More SMEs own office spaces to save on rental costs
By Millet Enriquez | Posted: 20 July 2011 2236 hrs
SINGAPORE: More small and medium enterprises (SME) are taking steps to own their business premises.
Experts said the upturn in Singapore's economy encouraged companies to increase their capacity.
And SMEs are also opting to buy office, warehouse and factory space to save on rental costs which analysts said could rise by 15 to 18 per cent this year.
Packaging solutions provider Greenpac believes consolidating its business under one roof will be beneficial in the long-term.
It will spend S$20 million on a new facility in Tukang Innovation Drive to move its warehouse and offices in the next 12 months.
This will shave some 30 per cent from its monthly rental costs of S$140,000.
Susan Chong, CEO of Greenpac, said: "After so many years of paying rent, I think it will be more viable to own the property. So end of the day, at least whatever you paid you still own them."
Low interest rates and the need to insulate against rising rentals are driving firms to seek loans.
OCBC Bank said it has seen a three-fold increase in the number of applications for mortgage loans for commercial properties in the past six months.
Tan Chor Sen, head of Emerging Business of OCBC Bank, said: "It's due to real demand for such properties, as well as the market's reaction to the various property cooling measures that have been introduced, as investors look at redirecting their surplus monies to alternative investment sources.
"Amongst the buyers, we see a growing interest in industrial properties, with many of them investing in such properties for business use such as manufacturing and storage of goods and raw materials,"
DBS has also seen growth in its commercial and industrial property loans among SMEs.
Experts said the trend will continue as more companies see the benefit of owning spaces rather than leasing them.
Alfred Chia, chief executive officer of financial advisory firm SingCapital, said: "Generally banks are willing to provide support for business owners to buy their own premises for their own use of up to at 80 per cent loan quantum.
"So based on a half a million dollar kind of property investment, generally, all you only need to do is come up with S$100,000 bearing in mind all the stamp duties and miscellaneous charges.
"The first point of consideration is, based on the rental I am paying now, can I better make use of these resources if I'm to own a space? For example, if I buy a space and my installment can be cheaper than my rental, then I would say that is a very good point of consideration. And any capital appreciation should come as a kind of secondary consideration."
SMEs are likely to buy those properties that are in city fringes or outskirts where Grade C offices and industrial properties are more affordable.
Donald Han, vice-chairman of Cushman & Wakefield, said: "Usual budget would be anything from about less than S$3 million in that sense.
"And you are looking at price per square foot affordability can range between S$300 per square foot to as high at about S$1,500 to S$1,600 per square foot."
"The first half of this year, rents have gone up by at least 10 per cent. We expect a more stable second half where rents will probably go up another 6 per cent. In all, we are looking at 15 to 18 per cent increase this year primarily led by prime office buildings."
But experts warn that SMEs must also be cautious before making the leap, as a rise in interest rates could impact their cash flow and ability to pay their mortgage.
And there are also other headwinds.
Edwin Khoo, head of Enterprise Banking of DBS Bank, said: "Going forward, uncertainties in the macroeconomic environment such as the anaemic growth in the US, debt situation in the Eurozone and threat of a hard landing in China may have an impact on demand for commercial and industrial property loans."
- CNA/ck
- wong chee tat :)
Monday, July 25, 2011
Rice price hike possible due to new Thai policies
Rice price hike possible due to new Thai policies
By Ryan Huang | Posted: 20 July 2011 2237 hrs
SINGAPORE: Thailand is expected to roll out policies to help its rice farmers get higher prices by the end of the year.
And there are some concerns this might affect importing countries like Singapore.
Some industry players said this might drive prices up by around 50 per cent, but some analysts said there is no need to panic yet because the eventual impact from the plans may not be significant.
Thailand's rice farmers can expect to earn more when a new policy to guarantee them higher prices comes into force by year end.
Giving farmers a minimum price to sell their rice was one of the key policy changes for Thailand's incoming government. Prime Minister-elect Yingluck Shinawatra had pledged to buy unmilled rice or paddy from growers at 15,000 baht, about 50 per cent above current prices.
But this has raised concerns because it will mean rice exports from Thailand could cost more in the future.
Under the proposed policy, farmers can sell their rice to the government for at least 50 per cent above current prices.
And even before it has been rolled out, there has already been some impact on the market.
Andrew Tan, Chairman of Singapore General Rice Importers Association, said: "A lot of rice millers in Thailand are anticipating this price increase. So they are keeping their paddy, resulting in a (lesser) supply of rice in the market, and causing prices to increase.
"So far rice prices have been going up by about 5 to 10 per cent from the Thailand side. And Singapore importers are currently absorbing this cost; two reasons - because of the strong Singapore dollar, and second, we have been buying rice and stockpiling them in the warehouse before this announcement."
Thailand's rice-export benchmark was set last week at US$555 a tonne, according to the Thai Rice Exporters Association.
And some industry players have raised the alarm that prices could surge to about US$810 a tonne by the end of the year, according to the median estimate of six millers, exporters and traders in a survey by Dow Jones.
But some analysts said it is still early to be overly concerned.
Santitarn Sathirathai, an economist at Credit Suisse, said: "There are two important points to consider. First point is that the government has to buy a large share of produce each year in order to have a big influence on the price. Given that Thailand produces as much as 30 million tonnes per year, that's going to take a lot of money from the government in order to buy up a huge amount.
"By way of reference, back in 2008 when rice prices already peaked, the government already bought as much as 30 per cent of rice at 20 per cent above market price, and that didn't really prevent the price from falling.
"Second point, we are not sure if it's even in the government's interest to bump up the market price of rice too much. After all a lot of the poor people in Thailand are net buyers of rice, which means an increase in price rice would hurt them as well, and inflation in Thailand is already a problem.
"So what we might see is that the government may choose to act as an intermediary where they buy rice at a higher price and sell it to the wholesalers and the exporters' market at a lower price, therefore subsidising farmers and the consumers at the same time, and bearing the loss the fiscal balance on the state-owned bank's balance."
Singapore retailers like Sheng Siong Supermarket said they are monitoring the situation closely.
"It is too early to tell whether prices of Thai rice will be affected. We also source our rice supplies from Vietnam," said a spokesperson for Sheng Siong Supermarket.
There will be other factors that will have an impact on rice prices as well. This includes the strength of the Singapore dollar, and whether markets such as India and Vietnam match any price increases.
There will be a clearer picture when Thailand reveals more details of its policy, which is not expected to be rolled out at least until November.
Any potential price increases could be capped by a move by India on Monday to offer cheaper alternatives on the export market.
India approved its first rice export in three years, giving the green light to export of 1 million metric tons of non-basmati rice from private companies. This will be sold at a minimum price of $400 a tonne.
Analysts said the move could help ease the pressure on global prices in the short term, but longer term prices will still be shaped by details on Thailand's new policy.
"While it remains unclear how quickly the new government will implement the campaign promise, impact on the importing economies, Singapore in particular will be notable. Thailand is one of the main rice suppliers for the Republic and an increase there could percolate to local supplies here," said Radhika Rao, Regional Economist at Forecast.
"In our view, a few offsetting measures will cushion the full impact of higher external prices. Supermarkets could use existing stockpiles to temper sharp increases; local sourcing companies could seek alternative suppliers - Vietnam, Cambodia India, Bangladesh to name a few," she added.
- CNA /ls
- wong chee tat :)
By Ryan Huang | Posted: 20 July 2011 2237 hrs
SINGAPORE: Thailand is expected to roll out policies to help its rice farmers get higher prices by the end of the year.
And there are some concerns this might affect importing countries like Singapore.
Some industry players said this might drive prices up by around 50 per cent, but some analysts said there is no need to panic yet because the eventual impact from the plans may not be significant.
Thailand's rice farmers can expect to earn more when a new policy to guarantee them higher prices comes into force by year end.
Giving farmers a minimum price to sell their rice was one of the key policy changes for Thailand's incoming government. Prime Minister-elect Yingluck Shinawatra had pledged to buy unmilled rice or paddy from growers at 15,000 baht, about 50 per cent above current prices.
But this has raised concerns because it will mean rice exports from Thailand could cost more in the future.
Under the proposed policy, farmers can sell their rice to the government for at least 50 per cent above current prices.
And even before it has been rolled out, there has already been some impact on the market.
Andrew Tan, Chairman of Singapore General Rice Importers Association, said: "A lot of rice millers in Thailand are anticipating this price increase. So they are keeping their paddy, resulting in a (lesser) supply of rice in the market, and causing prices to increase.
"So far rice prices have been going up by about 5 to 10 per cent from the Thailand side. And Singapore importers are currently absorbing this cost; two reasons - because of the strong Singapore dollar, and second, we have been buying rice and stockpiling them in the warehouse before this announcement."
Thailand's rice-export benchmark was set last week at US$555 a tonne, according to the Thai Rice Exporters Association.
And some industry players have raised the alarm that prices could surge to about US$810 a tonne by the end of the year, according to the median estimate of six millers, exporters and traders in a survey by Dow Jones.
But some analysts said it is still early to be overly concerned.
Santitarn Sathirathai, an economist at Credit Suisse, said: "There are two important points to consider. First point is that the government has to buy a large share of produce each year in order to have a big influence on the price. Given that Thailand produces as much as 30 million tonnes per year, that's going to take a lot of money from the government in order to buy up a huge amount.
"By way of reference, back in 2008 when rice prices already peaked, the government already bought as much as 30 per cent of rice at 20 per cent above market price, and that didn't really prevent the price from falling.
"Second point, we are not sure if it's even in the government's interest to bump up the market price of rice too much. After all a lot of the poor people in Thailand are net buyers of rice, which means an increase in price rice would hurt them as well, and inflation in Thailand is already a problem.
"So what we might see is that the government may choose to act as an intermediary where they buy rice at a higher price and sell it to the wholesalers and the exporters' market at a lower price, therefore subsidising farmers and the consumers at the same time, and bearing the loss the fiscal balance on the state-owned bank's balance."
Singapore retailers like Sheng Siong Supermarket said they are monitoring the situation closely.
"It is too early to tell whether prices of Thai rice will be affected. We also source our rice supplies from Vietnam," said a spokesperson for Sheng Siong Supermarket.
There will be other factors that will have an impact on rice prices as well. This includes the strength of the Singapore dollar, and whether markets such as India and Vietnam match any price increases.
There will be a clearer picture when Thailand reveals more details of its policy, which is not expected to be rolled out at least until November.
Any potential price increases could be capped by a move by India on Monday to offer cheaper alternatives on the export market.
India approved its first rice export in three years, giving the green light to export of 1 million metric tons of non-basmati rice from private companies. This will be sold at a minimum price of $400 a tonne.
Analysts said the move could help ease the pressure on global prices in the short term, but longer term prices will still be shaped by details on Thailand's new policy.
"While it remains unclear how quickly the new government will implement the campaign promise, impact on the importing economies, Singapore in particular will be notable. Thailand is one of the main rice suppliers for the Republic and an increase there could percolate to local supplies here," said Radhika Rao, Regional Economist at Forecast.
"In our view, a few offsetting measures will cushion the full impact of higher external prices. Supermarkets could use existing stockpiles to temper sharp increases; local sourcing companies could seek alternative suppliers - Vietnam, Cambodia India, Bangladesh to name a few," she added.
- CNA /ls
- wong chee tat :)
Consumers tweak golden taste
Consumers tweak golden taste
By Joanne Chan, Zhao Quan Yin | Posted: 19 July 2011 2231 hrs
SINGAPORE: With gold prices racing to record highs, consumers are tweaking their jewellery preferences to get the most bang for their buck.
To compensate for higher gold prices, young couples are turning to pieces that are hammered thinner but appear bigger from the front.
Jewellers said most wedding couples have a budget of between S$1,000 and S$2,000, and this hasn't changed much over the years.
With prices on the rise, couples are making do with less - a previous budget for 30 grammes of gold will now only fetch 20 grammes.
However, some buyers still see value in investing in gold.
"Some customers have confidence in gold prices. For them, they will like to keep gold as a kind of security. But some of them may not want to buy gold bars, so they tend to turn to more traditional gold ornaments, like bracelets or necklaces. Some buy up to 200 to 300 grammes (of gold) for keeping," said Mr Yeo Hiang Meng, managing director at Orient Goldsmiths & Jewellers.
Gold prices have been rising steadily for the last 10 days, soaring above US$1,600 per ounce on Monday.
The precious metal is seen by investors as a safe haven during times of global economic turmoil.
- CNA/cc
- wong chee tat :)
By Joanne Chan, Zhao Quan Yin | Posted: 19 July 2011 2231 hrs
SINGAPORE: With gold prices racing to record highs, consumers are tweaking their jewellery preferences to get the most bang for their buck.
To compensate for higher gold prices, young couples are turning to pieces that are hammered thinner but appear bigger from the front.
Jewellers said most wedding couples have a budget of between S$1,000 and S$2,000, and this hasn't changed much over the years.
With prices on the rise, couples are making do with less - a previous budget for 30 grammes of gold will now only fetch 20 grammes.
However, some buyers still see value in investing in gold.
"Some customers have confidence in gold prices. For them, they will like to keep gold as a kind of security. But some of them may not want to buy gold bars, so they tend to turn to more traditional gold ornaments, like bracelets or necklaces. Some buy up to 200 to 300 grammes (of gold) for keeping," said Mr Yeo Hiang Meng, managing director at Orient Goldsmiths & Jewellers.
Gold prices have been rising steadily for the last 10 days, soaring above US$1,600 per ounce on Monday.
The precious metal is seen by investors as a safe haven during times of global economic turmoil.
- CNA/cc
- wong chee tat :)
Room for growth in Asia's insurance market
Room for growth in Asia's insurance market
By Millet Enriquez | Posted: 18 July 2011 2306 hrs
SINGAPORE: Asia's insurance market is still largely untapped and industry players must continue to develop talents and understand the risks in the market.
That's according to Deputy Prime Minister and Minister for Finance and Manpower Tharman Shanmugaratnam who spoke at the launch of the new offices of French insurer AXA on Monday.
While Asia's insurance premiums are expected to grow 10 per cent yearly, the minister said longevity, environmental and socio-economic risks are also rising.
French insurer AXA is keen to expand its business in Singapore and Asia.
As part of its growth plans, AXA unveiled its new offices that will house more than 600 of its staff in general and life insurance. Located at 8 Shenton Way, the AXA Tower stands 235 metres with 52 storeys.
AXA is also looking to grow its 2 per cent share in the life insurance market currently dominated by Prudential and AIA in Singapore.
John Dacey, AXA group vice chairman for Asia Pacific, said: "We think we can be the top three players in Singapore life insurance market in the long term.
"We are not there today and we would like to become there. I think in general insurance, we are already towards the top."
AXA commands a 9.5 per cent market share in general insurance with health, cargo and motor as its main products.
For its expansion in Singapore, AXA plans to grow its advisers to 1,000 by 2012.
It will seek partnership to expand its life insurance market and launch new products that offer financial protection and disability and death benefits.
Last year, the life insurance industry saw around S$1.6 billion worth of new business premiums, according to data from the central bank and the trade industry - growing 16 per cent on-year from S$1.4 billion in 2009.
Still, industry studies show most Singaporeans are under-insured.
AXA is also focused on building its presence in Asia, where insurance premiums are expected to grow 17 per cent to US$957 billion in 2015.
But it must be prepared to face the challenges.
Mr Tharman said:"What's important for us is to position ourselves to take advantage of this, not just from the point of view of grabbing business because it's out there and growing.
"Take advantage of it by deepening skills and capabilities so as to develop better solutions for Asia going forward. Developing your people is critical and investing in research is equally critical."
So far, Indonesia and Thailand are AXA's key Asian markets for life insurance where it enjoys market share of 16 and 6 to 7 per cent, respectively.
- CNA/ck
- wong chee tat :)
By Millet Enriquez | Posted: 18 July 2011 2306 hrs
SINGAPORE: Asia's insurance market is still largely untapped and industry players must continue to develop talents and understand the risks in the market.
That's according to Deputy Prime Minister and Minister for Finance and Manpower Tharman Shanmugaratnam who spoke at the launch of the new offices of French insurer AXA on Monday.
While Asia's insurance premiums are expected to grow 10 per cent yearly, the minister said longevity, environmental and socio-economic risks are also rising.
French insurer AXA is keen to expand its business in Singapore and Asia.
As part of its growth plans, AXA unveiled its new offices that will house more than 600 of its staff in general and life insurance. Located at 8 Shenton Way, the AXA Tower stands 235 metres with 52 storeys.
AXA is also looking to grow its 2 per cent share in the life insurance market currently dominated by Prudential and AIA in Singapore.
John Dacey, AXA group vice chairman for Asia Pacific, said: "We think we can be the top three players in Singapore life insurance market in the long term.
"We are not there today and we would like to become there. I think in general insurance, we are already towards the top."
AXA commands a 9.5 per cent market share in general insurance with health, cargo and motor as its main products.
For its expansion in Singapore, AXA plans to grow its advisers to 1,000 by 2012.
It will seek partnership to expand its life insurance market and launch new products that offer financial protection and disability and death benefits.
Last year, the life insurance industry saw around S$1.6 billion worth of new business premiums, according to data from the central bank and the trade industry - growing 16 per cent on-year from S$1.4 billion in 2009.
Still, industry studies show most Singaporeans are under-insured.
AXA is also focused on building its presence in Asia, where insurance premiums are expected to grow 17 per cent to US$957 billion in 2015.
But it must be prepared to face the challenges.
Mr Tharman said:"What's important for us is to position ourselves to take advantage of this, not just from the point of view of grabbing business because it's out there and growing.
"Take advantage of it by deepening skills and capabilities so as to develop better solutions for Asia going forward. Developing your people is critical and investing in research is equally critical."
So far, Indonesia and Thailand are AXA's key Asian markets for life insurance where it enjoys market share of 16 and 6 to 7 per cent, respectively.
- CNA/ck
- wong chee tat :)
4,200 Honda cars in Singapore affected by recall
4,200 Honda cars in Singapore affected by recall
Posted: 25 July 2011 1828 hrs
SINGAPORE: Some 4,200 Honda cars sold by Kah Motor in Singapore are affected by a global recall involving 200,000 passenger cars.
Japan's Honda Motors said they have defective engine parts.
It said defective engine bolts may cause trouble with the motor cooling system and could eventually cause the engines to stop.
The company said it had received 63 customer reports in Japan of engine malfunctions as a result of the defect, but said none had led to accidents.
Kah Motor said three models are affected in Singapore - the Stream and the 1.6- and 1.8-litre versions of the Civic manufactured between 2008 and 2010.
It said affected customers will be contacted to bring their cars in for repairs which will take about 40 minutes.
The distributor said it is safe to drive the cars, but owners should call if they encounter engine stalling or abnormal sounds from the engine.
- CNA /ls
- wong chee tat :)
Posted: 25 July 2011 1828 hrs
SINGAPORE: Some 4,200 Honda cars sold by Kah Motor in Singapore are affected by a global recall involving 200,000 passenger cars.
Japan's Honda Motors said they have defective engine parts.
It said defective engine bolts may cause trouble with the motor cooling system and could eventually cause the engines to stop.
The company said it had received 63 customer reports in Japan of engine malfunctions as a result of the defect, but said none had led to accidents.
Kah Motor said three models are affected in Singapore - the Stream and the 1.6- and 1.8-litre versions of the Civic manufactured between 2008 and 2010.
It said affected customers will be contacted to bring their cars in for repairs which will take about 40 minutes.
The distributor said it is safe to drive the cars, but owners should call if they encounter engine stalling or abnormal sounds from the engine.
- CNA /ls
- wong chee tat :)
Two-thirds of NTU fresh grads secure jobs before convocation
Two-thirds of NTU fresh grads secure jobs before convocation
By Evelyn Choo | Posted: 25 July 2011 1858 hrs
SINGAPORE: A record 9,066 students are graduating from the Nanyang Technological University (NTU) this year.
And the cohort is riding on the waves of a tight job market, with two-thirds already securing employment.
Brothers Harry and Henry Zhuang have just been conferred their Digital Animation degrees and will be working in the same company.
"Actually we are quite surprised that the company is going to hire both of us. But he ensured that we are going to work on two different projects," said Henry, who graduated from NTU's School of Art, Design & Media.
Harry said: "I think there are jobs available. It's whether you're willing to work or not."
The brothers make up two-thirds of a cohort that have secured jobs before graduating.
In a preliminary study conducted by the university, it was also found that the top five earners from NTU's Class 2011 are drawing entry-level salaries of above $10,000.
NTU's new president predicts a significant proportion would be living and working abroad. The challenge then is to ensure future graduates have the competitive edge in a globalised job market.
"I think we've got to change the curriculum to increase communication skills. Apart from being good mechanical engineers, physicists or biologists, you have to learn social skills, cultural intelligence, because the work market is international," said NTU's president Professor Bertil Andersson.
"Many people say, for example, the SMU students are much better at communicating than NTU. I don't know if that's true, but certainly we should make the NTU students better in communication, having more social and international skills," he added.
Professor Andersson, who succeeded Professor Su Guaning whose term lasted eight years, was giving his first convocation speech. Professor Su was also conferred the title of President Emeritus.
- CNA /ls
- wong chee tat :)
By Evelyn Choo | Posted: 25 July 2011 1858 hrs
SINGAPORE: A record 9,066 students are graduating from the Nanyang Technological University (NTU) this year.
And the cohort is riding on the waves of a tight job market, with two-thirds already securing employment.
Brothers Harry and Henry Zhuang have just been conferred their Digital Animation degrees and will be working in the same company.
"Actually we are quite surprised that the company is going to hire both of us. But he ensured that we are going to work on two different projects," said Henry, who graduated from NTU's School of Art, Design & Media.
Harry said: "I think there are jobs available. It's whether you're willing to work or not."
The brothers make up two-thirds of a cohort that have secured jobs before graduating.
In a preliminary study conducted by the university, it was also found that the top five earners from NTU's Class 2011 are drawing entry-level salaries of above $10,000.
NTU's new president predicts a significant proportion would be living and working abroad. The challenge then is to ensure future graduates have the competitive edge in a globalised job market.
"I think we've got to change the curriculum to increase communication skills. Apart from being good mechanical engineers, physicists or biologists, you have to learn social skills, cultural intelligence, because the work market is international," said NTU's president Professor Bertil Andersson.
"Many people say, for example, the SMU students are much better at communicating than NTU. I don't know if that's true, but certainly we should make the NTU students better in communication, having more social and international skills," he added.
Professor Andersson, who succeeded Professor Su Guaning whose term lasted eight years, was giving his first convocation speech. Professor Su was also conferred the title of President Emeritus.
- CNA /ls
- wong chee tat :)
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