Orient Issue 27

T H E O F F I C I AL MAG AZIN E OF TH E BRIT IS H CHA MBER OF COMMERCE - S IN G AP ORE

I S S U E 27 : O C TO B E R  N O V E M B E R 20 10

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FEATURE:

BRITCHAM PROPERTY UPDATES 2010

INSIDE BRITAIN:

THE UK AT SHANGHAI EXPO: BUILDING ON THE PAST, SHAPING OUR FUTURE

BRITCHAM EVENTS: NETWORKING WITH SIR JACKIE STEWART

building networks connecting business creating opportunities

Contents

4

Presidents Message

8

Oc t/Nov Feature – Proper t y Updates 2010

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Singapore Office Market 2010 – Jones Lang LaSalle Singapore Residential Market 2010 – Jones Lang LaSalle

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Asian real estate markets enjoy encouraging first half. Outlook steady for the remainder of 2010 – CB Richard Ellis Central London Residential Market - Summer 2010 – DST international

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Corporate Social Responsibility

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Water shortages in Asia - CB Richard Ellis

18

Inside Britain

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The UK at Shanghai Expo: Building on the Past, Shaping our Future – UKTI

20

Economic and Business Insights

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Commodities – rising prices – how do you profit? – FryGroup Combining physical and digital logistics to enhance speed to market – DHL The pursuit of happy investing – iPac A healthier workforce means better business for you – Singapore National Employers Federation

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8 - 14

Feature: Property Updates 2010 - Singapore residential, office, Asia Pacific & London

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Inside Britain: The UK at Shanghai Expo: Building on the Past, Shaping our Future

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30

High Commission News

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British High Commission News October – November 2010

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BritCham

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Chamber news updates October - November Interview with Philippe Touati BritCham Even Calendar New Members

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Members Offers

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Members – Sterling News

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Sterling News

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BritCham News: Member visit to the Shanghai Expo 2010

EDITORIAL Editor: Sebastien Barnard

Orient is a bi-monthly magazine published by the British Chamber of Commerce.

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Contents

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46

BritCham Events: Singapore Grand Prix 2010 – An Evening with Sir Jackie Stewart

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Networking - Sir Jackie Stewart

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CSR Panel Lunch - Green Buildings

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Networking - Peter Mandelson

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BritCham & UKTI Breakfast Briefings – Doing Business in Asia

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BritCham Breakfast Clubs – September 2010

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BritCham Events

Members - Corporate News Corporate News

Destination The Challenging World of Business – BBC World News

Th Ch The Challenging ll i W World ld off Business: BBC World News, World Challenge Awards 2010

BRITISH CHAMBER OF COMMERCE, SINGAPORE SPONSORS PLATINUM SPONSORS

GOLD SPONSOR

SILVER SPONSORS

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BREAKFAST CLUB SPONSOR

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Saturday, 11 December 2010 Island Ballroom, Shangri-La Hotel 7:00pm

Black Tie

Booking forms available at www.britcham.org.sg For further enquiries please contact, The British Chamber of Commerce on: +65 6222 3552

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Pr e s i d e n t ’s M e s s a g e Dear Members, In conversations regarding the UK and Singapore it is often only a matter of time before the topic turns to the subject of property investment. Property is of interest to many of our members and it is therefore fitting that it is a common thread in an issue of Orient each year. Property is featured in this issue and this year the prospects for investment are particularly intriguing.

September was a busy month.

The Chamber embarked on its first overseas business mission as a group of us, led by High Commissioner Paul Madden, headed for Shanghai and the World Expo.

The experience was exceptional, not only for the splendour of Expo with the UK’s unique and inspiring ‘Seed Pavilion’ and the wonderful hospitality provided by UKTI, Diageo and BritCham in Shanghai, but also for the genuine warmth of the hosts at the Expo and various venues visited. Of course it would not have been a British overseas trip without a little humour and this was provided with a smattering of “Fawlty Towers” moments provided by our ground transport service providers.

September also featured the Singapore F1 Grand Prix, with this year the almost completed Marina development adding to the spectacular skyline seen by hundreds of millions in television audiences around the world. RBS ambassador Sir Jackie Stewart once again joined us as our special guest at a pre-race evening cocktail reception at the Cricket Club. Sir Jackie proved inspiring and excellent company, sharing racing experiences with guests and sharing truly heartfelt moments in a video of his recent family celebrations in Scotland for his 70th birthday. Our evening also raised some $10,000 in raffle and auction proceeds for dyslexic children, a charity for which Sir Jackie works tirelessly – a sincere thank you to those of you who contributed.

A further visitor in town for the F1 Grand Prix was Lord Peter Mandelson, who many see as the architect of the rise to power

BRITCHAM BOARD: PRESIDENT: Steve Puckett - Tri-Zen International VICE-PRESIDENTS: Chris Claridge – TCP Group Chris Davies TREASURER: Peter Allen - Pacific Century Regional Development HONORARY SECRETARY: Hugo Walkinshaw - Deloitte Consulting, SE Asia EX-OFFICIO: Amanda Brooks - British High Commission Mark Howard - British Council BOARD MEMBERS: Alan Goodyear Andrew Wine David Conway Emma Boyd Ingrid Child John Horsburgh Kevin Burke Nick McGylynn Philippe Touati Pek Hak Bin Richard Burn Roman Scott Stephen Crisp Simon Wilson 44 oorri e i enntt 44 oorriieenntt

RBS The Insight Bureau Pte Ltd Jupiter Asset Management Limited Ernst and Young Solutions LLP HSBC Singapore Rolls Royce Singapore Pte Ltd Barclays Bank PLC British Airways Standard Chartered Bank BP Singapore Pte Ltd Diageo Calamander Group BT Singapore Markel International

of the Labour government in the 1990’s and who later went on to run UKTI and be EU trade ambassador. Lord Mandelson’s tenure in government was not without controversy and at a Raffles lunch jointly arranged with The Singapore Press Club and the Chamber he candidly shared his views of his time in office. He proved to be an engaging and frank speaker with a style mirrored in his new biography The Third Man, copies of which were enthusiastically signed for members.

Our breakfasts on ‘Doing Business in Asia’, arranged jointly with the UKTI, continued with briefings on South Korea and Thailand. These well-attended and practical exchanges provide basic guidelines for understanding how best to conduct business for success and what pitfalls to avoid. The present series concludes with the Philippines and Malaysia. With such positive feedback we will look to do more of these in future years.

The CSR Seminar in September was sponsored by BP and focussed on Green Building initiatives in Singapore. It included the story of new eco-friendly energy efficient UWC school campus and gave insights into the high tech design features that went into the iconic MBS resort complex. British innovative design and technology is being employed in many areas across Singapore and is the subject of a book recently published by UKTI, Love and Money – Fifty Years of Creative Britain.

The 11th British Business Awards lived up to its billing as the premier business event in our calendar. This year once again we had more entries than before and many new names made it through as finalists.

In addition, this year the newly shaped award categories highlighted key ingredients for commercial success, while one sector-specific award, for outstanding professional services was retained, due to the strength and size of that sector among our Chamber members.

To conclude, I hope to see many of you at our ‘Starlight Ball’ in December, which promises to be a spectacular finale to our year.

Steve Puckett President British Chamber of Commerce, Singapore

COMMITTEES: Events: Philippe Touati Membership: Andrew Vine Corporate Social Responsibility: Steve Puckett External Affairs: Terry O’Connor Marketing & Communications: Chris Davies Young Professionals: Miles Gooseman BUSINESS GROUPS: Energy & Utilities: Damian Adams Entrepreneur & Small Business: Richard Ayres Financial Services: David Conway IT and Communications Technology: Richard Richardson Professional Services: Tulika Tripathi Media & Marketing: Fiona MacKinnon Shipping, Transport & Logistics: Neil Johnson MANAGEMENT TEAM: Executive Director: Brigitte Holtschneider Events & Business Group: Tiffeny Kua Marketing & Communications: Sebastien Barnard Membership Manager: Katie Hudson Membership Support: Rabiatul Adawiyah Accounts: Emmeline Ng

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AirAsia gains competitive advantage with unique FX currency solution

The Client’s Challenge To remove exchange rate uncertainty for AirAsia’s online customers, to enhance the convenience and transparency of their electronic ticket sales platform and to limit the company’s exposure to FX fluctuations.

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The Result With the risk of currency fluctuation removed from electronic ticket purchases across a comprehensive range of specific local currencies, AirAsia now benefits from a valuable competitive advantage. Online customers enjoy a much improved, more transparent experience and the company recently received Skytrax’s ‘World’s Best Low Cost Airline’ award.

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This advertisement has been prepared for information only. It should not be construed as an offer to sell or the solicitation of an offer to subscribe for a product or service. The Royal Bank of Scotland plc is authorised and regulated by the Financial Services Authority in the United Kingdom. Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. Registered in Scotland No. 90312.

The Royal Bank of Scotland N.V. is incorporated in the Netherlands. The Royal Bank of Scotland plc and The Royal Bank of Scotland N.V. are authorised agents of each other in certain jurisdictions.

Sterling Members

BRITISH CHAMBER OF COMMERCE, SINGAPORE STERLING MEMBERS

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share in our success Royal Skandia in Singapore is a premier provider of offshore investment solutions within Skandia International. We offer access to a wide range of assets from a large number of third-party fund managers and other organisations.

We have extensive experience in providing services for international investors.

But don’t just take our word for it. Financial services experts at ‘International Investment’– the authoritative UK magazine for international advisers – have just judged Skandia International the very first winner of their new award in 2009: Best International Provider – Far East.

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Feature: Proper t y Updates 2010

SINGAPORE OFFICE MARKET 2010 THE GREAT SINGAPORE BOUNCE BACK

building networks

By: Chris Archibold BSc (Hons) MRICS, International Director - Head of Markets, Jones Lang LaSalle

the activity was due to tenants taking the opportunity to consolidate that had previously not been able to find contiguous space when occupancy rates were very high (over 98%) during the peak in 2007 / 2008. These tenants were often coming out of leases with passing rents in the mid teens and given that much of the fringe CBD 2009 supply was transacting at the S$6.00 - 7.00 psf / pm mark the tenants could upgrade to a new building, pay for their fit out and still show a cost saving thereby giving them the opportunity to relocate. This “flight to quality” phenomenon was very prevalent in late 2009 / early 2010.

H

istorically the Singapore office market has not been a very volatile market when compared to other major markets such as Hong Kong.

However in recent years the market has been much more volatile than usual as can be seen during the last cycle. Rents grew very rapidly from around S$5.00 psf / pm in 2003 / 2004 to a peak of S$18.40 psf / pm in 3Q08. Rents then fell very sharply during the Global Financial Crisis, dipping 58% to S$7.75 psf pm by Q110.

Whilst all markets are cyclical, Singapore’s commercial property market saw rental fluctuations that were more typical of more volatile markets than ours. The reason for this scenario being that many new developments were cancelled or delayed during the Asian Financial Crisis / SARS period in 2000 – 2004. The construction period of c. 4 years for a Grade A office building means that there is a lag in the supply pipeline therefore the supply pipeline was adversely affected from 2004 – 2008.

Also 2006 – 2008 saw a very substantial increase in demand for office space from occupiers with much of this demand coming from the financial services sector,

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partly as a result of the global growth of this sector and partly as a result of Singapore’s successful repositioning as a global financial services centre. The lack of supply caused the vacancy rate to drop to a record low of below 2% and rentals to escalate to record levels. Jones Lang LaSalle’s 3Q08 number showed an average Grade A Raffles Place rent of S$18.40 psf / pm, this is an average number and there were some buildings seeing transactions of S$21-22.00 psf / pm at this time.

Global Financial Crisis Subsequently the impact of the Global Financial Crisis during 2008 and 2009 saw rents drop off dramatically caused by a lack of confidence in the global economy resulting in a sharp drop off in demand for space from occupiers and the impending supply boom in the CBD which will bring on line close to 8,000,000 sf of major projects between 2010 and 2015. The culmination of these factors being a 58% drop in rents to a level of S$7.75 psf / pm by Q1 10.

The first signs of a market pick up came in early 2010 when the market saw an increased level of activity in the 1,000,000 sf of buildings that came online in the CBD in 2009. Much of

The activity in 2010 has also been characterised by larger occupiers precommitting to new developments in order to consolidate their operations and because many occupiers and market pundits are sensing that the office market has bottomed out and that we may see a run up in rents over the next 2-3 years.

Rentals in the Singapore office market are experiencing an upturn and have

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seen strong growth during 3Q10. The 2Q10 increase was the first after 15 months of rental decline, registering a 2.6% increase. Jones Lang LaSalle’s preliminary estimate of the average CBD Prime Grade A gross effective rent shows an increase of 9.4% q-o-q to $8.70 per sq ft per month in 3Q10 from $7.95 per sq ft per month in 2Q10.

Leasing Activity The office market witnessed strong leasing activity during 3Q10. Many of the landlords in the market have enjoyed increases in achievable rents, with the better quality space experiencing double digit growth in achievable rents in 3Q10.

In terms of vacancy levels Jones Lang LaSalle’s preliminary data suggests that the vacancy rate in the Raffles Place Grade A market has been steadily decreasing. Vacancy in this submarket stood at 5.5% in 1Q10 dropping to 4.2% in 2Q10 and preliminary data shows a further drop too 2.8% in 3Q10.

Unlike in the previous period where the higher-tier segment of the market dominated the overall leasing scene, improvements in occupancy levels during 3Q10 were seen across the board in both investment grade and lower grade buildings. In particular, the overall increase in activity was spurred most significantly by large leasing deals, such as AXA signing up as the new anchor tenant at 8 Shenton Way by taking circa 70,000 sq ft of space in the building.

The outlook for upcoming buildings has also improved in terms of precommitment. These predominantly involve buildings that are scheduled to come on-stream next year in 2011. 50 Collyer Quay and Asia Square are both in serious negotiations with some major financial institutions and other MNC’s, while Ocean Financial Centre continues to see interest from several potential tenants.

50 Collyer Quay, Asia Square Tower 1 and Ocean Financial Centre have very

strong levels of pre-commitment at over 60%, 40% and 70% respectively precommitted or with terms agreed.

2011 will see 2,800,000 sf of new development come on stream which will increase market vacancy levels however this will be mitigated in part by supply coming out of the market to be redeveloped into residential and commercial. The increase in vacancy rates will keep rental growth in check as tenants will have a number of options in either the new buildings or space coming back to the market.

That said, assuming a strong economy, we do expect to see rental growth over the next couple of years.

www.joneslanglasalle.com.sg

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creating opportunities

Feature: Proper t y Updates 2010

SINGAPORE RESIDENTIAL MARKET 2010  A NEW ERA IN PROPERTY MARKET GOVERNANCE By: Dr Chua Yang Liang, Head of Research, South-East Asia, Jones Lang LaSalle

R

esidential demand has surged in many Asian cities as speculators and homeowners alike clamour to get a piece off the action before prices exceed their threshold buying level.

We have seen volume and prices of new launches in Singapore rising unabated. In 3Q09, the Property Price Index (PPI), a national price index developed by the Urban Redevelopment Authority on residential stock island-wide, took a sudden upturn, jumping by an amazing 15.9%—the largest ‘initial turn’ ever recorded during a recovery since 1975, suggesting that the market could have over-corrected in the previous quarters (see Chart 1).

A soft handed approach1

Monthly new sales also recorded similar surge, particularly in the month of January 2010, which saw sales tripling from the previous month. The average monthly sale of 1,430 recorded over the first six months of 2010 (from January to June) was 1.2 and 3.7 times the monthly average of 1229 and 389 transacted over the same period in 2009 and 2008, respectively.

In the last two decades of the 20th century, the state has not intervened in the market as much as it has over the first decade of this new millennium.

The state intervened over nine times from 1980 to 1999, especially towards the later period. But just in the past ten years (2000–2010), the government has already introduced several property related policies on ten occasions.

This exuberance in the residential market set off cautionary bells, thus spurring the government to introduce several contractionary measures as early as 14 September 2009.

For the first time contractionary measures were introduced immediately after a shock to the real economy. For the past 30 years, the state has adopted mostly expansionary policies. Following the recession in 1984/85, there were

For the past 30 years, the government has been involved in the property market in a number of ways: from the sale of state land to steer urban development to the imposition of taxes to ensure the smooth operation of the residential market (see Chart 2).

two policies that helped increase the demand for private housing market by allowing CPF funds to be used for the purchase of private properties. And after the Asian financial crisis, stamp duties were suspended to spur demand.

Interestingly, since the collapse of Lehman Brothers, the state has introduced contractionary measures i.e. the removal of Interest Absorption and Interest Only Loans schemes, reduction of the Loan-to-Value ratio and the introduction of a seller stamp duty.

These measures were aimed to cool the overheated property market that has been brought forth by the lower interest rate necessary to encourage growth in the larger economy.

However despite the introduction of more policies, the impact is not necessarily heavy as the policies have been more genteel. For example, the seller stamp duty introduced in February 2010 was only imposed for those who sell

1 In this short paper, we have only identified those government policies that would affect demand through enlarging the pool of buyers or strengthening a buyer’s ability to purchase a private residential unit—in particular, those that affect loan interest rates, loan to value ratio, purchase and disposal costs e.g. stamp duties, capital gains taxes, and overall availability of funds e.g. use of CPF for purchases. The latter also encourages more buyers to enter the market.

Expansionary policies are those that improve the buyers demand (e.g. lower interest rates, higher loan to value ratio etc). Conversely, contractionary measures are those that reduce the demand (e.g. increase or introduction of stamp duty, capital gains tax etc).

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within h a year off transaction compared d to the three years when a similar policy was introduced in May 1996. The impact of the policy is soft even though the market seems more heated than in 1996. The average quarterly increase in property price index over the three quarters before the introduction of the policy was 9.4% compared to 4.8% per quarter over the same period when the policy was introduced in 1996.

Feeling the stones Going by the sales volume subsequent to the introduction of these policies, they do not seem to have much effect on the market. The average monthly new sales (i.e. from March to August) after the policy was introduced in May was at 1,449, slightly lower than the monthly average of 1,751 recorded for the same period a year ago. Property prices as measured by PPI, also continued to

expand at 5.3% in 2Q10, dipping only marginally from the 5.6% recorded in 1Q10 when the policy was introduced.

With political election nearing and rising concerns over housing affordability for Singaporeans, the government on August 30th lengthened the seller side stamp duty on properties sold within 1 year of purchase to 3 years and lowered the loan-to-value ratio to 70% for buyers with outstanding housing loans.

Additionally the government also required all buyers who purchase a public housing flat must dispose of their private properties (including overseas properties) within six months of the purchase and vice versa. This essentially restores the intent of public housing as a commodity that meets basic housing need.

While the earlier policies could have been more aggressive, the recent condition facing policy makers is different. The financial crisis has required the injection of state funds to spur domestic consumption. This, coupled with the low interest rate environment, has added inflationary pressure to the physical assets. While a growing property market would lend some initial lift to the local economy, an asset-led inflation could potentially damage the recovery.

The policy makers had the unenviable task of balancing these two contravening factors, making fine adjustments as they move along.

As Deng Xiaoping once said ‘cross the river by feeling for the stones’, a soft and consultative approach to market regulation is a better option today than a heavy handed policy arm. The long and arduous path to the property market recovery after 1996’s anti-speculative policy would also serve to remind us of the damage that overtly aggressive policies could leave on the market.

More adjustments expected The main concern for the government is the sustainability of the property market.

The recent jump in prices has exceeded the real growth in the economy. There has been only a few occasions when

that happened and it usually occurs immediately following a correction (see Chart 2).

Most economists expect the Singapore economy to expand at a more sustainable level of about 4-5%. So long the property prices growth is moderate and not exceed the real economy for an extended period of time, the market should remain healthy.

While we expect the state to retain the soft approach towards the regulation of the property market, the government would not hesitate to adjust the current policies should transaction volume and PPI do not slow down correspondingly with the anticipated slowdown in economic growth. Freeplay in the current policies have been largely utilized and only tax on capital gains has yet been introduced. Nonetheless we reckon the policy risk is low for the immediate to short term.

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Feature: Proper t y Updates 2010

ASIAN REAL ESTATE MARKETS ENJOY ENCOURAGING FIRST HALF, OUTLOOK STEADY FOR THE REMAINDER OF 2010

A

sian real estate markets enjoyed an encouraging first half of 2010 as steady economic growth was underpinned by a surge in exports and global inventory re-stocking as well as the continued effects of the large fiscal and monetary stimulus deployed by various Asian governments. Improved intra-regional trade flows, which were partly attributable to the robust performance of consumer markets in China, India and other emerging Asian countries, and the strength of regional demand helped to offset worries over the fragility of the global economic recovery and the ongoing Eurozone sovereign debt crisis. At the same time, potential risks associated with excess liquidity in their financial systems compelled a number of Asian governments to adjust their previously loose fiscal and monetary policies as they looked to both clamp down on speculative activity and restrain rising commodity prices.

Direct real estate investment in the region rose 136% y-o-y during the first six months of the year to an estimated US$30 billion. Although activity levels rose significantly in virtually every Asian market as measured on a yearly basis, investment volume fell by 22% q-o-q in the second quarter as investors turned more cautious following the implementation of various measures by governments around the region intended to curb speculative activity.

Japan was the most active market in terms of volume, accounting for 29%

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of total investment in the region region. The US$8.8 billion worth of transactions completed in the country during the first six months of the year, a rise of 62% y-o-y, was only slightly below the all-time high recorded in the first half of 2007.

There was a steady flow of small and medium sized transactions involving the acquisition of assets in Tokyo as the period witnessed growing interest on the part of foreign investors looking to return to the market and expand their Japanese portfolios. Elsewhere, Hong Kong, South Korea and Taiwan all posted a strong q-o-q increase in transaction volume in the second quarter, rising by 33%, 81% and 79% respectively, as high net worth individuals and domestic buyers continued to display a strong appetite for prime investment property.

In contrast, China registered a sizeable decline in investment transaction volume of 87% q-o-q in the second quarter as a series of cooling measures were implemented by the government to expand housing supply and squeeze speculators.

Office occupier market Office occupier markets in the region showed continued signs of stabilising during the first half as the steady regional economic recovery encouraged multinational companies to reactivate expansion plans suspended earlier after the onset of the global financial crisis.

Greater China witnessed the largest upsurge in leasing activity with both multinational and domestic corporations

quite active in taking up space in major cities. The total net absorption of prime office space in Hong Kong and first-tier Chinese cities, namely Beijing, Shanghai and Guangzhou, collectively accounted for three quarters of the regional aggregate in the second quarter.

Positive rental growth was recorded in Hong Kong, Shanghai and Beijing while Singapore and Tokyo, which had endured 20 and 27 consecutive months of continuous rental declines respectively, witnessed the first signs of a rebound. Although overall office rents in Asia rose 2.1% in the second quarter, robust demand did not induce the significant hardening of rentals in many markets as landlords competed to fill up space amid relatively high availability and, in certain locations, a large quantum of future supply scheduled to come on stream over the short-to-medium term.

During the period the availability of Grade A CBD space in several markets fell as occupiers took advantage of still depressed rents to relocate to higher quality space, thereby leaving more space vacant in less desirable office sub-markets. One direct result of this phenomenon was increasingly divergent rental movements between the CBD and peripheral sub-markets across a number of Asian markets.

Retail Sector In the retail sector consumer demand and retailer sentiment in most Asian retail markets held firm over the first half of 2010, underpinned by optimism over the relatively strong outlook for growth. Retail rents for the best locations generally remained firm in most Asian markets. China and Hong Kong spearheaded demand as the recent announcement of the revaluation of the RMB helped boost already strong domestic consumption. With the exception of Japan, most other Asian retail markets witnessed solid consumer demand, most notably Taiwan, Korea,

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Indonesia, Singapore and India. As a consequence, some retailers came under increasing pressure to raise prices to offset higher inventory costs but the period generally saw price inflation remain benign across the region. The industrial property sector continued to witness a steady recovery in the first six months of 2010, albeit at a slower pace as compared to other property sectors, with major industrial markets such as Tokyo, Shanghai, Beijing and Hong Kong beginning to report both increased investment interest as well as growth in demand from domestic occupiers.

Rental rates for industrial facilities showed signs of stabilising in Shanghai, Beijing, Singapore and Hong Kong.

Asian REITs The first half saw acquisition activity

by Asian REITs rebound sharply with a total of US$5.7 billion worth of deals completed in the first six months of the year, surpassing the US$4.2 billion recorded for the whole of 2009. Six new REITs were launched during the first six months of the year in what was a dynamic period for REIT IPOs. However, despite this flurry of listing activity, the

fortunes of Asian REITs still remained mixed within the first half year, with some markets showing strong growth in IPO and acquisition activity and others witnessing delisting applications, mergers and consolidations. REITs in Japan, Taiwan, Korea and Hong Kong outperformed their respective stock markets, all of which suffered downward adjustments in the second quarter amid concerns over the pace of the global economic recovery. Japan remained the most active market for asset purchases with Mori Trust Sogo REIT’s JPY 110 billion (US$1.24 billion) acquisition of a 50% stake in the Tokyo Shiodome Building the largest transaction completed by a REIT in Asia in the first half of 2010. Singaporean and Malaysian REITs were active buyers of office, retail, industrial and healthcare assets but REITs in Hong Kong, Taiwan, Korea and Thailand remained inactive. Asian REITs’ total market capitalisation surged by 26.1% y-o-y to US$69.7 billion during the first six months of 2010.

2010 Looking ahead to the remainder of the year, the relatively steady level of real estate investment activity witnessed in the first half could potentially be matched in the second half and total investment volume in Asia for 2010 could therefore reach as much as US$60 billion.

However, the region is experiencing an uneven recovery and the persisting mismatch between sellers’ expectations and buyers’ risk tolerance will continue to

restrict market activity in the second half of 2010. The high level of outstanding corporate and government debt remains a cause for concern and continues to be viewed within the region as a potential downside risk. Nevertheless, the steady level of acquisition activity by both institutional investors and REITs, which jointly accounted for over US$5.6 billion or 43% of the total investment volume recorded during the second quarter, demonstrates that the Asian real estate investment market remains generally buoyant, although expanding at a slower pace than originally forecast.

Activity in the office occupier market is expected to remain relatively muted over the course of the rest of the year.

Companies continue to be confident about the regional economic outlook, but concerns over a slower global economic recovery following the outbreak of the eurozone debt crisis will probably curtail aggressive expansion by multinationals over the short-term. In the REIT sector, although the average dividend yield for Asian REITs contracted further from 8.06% in the first half of 2009 to 6.83% in the first half of 2010, they generally still provide comparatively high dividends over their respective government bonds.

However, after a series of REIT delistings and liquidation rumours in the first half, investors may demand stronger stock performance along with rising asset prices. The next six months should see Asian REITs recapitalise with ease and continue to acquire new assets and conduct fund raising exercises, although they should perform steadily over the remainder of the year, in contrast to the rapid gains they enjoyed in the first half, in light of rising concerns over the pace of the global economic recovery.

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Feature: Proper t y Updates 2010

CENTRAL LONDON RESIDENTIAL MARKET  SUMMER 2010 By: Vanessa Chan, Property Sales Consultant, DST International Property Services Pte Ltd London House Prices on the Rise As a result of the global financial crisis and UK economic recession, house prices in London and the UK fell substantially.

However, a combination of lower house prices, a weak pound and strong demand from buyers with sufficient equity, has generated a revival in activity and prices, particularly in London.

We expect Prime London residential prices to rise on average 9% each year till 2012 London Olympics and thereafter an average 6% increase each year.

Residential prices in Prime Central London fell by 23% from September 2007 peak to the March 2009 trough.

Furthermore, the decline in Prime Central London was slightly greater than in both the UK at 19% and Greater London at 20%.

The undersupply of housing in both the UK and in London, a characteristic that has been exacerbated over the past two years, should ensure that upward pressure in London remains reasonably strong at least in the medium term.

The lack of development land in Prime Central London makes the case for upward price pressure even greater in this location.

However, since March 2009 residential prices in Prime Central London have recovered strongly, rising by 17% in just nine months. International buyers have been very active during this time encouraged not only by lower residential prices but also by the weaker pound that has accompanied the UK economic recession.

A significant trend is that residential price growth has been far stronger in Prime Central London and in Greater London during this recovery phase compared to elsewhere in the UK. Price growth in the last months of 2009 averaged 17% in Prime Central London and 14% in Greater London while prices in the UK rose by a more sedate 8%.

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Demand & Supply Gap Widening Restrictive supply of land and planning will cause the London market to continue suffering from shortage of supply.

Overseas Buyers Prominent & Foreign Students Increasingly Important The currency fluctuations over the last two years or so have provided many buying opportunities. The Sterling has depreciated by circa 30% against Singapore Dollar over the last 20 months which effectively translates into a 30% drop in the cost when buying that London property!

Research has shown that a good 30% of London residential property purchasers are Asians and Singaporeans make 5% of that percentage!

Foreign students are also increasingly important with over 90,000 overseas students studying in London. Student numbers have also risen by 18% in past 5 years and the UK is second most popular foreign destination to study among Singaporeans.

Interest nterest Rates Low and Economy Recovering The UK base rate is 0.5% which is the lowest rate in the Bank of England’s 315 year history. This is good news for foreign buyers who now have cheaper borrowing options from their local banks!

It is however quite the opposite in the UK market as people are still finding it difficult, or expensive, to access finance due to the tightening of credit in the banks. It is believed banks want to discourage unsecured borrowing and high loan rates are an effective method of deterring would be applicants.

This deterrent has caused the Prime London property to slow which is a major reason why many UK developers have been increasingly promoting their developments in the Far East where buyers have sufficient liquidity and borrowing power.

In the long run, we expect interest rates to remain supportive of house price growth even after they have been raised from their current historic low while the terms of mortgages are also likely to become more supportive once the short-term uncertainties abate.

www.britcham.org.sg

East London will see a massive upgrade in facilities from hosting the Olympic and Paralympic Games. The area will beneďŹ t from a 500 acre Olympic Park reaching from the Hackney Marshes to the Thames, which will include an Olympic stadium, aquatic centre, along with several other sporting complexes and a 17,800 person Olympic village.

2012 London Olympics to Provide Additional Stimulus The Olympic Games is expected to provide additional stimulus to the London economy and housing market.

Previous Olympic venues delivered 1.7% pa house price growth above the national average in the 5 years preceding the Games.

Property prices in the East of London have already risen 26% since the city won the race to host the 2012 Olympic and Paralympic Games. Part of this rise is likely to have been due to an increased interest in property in these locations from both buyers and investors as a result of the associated regeneration taking place.

SigniďŹ cant transport improvements are also taking place. Stratford Regional and Stratford International Stations will be the main transport hub come 2012. It will be served by London Underground, Docklands Light Railway and National Rail services, with Crossrail services planned to serve the station from 2017.

Currently under construction in Stratford is the new WestďŹ eld Stratford City which will be the largest urban shopping centre in Europe. Due to open in 2011, it will be a huge boost to the area and its surroundings.

Looking Forward Now that the election and budget are over, the uncertainty of the short term market environment is removed.

A number of factors will continue to inuence the Prime London residential market as we have seen. The demand/ supply disparity of Prime London housing, inux of foreign investors and the forthcoming 2012 London Olympics will provide support for higher house prices.

www.dstproperty.com

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orient 15

creating opportunities

Corporate Responsibility Sustainability

WATER SHORTAGES IN ASIA ISSUES FOR THE REAL ESTATE INDUSTRY

R

ecent years have seen concern grow over a world d water crisis as unpredictable weather patterns, agricultural production, rapid urbanisation urb banisation and population popullation growth work wor rk together to increase demand for fresh estimates fres sh water. The UN estim mates that over one e billion people currently lack access to cclean lean drinking water aand nd more than double not dou uble that number do no ot have proper sanitation. In Asia, water shortages are already alre eady being reported as the region grapples with the twin n impacts of population pop pulation growth and climate change.

Other Oth her factors such as pollution and the uneven une even distribution and d wastage of water wat ter resources are also ccontributing ontributing to water wat ter scarcity.

According Water Acc cording to the 2030 Wa ater Resources Group, Gro oup, around 60% off China’s 669 cities citie es are already short of of water, with demand decades dem mand in the next two d ecades set to rise e by 32%. India is also suffering from rapidly diminishing water wate er supply due mismanagement to m ismanagement of water waater resources, over-pumping underground ove er-pumping of undergr round aquifers and d pollution, whilst sshortages hortages are also o impacting Vietnam and Thailand.

Despite Des spite having no natural naturral aquifers or lakes small lake es and only a very sm mall land mass Singapore to ccollect ollect rainwater, Singa apore is one of which the few Asian counties wh hich has made encouraging enc couraging strides towards towarrds addressing the issue of water scarcityy and is widely regarded as a world leader leaader in water 1960s management. In the 196 60s and 1970s water commonplace wat ter shortages were com mmonplace as urbanised, the country rapidly urba anised, but in recent Utilities rece ent years the Public U tilities Board (PUB) (PU UB) has largely succeeded succeed ded in creating

a sustainable, su ustainable, diversified diverssified and reliable supply supp ply of fresh water watter by adopting a “Four “Fou ur National Taps” Tapss” strategy which sources sour rces the precious resource from local catchment imports catch hment areas, im mports water from overseas over rseas and uses reclaimed re eclaimed water and desalinated desa alinated water.

Singapore’s “Four National Taps” Strategy Whilst the impacts of of water scarcity on the property property sector will will vary around the globe, glob be, the real estate estatte industry is only now w beginning to wake waake up to the extent of emerging emerging water risks. In Asia, the region’s regio on’s limited supply supp ply of water, rapidly increasing incre easing demand,, potential price increases, incre eases, climate cchange hange and weak infrastructure mean infraastructure all me ean that securing access acce ess to high quality, qualiity, affordable and reliable sources of fresh water will become beco ome increasinglyy challenging in many man ny markets. Indeed, In ndeed, prevailing

“over “o over one b billion illion people curren currently ntly y lack access to to clean drinking water” wa aterr” patterns patte erns of high water usage within the building sector, which which accounts for 17% of freshwater w withdrawal ithdrawal globally, expose expo ose the real estate industry to serious serio ous utility shortage and price risks.

Regional water price prices es are likely to rise in tthe he coming decade deccade as buildingrelated relatted water needss grow in tandem with rapid urbanisation and population and economic growth. growth h. Water shortages, disruption disru uption and intermittent interm mittent supply will also bring additional costs. Sourcing an alternative supply alterrnative water sup pply is possible but it can caan often be difficult difficcult and expensive to use source. usse a private sourc ce. Building owners in some so ome cities around d the region often drill wells to access backup water but this practice may fac face ce more regulatory restrictions restrrictions going forward forrward as such wells can lead to land subsidence, sub bsidence, saltwater intrusion lowering intru usion and the lo owering of ground water wate er levels.

Water Wate er rights and water priorities will impact commercial comme ercial buildings in particular partiicular as they are are less protected

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seve ere water water shortages than from severe erties in Asia. Across the residential prope properties dom mesticc users generally take region domestic wh hen it comes to water rights, priority when ricultural and industrial followed b byy agr agricultural owne ers of commercial and users. For owners dings, the rising cost residential build buildings, creased unreliability of of water o orr inc increased cou uld result ressult in higher operating supply could comp petitive rental rates and costs, less competitive occu upancy rates. Buildings that lower occupancy amounts of water or use it use large amounts d well become obsolete inefficientlyy could authorrities introduce legislation as authorities waater efficiency and mandating water

environmen ntally responsible tenants opt environmentally spaace only on nly in buildings allowing to lease space eff ffective ely manage and reduce them to effectively their waterr footprint. Building location be ecome e increasingly important will also become ctor in determining how as it is a major fac factor e a prop perty will be to risks such susceptible property carcityy, supply disruption and as water sc scarcity, usage related regulations. Developers will need to carefully assess the vulnerabilitty of ttheir heir projects in certain vulnerability drought when planning to areas to drought build new projects, while acquire land or build examin ning local lo ocal water infrastructure also examining whe ether it will be able to meet to see whether an nd projected pro ojected demand. Some existing and so ome areas areas within cities will cities or some experience dramatic fluctuations in water availability, resulting seasonal water uantiity and quality supply in water q quantity fo or properties pro operties located in these problems for Othe er sites site es may well be close to areas. Other sourcces off water pollutants which major sources quality of water supply. could affectt the quality

www.britcham.org.sg

In some parts of the world, shortages have already become so severe that city authorities are already beginning to take a more aggressive approach to handling water shortages and to limit new development in areas lacking water. Such measures may limit development going forward which could increase demand for available housing, a factor likely to drive prices up. On the other hand, cities may opt not to limit development, resulting in more intense water shortages and subsequent price rises, factors which may compel residents and tenants to move and thereby ultimately resulting in falling prices. With many cities in Asia grappling with worsening water scarcity and uninterrupted population growth, developers may face stricter laws of this type in the years ahead. New projects may be required to include water conservation measures or in some cases may even have to develop an alternative source of water supply, such as a treatment plant that can recycle waste water.

Green, sustainable building design Most water used by a building occurs during its operational phase and is typically used for direct tenant consumption, cooling systems, and operations and maintenance. It therefore follows that green or sustainable building design is a crucial step in reducing vulnerability to water risks through the use of water-saving technology and various conservation measures.

Typically more water is consumed outside buildings than is used inside, and smart landscaping and irrigation are taking an increasingly important role in green building design. New technology such weather-based irrigation can help building owners reduce water use by assessing weather conditions and

soil moisture to deliver water based on the needs of plants.

Other water-saving landscape features such as bioswales, which remove silt and pollution from surface runoff water, can also help conserve water as can more low-tech solutions such as Xeriscaping, an approach to landscaping that assumes a dry climate and uses only drought resistant plants and vegetation that is accustomed to a dry environment. Rainwater catchment and reuse systems such as siphonic roof drainage technology which uses negative pressure to draw water along horizontal piping and into storage tanks are other effective water conservation measures commonly found in many leading green buildings today.

Interior measures can also be installed, such as properly insulating and preventing leaks in piping and installing water conserving fixtures such as low flush or composting toilets, low or no flush urinals, aerators on taps and low flow nozzles on showerheads.

Building air-conditioning and cooling systems also use large quantities of water but technology such as variable refrigeration volume systems can cool individual rooms or parts of a building depending on tenants’ requirements.

The installation of sub-meters is another practice that can achieve water savings.

Sub metering products and software can measure when, where and how much water is being used and provides users with the information necessary to implement efficiency measures to lower usage and costs. All of these watersaving technologies and measures can reduce utility costs for building owners and tenants, thus reducing operating costs and improving rentability.

Buildings with water intensive designs and inefficient features and systems may eventually become obsolete as authorities mandate greater water efficiency in buildings and tenants opt for offices or homes providing a cheaper and more sustainable supply of water.

Global water scarcity The issue of global water scarcity is now firmly in the spotlight and governments and the private sector

are beginning to respond to the increasing unpredictability of weather patterns, growing economies and rises in population. The real estate sector is gradually starting to realise the full extent of emerging water risks and there will be a far greater emphasis on water conservation and efficiency in buildings going forward. Companies will be compelled to develop programs for water footprinting, and establishing water management goals at the corporate level as well as for specific facilities will be an increasingly common practice. Many governments, including the one here in Singapore, are gradually introducing and enforcing stricter building codes that require design and operational measures to recycle and conserve water, especially in cities with high exposure to water scarcity, thereby facilitating the growth of the green building market. Rainwater harvesting, grey water reuse, fixture replacements, water metering and cooling tower water reduction in buildings will prevent obsolescence and add significant value to projects by lowering annual operating costs and increasing net operating income. Investors will place far greater focus on assessing a building’s exposure, vulnerability, and capacity to mitigate water scarcity risks and will likely favour companies that have adopted green practices so they can reap the benefits of green properties. Site selection will become increasingly important as developers and investors look to ensure their projects are situated in areas without existing or potential future water scarcity issues.

In an ideal world however, new real estate developments will create little or no additional water demand at all as their water needs will be met by green design features. Whilst such a scenario is still some way off, it is clear that the real estate sector has a crucial role to play in using water in a responsible and sustainable way as stress on Asia’s water resources continues to intensify in the years ahead.

www.cbre.com.sg orient 17

Inside Britain

connecting business

THE UK AT SHANGHAI EXPO: BUILDING ON THE PAST, SHAPING OUR FUTURE

Katarina Stuebe

What has it meant for Business?

Expo has been a conspicuous success for the UK. The UK pavilion, designed

by Thomas Heatherwick, has captured the hearts of visitors. It is the winner of this year’s RIBA Lubetkin prize (for the most outstanding UK building overseas in 2010). This amazing structure stands out among the noise, the flash screens and the crowds of Expo. It has a clean, sculptural beauty which perfectly captures the imagination, and promotes the UK as a creative, innovative, energetic partner for China.

The UK pavilion will have received over 8 million visitors by the close of Expo at the end of October. It was the most visited pavilion at Expo and is the UK’s biggest visitor attraction in the world: bigger than the British Museum, Blackpool Illuminations etc. Visitors have included China’s top leadership and government, as well as business and political leaders and royalty from around the world.

Amongst these were BritCham’s own business mission led by HE Paul Madden in September.

The Pavilion, and the 300 events staged during the 6 months, were all designed

18 orient

to challenge outdated perceptions of the UK. The Pavilion acted as a focal point, driving participation in events, over 50% of which were designed to promote increased trade and investment.

The VIP service alone attracted 3000 Chinese business contacts and potential investors. The UK’s image is now that of a trade partner for future growth, with an economy which is a great “fit” for China’s own aspirations and ambitions, and as the prime inward investment destination in Europe for Chinese companies.

Shanghai Expo has also been a big success for China. Shanghai stands to benefit hugely. Some World Expos are credited with triggering economic advancements in their host cities and countries. In 1933, Chicago’s World Fair helped boost America’s push out of the Great Depression. Shanghai’s own facelift is an ambitious statement about the city’s future place on the regional and international stage. The transformation has covered new urban infrastructure throughout Shanghai (costing US$50 billion); and the world’s largest ever single urban regeneration project, the Expo site (another US$5 billion). The city’s roads, metro system, tunnels and

airport terminals have been upgraded.

With six new metro lines, Shanghai’s metro is now the second most extensive in the world, from scratch 12 years ago.

Economic restructuring has also been pushed and many polluting factories have been removed: a strategy entirely in keeping with the Expo theme of “Better City, Better Life”.

All of these developments offer opportunities for the UK. The challenge, and the opportunity, are clear. To give an idea of the scale of the opportunity: each 1% increase in exports to China, investment from China, in student and tourism numbers can deliver in ball park terms over £200m to the UK economy.

For more information on business opportunities for British business in China visit the UKTI website: www.ukti.gov.uk Founder Sponsor

UK Pavilion, Shanghai World Expo 2010

www.britcham.org.sg

Katarina Stuebe

UK National Day On 8 September, the UK held its National Day at the World Expo in Shanghai, with a delegation led by HRH the Duke of York and a host of events highlighting strong UK/China partnerships. The Chinese delegation was headed by Vice Foreign Minister Madame Fu Ying, the most senior counterpart afforded any EU nation at Expo. Events included a ceremonial flag raising and exchange of gifts; a joint ballet performance between the English National Ballet and Shanghai Ballet, which was spectacular in scale and execution; visits to the UK and Chinese pavilions; an outstanding concert by the London Symphony Orchestra; and finally a networking “Party in the Park” for 400 to close the evening. The programme also featured the Band of the Royal Marines; the investiture of the first Chinese citizen to receive an OBE (for his contribution to scientific links in botany and biodiversity); and performances by the pavilion’s resident street performers.

National Day was given added weight by the gala dinner for the third annual British Business Awards, which took place the evening before. Among a total of 8 awards, for the first time, a Chinese investor in the UK (Shanghai Automotive) was honoured as being among the “best of British”.

In the very competitive Expo environment, and in a country where the UK has a somewhat outdated and diffident image, the Head of the Expo Bureau commented that the UK National Day programme “knocked the socks off” all others’; and that the UK pavilion and programme is widely

Katarina Stuebe

recognised by Chinese officials as being head and shoulders above our competitors.

From one Crystal Palace to another 1851, London: the world’s first Expo and nothing like it had ever been done before. Crystal Palace stunned 6 million visitors with its incredible creative design. Over 150 years later the UK received over 8 million visitors to its “Seed Cathedral” in Shanghai; a design just as startling and cutting edge as its ancestor.

The first World Expo at Crystal Palace was held at a time of rapid urbanisation and industrialisation in the UK; a time when the UK was facing similar challenges to those in China today.

The response was the innovation of many of the technologies and inventions we now take for granted such as: the underground train (1863); the telephone (1873); and the electric light (1878).

Another simple but powerful innovation was the first public park.

This transformed the lives of the urban population and was the inspiration behind the UK Pavilion’s “urban park” and walkways.

But the UK has never stood still. Over the last century the UK has turned trains into hybrid engines, telephones into the internet, and the electric light into lunar power. The Pavilion reflects this too; a dramatic demonstration of the UK’s continuing power to innovate and create.

Lucas Digital

The Seed Cathedral: Like all great buildings of their time, the UK pavilion is a powerful symbol of a forward-looking nation; a statement of the UK’s creativity, modernism and innovation. Nothing like it has ever been built before. The Seed Cathedral is a physical representation of the Millennium Seed Bank, an amazing project to preserve our planet’s biodiversity for the future. Together 60,000 slender transparent rods draw on daylight to illuminate tens of thousands of seeds in the heart of the Seed Cathedral. But it is at night that the building really comes to life. Sitting right alongside the bank of the Huangpu River, tiny lights glow in the night sky, as the building gently moves in the breeze.

Inspiring the Imagination Described as one of the three most desirable Pavilions to visit, the UK Pavilion is an iconic structure representing British creativity and innovation at its best. Designed by multi-disciplinary designer, Thomas Heatherwick, it inspires the imagination.

Visitors are guided through walkways that show the greenery of cities, water as a life force and the use of plants by science. On entering the structure, the eye is drawn to the elegant spines that channel daylight into the interior, evoking a sense of wonder and awe.

The Urban Park During Expo the wide open space around the Seed Cathedral hosted troupes of UK performers. Drawing from the UK’s strong heritage in the tradition of performing arts, from Shakespeare to contemporary dance and street theatre, visitors experienced a taste of the UK cultural scene.

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Economic & Business Insights

connecting business

COMMODITIES  RISING PRICES  HOW DO YOU PROFIT? By: Aidan Bailey BA(Hons) CertPFS AWPCM General Manager Singapore, International Division

A

s you may have seen on the news, wheat prices are rising fast in reaction to drought and brush fires in Russia which has cut back production.

Russia has also recently taken the unprecedented step of banning grain exports, at least until the end of the year.

Where Russia is traditionally one of the largest producers of wheat, it is hardly surprising to see that prices have inflated and that will translate to a hike in cost of your daily breakfast.

So what does this mean for inflation and your investments?

With consumer price index inflation (CPI) already well above the Bank of England’s target of 2% and with these further inflationary forces in the pipeline, it would be easy to assume that the Bank of England will look to raise interest rates to dampen things down.

But I suspect nothing will happen.

It comes down to understanding the source of the inflation. The sort of price inflation that is worrisome for policymakers is inflation driven by wages. If there is excess demand for goods over supply, prices will rise to meet that demand. In turn, workers will demand higher wages to compensate,

“volatility is too great and high commodity prices almost automatically create the conditions for their own destruction” and then companies raise prices again to make up for the higher wage bill. This in turn leads to demands for higher wages again and, pretty soon, you get into a vicious circle.

That isn’t the sort of inflation that we have at the moment. Average wage growth has actually slowed in recent months and, hardly surprising, as unemployment is so high.

The inflation we have at the moment is being driven by a hike in raw material costs such as energy and food.

Significantly, these are all the things we need and find hard to cut back on. So, if you can’t cut back on these essentials and your wages aren’t rising as fast as your costs, that means you have to cut back on other things. So in this case, rising costs act a bit like a tax. A further drag on the economy.

So, for the time being, I suspect the Bank of England will continue to remain more worried about another slump rather than an inflationary spiral and that means that interest rates ought to remain low for the foreseeable future.

20 orient

www.britcham.org.sg

conditions for their own destruction people spot the opportunity to profit, so they plant more, they work on more efficient ways to grow things, they turn more land over to agriculture. In turn, this increases supply and prices drop.

A much more effective and relatively safer way is to invest in the companies in the supply chain that will make money by helping us to meet this demand.

There are plenty of funds in this sector that will manage the investment mix for you, retreat into cash when the time is right and use appropriate hedging to limit price volatility.

How to make a profit?

Low interest rates will continue to encourage investors to seek out yield elsewhere and that should be generally supportive of markets. However, in terms of profiting directly from growing

demand for food, how should you go about that?

www.thefrygroupsg.com

Personally, I am wary about investing into commodities directly. The volatility is too great and high commodity prices almost automatically create the

orient 21

Economic & Business Insights

coneecting business

COMBINING PHYSICAL AND DIGITAL LOGISTIC TO ENHANCE SPEED TO MARKET

S

peed rules our lifestyles nowadays.

Everyone wants things faster.

Instant gratification has become the rule rather than the exception. Consumers expect their orders to be fulfilled within days instead of weeks, hours instead of days.

The growth of e-commerce has further driven this need for speed to unprecedented levels. Just as fast as consumers can shop online nowadays with a few clicks of the mouse, they expect the same speed for the actual goods to be delivered to them.

This universal desire for speed has put immense pressure on businesses to keep pace with their customers’ expectations or risk losing them to those who can.

It’s survival of the fastest. To stay in the game, all a company needs to do is to find a logistics provider with an efficient customs-clearing and transportation systems right?

Traditional logistics providers will tell you so, but that’s only one part of the story.

customized according to business requirements and integrated into an organization’s workflow.

These digitized documents can flow seamlessly back and forth with physical logistics, creating a vigorous digitalphysical interaction that delivers goods faster and smoother. Immediately it will bring about multi-faceted advantages such as increased productivity, higher cost and time savings. Ultimately, this will translate into the ability for the company to focus on its core business, the nimbleness to respond to changing business needs and the power to increase customer satisfaction.

both the physical and digital realms.

Companies like DHL Global Mail has recently launched their Hybrid Solutions suite and are leading the transformation of traditional logistics players to partake in the digital revolution to speed up information flow. So what can companies expect from such hybrid solutions? Which parts of the logistics lifecycle will they help to speed up?

Going beyond traditional physical logistics Though critical, physical logistics does not form the whole equation for success.

It is the facilitation of documents that makes the difference.

Yes, before the wheels of physical logistics even start rolling, you need to take care of documentation – and that’s where the power of digital logistics kicks in.

But who should businesses go to so as to claim such advantages? While pure physical logistics providers are good at what they do, it is unlikely that they can help businesses when information flow crosses over to the digital realm.

Similarly, while there is no lack of players in the electronic field to address email, imaging, hosting and workflow needs for businesses, they are not proficient to fulfill physical logistics support.

Speed up with imaging Every day, many organizations churn out large volumes of all manners of documents from mail to forms to invoices. Currently, for a lot of companies, this colossal amount of data generated in their physical form, is likely to slow down delivery of information and goods to customers and other external parties.

Digital solutions could change this entirely. It holds the key to realization of speed – where information comes in and gets out quickly. With a full digital solutions platform, companies can dynamically manage imaging and hosting needs from a single source.

Here’s how it works.

Digital logistics is primarily concerned with converting and processing documents digitally. Once physical documents are converted into meaningful digital data, they can be

In light of the above, the market is inclining towards hybrid solutions providers with the ability to support information management across

With the appropriate document conversion solution, companies can not only scan images but also host them online or output to a hard drive

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or other storage media as required.

Innovative intelligent and optical character recognition technologies are now also available for implementation into the scanning process. With such technologies, images are not just scanned but converted into meaningful data that can be sorted, indexed and organized for easy access.

Such organized scanned data could improve workflow significantly especially if a company chooses the right solution tailored to their individual business needs. For instance, companies could use such digital data for office functions such as accounts payable or accounts receivable, to add efficiency to their payment processes.

Faster retrieval to enhance customer experience Speed is again critical in records management, the other end of a typical logistics lifecycle. More businesses are realizing the value of properly archiving and storing their records. And rightly so because the faster you can retrieve a record, the better you can service your customers.

As such, companies are increasingly willing to invest in a rigorous records management system that enables them to retrieve critical information and items where and when they need it.

A good records management system catalogues, codes, prepares and stores physical records properly well to enable prompt and efficient retrieval. It also indexes and archives digital records and makes them available for online retrieval so that companies can gain instant, global access to their data.

Electronic Invoicing - the Way of the Future Invoice presentment and payment has always taken up a substantial part of an organization’s resources and time. For organizations that are heavily involved in accounts payable and accounts receivable, the traditional paperintensive way of processing cannot quite catch up with the current hastened pace of business.

That is why electronic invoice presentment and payment has become increasingly relevant. Not only does this way of e-trading reduce the amount of paper used for documenting and

storing transaction information, it also reduces costs and errors on one hand, and enhances cash management on the other.

As such, instead of a paper-oriented billing process, many organizations are now leveraging information technology to put in place a lower-cost, higher efficiency electronic transaction processing system as the advantages are compelling.

For billers, e-invoicing dispenses them from a number of manual processes including printing, mailing, documenting, storing and reconciling paper invoices.

For payers, e-invoicing provides regular updates on invoice status and payment timings that enable them to estimate cash outflow with higher certainty, thereby helping them achieve better and more efficient working capital management.

Achieving print management with one-click efficiency Another key node in the lifecycle of information flow is print management.

Imagine a customer who subscribes to a magazine online today. The person probably expects the first copy of the magazine to be delivered to his or her letterbox within days. How do you promptly and smoothly fulfill that order?

Traditional logistics suppliers would likely focus on how they can help you transport the magazine from the warehouse to your customer’s letterbox as fast as possible. But the order will still be delayed if there is no efficient system to take care of the customer’s order from the time the ‘subscribe’ button is hit, to the processing of the order form, to printing it.

friendly as they reduce or eliminate paper volume. This is achieved by the combined power of pre-sorting of print files with servers and a one-stop production centre.

A one-stop production centre can take care of the entire process from printing, enveloping and franking to delivering business mails to national postal networks. While minimizing paper wastage, this type of centre also tightens the process and saves the company precious time and money.

Taking charge of every distribution need Another segment of the logistics lifecycle is distribution. Across industries, again to respond to customers’ expectations of speed, companies increasingly seek more efficient distribution management systems.

The solution they are looking for should feature the following: a single point of contact to address postal, courier and freight needs, as well as customized scheduled distribution of physical and digital office documents that can be tracked with software programmes.

Besides distribution, a good solution should also manage the returns. By having an adequate system to support the sorting, encoding and return of physical items and capturing of returns data according to individual business rules, the company can move, manage day-to-day operations with greater ease and speed.

Today, these needs can be realized as there are solutions that enable sending out of large volumes of day-to-day international business mails including order forms, invoices, statements and confidential documents digitally with one click of a mouse.

New formula for success – combining physical and digital logistics Understanding the new physicaldigital logistics dynamics is a key step to establishing your business to stay in command. Think about the speed and efficiency this transformation could add to your business processes.

Now is the time to incorporate digital logistics with physical logistics. Look for a service provider that provides outstanding physical logistics support and holds the key components of digitization in their hands at the same time.

These innovative print management systems also enable organizations to respond to the call to be environmental-

www.dhl-globalmail.com orient 23

Economic & Business Insights

THE PURSUIT OF HAPPY INVESTING

connecting business

by Mark Sing, Vice President, ipac financial planning Singapore private limited

T

he happiest man in the world is not necessarily the richest. Many of us associate happiness and income closely, and we all know people with windfall dreams, people who express a desire to stop working if they come into money, so that they can do other things in life that they are more passionate about.

The first Gallup World Poll surveyed over 136,000 people in 132 countries, representing 96 per cent of the world’s

population, asking them questions about happiness and income. The results showed that life satisfaction rises with income, but not necessarily positive feelings.

Unfortunately, many people do not truly have a sense of how happy they are or the simple steps they can take to become happier in their career, relationships, and especially with finances. People can become emotionally invested when it comes to their finances, which affects the decisions they make about their money.

To begin the pursuit of happy investing, invest in the following steps instead of investing in your emotions:

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1. A good plan People do not plan to fail but most of the time they fail to have a financial strategy.

If we spent as much time planning our financial affairs as we do planning our annual holidays, we would be better off financially. People who have a plan report that they have a greater satisfaction with life. Your plan should be based on your goals – not goals someone else says you should have, but on the things you wish to achieve or acquire.

A good plan is also flexible enough to accommodate life changes, whether its marriage, a new bundle of joy, a crosscontinent move, or that big career break you’ve been waiting for. It also helps to have the right guide who will plan for you and your interests, and not for his sales commission.

2. Making Time your friend First, you have to give your investment time to grow. It’s important to get in the game of investing sooner and realising the benefits of a long-term investment horizon. Many people make the error of confusing returns for performance.

Chasing high returns or attempting to chase trends over the short-term makes you a speculator. It’s impossible to time

the market, and successful investors don’t try to. They tend to look for consistent returns over the long-term.

Short-term fluctuations don’t trouble such investors because they remain focused on the long-term behaviour of their chosen assets. Investing at regular intervals will help to even out the unpredictable ups and downs.

Remember that time in the market is more important than timing the market. If you are constantly watching your investment and it is keeping you awake at night, perhaps you are taking too much risk or you are unsure of what you are doing! Review your portfolio annually and in the context of your longterm objectives.

3. Realistic returns Most people look at the return of a potential investment rather than the likelihood of achieving that return. A key determinant to your portfolio’s performance is choosing the allocation of your funds between the four main asset classes (cash, fixed interest, property and shares. Research by the Financial Analysts Journal indicates that up to 80% of investment returns are (over time) determined by the asset allocation decision, making it one of the most important decisions an investor has to make.

Each asset class has unique characteristics in relation to risk and as a general rule tend to work counter cyclically. For example, when interest rates are high, share markets are likely to be low, as investors will favour the lower risk associated with cash and fixed interest investments. Conversely, when interest rates are low, investors will accept share market volatility if it brings the prospect of higher returns.

The return from your investment is derived from the risk taken by your portfolio (and how effectively the risk of your portfolio is managed). Analysis

www.britcham.org.sg

5. Estate planning While it is important that you have a will and update it regularly, proper estate planning ensures your assets are structured in the most effective way. Together with this, make sure you have sufficient life cover and critical illness insurance, and that it’s all clearly integrated into your estate. The best gift you can leave your beneficiaries after you’re gone is an estate that is in order.

of long-term returns from cash, bonds, property and equities reveals that the four asset classes are likely to produce the following real returns (after inflation), illustrating that the risk of negative returns are dramatically decreased over time.

penalties if you wish to withdraw from the investment.

4. Expecting the unexpected It’s not a bad idea to take a leaf from the Boy Scouts Movement: “Always be prepared.” If you’re in a personal quagmire and dealing with other

source: The Road to Wealth by Paul Clitheroe/ipac securities.

The key to managing this is a welldiversified, well-balanced portfolio with an asset allocation that is suited to your personal circumstances and risk appetite. A well-diversified portfolio should be spread across asset classes, global markets and fund managers. Also review your portfolio at least once a year to check that you are on track to your long-term objectives.

Beware the “sexy” investment that tempts you with returns that sound too good to be true. If it sounds too good to be true, it probably is. Always find out the back story, and by that we mean find out about the underlying basket of investments and whether it suits your risk appetite and your longterm objectives. Also read the fine print for any hidden fees or costs, and any

stressors, the last thing you want is your finances in a mess and to struggle to make sense of them.

When it comes to investment, don’t lock yourself in if you can help it. This means investing your money in such a way that you can access it if you need to. Find out beforehand whether there are any fees or transaction costs involved in the event that you have to withdraw or wind down from your investments, and how long it would take for you to access the liquidated amount.

6. Being generous of spirit Realise that money alone will not make you happy. People who live rewarding lives and who find fulfillment in what they do are less likely to try to use money as a short cut. They are more likely to make better long-term plans because they realise that true gratification comes from treating money as a tool to achieve their life objectives.

Two of the richest men in the world, Bill Gates and Warren Buffett, not only give away their fortune to help others in need, they encourage others to do so. Giving with a sense of appreciation is one of the greatest enduring source of happiness.

The best part is, you don’t have to be the richest person in the world to help others.

The secret to happy investing is to think about what you want your money to do for you, not the other way round.

This means having a financial strategy for you, not just for your money.

Understanding how to make the most of your financial resources, and being able to link them to what you want to achieve in life, is a more meaningful approach to money. This approach will help you take more effective control of your personal finances, and more importantly, your peace of mind.

www.ipac.com.sg Most importantly, keep good records.

If something should happen to you, make sure your family knows where your file your financial statements and documents, as well as insurance policies, and who to contact.

In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any person. Before making an investment decision, you should speak to a financial adviser to consider whether this information is appropriate to your needs, objectives and circumstances.

orient 25

Economic & Business Insights

connecting business

CURRENCY VOLATILITY  BOON OR BANE FOR COMPANIES? By: Andrew Robinson, Market Analyst, Saxo Capital Markets C orporate exposure to currency movements has risen as a result of the escalation in global trade in recent years. These currency movements are seeing more volatility of late and there

is little sign that this is about to change, providing a boon to some companies and a headache to others.

Hedging is the process whereby companies attempt to protect themselves against unexpected movements or developments in currency markets. An effective hedging programme should not seek to eliminate all risk but is targeted at striking a balance between the benefits of protection against the costs of hedging.

It is noted that shareholders, or investors, do not like unpleasant surprises such as unexpected losses and naturally, such an adverse turn will not endear a company director or fund manager to his respective investors.

Operating risk For non-financial organizations, operating risk covers the risk associated with both manufacturing and marketing activities. These kinds of risk cannot be hedged since they h are a not traded so it is the t second category of o risk – financial risk r – that will be the focus of this piece. f Financial risk is the F risk r a company faces due d to its exposure to market factors such m as a interest rates, FX rates, commodity r and a stock prices. With the development t of o financial markets over the years, all of these risks can be hedged, using simple or more complicated hedging tools. There are relative costs attached to each hedging instrument, depending on its complexity.

In determining which risks to hedge, the risk manager should always consider the risk profile of the company.

Financial risk Within the framework of financial risk, we can break exposure down into a number of sub-categories:

The instruments used to hedge the respective risk in the list above may become more complicated. To hedge transactional risk, a manager may use simple spot FX, Forward FX or FX currency options.

Spot FX simply involves buying a currency and holding it ready to make a payment when it becomes due – this would be very short-term in nature.

Forward FX involves a contract to buy one currency against another at a specified rate for a specified delivery date. The advantage of this is that the rate is fixed and the cost is relatively cheap but there is no scope to take advantage of a sudden shift in exchange rates in the company’s favour.

FX Options are a financial foreign currency contract giving the buyer the right, but not the obligation, to buy or sell one currency for another at a specific price on or before a specific value date. This kind of hedge tends to be more expensive, depending on the structure, but has the advantage that, if FX rates move in a company’s favour, they can walk away from the contract and transact at a cheaper rate in spot or forwards markets, with the only cost being the premium to buy the initial option.

“Identify; Select; Understand; Evaluate and Control”

But in order to put in place an effective hedge, it is first necessary to determine key risks to which a company is exposed.

We can basically look at these under two broad categories – operating risk and financial risk.

26 orient

Transactional Risk – related to shortterm currency transaction flows.

Translational Risk – more long-term focused and is the exchange rate risk associated with companies that deal in foreign currencies or list foreign assets on their balance sheets.

Economic Risk – Identifying competitive advantages and disadvantages arising from longer-term currency movements and its impact on costs and revenues.

When it comes to managing a company’s longer-term obligations, managers look to interest rate swaps, interest rate options or foreign currency swaps to

www.britcham.org.sg

eliminate, or at least reduce exposure, to movements in interest rates. Interest rate swaps usually involve parties exchanging fixed rate exposure (for example where a company has issued long-term bonds) to floating rate exposure (usually pegged to a shorter-term fixing that is “fixed” at regular intervals throughout the life of the contract). Interest rate options are a derivative of interest rate swaps and, like the FX equivalent above, involve the buyer holding the right, but not the obligation, to exercise the option at, or before, maturity.

Once the risk manager decides what to hedge and how to hedge it, the cost to hedge may be a factor in determining the way the hedge is structured. It will also be necessary to implement a system to evaluate the performance of the hedge, relative to if it was never put in place. The performance evaluation can be simplified if appropriate (and realistic) goals are established at the onset. A hedging programme would also require a system of internal policies, procedures and controls to ensure that it

is applied and used appropriately and to avoid abuse.

If so many hedging tools are available to the corporate sector, why do we still read of companies making provisions in annual reports for exchange rate losses?

The mention of derivative instruments is prone to raise the hackles of many an investor when you consider their involvement in the financial crisis of 2008. They have certainly been heavily associated with speculation in the past and as a result many corporate risk managers may shy away from using them, thinking they may be adding more risk rather than lowering it.

In addition, within certain corporate structures, it may be possible that by not hedging an exposure, it will remain unnoticed by the board of directors, while hedging strategies may indeed receive an excessive amount of scrutiny and may involve explanations and education of the Board on its benefit.

Finally, unfamiliarity with a particular derivative product may prevent a risk manager from using a particular tool in his hedging strategy.

In conclusion, the use of hedging strategies is designed to reduce both risks and costs. It allows company directors to concentrate on core activities of a company’s business rather than face the distractions of currency movements, which are becoming more volatile by the day. In short: Identify; Select; Understand; Evaluate and Control to keep your shareholders and investors happy.

www.saxomarkets.com.sg

orient 27

Economic & Business Insights

connecting business

A HEALTHIER WORKFORCE MEANS BETTER BUSINESS FOR YOU

E

mployee health is a crucial factor in ensuring an organisation’s wellbeing and business success.

Currently, three in five companies have invested in a workplace health promotion (WHP) programme to enhance the health and wellbeing of their employees. Over the years, the proportion of private companies (with a workforce of at least 50 staff ) implementing a WHP programme, has risen from 33% in 1998 to 59% in 2006 (Source: National Workplace Health Promotion Survey 1998, 2003, 2006).

The increase in number of organisations implementing a WHP programme is not surprising; more organisations have realised that putting in place a WHP programme is a key strategy to boost employee productivity and enhance their competitive edge.

Organisations which have a strong focus on building a vibrant health culture creates a conducive environment which helps in attraction and retention of talent. Some of the long-term benefits which organizations have reaped from having a WHP programme include: • Healthier employees who are more productive and less stressed • Reduced absenteeism ensuring business continuity • Lower healthcare and business costs • Higher staff morale • Improved corporate image and being seen as a choice employer which cares for the health and well being of staff

The Health Promotion Board (HPB) provides a comprehensive support infrastructure and works with organisations to implement a holistic and comprehensive programme to: • Address the key pillars of healthy lifestyle, i.e. physical activity, healthy

28 orient

promotion programmes on healthy eating, exercise, mental wellness, smoking control, chronic diseases and other health related topics.

eating, smoking cessation and mental wellbeing.

• Adopt a balanced approach which includes education, health promotion activities, environmental supports and organizational policies at the workplace.

The WHP Grant Consultancy services, training courses and seminars are just a few of the services available for organisations.

Organisations can tap on the WHP Grant, a funding scheme that provides financial assistance to help organisations develop and sustain their workplace health progammes. For SMEs, the Grant cofunds up to 90% of the cost incurred for each WHP project, capped at $10,000 and for non-SMEs, the Grant co-funds up to 50% of the project, capped at $10,000.

The Grant funds for health screening, health risk assessment and health

Organisations that are applying for the WHP Grant will be eligible to apply for the Mental Health Top Up Grant that is capped at $2,000. This Top Up provides financial support exclusively for organisations to sustain and augment their workplace mental health promotion programmes and activities.

The Mental Health Top Up covers a range of programmes and services including consultancy services, mental health needs assessment, mental health education and targeted interventions.

HPB has also recently launched HealthWORKS, a pre-designed programme which can be customised to suit the needs of organisations. To make it hassle-free for organisations, the appointed service provider will help or organisations apply for the Grant, as well as implement and evaluate their WHP pr programme.

Im Implementing a WHP programme One organisation which has benefited O from implementing a WHP programme fro is DHL Express (Singapore) Pte Ltd. The organisation is among the growing list or of companies which is committed to helping their employees keep fit through he quality health programmes. Since 2003, qu DHL has incorporated workplace health promotion into its organisation culture and made it a vital component of their work-life policy.

Placing a strong emphasis on healthy living amongst its employees, DHL’s WHP Committee ensures that employees of the multinational company which are spread across five facilities, receive information on health activities through various communication channels like e-mail, bulletin boards and face-toface sessions with supervisors. Apart from designing a WHP programme

www.britcham.org.sg

which includes health screenings and educational talks on the four pillars, mass workout sessions and gym memberships are also offered.

Since implementing its WHP programme, DHL has witnessed a drop in the average number of sick leave taken as well as a decrease in the proportion of employees with high cholesterol levels. Participation in health promotion

activities is enthusiastic, with an average of 65% of employees attending talks on healthy eating.

The increase in the usage of DHL’s inhouse gym during the mornings, lunch breaks and evenings is a reflection of the employees heightened awareness of the importance of keeping healthy so as to perform better at work.

For its efforts in promoting healthy living to its employees, DHL Express (Singapore) Pte Ltd was awarded a Silver award in the Singapore HEALTH (Helping Employees Achieve Life-Time Health) Award 2008. The Singapore HEALTH Award, presented by the Health Promotion Board (HPB), is a national recognition to organisations

with commendable Workplace Health Promotion (WHP) programmes and takes place once every 2 years.

Interested to find out how you can start a WHP Programme?

Visit our website at www.hpb gov.sg/healthatwork or email: HPB_Health_At_Work@hpb.gov.sg .

orient 29

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In 2010, every five stays completed before December 31, 2010, will entitle you to a complimentary nights’ stay at any Leading Hotel.

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High Commission News

building networks

BRITISH HIGH COMMISSION NEWS OCTOBER / NOVEMBER 2010

E

nergy has been a big theme for the UKTI team over the last couple of months. Working with the Institute of Southeast Asian Studies and the Energy Studies Institute, and the British High Commission’s climate change team, we profiled the UK’s low carbon industrial strategy and the opportunities for the future at a one day seminar at NUS. The UK is at the forefront of the global transition to a low carbon resource efficient economy. The sector employs close to one million people, and last year saw the UK overtake Denmark as having the largest installed capacity of offshore wind power, and the world’s most sustainable car being built by Warwick University. The UK announced a £400 million investment fund for low carbon industries and advanced green manufacturing last year and the first investments have now been made, in wind, wave and tidal energy, in a Nuclear Advanced Manufacturing Research Centre, in electric vehicle charging infrastructure, in low carbon affordable homes.

all EU countries. Modec has recently signed a joint venture with Navistar, one of the largest truck manufacturers serving the US, Canada, and South America.

This shift to low carbon is being supported by R&D in universities and other institutes. For example, Imperial College’s Grantham Institute for Climate Change and the Energy Futures lab was formed to take on major research and educational challenges in sustainable technology and the mitigation of climate change. The Centre for Efficient and Renewable Energy in Buildings at London South Bank University will research the latest low carbon technology and showcase developments in renewable energy products such as photovoltaics, solar thermal and wind power. And four R&D projects will share in £20 million funding from the Energy Technologies Institute, a partnership between the UK Government and global industry to speed up the development of low carbon technologies.

This strong focus on the transition to low carbon is seen in the UK and Singapore’s

trade and investment relationship too.

Imperial College and the University of Cambridge recently signed MoUs with the new Energy Research Institute @ NTU, which will focus on research into fast-growing and increasingly important areas such as solar power, electric vehicles and smart power grids. I was delighted that Sembcorp won UKTI’s Innovation Award at this year’s British Business Awards (BBA), for the UK’s first large scale purpose built biomass plant, which produces renewable energy from sustainable sources of wood. But what was striking was that environmental impact was a key part of all of the three finalists excellent submissions. For Gammon, this was through the comprehensive use of green design through the ITE campus to minimise heat gain and the need for air conditioning, and for IECO, through an industry leading system to reduce water consumption and waste water. I’d like to add my congratulations to all the winners and the finalists at the BBA. Within Singapore, the focus on low carbon vehicles continues to grow.

Singapore is starting to build its network of charging stations to be completed by early next year to support the introduction of electric vehicles. UKTI recently supported a major conference in the UK on electric vehicles and we were delighted that the Economic Development Board were able to

The UK is promoting effective business partnerships across industries and between the public and private sectors, enabling companies to grasp new opportunities as we move towards a low carbon economy. For example: - B9 Shipping is building a commercially viable cargo ship that relies primarily on sails, with support from a carbonneutral bio-methane engine. The first vessel will be launched in 2012.

- Modec produced the first commercial pure-electric vehicle to obtain N2EC Whole Type Approval, allowing it into Lord Ron Oxburgh, the Climate Change team and team of delegates at Building Carbon Markets and Climate Policy: Lessons from the UK

32 orient

www.britcham.org.sg

Singapore’s trade and investment relationship has continued to thrive in 2010.

If you’d like to read more about the UK’s low carbon industrial policy, or to hear Lord Oxburgh’s speech at the seminar mentioned above, please take a look at our website : www.ukinsingapore.fco.gov.uk/en/ wo r k i n g - w i t h - s i n g a p o re / c l i m a te change/recent-highlights

participate. We will be following up on this in Singapore early next year with more work on electric vehicles – so watch this space for more information.

However the UK and Singapore’s trade and investment relationship extends across the energy sector, beyond the low carbon sector. Many of you will have seen HRH the Duke of York on his recent visit to Singapore. He was fascinated to

visit Pulau Bukom to see the new Shell Eastern Petrochemical Complex - the largest Shell refinery globally. And at the end of the year, UKTI is looking forward to welcoming over 75 British companies to Offshore South East Asia (OSEA) – the biggest UK contingent in some time.

All this goes to reinforce the perception – and the reality - that the UK and

AMANDA BROOKS DEPUTY HIGH COMMISSIONER DIRECTOR OF TRADE AND INVESTMENT www.ukinsingapore.fco.gov.uk www.uktradeinvest.gov.uk

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BritCham

CHAMBER NEWS  OCTOBER  NOVEMBER 2010

building networks

Dear Members, As a programme highlight in Q3, we organised our first business mission in September 2010 expanding our services to members.

The mission was lead by HE British High Commissioner Paul Madden travelling with 14 delegates. We organised a compact and comprehensive 2 ½ days programme comprising of: • A market briefing by UKTI Shanghai • A visit of the UK Pavilion at the Expo Park • Further visits of the China, India and Vietnam pavilions at the Expo Park • A How to do Business in China briefing by the China team of our member Diageo • A networking session with members of the British Chamber in Shanghai • A tour through selected industrial sector pavilions showcasing the Oil & Gas industry and Financial Services at the Expo Park • A China economic briefing by Stephen Green, Head of Research at Standard Chartered Bank China hosted by BCC Shanghai Delegate’s feedback was very positive and encouraging particularly highlighting the quality of the Diageo briefing providing extremely eyeopening and meaningful insights into doing business in contemporary China of the 21st century, the excellent networking and matchmaking

34 orient

opportunities at the sessions hosted

by BCC Shanghai, the very informative overview delivered by the UKTI team and last but not least the uniqueness and inspiration of the UK pavilion.

All delegates mentioned that many more members would have benefited from the programme and recommend watching out for a mission offering in 2011!

Please have a look at selected mission snapshots on the opposite page.

I would like to inform you that our Entrepreneur and Small Business Group is fostering a closer relationship with SICC and AmCham collaborating in the events and business services area with the aim to expand peer group exchange opportunities and provide assistance to small businesses. Benefiting from an existing collaboration between SICC and the Singapore Indian Chamber of Commerce and Industry (SICCI) our SME members can access the EDC (Enterprise Development Centre) of SICCI. EDC’s have been established and funded

by SPRING Singapore a couple of years ago encouraging the ethnic Chambers in Singapore (SICCI, SCCCI and SMCCI) to set up a service and consulting system for entrepreneurs and small businesses as such helping SPRING delivering its promise. EDC’s main objective is helping SMEs build capabilities by providing them with a channel to seek advice and consultation in growing their business.

A full overview of services available is going to be available on our website and in the next ORIENT magazine. If you wish to learn more immediately please contact us under 6222 3552 or visit www.edc-sicci.sg.

We are in the process of finalising our website modernisation and upgrading project. Please visit us under www. britcham.org.sg and watch out for new appearance and advanced application to be launched end of October.

Last but not least time is flying and we are fast approaching Christmas. This means we just launched our Starlight Ball 2010 taking place on Saturday December 11th at the Shangri-La Hotel. I hope you will be joining us for a fabulous year end party!

Meanwhile I wish you a productive and successful Q4.

Best wishes Brigitte Holtschneider Executive Director British Chamber of Commerce www.britcham.org.sg

www.britcham.org.sg

SHANGHAI MISSION 2010

orient 35

BritCham

NEW MEMBERS CORPORATE

building networks

Ingenico International (S) Pte Ltd Vince Tallent Managing Director APAC IQPC Worldwide Steven Smith Managing Director www.iqpc.com.sg South Seas Inspection (S) Pte Ltd Michael Slorach Director of Operations www.southseas-int.com BCG - The Boston Consulting Group Jeffrey Chua Partner & Managing Director www.bcgsea.com Elite Capital Solutions Neal Davies CEO www.elitecapitalsolutions.com

Individual RBS Coutts Bank Ltd Julian Chester Vice President Pacnet Internet (S) Pte. Ltd. Martin Slater VP, Technical Data Center Services Clear Channel Singapore Pte Ltd Wilson Tan CFO Corporate Plus Dyson Operations Hugh Abedin-Zadeh Finance Director www.dyson.com Hallin Corporate Services Pte Ltd John Giddens CEO www.hallinmarine.com Corporate SME

UBS AG Arnaud Bartholin Senior Client Advisor, UK Desk Singapore www.ubs.com Roffey Park Institute Michael Jenkins Chief Executive Officer www.roffeypark.com Clear Channel Singapore Pte Ltd Adam Butterworth CEO Gardiner & Theobald Fairway Pte Ltd Mark McGeoch Dispute Management, Avoidance & Resolution

SovereignGroup Joe Cheung

Adrian New Melvin Byres Paraic McGrath Rachel Mary Foxton Daniel Levy Mark Thomas cris galicha Adrian Rafferty Chris Davies Wayne Soo Robert Bier Ato Cheng Anthony Lucas Ashley Wright Nora Fatholmoein Overseas Corporate ea Consulting Group Stephen Robson www.eacg.co.uk Cubiks Joanna Cook HR Consultancy Cubiks Gavin Overseas Corporate Additional

Eames Consulting Group Shane Anthony O’Neill Managing Director Asia Pacific www.eamesconsulting.com

Mulcahy HR Consultancy

Excellens Group Pte Ltd Malcolm Rees Managing Director www.excellensgroup.com

Allen Chen NYSE Liffe

GetIT Pte Ltd Anal Bhattacharya CEO www.getitcomms.com

Stefan Ullrich Chief Representative, Singapore & South East Asia www.nyx.com/nyseliffe

Corporate SME Additional

BT Singapore Pte Ltd Stephen Crisp Director Public Affairs, Asia Pacific www.globalservices.bt.com

Overseas Individual

Sterling

Corporate Additional Meyado Pte Ltd Nicolson Marietta Associate Investment Advisor The Fry Group Ashley Jones Business Development Manager Roffey Park Institute Roger Byrne Director, Roffey Park Asia Pacific

36 orient

Excellens Group Pte Ltd Mark Stradling Principal British High Commission Carol Lee Trade & Investment Officer Government member

www.britcham.org.sg

BritCham

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The Hideaways Club - investment &

British Club offers a 15% discount (= S$ 600)

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for their 1 year membership* which retails @ S$

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4,000, to members of the Chamber who are not

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yet members of the Club. For more information

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please contact: membership@britishclub.org.sg

If you join the Club as a Lifestyle Member you will benefit from an additional off-peak week in any of our luxury properties in the

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Terms and conditions apply: visit www.britcham. org.sg to find out more. Please present your chamber membership card prior to payment

MSIG Insurance (Singapore) Pte. Ltd. UPTO 15% DISCOUNT FOR HEALTHCARE 10% discount for British Chamber of

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www.britcham.org.sg

Members - Sterling News

BT ACCELERATES MAJOR GROWTH PROGRAMME ACROSS ASIA PACIFIC

building networks

BT

, one of the world’s leading providers of communications solutions and services, announced the roll-out of the first phase of its recently publicised investment programme into the Asia Pacific region, covering additional resourcing, new infrastructure and expanded portfolio of services.

As part of this plan, BT is in the process of hiring around 300 new positions across

China, Hong Kong, India, Japan and Singapore. BT is also establishing a bid response centre in Singapore to enhance its capabilities to pursue large regional managed services deals.

Asia. This will ensure that key portfolio and services enjoyed by BT’s customers around the world can be offered and fully supported in Asia Pacific. New staff will be employed across the region in the key customer markets of Australia,

Jeff Kelly, CEO BT Global Services said, “…The first phases of our investment programme will globalise the key propositions and services our customers require from us...” www.bt.com

KEY FACTOR DRIVING GLOBAL MANUFACTURING COMPETITIVENESS: ACCESS TO TALENTED WORKERS CAPABLE OF SUPPORTING INNOVATION

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ccording to a benchmark report from Deloitte and the U.S. Council on Competitiveness, access to talented workers who are capable of supporting innovation is the key factor driving global manufacturing competitiveness.

This factor is well ahead of factors traditionally associated with competitive

manufacturing, such as labour, materials and energy.

Competition among nations – in particular China, India and the Republic of Korea (Korea) – to create and maintain a vibrant manufacturing competitiveness is fierce. The dominant

manufacturing super powers of the late 20th century – the United States, Japan, and Germany – are now lagging behind these rapidly growing Asian countries. Brazil, Mexico, Poland, and Thailand are expected to improve their manufacturing competitiveness in the next five years. www.deloitte.com

DHL GLOBAL MAIL EXPANDS OPERATIONS TERMINAL AND OPENS NEW HYBRID MAIL CENTRE IN HONG KONG

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HL Global Mail, the world’s leading provider of international postal solutions, has expanded its operations in Hong Kong. The new and expanded facility handles twice the volume of the former one, measuring more than 30,000 sq ft and is located in Tsuen Wan, a strategic area for logistics and commerce due to its close proximity to the Hong Kong International Airport.

This expansion plays a critical role in the growth of DHL Global Mail’s business in North Asia, including China.

The new terminal houses a Hybrid Mail Centre, which forms the core of DHL

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Global Mail’s Hybrid Solutions. At this off-site Hybrid Mail Centre, customers can enjoy services such as fulfillment and distribution management, imaging and hosting, and records management, at their convenience.

By converting physical documents into meaningful digital data that can be customized according to business requirements and integrated into an organization’s workflow, Hybrid Solutions transforms the way documents are managed and offers unprecedented cost and time savings. www.dhl-globalmail.com

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There.

Everywhere.

Members - Sterling News

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FUTURE LEADERS SOUGHT: ACCOUNTANTS IN DEMAND AS BUSINESSES LOOK AHEAD

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and performance,” said Chris Mead, General Manager of Hays in Singapore.

“The number of accountancy jobs at the executive level is now starting to climb as employers look for future leaders who can come into the business and up-skill current teams, add value and drive commercial decision making to increase revenue

“This focus on recruiting tomorrow’s leaders is a dramatic change from this time last year, when most organisations were recruiting for critical roles only.

Since Christmas 2009 employers have been repopulating their headcount to pre-GFC levels and now that they’re staffed appropriately they’re turning their attention to reinvesting in future leaders”, Chris said. www.hays.sg

usinesses are taking steps to attract, secure and invest in their future leaders, which is increasing demand for the top accountancy talent, says recruiting experts Hays.

STARHUB PARTNERS WITH FOX INTERNATIONAL CHANNELS TO OFFER A WIDER SPECTRUM OF MOVIES TO VIEWERS

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OX International Channels (FIC) and StarHub TV launched a new STAR Movies Pack starting 16 September 2010 that will include STAR Movies, FOX Family Movies, STAR Movies HD and STAR Movies On Demand.

FOX Family Movies debuts in Singapore as a dedicated movie

channel providing wholesome family entertainment, showcasing movies from leading studios such as 20th Century FOX and The Walt Disney Studios, with a movie premiere every Sunday. STAR Movies On Demand offers 30 movies up for viewing at any one time, with new titles available each month. STAR Movies HD is a simulcast of the popular

STAR Movies, offering the best of Hollywood in high definition.

“Our partnership with FIC has reached yet another milestone with the introduction of these three new channels on StarHub TV. We are constantly on the lookout for new and exciting content to add value to our customers’ viewing pleasure”, said Ms Iris Wee, StarHub’s Vice President of Home Solutions. www.starhub.com

TEAM GB IN SINGAPORE

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he inaugural Singapore 2010 Youth Olympic Games officially came to a close on 26 August, with memorable performances achieved

by Team GB’s 39 athletes. Besides the achievements on the sporting front, the Youth Olympics also saw several well-known British personalities come into town, with LOCOG chairman Lord Sebastian Coe being one of them.

To welcome the team to Singapore, High Commissioner Paul Madden hosted a reception on 13 August at his residence. A TV crew from BBC’s Blue Peter was there to film the evening, with presenter Helen Skelton

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volunteers from Southwark. British pop star Steve Appleton, who had been chosen to sing the Youth Olympics theme tune at the Opening Ceremony, also dropped by.

interviewing the inspiring Vancouver Gold Medal winner Amy Williams.

Educational and cultural exchanges are an important part of the Youth Olympics, which brings together some 3,600 14 - 18 year-old athletes from 205 territories, and the reception included school students from Wales and youth

On the sporting front, Team GB won 13 medals across eight sports, these includes five gold medals in five sports; taekwondo, rowing, gymnastics, equestrian and tennis. In addition to the medal winning performances, Team GB athletes recorded a further 25 top ten positions, of which 12 were in the top-six, against the best in the world in their age group. www.ukti.gov.uk

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AN EVENING WITH

SIR JACKIE STEWART

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Title Sponsor

Singapore Cricket Club • Thursday 23rd September 2010 Congratulations to our silent auction winners: Pair of Grandstand Tickets for Race Day 25th September 2010 – Lee Knight Signed Framed Photo of Rubens Barichello – Colin Thomson Signed Framed Photo of Sir Jackie Stewart from His Personal Collection – Clement Morrison Congratulations to all lucky draw winners!

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GREEN BUILDINGS: IDEOLOGY OR REALITY? Date : Venue : Presenter : Moderator :

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Wednesday 22 September 2010 Pacific 3, Pan Pacific Hotel Simon Thomas, Project Director, UWCSEA; Russell Cole, Director, Arup Singapore; Dr. Richie Lee, Executive Director, CB Richard Ellis Asia (Energy and Sustainability) Jessica Cheam, Correspondent, The Straits Times, SPH

Title Sponsor

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NETWORKING  PETER MANDELSON Reflections and lessons from the Blair years Date : Friday 24 September, 2010 Venue : Raffles Hotel Guest Speaker : Peter Mandelson, Member of the House of Lords, British Labour politician and author of THE THIRD MAN : Life at the Heart of New Labour Moderated by Kishore Mahbubani, Dean of the LKY School of Public Policy

Photos courtesy of Michael Culme-Seymour, MCS Lifestyle Photography • www.mcslifestylephotography.com

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BritCham Events

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DOING BUSINESS IN ASIA  OPPORTUNITIES FOR UK COMPANIES IN SOUTH KOREA Date: Tuesday 17th August Venue: Shangri-La Hotel Presenter: Douglas Barrett, Head of Trade & Investment, Seoul

DOING BUSINESS IN ASIA OPPORTUNITIES FOR UK COMPANIES IN THAILAND Date: Wednesday 8th September Venue: Shangri-La Hotel Presenter: Steve Buckley, Director of Trade & Investment, UKTI Thailand

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BREAKFAST CLUB SPONSORED BY:

CAN YOUR BRAND BE DIFFERENT? UNLOCKING THE VALUE OF BRITISH DESIGN Date: Tuesday 27th July 2010 Venue: Raffles Hotel Presenter: Jonathan Sands, Chairman, Elmwood

NAVIGATING ORGANISATIONAL POLITICS Date: Tuesday 31st August 2010 Venue: Pacific 1, Pan Pacific Hotel Presenter: Peter Hamill, MSc, BSc (Hons), PG CertCoun – Roffey Park Institute

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UK PENSIONS & EMERGENCY BUDGET, HOW WILL IT AFFECT YOU? Date: Thursday 2nd September 2010 Venue: East India Rooms, Raffles Hotel Presenter: Adrian Love, Global Financial Consultants Pte Ltd

POST MACONDO…HOW & WHY THE OIL & GAS INDUSTRY MUST CHANGE Date: Tuesday 7th September 2010 Venue: Jurong Room, Shangri-La Hotel Presenter: Colin Stuart, Managing and Technical Director, Stuart Wright

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Members - Corporate News

3W POWER HOLDINGS/AEG POWER SOLUTIONS ANNOUNCING PLAN FOR EXECUTIVE SUCCESSION

building networks

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world leading provider of premium power electronics, AEG Power Solutions announced that Bruce A. Brock, CEO since 2005, will retire on August 1, 2010. Dr. Horst J. Kayser has agreed to join the company with immediate effect and will assume the duties of CEO, as successor of Mr. Brock, after the short transition period. Mr. Brock will

continue to serve as a non executive member of the board of directors.

Dr. Kayser joins AEG PS having most recently served as Chief Executive Officer of Kuka AG, a leading industrial robotics enterprise. Prior to Kuka, Dr. Kayser had a distinguished career at Siemens AG spanning over 13 years. www.aegps.com

CARTUS SURVEY SHOWS NEW TRENDS IN GLOBAL RELOCATION

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ocated in the heart of the Shekou commercial and cultural centre, Ascott Maillen Shenzhen serviced apartments will be part of an

integrated development comprising an existing exclusive, high-end club with recreational and lifestyle facilities and restaurants. In the vicinity are key office towers, major entertainment centres, food and beverage outlets and shopping malls. These Shenzhen serviced apartments are also 5 minutes drive from the Shekou Ferry Terminal and only a 15 minute drive from the newly

opened Hong Kong-Shenzhen Western Corridor, a bridge which links Shenzhen to Hong Kong.

Await the opening of these luxury Shenzhen serviced apartments in 2H2010 for an unforgettable accommodation experience. www.the-ascott.com

BBC.COM LAUNCHES MAJOR REDESIGN OF NEWS SITE

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BC.com launches a new look to its award-winning News site www.bbc.com/news. BBC.com has introduced new functionality and

design and is ramping up its coverage of sport, travel, business and technology.

The redesign sees an overhaul of the layout with better use of video and images, more prominent labeling and easier ways to share stories with others.

Commented Luke Bradley-Jones, Global EVP & MD BBC.com, “This investment

clearly underscores our commitment to growing our digital business internationally and continuing to bring people authoritative and distinctive journalism. Our new design will make it even easier to find, use and share the BBC’s global news.” www.bbc.com

LONDON RESIDENTIAL PROPERTY MARKET: THREAT OF UK’S EMERGENCY BUDGET LOWER THAN EXPECTED FOR INVESTORS

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he UK’s emergency budget in June turned out to be much less threatening than expected for investors in London’s residential property market – and may even provide an indirect longterm boost for the private flat and house rentals sector.

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Anita Mehra, Managing Director of Benham and Reeves Residential Lettings said: “Investors in London property

have specific reasons to be optimistic as the most severe effects of the public spending cuts will be felt in the Midlands and north, not in London. With no dramatic increase in stock availability through forced sales, capital values will remain steady, thus suggesting that the current difficulties for first time buyers will remain – a fact which inevitably boosts the private rented sector” www.brlets.co.uk

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NOW AVAILABLE TO ORDER ONLINE  GREAT BOOTS PRODUCTS FROM THE UK’S LEADING PHARMACY LED HEALTH AND BEAUTY RETAILER

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ith more than 160 years of history, the Boots brand has an excellent reputation for differentiated health and b e a u t y products and excellent

customer care. At www.boots.com/asia you will discover the unique and exciting range of Boots own brands including No7, the UK’s number one cosmetics and skincare brand; and Soltan, one of the biggest selling brands in the UK. Michael Caves, International Business

BRITISH AIRWAYS AIMS TO RAISE UP TO $17M IN THREE YEARS TO FUND CHARITY PROGRAMMES WORLDWIDE

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atrons of British Airways (BA) can now play their part in helping vulnerable and disadvantaged children across the world through “Flying Start”, a new, global charity partnership between BA and Comic Relief, which has pledged to raise up to £8 million ($17 million) by 2013. This initiative is motivated by the

Development Manager said, ‘We are delighted by the launch of www.boots. com/asia. It’s a great opportunity for the Boots brand to have a presence in Singapore, offering it’s exclusive own brand ranges such as No7, Botanics and Soltan 24 hours a day...” www.boots.com

belief that every child deserves a happy and secure childhood.

Willie Walsh, British Airways’ chief executive, said: “Our partnership with Comic Relief will bring new help and support to underprivileged children around the world through funds we raise in the air, on the ground and online.” www.ba.com

CABLE&WIRELESS WORLDWIDE APPOINTS NEW SENIOR EXECUTIVE TO FOCUS ON SERVICE DELIVERY FOR THE ASIA PACIFIC REGION

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n line with its focus on service delivery excellence, Cable&Wireless Worldwide has appointed a new senior executive to focus on Service Delivery for the Asia Pacific region.

Bhupinder Singh has been appointed the company’s new Vice President for Service Delivery, Asia Pacific with

effect from June 1, 2010. He takes over from Mike Powell, who has assumed a global responsibility for service delivery covering all markets outside of the UK. Bhupinder has had extensive experience in the region, and is a seasoned handson telecommunications professional with more than 15 years of experience.

He has been with Cable&Wireless Worldwide since 2000, working in key positions across solutions, projects and service functions. www.cw.com

NEW DEAN APPOINTED AT UNIVERSITY OF CHICAGO BOOTH SCHOOL OF BUSINESS

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unil Kumar, the Fred H. Merrill Professor of Operations, Information and Technology and an expert in operations research at the

Stanford University Graduate School of Business, has been appointed the dean of the University of Chicago Booth School of Business. His five-year term as dean at Chicago Booth will begin on January 1, 2011.

Kumar succeeds Edward A. Snyder, who completed nine years as Chicago Booth’s dean on June 30.

University President Robert Zimmer and Provost Thomas Rosenbaum wrote “[Kumar] brings the right blend of vision, entrepreneurial energy and academic leadership that will build on the contributions of Chicago Booth at a time of tremendous momentum and achievement.” www.chicagobooth.edu

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Members - Corporate News

CLIFTONS DOUBLES ITS SIZE  MORE FLEXIBLE TRAINING ENVIRONMENT IN THE CENTRAL BUSINESS DISTRICT

building networks

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liftons, the leading provider of computer training, conference & seminar rooms, has doubled its size in Singapore.

Occupying 2 floors, their dedicated rooms now offer a larger and more flexible training environment,

accommodating up to 150 delegates in a Seminar Room or 70 in a Computer Training Room.

The new venue is conveniently located on Robinson Road, a 3 minute walk from the Tanjong Pagar MRT station. www.cliftons.com

CONTROL RISKS AND THE ECONOMIST LAUNCH AUTHORITATIVE GUIDE TO DOING BUSINESS IN CHINA

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ith many foreign businesses experiencing sluggish performance or even decline in their traditional markets, China seems to offer the chance of steady growth. Together with The EEconomist, Control Risks’ China specialist, Christopher Torrens recently launched his new book, ‘Doing business in China’, which serves as a practical guide to the risks businesses face when they operate in b China.

Drawing on Chris’ years of experience, the book explores the difficulties of doing business in C China and how to take the best advantage of the opportunities that exist to achieve the level of success C tthat every business aims for in China. www.control-risks.com

FAITHFUL+GOULD F+G PRESENTS TEACHING MATERIALS TO ADOPTED CHARITY EDEN SCHOOL

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aithful+Gould (F+G) company employees put together teaching materials and presented them to Eden School – their adopted Charity of the Year.

Since its establishment in Singapore in 1988, this is its first adopted charity. Eden School is an educational institution for children with autism. To raise awareness for autism, rather than the usual monetary sponsorship, discussions with the Principal of Eden School led to the idea of creating customised labour-intensive interactive books. Fund raising commenced in Dec 2009, and by the end of April 2010, 20 sets of interactive books were completed. www.fgould.com

GAMMON WINS HK$2.9 BILLION CONTRACT TO CONSTRUCT APPROACH TUNNEL FOR THE EXPRESS RAIL LINK ammon Construction Limited Gammon is working in a 50-50 joint

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announced that a Gammon joint venture has been awarded a HK$2.9 billion contract by MTR Corporation. The project is to construct the West Kowloon Terminus Approach Tunnel and Track Fan Tunnel section of the Guangzhou – Shenzhen – Hong Kong Express Rail Link, which forms part of China’s strategic national express rail network.

venture with Leighton Asia. Mr Thomas Ho, Chief Executive of Gammon, said, “We are very pleased to participate in the building of the Express Rail Link from Hong Kong to the major cities on the Mainland.” www.gammonconstruction.com

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GSK AND BJD COLLABORATE ON A NEW EDUCATIONAL PROGRAMME TO REDUCE GLOBAL BURDEN OF JOINT PAIN

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he Bone and Joint Decade (BJD) international initiative and GlaxoSmithKline (GSK) announced the launch of the LIBERATE™ joint pain management programme during the BJD’s World Conference in Lund, Sweden. The BJD, which is endorsed

by the United Nation’s World Health Organisation, and GSK have partnered to develop the global programme that provides information on practical and clinically proven techniques that people can use to self-manage their joint pain.

The educational programme emphasises the importance of a holistic approach

to joint pain management by focusing on six essential areas: diet, exercise, medications, mental attitude, tools and devices and alternative therapies.

The LIBERATE™ programme materials will be available at www.liberatefrompain. com from September 30. www.gsk.com

HENLEY GROUP CELEBRATES 20 YEARS IN ASIA AT THE ASIAN CIVILISATIONS MUSEUM

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flawless renditions of Nessun Dorma and other classics.

This exclusive gathering of over 200 people enjoyed celebratory bubbles, canapés and a surprise appearance for an opera singer cunningly disguised as a clumsy waiter. The guests enjoyed his

A silent auction, run by Chris Cowdry, ex-England Cricket Captain, also took place in order raise money for the Children’s Cancer Foundation and the end result was a fantastic S$20,000 for the worthy cause. www.thehenleygroup.com.sg

he Henley Group was proud to celebrate their 20th anniversary alongside a host of their clients and friends this July.

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Members - Corporate News

INTERNATIONAL SALVAGE UNION ANNOUNCES APPOINTMENT OF ROB WALLIS AS NEW LEGAL ADVISER

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building networks

he International Salvage Union (ISU) has announced that Hill Dickinson shipping partner Rob Wallis will succeed Mr Archie Bishop as its new legal adviser. The appointment is effective from the conclusion of the ISU Annual Meeting 21-23 September 2010.

President of the ISU, Mr Todd Busch said of the appointment: “…I am delighted to welcome Rob Wallis. He has great experience of salvage law and is a well-known and much respected lawyer in the shipping markets. We are honoured that he is joining us and that he will bring his 35 years of maritime law experience and expertise to bear on issues of common interest to marine salvors.” www.hilldickinson.com

RELOCATION OF INTERNATIONAL FINANCIAL SERVICES IFS HEAD_OFFICE IN SINGAPORE

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nternational Financial Services (IFS), Asia’s leading independent financial services organisation, has announced a relocation of the head_office in Singapore. The move by IFS, the second in the last three years, is as a result of continued growth in both client and consultant numbers. This latest relocation by IFS sees the office move from its previous location in Cecil Street, where the company reached maximum capacity, to DBS Building, Tower 2, Shenton Way. Licensed by the Monetary Authority of Singapore, International Financial Services (IFS) provides comprehensive wealth management solutions for investors and is one of the largest independent financial advisors in Asia. www.interfs.com

IPAC INTRODUCES QUALIFIED RECOGNISED OVERSEAS PENSION SCHEMES FOR UK PENSION OWNERS RESIDING IN HONG KONG AND SINGAPORE

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K pension owners residing in Hong Kong and Singapore and do not intend to return to the UK, can now turn to ipac for advice on transferring their UK pension benefits abroad. Financial advice on Guernsey-based Qualified Recognised Overseas Pensions Schemes (QROPS) is now available in its Hong Kong and Singapore offices.

A QROPS is an overseas pension scheme that is recognised by and registered with Her Majesty’s Revenue and Customs (HMRC) to receive transfers from UK pension schemes. Members of this scheme can take advantage of reduced taxation and increased flexibility in inheritance and succession planning. www.ipac.com.sg

IQE PLC: SMARTPHONES AND EMERGING OPTO MARKETS DRIVE RAPID INCREASE IN PROFITS

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QE plc (AIM: IQE, the “Group”), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, announced its Interim Results for the half year ended 30 June 2010.

Revenues grew by 54% to £33.0m (H1 2009: £21.4m), primarily driven by strong demand for smartphone products during the first half of the year

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supported by accelerating growth in optoelectronic and advanced silicon components. Gross profits increased by 93% to £7.3m (H1 2009: £3.8m) with gross margins improving from 17.8% to 22.2%. Dr Drew Nelson, IQE Chief Executive, said: “…The second half of 2010 has started well with strong demand across our full range of advanced semiconductor products…” www.iqep.com

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Members - Corporate News

KPMG: MERGER AND ACQUISITION DEALS DRIVEN BY EMERGING ECONOMY COMPANIES JUMP 25 PERCENT

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rade buyers in the emerging economies have their Merger and Acquisition (M&A) deal-making sights firmly set back on the developed economies. This comes after recording a 25 percent increase in cross-border deal activity in the past six months.

According to KPMG’s latest Emerging Markets International Acquisition Tracker (EMIAT), 243 Emerging-to-Developed (E2D) market deals were recorded in the first half of 2010. In comparison, there were 194 recorded in the latter half of 2009.

In contrast, the latest EMIAT reports 748 Developed-to-Emerging (D2E) market deals in the past six months; a nine percent increase over the previous six month period. www.iqep.com

RBS COUTTS AND STAFF DONATE S$30,000 TO PAKISTANI FLOOD VICTIMS

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BS Coutts and staff of the international private banking arm of The Royal Bank of Scotland Group have raised S$30,000 for the victims of the Pakistani flood.

corporate charitable giving programme, matched the staff donations dollar-fordollar and donated another S$15,000, bringing the total to S$30,000.

The funds, channeled through The Citizens Foundation, a non-profit organisation in Pakistan, will go towards providing food rations for the victims.

Through this effort, it will feed 3,750 Pakistanis for about one month. www.rbscoutts.com

The fund-raising drive, which took place over a two-week period, began on 17 August 2010, and S$15,000 was raised through individual donations from the staff at RBS Coutts in Singapore and Hong Kong. RBS Coutts Giving, the bank’s

ROBERT WALTERS GLOBAL POLL REVEALS TALKATIVE COLLEAGUES THE MOST DISTRACTIVE INFLUENCE AT WORK

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alkative co-workers are the most common distraction for office workers, according to a global poll by recruitment specialists Robert Walters.

When asked their most time consuming distraction at work, almost half of those polled responded ‘talkative colleagues’, one in three said personal e-mail and internet browsing, 8 percent claimed

social networking sites, 6 percent smoking breaks and 5 percent personal calls and/or text messages.

These global results were mirrored in Singapore, where 49 percent of professionals polled said talkative colleagues were the most timeconsuming office distraction, 31 percent claimed personal e-mail or internet and 8 percent smoking breaks. www.robertwalters.com.sg

STEPHENSON HARWOOD BOOSTS ASIAN SHIPPING PRACTICE

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nternational law firm Stephenson Harwood has hired a new Ship Finance associate Daniel Walker, further bolstering the firm’s Shipping practice offering.

Daniel’s recruitment swiftly follows the recent appointments of Singapore-based Shipping Litigation Partner Dirk Janssen in June and registered foreign lawyer (People’s Republic of China) Lu Xianming, who joined the firm’s Ship Finance practice in May.

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Daniel, who joins Stephenson Harwood from DLA Piper in the UK, where he assisted the Corporate group in matters such as indirect tax analysis, corporate tax and asset finance in relation to real estate, will bring a fresh perspective to the Ship Finance practice with his corporate experience. www.shlegal.com

WORK ENGAGEMENT PROFILE WEP AND MASCHLER BURNOUT INDICATOR MBI

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ith ongoing market research still showing high levels of staff disengagement and the risks of staff burnout increasing, some crucial help is now available to companies who would like to get early warning of both issues enabling them to take decisive steps to deal with the problem. Ray Bigger Managing Director of Think8 said “…

Now with these simple, quick and easy profile tools some very clear action steps can be determined before it becomes a serious situation…” “…Part of the problem is managers don’t seem to be sure what to look for and worse do not recognize symptoms when they arise…” www.think8.net

WATSON, FARLEY & WILLIAMS LLP ADVISES SEVAN MARINE IN THE ACQUISITION OF ITS MINORITY PARTNER

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he Singapore office of Watson, Farley & Williams LLP (“WFW”) advised Sevan Marine ASA (“Sevan”) in the acquisition of its minority partner in its Sevan Hummingbird FPSO (the “Vessel”) and in the refinancing of a $200 million bond issue.

After securing funds through the bond issue, Oslo-listed Sevan has paid British energy group Centrica $39 million for the 20% equity it holds in the Vessel, which is working in the UK central North Sea. As part of the deal, Centrica will retain the right to 20% of any profits from any future sale of the Vessel in the next five years. www.wfw.com

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Destination

creating opportunities

THE CHALLENGING WORLD OF BUSINESS

By Oliver Lamb, Researcher, BBC World News

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here has always been a certain amount of cynicism about entrepreneurs and business people.

There is always the stereotype of the ruthless, hard-nosed businessman, whose only interest is in making big bucks before sailing off into the sunset on a giant yacht.

While this stereotype may occasionally be close to the truth, there’s a growing class of social entrepreneur in Asia – business people whose projects try to make a difference whilst still making a healthy return on their investment – that look to challenge such prejudices.

They’re finding local answers to development problems that have global appeal – whilst still turning a tidy profit.

The 1980s may have opened up nations as never before to the perils of a cutthroat global market, but it also saw the mainstreaming of the mantra of sustainable development in organisations across the globe. With the largest Asian economies now taking shape as the next great economic superpowers, it remains to be seen whether the continent can fashion a market that doesn’t destroy its environment and the livelihoods of its people.

A brief history of the World (challenge) The World Challenge Awards is one of the BBC World News (BBCWN) channel’s flagship programmes. Now in its sixth year and still going strong, the series

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invites viewers to vote for their favourite project from a selection of innovative sustainable companies around the world. Marked by the diversity of the businesses it features, the show shines the spotlight on projects that find ingenious solutions to some of the major challenges we face today.

Going out to BBC World New’s average audience of close to 80 million dedicated viewers, on 260 million TV sets in over 200 countries and territories, the competition is about much more than just the prize money. The exposure and kudos of being selected as one of the 12 finalists by the distinguished jury, who choose from close to 1000 nominations each year, can help bring small social enterprises to the attention of a large audience of potential supporters, sponsors and clients.

The series has featured many Asian projects – in fact a third of all the finalists over the years have come from the continent, including four of the five eventual winners. What makes the programme so appealing to people voting for these producers?

Executive producer Robert Lamb notes, “World Challenge acknowledges not only excellence and innovation, but sustainability. It’s a term much mentioned but little understood – watch

World Challenge and see it in action”.

Asian Winners Coconets – Philippines – 2005 Winner Agricultural engineer Justino Arboleda was studying Bio-engineering in Tokyo when he first became interested in finding green solutions to environmental damage. He returned home to Bicol in the Philippines to work on an Asian Development Bank project looking at the root causes of the poverty affecting many in the region. A big problem for local farmers was the amount of erosion occurring – within just two generations a large portion of the native trees had been destroyed, and landslides were washing the soil away at an alarming rate.

Inspiration struck when he developed a community-based project that used the discarded husks of coconuts – known as coir - to make nets that could literally hold the soil in place. He founded Jubuken Enterprises to work with a local co-operative to make the nets, and various other products, for the international market. Justin estimates that Filipinos use just 20% of this waste product, and sees remarkable potential for the product to be used for building insulation, furniture stuffing and in handicraft production.

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creating opportunities

Destination

Elephant Paper – Sri Lanka – 2006 Winner Sri Lankan company, Ecomaximus, was founded by two friends after they’d returned from a three year odyssey around Asia. Having started the company Paper High in Nepal and India to promote the wonderful paper products they found being made there, the couple struck gold (figuratively speaking) when they visited an elephant orphanage near Kegalle in Sri Lanka. There they saw how the amount of bio-digested waste the six local elephants produced – around 200 kg each a day - made them a living source of materials for paper manufacture.

Starting out with just seven employees operating out of a small workshop, the company has grown and grown over the years. They were trying to show local populations that the elephants could be a positive source of revenue rather than simply a threat to their farms. They now work with the Millennium Elephant Foundation on a 15-acre estate called Samarasinghe - with a new recruit to add to the books called Pooja, the first captive elephant to be bred in the country.

Plan Bee – Pakistan – 2008 Winner The Hashoo foundation is a national charity in Pakistan. Part of their works consists of helping the women of Gilgit provide a sustainable living for themselves producing honey for the global market. It’s one of the few income opportunities for local women, and the Hashoo foundation stepped in to provide the logistical support necessary for them to get their high quality product to market. When World Challenge visited the project they had already benefited over 1200 people by setting up deals with 5-star hotel chains across India.

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The same year we met Sarah Hashwani and the women honey makers of Gilgit the project was also recognised by the Clinton Global Initiative as one of 4 projects from a pool of over 1000 shortlisted that they featured during their Annual General Meeting.

Continuing to support the locals to this day, it says a lot about how important the charity has become in the area that during the recent devastation caused by severe flooding the project provided a platform for news to get out to the wider world about the struggles of the local population.

A Bright Idea – Sri Lanka – 2009 Winner Last years winner of the World Challenge was Dr. Wijaya Godakumbura. He had dedicated his life to addressing the horrible burns and disfigurements caused by fires resulting from spills of DIY kerosene lamps. By designing an easy to make and cost effective safe lamp from recycled glass, and distributing them free to local residents, he had managed to prevent the injuries that still kill around 300,000 people around the world each year.

As of May 2010 the foundation has been able to distribute 800,000 of their ‘Supeeda’ lamps to those at risks from the horrific burns associated with kerosene lamp fires. Just as the World Challenge audience recognised the dedicated work of Dr. Godakumbura last year, the foundation itself has received a wealth of other awards in recent years. He is now writing a book in the local language on how to prevent injuries to children.

Future Challenges?

This year has again seen two very strong Asian projects make the final list of finalists. Husk Power Systems is an innovative energy solution from India where the discarded rice husks from cultivation – usually thrown away as useless – are put into a micro generation unit to turn them into energy. The smoke free process is a win-win situation that provides energy whilst using up waste and producing only fertiliser as a by-product. The United Nations Environment Programme believes that nearly one third of climate change is driven by the ‘brown cloud’ of smog

coming out of Asia, and anything that produces energy whilst cutting fumes must be celebrated - these are the type of energy solutions we’ll begin to hear more and more about in the coming years.

And from a new idea to an old idea given a new lease of life. The AID Foundation in the Philippines has taken a technology first developed by an English inventor in 1772 – the Ram Pump – and taken it to the hillsides of hilly regions around he world.

The Ram Pump uses just simple hydraulic power to push water uphill – making it perfect for mountainous areas in the Philippines where electricity is a luxury good. So far the group have installed Ram Pumps in 170 upland villages, potentially benefitting around 50,000 people. You can find the stories of this year’s projects on the World Challenge website on www.theworldchallenge. co.uk, where you’ll also be able to read about all the previous finalists from the last 6 years.

Sustainable Asia Asian projects certainly have a long association with the World Challenge Awards – these case studies show that there are entrepreneurs across the continent that want to make money whilst giving back to society. With sustainability now a mainstream idea, and companies around the world waking up to the strains a changing climate may put on their bottom line, the innovative and cost-effective ideas that have featured in the awards shine a light on what can be done. Perhaps the strangest feature of the World Challenge, a programme with such global appeal, is that there have never been any Chinese or Japanese projects make it through to the finals. It proves that here is still a long way to go for the mass of Asian businesses, but with role models like those mentioned above there can be a least some hope for a more sustainable future.

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World Bank increases funding for developing countries with USD 6 billion bond The Client’s Challenge The World Bank provides financing to developing countries for programs that reduce poverty and improve standards of living. The financial market crisis threatened to deteriorate conditions in these developing economies even further.

The World Bank had to be prepared for the growing demand for financing from its members.

Our Response Our close working relationship with the client enabled us to deliver fast and insightful recommendations on how to seize new opportunities and adapt to the new financial landscape. The unprecedented scale of funding needed and complexity of the markets required multiple cross border teams to work together as a cohesive global team.

They delivered multiple transactions that altogether provided 30% of the World Bank’s increased funding requirement and included the USD 6 billion record-breaking bond.

The Result Despite challenging market conditions, the largest ever USD issue by a supranational issuer and the World Bank’s largest ever transaction in over 60 years of existence was successfully delivered. It helped increase confidence and reopen markets earning it multiple awards including, ‘IFR 2009 SSAR Bond of the Year’ and ‘EuroWeek Dollar Supranational Deal of the Year’.

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