Complete Property Market Updates of Singapore

Republic ranked together with Japan, Germany & Australia

SINGAPORE is a very safe place to do business, according to findings from French credit insurance firm Coface’s Business Climate@ratings.

The study, released yesterday, provides two ratings for 150 countries - a rating on risks inherent in the business climate, and a more holistic rating that takes into account the business climate, economic and financial prospects and company payment behaviour.

Singapore’s ratings of A1 in both areas signify the lowest category of risk on a scale with seven levels in increasing order, numerically up to A4 and then alphabetically up to D.

This places Singapore in the top band, which includes Germany, Australia and Japan.

The purpose of the ratings is to assess the overall quality of a country’s business environment - whether financial information there is available and reliable, whether the institutional framework is favourable to inter-company transactions and whether the legal system provides fair and efficient creditor protection.

The business climate rating mainly comprises business data compiled by Coface on the quality of information available on companies and the legal protection given to creditors.

This rating is supplemented by an assessment of institutional framework quality, which reflects the quality of institutions whose strengths and weaknesses can affect companies.

The parameters considered include such standards as public service effectiveness (government, education, health, infrastructure), regulatory quality, rule of law and extent of corruption. They are based on data from external sources.

These are: a government effectiveness indicator maintained by the World Bank Institute, based on the quality of public services provided and civil service efficiency; the Human Development Index, created by the United Nations to rank the quality of life in countries; and an infrastructure quality index (energy, transport, telecommunications) published by the World Economic Forum.

Not all countries received the same business climate and overall ratings, owing to imbalances in levels of financial information, creditor protection and the institutional environment.

For 39 countries including China and India, or 26 per cent of the 150 countries, the business climate was rated lower than the country’s overall risk level.

For 17 countries including Turkey and Israel, or 11 per cent, the business climate was rated higher.

Source : Business Times - 5 Jun 2008

CHUA YANG LIANG gives an overview of the proposals in the Draft Master Plan 2008 and presents a wish list to planners

BESIDES the three strategic commercial hubs of Jurong Lake District, Kallang Riverside and Paya Lebar Central, which will strengthen the CBD alongside with development plans for Tanjong Pajar and the Beach Road/Ophir-Rochor corridor, there were no major changes or surprises to the zoning, plot ratio and planning directions in the 2008 Draft Master Plan. This observation is based on our brief review of three areas in particular - Buona Vista, Paya Lebar, and Harbourfront (which includes Telok Blangah) that will house the interchanges of two major transit lines (existing and the future Circle Line).

 
The 2008 Draft Master Plan maintains the time-tested planning vision that focuses on improving the overall quality of life, supported by a pro-business environment. It maintains the central planning philosophy found in the 2003 Master Plan - that of improving the quality of urban spaces and supporting general economic growth. This vision is inherent within the four key thrusts of ‘home of choice, magnet for business, exciting playground, and home to cherish’ and the zoning maps that developed from there.

Market trends

This planning deliverable is a highly practical one and focuses on concretising market trends that are conducive to improving the quality of living spaces and favourable to the overall business environment in Singapore.

The 2008 Draft Master Plan has not only respected the organic development trends, such as supporting the interim uses of vacant government buildings and sites, for example, Dempsey Road and Wessex Estates, it has also formally accepted and recognised other key market forces that would help improve the overall quality of living in Singapore. For example, a notable change in Buona Vista was the re-zoning of a popular area in Holland Village from ‘Residential with commercial at first storey only’ and ‘Commercial and Residential’ to purely commercial use.

The continual agglomeration of retail and commerce activities in this neighbourhood over the past few years has permitted retail activities to reach a threshold level thereby strengthening the area’s image and attractiveness as an F&B neighbourhood that is well patronised by foreigners and young locals. Coupled with the upcoming Holland Village MRT station and the one-north intellectual cluster located slightly further south, re-zoning to permit full commercial activities within this area is practical and will further enhance the overall quality of living in and around the immediate vicinity.

Similarly, taking its cue from current market trends, the 2008 Draft Master Plan has also proposed more housing in key areas where demand has been strongest. The urban planners have proposed an additional 300,000-plus housing units (both private and public) islandwide with an emphasis on ‘water-fronting’. This is similar to that proposed in the 2003 Master Plan where over 300,000 housing units were also suggested.

The largest increase is in the central and north-east regions where some 39 per cent and 38 per cent of additional housing units (over the existing stock) have been proposed. Likewise, in terms of the distribution of total new supply, the central and north-east regions again topped the list at 40 per cent and 24 per cent respectively. This can be expected given the strong residential demand as reflected in the recent surge in property values in these regions. This proposed new supply should help ease the values in these areas in the longer term horizon.

Echoing this trend is Buona Vista, which witnessed several residential sites being introduced. A site in Holland Drive, which was previously zoned for a civic and community institution, was re-zoned as a residential site with a plot ratio of 4.2, while sites at Slim Barracks Rise and Dover Close East, which were initially zoned white, are now zoned residential. The re-zoning of these three sites will support the area’s growing prestige as an education and research hub in Singapore.

For the other planning regions, new housing has been proposed around existing water bodies, for example, reservoirs in Bedok and Lower Seletar, and the proposed 4.2 km waterway in Punggol. This concept of urbanising Singapore’s waterways is not new but it has been given a greater push with the strong market response to developments in the Sentosa and Harbourfront area over the past two years. This emphasis on providing more waterfront homes would greatly enhance social equity by making such homes more affordable to the regular guy on the street and not just limited to the affluent.

Shifts in preferences

However, the danger of following market trends is sudden shifts in preferences. Just like dark undercurrents are a result of changing tides, a sudden turn in market preference may send urban plans out of orbit. The secret is providing sufficient free play to accommodate such shifts. In line with the evolving landscape of Buona Vista as an R&D and education hub, a site next to Buona Vista MRT station, which was initially zoned commercial, has been re-zoned White. This gives the future developer more flexibility in its development, providing the free play that could potentially eliminate any shifts in market preferences and possibly enhance the area further.

Likewise, the Harbourfront has seen a similar trend in providing more ‘planning flexibility’. Notable changes in the region were the shift in sites at Telok Blangah Road that were initially zoned ‘Subject to detailed planning - Residential’ to ‘Reserve’ sites.

The ‘planning flexibility’ in this instance is not accorded to the private market but given to the statutory planners. The ‘Reserve’ zone effectively buys the planners some extra time to evaluate and deliberate on the optimal land use zones on these sites.

This shift in zoning could also be a reflection of the evolving market dynamism in the area, i.e. the shift in demographic profile in the surrounding neighbourhood, particularly in light of current developments such as Resorts World at Sentosa, Reflections at Keppel Bay, VivoCity and the HarbourFront offices.

Coupled with the government announcing its intention to create a leisure and recreational destination along the Southern Ridges by introducing a 2.2 km linear park along the Southern Ridges Park, this could potentially be an indication of future alternative plans for the area other than simply residential. Whatever the intention, we do know that the statutory planners are deliberating on the potential uses and are not ready to disclose the plans for these areas as yet.

Urban sustainability

While the 2008 Draft Master Plan has clearly articulated the medium-term planning objectives, it could be further enhanced with an expression of how our statutory planners perceive and support the issue of environmentalism, particularly on the concept of urban sustainability, which stems from greater environmental awareness today. Increasingly, we have seen more private occupiers demanding, and developers providing, environmentally friendlier buildings.

Urban sustainability is more than just green buildings; it contains the same basic principles of social, economic and environmental sustainability but applied to a bigger spatial context, i.e. the urban conurbation in which sub-systems such as transportation, housing, retail, education and tourism should be duly considered.

We have the first ever Leisure Plan that would see to the tripling of existing park connectors, providing residents 150 km of round-island access 24 hours a day. Could we see an Urban Sustainability Plan that sets the targets, deliverables and specific actions of each sub-system, all towards a sustainable urban environment?

The writer is the head of research, South-east Asia and Singapore, Jones Lang LaSalle

Source : Business Times - 29 May 2008

THE Master Plan 2008 exhibition, launched at the URA Centre on May 23, is an important event for all here in the Urban Redevelopment Authority (URA). Not only is it the fruit of many months of brainstorming, discussions with various stakeholders and plain hard work, it also gives us an opportunity to share our excitement about the plans for Singapore’s future development.

For those unfamiliar with the Master Plan, it is the statutory land use plan that URA develops to guide Singapore’s development over the next 10 to 15 years. The Master Plan is reviewed every five years, and details the land uses and development intensities for land parcels in Singapore. It translates broader, longer-term development strategies formulated as part of the Concept Plan, which is the plan that sets the direction for Singapore some 40 to 50 years ahead. Both the Concept Plan and Master Plan work to ensure that there is sufficient land to cater to Singapore’s future needs, while maintaining a good quality of living for our population.

The launch of the Master Plan 2008 exhibition marks a significant milestone in URA’s history. Ten years have passed since the completion of the URA’s 1998 Master Plan. Though Singapore’s first statutory Master Plan was completed way back in 1958, it was the 1998 Master Plan that took planning one step forward by clearly spelling out a vision for Singapore in years to come.

For the first time, each plot of land in Singapore had a specific planning intention and development strategy. Changes in the Master Plan now signalled changes in the future landscape, rather than changes in existing uses on the ground. With the 1998 revision, the Master Plan became the forward-looking plan that we are familiar with today, a plan which enables land owners to make decisions with greater certainty.

As we prepare to complete and gazette Master Plan 2008, it would be interesting to review how successful our past Master Plans have been.

New commercial centres

Over the past 10 years, Singapore has developed new areas for businesses to flourish. Our vision for Marina Bay as an expansion of our CBD is being transformed into reality, as we speak. New developments like the Esplanade Theatres by the Bay, One Fullerton, Marina Centre, The Sail, the Marina Bay Financial Centre have been realised within the decade.

Beyond development of the city centre, these 10 years have also seen the growth of other commercial hubs. The Tampines Regional Centre, Buona Vista Sub-regional Centre (now known as One-North) and the Novena Fringe Centre are three such centres outside of the city centre being developed.

Both Tampines and Novena are now bustling commercial centres, with a mix of offices, retail and entertainment facilities that cater to the needs of residents in the eastern part of Singapore. One-North is an established hub for research, and looks set to become home to a dynamic blend of commercial, residential and recreational uses.

Thanks to this strategy to develop new commercial centres outside the Central Area, businesses now have a variety of locations to choose from, which are more affordable than those found in the city centre and which are well-suited to back-offices.

Flexibility for businesses

Another pro-business move by URA over the past years is to introduce more flexibility for businesses through new zoning policies that take into account changing business needs. New business zones, Business 1 and Business 2, were proposed in the 2003 Master Plan. Under the new zoning system, industrial and business activities are grouped according to their impact on the surrounding environment. The new ‘impact-based’ zoning approach allows businesses to house different uses under one roof and change activities easily without re-zoning.

Similarly, Business Parks and Business Park White zones were introduced, which facilitated the development of Changi Business Park and International Business Park which are now key employment centres.

URA also introduced a new type of zoning - the White Zone - which allows for the development of a variety of different uses like commercial, residential and hotel within the zone. This gives the market greater flexibility and creativity in planning for developments that provide a mix of uses like residential and retail. Today, several successful and innovative developments have been built on white sites.

For example, Central at Clarke Quay, built on a white site, is not only a busy shopping centre, but also pioneers the ‘Small Office Home Office’ concept here in Singapore by offering custom-built offices that function as residential units as well. Another white site that was successfully developed is Square2 at Novena. This development seamlessly integrates a medical centre with a trendy mall, and strengthens Novena’s position as a medical hub. Similarly, the white site in Farrer Park which was awarded in 2007, will see the introduction of a ‘mediplex’, which combines a hospital, hotel and specialist medical centre.

Good quality of living

Singapore has experienced substantial population growth over the past 10 years, from 3.9 million in 1998 to 4.6 million today. New housing had to be provided. Across the island, new HDB towns like Sembawang, Sengkang and Punggol have sprouted up to cater to the housing needs of our growing population. Since 1998, there have been 170,000 new homes created. We have also created a variety of housing choices, such as waterfront housing in areas like Tanjong Rhu. Industries in Bukit Timah and Hillview have also been relocated since the 1990s, and replaced with high-quality residential developments.

Recreation and leisure

Beyond housing, URA has also planned for the recreation and leisure needs of our population. As part of the Master Plan 2003, URA drew up the Parks and Waterbodies Plan and Identity Plan. The Parks and Waterbodies Plan set out proposals for an islandwide network of parks and park connectors. The park connector network has been implemented in stages, with the 42 km-long Eastern Loop running through Bedok, Pasir Ris and Tampines being completed last year.

The Parks and Waterbodies Plan and the Identity Plan also set out our vision for various areas like the Southern Ridges. As part of the Master Plan 2003, there was a proposal to connect the three Southern Ridges for a nine-km walk. This vision for a beautiful walk through nature has become a reality. Today, the Southern Ridges are linked by two bridges and an elevated walkway and are now open to the public.

More nature areas and nature parks have been opened up, in a sensitive way, for public enjoyment. Examples include Chek Jawa where the National Parks Board has completed the boardwalk, and the boardwalks, observation tower and suspension bridge opened at MacRitchie Reservoir.

The past decade has also seen the revitalisation of areas like the Singapore River. Through URA’s land sales programme and environmental improvement works, the three quays of the river are now popular nightspots offering a array of entertainment and dining options for locals and tourists alike.

Conservation

It has not just been a decade of unrestrained urban development, however. Even as condominiums, shopping malls and office towers are being built, pockets of Singapore remain carefully shielded from the pressures of development. The Identity Plan, created as part of Master Plan 2003, set out to conserve historical areas and buildings that have a special place in our hearts. In the past decade, 1,200 additional buildings have been conserved, in areas like Holland Village, Joo Chiat and Tiong Bahru. These buildings not only help Singapore’s streetscape to remain distinctive, they also provide our people with physical anchors for shared memories.

The next 10 years

Going forward, the Master Plan 2008 looks to build on the good foundations set by the past Master Plans. This time, the focus is on providing great opportunities and a good life. We have plans to develop new areas like the Jurong Lake District, Paya Lebar Central, Kallang Riverside, as well as continue growing Marina Bay as a 24/7 live-work-play environment. Tanjong Pagar and the Beach Road/Ophir-Rochor corridor will also be developed as strategic gateways to the city centre.

We also have an extensive Leisure Plan, which showcases a diverse range of leisure opportunities around the clock, island-wide, for people of all ages.

Our city’s achievements and the garnering of international accolades in the past decade bear testament to the strength of the vision for Singapore. However, this vision was not created solely by URA. It was drawn up together with other government agencies, private sector representatives and various stakeholders through focus group discussions, public forums and dialogues.

More importantly, the transformation of the past 10 years was achieved through joint efforts by the public, private and people sectors. The draft Master Plan 2008 exhibition, open to the public until June 20, is an opportunity for URA to gather comments and suggestions on these plans that will shape the way we all live, work and play in the years to come. Together, we can make Singapore a home of choice, a magnet for business, an exciting playground and a place to cherish.

By CAROLINE SEAH, head of physical planning and policies at URA

Source : Business Times - 29 May 2008

SURGING inflation will ease in the second half of the year despite spikes in global food and oil prices, said Trade and Industry Minister Lim Hng Kiang.

He was responding to a question from Non-Constituency MP Sylvia Lim yesterday on the inflation outlook for this year.

Mr Lim said: ‘It is still our central scenario for an easing off of inflation in the second half of the year. Domestically, the impact of the goods and services tax (GST) rise will ease off in July, while externally, the run-up on food prices is expected to ease in the second half.’

The Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore revised their full-year inflation forecast last week to between 5 and 6 per cent - up from an earlier estimate of between 4.5 and 5.5 per cent - citing dearer food and oil. Inflation last month hit a 26-year high of 7.5 per cent.

But the revised forecast remained consistent with the earlier expectations of a second-half cooling off, the MTI said.

While Mr Lim admitted that it was impossible to insulate Singapore from higher global prices, he said that the Republic’s exchange-rate-centred monetary policy, which has been in place since 1981, remained effective in staving off the full impact of global inflation.

He said that domestic inflation had been low over the sustained period between 1981 and last year, averaging 1.7 per cent. By contrast, inflation averaged 5.5 per cent for the Organisation for Economic Cooperation and Development (OECD), a 30-strong group of the world’s richest countries.

The exchange-rate policy of maintaining a strong Singapore dollar also helped to reduce the cost of imports, Mr Lim said. ‘For example, between January last year and March this year, global food prices - measured by the International Monetary Fund’s food price index - surged 50 per cent, whereas the domestic cost of food imports rose by a much lower 14 per cent.’

Opposition MP Low Thia Khiang (Hougang) raised the possibility of cutting taxes, such as the GST and the petrol tax, to help Singaporeans cope with rising prices.

But Mr Lim said that a multi-pronged solution was more desirable: ‘It is not useful to tweak the GST rate in response to short-term phenomena and we have adopted an approach aimed at the medium term.’

This approach, announced in February, includes the diversification of food sources to minimise spikes in prices due to supply disruptions.

At the same time, the Government is providing direct assistance to Singaporeans, especially those in the lower- and middle-income groups, who are affected by the higher cost of living, said Mr Lim.

Source : Straits Times - 27 May 2008

Bank strategist points to strong growth in China and India despite weaker US consumer demand

STRONG first-quarter growth in major Asian economies has lent greater credence to the theory that Asia’s economic performance is no longer as closely tied to the United States’ fortunes as it once was.
 
Strong growth in China, India and other emerging economies, along with improvements in investment spending in Asian markets like Singapore, has cushioned the region from the impact of flagging US consumer demand.

This is the view of Deutsche Bank’s chief Asian strategist, Dr Chua Hak Bin, who said in a weekly report that first-quarter data largely supported the theory that Asia has ‘decoupled’ from the US.

‘Gross domestic product growth has held up relatively well, coming in above expectations for most of Asia.’

This included growth in China at 10.6 per cent, Hong Kong at 7.1 per cent, Singapore at 6.7 per cent, Indonesia at 6.3 per cent, and South Korea at 5.7 per cent.

By contrast, the US posted anemic first-quarter growth of 0.6 per cent.

Dr Chua said: ‘First-quarter growth for Thailand, Malaysia, Taiwan and India will be released this week and, again, will likely come in on the strong side of expectations.

‘What looks like a mild, rather than severe, US recession is also limiting the fallout.’

He believes that the global credit crunch appears to have had only a limited impact on Asia thus far, as evidenced by the region’s two major financial centres.

‘Hong Kong’s foreign currency loan growth has accelerated sharply to 48.6 per cent in March, while overall loan growth is holding up and running at 18.7 per cent.

‘Singapore’s offshore loan growth shows a similar acceleration to 43.3 per cent in March, while domestic loan growth continues to climb steadily to about 23.9 per cent,’ he said.

He attributed this resilience to the region’s bank-centred financial system and aggressive US Federal Reserve rate cuts, which probably sheltered most Asian companies from the brunt of the credit crunch.

And while many governments have shifted their attention to surging global and domestic inflation, largely driven by more expensive oil and food, Dr Chua was more optimistic.

‘We would caution against being overly pessimistic about the impact from oil. After all, Asia has not sunk into a bust cycle despite oil prices having tripled over the past three years.

‘On the contrary, pockets of high-growth activity have emerged across Asia because of the oil boom,’ he said.

Robust GDP growth in region

DR CHUA Hak Bin, Deutsche Bank’s chief Asian strategist, said Asia’s gross domestic product growth has held up relatively well in the first quarter.

This included growth in:
China: 10.6 per cent
Hong Kong: 7.1 per cent
Singapore: 6.7 per cent
Indonesia: 6.3 per cent
South Korea: 5.7 per cent

By contrast, the US posted first-quarter growth of only 0.6 per cent.

Dr Chua also predicted that first-quarter growth for Thailand, Malaysia, Taiwan and India, which will be released this week, will likely come in on the strong side of expectations.

Source : Straits Times - 27 May 2008

From the Republic’s early days, the buildings that define its skyline reflect a nation that is increasingly vibrant

IF a country had a face, it would be the skyline of its city. Like a portrait on a sky-blue canvas, it is the profile of a nation - as visually unique as the individuals who inhabit it. And, like a face, it reflects the character and spirit of its people too.

Impressive edifices: An upcoming marquee project is the Marina Bay Financial Centre, a $2b complex of residential and commercial buildings. The Marina Bay Sands IR will also be a ground-breaking development in many ways

The economic success story of Singapore is not just recorded in the history books, but literally etched in stone. Well, concrete anyway. Soaring office towers decked out in glass and steel gleam proudly, shoulder-to-shoulder, scraping the sky above the Central Business District (CBD). But despite the rush to build on increasingly limited and expensive land, Singapore hasn’t become as suffocating a concrete jungle as many other developed cities. For all the human activity that is part and parcel of a bustling cosmopolitan city, Singapore’s business district is surprisingly well-ordered and efficient.

The brain behind the city’s pleasant face is the Urban Redevelopment Authority (URA). Since the mid-1970s it has been tasked with striking a balance between designing an aesthetically distinctive yet land-efficient cityscape. Beyond figuring out how to make the most of limited land, it also sees ‘the need for the CBD to be attractive and distinctive’. Indeed, the number of postcards that promote Singapore’s photogenic skyline to the world bear testament to the efficacy of URA’s work over the years.

Changing profile: Singapore’s skyline in 1977 and 1997. The city hasn’t become as suffocating a concrete jungle as many other developed urban areas

What is also notable is how young - compared with other developed cities - Singapore’s cityscape is.

A significant early development that contributed to the definition of its skyline came about a couple of decades ago in 1986 with the completion of OUB Centre at Raffles Place. The tower, which has 63 floors and is 280 metres high, was the tallest building outside the United States at the time of its opening.

Today, 22 years later, it still stands as an icon, sharing the title of Singapore’s tallest building with two other structures - UOB Plaza One and Republic.

 
Plaza, the former having been completed in 1992 and the latter three years later. Togetherthey comprise a triumvirate of titans that stand as towering witnesses to the economic growth of the nation.

But bigger plans are afoot for an island with ambitions bigger than its land mass. Reclamation has been actively pursued to meet the infrastructural demands of a burgeoning economy for decades. Between 1960 and 1990, 51.5 sq km of land was reclaimed, accounting for almost 10 per cent of Singapore’s total land area at the time. By 2030, it is estimated that another 100 sq km will have been added.

The swathe of land that houses the buildings in the Marina Bay area is, in fact, reclaimed. Comprising 3.6 sq km of prime real estate, it is the focal point of existing and future developments that will cement Singapore’s status as a financial and business hub. Set picturesquely by the waterfront, the area is set to evolve into what URA terms a ‘Garden City by the Bay’.

It is envisioned as a round-the-clock microcosm of cosmopolitan living, with a vibrant lifestyle and leisure component that will complement its business environment.

One way URA hopes to infuse more vibrancy in the area is to designate certain zones ‘white sites’, which means developers can mix commercial, retail and residential components within a single project.

But while many of these new buildings will have a premium view of the bay area and encompass a mix of lifestyle and business facilities, they will not soar as high as the other buildings in the vicinity. This is another deliberate feature - planners do not want to obstruct the view of earlier developments.

Graduating arrangement

In fact, a glance at a picture of Singapore’s existing skyline reveals that very trend. The result is a dynamic yet uncluttered and harmoniously graduating arrangement of heights that do not have to vie for the best view.

One significant development now being built that will acquire some height and prominence in the cityscape is The Sail @ Marina Bay, a luxury condominium which, at 70 stories tall, will be among the 10 tallest residential buildings in the world when it is completed next year. Comprising two distinctively sail-shape towers that are bound to become iconic fixtures of the future skyline, it will provide 1,100 apartments with a splendid view of the bay area.

Another upcoming marquee project is the Marina Bay Financial Centre, a $2 billion complex of residential and commercial buildings that will peak at 55 stories. When it is eventually up, it is expected to add a considerable 150,000 sq ft of Grade A office space, effectively doubling what is currently available in Singapore. The first phase is expected to be ready by 2010.

In fact, when the entire Marina Bay area is fully developed and integrated with the existing financial district, it will be twice the size of London’s famous Canary Wharf financial district and will provide a combined total of 2.82 million sq m of office space, equalling what is available in Hong Kong’s main business centre.

The most prominent - and anticipated - of these new developments will, no doubt, be the Marina Bay Sands integrated resort that is set to open for business next year. It will be a ground-breaking project in many ways.

A drive across Benjamin Sheares Bridge, which overlooks the expansive site, reveals an orchestra of cranes and a flurry of construction work - an impressive sign of the scale of things to come.

Its one-of-a-kind Sky Park - a two-acre stretch of landscaped gardens that will be perched atop and bridge its three 50-storey hotel towers - will offer breathtaking views of the entire city. When completed, it will offer six million sq ft of retail and entertainment space, 3,000 hotel rooms and a plethora of lifestyle and leisure activities.

While it may not be the tallest upcoming structure, it will undoubtedly be deemed the crown jewel on the eventual skyline. Certainly, at an estimated cost of more than $5 billion, it is likely to be one of the most expensive projects of its kind in the world.

With Singapore’s expanding skyline gradually taking form, the fact that each new storey of every eventual building represents a business opportunity is not lost on the different businesses involved in the building industry.

A significant portion of the investment pouring into the city will go to them, as developers continue dreaming up more impressive edifices to meet those increasing demands.

In fact, the total amount generated by the construction and building industry here is expected to hit a whopping $55 billion by 2011.

Last year, the industry grew by almost 10 per cent and awarded $19 billion of contracts.

International building centre

While its position as a financial and leisure hub continues to solidify, Singapore is also becoming a centre for the international building and construction industry.

With such an array of opportunities available and its reputation for business efficiency, almost everyone in the industry’s supply chain is finding some reason to do business here. They are either directly involved in the local industry or use it as a regional hub to reach out to larger markets in the region.

A good example is the upcoming BEX Asia 2008 exhibition, when building material and equipment suppliers from around the world showcase their latest products and technologies in Singapore. The event, from May 21-23 at Suntec Singapore, is expected to attract prominent industry players, both local and international.

And so, as developers build bigger and taller, they will continue to redefine Singapore’s skyline in the process. From the smattering of grey monoliths that sprouted up in the early days of the economic boom to the myriad glistening peaks and pinnacles that scrape our skies today - and those that will join them in the future - the skyline represents the face of a nation which, as it matures, begins to look increasingly radiant.

Source : Business Times - 20 May 2008

It is closing the gap on top-ranked US; 2008 may be the year the US falls from its pole position

SINGAPORE remains the world’s second most competitive economy but is closing the gap on the top-ranked United States, according to an annual analysis.

Now in its 20th year, the World Competitiveness Yearbook (WCY) by Swiss business school IMD gives Singapore a score of 99.33 in its 2008 study, up from 99.12 last year. The US - firmly entrenched in pole position since 1994 - has the 100 perfect score.

But the latest report has IMD asking if the US run will continue - or go the way of Japan, which was by far the most competitive in 1989, when the WCY was first published but has since dropped out of the top league, beset by numerous domestic economic crises. (In the 2008 rankings, Japan is 22nd, up from 24th in 2007.)

Says Stephane Garelli, director of IMD’s World Competitiveness Center: ‘In our 20th anniversary edition this year, we may be seeing the US in the number one position for the last time. Singapore is closing the gap with the US and 2008 might be the turning point where the US falls from its leadership of top competitors.’

Taking lessons from Japan’s downfall in the 1990s, Prof Garelli says that the present turmoil in the US ‘bears some resemblance’ with past crises in Japan that followed ‘a period of economic boom, real estate price follies and exuberant assets expansion’.

But there are also huge differences between the two economic societies, he notes: Apart from ‘notable successes’ such as Toyota and Canon, much of Japanese industry was ‘paralysed’ by the 1990s as ‘the Japanese never practised creative destruction’.

The US, on the other hand, ‘because of its openness, resilience and entrepreneurship, always seems to find the means to re-invent itself in ways that Japan (and much of Europe) often lacks’, he says.

In any case, one takeaway from 20 years of analysing competitiveness: ‘No nation, however competitive, is immune to a breakdown, especially when it stems from the financial sector.’

The WCY - which sees competitiveness as essentially the capacity of a country to manage its long-term prosperity - uses a mix of hard statistical data and soft survey feedback for its analyses. In all, 55 economies are assessed on some 330 criteria in four broad factors: economic performance, government efficiency, business efficiency and infrastructure.

Singapore is third on economic performance (up from fourth last year); up to second on business efficiency (fourth in 2007); and retains for the second straight year its first and third places on government efficiency and infrastructure, respectively.

Singapore’s challenges are, in the short term, managing costs in a global inflationary environment, and in the medium term, becoming a globalised, entrepreneurial and diversified economy, IMD notes.

According to Prof Garelli, a more advanced economy increasingly focuses on the ’something else’ that makes the difference between economic growth and prosperity, such as sustainable development, quality of life, even happiness. ‘These objectives, which would not be attainable without economic growth, are very subjective, hard to measure and linked to national value systems,’ he says. ‘Managing the ’softer’ side of an economy is thus a priority for any leader today.’

Competitiveness encompasses all these dimensions, and remains the key to success and prosperity, he maintains.

Source : Business Times - 15 May 2008

THE Singapore economy has held up well despite slower exports in the past 18 months, an economist said yesterday.

HSBC senior economist Robert Prior-Wandesforde said that tech exports in particular have been contracting, but this has not drastically affected the economy.

‘What we’ve seen over the past 18 months is something unprecedented,’ he said. ‘At the same time that the electronics sector has been under pressure, Singapore’s gross domestic product growth has held up remarkably well.

‘If we had known how electronics exports were going to be, we might have thought GDP would be growing at, say, 2 to 3 per cent at the moment. But it’s not. It grew 7.2 per cent in the first quarter.’

This indicates that the economy has decoupled from the electronics sector and diversified into other areas, ‘many of which are not correlated with the US or the developed world’s economic cycle’, Mr Prior Wandesforde said.

These include marine and offshore engineering and pharmaceuticals, which have doubled and grown 85 per cent respectively in the past four years.

Speaking yesterday at International Enterprise Singapore’s open house, Mr Prior-Wandesforde said that ‘older industries’ such as financial services and construction have been reborn.

‘In the financial industry, for example, we’ve seen a heavy push into wealth management, which is structurally a huge growth area, going forward,’ he said.

‘So clearly, structurally, Singapore has changed massively. It has diversified away from some of the traditional sources of growth.’

He believes that the economy ‘will do pretty well’ regardless of any ‘global storm’, and predicts 6 per cent GDP growth this year.

Source : Business Times - 15 May 2008

INFLATION is set to peak in the coming months before falling to 4 per cent by the end of the year, said HSBC Bank economist Robert Prior-Wandesforde yesterday.

However, he expects overall inflation for the year to average 6 per cent because of higher oil and food prices.

The Monetary Authority of Singapore anticipates inflation this year to be in the upper half of the 4.5 per cent to 5.5 per cent range.

Inflation in March hit a 26-year high of 6.7 per cent.

Mr Prior-Wandesforde, who was speaking on the economic outlook for Singapore, said: ‘We think the central bank will need to raise its inflation projection…the size of the oil and food shocks has taken everyone by surprise.’

Oil hit a record high of nearly US$126 a barrel last week, and food prices have shot up recently due to supply shocks and rising demand.

Mr Prior-Wandesforde expects inflation in Singapore to reach a high of just over 7 per cent by next month, with electricity and petrol prices likely to go up.

But it should fall back to about 4 per cent by year end due to the dissipation of the effect of last year’s goods and services tax hike, and hit 3.5 per cent by the middle of next year.

DBS Bank economist Irvin Seah said of HSBC’s forecast: ‘Six per cent’s possible if food and fuel prices continue to creep upwards.’

He tips inflation to be 5 per cent this year.  Mr Prior-Wandesforde expects gross domestic product to grow by 6 per cent this year - at the upper end of the Government’s forecast range of 4 per cent to 6 per cent.

‘It will slow down gradually this year,’ he noted. ‘Some cooling in the Singapore economy is to be welcomed, because the economy was growing a little too fast, resulting in cost and price pressures.’

Source : Straits Times - 14 May 2008

How do you see the downturn in the US playing out? Will it be V-shaped, U-shaped or L-shaped? Given your prediction, how do you see that downturn affecting your organisation and how are you planning for it?

MY ASSESSMENT is that the US is likely to go through a U-shaped scenario, where the downturn is prolonged and takes longer to recover from. While the fallout from the sub-prime mortgage crisis is pretty much evident, the full extent of the damage has yet to manifest itself as there is usually a lag between what is reported and the actual impact on the economy. Given that the crisis has not bottomed out yet, I am not optimistic that the US downturn will take the form of a V-shape.

The situation in the US will definitely impact consumer confidence in Asia, and Singapore is unlikely to be spared. As a leading mode of cashless payment pitched at everyday spending, Nets will not escape unscathed once consumers start tightening their belts. Should our economy slow down, our business will certainly be affected.

However, the impact is unlikely to be significant as consumers will still need to purchase daily necessities, which have always been Nets’ traditional strongholds in the payments market. As a point of reference, Nets’ transaction volumes actually rose during the Sars crisis, when the retail economy took a hit and businesses floundered.

Against such an economic backdrop, our strategy is to remain prudent as a company in monitoring our costs and discretionary spending. This will ensure that Nets remains on course to expand beyond Singapore, in becoming Asiaâ€TMs preferred world-class solutions provider for payment and processing services.

- Poh Mui Hoon
CEO
Nets

US downturn may be U-shaped

With the recent data from US pointing to an unexpected lower unemployment followed by a spike in the stock market, it may indeed indicate a U-shaped recovery. Most companies have reported their financial results within expectations, but we do see some big companies missing their numbers. Hopefully, all the bad news from the finance sector is already out. Hence, the few factors that could be hampering a speedy economic recovery would be the ever-increasing petroleum prices and spiralling commodity costs. This current high inflation would eventually have a negative effect on the world economy that extends far beyond the US economy.

As a US-headquartered company, there are several steps that we can take to counter the effects of a slowing US economy.

Firstly, we will have to continue to source and grow new opportunities within Asia. Secondly, we will have to closely monitor our sales operations costs. It is imperative that we maintain our Singapore business while seeking to expand our sales opportunities into other markets such as Vietnam and even Cambodia. All employees will be expected and encouraged to watch all business expenditures carefully. Therefore, we will have to work more with less budget. We are cautiously optimistic about our strong pipeline in Asia and believe our growth rate will continue to accelerate and outshine all other regions.

- Benjamin Low
Managing Director, South-east Asia and India
Secure Computing

We are taking a moderate view of the situation and predict a U-shaped reversal of the trend in next 12-18 months. The loss from securitisation of housing loans initially estimated at US$100 billion could now hit US$1 trillion. The looming crisis has bequeathed a recession in the US economy which could last as long as two years.

Nonetheless, signs are encouraging. The US economy grew at an annual pace of 0.6 per cent in the first three months of 2008, slightly faster than expected. Fewer jobs were lost than expected - at 20,000 jobs in April. And measures are underway. The Federal Reserve has announced its seventh rate cut since September last year, bringing down the federal funds rate from 5.25 per cent to a mere 2 per cent. On top of that, the Federal Reserve has also lent billions of dollars to the banking sector to avoid a financial meltdown. But worrying signs persist. Consumer spending, a key driver of growth, rose by just one per cent in Q1 2008. However, it will receive a boost with the US government’s tax rebates.

The US economy has a ripple effect on the rest of the world. Shrinking margins will force many US companies to shift business to India and other low-cost countries, hence increasing offshoring and outsourcing. The key is for organisations to constantly innovate and provide the best solutions that increase the productivity of the business while helping the organisations to reduce operating costs.

- Pramod Ratwani
President and CEO
Consilium Software Inc

WHILE many economists have ruled out an L-shaped recession because of US’s aggressive monetary and fiscal policies, the US economy will face a U-shaped recession because of several factors. While the US central bank has helped regain some confidence in credit markets, particularly in its bold rescue of Bear Stearns, many investors are choosing to wait on the sidelines. This will further aggravate the US economy.

The impact of the US recession will be definitely felt in Singapore in several sectors which Prime Minister Lee Hsien Loong had highlighted in his May Day Rally. Because of the nature of our business and our reach of clients from a range of industries and countries, the GMP Group will be affected as well. However, we have faced similar challenges during the Sars outbreak in 2003. During that time, recruitment was at its lowest since the economic crisis in 1997. We capitalised on the demand for health screeners from local hospitals.

Such an experience has taught us to look for opportunities amid adversity - the US recession is no different. This is a good time for us to take stock and re-evaluate our business goals. The ability to adapt to market changes and the foresight of such change are some of the hallmarks of a successful company. GMP will channel its energies and resources to where talents are needed most and re-focus our business strategy. With this, I believe we will be able to weather the storm.

- Annie Yap
CEO
The GMP Group

PEERING into the future can be dangerous because one single event could change everything, but it seems the worst of the credit crisis has passed. Thatâ€TMs the message from heavyweight analysts, who say economic health now hinges on how well the US and other governments tackle inflationary pressures. This is likely to take months, suggesting a U-shaped curve.

CA is in a strong position because our technology is sound, essential and difficult to live without in the enterprise community. An interesting aspect is that our solutions are extremely helpful in times like this because they help enterprises to manage risk and control costs. The group is also safeguarded to a degree by the very nature of our business plan, which is cautious and prevents us from over-extending ourselves at times of uncertainty.

I also feel CA became even stronger this year after adopting a channel partner-led sales strategy in parts of Asia, including Singapore. As well as streamlining our cost structure, this bold move provides CA with broader coverage and deeper penetration of markets, which equals access to more prospective customers.

- Gavin Selkirk
Senior Vice-President & General Manager
CA Asia Pacific & Japan

I BELIEVE that the US economy will follow a U-shaped trajectory whereas Singapore will experience a V-shaped one. This stems from the fact that unlike the US, Singapore is small, adaptive, and has a government that is able to respond quickly to the needs of the economy. Besides, we have several large-scale projects in the pipeline, including the integrated resorts and Youth Olympics, which are expected to greatly boost our economy.

In the case of Best World, we have weathered various crises and economic downturns in our 18-year history and have built on our core competencies and capabilities. Being in the direct selling industry, Best World is fairly ‘economy-proof’. When times are good, we place emphasis on selling our innovative products; and when times are tough, we focus on grooming business builders. During the latter scenario, people are keen on making money and seeking business opportunities. We would then be able to support their needs via the entrepreneurial platform we offer. In addition, the group has developed into a regionally strong organisation that does not depend solely on Singapore for continued growth and success.

- Dora Hoan
Group CEO
Best World International Ltd

MY PREDICTION is that we’ll see a U-shaped trajectory, with a definite recovery at the end. However, I also believe that the fallout from the US sub-prime crisis is still in its early days, and thus the ‘bottom of the U’ will be at least 18 months to four years.

While much of Singapore trade is directly US-based, even non-US-direct trade will be affected simply by referral, as other economies we trade with also suffer setbacks for the same underlying reason.

Our organisation remains focused both internally, and in assisting Singapore companies, to continue to restrain and manage costs in the IT area, and look carefully at all near-term expansion plans for viability in this scenario.

- Peter Rigbye
Managing Director
PASR Technologies Pte Ltd

US downturn may be V-shaped

I BELIEVE that the US is likely to see a V-shaped downturn. To me, whether there is a technical recession in the US is moot, but the economy is likely to have slowed dramatically in the first half of 2008. The slowdown would have been more pronounced had the Fed not taken decisive actions for JP Morgan to rescue Bear Stearns, put more liquidity in the market and cut interest rates in quick succession. With these measures in place, I think the US economy is likely to show some signs of a recovery in the second half of the year once the government’s stimulus package kicks in.

Notwithstanding the slowdown in the US economy, demand for steel worldwide continues to be strong. The Middle East is undergoing a huge infrastructure and building boom fuelled by petro-dollars. The Chinese and Indian success stories are likely to continue for many more years to come. The other two Bric countries - Russia and Brazil - have also benefited from the rise of commodity prices and embarked on major infrastructure and building projects.

- Wee Piew
CEO
HG Metal Manufacturing Ltd

IN TERMS of the economic outlook for Asean, I will go with the V-shaped projection. The US slowdown will inevitably have some impact on the region’s economic performance, but the foundation that the region has built over the past decade is strong enough for it to weather a downturn and see its economy bounce back quite quickly.

The Asean region particularly has shown strong resilience in the face of the slowing US economy. The service sector, for example, is one area that Asean is performing exceptionally well in. Hospitality establishments understand the importance of maintaining high service standards to continue to attract the growing influx of visitors.

The outlook for DoCoMo interTouch also remains positive. Even in times of economic slowdown, renowned hotel brands will not cut back on providing first-class broadband Internet and in-room entertainment to their guests. We therefore plan to continue our rapid expansion into new markets to ensure support for our global hotel partners.

- Charles Reed
CEO
DoCoMo interTouch

CORPORATE America has the uncanny ability at turning around businesses and entreprises that are in trouble or in dire straits. It is a characteristic of the US corporate and business culture - ‘bite the bullet, take the hit, restructure and start on a clean slate’.

Therefore, I am cautiously optimistic that the US economy will follow a V-shaped trajectory which involves a quick recession, followed by a quick rebound. My prediction is also predicated on the fact that any prolonged recession in the US is bad for the global economy; the economic forces, including that of government interventions, will provide the necessary check and balance to ensure that this will not happen. If the lower unemployment rate announced recently is anything to go by, the US may be getting out of the recession.

In times like this, CEOs should follow the key economic indicators closely, from as many sources as possible, to monitor the situation. I would carry out scenario planning to ensure that when the turnaround happens, I have the plan ready, be it Plan A, Plan B or Plan C.

While most companies may adopt a cautiously optimistic stance, given the current climate, it would be to their advantage and in their interests to avoid the pitfall of underscoping the opportunities, which often leads to under-providing for critical resources such as human capital, manufacturing capacity and financial capital to win a larger slice of the upturn.

- Lim Soon Hock
Managing Director
Plan-B Icag Pte Ltd

THE latest indicators on the US economy seem to suggest that we might be looking at a V-shaped recession in the US, and a bit of a plateau for Asia.

Despite global instability, most of the Asian economies look surprisingly resilient. While we may not see the growth rates of the past few years in Asia, there is still significant latent demand, tremendous desire to consume and sufficient resources to support this desire.

By focusing on the fundamentals - delivering the business outcomes that our customers are looking for (greater cost efficiency, more performance, security and value-added telecoms services) - Cable & Wireless is enabling our customers to weather the current business environment.

- Nick Lambert
President of Asia Pacific
Cable & Wireless Europe, Asia & US

Other views

NO ONE can say with certainty how the US economy will play out or its impact on Asian economies, although the next few months will give a clearer indication of where it is headed. I prefer to be a cautious optimist. We have learnt much from the last Asian crisis and many Asian economies today are in a better position to handle the situation than before.

I believe that we are only digging our own graves if we let ourselves be too affected by the doom and gloom surrounding the US economy - we cannot let it become a self-fulfilling prophecy. For example, if there is an opportunity for me to expand my business further, I would seize it rather than be paralysed into non-action by all the ‘what ifâ€TMs’. Of course, recognising how things could play out for the worse, I would not, at the same time, be on an expansion or spending spree.

Those who are in the retail business like us are often the first to experience the effects of a downturn. Instead of making two or three shirts in one go, some customers may cut back and make only one or postpone the spending. Fortunately, business has been steady and we have not noticed any out of the ordinary drop in sales. We are looking to grow organically and looking at extending special privileges to reward loyal customers, while growing a base of newer and younger customers.

CYC is not making any special provisions to deal with a financial crisis. Rather, we will stick with our tried and tested values: prudent spending, hard work and quality service and products.

- Fong Loo Fern
Managing Director
CYC The Custom Shop Pte Ltd

WE BELIEVE that the bottoming of the US economy is underway but this could be an extended process due to the damage done to key economic segments such as housing. The good news is that accommodative fiscal stimulus and monetary policy have been put in place to reflate the economy. In addition, corporate balance sheets excluding financials remain strong and exports are healthy, aided by a cheaper US dollar.

As such, we think the depth of the downturn may not be as severe as some would believe, but it will take some time before the impact of policy stimulus filters down into the real economy. From a corporate perspective, we need to tighten our belts and balance the financial spreadsheets while we continue to grow our footprint in Asia during this difficult period.

- Deborah Ho
CEO
DBS Asset Management Ltd

WE HAVE ruled out the possibility of a severe L-shaped downturn in the US economy. Though somewhat belated, the US Federal Reserve had acted, thus calming the market turbulence considerably.

We feel that the most likely scenario would be somewhere between the V and U-shaped economic downturn - not terribly harsh - but would take a longer period (from 12 to 18 months) to recover as more unexpected problems emerge.

There are two major problems we face. With the volatile exchange rates, we insist that some customers pay in Sing dollars for services rendered and products delivered.

The other related crisis is the shocking rise in the cost of living. As we have done in the past, our company has to go through this difficult phase as a united, unique family - without any retrenchment. Such a scenario exists globally and is a storm we are prepared to tide over.

- R Theyvendran, PBM
Chairman/Managing Director
Stamford Media International Group of Companies

WHILE I wish for a V-shaped recovery, it’s just my hope. V-shaped, L-shaped or U-shaped, it’s a game of predicting and there are very few who can accurately forecast the path the US economy would take. It is a high-risk game, and my advice to the investor would be to always behave as if a bad market is around the corner, even when the market goes up. This way, your guard is always up and you will always do your research well, hedge bets against sensational reports and be vigilant with your funds.

Never play with money you donate have and never pile up your debts, because in an L-shaped recovery, this could end up being your downfall. Ultimately, when facing uncertainty, it is always a safe bet to consult your financial adviser.

- Gary Harvey
CEO
ipac Wealth Management Asia

AS A region, South-east Asia still has tremendous growth opportunities backed by strong economies in Indonesia, Thailand, Malaysia and Singapore, and a combined GDP of more than 690 billion euros (S$1.459 trillion) per annum. With such impressive figures, TNT is confident that the region will remain robust and resilient even as the US economy slows down, and we believe we’ll see a rebound in the US in the near future. And with the talented workforce and stable infrastructure here, we believe businesses will withstand the current economic downturn.

We expect growth momentum for TNT to increase as we have always maintained a long-term business strategy to successfully build on our capabilities, to ensure that we remain nimble in the highly competitive global business landscape. As part of this strategy, we recently announced a 100 million euro investment in this region that includes the thrice-a-week flights of our Boeing 747-400ER freighter into Singapore, to meet growing demand for air freight services in the region.

- Onno Boots
Regional Managing Director
TNT South-east Asia

WITH US consumer spending growing at its weakest pace, the sub-prime mortgage problems still unravelling, a weakened dollar and high crude oil prices, it is really anybody’s guess how the US economic downturn will pan out. I hope that it will be a quick recession with a quick rebound. Any prolonged US recession will affect the global economy.

Our strategy, even before the current gloomy scenario, was to grow our service offerings, expand our customer base and explore new market opportunities in the region so as to be less dependent on a single market. We will consider ways to take advantage of the cheaper US dollar, utilise hedging instruments to minimise our risk exposure, and innovate for better cost efficiency.

- EH Lim
CEO
Avi-Tech Electronics Ltd

TECHNICALITIES aside, I believe the US has already entered a recession. We are probably looking at a V or U-shaped dip rather than an L-shaped scenario due to a number of factors including a still robust labour market, low interest rates and inflation and continued leadership in technology and innovation which will facilitate growth.

Singapore will only be marginally affected by the US slowdown; only 10 per cent of Singapore’s exports go to the US, with 90 per cent going to the European Union and regional trade partners where strong growth continues.

At Talent2 we continue to support our clients throughout the business cycle. We ensure our client base is diversified across sectors so that if one sector slows down, for instance financial services, we can pick up the slack in other sectors such as energy, construction and hospitality where demand for talent remains strong.

- Matt Beath
CEO
Talent2 International - Singapore

THE recovery could be V-shaped, U-shaped, L-shaped or even W-shaped. It doesn’t matter. What is important is where are we now in relation to these economic cycles. Going forward what should we do? And are there any dramatic shifts in mega-trends or changes in the global market space that demand that we conduct our business or investments differently?

I would say, as financial adviser and portfolio manager to HNWs (high-net-worth individuals), we were more nervous four months back than now.

In every major crisis, there will always be a notable ‘big name’ victim. On March 14, we saw the plight of an 85-year-old institution, Bear Stearns. Bear announced a rescue by JP Morgan Chase and the Fed. It once traded as high as US$172 but was sold to JP Morgan at US$2 a share, later renegotiated to US$10. It was Fortune’s top securities firm in the ‘America’s Most Admired Companies’ survey for three years running, from 2005 to 2007.

History has shown that when a ‘big name’ victim emerges, it is normally the beginning of a healing process for an ‘injured and over-fed market’. Will there be another casualty in the months to come? Possibly, one more. But we at GYC Investment Desk believe that 80 per cent of the risk has been removed.

Going forward, if we have $1 to invest, we would have already invested 30 cents two months back in March and we will invest another 30 cents in the next three months. And we will continue to monitor the situation to further invest the remaining 40 cents when the opportunities arise.

Our favoured asset class remains high-quality equities. Implied yield of equities are still higher than bonds. Balance sheets are still healthy, so are profit margins. Valuations are at a historical mid-to-low range. Emerging markets are offering growth and a US dollar shield. The crisis of confidence appears to be ending or simmering down.

Sub-prime-related writedowns 70-80 per cent disclosed + big-name casualty = improved investing environment compared to three months ago. It is time to be contrarian, not time to realise losses. Look to shift towards more aggressive allocation. We expect equities to reward within a three to four-year time horizon.

The ability to recognise that there is a major shift of power in the years to come is important. There is certainly more than one engine of global growth in the next decade. History has shown the rise and fall of major empires. We are certainly looking at a turning point of a significant transfer of power in the world economy.

- Goh Yang Chye
Managing Director
GYC Financial Advisory Pte Ltd

IT IS very hard to know how the downturn in the US will play out. And, as Warren Buffett told us, even if you knew what was going to happen in the economy, you still wouldn’t necessarily know what was going to happen in the stock market.

The increased volatility we have seen over the last year reflects systematic instabilities, which will take time to fix. In such an uncertain world, we think that investors will favour fund managers whose process they can understand. With our simple, long-term stock picking approach, we believe that we are well-positioned strategically, whatever the shape of the recovery.

- Hugh Young
Managing Director
Aberdeen Asset Management Asia

THE US slowdown has some way to go. While corrective measures have been taken, the damage to the US financial system created by the sub-prime problem cannot be repaired overnight. Losses have been made by companies and by individuals. Consumers have become unsettled by falling house prices and by widely reported job losses.

Twelve months of very sluggish activity seems likely before activity begins to pick up. We expect our Singapore unit trust business to grow in the next 12 months, but more slowly than in the previous 12 months. Singaporeans may invest more conservatively as a result of the uncertainty caused by the US economic situation.

- Lindsay Mann
Regional Head, Asia
First State Investments

FORMER Federal Reserve chairman Alan Greenspan has said in an interview that the US has fallen into an ‘awfully pale recession’. I certainly hope the economic downturn in the US will turn out to have a V-shaped recovery.

Despite weakening consumer spending in the US and the challenging market conditions faced by the electronics industry, we believe the rapid development in Asian economies will continue to offer opportunities for us. The important things are to manage business risks, stay focused on executing to strategy, and continue to stay ahead of competition.

At times like this, we will maintain our R&D investment and emphasise innovation across the group to ensure that we keep developing new applications and technologies for our customers. Since our transformation to a total solutions provider to Asiaâ€TMs electronic manufacturers and industrial corporations, we now cater to wider customer segments and cover more geographical markets.

Having diversified our business and markets, we believe we are better placed to cope with any downturn in a particular sector or market.

- Albert Phuay
Chairman and Group CEO
Excelpoint Technology Ltd

SCENARIO #1 V-shape: The US federal funds rate will drop further to one per cent by September 2008. By then, the market is expected to rebound strongly ahead of the Nov 4 presidential election. This will lead to a Santa Claus rally in December 2008.

Scenario #2 U-shape: By March 2009, the US recession would have lasted for 16 months, which has happened only twice in the past 60 years.

Scenario #3 L-shape: From March 2009, if the US economy continues to stagnate in the face of rising inflation, then we are facing prolonged stagflation which will eventually lead to the great depression of the world economy.

- Clemen Chiang
CEO
Freely Business School

OPINIONS conflict as to whether the US is entering a recession, is in the midst of an extended decline, or is exiting a shallow downturn. The duration of this economic cycle, and its combination of contributing factors (shaky credit markets, rising energy prices, stagnant employment), are historically unprecedented - making the outcome difficult to predict. At present, we see no signs that conditions are dramatically worsening or improving.

Kelly Services’ strategy is to diversify geographically, lessen our dependence on the US economy, target expanding markets around the globe, increase our skilled professional and technical staffing services, place more emphasis on outsourcing and consulting services, and focus on cost control. Those actions have allowed us to minimise risk, remain profitable, and expand sales.

- Dhirendra Shantilal
Senior Vice-President of Asia Pacific
Kelly Services

THE reality of a downturn in the US is starting to hit home, with businesses across the globe now starting to brace for and ideally reduce the impact of the impending slowdown in the global economy. Although there will still be growth in certain segments across various markets, the ripple effects of reduced corporate spending and consumer demand are undeniable. However, even in periods of reduced activity, there are still opportunities for the resourceful.

A downturn, V, U or L-shaped in nature, would unlikely have any influence on the threat posed to businesses and organisations from malicious online attacks via email, for example, or through denial of service attacks, spam, etc. In fact, a downturn could very likely spawn a flood of spam and phishing campaigns, heightening the need for security. In fact, spam attacks have already demonstrated their immunity to recessionary pressure both in the US and here in Asia in the 1990s.

The Radicati Group recently published a report that estimates 78 per cent of the 210 billion messages sent worldwide each day are unsolicited and squeezing through corporate firewalls; a disturbing statistic for companies trying to improve the efficiency of their mail and web servers. Proofpoint operates in the area of email security and while we see mega projects being scaled down in investment budgets, our position as a best of breed player in the email security space does afford us some new areas of opportunity.

In this climate of reduced spending, as we continue to help our customers better align their defences to these threats, we are seeing that any US slowdown will have little impact on Proofpoint’s triple digit growth targets for the Asian region.

- David Habben
Regional Manager - Asia
Proofpoint

Source : Business Times - 12 May 2008