0607 GMT [Dow Jones] STOCK CALL: SIAS Research downgrades CSC Holdings (C06.SG) to Sell from Buy on view valuation rich.
Says stock currently trades at about 38.2X forward earnings vs construction sector average of 19.2X; "since our initiation on the stock in December 2006, it has more than doubled in price.
Investors should take profit at this juncture. Also trims target price to S$0.32 from S$0.35 based on 31X forward P/E. Despite downgrade, SIAS expects civil engineering firm to benefit from strong demand for construction services in Singapore over next few years.
Stock flat at S$0.385. (FKH)
Tuesday, July 31, 2007
Saturday, July 28, 2007
OKP sees 7-fold jump in profit to $4.1m in H1
BT News Published July 28, 2007
OKP Holdings yesterday reported a near seven-fold increase in its net profit from $609,000 to $4.1 million for the six months ended June 30. The half-year net profit is already higher than the $4 million it achieved for the whole of FY2006.
Its turnover for H1 2007 rose 46.8 per cent to $49.1 million. OKP said the increase is mainly attributable to income generated from its civil and building segment which recorded a 72.1 per cent rise, coupled with recurring revenue from the road maintenance segment.
Offically Announcement
OKP Holdings posts net profit of S$4.1m in first half of 2007
Group benefits from booming oil and gas sector and is building up capabilities to grow its presence further, says Group Managing Director Or Toh Wat
SINGAPORE 27 July 2007 – SESDAQ-LISTED OKP Holdings Limited (“OKP”) today announced a net profit after tax and minority interest of S$4.1 million in its first half ended 30 June 2007, a whopping 572.4% increase from the same period in the previous year. More significantly, its six-month profit is higher than the S$4 million net profit the Group achieved for the whole of Financial Year 2006.
Group turnover for the first six months of 2007 was S$49.1 million, up 46.8% from the S$33.4 million it recorded in the previous corresponding period. Contributing significantly to the increase is the income generated from the civil & building construction segment, which recorded a 72.1% rise, coupled with recurring revenue from the road maintenance segment.
Earnings per share stood at 2.76 cents compared to 0.44 cents previously, an increase of 527.3%. The Group also registered a stronger gross profit margin of 19.8% and net profit margin of 8.4% compared to 8.4% and 1.8% respectively in the previous corresponding period. The improved gross profit margin is a result of better profits from civil engineering projects, good cost management and improved efficiency.
OKP is a leading home-grown infrastructure and civil engineering company in the region, specialising in the construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads. In the past two years, the company has had a presence in the oil and gas sector, providing civil construction work for petrochemical plants and oil storage terminals.
Group Managing Director Mr Or Toh Wat said the Group’s growing presence in a buoyant oil and gas sector had contributed significantly to its splendid showing. “I am delighted. At the same time, we have raised the bar for ourselves and I am acutely aware of the need to work much harder to take the Group to a higher level of performance,” he said.
Mr Or added that the Group continually builds on its core capabilities of civil engineering. “We do not veer from our original calling. We are a civil engineering firm, and while we take advantage of the currently booming Oil and Gas sector to grow our presence there, we also continue to prospect opportunities in other areas.”
For example, the Group continues to participate actively in government tenders for road maintenance works and is also actively exploring business opportunities overseas for airport-related projects. The Group’s order book to date stands at S$[209.0] million.
Strong financials and positive outlook
The Group’s financials appear strong. Its assets totalled S$61.24 million and net tangible assets stood at S$25.58 million. This works out to 17.07cents cents per share, compared with 12.81 cents per share as at 30 June 2006, an increase of 33.26%. Net working capital remained strong at S$17.31 million, compared to S$10.9 million it recorded as at 30 June 2006, an increase of 58.81%. OKP also generated a healthy operating cash flow of S$3.68 million, with cash and cash
equivalents of S$16.96 million. The Group’s market capitalisation stood at S$141 million, based on the closing price of S$0.94 as at 27 July 2007.
OKP’s Mr Or said he expected the outlook for the domestic oil and gas sector to remain robust for the next five years. The sector had been a strong catalyst for the Group’s growth in the last two years and with its recent S$40 million win from Foster Wheeler Asia Pacific Pte Ltd and WorleyParsons Pte Ltd for a Jurong Island project, the Group is confident that it will continue to benefit from the intensive activity there. "We believe that we are well-positioned to benefit from the current building boom there and will continue to build up our capabilities and track record with a mind to securing more deals in this sector,” said Mr Or.
He added that the Group’s 55-45% joint venture with Rotary Engineering Limited, OKP (Oil & Gas) Infrastructure Pte Ltd (“OKPOG”), has secured two contracts totalling S$6 million to date. OKPOG was formed to undertake civil engineering projects in the local Oil and Gas Sector. “We are optimistic that this joint venture will continue to generate new business opportunities for our Group and grow our presence further in the oil and gas sector here,” said Mr Or.
“Outside the oil and gas sector, we continue to leverage on our strength and expertise in tendering for government and other private projects,” he added. To date, the Group has secured three new contracts from the Public Utilities Board and one from the Jurong Town Corporation, with a combined contract value of approximately $30.4 million.
Going forward, OKP will continue to focus on a three-pronged strategy to grow its business, namely:
• Staying focused on core competencies: civil engineering projects will continue to feature prominently as this is OKP’s area of expertise where it has built up a distinctive track record over the years.
• Growing its presence in Oil and Gas: To spread risk, OKP will actively grow its niche in the expanding Oil and Gas Sector in order to grow its earnings base, and to ensure that it does not become overly-dependent on a single revenue source. In this regard, the Group has recently formed a 55-45% joint venture with Rotary Engineering Limited to undertake civil engineering projects in the local Oil and Gas Sector.
• Exploring overseas opportunities: While keeping a firm grip on the local market, it will also continually look for opportunities to grow its business overseas.
About OKP Holdings Limited (www.okph.com)
OKP Holdings Limited is a leading home-grown infrastructure and civil engineering company
in the region, specialising in the construction of airport runways and taxiways, expressways,
flyovers, vehicular bridges, urban and arterial roads. It was listed on the Singapore Exchange of Singapore Dealing and Automated Quotation System (“SESDAQ”) on 26 July 2002.
Established in 1966 by Founder and Chairman, Or Kim Peow, OKP has two core business
segments, Civil & Building Construction and Road Maintenance. The Group tenders for both
public and private civil engineering and infrastructure construction projects, which involve
the construction of urban and arterial roads, expressways, vehicular bridges, flyovers, airport
infrastructure and oil & gas related infrastructure for petrochemical plants and oil storage
terminals as well as the maintenance of roads and roads related facilities and building
construction-related works.
The Group has seven subsidiaries namely Or Kim Peow Contractors (Private) Limited, Eng
Lam Contractors Co (Pte) Ltd, OKP (Oil & Gas) Infrastructure Pte Ltd, OKP Technical
Management Pte Ltd, OKP Investments (China) Pte Ltd, United Pavement Specialists Pte
Ltd and OKP (CNMI) Corporation in Saipan, the Commonwealth of Northern Mariana
Islands.
OKP’s clientele includes Foster Wheeler and WorleyParsons, the Land Transport Authority,
the Housing Development Board, the Jurong Town Corporation, the Defence Science and
Technology Agency, the Civil Aviation Authority of Singapore, the Public Utilities Board, the
National Parks Board, Far East Organisation, Universal Terminal (S) Pte Ltd and Rotary
Engineering Limited.
OKP Holdings yesterday reported a near seven-fold increase in its net profit from $609,000 to $4.1 million for the six months ended June 30. The half-year net profit is already higher than the $4 million it achieved for the whole of FY2006.
Its turnover for H1 2007 rose 46.8 per cent to $49.1 million. OKP said the increase is mainly attributable to income generated from its civil and building segment which recorded a 72.1 per cent rise, coupled with recurring revenue from the road maintenance segment.
Offically Announcement
OKP Holdings posts net profit of S$4.1m in first half of 2007
Group benefits from booming oil and gas sector and is building up capabilities to grow its presence further, says Group Managing Director Or Toh Wat
SINGAPORE 27 July 2007 – SESDAQ-LISTED OKP Holdings Limited (“OKP”) today announced a net profit after tax and minority interest of S$4.1 million in its first half ended 30 June 2007, a whopping 572.4% increase from the same period in the previous year. More significantly, its six-month profit is higher than the S$4 million net profit the Group achieved for the whole of Financial Year 2006.
Group turnover for the first six months of 2007 was S$49.1 million, up 46.8% from the S$33.4 million it recorded in the previous corresponding period. Contributing significantly to the increase is the income generated from the civil & building construction segment, which recorded a 72.1% rise, coupled with recurring revenue from the road maintenance segment.
Earnings per share stood at 2.76 cents compared to 0.44 cents previously, an increase of 527.3%. The Group also registered a stronger gross profit margin of 19.8% and net profit margin of 8.4% compared to 8.4% and 1.8% respectively in the previous corresponding period. The improved gross profit margin is a result of better profits from civil engineering projects, good cost management and improved efficiency.
OKP is a leading home-grown infrastructure and civil engineering company in the region, specialising in the construction of airport runways and taxiways, expressways, flyovers, vehicular bridges, urban and arterial roads. In the past two years, the company has had a presence in the oil and gas sector, providing civil construction work for petrochemical plants and oil storage terminals.
Group Managing Director Mr Or Toh Wat said the Group’s growing presence in a buoyant oil and gas sector had contributed significantly to its splendid showing. “I am delighted. At the same time, we have raised the bar for ourselves and I am acutely aware of the need to work much harder to take the Group to a higher level of performance,” he said.
Mr Or added that the Group continually builds on its core capabilities of civil engineering. “We do not veer from our original calling. We are a civil engineering firm, and while we take advantage of the currently booming Oil and Gas sector to grow our presence there, we also continue to prospect opportunities in other areas.”
For example, the Group continues to participate actively in government tenders for road maintenance works and is also actively exploring business opportunities overseas for airport-related projects. The Group’s order book to date stands at S$[209.0] million.
Strong financials and positive outlook
The Group’s financials appear strong. Its assets totalled S$61.24 million and net tangible assets stood at S$25.58 million. This works out to 17.07cents cents per share, compared with 12.81 cents per share as at 30 June 2006, an increase of 33.26%. Net working capital remained strong at S$17.31 million, compared to S$10.9 million it recorded as at 30 June 2006, an increase of 58.81%. OKP also generated a healthy operating cash flow of S$3.68 million, with cash and cash
equivalents of S$16.96 million. The Group’s market capitalisation stood at S$141 million, based on the closing price of S$0.94 as at 27 July 2007.
OKP’s Mr Or said he expected the outlook for the domestic oil and gas sector to remain robust for the next five years. The sector had been a strong catalyst for the Group’s growth in the last two years and with its recent S$40 million win from Foster Wheeler Asia Pacific Pte Ltd and WorleyParsons Pte Ltd for a Jurong Island project, the Group is confident that it will continue to benefit from the intensive activity there. "We believe that we are well-positioned to benefit from the current building boom there and will continue to build up our capabilities and track record with a mind to securing more deals in this sector,” said Mr Or.
He added that the Group’s 55-45% joint venture with Rotary Engineering Limited, OKP (Oil & Gas) Infrastructure Pte Ltd (“OKPOG”), has secured two contracts totalling S$6 million to date. OKPOG was formed to undertake civil engineering projects in the local Oil and Gas Sector. “We are optimistic that this joint venture will continue to generate new business opportunities for our Group and grow our presence further in the oil and gas sector here,” said Mr Or.
“Outside the oil and gas sector, we continue to leverage on our strength and expertise in tendering for government and other private projects,” he added. To date, the Group has secured three new contracts from the Public Utilities Board and one from the Jurong Town Corporation, with a combined contract value of approximately $30.4 million.
Going forward, OKP will continue to focus on a three-pronged strategy to grow its business, namely:
• Staying focused on core competencies: civil engineering projects will continue to feature prominently as this is OKP’s area of expertise where it has built up a distinctive track record over the years.
• Growing its presence in Oil and Gas: To spread risk, OKP will actively grow its niche in the expanding Oil and Gas Sector in order to grow its earnings base, and to ensure that it does not become overly-dependent on a single revenue source. In this regard, the Group has recently formed a 55-45% joint venture with Rotary Engineering Limited to undertake civil engineering projects in the local Oil and Gas Sector.
• Exploring overseas opportunities: While keeping a firm grip on the local market, it will also continually look for opportunities to grow its business overseas.
About OKP Holdings Limited (www.okph.com)
OKP Holdings Limited is a leading home-grown infrastructure and civil engineering company
in the region, specialising in the construction of airport runways and taxiways, expressways,
flyovers, vehicular bridges, urban and arterial roads. It was listed on the Singapore Exchange of Singapore Dealing and Automated Quotation System (“SESDAQ”) on 26 July 2002.
Established in 1966 by Founder and Chairman, Or Kim Peow, OKP has two core business
segments, Civil & Building Construction and Road Maintenance. The Group tenders for both
public and private civil engineering and infrastructure construction projects, which involve
the construction of urban and arterial roads, expressways, vehicular bridges, flyovers, airport
infrastructure and oil & gas related infrastructure for petrochemical plants and oil storage
terminals as well as the maintenance of roads and roads related facilities and building
construction-related works.
The Group has seven subsidiaries namely Or Kim Peow Contractors (Private) Limited, Eng
Lam Contractors Co (Pte) Ltd, OKP (Oil & Gas) Infrastructure Pte Ltd, OKP Technical
Management Pte Ltd, OKP Investments (China) Pte Ltd, United Pavement Specialists Pte
Ltd and OKP (CNMI) Corporation in Saipan, the Commonwealth of Northern Mariana
Islands.
OKP’s clientele includes Foster Wheeler and WorleyParsons, the Land Transport Authority,
the Housing Development Board, the Jurong Town Corporation, the Defence Science and
Technology Agency, the Civil Aviation Authority of Singapore, the Public Utilities Board, the
National Parks Board, Far East Organisation, Universal Terminal (S) Pte Ltd and Rotary
Engineering Limited.
Wednesday, July 25, 2007
Economists hike S'pore trend growth to near 8%
Business Times - 25 Jul 2007
Main drivers include foreign labour growth, rise of Chinese and Indian economies
By ANNA TEO
(SINGAPORE) The Singapore economy can grow at a near-8 per cent pace for the next several years, economists believe.
Driven by an influx of foreigners, the economy's underlying growth potential has risen above the long-assumed 4-6 per cent range, they say.
Already, in the last three years, the economy has grown an average 7.8 per cent a year -
without stoking inflation, which has averaged just over one per cent a year over the period.
In a recent research report, HSBC economist Robert Prior-Wandesforde said: 'Singapore enjoys by far the best growth-inflation trade-off of any developed country in the world and it is hard to see what will stop this impressive performance from continuing over the foreseeable future. Indeed, it may get even better still.'
He reckons that the economy probably bottomed out in the first quarter of 2007 when it grew 6.4 per cent. 'Either overall policy conditions have been unusually supportive of activity and/or the trend rate of growth is considerably higher than the 4-5 per cent number suggested by the government and others.'
Singapore's medium-term growth potential has long been estimated at, initially 3-5 per cent, later raised to 4-6 per cent, with contributions from labour, capital and productivity.
But recent developments - reinforced by early Q2 growth estimates - suggest a higher trend growth rate. Despite a slump in export and manufacturing growth, the economy has remained buoyant, growing 8.2 per cent in Q2.
Mr Prior-Wandesforde thinks Singapore's new potential trend growth 'may be something in the order of 6.5 per cent', but other economists figure higher.
Says Nanyang Technological University economist Choy Keen Meng: 'My gut feel is that
Singapore should be able to grow at a range of 5-7 per cent, rather than 3-5 per cent, in the next five to eight years. Why? Because, barring unforeseen but especially political events that might throw spanners into the works, the rise of China and India will easily add a percentage point or two to GDP growth in Singapore, simply by servicing the needs of these economies.'
Most of the expansion is likely to come from foreign labour growth, he adds. 'The ability to attract foreign investments and an open-door policy on foreign talent will be critical.'
Agreeing, Citigroup economist Chua Hak Bin believes that Singapore's trend growth has probably risen to about 6-8 per cent over the next five years.
'I attribute the large part of the increase in trend growth to the labour component. For a small open economy like Singapore, foreign labour growth is an important driver. A more liberal immigration policy has lifted the potential labour growth component; it's no longer constrained by declining fertility rates and an ageing local population.
'Allowing gaming and lower tax rates have also opened up investment opportunities and raised returns on capital. This has increased investment and capital growth.'
He estimates that labour growth will contribute about 2.5-3.5 percentage points to GDP growth, capital growth about 2-3 points, and total factor productivity (TFP), about 0.5-1.5 points.
TFP can be seen as the qualitative part of economic growth that is not due to sheer increases in labour or capital. It reflects the efficiency with which people and capital are combined to produce output, and is conventionally measured as the residual in economic growth after the contributions of labour and capital are accounted for.
More bullish, PK Basu, Daiwa Institute of Research chief economist for Asia ex-Japan, thinks Singapore's potential growth is currently 7-8 per cent.
'Annual employment growth has averaged 2.8 per cent over the past 10 years, so it is reasonable to assume that the sustainable pace of labour force growth is actually closer to 3 per cent than the long-held figure of 1-2 per cent,' he says. And annual productivity growth across the economy has averaged 4 per cent over the past five years. 'I think this is the new sustainable pace of productivity growth.'
As for TFP, he believes that Singapore's TFP growth is improving as the economy 'now requires substantially less capital (gross domestic investment rates of 22-25 per cent now) to generate the 7.8 per cent annual growth in real GDP we've witnessed over the last three years, and which I expect to be sustained into this year and next'.
And given that external balances around the region are now more stable, it is reasonable to assume that Asia will be less subject to systemic crises in the next 10 years, he adds. Singapore will also be less vulnerable to the global IT cycle now that pharmaceuticals' contribution to manufacturing value-added looks set to exceed electronics' by next year.
'So yes, real GDP growth of near-8 per cent is actually quite sustainable for Singapore now - as evident in the fact that inflation hasn't risen at all during the past three years, even with growth being sustained at that pace,' MrBasu says.
HSBC's Mr Wandesforde says that the higher trend growth probably reflects underlying improvements in the services sector, as well as a rise in the investment share in GDP.
'It seems likely that the corporate sector has now repaired its balance sheet after the Asian crisis and is prepared to start spending in a meaningful and sustained fashion. This is particularly true of the construction sector.'
Main drivers include foreign labour growth, rise of Chinese and Indian economies
By ANNA TEO
(SINGAPORE) The Singapore economy can grow at a near-8 per cent pace for the next several years, economists believe.
Driven by an influx of foreigners, the economy's underlying growth potential has risen above the long-assumed 4-6 per cent range, they say.
Already, in the last three years, the economy has grown an average 7.8 per cent a year -
without stoking inflation, which has averaged just over one per cent a year over the period.
In a recent research report, HSBC economist Robert Prior-Wandesforde said: 'Singapore enjoys by far the best growth-inflation trade-off of any developed country in the world and it is hard to see what will stop this impressive performance from continuing over the foreseeable future. Indeed, it may get even better still.'
He reckons that the economy probably bottomed out in the first quarter of 2007 when it grew 6.4 per cent. 'Either overall policy conditions have been unusually supportive of activity and/or the trend rate of growth is considerably higher than the 4-5 per cent number suggested by the government and others.'
Singapore's medium-term growth potential has long been estimated at, initially 3-5 per cent, later raised to 4-6 per cent, with contributions from labour, capital and productivity.
But recent developments - reinforced by early Q2 growth estimates - suggest a higher trend growth rate. Despite a slump in export and manufacturing growth, the economy has remained buoyant, growing 8.2 per cent in Q2.
Mr Prior-Wandesforde thinks Singapore's new potential trend growth 'may be something in the order of 6.5 per cent', but other economists figure higher.
Says Nanyang Technological University economist Choy Keen Meng: 'My gut feel is that
Singapore should be able to grow at a range of 5-7 per cent, rather than 3-5 per cent, in the next five to eight years. Why? Because, barring unforeseen but especially political events that might throw spanners into the works, the rise of China and India will easily add a percentage point or two to GDP growth in Singapore, simply by servicing the needs of these economies.'
Most of the expansion is likely to come from foreign labour growth, he adds. 'The ability to attract foreign investments and an open-door policy on foreign talent will be critical.'
Agreeing, Citigroup economist Chua Hak Bin believes that Singapore's trend growth has probably risen to about 6-8 per cent over the next five years.
'I attribute the large part of the increase in trend growth to the labour component. For a small open economy like Singapore, foreign labour growth is an important driver. A more liberal immigration policy has lifted the potential labour growth component; it's no longer constrained by declining fertility rates and an ageing local population.
'Allowing gaming and lower tax rates have also opened up investment opportunities and raised returns on capital. This has increased investment and capital growth.'
He estimates that labour growth will contribute about 2.5-3.5 percentage points to GDP growth, capital growth about 2-3 points, and total factor productivity (TFP), about 0.5-1.5 points.
TFP can be seen as the qualitative part of economic growth that is not due to sheer increases in labour or capital. It reflects the efficiency with which people and capital are combined to produce output, and is conventionally measured as the residual in economic growth after the contributions of labour and capital are accounted for.
More bullish, PK Basu, Daiwa Institute of Research chief economist for Asia ex-Japan, thinks Singapore's potential growth is currently 7-8 per cent.
'Annual employment growth has averaged 2.8 per cent over the past 10 years, so it is reasonable to assume that the sustainable pace of labour force growth is actually closer to 3 per cent than the long-held figure of 1-2 per cent,' he says. And annual productivity growth across the economy has averaged 4 per cent over the past five years. 'I think this is the new sustainable pace of productivity growth.'
As for TFP, he believes that Singapore's TFP growth is improving as the economy 'now requires substantially less capital (gross domestic investment rates of 22-25 per cent now) to generate the 7.8 per cent annual growth in real GDP we've witnessed over the last three years, and which I expect to be sustained into this year and next'.
And given that external balances around the region are now more stable, it is reasonable to assume that Asia will be less subject to systemic crises in the next 10 years, he adds. Singapore will also be less vulnerable to the global IT cycle now that pharmaceuticals' contribution to manufacturing value-added looks set to exceed electronics' by next year.
'So yes, real GDP growth of near-8 per cent is actually quite sustainable for Singapore now - as evident in the fact that inflation hasn't risen at all during the past three years, even with growth being sustained at that pace,' MrBasu says.
HSBC's Mr Wandesforde says that the higher trend growth probably reflects underlying improvements in the services sector, as well as a rise in the investment share in GDP.
'It seems likely that the corporate sector has now repaired its balance sheet after the Asian crisis and is prepared to start spending in a meaningful and sustained fashion. This is particularly true of the construction sector.'
Tuesday, July 24, 2007
IDR committee forms 4 workgroups
Business Times - 24 Jul 2007
IDR committee forms 4 workgroups
They will identify and prioritise projects for collaboration in four areas to improve cooperation
By UMA SHANKARI IN JOHOR BARU
THE Malaysia-Singapore joint ministerial committee looking at Johor's Iskandar Development Region (IDR) has set up four workgroups to improve cooperation, it said yesterday.
The workgroups will look at facilitating immigration clearance, enhancing transportation links, tourism cooperation and environmental collaboration within the IDR, which is a special economic zone in Johor state.
The areas of focus were announced after the committee's inaugural meeting in Johor Baru yesterday.
The committee is jointly chaired by Singapore's Minister for National Development Mah Bow Tan and his Malaysian counterpart, Minister in the Prime Minister's Department Effendi Norwawi.
The workgroups, which will involve relevant agencies on both sides, will identify and prioritise projects for collaboration in each of the four areas, said a statement issued by the two countries.
These four workgroups are about 'facilitating the movement of people, goods and ideas so that we can better complement each other's strengths', Mr Effendi said.
Mr Mah said: 'Singapore is keen to work with Malaysia on the IDR's development and is confident that a successful IDR will benefit both our countries.'
The joint ministerial committee was set up to ease cooperation between the two countries on specific matters - including bringing about fuss-free travel - to boost the development of the 2,217-sq-km zone.
Malaysia wants the IDR to be the country's next growth area, and is trying to attract foreign investors - including those from Singapore.
The committee is a follow-up to a retreat in May when the Prime Ministers of the two countries agreed to explore bilateral cooperation to develop the IDR.
The ministerial committee is due to meet every quarter, while the workgroups will meet more frequently, to ensure that the initiatives which have been identified have been successfully implemented.
For now, the workgroups are slated to meet within the next month and will then report their progress to the ministerial committee at its next meeting.
IDR committee forms 4 workgroups
They will identify and prioritise projects for collaboration in four areas to improve cooperation
By UMA SHANKARI IN JOHOR BARU
THE Malaysia-Singapore joint ministerial committee looking at Johor's Iskandar Development Region (IDR) has set up four workgroups to improve cooperation, it said yesterday.
The workgroups will look at facilitating immigration clearance, enhancing transportation links, tourism cooperation and environmental collaboration within the IDR, which is a special economic zone in Johor state.
The areas of focus were announced after the committee's inaugural meeting in Johor Baru yesterday.
The committee is jointly chaired by Singapore's Minister for National Development Mah Bow Tan and his Malaysian counterpart, Minister in the Prime Minister's Department Effendi Norwawi.
The workgroups, which will involve relevant agencies on both sides, will identify and prioritise projects for collaboration in each of the four areas, said a statement issued by the two countries.
These four workgroups are about 'facilitating the movement of people, goods and ideas so that we can better complement each other's strengths', Mr Effendi said.
Mr Mah said: 'Singapore is keen to work with Malaysia on the IDR's development and is confident that a successful IDR will benefit both our countries.'
The joint ministerial committee was set up to ease cooperation between the two countries on specific matters - including bringing about fuss-free travel - to boost the development of the 2,217-sq-km zone.
Malaysia wants the IDR to be the country's next growth area, and is trying to attract foreign investors - including those from Singapore.
The committee is a follow-up to a retreat in May when the Prime Ministers of the two countries agreed to explore bilateral cooperation to develop the IDR.
The ministerial committee is due to meet every quarter, while the workgroups will meet more frequently, to ensure that the initiatives which have been identified have been successfully implemented.
For now, the workgroups are slated to meet within the next month and will then report their progress to the ministerial committee at its next meeting.
Saturday, July 21, 2007
Govt's move to raise development charge will slow en bloc sales
By Daryl Loo, Channel NewsAsia Posted: 18 July 2007 1942 hrs
SINGAPORE : The Ministry of National Development has announced that development charge rates will be revised from the current 50 percent of the appreciation in land value to 70 percent.
The revised rates take effect immediately and apply to development applications where provisional permission is issued on or after July 18.
The Ministry said the development charge was lowered from 70 percent to 50 percent in 1985 to avoid eroding the share of value enhancement that accrued to developers in a declining market.
But with the current buoyant property market, the government has decided to reinstate the development charge to its original rate at 70 percent.
Property analysts said the immediate impact of the move will be to slow down the ongoing frenzy in en bloc sales, as it gets more expensive for developers to buy land for redevelopment.
It is also seen as helping to stem the sharp rise in home rentals, as fewer apartments will be lost to the wrecking ball. The surprise hike in development charges is seen as having an impact on developers' appetite for collective sales.
Following the hike, at a site in Cairnhill Circle for example, the development charge for condominium use will go up from $5,000 per square metre to $7,000. Thus, if a developer plans to increase the gross floor area of the site by 1,000 square metres for more new apartments, it will need to pay $2 million more than previously.
Said Nicholas Mak, Consultancy & Research Director at Knight Frank, "It's basically an increase in taxation to the developers. It also depends on the developer's outlook for the market.
If developers are very bullish, and expect home prices to continue to rise in the future, they may be prepared to fork out more for that piece of land. But in this case, more will go to the government.
"But if the developer is not prepared to do that, then some of them may walk away from those collective sales."
The same increase will also apply to differential premium, which is what a developer pays to intensify the use of leasehold sites.
Analysts said this will also stem the demand for leasehold en bloc sites, such as privatised HUDC estates. The last change to the development charge took place in 1985 - when it was cut to 50% from 70%, amid a recession.
But now, the property market is seen as buoyant after several years of sluggishness. "One possibility is that they do want to slow down the depletion in the properties for lease to expatriates.
Another possibility is that the government may feel that the market is very buoyant, and it's time to increase taxes," explained Mak.
Minister Mentor Lee Kuan Yew had warned earlier this month that rising property prices and rents have to be kept in check to help Singapore maintain its competitive edge. - CNA /ls
SINGAPORE : The Ministry of National Development has announced that development charge rates will be revised from the current 50 percent of the appreciation in land value to 70 percent.
The revised rates take effect immediately and apply to development applications where provisional permission is issued on or after July 18.
The Ministry said the development charge was lowered from 70 percent to 50 percent in 1985 to avoid eroding the share of value enhancement that accrued to developers in a declining market.
But with the current buoyant property market, the government has decided to reinstate the development charge to its original rate at 70 percent.
Property analysts said the immediate impact of the move will be to slow down the ongoing frenzy in en bloc sales, as it gets more expensive for developers to buy land for redevelopment.
It is also seen as helping to stem the sharp rise in home rentals, as fewer apartments will be lost to the wrecking ball. The surprise hike in development charges is seen as having an impact on developers' appetite for collective sales.
Following the hike, at a site in Cairnhill Circle for example, the development charge for condominium use will go up from $5,000 per square metre to $7,000. Thus, if a developer plans to increase the gross floor area of the site by 1,000 square metres for more new apartments, it will need to pay $2 million more than previously.
Said Nicholas Mak, Consultancy & Research Director at Knight Frank, "It's basically an increase in taxation to the developers. It also depends on the developer's outlook for the market.
If developers are very bullish, and expect home prices to continue to rise in the future, they may be prepared to fork out more for that piece of land. But in this case, more will go to the government.
"But if the developer is not prepared to do that, then some of them may walk away from those collective sales."
The same increase will also apply to differential premium, which is what a developer pays to intensify the use of leasehold sites.
Analysts said this will also stem the demand for leasehold en bloc sites, such as privatised HUDC estates. The last change to the development charge took place in 1985 - when it was cut to 50% from 70%, amid a recession.
But now, the property market is seen as buoyant after several years of sluggishness. "One possibility is that they do want to slow down the depletion in the properties for lease to expatriates.
Another possibility is that the government may feel that the market is very buoyant, and it's time to increase taxes," explained Mak.
Minister Mentor Lee Kuan Yew had warned earlier this month that rising property prices and rents have to be kept in check to help Singapore maintain its competitive edge. - CNA /ls
IDR Joint Ministerial Committee to meet for first time this weekend
By S Ramesh, Channel NewsAsia Posted: 19 July 2007 1901 hrs
SINGAPORE: The first meeting of the Singapore-Malaysia Joint Ministerial Committee on the Iskandar Development Region (IDR) in Johor will be held this weekend.
Singapore's Foreign Minister George Yeo told Channel NewsAsia that National Development Minister Mah Bow Tan and Transport Minister Raymond Lim will meet their Malaysian counterparts on the joint committee.
Mr Yeo said that at this weekend meeting in Johor, the Singapore delegation will bring up some practical problems.
He said: "I believe that with the present spirit of cooperation goodwill, we should be able to do something to promote easier flows between the two sides, which would be good for the IDR.
"If there were no borders, then water will find its own level and a lot of the economic growth in Singapore will spill over into the IDR, which will lower our own costs. It will be good for Johor. It will be good for Singapore. Both sides will benefit. The pie will grow faster and there will be plenty to be shared.
"But, of course, there is a border, there is a fence. So the water doesn't flow completely and there is a certain pressure difference, but to the extent that there is connectivity and ferocity, that is good for both sides."
Since the announcement of the joint Singapore-Malaysia Ministerial Committee on the Iskandar Development Region, several business delegations and groups from the chambers of commerce have visited the IDR to see some of the investment opportunities the area offers.
Mr Yeo said: "Our people are curious, they are intrigued by the project. They have gone up and taken a sceptical approach, asking many questions. And I believe that some have come to the conclusion that the IDR is good for them, for their company, for SMEs, for potential investors. They will have to weigh the risks very carefully and make their own decisions. But it is a plus."
Mr Yeo cites the Singapore-Malaysia cooperation in the IDR as an example for ASEAN to show that countries are much better off when they work together.
He hopes this would spur the 10-member grouping to work towards one economic space with minimal friction for the movement of people, goods and services. - CNA/ir
SINGAPORE: The first meeting of the Singapore-Malaysia Joint Ministerial Committee on the Iskandar Development Region (IDR) in Johor will be held this weekend.
Singapore's Foreign Minister George Yeo told Channel NewsAsia that National Development Minister Mah Bow Tan and Transport Minister Raymond Lim will meet their Malaysian counterparts on the joint committee.
Mr Yeo said that at this weekend meeting in Johor, the Singapore delegation will bring up some practical problems.
He said: "I believe that with the present spirit of cooperation goodwill, we should be able to do something to promote easier flows between the two sides, which would be good for the IDR.
"If there were no borders, then water will find its own level and a lot of the economic growth in Singapore will spill over into the IDR, which will lower our own costs. It will be good for Johor. It will be good for Singapore. Both sides will benefit. The pie will grow faster and there will be plenty to be shared.
"But, of course, there is a border, there is a fence. So the water doesn't flow completely and there is a certain pressure difference, but to the extent that there is connectivity and ferocity, that is good for both sides."
Since the announcement of the joint Singapore-Malaysia Ministerial Committee on the Iskandar Development Region, several business delegations and groups from the chambers of commerce have visited the IDR to see some of the investment opportunities the area offers.
Mr Yeo said: "Our people are curious, they are intrigued by the project. They have gone up and taken a sceptical approach, asking many questions. And I believe that some have come to the conclusion that the IDR is good for them, for their company, for SMEs, for potential investors. They will have to weigh the risks very carefully and make their own decisions. But it is a plus."
Mr Yeo cites the Singapore-Malaysia cooperation in the IDR as an example for ASEAN to show that countries are much better off when they work together.
He hopes this would spur the 10-member grouping to work towards one economic space with minimal friction for the movement of people, goods and services. - CNA/ir
Thursday, July 5, 2007
Profit taking at work
Today see profit taking at work, typical "buy on rumour sell on news" play, its pretty normal nothing need to be scared of. Think it is going to be in play for the next couple of days.
To me, the focus in the coming weeks will be the govt advanced Q2 GDP data (out next week 10/07/07) on construction sector perforamce and the CSC FY07 annunal report to be received anytime from now (to check out the progress status of its subsidiaries in m'sia and india. these have not been factored into CSC latest FY07 results end march 07 as well as the message from the mgt).
To me, the focus in the coming weeks will be the govt advanced Q2 GDP data (out next week 10/07/07) on construction sector perforamce and the CSC FY07 annunal report to be received anytime from now (to check out the progress status of its subsidiaries in m'sia and india. these have not been factored into CSC latest FY07 results end march 07 as well as the message from the mgt).
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