Singapore

Hyflux, one of the world’s leading technology-driven environmental companies, has just signed a memorandum of agreement (MOA) for two seawater desalination plants in Libya and could potentially enlarge EPC order book by S$1billion and extend earnings visibility to 2013.

Jumping up 11 ranks in a listing of the world’s top country brands, Singapore now ranks 13th from last year’s of 24th in FutureBrand’s Country Brand Index (CBI). Singapore also got top spots in the categories of Best Country Brand for Shopping and Best Country Brand - Easiest to Do Business In.

Following the release of its 2009 earnings, Visa Inc. reported that the total volume generated on all Visa cards across Asia Pacific had increased by 13 percent to US$981 billion over the past 12 months.

Roche, a Swiss drug-making firm, specializes in research-focused healthcare particularly in the areas of pharmaceuticals and diagnostics. The company opened its first biologics manufacturing site in the Asia Pacific region in Tuas yesterday. Its two facilities cost Roche US$500 million and will be used to produce drugs Avastin and Lucentis. Avastin is a targeted cancer therapy which treats various tumour types such as colorectal cancer, lung cancer, breast cancer, brain cancer and renal cell carcinoma, while Lucentis is used to treat patients with wet age-related macular degeneration, a leading cause of blindness in people over 55. On the selection of Singapore, Dr Patrick Y. Yang, Executive Vice President of Genentech Technical Operations, which is a wholly-owned member of Roche Group stated: “As we supply a global market, Singapore offers important advantages to Roche’s manufacturing network, including a skilled labor pool, nearby biotechnology expertise and a supportive business environment.” Finance Minister Mr Tharman Shanmugaratnam, who was also at the opening ceremony, said: “Singapore is proud to be Roche’s first site for biologics manufacturing in Asia. The site expresses a number of things that are making Singapore's future – cutting-edge manufacturing technologies, the commercialisation of science, a commitment to develop a top-quality workforce and the deepening partnerships that leading global players are forging with Singapore.” He added that Singapore was committed to building its biologics manufacturing sector, with six plants so far set up in the last four years. When these are fully operational, they are expected to create over 1,000 jobs for employees.

The mailman definitely delivers. Singapore Post Limited reported an increase in net profit by 8.3% to $40.5 million. The group’s mail revenue did decrease 4.4% to S$87.6 million on lower international mail contributions. So which part of Singapore Post’s business was reeling in the profits? The company’s logistics revenue increased 142.6%, benefiting from the first full quarterly contribution from Quantium Solutions, a full-service information technology consulting company, offering both consulting and technical support to middle-market businesses and government agencies. Without Quantium Solutions, it is believed that the group would have posted a 4% decline this quarter. And although revenue from Speedpost saw a decline, rental and property-related income continued to grow, rising 23.1% to S$10.1 million, with higher rental income from Singapore Post Centre and the leasing of space at the repurposed post office buildings. Group CEO of Singapore Post Limited, Wilson Tan is cautiously optimistic about the postal service industry. “Although the global economy is showing signs of recovery, the postal industry typically experiences a longer recovery runway. We are certainly not out of the woods yet and we continue to face unrelenting pressures from the operating environment.” He added: “We remain disciplined on cost management, and are focused on expanding Quantium Solutions’ business beyond cross-border mail and extending its core competencies in Asia Pacific. We will continue to reinvent ourselves and stay relevant to our customers, while actively pursuing new growth opportunities.”

To the unemployed person the unemployment rate is always 100%. And with the recent retrenchments and hiring freezes around town, the odds of finding a job are akin to winning the lottery. So despite rumours floating around town that the economy is about to pick and many firms will begin to hire once again, why is it extremely difficult for anyone to land a job? The Singapore Business Review speaks exclusively to the region’s top human resources, recruitment and consulting firms and lets you in on the truth surrounding most companies managing their headcount, the hiring trends in 2009 and where the job market intends to go this year and how you could just land that dream job.

Out of the two integrated resorts that may be opening at the end of the year, Genting Singapore’s Resort World may have the upper hand over Marina Bay Sands when i t comes to packing in the local punters. And the secret to what may be the key to Resorts World getting the upper hand could just be the Universal Studios movie theme park. Analysts from DBS Vickers Securities believe that Universal Studios may be the key to attract Singapore’s mass market, and Genting’s strength in the mass market.

The APEC CEO Summit to be held in Singapore next week has 1,500 participants confirmed to attend. This is the largest attendance in record for the event since its inception in 1996.

Keppel Land’s head honcho Kevin Wong has a good reason to smile. Not only did Keppel Land report a strong set of figures for that period, it exceeded most analysts’ expectations.

The black ink continued to flow over at SPH, albeit not as quickly as last year as the downturn in advertising bit into revenues. But at least there was no red ink for the newspaper-cum-property development group, which saw rental income from its Paragon department store help it post a respectable full year profit of $497 million, which was down just under 1% on 2008.

It is a long way down from the top of the office buildings that ring Raffles Place, and so it has been for the rents their landlords command. At the height of the property squeeze in September 2008 one tenant with impeccable timing, signed up to pay $23 psf for some space in Republic Plaza. Had he waited a year, he could have gotten the same space in the same building for $9.50 psf.

Not all the cranes dottting Singapore’s Marina Bay skyline are building the the integrated resort. Many are, in fact, building ever more grade-A office space in the financial district and beyond. So much new supply is coming online in Singapore that analysts estimate the vacancy rate could hit an historic high of 25 % by 2011. That, coupled with the current downturn and a desire to shift to cheaper localtions like Changi, has seen CBD rents fall by as much as 25 %. Tay Huey Ying, Director of Research and Advisory of Colliers International said demand for office space contracted for the third consecutive quarter in 2Q 2009 by 248,000 sq ft. “Firms battered by the financial crisis continued to downsize and give up their office space. Coupled with the large impending supply, rents continued to free-fall in 2Q 2009 to average at S$6.73 per sq ft per month for Grade A offices in the CBD. For the first half of 2009, average rents of Grade A office space in the CBD have fallen some 41.5%, bringing rents back to mid-2006’s level,” shes said. So what does this mean for CBD office rents and how should potential tenants assess the market?

Not all the cranes dottting Singapore’s Marina Bay skyline are building the the integrated resort. Many are, in fact, building ever more grade-A office space in the financial district and beyond. So much new supply is coming online in Singapore that analysts estimate the vacancy rate could hit an historic high of 25 % by 2011. That, coupled with the current downturn and a desire to shift to cheaper localtions like Changi, has seen CBD rents fall by as much as 25 %. Tay Huey Ying, Director of Research and Advisory of Colliers International said demand for office space contracted for the third consecutive quarter in 2Q 2009 by 248,000 sq ft. “Firms battered by the financial crisis continued to downsize and give up their office space. Coupled with the large impending supply, rents continued to free-fall in 2Q 2009 to average at S$6.73 per sq ft per month for Grade A offices in the CBD. For the first half of 2009, average rents of Grade A office space in the CBD have fallen some 41.5%, bringing rents back to mid-2006’s level,” shes said. So what does this mean for CBD office rents and how should potential tenants assess the market? According to a research note from Credit Suisse, CBD rents for a grade A building may fall a further 14 % to $9.20 by the end of this year and will keep falling until the bottom out at $7/sq ft in 2011.Then there is the ‘shadow space’, which is when the tenant sublets, and there is a lot of supply coming onto the market as companies downsize central business district operations. Empty offices According to research from CB Richard Ellis, the weakening of prime office demand during the last quarter could leave the new office space in the works empty for the short term at least. “Singapore is home to the Asian headquarters of a large number of MNCs and consequently saw the further weakening of prime office demand during the quarter. Prime rents have now fallen 46.6% from the peak recorded in the third quarter of 2008, and occupancy rates will continue to face pressure from substantial new supply. Singapore has some 7.98 million sf of new office space in the development pipeline between now and 2013 and it seems certain that for the short term at least, supply will continue to outstrip demand,” said a CB Richard Ellis spokesperson.

Singtel may have won the screening rights for the English Premier League soccer, but will it be worth the price? In terms of recouping the rights fees in subscription revenues, most analysts agree this is a lousy deal for SingTel. Analysts estimate the telecom company has agreed to pay around $350 million over three years, but the firm says it plans to charge subscribers just $23 a month. It would need to sell 4.2 million subscriptions to recoup its investment, which is more than there are households in Singapore. The market for cable subscriptions stands at just 630,000 as at June 2009, and of that Starhub had 530,000, of which half are reckoned to subscribe to its sports channel.

If you were in charge at Keppel Corporation, now would be the time to take a cue from Tom Cruise in Jerry Maguire and yell at the top of your voice, “Show me the money!” One of the largest offshore and marine groups in the world finally has the go ahead for a rigs costing, an eye-popping US$1.2 billion for Skeie Drilling to go ahead. And Lim Siew Khee, an analyst from CIMB-GK believes that it is unlikely for the three N-class jack-up harsh environment rigs for Skeie Drilling to be cancelled given the positive development with the restructuring and consensual agreement reached with bondholders. And that isn’t all, there is news that Keppel and WTorre are currently in talks surrounding the possible acquisition of Estaleiro Rio Grande (ERG) shipyard in Brazil. Now what is the big deal about ERG that makes Keppel wants to take over the shipyard? Well, according to Lim, ERG is designated to build eight FPSO hulls for Petrobras which could potentially add a sweet US$4 billion (or US$500 million per hull) to Keppel’s order book of S$9.5 billion. Add the $1.47 billion from Petrochina brought about from the sale of SPC which has strengthened Keppel’s cash position, which Lim believes is likely to be deployed for Infrastructure M&As and may be preserved as buffer for potential aid to rig customers with financing difficulties. The recent equity raising has also alleviated funding overhang for Keppel Land. While Keppel Land has indicated that part of the proceeds could be used to pursue strategic acquisitions, we believe that any potential M&A is still in the infancy stage. In the near term, we see the bulk of the proceeds could be channelled to development capex and capital-management initiatives. Recall that office developments in progress include Marina Bay Financial Centre 1 & 2 and Ocean Financial Centre. Sentiment in the sector has since recovered, with transaction volumes improved dramatically over the last four months. Successful new launches in both China and Singapore could further augment Keppel Land’s balance sheet health. This may just make the management from Keppel Corporation much happier than a group of eighteen-year-old boys left unsupervised at the Playboy mansion. F&N on a sugar high Frasier & Neave, or F&N for short, has hit a sweet spot not only for their famed canned but also for property. According to analysts from DBS Group, recent launches by the Group have met with overwhelming response in terms of units sold and ASPs. The latest being 8@Woodleigh, which sold 90% of the units over its soft launch last weekend at ASPs of S$770 per square foot, 10% above industry observers’ expectations. Higher-end projects such as Martin Place Residences also met with keen response, at ASPs between S$1,450 per square foot to S$1,700 per square foot, much higher than the S$1,250 per square foot that industry analysts had anticipated.And it isn’t only in the local property market that F&N is seeing significant growth. Recent positive property sentiment in China could also bode well for the corporations developments in the People’s Republic.Apart from overwhelming property sales, Frasier & Neave also has a current landbank of 930 attributable units in Singapore which according to analysts from DBS Group is relatively low. The same analysts from DBS Singapore Research Team say that the F&N Group will be looking to acquire land, particularly from URA’s Reserve List GLS. This possible acquisition of land could be a catalyst for the counter, if it materialises, as it first of all signals a positive on-the-ground view of the property market and will prompt an upward revision on RNAVs. Strait and Narrow Straits Asia Resources (SAR), the first pure mining company to be listed in Singapore, has seen its share price more than double since March which is in tandem with the resurgence of oil prices. The impact of global economic stimulus plans has started to flow into the real economy, leading to tighter energy markets. Improvements in fundamentals bode well for SAR, as firmer coal prices will boost its revenue. Management holds the view that energy markets will continue to tighten in the second half of this year and is optimistic that its 2010 financial year output will be priced at more favourable levels than recent spot prices of around US$60 per ton.

The great financial recession may have knocked the economy for six, but the residential property market has seemingly defied all logic and staged a dramatic comeback.