Sundar Pichai: the little-known new chief of Google

Mr Pichai, 43, was named chief executive officer of the Internet titan Monday, as Google unveiled a new corporate structure creating an umbrella company dubbed Alphabet. 

PHOTO: AFP

AUG 11, 20159:59 AM

[SAN FRANCISCO] His name may not ring a bell, but Google's new CEO Sundar Pichai has worked on some of the company's best-known products - from the Chrome browser to the Android mobile software.

Mr Pichai, 43, was named chief executive officer of the Internet titan Monday, as Google unveiled a new corporate structure creating an umbrella company dubbed Alphabet.

He will oversee the biggest company under that umbrella, which will still be called Google and will continue to include some of its household products, including its search engine, ads, maps, apps, YouTube and the Android system.

Alphabet will be run by Google chief Larry Page, who showered praise upon Pichai, senior vice president of products.

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"I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations," according to Mr Page in a blog post.

Mr Page said he was impressed with his "progress and dedication to the company" and promised to continue to groom Mr Pichai, who has been at Google since 2004.

"I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that." In his role as SVP of products, Mr Pichai oversees management, engineering and research for Google's products and platforms, according to Google's filing at the US Securities and Exchange Commission.

Before that, he was SVP of Google Android, Chrome and Apps, working on consumer products "used by millions of people," the filing said.

Mr Pichai was part of the team that launched the Chrome browser in 2008 and also worked on various search products, including Google Toolbar, Desktop Search, Gadgets and Google Gears, according to the company.

Before joining Google, Mr Pichai worked as an engineer at manufacturer Applied Materials, followed by a stint in management consulting at McKinsey & Company.

US media described him as soft-spoken, little-known, and a long-time right-hand man to mentor Page.

Originally from Tamil Nadu province in southeast India, Mr Pichai received a Bachelor of Technology from the Indian Institute of Technology Kharagpur.

He also has a Master of Science from Stanford University and a Master of Business Administration from the Wharton School of the University of Pennsylvania.

Mr Page said Mr Pichai is the man to steer the Google ship in the coming years, as it continues to innovate and expand its product base.

"Google itself is also making all sorts of new products, and I know Sundar will always be focused on innovation-continuing to stretch boundaries," he said.

"I know he deeply cares that we can continue to make big strides on our core mission to organise the world's information."

AFP

    

Japan ends nuclear shutdown four years after Fukushima

Police officers and security personnel stand in front of the gate of the Kyushu Electric Power Sendai nuclear power plant as anti-nuclear protesters rally against the restarting of the nuclear reactor in Satsumasendai, Kagoshima prefecture, on Japan's southern island of Kyushu on Aug 10, 2015. 

PHOTO: AFP

AUG 11, 201510:10 AM

[TOKYO] Japan on Tuesday switched on a nuclear reactor, officials said, ending a two-year shutdown in the energy-hungry country that was sparked by public fears following the 2011 Fukushima crisis, the worst atomic disaster in a generation.

"The reactor No 1 at the Sendai nuclear power plant started operating at 10.30 am (0130 GMT)," said a spokesman for Kyushu Electric Power, which operates the reactor about 1,000 kilometres southwest of Tokyo.

The 31-year-old reactor - operating under tougher safety rules - was expected to reach full capacity around 11.00 pm Tuesday and would start generating power by Friday.

Commercial operations are set to begin early next month, the spokesman said.

The restart comes more than four years after a quake-generated tsunami triggered meltdowns at the Fukushima plant, prompting the shutdown of Japan's stable of reactors.

Anti-atomic sentiment still runs high in Japan and there were reports Tuesday of protesters scuffling with police in front of the Sendai plant, which is on the southernmost island of Kyushu. Local media said about 200 protesters gathered in front of the plant.

The resource-poor nation, which once relied on nuclear power for a quarter of its electricity, restarted two reactors temporarily to feed its needs. But they both went offline by September 2013, making it completely nuclear-free for about two years.

Japan has ushered in stricter safety regulations to avoid a repeat of Fukushima, including more backup prevention measures and higher tsunami-blocking walls in areas most susceptible to them.

The government of Prime Minister Shinzo Abe is keen to get some of about four dozen reactors back up and running. So are the power companies that own them, fed up with having to make up lost generating capacity with pricey fossil fuels.

AFP

    

Oil prices fall after China devalues yuan

AUG 11, 201511:41 AM

[SINGAPORE] Oil prices slumped on Tuesday following a jump in the previous session, as China devalued its yuan currency following a run of poor economic data that underscored the market view that fundamentals are too weak to warrant higher oil prices.

Crude oil futures jumped almost 4 per cent on Monday, moving away from January lows, as speculative traders increased their net-long positions, but prices slumped again on Tuesday morning and remain over a quarter below their most recent peaks in May.

China devalued the yuan on Tuesday in what its central bank called a "one-off depreciation" of nearly 2 per cent as its economy grows at its slowest pace in decades, guiding the currency to its lowest point in almost three years.

As a result, front-month Brent futures were at US$50.02 a barrel at 0308 GMT, down 39 cents from their last close. US crude fell 42 cents to US$44.54. "Prices are still facing heavy bearish pressures. This could mean that prices could reach 2015 lows," Singapore-based Phillip Futures said, although the brokerage added that it does not expect oil prices to fall below this year's lowest point reached in January.

The overall low prices come on the back of weak supply and demand fundamentals, with output from key producers like the Organization of the Petroleum Exporting Countries (Opec), Russia and the United States near record highs just as demand growth slows.

In China, the world's No.2 economy and oil consumer, exports tumbled 8.3 per cent in July in their biggest fall in four months, threatening the government's 7 per cent economic growth target for this year, already the lowest in decades.

REUTERS

    

Brokers' take: Downside risks to Singapore's economic growth piling up

By

Angela Tanangelat@sph.com.sg

A Development Bank of Singapore (DBS) logo in pictured in the backdrop of the central business district in Singapore. 

PHOTO: REUTERS

AUG 11, 201510:11 AM

SINGAPORE'S Ministry of Trade and Industry (MTI) announced on Tuesday that the Singapore economy grew by 1.8 per cent on a year-on-year basis in the second quarter, slower than the 2.8 per cent growth in the previous quarter.

Here are some comments:

DBS Group Research:

"In line with our expectation, upward revision in the services sector has helped to offset the slump in the manufacturing sector."

"Manufacturing sector has indeed been the weakest link. Overall manufacturing growth in the second quarter now reads -4.9 per cent year-on-year against the advance estimate of -4.0 per cent.''

"Beyond the rising external headwinds and global uncertainties, Singapore manufacturers are also struggling with the double whammy of higher business costs and domestic labour crunch."

"For example, electronics exports in Singapore have been stuck in the doldrums for the past three years. This has allowed emerging electronics manufacturers such as Vietnam to catch up. In fact, Vietnam will overtake Singapore to become the fifth largest electronics exporter in Asia within the next two years. Unless Singapore can find "greener pastures" in manufacturing, otherwise, this sector could be in for a steady structural decline."

"External headwinds have remained strong. Absent a recovery in the global economy, manufacturing performance will continue to languish while the services sector struggles with the domestic labour constraints. Full year GDP growth for 2015 is expected to register 2.4 per cent. But downside risks are certainly piling up. Against the backdrop of the second quarter GDP contraction, risk of a technical recession, albeit still low, should not be discounted.

Credit Suisse:

"Fiscal policy holds the key to growth improvement in H2. Partly due to the weak Q2 GDP print, we see downside risks to our full year 2015 GDP estimate of 3.2 per cent (consensus: 2.6 per cent).''

"Today's GDP print is unlikely, in and of itself, to move the needle on the central bank's exchange rate policy yet. As we have been highlighting, the biggest risk to policy comes from stability in the labour market, in our view...This is important too in light of General elections likely to be called sometime later this year.''

    

US dollar up as China devalues yuan

The US dollar lurched higher on Tuesday as China allowed its yuan to fall to levels last seen in 2012, a move that could provide a competitive boost to exports from the world's second largest economy. 

PHOTO: BLOOMBERG

AUG 11, 201510:40 AM

[SYDNEY] The US dollar lurched higher on Tuesday as China allowed its yuan to fall to levels last seen in 2012, a move that could provide a competitive boost to exports from the world's second largest economy.

Asian stocks mostly held firm as investors weighed the implications of the surprise move, which seemed to end months of officially sanctioned yuan strength.

China's central bank set the mid point for its currency at 6.2298 per dollar, down from Monday's fix of 6.1162, and said it was aiming for a depreciation of 2 percent.

Markets reacted by selling the Australian dollar, often used as a liquid proxy for the Chinese currency. The Aussie slid to US$0.7347, from US$0.7430 ahead of the news.

Other currencies in the region also lost ground to the US dollar as investors reasoned they would have to ease to stay competitive with China.

Against a basket of currencies, the US dollar gained 0.2 per cent to 97.339. The euro eased a touch to US$1.0990 , while the dollar firmed to 124.85 yen.

Chinese share markets were holding steady following hefty gains on Monday.

Elsewhere in the region, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.45 per cent. Japan's Nikkei added 0.6 per cent.

Sentiment had got a lift from Wall Street, where the Dow had ended Monday with gains of 1.39 per cent, while the S&P 500 climbed 1.28 per cent and the Nasdaq 1.16 per cent.

Shares in Google jumped over 5 per cent, adding US$25 billion to its market value, after announcing a new holding company called Alphabet which will separate the core web advertising business from newer ventures.

In commodity markets, oil eased back after a sharp rally on Monday. Brent crude was quoted 29 cents lower at US$50.12 a barrel, while US crude eased 31 cents to US$44.65.

REUTERS

    

MBA stars shun Wall St for the good life elsewhere

PUBLISHED

AUG 10, 2015, 5:00 AM SGT

NEW YORK • Ruined weekends, PowerPoint drudgery and overnight shifts in Manhattan skyscrapers once were a point of pride for the Harvard Business School graduates who went to Wall Street.

Now young stars hold heads high about how lucrative and healthy their lives will be - elsewhere.

"People used to brag and say, 'Oh yeah, 21-hour days, seven days a week for eight months,' that was a badge of honour," said Ms Kiran Gandhi, who like others in this year's class applied to technology companies. "The humble brag is now, 'Oh yeah, I work 9 to 5, I get paid a tonne of money, and I have a great life.'"

The allure of Silicon Valley, where hip start-ups are minting billionaires, is eclipsing that of staid investment banks under pressure to cut risks and costs.

This year, a long slide in the number of Harvard MBAs joining banks may hit a new low, even after many of the biggest firms adopted policies to become more hospitable to new recruits.

BIG BUCKS, GREAT LIFE

The humble brag is now, 'Oh yeah, I work 9 to 5, I get paid a tonne of money, and I have a great life.'

MS KIRAN GANDHI, who applied to technology companies instead of Wall Street

In 2007, about 13 per cent of the school's graduates who landed jobs went into investment banking or trading, according to Harvard's reports. By last year, that fell to about 5 per cent.

Now a preliminary survey of this year's grads shows only 4 per cent intended to join a bank after getting degrees.

Among the 46 Baker Scholars - a designation Harvard grants the top 5 per cent of MBAs - only one expressed interest.

Those are the findings of Mr Keima Ueno, who got his MBA from Harvard this year.

As a student, he served as a peer mentor and wrote a blog on what life is like at the school.

So when Harvard sent his class data from a pre-commencement survey, he used it to figure out where the Baker Scholars wanted to go. He wasn't surprised by the results.

"When we hear that our classmates managed to acquire a position with an investment bank, we say, 'Congratulations,"' he said.

"But we are thinking, 'I'm sorry to hear that.'"

Mr Ueno spent three years in Morgan Stanley's investment bank before returning to school to earn his MBA.

Now he's in Japan, running his family's healthcare business and a start-up Internet retailer.

Technology companies have been luring more top graduates with the promise that they'll not just make gobs of money, but also have a happier life, even if the hours are still long, according to students and recruiters.

Last year, about 17 per cent of Harvard's business school graduates poured into the industry, up from 7 per cent in 2007, its figures show.

Banks lost more recruits than any other sector.

While Mr Ueno's tally doesn't break out tech the same way, it shows start-ups alone are attracting 16 per cent of this year's class, including six Baker Scholars.

Big banks are fighting back, promising recruits more hours to sleep, the occasional day off and reasonable deadlines.

What the banks can't promise is the kind of windfalls that attract graduates to start-ups. And average pay at investment banks has shrivelled since the financial crisis because of a drop in revenue and a greater focus by regulators and shareholders on bonuses.

Goldman Sachs per-employee compensation expense fell to US$373,265 (S$517,000) last year from US$661,490 in 2007.

US business schools don't typically release statistics showing where graduates landed until autumn, and Harvard would not comment on Mr Ueno's tally.

Representatives from top investment banks said they are still drawing plenty of business school graduates.

Goldman Sachs received more MBA applicants this year for its summer associate programme, a feeder for the firm's full-time associate positions, according to Ms Leslie Shribman, a spokesman.

Mr John Yiannacopoulos, a spokesman for Bank of America, said: "We continue to see strong interest in our programmes from students at top MBA schools across the nation."

BLOOMBERG

Singapore's slowing economy adds to bank risk as loans slump

Singapore lenders have placed 2.3 per cent of their loan books in a "special mention" category that signals potential weakness, the highest since 2009.PHOTO: ST FILE

PUBLISHED

1 HOUR AGO

SINGAPORE (BLOOMBERG) - Slumping property and oil prices have dragged a gauge of Singaporean banks' loan quality to the worst in six years, inflating their borrowing costs.

Lenders have placed 2.3 per cent of their loan books in a "special mention" category that signals potential weakness, the highest since 2009. The extra yield investors demand to hold DBS Group Holdings 2019 dollar notes over US Treasuries surged to a record 87 basis points last month. Similar measures for United Overseas Bank and Oversea-Chinese Banking Corp. are the highest in at least six months.

While Singapore's banks are among the best capitalized in the world, loan recovery is suffering after government curbs drove home sales to a six-year low in 2014, oil prices slumped and Southeast Asian economies faltered. Singapore's gross domestic product shrank an annualized 4 per cent quarter-on-quarter in the three months through June, as bank lending fell for three straight months starting February in the longest tumble since 2009.

"You could see higher nonperforming loans and higher credit costs for the banks" because of the oil and property sectors, said Matthew Phan, a Singapore-based analyst at CreditSights Inc.

Soured debt at DBS backed by property increased 39.7 per cent from last year to $524 million at the end of June. Non-performing real-estate loans rose to 1 per cent of all lending at UOB as of June 30 from 0.8 per cent. Oil and gas loans are under some stress, which will continue, Samuel Nag Tsien, chief executive officer of OCBC, said July 31.

The trends may hurt lenders' profitability, according to Eugene Tarzimanov, senior credit officer at Moody's Investors Service in Singapore.

"Banks make good returns if they are growing or margins are widening," he said. "In Singapore, both conditions are not there."

call and an e-mail to the corporate communications officers of DBS and UOB were not answered. An OCBC spokesperson referred to the comments made by the bank's chief executive officer during the analyst call for company views on exposure to oil and property.

Since 2009, Singapore moved to stem a surge in the property market that was fueling discontent in the city-state. The measures included taxes as high as 15 per cent of the purchase price for foreigners.

Moody's also cited the government's guiding housing prices lower without sparking sharper slides in changing its outlook on Singapore's bank system to stable from negative last month. While the credit assessor expects a "mild deterioration in books," the relatively low exposure to commodities including oil should prevent major problems, Mr Tarzimanov said.

Banks and builders face an economy that shrank the most since 2012 last quarter. The city had the weakest-performing luxury residential market in the world for the sixth consecutive quarter at the end of June, according to consulting firm Knight Frank.

Office rents posted the first decrease in more than two years and residential prices have fallen for seven quarters in the longest run of declines since 2002.

While Singapore's lenders mitigate risks by securing loans, their exposure to the property industry represents about 40 per cent of all lending, according to Fitch Ratings.

"We believe the overall health of the Singapore economy is highly correlated with the property market," said Elaine Koh, a director in the financial institutions unit of Fitch in Singapore. "A severe and extended market correction would likely hit the banks' asset quality through a number of channels."

China July new yuan loans rise to 1.48t yuan, beating forecasts

Chinese banks extended 1.48 trillion yuan (S$329 billion) in new yuan loans in July, far exceeding analyst expectations, coming in higher than the previous month's lending of 1.28 trillion yuan. 

PHOTO: BLOOMBERG

AUG 11, 20158:53 AM

[BEIJING] Chinese banks extended 1.48 trillion yuan (S$329 billion) in new yuan loans in July, far exceeding analyst expectations, coming in higher than the previous month's lending of 1.28 trillion yuan.

The central bank said the broad M2 money supply (M2) grew 13.3 per cent from a year earlier, beating forecasts.

Outstanding yuan loans grew at 15.5 per cent by month-end.

Analysts polled by Reuters had expected outstanding loans to rise by 13.6 per cent, and predicted the money supply would rise by 11.7 per cent, with new yuan loans at 738.0 billion yuan.

Total social financing stood at 718.8 billion yuan in July.

REUTERS