Monday, March 3, 2008

End Of Bidding War For Straits Trading Is Good News For Minority Investors

Source : Channel NewsAsia, 03 March 2008

A bidding war between two of Singapore's most famous corporate families has come to an end but not without a final climax.

Insurer Great Eastern Holdings says it will sell its shares in Straits Trading to Tecity, which is controlled by the family of the late Tan Chin Tuan.

On Sunday, the Lee family, the main shareholder of Oversea-Chinese Banking Corp, pulled out of the race for Straits Trading, saying it would accept the S$6.70 per share offer from Tecity.

Analysts say minority investors should seriously consider cashing out at this price too.

The corporate drama that had investors glued to mainboard-listed Straits Trading's share price has drawn to a close.

Citing market volatility, the Lee family chose not to make a counter-bid, and instead, took up the Tans' offer of S$6.70 a share.

But pushing this unfolding spectacle into a new peak is Great Eastern, whose move to sell its shares in Straits Trading tipped the scales Tecity's way.

The Tan family owns about 26 percent of Straits Trading.

The decision by the Lee Family and Great Eastern will give it an additional stake of about 27 percent.

And that would give the Tan family control of Straits Trading, allowing them to unlock whatever potential it sees by playing an active role in the board.

It has, however, made clear in its offer document that the component of the management team will be untouched.

All eyes are now on another key shareholder OCBC.

At its latest results briefing, OCBC said it was considering the Tecity offer.

Shares in Straits Trading have been gaining, thanks to the bidding war.

Mu Quek Siong, Head, POEMS Dealing Team, Phillip Securities, says: "For minority shareholders yes it's good news. Because if you look at Straits Trading prices from 1989 until now, this is quite far away from their prices. All the way from 1989 to 2006, 2005 they have been trading at below S$3.50 level. These two years we have seen exponential gains at S$6.70. This is a good chance for minority shareholders to exit at this price. The next thing we might wanna ask the management is how you unlock the share value of this company."

The offer from the Lee family values the commodities and property firm at S$2.18 billion. - CNA/ch

Great Eastern To Accept Straits Trading Offer

Source : The Business Times, March 3, 2008

Singapore insurance firm Great Eastern said on Monday that it will accept an offer for Straits Trading by Tecity, whose offer values the commodities and property firm at $2.18 billion (US$1.56 billion).

Oversea-Chinese Banking Corp, together with insurance unit Great Eastern Holdings, control about 25 per cent of Straits Trading. -- REUTERS

Tussle Over For Straits Trading … Almost

Source : TODAY, Monday, March 3, 2008

Lees say yes to Chew Gek Khim’s offer, but will OCBC?

A rare and intense corporate tug-of-war between two distinguished families has ended with one side throwing in the towel, but not without first squeezing the other side.

The Lees of OCBC fame yesterday retreated from the tussle for one of Singapore’s oldest firms - Straits Trading Company (STC) - by accepting the offer of $6.70 a share from the family of late banker Tan Chin Tuan.

When contacted, a spokesman for Tecity - an investment firm run by the Tans - said: “We welcome the Lees’ decision. It is a gesture of friendship.”

Two months ago, ties between the two families appeared less than friendly in public.

Both had been locked in a staring match since January, when Tecity - led by Ms Chew Gek Khim (picture), granddaughter of the late Dr Tan - first proposed $5.70 per share to take over STC.

The offer for the firm, which holds diverse assets such as properties in the prime Orchard area and a tin smelting business, breathed life into an otherwise illiquid stock.

The market’s excitement was fanned further when the Lees, holding a direct 7-per-cent stake, flexed their financial muscle - but their counter bid was just a few cents more.

Word on the street was that the Lees, whose patriarch is the late banker-philanthropist Lee Kong Chian, were trying to provoke Ms Chew to raise her offer.

She did so, twice, arriving at a total improvement of $1 or 17.5 per cent from the original price. But Ms Chew - who in 2006 publicly fell out with Lippo Group over boardroom manoeuvres in Robinson, the retailer her grandfather built up - also made it clear her third call would be the final one.

Yesterday, the Lees said “yes” and withdrew their offer of $6.55 for STC.

In their statement, the Lees said they arrived at that decision after “taking into account the foregoing as well as the current volatile market conditions”.

They also “noted” that it was “in response to” their two counter offers that total STC shareholder value has grown by about $326 million.

But for Ms Chew, the battle is not yet over.

Tecity’s offer, which expires on Thursday, is conditional upon its amassing at least 50 per cent of STC. Otherwise, the takeover plan fails.

With the Lees’ direct stake in the bag, Ms Chew will have 35.1 per cent, up from the latest figure of 28.1 per cent last Friday.

The swing vote is held by OCBC and Great Eastern Holdings, which hold a combined 26 per cent of STC and are substantially owned by the Lees.

Last month, OCBC said it did not intend to accept Ms Chew’s offer, saying the OCBC stable and the Lees could “jointly unlock value in Straits Trading”.

But with yesterday’s development, OCBC spokesperson Koh Ching Ching told Today: “We are reviewing the matter.”

Tecity has held STC shares since the 1950s and has said publicly that it plans to work with STC’s management and directors to “undertake a strategic and operational review” of the 121-year-old company.

Great Eastern Should State Stand On Straits Trading

Source : The Business Times, March 3, 2008

THE tussle for control of The Straits Trading Company has dragged on for almost two months - during which the market has yet to know what substantial shareholder Great Eastern Holdings (GEH) thinks.

The need for GEH to show its hand has become even more urgent with the Lee family throwing in the towel and withdrawing its bid for Straits Trading yesterday.

GEH’s failure to indicate what it intends to do with its 19.92 per cent Straits Trading stake suggests a debatable lapse in its disclosure obligations as a publicly listed company.

Straits Trading received competing takeover bids from Tecity - which belongs to the family of former OCBC Bank chairman, the late Tan Chin Tuan - and the Lee family, which holds stakes in OCBC and, indirectly, in GEH.

The Tans raised their bids twice, in response to the Lees’ counter-offers. But the Lee family gave up the fight yesterday, announcing that it would withdraw its offer of $6.55 a share and sell its 7.1 per cent stake to Tecity - on the basis that it would make more sense for the Lees to realise their investment in Straits Trading now, given the current volatile market conditions.

OCBC and GEH have yet to announce their positions - and, in GEH’s case, have yet to make known their intentions at all.

Straits Trading shareholders have to decide if they want to sell their stakes to the Tans, who have offered $6.70 a share, or to hold on to their stakes.

And that decision depends on whether they think it’s time to cash out or not. For minority shareholders, knowing what the major shareholders think could help them make up their minds.

Should OCBC, which owns 6.21 per cent of Straits Trading, and GEH decide to sell their stakes to the Tans, that could mean a very different future for Straits Trading.

There’s also the matter of the size of GEH’s stake in Straits Trading. The insurance firm’s stake of 19.92 per cent is second only to that held by the Tan family, which now owns about 26.05 per cent.

GEH’s substantial ownership of the tin-mining company means that any action it takes in relation to the latter would have a significant impact on it. Its decision to hold or sell could make or break the takeover situation Straits Trading is facing.

Should GEH choose to sell its Straits Trading stake - along with the Lees disposing their 7.1 per cent - Tecity would end up owning a whopping 53.07 per cent, making its takeover bid for Straits Trading unconditional.

The material impact of GEH’s vote all the more necessitates frequent and timely disclosures on its plans for Straits Trading.

This is especially so when smaller shareholders have recognised the importance of keeping the market informed of their intentions for Straits Trading, given the significance of their position.

OCBC last month rejected the takeover offers for its shares in Straits Trading, saying that it can extract greater value for itself by staying put and adopting a more proactive role in the company.

The bank also noted that Straits Trading has a cash surplus of $347 million and a realestate portfolio worth at least $1.33 billion, and said that it would seek board representation at Straits Trading as well as request the board to appoint a financial adviser to study ways to unlock value and enhance shareholders’ value.

Aberdeen Asset Management, which owns about 2.5 per cent of Straits Trading, has also signalled its intentions. It said last week that it would choose the option that would realise the maximum value in Straits Trading.

GEH, on the other hand, has remained mum on its plans - save for a statement, reported in early January, that said that it had yet to decide on the initial offer made by Tecity.

The importance of major shareholders keeping the market informed as to their plans for Straits Trading was probably also recognised by Tecity - which sent personalised offer letters to OCBC and GEH, in addition to the general circular to shareholders. The move had the effect of putting the spotlight on OCBC and GEH and their disclosure obligations.

It could be that GEH believes the market would assume that it would vote in the same way as its parent, OCBC.

But, as one would never assume that every statement made by OCBC reflects a similar position held by GEH, that assumption is flawed. GEH is, for all intents and purposes, an independent entity that’s listed on the Singapore Exchange and accountable to its shareholders.

One would also hope that in a market as developed as Singapore’s - and especially one that prides itself on having an efficient disclosure-based regime - listed companies would choose not to forego such important announcements, on the basis of such assumptions.

Lees Withdraw Offer For Straits Trading

Source : The Business Times, March 3, 2008

They are accepting Tan family’s $6.70 a share offer, citing volatile market conditions.

The protracted battle for The Straits Trading Company (STC) has come to an abrupt end with OCBC Bank’s founding Lee family suddenly withdrawing its offer for the mainboard company and accepting the $6.70 per share competing offer from the Tan family’s The Cairns.

In an announcement released yesterday, the Lee family vehicle Knowledge Two Investment Pte Ltd said that it was ‘withdrawing its offer with immediate effect’ and citing ‘volatile market conditions’ among other things.

‘Any acceptances of the offer prior to or after the date of this announcement will be deemed not to have been made,’ it added.

In its reasons for the withdrawal, Knowledge Two Investment noted that in response to its offers of $5.76 and $6.55 per share on January 24 and February 14 respectively, The Cairns had increased its offer price by $1 per share or 17.5 per cent from its original offer price of $5.70 per share.

‘This has increased total STC shareholder value by approximately $326 million,’ the statement added. ‘Taking into account the foregoing as well as the current volatile market conditions, the offeror and the Lee family companies holding in aggregate approximately 7.1 per cent of the total number of issued shares, have decided to realise their investments in STC and accept the Cairns offer at $6.70 per share.’

This effectively ends a battle which saw two of Singapore’s most famous corporate families - the Lees and the Tans, which have been linked for decades through OCBC Bank - on opposite sides in a contest for one of Singapore’s oldest listed companies.

It began on Jan 6 when the Tan family - led by Ms Chew Gek Khim, the grand daughter of the late OCBC chairman Tan Chin Tuan - made an offer of $5.70 per share for Straits Trading.

Then on Jan 24, the Lee family made a counterbid of $5.76 per share. The Tans - who at the time held about 22 per cent - swiftly responded on Jan 28 by raising their offer to $6.50 per share.

The Lees then came back with a second counter offer of $6.55, which the Tans matched and upped at $6.70 per share.

Caught in the middle of it all were OCBC Bank, which owns 6.21 per cent in Straits Trading, and insurance giant Great Eastern Holdings which has 19.92 per cent - second only to the Tan family’s current stake of about 26 per cent.

Though the Lee family has a relatively small stake in Straits Trading - much smaller than the Tans - it is a key shareholder in both OCBC and Great Eastern.

OCBC last month rejected the takeover offers for its shares in Straits Trading, saying it could extract greater value for itself by staying put and adopting a more proactive role in the company. The bank also noted that Straits Trading has a cash surplus of $347 million and a realestate portfolio worth at least $1.33 billion. It also said it would seek board representation at Straits Trading as well as request the board to appoint a financial adviser to study ways to unlock value and enhance shareholders’ value.

Aberdeen Asset Management, which owns about 2.5 per cent of Straits Trading, said last week that it would choose the option that would realise the maximum value in Straits Trading.

Great Eastern has remained mum so far.

Not surprisingly, the battle between the two famous families has enthralled corporate Singapore, and fanned much speculation as to why things have come to a head over the tin smelter.

One theory has to do with OCBC’s recent sale of its stakes in companies like Robinson and Raffles Hotel.

There is speculation that the Tan family - especially Ms Chew - is unhappy with the moves, which could be seen to be unwinding the legacy that her grandfather built up.

OCBC’s stake sales have been driven by changes where financial regulators hold banks back from having significant non-banking businesses.

But the Tan family could be worried that any decreasing involvement of the Lees in the bank could speed up the divestment process. Although former OCBC chairman Lee Seng Wee’s son Tih Shih, 44, sits on the OCBC board, none of the third generation of the Lees is as closely involved in the banking business as previously.

The fear amongst the Tans could be that as the Lees exit the business and OCBC sells its non-bank assets, they would have to deal with less-than-friendly majority owners in these companies where they still hold significant stakes.

Views From The Top: If The US Goes Into A Recession...

Source : The Business Times, March 3, 2008

How will a US slowdown or recession affect your organisation and industry, and the Singapore economy in general? What can businesses do in the event of a slowdown?

THE US recession had already started since December 2007. I predict that the federal funds rate will drop to one per cent by September 2008. After that, we will most likely witness a rebound and rally in the market.

If the recession is more prolonged, it would at most extend by another six months to March 2009. Investors must remember that our present recessionary cycle is very different from the US recession between July 1981 and November 1982. In one way, it is similar to the 1981-82 one because the recession hit financial institutions such as banks and savings and loans particularly hard. The significant difference lies in the fact that we now have the sovereign wealth funds stepping in to prevent these financial institutions from closing down. In addition, we have wealth distributed from oil-rich countries in the Middle East.

Singapore is positioned to ride through the stormy weather in style! In these unique circumstances, Singapore has invested in three of the world’s most exciting banks, namely UBS, Citigroup and Merrill Lynch. We have also lined up world-class activities to ensure a continuous influx of tourist arrivals to boost domestic consumption:

Q1 2008 - Singapore Flyer Q3 2008 - Singapore Grand Prix Q3 2009 - Las Vegas Sands Marina Q3 2010 - Singapore 2010 Youth Olympic Games Q4 2010 - Resorts World Sentosa.

These activities will allow us to tide over the challenges ahead. In the event of a slowdown, Singapore businesses should take advantage of this period to upgrade themselves through higher education, visiting other countries for opportunities and consolidating.

Singapore can weather storm

SINGAPORE had been largely dependent on the US for its export market. However, in recent years, Singapore has successfully diversified its export markets to include China and India. In addition, its ongoing projects such as the integrated resorts, the hosting of the first Formula One night race and, most recently, the hosting of the 2010 Youth Olympics, would provide plenty of opportunities for the local market especially in the construction and services industries.

Hopefully, the ongoing IR projects and the tourism dollars being projected for the F1 race in September would be sufficient to tide us over the US slowdown.

The only other economic factor that will pose a challenge is high inflation due to the double whammy of higher prices for both petroleum and food.

As an IT security company with headquarters in the US, with Singapore as its Asean and India headquarters, we will be able to sustain our growth by tapping the current ongoing projects in Singapore, as well as growing revenues in countries such as India and Vietnam.

While striving to increase our business revenues, we have to strive even harder to keep overheads such as travel, entertainment cost, rental and even remuneration packages to a bare minimal.

Therefore, Singapore is likely to be spared the economic meltdown in spite of the slowing US economy, as we have been taking steps to minimise our dependency on the US market. This is one giant leap of faith by the Singapore government in the right direction. In the words of Prime Minister Lee Hsien Loong: ‘We have dared to bring our dreams into reality.’

- Benjamin Low Managing Director, South-east Asia and India Secure Computing

I THINK a lot will depend on how protracted the US recession will be. If the US slowdown lasts for two quarters, as some economists believe, then I think the Singapore economy might not be significantly affected. Singapore is now less dependent on the US than before and is quite well plugged to the Asian twin growth engines of China and India. The Singapore economy has growth momentum on its side, with many projects like the IR, F1 and now the Youth Olympics, to stay resilient. However, if the US recession turns out to be severe, then not just Singapore but the global economy will be affected.

The steel industry, on the other hand, is going through interesting times. While 2007 was a good year for the industry, 2008 is beginning to look like an equally good if not better year. Demand for steel is going from strength to strength, not just domestically but globally.

In Singapore, demand for steel will see a further boost with more public projects in addition to the existing residential and office projects. Singapore is expected to construct a new University Town to host the Youth Olympics and there are planned expenditures to further expand our rail and road infrastructure in the coming years.

Globally, besides China and India which are consuming a lot of steel, the other two BRIC countries - Russia and Brazil - which used to be net exporters of steel are now instead buying steel. Russia - which benefited from the buoyant oil market - and Brazil - which benefited from the rise of both hard and soft commodities like iron ore and wheat - are undergoing an infrastructure boom.

With the rise of commodities, there is also strong demand for steel in the shipbuilding sectors to build vessels to carry the commodities.

- Wee Piew CEO HG Metal Manufacturing Ltd

A SLOWDOWN in the US economy will undoubtedly have an impact on the logistics sector and UPS, but we are confident that we will continue to grow by generating greater synergy between our businesses. Being an open economy, Singapore is naturally more susceptible to external shocks. However, the Singapore government has been successful in attracting investments, which will provide some buffer from an external slowdown. This, complemented by growth in other regions, particularly the Asia Pacific, will provide impetus for the economy.

Asia was a key growth area for UPS in 2007, and looks set to continue this year. Growing intra-Asia trade and strong demand from China and India will continue to drive trade in the region. By aligning our supply chain and parcel delivery businesses, UPS will ensure greater synergy and more competitive offerings for our clients across Asia.

Despite the challenges and a moderated economic growth forecast, UPS is positive that the Singapore economy is resilient and diversified enough to withstand the effect of a US slowdown.

- Mary Yeo Managing Director UPS

EXPERTS agree that the US economy is closer to the bottom than the top. Given this, we all must brace for ways of coping in the event of a full-blown US recession. As experience has shown us, a downtrend does not mean we are in for a crash. I would say that those of us in the direct selling industry can be resilient to an economic crunch for as long as we are able to grow and expand distributorship.

Still, it remains critical to re-think business decisions having to do with the proper marshaling of resources, especially for small and medium-sized businesses which will be the hardest hit. The basics, of course - stick to budget, monitor business closely, keep collection coming in, and tighten financial control.

Others would be wrongly cutting costs by way of reducing employee incentives. I believe, on the contrary, that we must encourage pay for performance incentives.

At Best World, our strategy is two-pronged: to continue to grow company sales and to optimise employee productivity. I believe that even in bad times, we must reward people as long as they are clearly able to contribute better performance to grow the company bottom line.

This year, we have restructured our company bonus system by basing it on company profit instead of gross sales. I see this as a win-win situation, a mutually beneficial manner of giving everyone a stake in the growth and viability of the business during these critical times.

- Dora Hoan Group CEO Best World International Ltd

See downturn as opportunity

THERE is too much attention paid to whether ‘an economy’ is in recession. My view is that different sectors have remarkably different dynamics which argue against a generalised view. For example, it is fairly clear that financial services, construction and probably the durable goods sector in the US are ‘in recession’.

However, agriculture, aerospace and international tourism are booming. I have been surprised at the strength of the recent retail numbers. At any point, some sectors are likely to be in recession and others booming. Asia is no different.

A lot of attention has been paid to whether or not the Asian economies and the US economy are decoupled. I’ve seen little high-quality data associated with this debate; analysts seem to quote data showing the declining percentage of exports from Asia going to the US. This is a fairly shallow understanding of decoupling.

Second, the level of coupling will, of course, vary significantly by sector. For example, I have been surprised by the extent that Chinese and Singapore-based banks have taken write-offs on the US sub-prime products - which just goes to show that ‘coupling’ can occur in mysterious ways.

I believe a number of key sectors in the US will go through a fairly deep recession. The US is a more flexible and responsive economy than most OECD economies, and will therefore restructure and recover more quickly then other countries such as Japan, Germany and France. This is one of the great strengths of the country.

The nature of most Asian companies is that they would rather lose money then downsize, though this is a generalisation. If Asian companies find markets in the US are being crimped, they will aggressively pursue other markets. A Chinese toy manufacturer will not undertake layoffs because of a US slowdown. They will ask: Where else can I sell these toys?

As a result, whether Asia is currently decoupled from the US, at the end of this down-cycle Asia will be more decoupled from it than before. But it won’t happen automatically or smoothly; Korea and India are simply not going to accept Chinese toys as easily as the US. The optimistic case is that these frictions result in new resolve for the World Trade Organization and consistent global trading rules. Of course, there are pessimistic cases.

For companies, there is the classic advice: Cut costs and find new sources of revenues. I’m a consultant - of course I would say this! Just as important is to have a clear sense of history - who were the winners and losers in your sector in the last downturn? What did they do to gain share and maintain their financial performance?

The worst thing you can do is just hunker down and wait for the next upturn. Get your management together and figure out how to convert the downturn into an opportunity. If you don’t have some great ideas - hire a consultant!

- Charles M Ormiston Director Bain & Company

IT IS widely misunderstood that a slowdown or a recession will affect every company that is doing business with the US. This may not be the case as there are some recession-proof industries. I consider the aftermarket tyre industry to be such an industry. A slowdown in the auto industry affects the sales of new vehicles - but existing vehicles still need tyres to ply on. Within the tyre industry, the major brands may feel more heat than the budget brands. There is a tendency to shift from an expensive branded product to a non-branded economical product in such an environment.

I have seen a surge in business recently which strengthens my belief that the market is shifting its purchasing pattern. As such, I do not think that the companies operating in the ‘budget brand’ category in the after-market auto industry will be affected. In fact, this is the time to go after business which was not accessible in the past. Now is the time that customers are actually looking for value.

As a precaution, however, it is imperative that businesses start spreading their chips into other markets and protect their existing business by investing in business/credit insurance, which will cover them adequately in case of any default.

- GS Sareen President and CEO Omni United (S) Pte Ltd

MY ASSESSMENT is that a US slowdown will have a material impact on Singapore only if it is prolonged and severe. This is due to our sound economic fundamentals, diversification of our economy away from manufacturing and electronics, as well as our location in a high-growth region with a large middle-class market and educated workforce.

In times of market volatility, we foresee growth opportunities over the next few years given large foreign investment flows into the region, booming regional economies that contribute to rising mass affluence, as well as higher demand for wealth planning from fast-ageing societies.

As an Asian specialist, the DBS Group is well-placed to seize these opportunities because of our experience and sound understanding of the regional markets.

Businesses caught in the slowdown can look into ways to better manage their costs, explore other potential avenues for growth, possibly in new untapped markets, consider flexible work arrangements and raising staff productivity.

- Deborah Ho CEO DBS Asset Management

AS THE world’s third-largest IT services provider, Fujitsu Asia provides solutions for customers in the Asean markets of Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam - but not the US. Therefore, as long as the IT demand in our target markets remains healthy, we needn’t fear that a US slowdown or recession will impact us negatively.

The Singapore economy in general should also continue to do well because we are not as dependent on the US economy as compared to, say, five years ago.

Most indicators suggest that the IT demand will remain very strong this year. For example, a recent Gartner survey of about 1,500 chief information officers (CIOs) worldwide revealed that IT expenditure is expected to surge by about 8.3 per cent in Asia this year - far outstripping the 3.3 per cent rise in the global average.

The report also identified that in 2008, the focus areas among Asian CIOs include IT infrastructure, application rollouts and other areas. The implication here is that, despite the possibility of a US slowdown or recession, Asian companies are still prepared to invest in technology to prepare themselves for future business growth.

This makes sense because it can take months or even years for an IT investment to progress from conceptualisation to rollout.

Hence, companies that delay making vital investments during a downturn could be unknowingly disadvantaging themselves when things are back on the upswing. After all, without added headroom - which IT investments can provide - for scaled-up operations, companies might be unable to capitalise on the business opportunities that an economic recovery presents.

I always believe that adversity and opportunity exist togther. A slowdown in the US may pose some challenges, but it indirectly provides an impetus for companies to prepare themselves for future growth, which is merely a matter of time. And leading IT companies like Fujitsu Asia can help companies with such preparation efforts.

- Noboru Oi Group CEO Fujitsu Asia Pte Ltd

WITH the US being the world’s largest economy, economists and analysts have said that any signs of slowdown could impact everyone, especially those economies or industries highly dependent on the US. Some have warned that the effects of a drop in consumer spending could impact the Asian electronics manufacturers.

That said, we see resilience in the global economies. Where there are challenges, we also see some opportunities. All the more, businesses need to focus on creating value for their customers to maintain their competitive edge and strengthen their position in the industry.

For Excelpoint, we believe that it is critical to focus on executing well to strategy, maintain a strong cash position to capture opportunities, and be prepared to make adjustments where necessary to mitigate any risks. We will continue to invest in emerging markets where our customers have ventured into, and collaborate with them and our global partners to capitalise on opportunities in those markets.

Important, too, is the continued emphasis on innovation. We want to be able to research and develop new applications and technologies with the aim to offer our customers a wider range of solutions. This will help us emerge as winners in the industry in the long run.

- Albert Phuay Chairman and Group CEO Excelpoint Technology Ltd

WHILE we believe that a potentially bearish US economy will have a global impact on organisations and markets, this is an opportunity for many companies to take a hard look at how their operations can be optimised for efficiencies and how new businesses can be gained by looking beyond traditional means of getting to their customers and the marketplace.

There is a growing trend where deploying innovative technologies such as virtualisation and open source are helping businesses achieve these goals by optimising how information technology is supporting their existing business. Increasingly, businesses are also looking at more cost-effective and efficient channels to get to the business partners, customers and the marketplace by making information technology supplement their existing route to market.

We are confident that this is one way that businesses can save money and grow their businesses and give them a better chance of weathering not just this slowdown but any slowdown.

- Ong Chee Beng Managing Director, Singapore Sun Microsystems

IT IS still premature at this point to predict the extent of the US slowdown and to project how it will affect the Asia Pacific, and Singapore. However, with globalisation and lessons learnt from the Asian crisis, countries like Singapore are now more hedged against fluctuations from the US economy with greater investments in fast-growing markets like China and India.

I believe when one door closes, another window opens. In times of cyclical downturns, it is the onus of business leaders to proactively seek new opportunities (perhaps investing in emerging markets in the Asean region) to diversify risks and chart future growth. Many companies like us would have laid the groundwork in recent years, coupled with a long-term strategy, enabling us to ride out cyclical downturns, resulting in business continuity and growth prospects for the future.

- Bryan Low Vice-President and Managing Director AMD South Asia

S’pore will be insulated by Asia

A RECENT study by technology research house Gartner shows that despite the US slowdown, Asian firms still plan to increase their annual IT budgets by about 8.3 per cent in 2008.

I believe that companies’ priority this year will be on technologies that directly improve their business performance. CA will continue to create and refine software that can help firms simplify and unify their IT operations, and which deliver tangible business value.

With regard to Singapore, the projected growth in Asia’s emerging economies should insulate us somewhat from the US slowdown, although many firms will still come under pressure to control costs. This means that organisations should work on better tapping into their current resources. Besides using technology to streamline their operations, they should look harder at integrating technology with their people and processes. Best practices and consultancy services to achieve this are readily available, and businesses should proactively check them out.

- Brenton Smith Managing Director and Area Manager, Asia South CA

THE slowdown in the US may dampen business confidence and hurt our export-led economy but we will more likely be impacted by rising inflation and rapidly increasing business costs.

Many businesses are linked to regional and global customers, thus removing our reliance on just one country for trade. We are moving into Middle Eastern economies. We already have strong business links with the Chinese and Indian markets and these should help cushion the impact of the US slowdown. However, what seems to be at the forefront of many companies’ concerns is the more pressing problem of rising wages and a shortage of talent.

- Dhirendra Shantilal Senior Vice-President, Asia Pacific Kelly Services

Be ready for tough times

TECHNOLOGY spending is normally a lagging indicator of an up or down-market. Our order book and sales pipeline currently look very strong. If we are to see slowing tech spending it will most likely hit Asia three to four months from now. So far, US multinationals, even in the financial services sector, are keeping up their spending with projects still being executed. Only one major client that I have met recently has talked of deferring a project. Companies obviously need to have a Plan B ready for any slowdown in spending. It’s important to be ready with scenarios so that we can adjust our model as any changes unfold.

- Bill Padfield CEO Datacraft Asia

THE US will continue to be the leading global economy for many more years. However, the print, publishing and media-related industry as a whole, my organisation included, has also diversified, doing a substantial amount of business with Britain, the Middle East and the EU countries.

On a national basis, the US is one of our main trading partners. Consequently, a US slowdown or recession would, together with many other Asian countries, definitely affect us negatively. Gloomy markets, recovery and growth are all part of the economic system.

Singapore businesses can reduce this looming negative impact by aggressively diversifying investments and export makets - which we have already done to a considerable extent.

With prudence and foresight, our businessmen could further move into Russia, the Middle East, the Korean peninsula and other Asian countries, Latin America and Africa.

Singapore businesses - especially our cash-rich investors and exporters, be they in mindshare leadership, providing services or manufactured products - should reduce over-dependence on the US.

- R Theyvendran Chairman / Managing Director Stamford Media International Group

A US slowdown or recession will have a negative impact on the global economy. US consumption has been instrumental in helping to boost world economies for several years. The growth of China and India is not going to be able to make up for the shortfall in US consumption in the event of a major cutback in spending in the US.

In a similar vein, manufacturers in Singapore will be negatively affected by the US slowdown as their products are mostly exported overseas. CEOs need to understand that it is no longer business as usual. Fortunately for my company, we will be able to comfortably ride out the tough times as we are a multinational company that has recognised the need to change much earlier.

For those businesses which are financially weak, it is important to restructure quickly to face the new harsh realities. They have to review their cost structure to ensure that they remain cost-competitive. Companies need to penetrate markets such as the Middle East, China and India, whose economies are still booming. However, for weak companies, it is better to be healthy before expanding overseas, or their limited resources will be further dissipated. They should get their act together in Singapore first, such as putting in place a strong and competent management team and getting a positive cash flow. There are opportunities in the recession too as many weaker competitors will be knocked out of the race.

- Teng Yeow Heng Michael Managing Director TR Formac Pte Ltd

A US recession will cause uncertainties and undulations across the globe, but economic giants like China and India can cushion some of that ripple effect. As expounded by Minister Mentor Lee Kuan Yew, increased domestic consumption and investments in infrastructure, which serve to sustain a robust financial core, can also help weather the economic storm.

Local businesses, particularly SMEs, must be ever-ready for unforeseen events and have contingency plans in place during a period of decline. These include cost-cutting measures like downsizing and reducing overheads as well as increasing savings and investing in short-term assets that can be liquidated in times of need.

- T Chandroo Chairman and CEO Modern Montessori International

Singapore may be hit

THERE is no doubt that any slowdown or recession in the US economy will have a direct impact on the Singapore economy. Although Minister Mentor Lee Kuan Yew has stated that Singapore will not be too badly affected should the US catch a cold, prevention is better than cure.

As electronics is an important sector that exports to the US market, any contraction in the US will have immediate effect on this major industry which contributes a large percentage of the manufacturing exports. To mitigate any drastic drop in exports, IE Singapore should support our manufacturers in aggressively sourcing new emerging markets in the Middle East, South Asia and North-east Asia. A better option would be to shift the bases of production closer to the markets.

Pakistan has been identified as a pivotal centre for electronics serving the Middle East and South Asia, while North Korea is also a focal centre serving Greater China and East Asia.

It is timely for the Singapore Business Federation to organise missions to these key centres to explore, exploit and extract the opportunities for exports, investments and R&D, etc. I am confident that the electronics sector would be nimble enough to ride out any economic setback in the US. Let’s pull ahead.

- Derek Goh Executive Chairman / Group CEO Serial System Ltd

I BELIEVE the signs indicate that the US is in a recession or on the verge of one - with consumption going down, interest rates being reduced, and the implementation of a US$152 billion package to stimulate the economy.

In such a scenario, I would suggest that Singapore businesses take a conservative approach by containing costs, ensuring that forecasts are conservative and watch inventories. When there are opportunities to monetise assets, I would proceed, as cash is king in this situation.

Until India and China dominate the world economy, I believe that whatever happens in the US will have an adverse impact on Asia and Singapore, although this will be less than before. Singapore has taken enough precautions to fend off any cold the US might suffer, but again it depends on how badly the US will be affected, as the financial crisis continues to unfold.

- Lim Soon Hock Managing Director Plan-B Icag Pte Ltd

THE sub-prime mortgage crisis has now ballooned into a deepening credit crunch, leading to less liquidity for a host of financial assets and structures. Although the US Federal Reserve has reduced interest rates in recent months, there is still a crisis of confidence in the US which mirrors the experience in Asia during the 1997 financial turmoil.

Clearly, the US is already in recession. Its extent and duration will depend on how long it takes for confidence to be restored. And the signs are not good because it seems that investors, banks and markets are getting more - and not less - jittery with each passing week. The impact of the US recession on Asia may be limited if it lasts six to nine months. However, Asian economies - even Japan, China or India - are probably not strong enough to weather a prolonged economic depression in the US.

As a privately-owned bank, Rabobank is taking steps to strike a balance between supporting our long-term customers, and preparing for a possible slowdown in this part of the world. On the one hand, as a financial cooperative, we must do our best to ensure that the funding needs of our customers are met. On the other hand, as a bank with a Triple A credit rating, we must maintain prudent lending policies, exercise due diligence and read market warning signs early and accurately.

Every cloud has a silver lining, so a widespread recession could perhaps moderate the worldwide trend of rising inflation, which is caused by escalating prices of commodities, labour and land.

If Singapore enters a recession, hopefully workers will realise that wage increases cannot outpace productivity gains indefinitely without companies losing competitiveness - which may ultimately lead to employees losing their jobs.

- Goh Chong Theng General Manager, Singapore Rabobank International

ANY US slowdown will impact businesses here. Everyone’s hope is that it will not be a contagion with business confidence being dragged down. The flipside is that the costs of US goods and services will be lower with a weaker dollar for those who do business with the US. This sliver of opportunity should enable us to offer more attractive and competitive goods and services.

On the other hand, people are hoping that the boom in China, the Middle East and elsewhere will provide a counter-balance. Like many Singapore companies, we stand our business on many legs in different countries. We hope to re-adjust our balance even as one part of the business is down. Indeed, it may ironically be the balance we need with the current inflation and a resource crunch.

But more worrying is the way events might turn out. The great uncertainty and turbulence might catch many businesses wrong-footed. We all need to be vigilant.

- Liu Chunlin CEO K&C Protective Technologies Pte Ltd

A RISING tide lifts all boats, but unfortunately, the inverse is true as well when it comes to a US recession. Asia is not decoupled from the US or any other world economy and this should come as no surprise. Access and dependency go in lock-step and capital markets are extremely efficient at providing access to virtually any market segment in any economy - the sub-prime market, for example.

Diversification is the key and where countries are not efficient at achieving balance our firms must be. An organisation’s best hedge is a global revenue stream, a balanced product set, and access to a wide range of market sectors.

- Mark Bashrum Regional Vice-President, Asia ESI International

DESPITE the slowdown in the US, Singapore’s financial and construction services clearly remain the bright spots, fuelling a soft-decoupling story for Singapore from the US economy. Still, with rising inflation and a negative real interest rate environment, private banking, like other businesses, cannot completely ignore the US downturn.

Investors, regardless of their wealth bracket, behave differently in this climate. Private banking clients tend to lower their risk appetite, gravitating towards conservative products with lower yields and margins. However, my private bankers must also be able to give clients the confidence to look beyond the downturn, instead of focusing on the storm clouds. It’s essential that we take a fresh look at our clients’ changing situation or new environment. Then we make sure our products and services adapt to help clients navigate the storm and come out on top.

- Barend Janssens Head ABN Amro Private Banking, Asia

THE US is a major consumer of goods and services which are manufactured all over the world. In the case of electronic goods, consumer demand will fall. Singapore, as a manufacturing site for such products, will be affected. Both facility and equipment utilisation will consequently be impacted. Following from this, there is likely to be a reduction in labour and overhead costs by businesses to keep costs low and ride through the storm.

There is no miracle solution to overcoming recession as it is part of the business cycle. During a recession, businesses have to be prudent and keep a tight control over costs. We also have to explore other markets such as China and India to sell our goods but this does not happen overnight. The government can provide support in terms of incentives, rental reductions, property tax adjustments, energy rate cuts and other such measures which will help companies through the turbulent period.

- EH Lim CEO Avi-Tech Electronics

Signature @ Lewis

Inspired lesisurely living.
D10 location, freehold.
Enticingly near Orchard.
Abundant greenery.
Lovely unobstructed views.


Developer : Guan Hoe Development Pte Ltd
Address : 1 Lewis Road
Tenure : Estate in Fee Simple (Freehold)
Expected TOP : 31 Dec 2011
Expected Legal Completion : 31 Dec 2014

Prices :-
1 BR [635sqft] : $1965psf up
2 BR [980sqft] : $2020psf up
4 BR [1841sqft]: $2099psf up
4 BR Penthouse + Pte Pool[3445sqft] : $2400psf
4 BR Penthouse + Pte Pool[3068sqft] : $2408psf


Situated in one of Singapore's exclusive District 10 neighbourhoods, the 12-storey Signature At Lewis creates an undeniable presence in an area dominated by widely spaced out, affluent landed properties.

Mere minutes away from Orchard, a jubilant mix of shopping, dinning and entertainment choices await discerning individuals. Appetising food centres and upcoming MRT stations (Circleline) add greater convenience to daily living.

Prestigious membership clubs (Raffles Town Club, The Pines Country Club)and premier schools (SCGS) nearby create additional enticing reasons that make the neighbourhood even more desirable to the privileged.

Features & Facilities:-
-Lap Pool
-Wading Pool
-Massage Spout Pool
-Children's Playground
-Yoga Deck
-Barbecue Area
-Female Changing Room and Steam Room
-Male Changing Room and Steam Room
-Function Room
-Outdoor Exercise Garden
-Exquisite Top European finishes like Caesearstone Countertops
-Durivit Toilet Finishings
-Hansgrohe Shower Fittings
-Gaggenau Kitchen Appliances

UE’s Net Profit Up 5-Fold On Revaluation Gains

Source : The Business Times, March 1, 2008

CONSTRUCTION and property company United Engineers (UE) said yesterday that its net profit rose five-fold to $176.2 million for 2007 - from 2006’s $34.83 million - on the back of revaluation gains.

UE saw a fair value gain of $186 million on the value of UE Square, as well as fair-value adjustments and gains from the divestment of investments.

Revenue for the year fell 12 per cent to $539.8 million, from $614.1 million the year before. The company’s engineering and construction (E&C) division - from which it made most of its revenue in 2006 and 2007 - reported a 21 per cent slide in revenue to $405.9 million in 2007.

UE said that yearly comparisons of E&C results are not meaningful as progress billings vary from project to project.

The group’s integrated facility management division, which includes property development, lifted revenue 19 per cent to $138.1 million in 2007. This was mainly due to higher rental income and occupancy in an improving economy, UE said.

Earnings per share rose to 80.4 cents, from 16.1 cents in 2006.

The company has declared a dividend of 10 cents a share for 2007, comprising a normal dividend and a special dividend of five cents each. It will also pay a dividend of 7.5 cents for each preference share.

UE, which had an order book of $1.1 billion at end-2007, said that it will continue to carry out large building and infrastructure projects in Singapore and the region in 2008.

‘Additionally, the rapidly developing economies of China, Middle East, Indonesia and Vietnam are expected to contribute to the region’s strong demand for infrastructure development,’ UE said.

UE’s shares closed 12 cents up at $3.84 yesterday.

URA Auctions 11 Land Parcels In Sembawang

Source : TODAY, Weekend, March 1, 2008

The Urban Redevelopment Authority (URA) is auctioning 11 land parcels along Sembawang Road/Andrews Avenue as part of its plans for a landed housing estate in the area.

The plots constitute the Phase 2 development of the Sembawang Greenvale project, and can accommodate 90 dwellings, comprising of one bungalow, 16 semi-detached houses and 73 terrace houses. Phase 1 of the project, which consists of 12 plots along the same stretch of road and accommodates 57 dwellings, was fully sold last October.

Property watchers said yesterday’s announcement of the URA tender would likely draw interest from small property developers, contractors and engineering firms, despite projected slower economic growth and a volatile stock market.

“The landed segment is still a very stable market and the sites are targeted at local buyers, especially displaced owners from collective sales. But there is a strong chance that developers will factor in the current market uncertainty, and this will translate into a lower price,” said Mr Donald Han, managing director of Cushman and Wakefield.

Mr Han expects prices to be 5 to 10 per cent lower than those transacted at last year’s auction, which fetched an average $285 per sq foot of land.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, however, is more optimistic. He noted that the median unit price for landed housing in the area had increased 12 per cent in the fourth quarter of last year from the previous three months.

Mr Mak expects prices in Phase 2 to be higher than those of Phase 1, and fetch $320 to $380 psf for terrace plots, $300 to $350 for semi-detached plots, and $200 to $260 for L-shaped bungalow and semi-detached plots.

How Can I Make Uncle Honour Dead Grandpa’s Self-Made Will?

Source : The Sunday Times, March 2, 2008

Q I AM from Malaysia. My grandfather, a Malaysian, died six years ago.

According to his self-made will, his properties were to be distributed among his six sons. His eight daughters were not given a share in the will.

My grandfather signed this self-made will and so did his six sons. There were no signatures from the daughters.

However, immediately after my grandfather died, one of his sons, who is my third uncle, declared that he did not agree with the will. Because of his refusal to accept the will, all my grandfather’s properties are at the moment still under my grandfather’s name.

My third uncle is the one who manages the plantation and the company. He took all the income and did not distribute any to the shareholders.

My father was older than my third uncle and could have challenged my uncle, but unfortunately, he died in June last year.

According to my father’s will, which has been certified by a lawyer, I am the executor.

I want to get back what belongs to my sister, my brother and myself, and I have approached my third uncle. But he told me that, as his nephew, I have no right to ask for anything.

I personally feel that the only way to retrieve what is rightfully ours is to make my grandfather’s self-made will valid in the eyes of Malaysian law. But I have only a photocopy of the will and it was written in Chinese.

In your opinion, is the will of any use in the eyes of the law? Is there a solution to my problem?

A I MIGHT not be able to help very much. As your grandfather and father were Malaysians, Malaysian law would apply.

My advice as follows is based on Singapore law as I am not conversant with Malaysian law. You may wish to seek the advice of a Malaysian lawyer.

There are many dangers in relying on a self-made will. In this instance, it is not clear, based on what you have said, whether the will was properly executed and witnessed.

Also, when the six sons put their signatures on the will, it is not clear in what capacity they did so. Were they witnesses to the will? If so, the gift to them under the will is void as they were also the named beneficiaries under the will.

Under the Wills Act, a beneficiary of a will cannot also be a witness to it; the same applies to his or her spouse. Otherwise, the gift to that person under the will is utterly null and void. If the will includes other gifts and an appointment of executors, it is still valid where these are concerned.

In your grandfather’s case, if the will is void with regard to the gifts to the six sons, you will need to see whether there are other gifts stated in the will. For example, if your grandfather left the residuary estate to all his children, then all his sons and daughters would get a share.

If nothing else is said in the will, intestacy laws would apply. Under Singapore law, when a widower dies (assuming your grandmother died before your grandfather), all his assets will be divided among all his children. In this case, this would include the six sons and eight daughters. You and your siblings would inherit your father’s portion of your grandfather’s estate.

You might wish to get one or more of the other uncles or aunts to apply for letters of representation from the Malaysian court.

You might apply - as executor for your father’s estate - together with them.

You would need to produce the original will to the court when applying for the letters of representation. You would need to get a translation as well.

After the letters of representation have been extracted from the court, the personal representatives can request that your third uncle give an account of the income earned and expenses incurred by your grandfather’s estate during the time your uncle managed the assets.

Ang Kim Lan, Goodwins Law Corporation

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Getting A Divorce Without Losing Her Home

Source : The Sunday Times, March 2, 2008

Recent CPF changes allow for a more eqitable distribution of the matrimonial home and let the ex-wife keep a roof over her head.

DIVORCING couples come under even greater emotional strain when they try to sort out who gets what.

Last October, measures were put in place that tilt the balance towards divorced women who would otherwise get little from the sale of the matrimonial home - or could even lose the roof over their heads.

Under the revised Central Provident Fund (CPF) rules, retirement funds will be distributed more equitably when coupples split their matrimonial property .

In a nutshell, the changes allow CPF assets such as property or unit trusts, or sale proceeds from these assets, to be transferred immediately to the ex-spouse’s account.

Most Singaporeans use CPF monies to buy the matrimonial home. In some cases, the husband is more willing to transfer it to his former wife, says lawyer Amolat Singh of Amolat Singh & Partners, especially if she can show she’s entitled to a big share.

CPF rules

The old system

The property could not be transferred to the wife until and unless all the monies used by her ex-husband for the mortgage had been fully reimbursed into his CPF account, together with the accrued interest.

Often, the parties did not have the funds to do so, so they were left with no choice but to sell the flat.

This could place them in financial straits, especially if they’d paid a high price for the home. Also, the spouse with the kids would probably have to find alternative accommodation.

This was what happened to Madam Shirley Chong (not her real name), who downgraded to a three-room flat from a four-roomer. Her two kids had to move to a new school as well.

The court had ruled that the flat should go to her, but she did not have the money to make the reimbursement, so the transfer could not take place. The flat was sold and a charge placed on her ex-husband’s account.

He is not yet 55 years old and it remains to be seen whether she will get her money when he reaches that age, as a mandatory Minimum Sum has to be retained in his CPF account.

The new system

The property can be transferred immediately from one spouse to the other even if the funds have not been fully reimbursed into the CPF account.

A charge is placed on the account so as to secure the refund of the CPF monies in the event of a sale.

If the wife sells the property , she must make a reimbursement equivalent to the total amount of the CPF monies used by her ex-husband, into her own CPF account.

This ensures that there is no leakage of funds from the CPF system.

The refund is just postponed until there is a sale, and the refund or reimbursement is made into her own account.

Madam Chong would be far better off under the new rules as the court could order an immediate transfer of the flat to her with or without a reimbursement.

Here are three real-life cases where divorced couples have benefited from the new rules.

Couples who have benefited

Case 1

MARRIED for six years, Mr and Mrs Victor Lee (not their real names) bought a three-room HDB flat now worth $200,000 on the resale market. He owed her $9,000 for maintenance in arrears.

Finally, they divided the flat in such a way that she took over his share by paying $60,000 into his CPF account. This represented the CPF monies he had withdrawn to buy the flat, plus accrued interest, less the debt of $9,000.

Said Ms Lie Chin Chin, the managing director of law firm Characterist: ‘Without the revised ruling, the $9,000 would have remained an outstanding debt. This ruling permits a partial refund of CPF monies into the ex-husband’s account, so Mrs Lee managed to offset the debt with the sum that was supposed to be refunded into his CPF account.’

When she sells the flat, however, she is required to refund any CPF monies she used for the property , plus the sum of $9,000, into her CPF account.

Case 2

AFTER 10 years of marriage, Mr and Mrs David Lim (not their real names) called it quits. At the point of divorce, she had no income and was thus unable to secure a housing loan. She had custody of a child and they needed a roof over their heads.

The Lims agreed that he would transfer his share in their five-room flat worth $400,000 to her without making any refunds into his CPF account. She managed to take over the flat in her sole name and continued living there with her child.

Without the revised CPF ruling, the division of the matrimonial flat could have posed a financial burden. The flat would have had to be sold or she would have had to take it over.

If the flat had been sold, most of the proceeds would have been refunded into his CPF account. There would have been little cash left over to be distributed. She would not have had the funds to buy another flat.

If she had taken over the flat, she would have had to get a loan so she could refund the monies into his CPF account. But she had no income, so her chances of getting a loan would have been practically non-existent.

Case 3

WHEN Mr and Mrs Joseph Ang (not their real names) bought their matrimonial home for $550,000 more than 10 years ago, they put in equal contributions using CPF monies.

The property is now worth $1.8 million. She paid for the renovation costs of $450,000.

They agreed to divide the house 80:20 in her favour. This meant he should receive $360,000.

But the sum due to be refunded into his CPF account was about $420,000 as the refund had to include the accrued interest on the CPF monies used. They agreed that she would take over his share by paying only $360,000 into his account.

Court order needed

Lawyers point out that the new CPF rules do not automatically apply in all divorce cases. A court order must first be made.

The onus is on the court to explicitly state that one spouse can transfer his or her share of the property to the other without having to refund the monies used. Only then can the transfer take place.

If the court does not make such an order, and it is purely the couple’s decision to buy over each other’s share of the property , the old rules still apply. The transaction must be done at fair market value and the monies must go back to the respective CPF accounts.

Dividing the assets

IN DECIDING who gets what, the law requires any division of matrimonial assets to be just and equitable.

Courts weigh certain factors when determining how assets should be split.

Matrimonial home

Contribution of each spouse: The starting point is the financial contribution that each party has made to initial payments and monthly mortgage payments.

Any payments made through the Central Provident Fund are also taken into account, said lawyer Amolat Singh.

Non-financial contributions: The court looks at who paid for the renovations; who bought the furniture, fittings or furnishings; who settled the monthly maintenance charges; and who paid the utility bills.

Also covered are expenses incurred for the welfare of the family and while looking after children or an aged or disabled family member.

Other assets

Efforts and contributions made by each party towards their acquisition: For example, for a business, the party making a claim must prove he or she has contributed to its success. One way is to show he or she has been involved in its administration or operations.

The court might not divide up these assets in the same proportion that it would the matrimonial home. For instance, the home might be split 50:50, but not the other assets.

Other factors: The court will consider the length of the marriage, the age and health of each spouse, and the couple’s standard of living during the marriage.

Dividing Assets After Divorce Easier Now

Source : The Sunday Times, March 2, 2008

Recent CPF rule changes will help divorced women get their fair share from sale of matrimonial home.

DIVORCED couples have benefited from recent changes in Central Provident Fund (CPF) rules, which allow for a more ‘equitable’ distribution of their CPF monies when they divide their matrimonial assets.

Previously, divorced women often got very little from the sale of the matrimonial home. The changes, which came into effect on Oct1 last year, are an attempt to help them get more money and not face financial hardship.

One of the changes allows a member to transfer money from his or her CPF account into the CPF account of his or her former spouse.

For instance, under the old ruling, if $100,000 had been used out of a member’s CPF account to buy the matrimonial property , the $100,000 would have had to go back into his CPF account together with the accrued interest once the property was sold. This was the case even if the court had awarded his ex-spouse half the proceeds, or $50,000. The reason was that members were not allowed to withdraw their CPF money until the age of 55.

With the change, the court can order the transfer of $50,000 from the member’s CPF account into his ex- spouse’s account.

Another change allows for the immediate transfer of a piece of property to the former spouse.

In the past, when a member had used his CPF money to buy property and the court ordered ownership to be transferred to his ex-spouse, the member had to return the due amount to his CPF account.

In cases where a wife had no money to make the refund to her ex-husband’s account, the transfer could not take place. The court might then have to order a sale of the property , which might not be ideal in a weak property climate.

With the rule change, the member or his former spouse no longer needs to put back into his CPF account whatever money had been taken out for the property .

But should the former wife wish to sell the property later, she will be required to refund her own CPF monies withdrawn, as well as what her ex-husband had withdrawn.

So far, five divorce cases handled by law firm KhattarWong have benefited from the revised rulings. So too four handled by another law firm, Characterist.

Charmed Circle

Source : The Sunday Times, March 2, 2008

The Circle Line will open from next year, starting with Stage Three, which links the Bishan station on the North-South Line to the Serangoon station on the North-East Line. Experts say this added accessibility will boost property values in the areas around each station. Which are some of the notable stations and residential developments to look out for now?

Steep price jump likely

Bartley Road

Current prices

AT THE end of last year, homes in the Bartley area averaged $543 per sq ft (psf) in price.

While there are too few projects in the area to allow an accurate comparison of average prices over time, those projects with more transactions showed steady price rises last year.

These include Casa Rosa at Lorong Ong Lye and Sun Rosier at How Sun Drive, which went up in price by 20 per cent to 30 per cent last year.

Potential growth

Home prices are likely to jump by up to 30 per cent after the completion of the Circle Line MRT Station in front of the Maris Stella schools, said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

He said this is one of the locations that will see the biggest rises in value as prices in the area are fairly low right now.

The construction around the area seems to be more extensive than usual, he noted.

'I would expect a significant price jump once the station is operational. Residents will then reap the benefits after suffering years of disruption from the road works.'

New launches

A new 35-unit freehold project, Evania at Bartley Road, was recently launched right in front of the future station.

Prices start from more than $800,000 for a two-bedroom unit and go up to just above $1.1 million for a 3+1 bedroom unit. There is also a penthouse.

Richly valued haven

Lorong Chuan

Current prices

PRICES in the area around Lorong Chuan and Serangoon Avenue 3 climbed almost 50 per cent on average last year, according to data from Savills Singapore.

They are now about $710 per sq ft (psf), from $480 psf the year before. But prices vary hugely depending on the project's age.

Chuan Park at Lorong Chuan, built in the mid-1980s, goes for about $600 psf. In contrast, The Chuan, a recent launch, has seen transactions go over $1,000 psf.

At Amaranda Gardens at Serangoon Avenue 3 and Goldenhill Park Condo at Mei Hwan Drive, both fairly new projects, units have sold for $743 to $914 psf since the year started.

Potential growth

The quiet residential area is popular with locals and expatriates alike, partly because of the schools there, which include Nanyang Junior College and St Gabriel's Primary School.

Home prices, however, have already gone up significantly in the last 12 months, so not much upside is likely, said Savills' Mr Ku Swee Yong. He expects a 10 to 15 per cent rise this year.

New launches

No future launches are known at this time. Apart from The Chuan, recent launches include two cluster housing projects, Dunsfold 18 and Milford Villas, which came on the market last year.

Dunsfold 18 bungalows sold for between $3 million and $3.6 million each.

The terrace houses at Milford Villas went for $1.2 million to $1.63 million each.

Moderate price increase


Current prices

CONDOMINIUMS around the future Marymount MRT Station saw an average price increase of 35 per cent last year.

Prices rose from about $576 per sq ft (psf) to $777 psf last year, according todata from Savills Singapore.

Thomson 800 at Thomson Road is among the developments that command the highest prices in the area. Its most recent transactions, in October last year, went above $1,000 psf.

Elsewhere, at Seasons View in Pemimpin Drive and Lakeview Estate in Upper Thomson Road, homes are fetching less than $700 psf.

Potential growth

The spillover from nearby Bishan - as well as the cluster of office and industrial buildings near the new MRT station - could boost prices in the area by up to 15 per cent, said Savills.

The proximity to Raffles Junior College and Raffles Institution will further enhance property values near the station.

New launches

A new project is set to be built at Bishan Street 22, courtesy of Sim Lian Land, which bought the land last year from the Housing Board (HDB).

Last year, Sim Lian's managing director, Mr Kuik Sing Beng, said he expected to launch a 600-unit development on the plot by this June.

He said it would be a 99-year leasehold, entry-level condo aimed at HDB upgraders. He estimated the homes could sell for between $700 and $750 psf.

Boost expected from Sports Hub


Current prices

LOCATED near the former Kallang Stadium site and the interim campus for the School of the Arts, Mountbatten is an up-and-coming estate, but it has few condominiums.

Apartments at nearby Tanjong Rhu and Meyer Road, however, are going for between $1,000 and $1,500 per sq ft (psf) on average.

Potential growth

Property watchers said with so few private housing projects in the vicinity, it would be hard to track price growth around the station. Once the nearby Sports Hub is completed, however, property values around the area could rise by at least 10 per cent, they said.

New launches

A small project launched in the area last Saturday quietly sold more than 80 per cent of its 45 units within a week.

The freehold Cosmo, located 400m from the upcoming Mountbatten MRT Station, fetched average prices of $1,050 to $1,100 psf.

As at Friday, a few two-bedroom and duplex units were still available, priced at between $700,000 and $925,000.

Mr Melvin Poh, the managing director of Cosmo developer Fission Development, describes the area as 'quite exciting', as there are so many billion-dollar projects sprouting up nearby.

He expects home rentals in the area to hold steady, given its proximity to the city and a future MRT station.

Values to swing up on HDB turf


Current prices

THE site for the upcoming Dakota MRT Station lies smack in the middle of an HDB estate, with few private homes immediately nearby.

The Government, though, may be trying to further develop private housing in the area, given the release of a plot at Dakota Crescent last year.

Few HDB resale transactions have taken place there in recent months. A single four-room flat sold for $440,000 last month.

Further down the Dunman Road/Tanjong Katong Road side, prices of private condominiums have shot up by some 40 per cent in the last year to an average of between $700 and $1,000 per sq ft (psf).

Potential growth

Home prices at Dakota are not expected to rise by that much, since they have already gone up a fair bit in the last year.

With a new station opening in the area, however, values could go up by at least 20 per cent, once construction is finished and the roads are cleaned up, said Savills Singapore's Mr Ku Swee Yong.

The presence of many schools in the area, including Broadrick Secondary School and Chung Cheng High School, should also boost demand and rentals.

New launches

Boutique developer Ho Bee, which bought the government plot released last year, has a widely anticipated project coming up on the site.

The new units are likely to be launched at an average of $1,000 to $1,100 psf, Ho Bee said last year.

About 380 homes can be built on the 99-year leasehold site.

Foreign Workers To Be Housed Next To Cemetery

Source : The Straits Times, March 2, 2008

Two dormitory blocks for 12,000 workers coming up less than 20m from Lim Chu Kang cemetery

THEIR neighbour is a sprawling cemetery with thousands of graves.

Not quite an ideal place to live in, you say?

SELF-CONTAINED, the two Lim Chu Kang dormitories will have their own gymnasium, reading rooms, outdoor games courts, mini-mart, canteen and even a barber shop. There are about 500,000 foreign workers in Singapore and more are expected here this year to meet the demand in the construction sector. ST PHOTO: LAU FOOK KONG

But in six months' time, about 12,000 foreign workers will have to live with that reality.

They will be housed in two blocks of dormitories less than 20m from the Muslim cemetery in Lim Chu Kang. The dormitories will be managed by the Building and Construction Authority (BCA).

Located at the far end of the cluster of Muslim, Christian and Chinese cemeteries, the dormitories are isolated. The nearest housing estate and shops are in Jurong West, at least 5km away.

At night, the cemetery area is pitch dark as there are no lamps around. As the last few cemetery visitors leave, the place becomes eerily quiet, lending it a spooky feel.

When told of the dormitories, one migrants' welfare group described the location as 'social isolation', while half of some 20 foreign workers polled by The Sunday Times said they would rather not live so near a cemetery.

There are currently 30 commercially run dormitories for foreign workers, with another three under construction, including the two in Lim Chu Kang.

Many are tucked away in the corners of Singapore and found within industrial estates in areas like Jurong, Boon Lay and Woodlands.

Due to the lack of amenities in the area, the two Lim Chu Kang dormitories, called Murai One and Murai Two, will be self-contained, said the BCA.

The dormitories will have their own gymnasium, reading rooms, outdoor games courts, mini-mart, canteen and even a barber shop.

There are about 500,000 foreign workers in Singapore and more are due to arrive this year to meet the demands of the construction boom.

The influx has resulted in complaints from Singaporeans who feel that their estates are being 'invaded'.

MPs have been fielding complaints from residents that foreign workers drink, litter and even urinate at the void decks.

The Straits Times Forum page regularly receives similar complaints from readers.

The Urban Redevelopment Authority and BCA told The Sunday Times that a key consideration when choosing dormitory sites is their location.

Said BCA spokesman Leong Ee Leng: 'Residents may not be tolerant of such facilities being located too near their homes. Generally, workers' dormitories are located away from existing residential areas.'

Dormitories are also not built too near polluted industrial areas which may pose a safety hazard to the foreign workers.

When The Sunday Times asked 20 foreign workers from India, Bangladesh and China if they would have any qualms about living beside the cemetery, half were reluctant because of superstitions associated with such a site.

Said a 27-year-old Bangladeshi construction worker: 'I don't think I will be able to sleep at night.'

Mr J. Huang, 40, a construction worker from China, said it was bad luck and spooky to live beside a cemetery.

The other 10 said they would not mind but would rather live elsewhere if given a choice.

A recent survey by the Singapore Contractors Association generated different results.

When it got wind of the Murai projects, the association surveyed 1,000 workers of various nationalities to find out if they minded living near the cemetery. Around 95 per cent said they had no issues with this.

Said the association's dormitory manager Uonos Mohamed: 'The workers don't care what is outside as long as the living quarters are comfortable and transportation to work is available.'

Mr Jolovan Wham, who runs the migrants' welfare group Humanitarian Organisation for Migration Economics, felt that housing foreign workers at the cemetery 'is as good as social isolation'.

'Even if the workers are not superstitious, it sends them a clear signal on where their social position is in our country,' he said.

Mr John Gee, president of Transient Workers Count Too, an advocacy group for migrant workers, said foreign workers should not be left to live 'in the wilderness'.

'They need some place where they can have access to shops nearby and are free to step out any time.'

Last year, National Development Minister Mah Bow Tan said that housing workers on Semakau Island or Pulau Ubin was out of the question as 'foreign workers need to have easy access to amenities'.

However, cinema manager Ng Hui Ying felt that even if the foreign workers are housed in a relatively remote place, they are still too close for comfort.

Ms Ng, 32, has seen foreign workers littering, sleeping and urinating at her void deck in Jurong West.

'These workers are mobile and can visit the nearby housing estates if they want,' she said.

Said a 22-year-old construction worker from India: 'I don't think Singaporeans like us very much. They need foreign workers to build their flats but expect us to be invisible.'

100 In A House

Source : The Sunday Times, March 2, 2008

The tenants, all foreigners, moved in late last year and are packed into 17 rooms carved out with partition boards

IT IS a house of 100 tenants in Geylang.

No, that's not the title of the latest drama serial on TV but an extreme case of overcrowding in a three-storey terrace house in Geylang Lorong 28.

NEIGHBOURS HAVE COMPLAINED about the huge influx of tenants, and the latter are also unhappy about the crowded living conditions. However, some say they have no choice but to stay on because their company had arranged for their accommodation there. -- ST PHOTO: WANG HUI FEN

Understandably, the neighbours are upset over this.

Take the case of taxi driver Chan Kok Chuan, 46, who lives just next door. When his TV set could not receive any transmission last month, he checked the antenna and found that it had been tampered with. The TV signals were being redirected to the neighbouring house, which had been converted into a workers' dormitory.

Furious, Mr Chan, who lives with his wife and two children, informed the police.

On another occasion, he had also called to complain about the littering outside his house.

His neighbours - some 100 foreigners - moved in late last year.

The house had been rented to a couple from China. They then sublet it to workers and students from China, Vietnam, Myanmar and Malaysia. Most are men.

They pay about $150 a month for a bed space in one of the 17 tiny rooms carved out using partition boards. The balcony on the second storey has also been converted into a bedroom.

Neighbours, alarmed by the big influx of tenants, alerted the authorities.

In January, the Urban Redevelopment Authority (URA) issued a warning letter to the owner of the house who, neighbours say, is a Singaporean man in his 50s.

Private homes are not allowed to be turned into workers' dormitories because of the inconvenience that the tenants might pose to the neighbours, the URA said.

Over the last 12 months, it had received 20 to 30 complaints a month on this matter. Offenders can be fined up to $200,000, face up to 12 months in jail, or both.

The owner of the Geylang house has since submitted an appeal and this is under consideration, said the URA.

The Sunday Times could not reach the owner or landlord for comment.

Neighbours voiced concern that the unkempt condition of the house could provide a breeding ground for mosquitoes and that the makeshift kitchen on the front porch might pose a fire hazard.

When The Sunday Times visited the house last Friday, the kitchen, hidden from view by a large blue-striped tent cover, was littered with food remains.

Rubbish had collected in a dried-out pond and empty cigarette boxes and even a broken gas canister had been discarded beside a drain.

During the time that The Sunday Times was there, two National Environment Agency officers also dropped in to inspect the premises.

One tenant, a Chinese national who wanted to be known only as Mr Hua, said it was not the first time that government officers had paid a visit.

Just days earlier, Singapore Civil Defence Force officers had gone down to instruct the tenants to remove the gas canisters used for cooking. They now use electric steamboat pots instead.

Tenants said they were also unhappy with the living conditions, but complaints to the landlord had fallen on deaf ears.

Some said they had no choice but to stay on because their company had arranged for their accommodation there.

Without a proper kitchen, some were forced to cook their meals outside their bedrooms. Every day, there is a rush to use the communal bathroom on the ground floor, with waits of up to one hour not uncommon. There is another toilet on the third floor.

There are times when groceries go missing from the only refrigerator in the house. Some tenants also take their girlfriends to the house despite the overcrowding.

But there is happy news for some tenants.

A 40-year-old construction worker from China said his employer was relocating him and 14 of his colleagues to another place.

He said in Mandarin: 'This is worse than where I live in China.'

Banks Woo Cash-Rich En Bloc Residents

Souce : The Sunday Times, March 2, 2008

Talks held at Farrer Court to promote financial services to residents after estate's $1.34 billion collective sale

WHERE there is money, businesses will pursue it. So it is not surprising that at least two financial players, Citibank and IPP Financial Advisers, have held talks at Farrer Court to woo residents with their services.

CITIBANK STAFF posted in the void decks of Farrer Court blocks invited residents to finance-related talks after the estate was bought by developer CapitaLand. At the talk, the Citibank officers spoke about financial management services for affluent customers. IPP Financial Advisers also held a talk there. -- ST PHOTO: WANG HUI FEN

Residents netted $2.15 million on average after the estate had a collective sale in June last year. The 618-unit estate in Farrer Road was bought by developer CapitaLand for a record $1.34 billion. The original owners paid a little over $100,000 for their units 31 years ago.

The wooing of the Farrer Court community began four months ago with the unusual sight of Citibank officers posted in the void decks. They invited residents to two finance-related talks, complete with a free buffet dinner, in the estate's function room.

When The Sunday Times attended one talk last Wednesday evening, we saw bank staff handing out booklets to more than 150 residents. The staff spoke about financial management and Citigold services targeting more affluent customers.

Citibank said such talks were held on an ongoing basis in private residences, including The Berth by The Cove in Sentosa Cove in January.

Many residents liked what they saw. As Mr Aeden Tang, 49, a bank officer, said: 'Other banks didn't take the trouble to reach out to us, unlike Citibank.'

Another resident, a 56-year-old retiree who wanted to be known only as Madam Tan, agreed: 'It's a win-win situation because many residents are old and can't shop around for a good bank.'

Independent financial adviser IPP also held a talk there yesterday which drew about 25 people.

Residents said Citibank's more aggressive tactics worked better than IPP's. The latter had put up a banner to advertise its talk.

Other banks such as Standard Chartered have also reached out to those living in private residences.

None of them or IPP wanted to reveal how much business the talks had generated. OCBC, however, stopped such roadshows two years ago as it felt that they encroached on residents' privacy.