Two dead, four injured in car crash on ECP

Two dead, four injured in car crash on ECP
Published on May 2, 2014 8:04 AM

ST_20140502_VNGRCRASH_285335e

The mangled remains of the white Volkswagen that crashed on East Coast Parkway yesterday. — PHOTO: LIANHE WANBAO

By Grace Chua

A car crash at dawn yesterday left four people injured and two dead, including the director of a local magazine publishing group.

Mr Jamie Ho, 33, a director of Magazines Integrated, or m(int), was driving a white Volkswagen with five passengers in it when it crashed into a guardrail and a tree at the Marine Vista exit of the East Coast Parkway.

The car struck the guardrail with enough force to tear up chunks of concrete anchoring it down, and ended up crushed and mangled on a grassy divider at the expressway exit.

The Singapore Civil Defence Force said it received a call about the accident at 7.34am, and sent a fire engine, a Red Rhino emergency vehicle, three ambulances and two other support vehicles to the scene.

Rescuers found Mr Ho and a 29-year-old woman trapped in the front of the car, and another passenger pinned in the back, while three other passengers had already exited the vehicle.

The SCDF pronounced the pair in front dead at the scene, and sent the other four people to Changi General Hospital.

Among the survivors were a 24-year-old woman with a hip fracture, a 26-year-old woman with multiple injuries, a 25-year-old man with chest injuries, and a 29-year-old woman with abrasions on her face and hands.

Mr Ho, a keen angler, was associate publisher of quarterly fishermen’s magazine Hooked, which is published by m(int).

According to the company’s website, his expertise was in interactive media, mobile broadcasts and events marketing of cyber-gaming competitions.

It is unclear how the accident occurred, but the car is believed to have skidded because it rained yesterday morning, reported Chinese evening daily Lianhe Wanbao.

Here is the video of the car crash:

Leadership needed to halt grave error

Leadership needed to halt grave error
CHEW KHENG CHUAN

FOR a long time, Bukit Brown had been hidden from public view, awareness and scrutiny.

But, now, it has been identified as a 2014 World Monuments Watch site, about to be irreversibly damaged by the construction of an entirely avoidable eight-lane expressway.

This will forever alter its unique nature, and destroy not just a huge swathe of nature, but also 4,000 graves in its path. Even as I write, the bulldozers are about to rumble. The point of no return is nigh. I am a great admirer of Singapore’s civil servants. They are highly competent, incorruptible, and think hard on solving Singapore’s problems. They got us to where we are today. But in the case of Bukit Brown, they have fallen short.

An intervention is needed. The political masters should act now to halt a grave error.

The plan to drive the highway through Bukit Brown was to solve traffic congestion. The new highway would let motorists bypass Lornie Road and connect them more directly to Pan-Island Expressway. All that was needed: A straight line through a closed-down cemetery called Bukit Brown.

The highway is just the start. The plan is to remove the entirety of Bukit Brown and contiguous cemeteries – all 162ha – and to use this prime location to house up to 50,000 new homes in 15-20 years’ time.

But Bukit Brown is the largest Chinese cemetery outside China, with more than 200,000 immigrant members of the Chinese diaspora buried there.

There are reburials of older graves that date back to 1833, just 14 years after the founding of modern Singapore. And this is the burial ground for most of the pioneers of Singapore, whose names identify the roads of this country – such as Joo Chiat, Keong Siak, Kheam Hock, Eng Neo, Ong Sam Leong, and my great-grandfather, Boon Lay.

The removal of Bukit Brown will serve Singapore’s needs of managing traffic congestion, and provide space to house the growing population.

Yet, the benefits are too little; the costs are too high.

Buried at Bukit Brown are the earliest generations of immigrants who built this society, the towkays and the coolies, and the wide swathe of society in between.

Bukit Brown is not just a cemetery for the dead, it is a unique ethnographic museum for the living.

Hokkiens, Teochews, Cantonese, Hakka – Chinese of all dialects are buried here, with the names of their descendants on the tombstones, looked after by the Jade Girl and the Golden Boy, accompanied by carved stone lions, phoenixes, tigers’ paws. Guarded by turbaned Sikh guards and angels. Recorded with different calendar systems – Qing, Confucian, Republican and Gregorian.

Rich layers of history and ethnography in the material culture of the graves of Bukit Brown have only recently been discovered, documented and expounded by researchers from the architectural faculty of the National University of Singapore.

It might be thought that once they have been documented they can be destroyed. But if this was right, then one might argue that once Stonehenge has been filmed and recorded, why not build a Tesco and a parking lot on its site?

Consider further, the cost to the habitat. Here is home to fauna that includes the endangered Sunda Pangolin, monitor lizards, as well as several butterfly species, some uncommon. Thirteen threatened bird species – 23 per cent of the nationally threatened bird species – four rare resident bird species and 15 uncommon resident bird species reside at Bukit Brown.

Its size and its contiguity to the Central Catchment Area of MacRitchie and Peirce reservoirs form a critical mass that influences the rainfall, the micro-climate of the district and the climate of the island.

Take away the natural sponge – the verdant flora and soils of Bukit Brown – and rainfall may possibly be channelled to flood Orchard Road!

If planners in the Ministry of National Development, Urban Redevelopment Authority, Land Transport Authority and Singapore Land Authority cannot understand this because they have a more immediate micro-perspective, then it is up to the political leadership to step in now to take corrective action.

A political leader has now got to step up to the plate, step into the breach and switch off the engines of destruction that will obliterate our heritage.

Call it off. Save the day.

The decision to build that highway, or those 50,000 houses, can still be made in the future – 30 or 50 years from now. But to proceed is to perform an irreversible act of destruction.

How should Bukit Brown be preserved? As a new, transformed national heritage park.

It will be a place of sanctuary, sanctity, sacred burials, cultural and historical heritage, education, research into our origins and identity as a nation.

It will be a unique tourist attraction, a park that caters to the recreational needs of citizens and visitors.

There are alternatives to a better traffic flow on Lornie Road. There are alternatives to space for 50,000 more homes.

What does it take to see that Bukit Brown needs to be saved and not destroyed?

Political vision; intelligence; and clarity that will be transformative for Singapore. A single bold decision. Leadership.

The writer is chairman of The Substation and a consultant fundraiser. This article first appeared in The Business Times Weekend.

Singapore Legal Practice in the 70’s

The Good Old Days Revisited

At the beginning of the 70s, I had been in practice for only a few years. I had just been made a salaried partner in Allen & Gledhill, which gave me a good pay rise without the responsibilities of full partnership (‘good pay rise’ is of course a relative term: my income as a salaried partner was significantly less than that of a present first year associate in the same firm). My firm was one of the biggest in town (with about a dozen lawyers), yet it was still small enough that I knew the name of every person in the firm (peons included), and partners would lunch with legal assistants on a regular basis.

The legal world was still dominated by the ‘Big 4’ firms which had been founded by expatriates, namely, Donaldson & Burkinshaw, Drew & Napier, Rodyk & Davidson and Allen & Gledhill. However, their dominance was being challenged by two ‘local’ firms, Shook Lin & Bok (which was founded by Malaysians) and Chor Pee & Hin Hiong (which later fell into difficulties with the prosecution and conviction of Khoo Hin Hiong). There were only about 300 practising lawyers at the Bar at the beginning of the decade, so the sense of camaraderie was strong.

Legal practice was relatively leisurely, compared to today’s pace. I thought I was working hard by not going home till after 6pm, and usually had time to go home for a shower before an evening engagement. There was time for an active social life after work despite having to go to the office on Saturday mornings. I even had time to join ‘The Sceneshifters’ (an amateur operatic society) with Woo Tchi Chu and together we formed part of the tenor chorus for operettas like ‘Land of Smiles’ and ‘Rose Marie’.

When we went to the High Court on summons in chambers days, we would walk back to Raffles Place, and have coffee at the G H Café in Battery Road (which is now part of 6 Battery Road) together with its sinfully delicious kaya cake. If we missed coffee, we could always go there for lunch and sit at a table reserved for lawyers (a sort of ‘mess table’). There I lunched with some of the legal giants of the day (such as David Chelliah, K C Chan, Goh Heng Leong, Tan Tee Seng, Tan Wee Kian, Sachi Saurajen and Koh Eng Tian). None of them had any airs and were happy to talk to junior lawyers as equals and share their knowledge and experience with them. Another favourite haunt of lawyers was the Polar Café in High Street, whose curry and cream (custard) puffs were legendary.

When we appeared in the traffic courts against police prosecutors, the magistrates (like Giam Chin Toon) would invite us back into their chambers for coffee after the case was over and we would chat with the magistrate as well as the prosecutor. Relations between bench and bar were much closer then with such regular exchanges, culminating in the Bench and Bar Games against the Malaysians, which really roused the camaraderie of the Singapore lawyers. Our motto when we left for our biennial trips to Malaysia was ‘kalah tidak apa, wang tidak apa, semua tidak apa, style mau’.

Some of the major legal events that happened in the 70s included the following:

•The Law Society was still known as the Advocates and Solicitors Society of Singapore until it became a statutory body known as the Law Society of Singapore on 12 June 1970.
• The Supreme Court of Singapore was established on 9 January 1970 when it formally became independent of the Malaysian Court.
• In 1970 the Revised Edition of the Laws of Singapore was published, replacing the Laws of the Colony of Singapore (1955 Edition).
• The then Prime Minister, Mr Lee Kuan Yew, addressed the Law Society twice in this decade. The first occasion was at our Annual Dinner in 1970, when he criticised the Stock Exchange of Singapore (‘SES’) and urged the Law Society to pay heed to the weaknesses he had identified in the SES. He also defended the abolition of the jury system which had taken place at the end of the previous decade. The second occasion was at our annual dinner in 1977 when he castigated us for not heeding his earlier warning and gave notice of the Government’s intention to:
(a) make voting at Law Society elections compulsory;
(b) appoint a nominee to the Law Society’s council.

Although smoking had not yet been abolished inside air-conditioned buildings at that time, there was an informal ban on smoking when the Prime Minister was in a room, and the ballroom on these two occasions was noticeable for extended bathroom breaks by large sections of the audience, who disappeared into the lobbies outside for a puff or two.
• In 1971, the Attorney-General’s Chambers moved from the present Family Court building in Havelock Road to High Street, next to Parliament House.
• In 1971, Prof Tommy Koh became Dean of the Law Faculty and Prof S Jayakumar became our Head of Mission to the United Nations.
• In 1974, the Singapore Association of Women Lawyers was founded with Farideh Namazie as its first President.
• In 1975, the Board of Legal Education was established by the Legal Profession Act (Cap. 217).
• In 1975, the Subordinate Courts Complex was completed.
• In 1975, the Subordinate Courts Complex was completed.
• In 1979, Phyllis Tan became the first female President of the Law Society and in the same year, TPB Menon became the first local graduate to serve as Vice President.

Lawyers who worked in the Raffles Place area used to visit the office-cum-showroom of the Malayan Law Journal in Raffles Place next to Robinsons to browse through the latest law books. Bashir Mallal was an amazing man, who had no formal legal training but taught himself law to such an extent that he could give legal opinions and was conferred an Honorary LLD by the then University of Singapore. His death in 1972 marked the passing of an era.

Another enduring memory for all lawyers who worked in the Raffles Place area was Robinsons Department Store in Raffles Place (now occupied by OUB Centre) where we would go for lunch or simply window shopping during lunchtime. One day in 1972, I set out for court in the morning and, when I returned, I found that Robinsons had been destroyed by a fire which also killed the kindly liftman who would say hello to me whenever I visited the store. My office (which was next door) had not been damaged by the fire, but suffered damage from the water pumped into the building by firemen anxious to protect it from the flames next door. I found that my carpet had shrunk by several feet owing to the water, and made an unsuccessful claim on our insurance company, which denied liability on the grounds that our fire insurance policy only responded to claims for damage from fire, not water which put out the fire.

My own work experience was being gained incrementally, as I counted many ‘firsts’. My first (and only) murder trial was in 1974 where Amarjeet Singh and I were assigned to defend two robbers who had killed the victim of their crime. Both our clients were convicted and were eventually hanged. My client was most reluctant to appeal against his conviction, and I was only able to persuade him to sign the appeal papers by telling him that his wish to be executed early could not be fulfilled until his co-accused’s appeals had been disposed of. In 1973, I argued my first case in the Court of Appeal which was for a sum of $1,400. Even then, that was not a large sum, and I was fearful of the reception I might receive from the Court of Appeal. To my relief, they heard me out patiently, and gave judgment in my client’s favour which established that the right of a buyer to reject defective goods could be lost after a reasonable time (1972-1974 SLR 189), which I later discussed in an article in 1992 published in the Lloyds Maritime and Commercial Law Quarterly at page 334.

I was also doing a good deal of corporate finance work, as my firm was acting for about a third of the new merchant banks in Singapore, which were at the vanguard of the new kind of corporate work that we were seeing for the first time. IPOs (or flotations, as they were then called) were starting to become popular, and lawyers were beginning to understand the urgency that such work demanded, which would change the pace of legal life (at least in corporate work) forever. I assisted in the first IPO in Singapore of a close-ended investment trust (Harimau), and the first take-over of a publicly listed company under the new Companies Act (Haw Par of M&G).

In the early 1970s the property market was as hot as it is now, and I was fortunate to have a big client from Hong Kong who went on a spending spree in Singapore, buying several large properties and thus underwriting my introduction to conveyancing practice. I also undertook my first experience as a developer’s lawyer for sales of units in an apartment block (Cavenagh House). The market remained on the boil until the Prime Minister announced on 10 September 1973 that only Singaporeans could purchase residential property. Overnight he brought the property market down from its giddy heights (again, this is a relative term: the best apartments were then selling for less than $100 per square foot) and killed the conveyancing market for almost the rest of the decade. I then switched to acting for landlords in granting commercial tenancies (ICB Building and Shing Kwan House) as well as acting for finance companies financing purchases of commercial units (Katong Shopping Centre).

On the extra curricular front, I began my practice of Family Law when I was asked to teach the subject at the University of Singapore as a part-time tutor. This led to my being appointed to a committee to advise the Ministry of Social Affairs on reforms to the Women’s Charter, after which I continued my interest in the subject by actively practising in this area for the rest of my career.

I also committed myself to pro bono activities. With my experience of Family Law, I volunteered for the Panel of Lawyers to assist the Legal Aid Bureau. More interestingly, I also joined the Samaritans of Singapore (‘SOS’) as a consultant, advising their clients who felt suicidal because of legal problems. I served under their first Chair, Margaret Jeyaretnam, wife of Ben and mother of Philip, and a wonderful person in her own right. Eventually, I became Chair of the SOS and served for three terms in that office.

The 70s were therefore a decade when lawyers led a busy (but not too busy) and eventful life and had time for each other. We were certainly a lot poorer than lawyers are now, but (arguably) we enjoyed our lives a little more.

Michael Hwang, SC
AAS NO. 15/1968

Wealth Over the Edge: Singapore

WSJ.MONEY March 7, 2013

Wealth Over the Edge: Singapore
$26,000 cocktails. Traffic jams freckled with Ferraris. The world’s sternest city is now the richest. Why?
By SHIBANI MAHTANI

It’s midnight on a Saturday night at the Marina Bay Sands resort near the sparkling Singapore River, and all the boutiques are shut. But past a cosmetic-surgery clinic and a Ferrari accessories store close by, a large crowd is getting increasingly agitated. Dozens of hopefuls are clamoring to get in to what is billed as the world’s most expensive club, Pangaea.

When most people think of Singapore, an order-obsessed Asian version of Wall Street comes to mind. But lately, Singapore has become a haven for the ultra-rich.

Tight-fitting Herve Leger bandage dresses are practically a uniform here, often paired with Christian Louboutin heels and Chanel 2.55 bags, as women try to befriend club goers who are lucky enough to get past the red-velvet barrier and bouncers. It is frequently the leggy models, part of the club’s core demographic, who succeed. Out-of-town visitors who negotiated their way onto the guest list weeks earlier are turned away, even after offering to pay more than $3,000 for a table. The nightclub is completely full.

Past the bouncers, a walk through a long tunnel with blue ultraviolet lights and a ride up an elevator reveal one of the world’s most exclusive parties. Michael Ault, Pangaea’s founder, sits at the club’s most prestigious table by the bar, on cushions covered in exotic African ostrich skins. His table is covered with bottles of Belvedere vodka, Cristal champagne, buckets of ice and dozens of glasses for his friends. His wife, Sabrina Ault, a former fashion model and now his business partner, wears a fake shark’s head and wields a plastic gun while dancing on a table top. At Pangaea, all surfaces are made for dancing—even tables made from the trunks of 1,000-year-old trees and the crocodile-skinned couches.

It may seem counterintuitive, but a dance club does not need a dance floor if you are Michael Ault. A veteran of Manhattan nightlife and descendant of blue-blooded socialites—he is the son of a Van Cleef from the Van Cleef & Arpels jewelry family and the stepson of Wall Street’s famed Dean Witter—Ault, 49, prides himself on one thing above all others: the ability to throw a good party. And he has done just that over the years at more than 25 clubs from New York to Miami Beach and São Paulo to London. He is credited with being one of the first nightclub impresarios to introduce bottle service—now commonplace globally—at the legendary New York Spy Bar in the 1990s, where even Kate Moss was turned away on exceptionally packed nights.

The Pangaea experience, he says, replicates the feeling of being at a house party—one that just happens to offer African tribal masks from Ault’s personal collection, throbbing music, a $26,000 cocktail that contains a diamond inside and is served by waitresses in black dresses, and the knowledge that many of the people around you are worth billions.

Pangaea, though just over a year old, is now considered the most profitable club in the world with revenues of more than $100,000 per night in recent months, Ault says. It’s also one of the most expensive clubs, with tables costing as much as $15,000, and the uber-rich regularly chalking up six-figure bills. He could have brought this extravagance to just about anywhere in the world. London, with its collection of royals and a party scene that attracts Europe’s glitterati. Dubai, too, the land of if-you-want-an-island-you-just-build-one. And of course, his hometown and former playground, Manhattan.

But Ault, who moved to Singapore three years ago, says he “no longer feels the magic” in Gotham, which still bears the scars of a financial crisis that knocked the wind out of much of its most extravagant party culture. Singapore, he says, is another matter. This is where he says the rich feel, well, rich, and unusually secure. And where they seem to know only one common language, the language of excess—all too shamelessly displayed in his club.

“One night, there were these kids here—literally kids in their 20s—who all had their own private jets,” Ault recalls during another meeting, on a Thursday morning, leaning back on a leather couch in his club wearing bright-blue fuzzy slippers embroidered with a pink skull. “Serious jets, too. There was an A380 which was converted to include a pool and basketball court—it was ridiculous.”

“What I see here is what I imagined must have happened in the U.S. in the 1880s, in the Gilded Age, when it first took over England in terms of wealth,” he says. “It is truly shocking how much wealth there is—and how willing people are to spend it.”

Welcome to the world’s newest Monaco, a haven for the ultra-rich in what until recently was mocked as one of the most straight-laced, boring cities in the world. When most people think of Singapore, if they do at all, they think of an order-obsessed Asian version of Wall Street or London’s Canary Wharf, only with implausibly clean, sterile streets and no crime. The southeast Asian city-state of five million people is perhaps best known for banning the sale of chewing gum or caning vandals, including American Michael Fay in 1994 for spray-painting cars. Drug traffickers face the death penalty, and even Ault complains the authorities won’t let him import his prized gun collection, which now sits in his other homes in Palm Beach and Manhattan.

But over the past decade, Singapore has undergone a dramatic makeover, as the rich and famous from Asia and beyond debark on its shores in search of a glamorous new home—and one of the safest places to park their wealth. Facebook co-founder Eduardo Saverin gave up his American citizenship in favor of permanent residence there, choosing to live on and invest from the island while squiring around town in a Bentley. Australian mining tycoon Nathan Tinkler, that country’s second wealthiest man under 40, whose fortune is pegged at $825 million by Forbes, also chose to move to Singapore last year. They join Bhupendra Kumar Modi, one of India’s biggest telecom tycoons who gained Singapore citizenship in 2011, as well as New Zealand billionaire Richard Chandler, who relocated in 2008, and famed U.S. investor Jim Rogers, who set up shop there in 2007. Gina Rinehart, one of the world’s richest women, slapped down $46.3 million for a pair of Singapore condominium units last year.

And then there are, of course, your average millionaires—more of whom can be found among Singapore’s resident population than anywhere in the world. According to Boston Consulting Group, the island had 188,000 millionaire households in 2011—slightly more than 17 percent of its resident households—which effectively means one in six homes has disposable private wealth of at least $1 million, excluding property, business and luxury goods. Add in property, with Singapore real estate among the most expensive in the world, and this number would be even higher. Singapore also now has the highest gross domestic product per capita in the world at $56,532, having overtaken Norway, the U.S., Hong Kong and Switzerland, according to a 2012 wealth report by Knight Frank and Citi Private Bank.

But what really checks all the right boxes for many of the world’s ultra-rich is Singapore’s obsession with order.

The toys of all these millionaires and billionaires are visible across the city-state. A country roughly the size of San Francisco, it now has 449 Ferraris, up from 142 in 2001, while its Maserati fleet has grown from 24 to 469. Yacht clubs are popping up along with super-luxurious shops, like the Louis Vuitton Island Maison, a flagship boutique of the ubiquitous luxury brand housed in its own floating pavilion. Nightclubs like Pangaea and Filter, which are frequented by the young Saverin and his crew of millionaire party boys, have turned into havens for the wealthy to mingle. Rich out-of-towners play at Singapore’s two glamorous new casino resorts, opened in 2010, including the Marina Bay Sands complex with its celebrity chef restaurants and an infinity pool on the 57th floor with palm trees overlooking the skyline. In 2007, Bernie Ecclestone decided that the city-state would be added to the illustrious Formula One World Championship calendar. The race—which is the only Formula One night race in the world and is set to continue annually until at least 2017—has emerged as one of the most glamorous Formula One events, broadcasting the impressive Singapore night skyline to millions globally.

Singapore has long been a magnet for rich expatriates and multinational corporate executives. They are attracted to the city-state’s low taxes, virtually crime-free streets, pro-business policies and predictable government, with one political party in power since it gained independence in 1965. But the onetime British trading post’s ascent into the stratosphere of the world’s ultra-wealthy cities in recent years reflects a momentous shift in the global economy, as wealth settles in Asia after more than a decade of booming emerging-market growth. Asia now has more millionaires than anywhere else, according to consultancy Capgemini and RBC Wealth Management. While the rich lick their wounds in Europe and North America, the net worth of individuals in countries like China and Indonesia are up 6 percent to 7 percent annually.

Danny Quah, professor of economics and international development at the London School of Economics, has calculated that the world’s economic center of gravity—measured by looking at income averages across more than 700 places worldwide—has shifted east over the past 30 years, from the Transatlantic Axis to somewhere across the Arabian Peninsula. If current growth trends continue, this center will move in another three decades to a resting point between India and China—just about where Singapore is, meaning its potential as the world’s economic center may not even be fully realized.

Unlike the West or even places like the Middle East, though, much of the new wealth being created in Asia is emerging in countries where rich people see their assets at risk, either because of unreliable governments or unloved ones. The Chinese alone are reportedly exporting billions of dollars, saying they no longer trust their government and want to put their money elsewhere. Indians and Indonesians have likewise been looking for a place where they can stash cash to avoid high taxes or work with international-class wealth managers, while steering clear of the unpredictable policy shifts in their rambunctious—and some say, corrupt—democracies. Many Americans and Europeans just want a place where their investments can keep growing—hardly a problem in Singapore, smack in the middle of the fast-growing Asia.

“This kind of sharp change [in the global economy] brings with it an emergence of the very rich, who seek security and stability and a pronounced need for financial services in wealth management, investment, and facilitating and guiding decisions,” Quah says. “A place like Singapore has developed both the reputation and the expertise along every single one of these dimensions.”

But what really checks all the right boxes for many of the world’s ultra-rich is Singapore’s obsession with order, predictability and control, all of which give comfort to individuals whose fortunes have recently gone down the drain in many parts of the world. It doesn’t hurt that Singapore has some of the lowest taxes in the world, including none on capital gains and most foreign dividends. But it also has relatively secretive private banking laws and zero harassment from paparazzi or protesters, whose activities are narrowly proscribed by Singaporean authorities, further creating an aura of order and stability. Ronen Palan, a professor of international political economy and an expert on offshore wealth and tax havens at City University in London, believes that while Switzerland is “clearly suffering” from the pressure put on its private-wealth sector from the European Union and the U.S., Singapore is a “very secretive location” where many—Asians in particular—believe their wealth will be spared scrutiny from Western regulators.

“For all the flack that Singapore has gotten for chewing gum and caning, it shows that things are orderly here. Corporate governance is in order, the ruling party is stable and is not going anywhere, things actually function—everything works,” says Indonesian-born millionaire Frank Cintamani, as he sits in front of gold-embellished couture dresses, wearing a three-piece gray Lanvin suit paired with black brogue shoes. It is Haute Couture Week in Singapore, an event he leads after luring it away from Paris. A Singaporean citizen who has spent a large part of his life living in hotels and who frequently dons diamond brooches, he also leads Men’s Fashion Week and Women’s Fashion Week, and has a host of other interests and investments, including in publishing.

“Rich people can have fun anywhere,” he says, as the sound of a Ferrari zooming past distracts his train of thought, while he directs a stream of models, designers and fashion writers coursing through a tent next to the Marina Bay Sands, where his fashion show is being held. Though sitting down, he constantly has to stand up briefly to greet the ultra-wealthy fashion aficionados who recognize him. “But over here they know they will always be safe, their privacy respected and their investments solid,” he says.

Cintamani, 36, interrupts the discussion on Singapore’s economic environment, drawing attention to two men—one in a three-piece black suit, and another in a futuristic-looking white top embellished with silver at its collar and reaching past his knees over skinny white pants with platform shoes—and a woman in a white two-piece, loose-fitting suit with silver heels.

“See those guys over there? The three people in the corner? Their combined worth is between six to seven billion U.S. dollars—and I know this for a fact,” he says. “This is why we need to do this here,” referring to his fashion ventures. He then points out that one of Mongolia’s richest men, with wide interests in property and a keen investor in Singapore’s real estate, is also in attendance at the couture show. Cintamani, whose business card carries several logos from ventures in magazine publishing to fashion shows, declines to say where his family’s wealth comes from, describing it as “sensitive.” (His spokesperson says much of it comes from the oil and gas business.)

The irony, as with other earlier boomtowns, is that the very sources of Singapore’s success may ultimately prove its undoing. The gushers of cash that have flooded Singapore in recent years have put relentless upward pressure on property prices, with private-home prices rocketing 59 percent higher since the second quarter of 2009, even as real-estate prices have tumbled or gone sideways in much of the rest of the world. Prime Minister Lee Hsien Loong was only admitting the obvious, some analysts say, when in a recent interview he said that the country’s property boom is “almost a bubble.”

Singapore’s “Gini coefficient”—the best-known economic measure of income disparity—is the second highest in the developed world. Wealth-X, a private consultancy that provides intelligence on the world’s uber-rich, estimates some 1,400 ultra-high-net-worth individuals now hold more than $160 billion of wealth in Singapore. Even upper-middle-class natives find themselves unable to afford houses in some parts of the city-state, such as Sentosa Cove, where more than 60 percent of the houses are owned by foreigners. Some are put off by flashy displays of wealth, particularly when it is the wealth of foreign nationals.

The dazzling party scene, meanwhile, has brought a new kind of anything-goes culture to Singapore that is threatening the sense of order that helped make it so alluring in the first place. One of the more disturbing examples came in May 2011, when a Ferrari driver from mainland China, traveling at more than 110 miles per hour, crashed into a taxi after running a red light and killed himself, the taxi driver and a passenger. The accident triggered an outburst of anti-foreigner sentiment online, with some Facebook users creating a fake profile for the dead Ferrari driver with derisive comments against mainland Chinese. Although authorities have largely succeeded in keeping out the kinds of criminal elements that populate the shadows of casino capitals like Las Vegas and Macau, local papers don’t shy away from reports of problem gambling in Singapore’s two new casinos, with one local middle manager reportedly losing $400,000 in a single bet. On a recent Saturday night near Pangaea, seven police officers were seen arresting a topless Caucasian male for alleged drunken and disorderly behavior.

The irony, as with earlier boomtowns, is that the very sources of Singapore’s success may ultimately prove its undoing.

Public expressions of anger or dissatisfaction with Singapore’s transformations are limited, since protests for the most part are prohibited. Yet signs of unhappiness are multiplying. The city-state’s ruling party retained power with its lowest percentage of votes in Singaporean history in 2011, and a thriving blog culture is prodding officials to consider some changes to the country’s economic model, including the creation of a bigger social safety net for the poor, which likely would require higher taxes. Indeed, several of the country’s leaders—who for decades staunchly defended long-standing policies of prioritizing economic growth above personal freedoms and welfare—seem to be doing some soul-searching. In his New Year’s Day message, Prime Minister Lee called on the nation to balance material goals with its “ideals and values. We are not impersonal, calculating robots, mindlessly pursuing economic growth and material wealth,” he said.

The rich in Singapore now find themselves with “new avenues to display their wealth,” according to Garry Rodan, a fellow at the Asia Research Center at Murdoch University, while “aged Singaporeans with grossly inadequate savings can be seen on the streets collecting plastic bottles for recycling.” Opportunities to move up the ladder, he says, are shrinking.

On the real-estate front, meanwhile, lawmakers have tried to deal with sky-high prices by introducing a 15 percent stamp duty on foreign purchases of private residential homes. Last year, the government also removed a program that allowed wealthy foreigners to “fast track” their permanent residency if they kept at least $8.1 million in assets in the city-state for five years, though investors who plan to dedicate a few million to help companies in Singapore grow are still welcomed. Authorities have repeatedly tightened the city-state’s tight casino-control laws, already among the strictest in the world, to restrict some locals from patronizing gaming floors and to punish casinos if they fail to keep problem gamblers away.

Optimists say those steps may, in the long run, prevent Singapore from going down the same road as earlier cities-of-the-moment that burned bright and then flamed out, like Dubai. “The writing was on the wall in Dubai in 2007—we had made our money and it was time to move on,” says Chris Comer, a property developer who is bringing the exclusive Nikki Beach franchise—a global chain of beach party clubs in St. Tropez, Miami and St. Barts, with girls in elaborate bikinis and patrons who show up in Caribbean pirate outfits or zebra body paint—to Singapore. Having lived in and out of Singapore for 17 years, Comer now resides in an oceanfront condominium in Sentosa Cove, a gated enclave of ultra-wealthy residents on an island 20 minutes from Singapore’s city-center. His beach club venture—one that he insists is “recession-proof”—is particularly well-matched for the city-state, he says, nodding at the seven pages of used Lamborghini listings in the online auto classifieds.

“Singapore is my home, this is my base, this is where I feel safe,” says Comer, speaking in the loft of his four-story office in a shophouse on Singapore’s Ann Siang Hill precinct, a preserved historic area just off Chinatown.

Others aren’t so sure about the future. They see youths burning through cash, and rich people who are totally oblivious to the sacrifices made by earlier generations that helped places like Singapore climb from Third World to First World status in just a few decades. “You see this happening often, one generation would make the wealth, and the next two or three will lose it,” Ault says. Moreover, “there is a mathematical certainty that there is going to be an economic tsunami” at some point, adds Ault, who trained as an economist with degrees from Oxford and the London School of Economics and worked on Wall Street before becoming a nightclub owner.

Others are worried secretive Singapore won’t be able to stay that way. The city-state, defiant against the label “tax haven,” has taken steps to ensure its tax treaties allow for more information exchange on tax dodgers, most recently firming a double-taxation agreement with Germany. (A spokesperson from the Monetary Authority of Singapore says it works hard to report any “suspicious transactions.”) Singapore is also forced to comply with new financial regulations—including the Foreign Account Tax Compliance Act, a way for the U.S. to ensure its taxpayers do not shirk payments through offshore holdings. This, Palan says, is a “game changer” for the private-wealth industry and will be used as a model by other countries.

Still, in the nightclub business—in which there’s always another night, and more models and rich kids waiting in line for an exclusive party—it pays to be positive. At least that’s how Ault, the highflying owner of Pangaea sees it. He figures that even if things do go awry, “Asia is better positioned.” Singapore, his city of choice, he says, is “doing all the right stuff to stay on top.”

Cedele by Bakery Depot

Interview with Ms. Yeap Cheng Guat, Founder of Cedele By Bakery Depot
by Teo Sok Huang on 28-May-2009

Founded in July 1997 and with the establishment of the brand name Cedele in 1999, this home-grown chain has expanded to 17 stores comprising of bakery cafes, bakeries and all-day dining restaurants. Bakery Depot has been advocating positive eating, attitude and healthy food, made responsibly and with great passion by artisan bakers. With its philosophy of “Eat Well, Be Well”, Bakery Depot has been creating nutritious and wholesome food, handmade from scratch with fresh and natural quality ingredients, without any unhealthy preservatives, trans fat or additives. The company has garnered numerous positive reviews from the media and public.

Interviewer’s Comments:
Ms. Yeap appeared sincere and self-confident throughout the interview. One can see her passion and enthusiasm in providing food of the best quality for the better health of her customers and the environment. Ms. Yeap was candid with how her previous working experience, family life and personal thinking have structured her business philosophy. Her dedication towards her company was evident, as she discussed her plans to further innovate and expand the business in Singapore and overseas. Ms. Yeap wants to take the lead in educating consumers on what good food is, and generating the interests of consumers in what goes into their food and how their food is made.

1. What is the nature of your business?
Bakery Depot started out as a bakery, which will always be the backbone of our business. Additionally, we bake for wholesale business. When we launched the Cedele brand, our proposition was to serve healthful meals. We offer a wide variety of wholesome, sugar- and fat-free freshly baked breads and have up to 8 different types of breads daily for our signature gourmet sandwiches. We were also the first to offer soups and salads made from scratch, which was like an innovation back then. Our vegetarian and meat-based soups are so hearty that most people would find that one bowl is sufficient. Our food has absolutely no trans fat and Cedele was the first in the market to introduce organic unrefined sugar in our cakes, pies, pastries and cookies. To date, we have 17 stores comprising of retail bakery, bakery cafe and all day dining restaurants. We are happy that we have provided an avenue for people to be given a choice to eat better.

2. When and why did you decide to become an entrepreneur / take over your family business? NOTE: If it is not a family business, ask: Do your parents have their own businesses too? Have they inspired you in one way or another? (Select appropriate question according to the entrepreneur being interviewed.)
I decided to be an entrepreneur as I want to make a difference and be free to express myself through my work. I also want to advocate healthy food and positive eating. My parents did have their own business but it is totally different from mine. Education was a priority in our family. My parents worked hard to ensure that their children received an education so that we can make a difference in our lives. My parents taught me virtue, life values, integrity and the value of education.

3. What are your reasons for choosing to do business in this particular industry?
The barrier to entry into the baking business was low. Also, baking is something that I have always done. Cooking and baking are very therapeutic and come as a second nature to me. So I went for cooking lessons and trained. Besides, I have an academic background and am strong in research, so I was confident that I could survive in the business.

4. How did you put together all the resources needed to start your business? For example: getting the start-up capital, hiring staff, doing sales and marketing, advertising, etc.
I try to hire people who are new to the business as they would not have any preconceptions. Also, you must first understand where you are now and what your business format is. I chose the appropriate marketing vehicle based on my budget and an understanding of where my business is. For example, television commercials may not be the best medium for a niche business like Cedele. It is better to find a medium that is more engaging and therefore, we have a website. In my first shop, I provided samples of our food for customers to try. I realized that sampling was one of the best ways to market my business, and calculated that it was cheaper than putting up an advertisement. We then built our customer base by introducing loyalty programmes such as loyalty cards or discounts. Communication is key and we implemented in-store communications posters and leaflets. Some of my thoughts or quotes even ended up on the blackboards in the stores! It is important to be newsworthy and have the press write about us. It is more credible for a third party to talk about us and this free publicity is a powerful vehicle for the public to learn about Cedele. We will also work with other organizations with the same ethos as us for joint promotions to further build the Cedele brand.

5. How did you go about designing the process? Did you have much knowledge regarding this industry when you first started?
I did not really have much knowledge about the F&B industry. I worked in real estate and telecommunications industries before. It was from an FMCG (fast-moving consumer group) multinational company that I learned a lot about business processes. I can resonate with the working style of an FMCG business. Thus I am very process-driven and would inject this discipline into my own business. Being in an FMCG company helped me understand and identify gaps in the market. For example, I noticed that people had to pay a lot for wholemeal bread and only selected groups could afford to buy. Thus I started a bakery business to make wholesome healthy breads more accessible to the public and sold at a reasonable price.

6. I am rather curious, why did you choose the name Cedele?
We started as Bakery Depot, which was essentially a bakery. When we first opened downtown, we decided to serve drinks and meals, alongside our breads, cakes and pastries. However people thought Bakery Depot was just a bakery and it would not be the first place in mind to go to for lunch. Hence we decided to use a different name – Cedele. It represents our retail brand. It does not have any apparent meaning but just sounds like Deli. We had to put a meaning to the Cedele brand in the initial years, as there was quite a lot of press already written about Bakery Depot. After 10 years of building the Cedele brand, landlords recognize and are comfortable with the brand. For the past few years, we have been positioning Cedele on a foothold emphasizing health, hence our “Eat Well, Be Well” proposition.

7. What are some interesting stories you have about your first few customers / first few years in business?

5 years ago, I met a couple who goes to our Frankel Avenue store every weekend. The husband liked to eat cakes and breads but could not as he was diabetic. I created a sugarless cake for him. He also inspired me to do a higher-percentage wholemeal bread and we now have a 100% wholemeal range. I think it is important to know what the customer needs. If a customer has special dietary needs due to medical reasons, we will try to provide a solution if we can at Cedele. Many years ago, I had a customer whose 12-year-old daughter was a recovering cancer patient and had not eaten a birthday cake for 6 years. I made her first birthday cake – a banana-bread cake – where I eliminated the sugar and ripened the bananas. She was so happy! She now regularly buys sugar-free cakes from Cedele. It makes me smile to be able to find happy solutions for my customers.

8. What were some of the challenges you faced when you first went into business?
One of the challenges would be getting the ingredients that we want. It was hard to get people to understand what I am doing, my philosophy and approach to creating and making food. I had peers in the industry who told me that I would fail and it was challenging to get bakers to work for me. For example, my bread recipes exclude fats and sugar.This was against the norm and many bakers did not believe that I could do it.

9. How did you overcome these challenges? Please share some specific examples of the action you took to overcome the challenges.
I did it the hard way by starting from scratch and training my people. I utilized my skills learnt whilst working in the MNCs which were useful in helping me to train my people effectively. I had to let my first baker go after 4 weeks into business as he would want to order improvers, which I do not allow. I also hired a junior baker, who was a cook but knew nothing about baking. Through training and mentoring, he is still with me today.

10. Can you remember your worst day in business or a time when you felt like giving up? What happened that made you feel that way and how did you triumph over it?
People do let me down, such as suppliers and stakeholders in the company. At times, we were unsuccessful in influencing certain people to join our organization or new workers from doing the opposite of what we want. I do get frustrated and start to question whether I should take the easy way out. However, I have never succumbed to such temptations and am clear of what I should do. I rethink how we should improve the shortlisting process and hire different groups of people. The solution is to hire the un-norm people, who have not worked in this industry, to fit into this un-norm business of ours.

11. What are some of your proudest business achievements to date? And why are they so important and meaningful to you?
I believe that it is the journey, rather than a fixed moment, that you can be proud of. Nevertheless, I did feel proud when I recently saw a local bakery truck carrying a label that said “No trans fat”. Years ago, Cedele was one of the first to introduce food with no trans fat, so I felt that I have made a shift by creating awareness and fighting against trans fat. You look back at your achievements, after a period of time in which you try to do the positive and right thing, and you see what has been the impact. Therefore another proud moment would be looking at how some of my staff have grown to be different and better persons compared to the day they first joined us.

12. How do you differentiate your business from your competitors? Please provide specific examples.
Cedele stands out from other cafe / restaurant operators because of our “Eat Well, Be Well” positioning and we translate this philosophy into creating and making of our food. We differentiate ourselves based on how and when we cook our food, how we buy the ingredients and how long they are kept. We continuously pay attention to our product quality and presentation, such that when a customer comes to Cedele, he knows that he will get a great deal, not of a low price but of quality and taste. Customers can be assured that our food has no trans fat since our “No Trans Fat” campaign was launched 4 to 5 years ago. We are the first company to use organic unrefined sugar in our products. We make our breads by hand, without using any pre-mix, improvers and preservatives, which are considered necessary in most bakeries. That is why we are artisan bakers, as we know what we are doing and follow the fundamentals. Our soups are gluten-free and thickened with only vegetables. Our cakes, cookies, pastries are handmade from scratch and we use organic unrefined sugar. We also buy diligently and responsibly. We purchase good quality and natural ingredients, with a focus on freshness. Our company has always been green. With a motto of “Waste Not”, we always recycle and order exactly to the required quantity. We also believe that we must give back to the society if we have an opportunity to build the business in a sustainable way. For example, our organic coffee is fairtrade and we buy from a UK-based company which contributes 60-80% of its profit back to the grower communities.

13. What are some business ideas you have implemented that created great results in your business or the industry as a whole?
I try to empower my customer with information, enabling them to make informed choices. I am pleased to make a difference and shift the thinking of people in their choice of eating better. Our all day dining concept was introduced in 2003 and it is doing very well. We were one of the first to make breakfast popular by serving a hearty breakfast, which is the most important meal of the day, at an accessible price. At our stores, our products have absolutely no trans fat. It has always been my mission to serve all organic foods in the future, and I see this as a natural progression for Cedele. We are one of the first to introduce freshly-baked organic breads in Singapore in 1997. Initially, there were not many organic ingredient suppliers and virtually no demand for organic products. However there are a lot of people buying organic products now. We are also the first to highlight gluten-free food in our menu. We have a wide range of gluten-free soups and salads for people who are looking for a low-gluten diet. Any small contributions matter and it may take awhile to gain acceptance, but Cedele has always been unafraid to take the first steps and make decisions outside the norm.

14. Can you share with us some ideas of how you maintain the high standards?
We have a buying department whose sole purpose is to examine the freshness of our ingredients and ensure the right temperature for storing them. Our storage capacity is small to discourage holding large volumes. My HACCP (Hazard Analysis and Critical Control Points) team helps to enforce proper production processes to ensure that fresh quality, cleanliness and hygiene practices and standards are maintained. They scrutinize our entire process of buying, receiving, storage, production and delivery of our ingredients and foods. We train our workers from the start on the disciplines that must be adhered to. As we are manufacturers, we control the ingredients for most of the food that we make. Hence we are able to shortlist suppliers who offer innovations (eg. organic unrefined sugar, grapeseed oil) and fulfill certain prerequisites such as having no trans fat, artificial preservatives and flavourings. We work with local and overseas suppliers to deliver quality and freshness according to our specifications. We do not compromise on quality and freshness and if our specifications are not met, we will reject the entire shipment. The method in which we cook our food and the ingredients that we put into our food are also important. Again, we emphasize freshness and the quality of our ingredients.

15. Where or who do you get your business ideas from?
I build my business just from listening to customers who tell me what they need. I always design food by thinking about the impact to the health of my customers, and will not do it if it is not good for them. For example, our flour has no mold inhibitor preservatives and I was educated about this from a customer, who is the president for a club for children with disabilities. Through research, I learnt that margarine has trans fat and is cancer-causing. This was enough reason for me to stick with butter and exclude margarine from my recipes.

16. What do you see for your business in the next 5 years, and does it include any plans for expansion?
It is inevitable for a business to expand and the form must change regardless of which way your business expands. Our proposition is relevant in a Western country and may probably be better-received there than in Singapore. It is our dream to bring our business into the West. Cedele, as a brand, will evolve to a different form, if the market conditions are ready. Another of my dream is to have a group of entrepreneurs working for our company in their own divisions. Our future end-state is to be all-organic. We will also be moving towards more fair trade products. The costs are higher but I believe I can bring positive impact to the lives of the growers.

17. As you are currently working with mainly overseas suppliers, do you have any plans to work with local firms as well?
I do purchase from local suppliers currently. I would love to support and work with more local enterprises. However, it is hard to find suppliers in the region who are able to complement our business. I strongly encourage young enterprises to work with us and we will be very happy to share our thoughts and philosophy. Hopefully, we can create a positive footprint. We admire people with a sense of responsibility and reliability, and they are whom we can resonate and work with.

18. What does entrepreneurship mean to you?
I do not think it should just refer to a quality of a person who has his own start-up. It can also mean a person who works for a company and starts his own project, thus building ownership, creativity and thoroughness in the business. If they drop their ego, which is always what stops people in their businesses, they will succeed. It is about having a thought in the beginning and putting them into a tangible form.

19. In your opinion, what does it mean to have the ‘spirit of enterprise’?
Always think out of the box. Give yourself the permission to take risks and apply the processes that you have learnt. If you do not dare to take risks or only have a small appetite, then work for people but still be an entrepreneur within the organization.

20. Who or what motivates and inspires you?
My ex-company was an US-based multi-national company. It was a socially responsible company which gave back to the society. I had an ex-colleague who stuck quotes at my desk. 2 quotes that stayed with me through the years: One was from Confucius, “If you enjoy what you do, you will never work another day in your life.” Another one is, “The best ideas are usually found in the graveyard.” Many people have good ideas but they never execute or share them in their lives, so their ideas go to the grave with them. This is for entrepreneurs who want to do something but never did. I decided not to procrastinate anymore and drove myself to open my bakery business. Even if things did not work out, I could still go back to the corporate world and my resume will look better. One of my professors told me that we will probably not remember what we have learnt after our course. The one thing he wanted us to remember is the importance of research and to apply this in our working life. I am very lucky to have had many mentors in my life and I pay attention to the people I meet, how they can engage and add value to my life, so that I can be more educated. Education never stops until the end of your life.

21. Would you quit your business and go back to the corporate world again?
It depends. I will not mind if any corporation can engage my service and I can add value to them.

22. What are some of your business values and what would you like to pass down to others, particularly the younger generation?
It is our mission to impact our customers positively by providing higher value in terms of better quality food at very accessible prices. I made a pact with myself years ago that when the company expands, we will not cut back on ingredients: we would want to buy higher quality ingredients but at lower prices because of our larger volume. This will enable us to pass these benefits to our customers. If you have a regular customer base, you cannot take them for granted. You must respect your customers. They will know when you try to cut corners, so do not even try. Believe in yourself. You should learn the right skills as you work and they should become your habits. Be very interested in your surroundings. Be observant, hardworking, methodological and organized. Do the right thing. Do not venture into business just for the sake of money. Stay true and focused.

23. Can you share some of the more significant events / incidents that affected or shaped your business philosophy and the way you conduct your business?
The recent economic downturn affected us a little but not significantly, as we have always been very sensible with controlling our costs. Previous major incidents such as 9/11 and SARS did not affect us adversely. In fact, the reverse was true: it affected our wholesale business to a major airline. When the contract ended with this client, it gave me a new opportunity to focus and open more shops. I see every downturn as an opportunity. I have always been a healthy eater who exercises regularly. When my ageing parents became ill, I read a lot on nutrition to nurse them back to health. This period helped me to be clearer about the position of my company – to advocate “Eat Well, Be Well”. As our customers continue to patronize us over time, we will need to introduce product innovations with health benefits, to provide a solution for their lifestyle change. For example, we just launched grapeseed oil to be used in our cakes and at our all-day dining stores. Grapeseed oil is a better oxygen carrier to the brain. With grapeseed oil, we use less oil now, so less calories. We subscribe to the concept of “less is more”, and it is a win-win strategy.

24. With the changes in the market today, do you think it has become harder or easier to succeed in business? Why do you say so?
Change is constant. In business, you must constantly create a niche for yourself and seek opportunities. There is no such thing as the market being too crowded. The probability of competition is endless. There are a lot of ideas and opportunities in the food business.

25. What advice would you give young people who want to do their own business?

You should start a business that you can handle. Otherwise it becomes overwhelming and you have to give it up when it becomes too difficult. It is about awareness. I hope all young people view their lives this way: apprehension will always be there but enjoy the journey and do not be worried. Ask yourself what is your strength and build your career from there. Think about the topic that you can resonate with, what you can positively contribute to society and never waste time. Do everything legal and help people.

www.cedeledepot.com

Higher starting pay for fresh graduates

By S Ramesh | Posted: 30 July 2012 1419 hrs

SINGAPORE: Global management consulting firm Hay Group believes that despite sentiments of a slowdown emerging in the global economy, fresh graduates will fare better this year, with employers in Singapore offering a higher base salary compared to their 2011 cohorts.

According to the Hay Group’s Fresh Graduate Pay Survey 2012 conducted in June, the average starting monthly pay for degree holders without honours is S$2,678; S$2,766 for those with Honours (Second Lower and below); and S$2,882 for those with Honours (Second Upper and higher).

79 companies across general industries in Singapore took part in the survey.

The results showed that jobs in engineering ranked at the top, commanding the highest average starting salary of S$2,777 per month for degree holders (without honours). This was followed by jobs in research and development (S$2,764 per month) and merchandise operations (S$2,742 per month).

For diploma holders, jobs in merchandise operations commanded the highest average starting salary of S$1,934 per month, with design/creative jobs coming in second (S$1,915 per month) and jobs in research and development following suit (S$1,903 per month).

The average starting pay for diploma holders is S$1,866 per month.

-CNA/ac

Economists warn of deep recession for Singapore if euro zone breaks up

Singapore could sink into a deep recession if Greece’s debt crisis leads to a break-up of the euro zone and causes another global downturn.

The warning came from economists on Wednesday who outlined a range of nightmare scenarios that, while appearing unlikely at present, remain possible if events spiral out of control.

The downbeat assessment also dovetailed with a new survey on Wednesday showing that Asia’s top companies are less optimistic about their business outlook.

Credit Suisse economist Robert Prior-Wandesforde painted two gloomy narratives that could result in the European monetary union falling apart in the coming months.

The first is one where Greece leaves the grouping but contagion to other European countries is limited; the second involves Greece leaving and contagion spreading.

If this second scenario transpires, Mr Prior-Wandesforde said Singapore would likely experience a deep recession by the year end with the economy contracting 4.6 per cent in the fourth quarter.

If this happens, the economy would be down 0.6 per cent for the whole year, similar to the 1 per cent fall in gross domestic product experienced in 2009 following the financial crisis.

Singapore is officially expected to grow between 1 per cent and 3 per cent this year, the Trade and Industry Ministry has said, although it too has warned of rising risks over the euro zone crisis.

‘This scenario assumes the most immediate impact, through the trade channels and exports to Europe and the United States,’ said Mr Prior-Wandesforde yesterday.

‘There are likely to be other negative implications as well. These include a drying up of trade finance, as witnessed during the financial crisis, as well as a withdrawal of funds from the Asian region to shore up European balance sheets.’

Bank of America Merrill Lynch economist Chua Hak Bin agreed, saying his model showed that an ‘ugly bear case’ could mean a 1 per cent contraction for Singapore’s economy this year.

‘We are worried about the financial contagion channel, which could see credit freeze up and affect many businesses,’ he added.

Mr Prior-Wandesforde was also less optimistic on the prospect of a quick recovery this time as governments have less financial power for another huge stimulus.

In 2010, Asia saw a quick and remarkable V-shaped recovery from the 2009 recession.

Singapore grew at a rapid 14.8 per cent that year, more than making up for the 1 per cent contraction.

Capital Economics noted that Asian governments are better placed than their Western counterparts to pump prime their economies this time but the region also has less firepower than in 2010.

It noted that both Hong Kong and Singapore have the healthiest fiscal positions in Asia, with large surpluses and reserves.

‘However, as trade-dependent economies with big financial sectors, they are the two places in Asia most vulnerable to a crisis in the euro zone and most exposed to another global downturn,’ it said.

‘As a result, even expansionary fiscal policy is unlikely to prevent these two economies from falling into a deep recession if exports slump.’

Fortunately a Greek exit is unlikely to happen in the next six months. Credit Suisse puts the probability at about 20 per cent while Swiss bank UBS says the chances of Greece leaving the euro zone are less than 10 per cent.

Meanwhile, a recent survey showed that Asia’s top companies are now less upbeat about their business outlook than in the first quarter.

The Thomson Reuters/Insead Asia Business Sentiment Index fell to 69 last month from 74 in March.

A reading above 50 indicates an overall positive outlook.

Of the 177 companies polled, 78 said their business outlook for the next six months was positive, while 87 said it was neutral, and 12 said it was negative, Reuters reported.

The poll was conducted between June 4 and 15.

Asked what the biggest risk factor they faced was, 111 companies said global economic uncertainty, and 28 cited rising costs.

‘Things are looking tougher with what’s happening in the global economy. Asia is not fully insulated but will still do relatively better, given that most governments in the region still have leeway to stimulate domestic economies,’ Aberdeen Asset Management Asia investment manager Kristy Fong told Reuters.

‘Cost pressures are another issue, such as rising inflationary pressures in Singapore (and) infrastructure and logistical bottlenecks in India.’

OCBC Investment Research analyst Carey Wong noted that consumers were turning more cautious in placing orders.

‘As long as customers don’t give them very clear order indications, sentiment won’t be that good. As a business owner, you can’t plan ahead, such as planning capital expenditure.’

Big fall in M&A activity involving S'pore firms

Business Times – 26 Mar 2012
Deals in Q1 down to 187 from 273 a year ago, while their value fell 36.5%

By LYNETTE KHOO

(SINGAPORE) A bleak picture on the local merger and acquisition (M&A) scene has emerged, showing M&A activity involving Singapore-domiciled companies sliding to the lowest level in value since the second quarter of 2009.

The total value of announced Singapore M&A deals in the first quarter registered year-on-year and quarter-on-quarter declines of 36.5 per cent and 24.6 per cent, respectively, to US$5.7 billion, latest data from Thomson Reuters shows.

The number of deals stood at 187 in the first quarter, down from 273 in the same period last year.

A similar trend unfolded in the South-east Asian region, with the total deal value slipping 19.2 per cent from a year ago and 11.9 per cent from the fourth quarter to US$20.3 billion.

Wong Ai Ai, principal at Baker & McKenzie.Wong & Leow, noted that deals are taking a longer time to negotiate and close due to gaps in pricing expectations and buyers’ concerns over risks. ‘Deals that were being looked at in the last half of 2011 have either not been completed or have fallen away for these reasons,’ she said.

Singapore companies have slowed down their buying spree abroad, with the overseas deal count falling from 104 in the first quarter last year to 68 this year, though the aggregate value of these deals were 12.3 per cent higher year-on-year at US$2.9 billion.

The total deal value was bolstered by United Fiber System’s proposed acquisition of Indonesia’s Golden Energy Mines through a reverse takeover valued at US$987.8 million.

At the same time, Singapore companies were also less targeted by overseas acquirers, with 30 announced inbound M&A deals in the first quarter compared to 50 deals in the same quarter last year.

This resulted in a 91.6 per cent plunge in the aggregate value of inbound M&A deals to US$224.3 million – the lowest quarterly level since the first quarter of 2004. Chinese acquirers still accounted for the bulk of Singapore’s inbound M&A deals with a 35.1 per cent share.

According to data from Thomson Reuters, Malaysian companies are most targeted in the region by acquirers, followed by Indonesia, Vietnam and then Singapore.

‘There’s been a lot of recent excitement over deals announced across the Causeway, and over the potential assets for sale in Indonesia, so relative to all that activity, Singapore may not look so exciting or well-priced,’ Ms Wong said.

‘But a lot of deal structuring is being done through Singapore, even though the companies involved may not be Singapore companies.’.

Private equity (PE) firms closed smaller M&A deals in the first quarter, with PE-backed deals involving Singapore companies falling by 95.4 per cent year-on-year to US$10.2 million although the deal count remained at five.

In the South-east Asian region, PE-backed M&As marked a 87.8 per cent fall to US$70.2 million while the number of deals declined from 19 in the first quarter last year to 13 this quarter.

Than Su Ee, head of Mezzanine Capital Unit (Private Equity & Special Opportunities) at OCBC Bank, noted that the let-up in M&A activity among PE funds in the last six to nine months is a reflection of the uncertainties surrounding global economic conditions.

‘This is changing as investors are increasingly of the opinion that the eurozone crisis and US economic troubles may have turned the corner,’ he said.

With improvements in economic climate and market liquidity, PE investors are expected to take advantage of better market conditions to undertake M&A financing or exit from their investments, he added. ‘Unless there are any major global economic or political surprises, we should see a return of private equity funds activities in M&A over the next 24 months.’

Slower M&A activities in the first quarter has translated to lower fees for advisors. Estimates from Thomson Reuters/Freeman Consulting Co show M&A advisory fees from completed transactions involving Singapore companies fell 39 per cent from a year ago to US$50 million this quarter.

Leading the pack is Morgan Stanley, which chalked up fees of US$4 million and accounted for 8 per cent of total fees. Daiwa Securities enjoyed the highest jump in estimated fees, enjoying an increase of more than 19-fold from a year ago to US$1.7 million in the first quarter.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.