Iskandar: Boon or Bane?
The Iskandar Development Region holds a lot of promise.
This area in Southern Johore that's three times the size of neighboring Singapore promises to be the next big development region on Peninsula Malaysia.
Most significant is that the federal government in Kuala Lumpur has relaxed the affirmative action policy, which promises indigenous Malays 30% equity stake in every company. Foreign
investors will be able to own their local units entirely.
While this may be a precurser to a relaxation of the policy nationally, the issue closest to the hearts of Investor Central's Serene Lim and Mark Laudi is whether the Iskandar Development Region will open up new land and new markets to land-sparse Singapore, or prove to be competition, attracting companies and people away from Singapore.
CLICK HERE to view their three minute discussion, then take sides!
The Iskandar Development Region: Good for Singapore? Bad for Singapore?
(And: do you think it'll fly?)
This area in Southern Johore that's three times the size of neighboring Singapore promises to be the next big development region on Peninsula Malaysia.
Most significant is that the federal government in Kuala Lumpur has relaxed the affirmative action policy, which promises indigenous Malays 30% equity stake in every company. Foreign
investors will be able to own their local units entirely.
While this may be a precurser to a relaxation of the policy nationally, the issue closest to the hearts of Investor Central's Serene Lim and Mark Laudi is whether the Iskandar Development Region will open up new land and new markets to land-sparse Singapore, or prove to be competition, attracting companies and people away from Singapore.
CLICK HERE to view their three minute discussion, then take sides!
The Iskandar Development Region: Good for Singapore? Bad for Singapore?
(And: do you think it'll fly?)
Indonesia: Shooting itself in the foot.
The Indonesians seem to be shooting themselves in the foot.
Just a few weeks ago, Indonesian authorities banned the export of land sand and granite to Singapore, citing environmental concerns.
But when questioned by the Singapore Ministry of Foreign Affairs, Jakarta said it had not banned exports.
The Indonesian navy is still detaining the barges and tugboats used to transport granite out of Karimun, where about 90% of the island's granite is exported to Singapore.
This situation has not only hit Singapore's construction sector, but has cost some 600 Indonesian workers their jobs too.
For those lucky enough to keep theirs, monthly wages have been slashed by 20%.
According to the Today newspaper, Karimun's head of administration, Mr Nubri Basirun, says a “solution could be on the cards if he raises export tax by 67% - to 30,000 rupiah per metric tonne of granite – and also hikes other duties”.
If this is indeed the case and by the time this issue is solved, Singapore might already have found an alternative source of the raw material.
The “peace-loving” locals of Karimun would then be left to eke out a different living once their quarries get shut down.
All this because of “environmental concerns”?
Come on, get real.
If Indonesia really felt granite was environmentally-damaging, the least they could do is to slowly ease off the export amount and help importers with the transition.
On a side note, this nonsense came out about the same time Malaysia started picking bones with Singapore about bidding for the F1 circuit.
Serene Lim
Just a few weeks ago, Indonesian authorities banned the export of land sand and granite to Singapore, citing environmental concerns.
But when questioned by the Singapore Ministry of Foreign Affairs, Jakarta said it had not banned exports.
The Indonesian navy is still detaining the barges and tugboats used to transport granite out of Karimun, where about 90% of the island's granite is exported to Singapore.
This situation has not only hit Singapore's construction sector, but has cost some 600 Indonesian workers their jobs too.
For those lucky enough to keep theirs, monthly wages have been slashed by 20%.
According to the Today newspaper, Karimun's head of administration, Mr Nubri Basirun, says a “solution could be on the cards if he raises export tax by 67% - to 30,000 rupiah per metric tonne of granite – and also hikes other duties”.
If this is indeed the case and by the time this issue is solved, Singapore might already have found an alternative source of the raw material.
The “peace-loving” locals of Karimun would then be left to eke out a different living once their quarries get shut down.
All this because of “environmental concerns”?
Come on, get real.
If Indonesia really felt granite was environmentally-damaging, the least they could do is to slowly ease off the export amount and help importers with the transition.
On a side note, this nonsense came out about the same time Malaysia started picking bones with Singapore about bidding for the F1 circuit.
Serene Lim
Private Equity Buyout = One Less Investment Idea
There is a growing trend of private equity funds buying out listed companies.
According to the Straits Times, the most recent prominent cases on the Singapore bourse include Nera Electronics, Landwind Medical and First Engineering.
It adds that more of such funds are heading into Asia because the “comparatively immature market” can still offer attractive returns.
While most investors are happy about the returns they get from these buyouts, one has to wonder what kind of effect this trend will have on the stock market.
First, it is the visibly performing companies which usually get earmarked for such takeovers, so that leaves either the untouchables (big caps who may be too expensive for some to invest in) or extremely small, below-the-radar, counters available.
Second, the universe of available investment ideas shrinks if more listed companies get taken private.
Investors will then have a harder time thinking of which stocks to park their money in, besides settling for a minimal interest rate from the bank.
Local shareholders may like to follow the example of their counterparts in Qantas Airways.
A key stakeholder in Qantas, institutional fund Balanced Equity, rejected a buyout deal last week worth A$11.1 bln from a consortium including Macquarie Bank and Texas Pacific Group, even though the proposal had been backed by the Australian government.
While Balanced Equity owns only 4% in the airline, Reuters said analysts now feared “other shareholders would also reject the bid”.
It added “there have been growing signs of shareholder resistance to private equity buyouts in Australia” and that travel retailer Flight Centre's shareholders threw out a A$1.6 bln offer last month.
Investors will lose one investment idea everytime a private equity fund buys out a listed company.
And if this goes on, fund managers will be struggling to look for value stocks to make up their portfolio.
In the same vein as how investment should be, shouldn't long term incentives take precedence over a short term, quick buck?
Serene Lim
According to the Straits Times, the most recent prominent cases on the Singapore bourse include Nera Electronics, Landwind Medical and First Engineering.
It adds that more of such funds are heading into Asia because the “comparatively immature market” can still offer attractive returns.
While most investors are happy about the returns they get from these buyouts, one has to wonder what kind of effect this trend will have on the stock market.
First, it is the visibly performing companies which usually get earmarked for such takeovers, so that leaves either the untouchables (big caps who may be too expensive for some to invest in) or extremely small, below-the-radar, counters available.
Second, the universe of available investment ideas shrinks if more listed companies get taken private.
Investors will then have a harder time thinking of which stocks to park their money in, besides settling for a minimal interest rate from the bank.
Local shareholders may like to follow the example of their counterparts in Qantas Airways.
A key stakeholder in Qantas, institutional fund Balanced Equity, rejected a buyout deal last week worth A$11.1 bln from a consortium including Macquarie Bank and Texas Pacific Group, even though the proposal had been backed by the Australian government.
While Balanced Equity owns only 4% in the airline, Reuters said analysts now feared “other shareholders would also reject the bid”.
It added “there have been growing signs of shareholder resistance to private equity buyouts in Australia” and that travel retailer Flight Centre's shareholders threw out a A$1.6 bln offer last month.
Investors will lose one investment idea everytime a private equity fund buys out a listed company.
And if this goes on, fund managers will be struggling to look for value stocks to make up their portfolio.
In the same vein as how investment should be, shouldn't long term incentives take precedence over a short term, quick buck?
Serene Lim
Prestige vs Value
The Olympic Games is a prestigious event whereby contestants from around the world come together to meet and compete, to be the best in its talents like running, swimming, cycling and tons of others. Companies try to be part of the infrastructural network, but at the end of the day, is it worth it?
I think being part of the Olympics is a prestige thing more than a monetary-value decision.
My reasons:
First, companies vie for a spot to be part of the team behind the infrastructure even though it may not recover the money spent.
Second, even if the companies have not secured any contracts, it boasts about having services that can support the network.
For example, DMX Technologies have, some years back, said that it would help build the digital TV infrastructure to prepare China for the Beijing Olympics.
Another example is Ace Achieve Infocom. It announced yesterday that it has been certified to be involved in 3G network in China, but it has not yet signed any agreements with the telcos.
But China is more likely to use state-owned companies to run its services, before thinking of outsourcing, especially to foreign companies.
Well, it might take place, but the value of these contracts may not be as large as assumed.
China would probably only turn to foreign companies if their home-grown ones do not have the expertise to do so.
So far, only China Hongxing has announced securing an agreement to sponsor the North Korean Olympics Team as well as its national women's soccer team.
Yes, they will be able get brand awareness but how much money will they actually make out of those contracts is another question.
Nurwidya Abdul and Serene Lim
I think being part of the Olympics is a prestige thing more than a monetary-value decision.
My reasons:
First, companies vie for a spot to be part of the team behind the infrastructure even though it may not recover the money spent.
Second, even if the companies have not secured any contracts, it boasts about having services that can support the network.
For example, DMX Technologies have, some years back, said that it would help build the digital TV infrastructure to prepare China for the Beijing Olympics.
Another example is Ace Achieve Infocom. It announced yesterday that it has been certified to be involved in 3G network in China, but it has not yet signed any agreements with the telcos.
But China is more likely to use state-owned companies to run its services, before thinking of outsourcing, especially to foreign companies.
Well, it might take place, but the value of these contracts may not be as large as assumed.
China would probably only turn to foreign companies if their home-grown ones do not have the expertise to do so.
So far, only China Hongxing has announced securing an agreement to sponsor the North Korean Olympics Team as well as its national women's soccer team.
Yes, they will be able get brand awareness but how much money will they actually make out of those contracts is another question.
Nurwidya Abdul and Serene Lim
Why the Bombay Stock Exchange would not take on Temasek Holdings and GIC
Temasek Holdings and the The Government of Singapore Investment Corporation (GIC) are, according to the Today newspaper, reportedly interested in buying equity in 132-year-old Bombay Stock Exchange.
This comes just a month after the Singapore Exchange bought a 5% stake in the it.
It also makes sense for the BSE because having partners in the SGX and Deutsche Börse (which also owns 5% stake in it) would directly benefit them through some collaborative efforts.
So would BSE take on Temasek and GIC as investors?
Probably not.
First, both Temasek and GIC would only inject capital into BSE and not be able to contribute much to it as a business.
Certainly not as much as another financial services player.
And the BSE does not seem like it is in desperate need of money.
If there was one reason it would want to take on Temasek and GIC as investors, it would probably be that BSE wants a direct link to the Singapore government.
Secondly, one of the reasons the maximum investment by each single investor is capped at 5% may be to prevent any one large consortium from holding a major stake in the BSE.
In this case, both Temasek and GIC are Singapore government-linked. Add the SGX into the equation and Singapore Inc might quite possibly own 15% in the BSE.
Considering what Temasek has been through with Thailand recently, that can be quite a risk too.
Thirdly, the cap on foreign direct investment is 26%, so the BSE seems far more likely to bring in peers like the London Stock Exchange, New York Stock Exchange and the Nasdaq.
In light of the above, it is highly unlikely for the BSE to even consider Temasek and GIC as possible investors.
So why would they even bother?
Serene Lim
This comes just a month after the Singapore Exchange bought a 5% stake in the it.
It also makes sense for the BSE because having partners in the SGX and Deutsche Börse (which also owns 5% stake in it) would directly benefit them through some collaborative efforts.
So would BSE take on Temasek and GIC as investors?
Probably not.
First, both Temasek and GIC would only inject capital into BSE and not be able to contribute much to it as a business.
Certainly not as much as another financial services player.
And the BSE does not seem like it is in desperate need of money.
If there was one reason it would want to take on Temasek and GIC as investors, it would probably be that BSE wants a direct link to the Singapore government.
Secondly, one of the reasons the maximum investment by each single investor is capped at 5% may be to prevent any one large consortium from holding a major stake in the BSE.
In this case, both Temasek and GIC are Singapore government-linked. Add the SGX into the equation and Singapore Inc might quite possibly own 15% in the BSE.
Considering what Temasek has been through with Thailand recently, that can be quite a risk too.
Thirdly, the cap on foreign direct investment is 26%, so the BSE seems far more likely to bring in peers like the London Stock Exchange, New York Stock Exchange and the Nasdaq.
In light of the above, it is highly unlikely for the BSE to even consider Temasek and GIC as possible investors.
So why would they even bother?
Serene Lim
SIA teams up with...US Airways??? Why this code-share is a bad decision
It shouldn't come as much of a surprise that Singapore Airlines will start code-shares with a fellow Star Alliance carrier, it may just surprise you with which carrier in the group they picked.
US Airways, which in my opinion is the 'worst' all around airline in the alliance, will begin carrying SQ flight numbers on selected routes in the US come June. Additionally, US Airways will be able to place its flight numbers on SQ operated flights to places such as Perth, Bandar Seri Begawan, Manchester, and Amsterdam just to name a few cities. US will also have a flight number on the non-stop flight to Singapore from Los Angeles.
For starters, I don't know how many people in the US can find Bandar Seri Begawan on a map, including US Airways reservation agents. In my experiences, airline customer service reps in America - those that haven't been outsourced to a call center on this side of the world at least, are geographically clueless to the location of some of their airlines destinations sometimes. Half the time when I have flown US Airways when I hand over my Krisflyer card at check-in, they don't even know the two letter code for Singapore Airlines! (which is SQ in case you are wondering). US Airways selection of cities in SIA's route network to place its flight number on is also particularly puzzling because they don't have a presence in Asia whatsoever as most all of their international operations are focused solely on Europe, Latin America, and Carribean destinations from their hubs in the U.S.
But despite the so-called "benefits" of code-sharing, I am going to go out on a limb and say that this is a bad decision for SIA, and quite saddly the only benefits that SIA will be receiving from this tie up will come in dollars and cents, something they have plenty of as we all know.
The routes SIA will place its code on make sense, as the destinations are major, growing markets in the U.S., including Las Vegas, which is a city SIA tried to serve but couldn't make work. But, where code-shares really fail in my view is where their is such a disparity in terms of overall quality from the operating airline of the flight, and the airline holding the code-share flight number. In more simple terms: SIA regulars are in for a real sad surprise when they get on that US Airways jet, and US Airways customers will see an unbelievable service improvement when they get on the SIA jets. Additionally, it will be interesting to see how US Airways prices their code-share flights when ticket booking is available in a few months, given the fact that US Airways went towards a more lower cost pricing structure that was adopted with the America West tie up.
SIA fares on the other hand, are on the opposite end of the spectrum practically, and are widely known in the airline world as being significantly higher than average in the 'premium' range. So it will be worth watching to see how they price their codeshare flights on US Airways.
Regardless of that factor, I think SIA is doing a great disservice to itself by linking up with such poor airlines. Singapore Airlines wins numerous awards on a yearly basis as the best airline in the world. US Airways on the other hand, consistently factors in much further down in terms of service, and you rarely ever see them win any accolades. During the 90's when US Airways was 'US Air,' their nickname become 'US scare' after a series of accidents and crashes.
I do however rank US Airways at the top of the list for one category; worst in-flight service, and rudest flight attendants I have encountered. But then again in America, this more often than not the norm, as good customer service in the skies is hard to come by.
US Airways also isn't the first substandard airline that SQ has code-shares with; Air India has a number of its flight numbers on routes operated with SIA aircraft.
The bottom line here is that SIA is known globally as providing a significantly better, and superior product than its competitors, and people pay money for that. However, when you link up code-shares with airlines that are significantly more substandard than yourself, it only hurts you and your brand. Such I think is the case we will find with this most recent tie up with US Airways.
-Curtis Bergh
US Airways, which in my opinion is the 'worst' all around airline in the alliance, will begin carrying SQ flight numbers on selected routes in the US come June. Additionally, US Airways will be able to place its flight numbers on SQ operated flights to places such as Perth, Bandar Seri Begawan, Manchester, and Amsterdam just to name a few cities. US will also have a flight number on the non-stop flight to Singapore from Los Angeles.
For starters, I don't know how many people in the US can find Bandar Seri Begawan on a map, including US Airways reservation agents. In my experiences, airline customer service reps in America - those that haven't been outsourced to a call center on this side of the world at least, are geographically clueless to the location of some of their airlines destinations sometimes. Half the time when I have flown US Airways when I hand over my Krisflyer card at check-in, they don't even know the two letter code for Singapore Airlines! (which is SQ in case you are wondering). US Airways selection of cities in SIA's route network to place its flight number on is also particularly puzzling because they don't have a presence in Asia whatsoever as most all of their international operations are focused solely on Europe, Latin America, and Carribean destinations from their hubs in the U.S.
But despite the so-called "benefits" of code-sharing, I am going to go out on a limb and say that this is a bad decision for SIA, and quite saddly the only benefits that SIA will be receiving from this tie up will come in dollars and cents, something they have plenty of as we all know.
The routes SIA will place its code on make sense, as the destinations are major, growing markets in the U.S., including Las Vegas, which is a city SIA tried to serve but couldn't make work. But, where code-shares really fail in my view is where their is such a disparity in terms of overall quality from the operating airline of the flight, and the airline holding the code-share flight number. In more simple terms: SIA regulars are in for a real sad surprise when they get on that US Airways jet, and US Airways customers will see an unbelievable service improvement when they get on the SIA jets. Additionally, it will be interesting to see how US Airways prices their code-share flights when ticket booking is available in a few months, given the fact that US Airways went towards a more lower cost pricing structure that was adopted with the America West tie up.
SIA fares on the other hand, are on the opposite end of the spectrum practically, and are widely known in the airline world as being significantly higher than average in the 'premium' range. So it will be worth watching to see how they price their codeshare flights on US Airways.
Regardless of that factor, I think SIA is doing a great disservice to itself by linking up with such poor airlines. Singapore Airlines wins numerous awards on a yearly basis as the best airline in the world. US Airways on the other hand, consistently factors in much further down in terms of service, and you rarely ever see them win any accolades. During the 90's when US Airways was 'US Air,' their nickname become 'US scare' after a series of accidents and crashes.
I do however rank US Airways at the top of the list for one category; worst in-flight service, and rudest flight attendants I have encountered. But then again in America, this more often than not the norm, as good customer service in the skies is hard to come by.
US Airways also isn't the first substandard airline that SQ has code-shares with; Air India has a number of its flight numbers on routes operated with SIA aircraft.
The bottom line here is that SIA is known globally as providing a significantly better, and superior product than its competitors, and people pay money for that. However, when you link up code-shares with airlines that are significantly more substandard than yourself, it only hurts you and your brand. Such I think is the case we will find with this most recent tie up with US Airways.
-Curtis Bergh
If it ain't broken, don't fix it (and they got the memo!)
If it ain't broken, don't fix it (and they got the memo!)
We should know within the next couple of months who Singapore Airlines will select as its new creative agency (DDB, Publicis, or TBWA). The airline dropped Batey Ads after more than 35 years, which shocked many, and spurred a whole discussion on whether the Singapore Girl, the timeless centerpiece of Singapore Airlines for the last generation or so, was going to be "updated" or ditched.
It appears that the global outpouring of support for the Singapore Girl worked, and management listened, as in the press statement today were some reassuring words:
"The strong support from our customers globally for the iconic Singapore Girl, as a
representation of the high service standards we aim to deliver, is very much
appreciated.
Singapore Airlines takes this opportunity to reassure our customers and supporters
the world over that the Singapore Girl icon will remain, and there will be no
change to the hallmark sarong kebaya uniform."
Singapore Airlines acknowledges that their may be some advertising differences, but (as evident of the above statement) the Singapore Girl is not going to be getting a makeover.
Globally, there is a very short list of brands that have as much prestige and equity as Singapore Airlines. It is absolutely remarkable that the brand and brand image of the glowing stewardesses in their Sarong Kebaya's have lasted since 1972. She's even earned herself a spot in Madame Tussaud's! It would have been absolutely foolish, almost negligent, if SIA management made changes to the Singapore Girl.
When people think SIA, they think the Singapore Girl, and to touch that image would be like violating something holy. Why on earth would you want to fool around with your brand image, especially when it is such a moneymaker and one of the best known brands in the world? There is no other airline on earth known simply for its stewardesses, or that simply plays on the same level of brand equity that Singapore Airlines does. I am guessing maybe 95% of Singapore Airlines brand equity is in the Singapore Girl (the other 5% in the logo and that's about it).
When you have something that is such a draw to consumers and customers, where they are willing to pay substantial premium prices to fly Singapore Airlines, and something that is so well known throughout the world, you simply don't mess around with it.
Where would Nike be if they got rid of their swoosh? Where would McDonald's be if they got rid of their golden arches? My point is, these brands are now in territory where they almost can't change their brand image/logo...it's unfathomable for McDonald's or Nike to try to dabble with their brand. And, the same goes for Singapore Airlines: don't try to change something that already works so incredibly well, and management seems to have gotten that memo.
-Curtis Bergh
We should know within the next couple of months who Singapore Airlines will select as its new creative agency (DDB, Publicis, or TBWA). The airline dropped Batey Ads after more than 35 years, which shocked many, and spurred a whole discussion on whether the Singapore Girl, the timeless centerpiece of Singapore Airlines for the last generation or so, was going to be "updated" or ditched.
It appears that the global outpouring of support for the Singapore Girl worked, and management listened, as in the press statement today were some reassuring words:
"The strong support from our customers globally for the iconic Singapore Girl, as a
representation of the high service standards we aim to deliver, is very much
appreciated.
Singapore Airlines takes this opportunity to reassure our customers and supporters
the world over that the Singapore Girl icon will remain, and there will be no
change to the hallmark sarong kebaya uniform."
Singapore Airlines acknowledges that their may be some advertising differences, but (as evident of the above statement) the Singapore Girl is not going to be getting a makeover.
Globally, there is a very short list of brands that have as much prestige and equity as Singapore Airlines. It is absolutely remarkable that the brand and brand image of the glowing stewardesses in their Sarong Kebaya's have lasted since 1972. She's even earned herself a spot in Madame Tussaud's! It would have been absolutely foolish, almost negligent, if SIA management made changes to the Singapore Girl.
When people think SIA, they think the Singapore Girl, and to touch that image would be like violating something holy. Why on earth would you want to fool around with your brand image, especially when it is such a moneymaker and one of the best known brands in the world? There is no other airline on earth known simply for its stewardesses, or that simply plays on the same level of brand equity that Singapore Airlines does. I am guessing maybe 95% of Singapore Airlines brand equity is in the Singapore Girl (the other 5% in the logo and that's about it).
When you have something that is such a draw to consumers and customers, where they are willing to pay substantial premium prices to fly Singapore Airlines, and something that is so well known throughout the world, you simply don't mess around with it.
Where would Nike be if they got rid of their swoosh? Where would McDonald's be if they got rid of their golden arches? My point is, these brands are now in territory where they almost can't change their brand image/logo...it's unfathomable for McDonald's or Nike to try to dabble with their brand. And, the same goes for Singapore Airlines: don't try to change something that already works so incredibly well, and management seems to have gotten that memo.
-Curtis Bergh
Remember we said don't panic?
So last week when everyone was having a panic attack because the market sank, we were not joining in the hoopla, mostly because we knew it was going to happen sooner or later. Relax, don't panic, it happens...that's what we said.
Well, a little more than a week later, we've seen a bit of a bounce-back I think, particularly this week where we just had 4 days straight of the STI finishing in positive territory.
There have also been some developments out of China, the main culprit of the global selloff last week: Hank's Here! (well...there, in China, I should say since I'm in Singapore). US Treasury Secretary Henry Paulson (a lot of people call him Hank) was back in China for another round of the strategic economic dialogue with top government officials, where he continued to urge reforms.
As we said in our blog last week, reforms are good! Sure it may have sparked a worldwide meltdown, BUT long-term, its a good thing. Additionally, the fact that Secretary Paulson is in China for more discussions should also help you breath a sigh of relief, mainly because he's been received extremely well by the Chinese ever since taking up his new posting, far more than his predecessor.
One of the key reasons is that in the private sector he developed a very good relationship with the Chinese, so he was already a very well-known, respected individual in China when he came to the table to offer his opinions and thoughts. In his current capacity, that only adds a bit more weight to what is discussed on his visits to China, and when he speaks as U.S. Secretary of the Treasury urging the Chinese to continue reforms.
It almost adds this comforting feeling that he is in China a week after the selloff began. And in an odd way, I think it may have just helped ease the panic attacks of some around the world...the calm after the storm.
Just my two cents, but I'll keep saying it, still, don't panic!
As always please see your licensed financial advisor before making any investment decisions.
-Curtis Bergh
Well, a little more than a week later, we've seen a bit of a bounce-back I think, particularly this week where we just had 4 days straight of the STI finishing in positive territory.
There have also been some developments out of China, the main culprit of the global selloff last week: Hank's Here! (well...there, in China, I should say since I'm in Singapore). US Treasury Secretary Henry Paulson (a lot of people call him Hank) was back in China for another round of the strategic economic dialogue with top government officials, where he continued to urge reforms.
As we said in our blog last week, reforms are good! Sure it may have sparked a worldwide meltdown, BUT long-term, its a good thing. Additionally, the fact that Secretary Paulson is in China for more discussions should also help you breath a sigh of relief, mainly because he's been received extremely well by the Chinese ever since taking up his new posting, far more than his predecessor.
One of the key reasons is that in the private sector he developed a very good relationship with the Chinese, so he was already a very well-known, respected individual in China when he came to the table to offer his opinions and thoughts. In his current capacity, that only adds a bit more weight to what is discussed on his visits to China, and when he speaks as U.S. Secretary of the Treasury urging the Chinese to continue reforms.
It almost adds this comforting feeling that he is in China a week after the selloff began. And in an odd way, I think it may have just helped ease the panic attacks of some around the world...the calm after the storm.
Just my two cents, but I'll keep saying it, still, don't panic!
As always please see your licensed financial advisor before making any investment decisions.
-Curtis Bergh
Temasek: Pawn in Thai Politics
It had seemed like a good commercial decision by Temasek Holdings then to buy up all of Shin Corp in January 2006, but what followed was out of Temasek's hands and their investment is now left hanging in the air.
The Thai government is now in the midst of deciding what to do with Shin Corp and have discussed seizing the satellite that now belongs, technically, to Temasek.
It has since taken over the country's only private TV broadcaster – iTV – and will halt operations there temporarily, but may re-open it under government control soon.
As sorry as you would feel for Temasek, you really should be worrying about where Thailand is heading.
Ever since the junta overthrew then Prime Minister Thaksin Shinawatra, the interim government introduced measures to halt the westernisation of Thai society.
Newsweek reported the interim Prime Minister Surayud Chulanont as saying they want to “maximise happiness, not growth”.
Chulanont said these measures were drawn from King Bhumibol Adulyadej's advocacy of “sufficiency” in Thai life, but others have a different name for it – Buddhist economics.
In Thailand's case, politics should not be mixed with business.
Since the coup, the Thai Stock Exchange has become one of the world's most sluggish.
This followed the Thai market crash in early January when Thai finance minister Prodiyathorn Devakula announced new foreign investment restrictions in early January.
Major global markets subsequently went into the red following that, prompting the Thai government to retract the decision and rethink it.
Newsweek quoted an unnamed Thai economist as saying he did not understand these new policies and that the junta was taking to “sufficiency with a puritanical streak”.
It is an extreme counter to Thaksin's style of doing things.
And because businesses there are in such disarray now, citizens are wondering if things might have been better if Thaksin was still in control.
If the junta thinks that strict measures which suggest isolation is what would bring the Thai people back down to the ground and that it would create a better way of life, they will find themselves in even darker days in no time.
King Adulyadej might really want his people to be happy, but happiness is a choice that would probably be more accessible if the country were prospering.
Not resistent to change or growth.
P.S: Meanwhile, the Business Times reported that Temasek is in talks with two top Thai investors to sell its stake in Shin Satellite.
These investors are chairman of Thai Beverage Charoen Sirivadhanabhakdi and chairman of CP group Dhanin Chearawanont.
Charoen is also Thailand's richest man, according to Forbes magazine.
The BT also wrote that “Coup leader General Sonthi Boonyaratglin has said he wants Shin Sat's four satellites back under Thai control as a matter of national security”.
Serene Lim
The Thai government is now in the midst of deciding what to do with Shin Corp and have discussed seizing the satellite that now belongs, technically, to Temasek.
It has since taken over the country's only private TV broadcaster – iTV – and will halt operations there temporarily, but may re-open it under government control soon.
As sorry as you would feel for Temasek, you really should be worrying about where Thailand is heading.
Ever since the junta overthrew then Prime Minister Thaksin Shinawatra, the interim government introduced measures to halt the westernisation of Thai society.
Newsweek reported the interim Prime Minister Surayud Chulanont as saying they want to “maximise happiness, not growth”.
Chulanont said these measures were drawn from King Bhumibol Adulyadej's advocacy of “sufficiency” in Thai life, but others have a different name for it – Buddhist economics.
In Thailand's case, politics should not be mixed with business.
Since the coup, the Thai Stock Exchange has become one of the world's most sluggish.
This followed the Thai market crash in early January when Thai finance minister Prodiyathorn Devakula announced new foreign investment restrictions in early January.
Major global markets subsequently went into the red following that, prompting the Thai government to retract the decision and rethink it.
Newsweek quoted an unnamed Thai economist as saying he did not understand these new policies and that the junta was taking to “sufficiency with a puritanical streak”.
It is an extreme counter to Thaksin's style of doing things.
And because businesses there are in such disarray now, citizens are wondering if things might have been better if Thaksin was still in control.
If the junta thinks that strict measures which suggest isolation is what would bring the Thai people back down to the ground and that it would create a better way of life, they will find themselves in even darker days in no time.
King Adulyadej might really want his people to be happy, but happiness is a choice that would probably be more accessible if the country were prospering.
Not resistent to change or growth.
P.S: Meanwhile, the Business Times reported that Temasek is in talks with two top Thai investors to sell its stake in Shin Satellite.
These investors are chairman of Thai Beverage Charoen Sirivadhanabhakdi and chairman of CP group Dhanin Chearawanont.
Charoen is also Thailand's richest man, according to Forbes magazine.
The BT also wrote that “Coup leader General Sonthi Boonyaratglin has said he wants Shin Sat's four satellites back under Thai control as a matter of national security”.
Serene Lim
Sentosa IR: The ship has sailed
Genting International won the bid to build and run the Sentosa Integrated Resort on 8 December last year. Star Cruise was initially part of the consortium as well, but announced on Saturday that it was pulling out of the IR and Genting would now have full ownership of it. Even so, it can still make money by implementing additional cruises to Singapore.
In January, Macau gambling tycoon Stanley Ho bought a 6.99% stake in Star Cruises. In return, Star Cruises would have received a 75% stake in a new hotel and casino project by Stanley Ho's group.
That was when the Ministry of Home Affairs announced suitability checks on Stanley Ho, under the Casino Control Act of Singapore.
In a media statement dated February 27, it said:
“MHA has informed GIL and SCL that MHA will be conducting suitability checks on the relevant parties to ensure that the consortium meets the suitability requirements before the Casino Licence is issued. We have requested that the necessary corporate and personal history disclosure forms be completed and submitted by the parties concerned. GIL, SCL and their associates are also required to remain suitable after the Casino Licence has been issued.”
The Act says:
Matters to be considered in determining applications
45. —(1) The Authority shall not grant an application for a casino licence unless the Authority is satisfied that the applicant, and each associate of the applicant, is a suitable person to be concerned in or associated with the management and operation of a casino.
(2) In particular, the Authority shall consider whether —
(a) each such person is of good repute, having regard to character, honesty and integrity;
(b) each such person is of sound and stable financial background;
(c) in the case of an applicant that is not a natural person, the applicant has, or has arranged, a satisfactory ownership, trust or corporate structure;
(d) the applicant has or is able to obtain financial resources that are adequate to ensure the financial viability of the proposed casino and the services of persons who have sufficient experience in the management and operation of a casino;
(e) the applicant has sufficient business ability to establish and maintain a successful casino;
(f) any of those persons has any business association with any person, body or association who or which, in the opinion of the Authority, is not of good repute having regard to character, honesty and integrity or has undesirable or unsatisfactory financial resources;
(g) each director, partner, trustee, executive officer and secretary and any other officer or person determined by the Authority to be associated or connected with the ownership, administration or management of the operations or business of the applicant is a suitable person to act in that capacity;
(h) any person proposed to be engaged or appointed to manage or operate the casino is a suitable person to act in that capacity; and
(i) any other matter that may be prescribed.
Which of these paragraphs, precisely, does Mr Ho contravene?
Could it be that he is just too powerful to be in line with Singapore's interests?
During the investigation, the volumes traded for Genting shot up, even now as we speak.
For the Lim family in Malaysia, which controls both Genting International and Star Cruises through its Bursa-listed Genting Berhad, it makes no difference whether the Singapore casino project is controlled by one or both.
The IR may not be partially owned by Star Cruises, but that shouldn't stop Star Cruises from launching additional cruises through Singapore on a commercial basis.
By Serene Lim, Mark Laudi and Nurwidya Abdul
ArchivesIn January, Macau gambling tycoon Stanley Ho bought a 6.99% stake in Star Cruises. In return, Star Cruises would have received a 75% stake in a new hotel and casino project by Stanley Ho's group.
That was when the Ministry of Home Affairs announced suitability checks on Stanley Ho, under the Casino Control Act of Singapore.
In a media statement dated February 27, it said:
“MHA has informed GIL and SCL that MHA will be conducting suitability checks on the relevant parties to ensure that the consortium meets the suitability requirements before the Casino Licence is issued. We have requested that the necessary corporate and personal history disclosure forms be completed and submitted by the parties concerned. GIL, SCL and their associates are also required to remain suitable after the Casino Licence has been issued.”
The Act says:
Matters to be considered in determining applications
45. —(1) The Authority shall not grant an application for a casino licence unless the Authority is satisfied that the applicant, and each associate of the applicant, is a suitable person to be concerned in or associated with the management and operation of a casino.
(2) In particular, the Authority shall consider whether —
(a) each such person is of good repute, having regard to character, honesty and integrity;
(b) each such person is of sound and stable financial background;
(c) in the case of an applicant that is not a natural person, the applicant has, or has arranged, a satisfactory ownership, trust or corporate structure;
(d) the applicant has or is able to obtain financial resources that are adequate to ensure the financial viability of the proposed casino and the services of persons who have sufficient experience in the management and operation of a casino;
(e) the applicant has sufficient business ability to establish and maintain a successful casino;
(f) any of those persons has any business association with any person, body or association who or which, in the opinion of the Authority, is not of good repute having regard to character, honesty and integrity or has undesirable or unsatisfactory financial resources;
(g) each director, partner, trustee, executive officer and secretary and any other officer or person determined by the Authority to be associated or connected with the ownership, administration or management of the operations or business of the applicant is a suitable person to act in that capacity;
(h) any person proposed to be engaged or appointed to manage or operate the casino is a suitable person to act in that capacity; and
(i) any other matter that may be prescribed.
Which of these paragraphs, precisely, does Mr Ho contravene?
Could it be that he is just too powerful to be in line with Singapore's interests?
During the investigation, the volumes traded for Genting shot up, even now as we speak.
For the Lim family in Malaysia, which controls both Genting International and Star Cruises through its Bursa-listed Genting Berhad, it makes no difference whether the Singapore casino project is controlled by one or both.
The IR may not be partially owned by Star Cruises, but that shouldn't stop Star Cruises from launching additional cruises through Singapore on a commercial basis.
By Serene Lim, Mark Laudi and Nurwidya Abdul
January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 August 2008 September 2008 October 2008 November 2008 January 2009
