Wednesday, September 30, 2009
What the Japanese cleanuped up is something that resembles "regulatory capture" [Link]. Industries can build up close relationships with regulatory bodies with the implicit understanding that lucrative jobs will be available to regulators in the industry causing them to act in favor of the industry. There are also other examples of this in the US defense industry where big defense companies have been known to hire people in govt responsible for purchasing weapons.
'Amakudari' documents set to be turned over
The government is considering forcing ministries and agencies to turn over memos and undisclosed documents regarding "amakudari" practices by retired bureaucrats and politicians to the new Administrative Reform Council, government sources said Thursday.
The move derives from the experience of Democratic Party of Japan lawmakers who, in their previous role as the opposition, uncovered the public pension record debacle and other improprieties that were traced to bureaucrats after acquiring undisclosed documents from the government.
The DPJ-led government believes it is highly likely that additional documents will reveal more waste, the sources said.
The council, which is chaired by the prime minister, will be tasked primarily with uncovering waste and corruption hidden within administrative services.
It will set up theme-based subpanels to root out waste, including one tasked with reviewing public and quasi governmental entities criticized as engaging in amakudari, the practice in which public and private entities provide lucrative jobs to retired senior bureaucrats who used to work at the ministries and agencies that oversaw them.
Amakudari literally means "descent from heaven."
A secretariat will soon be established at the Cabinet Office and will be staffed by 30 to 40 people to coordinate the work by the panels, the sources said. The secretariat could be headed by Hideki Kato, who represents a think tank called Japan Initiative.
Here is a Business Times report on the survey[Link].
1. "Singapore workers have to slog longer to earn enough money to bite into a Big Mac. Its price is equivalent to about 36 minutes' worth of work, 14 more than three years ago."
2."It shows that the country is among First World economies in prices but not necessarily in wages".
3. "With pay increases not keeping pace with price hikes, purchasing power is squeezed. Singapore has declined 10 spots to the 50th position, behind cities like Bratislava in Slovakia, Johannesburg in South Africa and Kuala Lumpur in Malaysia.
4. "Halimah Yacob questions the survey's validity".
5. "'The figures may be right, but the conclusion could be wrong" - MP Seah Kian Peng
You can go through the report in detail[Download here]. The numbers clearly shows that that our cost of living has risen much faster than our wages. We have gotten worse compared with other Asian cities such as KL, Seoul, Hong Kong etc. When interviewed by Business Times, MP Halimah said govt measures ranging from Workfare Income Supplement for low-wage earners, to rebates and subsidies in healthcare, education and housing help people to cope much better. Did she forget that the govt also implemented means testing that will significantly increase the cost of medical care for Singaporeans? Did she forget that the cost of housing has escalated by 40% in 3 years as govt subsidy remains more or less the same? Workfare? Most of us don't qualify and you don't envy those who do because at their income level life is just miserable in Singapore.
And there are plenty of things that has gotten worse that is not captured in the report. Buses packed like sardine cans, MRT carriages with seats removed, congested roads, decreasing job security etc. Overall life has gotten worse for most people in Singapore. It is hard for PAP MPs to understand this because their lives have not gotten worse. The PAP leaders have denied almost every problem Singaporeans raised. When the cost of housing rose, they insisted that it was still affordable so they did nothing - they blame Singaporeans for being too fussy and obstinate about location and size of flats. When Singaporeans above 40 (now above 30) find it hard to get jobs - they tell you to moderate your 'unrealistic' expectations and take any job that pays you anything....joblessness is also the fault of Singaporeans. When we tell them that utilities especially the cost of electricity is too high, they tell us to cut down on our usage if we can't afford it. ....it is again the fault of Singaporeans, they are using more electricity than they can afford. So this is what we pay this govt the highest salary for - to tell us to solve our own problems?....worse still to create problems for us to solve?
Tuesday, September 29, 2009
Here's the interview from which the Michael Moore's comment came from:
I like the part where the interviewer asked if Moore is a hypocrite for making so much money from the capitalist system then turning around to call it evil. Moore gave a pretty good answer to that one.
If capitalism is evil, what's the solution?
"Some people say to me, democracy is not an economic system, it's a political system. My answer to that is, you think capitalism has nothing to do with politics?
Let's quit talking like we're back in Economics 101. Capitalism is not only an economic system that legalizes greed, it also has at its foundation a political system of capitalism that is, "We have to buy the political system because we don't have enough votes. We're only 1% of the votes. We have to buy the people, and we have to buy the people by convincing them if they work hard, they too can be rich one day." [Americans] have gone along with it for the last 30 years. " - Michael Moore on his movie Capitalism [Link].
Yes, Michael Moore again. You can always count on his movies to exaggerate, spread half truths and tell one sided stories based on his own political agenda. That is Michael Moore and intelligent people will watch his "pseudo" documentaries and know they are simplistic portrayals of reality and won't simply accept his point of view without question. So is it true that Americans worked hard for the past 30 years and were short-changed by their system? The truth is Americans partied for the past 30 years going on an consumption binge while Asian workers worked in factories and sweatshops to produce the goods Americans consumed. If the Americans are victims of capitalism, the Chinese factory worker who is paid pittance for his labor is a bigger victim of capitalism. What about workers on a small island where there is no minimum wage and the income gap is twice as big as that of America....where the most people don't even get to vote because they don't really have a democratic political system.
Still, I like Moore. He gets us all interested and thinking with his documentaries.
S'pore needs to transform itself into a "whole brain economy"
Posted: 28 September 2009 2301 hrs SINGAPORE: Singapore needs to transform itself into a “whole brain” economy, said Minister in the Prime Minister's Office, Lim Swee Say. He noted that the country had done well in developing its "left brain" economy, by building “hard” capabilities to become a leading technology, engineering and manufacturing hub in the world. Going forward, he stressed it's important to combine this with “soft” capabilities such as the arts, dance, and design. These capabilities are no less important than Science or Business. Mr Lim said Singapore can strive to be both an Innovation Driven Economy and a Renaissance City. As part of efforts to build the creative industry, a S$1 billion development fund has been set up to support the media and gaming industry. The Media Development Authority also aims to add some 10,000 new jobs in the Interactive Digital Media industry by 2015. The two integrated resorts will contribute to the growth of creative pool of expertise as well. Speaking at Lasalle's 23rd Convocation Ceremony on Monday, Mr Lim said all these developments will mean promising career prospects for Lasalle graduates in the years ahead. He also encouraged the 825 graduands to do good for the community as responsible and caring members of society. - CNA/vm
Monday, September 28, 2009
Here are the numbers:
1. There are 4.99M people on the island.
2. There are 3.73M PRs + Citizens.
3. There are 0.53M PRs. Which means there are 3.2M citizens.
4. The number of non-PR foreigners is 1.26M.
5. The total number for foreignes in Singapore is 1.79M.
This means 36% of the people here are foreigners this is roughly 4 out 10 people....which makes life in Singapore very interesting.
Singapore population of 4.99m is older, more likely living aloneBy channelnewsasia.com
Posted: 28 September 2009 1448 hrs
Singapore: The population of Singapore at the end of June stood at 4.99 million according to the 2009 Population Trends report. The Department of Statistics report issued Monday also showed that there were 3.73m Singapore residents and 1.25m non-residents. Singapore Residents and Permanent Residents formed 75% of the population, with the resident population growing 2.55% in 2009, from the 3.1% total growth over the previous year. The statistics compiled through the register-based approach indicated that the number of Singapore citizens grew to 3.20m. This is as the number of permanent residents rose to 0.53m while non-resident numbers eased to a growth of 4.8% compared to 10% seen in earlier years. The Population Trends report also found that the Singapore population is now older with a median age of 37 years, as the baby boomers of the 1970s move into the 45-64 years age group. There are also more women in Singapore as the gap widened in 2009 with females outnumbering males by 44,4000. While the number of marriages went up to 24,596 making it the largest number since 2000, it also turned out that more people were marrying late with many still single despite being in their thirties. However, while more men did marry, more women were widowed, indicating the longer life-span of women. The fertility rate continued to decline with 1.28 live births per female in 2008 compared to 1.29 a year earlier. Women were also giving birth later, delaying till the age of 30-34 years, with fewer families opting for a third or fourth child. Households were small the report found, with a 10% rise in the number of people living alone. The Population Trends report also concluded that a 2008 new-born Singapore resident could expect to live some 80 years. - CNA
Aztech is not the only company that believes this. The others are bookstore chain Popular Holdings, wet market operator Heeton Holdings and jeweller Aspial.
This story just gives me flashback of so many other stories. A month ago I chatted with a barber who was cutting my hair. His barber shop was newly opened and he already had 3 other shops in the eastern part of Singapore. He told me about his exit strategy if he can't get enough customers for the new shop to overcome the high rent- he could sublet part of the shop or return to shop if he can't make money. He went on to tell me that making money by cutting hair is hard work - he would have to cut their hair of 400 people per month just to pay the rent. The big easy money is made selling shops. He made more money selling his 1st shop which he bought for $40K and sold for $800K than he made all the heads of hair he ever cut.
So why do all the hardwork of cutting hair, making electronics widgets and designing jewelry when you can just sell property and make money? Won't the demand and price of property keep going up as the population expands? The money for purchasing residential property ultimately comes from the household income of the family that purchases it. How high prices can go depends on how much loan they are willing to take and their ability to service that loan. Sustainable price increase occurs in tandem with the rise in income. Price of property cannot rise faster than household income in the long run- it is not sustainable because families have to keep piling up more debt and this stops when they can't service it or when people start defaulting on their loans. Rising property prices also deter foreigners from coming here as they would have to keep cough out a large fraction of their income to pay for rent or service their housing loans.
We all want to be the smart ones owning property that rise in value as the wave of foreign immigrants come to push the prices up to the stratosphere. This is the big easy money that companies like Aztech dream about. ..forget about the hardwork of innovating and manufacturing. This dream has a flip side. Remember Dubai? When its economy weakened and many property loans became negative equity, foreigners simply walked out and left - leaving the banks and real estate companies saddled with billions in bad debts[Link]. Cars, also bought on loan, were abandoned at the airport....credit card bills left unpaid. I think there is an important lesson here for Singapore.
Sunday, September 27, 2009
It particularly stipulated that “permanent residents are welcome” to apply for this “mid-career job (salary negotiable)”.
A copy of the advertisement found its way onto the web.
Applicants should have a diploma or a relevant trade certificate, with 3-5 years’ work experience, and “preferably non-Singaporean (PR welcome),” it added.
This provoked strong reactions from Singaporeans who are already upset at the large number of foreigners allowed to work here.
One asked if such discrimination is legal. “This sort of ad would have landed this company in heavy trouble in most developed states,” he added.
Another writer said: “Now we know where we stand. The policy has downgraded Singaporeans to below foreigners.”
Archilles said: “I feel left out by my own government, which is desperately trying to attract foreign talent (and) overlooking our own ‘local talent’. It’s sad, very sad!”
A similar storm broke some years ago when another company told a fresh Singaporean graduate during a job interview that his chances were slim if he had to report for annual reservist duty.
“We prefer a foreigner who has no such obligations,” the executive had added. Besides, they are much less costly to hire.
The reservist withdrew his application in disgust.
This is not just another act of public whining. The fact is many Singaporeans are no longer sure about their own role or entitlement in society.
In recent years, the rate of entry has increased sharply as the economy flourished. Every year some 100,000 foreigners have been arriving, putting pressure on what was already one of the most competitive and over-crowded cities in Asia.
The controversy couldn’t have come at a worse time when the country is emerging from a severe downturn and the people’s uppermost concern is getting – or retaining – their jobs.
Last month Seagate (worldwide: 10,000 workers) moved out its manufacturing capacity, retrenching some 2,000 workers. “It is difficult to imagine the impact of Seagate’s loss on our economy,” said commentator Harrison Goh.
Its departure, he added, may have marked the end point of Singapore’s involvement in the global manufacturing market.
“It spells a deepening crisis that most Singaporeans may not yet fathom, thinking that the PAP government has a ready solution.”
It is within this context that the unpopularity of the open door policy becomes apparent.
Political leaders are now working hard to reassure embittered Singaporeans that their interests would always come first.
Prime Minister Lee Hsien Loong announced last week that his government would reduce the inflow of foreign workers to maintain the “tone” of society. He gave no numbers.
At the same time, his Community, Youth and Sports Minister assured polytechnic students: “You have a birthright. Everything we do is for your long-term benefit. Foreigners are here to help make Singapore more viable and competitive.”
The other side of the coin is equally stark.
With 1.28 babies per couple, Singapore’s birth-rate is one of the lowest in the world and threatens its long-term survival.
Singaporeans are also ageing rapidly, which may require young people to pay higher taxes to look after them.
Both defects are already being felt in a manpower-short economy, which requires immigrants to correct, according to officials.
“Companies have been coming to us to ask ‘where are the workers, we can’t get them’,” a government official said.
Singaporeans, being descendants of immigrants themselves, have never been antagonistic to the presence of foreigners here – until now.
What they resent is not their coming, but the overwhelming numbers, which they feel are threatening their jobs and education opportunities.
They are also angry with uneven policies that benefit foreigners more than locals, especially national service (compulsory two years) and the subsequent annual reservist call-ups, a burden not borne by foreigners.
Permanent residents are exempted, but their children are not.
Not having to meet reservist call-ups and cheaper wages are powerful attractions for employers to hire foreigners, particularly in a weak economy.
Complaints have increasingly come from older or mid-career Singaporeans who have been replaced by lower-cost younger workers from China or India.
The foreigners, hungrier and without family responsibility here, generally work longer hours for less pay – something that married Singaporeans with a home mortgage to pay cannot possibly match.
A small industry has risen to recruit them in large numbers – as indicated by a recruitment agency, with this advertisement: “Do you find it difficult and expensive to hire local staff? Why not consider hiring foreign talents?”
Claiming it was licensed by the Manpower Ministry, the agency said that it had recruited thousands of workers from China, India, Vietnam and Malaysia for Singapore firms in the past five years.
Every time such an ad appears, it cuts into the popularity of the government, which won 66.6% of the popular votes in the 2006 election.
Several months ago, the government ordered its election machinery to prepare for a snap election in case one is called.
With the improvement of the economy, it is widely expected that it will take place next year, instead of 2011 as scheduled. The public discontent against massive immigration promises to be one of the hottest campaign issues if it happens.
This intensity of public feeling has been too sensitive to be reflected in the traditional media, which has toned down the coverage.
On the Internet, however, where Singapo-reans can air their grievances, the mood is more sombre. It probably requires more than mere government assurances to placate.
(This was published in The Star, Malaysia today)
Friday, September 25, 2009
The truth is becoming very clear. The PAP govt allowed a large influx of foreigners into the country with a large number of them obtaining PRs or citizenship in the past 3 years making them eligible for the purchase of HDB flats. The HDB did not provide sufficient supply for the increase demand that is why prices were going up even when the economy was slowing down. The PAP govt has made a mistake that has impacted Singaporeans looking for homes negatively. Their response to this issue has been to insist that HDB flats are still affordable and to urge Singaporeans to lower their expectations to go for smaller flats in less preferred locations. The govt mouthpiece even went on to say that Singaporeans are obstinate, selfish and unreasonable. The PAP govt is trying to deny there is a problem and push the blame to ordinary Singaporeans. These are not the actions of a good and responsible govt. The high price of housing relative to income will result in Singaporeans shouldering heavier debt and a poorer quality of life. Many Singaporeans are already struggling to make ends meet as the cost of living has gone up faster than their income in recent years.
The report by Eugene Lim, associate director, ERA Asia-Pacific can be found here via The Business Times.
Resale HDB prices increased by 38 percent; 40 percent of buyers PR
Prices of resale HDB flats have shot up 38% over the past three-and-a-half years according to Eugene Lim, associate director, ERA Asia-Pacific. But what's shocking is that 40% of buyers are made up of Permanent Residents according to recent ERA's resale transactions.
"The government's target population of 6.5 million is steadily increasing theIt is widely known that prices have risen over the past few years and that we had a large influx of new residents. But when you see these such statistics side by side, it begs to question why weren't countermeasures put into place earlier considering this happened over a sustained period of three-and-a-half years?Another statistic we found interesting in the report was how 86% of ERA's HDB recent resale transactions were concluded with Cash-Over-Valuation (COV). This number seems to come into conflict with what Mr Mah Bow Tan said recently about a third of HDB resale transactions done at or below valuation.
pool of PRs; and they have to buy their HDB homes from the resale market as they
do not qualify to buy new flats directly from HDB. ERA's resale transactions
show that PR buyers make up some 40 per cent compared to 20 per cent three years ago." - Eugene Lim, assosiate director, ERA Asia-Pacific.
Wednesday, September 23, 2009
"There is little doubt that state housing is affordable, whether new or resale"
"Home seekers create problems for themselves when, as seen, they buy bigger places than they can comfortably finance."
"They could also be unyielding about wanting to live.....for the (selfish?) child-minding convenience".
"This newspaper would go further: If they choose to be obstinate about quirks, they should not be hectoring the HDB for impossible concessions".
Well this newspaper is not a newspaper but a propaganda sheet. The PAP govt through its FT policy took in 400,000 people in 3 years without the corresponding increase of housing supply caused this problem. They now want Singaporeans to shoulder the burden - lower their expectations, shoulder more debt for housing or stay in smaller units. Straits Times is ridiculous to berate Singaporeans for being obstinate, unyielding and selfish.....this paper deserves its 142 ranking....it is nothing more than propaganda. They have sunk to a new low blaming a problem created by the PAP govt on ordinary Singaporeans who are now struggling to cope with the pain caused by poor govt planning.
Watching HDB price behaviour, sensibly
There is a rising pitch of anxiety evident in queries and feedback about HDB housing in recent months. -ST -->
Wed, Sep 23, 2009The Straits Times
THERE is a rising pitch of anxiety evident in queries and feedback about HDB housing in recent months. These have centred on affordability mainly, no surprise considering that the sudden spurt in private property prices since July has boosted HDB values, which already were holding better during the recession. Hence, complaints about cash over valuation. Why don't buyers exercise their democratic right to not pay a premium by looking in towns less 'prime'? Home buyers have also touched on policy issues like household income ceiling and the operation of ethnic quotas. National Development Minister Mah Bow Tan addressed most outstanding grouses in a well-timed statement in Parliament last week, but such is the variety of need and the habits of personal preference that assurances would still leave some home-seekers unconvinced.
Affordability is a bugbear, which in turn influences notions of supply relative to demand. Median income and the ratio of household income used for loan service (up to 30 per cent, as a general rule) cited by the minister are indicative of most people's ability to pay, but these are rough guides. In every flat type of up to five rooms and the corresponding price ranges, households which fall below the median income line could progressively be less able to own their homes. That's a lot of families. Financing difficulty can also arise when a family chooses a bigger flat than it can pay for, or needs. There are far too many of these big-is-better purchasers. But this is also where the comprehensiveness of HDB's income-differentiated schemes and the different types of supporting grants available reinforce affordability.
There is little doubt that state housing is affordable, whether new or resale, if one considers carefully precise matching need. The HDB has every conceivable flat type and location to suit every budget. Home seekers create problems for themselves when, as seen, they buy bigger places than they can comfortably finance. They could also be unyielding about wanting to live in 'mature' towns or to be near their parents, for the (selfish?) child-minding convenience. It is an odd mentality that regards only as 'ulu' the new towns which otherwise score heavily in more spacious estate layout and the much nicer, contemporary design of flats. And what of 'distance'? Farthest points on this island are reachable inside an hour by public transport, faster by car. Mr Mah urged buyers to be sensible about making 'trade-offs' between location and price. This newspaper would go further: If they choose to be obstinate about quirks, they should not be hectoring the HDB for impossible concessions
"In 2008, our population grew by 5.5% to 4.84M[Link] that is an addition of roughly 250,000 people. There were 100,000 newly minted PRs and citizens in 2008 and these people become eligible to buy resale HDB flats. Even in this severe recession demand is up possibly because of new immigrants".
A commenter Kojakbt posted a link to a chart that shows this big surge:
HDB prices its new flats based on the resale market price. The demand for housing, be it rental or purchased homes, has surged due the 400,000 foreigners coming here in the past 3 years. HDB builds 8000 flats a year[Link] and this is insufficient to meet the new demand. I'm not even sure 8000 flats is even enough for Singaporeans getting married and upgraders let alone the big surge in foreigners coming here. It is strange the govt & HDB did not plan for this. Now it spends all its time and effort telling Singaporeans that "HDB flats are still affordable"..... Singaporeans now have to pay more and shoulder higher housing debt because HDB undersupplied the market and the PAP govt chasing after GDP growth allowed in more foreigners than they can house. It is tiresome to listen to the PAP govt trying to talk its way out of this housing mess by denying there is a problem and insisting that 'flats are still affordable'. HDB's idea of affordability is you should downgrade your expectations all the way to a 2 room flat at a location you don't want when previously you could have owned a 3-room flat at a better location.....this is hardly a solution, the govt has simply passed the pain and consequences of its actions and poor planning to ordinary citizens who are already struggling with the high cost of living and facing a declining quality of life here.
Tuesday, September 22, 2009
The recovery in the US economy is hardly V-shaped like the stock market. The US economy has only recently stabilised and stopped getting worse. The consensus among economists is that there will be a very slow recovery..with a few people like Minister Tharman warning of a W-shaped recovery. So why has the stock market surged up?....Look at this chart:Yes, and the Fed will stop its quantitative easing soon....so guess what comes next for the stock market....
The HDB resale prices rose something like 40% in less than 2 years. How many people's income rose 40%? Whatever it is, HDB flats now are LESS AFFORDABLE. Whether it is still affordable is a subjective...it depends of what criteria you use to measure affordability. There is no point arguing if it is affordable or not. It is definitely LESS AFFORDABLE than before. HDB can always argue cheaper resale flats are available in faraway locations like Woodlands etc. Or you can buy a smaller flat and so on. We see the same thing happening for healthcare cost which is also rising faster than income. The truth is for the same job a person does, he now can afford less and that is a fact. We are all climbing this motorised stepper...at increasing speeds, you work harder just to stay at the same position. We are told to 'lower our expectations' because the system now yield less for the working class per unit of work. That is the heart of the problem. How does the PAP govt persuade people to accept and participate in such a system?
Friday, September 18, 2009
Here is a case of a kleptomaniac charged for stealing $2335 worth of goods[Link]... despite her mental illness she was given a jail sentence. Another case of a man who stole $2500 worth of scrap metal jailed for several weeks[Link]. Here is one guy who was jailed for 33 months for stealing the handbags of prostitutes. 3 weeks jail for a cabby who kept the belongings left in his cab by absent minded passengers [Link]. A woman who used another persons credit card to pay $4700 worth of goods was jailed for 28 months[Link].
Somehow the sentencing is sometimes inconsistent with what ordinary Singaporeans think of the justice system. We generally accept that our system is strict and if you steal something, you can expect to go to jail.
Ex-M1 CEO's son fined
By Elena Chong, Courts Correspondent
Briton Alexander Montefiore (left) stole a total of $13,000 from its managing director, Mr William Louis Selig, using his DBS debit card. -- ST PHOTO: WONG KWAI CHOW
THE son of former MobileOne chief executive was fined a total of $23,000 on Friday for theft from his boss and forgery.Briton Alexander Montefiore, 28, a former sales trader of Cantor Fitzgerald, a financial services company, stole a total of $13,000 from its managing director, Mr William Louis Selig, using his DBS debit card. He had admitted to two charges of theft by withdrawing $2,000 each time from Mr Selig's DBS account on Nov 7 and 26 last year.
He also pleaded guilty to forging an employment letter issued by the company by altering his annual salary from US$45,000 to US$100,000 on Nov 14. Five other theft charges were taken into consideration during his sentencing.Montefiore, now unemployed, is the son of former MobileOne chief Neil Montefiore.The court was told that Mr Selig had entrusted his DBS ATM card and PIN number to Alexander Montefiore for making withdrawals.On Nov 26 when Mr Selig returned to his office and found his DBS ATM card missing from his wallet, he suspected Montefiore of taking it. He later discovered that Montefiore had made six unauthorised withdrawals without his permission. Lawyer Suresh Damodara submitted more than a dozen testimonials and letters attesting to his client's good conduct to show that what he did was out of character.Among them was from Mr Selig, who had forgiven Montefioire, who had also paid back the money before he was charged. Consultant psychiatrist Brian Yeo, said Montefiore was found to have a depressive disorder and was always dependent on his father. He also used to take money from his Dad when he needed it. His wife, who was in court, broke down after District Judge Lee Poh Choo had passed sentence. His father will take over as CEO of StarHub next January following the retirement of incumbent chief Terry Clontz.
Thursday, September 17, 2009
In our quest to become a financial centre, the authorities have allowed various products/derivatives to be traded on the stock exchange. I'm not talking about structured products like the minibonds which are sold at the banks but various instruments traded on the stock exchange. There is this eagerness to just keep up with innovation elsewhere to encourage higher trading volume in our markets so that investment banks will set up shop here hire people, create and market various products. So far so good - jobs are created, products are created, banks make money ...everyone is happy...so you think. You rarely find articles in the Singapore papers or media critical of these products....nobody says these investment banks or brokerages are in some sense ripping you off. The problem is whatever these investment banks make, they make from you the investor....so the more they profits they make, the more you lose - this is not a win-win situation. I'll talk about 3 of these ETFs, structured warrants and CFD. Just remember if you can't figure out what they are, don't touch them.
ETFs (Exchange traded funds) have been marketed to Singapore investors as:
"Funds traded on SGX are known as Exchange Traded Funds, or ETFs. These funds generally aim to track indices like STI, MSCI India etc. This means that by investing in ETFs, you are effectively investing in the price movements of the component stocks in the underlying indices."[Link]
Investors are told in the marketing material that ETFs are superior to unit trusts because there no sales charge, and lower management fees than traditional funds. But how does it work? ...How do investment banks create an ETF on say on the STI, Gold, US financial sector, Hang Seng Index? You get an idea of how it is created in this article [What ETFs really are]. When you buy an ETF, you're sold a basket of derivatives, the fair value of which is known only to the managers of the ETF. Over time they can be decorrelated with the underlying basket of securities or index because the managers of these products can 'nickel and dime' you and your investment end up severely underperforming the index it is supposed to be linked to. Here is the video of a guy who tracked a number of ETFs on the US market and this is what he found: [Link].
"A structured warrant is a form of structured investment products issued by a third-party financial institution over a wide range of assets, including the shares of an un-related listed company, a basket of companies' shares or an index, and traded on SGX.
Structured warrants can be issued either as a call or put warrant. A call (put) warrant gives the holder a right, but not the obligation, to buy from (sell to) the issuer the underlying asset at a predetermined price, also known as the exercise price, on or before the expiry date, depending on the exercise style of the warrant.
In general, structured warrants enable investors to express their view of the performance of the underlying asset in a bullish or bearish market, at a significant degree of leverage over the life of the structured warrant. In addition, put warrants may be used by investors to hedge against the downside risk of one’s investment holdings." [Link]
The reason why you shouldn't buy these structured warrants in Singapore is they are frequently over-priced by the market maker who price in a huge premium which he can bring down over time. What this means is that these instruments have a higher than fair probability of depreciating over time to cause you losses and earn fat profits for the investment bank that operate as a market maker for the products. It will be interesting if MAS can make SGX release data on how much profits investment banks have made and how much investors have lost on these products. As for the use of these warrants for hedging ...forget it...the overpricing and expiry makes them useless for hedging.
CFDs are offered to investors by several brokerages in Singapore. These products allow the investor to leverage up to 6-7 times their capital on a stock. The brokerage offering the product is the counterparty. So if you go and buy $20K worth of DBS CFD, the brokerage takes the opposite position. They make money via the buy-sell spread, brokerage fee and the loan the give you to leverage. What the try to do is balance their long and short exposure so they make risk free returns. They do this by limiting the amount of long or short trades for a given stock. Because of the leverage, buying CFDs is more like gambling than investing. While it is more transparent that the other 2 products, the odds are stacked in favor of the brokerage firm just like a casino ...the odds are against the investor.
Just like other bad financial products, the marketing material for these products tend to describe how useful and good they are. They do not explain how investment banks and brokerages make money off amatuer investors/traders from these products. My advice is to avoid them completely as the odds are heavily stacked against you....
Higher wages seen for Singapore workers as job market tightens By Wong Choon Mei, Channel NewsAsia Time is GMT + 8 hoursPosted: 01 February 2006 2037 hrsSingapore businesses optimistic in first half of 2006 Time is GMT + 8 hoursPosted: 01 February 2006 1554 hrs Singapore's employment in 2005 at all-time high of 2.3 million By Hwee Goh, Channel NewsAsia, Time is GMT + 8 hoursPosted: 01 February 2006 1104 hrsSingapore's economy expected to continue prospering: PM Lee By Wong Siew Ying, Channel NewsAsia Time is GMT + 8 hoursPosted: 28 January 2006 0721 hrs
NTUC aim: Make 10,000 jobs pay more this year Straits Times Jan 14, 2006
RECORD panel recommends financial incentives for NSmen By Julia Ng, Channel NewsAsia, Time is GMT + 8 hoursPosted: 19 January 2006 1702 hrs
Panel recommends incentive package for companies to hire older workers
More workers expected to find jobs in 2006: NTUC Chief
NTUC to set up $50m fund to help low-wage workers upgrade their skills By May Wong, Channel NewsAsia
Medisave withdrawal limit to be raised from $300 to $400 from April
Singapore expects strong manufacturing investments in 2006
Strong jobs gains show Singapore employers hiring for growth: analysts
Jalan Besar Town Council unveils $517m estate upgrading plan By Yvonne Cheong, Channel NewsAsia
S&C and rental rebates for 700,000 households By Sharon Tong, Channel NewsAsia
Sembawang Town Council to spend $570m on renewal plan
Singapore created 28,500 jobs in Q3
ComCare Fund disburses $8.7m to help low income households By Wong Siew Ying, Channel NewsAsia
East Coast Town to undergo S$500m renewal programme By Julia Ng, Channel NewsAsia
HDB upgrading programme speeds up with 64 precincts chosen for 2006 By Farah Abdul Rahim, Channel NewsAsia
East Coast Town launches S$500m makeover programme By Asha Popatlal, Channel NewsAsia
Jobless rate down to 2.5%Lowest in 4 years! Straits Times 1 Feb 2006
Singapore retailers say festive season sales the best since 2003 By Anjana Menon, Channel NewsAsia
Manufacturing, service sectors optimistic about business conditions, Time is GMT + 8 hoursPosted: 01 February 2006 2016 hrs
Singapore's PMI expands for 9th straight month in January By Loh Kim Chin, Channel NewsAsia
Singapore's STI ends at six-year high for second day running Time is GMT + 8 hoursPosted: 02 February 2006 1818 hrs
Singaporeans less worried about economy, job security: survey By May Wong, Channel NewsAsia Time is GMT + 8 hoursPosted: 03 February 2006 1851 hrs
Its deja vu reading the news lately...
The economy is picking up and nice gestures like increasing NSmen pay, 'calibrating' foreign imported labor, anti-speculation measure to keep property prices from escalating, 'Singapore Rebel' unbanned, higher subsidies for nursing homes .....Khaw Boon Wan has started a blog [Link]. Yes, the good news is flowing, the timing is critical and it is all building up to something. In a few months, 66.6% of the populace will think they are living in paradise.
Elections have to be held every 5 years but most of them are held about 4 years from the previous one:
1948 · 1951 · 1955 · 1959 · 1963 · 1968 · 1972 · 1976 · 1980 · 1984 · 1988 · 1991 · 1997 · 2001 · 2006
During his talk with NTU students recently, PM Lee warned of a W-shaped recovery[Link]. That might happen given the global economy has recovered on the back of massive stimulus spending by various govts around the world. Once the effects these stimulus packages end, the economy might not hold out for too long. There is a window between now and the early part of next year when the 'ground is sweet'. Once you see the announcements of multi-million dollar plans for fountains, gardens, playgrounds and walkways near your home, you can be sure the elections are not too far away...
Wednesday, September 16, 2009
PM Lee says Singapore will make greater efforts at fostering integration
SINGAPORE: Singapore Prime Minister Lee Hsien Loong spoke at length on Tuesday evening, to some 1,500 students at the Nanyang Technological University on Singapore’s immigration policy and also gave the assurance that the interest of citizens will always come first.
Mr Lee explained that it was important for the issue to be discussed with the students because it concerned their future and eventually would be taken forward by their generation.
He said that the country will make greater efforts at fostering integration of new arrivals and that the National Integration Council will announce its initiatives soon.
"This is not a one problem you can solve one off, just answer an exam paper and settled. But it is a continuing issue with no final solution, where you have to manage it, decide, adjust your policy from time to time and as circumstances changed, adapt it in order to keep on going forward. And it’s a problem where what we do doesn’t just depend on the government or the government’s decisions but on how open our society is and how well Singaporeans adjust to and integrate new arrivals. And that depends on you, as your enter the workforce, work, settle your families and become the next generation of Singaporeans, what kind of Singapore you want," said Singapore Prime Minister Lee Hsien Loong.
He said that while Singaporeans understand the need for immigrants and foreign workers, they still have some concerns given the large inflow in the last few years.
When the Singapore economy was booming the country admitted many foreigners — more than 100,000 per year in recent years. Mr Lee, however, said the country will not continue to admit people at this pace as the nation cannot expect to continue booming as in the last few years.
So over the long term while Singapore needs to continue bringing in immigrants, it will be mindful of how quickly its society can absorb and integrate new arrivals.
"In the midst of all these discussions about Singaporeans and non—Singaporeans, I should emphasise one point— that in Singapore, the interests of citizens have to always come first. Not a short term interest but a long term interest. It is to safeguard the long term interest of Singaporeans, we must have a sustained, calibrated inflow of immigrants. We will make this differentiation sharper over time to reflect the responsibilities and privileges of citizenship. But we cannot make it so onerous for PRs and non—residents that nobody wants to come," Mr Lee said.
Furthermore, he mentioned that Singapore’s critical constraint isn’t with physical space but with its people — that with more good people, the country can generate new and creative ideas to expand the space and create more opportunities.
At the start of his speech, Mr Lee also had a word on the Singapore economy for his audience.
He said the third quarter economic forecast didn’t look bad.
But he cautioned that the nation must be psychologically prepared for a slow pickup and even surprises like a W—shaped recovery.
Monday, September 14, 2009
I wonder why the govt kept telling everyone that housing is affordable when it was planning to hit the market with various measures. Maybe it was trying to shock the market into behaving properly- in a research paper by Bernanke many years ago, he wrote that the most effective way for govts to intervene in the market is to catch the players by surprise. Property stocks fell sharply today....and the price of private condos may follow.
UPDATE 1-Singapore moves to curb property market speculation
Mon Sep 14, 2009 3:10am EDT
Govt says signs of heightened speculation in property mkt
* Govt to tighten housing loan rules, release more land
* CityDev, other property stocks fall on tightening steps
* Asian govts concerned about property bubbles (Updates with...";
* Govt says signs of heightened speculation in property mkt
* Govt to tighten housing loan rules, release more land
* CityDev, other property stocks fall on tightening steps
* Asian govts concerned about property bubbles
(Updates with details, analyst comment) SINGAPORE, Sept 14 (Reuters) - Singapore will release more
land for development and make it harder for home buyers to
defer payments, steps aimed at curbing speculation in the
housing market and that drove down property stocks on Monday. With immediate effect, banks and developers will not be
allowed to offer loans on homes under construction where the
borrower need only put down as little as a 5 percent cash
downpayment and defer repayment of the principal until after
building is completed. The government also said it will reinstate its "confirmed
list" of land sales in the first half of 2010 and increase the
supply of land available to developers. "Given the current market conditions, the government has decided to adopt several measures to temper the exuberance inthe market and pre-empt any speculative bubble from forming,"
National Development Minister Mah Bow Tan said in Parliament. Singapore's actions come as some Asian governments warn of speculative bubbles in real estate markets and said they may
take steps to cool an overheated market. For instance, Bank of Korea said on Thursday it would lift interest rates if home prices climbed further. [ID:nSEO269632] Mah's announcement in Parliament caused property stocks to fall sharply, with City Developments (CTDM.SI) falling as much
as 5.6 percent. CapitaLand (CATL.SI) fell 3.4 percent while
Keppel Land (KLAN.SI) was down 4.3 percent by 0640 GMT.
Home prices in Singapore have soared in recent months, with
transactions hitting record monthly highs, as buyers flock to
showrooms for new apartments. [ID:nSIN524230] "We are currently seeing signs of heightened speculative
activity, although the level of speculation is not yet
extreme," Mah said. Song Seng Wun, regional economist at CIMB, described the
Singapore government's action as a further sign that
authorities are becoming concerned about the rise in home
prices, but added the measures themselves appear relatively
muted. "It's a tentative step... More significant would be if the
government raises the 5 percent downpayment," he said. "It looks like the government is going down the
softly-softly route first before seeing if it needs to bring
out the big stick."
(Reporting by Kevin Lim; Editing by Neil Chatterjee)
Friday, September 11, 2009
His film Zahari’s 17 Years,remains banned under Section 35(1) of the Films Act for being contrary to the public interest. Only the (PAP) minister can lift the ban. If you watch have seen the film which consists mainly of Zahari giving his own account of what happened to him in the 60s when he was detained during Operation Coldstore, it is hard to understand how it is contrary to public interest when it is about his own detention experience ....so the account of Operation Coldstore in "Men in White" is acceptable but Zahari's account is not? The PAP govt still chooses the version of history it wants us to believe...
Home > Breaking News > Singapore > Story Sep 11, 2009
THE ban has been lifted on political film Singapore Rebel, which was passed by the censors with a M18 rating that prohibits people below 18 from viewing it. It is the first political film to get the go-ahead after the Films Act was amended in March, to lift the blanket ban on all political films. This move comes four years after the film - which is about opposition figure Chee Soon Juan - was banned in 2005. The Political Films Consultative Committee (PFCC), having reviewed the film, views 'Singapore Rebel' as a documentary film falling within the statutory exclusion set out in the Films Act and should therefore not be regarded as a party political film. http://video.google.com/videoplay?docid=-8057768553173785296#
Think about it...if a company does not want to keep an older worker, what is there in the legislation that stops him from letting the older worker go? Among developed countries, Singapore is the easiest place to retrench workers. Nevermind older workers, companies can easily retrench younger workers if it helps to cut cost and keep profits up. One reason companies keep workers they don't need is if the amount of training invested is high and they can't get workers trained in the area easily - they will try with short work weeks, no pay leave etc before they start retrenching. The main reason for hiring older workers is tightness of the labor market - since the floodgates to foreign workers have been open, the labor market has never gotten tight enough to result in a favorable environment for older workers. The 2 old aunties at a coffeeshop near my place have been replace by 2 young guys from China. I've no idea where the aunties went but I don't think they make enough to retire on coffeeshop helper salaries.
If Lim Boon Heng is serious about the hiring and retention of older workers, he should look at our foreign worker policy. This policy has distorted the demographics of the workforce by opening the floodgates to younger workers from overseas - employers don't have to hire older workers anymore because they have an infinite supply of young workers from overseas. In the past when the economy booms and the labor market becomes tight, it was a chance for older workers to get employment...that chance has been taken away. Businesses are not going to listen to Lim Boon Heng ....its all words and no action..this new piece of legislation has no teeth and it is going to waste more time giving false hope to the thousands of ageing workers.
BT Article Published September 11, 2009
Start hiring older workers now: Boon Heng
By FELDA CHAY
Email this article
FeedbackMANY companies are still not moving to hire workers aged 55-64, even though re-employment legislation is set to take effect in 2012, Minister in the Prime Minister's Office Lim Boon Heng said yesterday.'My advice is: Don't wait, start working on it now,' he said. 'You have only just over two years to get ready.'Mr Lim was speaking at a luncheon where the Housing & Development Board, National Healthcare Group (NHG) and Royal Plaza on Scotts (RPS) were commended for winning AARP International Innovative Employer Awards - an initiative of US-based non-profit organisation AARP.According to the Ministry of Manpower, Singapore's employment rate for workers aged 55-64 is 57 per cent.'So we still have a long way to go to reach our target of 65 per cent by 2012,' Mr Lim said.When re-employment legislation kicks in in January 2012, companies will have to offer to keep workers past retirement if they are fit and capable - but not necessarily in the same job or on similar wages as before.'The labour market in Singapore is quite a small one,' Mr Lim told reporters at the event. 'Although we have not got out of a recession as yet, the labour market is tightening.
'When we don't have enough workers, we should look at the pool of people who are not working.' Firms should learn how to implement age-friendly practices from the three companies that won AARP awards, he said.RPS, for instance, no longer requires job applicants to put their age on application forms. It also has flexi-work arrangements for older workers, who work 22 hours a week instead of 44.NHG creates and re-designs jobs for older workers, and like RPS, it has introduced flexi-work for them. Some 17 per cent of its staff are aged 50 or older, and its re-employment rate is 85 per cent. At HDB, employees aged 50 and above make up 35 per cent of the work force.AARP selected 10 international winners for their recruiting practices, employee benefits, scheduling and retirement flexibility, and training opportunities, among other factors.
Thursday, September 10, 2009
Hang Lung Properties’ Chan Says Singapore’s Casinos Will ‘Flop’
2009-09-10 05:20:36.882 GMT
By Chia-Peck Wong and Bernard Lo Sept. 10 (Bloomberg) -- Ronnie Chan, chairman of Hang Lung Properties Ltd., Hong Kong’s fifth-biggest developer by marketvalue, said the two casino-resorts in Singapore will failbecause they won’t be able to attract high-rollers. Las Vegas Sands Corp., the casino company controlled bybillionaire Sheldon Adelson, and Genting Singapore Plc, a unitof Asia’s biggest listed gambling operator, are building Singapore’s first two casinos. Chan commented after attending the Bloomberg LeadershipForum in Hong Kong. “The big rollers are what make money in casinos, they willnever come to Singapore, it’s a family entertainment” location. “You think big-rollers will go to Singapore where theyhave teeth and fangs coming out sideways? There are too many rules. I was in Sentosa island, I really think that it’s going to be a flop. “The whole integrated entertainment industry, I’m worried for them. The good thing about Singapore is that if you flop,you’re given a second chance.”
Wednesday, September 09, 2009
The article below gives an interesting breakdown:
1. UOL buy the land from the govt at $430 per square foot per plot ratio.
2. UOL plans to sell smaller units priced at $1000-$1050 per square foot.
3. UOL's breakeven selling price is $920 per square foot.
Based on these numbers UOL makes a profit of about 10% of the selling price of each unit. Given the risk it has taken given the economy can turn down by the the time it markets the condo, a 10% return is fair. Construction cost is about 10-15% of price (yes, a $800K condo cost about $80K to build). The bulk of it about 75%-80% is the cost of land which is sold by the govt to the highest bidder. Rising land cost is something Singaporeans cannot run away from (if they want to remain as Singaporeans). If you're Japanese and can't stand the cost of living in Tokyo, you can just pack up and go to one of the many prefectures which the cost of living is probably lower than in Singapore. If you are American and can't stand the cost of living in New York, you can go to California. In Singapore, we have no choice. That is why it make sense to have HDB sell affordable housing to Singaporeans - affordable meaning it is priced relative to income levels and general employment stability. But HDB's selling price based on the market and that has led to all sorts of problems for Singaporeans.
A total of 13 bids were received, reflecting developers' voracious appetite for mass-market and mid-tier private housing land.
The top bid from UOL Group was above market expectations of about $420-450 per square foot per plot ratio (psf ppr) just a few days ago.
UOL's price yesterday was slightly more than $329 million or about $508 psf ppr - just 3 per cent shy of the $524 psf ppr that Ho Bee and NUTC Choice Homes paid during the peak in June 2007 for the plot next door on which they are developing Dakota Residences, which has achieved an average selling price of about $970-980 psf. However, after taking into account changes in planning regulations since then, whereby planter boxes and bay windows are not exempted from gross floor area calculations, UOL's bid yesterday is probably higher than the equivalent 2007 bid for the next-door plot, some market watchers say.
BT understands that UOL is gunning for a high proportion of smaller units in its proposed scheme, and thus push for a higher average selling price of about $1,000-1,050 psf. 'They should be able to achieve this kind of psf price - so long as they keep the absolute price quantum within an affordable range,' an industry observer said. BT understands UOL's breakeven cost will be about $920 psf.
When contacted, UOL chief operating officer Liam Wee Sin said the group plans to build about 550-600 units, with at least half likely to be two-bedroom apartments. The 18-storey project will be launch-ready around mid-2010, he added. Analysts felt that most bidders would not build a basement in their scheme for the site to minimise construction costs given the marine soil on the site, which fronts Geylang River. Said Mr Liam: 'Our bid assumptions were based on current pricing. And this is one of the more choice plots on the current Government Land Sales Programme.' 'UOL's Singapore residential development business has grown to be a very important growth engine for the group. And having successfully launched two projects this year - Meadows @ Peirce and Double Bay Residences - we need to acquire more land to sustain this growth-engine,' Mr Liam added. The group will continue to be on the lookout for more residential sites in Singapore, he added. Analysts note that the supply pipeline for mass-market homes, particularly those on 99-year sites bought at state tenders, has dwindled rapidly in the past six months, aided by the suspension of the confirmed list state land sales since October last year and strong home buying in this segment since February.
Credo Real Estate managing director Karamjit Singh said: 'The rally in the mass and mid-tier markets probably has another one-and-a-half or two years to run - assuming there's no intervention by government to cool demand or any negative external factors coming into play. That's something that developers are beginning to appreciate, which is why the participation rate at today's tender is very high,' he added. 'The bottomline is that $508 psf ppr is still a very viable proposition for the developer as the site has qualities that appeal to this segment of the market - proximity to an MRT station and amenities,' Mr Singh added. UOL's $508 psf ppr bid was 5.4 per cent higher than the next highest offer by GuocoLand of almost $482 psf ppr. Frasers Centrepoint bid about $462 psf ppr. Four other bids were above $400 psf ppr. A unit of Lippo group posted the lowest bid of $247 psf ppr. The highest bid was 2.53 times the minimum price of $200.74 psf ppr for the plot, which is from the government's reserve list. Such sites are launched for tender only if there is a successful application by a developer with an undertaking of a minimum offer acceptable to the state. Confirmed list sites on the other hand are launched for tender according to scheduled dates, which could translate to more residential property launches. By some estimates, developers have raised prices of mass-market projects by about 10-15 per cent from the January-February lows.