 per cent last year,
compared with an 11 per cent gain
for the Standard & Poor’s 500 Index.
The company on Thursday also
named a new head for its North
American business, the epicentre for
many of its troubles. Andre Cohen
will become president for North
America, a position that will oversee
retail management, marketing, merchandise and e-commerce. Francine
per cent to US$1.22 billion, just missing analysts’ US$1.23 billion average
estimate.
Net income in the quarter ended
Dec 27 fell 38 per cent to US$183.5
million, or 66 cents a share.
Kate Spade & Co, one of Coach’s
main handbag rivals, said on Thursday in a preliminary earnings statement that 2014 sales were about
US$1.13-1.14 billion, a 40 per cent
gain from a year earlier. Analysts had estimated about
US$1.1 billion.
As part of the effort to refresh its image, Coach
agreed this month to buy
designer footwear company Stuart Weitzman for as
much as US$574 million.
Private-equity firm Sycamore Partners is selling the
unit, which will add to earnings immediately. The deal is expected to close in May.
Coach will pay about US$530 million in cash to Sycamore Partners initially. The retailer will pay US$44 million more on the achievement of revenue targets during the three years after the acquisition is final. Stuart
Weitzman had about US$300 million
in sales in for the 12 months ended
Sept 30, according to a Jan 6 statement. Bloomberg
‘. . . first time they’ve said
anything positive about the
business, and it gives
people hope that maybe the
product is taking hold.’
Analyst Brian Yarbrough
Della Badia, who previously led
North American retail, will leave the
company in February.
Mr Cohen joined Coach in 2008
and had served as president and CEO
of the China and Asia operations. He
has also held positions at Timberland, Swatch Group and LVMH Moet
Hennessy Louis Vuitton.
Coach’s second-quarter sales in
North America fell 20 per cent to
US$785 million. Total revenue slid 14
transport 21
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
airasia crash |
Pilots cut power to critical systems: sources
Action appears to have helped trigger Dec 28 events, when plane climbed abruptly before falling
Jakarta
THE pilots of AirAsia Flight 8501
cut power to a critical computer
system that normally prevents
planes from going out of control
shortly before it plunged into the
Java Sea, two people with knowledge of the investigation said.
The action appears to have
helped trigger the events of Dec
28, when the Airbus Group NV
A320 climbed so abruptly that it
lost lift and began falling with
warnings blaring in the cockpit,
the people said. All 162 aboard
were killed.
The pilots had been attempting to deal with alerts about the
flight augmentation computers,
which control the A320’s rudder
and also automatically prevent it
from going too slow. After initial
attempts to address the alerts,
the flight crew cut power to the
entire system, which is comprised of two separate computers
that back up each other, the people said.
While the information helps
show how a normally functioning A320’s flight-protection system could have been bypassed, it
doesn’t explain why the pilots
pulled the plane into a steep
climb, the people said. Even with
the computers shut off, the pilots
should have been able to fly the
plane manually, they said.
Airbus discourages pilots
from cutting power to systems because electronics in the highly
computerised aircraft are interconnected and turning off one
component can affect others,
John Cox, a former A320 pilot
who is now a safety consultant,
said in an interview.
“Particularly with an Airbus
you don’t do that,” said Mr Cox,
chief executive officer of Washington-based industry consultant Safety Operating Systems.
Flight 8501 climbed more
than 5,000 feet (1,524 metres) in
less than 30 seconds, rising
above the altitude where it was
authorised to fly, Ertata Lananggalih, an investigator with
Indonesia’s National Transportation Safety Committee, said in Jakarta on Thursday.
The co-pilot, with 2,247 hours
of flying experience, was at the
controls and talking to controllers while the captain, who had
20,537 hours, was monitoring,
said Mardjono Siswosuwarno,
the lead investigator of the crash.
The account was the first description of the last moments of the
flight.
The investigators didn’t address whether pilots had cut pow-
DETRITUS
An Indonesian diver and an official examining the wreckage of AirAsia flight QZ8501 after it was lifted into the
Crest Onyx ship at sea. PHOTO: AFP
er to the flight augmentation
computer system and said they
wouldn’t release more information on the case.
Airbus is barred from commenting on the accident under
international investigation treaties, the company’s North American spokesman, Clay McConnell,
said in an e-mail.
From a cruising altitude of
32,000 feet, the single-aisle A320
climbed to 37,400 feet as pilots
probably tried to avoid bad
weather, Mr Lananggalih said.
The aircraft then descended slowly for three minutes before it disappeared, he said.
“The pilots were conscious
when the manoeuvre happened,” he said. “They were trying to control the airplane.”
Mr Cox said such an abrupt
climb would almost certainly
cause a rapid loss of speed and a
“very pronounced stall”.
The aircraft, operated by the
Indonesian affiliate of Malaysiabased AirAsia, disappeared from
radar en route to Singapore from
Surabaya.
Indonesia won’t release a preliminary report on its investigation into Flight 8501 because
fact-findings could change rapidly, Tatang Kurniadi, head of the
commission, said on Thursday.
Indonesia sent the preliminary
findings to all countries in the investigation on Jan 28, he said.
The pilots had sought permission from air traffic control to
turn left and then climb to 38,000
feet because of storm clouds.
Four minutes after the request, a
controller cleared the pilots to
climb to 34,000 feet, he said.
Satellite images showed storm
clouds that reached as high as
44,000 feet, according to investigators.
The aircraft was in “good condition”, Mr Siswosuwarno said.
All Airbus models produced
since the 1980s are designed to
prevent pilot errors from causing
crashes. The planes are controlled by multiple flight computers,
which limit pilots from overly
steep turns or getting too slow.
In the event of a malfunction
or loss of power, the flight protections will shut down and leave
the pilots to fly the plane manually. That appears to be what happened before Flight 8501 entered
the steep climb and stalled, the
two people said.
Investigators are still trying to
determine why the pilots would
cut power to the flight augmentation computers by pulling a circuit breaker in the cockpit.
Indonesian authorities have
so far recovered at least 70 bodies. Investigators still haven’t
managed to lift the jet’s fuselage,
but the tail section has been retrieved. Indonesia’s military
pulled out of the search this
week.
The cockpit voice recorder
captured the pilots’ voices and
no explosion was heard, Nurcahyo Utomo, an investigator
with the committee, said last
week.
The flight data recorder captured 1,200 parameters and the
voice recorder captured the last
two hours and four minutes of
the flight, the investigators said.
The two devices are called the
black boxes.
After studying data from the
black boxes, authorities ruled out
terrorism as a factor that brought
down the plane.
Flight 8501 appeared to have
stalled after climbing steeply,
Minister of Transportation Ignasius Jonan said earlier this month.
A stall occurs when airflow over
the wings is disrupted or becomes too slow to provide lift
and keep a plane aloft.
Indonesia has said it intends
to shut the agency responsible
for coordinating aircraft flight
slots in three months. That’s after the AirAsia flight took off on a
Sunday, without a Ministry of
Transportation permit to fly that
day.
The government has suspended the licence of AirAsia for that
route, found other airlines in
breach of permits and removed
officials involved from the ministry, AirNav Indonesia and state
airport company PT Angkasa Pura 1. Bloomberg
ANA, JAL see good year despite mixed results
Tokyo
JAPAN’S two biggest airlines posted mixed nine-month results on
Friday with All Nippon Airways
(ANA) posting a 57 per cent rise
in net profit as its international
business took off, while rival Japan Airlines (JAL) saw its bottom
line shrink.
Despite the fall in profit, JAL
raised its full-year earnings forecast because of falling fuel costs
and stronger revenue in its cargo
business.
A drop in oil prices is good
news for airlines which often
count fuel as their single-biggest
expense, especially as a sharp
drop in the yen boosted those
costs.
ANA said its April-December
net profit more than doubled to
52.36 billion yen (S$600 million)
from a year ago, as an expansion
at Tokyo’s downtown Haneda airport increased landing slots for
international flights.
Sales in the latest period rose
9.1 per cent to 1.3 trillion yen, the
company said.
Revenue from international
passenger flights jumped 19.1
per cent year-on-year, ANA said,
while revenue in its domestic passenger flight business edged up
1.0 per cent.
“(The company) moved to
strengthen its overseas networks
by taking advantage of the increase in takeoff and landing
slots for international routes at
Haneda Airport last spring,” it
said in a statement.
ANA added seven new routes
at Haneda with flights bound for
London, Paris, Munich, Hanoi, Jakarta, Manila and Vancouver.
The airline left unchanged its
annual net profit forecast of 35
billion yen for the fiscal year to
March.
ANA’s rival said profit for its
April-December period slipped
by 3.1 per cent, to 119.7 billion
yen, while revenue rose 3.3 per
cent to 1.02 trillion yen from a
year ago.
But JAL revised up its earnings
forecast to a net profit of 139 billion yen – against a previous projection of 135 billion yen – due to
falling fuel costs and better sales
in its cargo business. AFP
22 government & economy
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Greek meltdown splits
investors figuring Tsipras
Bigger risk Greece
will restructure its
debt sooner, not later
Athens
GREECE’S bondholders are back
at the precipice and the difference between winning and losing comes down to the brinkmanship of the nation’s new leader.
Bulls, whose ranks include
Greylock Capital Management’s
Hans Humes, say investors are
safe because it’s only debt owed
to institutions such as the European Central Bank that Prime
Minister Alexis Tsipras wants to
renegotiate. Bears say that one
false move by the 40-year-old premier risks Greece tumbling out of
the euro area and defaulting.
“If you listen carefully to what
these people are saying, they’re
not threatening a restructure of
these bonds,” said Padhraic
Garvey, global head of rates strategy at ING Groep NV in London.
“There’s a lot of risk priced in,
which is why I like Greek government bonds.”
Markets so far aren’t showing
confidence in Mr Tsipras, with
bond traders demanding about
seven percentage points of extra
yield to own three-year notes instead of those maturing in 10
years. That means investors see a
bigger risk that Greece will restructure its debt sooner rather
than later.
Mr Tsipras is aiming to water
down the financial conditions
that underpin Greece’s 240 billion euro (S$367 billion) rescue
from the euro region and the International Monetary Fund
(IMF), as well as negotiating on
some debt repayments. He needs
to move fast because the current
bailout agreement expires on
Feb 28. Meanwhile, obligations
are coming due, with one billion
euros of Treasury bills maturing
as soon as next week.
The bond market reacted with
trepidation to the Jan 25 election
that swept Mr Tsipras into power. Yields on three-year notes
reached 18.88 per cent, up from
10.08 per cent before the vote, exceeding levels when the nation received its first financial rescue in
May 2010. Bond risk soared and
stocks plunged, wiping about
US$10 billion off the value of the
country’s banks.
This week’s slump is based on
a misunderstanding, according
to those sticking with the bonds.
Syriza, the party Mr Tsipras
heads, has made clear it won’t
ask private holders to take losses,
according to Greylock’s Mr Humes, who said his US$870 million company is “very enthusiastic” about Greek debt.
Markets have overestimated
the likelihood of Greece leaving
the euro area and there may be
favourable opportunities to buy
its securities in coming weeks,
said Lorenzo Pagani, a Munichbased money manager at Pacific
Investment Management Co.
“Clearly, a default would be a
big mess in terms of investor confidence,” said Orlando Green, a
fixed-income strategist at Credit
Agricole SA’s corporate and investment banking unit in London. “We are still looking at a
compromise and maybe at least
see some form of extension of
the debt, better terms, and pushing them so far out that by the
time it becomes important, the
market has probably moved on.”
Recent history shows the risks
and the potential rewards of owning Greek securities, the powder
keg that ignited Europe’s sovereign debt crisis. It’s less than
three years since it was subject to
India GDP growth
revised up by 50% after
methodology change
New Delhi
INDIA’S economy grew almost 50 per cent
faster in 2013/14 than earlier thought, the
government said on Friday after changing
a formula, a reminder of the challenges
that unreliable statistics present to Indian
policymakers.
In the year leading up to the elections
that brought Prime Minister Narendra Modi to power last May, the economy grew
6.9 per cent, not the 4.7 per cent reported
earlier, chief statistician TCA Anant told reporters.
Mr Modi’s campaign succeeded partly
because of the widespread feeling that his
predecessors from the Congress party had
plunged the economy into the country’s
longest deceleration in growth in a generation.
The revised formula, showing a faster
recovery, includes under-represented and
informal sectors as well as items such as
smartphones and LED television sets in
gross domestic product (GDP).
That could boost India’s growth figure
in the year ending in March 2015, which
the Reserve Bank of India (RBI) has projected to be around 5.5 per cent.
Some in government predict that the
change will help bring down the fiscal deficit as a share of GDP, making it easier for
Mr Modi to trim the gap to a seven-year
low of 4.1 per cent in the year to March despite a shortfall in revenue.
However, Mr Anant said that the overall size of India’s US$1.8 trillion economy
had not changed enough to shift the ratio
significantly, adding: “Our ranking in GDP
terms will not change as the size of economy has almost remained the same.”
The new methodology moves India
more in line with global standards by
measuring the economy at market prices,
and by tracking consumer rather than
wholesale inflation. “This will help lower
market distortions and give better representation to the manufacturing sector,”
said Soumya Kanti Ghosh, chief economic
adviser at State Bank of India.
But the frequent GDP revisions and other deficient data are a headache for economic planners. Among the worst offenders are the volatile index for industrial production and the jobless numbers, seen as
very unrepresentative. The latest GDP revision is part of a change to the method of
calculating national accounts that happens every five years. Reuters
PRECARIOUS POSITION
Bears say one false move by the new 40-year-old premier risks Greece
tumbling out of the euro area and defaulting. PHOTO: REUTERS
the biggest restructuring in history, which cost private bondholders about 100 billion euros.
On the other hand, investors
who’ve held Greek bonds since
that event in 2012 have been rewarded with the biggest returns
among developed markets
tracked by Bloomberg World
Bond Indexes. The more than
200 per cent gain compares with
a 27 per cent return for the euro
area as a whole.
Greece’s new government
meanwhile began talks with its
eurozone partners on Friday in
what promises to be a bitter confrontation over its international
bailout. Mr Tsipras met Jeroen Dijsselbloem, current head of the
eurozone group of finance minis-
ters, in an encounter that Athens
said would mark the start of
Greece’s bid to revise the conditions of the massive bailout.
Mr Dijsselbloem warned before arriving in Athens that the
new Greek government is already setting itself an impossible
task, raising expectations it cannot meet. “If you add up all the
promises (made in the election
campaign), then the Greek budget will very quickly run totally off
course,” he said in Amsterdam.
Friday’s talks come on the
heels of warnings by the EU and
Germany that there was little support for reducing the debt, which
the radical new government is
hoping to cut in half. Bloomberg,
AFP
European investment fund may
be launched in September
Frankfurt
A FUND to bolster investment in Europe
should be up and running by September,
an EU official said on Friday, outlining the
timetable for a highly leveraged scheme to
bolster growth in a moribund EU economy.
The European Fund for Strategic Investments, which can invest in projects from
infrastructure building
to expansion of small
businesses, is the European Union’s flagship
scheme to help address slack growth.
Jyrki Katainen,
Vice-President of the
European Commission responsible for
jobs and growth, told
journalists that its
set-up could be finalised by European Union leaders in June, with a start date some
months later. “I expect that the fund itself
will be up and running, let’s say, in September,” he said, on a whistle-stop tour of
Europe to drum up investor and government interest in the scheme.
Mr Katainen said, however, that it was
unclear which governments would invest
money in the scheme, intended to be a
315-billion-euro (S$482 billion) investment vehicle based on modest financial
guarantees given by states. “There has
been quite a lot of interest towards the
fund but nothing has been realised yet,”
he told journalists. “We built the fund so
that it can operate even without any additional commitments. We don’t have any
expectations.” The late start-date may disappoint some. European Central Bank President Mario Draghi, for
example, recently
urged EU leaders to
speed up the project.
The dire economic
outlook prompted
Mr Draghi last week to
unveil last week a
roughly
one-trillion-euro plan to print
fresh money, chiefly to
buy government bonds.
He has told governments to do their
part, by pursuing economic reforms.
But finding agreement among the 19
countries in the euro zone, from Germany
to Greece, is difficult. This also slows
progress on broader EU schemes such as
the joint investment fund. Reuters
The late start-date
may disappoint
some. ECB
President Mario
Draghi recently
urged leaders to
speed up the project.
government & economy 23
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Eurozone prices down 0.6% in January
Slide worse than the
0.5 per cent
decline expected
Brussels
EUROZONE consumer prices fell
at a record-equalling pace in January, more steeply than expected
and supporting the backers of
the European Central Bank’s
money-printing plan to combat
sustained deflation.
The European statistics office
said in a first estimate on Friday
that prices in the 19 countries using the single currency in January were 0.6 per cent lower than
a year earlier, after a 0.2 per cent
decline in December.
This was a sharper fall than
0.5 per cent decline forecast by
economists in a Reuters poll.
The eurozone has only endured negative inflation rates in
one other period, from June to
Oct 2009. The 0.6 per cent decline this month matched the
lowest figure during that period,
in July 2009.
Sharply reduced fuel costs explained the drop. Energy prices
plunged 8.9 per cent. Unprocessed food was 0.9 per cent
cheaper, outweighing a 1.0 per
cent rise in the cost of services.
Oil prices have more than halved
since June, with Brent at just below US$50 per barrel on Friday.
Core inflation, which excludes
volatile energy and unprocessed
food prices, dipped to a new euro-era low of 0.6 per cent in January from 0.7 per cent for the previous three months.
Aline Schuiling, senior eurozone economist ABN Amro, said
UNDER PRESSURE
Core inflation dipped to a new
euro-era low of 0.6% in January
from 0.7% for the previous three
months. PHOTO: REUTERS
that she did not believe this
marked the start of a negative
trend in core inflation, with
Thursday’s German inflation figures influenced by one-offs such
as the timing of sales and volatile
prices of package holidays.
Other economists said the impact of certain tax hikes a year
US in total ‘solidarity’ with
Japan over hostage crisis
By Anthony Rowley
[email protected]
Tokyo
AS efforts continued on Friday to secure
the release of Japanese journalist Kenji
Goto, who is being held hostage by the Islamic State of Iraq and Syria (ISIS), Prime
Minister Shinzo Abe received support
from visiting US Under Secretary for Political Affairs Wendy Sherman, who said that
the US is in total “solidarity” with Japan
over the crisis.
She spoke as Mr Abe told a parliamentary panel that every effort was being
made to secure the release of the captive
journalist. “We are gathering and analysing information while asking for cooperation from Jordan and other countries, making every effort to free Kenji Goto,” he
said.
In Tokyo on the final leg of a tour that
has taken her to capitals in Europe, the
Middle East and Asia, Ms Sherman refused to associate the US with domestic
criticism in Japan of Mr Abe over his handling of the protracted hostage crisis.
Asked whether a speech made by Mr Abe
in Israel shortly before the hostage crisis
erupted, in which he offered financial support to Middle Eastern countries opposed
to the ISIS, Ms Sherman said at a press
briefing that Mr Abe had made a “positive
contribution” to the fight against terrorism.
More than 60 countries including Japan and the US, are opposed to ISIL, she
said, using an alternative designation for
the Syria-based ISIS authority. Their objective is to “degrade and then take out ISIL”.
She praised Japan for “demonstrating support” for such efforts and for “upholding
human rights and democratic foundations”.
Japan was meanwhile working closely
with Jordan on Friday to find out what
was happening to the Japanese journalist
held by ISIS militants after a deadline
passed for the release of an Iraqi would-be
suicide bomber on death-row in Jordan,
Reuters reported in a joint dispatch from
Amman and Tokyo.
Jordan said on Thursday that it was still
holding the Iraqi woman prisoner as a
deadline passed for her release, which was
set by the militants, who threatened to kill
a Jordanian pilot unless she was handed
over by sunset, Reuters reported.
An audio message purportedly from
Mr Goto said that the pilot would be killed
unless Jordan freed Sajida Al-Rishawi,
who is on death row for her role in a 2005
suicide bomb attack that killed 60 people
in Amman. The message postponed a previous deadline set on Tuesday in which
Mr Goto said that he would be killed within 24 hours if Al-Rishawi was not freed.
The hostage crisis comes, Reuters noted, as ISIS, which has released videos
showing the beheadings of five Western
hostages, is coming under increased military pressure from US-led air strikes and
by Kurdish and Iraqi troops pushing to reverse the Islamist group’s territorial gains
in Iraq and Syria.
A report in the Japan Times suggested
on Friday that the Abe administration’s response to the hostage crisis might leave
other Japanese at risk of being kidnapped,
as extremists and those wishing to profit financially see the Japanese as “easy prey”.
“Japan has long maintained a fairly
neutral stance toward the Islamic State
group and thus the extremists had no intention of harming Japanese people” the
Japan Times reported international affairs
analyst and former member of the Japanese parliament Nobuhiko Suto as saying.
“But once (Mr Abe) clearly announced
that Tokyo would support the nations opposing the Islamic State, it told the extremists that Japan is within the scope of targets,” Mr Suto was quoted as saying.
ago could have led to the eurozone core figure dropping.
Headline inflation has also
been in what the ECB calls the
“danger zone” of below one per
cent since October 2013.
The ECB aims to keep inflation just under 2 per cent over
the medium term and the risk of
sustained deflation led it earlier
this month to launch a 1.1 trillion
euro (S$1.68 trillion) quantitative
easing programme of government-bond buying.
The eurozone’s central bank
plans to purchase sovereign debt
from March this year until September 2016, releasing 60 billion
euros a month into the economy.
“It confirms the point of view
of the doves that the ECB is on
the right track. That’s the basic
message,” said Commerzbank
economist Bernd Weidensteiner,
adding that if inflation remained
low then pressure could mount
for the ECB to increase its monthly bond purchases. Reuters
24 government & economy
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Russian central bank cuts
interest rate by 2 points
Move implies shift in priorities – towards trying to support economic activity
Moscow
RUSSIA’S central bank unexpectedly cut its main interest
rate on Friday as fears of recession mount in the country
following the fall in global oil prices and Western sanctions over the Ukraine crisis.
The central bank reduced its one-week minimum auction repo rate by two points to 15 per cent, a little over a
month after pushing it up by 6.5 points to 17 per cent after a run on the rouble.
The bank had been widely expected not to change the
rate. Following the decision, the rouble extended losses
to trade as much as 4 per cent on the day against the dollar, though it later clawed back some of the losses.
The move implies a shift in the bank’s priorities away
from clamping down on rising inflation and supporting
the rouble, towards trying to support economic activity,
which the bank expects to fall sharply in the coming
months.
“Today’s decision to lower key interest rate by 2 percentage points is intended to balance the goal of curbing
inflation and restore economic growth,” the bank’s governor, Elvira Nabiullina, said after the announcement.
In an e-mailed statement, the banks’s press service
quoted her as saying that the rate remained high enough
to allow the Bank of Russia to reach its inflation target in
the medium term.
The decision will also fuel speculation that recent
changes in the bank’s senior management have shifted
the bank towards more dovish monetary policy, possibly
under pressure from the Kremlin, banks and business lobbies.
“The decision appears to be politically driven, since it
is a cut that shows the central bank is worried about the
risks to the banking sector. It looks like the central bank’s
hand has been forced,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London.
Earlier this month the bank’s head of monetary policy,
Ksenia Yudayeva, an anti-inflation hawk, was replaced by
Dmitry Tulin, a central bank veteran seen as more acceptable to bankers, who have been called for lower interest
rates.
But the shift in policy may also reflect the realisation
that Russia’s economy is heading for a hard landing as
low oil prices look set to persist and the conflict in
Ukraine has worsened, defying hopes of an early end to
Western sanctions.
Macroeconomic data released earlier this week
showed real wages slumping by 4.7 per cent year on year
in December and real disposable income slumping by 7.3
per cent, boding ill for economic growth in the months
ahead.
In an accompanying statement, the bank said it expected gross domestic product to fall by 3.2 per cent in
annual terms during the first half of 2015, following
growth of 0.6 per cent in 2014.
Analysts had nevertheless expected the bank to hold
rates this month, as the bank had previously said it would
cut rates when inflation is on a sustained downward
trend. Inflation has instead been shooting up as a result
of the slide in the rouble.
The bank said that it saw conditions for lower inflation in the medium term, but effectively acknowledged
that inflation would stay in double-digits throughout this
year.
It said it expected inflation to fall below 10 per cent in
POLICY SHIFT
The bank saw conditions for lower inflation in the medium
term, but effectively acknowledged that inflation would stay
in double-digits throughout this year. PHOTO: REUTERS
Jan 2016. Inflation was 13.2 per cent as at Jan 26, the bank
said, up from 11.4 per cent in December.
“I see big risks in today’s decision,” said Rosbank economist Evgeny Koshelev. “Now the geopolitical background is unclear and inflation pressure remains quite
strong, as well as signals for the outflow of capital . . . This
(rate cut) is probably a reason to sell the rouble more in
the short term.”
However, Renaissance Capital economist Oleg Kouzmin said he welcomed the move: “It’s good that they are
lowering now. This is a sensible step. This will help the
economy and allow stability to be preserved.”
He added that high interest rates do not especially
help the rouble as capital outflows are largely linked to
debt repayments. “Will the capital outflow be stronger?
Yes, but there will be a weaker rouble and a stronger current account, which means it won’t be necessary to
spend more forex reserves.” Reuters
Swiss leading economic indicator edges lower
Zurich
SWITZERLAND’S leading economic
indicator edged lower in January, a
survey showed on Friday, though the
reading doesn’t yet reflect fallout
from a surging Swiss franc after the
Swiss central bank abandoned a cap
on currency.
The KOF Economic Barometer,
which gives an indication of the likely performance of the economy in
about six months’ time, fell to 97
points in January from a revised 98.8
points in December. That was below
analysts’ expectations for a reading
of 97.5 and below the long-term average of 100 points.
The KOF institute predicted earlier this week that Switzerland’s economy will contract as a result of the central bank’s shock decision on Jan 15
to abandon the Swiss franc cap.
It said that change was not yet reflected in the January indicator because most participants had already
responded beforehand. “However,
the KOF barometer would have also
declined if only those responses
would have been taken into account,
which were given before the repeal
of the Swiss franc lower bound,”
KOF economists said in a statement.
“Therefore, the KOF Economic Ba-
rometer indicates that the climate
for the Swiss economy gets rougher.”
The KOF said that the hospitality
industry and textile, mechanical engineering and chemical manufacturing were the main drags on the index, but construction and consumption partly cushioned the blow. The
banking sector was largely stable.
The Swiss National Bank upended financial markets two weeks ago
by scrapping the franc’s three-yearold cap against the euro, sending the
currency soaring and stoking fears
for Switzerland’s export-driven economy. Reuters
government & economy 25
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
China’s fiscal
revenue growth
slows in 2014
CAUTIOUS
OPTIMISM
Economists
say there are
risks that
near-term
growth
could be
undermined
by a
weakening
global
outlook.
Shrinking govt tax base is curbing scope for
stimulus and onus may fall on central bank
Beijing
CHINA’S fiscal revenue increased the least in a generation
last year, curbing the scope to
stimulate demand.
Government revenue rose 8.6
per cent in 2014, according to a
statement on the Ministry of
Finance’s website, down from
2013’s 10.2 per cent increase and
a peak of 32 per cent in 2007.
Public expenditure rose 8.2
per cent, the least since 1987.
A property slump and declining factory profits have dented
the central and local
governments’ tax bases.
With government plans for
“proactive” spending stymied by
declining revenue, the onus for
more stimulus may fall on the
central bank after the economy
last year expanded at the slowest
pace since 1990.
“Proactive fiscal policy will
not be truly proactive,” said Ding
Shuang, senior China economist
at Citigroup Inc in Hong Kong.
“Any stimulus or projects
need to be supported by monetary policy. Any fiscal boost will
only come after March”, when
the National People’s Congress
approves the budget for this year,
he said.
Slower-than-expected public
spending will weigh on gross domestic product growth this quarter, he said.
Deepening the downturn in receipts, returns from land sales –
which aren’t included in the fiscal revenue figure – rose just 3.2
per cent last year, the MOF data
showed.
That compares with 2013’s 47
per cent surge, according to
China’s statistics yearbook published in September.
Revenue from land sales totalled 4.3 trillion yuan (S$931 billion) in 2014.
Fiscal revenue, which includes taxes and other receipts
such as fines, totalled 14 trillion
yuan in 2014. Expenditure was
15.2 trillion yuan.
China is probably going to
face a “severe fiscal challenge in
2015”, that will drag the nation’s
economic expansion to 6.8 per
cent this quarter, Zhang Zhiwei,
Deutsche Bank AG’s chief China
economist, wrote in a report this
month.
China’s gross domestic product rose 7.4 per cent last year.
Bloomberg
PHOTO:
BLOOMBERG
Taiwan’s 2014 growth at 3-year high
Taipei
TAIWAN’S export-driven economy grew at its fastest pace in
three years in 2014 fuelled by global demand for smartphones
from Apple Inc and other technology goods, but there are risks
that near-term growth could be
undermined by a weakening global outlook.
Gross domestic product expanded 3.51 per cent last year,
the best annual rate since 2011
while fourth quarter on-year
growth at 3.17 per cent came in
line with expectations of 3.1 per
cent forecast in a Reuters poll.
But the quarterly gain was the
slowest since the 1.45 per cent
made in the third quarter of
2013, preliminary figures from
the Directorate General of Budget, Accounting and Statistics
showed on Friday.
Since the statistics agency’s
last GDP review in late November, central banks around the
world have acted to counter disinflation and slowing growth by
easing monetary policy even as
the US economy appears to be in
good heart.
Taiwanese authorities have
cautioned that growth in exports
and export orders may slow, citing fragile economies in China
and Europe as uncertainties.
For the current quarter,
growth could be fairly similar to
last quarter’s, said Forest Chen,
analyst at TC Bank in Taipei.
Manufacturers may delay importing raw materials until they believe falling commodity prices, including oil, stabilise, he said.
The Federal Reserve’s latest
upbeat assessment of the US
economy, the ultimate destination for many Taiwan-produced
tech gadgets, continues to favour
a more optimistic view on
Taiwan’s economy.
Taiwan tends to follow US
monetary policy closely and
economists don’t expect the
island’s central bank to raise
benchmark interest rates until
the second half of this year.
Purchases of new passenger
cars and new models of smartphones, in addition to spending
related to local elections held at
the end of November, boosted
domestic demand in the fourth
quarter. However, some of the increase was countered by weakness in the food and beverage
sectors due to a tainted oil scandal, the government said.
The statistics agency will revise the quarterly GDP data in
two to three weeks and provide
its updated economic outlook.
Its current forecast is for GDP
this year to grow 3.5 per cent. Re-
uters
Beijing demands ‘secure and controllable’ tech for banks
San Francisco
DRAFT Chinese government regulation would force technology
vendors to meet stringent security tests before they can sell to
China’s banks, an acceleration of
efforts to curb the country’s reliance on foreign technology that
has drawn a sharp response from
US business groups.
But a translation of the proposed rules viewed by Reuters
shows its immediate impact on
foreign firms may not be as
tough as feared.
The draft shows the regulation would initially focus on
types of hardware and software
where domestic suppliers already have a stronger market position than their foreign rivals.
Western companies say the
rules have not yet been formally
adopted, and some said they believed Beijing would retreat on
some of the most onerous ideas,
including demanding that
firms’proprietary source code be
reviewable.
Chinese leaders are to review
the plan next week, US tech industry sources said.
On Wednesday, 18 American
business groups urged Beijing to
postpone rolling out the regulation, which they argued were motivated by protectionism as well
as security concerns that intensified in the wake of disclosures of
US spying techniques by former
National Security Agency contractor Edward Snowden.
The guidelines by the Chinese
Banking Regulatory Commission
were issued on Dec 26 in a
22-page paper that outlines security criteria that tech products
must meet in order to be considered “secure and controllable”
for use in the financial sector, according to sources with knowledge of the matter.
Source code powering operating systems, database software,
and middleware must be registered with the commission to be
considered “secure and controllable,” while only wireless routers
that have approved encryption
or virtual private networking
(VPN) certificates may receive
the designation.
The new regulations represent one of China’s most significant steps towards banishing foreign technology, 18 months after
Snowden disclosed that US spy
agencies planted code in American tech exports to snoop on
overseas targets.
According to a presentation
used by regulators during the
briefing and obtained by Reuters,
Chinese government officials established the “self-controlled”
technology strategy in 2012 – prior to the Snowden revelations –
and hoped 75 per cent of tech
products used by banks would
meet a “secure and controllable”
criteria by 2019.
In order to meet the criteria, a
product will also be judged on its
“intellectual property and the level of independence during its development process”. Firms planning to sell computer equipment
to Chinese banks would also
have to set up research and development centres in the country,
get permits for workers servicing
technology equipment and build
“ports” which enable Chinese officials to manage and monitor data processed by their hardware.
Analysts say the regulations
may not bite into foreign suppliers’ market share immediately,
as banks may continue to opt for
cutting-edge offerings from the
likes of IBM or Oracle Inc while
testing out domestic options.
China appears to have tailored its guidelines based on the
competitiveness of its domestic
contenders.
For instance, banks are expected in 2015 to exclusively purchase approved low-end PC servers, a market where Lenovo is ex-
pected to be competitive following its US$2.1 billion acquisition
of IBM’s server unit.
However, the guideline for sophisticated virtualisation software carried out by local firms is
set at just 10 per cent. Chinese
companies such as telecom giant
Huawei Technologies have only
recently begun to offer virtualisation services that are used, for instance, in cloud computing.
While the banking rules will
gradually push out foreign firms,
they are expected to boost domestic contenders including Inspur International Ltd, the datacentre maker.
The People’s Bank of China
has already run trials to see if it
could replace Microsoft ‘s Windows operating system on some
machines with NeoKylin, a
Linux-based offering by Standard Software, a Shanghai-based
firm with ties to the Chinese government, a source familiar with
the matter said. Reuters
26 opinion
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
opinion 27
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Charlie Hebdo, writers
and effecting change
By Dennis Posadas
C
reative industries
worldwide are an
important driver
of
economic
growth and cultural influence. In
addition to creating numerous
jobs for the economy, creative industries
can also shape public perception of countries, regions and cities (and hence place
brand).
Singapore, too, understands the potential for creative ideas to transform the
economy. Among its more high-profile
projects include attracting Lucasfilm and
video gaming giant Ubisoft to set up base
in the country.
A risk-taking appetite among young
Singaporeans is necessary for our creative
industries to take off; so is overseas exposure. And where better to take a class of 24
students from Singapore Management
University on a business study mission to
gain insight into the creative industries
than New York City. One of the world’s creative cities, New York is a bastion of creativity and cultural and artistic production.
From advertising agencies to arts organisations, the city’s diverse creative sector is
one of its most important economic assets.
With such a smorgasbord of players, it
was not difficult for my students to see
first-hand some of the principles learnt in
the classroom coming to life, for example,
the inherent tension between creativity
and business (which Richard Caves highlights in his book Creative Industries:
Contracts between Art and Commerce). At Mason Jar Music (named one
of the world’s most innovative music companies by Fast Company ), one of the
company’s co-founders said that the goal
of the creative person is to maximise risk,
while the goal of business is to minimise
it. Navigating that tension is the root of
success in the creative sector.
Singapore’s own Yellow Box Studios
embodies this principle by taking on international projects such as the TV series
Marco Polo and the Golden Horse
Award-winning movie Seediq Bale.
What is “good” in the creative sphere is
highly subjective. Given its experiential nature, the value of creative products and
services has to be ascribed by someone.
This explains the importance of tastemakers such as Vogue editor Anna Wintour
and music producer Clive Davis (the Clive
Davis Institute of Recorded Music was
one of our stops), whose “picks” give consumers and audiences important cues on
what is “good” or “cool”.
The “winner takes all” phenomenon also typifies the creative industries (as pointed out by the Broadway League). That is,
very few creative products and services
are highly successful, but the ones that
are, reap the lion’s share of the rewards
from the market. This phenomenon goes
hand in hand with a blockbuster strategy,
which sees a company invest a dispropor-
T
The business of
creative industries
Sound strategy, company culture and a conducive ecosystem are necessary for a
winning combination. By Mark Chong
tionate amount of its resources in just a
few, carefully selected products or services (for instance a blockbuster movie).
Examples from Broadway include very
long-running productions such as Phantom of the Opera, Wicked, and The Lion
King.
The business study mission’s main focus was on creative communication agencies (symbolised by Madison Avenue).
While its traditional business model is broken, innovative agencies such as Anomaly
(which aims to be the “change agent of
the communication industry”) are showing the way forward by establishing value-based compensation structures and
creating/owning Intellectual Property.
In Singapore, our own The Secret Little
Agency has also ventured into IP creation
and product design. The days of interrupting and “hard selling” to consumers are also long gone. VaynerMedia, one of the
leading digital media agencies in the US,
believes brands must be sensitive to the
consumer’s journey and communicate accordingly.
We are also living in the “screen age”.
Indeed, the screen has become so dominant that it is even influencing what kind
of dance becomes popular – most dance
performances aren’t “consumed” live, but
through mediated platforms such as
YouTube, as Pentacle Danceworks pointed out to the class. Thus, visual storytelling has become the order of the day.
Throughout the 13 days, the link between organisational culture and creativity was impressed on the class. The visit to
Mason Jar Music and BBDO – Adweek’s
Global Agency of the Year in 2014 – drove
home the importance of having a company culture that is rooted in collaboration
and diversity.
Good creative ideas are rarely the result
of individual effort, but the outcome of the
interplay of ideas among diverse, creative
minds. Indeed, BBDO has been lauded for
its cohesive worldwide talent pool. For creative firms, culture is a strategic asset.
But company culture is often at odds
with business growth. Anomaly – rated
one of the world’s top 10 most innovative
advertising companies by Fast Company –
believes that a company can maintain its
culture only up to a certain company size
(between 60 and 100 people). Beyond that,
the culture that has made the firm so distinctive in the first place starts to lose its
imprint on employees.
Anomaly and VaynerMedia revealed
they could have expanded at a “much faster pace” – if it hadn’t been for the “culture
imperative”. In the same vein, Tumblr (another company we visited) wants to remain a “small” company in spirit despite
its global popularity – its identity is reflected in its ethos of promoting what is “local”
and “native”.
Finally, while it is important for crea-
POSITIVE VIBES
One of the world’s creative cities, New York
is a bastion of creativity and cultural and
artistic production. PHOTO: AFP
tive firms to have compelling business
models and winning strategies, it is advantageous to be located in a place that offers
them a developed ecosystem of tastemakers, the audience, the global media, and
the creative community. New York offers
one of the highest concentrations of creative talent in the world and a highly visible
platform for creative work.
Elyn Wong, the founder of Singapore
fashion label Stolen who gave a talk to the
class, showcased her collection in New
York largely for the same reason. In the
words of New York-based fashion designer Zac Posen, it is about “presenting your
work in the place of exposure . . . It’s geographical, it’s a landing point.”
The Singapore government has made
investments in infrastructure, education
and cluster development. It has also attracted a number of “marquee” multinational companies to set up shop in the
country. Nonetheless, the key stakeholders here will need to determine which
parts of the creative industry value chains
Singapore has the best chance of winning
in. They will also need to think of ways to
foster a stronger risk-taking culture.
✎ The writer is associate professor of
corporate communication at Lee Kong
Chian School of Business, Singapore
Management University
HE recent killing of satirists at Paris-based Charlie Hebdo has ignited
a maelstrom of discussion about
free speech and its limits, particularly in
this case in relation to the world’s major
religions. Various commentaries have
been issued, including about the Pope’s recent pronouncements.
But the question is, if the satirists had
truly wanted to effect change, could they
have done it in a more reasoned way? The
answer is they could have – but for some
writers, the power to provoke is much
more important than the message.
This is like a child who throws a tantrum because he wants something and
didn’t get it, failing to realise that asking
nicely in the proper way can create better
results. We forget that if we must provoke,
there should be a better reason for doing
so than simply because we can.
What is lost in the discussions is why
writers (including satirists) are needed in
the first place: to provoke societal discussions because we need to launch changes,
be it in the political, social, economic and
even technological spheres, within the
context of what modern society allows.
The freedom to do so is there, but we
often forget freedom is simply a means to
an end. Too many writers are addicted to
the fringes of that freedom, and fail to realise that moving hearts and minds is not always a matter of creating a controversy or
inciting to violence.
Sometimes, new paradigms need to be
introduced to create breakthroughs. But
in failing to do that, writers sometimes impulsively complain about legal limits to
launch changes, when in fact history
shows that with the right choice of words,
needed changes can be launched. Is it really necessary to deface something, insult or
provoke to get a reaction? Or are we as
writers simply being lazy with our craft in
attracting needed attention to our work?
I must stress that freedom of speech is
important and must be defended. It has in
many cases been won in blood. But granted there are times that writers need to
challenge legal limits because they have to
(as in the case of those living in countries
with brutal dictatorships), there are many
times that writers challenge the rules simply because they want to show they can.
All authors and writers have limits to
contend with. But unlike Charlie Hebdo,
which had to resort to taunting religious
figures by operating at the fringes of free
speech, there are many changes – badly
needed ones – that can be launched within the present set of limitations, be they legal or otherwise, given to writers and content creators.
It is those poorly equipped to communicate their ideas who often complain
about the limitations of their medium and
their environment – in this case, the written word. When used properly, words are
capable of moving minds and men to action. A story told well is oftentimes better
than the best multimedia message out
there for communicating a message.
Many remember JFK’s historic speech
exhorting his fellow Americans to go to
PRIORITIES
Freedom of speech is important and must be defended. But just focusing on the freedom
to provoke, instead of the power of words to effect change, loses the point. PHOTO: REUTERS
the moon. Every day, we are confronted
with changes that need to happen, be it in
eradicating malaria, ensuring the safety of
women and children, to creating a better
place to live in. Words have power, and
writers should use words to create messages that move people’s hearts and minds,
and not just for the sake of provocation.
Writers have to constantly use their gift
to push the envelope and launch their
own changes, not because they want to
run afoul of the law or public morals, but
because the change itself needs to be ignited. We provoke because we must, and not
because we can. Freedom of speech is important and must be defended, but just focusing on the freedom to provoke, rather
than on the power of words to effect
much needed changes, loses the point.
✎ The writer is a low-carbon-
technology consultant and author of
Greenergized (UK: Greenleaf, 2013)
weekend
the business times
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CHRISTOPHER LIM SIMON ANG
SATURDAY with Ludwig
‘ The dollar is still falling, as we speak.’
Wealth
wealth 29
investing
28 | THE BUSINESS TIMES WEEKEND | SATURDAY/SUNDAY JAN 31-FEBRUARY 1, 2015
SHOW US THE MONEY
Jakarta workers erecting iron
reinforcement bars at a commercial
high-rise building site last week. Increased
growth augurs well for a regional industry
that has long been considered a far-flung
fringe market by global institutions that
have increasingly dominated hedge-fund
inflows since the crisis. PHOTO: AFP
len CIO Ken Xu helped manage money at
both Och-Ziff Capital Management
Group LLC and billionaire Steven A
Cohen’s SAC Capital Advisors.
Pleiad co-founders Kenneth Lee and
Michael Yoshino are alumni of Soros
Fund Management and backed by Hong
Kong-based HS Group in starting their
own firm.
The regional industry has long been
considered a far-flung fringe market by
global institutions that have increasingly
dominated hedge-fund inflows since the
crisis. Credit Suisse statistics show it takes
about 10 months to a year between the
first conversation an Asian hedge fund
has with a potential investor and the actual capital allocation, compared with six to
seven months for their US and European
peers.
Hong Kong
S
OME of Asia’s newer hedge
funds were a magnet for investors last year.
The assets of Oryza Capital
and Pine River China Fund
have expanded at least eight times since
the funds started in the second half of
2013. BosValen Asset Management, Pleiad Investment Advisors and Guard Capital Management were among the 2014
startups that raised hundreds of millions
of dollars each within a few months.
They stood out in a region where, on
average, it takes almost two years for a
hedge fund’s assets to increase to US$250
million from US$50 million, according to
Singapore-based Eurekahedge Pte Investors.
Investors turned their attention to
younger funds – and fresh entrants in
some cases – as the regional industry beat
global peers’ performances for a third
straight year and some of the bigger managers in Asia stopped accepting money after reaching capacity.
“There’s a supply of money coming
back to Asia and that’s unprecedented,”
said Myo Schollum, Asia-Pacific head of
prime services coverage at Credit Suisse
Group AG in Hong Kong. “There are six to
eight hedge funds that launched with
day-one capital in excess of US$250 million. That’s previously unheard of in
Asia.”
US$1 billon mark
Oryza, the first Asia fund of Goldman
Sachs Investment Partners, told investors
in June it would stop taking additional
money after it raised about US$1 billion.
Its Asia-focused equity long-short fund
started in September 2013 with an initial
capital of US$80 million.
Pine River China Fund expanded assets to about US$850 million by the start
of this year, from the US$100 million it
started with in October 2013, said a person with knowledge of the matter, who
asked not to be identified as the figures
aren’t public.
BFAM Partners (Hong Kong), spun off
from Nomura Holdings Inc in April 2012,
increased assets to more than US$1 billion from US$323 million at the start of
2014, according to a person familiar with
the fund.
Among newcomers, Pleiad is nearing
US$500 million in assets after starting the
Outperforming market gains
Asia’s hot, young hedge
funds lead the charge
Global investors buy into the notion that Asia is a good alpha market. By Bei Hu
fund on Sept 1 with just over US$150 million, said a person familiar with the matter. Guard, which began with just under
US$50 million on Aug 1, has grown to
US$292 million, another person said. BosValen has raised about US$300 million
since its early November inception.
Most of the funds’ asset gains were
fuelled by new capital rather than performance gains, the people said. Spokesmen at the firms declined to comment.
Pine River China Fund returned 30 per
cent in 2014, Guard gained about 10 per
cent in its first five months and BosValen
returned just under 3 per cent in the two
months it traded last year.
The other funds’ performances could
not be confirmed. The Eurekahedge
Hedge Fund Index, tracking managers globally, returned 4.4 per cent last year.
Asian hedge-fund assets were slow to
rebound after the plunge during the 2008
global financial crisis. While worldwide
hedge-fund assets eclipsed the 2007 peak
in 2010, it took the Asian pool three more
years to do so, according to Chicago-based Hedge Fund Research Inc.
Only a few Asia-based startups have accumulated US$1 billion or more since the
2008 crisis, including former Highbridge
Capital Management Asia head Carl
Huttenlocher’s Myriad Asset Management and Tybourne Capital Management
(HK), led by Eashwar Krishnan, who earlier worked for Lone Pine Capital.
The average Asian hedge fund oversaw
US$117 million at last year’s end, according to Eurekahedge.
“A lot of the larger established managers were closed to new money, so inflows
of capital were going into newer managers looking to scale or new launches,” said
Shane Bolton, Hong Kong-based head of
Asia prime brokerage at Goldman Sachs
Group Inc.
The difference with 2013’s startups
“was consistency of pedigree and that a
majority already had strategic capital, enabling them to reach critical mass at
launch.” BFAM is staffed by a former
Nomura team of traders led by Benjamin
Fuchs that traces its roots to an
Asia-based internal fund started by Lehman Brothers Holdings Inc in 2007.
It started with Nomura support.
Oryza’s Hideki Kinuhata and Ryan Thall
traded for the global fund of Goldman
Sachs Investment Partners, set up to allow clients to invest with some of the New
York-based bank’s top proprietary traders.
Leland Lim, Guard’s chief investment
officer, was previously co-head of Goldman Sachs’s macro trading team in the
Asia-Pacific region outside Japan. BosVa-
New deposits arrived as regional hedge
funds outperformed global peers in each
of the last three years, returning an annualised 10.4 per cent to beat the 6.7 per
cent gain of Eurekahedge’s global index.
Asia-based hedge funds attracted an estimated US$14 billion of new capital in
2013 and 2014, a turnaround from the
US$17.6 billion of outflows over the previous four years, according to Eurekahedge.
The figures may underestimate inflows because larger hedge funds typically do not
report to public databases.
“It needed a good 2013 for the global
investors to say Asia can differentiate in
performance, Asia is a good alpha market,” said Matt Pecot, Asia-Pacific head of
prime services at Credit Suisse, referring
to funds’ outperformance over market
gains. “That’s why people are parking
money here.” Prime brokers provide services to hedge funds, including lending
cash or stocks, settling their trades and
linking them to potential investors.
In a region whose smaller markets are
vulnerable to capital flows from the US
and Europe, there have been concerns
rapid asset expansion will hinder hedge
funds’ ability to generate investment
gains.
Turiya Advisors Asia, which started in
April 2010, decided to return 17.5 per cent
of its end-of-2014 assets to investors to
maintain performance after the size of its
hedge fund swelled with new capital and
investment gains. The Hong Kong-based
firm, led by former Goldman Sachs and
Deutsche Bank AG trader Davide Erro,
oversaw more than US$3 billion after
starting with US$150 million. Bloomberg
share (EPS), “hold” rating and target
price alone.
BROKERS’ TAKE |
SMRT Corporation
Buy
OCBC Investment Research | Jan 30 |
Jan 30 close: S$1.75
Target price: S$1.90
SMRT continued its recovery momentum with a set of solid Q3 FY15 results.
Our view on SMRT’s outlook remains
positive on several factors: 1) its ability
to consistently manage expenses since
Q1 FY15 reflects the measures taken
are likely sustainable; 2) management,
though tight-lipped on hedging position, stated electricity costs will continue to decrease; we believe that their
FY2016 diesel needs are largely exposed and hence we should see further
reduction in costs as well; 3) management also stated full contribution of
rental income from Kallang Wave Mall
is likely to come in only from FY2016
onwards, and hence we change our assumption of full contribution from H2
FY15 to FY16 onwards; 4) taxi segment
is likely to see higher growth with newer fleet commanding higher rental income; and 5) LTA’s purchase of
SMRT’s bus assets in order to switch to
the new bus contracting model could
potentially see lump sum cash inflow
to SMRT, leading to a possible special
dividend or acquisition for growth.
However, with no details announced,
we have yet to factor this into our model. Consequently, our fair value increases from S$1.70 to S$1.90. Maintain
“buy”.
Genting Singapore
Hold
Maybank-Kim Eng Research | Jan 30 |
Jan 30 close: S$1.08
Target price: S$1.13
What is interesting is that Marina Bay
Sands’ (MBS) Q4 VIP volume was up 10
per cent quarter on quarter although
Macau’s was down 8 per cent quarter
on quarter. We attribute this to its rebate rate of 1.28 per cent, up six basis
points quarter on quarter.
This attracted more VIPs. Assuming
Singapore’s VIP volume tracked
Macau’s, we reckon Resorts World Sentosa (RWS) may have ceded VIP volume share. Still, we find it encouraging
that MBS’s Q4 2014 non-rolling chip
and slot revenue continued to grow
year on year. We leave our earnings per
Singapore banks
DMG & Partners Research | Jan 29 |
MAS’s easing of monetary policy coupled with the strengthening USD
would see a shift towards SGD funding.
Given the tightening domestic liquidity, we believe short-term rates would
remain on an uptrend ahead of US rate
hikes from mid-2015. We expect a gradual improvement in banks’ net interest
margin (NIM) from H2 2015. DBS is
our preferred sector pick as it offers the
best leverage to rising short-term rates.
That said, we expect NIM improvement to be gradual with off-sets coming from: i) funding pressures as liquidity tightens; and ii) potential softening
of loan demand.
OUE Hospitality Trust
Buy
DBS Group Research | Jan 29 |
Jan 30 close: S$0.935
Target price: S$1.02
OUE Hospitality Trust (OUEHT)
should benefit from a recovery in tourist arrivals this year and the impact of
newly refurbishment rooms. Nevertheless, there may be some short-term volatility in Q1 2015 on account of softer
Indonesian guest numbers following
the recent AirAsia incident and the
opening of new hotels in Orchard.
OUEHT’s unitholders recently approved the S$495 million acquisition of
Crowne Plaza Changi Airport (CPCA)
and its future extension (CPEX). Assuming a 75 per cent/25 per cent debt and
equity funding mix, we raise our
FY15-17F distribution per unit by zero
to 2 per cent. Gearing is also projected
to rise to about 42 per cent by end
FY2016. Besides an uplift in earnings,
OUEHT will benefit from a more diversified portfolio following the acquisition of CPCA.
Compiled by Jamie Lee
✎ Disclaimer: All analyses,
recommendations and other
information herein are published for
general information. Readers should
not rely solely on the information
published and should seek
independent financial advice prior to
making any investment decision. The
publisher accepts no liability for any
loss whatsoever arising from any use
of the information published herein.
Brokers who wish to send in their
reports can email us at
[email protected]
30 wealth
investing
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
TOUGH SELL
Sotheby’s auction in New York on Jan 29,
2015, includes ‘Pantheon in Rome’ by
Giovanni Paolo Pannini (above), estimated
at between US$3m and US$5 million. The
Old Masters category showed a glimmer
of hope last year when Sotheby’s sold
‘Rome, From Mount Aventine’ (right), an
1835 landscape of the Italian capital by
JMW Turner, fetched £30.3 million, setting
an auction record for the artist.
PHOTOS: SOTHEBY’S, AFP
Old Masters lag postwar artists
Contemporary art pulls in the big spenders while the Old Masters fail to draw art collectors with deep pockets
New York
THAT US$3 million Caravaggio is looking
like a bargain compared to a US$81.9 million Andy Warhol.
This week at the Old Masters sales in
New York, when as much as US$200 million of 15th-to-19th-century paintings,
drawings and sculptures are on offer, the
auction houses will try to slightly narrow
the disconnect between the record prices
commanded by postwar, modern and contemporary art and the much lower estimates for the older works.
Old Masters, the most popular category
until the 1980s, is now a small part of the
art market, and drumming up renewed interest won’t be easy. The group in 2013 accounted for 10 per cent of the value of the
art market, with just over 1 billion euros
(S$1.52 billion) in sales, according to the
European Fine Art Foundation.
“There’s no real connection between
the two markets,” said Otto Naumann of
Otto Naumann Ltd, a New York gallery
that specialises in Old Masters. “They’re
two totally different fields. They both just
happen to be called art.” That’s not stopping auction houses from trying. One of
the most expensive lots of the week at
Christie’s is a 16th-century portrait painting by Agnolo Bronzino, estimated at between US$8 million and US$12 million,
which failed to sell at the same auction
house in 2013.
Christie’s catalogue compares the work
to Warhol’s portrait of Mao, and Lucian
Freud’s painting The Brigadier. An oil
painting of a vase with flowers by the
16th-century German artist Ludger Tom
Ring II is compared in the Christie’s catalog to Jeff Koons’s Small Vase of Flowers, a
polychromed wood sculpture from 1991.
Ring’s still life is estimated to go for between US$400,000 and US$600,000. The
Koons sculpture sold for US$2.3 million at
Christie’s in New York in May 2005. More
recently, a 3.81-metre-tall orange stainless
steel sculpture by Koons fetched US$25.9
million in November in New York at the
same auction house.
Some dealers aren’t convinced such
promotion will work.
“The disparity between Andy Warhol
and the Old Masters is just too wide to
bridge,” said Richard L Feigen, the Manhattan dealer and Old Masters expert whose
Sotheby’s, which is offering 728 lots valued between US$74 million and US$106
million over five auctions, has 17 paintings
from the collection of Jacqui Safra, who belongs to the billionaire Safra banking family.
Mr Safra, a former producer of Woody
Allen’s films, has consigned works that include a 1732 oil painting of the Pantheon
in Rome by Giovanni Paolo Pannini estimated at between US$3 million and US$5
million. Canaletto’s view of London from
St James Park is estimated to go for between US$4 million and US$6 million.
A 1596 oil on copper depiction of paradise by Jan
Brueghel The Elder is valued from US$3.5 million
to US$4.5 million. The detailed work depicts animals flocking to Noah’s
ark and was seen in public
only once, in a 1998 exhibition in Amsterdam.
Christie’s sales are
Manhattan-based art dealer Richard L Feigen
slightly smaller, with 475
lots estimated between
gallery bears his name. Warhol was the US$63 million and US$95 million. Hightop-selling artist at auction in 2014, accord- lights include 119 bronzes and clocks from
ing to New York-based researcher Artnet. the collection of Peter Guggenheim, a deHis Triple Elvis, a 1963 silkscreen of Elvis scendant of the Guggenheim mining famiPresley, sold for US$81.9 million while ly, and his partner John Abbott.
Four Marlons, a 1966 canvas of Marlon
An early painting by Michelangelo MeriBrando, fetched US$69.6 million. Both si da Caravaggio of a young boy peeling
works were sold in November at Christie’s fruit, estimated to sell for between $3 milin New York.
lion and $5 million, was exhibited as early
While not exactly cheap – Sotheby’s has as 1791 in London.
16 works estimated above US$1 million –
Part of the disconnect between the pricthe sales that began on Jan 27 won’t come es commanded by Old Masters and connear the record US$2.3 billion of Impres- temporary art are a result of provenance,
sionist, modern, postwar and contempo- or the history of ownership, and a work’s
authentication, Mr Naumann said. Very
rary art sold in November in New York.
‘Hedge fund guys are not going to
buy Old Masters paintings, even if
they hear prices are a fraction of
contemporary art. How will it
hang in some loft in lower
Manhattan?’
old works of art have scattered sales
records, if any at all. “That’s one reason
contemporary is so high and Old Masters
is not – there’re so many questions in Old
Masters,” said Mr Naumann.
A work attributed to Anthony Van Dyck,
estimated to auction between US$100,000
and US$150,000 at Sotheby’s, was displayed 14 years ago at the Metropolitan
Museum of Art as a work by the British portraitist William Dobson. It was exhibited 50
years before that at the Royal Academy of
Arts in London as a Van Dyck.
In its catalogue for this week’s sales,
Sotheby’s described Dobson’s work, stating his “broader and drier handling of
paint in the latter does not suggest his authorship for the present canvas”. Old Masters works aren’t in fashion especially
among hedge fund managers, dealers said.
“These hedge fund guys are not going
to buy Old Masters paintings, even if they
hear prices are a fraction of contemporary
art,” Mr Feigen said. “How will it hang in
some loft in lower Manhattan?”
The category is showing some stirrings,
however. In December in London, the Old
Masters and British paintings sale at
Sotheby’s totalled £54 million (S$110 million), above the high estimate of £44.9 million. The sale included Rome, From Mount
Aventine, an 1835 landscape of the Italian
capital by JMW Turner that fetched £30.3
million, setting an auction record for the
artist.
“We see buyers as mostly Americans or
European,” Henry Zimet, president of Old
Masters gallery French & Co in New York,
said about sales in the category. “We’ve
had some contact with Russian and Chinese collectors, but no business.” Bloomb-
erg
life & culture 31
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
WTA prize raised to S$7m
Racquet Club
VIP hospitality
tickets go on sale
By Lee U-Wen
[email protected]
@LeeUwenBT
Singapore
WHEN the world’s top female tennis players return
to Singapore for their season-ending championships this October, they
will have their eyes fixated
on a record prize purse
that has now ballooned to
US$7 million.
This is nearly 10 per
cent more than the US$6.5
million that was given out
at last year’s BNP Paribas
Women’s Tennis Association (WTA) Finals, which
was the first time that the
women tour’s showpiece
tournament was held in
the Republic.
Spectators will get more
opportunities to catch their
favourite players in the
flesh, with an extra day of
competition added to the
schedule, making it a total
of eight days.
The tournament and its
various side events take
place at the Singapore
Sports Hub in Kallang starting Oct 23.
Even though this year’s
tournament is nearly nine
months away, event promoter World Sport Group
(WSG) is officially launching ticket sales for its Racquet Club VIP hospitality
programme on Saturday.
Those with Racquet
Club passes get to enjoy
TENNIS ROYALTY
The world’s top female tennis player, Serena Williams, was
mobbed when she visited one of the suites at the Racquet
Club in October 2014, during the BNP Paribas WTA Finals
tournament at the Singapore Sports Hub. Williams was the
winner of the inaugural tournament, the first time it was
held in Singapore. PHOTO: WORLD SPORT GROUP
meals prepared by celebrity chefs before the matches, a free flow of champagne in a private lounge,
and the best seats at the
Singapore Indoor Stadium
to watch the players in action. They will also get
more access to meet players up close. Last year,
some of the players that visited the suites at the Racquet Club included Serena
Williams, Li Na, and legends Billie Jean King and
Chris Evert.
During last year’s WTA
Finals, the original inventory of 5,500 Racquet Club
passes were sold out,
which led to WSG releasing
another 2,200 spaces to
meet demand. These were
also sold out.
For the early-bird phase
that runs until Feb 28, fans
have the chance to get the
Oct 25 opening night VIP
tickets (S$795), a weekend
package that includes the
semi-finals and the grand final (S$4,500), and a combination of both the opening
night and the weekend
package (S$5,000).
The sales for the other
weekday sessions and packages will begin in March
once the WTA releases the
official match schedules.
For bookings of 10 seats
of any package, clients will
get a dedicated table inside
one of the suites with the
option to include branded
signages. A booking of 50
seats or more entitles the
buyer to a private suite that
can be customised.
Adrian Staiti, the executive vice-president for global partnerships at WSG,
said that the Racquet Club
would present Singapore’s
corporate community with
the chance to host and engage their business partners at a major sporting
event.
Renowned ‘Thorn
Birds’ author dies
Sydney
TRIBUTES for renowned
Australian author Colleen
McCullough, whose romantic saga The Thorn Birds
sold more than 30 million
copies, poured in on Friday
from the publishing world
to politics following her
death at the age of 77.
The best-selling writer,
known for her wit and
warmth, died in hospital
on the remote Pacific outcrop of Norfolk Island
where she lived for most of
the last four decades, after
suffering a series of small
strokes. Prime Minister
Tony Abbott described her
as “a unique Australian personality and Norfolk
Island’s most famous resident”.
“She enthralled readers
for decades and she will be
missed,” he said. Her publisher HarperCollins Australia said that McCullough
had fought through a string
of health problems to continue writing via dictation.
“Ever quick-witted and
direct, we looked forward
to her visits from Norfolk Island and the arrival of each
new manuscript delivered
in hard copy in cus-
COLLEEN MCCULLOUGH
Publishing director Shona
Martyn: ‘The world is a less
colourful place without Col’
tom-made maroon manuscript boxes inscribed with
her name,” publishing director Shona Martyn said.
“The world is a less colourful place without Col.”
AFP
“We’ve seen a great response from businesses
that have harnessed the
platform to engage their
key stakeholders at the Racquet Club last year (and)
we hope to provide an enhanced experience – both
on and off the court – for
all guests (this year),” he
said.
Last year’s WTA Finals
champion was the reigning
world No 1 player Serena
Williams, who trounced Simona Halep in straight sets
in the deciding match.
The other singles players who graced the inaugural edition were Maria
Sharapova, Ana Ivanovic,
Caroline Wozniacki, Agnieszka Radwanska, Petra
Kvitova and Eugenie Bouchard.
The top eight singles
players and doubles teams
who amass the most
number of points at various tournaments this year
will earn the right to compete in Singapore.
Ringo Starr set for
new album, tour
New York
EX-BEATLE Ringo Starr is
set for the Rock and Roll
Hall of Fame, but first he
plans a new album and
tour of the United States
and Latin America.
The drummer for the
Fab Four announced on
Thursday the release of his
18th studio album, Postcards from Paradise, on
March 31.
The release comes just
before Starr, 74, who is already in the Rock and Roll
Hall of Fame as a member
of the Beatles, is inducted
in his own right at an April
18 ceremony in Cleveland.
Starr plans a onemonth tour starting on Feb
13 in the southern US state
of Louisiana, with about
half the concerts taking
place in Latin America.
He will play two dates
each in Brazil and Mexico,
STARR TURN
The ex-Beatle said he would
release his 18th studio
album, ‘Postcards from
Paradise’, on March 31
as well as one show each in
Argentina, Chile, Colombia, the Dominican Republic and Puerto Rico. The
singer/songwriter said he
enjoyed past performances in Latin America. “The
audiences were just great
and so loving, we can’t
wait to go back,” he said.
Starr will be joined by
his All Starr Band of other
prominent musicians. AFP
CRYPTIC CROSSWORD
Across
1 Certainly upset, due to spy
in bed (6,7)
9 Humiliated, Charlie
stepped on the gas (9)
10 Pal shot on a motorway
(5)
11 Go in with answer for
new consumer (5)
12 Proclaim a moratorium,
arresting a leader of
prayers (4)
13 Eject leaders of only
union seeking terms (4)
15 Do better than Portugal,
squeezed by expenditure
(7)
17 An adept bowler,
perhaps, accepted by
degrees (7)
18 An absorbing process is
attached to the universe,
extracting carbon (7)
20 Withdraw from race,
disheartened, needing
nurse (7)
21 The last word to change
almost completely (4)
22 Great love absent from
the last letter (4)
23 A person protected by
king is a person who’s
doomed (5)
26 Fruit finally ready for
picking? Rubbish (5)
27 Could men in trouble
crossing river spread this?
(5,4)
28 Understand what
paparazzi must do (3,3,7)
Down
1 Graduate composer and
orator self destructed
(8,2,4)
2 What a brewer needs —
still holding ales being
emptied (5)
3 First to support genuine
scientist (10)
4 Studies Italian with variable
concentration (7)
5 Doctor raised origin of
murder weapon (7)
6 Raise cap in support of
socially acceptable state
(4)
7 Quite ridiculous contents
of letter giving protocol
(9)
8 Catch spanner needed for
game (8,6)
14 Pretty as a picture? (10)
16 Doing office work
includes cover for editor
and moderating (9)
19 Furtive behaviour of the
last out? (7)
20 Guide travelled in
conversation with
politician across area
(4,3)
24 Pacific island vessel going
north full of gold (5)
25 Talent of criminal? (4)
YESTERDAY’S SOLUTION
Across: 1 Spirits, 5 Selfish, 9 Upset, 10 Raindrops, 11 Describing, 12
Tart, 14 Astonishment, 18 Conversation, 21 Soil, 22 Triangular, 25 Operating, 26 Oddly, 27 Sorting, 28 Entered.
Down: 1 Sturdy, 2 Insist, 3 Interested, 4 Scrub, 5 Scientist, 6 Lids,
7 Isolated, 8 Hesitate, 13 Throughout, 15 Observing, 16 Scissors, 17
Engineer, 19 Glider, 20 Prayed, 23
Argue, 24 Taxi.
G Telegraph Group Limited, London
32
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Published and printed by Singapore Press Holdings Limited. Co. Regn. No. 198402868E. A member of Audit Bureau of Circulations Singapore. Customer Service (Circulation): 6388-3838, [email protected], Fax 6746-1925.
Living
BT
THE BUSINESS TIMES WEEKEND | JANUARY 31 - FEBRUARY 1,
2015
C
A
R
T
IE
R
TIME'S A-CHANGING
Luxury watchmakers put up a sober front at the
Salon International De La Haute Horlogerie 2015
L2-4
ILLUSTRATION OF CARTIER CRASH SKELETON BY LUDWIG ILIO
DINING
Take away a feast L6-8
DESIGN
The National Gallery: Monuments reborn L10-11
MOTORING
The BMW X6: Xtra sporty L14
GUEST CHEF
Thai celebrity chef I an Kittichai L9
PERSONAL SPACE
Evolving around the mothership L12-13
NO HOLDS BARRED
EPL’s top two on collision course L16
L2 watches
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
A quiet mood prevailed at the
Salon International De La Haute
Horlogerie 2015 in Geneva last
week. Luxury watchmakers put up
a sober front, pruning away excess
and offering new lines at more
accessible prices. Innovations were
few and far between, while the
minute repeater appeared to be
the ‘in’ thing.
By Chuang Peck Ming
TIME’S
A-CHANGING
T
HE show must go on, even you’ve appeared to pervade SIHH 2015. They lacked the innovaNovelties with a price tag of a million-Swiss franc or
just been jolted by bad news. tiveness and surprise element of a number of the time- more were nowhere in sight. Richard Mille’s Tourbillon
Still, the shock of the sudden pieces launched at last year’s fair. Pieces like Van Cleef & Fleur came close at CHF824,500, but then the price resurge of the Swiss franc on the Arpels’ Midnight Planetarium, an astronomical complica- flected largely the diamonds on the watch.
eve of one of the world’s two big- tion that offers a 24-hour time displayed by a comet; and
Cartier’s Rotonde de Cartier Grande Complication, its
gest watch fairs still lingered last A Lange & Sohne’s Richard Lange Calendrier Perpetual first grand complication which features also a minute reweek at the annual Salon Interna- Terraluna, an impressively sophisticated perpetual calen- peater in a platinum case, is going for an estimated
tional De La Haute Horlogerie (SI- dar with a striking orbital moon-phase display seen 600,000 euros (CHF600,000). That’s way below Lange’s
HH) exhibition in Geneva.
through its casebook.
Grand Complication in pink gold launched two years
It didn’t help that many of the
Then there was Roger Dubuis’ super accurate Excali- ago; the Lange complication was then listed as 1.9 milretailers and journalists who bur Quatuor, which is capped with the world’s first sili- lion euros.
made up the 14,500 visitors to the week-long event – 4 cone case and its balance wheel regulated unusually by
More tellingly, Greubel Forsey, known for its top qualiper cent up from 2014 – found the new timepieces show- four sprung balances; Cartier’s mystery watch with hands ty tourbillons priced easily over CHF500,000, unveiled
cased by the 16 luxury brands mostly underwhelming.
that appear to float on air; and Piaget’s record-breaking the Tourbillon 24 Secondes Vision at an estimated
For the SIHH, which turned 25 this year, there was no excessively thin Altiplano 38mm 900P watch.
CHF290,000 – its cheapest creation so far.
birthday party to celebrate.
These provided at least some excitement and buzz to
The watches launched this year were certainly more
The Swiss central bank’s move to unpeg the Swiss an exhibition which otherwise would have been pretty accessible price-wise, but that did not necessarily come
franc from the euro was only the latest shocker for
at the expense of quality.
the Swiss watch industry. The SIHH 2015 was alMontblanc’s Ultra Slim is again a
ready staged against a backdrop of high costs and
clear indicator.
low growth in many key markets.
Neither has a more conservative
Even the organisers, who have every reason to
pricing policy stopped major brands
paint a happy picture, conceded that the exuberfrom launching of high-cost compliance flaunted in recent years was gone, along with
cations and hand-crafted artistic
the double-digit growth in Swiss watch exports.
works. There were several grand
Classical and low-profile watches were the main
complications – and the minute restaples at the fair, they reported after the exhibipeater appeared to be the ‘in’ thing.
tion ended two Fridays ago.
Besides Cartier, Audemars Piguet
Still, some of the new timepieces launched by
presented the Royal Oak Concept Rethe brands – 12 owned by Swiss luxury goods
cherche Acoustique, a grand compligroup Richmont – did cause a minor stir.
cation with a minute repeater conRichard Mille’s RM 19-02 Tourbillon Fleur seceived in AP’s lab for acoustic reduced some visitors with a Magnolia flower that
search; it produces a sound volume
Cartier Crash
Greubel Forsey GMT
opened and closed in sync with the movements of
never reached before.
Skeleton
with platinum case and
a tourbillon in flight. Montblanc won admirers
IWC’s Portugiese Grande Complired gold dial
with its Heritage Chronometrie Ultra Slim, which
cation has a minute repeater funchad one fan gushing over its “incredible looks and
tion as well. Similarly for
impressive quality with a shockingly low price tag”
Jaeger-Lecoultre’s Master Grande
boring. Some of this year’s novelties which caught Tradition Grande Complication.
.
A Lange & Sohne deployed know-how picked up from
The simple but elegant timepiece, fitted with a 38mm visitors’ eyes weren’t even deemed to be worth a mencase 5.8mm thick that houses a Montblanc movement, is tion by their brands. Montblanc’s Ultra Slim, for one, was its Grand Complication to make the Zeitwerk Repetition
Minutes, a minute repeater housed in a platinum case.
listed at 1,900 euros (S$2,850) in steel and 5,500 euros left out of the press presentation.
The brands may say the sober-looking watches are
In the art and craft department, Roger Dubuis showed
(S$8,250) in solid red gold. Jaeger-LeCoultre’s 38mm Masoff its skills in crafting skeleton timepieces in pieces like
ter Ultra Thin introduced some years ago is selling for what the market want – and they have a point.
After years of excess fanned by an economic boom, a the Excalibur Spider Double Tourbillon Volant Squelette
around S$11,000 in steel and S$20,000 in red gold, though
the watch made by this sister brand (Richmont owns softer and uncertain economic climate now demands to EX0481, which is powered by a hand-winding skeleton
do away with the bells and whistles – just plain but movement. Even newcomer Ralph Lauren has a skeleton
both Montblanc and Jaeger-Lecoultre) is still thinner.
watch in its new Automotive collection, the RL AutomoAnother novelty was Officine Panerai’s Mare Nos- well-made watches will do.
Watch prices, which are already coming down with tive Skeleton. Vacheron Constantin displayed its expertrum, a 52mm giant of a chronograph first created in
1943 for the Royal Italian Navy. While the vintage model the more sober mood, continued to stay down to earth tise in engraving in two models: the Metiers d Art Mecahad a dark green dial, the updated version is tobacco with the new timepieces launched at SIHH 2015. niques Gravees – 14-Day Tourbillon and the Metiers
brown. Instead of steel like the original, the new one is Montblanc’s is only one example. Baume & Mercier, the d’Art Mecaniques Gravees.
For the detail hungry, check out our snapshot of what
made of titanium and is powered by a superior move- self-proclaimed purveyor of “affordable luxury” timepieces, boasted that the average price of its latest collection is the participating brands offered at SIHH 2015.
ment.
[email protected]
Yet these notables failed to lift the “quiet” mood that under 3,000 Swiss francs (S$4,470).
watches L3
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
A Lange & Sohne
In addition to the Zeitwerk
Minute Repeater, the German
brand also presented updated
versions of the Lange 1 and
Saxonia, two of the four models
that made their debut when
Lange was revived in 1994.
The new Lange 1 is driven by
a new hand-wound movement,
which has an escapement with a
balance wheel that features
eccentric poising weights and a
freely oscillating balance spring.
Apart from narrower bezel, a
precisely jumping outsize date
now graces the dial – this
advances by one day exactly at
midnight and delivers a
doubt-free reading.
The Saxonia is reduced to
35mm, making it the smallest
member in the Saxonia line. The
markers on the dial are tweaked,
rendering it easier to read.
A Lange & Sohne Zeitwerk
Minute Repeater, 440,000 euros
(S$660,000)
Cartier
Audemars Piguet
Baume & Mercier
The star piece in its collection is
not for sale, at least not yet. The
Royal Oak RD#1 concept watch
is a grand complication with a
minute repeater that’s so
outstanding it overshadows the
other two features of the
timepiece: a tourbillon and
chronograph. The minute
repeater is the result of an
indepth eight-year sound
research programme. Those who
heard it said it’s the loudest they
heard so far.
Audemars Piguet Royal Oak
Concept RD#1, price not
available
After two ultra-thin models,
chronograph and tourbillon, its
Clifton collection, the brand that
prides on its relatively low prices
added two more novelties this
year with hints from the 1950s:
The hand-wound Clifton Huit
Jours with 8 days’ power reserve;
and the automatic Clifton
Grande Date Reserve De Marche
which has a power reserve
indicator and large date in
double window.
Baume & Mercier Clifton Big Date
and Power Reserve, S$5,450
Perhaps the most prolific of the brands,
Cartier launched its most complex watch, its
first shaped movement and a new line in
addition to an assortment of other new
complications and artistic timepieces.
The first, the Cartier grand complication,
took five years to finish. The minute
repeater-flying tourbillon-perpetual calendar
combo is powered by an automatic slender
in-house movement.
The shaped movement came in the form
of the Crash Skeleton, a spinoff of Cartier’s
iconic Crash watch introduced in 1967.
The new line – the Cle De collection for
men and women – has, as its name suggests,
a key-like crown and new shape that’s
described as “tightly-drawn curve, arched
streamlined and sleek”.
Rotonde De Cartier Grande Complication
Squelette, 600,000 euros (S$900,000)
L4 watches
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
IWC
Greubel Forsey
The name that spells pricey
tourbillons has, surprisingly, a
new offering that’s 10 per cent
cheaper than its lowest entry-level
creation – the Tourbillon 24
Secondes Vision.
Greubel Forsey Tourbillon 24
Secondes Vision, CHF290,000
(S$435,000)
IWC marked the 75th anniversary
of its best-selling Portugieser line
with its first annual calendar, the
Portugieser Calendar. There’s
also the Portugieser Perpetual
Calendar Digital Date-Month
75th Anniversary Edition and the
Portugiese Hand-Wound 8 Days
75th Anniversary Edition.
IWC Portugieser Annual Calendar,
S$32,900 in steel
watches L5
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Jaeger-LeCoultre
Montblanc
Piaget
The moon is where
Jaeger-LeCoultre turned to for
inspiration for this year’s
collection, creating timepieces
like the Duometre
Spherotourbillon Moon, Master
Calendar and Rendez-Vous
Moon. But the piece that stands
out is the Master Grande
Tradition Grande Complication,
which has a flying orbital
tourbillon, a minute repeater and
a dial displaying the sky chart of
the Northern Hemisphere.
Jaeger-LeCoultre Master Grande
Tradition Grande Complication,
269,000 euros (S$403,500)
Probably the first to have taken a
stab at making a smart watch in
the luxury range, the brand
unveiled the TimeWalker Urban
Speed e-Strap which has a strap
whose features include an
“integrated technology device”
that offers an activity tracker and
smart notifications, fuelled by a
Bluetooth connection to an iOS or
Android smartphone.
But Montblanc’s main
attraction was a collection
inspired by the explorer Vasco da
Gama. And the star piece in it was
the Villeret Tourbillon Cylindrique
Geospheres Vasco da Gama
Limited Edition 18, which unites a
cylindrical tourbillon and unique,
functional world time indication.
Connecting the Northern and
Southern Hemispheres – as Vasco
da Gama did in journeying to
India – world time is read on two
sapphire crystal spheres, which
show the course of day and night
around the world.
Montblanc Tourbillon Cylindrique
Geosphères Vasco da Gama,
250,000 euros (S$375,000)
After breaking Jaeger-LeCoultre’s
record for an ultra-thin
hand-wound timepiece last year,
the brand seen more as a jeweller
than watchmaker presented yet
another ultra-thin creation – the
Altiplano Chronograph, a
chronograph that’s the first
complication in its Altiplano line
and carries an attractive price tag.
The price is around S$40,000, not
much higher than the simple
ultra-thin model launched in
SIHH 2014.
Piaget keeps pushing to make
slimmer timepieces because it
wants to tell the world that it’s
also a watchmaker, according to
the brand’s CEO Philippe
Leopold-Metzger.
Piaget Altiplano Chronograph,
S$41,700
Ralph Lauren
Richard Mille
Its Automotive collection of six
watches is inspired by the
designer’s rare 1938 Bugatti sports
car. The use of burl wood defines
the timepieces, echoing the
Bugatti’s steering wheel and
dashboard, along with exposed
screws on the bezel and polished
and shot-blasted cases. IWC and
Jaeger-LeCoultre movements drive
some of the watches.
Ralph Lauren Automotive, S$8,200
The brand dedicated SIHH 2014
to the ladies. The two
complications among its
novelties in SIHH 2915, including
the Tourbillon Fleur, were also
aimed at them.
But what’s really news at the
Richard Mille stand this year was
bracelets — a first for the brand.
These were made for two existing
models: RM 07-01 and RM 11.
But you can’t buy the bracelet for
your RM 07-01; it comes only
with the watch. You can buy the
titanium bracelet for your RM 11,
though. It costs CHF58,000
(S$87,000), half the price of the
timepiece.
Richard Mille RM19-02 Tourbillon
Fleur, CHF824,500 (S$1.24 million)
Roger Dubuis
Its focus this year is on skeleton
movements designed in the
brand’s signature star shape. The
collection demonstrated not only
Roger Dubuis’ skills in crafting
skeleton timepieces, but also its
artistry and inventiveness in
producing works such as the
Excalibur Spider Skeleton Double
Flying Tourbillon. Made out of
titanium, black DLC-titanium
and red aluminium elements, it
looks and feels great.
Roger Dubuis Excalibur Spider
Double Tourbillon Volant
Squelette, S$395,000
Officine Panarei
Fans of the brand were treated to
new timepieces that included the
Laminar Submersible 1950
Carbotech, an automatic watch
made from a new composite
material based on carbon fibre; the
Radiomir Firenze that spots a
hand-engraved case; and the
Radiomir 1940 Equation of
Time. The stand-out piece is
the Mare Nostrum Titanio.
Panerai Mare Nostrum Titanio
(52mm), S$58,200
Parmigiani
This year Parmigiani put its creative
juices to work on all its key
collections, expanding the automotive
Bugatti line with its transversal
movement, the Kalpa collections
dedicated to women and Tonda,
which knows how to please women
and men in an elegant way. Three
watches were created to
commemorate the 10th anniversary of
Parmigiani’s partnership with Bugatti:
the Bugatti Mythe; Bugatti Revelation;
and Bugatti Victoire.
Parmigiani Bugatti Mythe, price not available
Vacheron Constantin
The brand celebrated its 260th
anniversary by unveiling a new
Harmony line made up of seven
cushion-shape timepieces
powered by new in-house
ultra-thin mono pusher
chronograph movements. The
line was inspired by a VC
chronograph introduced in 1928
– and one of the Harmony pieces,
the Chronographe Monopusher
Pulsometre, which has a
pulsimeter scale, is an updated
version of it.
The other variations are a
flyback chronograph, a tourbillon,
a ladies’ double-pusher
chronograph and a trio of
dual-time watches.
Vacheron Constantin Harmony
Chronograph, S$105,600
Van Cleef & Arpels
After a successful foray into
men’s watches in SIHH 2014
with the amazing astronomic
Midnight Planetarium and the
Pierre Arpels Heure travelling
timepiece, Van Cleef returned to
its feminine roots. It brought
back the Cadenas with two
gem-set versions: one on an
alligator strap and the other on a
gold bracelet.
Van Cleef & Arpels Cadenas,
15,000-114,000 euros
(S$22,500-S$171,000)
L6 dining
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
The Chinese New Year reunion dinner does not have
to be an assembly-line restaurant affair with draconian
time limits. A growing number of takeaway options
means you can enjoy your family get-together at home.
BT Weekend helps you to choose your menu.
By Tay Suan Chiang and Rachel Loi
Quayside Seafood
6338 3195 | www.quaysidedining.com
This seafood pen cai certainly lives up to
its rather fancy name - ‘Completeness &
Overflowing Wealth’ Whole Lobster & Seafood Treasures Pen-Cai. There is a whole
lobster in there, plus 10-head abalones
from Australia, a healthier-choice hormone-free whole chicken, hybrid grouper
fillets, clams, Alaskan crab claws, king
prawns, South African sea cucumber,
fresh whole scallops, whole shiitake mushrooms, taro, tender wawa vegetables, and
dried oysters.
Each pot is priced at S$328, and is good
for six diners. Extra orders are priced at
S$53 for each diner.
TAKE AWAY A FEAST
Ah Hoi’s Kitchen
Hotel Jen Tanglin Singapore 6831 4373
[email protected]
You have to dig deep to get every morsel of goodness in this pen cai, or
what the restaurant calls the Fortune Big Bowl Feast. Some of the premium ingredients used include black moss, abalone, superior sea cucumber, fish maw, dried oyster, fresh prawns, along with roasted pork,
chicken, yam, beancurd, lotus root, Chinese cabbage, gingko nut, golden mushroom, superior mushroom and conpoy broth. A medium
sized pen cai is good for four to six persons and is priced at S$268.
dining L7
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Xi Yan
6220 3546 | www.xiyan.com.sg
TungLok Restaurants
9088 8008 | www.tunglok.com
You’ve heard of Buddha Jumps
Over the Wall, but how about its
baked version? This one from Xi
Yan features a whole bird baked in
a giant bun, which helps to keep the
chicken warm.
Cut away the bread to get the
succulent chicken which comes
stuffed with sea cucumber, pork belly, mushroom, dried scallop and abalone. The Baked Buddha Jump
Over the Wall is priced at S$128.
If you're looking for a vegetarian option for your reunion dinner, try TungLok group's vegetarian take-home feast ($238
for 6 pax and $328 for 10 pax).
It includes a vegetarian yu
sheng, rice wrapped in lotus
leaf, Thai-style deep-fried vegetarian fish, a TungLok nian gao,
and a vegetarian pen cai featuring deep-fried beancurd skin
rolls, chestnuts, vegetarian abalones, vegetarian lobster balls, braised
tofu, taro, broccoli and bamboo fungus.
Regular options are also available, in the form of
their heavenly ($468 for 6 pax and $698 for 10 pax) and royal ($368 for 6 pax and $498 for 10 pax) take-home feasts. These include salmon yu sheng,
signature TungLok treasure bowl (pen cai), fried glutinous rice with assorted preserved
meat, herbal chicken, and one of TungLok's nian gao options.
Li Bai Cantonese Restaurant
Sheraton Towers 6839 5623 | www.sheratonsingapore.com
New to the range of festive offerings by Li Bai Cantonese Restaurant is
the stewed “eight treasures” duck which now comes with 5-head abalone in addition to its eight ingredients – lotus seed, Chinese mushroom, sea cucumber, salted egg, barley, chicken, pork, and chestnut
($388). Also available are traditional favourites like the Buddha Jumps
over the Wall ($568 for 4 pax) with 2-head abalone, sea cucumber,
fish maw, ginseng and dried scallops. One tip however, is to get a bottle of their in-house XO sauce ($28+ per bottle) made with scallops
from Japan, Chinese ham, salted fish and shrimp – it'll be sure to add
a nice kick to your meal.
Xin Cuisine Chinese Restaurant
Holiday Inn Singapore Atrium 6731 7173
Xin Cuisine's yusheng ($63 to
$98) is a refreshing way to start
the new year with its sweet passionfruit sauce to go with either
Japanese prawns or salmon. For
a more luxurious meal, order
the imperial pen cai ($999 for 10
persons) and get premium
items like a whole Australian
3-head abalone, bird's nest,
deer tendon, goose web and
Mexico sea cucumber. Also
available is their crispy-skinned
roasted suckling pig ($298) and
an eight-treasures duck ($198)
which is stuffed with ingredients like fish maw, whole abalone, sea cucumber, sea whelk.
Oceans of Seafood
6466 1005
www.oceansofseafood.com.sg
Oceans of Seafood’s Vibrancy of
Life yusheng comes with a Japanese twist. The yusheng, S$128,
comes with a whole boiled rock
lobster, salmon and amberjack
sashimi. The amberjack is flown
in from Tokyo’s Tsukiji market,
and the lobster is from the UK.
The yusheng also has vegetables
imported from Japan, such as the
red and white radishes. Extra ingredients that are thrown in with
a Japanese slant are edamame
beans, and tobiko, or flying fish
roe. For that extra luxe touch, the
yusheng is garnished with gold
flakes. Instead of an overly sweet
sauce, the dressing here is sesame
with a hint of wasabi.
Majestic Restaurant
New Majestic Hotel 6511 4718
www.restaurantmajestic.com
JING One Fullerton
6224 0088 | www.jing.sg
This year, Jing is offering a three-course takeaway menu that is good for
four to six persons. Start off with the salmon yusheng, followed by Jing’s
Abalone Dried Seafood Poon Choi. Each claypot comes packed with abalone, fish maw, fish glue, Japanese mushroom, dried oyster, prawns, lotus roots, braised tofu, chicken, black moss and sea asparagus. For
some carbohydrates, there’s the Supreme Fried Rice, wok-fried with Chinese sausage and diced mushrooms, wrapped in fresh lotus leaf. Priced
at S$288. Get a 20 per cent discount if you order by Feb 17.
The Organic Grocer
8125 4077 | www.theorganicgrocer.com
Eat healthy this Lunar New Year with The Organic Grocer's newest range of Organic
Prosperity Boxes that come in two sizes – medium ($88) for three to four pax, and
large ($150) for six to seven pax. Each box contains a medley of hotpot ingredients
made up of organic produce and hormone-free meats, such as fresh organic green
vegetables, Chinese cabbage, cherry tomatoes, and Swiss mushrooms, organic tofu,
free roaming chicken, organic grass-fed beef, natural pork from the northwestern
United States, and 300g of wild caught all natural scallops. A delivery fee of $15 will
be waived with orders above $150.
Choose from three different yu
sheng options at Majestic Restaurant with their Atlantic salmon lo
hei ($58 or $88), ikan parang lo hei
($58 or $88), and snow pear and
mixed vegetables lo hei ($48 and
$68). Or if you'd prefer to keep
things simple, order the Majestic
deluxe treasures claypot takeaway
set ($388 for 6 pax, $488 for 8 pax,
or $588 for 10 pax) which comes
with the Atlantic salmon lo hei,
roasted pork, steamed rice with
Chinese sausage and preserved
meat, deep-fried nian gao with
yam and sweet potato, and of
course the Majestic deluxe treasures claypot that includes abalone,
fish maw, sea cucumber, dried oyster and flower mushrooms.
L8 dining
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Young chefs vie to represent S-E Asia
By Rachel Loi
N
EXT Thursday, 10 young chefs
from South-east Asia will face
one another in a cook-off to determine who gets to represent the region
in the finals of the San Pellegrino Young
Chef 2015 competition – a global search
for the world’s best young chefs under 30.
Half of these semi-finalists come from
Singapore, including 25-year-old Elaine
Koh – a chef de partie (or station chef) at
Jaan, one of Singapore’s most prestigious
restaurants, and no. 17 on the Asia’s 50
Best Restaurants list. Within the two-hour
time limit, she will have to prepare her signature dish – mackerel with sherry, beets
and horseradish.
Along with the other nine competitors,
Chef Koh will be judged by a panel made
up of Bangkok-based Indian chef Gaggan
Anand, and two Singapore-based chefs –
Andre Chiang of Restaurant Andre and Ryan Clift of Tippling Club.
The winner will go on to represent the
South-east Asian region at the grand finals
in Milan this June, where they will compete against 19 others from other regions
around the world.
San Pellegrino’s marketing coordinator
for Asia, Elisabetta Ceriani, says: “We decided Singapore was the best option (to
host the semi-finals) because it’s the most
developed country in South-east Asia, and
the most centralised. And of course the culinary scene here is growing too.”
As one of the South-east Asian judges,
Chef Clift is proud of the fact that half the
region’s semi-finalists come from Singapore. He says: “It shows the calibre of Singapore right now. I’m hoping maybe one
of two of the local guys will include some
local flavours in their dish – that would be
good to see.”
The other four chefs from Singapore
are Chua Guo Sen from Sky On 57, Kirk
Westaway from Jaan, Andrea de Paola
from &SONS Bacaro, and Immanuel Tee
who runs his own hawker stall Immanuel
French Kitchen.
The competition has five main judging
criteria (or “golden rules”) – ingredients,
skills, genius, beauty, and message.
Chef Tee will be making his Kakuni
pork belly with Duxelle mushroom, onsen
egg and potato foam – a dish he created
while working at Keystone restaurant a
few years ago. An important criteria for
him is his “message”, which he explains:
“The technique is very Western, but the
pork belly flavour is very Asian. The dish
represents me that way, and it’s important
to have your own identity and touch.”
When asked which of the criteria was
most important to him personally, Chef
Clift immediately says: “Ingredients. The
fundamentals of all my cooking is ingredients. Everyone thinks maybe it’s technology but it’s not. If you don’t start with good
produce, you don’t end with a good dish.”
That said, he adds: “I think (the young
chefs) just need to be true to themselves.
Yes, you have to take the competition seriously but you also have to enjoy it. It’s an
experience.”
BEST UNDER 30
Singapore’s Chef
Tee and Chef Koh
(left) will be
cooking their
signature dishes in
a bid to reach the
finals of the San
Pellegrino Young
Chef 2015
competition
[email protected]
@RachelLoiBT
wine&dine
with BTWeekend
Marina Mandarin Singapore
6 Raffles Boulevard, Level 5 Z 6845-1018
Chinese New Year Goodies
Chinese New Year Goodies are now
available for takeaway at Peach Blossoms.
Enjoy Marina Mandarin xi qi yang yang Yu
Sheng, Pumpkin Cake with Shredded Yam,
Supreme Braised Buddha Jumps Over the
Wall and many more at your private
celebrations with family and friends with
the convenience of our takeaway goodies.
Drive through collection is available. For
orders and enquiries, please visit
www.marinamandarin.com.sg/dining.
Lobby Lounge & The Terrace
Conrad Centennial Singapore
Two Temasek Boulevard, Lobby Level
Z 6432-7483 / 6432-7487
Lunch On The Go: (Available Monday To
Friday, 11.30am to 2.30pm) T-Wrap:
Succulent Chicken Shavings with Garlic
Sauce, Vegetables and your choice of
Wasabi or Barbecue Sauce at $7.50
Sundowner Special: 1-for-1 Traditional or
Modern Gin and Tonic from 5pm – 7pm
Weekend Afternoon High Tea:Elegance and
Indulgence redefined – (Available Saturday
and Sunday and Public Holidays, 2pm to
6pm) Indulge in a buffet of oysters,
meat-carving stations, unlimited chocolate
selection and tropical sangrias to kickstart
your weekend! $58++ per adult while
children from six to 12 years old enjoy 50
per cent off the adult price. For enquiries
or reservations, call The Terrace at
6432-7487 and Lobby Lounge at
6432-7483. Alternatively, you may e-mail
[email protected].
Asian Market Cafe
Fairmont Singapore
80 Bras Basah Road, Level 2 Z 6431-6156
Featuring local favourites and
contemporary regional delicacies, Asian
Market Cafe offers a glorious buffet spread
showcasing the breadth and depth of
Halal-certified authentic pan-Asian cuisine
presented in a nostalgic and traditional
hawker set-up. For reservations, please call
6431-6156, e-mail
[email protected] or book
online at www.asianmarketcafe.com.sg.
Triple Three
Mandarin Orchard Singapore
333 Orchard Road, Level 5
Z 6831-6288/71
Named after the address of the hotel –
333 Orchard Road, Triple Three is
Mandarin Orchard Singapore’s
award-winning international
Japanese-inspired buffet restaurant,
featuring live cooking stations. Signature
dishes include Kagoshima wagyu beef and
the much-acclaimed honey-glazed ham,
perfected through 30 years of experience.
In addition to the freshest sashimi and
sushi, tempura and teppanyaki specials,
Triple Three prides itself on having a
premium roast section, seafood on ice,
Asian wok-fried favourites, flavourful Indian
dishes, and mouth-watering desserts. For
enquiries or reservations, please call
6831-6288/71 or e-mail
[email protected].
Pan Pacific Orchard
10 Claymore Road Z 6831-6686
Celebrate special moments with your loved
over champagne, handcrafted chocolates,
breakfast-in-bed and a surprise bouquet of
roses with our Amour in the City escape,
or indulge the afternoon in sweet
company, conversations and elegant
three-tiers of pure delight at our
Champagne Gourmet High Tea in the lofty
Lobby Lounge from 13 to 15 February. An
indulgent buffet awaits those who relish an
epicurean gastronomy with freshly shucked
oysters, fresh seafood on ice including
Maine Lobster, Queen Roe Scallops and
freshly sliced air-flown sashimi and a la
minute Plates of Pleasure specials including
Lamb-Foie Gras dumpling and Steamed
Pacific Barramundi in Lemongrass Dressing.
Available at lunch and dinner, 14 February
2015. Or allow our 8-course degustation
menu take you on a gourmet journey,
unfurling flavours and textures that will
surely delight, starring gently prepared Sea
Urchin with eggs, Duo King crab and Raw
Scallop ceviche, Trio of freshly shucked
Oysters and seared Foie Gras, Duo of
USDA 1885 Wagyu and Omi Wagyu ending
with a refreshing note of Pistachio Lemon
Curd, macaroon and pralines. Available at
dinner, 14 February 2015. Visit
panpacific.com/orchard for more details or
speak with us at 6831-6686.
Serenity Spanish Restaurant
391 Orchard Road, Ngee Ann City
Takashimaya SC #05-32 Z 6235-9989
No 1 Harbourfront Walk, VivoCity
#01-98/99 Z 6376-8185
Pioneering authentic Spanish cuisine in
Singapore, Serenity opened its first outlet
in VivoCity six years ago and the second
outlet in Sanur Bali Indonesia. Now the
third Serenity is newly opened at Ngee Ann
City – Takashimaya SC. Serenity brings you
the most authentic Spanish flavours and
culture – delicious cuisine, charming
ambience and attentive friendly service.
Must-tries at Serenity are Signature
Suckling Pig (Cochinillo Asado), delectable
Spanish Rice Dishes (Paella), Spanish
Noodle Dishes (Fideuas), Palatable Soups
and, of course, Spanish Wine Cocktails
(Sangrias). The wine list contains more
than 60 labels of exclusive and rare Spanish
wines covering famous wine regions such
as Rioja, Rueda, Torro, Rebera Del Duero,
Riaz Bixas and Malaga. Serenity is a great
place to have business lunches, dinners and
gatherings. For dining enquiries and
reservations, call Ngee Ann City –
Takashimaya SC branch (open daily
11.30am to 10pm) at 6235-9989 or
VivoCity branch (open daily 11am to
12 midnight) at 6376-8185.
Plate
Carlton City Hotel Singapore
1 Gopeng Street, Level 3 Z 6632-8922
‘L’ for Love Set Dinner Menu – 14 February 2015
Be swept away for a gastronomic love
affair this Valentine’s with a sumptuous
4-course set dinner at Plate, alongside two
complimentary glasses of sparkling wine.
Romance couldn’t get anymore delicious.
$138++ per couple; with two
complimentary glasses of Chandon
Plate, Carlton City Hotel’s all-day dining
restaurant is located on level 3. With its
contemporary design and a view of the
swimming pool and lush greenery, guests
can enjoy an extensive buffet breakfast
with natural daylight. Plate offers a diverse
menu featuring salads and light meals, local
favourites, the classic and items from the
grill. Phone: 6632-8922; e-mail:
f&[email protected]
Reach out to more than 100,000 readers daily in the Wine & Dine Scheme. Contact Amy Leo at 6319-2129
dining L9
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
guest chef |
With a
golden hand
Thailand’s first celebrity chef Ian Kittichai does not let
fame go to his head. By Tay Suan Chiang
H
E IS Thailand’s first celebrity chef, but Ian Kittichai
says: “I’m less a celebrity
and more a chef.” Chef Kittichai has been a regular
fixture on TV since 2001, when he began
hosting the weekly cooking show Chef
Mue Tong (The Golden Hand Chef), which
is broadcast in over 70 countries; and
since 2012, he has been one of the permanent chefs on the TV series Iron Chef Thailand.
Despite his fame, he feels uncomfortable about how chefs on TV are being seen
as superstars, but says that being on TV
has its benefits – for one thing, people get
to know about him and go to his restaurants. “But then you have to be concerned
about who you are and how you cook,” he
says. “Diners will want to know if you can
really cook, or are you just a celebrity.”
Rather than let the superstar label go to
his head, Chef Kittichai says: “I always
think about where I came from. I started
as a chef, and not a celebrity. I worked my
way up from the bottom, and climbed up
the ranks.”
Two TV shows aside, the 47-year-old
chef currently has nine restaurants, six in
Thailand, including Issaya Siamese Club
ranked 31st in the Asia’s 50 Best Restaurant list last year. Outside of Thailand,
Chef Kittichai has two restaurants – one in
New York, and one in Mumbai.
He now adds Singapore to the list,
where he is the consultant chef for spa restaurant Tangerine at Resorts World Sentosa. The restaurant, located in ESPA spa,
was previously run by Thai chef Forest
Leong, wife of home-grown celebrity chef
Sam Leong, who runs a contemporary
Asian restaurant called Forest at the integrated resort’s Equarius Hotel.
“I’ve known Chef Sam for many years,
and it was he who referred me for the
job,” says Chef Kittichai, who said yes,
since he has had experience creating spa
cuisine.
He says that unlike regular cooking,
where “you can throw all things in”, spa
cuisine is a little more tricky. “Not only are
the portion sizes smaller, but I want to
throw in more protein, less fat, salt and
sugar into the dishes,” says Chef Kittichai
who is also into healthy eating himself. “It
is not just all raw foods either.”
He adds that the cooking techniques
have to be different too. The food is done
sous vide style, steamed or lightly seared
to retain the vitamins and minerals.
At Tangerine, where simplicity, flavour,
and nutrition lead the menu, some of the
signature dishes that Chef Kittachai has
created are Thai-Inspired Sous Vide Pork
and Asian Style Sea Bass and Salsa. The
former features Australian pork loin sous
vide at 65 degrees Celsius to retain the
maximum amount of nutrients and flavours, complemented with fresh garden
greens, young broccoli leaves and micro
cress which are high in antioxidants and
beta carotene. Meanwhile the sea bass is
lightly pan fried and sits on a bed of sauteed Napa cabbage, and is served with an
Asian style salsa and lime chilli sauce.
“My cooking style is very simple, and
about using fresh ingredients,” he says.
“After all, with great ingredients, you don’t
have to do too much.”
Chef Kittachai’s food journey began
from humble beginnings in Bangkok. Every morning, he would rise at 3am to accompany his mother to the wet market to
select the best meats, seafood and vegetables for her neighbourhood grocery. While
he was in school, she would cook a dozen
different types of curries. When he got
home, he would push a cart through the
neighbourhood, selling the curries, calling
out “Khao Geang Ron Ron Ma Leaw Jaar”,
or hot curry coming.
He later went to London to study, with
no intention of becoming a chef. While
working part-time at the Waldorf Hotel,
the hotel chef saw potential in the Thai na-
INTO DESIGNING FOOD
‘My cooking style is very simple, and about using fresh ingredients. After all, with great
ingredients, you don’t have to do too much,’ says Chef Kittichai
tional. Before long, the hotel sponsored
him to attend culinary school in London,
and he subsequently completed his culinary studies in Sydney.
He later honed his skills at the Four Seasons Bangkok, and also at top names such
as Georges V in Paris, French Laundry in
Napa Valley, and El Bulli in Spain.
Had he not become a chef, he says he
would have been a potter. “I saw some students moulding plates when I was in Sydney, and I think I would have become a
plate maker.” He didn’t go down that path
for a simple reason. “I realise that I
couldn’t design plates. I can design food,
but not plates. So it is better that I focus
on cooking,” he quips.
The celebrity chef is mostly based in
Bangkok, although he does make two trips
to visit his New York restaurants annually.
He hopes one day to open restaurants
in the major European cities – London,
Paris and Milan – but at the same time, is
realistic about certain issues. “Paris would
be difficult since they have strict labour
laws. Milan would require lots of education on Thai cuisine,” he points out. “London would be great. It is a sophisticated
city and people like to try new things.”
[email protected]
@TaySuanChiangBT
Blue swimmer crab and pomelo salad
Serves one
Ingredients
80g pomelo flesh
2 orange segments, peeled and halved
40g crab meat, shredded
5g young ginger, peeled and bruised
1
/4 lemongrass stalk (tender portion), chopped
1
/2 shallots, peeled and finely chopped
1
/4 red chili, finely chopped
2 tbsp palm sugar
1 tbsp fish sauce
1
/4 cup water
1
/2 stalk apple mint, finely chopped
Method
Place crab meat, young ginger, lemongrass
stalk, shallots, red chilli and mint leaf into a
bowl and mix.
Boil the water, palm sugar and fish sauce in a
pot for a few minutes until sauce thickens.
Set aside to cool.
Mix the sauce and pomelo.
To serve
Place the pomelo onto a serving plate, lay
crab meat mixture on top of it then garnish
with orange segments.
L10 design
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
design L11
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
Monuments
reborn
The City Hall and former Supreme Court buildings are undergoing
refurbishment to reopen as the National Gallery Singapore in November.
BT Weekend takes a peek at the work-in-progress. By Tay Suan Chiang
TRANSFORMED
Clockwise from left:
The grand staircase at
the entrance of the
former Supreme
Court. A tree-like
structure helps to
hold up the roof
which is made of
perforated aluminium
panels. Major works
are still being carried
out at the former
City Hall. An artist’s
impression of the
building’s roof deck
which will have a
garden and reflective
pools.
AS GOOD AS NEW
Above: The former Supreme
Court’s facade with its
Corinthian and Ionic columns
and relief panels have been
restored. Right: The wooden
panels on the ceiling were
cleaned up and repaired by
local artisans and carpenters
I
T is 10 more months to the opening of the National Gallery Singapore, and refurbishment
works are going on non-stop inside the City
Hall and the former Supreme Court. There are
hundreds of workers around, constructing
staircases, lifting structures in the atrium – the
buzz is not slowing down.
“Construction is on track to be completed
on time. Today, the focus for me is to deliver the best
quality in all details,” says Jean Francois Milou, founder
and principal architect of studioMilou architecture.
In 2008, his firm won an international competition
and partnered the local architecture and engineering
firm, CPG Consultants, to convert two of Singapore’s
most significant heritage buildings into the largest visual
arts venue in Singapore, and one of the largest in the region.
The National Gallery is dedicated to modern visual
art, with a focus on South-east Asian art, including Singapore art, from the 19th century onward.
Work on the former Supreme Court started first, and
is almost complete, with galleries in the midst of being fitted out for the exhibition display. Major works are still ongoing at City Hall. “Less work was needed for the former
Supreme Court, hence we started work on it first,” says
Mr Milou, who moved his family to Singapore and
PHOTOS: YEN MENG JIIN
opened a local office managed by Singaporean talent to
focus on the project.
Located in the heart of the Civic District, the City Hall
and former Supreme Court buildings were focal points
for many important events in Singapore’s history.
The City Hall building was built between 1926 and
1929, and it housed the Municipal Council. It was also
the office of Lee Kuan Yew, when he became the first
prime minister of Singapore. The then-prime minister
and members of his Cabinet took their oaths in the City
Hall Chamber.
City Hall continued to house various government departments until it was eventually vacated in 2005.
The adjacent former Supreme Court building was
built between 1930 and 1939 to serve the judiciary system
of Singapore. Its facade was designed to match City Hall,
with classical architecture and corresponding Corinthian
columns.
Both buildings were gazetted as national monuments
in 1992. Under guidelines set by the Preservation of Sites
& Monuments, the two buildings have to be preserved.
Together, CPG, studioMilou, Architectural Restoration
Consultant and Takenaka-Singapore Piling Joint Venture
all worked closely with the client on the complex tasks of
renovation while preserving the historic elements of the
monuments.
“The goal is to offer an elegant and welcoming art gal-
‘The goal is to
offer an elegant
and welcoming
art gallery that
deeply respects
the historical
importance of
the existing
buildings.’
Jean Francois Milou,
founder and principal
architect of studioMilou
architecture, at the atrium
of the new gallery
lery that deeply respects the historical importance of the
existing buildings while creating new architectural layers,
each placed upon the monuments with little intervention,” says Mr Milou. “We want to create a space where
museum goers will feel they are in historical buildings,
but yet at the same time, by looking out through the
buildings’ many windows, they can still see the city.”
The former Supreme Court’s facade with its Corinthian and Ionic columns, and relief panels have been lovingly restored. Inside, floor tiles, wooden pillars and panels
on the ceilings were cleaned up and given new life by local artisans and carpenters.
“The restoration works in this building were not the
most complex in my experience,” says Mr Milou, who
has restored and readapted other historic buildings before. “The biggest challenge for this building was in the
details.”
They include details such as ensuring that the building is now handicap-friendly, by creating a slightly sloping floor, so that the wheelchair-bound can easily head
out onto the balconies. “This was non-existent before,”
he says.
Other “modern” features that had to be put in to suit
the art museum included special lighting, fire protection,
air-conditioning and the installation of security cameras,
while respecting the historical character of the buildings.
The next stop is the fifth floor of the former Supreme
ARTIST’S IMPRESSION: NATIONAL GALLERY SINGAPORE
Court which resembles the set of a sci-fi movie. Smack in
the centre is the roof of a rotunda, which housed the
former library, and there are tree-like structures that hold
up the roof made of perforated aluminium panels. On a
sunny day, sunlight streams in, bathing the entire floor in
natural light.
Design wise, the more exciting part of the Gallery is in
the space between the two buildings. Back in the old
days, the two buildings were separated by a lane. The
space is now covered by a roof and veil, with two sky
bridges connecting the two buildings.
The roof and veil are also made of the same perforated
aluminium panels, which give the impression of a filigree
structure marking the main entrance into the Gallery,
and also creating a visual continuity from the main atrium to the Padang. Glass panels are fitted under the aluminium panels, so that the whole area can be air-conditioned.
“The perforated panels help filter out the sunlight, so
you still get light coming into the Gallery, but it is very
soft,” says Mr Milou.
The atrium roof is held up by another large tree-like
structure, so that the roof has no direct impact on the existing buildings.
Access to the roof top of the City Hall building is currently restricted, but Mr Milou and his team have developed the design to include a garden there, surrounded by
restaurants and cafes. There will also be reflective pools
set in the garden. “They appear as pools on the roof top,
but if you were to look up from the basement, the pools
appear as skylights,” he says.
It is not just the two buildings that have been adapted.
A new basement had to be constructed to house technical facilities, ticketing and reception areas, so that the
ground floor level can be used for the gallery’s core activities. The underground concourse can be accessed by
four monumental flights of stairs, each leading from one
of the gallery’s facades, allowing access from every side of
the institution.
Having worked closely on the project for some years,
Mr Milou cannot help but admit: “There’s definitely a
very endearing quality to the buildings and the new design.”
[email protected]
@TaySuanChiangBT
L12 home & garden
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
home & garden L13
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
COOKING UP INSPIRATION
(Left) The open kitchen, with an island counter constructed
to straddle the 5cm drop between the dining and kitchen
areas; (below) limited edition figurines take pride of place in
the home
personal space |
Evolving around
the Mothership
‘We wanted it
to be a
work-inprogress; to
be in a state
of constant
evolution.’
With their ‘living organism’ chandelier and work-in-progress ambience, the
Thongs’ home is unique and distinctly their own. By Arthur Sim
I
T IS always a good idea to have a couple of accent
pieces mixed in with the general design scheme of
things when it comes to home decoration, even if
it is only to get the conversation going when
friends come over for dinner. But with their creeping chandelier that has pendant lights connected to
200m of black electrical wiring, have the Thongs of Serangoon gone too far?
The chandelier is a tentacle-esque construction that
hangs from the ceiling of the stairwell in the apartment of
Thong Chew Fatt, 33 and his wife Eileen See, 32. Describing the light fixture, Mr Thong likens it to a “living organism” that can extend into most corners of the 1,700
square foot apartment by way of free floating pendant
lights that can be anchored to any of the 700 hooks affixed to the ceiling for task or accent lighting. Because
they are not fixed permanently, the pendant lights can always return to the main chandelier cluster in the stairwell or as Mr Thong likes to call it, “the Mothership”.
The reference to science fiction becomes clearer after
Mr Thong reveals he is a fan, especially of Australian comic book artist Ashley Wood. Limited edition figurines by
the artist take pride of place in this home and upon closer
inspection, it is not difficult to understand why the Mothership needs to always be close by. “I like the tension it
creates,” he adds.
The Mothership was actually inspired by a lighting design that Mr Thong, a creative director in his own advertising firm, had come across while surfing on the Internet. But instead of buying something off-the-shelf, he decided to create his own version with the help of his wife.
Together, they sourced for parts online and had it put together with the help of interior designer Raymond Seow
of Free Space Intent.
While the Thongs had ideas of their own – such as having walls and floors finished in cement screed – it was Mr
Seow who helped manage their expectations. For instance, Mr Seow had to make it clear that the cement
screed will stain, crack and is unpredictable in the way it
ages.
Mr Seow also advised against demolishing the existing
staircase and rebuilding a new one to save on construction costs so that eventually, even the old wooden banisters were retained, albeit painted black. Construction
costs were further kept low with most of the built-in carpentry work reserved for the kitchen and the Thongs
were able to maintain their renovation budget of about
S$120,000. As a word of caution to other potential homeowners, Mr Seow does point out that the cement screed
finish was not cheap. While this sounds counter-intuitive, he explains that with labour costs rising, it is actually
cheaper to lay floor tiles than it is to plaster-on cement
screed. “We needed to have three people plastering the
wall simultaneously to ensure there would be no patchiness,” he explains.
Still, with wires dangling all over the place, and walls
that seem to be missing a coat of paint, the flat has an air
of being unfinished and one almost expects workmen in
safety boots to come through the front door at any moment. But this, however, is exactly how the homeowners
prefer it. “We wanted it to be a work-in-progress; to be in
a state of constant evolution,” adds Mr Thong, noting also that the walls have taken on a pleasing, darker tint
since they moved in last year.
The abundance of flora in this apartment is another
reference to Mr Thong’s penchant for the organic, although this one has nothing to do with science fiction. “It
is a connection with my childhood,” says Mr Thong who
Mr Thong (left, with wife
Eileen) on how the flat
has an air of being
unfinished
CREEPING
LIGHTS
The Thongs’
creeping
chandelier has
pendant lights
connected to
200m of black
electrical
wiring which
can extend
into most
corners of
their 1,700
square foot
apartment
including
(anti-clockwise
from right)
the dining
area; the
stairwell and
the living
room
remembers growing up in a terrace house with a garden
and, “playing with bugs and worms”. The plants are mostly relegated to the balcony.
To create an open kitchen, one of the rooms on the
first level of the maisonette had to be sacrificed and reduced to just a storeroom. Walls containing the old kitchen were knocked down and an island counter was constructed to straddle the 5cm drop between the dining
and kitchen areas, circumventing the need for major reconstruction.
In almost all design decisions, Mrs Thong, who is in
the banking industry, gladly gave in to her husband’s
choices: “I trust my husband’s tastes,” she adds. But because the kitchen is her domain, she did insist on certain
features, including the lighter colour for the kitchen cabinet laminates and Blum cabinet components that ensure
drawers and doors close with just a soft touch. Interestingly, Mrs Thong, who shopped for the dining chairs, TV
console, living room bookcase and even the “robot” vacuum cleaner online, was “hesitant” to buy cabinet components online even though there would have been a substantial saving because she wanted the warranty. With a
seasoned shopper’s savvy, she did her research and even
joined online forums on home renovations before making decisions.
With both husband and wife taking such a hands-on
approach to the renovation of their flat, their home could
not be anything but unique and distinctively their own. It
is an example of resourcefulness and creativity that
bodes well for this younger generation of homeowners
who are happy to boldly go where no one has gone before.
L14 motoring
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
X-TRA SPORTY
The big and tall BMW X6’s best attribute is its handling. By Samuel Ee
N
OW that everyone
has got used to the
way the BMW X6
looks, it seems the
German luxury manufacturer has left
the exterior styling
untouched to concentrate instead on the interior for the latest iteration.
The X6 sport-utility vehicle with the distinctive design is dubbed a Sport Activity
Coupe by BMW – a so-called “coupe” version of the X5 Sport Activity Vehicle with
more rakish styling.
Notwithstanding its polarising looks,
there has never been any argument about
the X6’s dynamic handling. It may be 1.7
metres tall but it corners like a lower and
sleeker 5 Series sedan.
It comes as no surprise that a model
with the BMW badge on the hood will han-
MORE LUXURIOUS
THAN BEFORE
The X6 cabin looks more
opulent with higher-grade
leather and richer hues;
the interior can be
specified in a two-tone
colour scheme with
contrast stitching and
nicer wood trim choices.
There are more and
bigger storage
compartments, and an
automatic tailgate is now
a standard feature
dle well. On the X6, this is enhanced by
the xDrive full-time all-wheel-drive feature which varies the torque between the
front and rear axles automatically to provide excellent grip. At the same time,
torque vectoring adjusts the power to
each of the rear wheels for more agility in
corners.
The brand new X6 is no different. This
second-generation model X6 still has a
lower roofline but it now comes with added comfort and luxury. It follows the same
brief as the latest X5, which was re-positioned with a higher trim level and improved ride comfort.
In the new X6, the materials and details
are more luxurious than before, while retaining its overall size and original concept of a spirited drive. Yet, the SUV-coupe still manages to be lighter with even
better boot space.
But from behind the wheel of the X6
xDrive50i with the latest-generation 4.4-litre V8 turbocharged engine (said to be 22
per cent more frugal), the big BMW is surprisingly unenthusiastic when moving off
from stationary, as if turbo lag and the
nearly 2.2-tonne body are holding it back.
When the eight-speed automatic transmission is left in D, the power delivery can
occasionally accelerate with some difficulty at lower speeds.
Progress improves when the gear lever
is slotted in Sport position but it is by no
means effortless, considering the more
than generous 450 hp and whopping 650
Nm on tap.
The Driving Experience Control function offers four driving modes – Eco Pro,
Comfort, Sport and Sport+ – and the X6
performs best when both this and the gear
lever are set to Sport (Sport+ engages Dynamic Traction Control which allows for
more wheel slip and therefore more dynamic driving).
In this mode, the steering becomes
meatier but also more wooden.
Inside, the X6 cabin immediately looks
more opulent with higher-grade leather
and richer hues. The interior can be specified in a two-tone colour scheme with contrast stitching and nicer wood trim choices. There are more and bigger storage
compartments, and an automatic tailgate
is now a standard feature.
On the outside, the side steps add a stylishly sporty touch. But the cool-looking
aluminium running boards with their rubber inserts may not appeal to everyone.
They are too narrow to step on confidently, yet jut out enough to rub against your
leg if you choose to avoid using them to
enter or exit the tall X6.
So despite its handling prowess, it
looks like the BMW X6 SUV-coupe with its
niche styling will appeal to a niche crowd.
[email protected]
SPECS
BMW X6 xDrive50i
Engine 4,395cc V8 turbocharged
Gearbox 8-speed automatic transmission
Max power 450 hp @ 5,500-6,000 rpm
Max torque 650 Nm @ 2,000-4,500 rpm
0-100 kmh 4.8 secs
Top speed 250 kmh
CO2 emissions 225 g/km
Average OMV from S$93,000
Price S$488,800 (with COE)
Distributor Performance Motors
Z 6319-0100
motoring L15
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
I
F the new Peugeot 308 had any skin or teeth,
they would definitely be involved in its COE
categorisation. Because with its turbocharged petrol engine producing 129 hp, the
308 slots neatly into Category A with just one
hp to spare.
And it is this 1.2-litre three-cylinder engine that
has to be the most intriguing aspect of the second-generation 308 (unlike previous models, Peugeot retains the last digit of the nameplate instead of
increasing it). Being small means it is a frugal unit,
promising to consume as little as 5.1 litres per 100
km under the combined cycle, or an amazing 19.6
km per litre.
But despite its size, it is able to muster up 230
Newton-metres of torque, delivered to the front
wheels via a conventional six-speed automatic
transmission.
“1,200 cc” may not sound like much but the 308
will make most think again. Floor the accelerator
and this tiny dynamo goes to work with minimal
turbo lag. Press the S button on the lower centre
console and the performance becomes even livelier
with delayed upshifts.
The gear lever can also shift manually, using the
more intuitive forward-nudge-to-change-down logic, but selecting D is more than good enough for
this box.
It is hard to believe that three cylinders with a
displacement of 400 cc each are capable of such
torque and smoothness but a low kerb weight of
1,150 kg helps.
At about 140 kg less than its predecessor, this
lightweight 308 hatchback, or the Peugeot 308 1.2
Puretech Turbo EAT6 5-Door to be precise, also has
attributes other than good performance and fuel
economy. One of them is ride comfort.
While the previous 308 had a firmer ride, this
new 308 is slightly comfier but without the floaty pliancy of some French models.
Its good blend of handling and comfort allows it
to skim over rough roads while displaying good
poise in fast corners. But it does feel a bit light
when doing the latter, with its rear torsion beam
suspension probably contributing to this.
The well-weighted steering has wonderful feedback and its size plays a big role in its perception of
agility. This tiny flat-bottomed steering wheel was
first seen in the Peugeot 208 supermini and is one
of the three elements of the French carmaker’s
i-Cockpit interior concept. The other two are the
raised instrument binnacle and the 9.7-inch touchscreen in the middle. The tachometer in the former
is unique for being calibrated anti-clockwise. This
is to ensure it will be readable whatever the height
of the diminutive steering wheel.
Together with the soft-touch dashboard and
minimalist single button centre console (inspired
by high-end hi-fi), the 308 interior is surprisingly
classy, with the leather on the steering wheel and
most of the metal trim nice to look at and touch.
At 4.25 metres in length with a 2,620 mm wheelbase, the new 308 is actually very slightly shorter
than its predecessor even though it is visually
lengthened with a 10 mm increase in the wheelbase. The styling has Teutonic overtones and gone
is the Gallic quirkiness of old, replaced by a welcome European distinctiveness.
There are two trim levels – Active and Allure.
The latter has more equipment, and given the low
kerb weight, this affects emissions, consumption
and zero to 100 kmh acceleration figures. The Allure also costs S$12,000 more, for nicer stuff such as
keyless entry and start, GPS and reverse camera, a
blind spot monitoring system, automatic parking,
front sports seats and a panoramic glass roof,
among others.
But with or without these extras, the new Peugeot 308 should still be an amazing little number.
[email protected]
TINY DYNAMO
Its good blend of
handling and
comfort allows
the new Peugeot
308 to skim over
rough roads while
displaying good
poise in fast
corners.
This number for
a good time
The 308 has a small engine but unexpectedly good
performance. By Samuel Ee
SPECS
Peugeot 308 1.2 Puretech Turbo
Engine 1,199cc 3-cyl turbocharged
Gearbox 6-speed automatic
transmission
Max power 129 hp @ 5,500 rpm
Max torque 230 Nm @ 1,750 rpm
0-100 kmh from 10.2 secs
Top speed 200 kmh
CO2 emissions from 117 g/km
Average OMV from S$18,000
Price from S$113,900 (with COE)
Distributor AutoFrance
Z 6376-2288
L16 sports
THE BUSINESS TIMES WEEKEND SATURDAY/SUNDAY, JANUARY 31-FEBRUARY 1, 2015
no holds barred |
EPL’s top two on collision course
Lee U-Wen
[email protected]
@LeeUwenBT
Correspondent
T
HERE is simply no rest for
the weary, especially in a
sport as demanding as football, as English Premier
League (EPL) leaders Chelsea will soon find out.
Jose Mourinho will lead his men out at
Stamford Bridge on Saturday (1.30am Sunday, Singapore time) against the defending champions Manchester City, barely
four days after surviving a bruising League
Cup semi-final win over Liverpool that
went into extra time.
It took Chelsea 210 minutes in total to
dispose of Liverpool over two legs and
book their place in the League Cup final
on March 1 at London’s Wembley Stadium.
But that competition will have to take a
back seat for now, with the Blues needing
to rejig their starting line-up ahead of the
visit of the second-placed Citizens for this
tantalising top-of-the-table clash.
Chelsea have the comfort of a commanding five-point lead over Manchester
City, and will still be first in the standings
no matter the final outcome of Saturday’s
showdown.
But try telling that to Mourinho, the
wily Portuguese manager who will stop at
nothing to expand that gap to eight points
with just 15 more games to play.
A win would also stamp his authority
on a fascinating and simmering rivalry
with his Manchester City counterpart,
Manuel Pellegrini.
The two coaches have a fractious relationship that dates all the way back to
their respective stints in charge of Spanish
club Real Madrid.
Pellegrini lasted just one season in the
Spanish capital where he failed to finish
on top of Real’s perennial rivals Barcelona. He was sacked and replaced by Mourinho in the summer of 2010.
Pellegrini went on to manage Malaga
and Mourinho, ever the opportunist,
couldn’t resist taking a jibe. “If Real Madrid were to fire me, I wouldn’t go to Malaga. I’d go to a top-level team in Italy or
England,” he said.
Pellegrini hasn’t forgotten those
taunts. The measured and mild-mannered Chilean prefers to let his club’s results do the talking.
The 61-year-old doesn’t smile that often, but even he had to ditch his usually
sombre look last May when his talented
Manchester City team stormed to a second EPL title with a late run of victories
that left Chelsea and Liverpool eating
their dust.
Many will remember the last time that
Chelsea and Manchester City, two of the
biggest-spending clubs in England’s top
division, met at Stamford Bridge in October 2013.
SHOWDOWN
Left: Chelsea have the comfort
of a commanding five-point
lead over Manchester City, and
will still be first in the
standings no matter the final
outcome of Saturday’s game.
Above left: A win for Jose
Mourinho’s team would stamp
his authority on a fascinating
and simmering rivalry with his
Manchester City counterpart,
Manuel Pellegrini.
PHOTOS: REUTERS, ACTION IMAGES
It was Fernando Torres – a player who
has since left Chelsea – who scored a late
winner that day, after City’s talisman Sergio Aguero cancelled out Andre Schurrle’s
first-half opener for Chelsea.
Cue the raucous celebrations as Mourinho threw himself into the crowd in joy,
as a disgusted Pellegrini left the pitch at
the end without shaking his opponent’s
hand. “I didn’t want to,” he muttered
when asked by reporters whether he had
gone to see Mourinho at the final whistle.
Chelsea could, however, be without the
services of the in-form Diego Costa, a player who has been in the news for all the
wrong reasons of late. The league’s top
scorer is likely to be banned after he was
charged by the Football Association for appearing to stamp on Liverpool’s Emre Can
in that League Cup victory on Tuesday.
Another Spaniard, Cesc Fabregas, also
limped out with a hamstring injury in that
same match, but at least Mourinho can
count on the evergreen Didier Drogba, the
36-year-old Ivorian striker who has six
goals already but none in his last eight
games.
As for Manchester City, which have not
won in the EPL since New Year’s Day, Pellegrini must mastermind a victory without
his star midfielder Yaya Toure, who is
busy with the Ivory Coast at the ongoing
African Cup of Nations tournament in
Equatorial Guinea.
City can perhaps take a leaf from tiny
Bradford City, the third-division team
from West Yorkshire that sent Chelsea
crashing out of the FA Cup last Saturday
with a remarkable 4-2 result at Stamford
Bridge.
But Pellegrini himself wasn’t spared an
FA Cup shock. His players were brought
down to earth by second-tier Middlesbrough, which won 2-0 at the Etihad Stadium in Manchester.
The early eliminations from English
football’s oldest cup competition will only
galvanise the two teams to go tooth and
nail for the EPL crown.
Even at this stage of the season, it is
looking very much a two-horse race, with
Southampton and Manchester United –
third and fourth in the table respectively –
looking too far behind to put up a decent
fight.
A Chelsea win on Saturday will almost
certainly see the trophy move to London
in May. If City wins, the title race could
well go down to the wire. A draw won’t do
either side any favours, so expect both
managers to go for the jugular from the
first minute.