SINGAPORE (Oct 14): “We have certainly received a lot of questions regarding the freedom to move money.” — Clifford Ng, managing partner at Zhong Lun Law Firm in Hong Kong, whose clients are keen to shift assets to Singapore.
Singapore ousts US for top spot in competitiveness ranking
The US dropped from the top spot in the World Economic Forum’s annual competitiveness report, losing out to Singapore. Hong Kong, the Netherlands and Switzerland made up the rest of the top five, according to the WEF survey published on Oct 9. On the US, it noted growing uncertainty among business leaders and said trade openness had declined.
The forum focused its report on continued low productivity growth a decade after the financial crisis, calling this the US$10 trillion question — the amount injected by the world’s four major central banks through 2017. In line with others, its view is that while monetary stimulus helped pull the global economy out of recession, it was not the solution for all problems.
With a new slowdown emerging, the WEF said fiscal policy has been underused. It joined the chorus calling for more government support, particularly in investment to boost productivity. — Bloomberg LP
Wiranto hurt in knife attack
Indonesia’s chief security minister Wiranto was knifed on Oct 10. The two suspects behind the attack are members of a terror network called Jamaah Ansharut Daulah, comprising dozens of radical groups that have pledged loyalty to the Islamic State group in Indonesia. Wiranto, a former military general, suffered two wounds in his stomach but is conscious and in stable condition. The attack took place in the town of Pandeglang in Banten province on Java island. Wiranto was there to open a new building at a university and the attacker struck when he was shaking hands with the crowd. Besides Wiranto, there were three other victims: a local police officer and two aides. They all had non-life-threatening injuries.
NBA loses Chinese market after tweet in support of HK
Major Chinese companies have pulled back support from the National Basketball Association after an official of one of the US basketball teams tweeted support for the protests in Hong Kong. The Twitter post by Daryl Morey, general manager of the Houston Rockets, for whom Chinese basketball star Yao Ming played, was quickly deleted, but the damage was done. Chinese state broadcaster CCTV and Tencent Holdings said they would no longer air NBA China games, while sportswear brand Li Ning and Shanghai Pudong Development Bank ended cooperation with the Rockets.
‘Hard to say’ if HKEX will revisit offer for LSE, says chairwoman Laura Cha
Fresh from withdrawing its £32 billion ($54 billion) bid to buy the London Stock Exchange Group (LSE), Hong Kong Exchanges and Clearing (HKEX) chairwoman Laura Cha said she was unsure as to whether the Hong Kong bourse might revisit the offer in the future.
The offer — which excludes LSE’s offer to buy Refinitiv, a data and trading group, for US$27 billion ($37 billion) — was rejected by LSE. “It’s hard to say, it’s hard to say,” Cha said during a panel discussion at the 59th World Federation of Exchanges General Assembly and Annual Meeting on Oct 9.
Asked whether HKEX might consider acquiring a different target, Cha said: “It’s hard to say too.” Nevertheless, she added that HKEX will not rule it out. According to Cha, HKEX had wanted to make the offer for LSE in September last year, but decided not to do so given the uncertainty over Brexit.
Yet, as it turned out, Brexit did not happen on March 31. And so, HKEX made the offer last month, thinking it was “better timing”. HKEX’s decision to withdraw its acquisition offer for LSE was a disappointing move, conceded Cha. “But [if we were] to move forward [with the offer], we would be going into hostile territory, which is not something we have intended,” she said. — By Jeffrey Tan
SGX ‘well positioned’ for potential Aramco listing, CEO says
Loh Boon Chye, CEO of Singapore Exchange, is vague over whether the listing of Saudi Aramco — touted as potentially the world’s largest IPO ever — could take place here. He also would not confirm or deny that SGX officials had been diligently courting the world’s largest oil producer to list on SGX, which could raise close to US$100 billion. “I think we are as well positioned as any other potential exchange,” he said during a panel discussion at the 59th World Federation of Exchanges General Assembly and Annual Meeting on Oct 9. Still, Loh said such a listing of “significance” would undoubtedly attract many bourse operators.
But, to win over Aramco, bourse operators need to have the right attributes to ensure the company’s successful listing, he said. For example, SGX can leverage Singapore’s AAA credit rating and its status as a regional financial centre, he added.
According to sources quoted by Bloomberg in August, top officials from the London Stock Exchange Group, New York Stock Exchange and Hong Kong Exchanges and Clearing have been actively pitching for the business. While Saudi Aramco is planning a local listing on the Saudi Stock Exchange as part of the IPO, it has yet to make a decision on other venues, the sources said. — By Jeffrey Tan
Fare hikes can lift revenue by $132.5 mil
Public transport operators could see an annual revenue increase of $132.5 million, after the Public Transport Council (PTC) on Oct 8 granted the full 7% increase in fares, citing higher fuel costs.
Andy Sim, an analyst at DBS Group Research, notes that the fare increase will be positive for the two rail operators — ComfortDelGro Corp subsidiary SBS Transit and SMRT Trains. However, there will be no impact on the transport operators’ bus revenues, as it is now under the Bus Contracting Model. “The increases in annual revenues for SBS Transit and SMRT Train amount to $18.8 million and $40.2 million respectively,” Sim says in a note on Oct 8. “We now estimate that the 7% increase in fares could add on 3% to 4% to our ComfortDelGro forecast for FY2020F,” he adds, keeping his “hold” call on the company, with an unchanged price target of $2.59.
“While the fare increase should lead to an improvement in [ComfortDelGro’s] rail operations, we continue to expect the positive effects to be partially negated by the challenges it currently faces in its taxi operations,” he says.
Sim notes that ComfortDelGro’s taxi fleet continues to shrink, and now stands at close to 11,200 as at July. Year to date, the average fleet is down 7% y-o-y. “We believe competition remains keen and could pose downward pressure on taxi margins. In addition, the continued [British pound] weakness should also lead to lower contribution from its UK operations when translated into [Singapore dollars].” — By Pauline Wong
Malaysia to scrap anti-fake news law once used against Mahathir
Malaysia is set to scrap an anti-fake news law that was once used to investigate Prime Minister Dr Mahathir Mohamad during his election campaign. The Parliament’s lower house voted to repeal the law a second time, after its first attempt was blocked by the upper house last year. This time, the decision is set to be passed to Malaysia’s king regardless of the upper house’s stance, and the king is not expected to deny it.
The law, which carries a punishment of up to 10 years in prison, was passed months before the May 2018 election that saw Malaysia’s first change of government since its independence. It was used to put Mahathir under investigation for saying that a plane due to take him on his campaign trail was tampered with, after the Civil Aviation Authority of Malaysia denied any sabotage. The probe was later dropped. — Bloomberg LP