It has a paid up capital of $3.2m.

ST Engineering announced its expansion in Saudi Arabia, establishing ST Electronics (Saudi Arabia) Limited.

The newly-formed subsidiary has a paid up capital of 8.4m Saudi Riyals or approximately $3.2m. It will be put up in Riyadh.

The shareholders of this entity are ST Electronics (95%) and its subsidiary, ST Electronics (Info-Comm Systems) Pte. Ltd. (5%). STSA will offer ST Electronics’ engineering services for mass rapid transit projects, intelligent transportation as well as advanced electronics solutions in Saudi Arabia.

The setup is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.

For starters, it is still seeing a drop in medical tourism.

For the analysts at CIMB, it is too premature to start turning positive on Raffles Medical Group, seeing that the 1.3% full-year growth is not something to spark a turnaround.

According to CIMB, the group's 4Q16 top line growth was weak amidst slowing demand. In the said quarter, Raffles incurred a 1% QoQ sales decline.

Quoting the group, CIMB said that this is attributed to the weakness to medical tourism.

"The miss in medical tourism mostly came from Indonesian patients. Indo patients now form less than 20% of RFMD’s total foreign patients (prev. 20+%). Even as management cited growth from other markets including Malaysia, Vietnam, Myanmar and China, the tone was that medical tourism growth will likely be subdued," CIMB said.

CIMB stated three deterrents to Raffles' medical tourism growth including a strong dollar, the rising private healthcare costs, and the strong competition from regional peers.

"Weak medical tourism, limited domestic growth and expansion costs are hitting the group’s hospital segment. The hospital saw its first ever PBT decline in FY16 at 3% YoY," CIMB noted. 

Soybean yields began to drag down CPO prices.

Analysts are starting to witness a fall in CPO prices, marking the start of lower plantation profits for agribusiness group Wilmar.

According to RHB, good soybean yields reported in Brazil have begun to drag down CPO prices.

"We believe the downward pressure on CPO prices would persist as most companies are expecting solid improvements in FFB production this year," the firm said.

However, Wilmar is expected to replant 10,000ha of its plantation this year and is seeing only 5-10% increase in production levels.

Meanwhile, RHB said better processing margins will offset the lower plantation profits.

"Based on our 2017 house view on CPO price remaining at MYR2,500/tonne (USD564/tonne), we expect plantation profits to come off significantly. Nevertheless, we believe this would be more than offset by better processing margins due to lower feedstock costs," RHB explained.

There is an inadequate short-term support to lower compliance costs.

The Singapore Business Federation has raised their disappointment after Minister Heng Swee Keat's Budget 2017 failed to provide short-term measures to support the lowering of business and compliance costs.

SBF cited for instance that the deferment of foreign worker levies by one year for only the marine and process sectors should have been extended to other sectors which are still experiencing cost challenges. The institution also said there is an absence of measures on rental rebates for businesses in general.

SBF Chairperson S.S Teo said this year's Budget fell short of the group's expectations.

"However, we are confident that the Government is monitoring the situation very closely and will respond accordingly when the need arises. Also, SBF and the TACs look forward to working closely with the Government on the implementation of the remaining 17 ITMs,” he explained.

Despite this, SBF recognised the medium to long-term measures, namely in the areas of internationalisation, innovation and development of digital capabilities, which continue to pave the way for the future economy.

SBF-led SME Committee Chairperson Lawrence Leow said while this year's budget has a strong focus on preparing our SMEs for the future economy, the current business outlook remains challenging.

"The business community requires immediate stimulus. We hope to see more details shared at the Committee of Supply debate. The SME Committee will continue to provide the platform for Government and businesses to work together to transform our industries,” he noted.

Exports are expected to expand 2%.

After growing slightly in January with an 8.6% expansion, Singapore is on its way of reversing its 3.2% NODX drop last year.

According to RHB, NODX is expected to expand 2% this year, underpinned by four things. The brokerage firm said exports will be driven by the simultaneous fiscal stimulus from the developed nations, the consolidating US economic recovery, the stabilising growth in China, and the improving commodity prices – this ought to aid in the economic recoveries of the regional trading peers.

To recall, electronic NODX grew 6.1% in January, picking up from its 5.7% jump in the month before. Shipments of semiconductors remained robust at +31.6% YoY, up from 29.9% in the month before.

"Things were further improved as exports of PC parts rose 11% YoY, ie more than double the pace of increase in Dec 2016. However, shipments of PCs, diodes & transistors and telecom equipment worsened. This has capped some of the upside," RHB said.

Meanwhile, non-electronic NODX slowed to 9.9% YoY in January from a 10.7% jump in the month before. Shipments of pharmaceuticals slumped 12.6% YoY during the month under review after rising 7.3% in Dec 2016.  

It will have must pass on the tax reduction to drivers.

Minister Heng Swee Keat announced during the Budget 2017 the restructuring of diesel taxes from lump-sum tax, a special tax levied on diesel taxis and is payable annually, to usage-based tax which is based on the volume of diesel used. What does this mean for transport group ComfortDelGro?

According to OCBC Investment research, this $0.10/litre diesel duty will be levied on automotive diesel, impacting the taxi drivers. At the same time, the government has also announced that the annual special tax on diesel taxis will be reduced permanently by $850.

"In our view (this) will allow ComfortDelGro (CDG) to pass on some of these savings back to the taxi drivers to help the drivers partially or fully offset the increase in the diesel costs," OCBC noted.
 

It unveiled Hack2Hire to identify successful candidates.

DBS announced its plans to hire 100 developers skilled in emerging and disruptive technologies as it cements its position as a leading digital bank.

With this, it will be unveiling a coding challenge and hackathon where successful candidates will eventually be offered to join DBS's developers. The bank is the first bank in Southeast Asia to do such recruitment drive. Fresh graduates and experienced professionals can take part in the hackathon.

DBS Head of Core Systems Technology Soh Siew said the group is seeing rapid advancements in banking technology using cloud, machine learning and Big Data, which are paving the way for a new world of seamless banking.

"We want to bring developers well-versed in these new technologies into the bank to accelerate our digital transformation efforts. We believe that recruiting via a hackathon is an innovative and effective way to attract the right talent,” she said.

Hack2Hire, which will be conducted in collaboration with Amazon Web Services, Cloudera, and Pivotal, consists of two parts - an online assessment challenge to gauge the programming and technical capabilities of candidates, followed by a live two-day hackathon session, where their approach to problem-solving will be put to the test. Shortlisted candidates from the second round will be offered full-time roles at DBS.

Over the last five years, DBS has made significant investments in strategic technology initiatives to weave banking into the everyday life of its customers so that they can spend more time on people or things that they care about. This includes initiating a comprehensive re-architecture of the bank’s technology as well as catalysing a change in culture within the bank to one that is more “fintech-like” in nature.

DBS launched digibank, India’s first mobile-only bank, last year and has plans to introduce this groundbreaking service in other markets. It was also the first bank to be recognised as the “World’s Best Digital Bank” by prestigious financial magazine Euromoney in 2016. 

(Photo from DBS press release)

The grant is being increased to $50,000 for 4-room flats.

One of the key things announced in the budget is the increase in CPF housing grants for resale flats.

Minister Heng Swee Keat said the grant is being increased from $30,000 to $50,000 for 4-room flats or smaller, while the increase for 5-room flats from $30,000 to $40,000. Real estate firm JLL said these grant increases are likely to assist more buyers keen to snapping up resale flats.

"The above CPF housing grant increases are likely to assist more buyers interested in resale flats and expected to sustain the increase in resale volume, which already rose 7.8 per cent in 2016 y-o-y. The resale price index, which has remained largely flat since 3Q15, will certainly stabilise or perhaps rise slightly with increased demand and higher resale volume," JLL said.

It added, "A healthy HDB resale market with stable prices would lift sentiments amongst HDB households aspiring to upgrade to private homes. Demand for private homes may improve more than earlier expected and help to stabilise the private residential market." 

Thanks to healthcare services' 30.8% revenue growth.

Leading integrated healthcare organisation Raffles Medical Group achieved a record revenue of $473.6m for the year ended 2016, a 15.4% growth from 2015.

All divisions contributed positively to the growth of the Group with revenue from Healthcare Services growing an impressive 30.8% and Hospital Services increasing by 6.3%. The strong revenue growth was driven by higher patient load from the expanding RafflesMedical clinic network, higher revenue contributed by more specialists as well as full year contributions from International SOS (MC Holdings) Pte Ltd and its subsidiaries (MCH). Excluding the revenue contribution from MCH, the Group’s revenue would have grown by 7.5%.

The Group registered a Profit After Tax and Minority Interests of $70.2m, an increase of 1.3% from $69.3m in 2015. The strong revenue performance was offset by greater staff costs, operating expenses and consumables. The increase in staff costs was due to manpower recruitment to cater for expanded business operations and the new medical centre in Raffles Holland V. On a comparable basis, excluding the results of MCH, the Group’s operating profit would have grown by 4.4% instead of 1.7%.

The strong performance of the Group translated into a strong cash flow from operating activities of $78.9m. The Group has a healthy cash position of $111.9m as at 31 December 2016. The strong operating cash flows will enable the Group to support its investments in MCH, RafflesHospital Shanghai and RafflesHospital Extension. These investments amounted to $45.6m in 2015.

No thanks to the losses in Oilseeds & Grains incurred in Q2.

Agribusiness giant Wilmar International Limited reported a lower net profit for 2016, slipping 5% to US$1.02b ($1.5b) due to losses of US$343.8m in Oilseeds & Grains during the second quarter of the year.

For 4Q16, reported a 70% increase in core net profit of US$589.5m for the quarter, mainly driven by stronger performance across all business segments and aided by the recognition of deferred tax assets of US$142.1m for the Group’s Indonesian operations.

The Tropical Oils and Oilseeds & Grains segments continued their good performance in 4Q16, while the Sugar segment benefited from higher sugar prices and the extension of the season for milling activities in Australia. Together with improved contributions from associates, 4Q16 was the best performing quarter for the year.

Revenue grew 27% to US$11.95b in 4Q16 (4Q2015: US$9.43 billion), mainly due to higher commodity prices and stronger sales volume. For the year ended December 31, 2016, the increase in sales volume, partially offset by lower commodity prices experienced during the first quarter of the year, resulted in a 7% increase in revenue to US$41.40b (FY2015: US$38.78b).

Check out how Wilmar's segments performed in Q4:

Tropical Oils (Plantation, Manufacturing & Merchandising) reported a 94% increase in pre-tax profit to US$184.3 million in 4Q2016 (4Q2015: US$94.8 million). The strong performance was led by the plantation business which benefited from higher crude palm oil (“CPO”) prices during the quarter. This coupled with the consistently robust performance from the downstream businesses throughout the year resulted in the 40% increase in pre-tax profit to US$689.2 million for FY2016 (FY2015: US$491.5 million).

Oilseeds & Grains (Manufacturing & Consumer Products) registered an 8% improvement in pre-tax profit to US$177.9 million in 4Q2016 (4Q2015: US$164.2 million), supported by stable soybean crush margins. For FY2016, pre-tax profit of US$251.1 million (FY2015: US$689.8 million) was affected by losses recognized in the second quarter of the year.

Sugar (Milling, Merchandising, Refining & Consumer Products) reported a 68% increase in pre-tax profit to US$135.9 million in 4Q2016 (4Q2015: US$81.1 million). The milling business delivered an outstanding set of results, helped by higher sugar prices as well as the season extension for milling activities, which led to higher volume of cane crushed. The overall Sugar results included a US$33.5 million impairment charge on the refinery assets in Australia. Excluding this impairment charge in 4Q2016, pre-tax profit for FY2016 improved by 88% to US$158.8 million (FY2015: US$84.3 million).

It is now around 5% of loans.

Looking at which amongst the big three banks suffered the most from O&G, it was DBS with an exposure of $17b. However, this figure does not include the bank's exposure Swiber.

According to Maybank KimEng, lending to upstream industries rose from $4.0b to $5.3b. The firm noted that DBS' loans to O&G sector comprised 6% of its total loans. 

Meanwhile, OCBC's exposure reached $13.4b, while UOB recorded $11b. 

Check out the things to watch out for in the budget.

According to Bloomberg, with China’s economy showing consistent signs of recovery, spurring exports across the region, the immediate pressure is off Finance Minister Heng Swee Keat to provide a large stimulus package when he gives his budget speech in Parliament on Monday. Consumer demand remains weak though, and with global uncertainties mounting, the fiscal policy focus is set to stay on targeted measures and plans to spur productivity in a country grappling with an ageing population.

“The urgency for a sizable counter-cyclical fiscal stimulus has probably eased compared to just three months ago,” said Kit Wei Zheng, an economist at Citigroup Inc. in Singapore.

Click here to get to know the things to watch out for in the budget.

But higher NPL ratio is expected by end-2017.

Luck may have been UOB's way in the past quarter, as its nonperforming loan ratio marginally dipped to 1.5% in 4Q16, from 1.6% in the previous quarter due to higher write-offs.

However, RHB noted that it sees UOB's NPL ratio increasing in the future, growing 1.7% by end-2017 due to the soft economic environment.

RHB stated that one upside UOB can expect this year is the widening of the net interest margin and the stronger non-interest income.

"4Q16’s NIM of 1.69% was unchanged QoQ, but was 10bps narrower YoY. We forecast 2017 NIM of 1.76%, up from 2016’s 1.71%, on the back of a higher Singapore Interbank Offered Rate (SIBOR) from Fed rate hikes," RHB explained.

It furthered, "Its 2016 non-interest income fell 1.6%. This was mainly due to trading and investment income falling 8.1% due to lower gains from the sale of investment securities, but partially offset by higher trading income. We have factored in stronger 2017 non-interest income from the lower 2016 base."

The bank's NPL ratio rose 1.4% in Q4.

It appears that the worst for oil & gas is not over after all for DBS Group, according to a report from CIMB.

The report noted that the bank's non-perfoming loan ratio crept up 1.4% in the past quarter as more O&G loans were classified. Of its $5.5b exposure to non-state owned OSV companies, $2.6b is to five chunky names, of which two are now in NPAs. The remaining $2.9b exposure to 90 names now has half the portfolio showing weakness, up from a third previously.

"Three of the 90 names became NPLs in 4Q, bringing the total to six names. Two-thirds of the vessels are still being utilised. NPL ratio for OSV segment was 21%,"A CIMB explained.

Here's more from the brokerage firm:

Of the $3.5b in new NPA formation in 2016, half were from O&G: $721m for Swiber, $800m for two large names and $200m for six smaller exposures. Another $1.25b of smaller O&G loans looks weak but has not turned into NPLs, and may face problems amid falling charter rates and contract terms in the absence of new E&P spending. While DBS shared three anecdotes where it sold vessels above the marked down collateral value, larger purpose-built vessels may be harder to sell or need steeper discounts.

 

A one-time gain of $161m from The Nassim is expected in Q1.

Big-time developer CapitaLand continued to see strong momentum in its residential division in both Singapore and China, a report from DBS Group Vickers noted.

The report noted that in Singapore, the group the group has substantially sold most of its available development projects and will book a one-time gain of close to S$161m post the bulk-sale of The Nassim in 1Q17.

Meanwhile, its China sales momentum remains strong and the group will look to launch another 7,000 units in 2017. In addition, the CapitaLand has close to RMB8.9bn in unrecognised revenues which will be booked in 2017-2018.

Non-performing loans spiked 12% to $306m.

The distress in the oil & gas sector is still on-going for Singapore banking giants, contributing to the increase in non-performing loans.

This is the case with OCBC whose NPL ratio deteriorated slightly from 1.19% to 1.26%. NPLs increased $306m or 12% QoQ in 4Q16, coming mainly from large corporates within the O&G sector.

"We estimated that NPLs for the O&G sector increased by S$237m or 21% QoQ to S$1,343m. 52% of the O&G NPLs, some of which are restructured, are still being serviced (not overdue)," UOB KayHian said in a report.

The offshore support vessels (OSV) sub-sector accounted for 39% of its O&G portfolio, of which 22% are classified as NPLs.

With this, UOB said total provisions were elevated at S$305m (57bp), an increase of 57% YoY. Specific provisions were hefty at $235m due to exposure to the OSV sub-sector.

"Management believes that oil prices have to stay at above US$60/bbl on a sustained basis before charterers would come back to sign medium to long-term contracts (currently, many vessels are tied up in short-term 1-year contracts)," the research firm said.

It added, "The bank reviews cash flows and value of collaterals (apply conservative haircut to valuations provided by professional valuers) and makes the necessary specific provisions every quarter. It also puts in additional general provisions to create a buffer." 

And here are top asset management firms you should consider investing with.

Hong Kong and Singapore are at it again. The Asian financial hub rivals are reviving a debate on dual-class shares as global competition for the hottest initial public offerings intensifies. Singapore is a few steps ahead. Prime Minister Lee Hsien Loong last week gave his approval to dual-class shares and other measures proposed by a panel to drive economic growth. The city-state’s stock exchange on Thursday started a public consultation, a final hurdle before allowing the structure. Hong Kong Exchanges & Clearing Ltd. Chief Executive Officer Charles Li in January revisited the topic after a 2015 proposal was shot down by his regulator. Read the full story here. 

Singapore's trade-driven economy rose faster than thought in 2016 but concerns over a "lack of clarity" on US President Donald Trump's policies could hit growth this year, the government said Friday. The economy expanded 2.0 percent in 2016, powered by a strong manufacturing sector performance in the fourth quarter, final data from the trade ministry showed. Click here for the full story.

For high net worth individuals looking to find a financial advisor the Singapore market is abundant with options. While finding the right advisor is largely based on finding the right ‘fit’ in terms of personality, professionalism and goal alignment, this article will highlight some of the top firms in Singapore for an individual to consider.