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07 June 2019 / Issue 23

By in Weekly News Review with 0 Comments

Top News for the Week


Supply of private homes reined in amid fears of glut

Amid a slowdown in the property market and a souring business outlook, the Government is reining in the supply of private housing units being released in the second half of 2019.

The aim is to avoid worsening a supply glut with a squeeze on confirmed sites under the Government Land Sales (GLS) programme, which are put up for sale on pre-determined dates.

Only 1,715 housing units – including 480 executive condo (EC) units – will be up for grabs on the five confirmed list sites in the second half of the year. This is 15.3 per cent less than the 2,025 such units offered in the first six months of 2019.

For the year as a whole, only 2,875 private residential units – excluding ECs – would have been released into the market through the confirmed list. This is the lowest quantum since 2014, when the total debt servicing ratio (TDSR) was imposed to ensure that property buyers do not overextend themselves.

In the past five years, the supply of private homes under the confirmed list has ranged from 3,095 units to 4,355 units Including the reserve list, which can be triggered for sale only if there is sufficient market interest, a total of 6,430 potential units are on offer.

There are eight reserve list plots in the upcoming GLS programme that can yield 4,715 units, 92,000 sq m gross floor area of commercial space and 1,100 hotel rooms, said the Ministry of National Development (MND).

Analysts also noted that the upcoming slate allows more flexibility in land use through white sites, where a range of uses is allowed, such as at the proposed 9.2ha site in Kampong Bugis.

Links to the story: concerns

Kampong Bugis site makes it to GLS programme for H2 this year

The long-awaited Kampong Bugis site has finally made it to the government land sales programme (GLS) for the second half of this year, and market response will be keenly watched due to its size and master developer concept.

The 9.2 ha site, to be released under the reserve list and completed over the next 9 to 11 years, will be awarded to a single master developer to comprehensively master plan the site, and implement district-wide urban solutions.

The precinct can potentially yield 4,000 dwelling units and 50,000 sq m of complementary uses like retail and office, out of the total gross floor area (GDA) of 390,000 sq m. In its Phase 1, a minimum of a currently estimated 1,000 housing units will have to be built.

Kampong Bugis was envisioned as a site housing about 4,000 homes and car- and bicycle-sharing facilities in the 2013 Draft Master Plan. In 2017, plans were unveiled to turn the plot of waterfront land, once home to Kallang Gas Works and largely left vacant for years, into a waterfront precinct to be tendered out to a master developer.

Kampong Bugis is one of four new sites on the H2 2019 GLS confirmed and reserved lists. One of these new sites that analysts believe could pique developer interest is a 1.27 ha Irwell Bank Road site in River Valley, which is located close to the future Great World City MRT, Great World City shopping mall and River Valley Primary School.

The site, which is on the confirmed list, can yield 445 units and is estimated to launch in October.

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More resale flats sold in May but prices dip slightly

There were more Housing Board resale flats sold in May compared with April, though resale prices showed a slight dip month on month.

Last month, 2,075 HDB resale flats changed hands, a 7.5 per cent increase from the 1,931 transacted units in the month before, according to flash estimates.

Resale volume was 18.3 per cent higher in May than the 1,754 units sold in the same month last year.

In addition, the data showed a 0.2 per cent drop in May’s resale prices.

This was also a 1.2 per cent slide from May last year and 14.1 per cent lower than the peak in April 2013.

Prices in mature estates dipped 0.1 per cent, while those in non-mature estates fell 0.2 per cent. Prices of three-room, four-room and five-room flats were each 0.2 per cent lower, while prices of executive flats declined by 0.6 per cent.

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New HDB flats to come with condo-like fittings

New Housing Board flats will now come with condominium-like finishings at a fraction of the cost.

These sleeker and more modern fittings – such as larger tiles and concealed floor traps – will be installed in new Build-To-Order (BTO) projects launched since February.

The new flats will incur marginally higher costs that the HDB will absorb without affecting home pricing, a spokesman said.

Mr Jansen Foo, deputy director of the HDB’s Building Quality Group, said the net increase in cost is minimal as the HDB has been able to achieve economies of scale. As such, it is able to absorb the cost.

The HDB has adopted several practices akin to those at private condos in recent years, such as pushing structural walls and beams to the side to encourage open-plan layouts, as well as open- concept kitchens.

The new fittings include a scratch-resistant laminated timber main door with better finishing, which replaces the timber-veneer doors in older flats.

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Mixed results in HDB block that mixes rental and purchased flats

Marsiling Greenview is one of three (BTO) projects that will mix rental and purchased units in the same block.

The rental and purchased flats in the block are almost indistinguishable from each other unlike those previous neighbourhood, where the rental block came with more basic fittings for things such as drying racks.

The other two projects that will feature such blocks – in Bukit Batok and Sengkang – are due to be completed in the next few years.

The initiative was part of a wider move to tackle growing inequality and stratification.

National Development Minister Lawrence Wong, who announced the move in March last year, said more of such integrated blocks will be built if feedback about the lived experiences is positive. Rental flats typically cater to the lower-income, including those on social assistance. A household’s total gross monthly income must not exceed $1,500 to qualify for the Public Rental Scheme. The HDB ramped up the supply of rental flats from 42,000 units in 2007 to about 60,000 as of August last year.

An Institute of Policy Studies (IPS) study conducted in 2017 found that divisions along school and housing types are stronger than those across race and religion.

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Singapore housing loans shrink again in April

Housing loans in Singapore shrank for a third month in April, leading a continued contraction in consumer loans, preliminary data from the Monetary Authority of Singapore (MAS) showed.

Mortgages and bridging loans booked in April on a net basis came in at $202.76 billion, falling from $203.38 billion in March.

With housing loans making up roughly three-quarters of consumer lending, overall consumer loans stood at $264.57 billion, lower than the $264.67 billion in March.

Earlier this week, Minister for National Development Lawrence Wong told Bloomberg that almost a year after intervening to stem soaring property prices, Singapore has stabilised the property cycle. The measures are now in their 11th month.

“The property market last year, before the cooling measures were put in place, we saw prices rising very sharply,” Mr Wong said in an interview with Bloomberg Television’s Haslinda Amin in Singapore.

“There was a very real risk that prices would outpace fundamentals, and I think if that had happened, then eventually it would lead to a destabilising correction, and I think everybody would be worse off.

“It was, as we had stressed then, not to bring down prices but to stabilise and moderate the cycle, and I think we have achieved that effect,” he said.

Overall bank lending in Singapore was flat in April from a month ago, weighed down by the decline in consumer loans and moderated growth in business lending.

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Developer Evia, Metro take S$296m green loan for Tampines office towers

Privately-held Evia Real Estate Management and mainboard-listed Metro Holdings have secured a S$296.3 million four-year green loan to finance partially their 50:50 acquisition of a pair of Grade-A eco-friendly office towers, 7 & 9 Tampines Grande Singapore.

This is the first green debt instrument secured by the Singapore-based property developer and institutional fund manager.

The green loan was granted to an Evia-managed investment company and its partner Metro Holdings. Evia’s co-investors include Malaysia-listed property developer Amcorp Properties.

OCBC was the sole green loan adviser and, together with DBS, acted as joint green coordinators for the loan.

Acquired this April for S$395 million, the property comprises two blocks of eight-storey office towers in Tampines linked by an entrance lobby with retail, as well as food and beverage outlets on the ground floor.

Link to the story: towers


Funan mall reopens June 28; 92% of retail, 98% of office space taken up

Funan has achieved 92 per cent in commitment for retail leasing to date, and 98 per cent in pre- leasing commitment for its twin office blocks, said CapitaLand Mall Trust’s (CMT) manager and CapitaLand in a joint statement.

The mall will welcome shoppers again on June 28, two months ahead of schedule following a three-year redevelopment.

CMT’s manager expects more retail leases to be signed in the coming months, said Tony Tan, chief executive officer of CapitaLand Mall Trust Management.

With a total gross floor area of 887,000 square feet, the Funan integrated development comprises the shopping mall, two office blocks and lyf Funan Singapore – the Singapore flagship of The Ascott Limited’s lyf co-living serviced residence, which is slated to open in the fourth quarter.

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Enforce fair rent terms to level the playing field?

Should Singapore introduce fair tenancy legislation?

Small and medium-size enterprises (SMEs) are a significant part of Singapore’s economy. They constitute 99 per cent of all enterprises and employ 65 per cent of all workers in Singapore. Critical for SMEs’ survival are fair and affordable rental terms.

Typically, though, landlords have the upper hand in rental negotiations.

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Construction workers to hone skills at new hub

Construction workers will be trained to use technology like augmented and virtual reality when Singapore Contractors Association Limited (SCAL) opens its Construction Hub in 2021.

This hub, which SCAL announced would be housed in a seven-storey commercial building in Tannery Lane in MacPherson, is to be refurbished from the fourth quarter of this year.

The association plans to offer experiential learning there, to teach workers the latest techniques in manufacturing, assembly, virtual design and construction.

SCAL’s current head office is in Bukit Merah.

With an estimated gross floor area of about 4,550 sq m, the freehold property, which is worth S$35 million, will also house the offices of SCAL’s five subsidiaries, including the SCAL Academy and Singapore Construction Mediation Centre.

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Liang Court deal shows quirk in CapLand strategy

The completion of the acquisition of Liang Court mall along River Valley Road by CapitaLand and City Developments Ltd (CDL) brings together two property groups that have adopted somewhat different business strategies in the past.

With their S$400 million purchase of the mall from an entity linked to PGIM Real Estate, control of the overall Liang Court mixed-development complex has narrowed from three parties previously to just two.

The ageing complex has two other components. CapitaLand’s listed unit Ascott Residence Trust already owns the Somerset Liang Court Singapore serviced residence while CDL’s indirect subsidiary CDL Hospitality Trusts owns the Novotel Singapore Clarke Quay hotel.

With just two parties – CapitaLand and CDL groups – now controlling Liang Court complex, expectations are that this should facilitate planning for a redevelopment of the commercial and residential-zoned site. This would capitalise on the site’s strategic location along the Clarke Quay stretch of the Singapore River; the plot is also next to the Fort Canning Station on the Downtown Line and a stone’s throw from the Clarke Quay Station on the North-East Line.

Developed in the 1980s, the Liang Court complex is on a site with leasehold tenure of about 97 years from April 1980, leaving 58 years on its lease.

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Transition to circular economy key to a sustainable future

The transition to a circular economy is something which is not only environmentally sustainable, but is also imperative to the survival of certain businesses, said a group of panellists at a dialogue during the Ecosperity Conference.

Edwin Keh, CEO of the Hong Kong Research Institute of Textile and Apparel, broke down the concept of circularity, saying: “Circularity is about making things robust, so that you can use them for a very long time.”

He added: “Eventually, as you get all the utility out of the material, you have to make it recyclable, which means creating a new use for it; at the end of that cycle, you have the biodegradability of the material.”

Harsha Vardhan, global environment manager (production) at H&M Group, noted that there was likely to be a growing scarcity of materials such as cotton, as more farmers choose to rear food crops instead because of growing populations around the world.

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Shopee ups entertainment ante; still favours growth over monetisation

E-commerce platform Shopee is doubling down on interactive features to boost user stickiness, while monetisation continues to take a back seat over growth for the Singapore-headquartered firm.

Shopee, a unit of New York-listed Sea Group, unveiled a new in-app live-streaming feature for users in Singapore, where sellers can promote their items over video in real-time.

Meanwhile, the company has also updated Shopee Quiz, its trivia game, such that participants can invite friends to play the game and earn rewards in groups.

Those who answer all questions correctly can win Shopee coins, the platform’s virtual currency, and products from participating brands.

Investing in these interactive elements can boost user stickiness without raising marketing costs too significantly, said Shopee’s chief commercial officer Zhou Junjie at a media briefing.

Shopee has stepped up monetisation efforts, but it is still not a top priority compared to user growth, Mr Zhou told The Business Times when asked about broader strategy.

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Invest in innovation, people and community for the future: Heng

To be good stewards of the future, businesses should invest in innovation, people and the community, said Deputy Prime Minister and Minister for Finance Heng Swee Keat.

These investments are called for in the face of three global trends: the rapid rise of new technologies, declining support for globalisation, and the growing economic and strategic weight of Asia, along with the resulting shifts in supply chains.

“Businesses have to be quick to innovate, in order to stay relevant and competitive,” said Mr Heng, who was speaking to an audience of business leaders at the Stewardship Asia Roundtable 2019, organised by Temasek Trust non-profit organisation Stewardship Asia Centre.

Though there are trade-offs between short-term returns, “which drive many shareholder decisions”, and long-term growth, companies must be prepared to plan and invest in innovation for the long term, he said.

Link to the story: future-heng


IMDA, Aussie trade agency in tie-up on smart estate solutions

As part of Singapore’s ongoing efforts to realise its Smart Nation vision, the Infocomm Media Development Authority (IMDA) has partnered with Australia’s trade and investment agency Austrade to develop innovative smart estate solutions.

Smart estates refer to estates that leverage smart technologies to collect and analyse data to optimise maintenance cycles as well as pre-empt problems. The aim is to enrich the lives of members of the community through the use of technology.

For example, this could mean tapping data to predict the next lift breakdown, or making use of more efficient energy resources through on-demand lighting and cooling systems in buildings.

IMDA and Austrade signed a memorandum of understanding (MOU) that will focus on three key areas for smart estates.

These encompass facilitating networking opportunities for Singaporean and Australian smart estate players, driving technology projects for the two countries, and co-developing a smart estate guide for the industry.

The MOU signing, which took place at the Regional Built Environment Forum at Sofitel Singapore City Centre hotel, was witnessed by Senior Minister of State for Communications and Information Sim Ann and Australia’s High Commissioner to Singapore Bruce Gosper.

In a statement, IMDA chief executive officer Tan Kiat How said: “As we continue to develop a vibrant smart estates ecosystem in a digital economy, there is a strong need to foster greater collaboration with key players within the built environment cluster.

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Asean must widen network of ties to cut its risks: Chan

It will take time to see progress in trade issues between the United States and China, and Asean can take steps to prepare for a potentially lengthy period of uncertainty by striking new partnerships, Trade and Industry Minister Chan Chun Sing said.

It must continue to remain open and forge links with as many countries and economic blocs as possible, diversifying its markets and reducing its risks in the process, he said at the Asean Conference.

It is also in the interest of Asean and the world to uphold and update the World Trade Organisation system so there are open, transparent and inclusive rules for all countries to work together, Mr Chan added.

“The more we are able to leverage each other’s comparative advantage, the more we are able to boost global production for the good of our people,” he said in a dialogue with Singapore Business Federation (SBF) chief executive Ho Meng Kit.

Asean needs to also come together to seize new opportunities offered by the digital space, with the cross-border flow of data allowing firms to create new products and services. It should work on common platforms in payment systems and intellectual property protection as well, he said.

But Mr Chan cautioned: “If we trip over ourselves with fragmented rules and regulations, not only will we not have an integrated Asean market, we subtract from our efforts to boost the Asean brand.”

Links to the story: amid-us-china-dispute


New hub for social enterprises aims to spur ideas on sustainability

Foreword Coffee is a cafe with a social mission: to empower people with disabilities and special needs by providing them with skills training and employment in the food and beverage sector.

They are also placed in a front-line role serving customers. The company believes that interactions with the public will promote greater understanding all round.

The cafe is an example of a social enterprise that innovates and finds market-based solutions to social issues, Senior Minister Tharman Shanmugaratnam said on Monday (June 3).

He was speaking at the official launch of the new Temasek Shophouse, a 25,000 sq ft co-working hub in Orchard Road for social enterprises such as Foreword Coffee.

“It is important that we make sure that those who have special needs have employment for a good part of their adult lives, and are able to contribute meaningfully to society,” said Mr Tharman, who is also Coordinating Minister for Social Policies, at the launch.

Organisations that want to create social impact can use Temasek Shophouse to brainstorm ideas, hold project meetings and network with like-minded collaborators.

The space serves as the new office for Temasek Trust, Temasek Foundation and the Stewardship Asia Centre. It also houses the new ABC World Asia Fund, a private equity fund set up by Temasek Trust to invest in companies committed to making social or environmental impact in South Asia, South-east Asia and China.

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US, China must be mindful of perception of their policies, progress: Ng

The acceptance of the United States’ or China’s dominance will be diminished if their policies or progress are perceived to be lopsided against the national interests of other countries or the collective good, said Defence Minister Ng Eng Hen.

China will hedge first in trade ties, and later inevitably in security alliances, he added, citing examples of the Trans-Pacific Partnership (TPP), in which 11 nations chose to proceed after the US pulled out.

The Japanese and Australians later led the effort to establish the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Even China has not said no to joining the CPTPP, said Dr Ng in a speech on the third and final day of this year’s Shangri-La Dialogue.

Links to the story: progress-ng


Shangri-La Dialogue: Ng Eng Hen warns of risk of parallel blocs

Shifting economic dependencies could lead to countries forming parallel blocs – a situation which could set them up for conflict, Defence Minister Ng Eng Hen warned.

Answering a question at the Shangri-La Dialogue, he said that if technological, trade or security ties “criss-cross less and less”, then the world could end up with multiple blocs with parallel lines, and strong divisions between them.

Dr Ng stressed the importance of economic dependencies for security. “Because if I trade a lot with you, it is quite hard for me to fight with you.”

In an earlier speech at the same session, he said the acceptance of the dominance of the United States and China would be diminished if their policies or progress were perceived to be lopsided against the national interests of other countries or the collective good.

“The challenge for both the US and China, amid their bilateral struggle… is to offer that inclusive and over-arching moral justification for acceptance by all countries, big and small, of their dominance beyond military might.”

Dr Ng also underscored the role that the Shangri-La Dialogue has played in fostering consensus, collaboration and dialogue for a stable, progressive and inclusive region since the forum was started in 2002.

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US-China face-off not a strategic inevitability, says Lee Hsien Loong

There is no strategic inevitability about a US-China face-off, but at the same time, if such a face- off does happen, it will be nothing like the Cold War, said Prime Minister Lee Hsien Loong last night.

First, there is no irreconcilable ideological divide between the US and China.

China may be communist in political structure, but it has adopted market principles in many areas, and is not attempting to turn other countries communist.

“The Soviets sought to overturn the world order. But China has benefited from, and by and large worked within, the framework of existing multilateral institutions,” he said at the Shangri-La Dialogue.

Second, China has extensive economic and trade links with the rest of the world, and is a major node in the world economy, unlike the Soviet Union, which had negligible economic links outside the Soviet bloc.

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It’s not in Singapore’s interest to manipulate currency: Heng Swee Keat

Singapore is not a currency manipulator, visiting Singapore Deputy Prime Minister Heng Swee Keat said, in his first comments on the United States placing the country on its currency watch list with eight others, including China and Japan.

“It is not in our short-term nor long-term interests to manipulate the currency,” Mr Heng, who is also Finance Minister, said in his reply to The Straits Times.

Speaking to Singapore journalists at the end of a three-day visit to Tokyo, he said the Monetary Authority of Singapore is unique in how it uses the exchange rate as its monetary policy tool, unlike most central banks that use interest rates.

“Many years ago, we have already realised that, being such an open economy where trade is a much bigger percentage of our gross domestic product – today it is three times our GDP – the exchange rate has a far bigger impact on inflation and economic conditions than interest rates,” he said.

“Our monetary policy seeks to achieve price stability that is compatible with growth.”

Singapore was placed on the watch list for its large current account surplus and net foreign currency purchases of at least US$17 billion (S$23.4 billion) last year, or 4.6 per cent of the GDP, which is more than double the US threshold.

The US said it will monitor countries on the list to see if they are purposely devaluing their currencies to gain a trade advantage.

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PUB plans massive floating solar panel system in reservoir

One of the world’s largest single floating solar photovoltaic (PV) systems will find a home in the waters of Singapore’s Tengeh Reservoir by 2021.

National water agency PUB is seeking proposals from companies to design, build, own and run the nation’s first large-scale floating system of solar panels to power water treatment processes.

Covering an area the size of about 45 football pitches, the floating solar farm will operate at 50 megawatt-peak and can power up to 13,500 four-room Housing Board flats annually.

Two smaller floating solar PV systems, each running at 1.5 megawatt-peak, will also be deployed by PUB at Bedok and Lower Seletar reservoirs by next year for the same purpose.

Alongside the conversion of food waste into agricultural compost and the use of water sludge to produce biogas as an alternative energy source, the floating solar PV systems are yet another tool in the nation’s arsenal to thrive in a resource-constrained world.

Links to the story: reservoir


Singapore GDP growth to slow to 1.9% in 2019: ICAEW

In light of renewed US-China trade tensions, South-east Asia is expected to see a greater slowdown in economic growth, with Singapore being “most negatively affected and would likely dip into recession in 2020”.

This is according to the Institute of Chartered Accountants in England and Wales (ICAEW), in a report.

As a small, open economy heavily dependent on exports, the report noted that Singapore is expected to experience the sharpest slowdown in the region.

The country’s gross domestic product (GDP) growth in 2019 is expected to moderate to 1.9 per cent from 3.1 per cent in 2018, before rising to a below-trend rate of 2.2 per cent in 2020.

The outlook for the Singapore economy, however, is not all doom and gloom.

Household spending remained resilient, and non-residential and infrastructure construction saw positive growth for the first time in two and a half years in the first quarter.

Furthermore, the labour market in Singapore is “still quite healthy”, Ms Fenner added. Meanwhile, GDP growth across South-east Asia in 2019 is predicted to slow to 4.8 per cent from

5.3 per cent in 2018, before moderating to 4.7 per cent in 2020.

“This slowdown in growth reflects the weaker global trade environment, as well as the uncertainties on external demand, and how this will impact investment decisions,” said Ms Fenner. The report added that export momentum across the region has continued to deteriorate into the second quarter, owing to weaker Chinese import demand, a slowdown in the global information and communication technologies cycle, as well as the increase in trade protectionism over the past year.

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Hopes dim of growth recovery in H2 as May’s PMI falls below 50

Singapore factories face an uphill slog, as a much-longed-for industry turnaround in the second half of the year could fail to materialise.

Manufacturing sentiment has turned negative for the first time in almost three years, with economists warning that the rot may spread beyond the cooling electronics cluster.

Singapore’s headline Purchasing Managers’ Index (PMI), an early measure of factory activity, fell below 50 in May – which indicates contraction – after notching 32 months of growth.

It dipped to 49.9, down by 0.4 point on the month before, said the Singapore Institute of Purchasing and Materials Management, amid slower growth in areas such as new orders, new exports and factory output.

As key trade talks fell through, the United States hiked tariffs on US$200 billion of Chinese goods in May – setting the stage for China’s tit-for-tat duties. The US has also moved to blacklist key Chinese technology companies from access to American parts.

Last month’s ramp-up in trade tensions thew a spanner in the works of the expected electronics pick-up, amid hopes that a cyclical downturn in technology had bottomed out.

Links to the story: below-50


Transport, air-con are key green investment areas in Asean: expert

Urban transport is an important green investment area to watch in Asean, as countries grapple with air pollution associated with conventional vehicles, said climate policy and finance expert Paul Bodnar.

Noting that India is accelerating its transition to electric vehicles, he said: “That has not happened in Indonesia, the Philippines and Vietnam yet, but I would not be surprised if they follow India’s example.”

Agricultural land-use and air-conditioning are other key areas for Asean, said the managing director of non-profit Rocky Mountain Institute, which aims to shift global energy use towards low-carbon technologies.

Links to the story: asean-expert  cities

Singapore vulnerable to foreign election influence

Singapore has several ingredients a foreign power can exploit to influence election results or even policies, French political analyst Fabrice Pothier said.

Its multi-ethnic, multilingual social fabric, as well as dependency on the global market, means the Lion City is vulnerable to attacks and information campaigns from outside, he said.

“I would imagine that there are some big neighbours of Singapore who might want to shake things up and influence things,” said the co-founder of the Transatlantic Commission on Election Integrity.

Formed last year, the commission works with lawmakers in Europe and North America on how to reduce the risk of interference from foreign powers.

This topic has come under the spotlight in recent years, with countries like the United States, Australia and France encountering foreign interference – likely from Russia – in their elections and politics.

The authorities are reviewing whether and how the legislative framework here “should be updated to give (the) authorities the wherewithal to combat the threat and tactics of foreign interference in our elections”, an MHA spokesman said.

In an interview, Mr Pothier stressed the importance of putting in place measures to prevent foreign intervention.

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Singapore is top source of foreign direct investment into India

Singapore has emerged as the largest source of foreign direct investment (FDI) into India, underlining growing business links between the two countries.

According to latest figures from the Indian Department for Promotion of Industry and Internal Trade, the country received the greatest share of FDI inflows from Singapore, valued at US$16.23 billion (S$22.1 billion), in the last Indian financial year, which ended March 31.

Singapore was followed by Mauritius (US$8.08 billion), the Netherlands (US$3.87 billion), the United States (US$3.14 billion) and Japan (US$2.97 billion).

The total FDI inflow into India for the 2018-2019 financial year stood at US$44.37 billion.

One of the factors behind the jump in FDI inflow from Singapore was a big-ticket investment from Walmart, which acquired a 77 per cent stake in Indian online retailer Flipkart for US$16 billion in May last year. The latter’s parent firm is based in Singapore.

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Singapore among top 10 exporters of creative goods: Unctad study

Singapore came in 10th on a list of the world’s 10 largest exporters of “creative goods”, which are one of the fastest-growing sectors in the global economy.

The United Nations Conference of Trade and Development (Unctad), using figures from 2015 (the latest available), said the Republic shipped US$10 billion in goods under the categories of art and crafts, audio-visuals, design, digital fabrication, new media, the performing arts, publishing and the visual arts.

In 2005, Singapore’s figure was US$2.1 billion.

China topped the 2015 list as the largest exporter of such goods, sending out shipments worth US$168 billion; it was followed by the United States (US$39 billion) and France (US$34 billion).

Link to the story: unctad-study


Move over Google, here’s Singapore’s Boogle

Two Singaporeans have founded a tech start-up with the ambition to be the next Google and more. For a start, they are launching a search engine that promises to offer users “free, open and autonomous” Internet searches.

Called Boogle, the search engine stores all ranking and search data on blockchain, which is a decentralised store of information shared across a network of computers.

And it cumulatively builds a search ranking system “democratically” from the search results of all its users, said the firm.

Already, there are search engines such as DuckDuckGo and StartPage that market themselves as search tools that respect user privacy and will not sell user data for money.

But the Boogle founders claim to have taken it a step further by using blockchain technology that does not keep data in a central system.

To date, they have pumped in nearly $4 million and are in talks with several global banks and financial institutions, as well as a fintech fund, for further funding.

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Hong Leong Finance doubles down on core SME segment

Local companies will likely face a profit slowdown this year on the back of the US-China trade war, which shows no signs of easing, as well as property cooling measures that kicked in last July, said Ang Tang Chor, president of Hong Leong Finance.

“SMEs (small and medium-sized enterprises) in Singapore will be hit harder than others, especially those at the lower end of the value chain,” he told The Business Times in an interview.

This could spell bad news for Hong Leong Finance, for which SMEs make up about 70 per cent of its loan books. It is also heavily collateralised against real estate, which accounts for 80 per cent of its portfolio.

So far, there seems to be no visible impact on its bottomline. In its latest Q1 results, it posted a 1.5 per cent increase in net profit to S$26.2 million, while its revenue, measured by its total interest income and hiring charges, rose 18.4 per cent to S$95.2 million, driven by loan growth and higher average loan yield.

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The truth about trade deficits: Why trade imbalances are not always bad

At the centre of the ongoing trade dispute between the United States and China is US President Donald Trump’s claim that it loses US$500 billion (S$685 billion) to China every year. He has promised to cut the trade imbalance to bring factory jobs back to the country, boosting its economy. The US trade deficit with China is not the only one that President Trump has taken issue with. In his visit to Japan last month, he rapped his host for its “substantial edge” over his country in trade. His trade war widened to Mexico and India at the weekend, when he threatened the neighbouring country with tariffs over a migration issue, and stripped the South Asian nation of its special trade status.

However, Chinese Vice-Minister of Commerce Wang Shouwen hit back, saying that China should not be blamed for the loss of US manufacturing jobs, adding that US officials overestimate the trade deficit between both countries. The goods and services deficit with China is closer to US$150 billion, he said, unlike what US officials quoted.

Unveiling a new government policy paper on the ongoing trade war, he added that China’s processing trade with the US should not be included in deficit calculations. This refers to trade where materials, parts and components are imported to a country for processing or assembly before being re-exported to another market.

Imposing tariffs to narrow trade deficits seems to be President Trump’s solution to his country’s economic problems, but economists tell The Straits Times that looking at trade deficits alone – which are not inherently bad – gives a “myopic” view of economic linkages between countries.

The use of tariffs, which do not help to reduce the trade deficit and appear to be a political measure, is also likely to manifest as a “consumer tax” on US consumers, given that the US itself does not have a comparative advantage in producing the goods in question.

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Expansion of microalgae production to improve Singapore’s food security

Local agritech startup Life3 Biotech and Temasek Polytechnic have joined forces in an effort to improve Singapore’s food and nutrition security.

Life3 Biotech revealed that its continued partnership with Temasek Polytechnic aims to develop a special cultivation medium that uses food by-products to enhance the growth as well as nutritional profile of its microalgae variety as food ingredients.

In doing so, they hope to expand the production scale of plant-based seafood alternatives and help address concerns about Singapore’s food security.

This follows an initial collaboration between the startup and the polytechnic in a scale-up production of microalgae both in indoors and an outdoor bioreactor in its initial research collaboration with Temasek Polytechnic at its Project Cube/Roots’ agritech facility.

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Trade war could pop Hong Kong’s property bubble

Record high home prices in Hong Kong have prompted some economists to forecast a bursting of the bubble.

Residential property values reached an all-time high last week after relentless gains over the past three months. Prices have risen by 8.6 per cent since the beginning of the year, Centaline data shows.

However, with Hong Kong exposed to the US-China trade war and the city’s stock market taking a hit, analysts say the likelihood of home prices declining is even greater now.

The recent equities sell-off has been so widespread that about a third of Hang Seng Index constituents entered oversold territory – a technical indicator that traders use to evaluate whether buying or selling of a security has become too extreme – the most in almost one year.

The value of property transactions in the first five months of the year reached the highest level since 1997, with buyers spending HK$348.2 billion (S$60.6 billion) on everything from homes to car parks, shops and office units, according to Ricacorp Properties.

But the realtor believes an escalation in the trade war and a stock market correction could put the brakes on buying, resulting in up to 40 per cent fewer deals this month versus May.

That negative sentiment is being expressed in other quarters too.

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China curbs developers’ funding to cool market

Chinese authorities are taking fresh steps to cool the property market, curtailing onshore fundraising for developers found to have bid aggressively in land auctions.

The curbs have affected companies including Sunac China Holdings Ltd and Gemdale Corp, said people with knowledge of the matter, who asked not to be named.

In some cases, developers’ underwriters were asked by regulators not to tap unused quotas for selling yuan bonds or asset-backed securities, according to the people. Cifi Holdings Group Co, Risesun Real Estate Development Co and Country Garden Holdings Co are also among those impacted, the people said.

Regulators’ actions were primarily driven by the view that the developers had been aggressive in bidding for land plots in some cities, one person said. By targeting developers’ financing plans, authorities signal they are willing to use a wide range of levers for keeping the housing market in check, in addition to more blunt tools such as outright price curbs.

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Developers bank on improving Aussie property market

Singapore developers are looking to a turnaround in the Australian property market, with an easing of credit controls and lower interest rates.

Tighter credit conditions and stamp duties contributed to a slower property market Down Under in recent years, making it challenging for residential developers to sell their projects there.

Developer Chip Eng Seng’s Australian subsidiary released 222 units for sale from its freehold 704- unit project Fifteen85 in South Melbourne in June last year. According to Chip Eng Seng’s FY2018 annual report, only six per cent of the units – or about 13 apartments – were sold.

Sales have been slow owing to the weak property market, a spokesman for Chip Eng Seng told The Business Times. However, the developer believes that sales will pick up as the weaker Australian dollar and decline in residential prices could attract foreign buyers.

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Australia home prices fall at slower pace, auctions revive: report

Australian home prices fell again in May though the pace of decline slowed as auction clearance rates picked up and sentiment was likely to improve further with regulators easing lending rules and on hopes of interest rate cuts.

The report from property consultant CoreLogic showed home prices nationally fell 0.4 per cent in May from April, when they dropped 0.5 per cent. The pace of decline has been gradually slowing since December when prices slid 1.1 per cent.

“This improvement is primarily being driven by a slower rate of decline in Sydney and Melbourne where housing values were previously falling at the fastest rate of any capital city,” said CoreLogic’s head of research, Tim Lawless.

The Australian housing market remains in a broad-based downturn though, he added.

Over the past 12 months, prices have slid 7.3 per cent nationally. In the major capital cities, values fell 0.4 per cent on the month and 8.4 per cent for the year. Home prices in Australia have been in a free fall since late-2017, eroding household wealth and weighing on consumer spending.

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By: Lee Sze Teck Head, Research




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