On a yearly basis, December prices only inched 0.1% up.

The end of 2016 saw a slight uptick in condo resale prices, based on the latest figures by SRX Property.

According to SRX, non-landed private residential resale prices increased by 0.4% in December 2016 as compared to the previous month, with resale prices in OCR reflecting the biggest increase at 1.2%. This came as prices RCR decreased by 0.5% and prices in CCR remained unchanged.

On a yearly basis, prices in the said month increased only by 0.1%, with RCR and OCR recording a year-on-year price decrease of 0.9% and 0.4% respectively. On the other hand, CCR posted a year-on-year price increase of 1.8%. Overall prices in the said month were down 7.8% from the recent peak in January 4.

This slight price uptick came along with the crumbling resale volume, which saw a 21.7% decline in December.
According to SRX, an estimated 484 Non-landed Private Residential units were resold in December 2016, down from 618 units sold in the previous month.

On a yearly basis, resale volume was 6.8% higher compared to 453 units sold in December 2015.
The recent resale volume was down 76.3% compared to the latest peak of 2,050 units sold in April 2010.

The amendments in the re-employment bill will take effect starting July.

As Singapore faces a sluggish job market coupled with the rise of the ageing population, the parliament has passed The Retirement and Re-employment (Amendment) Bill 2016 which will raise re-employment age from 65 to 67.

In April 2016, the Ministry of Manpower announced that following extensive tripartite consultations, the tripartite partners had agreed to several amendments to take effect from July this year.
Aside from raising the re-employment age, there will also be an introduction of an option to allow eligible employees to be re-employed by another employer to increase labour market flexibility and removal of the option of employers cutting employees’ wages at age 60.

In a statement, MOM said the current law does not allow employers to transfer their re-employment obligations to another employer.

"This amendment in the Bill allows an employer who is unable to offer a suitable position in his own organisation, to transfer his re-employment obligations to another employer, provided this is done with the older employee’s consent and that the second employer agrees to take over all applicable re-employment obligations," the ministry said.

Commenting on the passing of the bill, Singapore National Employers Federation executive director Koh Juan Kiat urges employers to make early adjustments to their HR practices to further re-employ workers to age 67.

"Employers can tap on the age management, job redesign and work-life grants to adapt their workplaces and work arrangements to make jobs more suitable for their older employees," he said.

Meanwhile, Heng Cheee How, deputy secretary-general of the National Trade Union Congress said the law will remove the possible cutting of wages at age 60 while enlarging the pool of companies that can re-employ a worker reaching the statutory age of 62 beyond his immediate employer, subject to the worker’s express agreement.

"These are significant changes that benefit both employees and companies, and strengthen the re-employment of mature workers. The Tripartite Guidelines have thus been revised to incorporate these enhancements, so that firms, unions and workers can implement these smoothly and correctly," Heng noted.

Smartphone penetration in APAC region is expected to hit 51.5% by 2019.

It's gonna be a 'new year, new me' for Singapore companies this year as they start 2017 looking for fresh people to join their manpower. But in this new era of selfies, snapchat, and social media reputation, how can they find the right talent that could be of benefit to them?

According to HireRight, companies should optimise their application process for mobile, as APAC smartphone penetration is expected to hit 51.5% by 2019.

"Hiring experiences should be as digitally friendly as possible -- from your company's website and application process, through to the background screening and the on-boarding experience," the group said in its latest infograph.

HireRight also provided four other tips for Singapore companies to kickstart their year right in terms of finding the right talents.

But expect limited boost today.

The Straits Times Index (STI) ended 18.91 points or 0.64% higher to 2981.54 on Monday, taking the year-to-date performance to +3.43%.

According to OCBC Investment Research, this came as U.S. stocks retreated as the Dow Jones Industrial Average pulled back further from the psychologically significant 20,000 milestone, although the Nasdaq bucked the weak trend to finish at an all-time closing high for a second session in a row.

Meanwhile, eight out of eleven S&P 500 industries ended lower. The best performer was Health Care (0.44%) while the worst performer was Energy (-1.48%).

"The mixed showing on Wall Street overnight is unlikely to provide much of a boost to the local bourse today," OCBC said.

Here's more from the brokerage firm:

We note that the RSI continues to turn up, hovering around 69%, although the daily MACD continues to look pretty positive.

On the upside, we peg the immediate resistance at 3000, ahead of 3040. On the downside, we peg the immediate base to 2970 resistance-turned-support level, followed by the next support at 2930.

Overall volume fell 1.7%, with 2.1b units traded, but total value lost 23.4% to S$0.8b, while average value/unit fell 22.4% to S$0.39.

 

Outllook remains negative, as visitor arrivals are expected to dip.

Weak revenue per available room (RevPAR) will continue to haunt the hospitality sector this year, as outlook on visitor arrivals remain muted.

According to DBS Group Research, demand in 2017 will grow 4% YoY, but as corporate demand is expected to remain soft, projected demand for accommodation growth should remain modest.

"Persistent supply pressures arising from a 6% increase in room stock will pressure room and occupancy rates. We
project RevPAR to fall by 4% in 2017 before rebounding thereafter," the research firm noted.

DBS cited two risks that may affect the hospitality sector this year, including the slower-than-expected rebound in Chinese tourist arrivals and greater level of competition from regional markets that would cause RevPAR to drop more than expected and the upside risk that would come from delays in opening of new hotels. 

And here are 4 things businesses should consider when expanding overseas.

The total value of construction contracts to be awarded this year could hit a high of $35 billion. The Building and Construction Authority (BCA) expects the total value of construction contracts to be awarded this year to hit between $28 billion and $35 billion, up from last year’s preliminary estimate of $26 billion, with the public sector accounting for about 70 percent of total construction demand, it said in a statement. The BCA forecast demand from the public sector to increase from about $15.8 billion last year to between $20 billion and $24 billion in 2017, on the back of an increase in demand for most building types and civil engineering works. Read the rest of the story here.

The Singapore Exchange (SGX) is currently actively pursuing Chinese listings, aiming to obtain not only Initial Public Offerings (IPO’s) but also cross-listings of entities that are already pre-listed on the Chinese stock markets. This comes after a period of some uncertainty on the SGX, whereby Chinese companies started listing on our local bourse in the mid-2000’s, before our domestic regulators effectively blocked Chinese listings for several years, or at the very least made it a tedious and difficult process such that prospective companies decided to undergo public listing elsewhere. Click here to see the tops before investing in Chinese listings on SGX.

2016 has seen a very strong push from the Government for Singapore Small and Medium Enterprises (SMEs) to move towards more productive business processes, as well as to continue to actively look beyond our shores to expand their business. This was strongly focused on at the Budget 2016 announcement, and was further reinforced at the National Day Rally 2016. Here are four things businesses should consider when expanding overseas.
 

It would let local and foreign businesses anchor their R&D activities in the city-state.

Ahead of the Budget 2017, some experts are expecting the Singapore government to spearhead an innovation-friendly tax regime as it builds on the strong foundations laid in the previous Budgets and as it helps Singapore businesses survive and thrive amidst uncertain economic conditions.

According to Deloitte Singapore, 2016 has been marked with certain economic challenges for the city-state, buffeted by events happening many miles from its shores.

In its Budget 2017 feedback submitted to the Ministry of Finance, Deloitte said Singapore must ensure that its tax regime remains transparent and acceptable in the international tax arena as it courses through the Base Erosion and Profit Shifting project, which has undergone the implementation phase in 2016.

This is where creating an innovation-friendly tax regime comes in, Deloitte explained.

As the popular Productivity and Innovation Credit Scheme is set to end in 2017, the firm noted that Singapore needs to exert more support for innovative activities to complement existing incentives for research and development.

Deloitte Singapore regional managing partner for tax Low Hwee Chua said this could come in the form of enhanced tax deductions for spending incurred on “innovative activities” that lead to the creation of new products or services.

“Innovation does not necessarily involve the creation of something new from scratch. Taxpayers who undertake innovative activities – which in certain instances may just be shy by a whisker from being regarded as research and development (R&D) as per the definition under the Singapore Income Tax Act – may be frustrated by the lack of broad-based support,” Low argued.

Meanwhile, Deloitte Singapore tax partner and tax leader for public sector Daniel Ho said, Singapore could also consider introducing enhanced tax deductions to encourage digitisation, such as designing and implementing e-billing systems or workflow systems, so as to subsidise part of the upfront costs. This is in line with the government's Smart Nation Initiative.

“Currently, purchases of computer hardware and software are incentivised under the PIC scheme. With the PIC scheme coming to an end, the Government may wish to consider incentivising personnel or consultants’ costs involved in the digitisation of processes – the nexus between such expenditure and improvements in productivity may be greater, as compared to mere purchases of computer equipment,” Ho commented.

The accounting and consultancy firm argued that these proposed enhancements to Singapore's existing R&D tax regime may lead to both local and foreign businesses continuing to anchor their r&D activities in the city-state.

“As the PIC scheme expires at the end of 2017, there is a perceived gap in broad-based R&D tax incentives, leading to a concern that this may hinder the general development of Singapore’s R&D capabilities and innovative culture. As an alternative to granting additional tax deductions on qualifying R&D expenditure, the Government could consider granting R&D tax credits. This would be calculated based on the R&D expenditure incurred and it would achieve the same objective of decoupling the R&D regime from Singapore’s tax rate to ensure that Singapore remains attractive to R&D investments,” Deloitte Southeast Asia Leader of R&D and Government Incentives Lee Tiong Heng said.

First-round bids are due by the end of January.

United Engineers Ltd.’s largest shareholders have started formally assessing buyer interest in the century-old Singapore property group, a report from Bloomberg said.

The major shareholders of the company, which has a market value of S$1.7 billion ($1.2 billion), have been sending preliminary financial information on United Engineers’s business to potential bidders since the end of December, the people said. At least 10 parties including regional property developers, private equity firms and real estate funds have indicated interest, the people said, asking not to be identified because the information is private.

Get to know the full story here. 

It could deliver a 27% net profit growth this year.

Raffles Medical Group is entering another era of growth this 2017, as its medical centres is seen to manifest improved profitability and higher patient load factor is expected with the Raffles Hospital extension.

According to RHB Research, Raffles Medical is to deliver a solid net profit growth of 27% in 2017, aided by a boost from rental income at Raffles Holland V mall. Around 95% of the space has been committed already by the end of 2016.

"We expect majority of the tenants to move in by 1Q17. Virgin Active gym, which took up more than one floor of space, is set to open in Apr 2017. We believe the opening of the gym would bring more foot traffic to that mall," the research firm noted.

It added, "In addition, operations of its new medical centres are improving. We expect operating profitability of the medical centres at Raffles Orchard and Raffles Holland V to turnaround in 2017 while International SOS is also expected to deliver a higher contribution."

Meanwhile, the ageing population and increased number of medical insurance are also set to drive growth for the group.

"Being one of the largest private medical groups in Singapore, we expect Raffles Medical Group (Raffles Medical) to benefit from Singapore’s ageing population as well as an increased sophistication in medical insurance plans. An ageing population and increased number of medical insurance policyholders would also support the resiliency of private healthcare spending in Singapore," RHB noted.

RHB believes that the long-awaited Raffles Hospital extension would lead to a higher patient load factor by the end of this year.

"We understand that the Group is trying to expand its team of international specialists as well. We believe that progress in its plan to expand (for new hospitals) in Beijing or Shenzhen would be a positive catalyst to the share price," the firm stated.
 

The average utilisation was highest among Singaporeans aged 25 to 29.

There seems to be a steady growth in Singapore's implementation of Skillsfuture Credit, which citizens can use to pay for out-of-pocket course fees for attending work-skills related courses.

By end-December, more than 126,000 Singaporeans have used the SkillsFuture Credit to up-skill or re-skill themselves in the first year of this scheme.

In a recent statement, SkillsFuture Credit showed that there is a good spread of users in different age groups, where average utilisation was highest among Singaporeans aged 25 to 29 at almost $400 per person.

When it comes to the most popular area of training, Information and Communications Technology rose led the sectors across all age groups.

"Younger Singaporeans enrolled for courses on emerging ICT skills such as data analytics, while older Singaporeans use their SkillsFuture Credit to acquire more fundamental ICT skills such as using the basic functions of a computer," it said.

Other popular training areas include Language Skills, Productivity and Innovation and Security and Investigation.

The improvement also came as the number of eligible courses continued a steady increase.

"Singaporeans can now use their SkillsFuture Credit for over 18,000 approved skills-related courses. These are provided by over 700 training providers, comprising both public and private providers," its noted. 

Engineers are tunnelling their way into overseas projects.

An increasing number of companies are trying to acquire new projects in Southeast Asia amidst sluggishness in the local market.

Changi Airport’s Terminal 5, Jewel Changi Airport, and the Tusa seaport are just some of the infrastructures due to be built less than five years from now.

The Hays Quarterly Report for the fourth quarter of 2016 notes an obvious increase in the demand for engineers who are skilled in civil and structural design, electrical design, and mechanical design related to rail. This is amidst government plans to spend $26b on transport infrastructure by 2020.

Hays says aside from those with rail experience, tunnelling engineers will also find their services in demand. The healthcare sector, according to Hays, is also a strong market with the new build/extension and upgrade of existing hospitals creating demand for candidates with mechanical design experience.

“As a result of this planned work, many employers have moved their staff internally from buildings teams to healthcare/rail/infrastructure works to ensure they can cope,” notes Hays. Randstad concurs, saying the healthcare segment is boosted by the Ministry of Health’s 2025 plan to prepare the country for the ageing population. “Following a regional trend, initiatives and projects have been set in place to decentralise the healthcare system and improve accessibility to healthcare services,” comments Randstad.

In terms of hiring preferences, Hays says employers have a desire for permanent hires only, given that most of the projects have a deadline of completion by 2020. “A preference at the moment is to employ local permanent staff. However, contract work will be offered for niche skill set roles where the need is project related,” it adds.

Consultancies are said to be setting their sights on overseas projects, amidst sluggishness in the residential and retail markets. Hays says there’s demand for candidates who have had experience working in the wider Southeast Asia region, citing an increasing number of companies trying to acquire new projects in Southeast Asia.

“As government cooling measures are still in place, residential and retail markets remain sluggish with little or no new developments in the local market. As a result, consultancies are starting to focus their attention on overseas projects. With the private sector also quiet, the focus is on government funded public works focussing mainly on railway and infrastructure,” reports Hays.

Surbana Jurong, for instance, was recently awarded the contract to design the masterplan for the Hyderabad Pharma City in India’s newest state of Telangana. In 2016 Surbana Jurong also acquired Australia-based SMEC Holdings Ltd. Meanwhile, Randstad says professionals and organisations with transportation infrastructure experience in Singapore are gaining regional recognition and are increasingly sought after for overseas projects.

In terms of innovation, BMI Research notes tirst movers in adapting 3D printing to the construction space are likely to achieve significant advantages in terms of precision and waste reduction over market participants relying on conventional construction methods.

Surbana Jurong keeps top spot

Still the largest engineering firm in Singapore following a merger in 2015, Surbana Jurong tops Singapore Business Review’s 2016 list, followed by AECOM Singapore and Parsons Brinckerhoff.

Meanwhile, Surbana Jurong Chairman Liew Mun Leong was conferred the Distinguished Professional Engineer Award 2016 by the national Professional Engineers Board in November.

Surbana Jurong has also acquired 100% shareholdings in AETOS from Temasek, expanding its overall service offerings to include safety and security capabilities.

Accountants are sought after now more than ever.

As companies seek to take greater control of their expenses to protect their profits, recruitment agency Hays sees growing demand for accountants.

One of them turned 75 years old in 2016, another welcomed new female partners, and one opened four new ‘centres of excellence’ in Singapore. No wonder they remain on top of
Singapore Business Review’s list of the city-state’s largest accounting firms for 2016. Keeping its place at number 1 is KPMG, with total staff of over 3,000. PwC Singapore also did not move at number 2 with its more than 2,700 total staff. EY, also ranked third the previous year, came in close with just over 2,600.

2016 milestones

In an interview with KPMG’s internal publication Veritat in celebration of the firm’s diamond jubilee, retired KPMG managing partner Danny Teoh remarks, “Don’t stop believing. Building momentum is the hard part, but once that has been built, it has a life of its own.” KPMG, which turned 75 in October, says it audits 50% of the biggest Singapore-based international companies.

PwC Singapore, meanwhile, welcomed eight new partners last July – six of them female. They come from different cultures and nationalities: Australia, India, Myanmar, the Netherlands, and Singapore. “As a global network, PwC has always valued diversity and continually aims to create value for the business community by leveraging the power of differences to enhance innovation and creativity,” says Yeoh Oon Jin, Executive Chairman, PwC Singapore.

According to Yeoh, these new partners bring with them a vast diversity of experiences, areas of specialisation, and global acumen to meet new demands brought about by technological disruption and increased globalisation. EY, on the other hand, launched four centres of excellence in the city-state last March. The firm says the four centres for advisory, analytics, cybersecurity, and manufacturing “represent EY’s commitment to a multi-million dollar, multi-year investment in Singapore.”

Max Loh, EY Asean and Singapore managing partner, explains, “Singapore is a strategic gateway to the Asia-Pacific region, underpinned by strong economic fundamentals, trade connectivity, pro-business values, and a strategic transformation vision to be a valuecreating economy.” Growing demand for accountants According to recruitment agency Hays, management accountants and financial analysts will continue to be in demand as many businesses place a greater emphasis on accurate forecasting and budgeting. 

“We expect to see a growing demand for cost accountants, as firms seek to take greater control of their expenses to protect their profits. Candidates who are seeking these more commercial roles will need to demonstrate their ability to liaise and manage internal stakeholders, in order to successfully assist the business to understand the health of their
business units,” notes Hays in its quarterly report. 

Meanwhile, a slowing economy has kept accounting and finance professionals in Singapore on their toes over the recent months, according to Randstad Singapore. 

“Organisations are under increasing pressure to streamline operations, and disruptive technologies are changing the way the industry functions – including employers’ expectations of these candidates.” 

Daniel Goh, manager, accounting and finance at Randstad Singapore, says that despite the gloomy forecast, hiring remains strong and they continue to see a high demand
pressure for quality accounting and finance talent.

Ascendas REIT and Mapletree Logistics have entered deals to enlarge portfolios.

The acquisition momentum continues for Singapore Industrial REITs in the past month leading up to this year, according to OCBC Investment Research.

Notably, Ascendas REIT (A-REIT) and Mapletree Logistics Trust (MLT) both sought to enlarge their portfolios with proposed acquisitions.

Ascendas is on the prowl to acquire the leasehold interest in the property located at 12, 14 and 16 Science Park Drive from its sponsor for a purchase consideration of $420m. This could generate a NPI yield of approximately 6.3% before the acquisition cost and 6% post-acquisition costs n the first year of ownership.It would also increase Ascendas portfolio Weighted Average Lease Expiry to 4.4 years from 3.7 years.

Meanwhile, Mapletree has continued to target inorganic growth overseas in Australia.

"It recently proposed to acquire a portfolio of four logistics properties in Victoria for a purchase consideration of A$142.2m (~S$151.9m), thus boosting its Australian portfolio to nine properties. The initial NPI yield is estimated to be 7.6%, and is expected to be accretive at the distribution level," OCBC said.  

It registered a full-year growth of 1.8% in 2016.

Singapore’s economic growth quickened to the fastest pace in more than three years last quarter as manufacturing and services rebounded, according to a report from Bloomberg.

Gross domestic product rose an annualized 9.1% in the three months to December from the previous quarter, when it declined a revised 1.9%, the trade ministry said in a statement. The median estimate of nine economists in a Bloomberg survey was for a 4% expansion. GDP rose 1.8% in the 4Q16 from a year earlier, compared with the 0.3% median estimate in a Bloomberg survey. The Singapore expanded 1.8% in 2016, the slowest pace since 2009.

Singapore, among Asia’s most-export dependent nations, is seeking new growth engines to boost incomes as its population ages and trade falters. With global growth under pressure and the U.S. threatening to turn more protectionist under Donald Trump, the outlook remains cloudy. That will be a consideration for the central bank in its April policy review after it signaled in October it will stick to its neutral currency policy for an extended period of time.

Read the full story here.

A deal for GLP could rank as one of the biggest-ever buyouts in Asia Pacific.

Global Logistic Properties Ltd. has begun formally reaching out to potential bidders for the $7.8 billion industrial property owner, a report from Bloomberg said.

The Singapore-based company sent out an information letter to targeted bidders at the end of last month and has asked for first-round offers by early February, according to the people. GLP attracted interest from suitors after announcing a strategic review in December, one of the people said, asking not to be identified because the information is private.This deal would add to the $215 billion of property and property-related deals involving firms in the region in the last 12 months, according to data compiled by Bloomberg. The company has been involved in $1.3 billion of acquisitions in the past year, the data show.

Read more here. 

Overall vacancy in private housing is to peak at 12.6% in 2017.

There could be a budding supply-led recovery in selective property sectors which include residential spaces, UOB Kay Hian foresees.

Their analysis of unsold private residential inventory indicates that 2018 is likely the year where vacancy could reverse its upward trend after peaking this year, as supply tapers.

"We expect overall private housing vacancy to peak at 12.6% in 2017 before fundamentals begin improving in 2018 (12.5% vacancy) to 2020 (11.1% vacancy)," the research house noted.

It furthered, "This will be propelled by tapering private residential supply, as even we forecast muted residential demand of about 8,200 units p.a. from 2015 to 2020, by incorporating conservative population growth estimates at a CAGR of 1.2%."

As of 3Q16, unsold inventory, including completed units, of 27,894 units was near trough levels, based on URA data stretching back to 1999. 4Q16 URA flash estimates indicate slower qoq decline, with the private residential price index down 0.4% qoq compared with 3Q16’s 1.5% qoq contraction. The flash estimates also indicate a slower decline in private home prices for 2016 (-3.0%) compared with 2015 (-3.7%).  

Expect more gains today.

The Straits Times Index (STI) ended 8.49 points or 0.29% higher to 2962.63 on Friday, taking the year-to-date performance to +2.77%.

According to OCBC Investment Research, this came as modest gains on Wall Street pushed the S&P 500 and Nasdaq Composite to record levels, while the Dow closed a fraction below the closely watched 20,000 level, following a December U.S. jobs report that investors interpreted as generally positive.

Nine out of eleven S&P 500 industries ended higher, led by Information Technology (0.96%) and Industrials (0.54%) while Telecommunication Services (-2.67%) and Real Estate (-0.02%) lost ground. The index was up 1.70% for the week.

"The gains on Wall Street Friday could provide a modest boost to the local bourse today," the brokerage firm noted.

Here's more from OCBC:

As such, we could see the STI continue its climb and test the 2970 initial hurdle. Again, the ability of the index to sustain convincingly above 2970 is crucial, failure which could result in selling into strength.

Technically, MACD has initiated a bullish crossover while RSI is now just a shade below the overbought region, hovering around 65%.

On the downside, we peg the immediate base to 2930 followed by the next support at 2900.

Overall volume rose 6.2%, with 2.2b units traded, but total value lost 11.7% to S$1.2b, while average value/unit fell 16.8% to S$0.50.