Singapore economy under threat from high leverage, rising redundancies: IMF

More retrenchment for Sinkies as DBS relocates 1500 PMET jobs to India where it is cheaper. DBS is investing their technology hub in India instead of Singapore.


http://theindependent.sg/business/piyush-gupta-of-dbs-bank-moves-1500-local-jobs-to-hyderabad/

Piyush Gupta of DBS Bank moves 1500 local jobs to Hyderabad

By The Independent - May 19, 2016


One thousand five hundred jobs will be farmed out to DBS’s technology hub in Hyderabad over the next two years said Piyush Gupta in a press statement earlier this week.

“The new facility will be our largest tech hub outside our home market of Singapore. India was a choice market for this investment given its enabling ecosystem for technology innovation and access to a wide global talent pool,” DBS Group Chief Executive Piyush Gupta said.

DBS Bank has created a wholly-owned subsidiary in India, DBS Asia Hub 2, for this purpose and according to a filing with the Stock Exchange of India, the initial paid-up capital stands at Rs. 70.5cr (SGD 15M).

There are growing concerns that this move will trigger a trend towards outsourcing of our jobs to countries with lower costs structures in the name of efficiency.

“This is going against the grain,” said a local business owner who has been providing technical talent to DBS. “I thought the government was supporting local PMETs. But this move suggests that the government is not sincere about the promises it makes to the local businesses. Maximizing profits is the order of the day!” said Mr Rao.

The announcement was rather muted in the local media in Singapore, which is another cause for concern, said Mr. Rao.

Both domestic and foreign wholesale trade have dropped substantially.



http://sbr.com.sg/economy/news/domestic-wholesale-trade-tumbles-226-in-q1#sthash.4eEYbpeL.dpuf


Domestic wholesale trade tumbles 22.6% in Q1

Published 20 May 2016


Singapore's domestic wholesale trade slumped by 22.6% year-on-year in the first quarter, on back of a 38.2% drop in petroleum sales.

Excluding petroleaum, domestic wholesale trade dropped by 11.4%. The decline in trade value was due partly to lower prices of petroleum and chemical products, the Department of Statistics said.

On a quarter-on-quarter basis, domestic wholesale trade dropped by 17.2%. Excluding petroleum, the contraction was at a smaller extent of 7.2%.

Meanwhile, foreign wholeale trade dropped 13% quarter-on-quarter and 17.4% year-on-year.

yahoo55 said:

More retrenchment for Sinkies as DBS relocates 1500 PMET jobs to India where it is cheaper. DBS is investing their technology hub in India instead of Singapore.


http://theindependent.sg/business/piyush-gupta-of-dbs-bank-moves-1500-local-jobs-to-hyderabad/

Piyush Gupta of DBS Bank moves 1500 local jobs to Hyderabad

By The Independent - May 19, 2016


One thousand five hundred jobs will be farmed out to DBS’s technology hub in Hyderabad over the next two years said Piyush Gupta in a press statement earlier this week.

“The new facility will be our largest tech hub outside our home market of Singapore. India was a choice market for this investment given its enabling ecosystem for technology innovation and access to a wide global talent pool,” DBS Group Chief Executive Piyush Gupta said.

DBS Bank has created a wholly-owned subsidiary in India, DBS Asia Hub 2, for this purpose and according to a filing with the Stock Exchange of India, the initial paid-up capital stands at Rs. 70.5cr (SGD 15M).

There are growing concerns that this move will trigger a trend towards outsourcing of our jobs to countries with lower costs structures in the name of efficiency.

“This is going against the grain,” said a local business owner who has been providing technical talent to DBS. “I thought the government was supporting local PMETs. But this move suggests that the government is not sincere about the promises it makes to the local businesses. Maximizing profits is the order of the day!” said Mr Rao.

The announcement was rather muted in the local media in Singapore, which is another cause for concern, said Mr. Rao.

Click to expand...

why sph never publish it in straits times?:oIo:

nowadays, there is even no need to compete with FTs, they just need to shift the jobs out.:oIo:

kiwibird7 said:

SING$ so STRONG, how can the economy be under threat and in trouble?
Only when the SING$ becomes cheaper than toilet paper then I would believe that the SING economy is in trouble

Click to expand...

Strong SGD is not good for manufacturers and trade exporters because it increases the costs. The income for manufacturers and exporters are mostly in foreign currency, but a substantial percentage of their costs are in SGD such as labor costs, shipping costs, rent, utilities, transport, monthly expenses etc.

Manufacturers are closing down or leaving Singapore for cheaper locations, the manufacturing sector have now shrunk to a record low 17% of GDP. Exports have crashed, even the foreign wholesale trade have sunk substantially. The strong SGD and high costs are killing the exporters, Singapore is too expensive.

krafty said:

maybe sing$ backed by gold reserves???

Click to expand...

Sink$ is safe haven currency for chinamen businesses all over south east asia.
Those guys make th3ir money and dump it into S$ assets as it normally increases in value over time.so sinkie economy just like australian that earns a big bulk of their income from foreigners studying, emmigrating or investing there. Both these economies do not have to manufacture anyth8ng. Just by standing still, it attracts tens of billions.

yahoo55 said:

More retrenchment for Sinkies as DBS relocates 1500 PMET jobs to India where it is cheaper. DBS is investing their technology hub in India instead of Singapore.

http://theindependent.sg/business/piyush-gupta-of-dbs-bank-moves-1500-local-jobs-to-hyderabad/

Piyush Gupta of DBS Bank moves 1500 local jobs to Hyderabad

By The Independent - May 19, 2016


One thousand five hundred jobs will be farmed out to DBS’s technology hub in Hyderabad over the next two years said Piyush Gupta in a press statement earlier this week.

“The new facility will be our largest tech hub outside our home market of Singapore. India was a choice market for this investment given its enabling ecosystem for technology innovation and access to a wide global talent pool,” DBS Group Chief Executive Piyush Gupta said.

Click to expand...

Surely he means they would have access to a wide "local talent pool" in India and not "global talent pool".

The Ah Nehs are here to help their country.

This Ah Neh CEO doesn't give a damn how this impacts on the lives of 1500 sinkees!

The Ah Nehs, including our Ah Neh ministers, are killing peesai bit by bit.

The manufacturing sector has been contracting, and now the services sector which accounts for 2/3 of Sinkieland GDP is steadily contracting too. When the services sector contracts, the economy follows.



http://sbr.com.sg/economy/in-focus/...rvices-momentum-stumbles#sthash.pm13v8M0.dpuf

Singapore’s economic woes mount as services momentum stumbles

Published: 26 May 16


The country barely escaped recession.

The services sector was once considered a bulwark of Singapore’s economy, but first-quarter figures show that growth is steadily heading south. Services growth contracted by 5.9% quarter-on-quarter, down from an already anaemic forecast of -3.8% quarter-on-quarter in advance forecasts.

Analysts warn that the poor performance from the services sector bodes ill for the rest of the economy, particularly because it accounts for about two-thirds of the GDP.

“When the services sector turns, the economy follows. This essentially makes for significant downside risk to growth in the coming quarters,” DBS Vickers noted in a report.

Meanwhile, UOB economist Francis Tan notes that although the services sector managed to continue holding up overall growth, it grew at the slowest pace since the global financial crisis in Q1.

"[This possibly indicates] that the negative spillover effects to the services sector from the prolonged contraction in the manufacturing sector may have begun," Tan said.

"Indeed, although Singapore’s domestic economic conditions remain relatively strong, in view of the low unemployment rate and wage gains in 2015, some of the more externally-driven services sectors were hit by the global growth slowdown, while the domestically-driven sectors are feeling the lagged impact from the manufacturing sector contraction," Tan added.

As a result of lacklustre external conditions and weak domestic demand, experts reckon that overall growth prospects will remain muted in the first half.

"While it will be helpful for exporters of goods and services, the resulting impact will be higher domestic interest rates. With current expectations of still-low inflation in 2016, this may result in higher real interest rates and could further impede investment and consumption growth,” Tan noted.

"There is nothing to shout about in Wednesday’s number. Growth of 0.2% q-o-q saar is anaemic. While a contraction has been averted, growth remains weak, with the key drag coming from the services sector, supposedly the main engine of growth," DBS Vickers noted.

Sinkie companies expect both volume of sales and net profits to contract in Q3. Selling prices are also forecasted to head south, while inventory levels and employment levels also slipped noticeably.



http://sbr.com.sg/economy/in-focus/...ng-profits-slowing-sales#sthash.bfvOjSJU.dpuf

Business optimism tumbles as firms face dwindling profits, slowing sales


Corporate confidence deteriorated across services and manufacturing.

Singapore-based companies have grown steadily more pessimistic about their growth prospects for the third quarter, according to Singapore Commercial Credit Bureau (SCCB)’s latest quarterly Business Optimism Index (BOI).

On a year-on-year basis, the BOI has dived significantly from +14.6 percentage points to just +1.11 percentage points.

The report showed that companies expect both volume of sales and net profits to contract in Q3. Selling prices are also forecasted to head south, while inventory levels and employment levels also slipped noticeably.

The construction sector emerged as the most optimistic sector due to the expected increase in public construction contracts being awarded in the upcoming months. The financial sector emerged as the second most optimistic sector, followed by the wholesale sector.

However, business sentiment within the services and manufacturing sectors remained downbeat. Retail activities within consumer-facing segments are expected to remain weak, while demand from regional clients are also expected to stay soft.

“The overall outlook for local businesses remains weak across most sectors. With the softening of retail activities in Singapore, we are expecting sentiments within the consumer-facing services sector to be dampened. At the same time, the influence of global downside risks on export-oriented sectors, such as the potential Brexit from the Eurozone as well as China’s emphasis on lower imports and higher domestic production, are likely to persist into 2H 2016,” said Audrey Chia, SCCB’s Chief Executive Officer.

when are they going to start sending the fts home?i hope the gods of heaven punish PAP for importing 2 million trash,let the economy crash another 10 percent!!!!!send the fugging fts home!!!!

frenchbriefs said:

when are they going to start sending the fts home?i hope the gods of heaven punish PAP for importing 2 million trash,let the economy crash another 10 percent!!!!!send the fugging fts home!!!!

Click to expand...

hardly see any ft's these days. many have balik kampung to spend their hard earned strong sgd.

Sinkie exports continue sinking.



http://business.asiaone.com/news/exports-fall-between-3-cent-and-5-cent-year#sthash.wUC05EBM.dpuf

Exports 'to fall between 3 per cent and 5 per cent this year'

The Straits Times
Thursday, May 26, 2016


More dark clouds are massing on the horizon for Singapore exporters, according to the latest gloomy trade statistics.

Trade agency IE Singapore has made a sharp downward revision to its trade forecasts and now expects non-oil domestic exports (Nodx) to decline between 3 per cent and 5 per cent this year, from an earlier forecast of 0 to 2 per cent growth.

This came after Singapore's export slump worsened in the first three months of the year - Nodx shrank 9 per cent in the first quarter, compared with the same period a year earlier.

Shipments to eight out of 10 of Singapore's top export markets slid in the first quarter, IE data showed. The biggest contributors to the contraction were China, Taiwan and the European Union.

Both electronic and non-electronic Nodx were hit.

There has been no reprieve for exporters since the first quarter. Data released last week showed Nodx fell 7.9 per cent in April from the same month a year ago.

The global economic outlook has weakened since the start of the year, IE Singapore said in a statement yesterday explaining the downward revision in its forecasts.

The nascent recovery in the United States has slowed in recent months and China's economy is expected to ease further this year.

In addition, persistently low oil prices are expected to continue weighing on Singapore's oil trade, IE noted.

CIMB economist Song Seng Wun said global trade volumes have been below trend for the past five years on the back of lacklustre consumer and business sentiment.

"There has been no catalyst to induce consumers around the world to open up their wallets in a meaningful way," he added.

The tepid global environment has hit manufacturers here especially hard, as two-thirds of manufactured goods are exported.

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http://www.channelnewsasia.com/news/business/singapore-s-manufacturing/2838688.html

Singapore's manufacturing economy contracts for 11th straight month

Updated 02 Jun 2016 22:25


SINGAPORE: Local manufacturing activity remained in contraction in May for the 11th straight month, but sating level with the performance in April.

The latest Purchasing Managers' Index (PMI) reading released on Thursday (Jun 2) came in at 49.8, unchanged from April's reading, according to the Singapore Institute of Purchasing & Materials Management (SIPMM). A reading above 50 means that the manufacturing economy is expanding, while a reading below 50 indicates contraction.

The unchanged reading was due to new orders and new exports posting marginal declines, which was offset by a marginal increase in factory output, said SIPMM.

It said that the production index has posted a marginal expansion reading after 10 months of contraction, while input prices for raw materials have recorded 11 months of contractions.

"Manufacturing employment has been lacklustre, with the index recording continuous contractions since November 2014," SIPMM added.


ELECTRONICS SECTOR POSTED DROP

Manufacturing activity in the electronics sector fell to 49.1 in May, a fall of 0.4 points from 49.5 in April.

SIPMM attributed the the drop in manufacturing activity to lower new orders and new exports, a slower factory output, and declining employment.

Electronic employment has recorded 13 months of contraction, while electronics finished goods has recorded 11 months of expansion, said SIPMM.

"This indicates that the electronic manufacturers are not clearing their finished goods fast enough, thereby creating a situation of stock overhang, and thus hampering employment," it added.

- CNA

Local retail business is sinking. Sinkieland is too expensive and the high SGD, cheaper for foreign tourists and Sinkies to buy overseas or online.

Wholesale and retail trade are a big component of Sinkie GDP and one of the biggest employer in Sinkieland, expect more retrenchment as more shops close down.

Now the only thing propping Sinkieland from sinking into recession is the massive public spending by PAP govt on expensive public sector infrastructure projects and the construction of HDB flats.


http://www.straitstimes.com/busines...malls-suffer-as-locals-tourists-curb-spending

Shoppers' paradise lost? Singapore malls suffer as locals, tourists curb spending

Published: 06 June 2016


SINGAPORE (REUTERS) - After serving only a handful of customers in five hours on a recent weekday, Sam Goh said he was worried the sportswear shop he manages, LIV ACTIV, will eventually join other brands in leaving Singapore's Orchard Road shopping boulevard.

Singapore's reputation as a shoppers' paradise, which saw investors pour S$10 billion into retail developments here in the past five years, is taking a pummeling because of weakness in the local economy and a drop in spending by tourists. Commercial space has increased by a tenth in that period, but vacancy rates have risen to 7.3 per cent from 5.0 per cent and industry analysts expect them to keep rising.

"Instantly when you enter this mall you see emptiness," said the 44-year-old Goh, whose shop gave up a quarter of its space last month to cut costs.

Further down the street, cashiers play games on their phones, while some shop assistants have improvised a mini-golf game along a quiet corridor of a shopping centre. Thirteen of 16 units on the 5th floor lack tenants.

Store space in places with lower foot traffic is getting few takers. For example, in a suburban area on the west side of Singapore, more than two-thirds of a basement shopping centre that has been open for almost two years remains empty.

These are all signs of bets that have gone wrong: that the domestic economy would remain robust, allowing demand from this city state of 5.5 million people to stay strong, and that retail splurges by visitors from the rising middle classes in China, India and Southeast Asia would keep increasing.

For Singapore this is not a small thing - wholesale and retail trade vies with manufacturing to be the biggest contributor to its gross domestic product and it is the biggest employer here.

But the sluggish global economy has put a brake on spending by Singaporeans, especially workers in hard-hit export sectors. Shoppers from abroad, meanwhile, spent 7 per cent less in the first nine months of 2015 than they did in the same period of 2014.

Wealthy Chinese, hit by an economic slowdown and a corruption crackdown at home, have less appetite for the luxury items they flocked to Singapore to buy during the boom years.

China also has built many of its own luxury malls and has even set up duty-free paradises in local tourist hot spots to lift consumption and spur domestic tourism.

And Indonesians, Thais and Malaysians now have cheaper versions of the same products back home. A luxury bag made by Coach can now cost twice as much in Singapore as in these countries.

In Bangkok and Jakarta, retail space has risen 20-25 per cent in five years, with vacant space shrinking, data from real estate firm CBRE shows.

"Many rich Chinese used to come and spend money on luxury items and that is no longer the case and in the region you have a lot of competition," said Christine Li, director of research at commercial real estate services company Cushman & Wakefield. "I am pessimistic about retail here," she said in reference to Singapore.

The deteriorating retail outlook is among several challenges faced by Singapore's property sector, which includes developers and real estate investment trusts or landlords, with shares of companies such as Frasers Centrepoint, Capitaland and Wheelock Properties losing 10-20 per cent in the past 12 months.

More than 2 million square feet of new retail space will be ready for occupation in Singapore by the end of 2017, and it won't be easy to find tenants. But many of the bigger developers are partially protected from the downturn because they are present across segments like hospitality or homes in other Asian markets and beyond.

"Over the next three years you can see that supply is fairly strong and although the first quarter was fairly resilient, you're not seeing much revenue growth," said Joshua Tan, an analyst with Maybank Kim Eng, referring to real estate investment trusts. He said that many of the retailers suffered from having similar product offerings to their rivals.

Sales of apparel and footwear in Singapore dropped 3.5 per cent year-on-year in March and 14.6 per cent in February, with brands such as British apparel brand New Look and Celio of France planning to close branches in Singapore this year.

Seth Kok from SG Debt Busters, has seen a 23 per cent increase so far this year in shopowner clients seeking advice on how to reduce debt or deal with bankruptcy.

Retailers "expanded way too fast," said Kok. "But things turned bad ... everything started when China slowed down."

Internal factors are at play as well. Measures to give Singaporeans priority for jobs have curbed the number of expatriates on juicy salaries.

Wage growth is also expected to slow to 2.5-3.0 per cent in 2016, compared with a 10-year average of 3.6 per cent.

"We cannot fight these major trends," said Stephen Goh, executive director at Orchard Road Business Association, mentioning the job curbs, a strong currency, weaker tourism spending and a tendency for more Singaporeans to shop in cheaper malls overseas.

http://sbr.com.sg/source/efinancial...d-banks-begin-cut-junior#sthash.EHGJiztO.dpuf

Investment banking hiring slumps 70% in Singapore and banks begin to cut junior jobs

Published: 14 June 2016


IB revenue is at a record low.

Investment banks in Singapore are reducing front-office recruitment and axing junior jobs as regional revenues plummet.

Southeast Asian investment banking revenue stands at US$319m so far this year – the worst performance in 12 years for the period and down 37% from 2015, according to Dealogic data.

Front-office investment banking vacancies in Singapore have fallen significantly year-on-year as a result, say headhunters.

Farida Charania, Asia Pacific CEO of search firm Nastrac Group in Singapore, puts the annual decline at “nearly 70%” for senior vacancies.

“Classic investment banking – M&A and corporate advisory – is a mug’s game in Singapore,” adds former Deutsche Bank managing director Tanmai Sharma, now CEO of Singapore start-up Mesitis Capital.

“There are frequent layoffs, and the MDs that survive make the money while the rest just whittle away their lives and work every weekend,” he adds. “Capital markets used to have a better run than M&A, but now even these are having a tough time.”

As in Hong Kong, investment banking layoffs have until recently largely been confined to expensive directors and managing directors.

But now investment banks in Singapore are also culling underperforming junior and mid-level staff. “It’s no longer just the seniors, but across all levels,” says former ANZ banker Jerald Chen, now a recruiter at Kerry Consulting in Singapore.

Firms that have made cuts below director rank in Singapore include Barclays, Credit Suisse and HSBC, says a headhunter with knowledge of the firms who asked not to be named.

Equity capital markets (ECM) bankers should be feeling the most ill-at-ease about their jobs. ECM has led the overall decline in investment banking revenue in Southeast Asia, falling to US$44m year-to-date, the lowest level since 2003.

“The equity markets have been hardest hit, and several European banks had downsized their capital market teams in Singapore,” says Gary Lai, managing director for Southeast Asia at recruitment firm Charterhouse Partnership.

And although investment banks are continuing to cut headcount in Hong Kong, industry sources suggest the front-office job market is even worse in Singapore.

“Market sentiment in Singapore investment banking is less buoyant compared to Hong Kong, especially when we don’t have as many companies as Hong Kong and China, so there are fewer deals to close in the first place,” says Lyn Sia Rosmarin, a former Merrill Lynch director turned-entrepreneur who has worked in both cities.

“The overall fall in revenue in Southeast Asia makes it less attractive for bankers to be based in Singapore as opposed to North Asia,” adds Lai from Charterhouse.

http://sbr.com.sg/hr-education/in-focus/analysts-alarmed-pmet-redundancies-rise#sthash.aPzfALOp.dpuf

Analysts alarmed as PMET redundancies rise

Published: 15 June 2016


Increasing under-employment is a key threat.

More white collar workers are getting the axe in Singapore. Statistics from the Ministry of Manpower show that professionals, managers, executives and technicians (PMETs) accounted for 71% of layoffs in the first quarter.

At the same time, the number of job openings fell to 50,000 in the first quarter bringing the seasonally adjusted ratio of job vacancies to unemployed persons down to 103 openings per 100 seekers in March. This marks the lowest ratio of job openings to job seekers since June 2012.

Analysts warn that the gloomy Q1 job statistics are likely to keep policymakers on their toes, particularly in light of broad-based weakness in demand for resident PMET jobs.

“Should retrenchments amongst local PMET continue to rise, we would not be surprised to see Off-Budget measures in the form of further targeted wage subsidies for PMETs (such as the existing Career Support Programme), or even tightened eligibility criteria for Employment Pass holders,” a report by Citi noted.

Meanwhile, a report by DBS noted that the increase in PMET redundancies likely highlights the problem of under-employment in Singapore.

“It is not unreasonable to assume that these professionals may have to accept lower pay and take up lower skilled jobs in order to return to the workforce. This is under-employment. It is debateable whether this is merely the effects of cyclical slowdown or a tell-tale sign of “value destruction” within the economy amid the structural transition,” noted a report from DBS.

http://sbr.com.sg/economy/news/char...rates-rise-analysts-warn#sthash.DrZ0pbtH.dpuf




Chart of the Day: Domestic growth might come to a standstill as interest rates rise, analysts warn

Published: 14 June 2016


High leverage is a key threat.

Singapore is one of the region's most heavily-indebted economies, and experts fear that steep debt burdens might derail economic growth as real interest rates rise.

According to a report by Deutsche Bank, elevated leverage is a cause for concern although debt servicing capacity remains high for both households and corporates.

"A weaker SGD and higher interest rates could increase the debt burden, which in turn could dampen the appetite for capital expansion among firms and spending among consumers," Deutsche Bank said.

“The heavy debt burden also stands to make the economy more vulnerable to adverse income shocks, such as a slowdown in economic activity which could lead to retrenchments or a drop in property prices in which over 45% of household wealth is anchored upon,” the report added.

The chart shows that economic growth will take a hit as borrowing costs normalise, a trend which is exacerbated by persistently negative inflation.

“With the MAS not controlling interest rate policy, but at the same time its liquidity measures to influence the NEER band not helping rates, the question is if Singapore can tolerate higher interest rates at this juncture. With the debt burden so high, we see the answer as a simple no,” Deutsche Bank noted.

yahoo55 said:

http://sbr.com.sg/hr-education/in-focus/analysts-alarmed-pmet-redundancies-rise#sthash.aPzfALOp.dpuf

Analysts alarmed as PMET redundancies rise

Published: 15 June 2016


Increasing under-employment is a key threat.

More white collar workers are getting the axe in Singapore. Statistics from the Ministry of Manpower show that professionals, managers, executives and technicians (PMETs) accounted for 71% of layoffs in the first quarter.

At the same time, the number of job openings fell to 50,000 in the first quarter bringing the seasonally adjusted ratio of job vacancies to unemployed persons down to 103 openings per 100 seekers in March. This marks the lowest ratio of job openings to job seekers since June 2012.

Analysts warn that the gloomy Q1 job statistics are likely to keep policymakers on their toes, particularly in light of broad-based weakness in demand for resident PMET jobs.

“Should retrenchments amongst local PMET continue to rise, we would not be surprised to see Off-Budget measures in the form of further targeted wage subsidies for PMETs (such as the existing Career Support Programme), or even tightened eligibility criteria for Employment Pass holders,” a report by Citi noted.

Meanwhile, a report by DBS noted that the increase in PMET redundancies likely highlights the problem of under-employment in Singapore.

“It is not unreasonable to assume that these professionals may have to accept lower pay and take up lower skilled jobs in order to return to the workforce. This is under-employment. It is debateable whether this is merely the effects of cyclical slowdown or a tell-tale sign of “value destruction” within the economy amid the structural transition,” noted a report from DBS.

Click to expand...

Not sleeping enough already why need to alarm. Just switch to snooze.

Source: HSBC