Sunday, February 14, 2016

Harnessing skills to spark innovation, boost productivity

Harnessing skills to spark innovation, boost productivity

SkillsFuture a long-term initiative to help workers build desirable deep skills and expertise

Singapore
BRANDON Tan has his hands full juggling a hectic full-time job and raising two young children with his stay-at-home wife, but the marketing manager at an insurance firm is still always thinking of ways to move up the career ladder.
The 38-year-old intends to use the S$500 in his SkillsFuture Credit account to pay for a two-day course on sales and negotiation skills, with a view to joining a financial institution later in the year. That amount will offset just over half of the fees, and he plans to tap other government subsidies to keep his out-of-pocket costs to a minimum.
"I was in two minds about going for the course because I can barely spare the time, but being able to use the SkillsFuture Credit made it much easier for me to decide. It's an opportunity to learn something new and improve myself," he said.
The government hopes that more people like Mr Tan will take greater ownership of their learning journeys and upgrade themselves as well.
Already, more than S$1 billion has been set aside to give some 2.5 million Singaporeans aged 25 and above an initial sum of S$500 worth of credits. These do not expire and top-ups will be made periodically.
More than 10,000 approved courses are already available in areas such as digital animation, healthcare, languages and finance, with more progressively joining the list.
The SkillsFuture Credit, however, is just one of the many planks that make up the SkillsFuture movement. This is a long-term national initiative to help Singaporean workers build deep skills and expertise that are desired by employers. The plan is to give adult citizens the opportunities to develop their fullest potential throughout life, regardless of their starting points.
"It is only with skills mastery that we can spark innovation, and with that, competitiveness and productivity," said a spokesperson from the Singapore Workforce Development Agency (WDA), the statutory board in charge of coordinating the training of working adults.
During his visit to Changi Airport on the first day of Chinese New Year last week, Prime Minister Lee Hsien Loong said that the government, businesses and workers need to focus on preparing for the long term, given that the Singapore economy is likely to grow at a slower pace this year.
"In the longer term, the focus has to be on upgrading, on productivity, on training, on SkillsFuture," he said. "These are the skills which we have been doing and, if the economy slows down, it's an opportunity for us to take them even more seriously and to work at them."
Some observers whom The Business Times spoke to agree that it should be the workers, and not employers, who should make that all-important push for a stronger culture of training and upgrading here.
"Traditionally, skills training has been the job of the employers. But it is the individual who can decide what he or she needs to learn and work towards specialisation and skills mastery," said Karippur Nanda Kumar, an associate professor at the SP Jain School of Global Management.
While Walter Theseira, an economist and senior lecturer at SIM University, praised SkillsFuture for its many novel initiatives, he stressed that there was still too much emphasis on credentials at the workplace and not enough on skills and abilities.
"Of course, you do have to make sure that people really do have the training to do a given job, but, for example, there is a strong belief among many that the solution to a stagnating career is to pursue another degree or get a particular certification," he said.
"While it seems on the surface that this is an example of lifelong learning, it is likely to be a waste of time and effort if the training decision is made poorly and based on the wrong premises," added Prof Theseira.
This was a point echoed by the WDA. It called on companies to refresh their human resource practices to focus on skills and strength of character in their hiring and promotion activities, and not on a person's age or academic paper qualifications.
The agency also suggested that firms set up mentorship systems to help transfer and deepen skills in their employees.
The WDA made the point that the success of SkillsFuture hinges on the commitment and buy-in from all stakeholders - the government, individuals, parents, educators, training providers and employers.
On its part, the government will fund programmes, restructure agencies and expand the offerings at both the tertiary level and in the continuing education and training space.
Workers and students should pursue their passion and cultivate interest in the fields they are in, while employers should support their staff with their training and development needs.
Even though SkillsFuture is still in its infancy, Prof Kumar described it as an "essential" asset which will keep pace with an economy that is being reshaped by technology and globalisation.
The SkillsFuture initiative will move in tandem with the work of the Committee on the Future Economy (CFE) led by Finance Minister Heng Swee Keat.
Of the five focus areas that the 30-member committee has deemed crucial to Singapore's future economic development, one is centred on "jobs and skills".
A sub-committee co-chaired by Acting Education Minister (Higher Education and Skills) Ong Ye Kung and Singtel CEO (Group Enterprise) Bill Chang is expected to hold its first meeting soon.
Among other things, they will assess the impact of demographics and technology on the labour force, and recommend strategies to create and re-design jobs
.

Strong presence at S'pore Airshow despite slow economy

Strong presence at S'pore Airshow despite slow economy

By
nishar@sph.com.sg@Nisha_BT
Singapore
THE Singapore Airshow 2016 (Feb 16-21) is back this week as the global economy slows down. But industry heavy-hitters, senior government officials and military chiefs from around the world continue to show up at Asia's largest airshow, signalling their confidence that long-term growth remains robust for one of the fastest-growing aviation markets, organiser Experia Events said.
Over 1,000 companies from some 50 countries and regions - on par with the 2014 event - will be at the fifth edition of the biennial Singapore Airshow, which features both commercial and military aviation. Of these, three-quarters are returning exhibitors, including 65 of the world's top 100 aerospace companies.
France, the feature country this year, will have its biggest presence with more than 50 participating companies.
The new exhibitors include local and foreign firms such as Aviage Systems, BSB Aviation, CWT Defence Services, the Eurasia Partnership of Aerospace Cluster, and Turkey-based Roketsan.
Experia Events' managing director Leck Chet Lam said: "The strong support from new and returning exhibitors in 2016 demonstrates that the Singapore Airshow will continue to be the platform of choice and a must-attend event for exhibitors to reach out to key stakeholders and conclude new deals. We are looking forward to a stronger and more exciting edition in 2016."
Singapore's warm relations with many countries also make it an ideal location for high-level discussions on emerging trends and industry challenges, pointed out Subhranshu Sekhar Das, vice-president (aerospace & defence) at Frost & Sullivan.
The 2014 Singapore Airshow - which contributed over S$319 million in direct spending to the local economy - saw more than 1,000 high-level meetings take place between exhibitors and 274 official delegations from 76 markets. Similar numbers are expected this year.
This year, a new zone has been earmarked during the trade days to showcase emerging and innovative technologies such as unmanned aerial vehicles, 3-D printing and aircraft-related IT.
While the Singapore Airshow doesn't typically net the huge order books chalked up at airshows in Europe and Dubai - February is too close to the year-end book closure for planemakers - there is chatter that certain deals could be inked this week. Among them are an announcement for six wide-body aircraft by Philippine Airlines as well as an order for turboprops from Europe-based planemaker ATR for a leasing company.
"We hope to see a similar result as what was achieved at the Singapore Airshow 2014, where major contracts worth some US$32 billion were announced for Airbus, Embraer, Boeing, Rolls-Royce, Pratt & Whitney, Bombardier (and) ST Engineering, to name a few," said Mr Leck.
Centre for Aviation (CAPA) analyst Brendan Sobie doesn't expect "eye-popping" orders at the Singapore Airshow, but reckons there could be some orders from Asian airlines and leasing companies.
"For South-east Asia, we have seen so many orders over the last several years that it is the time in the cycle to take a hiatus generally from more large-scale orders," he said. "With more than 1,500 orders from South-east Asia airlines, there is plenty already in the pipeline covering both replacement (aircraft) and growth."
Frost & Sullivan's Mr Das reckons that the plunge in jet fuel prices might even encourage some carriers to hang on to existing aircraft longer as opposed to trading them in for new, more fuel-efficient planes.
Asia is expected to overtake North America in having the world's largest fleet by 2034, highlighting the need for investment, the infrastructure as well as the services to support growth in this part of the world.
And as original equipment manufacturers (OEMs) continue to set up base in the region to cater to demand, the Economic Development Board (EDB) is keen to build an aerospace eco-system in Singapore that will be able to design, engineer, produce as well as deliver after-market services for key aircraft programmes. Singapore already holds a 10 per cent share of the global maintenance, repair and overhaul (MRO) industry.
"By 2040, we envision that Singapore will have a comprehensive manufacturing and after-market presence from leading aerospace OEMs as well as home-grown enterprises who are able to service and supply to major aircraft programmes," said Tan Kong Hwee, EDB's director (transport engineering), speaking at a press conference on Sunday morning. "We would like to see much more substantial participation from our local enterprises in this industry."
Meanwhile, aircraft on display at this year's airshow include the F-16C from the Singapore Air Force, two F-22 stealth fighters from the US Air Force, the military transport aircraft A400M, a US Navy P-8A Poseidon, as well as - for the first time - the Airbus H1454 and the Bell 505 helicopters. Luxury executive jets from Bombardier, Embraer and Gulfstream will also be on display, such as the G650ER.
Conferences taking place include the Singapore Airshow Aviation Leadership Summit, which has lined up eminent speakers such as Deputy Prime Minister Tharman Shanmugaratnam, International Civil Aviation Organization council president Olumuyiwa Benard Aliu, International Air Transport Association chief Tony Tyler and Violeta Bulc, the European Commissioner for Transport.
Peripheral activities held in conjunction with the airshow include the launches of Pratt & Whitney's first manufacturing facility at Seletar Aerospace Park and Singapore Aero Engine Services' expanded facility in Loyang
.

Asia: Stocks outside China to rebound as yen, gold extend losses

Asia: Stocks outside China to rebound as yen, gold extend losses

[WELLINGTON] Australian stocks rallied and futures on equity indexes outside of China signaled gains after a rebound in oil at the end of last week spearheaded a revival in risk appetite. The yen continued to decline with the euro as bonds in the region fell with gold.
Takeover activity fueled the steepest advance in New Zealand's benchmark in a year, while Australian shares rebounded from a 2 1/2-year low, with US index futures also jumping amid market holidays in North America.
Contracts on Japanese stocks foreshadowed gains after equities there suffered their worst week in more than seven years.
Markets in mainland China resume Monday after a week-long holiday, during which the yuan soared to a 2016 high in offshore trading.
The yen weakened a second day with the euroas Australian and New Zealand government bonds tracked losses in Treasuries.
US crude fell to around US$29 a barrel after its Friday surge burnished market sentiment.
People's Bank of China (PBOC) governor Zhou Xiaochuan tried to front foot the expected gyrations in local markets by talking up the nation's stability in an interview at the weekend, saying there was no basis for continued depreciation in the yuan.
Global equities entered a bear market last week and demand for haven assets jumped as the Federal Reserve acknowledged the worldwide volatility and signaled it may delay further policy tightening in the US.
After sliding for six straight days on glut concerns, crude futures surged 12 per cent Friday amid a rebound American stocks on strong US retail sales data.
"It is difficult to be sure these days given the extent of volatility present, but one of the catalysts for the better tone to financial markets on Friday appeared to have been some respectable economic data out of the US," Philip Borkin, senior economist in Auckland at ANZ Bank New Zealand Ltd, said in a client note.
"This is important, as together with concerns over China's outlook and emerging markets more generally, recent US data wobbles had added to financial market angst."
While China, Taiwan and Vietnam return from their Lunar New Year breaks Monday, markets in the US and Canada will be closed for holidays.
Japan reported a weaker-than-expected drop in fourth-quarter gross domestic product Monday, with Thailand also slated to update on its economy.
China resumes to a slew of trade numbers, with economists projecting a seventh straight month of contraction in exports. Indonesia also reports on trade, Singapore issues retail sales figures and India will update on wholesale prices.
Stocks Australia's S&P/ASX 200 Index advanced 1.1 per cent as of 8:52 am Tokyo time, as mining and energy stocks drove the rebound.
New Zealand's S&P/NZX 50 Index climbed 1.6 per cent, driven by gains of at least 26 per cent in Diligent Corp and Nuplex Industries Ltd. Diligent agreed to be bought out and chemical company Nuplex received a conditional takeover offer.
Futures on Japan's Nikkei 225 stock average were bid for 15,420 in the Osaka pre-market, up 4.2 per cent from what they closed at on Friday, while yen-denominated contracts gained 0.5 per cent to 15,485 in Chicago. The Nikkei 225 slumped 11 per cent last week, its worst week since October 2008, as a gauge of Japanese equity volatility jumped 35 per cent to an almost five-year high.
In Hong Kong, futures on the Hang Seng Index added 0.1 per cent in most recent trading, while those on the Hang Seng China Enterprises Index, a measure which tracks mainland companies listed in the city, fell 0.1 per cent.
Stocks in the Shanghai Composite Index were valued at 11.3 times estimated earnings when they last traded Feb 5, above the average valuation of 10.5 times for shares in MSCI's Emerging Markets Index, which slid 3.8 per cent last week to its lowest level in more than two weeks.
"There's been a lot of embedded selling pressure in the A- share market," said George Hoguet, a Boston-based global investment strategist at State Street Global Advisors, which has US$2.4 trillion under management, referring to the domestic Chinese equity market.
"I don't think the market is fully cleared yet."
Futures on the Standard & Poor's 500 Index gained 0.6 per cent to 1,868.75 Monday, while those on the Dow Jones Industrial Average climbed 0.5 percent. The S&P 500 rallied 2 per cent with the Dow on Friday, trimming their weekly losses to less than 1.5 per cent as mining stocks and banking shares led the recovery.
Currencies
The yen retreated 0.3 per cent to 113.62, after trimming its weekly advance to 3.1 per cent on Friday. It was still the best performance among 16 major currencies tracked by Bloomberg against the dollar.
The euro lost 0.3 per cent to US$1.1222 after slipping 0.6 per cent on Friday, only its third drop in 10 days.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.1 per cent after gaining 0.2 per cent on Friday as more positive sentiment dimmed the appeal of haven currencies like the yen, euro and the Swiss franc. The index has lost 1 per cent this year as the case for further US rate hikes in 2016 dims.
The yuan was little changed early Monday at 6.5125 per dollar in Hong Kong trading, after jumping 0.5 per cent on Friday to cap an offshore advance of 0.9 per cent, its fifth straight weekly climb.
PBOC chief Mr Zhou said China's balance of payments is good and capital outflows are normal, with the exchange rate basically stable against a basket of other currencies, according to an interview published Saturday in Caixin magazine. The comments marked an escalation in verbal support for Chinese markets, with Mr Zhou leaving most of the commentary over the past few months to deputies and the chief economist of the central bank's research department.
Policy makers in Beijing have a tricky task Monday given the offshore yuan's strength against the dollar last week. Boosting the so-called yuan fixing would wipe out much of the benefits afforded by January's depreciation of the currency, while any bias toward weakness after the holiday could spur on global market turmoil.
"They have to take into consideration the big drop in the dollar while they were away," said Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd in Singapore.
"But unfortunately for China, they've made it such that the market tends to read the fixing as a signaling tool, and that makes Monday's reference rate very important."
Commodities
West Texas Intermediate crude fell 1.2 per cent to US$29.10 a barrel in early Monday trading, after paring last week's selloff to 4.7 per cent with the Friday jump. Brent slipped 1.7 per cent to US$32.80 after rising 11 per cent at the end of last week.
US oil explorers idled more rigs last week amid oil's fluctuations and descent below US$30 a barrel. Rigs targeting oil in the US fell by 28 to 439, after more than 1,000 were idled over the past year and a half, Baker Hughes Inc said on its website Friday. The report marked eight straight weeks of declines in the number of working rigs.
Copper futures rose 0.9 per cent to US$2.0470 a pound, while gold for immediate delivery was down 0.4 per cent to US$1,232.83 an ounce in a second day of losses. The precious metal climbed 5.5 per cent last week, its best weekly performance since 2011.
BLOOMBERG

Banks to plump cushion against growing risk to asset quality

Banks to plump cushion against growing risk to asset quality

Investors are pricing a crisis into banks' share prices, even as analysts are clear that things are not so dire

Singapore
WHEN Singapore banks announce their fourth-quarter results this week, they are likely to set aside more provisions against souring assets - as the local lenders are expected to flag risks in not only their current portfolios, but also growth areas like trade finance.
With investors spooked by China's shaky economy and oil prices stubbornly low, Singapore banks are now trading at about crisis levels when compared to book value. Between their one-year peak and trough, the banks' share prices slumped more than 30 per cent, with DBS taking the biggest plunge.
"This we view as a signpost that we are entering a bear market end game, where the market is not only pricing zero growth but also ROE (return on equity) downgrades likely through an expected spike in credit costs," Citi Research analyst Robert Kong cautioned in a brief report.
Yet, despite the scary calls by funds, analysts are not proclaiming a banking crisis. Non-performing loan (NPL) ratios are low - but they haven't fallen to 2009 levels, which breached the critical 2 per cent mark. Singapore banks are still well capitalised. Bloomberg data shows DBS and OCBC remain "buy" calls for most analysts.
For UOB, the ratings for its stock are "buy" or "hold".
Analysts noted that since the last global financial crisis, provision and profit growth have not kept pace with loan growth for the local banks - though this also reflects that the loans today are less risky than before. Most of the banks' growth in the last five years was driven by short-term trade loans, as mortgages came under tougher regulation.
Still, given this lag, "sensitivity to rising provision charges for the Singapore banks today is elevated", said a UBS Research note, noting every 10- basis-point (bps) lift in provision charges causes a 6-7 per cent drag on banks' currently expected 2016 earnings.
Citi likewise pointed out that "investors seem uncomfortable with benign asset quality and credit costs guided by Singapore banks management". "Aside from mortgages, loan growth is increasingly corporate. As such, credit costs can stay low for long periods before being hit with 'episodic' NPL formation," it added.
At current prices, the market is pricing provisions - a form of reserve taken against earnings and typically measured as a percentage of all loans - to rise to over 70 bps of loans. This is similar to the level in 2008 but lower than 2009's 132 bps, Citi said. It does not expect capital raising, or a cut in dividends, but noted that the late credit cycle NPLs may temporarily bring quarterly ROEs to under 9 per cent.
CIMB has factored in provisioning levels of 38-65 bps of loans for 2016, despite the banks' guidance of total provisioning at 30-35 bps of loans, said its banking analyst Kenneth Ng.
UBS Wealth Management's Singapore equities analyst Lee Wen-Ching had forecast an increase in Singapore banks' NPL ratio to 1.1 per cent in 2015, and 1.39 per cent in 2016. "We believe that the market would be comfortable with a gradual increase in NPLs, so long as there are no sharp and sudden spikes in them."
Both OCBC and UOB reported for the third quarter higher NPLs due mainly to its oil-and-gas customers. Bad loans at OCBC rose to 0.9 per cent from 0.7 per cent a year ago. The bank said then it had already restructured certain loans. DBS's NPL ratio was unchanged at 0.9 per cent, holding steady for six straight quarters. The bank's stress tests showed at that point that 5 per cent of its portfolio would be affected if oil prices remained low for the next 24 months.
Significant shifts in yuan movement will have an impact, and not just because of its recent depreciation against the greenback. Trade finance should weaken as the arbitrage game between offshore and onshore yuan is no longer attractive to Chinese companies. Banks such as DBS and OCBC had benefited from companies that were taking up financing at better offshore-yuan rates. Today, that trend has reversed, with onshore-yuan rates significantly better than the rates in offshore markets.
DBS chief executive Piyush Gupta said three months ago that the bank would be able to hold its trade book at current levels, but only if there was an "equalisation" of onshore and offshore rates. But Macquarie analyst Thomas Stoegner in a recent report on DBS said: "The RMB arbitrage trade does not work any longer."
CIMB's Mr Ng similarly noted that the volume of Asian trade has come down about 10 per cent, as commodity prices halved. "This has significantly reduced overall loan growth for the banks, and has its associated effects on fees earned," he said.
One piece of good news with trade finance is the "rationalisation" of some competitor behaviour, reducing certain price-driven transactional deals in 2015, said analyst Paul Dowling of East & Partners Asia.
Damage to asset quality from trade finance is unlikely, analysts noted, with CIMB's Mr Ng flagging bigger concerns from long-dated lending in the US dollar for RMB activities.
Data from the Monetary Authority of Singapore (MAS) showed 80 per cent of large firms listed on the Singapore Exchange (SGX) hedge forex risks. But only half of small and medium-sized enterprises (SMEs) do this, making them more vulnerable than their larger peers.
Macquarie estimates that in an adverse scenario, 3.6 per cent of total revenue at DBS could be at risk, reflecting both margin pressures and a fall in trade assets. The bank has a trade finance exposure of about S$50 billion, with trade finance accounting for about 18 per cent of its total loans.
Full-year loan growth for 2015 in Singapore closed at 1.1 per cent - the most sluggish since 2002, dragged down by weak lending for trade, manufacturing, and financing activities. Consumer lending here is growing, but at a slower pace for some two years now. This is due to prudent regulations to ease household leverage in purchases of property and cars, and in the rolling of credit-card debt.
The rise in rates should be a catalyst, since this boosts net interest margins (NIMs) for banks. Singapore's interbank offered rate (Sibor) has more than doubled over 2015, and is now around 1.25 per cent. UBS's Ms Lee expects Sibor to hit 2.2 per cent over a 12-month period. NIMs should expand from 1.72 per cent in 2015 to 1.77 per cent in 2016.
CIMB's Mr Ng has a more muted call, expecting NIMs to rise very gradually by 1-3 bps. "The US Federal Reserve may have its hands tied in consecutive rate hikes, after last December's move and the global stockmarket collapse. However, the strength of the US dollar, as most other countries have continued on the easing path when the US has narrated a tightening path, has seen Sibor creep up," he said. "The downside for Sibor and NIMs lies in the risk that the Fed does an about-turn and goes back to aggressive QE (quantitative easing)."
UOB will release its results on Feb 16, OCBC on Feb 17, and DBS on Feb 22
.

HSBC decides to stay in Britain

HSBC decides to stay in Britain

[LONDON] HSBC has decided to keep its headquarters in Britain, the bank said on Sunday, following a review into a potential move that could have shifted the group's base to Hong Kong.
The decision to stay gives a boost to London's status as a global financial centre, which has faced challenges from tougher regulation since the financial crisis as well as rising costs. "The decision of the Board was unanimous," HSBC said in a statement.
REUTERS

Technics fails to reach deal on disposal of assets; resuming trading

Technics fails to reach deal on disposal of assets; resuming trading

TECHNICS Oil & Gas will resume trading on Monday (Feb 15) after failing to reach an agreement to sell certain assets.
The oil and gas contractor suspended its stock on Jan 6 to give itself more time to negotiate what it described as a "major disposal".
But Technics announced early on Monday it has stopped discussions after the company and potential buyers failed to reach definitive agreements.
The company on Feb 4 posted a net loss of S$1.2 million, or 0.53 Singapore cent per share, more than double the year-ago loss of S$593,000, or 0.25 Singapore cent per share.
Technics shares last traded at 62 Singapore cents on Jan 5.

728 X 90

336 x 280

300 X 250

320 X 100

300 X600