SIA & China Eastern: expect turbulence
So we all know now that Singapore Airlines is taking a nearly US$1 bln stake (roughly 25%) in China Eastern, but don't think this is exactly going to be smooth sailing entirely. In fact, expect turbulence.
First, Singapore Airlines taking a stake in a foreign carrier isn't exactly their cup of tea to begin with, and they have not had a great track record in the past (case in point: Air New Zealand, Virgin Atlantic).
SIA once held a 25% stake in Air New Zealand, which was later reduced to 6.3% following the New Zealand governmental rescue in 2001 of ANZ after a slew of problems with ANZ and Ansett. It then divested that 6.3% stake for next to nothing.
The 49% stake in Virgin Atlantic has also not been something that has been entirely "awesome" for SIA; case in point, look at their latest FY earnings from a few months ago and the comments on Virgin Atlantic. Not good.
Now SIA is dabbling with China Eastern. Concerns have surfaced about the deal and the Singapore government's role in it, but it is widely expected Beijing will approve it. Still, China Eastern operates at a loss (the only one in China to do so)and it remains to be seen just how far SIA will be able to affect change at the carrier.
While China Eastern does have its hub in Shanghai, and Singapore Airlines now has a foot in the door with the mainland chinese market, enacting change at China Eastern is something I don't think is likely, and at the end of the day its all about dollars and cents which is what everyone cares about; and thats the biggest problem at China Eastern now.
Curtis Bergh
First, Singapore Airlines taking a stake in a foreign carrier isn't exactly their cup of tea to begin with, and they have not had a great track record in the past (case in point: Air New Zealand, Virgin Atlantic).
SIA once held a 25% stake in Air New Zealand, which was later reduced to 6.3% following the New Zealand governmental rescue in 2001 of ANZ after a slew of problems with ANZ and Ansett. It then divested that 6.3% stake for next to nothing.
The 49% stake in Virgin Atlantic has also not been something that has been entirely "awesome" for SIA; case in point, look at their latest FY earnings from a few months ago and the comments on Virgin Atlantic. Not good.
Now SIA is dabbling with China Eastern. Concerns have surfaced about the deal and the Singapore government's role in it, but it is widely expected Beijing will approve it. Still, China Eastern operates at a loss (the only one in China to do so)and it remains to be seen just how far SIA will be able to affect change at the carrier.
While China Eastern does have its hub in Shanghai, and Singapore Airlines now has a foot in the door with the mainland chinese market, enacting change at China Eastern is something I don't think is likely, and at the end of the day its all about dollars and cents which is what everyone cares about; and thats the biggest problem at China Eastern now.
Curtis Bergh
Labels: China Eastern, MU, Shanghai, Singapore Airlines, SQ, Turbulence
Why the property bubble may burst soon.
The hottest investment vehicle now has got to be property.
Property developers owning commercial buildings in town are hiking up rents and companies are paying through their noses because they don't want to lose their spot, especially when supply for prime office space is running dangerously low.
Investors in private property, while waiting to sell off their units for a hefty profit, are pocketing tidy little sums monthly from jacking up rentals to tenants so used to their dwellings they are adverse to the idea of moving out.
All's well and good for the property market, and for the people who had the foresight to invest in it before the big boom came around.
But what of the companies who lease prime office space and the people who rent condos and landed property?
Humanising the effects of this upswing in property will show just how easily, and soon, the property bubble could burst.
First, companies situated in the central business district face burning huge holes in their pockets if they want to stay in their premises. They are reluctant to move because they want to stay close to their customers.
These companies may suffer a double whammy in costs if they hire expatriates, because their salary packages usually include relocation and rental expenses.
So besides paying more to rent prime office space, they also have to pay more for their expat staff to live in Singapore.
These factors might either push firms out of the CBD area or deter them from hiring foreign expertise, even if their business needs them.
Second, the expats have to pay more for their private property rental. Their companies' rental assistance may not be proportionate to their rent increase. Some of them face rental hikes of 50-100%, and many of them have since moved out of districts 9, 10 an 11. Some have even downgraded to staying in HDB flats.
Those who find it increasingly stressful to stay on will have to reconsider their future in Singapore.
Now that will put a huge dent in the country's target of a record population by 2015.
While the empty flats in Sengkang stand more chances of being filled now, the near future of the private property market seems less bright.
After all, if even expats cannot afford condos in districts 9, 10 and 11, what hope is there for the locals?
And now that the expats are downgrading and moving to the outskirts, it may be even more difficult for us to buy property in the suburban areas without burning holes in our own pockets.
Serene Lim
*picture courtesy of www.offthemarkcartoons.com.
Property developers owning commercial buildings in town are hiking up rents and companies are paying through their noses because they don't want to lose their spot, especially when supply for prime office space is running dangerously low.
Investors in private property, while waiting to sell off their units for a hefty profit, are pocketing tidy little sums monthly from jacking up rentals to tenants so used to their dwellings they are adverse to the idea of moving out.
All's well and good for the property market, and for the people who had the foresight to invest in it before the big boom came around.
But what of the companies who lease prime office space and the people who rent condos and landed property?
Humanising the effects of this upswing in property will show just how easily, and soon, the property bubble could burst.
First, companies situated in the central business district face burning huge holes in their pockets if they want to stay in their premises. They are reluctant to move because they want to stay close to their customers.
These companies may suffer a double whammy in costs if they hire expatriates, because their salary packages usually include relocation and rental expenses.
So besides paying more to rent prime office space, they also have to pay more for their expat staff to live in Singapore.
These factors might either push firms out of the CBD area or deter them from hiring foreign expertise, even if their business needs them.
Second, the expats have to pay more for their private property rental. Their companies' rental assistance may not be proportionate to their rent increase. Some of them face rental hikes of 50-100%, and many of them have since moved out of districts 9, 10 an 11. Some have even downgraded to staying in HDB flats.
Those who find it increasingly stressful to stay on will have to reconsider their future in Singapore.
Now that will put a huge dent in the country's target of a record population by 2015.
While the empty flats in Sengkang stand more chances of being filled now, the near future of the private property market seems less bright.
After all, if even expats cannot afford condos in districts 9, 10 and 11, what hope is there for the locals?
And now that the expats are downgrading and moving to the outskirts, it may be even more difficult for us to buy property in the suburban areas without burning holes in our own pockets.
Serene Lim*picture courtesy of www.offthemarkcartoons.com.
Labels: companies, expatriates, property, Singapore
No GST hike will tamper sales!
Today marks the start of the Great Singapore Sale (GSS). And to top it all off, aka 'cherry on top of the cake', it's the last Friday of the month; late night shopping.
Yes, the much-awaited shopping season is here and it will stay until July 22.
The government will be implementing the 2% GST hike on 1st July.
I say that the 7% GST will not shy shoppers away.
My reasons:
First, sooner or later it's going to happen anyway. Besides, the hike will only kick in 1st July. That spells a whole month of mad-rush shopping before that day.
Second, apart from facing it, the government has set aside the GST Offset Package that can be used come July. This is done to help people cope with the hike.
Looking at the flip side, it's like being given money to shop.
In yesterday's Straits Times article about the GSS, Dr Tay, President of Singapore Retailers Association, say that she hopes this year Singapore sale could reach S$5.2 bln, compared to last year's S$5 bln.
She also added that it was up to retailers if they decide to waive the offset or not.
There may be a hike, but that may not deter people from spending in the GSS.
Nurwidya Abdul
Yes, the much-awaited shopping season is here and it will stay until July 22.
The government will be implementing the 2% GST hike on 1st July.
I say that the 7% GST will not shy shoppers away.
My reasons:
First, sooner or later it's going to happen anyway. Besides, the hike will only kick in 1st July. That spells a whole month of mad-rush shopping before that day.
Second, apart from facing it, the government has set aside the GST Offset Package that can be used come July. This is done to help people cope with the hike.
Looking at the flip side, it's like being given money to shop.
In yesterday's Straits Times article about the GSS, Dr Tay, President of Singapore Retailers Association, say that she hopes this year Singapore sale could reach S$5.2 bln, compared to last year's S$5 bln.
She also added that it was up to retailers if they decide to waive the offset or not.
There may be a hike, but that may not deter people from spending in the GSS.
Nurwidya Abdul
Labels: Great Singapore Sale, GSS, GST hike, GST offset package, late night sopping
Independent directors: watch them, too!
Independent directors are supposed to be the ultimate guardians of corporate governance. They are expected to rise above the vested interests which directors appointed by substantial shareholders are assumed to have. They don't work in the company on a day-to-day basis and are thought to be able to watch over the company's activities more clearly from a distance. The problem is that sometimes independent directors possibly rise too high above the interests of shareholders, do too little work for the company, and are too far removed. My contention is that executive directors and directors installed by substantial shareholders should get more credit, and that independent directors deserve more scrutiny.
Yellow Pages substantial shareholder and director Stanley Tan was quoted in the Business Times Tuesday (May 22) that he wants 'a more effective board that can inject fresh direction and more aggressive growth desire for the company'. He made the comments not out of spite, he says, but because the company can achieve more, based on his assessment. The directors he wants replaced:
· Robert Tomlin, Vice Chairman, UBS Investment Bank, Asia
· Richard Helfer, Chairman, RCH International
· Foo Say Mui, Managing Director, ANZ Singapore
· Helen Yeo, managing parter, Rodyk & Davidson, and
· Goh Sik Ngee, Yellow Pages' own chief executive officer.
Now, I'm not making any comment about the abilities of these people. I have no evidence to suggest they aren't doing their jobs as best they can, in this or any other capacity. They certainly seem extremely well qualified on paper. Actually, it's quite a distinguished list!
Further, we don't know how much of Stanley Tan's criticism belongs more to those with an executive role, compared to those who are independent.
What I find most interesting, though, is that the tone of Tan's comments, that more could be achieved if other directors were on board, resonates with the CEOs of other companies.
Talk to them, and they'll tell you that the drive to get independent directors on board is all well and good, but frankly, they have to pull their weight just as much as the others, if not more so. This is because attending board meetings and helping out where possible is perceived to be a lot less than being actively engaged in the company's affairs on a day-to-day basis. Independent directors do not share the same level of responsibility as executive directors to generate cashflow, develop new business opportunities, hire and fire staff, and so on, they say (independent directors would argue they actually have more responsibility to safeguard the interests of the company).
CEOs will tell you independent directors have to earn their keep, and that sometimes this doesn't happen. Without picking on any independent director of any company specifically, they often hold more than one board appointment in addition to an executive position somewhere else. This means their attention and energy is split among several or many boards.
Executive and non-independent directors have been maligned for being too close to the action, and for having vested interests of majority shareholders at heart. Well frankly, when was the last time you hired someone because they seemed distant from your business, and didn't have shareholders' interests at heart?
So I say, let's ensure Independent Directors are held to account just as much as their executive and non-independent counterparts.
Yellow Pages substantial shareholder and director Stanley Tan was quoted in the Business Times Tuesday (May 22) that he wants 'a more effective board that can inject fresh direction and more aggressive growth desire for the company'. He made the comments not out of spite, he says, but because the company can achieve more, based on his assessment. The directors he wants replaced:
· Robert Tomlin, Vice Chairman, UBS Investment Bank, Asia
· Richard Helfer, Chairman, RCH International
· Foo Say Mui, Managing Director, ANZ Singapore
· Helen Yeo, managing parter, Rodyk & Davidson, and
· Goh Sik Ngee, Yellow Pages' own chief executive officer.
Now, I'm not making any comment about the abilities of these people. I have no evidence to suggest they aren't doing their jobs as best they can, in this or any other capacity. They certainly seem extremely well qualified on paper. Actually, it's quite a distinguished list!
Further, we don't know how much of Stanley Tan's criticism belongs more to those with an executive role, compared to those who are independent.
What I find most interesting, though, is that the tone of Tan's comments, that more could be achieved if other directors were on board, resonates with the CEOs of other companies.
Talk to them, and they'll tell you that the drive to get independent directors on board is all well and good, but frankly, they have to pull their weight just as much as the others, if not more so. This is because attending board meetings and helping out where possible is perceived to be a lot less than being actively engaged in the company's affairs on a day-to-day basis. Independent directors do not share the same level of responsibility as executive directors to generate cashflow, develop new business opportunities, hire and fire staff, and so on, they say (independent directors would argue they actually have more responsibility to safeguard the interests of the company).
CEOs will tell you independent directors have to earn their keep, and that sometimes this doesn't happen. Without picking on any independent director of any company specifically, they often hold more than one board appointment in addition to an executive position somewhere else. This means their attention and energy is split among several or many boards.
Executive and non-independent directors have been maligned for being too close to the action, and for having vested interests of majority shareholders at heart. Well frankly, when was the last time you hired someone because they seemed distant from your business, and didn't have shareholders' interests at heart?
So I say, let's ensure Independent Directors are held to account just as much as their executive and non-independent counterparts.
Your success could be your downfall
While interviewing a certain Company A one day, the colleague and me heard from its CEO an account of how he was trying to set up Blackberry accounts for his managers.
He said he had approached Telco S for help to set up those accounts, which then told him to fill in some forms downloaded off its website. He then called Telco M, which immediately sent a representative down to his office to discuss the company's needs.
Needless to say, Telco M got his business. It also got one of the CEO's counterpart's business.
Telco M is a relatively small player in the mobile field, compared to Telco S.
Company A's public relations advisor offered that Telco S' focus was probably not on Singapore, but on regional expansion.
Even if that is the case, Telco S sure isn't doing itself any favours by giving would-be clients the impression that their business doesn't matter.
The moral of the story is: Remember where you came from, and try to stay grounded at all times.
First, companies should always remember who their customers are.
It's just like how American Idol Kelly Clarkson would remember how she got her big break – by public votes (not that I know if Kelly Clarkson is actually that grounded).
Second, never turn away business, even if it seems like it'll do nothing to enhance your portfolio. Word of mouth is a very powerful marketing tool. So if you turn a seemingly small fry away and he complains to his godfather of a well-known venture capitalist with major contacts, you're as good as fried.
So try to stay grounded even if your business is scaling heights like never before, or at least try to act like you aren't that taken by the bright lights.
On a side note, if Telco S continues to be this complacent, it would soon find the carpet being pulled from under its feet. Without its competition even trying to outdo it.
Serene Lim
He said he had approached Telco S for help to set up those accounts, which then told him to fill in some forms downloaded off its website. He then called Telco M, which immediately sent a representative down to his office to discuss the company's needs.
Needless to say, Telco M got his business. It also got one of the CEO's counterpart's business.
Telco M is a relatively small player in the mobile field, compared to Telco S.
Company A's public relations advisor offered that Telco S' focus was probably not on Singapore, but on regional expansion.
Even if that is the case, Telco S sure isn't doing itself any favours by giving would-be clients the impression that their business doesn't matter.
The moral of the story is: Remember where you came from, and try to stay grounded at all times.
First, companies should always remember who their customers are.
It's just like how American Idol Kelly Clarkson would remember how she got her big break – by public votes (not that I know if Kelly Clarkson is actually that grounded).Second, never turn away business, even if it seems like it'll do nothing to enhance your portfolio. Word of mouth is a very powerful marketing tool. So if you turn a seemingly small fry away and he complains to his godfather of a well-known venture capitalist with major contacts, you're as good as fried.
So try to stay grounded even if your business is scaling heights like never before, or at least try to act like you aren't that taken by the bright lights.
On a side note, if Telco S continues to be this complacent, it would soon find the carpet being pulled from under its feet. Without its competition even trying to outdo it.
Serene Lim
Labels: downfall, listed companies, Singapore, success
Is social responsibility counter-productive?
Companies do get involved with social responsibility like caring for the environment, poor and disabled, donating and many others.
But when they do that, will they become productive or counter-productive?
I say that social responsibility is productive.
My reasons:
First, giving back something to the society is always good. Not only does the company's bond with the community is closer, the transparency from the company and trust from the public is stronger.
Second, it is everybody's responsibility to do their part, to give back to the environment and community, regradless of how small it is. It doesn't mean that if a company does not have a lot of extra cash for goodwill, that it shouldn't contribute. Even by having a visit to the old folks' home does not require money.
For some, its business is all about social responsibility. Like for example, Bodyshop. The company's policy is against animal testing.
This unique-selling point for Bodyshop has earned itself fans and customers. It is able to make products without having to test on animals.
Another example is Shell. The petroleum company is into conserving energy and protecting the environment.
It also supported the arts by having several Arts awards and scholarships.
Early this year in January, it launched a programme at Sungei Buloh Wetlands Reserve called Shell-NParks Nature Nurtures Programme. The aim is for teens to learn about contributing to the society.
It also has the famous programmes for schools in the Road Safety Park at East Coast to teach students about road safety.
And the list goes on.
Doing something in the course of social responsibility can only end in a good light.
Nurwidya Abdul
But when they do that, will they become productive or counter-productive?
I say that social responsibility is productive.
My reasons:
First, giving back something to the society is always good. Not only does the company's bond with the community is closer, the transparency from the company and trust from the public is stronger.
Second, it is everybody's responsibility to do their part, to give back to the environment and community, regradless of how small it is. It doesn't mean that if a company does not have a lot of extra cash for goodwill, that it shouldn't contribute. Even by having a visit to the old folks' home does not require money.
For some, its business is all about social responsibility. Like for example, Bodyshop. The company's policy is against animal testing.
This unique-selling point for Bodyshop has earned itself fans and customers. It is able to make products without having to test on animals.
Another example is Shell. The petroleum company is into conserving energy and protecting the environment.
It also supported the arts by having several Arts awards and scholarships.
Early this year in January, it launched a programme at Sungei Buloh Wetlands Reserve called Shell-NParks Nature Nurtures Programme. The aim is for teens to learn about contributing to the society.
It also has the famous programmes for schools in the Road Safety Park at East Coast to teach students about road safety.
And the list goes on.
Doing something in the course of social responsibility can only end in a good light.
Nurwidya Abdul
Selling your place En-Bloc...RESIST!
So the red hot market may have you thinking about whether or not your place should go up for sale En-Bloc so you can make a somewhat decent return and move to another place.
Well I say...RESIST THAT URGE!!!
Despite what initially looks good (basically, you buy a place...and when it collectively sells, you make a profit), but where are you going to go afterwards?
Property has been on fire in Singapore lately, rates have gone up, selling prices have doubled in some cases, and people are flipping properties and cashing in left and right it seems.
Prices are probably going to be higher for a place of similar quality, or, further up the luxury chain than what you're already living in. The rush to flip property has given some people a very short-sighted view of what happens beyond the sale when they have to move out and live someplace else.
In some cases, you may have to downgrade just to be able to afford a place of lesser quality because housing prices have shot up so much the past year. I should know, I live way out in Tampines cause I couldn't afford anything downtown!
So if you get caught in that predicament of selling your place en-bloc (or just selling it in general) make sure that you have a realistic expectation of what your next dwelling will cost you, pick it out ahead of time and do your homework. Then when your place sells en-bloc, you'll be confident to know you wont be stuck in the same predicament all your neighbors are in.
Thats just my 2 cents worth, but, it always makes sense in life to me to think 10 steps ahead instead of 2, especially for something like this.
Curtis Bergh
Well I say...RESIST THAT URGE!!!
Despite what initially looks good (basically, you buy a place...and when it collectively sells, you make a profit), but where are you going to go afterwards?
Property has been on fire in Singapore lately, rates have gone up, selling prices have doubled in some cases, and people are flipping properties and cashing in left and right it seems.
Prices are probably going to be higher for a place of similar quality, or, further up the luxury chain than what you're already living in. The rush to flip property has given some people a very short-sighted view of what happens beyond the sale when they have to move out and live someplace else.
In some cases, you may have to downgrade just to be able to afford a place of lesser quality because housing prices have shot up so much the past year. I should know, I live way out in Tampines cause I couldn't afford anything downtown!
So if you get caught in that predicament of selling your place en-bloc (or just selling it in general) make sure that you have a realistic expectation of what your next dwelling will cost you, pick it out ahead of time and do your homework. Then when your place sells en-bloc, you'll be confident to know you wont be stuck in the same predicament all your neighbors are in.
Thats just my 2 cents worth, but, it always makes sense in life to me to think 10 steps ahead instead of 2, especially for something like this.
Curtis Bergh
Labels: En-Bloc, Housing, Real-estate, Singapore
Investor education = Less jargon
One can never stress enough about investor education.
How many times have people bought into stocks, not knowing what the company does?
Some traders don't even know the names of the companies they trade, because all they care about are the stock codes and stock prices.
So whose responsibility is it to educate investors and traders?
It is true that investors themselves should do some homework if they want to make sensible investment decisions. They can better inform themselves through courses conducted by various financial institutions like brokerages, or affiliated bodies like the Securities Investors Association of Singapore. These courses range from teaching the man-on-the-street how to analyse companies' annual reports to technical analysis of stocks.
But business news should, in itself, be educational.
For starters, this means that industry jargon should be reduced to the bare minimal in business news stories.
The business media puts out reports to inform the public of breaking news stories and companies' developments. The intended audience should be the general public, not just the people who understand. Heavily-jargonated publications can turn some would-be investors away simply because these people “don't get” what's written. Trade publications are, of course, the exception.
Second, listed companies (who are already subject to media coverage) should not turn away those who want to learn more about their businesses.
One of the reasons journalists fear asking questions like “so what exactly do you do” and “why do you run your company this way” is that some companies frown upon such queries. Some heads of companies seem to think that reporters should have done their homework on them before conducting the interview.
What these heads don't seem to realise is that most journalists are sometimes bogged down with a few stories from different industries at once, so it really is a blessing that some reporters even bother to clarify some bits of information.
Sinwa CEO Mike Sim is an example of a company head who seems to believe in teaching people about his company.
When Sue En and me went to interview him at his office about a month back, he was able to paraphrase and explain on-camera his latest MOU (the press release was quite a mess to get through). After the interview, he got one of his department heads to show us around the yard, who also put into perspective how stocking ships is just like stocking up households, only in a different scale.
So the business media should have a hand in educating investors by reducing jargon in news stories.
And companies, in turn, should try to be more patient with people who ask them about what they do. Even if things look extremely obvious.
Serene Lim
How many times have people bought into stocks, not knowing what the company does?
Some traders don't even know the names of the companies they trade, because all they care about are the stock codes and stock prices.
So whose responsibility is it to educate investors and traders?
It is true that investors themselves should do some homework if they want to make sensible investment decisions. They can better inform themselves through courses conducted by various financial institutions like brokerages, or affiliated bodies like the Securities Investors Association of Singapore. These courses range from teaching the man-on-the-street how to analyse companies' annual reports to technical analysis of stocks.
But business news should, in itself, be educational.
For starters, this means that industry jargon should be reduced to the bare minimal in business news stories.
The business media puts out reports to inform the public of breaking news stories and companies' developments. The intended audience should be the general public, not just the people who understand. Heavily-jargonated publications can turn some would-be investors away simply because these people “don't get” what's written. Trade publications are, of course, the exception.
Second, listed companies (who are already subject to media coverage) should not turn away those who want to learn more about their businesses.
One of the reasons journalists fear asking questions like “so what exactly do you do” and “why do you run your company this way” is that some companies frown upon such queries. Some heads of companies seem to think that reporters should have done their homework on them before conducting the interview.
What these heads don't seem to realise is that most journalists are sometimes bogged down with a few stories from different industries at once, so it really is a blessing that some reporters even bother to clarify some bits of information.
Sinwa CEO Mike Sim is an example of a company head who seems to believe in teaching people about his company.
When Sue En and me went to interview him at his office about a month back, he was able to paraphrase and explain on-camera his latest MOU (the press release was quite a mess to get through). After the interview, he got one of his department heads to show us around the yard, who also put into perspective how stocking ships is just like stocking up households, only in a different scale.
So the business media should have a hand in educating investors by reducing jargon in news stories.
And companies, in turn, should try to be more patient with people who ask them about what they do. Even if things look extremely obvious.
Serene Lim
Labels: business, investor education, media, sinwa
F1 Race in Singapore: Do it
By the time you read this the news may have already broken about whether or not an F1 night race will be staged on the streets of Singapore (announcement expected at 0900 GMT).
I'm going to go out on a limb and say that this would be the best thing to happen to the Singapore sports scene in the nations history, and, the biggest and best opportunity to benefit local businesses that we've seen in a long time. Everyone should be rallying around this in Singapore, especially local businesses, here's why.
There is no single, better opportunity, to pump as much money into the local economy as a major international sporting event.
We've seen what the throngs of thousands of delegates to major international exhibitions and conferences can do to the local economy (case in point: IOC meeting in 2005, IMF/World Bank meetings in 2006).
Sports by in large, are a much bigger draw as you don't have to be credentialed and granted permission to enter, you just need to buy a ticket.
In the United States, cities that host major sporting events such as the Super Bowl, and the NCAA Final Four, all benefit extremely well from such an event.
The thousands of tourists pump millions into the local economy, and local businesses reap the rewards through increased sales, but also exposure that they otherwise wouldn't get.
Even more the case for olympic cities which practically get an "extreme makeover" for the games, and have be known to see an economic turnaround afterwards. Look at the boom in Beijing for next years games. Barcelona is probably the best, most recent example as the city before the games wasn't necessarily high on peoples list of places to visit, thats now an almost must see in Europe.
For Singaporean companies, this is a chance to showcase themselves on the world stage, and any company that invests in advertising and supporting the race here will reap the benefits. I bey maybe 10, 20, maybe 30 fold! (sorry I can't contain my enthusiasm). What a great ROI that would be.
For the country, the economic benefits as well as the image of Singapore as a hub of sporting events globally will be cemented, benefiting everyone I think.
So, we'll find out here in just a matter of hours.
Next up: Singapore for the 2020 olympic games! No I'm not kidding, I think they would be great here.
-Curtis Bergh
I'm going to go out on a limb and say that this would be the best thing to happen to the Singapore sports scene in the nations history, and, the biggest and best opportunity to benefit local businesses that we've seen in a long time. Everyone should be rallying around this in Singapore, especially local businesses, here's why.
There is no single, better opportunity, to pump as much money into the local economy as a major international sporting event.
We've seen what the throngs of thousands of delegates to major international exhibitions and conferences can do to the local economy (case in point: IOC meeting in 2005, IMF/World Bank meetings in 2006).
Sports by in large, are a much bigger draw as you don't have to be credentialed and granted permission to enter, you just need to buy a ticket.
In the United States, cities that host major sporting events such as the Super Bowl, and the NCAA Final Four, all benefit extremely well from such an event.
The thousands of tourists pump millions into the local economy, and local businesses reap the rewards through increased sales, but also exposure that they otherwise wouldn't get.
Even more the case for olympic cities which practically get an "extreme makeover" for the games, and have be known to see an economic turnaround afterwards. Look at the boom in Beijing for next years games. Barcelona is probably the best, most recent example as the city before the games wasn't necessarily high on peoples list of places to visit, thats now an almost must see in Europe.
For Singaporean companies, this is a chance to showcase themselves on the world stage, and any company that invests in advertising and supporting the race here will reap the benefits. I bey maybe 10, 20, maybe 30 fold! (sorry I can't contain my enthusiasm). What a great ROI that would be.
For the country, the economic benefits as well as the image of Singapore as a hub of sporting events globally will be cemented, benefiting everyone I think.
So, we'll find out here in just a matter of hours.
Next up: Singapore for the 2020 olympic games! No I'm not kidding, I think they would be great here.
-Curtis Bergh
Labels: F1, Olympics, Racing, Singapore, Sporting Events
Warren Buffet should have an interview showcase like 'The Apprentice' in his search for suitable candidates in his board.
The legendary Warren Buffet, guru in investment, is looking out for suitable candidates to fill in positions in the board when he retires.
No, he is not retiring now, but a little 'contigency plan' is slowly taking place while waiting for that day to come.
He is looking to hire about three or four people as investment managers, with maybe one or two of them would be Chief Investment Officer. At the moment he is sieving through about 600 to 700 applications for the post, perhaps more over the days.
In The York Dispatch article written by Josh Funk, it was mentioned that Warren Buffet has arranged for one of the Berkshire Hathaway's (his company) manager to take his place.
An article in 'The Daily Times written by Rick Laney says that he has picked three managers from companies that Berkshire Hathaway owns.
Shareholders in his company is not really comfortable thinking about somene else replacing the legendary Warren Buffet.
That's why I think that Warren Buffet should have a reality programme like 'The Apprentice' in his search for the suitable candidate.
My reasons:
First, everybody in the world of investment knows Warren Buffet and the idea of someone replacing a successful person draws a lot of questions like; Can he do it? Will he be as good?
To minimise all possible doubts, having a reality TV show could showcase the talents of the applicants and therefore, make shareholders especially at ease as they have seen the working ethics of the candidates.
Second, the programme would help increase awareness to the public about investment. Finalists could well be sought after by other companies and this would show that there are reliable people out there running companies and may be convinced to invest if they haven't already.
Yes, Warren Buffet has his mind on some managers and the TV programme might actually swing that way, but at least people get to see why Buffet wants these people on board.
In any case, fret not. There was only one position that he didn't include in the application form; Chairman. Buffet says that his son, Howard, will take over to keep the Buffet culture after the man himself passes away. At the moment, Howard Buffet himself is already on the board.
Berkshire Hathaway deals in clothing, furniture, jwelry, insurance, restaurants, jet companies as well as huge investments in companies like Coca-Cola.
Nurwidya Abdul
No, he is not retiring now, but a little 'contigency plan' is slowly taking place while waiting for that day to come.
He is looking to hire about three or four people as investment managers, with maybe one or two of them would be Chief Investment Officer. At the moment he is sieving through about 600 to 700 applications for the post, perhaps more over the days.
In The York Dispatch article written by Josh Funk, it was mentioned that Warren Buffet has arranged for one of the Berkshire Hathaway's (his company) manager to take his place.
An article in 'The Daily Times written by Rick Laney says that he has picked three managers from companies that Berkshire Hathaway owns.
Shareholders in his company is not really comfortable thinking about somene else replacing the legendary Warren Buffet.
That's why I think that Warren Buffet should have a reality programme like 'The Apprentice' in his search for the suitable candidate.
My reasons:
First, everybody in the world of investment knows Warren Buffet and the idea of someone replacing a successful person draws a lot of questions like; Can he do it? Will he be as good?
To minimise all possible doubts, having a reality TV show could showcase the talents of the applicants and therefore, make shareholders especially at ease as they have seen the working ethics of the candidates.
Second, the programme would help increase awareness to the public about investment. Finalists could well be sought after by other companies and this would show that there are reliable people out there running companies and may be convinced to invest if they haven't already.
Yes, Warren Buffet has his mind on some managers and the TV programme might actually swing that way, but at least people get to see why Buffet wants these people on board.
In any case, fret not. There was only one position that he didn't include in the application form; Chairman. Buffet says that his son, Howard, will take over to keep the Buffet culture after the man himself passes away. At the moment, Howard Buffet himself is already on the board.
Berkshire Hathaway deals in clothing, furniture, jwelry, insurance, restaurants, jet companies as well as huge investments in companies like Coca-Cola.
Nurwidya Abdul
Labels: Berkshire Hathaway, Coca-Cola, Howard Buffet, The Apperentice, Warren Buffet
Corn feed stock: may wring our pockets dry
The Mexican tortilla producer is angry.
The corn it uses to make its tortillas is getting more expensive because of the next big thing in alternative energy – ethanol.
The crop is being used as feed stock for producing biofuel in Brazil and the United States, more so than sugarcane and palm oil.
(Malaysia has been using and further exploring the latter as an alternative fuel source.)
The Mexican tortilla maker is angry, but so are farmers who feed their livestock corn.
And soon, it might be you – the consumer – who will bear the brunt of it all.
Because you will have to pay more for fuel in the future AND more for your groceries and food.
As TIME magazine puts it, “everyone may have to decide between filling their tanks or their larders”.
So here's a solution: big-time ethanol producers should consider using palm oil and sugarcane as alternatives to corn.
Here's why:
First, according to TIME, “Brazilian biofuel distilled from sugarcane is a third cheaper than the stuff the farmers up north brew”.
Second, Cornell University agricultural scientist David Pimentel says “about 70% more energy is required to produce ethanol (from grain) than the energy that actually is in ethanol.”
Third, corn as a feed stock costs more than the production of ethanol. According to Pimental's analysis, planting, growing and harvesting an acre of corn (7,110 pounds) requires about 140 gallons of fossil fuels and costs US$347 per acre. So even before the corn is converted into ethanol, the feedstock alone costs US$1.05 per gallon of ethanol.
While energy companies are hard-pressed to find a replacement for fossil fuel, they should also consider how their current efforts would create a butterfly effect on consumers and other businesses globally.
In this case, perhaps agricultural by-products could be the way to go.
Otherwise, again, we may have to choose between filling up our tanks (or paying more for public transport because of higher fuel prices) or giving in to our appetites.
Serene Lim
The corn it uses to make its tortillas is getting more expensive because of the next big thing in alternative energy – ethanol.
The crop is being used as feed stock for producing biofuel in Brazil and the United States, more so than sugarcane and palm oil.
(Malaysia has been using and further exploring the latter as an alternative fuel source.)
The Mexican tortilla maker is angry, but so are farmers who feed their livestock corn.
And soon, it might be you – the consumer – who will bear the brunt of it all.
Because you will have to pay more for fuel in the future AND more for your groceries and food.
As TIME magazine puts it, “everyone may have to decide between filling their tanks or their larders”.
So here's a solution: big-time ethanol producers should consider using palm oil and sugarcane as alternatives to corn.
Here's why:
First, according to TIME, “Brazilian biofuel distilled from sugarcane is a third cheaper than the stuff the farmers up north brew”.
Second, Cornell University agricultural scientist David Pimentel says “about 70% more energy is required to produce ethanol (from grain) than the energy that actually is in ethanol.”
Third, corn as a feed stock costs more than the production of ethanol. According to Pimental's analysis, planting, growing and harvesting an acre of corn (7,110 pounds) requires about 140 gallons of fossil fuels and costs US$347 per acre. So even before the corn is converted into ethanol, the feedstock alone costs US$1.05 per gallon of ethanol.
While energy companies are hard-pressed to find a replacement for fossil fuel, they should also consider how their current efforts would create a butterfly effect on consumers and other businesses globally.
In this case, perhaps agricultural by-products could be the way to go.
Otherwise, again, we may have to choose between filling up our tanks (or paying more for public transport because of higher fuel prices) or giving in to our appetites.
Serene Lim
The very public part of private life for executives
CEO's and top executives at companies are under constant, intense scrutiny, from financial markets and shareholders for their roles and the performance of their companies.
When they clock out, and go home to their personal lives, that was where the line was drawn and investors stopped putting CEO's under the microscope so much.
Not anymore.
With the recent, surprising resignation, of British Petroleum (BP) CEO John Browne over stories surfacing about his personal life and potentially damaging allegations that he misused company resources, we're putting the debate back front and center...where do you draw the line about what the investors and the public need to know about what happens in the private life of CEO's?
With such a shock announcement, the fine line between public and private life for executives was almost erased, leaving investors and the public scrambling to find some semblance and where to draw the line of what is relevant that investors should know about the private lives of very top executives.
Now, I do think there is some clarity that a lot of people would agree on on what is pertinent and relevant information that markets and investors would need, and want, to know about what happens out of the office.
CEO's and officials misusing company resources, would definitely fall under something that shareholders deserve to know, regardless if it happens in the private life of executives.
What I don't think is relevant to investors, or is any business of ours, is what these CEO's do in their personal lives or their life decisions they decide to make.
Gay, straight, bisexual, married, divorced, what race they are, nationality, problem child, religious or not and which religion they practice, all irrelevant to me as an investor, and none of my business to begin with.
All I am concerned about is how they perform as CEO, and if for some reasons stuff they were going through in their personal lives affects their performance as CEO.
In John Browne's case, him having a "boyfriend"...doesn't matter to me. The fact that he lied to a judge about how he met his former partner, and that he potentially misused company resources, is the information that is pertinent to shareholders and something that warrants placing his private life under the microscope, as this would also affect BP in some way, shape, and form.
I take you back to the Bill Clinton/Monica Lewinsky fiasco that gripped America in the 90's.
Sex in the oval office of the White House? Don't care.
President lying under oath about it, now that is something we should care about. Furthermore, to clear that up, THAT is also the reason why Bill Clinton got impeached, not because he was fooling around with an intern.
In John Browne's case, him lying to a judge and potentially misusing company resources are what will bring him scrutiny and trouble, not the fact that he had a boyfriend.
The line has to be drawn somewhere, and after this latest incident, we probably need to redraw where it is again.
-Curtis Bergh
When they clock out, and go home to their personal lives, that was where the line was drawn and investors stopped putting CEO's under the microscope so much.
Not anymore.
With the recent, surprising resignation, of British Petroleum (BP) CEO John Browne over stories surfacing about his personal life and potentially damaging allegations that he misused company resources, we're putting the debate back front and center...where do you draw the line about what the investors and the public need to know about what happens in the private life of CEO's?
With such a shock announcement, the fine line between public and private life for executives was almost erased, leaving investors and the public scrambling to find some semblance and where to draw the line of what is relevant that investors should know about the private lives of very top executives.
Now, I do think there is some clarity that a lot of people would agree on on what is pertinent and relevant information that markets and investors would need, and want, to know about what happens out of the office.
CEO's and officials misusing company resources, would definitely fall under something that shareholders deserve to know, regardless if it happens in the private life of executives.
What I don't think is relevant to investors, or is any business of ours, is what these CEO's do in their personal lives or their life decisions they decide to make.
Gay, straight, bisexual, married, divorced, what race they are, nationality, problem child, religious or not and which religion they practice, all irrelevant to me as an investor, and none of my business to begin with.
All I am concerned about is how they perform as CEO, and if for some reasons stuff they were going through in their personal lives affects their performance as CEO.
In John Browne's case, him having a "boyfriend"...doesn't matter to me. The fact that he lied to a judge about how he met his former partner, and that he potentially misused company resources, is the information that is pertinent to shareholders and something that warrants placing his private life under the microscope, as this would also affect BP in some way, shape, and form.
I take you back to the Bill Clinton/Monica Lewinsky fiasco that gripped America in the 90's.
Sex in the oval office of the White House? Don't care.
President lying under oath about it, now that is something we should care about. Furthermore, to clear that up, THAT is also the reason why Bill Clinton got impeached, not because he was fooling around with an intern.
In John Browne's case, him lying to a judge and potentially misusing company resources are what will bring him scrutiny and trouble, not the fact that he had a boyfriend.
The line has to be drawn somewhere, and after this latest incident, we probably need to redraw where it is again.
-Curtis Bergh
Public companies tempted to go private
Heading a public company is like having “a gun to your head”.
Or at least that's what J. Crew Group's chairman and chief executive Millard S. “Mickey” Drexler told BusinessWeek magazine.
More heads of public companies are finding it increasingly difficult to develop their businesses without being heckled by its many shareholders and for various other reasons. This leads to management being extremely tempted by private equity buy-outs, or top management leaving the fishbowl for private firms.
On the other hand, shareholders have the right to meet with management and question their intentions because they are deemed responsible to the public.
There really only seems to be one solution: shareholders should back off and trust management to run the company and believe it will do the job to the best of its ability.
J. Crew's Drexler can attest to the effectiveness of that, saying that he now has “'an ownership that truly cares about long-term shareholder value,' in stark contrast to public investors who obsess over quarterly earnings.”
He has had 11 years of experience turning AnnTaylor Stores and Gap around.
Here's why public firms would consider going private:
First, CEOs spend infinite hours on meetings with analysts, banks and brokerages and talking to major shareholders. All these take time away from managing the business proper.
Second, Business 2.0 magazine writes that “many value-building moves...take time to produce results but their costs appear immediately, thereby penalizing earnings in the short run,” which shareholders will harp on.
Third, while Singapore-listed companies do not face regulations as tough as those in Sarbanes-Oxley, they still face other hassles of being a publicly-listed entity. These include the added risks of shareholder lawsuits and dealing with issues pertaining to the size of the board and who constitutes it.
Another reason for going private is, according to Business 2.0, “the ability to run a business more effectively”. For starters, management would be allowed “take risks that public shareholders won't,” Clayton, Dubilier & Rice CEO Donald J. Gogel tells BusinessWeek.
They will have more freedom to do the tough but necessary things to help the company in the long-term, instead of focussing on quarterly results and meeting yardsticks.
Of course, less scrutiny does not mean shareholders have to lay off management totally.
Stakeholders can and should still play their part when they do not feel the company is performing up to mark, even after being given the leeway and time to do so.
Otherwise, CEOs of public companies should be trusted to run their companies and not have the media, analysts and shareholders breathing down their neck.
If retail investors still do not understand how some decisions are made for long-term benefits and keep hammering management for not meeting numbers every quarter, we might see a lot more “capital and talent exiting the public realm”.
Do you agree with me, or do you think retail investors are still king and management should be absolutely responsible to them?
Serene Lim
ArchivesOr at least that's what J. Crew Group's chairman and chief executive Millard S. “Mickey” Drexler told BusinessWeek magazine.
More heads of public companies are finding it increasingly difficult to develop their businesses without being heckled by its many shareholders and for various other reasons. This leads to management being extremely tempted by private equity buy-outs, or top management leaving the fishbowl for private firms.
On the other hand, shareholders have the right to meet with management and question their intentions because they are deemed responsible to the public.
There really only seems to be one solution: shareholders should back off and trust management to run the company and believe it will do the job to the best of its ability.
J. Crew's Drexler can attest to the effectiveness of that, saying that he now has “'an ownership that truly cares about long-term shareholder value,' in stark contrast to public investors who obsess over quarterly earnings.”
He has had 11 years of experience turning AnnTaylor Stores and Gap around.
Here's why public firms would consider going private:
First, CEOs spend infinite hours on meetings with analysts, banks and brokerages and talking to major shareholders. All these take time away from managing the business proper.
Second, Business 2.0 magazine writes that “many value-building moves...take time to produce results but their costs appear immediately, thereby penalizing earnings in the short run,” which shareholders will harp on.
Third, while Singapore-listed companies do not face regulations as tough as those in Sarbanes-Oxley, they still face other hassles of being a publicly-listed entity. These include the added risks of shareholder lawsuits and dealing with issues pertaining to the size of the board and who constitutes it.
Another reason for going private is, according to Business 2.0, “the ability to run a business more effectively”. For starters, management would be allowed “take risks that public shareholders won't,” Clayton, Dubilier & Rice CEO Donald J. Gogel tells BusinessWeek.
They will have more freedom to do the tough but necessary things to help the company in the long-term, instead of focussing on quarterly results and meeting yardsticks.
Of course, less scrutiny does not mean shareholders have to lay off management totally.
Stakeholders can and should still play their part when they do not feel the company is performing up to mark, even after being given the leeway and time to do so.
Otherwise, CEOs of public companies should be trusted to run their companies and not have the media, analysts and shareholders breathing down their neck.
If retail investors still do not understand how some decisions are made for long-term benefits and keep hammering management for not meeting numbers every quarter, we might see a lot more “capital and talent exiting the public realm”.
Do you agree with me, or do you think retail investors are still king and management should be absolutely responsible to them?
Serene Lim
Labels: J. Crew, listed, private, public, shareholders
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
