TR EMERITUS

I'll not comment on Tharman's CPF speech as Uncle Leong and many others have covered it. Instead, I'll focus on a speech he made last week congratulating himself on "cooling" the property market. On 5th July BT reported that Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam told a conference that Singapore had responded early enough to raging property prices with a set of cooling measures. Err... is he living in the same S'pore as I am or is he in S'pore (Roy Ngerng's version). Here's what the FT reported on 30th June Over the past four years, the Asian city state has implemented more than a dozen measures to cool its housing market and stem a growing tide of protest from locals that rich foreigners are making home ownership unaffordable. If this sounds like an echo of popular sentiment in London, that is because these are very similar economies. A big financial services industry, paying generous wages, sustains demand for high-end housing. That, in turn, pulls up prices further down the price scale, a dynamic accentuated by the availability of mortgage finance at record low rates. Both cities are also regional hubs for wealthy foreigners, with solid legal systems and relatively open borders attracting property investment from Chinese, Russian and Middle Eastern millionaires. ... Back in 2010, when Singapore began to tighten mortgage conditions, the initial moves were similarly token [Talking of recent UK measures]. Stamp duty was imposed on property sellers, and the cap on the size of a buyer’s loan relative to the value of the property being bought was trimmed from 90 per cent to 80 per cent. Every few months since then, there have been further, ever more desperate measures. Stamp duty was raised, to punish quick purchases and resales; the LTV cap was cut to 50 per cent; higher taxes were imposed on foreign buyers; and a tradition of 50-year loans was cut to 30 years. None had much of an effect.So much so that this normally politically conservative island nation has been rebelling. The popularity of the ruling PAP party – in power since the formation of Singapore as an independent state 49 years ago – has plummeted. Disaffection with rising property prices is widely cited. [Emphasis mine] ... It was only recently that Singapore’s cooling measures finally had a clear impact on runaway house prices, following introduction of a new “total debt servicing ratio” – a metric that limits a borrower’s aggregate debt repayment commitments to 60 per cent of income. Property purchase volumes have duly fallen by 50 per cent. Prices are down by 6 per cent and are forecast to fall by as much as 20 per cent. Or is he trying to entertain his audience? As he's an intelligent, no BS person, I have to conclude that he's out to entertain. Isn't his comments on govt acting quickly on property prices, bit like his jokes on inflation, wages? [Link1] [Link2] BTW, according to the BT report, he raised the possibility of a further correction in property prices, "I think further correction would not be unexpected." but added that a crash in the property market was unlikely. The PAP would hope not given that next yr is an impt yr to remind the sheep of the PAP's good deeds in the 60s, 70s and early 80s (before PM became a cabinet minister and too bad about the late 1990s and noughties, when he was DPM, dauphin and economic czar). And On the subject of keeping track of the market, he called for more emphasis on monitoring banks. "I don't want to quarrel with the Basel recommendations. They are basically in the right direction; they are good for the long term. If anything our banks are over-monitored (which is why the intellectual financial stuff gets done in HK, while the commoditised trading gets done here), not that this over-monitoring has done the "little people" any gd: ask the mini-bonders. Cynical Investor [Source]: Thoughts of a Cynical Investor  Read More →

We refer to the article “Better job prospects for ex-offenders” (Straits Times, Jul 14). Ex-offenders’s job prospects improving? It states that “Former prison inmates are commanding higher pay and staying longer in their jobs now, according to data released to The Straits Times by the Singapore Corporation of Rehabilitative Enterprises (Score), which trains and matches ex-convicts to employers. Last year, 34 per cent of the 2,123 ex-offenders it placed earned about $1,300. In 2011, only 8 per cent took home that amount. Some 16 per cent drew a salary above $1,500, compared with 5 per cent in 2011. Not only has their starting pay risen, more are able to hold on to their jobs. Last year, about 60 per cent of the former convicts retained their jobs for at least half a year, compared to 37 per cent who manage to do so in 2007.” Annual report seems to suggest otherwise? 3 months job retention fell? - According to Score’s 2013 Annual Report – the 3 months job retention fell from 83% in 2012 to 81% in 2013. Why has this statistic deteriorated in a supposedly tight labour market? 99% secured jobs? It says that the percentage of inmates securing jobs before release was 99% and the number of inmates assisted with employment before release was 2,123. Since “the prisons release about 9,000 inmates a year” – we are somewhat puzzled as to how 2,123 inmates assisted with employment before release can be 99% of inmates securing jobs before release? Has pay risen with inflation? Since inflation from 2011 to 2013 was about 7%, the $1,300 pay is 2013 is equivalent to about $1,215 in 2011. Also, does it mean that 66% earned less than $1,300? Statistics don’t mention those who couldn’t get a job? Since the statistics cited are for inmates placed into jobs – what about the number of ex-offenders who couldn’t get a job? Is it about 76% (9,000 ex-offenders released in a year less the 2,123 placed in jobs)? Ratio of trained to training places only 26%? The number of inmates trained was 5,896 against 22,504 “number of training places”. Why is this ratio of inmates trained to training places only 26%? Engaged in work programme dropped? The number of inmates engaged in work programme daily dropped from 3,119 in 2012 to 3,109 in 2013. The percentage of inmates engaged out of those employable dropped from 82% in 2012 to 77% in 2013. No. of community partners dropped? The number of community partners fell from 257 in 2012 to 235 in 2013. No. of programmes funded dropped? The number of programmes funded by the Yellow Ribbon Fund fell from 14 in 2011 to 13 in 2013. Yellow Ribbon Fund disbursed only 51%? The Yellow Ribbon Fund raised 2.23 million, but only disbursed 1.14 million in 2013 – i.e. only 51% was disbursed, compared to 86% in 2012 ($1 million raised and 0.86 million disbursed). $29.3m accumulated surplus? The accumulated surplus is $29.3 million. How many employed by Govt? Perhaps the most significant statistic that people have been asking for years is still not disclosed – how many inmates are employed by the Government and Government agencies? The public sector should set the example and take the lead to encourage the private sector to follow in helping ex-offenders. Highest recidivism rate in at least 8 years? Finally, if things are really looking up for ex-offenders – why is it that “According to statistics released by the Singapore Prison Service (SPS), the overall two-year recidivism rate of 27.4 per cent for inmates released in 2011 was the highest in at least eight years (“Rate of recidivism on the rise“, Today, Feb 12, 2014)?   S Y Lee and Leong Sze Hian    Read More →

Singaporean-based Tiger Air officially closes its Indonesian subsidiary on July 1st- in just four days time. It is the third failure of Tiger Air in its struggle to become a Pan-Asian carrier. Is it fate or bad management strategy from the Singapore based group? (27 June 2014)     Speak about Singapore to other Asians. Generally they will qualify people as efficient, hard working but also arrogant. And this is true that the incredible growth of Singapore from a trading port into a world financial and economic metropolis justifies Singaporeans pride. However, this pride has been often associated with in fact a way to look down at the rest of Asia. Generally Singaporean companies, when settling abroad, love to lecture and explain to the locals how good they are. It will probably not be the case for Tiger Airways’ management. The carrier was born in 2003 from the will of both Singaporean government and State company Temasek to show that Singapore could also create a very successful low cost carrier similar to AirAsia. Probably the wrong motivation but Tiger Airways has since been a long painful succession of failures outside its protected home market.   Read more:   http://www.traveldailynews.asia/news/article/55955?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TraveldailynewsAsiaLatest+%28TravelDailyNews.asia+Latest+News%29  Read More →