Singapore's investment commitments in 2015 met or exceeded forecasts: EDB

By

Lee U-Wenleeuwen@sph.com.sg@LeeUwenBT

The investment commitments in 2015 either met or exceeded the Economic Development Board's (EDB) forecasts for all indicators, the statutory board announced in a statement on Tuesday. 

ST PHOTO

FEB 2, 20162:04 PM

THE investment commitments in 2015 either met or exceeded the Economic Development Board's (EDB) forecasts for all indicators, the statutory board announced in a statement on Tuesday.

This will lead to the creation of 16,800 jobs when the projects are fully implemented, within the earlier forecast of 16,000 to 17,000 jobs.

Last year, EDB attracted S$11.5 billion in fixed asset investments, beating its forecast of between S$9 billion and S$11 billion. Total business expenditure per annum and value-added per annum, at S$5.6 billion and S$12.3 billion respectively, were within the initial estimates.

For 2016, EDB expects the level of investments to remain moderate due to uncertain global economic conditions. The weak global demand is also likely to continue to affect Singapore's manufacturing output, although the agency remains confident about the underlying health of the country's manufacturing sector.

"The investment commitments achieved in 2015 are a demonstration of the resilience of Singapore's attractiveness as a global business hub for leading companies seeking long-term competitiveness as well as pursuing growth opportunities in Asia," said EDB chairman Beh Swan Gin.

"These are exciting times for Singapore as we transition to a value-creating economy. EDB will continue to attract quality investments, and transform existing industries to bring about sustainable economic opportunities for all."

    
 

Singapore's consumer confidence dips in Q4: Nielsen index

By

Lee Meixianleemx@sph.com.sg@LeeMeixianBT 

FEB 2, 20162:40 PM

SINGAPORE'S consumer confidence index has fallen seven points to 94 in Q4, according to the latest Nielsen global survey of consumer confidence and spending released on Tuesday.

The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions, among more than 30,000 respondents in 61 countries.

Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism respectively.

According to its findings, Singaporeans have displayed signs of apprehension in Q4 (40 per cent, as compared to 30 per cent in Q3).

Job security (30 per cent) and the economy (30 per cent) are the top major concerns to locals.

"The slowdown in China has a direct and broad-based impact on businesses and jobs in Singapore as China is the largest export destination for the nation," said Joan Koh, managing director of Singapore and Malaysia, Nielsen. "Layoffs in the financial sector due to a changing business environment, weak macro economy and higher costs have also added to the rising concerns of job security and a lacklustre economy."

In view of the situation, consumers have cut back on lifestyle expenses including shopping for new clothes (62 per cent), holidays and short breaks (50 per cent), and out-of-home entertainment (47 per cent).

Locals are also switching to cheaper grocery brands (43 per cent) and saving on gas and electricity (41 per cent).

Respondents have also indicated that they will continue to reduce their discretionary spending when times are better, especially on buying new clothes (36 per cent), expenditures on gas and electricity (29 per cent) and splurging on out-of-home entertainment (27 per cent).

Nielsen's findings also show that Singaporeans remain among the top savers and investors in the world.

Some 64 per cent put their money into savings, while three in 10 Singaporeans (30 per cent) have invested in shares and mutual funds.

One in four locals (25 per cent) will top up their retirement funds to ensure a comfortable retirement in their golden years.

"Our findings continue to reveal that Singaporeans have displayed a strong desire to ensure financial security through savings and investments regardless of a rainy day," added Ms Koh. "In addition, Singapore has an ageing population and it is a wise choice to plan early for the retirement nest egg."

      

Australia central bank holds rates, gives nod to global risk

Australia's central bank held rates steady for an eight month on Tuesday, even as wild swings in global markets, deepening unease over China's economy and a fresh outbreak of easing abroad suggests risks are for a further cut going forward. 

PHOTO: REUTERS

FEB 2, 201612:30 PM

[SYDNEY] Australia's central bank held rates steady for an eight month on Tuesday, even as wild swings in global markets, deepening unease over China's economy and a fresh outbreak of easing abroad suggests risks are for a further cut going forward.

The Reserve Bank of Australia (RBA) did leave the door open to a move after its first policy meeting of the year, saying that a background of subdued inflation meant there was scope for a reduction if needed to support the economy.

The Board specifically noted that coming data would allow it to better judge if turmoil in financial markets truly augured tougher times for the global economy, and whether recent strength in employment at home would prove long lasting.

Yet it also saw reasons for optimism. "The Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target," RBA Governor Glenn Stevens said in a brief statement. "The available information suggests that the expansion in the non-mining parts of the economy strengthened during 2015 even as the contraction in mining investment continued."

The steady outcome was no surprise given the RBA has repeatedly questioned whether lower rates would do much good, and might cause harm by inflating a bubble in home prices.

In a Reuters poll of 32 analysts, all had expected no change in the 2 per cent cash rate this week.

The central bank last eased in May and has since shown a preference for further stimulus to come through a weaker currency. The local dollar has obliged somewhat by falling to near seven-year lows against its US counterpart.

Investors still assume the global outlook argues for at least one more cut in rates, albeit not for a while.

Interbank futures imply around an even chance of a move by May and are fully priced for 1.75 per cent by October.

Already this year, the Bank of Japan has shocked by cutting rates to less than zero, while the head of the European Central Bank all but promised further stimulus steps by March.

The resulting drop in the yen and euro, combined with feverish talk of a possible devaluation of the Chinese yuan, are pressuring other countries to keep policy loose so as to avoid a damaging appreciation in their own currencies.

Worries about the health of Chinese demand have also contributed to steep price falls for many of Australia's major commodity exports, hitting profits, wages and tax receipts.

The RBA's own index of commodity prices sank by a quarter in the year to January, when measured in US dollar terms.

Domestic inflation would be no bar to action given it is running at the very bottom of the central bank's long-term target band of 2 to 3 per cent.

REUTERS

    
 

China fines domestic drug firms for price fixing

FEB 2, 201612:53 PM

[SHANGHAI] China's anti-monopoly regulator has fined five domestic drug firms a total of close to 4 million yuan (S$866,150) for fixing the prices of their medicines, the watchdog said on Tuesday, as the country battles to keep medicine prices down.

The drug firms colluded over a period from April 2014 to September 2015 to raise the price of allopurinol tablets, a drug used to treat gout and kidney disease, the National Development and Reform Commission (NDRC) said in statements on its website.

The fine, though relatively small, indicates China's anti-trust watchdogs may be turning attention towards medicines, a potential headache for domestic and international firms targeting the world's second-largest pharmaceutical market. "(The firms) created monopolies by agreeing to raise sales prices and to artificially carve up the market," the NDRC said in the statements. It added the drug was commonly used and was on the country's essential drug list. "This eliminated or restricted market competition, raising the cost of allopurinol tablets for the end user, and so harmed the interests of consumers."

China's near 1.4 billion potential patients are a major lure for drug firms targeting growth driven by rising incomes and a fast-ageing population. However, regulators have been clamping down on quality and forcing prices down to rein in a wider healthcare bill set to hit US$1.3 trillion by 2020.

The NDRC said the firms had held several meetings with each other to negotiate and agree on fixed prices, thus violating China's anti-monopoly law.

The firms include Chongqing Qingyang, Chongqing Datong, The Place Pharmaceutical (TPP), Shangqiu Huajie Pharmaceutical and Shanghai SINE Pharmaceutical Co, a subsidiary of Shanghai Pharmaceuticals Holding Co Ltd, the NDRC said.

Shanghai Pharma did not immediately comment on the case when contacted by Reuters.

China's drug market, which was growing at above 20 per cent back in 2012, slowed to around 5 per cent by the middle of last year, according to data from IMS Consulting Group.

Chinese regulators have previously gone after technology companies, automakers and dairy firms over monopoly issues, pulling in names such as Microsoft Corp, Daimler AG's Mercedes-Benz and French dairy Danone SA.

REUTERS

    
 

Freeport asks Indonesia to cut or postpone US$530 smelter bond

FEB 2, 20161:31 PM

[JAKARTA] Freeport McMoRan Inc has asked Indonesia to reduce a US$530 million smelter bond the local unit of the US copper mining giant must set aside before receiving an extension of its export permit, Indonesia's mining minister said on Tuesday.

Freeport's 6-month copper concentrate export permit expired last week amid a deadlock over the bond, which Indonesia has requested as a guarantee that the miner will complete construction of another local smelter.

"They have appealed to ask whether we can postpone it or give them a discount, but we asked them to show their commitment in another equivalent way," Energy Minister Sudirman Said told reporters, referring to an exchange of letters with the Phoenix, Arizona-based company.

REUTERS

Mining giant BHP's credit rating cut on low commodity prices: S&P

Mining giant BHP Billiton's credit rating was cut by Standard & Poor's Tuesday as it is battered by plunging global commodity prices, with the agency warning of further downgrades. 

PHOTO: REUTERS

FEB 2, 20161:28 PM

[SYDNEY] Mining giant BHP Billiton's credit rating was cut by Standard & Poor's Tuesday as it is battered by plunging global commodity prices, with the agency warning of further downgrades.

The decision comes as miners around the world are buffeted by an income slump, with the cost of key materials such as oil, iron ore, copper and aluminium at multi-year lows owing to a global economic slowdown, most painfully in key customer China.

Iron ore, Australia's largest export, has seen its price tumble to below US$40 a tonne, since peaking near US$200 a tonne in 2011.

The move will put pressure on chief executive Andrew Mackenzie, who has pledged to keep the firm's A-grade rating in the face of price headwinds.

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"In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term," he said last month in an operational update.

S&P downgraded the world's number one miner to A from A+ and placed it - along with rival Rio Tinto - on negative credit watch, it said in a statement. Rio currently has a A- rating under S&P.

"The rating cut was very widely expected," CLSA's head of resources research Andrew Driscoll told AFP.

"It's becoming increasingly clear to the investment community that as commodity prices have deteriorated, it's an increasing challenge for the major mining companies to maintain credit ratings amidst lower operating cash flows and their progressive dividend distributions."

S&P said it forecast a "material drop in BHP Billiton's results in the coming 18 months, with key credit metrics well below the levels we consider to be consistent with an 'A+' rating".

BHP shares sank 1.18 per cent to A$15.07 in afternoon trade in Sydney, while Rio was 2.00 per cent lower at A$38.19.

The Anglo-Australian miner said in a statement Tuesday that the company "has the strongest credit rating in the sector and remains committed to maintaining its strong balance sheet through the cycle".

The CLSA's Driscoll said BHP could cut its dividend when it announces its interim 2016 financial year results on February 23, in order to strengthen its balance sheet.

S&P's investment-grade rating is usually seen to be at least BBB-, with lower credit ratings raising the cost of borrowing. A "junk" rating is BB+ or lower.

AFP

    
 

Gold hits 3-month high on shaky global economy

Gold edged to a three-month high on Tuesday as weak global manufacturing activity underscored the challenges for the world economy, pushing investors towards safe-haven assets. 

PHOTO: BLOOMBERG

FEB 2, 201611:14 AM

[MANILA] Gold edged to a three-month high on Tuesday as weak global manufacturing activity underscored the challenges for the world economy, pushing investors towards safe-haven assets.

Increased volatility in other assets has benefitted gold and it could see more gains as global central banks may be forced into easing monetary policy further this year to spur growth.

With rates close to zero, the "only option is to move either towards zero or negative rates as the Japanese and selected European countries are already doing in a desperate attempt to force banks to lend", INTL FCStone analyst Edward Meir wrote to clients.

"Whatever the case, this should be constructive for gold." Spot gold touched US$1,130.11 an ounce, its strongest since Nov 3, and was trading down 0.2 per cent at US$1,126.55 by 0226 GMT.

A break above US$1,136 could lift gold towards US$1,157, a level reached in late October, said ScotiaMocatta technical analysts.

US gold for April delivery was flat at US$1,127.30 an ounce.

Reflecting growing confidence in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 21.9 million ounces on Monday, the most since Nov 3.

Global manufacturing expansion accelerated slightly but remained weak at the start of 2016 as faster growth in developed markets failed to offset a contraction in emerging economies. In China, a gauge of factory activity fell to its lowest since mid-2012.

The US economy could suffer if recent volatility in financial markets persists and signals a slowdown in the global economy, Federal Reserve Vice Chairman Stanley Fischer said.

Gold is typically the asset of choice in times of uncertainty. It posted its best monthly jump in a year in January, and has gained more than 6 per cent so far in 2016, after falling 10.4 per cent last year.

The Fed's statement last week that it will closely monitor the global economy and financial markets lifted gold to near US$1,130, as it underlined expectations that US policymakers may take it slow in raising interest rates this year.

"Weaker macro numbers out of the US are also increasing the odds that the Fed's December move could have been an outlier, forced onto a central bank that basically had to move after promising to do so for much of the last year," said Meir who sees only one US rate hike this year.

Spot platinum fell 1 per cent to US$860.85 an ounce, palladium was steady at US$500.16 and so was silver at US$14.31.

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