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Hunger games meetsTHE wolf ofwall street auctions heat up amidst cooling measures Death ofthe Singaporean consumer
More turbulence as ASEAN opens skies chinesetourists: exploring new frontiers
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FROM THE EDITOR In this issue, we bring you a comprehensive 2013 review of investment banking in Asia. Just when investment bankers thought 2012 couldn’t be worse, along came 2013. Find out why it’s more the Hunger Games than the Wolf of Wall Street. Also, check out who made it to our annual list of Singapore’s 20 hottest startups to watch in 2014 and 25 largest law firms. Enjoy the issue!
Tim Charlton Singapore’s top 25 ACCOUNTING firms
ERRATUM Singapore Business Review erred in its December-January issue in stating Crowe Horwath’s total number of staff for the second edition of Singapore’s 25 largest accounting firms. The report incorrectly stated that the firm was ranked 17th after a 42% shrinkage in staff count from 120 to 70. This was a transcription error made by our research team. The correct number was 120, which means that Crowe Horwath’s staff number remained the same and they should have been ranked 13th on the list. For the full corrected list, please visit http://sbr.com.sg/financial-services/ feature/singapore’s-25-largest-accounting-firms-2013 Singapore Business Review apologises for the error. For more on Crowe Horwath, please see our corporate profile on page 25.
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4 SINGAPORE BUSINESS REVIEW | JANUARY 2014
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Auctions heat up amidst 30 ANALYSIS cooling measures
18 FIRST Death of the Singaporean
CoVER STORY Singapore’s 20 Startups to watch in 2014
16 Who’s hiring?
18 Love bytes
28 Financial Insight
16 More turbulence as ASEAN
20 FireEye flames up in red and black
38 Singapore’s 25 largest law firms
17 Rent squeeze pressures space 17 The Chartist: Singapore inflation 18 1 in 3 Singaporeans worry about
meeting financial goals
18 Singapore Medical Group’s new
CEO eyes aesthetics and wellness screening
Published Bi-monthly on the Second week of the Month by Charlton Media Group #06-09 E, Maxwell House 6 20 SINGAPORE BUSINESS REVIEW | MARCH 2014 Maxwell Road
40 Legal Briefing
22 Singapore’s car drivers turn to
42 CMO Briefing
renting and sharing to beat high COE prices
44 CIO Briefing
24 Find out more about the 10
26 Here’s why 2014 will be solid but
biggest acquisitions by SREITs
not spectacular for OCBC
46 Chinese tourists: Exploring new frontiers
The Chinese are exploring new locations such as Dubai, France, and Kenya.
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News from sbr.com.sg Daily news from Singapore most read
HDB rolls out 3,139 new flats HDB launched six Build-To-Order (BTO) projects, offering 3,139 new flats in four non-mature towns (Bukit Batok, Jurong West, Punggol and Woodlands) and one mature town (Serangoon). This is the first tranche of the 24,300 BTO flats that HDB has planned for 2014. For the rest of the year, there will be a good mix of BTO flat types across various towns, i.e. Bukit Batok, Hougang, Jurong West, Kallang Whampoa, and Punggol.
HR & EDUCATION
Guess what are Singapore’s most indemand jobs Accounting, finance and IT professionals will be in hot demand during the first half of 2014 as businesses expand their products, services and reach. According to the Robert Half Employment Report for the first half of 2014, released by specialist recruitment firm Robert Half, confidence in the Singapore economy has increased, setting the platform for a period of expansion in 2014.
Singapore inflation moderated to 2.4% in 2013 According to a joint release by the Monetary Authority of Singapore and the Ministry of Trade and Industry, for the whole of 2013, CPI-All Items inflation averaged 2.4%, sharply lower than the 4.6% in 2012. CPI-All Items inflation fell to 1.5% in December from 2.6% in the preceding month, mainly reflecting the decline in private road transport cost.
Top 8 career resolutions for Singapore PMEBs in 2014 BY SEE WEE HENG Time flies. In the blink of an eye, the year 2013 has disappeared. There have been a few incidents from work and daily interactions that got me thinking. With Singapore becoming a global city, Singaporeans are experiencing greater competition in our Little Red Dot. Navigating and surviving well in our corporate work environment is getting tougher and tougher by the day. Here are my Top 8 Career Resolutions.
3 investing myths Singaporeans must know BY GLENN HO Fresh out of Singapore national service and in my undergraduate years, I am greeted by a local stock broker who set up a booth at my university. That’s how my investment journey began; combining a new opportunity with the various theories taught in school, I made money. Looking back however, I learnt that the line separating ‘smarts’ and luck is thin and dashed, and we are not as smart as we think.
MOST READ COMMENTARY Is cycling the most dangerous thing that you can do in Singapore? BY CHRIS REED The benefits of encouraging people to cycle are immense; from decreasing congestion on roads and rail to increasing the number of healthy and less obese people (which means less use of hospital resources, less MC etc.) to a greener economy and country to name but three. So why don’t more people ride bikes to work or school? Answer: because they may end up being killed or maimed by motorists.
8 SINGAPORE BUSINESS REVIEW | MARCH 2014
Agenda PEOPLE | PLACES | SERVICES | OPPORTUNITIES
WOOLOOMOOLOO Taking its name from a bay side town in Sydney, Australia, Wooloomooloo Steakhouse is situated in a stunning locale with impressive views of the city. Comprising 6,300 sq ft of wining and dining space, the stylish restaurant promises a memorable dining experience with its premium steak selection, Australian-inspired offerings, as well as an outstanding range of wines and cocktails. The 140-seater restaurant also hones a semi-private dining area that is created using chain link curtains, aiming to provide diners a more intimate spot for private occasions. Address: 2 Stamford Road, Level 3 Swissotel The Stamford, Singapore 178882 Contact Number: 6338 0261 Email: firstname.lastname@example.org
WSH CONFERENCE 2014 Themed “Integrating safety and health: Towards a holistic approach”, the Singapore Workplace Safety and Health Conference 2014 is Asia Pacific’s premier platform for industry leaders and policy makers to exchange and learn about sustainable business solutions through a safer and healthier work environment. Held at the Suntec Convention and Exhibition Centre on 7 and 8 May 2014. For more information, visit: www. singaporewshconference.sg/home.html
Shabuya & Shochu Bar An intimate Shabu Shabu experience The house of Shabu Shabu presents a traditional Japanese-style hotpot cooking of fresh seafood and prime meat such as Wagyu beef, Black Angus and Kurobuta pork. Dine in intimate 2-seater booths and individual hotpots. The cosy home environment echoes a sense of harmony with nature, incorporating stylized cherry blossom motifs, timber finishing and an impressive bamboo ceiling feature. Unwind with a bottle of Sake and Sochu as you dine al fresco at the newly renovated Shochu Bar overlooking the Habourfront and beautiful Sentosa Island.
Address: #01-102/103, Vivocity Contact Number: 6377 0060 Website: www.shabuya.com.sg
FOR MORE INFORMATION on EVENTS AND ADVERTISING
Revamped Suntec perfect for Corporate Events Recently reopened after a S$184m modernisation programme, Suntec Singapore Convention & Exhibition Centre offers flexible spaces supported by top-tier service. With rooms and spaces that are ideally suited for conferences, meetings, trainings, AGMs, Dinner and Dance or product launches, Suntec Singapore offers the best value for any corporate function. Visit www. suntecsingapore.com/ for more details. Contact us at +65 6337 2888 or email email@example.com
SCCP The SCCP Group is a global innovator in secure m-Commerce technologies that has developed Swiff, its flagship product suite. Swiff mPOS and mWallet are white label solutions that embed patented Multi-Factor Authentication (MFA) to ensure bank-level of security to safeguard customer data. Using the company’s unique technologies in payment processing and authentication, acquiring banks and merchants, from enterprise to SMEs can seamlessly deploy one integrated payment solution.
Agenda PEOPLE | PLACES | SERVICES | OPPORTUNITIES
THE MOLUCCAS ROOM As Singapore’s best in serving authentic Indonesian cuisine, The Moluccas Room now offers a deal for beer and sate enthusiasts alike. Diners may now enjoy a 1-for-1 signature sate with every purchase of a bucket of four beers for only $32++. This promo is available daily, from 6pm-9pm. The 1-for-1 sate is subjected to prices of equal or less value and not valid with other promotions and discounts. The Moluccas Room is located at The Shoppes at Marina Bay Sands 2 Bayfront Avenue L1-81. For reservations, call (65) 6688 7367
K.G. TAN & CO. PAC K.G. Tan & Co. PAC is a Certified Public Accounting (CPA) firm comprised of dedicated and competent accounting professionals specializing in audit, tax, accounting, advisory, and other corporate services. In 2013, they were ranked as one of Singapore’s Top 25 Largest Accounting Firms by Singapore Business Review. As a member of Alliott Group, they provide a platform for their clients to globalize their business. They strive to be their clients’ most trusted and reliable partner while delivering value and engaging in every stage of their business life cycle.
Tigerspike Tigerspike, a global enterprise software and user experience technology company, is helping businesses in Singapore harness the power of mobile and tablet technology, connecting organisations with customers and empowering employees, increasing sales, reducing costs and driving productivity. Tigerspike is transforming businesses from 8 offices, with over 60 awards in its 10 years. Tigerspike’s reputation for innovation creates long-term partnerships with customers including AMEX, Standard Chartered, Cold Storage, Westfield, SPH, Great Eastern, Maxis, Novartis, Shell, Emirates and Vodafone. www.tigerspike.com Tigerspike hosts monthly briefings on the state of the technology market and future of mobility. Email firstname.lastname@example.org if you would like to attend the next event focusing on mobile security.
FOR MORE INFORMATION on EVENTS AND ADVERTISING
Marina One, the upcoming Star project at the Marina Bay area, an integrated development of residential, offices and retail services, is developed by a renowned and strong team. Enjoy this distinguished address and World Class Destination with magnificent landscape, new Financial Business Hub, Marina Bay Sands is nearby. With three awards, it’s sustainable and environmentally friendly design, this is truly a gemstone for business, leisure and stay, the world at your playground. Please contact 9798 4691 or email email@example.com to know more.
HARRY ELIAS PARTNERSHIP LLP Established in 1988 by Mr Harry Elias, Senior Counsel, Harry Elias Partnership LLP is a leading law firm that has been shaping the evolution of Singapore’s legal landscape for the last 25 years. The firm is known to be “A practice of firsts”, consistently breaking new ground in watershed cases. Last year, the firm celebrated its 25th Anniversary as well as officially launched its Brunei Office, making it the first known Singapore law firm to have a physical footprint in Brunei.
Building a Next Generation Cloud Computing Platform for Businesses in Asia In-depth experience and quality customer care give Telstra the cutting edge.
Nathan Bell, Director Marketing, Products and Pricing, Telstra Global
eadquartered in Hong Kong, Telstra Global is a part of a leading telecommunications and information services company of Australia. The company has top-tier international customers across Asia Pacific, Europe, and the Americas with a full breadth of holistic and end-to-end solutions including managed network services, data, voice, and satellite solutions. Through its strategic investments over the years, Telstra now owns one of the most technologically advanced IP backbone networks in the world, together with its offshore subsidiaries. Success from experience Over the last 12 months, Telstra has expanded its operations and obtained additional licenses in Taiwan and India as well as the United States and China. What sets the company apart from others is its commitment to improving customer experience. “We have a range of initiatives in place to improve our interactions with customers and we conduct extensive surveys to generate our Net Promoter Score (NPS) to ensure we continue to provide high quality, timely, and differentiated experiences to our customers,” says Nathan Bell, Director Marketing, Products and Pricing, Telstra Global. This success story comes from Telstra’s deep understanding and experience in the Asian market for over 30 years. It considers Asia to be a key growth market due to the region’s vast economic potential, particularly in the current global 14 SINGAPORE BUSINESS REVIEW | MARCH 2014
financial climate. “Within Asia, Telstra Global is uniquely positioned to serve multinational companies (MNC) operating in the region, with headquarters and offices in key markets like Singapore and Hong Kong, as well as businesses from the US, Europe, and other global MNCs looking to expand into Asia,” shares Bell. Telstra’s continued investment in infrastructure ensures that its customers continue to receive the high quality, endto-end service they require for scalability, reliability, and innovative products tailored to their needs.
Year by Frost & Sullivan Asia Pacific and we have just been positioned by Gartner, Inc. as a Challenger in this year’s Magic Quadrant for Cloud-Enabled Managed Hosting, Asia/Pacific. These accolades are testament to our continued improvement to our cloud services,” says Bell. “We will continue to strive to be an agile, nimble, and customer-centric organisation that understands the way Asian markets work. We aim to grow our proven track record of expertise in the Asian market and continue to help MNCs expand into the region,” he adds.
Cloud - changing the way businesses manage technology Provided in a highly secure online environment, scalable cloud services give businesses the power to streamline ICT management and costs. “Our cloud solutions are tailored to users to ensure they enjoy a unique user experience through easy-to-use interface to make informed business decisions. We have recently announced a globally connected Infrastructure-as-a-Solution (IaaS) solution for MNCs, enabling them to consistently deploy applications, deliver business processes, and deploy offshore disaster recovery solutions across multiple geographic locations,” Bell says. “Our customers are now able to enjoy access to a globally consistent and highly scalable platform with dedicated servers for high performance and availability, whilst also being able to better manage cloud applications and utilise Telstra’s expertise in managing their cloud solutions on their behalf,” adds Bell. The various industry awards Telstra has won show its commitment to customers and provide worldwide recognition for its products and services in the business landscape. “Last year, we were named the Telecom Cloud Service Provider of the
Global Cloud Infrastructure Telstra Global’s Cloud Infrastructure offering is engineered for global businesses that need to consistently deploy applications, deliver business processes and deploy offshore disaster recovery solutions across multiple geographic locations. Built on proven technology and expertise, Telstra’s Cloud Infrastructure solution is available within its Tier III equivalent data centres in Australia, Hong Kong, Singapore and the United Kingdom. It helps to revolutionise the way organisations pay for and manage their ICT through a comprehensive suite of dedicated servers, virtual servers and backup options, and allows these to be combined with colocation to create hybrid hosting environments that match specific customer needs. Flexible add-ons such as secure private networks, optional disaster recovery and off-site back-up capabilities help to reduce security concerns, and assurance is provided via a combined service-level agreement (SLA) that can extend across a customer’s global hosting infrastructure and network connectivity. Delivered over Telstra’s leading global IP backbone network, it can help businesses reduce costs, enable innovation and streamline the way they manage their ICT. It provides customers with an exceptional end-user experience, combining the flexibility of cloud computing with a world-class, highperformance, low latency global network.
“Cloud computing has revolutionised the way businesses are managed and operated.”
FIRST meet management’s expectations or objectives,” says Maybank Kim Eng analyst Mohshin Aziz. While this reform may seem to highlight risks airline companies will soon face, IATA’s CEO, Tony Tyler sees a silver lining in this shift: “Europe’s Single Aviation Market delivers tremendous value to European integration. And the ASEAN liberalization plans have similar potential.” However, Tyler notes that this will only be realized if states implement what they have committed to do.
Singaporean bosses may not be paranoid if they think their staff are spending a lot of time on job boards with a recent survey from jobsDB finding that 85% of workers want to explore new roles this year. Of those looking to explore new roles however, 50% are passive, meaning they are currently employed and not actively looking, but open to opportunities. Only 35% are active while the rest are unemployed. Nineteen percent of organisations said they expect to recruit staff; 67% said they will maintain staffing levels, while only 3% said they would trim staff. This yields a net employment growth outlook in Singapore of 16%. With a smaller pool of talent, jobsDB advises that it’s not only about casting the net wider to reach more job seekers, but also engaging them before they decide to actively seek a new role. In this war for talent, it’s important for employers to understand job seekers’ values and considerations as well as how to communicate with them. Job seekers set criteria Among the three highest ranked considerations job seekers look for in employers, over a third of the respondents prioritized ‘generous salary’ (40%). This is followed by ‘overall reputation of the company’ (24%), and ‘reputation of the company for having a good work-life balance’ (23%). To provoke passive job seekers to act, brands can do two things; stand out against the competition and engage, said jobsDB. Sheldon Fernandez, General Manager of jobsDB of Singapore and Malaysia, advises employers to attract quality talent through innovative job ads but also use tools to filter the right candidate by seniority level.
16 SINGAPORE BUSINESS REVIEW | MARCH 2014
Up, up, and away!
More turbulence as ASEAN opens skies
f it seems that all your favourite airlines seem to be merging or selling off you are not mistaken. The cause is the ASEAN Open Skies agreement which will greatly liberalise air travel in the region and kicks off in 2015. In preparation for this there has been flurry of aviation deals including Scoot tying up with NOK Air to form a new long haul budget carrier called NokScoot based in Bangkok. Scoot also enhanced its existing alliance agreement with Tigerair which might serve as a precursor for a full merger. Tigerair has formed a joint venture airline with China Airlines called Tigerair Taiwan, and has inked an interline connection agreement with SpiceJet. All set for ASEAN Open Skies Analysts noted ASEAN Open Skies is an agreement between the ten nations in the region to loosen ownership restrictions across their airlines. One of the more notable provisions under the agreement is that ASEAN-based airlines will be able to own up to 70% of another ASEAN-based airline. “This is a motivating factor to experiment and set up a joint venture (JV) to share the risk, and have the option to buy out or sell off the stake if the JV does not
One of the more notable provisions under the agreement is that ASEANbased airlines will be able to own up to 70% of another ASEAN-based airline.
Execution risks, fuel cost hit But Aziz warned that while alliances seem solid on paper, it will take some time before they can enhance the bottom line. “The long-term outlook is interesting, as it allows Singapore to leverage the upcoming ASEAN Open Skies and subset it with India and Taiwan collectively into its network.” The aforementioned deals are seen positively, helping improve Singapore airlines and their partners in the more liberalized market on the horizon. “The formation of NokScoot and Tigerair Taiwan will open up new markets, enhance route network and connectivity,” noted Aziz. All in all, the impacts and benefits of the move for airline liberalization are yet to be seen. “I don’t believe that there is any appetite amongst governments for a big-bang shift to global liberalization. But initiatives such as the one being pursued in ASEAN are the building blocks for the industry’s future shape and form,” says Tyler.
ASEAN Open Skies Agreement and Ratification Status
Source: NUS CIL Treaty Database, DBS Vickers
Space is a luxury in Singapore and the trend is going more like Hong Kong.
Brace yourselves for rocketing rents
Rent squeeze pressures space
hen Fulford Public Relations managing director Marina Mathews’ rent renewal for the firm’s 2,176 sq ft shop house office in Amoy Street came up, she was shocked that the landlord was asking for a 15% rent increase despite their 10-year tenure at the location. After an exhaustive 3-month search within the area she found a similar styled office at a higher rental rate per square foot but slightly smaller. “Space is a luxury in Singapore and the trend is going more like Hong Kong in that people are more
careful and considerate in terms of how much space is really required per head. It’s very hard finding anything under 2000 sq ft and with rents rising we have taken the step of locking in the rent for a 3-year period,” says Mathews. It is an experience being played out across Singapore with demand for space now exceeding supply. According to Tricia Song, Asia ex-Japan real estate analyst at Barclays, a 10-15% increase in office rents will be the trend in 2014. Prime office rents, in particular, will likely register a 4-5% annual growth in the final quarter of 2014,
breaking five consecutive quarteron-quarter declines in office rents, says Louise Toovey, associate director at Knight Frank. “Looking further ahead, overall prime grade office rents could increase by an average of 10 to 15% from end 2013 to end 2016, assuming a steady growth path for global and local economies and barring any unforeseen circumstances,” she adds. Headwinds for Grade B rents While Prime Grade A office rents will see a slight uptick, older offices could see their rents erode due to competition, says Yvonne Voon, research analyst at Credit Suisse. “Older offices could see negative headwinds due to competition,” adds Voon. “We expect downside risk to rents to be more prevalent at fringe CBD and older central offices due to flight to quality.”
Upcoming office supply from major office devts
Source: Knight Frank Research
The Chartist: singapore inflation Don’t be so happy with the moderation in inflation as DBS analysts say the current “inflation bliss” will be short-lived. The 1.5% inflation moderation was just a blip. According to DBS, the story behind the moderation in inflation is the 2.1% decline in transport CPI inflation. “And that most likely came on the back of the lower COE premiums in the month compared to the same period in 2012,” says DBS. Looking into 2014, while the recovery in the advanced economies is expected to lift Singapore’s export demand, growth is likely to remain moderate given on-going structural reforms in China and fiscal consolidation in some ASEAN countries, according to OCBC.
Inflation trends and official forecasts
Source: MAS, OCBC
SG inflation to pickup from 2014 onwards
SINGAPORE BUSINESS REVIEW | MARCH 2014 17
Death of the Singaporean consumer
Mobile food orders
rom 2011 to 2013, as the world economies struggled and Singapore’s exporters lagged, consumers propped the economy up by going on a buying binge pushing up prices of everything from retail rents to residential property and with it the whole economy. That trend is about to reverse itself again and see Singapore return to its traditional role as an export led economy. According to JP Morgan analyst Matt Hildebrandt, external demand has traditionally driven GDP growth as export and financial market trends lead domestic dynamics. But, between 2011 and 2013, he notes that domestic demand drove the economy while the contribution from net exports was very modest, if not a drag. External market forces Hildebrandt says that the drivers of economic growth are now shifting back to externally driven factors. “Fed tapering and government policy have led to tighter domestic monetary conditions, slower credit growth, and more stable housing prices, all of which will weigh on domestic demand. Tight labour market conditions are forecast to
The rise and fall of the consumer
persist in 2014 and domestic demand is expected to contribute to growth this year, but net exports should retake its place as the economic engine of growth.” GDP forecasts Hildebrandt forecasts the economy will grow 4.1% in 2014 as stronger G3 demand translates into faster GDP growth. Given Singapore’s high-beta relationship with the global economy, he said that the growth would be forecast at an even faster pace. “Singapore’s potential growth rate is widely believed to have slowed from an estimated 3%-5% range to 2%-4%,” he says.
Domestic demand drove the economy while the contribution from net exports was very modest, if not a drag.
1 in 3 Singaporeans worry about meeting financial goals Be it with current or modified asset allocations, 35% of Singaporeans surveyed by Nielsen say they have no confidence they will meet all their financial goals. But on the flip side, Nielsen revealed that almost two-thirds of consumers in Singapore (65%) believe they will achieve all their financial goals for the future. While 50% is aware of the need to take a proactive approach to saving and investing, a mere 15% think that current planning efforts will suffice for the future. Plans to save in the future are especially strong among respondents in Singapore for intentions to fund: personal luxuries (54%), financial legacy (53%), retirement fund (52%), upgraded and second-time property purchases (both 50%). “The greater number of respondents planning to save in the future suggests an opportunity to better educate consumers about saving strategies,” says Luca Griseri, from Nielsen. 18 SINGAPORE BUSINESS REVIEW | MARCH 2014
Anshul Gupta, Chirag Tejuja, and Sankaran Sreeraman were still INSEAD Business School students when they saw the need for a mobile ordering and billing technology that integrated with restaurant back-end operations. This led them to create TabSquare in May 2012. Thanks to the backing of the INSEAD entrepreneur/alumni network, Gupta says raising funds was easier because they were connected to the right incubators and fund managers. “We presented to a number of incubators and while many were interested in investing, we went ahead with Get2Volume as we saw a great fit between their portfolio of companies and alignment of the vision for the company,” he says. TabSquare intends to change the way consumers dine out.
Back when he was still single, Joseph Phua was addicted to trying different dating apps and sites but none seemed to be good enough. That’s when he decided to create Paktor, a social networking platform and mobile app, to help himself and many other singles like him in Asia. Paktor started in April 2013 in Chicago. “I had quite a bit of success in the US and realized there were no other similar platforms in Asia,” he said. To date, Phua has raised a sevendigit figure from a consortium of local and international angels and a few venture capitalists. In the last four months, Paktor has matched more than 1.5 million singles, making it one of the fastest growing social networking sites for singles in Asia.
Singapore Medical Group’s new CEO eyes aesthetics & wellness screening
r Beng Teck Liang was appointed Group Chief Executive Officer of Singapore Medical Group in December 2013. In his new role, Dr Beng will be responsible for leading day-to-day operations and the organisation’s long-term strategy. He recently shared with Singapore Business Review some of his short-term and long-term objectives for the company and gave a glimpse of how he plans to give the current business model some tweaking. SBR: What makes you excited about your new position? I am excited that I am able to bring my 10 years of MNC experience to managing an SME business that is close to my heart and which I am very passionate about. I left the healthcare scene more than 10 years ago to pursue a career in information technology. Singapore Medical Group (SMG) is a unique setting that enables me to leverage my backgrounds in medicine, management and technology. I might probably be one of few unique individuals in Singapore with this mix of background. I would want to build the SMG brand to be synonymous with quality specialist care and being a patient-centred medical care provider to every individual, both in Singapore as well as overseas.
SBR: What three goals are you focused on? Firstly, get SMG on track for healthy growth. Secondly, continue extending Singapore’s healthcare services and quality beyond of our shores. Lastly, build and apply innovative, simple and useful technologies in the context of our current environment to empower our patients. We want to improve patient care and quality. We have started to apply some of these ideas and initiatives in our clinics and we will share more in due course. SBR: What changes are you planning for? We have recently launched new clinics, recruited new doctors and introduced a new management with MNC experience. We intend to grow SMG substantially into a much larger healthcare company and will continue to invest in our people. I want to bring on board the best and brightest people to the team, as we are a ‘people business’. We are tweaking the mix of our businesses. We will continue to focus on some of the existing verticals of the business such as ophthalmology, obstetrics and gynaecology, but we intend to grow them individually by growing our pool of doctors and clinics. We are also looking into the areas of aesthetics, wellness and health screening. I will personally be taking on
Dr Beng Teck Liang Chief Executive Officer Singapore Medical Group
the role as Medical Director for a new clinic called The Wellness Suite, where I am taking the opportunity to introduce and encourage the concepts of wellness, prevention and health screening into the organisation. SBR: What are your key business philosophies? I believe in people and I want to build the best possible team. Empower the team with the best technologies, tools and environment to do the work they do best.
FireEye flames up in red and black
Hackers in Singapore must be scared out of their wits as FireEye unveils its headquarters in Asia. Opened in midJanuary, FireEye’s cyber security training hub in Singapore is home to more than 150 IT professionals specializing in products and solutions to address regional and global threats across different specializations. This 10,000 sq. ft. space bills itself as the Centre of Excellence in the area of cyber security in Singapore, garnering huge support from the Infocomm Development Authority (IDA). This partnership with IDA aims to train a new generation of cyber security professionals to meet the next wave of advanced threats across Asia. FireEye delivers industry training solutions on the latest cyber defence strategies and skills to address the accelerating talent requirements in this area.
20 SINGAPORE BUSINESS REVIEW | MARCH 2014
FIRST DEAL WATCH
EuroSports gallops into SGX
Beg, borrow, but don’t steal
Howard Cheam from Capital Markets / M&A Practice of Rajah & Tann’s Singapore office co-led his team as EuroSports Auto Pte kicked off 2014 with its IPO plans. On 17 January, EuroSports Global Limited was listed on Catalist, being the year’s first Catalist IPO in Singapore.
Singapore’s car drivers turn to renting and sharing to beat high COE prices
AusGroup rolls out 96m new shares
ust when you thought car prices in Singapore couldn’t get any pricier, along came the government’s transport curbs. While car retailers are looking out for the next best move to cope with the recent measures, personal transport service firms are already basking in the new boom: car sharing. Lai Meng, President for Car-sharing Association (Singapore), says “car-sharing is set to grow as the transport authorities, under the Land Transport Master Plan 2013, are working closely with the industry to provide more car-sharing locations and publicity to make it easier and more convenient for users and businesses to access the car-sharing service as a complement to public transport.”
SGX-listed AusGroup Limited tapped the expertise of Goh Kian Wee of Rajah&Tann in its proposed private placement of 96,100,000 new ordinary shares. to approximately SGD$16.1 million.
Active car owners and renters Marvin Mohan, Marketing Manager for iCarsClub Singapore, also noted that “a steady rise in signups for both car owners and renters culminated in a huge spike (more than 300%) in numbers through the Christmas and CNY period. Just a year into our operations, we have reached more than 200 active car owners and 2000 car renters, despite the restrictions imposed by the Private Car Rental 22 SINGAPORE BUSINESS REVIEW | MARCH 2014
Scheme.” Meanwhile, another form of public transport service is gaining traction in Singapore car rental. Adrian Lee, Co-founder at Drive.SG, said his company was started during the peak of COEs prices (2010-11). At that time, he said it made absolute sense to hirers to rent a car and used it when they needed it instead of owning it. Economic benefits Lee explained that Singapore Tax for new car prices was changed drastically in 2013. It made it very difficult for individuals who wish to buy cars because it was significantly more expensive to buy the same car in 2013 than in 2012. “It made economical sense for drivers to lease cars that were 1-2 years old,” he said, adding that they have seen a stronger female hirer demographic in the last 1-2 years. The younger demographic is turning to car leases. The permonth outlay is much lower than owning a car. Since car leasing is a full-service, it fits the hassle-free desires of young working gen-y adults. The 30 to 40 year old, male, demographic are changing cars at at faster rate with car leasing. Some have changed their car model in as little as 9-12 months.
Universal Group oils business
Angela Lim led Rajah&Tann in acting for Universal Group Holdings Pte Ltd in a S$1.15 billion loan facility. The loan is secured against project receipts arising from commercial tankage and storage services provided to various firms in connection with the storage of oil at a subsidiary’s oil tanks located in Jurong Island.
co-published Corporate profile
Finances through the lens of a Forex broker Find out how to make the most of a currency as an investment instrument.
n today’s world, it is getting more and more difficult to live without information about business and politics. In some cases ignorance of politics can be winked at, but being unaware of major financial laws can weigh on efficiency and result in losses not only for companies and households, but also for individuals. Anyway, almost every employed person keeps some savings at home, in a bank, or invests them in various assets. It can be precious metals, shares, and works of art. However, the most popular saving and investment instrument rolled into one is a currency or a basket of currencies. However, to make the most of a currency as an investment instrument, you need to trade it directly on the forex market with the help of a worldrenowned broker like InstaForex, not via bank or exchange office. Only a large broker can guarantee the lowest possible difference between the bid and ask prices (spread) and provide you with the most accurate quotes possible and instant execution of orders. In fact, currency trading is the most affordable and efficient way of making your money work for you. Thus, you multiply your savings by buying some amount of currency and then selling it at a higher price. Trading forex, you have not only the liquid saving instrument – currency, but also an opportunity to make money with currency speculation buying and selling it at a profitable rate. In other words, you have a certain sum of money, part of which can be converted into any other currency at any moment right on the global forex market. What’s more, forex trading broadens your financial horizons and, consequently, improves other material aspects of your life. To trade successfully, you will need to keep abreast of the latest macroeconomic events and base your decisions on them. In fact, forex trading represents the whole world filled with exciting and interesting things and, which is more, bringing real money. However, before you start trading, you need to choose a reliable broker. As the
forex market is unique, easily-accessible, and presented by the huge number of brokers, a reliable one should be working for at least 3-4 years and have impressive client base. Only such a broker is considered trustworthy having beneficial trading terms and providing state-ofthe-art products and services. InstaForex is the broker that has been operating on Forex for the seventh year. Its overall number of customers rose beyond one million two years ago. Currently, the number of InstaForex loyal traders tends to 1.5 million. It was InstaForex to roll out the range of unique services including PAMM accounts, InstaWallet, Forex options trading, and ForexCopy, the system for copying successful trades. In short, all traders from novice to professional will find in InstaForex
“Currently, the number of InstaForex loyal traders tends to 1.5 million. ”
everything they need. The company provides the best trading terms; biggest bonuses among all brokers; most useful and groundbreaking trading software products; widest range of contests and campaigns with a prize pool of more than $1 million. It also offers unparalleled information content which is regularly updated. InstaForex has responsive and professional support service that will not leave you with the problem but will do everything it can to help resolve the matter. Having bookmarked InstaForex website, you will keep the whole currency market at hand. InstaForex will be the perfect forex broker for you whatever country you are from and whatever language you speak. No matter what experience or how much money you have, the broker will help you turn your efforts into substantial profits that will one day outpace your regular monthly earnings. Magnify your returns by trading on Forex; InstaForex will help you do it properly and effectively. SINGAPORE BUSINESS REVIEW | MARCH 2014 23
Travel predictions for 2014 1
The 10 tech geeks under 30 to watch
ingapore Business Review searched through the local app development market to round up 10 fresh-faced app developers under 30. These young men, with ages ranging from 29 all the way down to 21, are behind apps for Android and iOS, from games to productivity tools. 1. At an early age of 18, Sidwyn Koh has launched a tech training company, The Pragmatic Lab. He has also worked with numerous Bay Area startups to build iOS apps and has led the mobile team at Roomarama, a booking site for short term rentals. Now at 21, Sidwyn is working on Occuhunt, a job hunting site. 2-3. Burpple, a social food guide app that has been featured both in Google Play Store and iTunes App Store employs two young innovators. Theodore Felix Leo, 23 singlehandedly built Burppleâ€™s Android app which was featured in the Google Play Store for 9 different major countries around the world. Burppleâ€™s Lee Jun Kit, 26, is meanwhile in-charge of iOS app. Burpple app has been featured on the iTunes App Store numerous times in 14 major countries around the world, including the US. 4. The 25-year old Ryan Rogowski is the CEO of Waygo Translator, an app that instantly translate Chinese characters to English. Ryan worked at an iPhone game development startup and co-created two games in the appstore: Wordlands and Quoth. Wordlands was the top word game in the Hong Kong app store market for six months in 2013. 5. Chiew Ming Hui, 25, graduated from Nanyang Polytechnic with a diploma in Digital Media Design specializing in Games
24 SINGAPORE BUSINESS REVIEW | MARCH 2014
Design. He currently pursues a double major bachelor in Psychology and Marketing as part of his interest in understanding the needs and playing habits of a gamer both casual and non casual. Prior to joining Swag Soft, he worked at a start-up focusing on Gamification to learn more about human responses to various game mechanics. 6. Julien Grimault, 26, is an employee number one at TradeHero, a mobile stock market game. He built complete product with the CTO (iOS client and REST API) that went from seed funding to $10M Series A in 13 months. Julien also built TradeHero prototype that raised $500K in seed funding in July 2012. 7. George Rajiv Shivkumar, 28, co-founded Replaid, a mobile app development solution provider. Together with his brother Sanjay Shivkumar, they started a branch office in Taipei in 2012. Their highest profile app was Summon Auntie, which over 200,000plus downloads in Singapore, a proud number considering there are only about 500,000 plus cars on the road. 8. Ng Jingshen, 29, an ex-Amazon S3 engineer is currently the Chief Technology Officer of Paktor, a social networking app. He has transformed MVP state product into 99.95% uptime product and scaled platform from being able to accomodate 10,000 users, to 1 million users. 9-10. Rainmaker labs, the creator of Shop Guru eShops, a mobile shopping and reward app and BLEep, a pocket hardware device that can now receive Bluetooth signals without the requirement for pairing also has two young bright minds - Neo Zhizhong, 29, and Goh Mia Hiang, 24.
Where are Singaporeans headed to this year?
1. Bangkok 2. Hong Kong 3. Jakarta 4. Taipei 5. Manila
6. Bali 7. Kuala Lumpur 8. Phuket 9. Seoul 10. Penang
1. Seoul 2. Taipei 3. Tokyo 4. Bangkok 5. Singapore 6. Osaka 7. London 8. Taichung 9. Kaohsiung 10. Okinawa
1. Hong Kong 2. Beijing 3. Shanghai 4. Chengdu 5. Lijiang
CO-PUBLISHED CORPORATE PROFILE
Crowe Horwath First Trust upholds its record of excellence
Crowe Horwath First Trust is one of the leading mid-tier accounting and advisoryservice firms in Singapore.
rowe Horwath First Trust (“CHFT”) was established by its current managing partner Mr. Tan Kuang Hui and executive director Mr. Alfred Cheong in 2002. Since its founding, the firm has come a long way in fulfilling its vision of being the firm of choice for growing businesses. Today, CHFT has professional staff strength of 120 led by 9 partners. It provides mainly external audit, risk advisory, tax and accounting services to about 40 public listed corporations in Singapore. It is an active player in the IPO market in Singapore and is registered with the Public Company Accounting Oversight Board (PCAOB) in the USA. Growing list of services What started as an audit practice in 2002 has, over the years, grown to include a wide range of services to help their clients meet the demands of a fast evolving business landscape. The latest in a series of new service offerings is Technology Risk Advisory which was launched in August 2013. This expanded its suite of risk advisory services to help its clients ensure that risks arising from the deployment of information technology are well managed for the achievement of
organisational goals. Earlier, in 2012, a Japan Desk was set up to provide services for Japanese companies looking to expand their operations into Singapore, either to tap on the Singapore market or to use the Singapore market as a springboard to expand into the region or other Asian companies looking to expand their operations into Japan. CHFT’s tax services was also enhanced with the addition of a Transfer Pricing practice in 2011 to support its clients that are growing regionally and are faced with transfer pricing issues. The growing list of services provided includes: • Assurance • Corporate FInance • Corporate Recovery • Fund Administration • Japan Desk • Outsourcing • Risk Advisory • Tax • Technology Risk Advisory • Transfer Pricing In the area of knowledge leadership,
“What started as an audit practice in 2002 has, over the years, grown to include a wide range of services.”
CHFT will be holding its annual Singapore Budget Seminar on 12 March 2014. The seminar will highlight key tax developments from the Budget 2014 as well as an overview of recent tax developments to help businesses understand their planning opportunities and their compliance obligations going forward. Benefits of attending • Gain an in-depth understanding of the changes announced in Budget 2014 and the implications for your business • Understand how your business can take advantage of any tax planning opportunities arising from any new measures introduced in the Budget 2014 • Keep up to date on recent tax developments to effectively manage your tax compliance obligations Details Date : 12 March 2014 Time : 9:00am – 1:00pm Location : Level 4, Bras Basah Room, Raffles City Convention Centre To register for the event on-line, please visit www.chtax.eventbrite.sg
Tan Kuang Hui, Managing Partner & Founder, Crowe Horwath First Trust CHFT has authored several publications over the years such as the Singapore Withholding Tax and Treaties Online and Tax Essentials for HR Professionals, Singapore, both of which are published by CCH Asia Pte Ltd. In 2014, CHFT will be releasing the fourth edition of Crowe Horwath’s Quick Guide to Business Tax in Singapore, also published by CCH Asia. CHFT’s Pride CHFT has always prided itself on its ability to provide innovative and timely services to the market and its clients and it will continue to build on its local knowledge, expertise, and experience to provide value to its clients in 2014 and beyond. Also, as a member of Crowe Horwath International, the 9th-largest global network of independent audit and advisory services firms with offices in over 100 countries in the world, CHFT is well placed to deliver value to clients doing business across borders due to the network’s shared commitment for impeccable quality service, highly integrated service delivery processes and a common set of core values. SINGAPORE BUSINESS REVIEW | MARCH 2014 25
FIRST The Analysts’ call
How will OCBC perform in 2014?
OCBC’s wealth-related fees predicted to grow
Here’s why OCBC is headed for a solid but not spectacular 2014
his year will see OCBC grow in moderation as headwinds temper its potential. OCBC will likely see single-digit loan growth and improved net interest margin, but analysts see funding cost pressures on the horizon. As with all Singapore banks, OCBC will also have to grapple with the threat of the US Fed tapering its quantitative easing programme. The tapering could negatively affect OCBC through its life insurance arm, Great Eastern,
OCBC will also have to grapple with the threat of the US Fed tapering. which may suffer mark-to-market losses for its non-participating fund when bond yields spike. This relatively volatile earnings profile is one of the big reasons investors should be cautious about OCBC in 2014, said Joshua Tan, analyst at PhillipCapital. Meanwhile, OCBC’s wealth management division, which has accounted for more than a quarter of its fee income, has also encountered short-term headwinds as investors become more risk averse, according to Jonathan Koh, analyst at UOB Kay Hian. Investors have been switching from exotic structured products to savings products, such as fixed deposits, but Koh notes that client activities have recovered since October 2013. This gives hope that the wealth management division – along with its fees and commission 26 SINGAPORE BUSINESS REVIEW | MARCH 2014
– will likely be resilient going forward. Tan shares this enthusiasm for wealthrelated fees, expecting them to show increasingly strong growth in 2014 as OCBC tries to increase its assets under management. Emerging signs of recovery in major markets should also contribute to luring back more investors. OCBC’s outlook is also brightened by the strong potential of its overseas businesses. Sue Lin Lim, analyst at DBS Group Research, specifically points to its Islamic banking business in Malaysia as giving the bank an added advantage over other Singapore banks. Koh adds that OCBC has been building up its presence in Indonesia and Greater China, and core income from both countries has been steadily increasing. Increased intra-regional trade and investments, as well increased affluence of households, should further boost their income potential. Lim has a pessimistic view on Indonesia given its softer economic outlook and political uncertainties, although she agrees that OCBC’s expansion into Greater China has potential for growth. Overall for 2014, Lim says “OCBC’s banking operations will remain strong and solid in addition to its better-than-average asset quality indicators.” The bank’s net interest margin should improve as credit spreads increase, and is in a relatively better position in the sector in terms of liquidity and ability to leverage an uptick in interest rates.
Joshua Tan – Phillip Capital Although OCBC has been able to grow their fees and commission at a good momentum, we remain cautious going into FY14 due to uncertainties on some ASEAN countries. We expect wealth-related fees to show increasingly stronger growth in FY14 as OCBC puts focus on increasing its AUM and our outlook of more favourable market conditions in FY14 with major markets showings signs of recovery. Jonathan Koh – UOB Kay Hian OCBC encountered short-term headwinds as the threat of QE3 tapering hit emerging markets, such as Malaysia and Indonesia, the hardest in 3Q13. The worst is likely over given that regional currencies have already started to rebound since Oct 13. We see reprieve as the Federal Reserve is expected to delay QE3 tapering till 2Q14 due to uncertainty created by the threat from a budget impasse and a potential repeat of a government shutdown. Thus, the negative impact of mark-to-market losses from Great Eastern’s non-participating fund is expected to be less severe. Sue Lin Lim – DBS Group Research Management guides for high singledigit loan growth and expects NIM to improve as credit spreads increase, but there may be pockets of funding cost pressures. Credit cost and non-performing loans (NPLs) had fairly stable trending patterns over the past six quarters. In terms of liquidity and ability to leverage on any SIBOR uptick, we believe OCBC is in a better position versus UOB. Already firmly established in Singapore and Malaysia, OCBC has introduced its bancassurance model to OCBC NISP.
co-published Corporate profile
The Preferred Place to Meet – Suntec Singapore Suntec Singapore leads the industry with high-tech revamp
untec Singapore is a world-class venue located at the heart of Asia’s most integrated meetings, conventions and exhibitions hub and has hosted more than 18,000 events over 18 years. The Centre recently embarked on an S$184 million modernisation programme and re-opened to the public on 3rd June 2013. CEO Arun Madhok says the S$184 million high-tech renovation project focuses on bringing quality and value to their clients. “Space is a premium in Singapore and we make every inch of it work harder for our clients. We have over 42,000sqm of flexible, customisable space. No event is too big or too small for Suntec Singapore: name it and you can be confident that we will deliver the first-class venue and the impeccable service quality that is expected from a venue with our sterling reputation.” The redesign pays particular attention to flexibility, functionality and convertibility while integrating advanced technology, and includes the world’s largest interactive HD video wall and free WiFi for all visitors. The Centre is also well-known for its intelligent sustainability and culinary excellence. Table for 4500 Suntec Singapore’s kitchen offers a menu of over 800 local and international dishes. Clients have their choice of style and service, including booth catering, sit-down banquets or buffets, and the kitchen can serve some 4,500 individual guests at a single meal. All the dishes and menus are carefully curated and prepared by Suntec Singapore’s celebrated chef Alfred Lee and his team. Focused on MICE business Suntec Singapore is focused exclusively on the MICE business, which in turn results in a better experience for clients and more attention to detail. “We want to keep our eyes on our core business, which is providing our clients with the very best experience for their event,” says Mr Madhok, “We’ve got
free WiFi, seamless connectivity to public transportation, ample parking space, and easy access to over 1,000 shops, 300 restaurants and 5,200 luxury hotel rooms all within a 15 minute stroll.” Intelligent Sustainability The revamp also includes extensive environmentally sustainable modifications. LED lights are installed where possible throughout the building, and induction technology has replaced dependence on gas cooking, significantly cutting energy costs. These improvements also greatly reduce heat generation within the building and lower the cost of air-conditioning. Crystals On 4, Suntec Singapore’s intelligent and fully programmable LED ceiling light display, can be used to create variable mood lighting and low resolution graphics such as company logos across the exhibition hall ceiling. As the first such installation here, Suntec Singapore is now able to set the mood in the massive space to suit nearly any purpose, be it a brightly lit exhibition or a romantic wedding dinner. Air conditioning can be controlled in each individual space, and the intelligent building management system senses the configuration of each room in real-time and automatically allows the user to control the environment for the relevant space. Computerised systems help to shut off air conditioning for spaces that are not in use. Modern Technology Many things have changed in the industry since Suntec Singapore first opened its doors in 1995. For example, technology like free WiFi has become a must-have for a modern conference and exhibition venue. A large portion of Suntec Singapore’s $184 million revamp was spent on high-tech upgrades to the event space to push the envelope for the MICE industry. Apart from offering up to 6,000 simultaneous high-speed free public WiFi
“No event is too big or too small for Suntec Singapore: name your event and you can be confident that we will deliver the first-class venue and impeccable service quality.”
connections, Suntec Singapore is leveraging technology in ways that no other venue in the region has done before. “We have provided free WiFi throughout our venue to increase the mobile connectivity as many of our clients who are beginning to see this as a basic need,” Mr Madhok says. The Big Picture, at the Convention and Exhibition Centre’s entrance, holds the Guinness World Record for the world’s largest HD video wall, standing over 3 storeys high and 60 meters wide. The Big Picture consists of 664 full-colour 55” HD LED screens. “This eye catching mega video wall showcases Suntec Singapore, our partners, events and advertisers at the heart of the Central Business District,” added Mr Madhok. “Over the last few months we have even had people make wedding proposals on our screen. It was a big proposal, of course.” Leading by example, Suntec Singapore aims to inspire positive change to the MICE industry and change the way people look at the convention and exhibition business altogether. SINGAPORE BUSINESS REVIEW | MARCH 2014 27
Some wolves in Asia are looking rather mangy and underfed
Hunger Games meets the Wolf of Wall Street
Find out why the wolves around Shenton Way and Queens Road Central are looking rather mangy and underfed.
ust when investment bankers thought 2012 couldn’t be worse, along came 2013. With the full figures now in for the year, research agency Dealogic reported investment banking revenue in AsiaPac ex Japan was down a bonus-sapping 12% to $8.8bn. It was even worse for the bond issuers, with the amount of debt issued in Asia down 14% to $944.3bn for the year, the region’s first yearly decline since 2010. It’s more the Hunger Games than the Wolf of Wall Street and some formerly well-fed denizens of Exchange Square and the Marina Bay Financial Centre are looking a tad mangy and underfed. Ho Kok Yong, Financial Services Industry Leader at Deloitte Southeast Asia, concurs that 2013 was indeed a bad year for the investment banking sector.
28 SINGAPORE BUSINESS REVIEW | MARCH 2014
Among the losers for 2013 were the Chinese investment banks with CITIC Securities and Bank of China falling out of the top 10.
“We see low investor confidence, less risk taking and funds flowing from cash or fixed income to equities. We also see equity and fixed income underwriting performing weakly with few landmark transactions announced in 2013,” he adds. However, he predicts mergers and acquisitions activities will improve in 2014. 2013 revenue rankings The natural order of the top 3 investment banks was maintained for the year, with the packleading UBS raking in $536m in fees from investment banking deals, followed by Credit Suisse and JPMorgan with $434m and $382m respectively, according to Dealogic. Keith Pogson, Financial Services Partner with Ernst & Young, attributes UBS’ favourable ranking to significant leveraged
finance deals. One such deal was the purchase of a sizeable stake in Ping An by a Thai billionaire from HSBC. Among the losers for 2013 were the Chinese investment banks with CITIC Securities and Bank of China falling out of the top 10. Ho explains that the Asian investment banking relies heavily on equity capital markets (ECM), making it especially vulnerable- not to mention it is far too focused on China. The ECM business, he adds, makes up about 75% of the capital markets business in Asia and China makes up 50% of that ECM business. “It is not especially healthy to have such a concentration on one country. State-owned enterprises and private enterprises form the IPO market and, since most start with 25% free floats, offer ample opportunity for secondaries when they need more capital. Widespread debt issuance, and M&A activity, tend to follow later, eventually shifting revenue composition. Equity business is attractive, but expensive to run,” says Ho.
FINANCIAL INSIGHT It was a dogfight for some banks to even remain in the top 10. Citi only brought in $305m in 2013, compared to $343m in 2013, causing it to drop from 5th spot to 8th. Deutsche Bank and HSBC both fell one spot from the 2012 rankings with revenues of $334m and $314m in 2013. Two investment banks clawed their way into the top ten. Jumping two spots and three spots to rank 9 and 10 was Bank of America Merrill Lynch and Standard Chartered Bank, respectively, with $217m and $219m in revenue. Equally upping their game last year was Morgan Stanley, springing three spots up to 6th with $331m in revenue. Leaping to the top 4 from 7th was Goldman Sachs with $363m in revenue. Pogson is not surprised that Standard Chartered worked its way up the rankings, being more geographically diverse and less China-focused. “It is the only house beefing up in the region,” he adds. Deloitte’s Ho notes that all these changes can be attributed to 2013 being a subdued year for deals such as M&A’s. Also, there were too many banks competing for fewer deals, pushing fees lower. He adds that banks aggressively expanded their Asia operations after the global financial crisis and hired for an expected increase in stock and bond underwriting and advice on M&A, which didn’t happen. “Based on public data available to Dealogic, certain banks look particularly reliant on ECM. In terms of revenue mix, some banks were less exposed to the equity business last year than some other firms,” adds Ho. M&A deals If there was a bright spot for the hard working bankers in Singapore and Hong Kong it was in Mergers & Acquisitions, which saw transaction volumes up 17% to $546.5b. Despite the political instability, Thailand was the most targeted nation in South East Asia for the first time with a record $18.2bn via 191 deals
in 2013, more than double the $7.2bn announced in 2012. The $6.6bn acquisition of Siam Makro by CP All was the largest Thai targeted deal in 2013. Another key deal in this market was The Bank of Tokyo Mitsubishi UFJ’s US$5.31bn acquisition of a 72% stake in Thailand’s Bank of Ayudhya which made it the largest acquisition in Asia by a Japanese bank to date. Tim Bednall, Managing Partner for Corporate M&A and Tax Australia at King & Wood Mallesons, a firm which ranked third for M&A deals in 2013 according to Thomson Reuters, says, “We saw a very strong flow of M&A transactions across the region in the last 6 months of 2013, especially in China where the firm achieved the #1 position in the M&A league tables. We expect that level of deal flow to continue for the first half of 2014.” M&A vs joint ventures According to Elaine Tan, Senior Analyst for Deals Intelligence at Thomson Reuters, corporate decision-makers are expecting a 17% increase in worldwide M&A during 2014, bolstered by increased confidence in the financial and real estate, media and telecom, and healthcare sectors. She adds that, according to the survey, 63% of respondents in Asia are looking to penetrate new markets in 2014. “Asia Pacific respondents also demonstrated a marked preference for exploring M&A as opposed to organic expansion or joint ventures,” Tan says. Manish Nigam, a research analyst with Credit Suisse, says one of the key reasons for this expected acceleration in M&A and corporate net buying is that the corporate sector has US$2.3tn of ‘firepower’ to return leverage to average levels in Europe and the US, and private equity has nearly US$1.1tn available to spend. Nigam notes that given the fragmented nature of competition in various markets in Asia and the challenging business environment,
Ho Kok Yong
one common area for M&A is that of larger companies buying out smaller companies. “At the sector level, banks and insurance are likely to remain an active area of consolidation and we expect the larger Internet companies to further expand their presence through acquisitions,” he adds. EY’s Pogson concurs and believes 2014 will be a good year for M&A. He adds that China will be a better source of revenue given the re-opening of the capital markets. ECM market The ECM market also paints a better picture with volume in Asia Pacific up 4% to $194.1bn via 2,037 deals in 2013. IPO volume was also up 20% to $47.2bn. PwC reports that the Hong Kong IPO market is poised to continue being in the top three of listing hubs for this year. Dealogic reported that 94% of IPO volume from Chinese issuers in 2013 listed in Hong Kong, the highest proportion on record. HK Electric Investments’ $3.1bn IPO leads the top global IPOs for 2014 YTD, the world’s largest IPO since Royal Mail’s $3.2bn listing in October 2013. But even that deal disappointed bankers, raising much less than the $6bn that had been bandied about, and was priced at the bottom end of the range. “The Hong Kong IPO market livened up in the second half of 2013, and especially in the fourth quarter. Market uncertainties were being eliminated gradually and this favoured IPO pricing. There were also adequate funds in the market,” says Benson Wong, PwC Hong Kong Assurance Partner.
Asia-Pacific IB Revenue - Full Year $bn
SINGAPORE BUSINESS REVIEW | MARCH 2014 29
ANALYSIS: PROPERTY AUCTIONS
Going, going, gone...
Auctions heat up amid cooling measures Dampened buyer interest paved the way for fewer but bigger auction sales.
s buyers balked after the Singapore government introduced another round of property cooling measures, owners turned to auctions to attract more buyer interest, especially in the latter half of the year, according to industry data and analyst year-end reports. Total auction sales value climbed 69.5% to $99.6 million in 2013 from $58.7 million in 2012, reports Jones Lang La Salle, despite only 21 of properties being sold in 2013, down from 26 in 2012. “The rise in total sales value is primarily due to a higher number of large deals closed in 2013,” says Mok Sze Sze, Head of Auction and Sales at Jones Lang LaSalle. In a separate report, Colliers International says total auction sales rose 46.7% to S$91.63 million in 2013 from S$62.44 million in 2012. Sales value increased despite a 20.8% decline in auction sale volume from 24 properties sold in 2012 to 19 sold in 2013. What can be gleaned from both reports is that 2013 saw a handful of large auction deals across the spectrum of industrial, residential and
30 SINGAPORE BUSINESS REVIEW | MARCH 2014
Total auction sales rose 46.7% to S$91.63 million in 2013 from S$62.44 million in 2012.
retail markets. The largest auction deal in 2013, for example, was for a JTC factory at 39 Benoi Road worth $25.6 million, sold in February by Jones Lang LaSalle. Three other high-value properties, defined as those worth more than S$5 million each, were sold in 2013. These were the Good Class Bungalow at 8 Chee Hoon Avenue, which sold for S$22.9 million, the four adjoining shophouses at 762/764/766/768 North Bridge Road, which sold for a combined S$15 million, and a three-storey shophouse at 38 Tras Street, which sold for S$6.6 million, according to a Colliers International summary. Altogether, these four high-value properties sold for $68.5 million, or roughly 68.8% of the total auction sales value for 2013 as recorded by Jones Lang LaSalle. Industrial and residential sectors The industrial and residential sectors contributed to the bulk of total auction sales. The industrial sector contributed $33.99 million or 37.1% of the
S$91.63 million total sale value as tallied by Colliers International. This is more than triple the S$10.12 million recorded for the sector in 2012. “The slightly higher total sale value garnered by the industrial sector this year was mainly due to the sale of a JTC factory at Benoi Road, which was sold for S$25.6 million. Although investors’ demand for industrial properties waned as a result of the Seller’s Stamp Duty (SSD), there was still healthy demand from end users for affordable strata-titled industrial units. Apart from the JTC factory at Benoi Road, the remaining 8 properties were strata-titled industrial units that were sold for less than S$2 million each,” said Grace Ng, Deputy Managing Director of Colliers International. Meanwhile, the residential sector contributed S$31.45 million or 34.3% of the 2013 total sale value. Only five residential properties were sold this year, generating a total sale value of S$31.45 million. “On the other hand, although the residential sector also saw a high-value sale of a Good Class
ANALYSIS: PROPERTY AUCTIONS Bungalow at Chee Hoon Avenue for S$22.9 million, there were only 4 other residential properties that were sold at under S$3 million each,” says Ng. “Furthermore, the high-end residential segment this year witnessed only tepid activity. There is a notable fall in demand from both foreigners and locals – following the imposition of ABSD and TDSR, amid a lull leasing market,” she added. The Singapore government, in an effort to dampen soaring residential property prices, rolled out higher Additional Buyer’s Stamp Duty rates in January 2013, which made it more expensive for foreigners, permanent residents and even citizens to acquire residential property. The government also implemented the Total Debt Servicing Ratio (TDSR) framework in June 2013, which further tightened the qualifications for granting property loans based on a borrower’s debt obligations. Retail sector The retail sector contributed the least among the three at S$26.2 million or 28.6% of the 2013 total sale value. Five retail properties were sold at auctions in 2013, most of them shophouses. “Investment-grade properties, such as conservation shophouses, remained popular due to their scarcity. A row of shophouses at North Bridge Road and another shophouse at Tras Street were sold for S$15 million and S$6.6
million, respectively,” says Ng. “Meanwhile, HDB shophouses, especially those offering yields of some five per cent, received healthy interest from investors amid a volatile stock market.” Rounding out the retail sector auction sales were two HDB shophouses at Bedok North and Toa Payoh, which sold for S$1.6 million and S$2.568 million, respectively, and a shop at High Street Centre along North Bridge Road, which sold for S$430,000. Auction houses Among auction houses, Jones Lang LaSalle led the field. For the first five months of 2013, Jones Lang LaSalle grabbed more than a third of auction sales with 37.2% market share at $32.96m. Savills came at second during the period with 25.9% market share at $22.9m. DTX, Colliers and Knight Frank came in at third, fourth and fifth, respectively. “In the last quarter of 2013, Jones Lang LaSalle led the Singapore auction market, accounting for three out of four successfully hammered properties during auction. Overall, our auction team concluded the highest auction sales in 2013, in terms of property value, amongst all the auction houses,” says Mok. Analysts had conflicting views on whether owners have been warming up or becoming colder to selling their
The retail sector contributed the least among the three at S$26.2 million or 28.6% of the 2013 total sale value.
property by auction. Some saw a notable increase in auction sales interest, while others saw relatively tepid action in the past six months. “Due to cooling measures and TDSR, we see an increase in instructions from owners to put up properties for auction as they believe that auction does give more exposure to their properties as compared to private treaty,” said Sharon Lee, Director & Head, Auction at Knight Frank in the firm’s quarterly bulletin for the third quarter of 2013. As more owners sought to sell their property via auction, Lee reveals that Knight Frank has been focusing on promoting via social media marketing, publishing advertisements in major newspapers, and sending out details to clients in their database and those that live in the vicinity of the auctioned property. Lee also observed that more sellers are now more willing to sell their properties at ‘reasonable’ prices. But for Mok, the second half of 2013 proved to be underwhelming in terms of auctions as she claims sellers do not want to settle for lower selling prices.“The credit tightening measures of the Total Debt Servicing Ratio (TDSR) and the Additional Buyers’ Stamp Duty (ABSD) deterred investors and were considered to be the major attributes of the rather quiet auction market in the second half of 2013,” says Mok. “Buyers have been very cautious at this point in time, when the property market is believed to have reached an inflection point. On the other hand, most of the sellers do not seem willing to lower their price expectations. Both sides are still waiting for market clarity,” she adds.
Sectoral contributions to total auction sales in ‘13
TDSR and ABSD deterred investors
Source: Colliers International Singapore Research
SINGAPORE BUSINESS REVIEW | MARCH 2014 31
singapore’s hottest startups 2014
Singapore’s 20 hottest startups to watch in 2014
Here’s a look at the city’s biggest up-and-comers offering products and services ranging from an online marketplace to 3D printing technology to a cancer cell detection system.
ingapore Business Review sifted through over a hundred nominations submitted by founders, investors and industry observers in the search for startups worth watching over the next 12 months. The list of 20 hottest startups in Singapore is now on its third year and the selection process has become even more extensive. The companies selected started operating from 2010 and were able to make their business flourish from initial funding that ranges from $47,500 to $9M. Some were spin-off companies from top local universities while a few were co-founded by expatriates. Startups which made it to the list were arranged based on total funding generated to date. Find out how each is shaking up its sector’s norms with new innovations. 1. ClearbridgeBioMedics Founders: Johnson Chen, Chong CheeWah, Tan Swee Jin, Lim ChweeTeck Funding: Undisclosed for Series A, S$9M for Series B; Clearbridge Accelerator, Vertex Venture Holdings, SPRING Seeds Capital, Clearbridge BSA, BioVeda Capital
Start of operation: 2010 ClearbridgeBioMedics is a spin-off company from the National University of Singapore. The company’s proprietary ClearCell System is billed as one of the first non-biomarker based systems that is commercially available to effectively detect, isolate and retrieve circulating cancer cells from patients, blood. 2. DocDoc Founders: Dawn Soo, Grace Park, Cole Sirucek, Max-F. Scheichenost, Daniel Endres Funding: S$6M; Koh Boon Hwee, Jungle Ventures, 500 Startups Start of Operation: August 2012 DocDoc is an online medical appointment-booking and health-related information portal in PanAsia. It recently merged with another medical appointment booking portal, DoctorPage. It boasts more than 29,000 doctor profiles listed on the portal with about 2,500 providing real-time appointments.
singapore’s hottest startups 2014 6. PayrollHero
3. RedMart Founders: Roger Egan, Vikram Rupani, Rajesh Lingappa Funding: S$5.83M (US$ 4.6M); Garena, Toivo Annus, Golden Gate Ventures, Boon Ling Yee , Steve Melhuish and Jani Rautiainen, Jason Ackerman Start of operation: October 2011 RedMart is a tech firm focused on grocery retail. According to the founders, the company has grown 20-30% month-over-month since launching in Oct 2011. It has reached 400% annual growth. RedMart recently launched an iPhone app and within just 2 months of launch, 24% of their orders came from the app. It has also launched an Android app. “We expect that over 50% of our orders will come from mobile in the next 6 months,” say the founders. RedMart now has 100 people. 4. ApexPeak Founders: Gakim Solomons, John Fearon, Nicholas Gan funding: S$2.4M; Angels, Gilcrux Holdings Start of operation: February 2012 ApexPeak is in the business of invoice-discounting and helping small and mid-sized businesses turn invoices into cash in as little as 3 days. “Unlike traditional financing options, ApexPeak allows SMBs in developing countries gain fast and affordable access to working capital in order to grow their businesses,” say the founders. Within 5 months of operations, ApexPeak has already broken even and is looking at posting a sizable profit by the end of the year. “By going through a quick but thorough online automated vetting process before being approved by authorized officers, the current default rate is 0%,” they adds. The founders are currently focusing on the massive markets of SouthEast Asia and Africa. They plan to take the company public shortly. 5. Pirate3D Founders: Roger Chang, Brendan Goh, Tsang You Jun, Neo Kok Beng Funding: S$2.3M (US$482K from Red Dot Ventures + US$1. 438M from Kickstarter) Start of operation: August 2012 Pirate3D aims to bring 3D printing technology into our homes. “By focusing on making the user experience better and devices more affordable, we believe that everyone can tap into the worldchanging potential of 3D printing,” say founders. Pirate3D launched a Kickstarter campaign in June 2013, featuring their flagship consumer 3D printer, The Buccaneer.
Founders: Michael Stephenson, Stephen Jagger Funding S$1.75M (CAD1.5M); 500Startups, LX Ventures, 8capita, Benjamin Joffe, Dan Martell, Ryan Holmes Start of operation: 2011 PayrollHero optimizes work productivity by developing consumer-friendly Time, Attendance, Scheduling and Payroll in the cloud for web and mobile. “ Our facial recognition platform is loved by employees and our platform makes it easy for payroll, HR, managers, owners and employees to manage their specific roles better,” say the founders. Amongst its clients are The Coffee Bean and Tea Leaf, and Krispy Kreme. 7. ConnectedHealth Founders: Mike Holt and Hari Ramachandran Funding: S$1.1M (equity), S$300K grants; Koh Boon Hwee, Get2Volume, National Research Foundation Start of operation: March 2010 ConnectedHealth is a wireless health innovator committed to developing health monitoring connectivity solutions that drive down healthcare costs by improving patient compliance. ConnectedHealth’s eHealth Platform product is billed as the first to provide an end-to-end connected solution for remote health management. ConnectedHealth’s eHealth Platform is deployed into two large US health care groups and has demonstrated a per patient annual savings of $33,000, say the founders. 8. Waygo Translator Founders: Ryan Rogowski, Kevin Clark, Huan-Yu Wu Funding: S$1.14M (US$900K); 500 Startups, Goldengate Ventures, AngelVest, Gengo, Niket Desai, and Maneesh Arora Start of operation: June 2011 Waygo is a language translating app which utilizes a combination of both Optical Character Recognition and a translation piece. Waygo currently translates Chinese characters into English text by seeing images, finding the relevant text, and finally creating sensible phrases. Waygo does not require an internet connection to operate. 9. Flocations Founders: Tudor Coman, Florian Cornu, Shaw Chian, Venkatraman Dhamodaran
singapore’s hottest startups 2014 Funding: S$720K; Singtel Innov8, TNF Ventures Start of operation: February 2012 Flocations bills itself as the Only Search Engine for travel packages from offline and online travel agencies in Singapore. It started as a StartupUp Weekend project and the founders turned down a US$250,000 from Singapore TV reality show Angel’s Gate before going to startup accelerator JFDI. 10. HipVan Founders: Danny Tan, Deborah Wee, Shobhit Datta, Kevin Vo Funding: S$500K; Silicon Straits, Toivo Annus , Jade Seah, private investors. Start of operation: 1 April 2013 HipVan is an online store for great designs in home & furniture products, fashion & accessories, art & collectibles and much more! HipVan members sign-up to receive great designs in their inbox 7 days a week, at up to 70% below retail prices. 11. Foxysales Founders: Alexia Sichere, Maelle Ternot Funding: S$450K; Business Angel, venture capitals, equity Start of operation: January 2011 FoxySales is an online shop that offers discounted European products to its members. The website has a rapidly growing membership, currently with 35,000 members, and works with 180 exclusive brands including Kenzo Kids, Swatch and Pediped. Their aim is to provide each of their customers with deals that beat all the competition. Sale items are available exclusively to its members, who sign up for free. The flash sales last for 5 to 7 days. Foxysales bills itself as the first private flash sales website 100% dedicated to moms, babies & kids based in Singapore and is planning to grow throughout the SEA region. 12. glomp! Founder: Zachary Lai Funding: S$291K (USD230K); Sparx Ventures and Private Angel investors Start of Operation: November 2013 glomp! bills itself as a revolutionary digital platform that extends digital connectivity to a more enriching level by enabling friends and contacts to treat each other in a
manner that is fun, convenient and personalised. “The casual, frequent act of treating is common in relationships as a gesture of appreciation or thanks, but catching up in person has increasingly become a challenge in our fast-paced society where meeting may be difficult. By bringing the giving and receiving of real, casual products to bridge the existing digital connectivity gap, glomp! takes people beyond the current tools of texting, emailing, sharing information or ‘Like’-ing, to a more gratifying level. Featuring enjoyable, quality products ranging from a coffee, smoothie or beer to an ice-cream as examples to select from,” says founder Zachary Lai. 13. Travelshopa Founder: Renée Lodens Funding: S$ 250K; private equity Start of operation: October 2013 Travelshopa claims to be the first online community dedicated to local designers and retailers. According to founder Renée Lodens, the business has two distinct points of difference to other ‘shopping directories’ available on the market. Firstly, Travelshopa is deeply focused on the local shopping scene. Secondly, the search-based site is a marketing platform where local designers and retailers can promote themselves as well as receive marketing support; be they bricks and mortar, online, and by appointment only stores as well as pop-up shops and local shopping events. It plans to reach as many as 10 key destinations in Asia Pacific within the coming 24 months. 14. EatAds Founders: Dhruv Sahgal, Nigel Hembrow Funding: Less than S$250K; Crystal Horse Investments, Gilcrux Holdings, Private Angels from India & Singapore Start of operation: March 2011 EatAds is an online marketplace for Outdoor and OOH media. According to founders, EatAds is tackling some of the major challenges which faces the growing, $33billion outdoor advertising industry. Smart platforms and data analytics are what EatAds brings to the table to help disrupt the oldest form of advertising. “We are bringing transparency, efficiency, as well as ROI metrics to an industry which doesn’t employ the power of tech to operate at the level of sophistication it should be,” they say. 15. Kluje Founder: Jamey Merkel Funding: S$250K; Crystal Horse Investments, Gilcrux Holdings Start of operation: November 2013 Kluje offers a multi-sided platform which connects homeowners with qualified and peer reviewed con-
singapore’s hottest startups 2014 tractors. “Our platform will enable homeowners to hire contractors with larger degree of certainty, with the power of online ratings and a built history with the platform,” says Jamey Merkel. In just two months of operation, Kluje reports of over S$500,000 worth jobs posted on their website and more than 400 accounts created. 16. Vault Dragon Founders: Vishesh Mittal, Tseng Ching-Tse Funding: S$115K; JDFI Asia START OF OPERATION: August 2013 Vault Dragon is the “Dropbox” for physical items. It is an integrated urban storage company that claims to provide affordable, secure and on-demand storage solutions with flexible terms. “We help people to get more living space, delcuttering their lives by allowing them to deposit, index, search and retrieve their belongings through our intuitive web and mobile applications at just 45 cents a day.” 17. FlagAHero Founders: Ken Toh & Yumi Wong Funding: Less than S$200K; Private Angels, ACE Grant Start of operation: April 2012 FlagAHero bills itself as one of the first marketplaces in the region built and designed specifically for people in the profession of selling events. “People can now have a great platform to discover interesting local services such as magicians, pet groomers, photographers, makeup artists and all kinds of niche skill providers in the community,” say the founders. 18. Viddsee Founders: Ho Jia Jian, Derek Tan Funding: S$50K; Spring ACE grant Start of operation: January 2013 Viddsee is an online video platform for audiences to easily discover, watch and share short films from Asia on their desktop and mobile devices. Viddsee has since partnered with various film festivals from countries like Singapore, Malaysia and Japan within 12 months of launch. “We started this company when we were deciding on pushing our own short films up online and were finding a targeted platform to do so. Having our background in the Pay TV business also did help kickstart the company. We approached our alma mater and obtained our funds through their incubator. We are currently also looking for our next round of investment,” say the founders. the company started with launching a social web platform around short films from Southeast Asia through support from Spring ACE
19. Collegify Founders:Rohan Pasari, Stanley Chia Dingli Funding: above S$50,000 + operational profits ; Private Angel Investors (Eric Tachibana, Alvin Low) Start of Operation: January 2012 Striving to find the best fit colleges for applicants and helping them achieve their goals of entering into their dream universities around the world, Collegify has helped students get accepted to Wharton, Columbia, Yale, Oxford and Carnegie Mellon, among others for undergrad and MBA studies. “In 2013, we achieved 500% annual growth and started our test prep (SAT/GMAT) arm under the brand name of Sitfor. In December 2013, we launched the first phase of our online platform that will transform how students prepare for their SAT tests,” said founders. 20. SnappyFit Founder: Ong Sin Ning Funding: S$47,500, Spring Singapore, YES! Start of operation: 15 October 2012 SnappyFit is a one-stop fitting room for women, complete with alteration outsourcing services. It bills itself as the pioneer of the first-of-its-kind concept for a try-before-you-buy one-stop fitting room service in Singapore and in the world.“We help to solve a need for women who are online-savvy, increasingly time-poor, yet do not wish to purchase fashion items online as they need to try them on first,” said Ong Sin Ning. SnappyFit also serves ‘non-standard’ body types - women who are slim but have curvier hips, smaller bust, curvier bust, are taller than average etc., and plus-size women.
SPECIAL FEATURE: EXECUTIVE EDUCATION
SIM Campus Development Master Plan (Artist Impression)
Shaping minds that shape world businesses
Find out why SIM Global Education, Aalto Executive Education Academy, and MDIS stand out in the executive education industry
he Singapore Institute of Management (SIM Group) has been the key provider of executive education since Singapore’s early days. Founded by the Singapore Economic Development Board in 1964, the Singapore Institute of Management’s mission is to spearhead management education and training. In the 1970s, SIM introduced a part-time management diploma to provide executive education. Since then, they have continuously kept pace with changing needs by introducing education programmes in order to provide working professionals with industryrelevant knowledge and skills that enable them to function effectively in the workplace. Postgraduate programmes at SIM Global Education In recent years, there has been a demand from those who wish to further their knowledge with a masters degree after their undergraduate studies. SIM Global Education (SIM GE) work with their university partners to introduce Master degrees that can be completed in one year on a full-time basis. “We focus on not just academic excellence for our students but also learning and networking opportunities 36 SINGAPORE BUSINESS REVIEW | MARCH 2014
beyond the classroom,” says Mrs Ho Soon Eng, Director for Higher Education and Student Life at SIM GE. “Over the years, we have partnered with numerous overseas universities, such as the University of Birmingham, the University at Buffalo, the University of Warwick and the University of London, to offer postgraduate programmes to working professionals,” she adds. These programmes enable professionals to gain an overseas degree without having to leave their jobs in Singapore. “For instance, the University of Warwick’s Master programme is a collaboration with the Singapore Institute of Manufacturing Technology (SIMTech). Modules are assessed by assignments designed to apply the learning from the module to the participant’s industrial context,” cites Ho. To give their students the best possible opportunities, SIM GE’s comprehensive and well-rounded education has practiceoriented curricula and pedagogies. SIM GE has also opened doors for their student graduates to higher education. “Some of our graduates have gone on to pursue higher education at world-renowned
Ho Soon Eng, Director for Higher Education and Student Life, SIM GE institutes like Cambridge, Oxford and Booth School of Business at University of Chicago,” shares Ho. Executive learning in Aalto EE Education is an investment, more so if you hope to advance to executive positions. With a top-rated quality and global approach, Aalto Executive Education Academy (Aalto EE) offers high-quality executive development services including Executive MBA, drawing on the many strengths of their extensive international network and the competencies of Aalto University, Finland. It has all three of the most sought after accreditations: AACSB, AMBA & EQUIS that are granted to only 0.4% of the world’s business schools. “We strongly believe in life-long learning and in the importance of educating a new generation of leaders. We want to provide a safe context to test, experiment, fail and learn,” shares Aalto EE Asia Pacific’s Executive Director, Mrs Kati Illikainen. “The Aalto EE learning experience is about joy of learning and discovering your full potential. We combine latest business knowledge and theories with business experience in multidisciplinary and novel ways,” she adds. Finland is recognized as having one of the best education systems in the world. Aalto EE is ranked within the top
“Education is an investment, more so if you hope to advance to executive positions.”
SPECIAL FEATURE: EXECUTIVE EDUCATION
“The Aalto EE learning experience is about joy of learning and discovering your full potential.” with great general management knowledge and capabilities to lead their organizations and excellent leadership skills and self-knowledge to move them and their organizations forward in the corporate arena.
Kati Illikainen, Executive Director, Aalto EE Asia Pacific 1% of executive education providers in the world and placed 41st globally in the Financial Times Executive Education rankings. The multidisciplinary approach and international presence of the Aalto University are its indisputable assets, as is the above-average share of female professors. In addition to Finland and Singapore, Aalto EE offers education programs in South Korea, China, Taiwan, Indonesia, Poland, Sweden, and Russia. “The relevance of our program content and immediate application of new knowledge to the workplace will benefit the companies. Aalto EMBA participants are seasoned executives that want to develop themselves and their companies further in the long run instead of the short term wins.” Aalto’s EMBA graduates are equipped
Graduate degree studies at MDIS A graduate degree should be earned in the right institution with the right educational tools for it to be worth the investment. The Management Development Institute of Singapore (MDIS) offers globally accredited postgraduate programmes with well-recognised universities such as the Grenoble Graduate School of Business from France, University of South Wales, University of Bradford and University of Sunderland from the United Kingdom as well as Southern Cross University from Australia. As the oldest not-for-profit educational institution in Singapore, they carry a long and established track record of more than five decades. Two of these universities: the Bradford University School of Management and Grenoble Graduate School of Business, are ranked among the top 50 universities in the European Business School Rankings 2013 by Financial Times. Their business programmes are recognised worldwide and awarded the prestigious “Triple Crown” - accredited by AACSB (Association to Advance Collegiate School of Business), EQUIS (European Quality Improvement System) and AMBA (Association of MBAs).
“MDIS gives all its students, regardless of nationality, social background or religion, a holistic education.”
These are the largest and most influential business school accreditation associations. “Our mission was and still is to train and educate people to meet the needs of industry. We have successfully achieved this not just for Singapore but also globally,” shares Dr R Theyvendran, PBM, MDIS’ Secretary-General. “We also focus on soft skills and the nurturing of social and moral values so that our graduates become well-balanced individuals who can take on leadership roles and make meaningful contributions to society,” he adds. To enhance their postgraduate courses, the School of Postgraduate Studies (SPS) would cater to the rising aspirations of Professionals, Managers, Executives and Businessmen (PMEBs). SPS is equipped with state-of-the-art facilities and dedicated staff needed to give postgraduate students the best learning experience. “Today, MDIS has students from more than 76 countries – many of whom are mature, mid-career individuals hailing from different backgrounds, and have come here to pursue lifelong education – so that they can continue to arm themselves with the right skills and knowledge to make the next leap in their careers,” notes Dr R Theyvendran. “Our graduates are industry-ready with globally-recognised qualifications which will bring value to the organisations they serve. They have a global perspective and are environmentally-responsible and balanced individuals who are passionate about their professional development and at the same time, committed to contributing back to the community,” says Dr R Theyvendran.
Dr R Theyvendran, PBM, Secretary-General, MDIS SINGAPORE BUSINESS REVIEW | MARCH 2014 37
Singapore’s 25 largest LAW firms
Singapore’s largest law firms employed 3% more in 2013 Local law firms continue to lead the pack with only eight foreign firms making it to the list.
ocal law firms have once again dominated Singapore Business Review’s second year ranking of the 25 largest law firms in the city based on the number of legal professionals. Only 8 foreign firms made it to the list with Baker & Mckenzie. Wong & Leow taking the lead. The firm, ranked 7th overall, reported 10% employment growth to 97 in 2013. The 2012 list was re-ranked to reflect only the number of employees that are based in Singapore and lawyers by profession in the final count. Paralegals, trainees and other non-fee income earners were excluded from the counting. The top five For the second year in a row, Allen & Gledhill topped the overall list with 352 legal professionals. A 38 SINGAPORE BUSINESS REVIEW | MARCH 2014
For the second year in a row, Allen & Gledhill topped the overall list with 352 legal professionals.
European research institute has ranked Allen & Gledhill as one of Singapore’s top five most popular graduate employers in 2013. It is closely followed by Rajah & Tann with 335 legal professionals. The number is 6% lower than the previous year. According to Rajah & Tann’s managing partner Lee Eng Beng, the company expanded its regional footprint significantly over the last years with offices or associated offices in 9 countries, principally in South East Asia. “2013 was a particularly exciting year. We integrated with two local and well-established law firms in Cambodia and Myanmar (R&T Sok & Heng Law Offices and Rajah & Tann NK Legal respectively). We also signed a strategic tie-up with Assegaf Hamzah & Partners, Indonesia’s fourth largest law firm, to give our clients access
to quality legal services in the largest economy in Southeast Asia. Assegaf Hamzah, with 60 fee earners, is ranked one of the leading go-to firms for corporate law in Indonesia,” he says. WongPartnership remained in 3rd place with 280 legal professionals, 4% up from last year. In 2013, WongPartnership moved its office to Marina Bay Financial Centre Tower 3. Amongst its significant activities includes the alliance it formed with Malaysian firm Foong & Partners. Drew & Napier displaced Rodyk & Davidson in 4th place after its number grew by 19% to 224. Amongst its biggest addition to its people is ex-Deputy Prime Minister of Singapore Professor S. Jayakumar as a Consultant on 1 May 2013. Rodyk & Davidson, now at 5th place, has grown its number by 2% to 210. Together, the top 25 law firms employed 2,586 legal professionals in Singapore; 3% higher than in 2012. The average number of legal professionals in the top 25 firms was 103. Employment growth Local firm Stamford Law Corp posted the biggest jump in employment growth at 44% to 98. It climbed five notches up to 6th place as a result. In 2013, Stamford Law welcomed a former Drew & Napier senior lawyer, Adrian Tan. Stamford is closely followed by another local firm TSMP Law Corp at 34% to 67. In 2013, the firm expanded its services by establishing a Regulatory, Compliance and Crisis Management Desk headed by Collin Seah. RHTLaw Taylor Wessing is third highest in employment growth at 27% to 84. The firm, ranked 8th, formed RHT Compliance Solutions in August 2013. It is billed as the first and only integrated outfit providing legal and financial services regulatory compliance solutions for financial institutions in Singapore and Malaysia.
Singaporeâ€™s 25 largest LAW firms
The 25 largest law firms in Singapore Company Name
2013 LEGAL PROFESSIONALS
2012 LEGAL PROFESSIONALS
Managing Partner/ SG HEAD
Allen & Gledhill
Rajah & Tann
Lee Eng Beng, SC
Rachel Eng, Ng Wai King
Drew & Napier
Davinder Singh, SC
Rodyk & Davidson
Philip Jeyaretnam, SC
Stamford Law Corporation
Baker & Mckenzie. Wong & Leow
RHTLaw Taylor Wessing
Tan Chong Huat
Shook Lin & Bok
Sarjit Singh Gill, SC
Deborah Barker, SC
TSMP Law Corporation
Stefanie Yuen Thio, Thio Shen Yi, SC
Norton Rose Fulbright
Allen & Overy
Colin Ng & Partner
Tan Min-Li, Lisa Theng
Harry Elias Partnership
Herbert Smith Freehills
White & Case
Kelvin Chia Partnership
Tan Kok Quan Partnership
Kannan Ramesh, SC
ATMD Bird & Bird
Latham & Watkins
Lee & Lee
Kwa Kim Li
Tan Peng Chin
Wong Liang Kok, Lim Jo See
*The list is based on the information provided by the companies or as shown on their websites. SINGAPORE BUSINESS REVIEW | MARCH 2014 39
Do Not Call Registry to hit telemarketers Latest policy on personal data protection tightened consumers’ reign on their phones.
e’ve all had an annoying call from a telemarketer that happens to have our mobile phone number and calls us at 10PM at dinner. That was supposed to change with the implementation of the Do Not Call (DNC) Registry which took effect from this year but already there are signs that implementation is difficult and enforcement, patchy. The implementation of Singapore’s Do Not Call (DNC) Registry started a tapered business environment for industries banking on telemarketing for more patrons and higher revenues. The DNC Registry is in line with the first phase of implementation of Singapore Personal Data Protection Act of 2012 which comprises rules governing the collection, use, disclosure and care of personal data. The move is in response to the growing concern over the easier access to personal data made possible by increasingly sophisticated technology. What is the DNC Registry? Lim Chong Kin of Drew and Napier explain that the DNC Regulations, which took effect on 2 January, 2014, provides for the keeping and maintenance of the No Fax Message Register, the No Text Message Register and the No Voice Call Register by the Personal Data Protection Commission (PDPC).
The obligation to check the DNC Registry will have an administrative and economic impact on any industry... Small businesses and sole traders will be especially hard hit. After instituting a DNC Register, individuals with Singapore telephone numbers may apply to add or remove their Singapore telephone number from a DNC register as well as to confirm whether any Singapore telephone number is listed in a DNC register. “Persons intending to send specified messages may also apply to the PDPC via the specified website to set up an account to enable them to check whether the Singapore telephone numbers to which they are intending to send specified messages are listed on the relevant DNC Registers,” Kin says. He notes that the there is a registration fee of S$30 for each account (or sub-account) that is created. “Further, a processing fee of S$30 will be payable where the person is required to submit a document verifying the person’s identity as part of the registration process,” he adds. The new policy also requires telecommunication service providers to report all terminated Singapore 40 SINGAPORE BUSINESS REVIEW | MARCH 2014
telephone numbers to the PDPC.
Lim Chong Kin
How are DNC Registers administrated? According to Kin, a subscriber to a Singapore telephone number can add to, remove from, or confirm the listing in any DNC Register of, his number by making a call, sending an SMS or submitting an online application. The relevant numbers are posted at a PDPC-specified website. “A subscriber making a subscriber registration application or a subscriber confirmation application must not conceal/withhold, or cause to be concealed/ withheld, his calling line identity,” he stresses. Kin emphasizes that the registration application must be made by the subscriber himself or by someone he/she authorized. If the subscriber is an organization, the application must be made by any individual authorized by the organization to make the application on its behalf. “Where the PDPC is satisfied that a subscriber registration application is not made in accordance with the DNC Regulations, it may remove or reinstate that number from or to the DNC Register,” he says. The PDPC may also remove a terminated number from the DNC register or correct any entry in a DNC Register that is due to an error, default or omission by the commission. How does it impact various industries? Elaine Lew of Rodyk and Davidson says anyone wishing to send a specified message to any Singapore telephone number must first check with the relevant DNC register(s) and confirm that the number is not listed on the register(s). She said no one will be allowed to send specified messages to Singapore telephone numbers that are registered with the DNC register(s) without first obtaining prior consent from the user/subscriber of that number. “Sending specified messages to numbers listed on the DNC register(s) without consent is an offence,” she notes. In light of the new policy that requires to check the DNC Register before contacting consumers with Singapore telephone numbers, Gupinder Assi of Bryan Cave expressed concern for industries using telemarketing as a business strategy. “The obligation to check the DNC Registry will have an administrative and economic impact for any industries involved in telemarketing, including financial institutions (such as banks and insurance companies), real estate agents and recruitment consultants. Small businesses and sole traders will be especially hard hit,” he stresses. Apart from being restricted from instantly calling Singapore telephone numbers, Assi emphasized that organizations will need to create an account and acquire credits in order to access the DNC Registry.
co-published Corporate profile
Harry Elias Partnership leads the legal landscape for 25 years and counting
Find out how the firm’s heritage and reputation continue to propel it forward.
ingapore has a multitude of law firms that offer a spectrum of legal services for a client’s legal needs. However, the best law firms look at the client’s issues in totality and use that as a compass in order to provide the most appropriate legal solutions. Since 1988, Harry Elias Partnership has been able to establish itself as one of the most well-reputed litigation firms. This continues on today as they maintain their stellar track record as one of the country’s best in Dispute Resolution. “The firm mainly started as a litigation firm but as the firm grew, our suite of legal services expanded to include Corporate & Commercial, Real Estate and Banking and not forgetting Matrimonial and Family Law. We’re also involved in mergers and acquisition, IPOs, and regulatory work among others,” shares Philip Fong, Harry Elias Partnership’s Managing Partner. Landmark cases Over the past year, the firm has worked with some of the world’s most
sophisticated businesses on marketleading transactions that have impacted several industries. “Our top cases would be law making cases such as the Raffles Town Club case, Digilandmall.com case, and the Horizon Towers case,” notes Fong. These landmark cases paved way for statutory changes in Singapore. But like most companies, the firm had humble beginnings. Mr Harry Elias, the firm’s Senior Counsel, Founder, and Consultant takes pride in how the firm has developed from a relatively small firm into a multi- expertise legal institution. “The firm’s growth from a 3-man litigation law firm to a well-reputed multi-disciplinary law firm and its ability to continuously attract and retain highly talented lawyers from both the public and private sectors fill me with a quiet sense of pride and satisfaction. Today,
“They were able to successfully enhance and protect real business value.”
Ms. Foo Siew Fong, Mr. Harry Elias, Mr. Philip Fong and Mr. Tan Chau Yee
the HEP brand name is unquestioned,” he says. Fong notes that they are the go-to lawyers for construction, engineering & infrastructure projects. Their involvement in high-profile real estate matters including several Singapore landmarks continue to be the solid proof of their excellence as a firm. Talent Currently, the firm employs around 60 lawyers and close to 150 staff. “Although we are not a big firm, we have the weight even though we don’t have the numbers. We are proud of that,” says Fong. The firm has also won accolades for being “ALB’s Employer of the year” for two years running. As a trusted business partner of a number of organizations in Singapore, they have built a solid reputation for delivering solid legal solutions to their clientele. “We’re a practice of firsts, our reputation is not derived from the “firsts” but from what lies behind those firsts. Our core values of Integrity, Cohesion, Accountability, Respect and Excellence (I CARE) differentiate our firm from others. These put us in the best position to meet our clients’ needs in the divergent legal landscape of the region,” shares Fong. With an extensive industry insight and hands-on approach, they were able to provide clients with pragmatic advice as well as effective and valuable solutions to simple and complex business matters. “Above all else, our clients enjoy the personal attention of our vibrant partners, who work with passion and intensity,” says Fong. The firm, having built up a history and reputation in Singapore, then decided to venture into untapped markets in the region, the first being Brunei. Harry Elias Partnership LLP is the first Singapore law firm to have a physical presence in Brunei by way of a collaboration under the entity “HEP Law Office”. The firm has gained a substantial foothold in Brunei related work and has seen a steady stream of work since its official launch in November last year. SINGAPORE BUSINESS REVIEW | MARCH 2014 41
CMO Briefing investment in the development of ecologically sustainable solutions. “A winning marketing strategy will be to build thought leadership and create awareness in the market about the company’s deep commitment to the cause,” he says.
Here’s how to go green in marketing
CMOs talk about their best practices and share insights on how companies can win by going green.
usinesses in developed economies are starting to embrace environmentally friendly practices in the workplace, making the shift from mindless to mindful consumption. Marketing departments of companies are keen to jump on the green bandwagon, adopting policies that reduce waste and use energy more efficiently. Green IT marketing focuses on two main concerns of the market: how to reduce e-waste and how to improve efficiency, says K.P. Unnikrishnan, Asia Pacific Regional Marketing Director for Palo Alto Networks. The green IT movement has gained momentum in the last 20 to 30 years, and Unnikrishnan believes it is here to stay due to strong market forces that work in its favour. “Whether it’s for the purpose of compliance, a better brand image, demand from the market or pure cost benefits, green IT is only set to grow,” he says. Embracing sustainability Unnikrishnan points out what he regards as a major positive change in how companies adopted environmental sustainability in their practices over the years- earlier efforts were largely seen as more compliance driven, but now companies are more proactive in going green. In turn, this presents a challenge to a company’s marketing team- ensuring that consumers are made aware of the company’s marketing initiatives. “Take a step further to show your brand’s commitment through participation in trade events or social activities that provide a platform to discuss and share ideas on sustainability. These are great forums to enhance your brand presence,” he says. Unnikrishnan believes that a company’s effort to go green should be backed up by long-term
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Whether it’s for the purpose of compliance, a better brand image, demand from the market or pure cost benefits, green IT is only set to grow.
Go paperless, lead the pack Alicia Seah, Marketing Communications Director at Dynasty Travel International, takes pride in her company’s decision to go paperless by launching an iPad Mini system in the first quarter of 2014, doing away with the traditional paper-and-pen tour agency norm when making their sales pitch and processing their bookings. Singapore-based Dynasty Travel International claims to be the first travel agency to launch a travel app two years ago, where customers can browse travel package details, flight and country details and redeem their after travel reward points on iDynasty. Customers can also make payments via AXS machines near them instead of visiting the company’s headquarters. “Using technology to provide customers with greater ease and convenience is how Dynasty Travel stays ahead of its competitors,” she says. The company recently won an Enterprise 50 Award, which recognises local, privately held companies that have contributed to economic development in Singapore and abroad. Consumers support going green As companies make proactive efforts to adopt ecofriendly and energy-efficient practices, consumers themselves develop a sense of preference for products and services that are environmentally friendly. “There is a growing interest among consumers in being part of and supporting a community and in knowing where their products are coming from,” says Maneesh Sah, Southeast Asia Marketing Director at Towers Watson. Unnikrishnan agrees, saying that IT buyers today want to reduce their carbon footprint and adopt technology that help them not only enhance their brand image as environmentally friendly but also reduce their energy bill. This, in turn, brings down operating costs. “Consumers want to see measurable gains in their sustainability efforts and a company’s marketing initiatives must focus on building competitive advantage by quantifying the benefits of using its products. In other words, show the ROI,” Unnikrishnan adds. The words ‘sustainable, ‘socially responsible’ and ‘ethical’ have already become buzzwords in marketing, but Sha believes companies should do beyond lip service by finding innovative ways to sell green by focusing on core attributes of sustainability, such as the ability to track the product back to a place and producer of origin and supporting artisans and bringing their stories to life in a creative way, making their products appealing and relevant to their customers.
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CIO Briefing Fostering a culture of innovation requires CIOs to constantly engage employees.
Secrets to sustainable innovation revealed
CIOs share their top techniques to keep the innovation ball rolling.
ompanies now consider innovation a key ingredient to beating the competition, with Chief Information Officers (CIOs) trailblazing the way to improvements that unlock value for their firms. But a haphazard or halfhearted approach to innovation will no longer cut it, say CIOs. Those who take this approach run the risk of sparking innovation, then losing grasp of it down the line, leaving the firm with little to show for their substantial innovation-focused investments. Setting an innovation agenda To ensure that innovation is churned out effectively and consistently, CIOs must set an innovation agenda that is aligned with business strategy and with priorities, says Ofir Shalev, CIO Employee Health & Benefits APAC, Mercer. Shalev says CIOs can set the tone by spearheading process innovation techniques such as lean methods, process standardization and predictive analytics, and the rest of the staff should follow. Formulating the innovation agenda requires CIOs to take an extensive sweep of external factors in the industry, says Scott Cassin, Chief Technology Officer Enterprise Services, Asia Pacific and Japan, HP. They must also leverage key innovation assets from their technology and service partners, as well as secure strong backing from top executives. “The innovation agenda in the organization should be both economical and purposeful, clearly aligned to business goals, delivering measurable business value and setting clear expectations. Key to success is belief and support from the senior 44 SINGAPORE BUSINESS REVIEW | MARCH 2014
CIOs must set an innovation agenda that is aligned with business strategy and with priorities.
management and a culture that provides purpose and freedom for employees to be innovative,” said Cassin. CIOs in particular should consider a shift to cloud computing as part of their innovation agenda, said Claus Mortensen, AP Analyst at IDC. This is because when companies offload and outsource the burden of their information technology (IT) maintenance through cloud computing, organizations can devote more manpower and resources to innovation. Mortensen acknowledges though that not all companies can easily transition to cloud computing. But it could be worth the trouble, as the CIO becomes more empowered to drive innovation instead of just managing it. Creating a sustainable innovation process Once the innovation agenda has been laid down, it now falls to CIOs to create a sustainable innovation process to ensure that goals are continually identified, evaluated for feasibility and achieved. Some CIOs even go as far as suggesting that a sustainable innovation culture be put in place for companies to reap the full benefits of their innovation agenda. Companies who adopt a culture of innovation shift their thinking, from ‘this is what we do’ to “this how we do things,” says Cassin. “Innovation is more than a process, it is a ‘state of mind’ and to create sustainable innovation for any organization.” But this is easier said than done, and requires strong business alignment. “For innovation to be sustainable, it cannot be just a one-off effort but rather a disciplined, continuous process supported by senior management and involving the different stakeholders from business, operations and IT,” says Shalev. “Anyone can innovate, but there should be a systematic framework to identify and collect the opportunities, analyze and prioritize them, develop a concept and optionally prototype it. It is important to track the post-implementation phase to make sure the benefits are realized as planned.” Fostering a culture of innovation requires CIOs to constantly engage employees, whether through innovation jams, hackathons or big idea challenges, according to Mortensen. Such an open and encouraging environment generates ideas, and there must be a mechanism that fast-tracks the best ones for evaluation and possible implementation. “Such group activities can send a message to the organization that change is important to the company and that the company is capable of changing.”
REGIONAL ANALYSIS: CHINa TOURISm Chinese departures implies outbound-tourist penetration increasing to 15%, which is in line with penetration seen in Japan and Korea in the early 2000s, but still significantly below that of Taiwan. China is about to enter a sweet spot that will spur J-curve outbound-tourism growth driven by rising disposable incomes. More annual leave, relaxation of visa restrictions, a deteriorating living environment at home, strained domestictourism infrastructure and increased urbanisation will also drive more mainland Chinese to travel abroad.
Mainland Chinese now want to “experience life” by travelling
Chinese tourists: Exploring new frontiers
The Chinese are exploring new locations such as Dubai, France, and Kenya. By Aaron Fischer, Head of Consumer & Gaming Research, CLSA
ou don’t need rocket science to see that China’s outbound tourism is accelerating at a pace that defies gravity, fuelled by a fast-growing, monied middle class eager to explore new frontiers. Departures broke through the 100-million barrier for the first time last year and we expect that to double by 2020. China’s outbound tourism is accelerating at a phenomenal speed. We expect departures to increase from 83 million in 2012 to 200 million by 2020, enjoying an 11% Cagr over the next eight years, which is double the United Nation’s World Tourism Organisation’s estimate of 100m. Outbound-travel penetration is still low and we expect higher incomes, more annual leave and easing visa restrictions to drive J-curve growth. It’s not just tourist 46 SINGAPORE BUSINESS REVIEW | MARCH 2014
Departures broke through the 100-million barrier for the first time last year.
numbers that are growing; travel destinations are also changing as Chinese broaden their horizons and visit more exotic locations. Still early days China witnessed a massive outbound-tourism boom in the 18 years to 2012, with resident departures increasing from six million to 83 million, representing a 16% Cagr over 1994-2012. Despite the impressive growth, it is still early days, with outboundtravel penetration low at 6%, compared with 15% in Japan, 28% in Korea and 45% in Taiwan. China’s outbound-travel penetration is tracking J-curve growth experienced by Japan, Korea and Taiwan in the late 1980s as those countries saw rising incomes help drive increased travel. Our forecast 200 million
J-curve growth Historically, Asian countries such as Japan, Korea and Taiwan experienced similar J-curve outbound tourism growth as per-capita GDP exceeded US$8,000-9,000, which triggered accelerated outbound-tourism growth. Japan’s economy expanded rapidly in the early 1960s, with real per-capita GDP increasing from US$7,100 to US$9,000. But the travel rate was still mild, expanding from 0.08% to 0.1%. Accelerated outboundtourism growth kicked in when per-capita GDP broke through the US$8,000 barrier in 1964. Between 1964-74, we see extended economic prosperity as per-capita GDP doubled from US$9,000 in 1963 to US$18,000 in 1973. Outbound tourism, however, grew at a much faster rate, with the penetration rate increasing from 0.1% to 2.1%. We see a similar trend in Korea during the early 1980s when consistent economic growth translated into moderate outbound-tourist growth. Per-capita GDP increased from US$4,000 in 1978 to US$8,000 in 1988, while overseas travel penetration increased from 0.7% to 1.7%. In 1988, as percapita GDP hit US$8,000, we see J-curve outbound growth, with overseas travel penetration
REGIONAL ANALYSIS: CHINa TOURISm increasing from 1.2% in 1987 to 10% in 1997. Lastly, in Taiwan, outbound tourism was flat over 1984-86, at around 4% despite robust economic growth. Again, penetration started to accelerate from 1988 as per-capita GDP reached US$8,000. Outbound travelers expanded from 5% in 1987 to 29% in 1997 while per capita GDP increased from US$8,000 to US$12,000.
Shopping should continue to rank top on their agenda, but “seeing the world” and “experiencing life” will be an indispensable part of their experience.
Yet to reach the tipping point Historical examples in other Asian countries suggest that per-capita GDP growth beyond US$8,000 triggers explosive outbound travel. We have yet to see this happen in China. Average per-capita GDP over 2008-12 was well below the US$8,000 trigger point and outbound travel expansion has only been in line with that of income growth. Given the vast size of China, it is appropriate to review percapita GDP of various provinces rather than focus on the blended average of the country. As of 2012, only the wealthy states in coastal areas had reached the sweet spot for outbound travel, with Beijing, Tianjin, Zhejiang and Jiangsu having per capita GDP of more than US$10,000 and Guangdong, Fujian, Shandong and Liaoning having a per-capita GDP of over US$8,000. A similar trend has already played out in the luxurygoods sector, with the industry enjoying explosive 135% growth over 2009-12, with income growth triggering J-curve expansion in luxury-goods demand. Price of various travel packages (departing from Beijing)
Source: Ctrip.com, CLSA
Seeing the world from a new perspective
Historically, Chinese have travelled solely to shop, which has benefitted tax-free shopping cities such as Hong Kong and Korea. Shopping should continue to rank top on their agenda, but “seeing the world” and “experiencing life” will be an indispensable part of their experience as they move up the “travel learning curve” and explore new locations such as Dubai, the Maldives, France, the USA and Kenya. Rising incomes are a key factor driving mainland Chinese up the travel learning curve, as affordability historically has been a factor limiting them to travel further out. According to Ctrip.com, a travel package to neighbouring Asian cities generally costs Rmb5,000-6,000 per person, while cost of travelling to Europe or the USA would be no less than Rmb15,000. Exploring new frontiers The march towards new travel destinations have already commenced, as we see a 62% increase in mainland Chinese visitation to Thailand in 2012. Travel to South Korea, Taiwan and Singapore has also grown strongly by 30-55% in 2012. The Maldives has also been a clear beneficiary of Chinese travelling further abroad, with numbers increasing from 14,000 in 2005 to 220,000 in 2013. Guam is following a similar path, with mainland Chinese tourist arrivals increasing from 1,000 in
2007 to 21,000 in 2013. Hong Kong and Macau should remain mainland Chinese’s top outbound travel destination given their close proximity, lack of language barriers and an attractive tax-free shopping environment. However, growth in mainland Chinese visitation should underperform that of other locations as we forecast resident departures to Hong Kong and Macau to grow by 7-9% Cagr over 2013-20. Slower Chinese inbound-travel growth in Hong Kong and Macau would imply the importance of these two cities gradually declining. While they will continue to be favourite tourist destinations, we expect a decline from 62% of the total in 2012. Chinese are spreading their wings We incorporate shifting travel patterns into our Chinese outbound-tourist estimate and forecast stronger growth in further out locations as travellers look for a more desirable travel experience. Resort destinations such as Guam, the Philippines, Thailand and Singapore are becoming increasingly popular among the Chinese and we expect visits to these countries to enjoy a 1748% Cagr over 2013-20. We also expect strong growth in inbound tourists to the USA and Europe as they have always been Mainland Chinese’s aspired outbound tourist destinations. SINGAPORE BUSINESS REVIEW | MARCH 2014 47
SPECIAL FEATURE: MICE Report
Why Singapore is the best for MICE events
Find out how the Suntec Singapore Convention and Exhibition Centre and The Star Performing Arts Centre establish Singapore as the top country for MICE events.
untec Singapore has released a sterling lineup of key events for the first full year since the completion of its $184 million revamp. The company announced 88 key events from its 2014 lineup, including 16 major medical events, 16 trade shows, 19 consumer events and 37 international conferences and special events. “I fully expect 2014 to be a very successful and busy year,” said Suntec Singapore CEO Arun Madhok, “Having said that, we are not just looking to fill the Centre for the sake of it. We are looking to foster long term collaboration with events and clients who can use the full potential of our Centre for our collective success.” Strong growth in 2014 The 88 key events for 2014 span a wide range of industries including Medical, Technology, Lifestyle and Financial. These include first time events such as Blueprint 2014, Prudential Eye Awards, Singapore Art Fair as well as AAMA-TEX, UROFAIR and Trans Asia 2014. JEC Composites, the key event for the Composites Industry, has extended its longstanding relationship with Suntec Singapore with a Multiple-Year deal for the event. Exhibitions continue to form the core of the business with events such as STJobs HR Summit, Beauty Asia and Asia PCR/ SingLIVE that have also signed multipleyear deals with Suntec Singapore. New consumer events include SG Tech Show, and Suntec Singapore continues to be favoured by major consumer shows like COMEX because of its accessibility and size. Surge in medical MICE Suntec Singapore is also fast becoming a magnet for medical and pharmaceutical events because of its ability to comply with the strict codes of conduct and special requirements of this group of clients. Out of the current 25 confirmed large-scale conferences and exhibitions in 2014, more than 50% are from the medical and pharmaceutical industries. Globally renowned medical events like Asia PCR, International Dental Exhibition
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Suntec Singapore Convention and Exhibition Centre and Meeting (IDEM) Singapore, Medical Fair Asia, International Master Course on Aging Skin (IMCAS) Asia, and Occupational Safety & Health Exhibition for Asia (OS+H Asia) are coming to Suntec Singapore once again and have been doing so since 2010. Changes in MICE industry The rising popularity of the ConFex (conference/Exhibition) model has posed. As the line between Conferences and Exhibitions continues to blur, venues need to change to meet the demands of event organisers. Suntec Singapore has reacted by making its venue as flexible as possible, with moving walls and LED lights that allow every space to be used for more than one type of event. Clients also have growing technological expectations of MICE venues, such as WiFi connections for all delegates and visitors. This is the reason why Suntec invested heavily in free WiFi infrstructure. Suntec’s service allows up to 6,000 simultaneous users to connect to the Internet without
“We are looking to foster long term collaboration with events and clients who can use the full potential of our Centre for our collective success.”
experiencing a noticeable drop in service level. With more business coming in from abroad, Suntec has invested in a customer portal that integrates customer and event planning in an online portal that gives updated 3D modeling of room layouts and on-the-spot planning of catering menus from anywhere in the world. “Old and new Clients have expressed their interest to have a first taste of the Centre the moment that we were back in operation,” shared Mr. Arun Madhok, “We have been busy pushing the limits of the new technology and facilities to show our clients that we can offer far more than what we could in the past, and to show the edge that we have over other centres.” Staging culture and artistry Being one of the best countries to hold conventions and other events, Singapore boasts of another venue that makes it firstrate not only in holding major summits and conferences but also in staging culture and artistry. Since its grand opening on November 1, 2012, The Star Performing Arts Centre is one of Singapore’s latest venues catering to different genres of concerts such as Western, K-pop, Pop Orchestras, and the like. As the first and only 5,000-seat performing arts theatre in Singapore, it has been serving a niche in terms of audience capacity. They provide
SPECIAL FEATURE: MICE Report
The Star Theatre
The Star Loft concert promoters and show organizers an added option not only in terms of the choice of venue but the technical capability to deliver shows and performances of the highest standards with state-of-theart audio, video and production lighting equipment. As an integrated hub, The Star comprises a Civic & Cultural Zone named The Star Performing Arts Centre, and a retail mall, The Star Vista, managed by CapitaMalls Asia Limited. Sarah Lim, Director of Sales and Marketing for The Star Performing Arts Centre shares, “Our vision is to create a world class venue that attracts great performing artistes.” According to Lim, the encouraging and positive responses from concert promoters are their biggest milestones since its opening. Additionally, performing artistes and patrons in the past years spurred them on with positive comments and reviews. “These feedback fuel our motivation to constantly improve every aspect of our services and move towards our vision to be a locally and internationally recognized venue of exceptional experience,” Lim says. While there are numerous positive reviews, there are also many challenges including initial hurdles of way-finding, crowd management, and the tight turnaround time for consecutive events at The Star Theatre. “We depend on a great team of committed professionals to ensure every show runs smoothly, from the front-of-house to the back-of-house support. Lastly, practice makes perfect to turnaround the theatre after a Saturday night concert in time for Sunday morning
The Star Performing Arts Centre events,” shares Lim. Classy and multi-functional Out of the many venues at The Star Performing Arts Centre, The Star Gallery is most versatile and may further be divided into five smaller individual spaces, each capable of offering complete audio and visual support. “It can support different events from meetings and award ceremonies to banquets, corporate functions and small performances,” says Lim. Event organizers may opt to arrange it in either theatre-style seating for 770 guests or round-table seating accommodating up to 490 guests for banquet functions. “Hirers are also able to fully utilise the wooden deck for reception and the ancillary studios for break-out rooms,” she adds. Additionally, events happening at The Star Theatre may also be viewed in The Star Gallery via live feed. The Star Loft, situated on Level 11, is an exclusive and private function space which opens up to a roof terrace with a landscaped garden. It accommodates 140
“These feedback fuel our motivation to constantly improve every aspect of our services and move towards our vision to be a locally and internationally recognized venue of exceptional experience.”
The Star Gallery guests in a theatre-seating arrangement and is perfect for VIP functions, media conferences, intimate weddings, solemnisations, corporate receptions, product launches, and the like. Complete with a private deck offering generous views of the one-north district, The Star Loft ensures maximum privacy amidst a classy atmosphere. The Star Terrace, on the other hand, offers the perfect casual and relaxed setting for an event and promotes maximum interaction between the performer and the audience. As an outdoor amphitheatre featuring bench seating for 300 guests and a deck area for reception, it is ideal for music showcases, product launches, movie screenings, meetand-greet sessions with artistes, publicity events, and others. With a myriad of venues, The Star Performing Arts Centre is poised to be the venue of choice for concerts, musicals, seminars, meetings and other events in the region. SINGAPORE BUSINESS REVIEW | MARCH 2014 49
co-published Corporate profile
Check out Knight Intelligence and Forensics’ security consulting specialty See how the company managed to establish a trusted customer-based platform over the years.
Roy S Ramachandaran Director, Knight Intelligence and Forensics
“As a security consultancy firm, they recognize that customizing solutions is the best way to meet a client’s unique requirements.”
ncorporated in 2005, Knight Intelligence and Forensics has been in the business of security consulting to overseas clients. In March 2008, it decided to enter the commercial investigation & security industry where a license is needed. Then the two directors, Mr. Roy S Ramachandaran and Mr. Mathew Kurian, both company shareholders, applied and successfully got the license to do Investigation and Security Services to local clients. Based in Singapore, Knight Intelligence & Forensics Pte Ltd provides security solutions to their local clients. The company’s objective has always been to provide effective, customerfocused security solutions. “To achieve this, we constantly have open communication with the clients, identifying their wants and needs and the best way to solve their problems,” says Mr Ramachandaran, Knight Intelligence and Forensics’ Managing Director. Humble beginnings Knight started with five and now they are 25 strong, comprising of Mobile Investigation Team (MIT), Mobile Patrol Team (MPT), and Mobile Executive Protection Team. Each team is headed by an experienced team leader, whose background is either in Police or Armed Forces. “We have a Mobile Investigation Team which within a short notice, a team of trained PI’s can be activated to handle a client’s urgent cases. We will at the same time give a legal setting to each case as a privilege,” Ramachandaran shares. Our MPT also acts as a back up support team for MIT for the first 48 hours which is very crucial in any investigation. “Once the client have decided that we are the right team for their job, our Admin team puts up a Warrant to Act or Contract which spells out the tasks and conditions
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clearly based on the consultation of the client. Once the green light is given, our MIT will immediately proceed with the investigation process and give regular updates to the clients,” he further elaborates. Different strokes for different folks They believe in the idea that there should be “Different strokes for different folks.”As a security consultancy firm, they recognize that customizing solutions is the best way to meet a client’s unique requirements.“ We will cater for different clients with different solutions to their consultations. On the long run, we were able to build a trusted customer-based platform,” Ramachandaran says. Effectiveness along with completeness define a good security consultancy. Their knowledge of both international and local security leverages on modern technology in order to deliver the best security solutions. “I was able to set up a dedicated team of Mobile Patrol officers who will patrol and send returns
to clients ASAP if they happen to find any discrepancy, during their regular visits to all our sites. This is our distinct advantage,” Ramachandaran shares. However, all businesses have their fair share of challenges. Knight Intelligence and Forensics identify retaining trained manpower as theirs. In order to mitigate this, they introduced special benefits to outstanding officers. Ramachandaran adds that they also have profit sharing, birthday surprises, and monthly meetings followed by a good dine and wine where everyone speaks and listens with one another in order to build the team’s relationship dynamics. Security requires commitment as well as resources. “As everyone knows, dedication is not an easy word. You need people who are motivated and need the passion for the job,” Ramachandaran says. “While actively managing our clients’ portfolio, we often go the extra mile in helping them. In return, they gave us testimonials of appreciation which really boost our confidence,” he adds.
Executive Protection Team during a visit of the Spanish football stars in Singapore
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