BT: Network Man, Ricky Wong

Very inspiring article about how a man can grow from small to big in his career.

Business Times - 26 Jul 2008

Network man

Ricky Wong, chairman of Hong Kong-based City Telecom, tells AMIT ROY CHOUDHURY that Singapore's planned broadband network is all about attracting talent RICKY Wong's idea of future-proof technology is simple. It should be something his grandchildren will be able to use when they grow up.

As 46-year-old Mr Wong, co-founder and chairman of Hong Kong-based City Telecom (HK) Ltd (CTI), has two young children, it's obvious he is talking in terms of a couple of decades at least.
And he thinks the super-fast broadband network he has put up in Hong Kong, which connects 1.5 million homes in that city, is future-proof infrastructure his grandchildren will enjoy and find useful.

You need to remember how fast things move nowadays to understand the significance of Mr Wong's belief. Yesterday's cutting edge is today's obsolete technology.

Sub-megabit per second (mbps) connection speeds provided by dial up modems were state-of-the-art only a few years ago. Now a 100 mbps broadband connection, the highest Singapore has today, is already considered previous generation.

Cisco has called the Hong Kong cyber highway the world's biggest Metro Ethernet network. It can provide connection speeds of one gigabyte per second (gbps) and beyond.

The Hong Kong cyber highway was set up by Hong Kong Broadband Network, (HKBN), a wholly-owned subsidiary of CTI.

Mr Wong has now teamed up with local telcos StarHub and MobileOne in the Infinity Consortium to build Singapore's very own cyber highway - the Next Generation Broadband network, called Next Gen NBN or NBN for short.

Infinity is one of two bidders for the network. The other is the OpenNet consortium, led by Canada's Axia NetMedia and comprising Singapore Telecom, Singapore Press Holdings and SP Telecommunications.

One of these two consortiums will build the network and run it as the Network Operator - or NetCo.

Mr Wong comes across as a sincere man with a clear vision of what he wants to achieve and what the hurdles are.

He candidly admits that in this project there are plenty of wild cards. 'The oil price, interest rates, material costs, the regulatory environment and whether the current telecom incumbents will use our network - there are many unknowns,' he says.

As well as this: there is a fundamental difference between the Hong Kong example and what Singapore is embarking on. And that is the basic model being adopted.

In Hong Kong, HKBN is a vertically integrated service provider, meaning it owns the dark fibre and uses the bandwidth it provides to offer all manner of services.

Singapore has adopted a radically different model - an open access, no conflict model with the infrastructure owner not playing in the retail space, to ensure that it does not enjoy the competitive advantage by owning the network.

On top of the NetCo layer - for which the Infinity Consortium is bidding - there will be an Operating Company or OpCo, for which a separate bidding process will be held.

CTI is a pre-qualified bidder for this process, if it chooses to bid, when the bidding process is started by the government.

The OpCo will lease the bandwidth from the NetCo, then sell it to various companies which will use that bandwidth to offer all manner of retail services, from plain vanilla Internet connections all the way up to IPTV (Internet Protocol TV) and VoIP (Voice over Internet Protocol).

So, considering all the uncertainty, why is Mr Wong here? As he says himself, this job is not going to make him a billionaire. And anyway, he already has tonnes of money.

'I'm financially secure and I can retire because I'm the majority shareholder of CTI. But I still work hard because I enjoy what I do,' he says. Mr Wong has a dream - and that's what drives him. He wants to ensure that in five years there is fibre to most homes in Singapore and Hong Kong.

'Then these two cities will become a model for the rest of the world. The Americans and Europeans will come here to learn and follow us. We will become the technology leaders.'

And he adds an important point - maybe the big idea behind the building of the NBN. 'What is important is not how much bandwidth is used after the fibre is laid. Rather, what's important is that the bandwidth acts as a magnet to attract more talent. Attracting tech-savvy talent to Singapore is the real purpose of the NBN. If that is achieved, the NBN can be considered a success.'

Mr Wong reckons tech-savvy people worldwide will then see that Singapore is the best place to live, work and play - better than Silicon Valley, because it will have the best infrastructure.

Apart from this vision, Mr Wong loves a challenge, which is another factor behind his commitment to spend - as he says - half of the rest of his working life in Singapore if his consortium wins the contract.

To understand this urge to take risks and do something different, it's useful to know how Mr Wong's past experiences have made him a streetsmart - and contrarian - businessman.
'My first business was back in 1979 when I was 17 and had just finished my public examination at secondary school,' he says. 'I organised a summer school, got 400 students and made around HK$40,000,' he adds with a wry smile.

A few years later, when he entered Chinese University of Hong Kong to study electronics, he traded in textbooks. 'I used to bring in textbooks from Taiwan, where they were about 70-80 per cent cheaper than in Hong Kong, and sell them to fellow students. 'That helped make me self-sufficient while at university.'

After obtaining a Bachelor of Science degree in electronics in 1985, Mr Wong joined IBM in Hong Kong and worked for four years. After that, he migrated to Canada where he set up CTI in 1991. A year later he returned to Hong Kong to set up CTI there to provide competitively-priced IDD (international direct dial) services.

'In 1992 we did what was known as a call-back service - an alternative IDD service,' he said 'We did that until 1999 when we started to do simple re-selling of IDD.'

In 2000, CTI got a fixed-network licence in Hong Kong. 'We could do both international calls and infrastructure within the city of Hong Kong,' he says.

In the same year, CTI started a broadband venture. At the time, the idea that broadband could be a viable business was yet to sink in. But he went ahead. 'I wanted to take risks,' he recalls. 'I liked the challenge. I wanted to change the world. Everyone, including my parents, poured cold water on my plans, saying, 'Ricky, you know what you are doing? You are fighting with Hong Kong Telecom. They are huge, so what makes you so confident? Why are you wasting your time'?'

But Mr Wong politely told his parents: 'I know I can do it.'

His confidence came from the fact that CTI did it in IDD, so much so that at the peak, its market share was only 2 per cent lower than that of Hong Kong Telecom, now owned by PCCW.

Mr Wong recalls that in 2000 CTI was the last player to enter the local fixed-line market, unlike with IDD, in which it was the first to enter the re-selling market.

'The local fixed market deregulation started in 1995-96.' he says. 'And before we entered the market in 2000, three additional licences were issued - to Hutchison, Wharf and New World.'
As a result, CTI found itself up against a formidable foursome of blue chip companies - PCCW, Hutchison Telecom, New World Telecom and Wharf T&T.

At the time, broadband was very expensive in Hong Kong. It was a luxury product that cost from HK$300 to HK$400, Mr Wong recalls.

He, however, noted something that seemed significant, Although all of his major competitors were blue chip companies rolling in money, only one of them, PCCW, had its own network. The others leased network space from PCCW and other parties.

'So I said to myself, what's the difference in terms of service? Same chef, different waiter. Where is the choice (for consumers)?' says Mr Wong.

CTI decided to build a new network so it did not have to depend on the old networks to provide services.

But it was tough going. 'We didn't want to take the easy way out, so we built everything from scratch, because even if there is one inch of old cable in a network, that will become a traffic bottleneck,' says Mr Wong.

CTI faced many difficulties, as building owners were reluctant to let company engineers in to do construction work.

'I personally went to hold meetings with house owners,' Mr Wong says. 'They were mostly housewives and professionals who were not experts in telecommunications.'

He recalls talking until midnight, explaining to them the benefits of having high-speed connections to their homes. 'I used simple language to explain,' he says

Mr Wong feels that apart from being able to convince home owners, he was able to demonstrate to his staff that they had to be patient.

He notes that today, the incumbent player in Hong Kong provides around 8 mbps downlink and about one mbps uplink, while CTI's standard product is 100 mbps uplink and downlink. 'It's totally two generations up front and is not comparable.'

The CTI network is what is called a Category 5 network - the best there is on the market. Telephone lines are uncategorised or Category 0. Category 5, or Cat 5, as it is known, is the highest quality - the same as computer cabling.

'The difference between Cat 5 and a telephone line is the capacity we can put on,' says Mr Wong. 'With Cat 5 we can do 10, 100 and even 1,000 mbps (1 gbps).'

In Hong Kong, CTI offers two customer solutions. They can either use Cat 5, that is a high quality copper wire, or opt for an optical fibre line. The capacity limit of a Cat 5 copper wire is 1 gbps. With optical fibre, capacity is theoretically infinite.

'It's a future-proof technology,' says Mr Wong. 'We haven't come up with any alternative that is faster than fibre. It will be relevant for the next 20 years.'

And so what about the Singapore project?

Mr Wong feels very confident because there are, according to him, a lot of similarities between Hong Kong and Singapore. 'I think most of the households in the two cities already have a telephone line and a coaxial line for cable TV. The optical fibre will be an additional piece of infrastructure,' he says.

He, however, agrees that Singapore's open access model is radically different from his vertically integrated model in Hong Kong, but feels it's the only model that can succeed in Singapore.
'In Hong Kong we are all self-funded. We have no government support,' he says. 'But in Singapore, whoever builds the network will need government funding.'

While there are many similarities between the two cities, there is also a key difference, he says. And that is household density. In Hong Kong there are, on average, about 300 households per residential building, whereas in Singapore the number is about 80. 'So the construction cost is very different and that makes the whole business mode different.'

Mr Wong says he spent about HK$2.8 billion to connect 1.5 million homes. 'In Singapore it will definitely cost multiples of that amount to build a same-size network.'

As result, he adds, the Singapore NBN cannot be set up purely on a commercial basis, because the risk and return will not satisfy prudent investment criteria.

Singapore is not alone. Around the world, especially in European countries, the situation is the same, as it is in many other Asian countries, Mr Wong adds.

So if there has to be government support, it is only fair that the model should be open access with no conflict. 'It should be very low-risk, low-return kind of model, like say a water supply company.'

He reckons that for the system to work satisfactorily, the NetCo and OpCo should just provide the infrastructure. 'The competition should be at the retail level - the supply of different quality and type of services, like VoIP, karaoke, monitoring of the elderly etc. This is the right model to usher in a new network in Singapore.'

Mr Wong believes his company has one great advantage in the race to build the NBN - its experience in building in dense areas, using existing infrastructure and causing minimum disruption.

'While forming the (Infinity) consortium, I got a very good understanding of what is happening in Singapore,' he says. 'I even went down into one of the drains one rainy day to see how we can use them to build out the network. I saw we can utilise a lot of existing non-telecom infrastructure, like drains and bridges, to roll out the network, just as we did in Hong Kong. Our experience will come in handy.'

So the savvy Hong Kong businessman waits for the government to announce the winner of the bid to build Singapore's own cyber highway. And if the Infinity Consortium wins, Mr Wong is confident he will help build something his grandchildren's generation in Singapore will thank him for.

BT: Mass market stays buoyant as buyers find price is right

Business Times - 02 Jul 2008


Mass market stays buoyant as buyers find price is right

Flash estimates for Q2 show overall private home prices flattening; steady HDB resales keep mass market more active

By ARTHUR SIM

(SINGAPORE) Flash estimates for property price indices are in with numbers suggesting that price-sensitive buyers are bargain hunting or scaling down their expectations altogether.

The Urban Redevelopment Authority (URA) released estimates for the Q2 2008 price index for private residential property yesterday with prices rising just 0.4 per cent - a mere crawl compared to the 3.7 per cent increase in the previous quarter.

While this represents the slowest growth in four years, Jones Lang LaSalle's local director and head of research (South East Asia) Chua Yang Liang also notes that it is the, 'steepest' quarterly rate of change since Q3 2000.

Much of the activity was in the mid and mass-market as reflected by URA's index for three geographical regions. Prices of non-landed private residential properties increased by just 0.2 per cent in Core Central Region (CCR) and 0.7 per cent in Rest of Central Region (RCR), but climbed a more robust 1.3 per cent in Outside Central Region (OCR).

Dr Chua added that demand remained favourable in the OCR supported by average nominal wage increases in the Q1 2008 and 'dislodged residents of collective sale sites'.

Also robust was the Housing and Development Board's (HDB) resale market with estimates for the quarter revealing that the HDB Resale Price Index increased by 4.4 per cent over the previous quarter, and higher than the 3.7 per cent increase in Q1 2008.

Knight Frank director (research and consultancy) Nicholas Mak said that the mass market is 'influenced' by HDB's resale market and added that, 'the resale market has been steady'.

Indeed, while HDB resale volume did fall to 6,360 units in Q1 2008, a 6 per cent drop compared to Q4 2007, it actually increased by one per cent on a year-on-year (y-o-y) basis.

By comparison, secondary market private property transactions of 2,304 units in Q1 2008 was a fall of about 40 per cent, quarter-on-quarter (q-o-q) and a fall of 57 per cent, y-o-y, while primary market transactions of about 762 units was a fall of about 48 per cent in Q1 2008 q-o-q, and a fall of 84 per cent y-o-y.

Related article:

Click here for the URA news release


ERA Realty Network assistant vice-president Eugene Lim also believes that a buoyant HDB resale market could boost HDB upgrader sentiment, but he pointed out that the strength of the HDB resale market can be attributed to 'upgraders, downgraders and permanent residents'. On the last group, Mr Lim estimates that based on in-house data, permanent residents account for about 20 per cent of the buyers in the HDB resale market.

And attention is likely to continue to be diverted away from high-end products.

'The market is not short of buyers and many astute investors have been shopping around, looking to scoop up value buys,' added Mr Lim.

CBRE Research executive director Li Hiaw Ho noted that in the private property market, most of the transactions were mid and mass-market projects with the majority of transactions in the $750-$1,000 psf price bracket.

As such, Mr Li expects sales volume of new launches to rise to between 1,200-1,400 units in Q2 2008, compared to just 762 units in Q1 2008.

Property consultants have so far been careful to not use the 'F' word to describe home prices. Most believe prices have 'plateaued' or 'softened', but not 'fallen'.

Colliers International director (research and advisory) Tay Huey Ying even believes that home prices have, 'remained stubbornly resilient to the extent that they continue to post a y-o-y increase of 20.4 per cent'.

Ms Tay also added that for the first six months of the year, home prices rose by 4.2 per cent. '(Developer's) current pricing strategy can be described as competitive, that is either similar to current market prices or marginally lower than competitors,' she added.

Ms Tay believes that home prices will continue to resist 'downward pressure' and expects prices to hold steady or decline marginally by not more than 3 per cent in Q3 2008.

Saying that mass-market prices have generally not been 'chased up' or preyed upon by the 'speculative element', Ms Tay believes this sector could be the best performing for the rest of the year.

This however needs to be put in context.

Knight Frank's Mr Mak does point out that prime property prices have increased by 52.4 per cent over the last two years. 'On this basis, it is not surprising that this market segment will lead the slowdown in price growth,' he added.

DJ MARKET TALK: Singapore Construction Faces Rising Risks -CIMB

06/06/08

DJ MARKET TALK: Singapore Construction Faces Rising Risks -CIMB

0110 GMT [Dow Jones] The Singapore construction sector is facing leaner trading conditions and investors should tread carefully, says CIMB. Broker notes private residential development subdued due to weak buyer demand, with rapid rise in construction costs putting developers' margins under pressure. Broker remains Overweight on Singapore construction sector as a whole, but turns more selective; "we recommend reduced exposure to integrated construction stocks and a switch to specialist construction companies." Adds best placed construction firms are those that have low exposure to higher construction material costs or who can manage their exposure well thanks to short project turnarounds. Says Tat Hong (T03.SG), Tiong Woon (T06.SG), CSC Holdings (C06.SG) are top picks. Latest prices: Tat Hong +0.5% at S$2.19, Tiong Woon +0.9% at S$0.58, CSC +1.7% at S$0.295. (KIG)

BT: Never too early for financial planning

Business Times - 02 Jun 2008

Never too early for financial planning

A survey of tertiary students has shown over three-quarters are clueless about investment options available. CHUA SI MIN, TOR SHI TING, WONG HAN YEE and KONG YOON KEE provide some pointers

IN THE MoneySENSE National Financial Literacy Survey 2005, almost all respondents indicated the importance of starting financial planning early. But the fact is, 17 per cent of them had not started. The survey also found that 17 per cent of respondents believed the best time to start financial planning is during school - yet only 9 per cent of them do so.

To find out why, we conducted a survey of tertiary students.

The 'save' choice

When it comes to planning their finances, most tertiary students can only think of the 'save' choice. Although 76 per cent of our survey sample do not invest, 78 per cent have a savings account. A majority of them put aside less than 10 per cent of their monthly allowance.

At an interest rate of 0.25 per cent, $1,000 in a savings account will turn into $1,002.50 at the end of the year. However, if inflation is at 5 per cent, it would reduce one's purchasing power as the savings interest rate is less than the rate of inflation.

Investing fares better, if one can find investments that offer returns higher than the inflation rate. Many students in the survey knew about the huge potential returns involved in investing, but a large majority do not invest. The two most common reasons for not investing are 'lack of financial knowledge' and 'lack of funds'.

In other words, tertiary students want investments that are affordable and easily manageable. Here are some options.

The Regular Savings Plan (RSP) and unit trusts

RSP allows you to invest a small amount of money, usually monthly, in a fund. The minimum monthly amount starts from as little as $100. There are a few RSP routes but the simplest would be through unit trusts. In a unit trust, your money is pooled with that of other investors and invested in a portfolio of different assets by a fund manager.

Among unit trusts, specialised funds and global equity funds typically manage higher returns at higher risk. Balanced funds carry moderate risk while bond funds and money market funds provide lower average returns at lower risk.

Investing in unit trusts reaps diversification benefits. By spreading your money among different investments, risk is reduced. On average, they provide higher long-term earnings than savings accounts or fixed deposits. Unit trusts can be redeemed any time without incurring penalties. They are managed by professional fund managers and are a good starting point for tertiary students lacking knowledge in direct investment.

Bonds: Singapore Government Securities (SGS)

SGS bonds are marketable debt instruments issued by the Singapore Government through the Monetary Authority of Singapore (MAS). They pay a fixed rate of interest every six months, and the principal is repaid on the maturity date. The minimum denomination is $1,000.

SGS bonds are safe investments as they are guaranteed by the government and investors can lock in a fixed interest rate - typically higher than savings interest rate - over longer periods. They can be sold easily prior to maturity, unlike fixed deposits. However, investors face a price risk if they sell prior to maturity.

Stocks

Share investors earn a return via capital appreciation/depreciation (from share price increases/falls) and dividend income (periodic payments by the company that are not fixed and can be zero).

Investors seeking high capital appreciation typically seek out profitable firms that pay low dividends, as these firms plough back earnings to expand the company rather than pay them out as dividends. These tend to be the riskier stocks. Investors desiring regular income tend to invest in lower- risk, higher dividend-paying stocks. The choice depends on one's objectives and risk appetite.

Stocks are considered riskier than bonds because their returns are more volatile. If you hold stock from a single company, your risk is not diversified. Successful stock investing requires intimate knowledge of the stocks one invests in.

Supplementary Retirement Scheme (SRS)

With the SRS, the government hopes to encourage Singaporeans to save more for their old age by means of voluntary contributions to their SRS accounts, which enjoy certain tax benefits.

Participants can contribute a varying amount to an SRS account (subject to a cap) at their own discretion. These contributions may be used to purchase various investment instruments. Each dollar of SRS contribution will reduce income chargeable to tax by a dollar. Investment gains will mostly accumulate tax-free in SRS. Tax will only be payable when you withdraw your savings from your SRS account. Furthermore, if you withdraw your savings upon retirement, only 50 per cent of the savings withdrawn will be subject to tax. You may also spread your withdrawals over a period of up to 10 years to meet your need for regular income. Spreading out your withdrawals will generally result in greater tax savings.

Take the initiative

According to our survey, the most important reason cited for not investing is lack of knowledge. But there are plenty of information sites - and even tutorials - to guide you step-by-step on how various investment tools work. If you are still clueless, MoneySENSE (www.moneysense.gov.sg) supported by MAS, is a credible site to browse. There are also many financial advisory firms with websites to educate you on the basics of investing and how to invest in unit trusts. Just make sure you do your research thoroughly before taking the plunge.

Chua Si Min, Tor Shi Ting and Wong Han Yee were final-year banking and finance students at the Nanyang Business School when they wrote this article. Dr Kong Yoon Kee is a lecturer at the school's banking & finance division.

Phillip Securites: FY08 results, Buy TP $0.45

30/05/2008

Results in line with expectation. CSC Holdings announced net income of S$43.2 (+400.3% yoy) mil on revenue of S$483.7 mil (+281.8% yoy) for FY08. Gross profit margin improved from 15.4% in FY07 to 20.2% in FY08, while net profit margin increased from 6.8% in FY07 to 8.9% in FY08. The Company proposed a final dividend of 0.5¢/sh, along with a special dividend of 0.4¢/share (tax exempt).

FY08 powered by doubling of capacity. FY08 saw the first full year contribution of L&M Foundation Specialists, a subsidiary that was acquired towards the end of FY07. The acquisition of L&M doubled CSC’s equipment fleet and capacity, which facilitated growth in both top and bottom lines. According to the management, margins were also stronger due to better economies of scale achieved. Management also attributed growth in FY08 to better pricing power amidst the current capacity crunch.

FY09 likely to be marked by geographical expansion. While growth in FY08 was largely fueled by fleet expansion, we expect CSC’s plans to expand geographically to become more apparent in FY09. While we expect results and profitability to continue strengthen into FY09, growth is more likely to be muted.

Maintain BUY, FVE S$0.45. We believe CSC is still an attractive buy at the current price, given the Company’s growth prospects, strategic positioning in the region, and the management’s prudent financial management. We maintain our BUY call on CSC, keeping to our DCF-derived FVE of S$0.45.

CIMB: FY08 results Outperform TP $0.49

30/05/2008

• Within expectations. FY08 net profit of S$43.2m (+400% yoy) was in line with our forecast of S$42.8m. Gross margins improved to 20.2% from 15.5% a year ago, attributable to improved operational efficiencies and better-margin contracts. 2HFY08 net profit rose 533% yoy to S$24.1m from S$3.8m in 2HFY07. A final dividend of S$0.005 and special dividend of S$0.004 were declared.

• Operational review. FY08 revenue rose 282% yoy to S$484m on strong demand for specialist foundation engineering (+287% yoy to S$449m) and equipment trading and leasing (+444% yoy to S$33.9m). Depreciation expenses rose sharply due to a reduction in the useful life of equipment from 15 years to 10 years.

• Improved financial position. CSC now has net cash of S$20.3m. It had managed its cash cycle well, with receivables at 38 days vs. payables at 100 days. Operating cash flow was S$50.7m vs. just S$2.2m in FY07.

• Positive outlook. Management remains optimistic of business prospects in the next few years. Current order book of S$400m is expected to expand further as it has been bidding for contracts. Management, however, acknowledged the potential adverse impact from inflationary pressures but given the nature of foundation engineering work, materials can be procured at fixed prices upon securing contracts. Also, CSC’s average contracts have short tenures of 3-6 months, which limits CSC’s exposure to fluctuating prices. A JV with Malaysia’s IJM Corporation is expected to develop new business revenues from the Middle East and India in the medium term.

• Maintain Outperform; lower target of S$0.49 (from S$0.57). With the Kok Tong acquisition aborted, we have cut our growth assumptions and reduced our net profit forecasts by 0.3-16.4% for FY09-10. We also introduce FY11 forecasts.

We continue to value CSC at 10x CY09 P/E, in line with P/E targets for industry peers. Our new target is S$0.49 (previously S$0.57) after our earnings reductions. Maintain Outperform on the back of a still-strong order book and mitigated cost pressures.

BT: CSC earnings jump five times

Business Times - 30 May 2008

CSC earnings jump five times

Strong demand for specialist foundation work, efficiency gain boost margin

By LYNETTE KHOO

RIDING the upswing in the Singapore construction sector, CSC Holdings saw its net profit soar to $43.21 million for the full year ended March 31 - five times the preceding year's $8.6 million.

Revenue almost quadrupled to $483.7 million from $126.7 million, driven by strong organic growth and contributions from three newly acquired subsidiaries. This far outpaced the 46 per cent growth reported in the Building and Construction Authority's report on the value of construction contracts awarded in 2007. Earnings per share rose to 3.85 cents from 0.87.

CSC's gross profit margin improved to 20.2 per cent from 15.4 per cent, thanks to the strong demand for specialist foundation work and improved operational efficiency.

Activity increased across all of CSC's business segments. The company attributed the quantum leap in revenue to strong organic growth and timely acquisitions. It invested $50.8 million in plant and equipment to expand its capacity and capability.

The directors have recommended a tax-exempt final cash dividend of half a cent and a tax-exempt special dividend of 0.4 cent per share. These dividends are on top of a special dividend paid out in December 2007 of 0.282 cent.

CSC is optimistic about prospects for the current financial year despite the sub-prime crisis in the US, rising building material costs, fluctuating oil prices and a general shortage of resources.

Related articles: Click here for CSC news release Financial statements

It managed these issues by procuring key materials at fixed prices upon securing contracts. Given that the average duration of a contract is about three to six months, the group's exposure to fluctuating prices is relatively manageable, said CSC.

CSC has also made inroads into Malaysia through a joint venture with IJM Construction Sdn Bhd and is looking to boost its revenue stream by diversifying into the Middle East and other Asian markets.

'We are committed to building our presence in the overseas markets where investment in real estate and infrastructure are rapidly growing,' said CSC chief executive See Yen Tarn.

At May 23, the group's outstanding order book was about $400 million.

CSC shares ended trading yesterday at 27.5 cents, down half a cent.

BT: PERSONAL SPACEWhere life's a breeze

A private sanctuary: (above) Mr Tan's contemporary house has four levels. The top floor has a roof terrace to take advantage of the sweeping views. The grounds outside boast a 30-metre long black-tiled swimming pool, fish ponds and reflection pools.

A wine cellar in the basement can hold about 10,000 bottles and an adjoining wine-tasting room has the walls, floor and ceiling made entirely of cork

Business Times - 17 May 2008

PERSONAL SPACEWhere life's a breeze

Tan Eng Sim's home on a hill is bright and airy with panoramic views of treetops and Nature at the doorstep, writes GEOFFREY EU

THERE are many things to admire about Tan Eng Sim's spacious modern home near the top of a small, secluded hill in a prime residential district in central Singapore. Among them are the sense of being in a private sanctuary, with verdant surroundings and unobstructed views over the treetops to the Botanical Gardens and beyond. Nature is not only at your doorstep but also a welcoming presence indoors.

Most precious of all, perhaps, are the gentle breezes that drift lazily through the many well-placed openings - both large and small - in the house, which was designed to harness the wind and make the most of even the most oppressive days when the tropical sun scorches everything beneath it. Not for no reason is this home known as the Wind House.

According to Mr Tan, the primary brief he gave to the architect of the house - Richard Hassell of WoHa Architects - was that he wanted a bright and airy home, with plenty of natural ventilation and no particular need for air-conditioning during the day. The architectural team conducted extensive research on local wind patterns, also noting the arc of the sun through the sky at various times of the day. It took about 11 months of design work before a tender for contractors was called - an unusually long period that Mr Tan says was time well spent in order to get everything just right.

The result is something that Hassell has termed a 'wind machine' - a comfortable and contemporary five-bedroom house on four levels with additional specific-purpose rooms, strategically placed glass roofs and panels, fish ponds and reflection pools, outdoor terraces, suspended walkways and rooms with high ceilings and full-height doors. Given the various cross-ventilation features throughout the house and the fact that it sits on a generous 29,000 sq ft plot of land, there is a strong sense of space and not much chance of feeling that the walls are closing in on you.

Mr. Tan's retirement in 2006 - he was managing director of Jurong Cement - after more than 40 years in the cement business coincided roughly with the completion of the house, which replaced a 1970s building he purchased more than 20 years ago. He now spends much of his time visiting his daughter in San Francisco, and friends and relatives in other parts of the world while also indulging in a passion for premium wines. He enjoys going to wine regions on a frequent basis.

If the size of the allocated storage space is any indication of his interest in wine, then Mr Tan is a very serious collector indeed. In the basement level of the house, there is an impressive showcase cellar built to accommodate about 10,000 bottles, and an adjoining wine-tasting room where the floor, walls and ceiling are made entirely of cork. A series of wine-related paintings, including a tell-tale one depicting a bottle of 1943 Bordeaux, lines one wall. Just for good measure, there is also an unfinished cellar in an adjacent space, capable of storing another 20,000 bottles.

Not surprisingly perhaps, Mr Tan says the cellar, with the abundant liquid joy it holds, is his favourite space in the house. He spends a considerable amount of quality time in there, either alone or with friends from his regular wine group - but it isn't the only place in the house where it's possible to unwind.

A quick visit to the attic floor - via a glass-backed elevator, naturally - leads to the gym, with glass panels along one wall and art-storage cupboards on the opposite side (his wife is an enthusiastic collector of Southeast Asian art). Outside, there is a roof terrace to take advantage of the views, and also a jacuzzi is heated to a constant 36 degrees C. A small herb garden anchors the opposite end of the attic floor.

The panoramic views from this top floor are certainly tremendous, but there is an additional feature - a narrow steel walkway that juts out from the main house and looks out over the 30-metre long, black-tiled swimming pool below. Its purpose is to serve as an outdoor link between the pool and the jacuzzi.

The house is designed so there is a central atrium between two main blocks where a series of internal staircases links the various levels of the building together. Some sections of the roof are finished in glass, so even the basement is bathed in natural light.

Most of the bedrooms are on the second floor, while the main living area on the ground level holds a large study and adjoining rooms for Western and Chinese dining, which have views out to the garden and pool. There is also a wet kitchen and a dry kitchen, equipped with restaurant quality appliances. At the far corner of the garden there is a casual covered area where the residents can relax or have breakfast by the pool.

By day, barring inclement weather, all the ground-floor doors to the house are open, extending the boundaries of the living and dining rooms to the outdoors. 'The old house we used to live in was air-conditioned all the time,' says Mr. Tan. 'I'm a lot happier with this house, and I seldom use the air-conditioning, even when it's warm outside. The individual rooms are not big, but they can all be opened up to give that sense of space.'

The Wind House is Mr Tan's fourth go at building a bungalow in recent years, and all of them were designed by well-known Singapore-based architects. He has turned his interest in developing individual properties into a lucrative hobby, and he says he is not done yet - can Earth and Water houses be too far behind?

BT: Govt has arsenal to counter US-driven slowdown: PM Lee

So I believe Singapore construction sector will still be resilient and in high demand amid the ongoing slowdown in US.



Business Times - 07 May 2008

Govt has arsenal to counter US-driven slowdown: PM Lee

In a crunch, it can pump-prime the economy and give targeted assistance

By CONRAD TAN

(SINGAPORE) Singapore is prepared to face any economic scenario that emerges from the current uncertain climate, including a prolonged downturn in the United States, said Prime Minister Lee Hsien Loong yesterday.

One option to fall back on would be to boost economic growth through government spending, including resuming construction projects that were earlier put on hold, he said.

'If things do get bad, which cannot be ruled out - although it does not appear to be on the cards - we are not without recourse,' he told a group of some 100 guests including chief executives, senior bankers and economists at a discussion hosted by Thomson Reuters.

'If we need to move on fiscal policy to stimulate the economy, we can do that. If we have to have directed assistance to help the lower-income because unemployment has gone up - right now it's at a very low level, but if that happens - we can do that.

'And if I have to stimulate the economy or some sector of the economy, I can do that too.' In the construction sector, for example, the government could restart projects that it had put on hold, he said.He also said that he wished that the government had 'moved earlier' to ease the office space crunch in the financial sector, which has grown so rapidly that prime office space rents have soared, prompting banks to move some of their staff and operations to out-of-town locations.

'I wish we had moved our banking and financial centre six months earlier than we actually did. But at that time, the market looked cold and nobody was interested and we were unable to generate the interest for it to take off.'

But the government has since taken steps to build more office space, housing and schools to ease some of the capacity constraints, he said.

HSBC economist Robert Prior-Wandesforde asked Mr Lee if he thought that Singapore could be in danger of losing its lead over other countries in export competitiveness, especially given the recent disappointing growth figures for electronics exports.

Singapore's non-oil domestic exports fell by 5.9 per cent in March, the steepest decline since February last year. Electronic exports shrank for the 14th month in a row.

Mr Lee said that the falling dollar value of electronics exports was likely to be an 'inevitable trend' - partly because 'prices have been crashing' even though the volume had risen - but that other sectors of manufacturing such as pharmaceuticals would provide support. 'Our overall export numbers are not bad - could be better, but they're not bad. I don't think it is a sign of our losing export competitiveness.'

David Conner, chief executive of OCBC Bank, asked Mr Lee what he thought the reaction of other governments in the region to rising food prices and overall inflation was likely to be.

Mr Lee said that 'it would be a pity' if countries closed up their markets 'because it's really the markets that are going to make sure that the food goes where it's needed and there's enough for everybody to eat'.

He said that cooperation among the Asean countries was necessary 'to make sure that we coordinate among ourselves and do not work against one another'.

Long-term problems affecting food supply such as under-investment in research and development would take time to solve, he said. 'We must be prepared to see food prices up for some time.'

Separately, he told Reuters in an interview before the discussion that the Government of Singapore Investment Corp (GIC) would not disclose as much detail about its investment portfolio as Singapore's other state-owned fund, Temasek Holdings, despite pressure from foreign governments.

'GIC and Temasek are different,' he said. 'We do not want to tell people exactly how much we have so it's easier for them to make a run on the Singapore dollar.'

GIC, which invests Singapore's foreign reserves overseas, is believed to be the world's third largest sovereign wealth fund, with an estimated US$330 billion in assets under management, according to Morgan Stanley in February. Unlike Temasek, which began publishing an annual review of its portfolio in 2004 containing consolidated financial statements and its investment returns, GIC reveals only that it manages funds 'in excess of US$100 billion' on behalf of the government and the Monetary Authority of Singapore.

CSC: Lapse of PROPOSED ACQUISITION OF 60% EQUITY STAKE IN CLS HOLDINGS PTE. LTD.

PROPOSED ACQUISITION OF 60% EQUITY STAKE IN CLS HOLDINGS PTE. LTD.

We refer to the announcement of the Company dated 1 April 2008 on the subject matter above and the subsequent discussions on the extension of the non-binding memorandum of understanding (the “MOU”) with Chua Lai Seng (the “Vendor”). The Board of Directors (the “Board”) wishes to announce that after considering the merits of the request from the Vendor and the interests of the Company, the Board had decided to allow the MOU to lapse and not to extend the exclusivity period which ends on 31 March 2008.

BY ORDER OF THE BOARD
Lee Quang Loong
Company Secretary

Date: 22 April 2008

CSC: WINS ANOTHER CONTRACT IN THE ENERGY RELATED INDUSTRY $47m

CSC WINS ANOTHER CONTRACT IN THE ENERGY RELATED INDUSTRY

S$47m Contract is the Group’s Largest Driven Pre-Stressed Concrete Pile Project

Marking yet another milestone for the Group, a subsidiary of CSC Holdings Limited (“CSC”), has won a S$47 million foundation contract worth from Norway’s Renewable Energy Corporation ASA (“REC”). For CSC, this is the largest driven pre-stressed concrete pile project secured. The contract will be for a period of nine months. REC will be investing up to S$6.3 billion over the next five years to build the world’s largest fully integrated solar manufacturing complex here. When fully developed, the complex will be capable of producing up to 1.5GW of solar wafers, cells and modules annually, or about 75% of the world’s output in 2006.

This latest contract secured is a resounding vote of confidence to our ability and commitment to construct and deliver results for our customers within a tight turnaround time. CSC is honoured
to be given a chance to work with REC on such an iconic development.

In addition to this contract win, the Group recently also secured other foundation engineering
and geotechnical investigation and instrumentation jobs valued at about S$24 million collectively. These include works for a Downtown Line MRT station, public housing development in Bukit Merah and works for an electrical sub-station building at Choa Chu Kang.

With these recently secured contracts amounting to a total of S$71 million, the Group’s order book now stands at approximately S$400 million. Most of the projects will be completed within
the next 12 months.

BY ORDER OF THE BOARD
Lee Quang Loong
Company Secretary

BT: Economy surprises with robust 7.2% Q1 growth

Business Times - 11 Apr 2008

Economy surprises with robust 7.2% Q1 growth

But MAS says growth is likely to ease in next few quarters as global outlook dims
By ANNA TEO

(SINGAPORE) Inflationary concerns outweigh downside growth risks - for now anyway - as the economy rebounded strongly in the first quarter. But GDP growth is expected to ease in the months ahead.

The 7.2 per cent flash estimate of Q1 growth - against sub-6 per cent consensus forecasts, and up from the preceding Q4's 5.4 per cent pace - mostly surprised on the upside. In annualised, adjusted terms, the economy - far from slipping into a technical recession, after a Q4 contraction - grew almost 17 per cent in Q1, according to the advance figures based only on January and February data.

Notably, the manufacturing sector roared back after the previous quarter's flat performance. According to the Ministry of Trade and Industry, the sector's 13.2 per cent recovery was due to a surge in the biomedical cluster and a better showing by mainly the electronics and chemicals industries.

Growth was fairly broad-based across the economy, with the services sector maintaining pace at 7.6 per cent, led by the financial services. Construction growth slowed, but to a still robust 14.6 per cent.

The Monetary Authority of Singapore - which unexpectedly tightened monetary policy yesterday - had rather a lot more to say about the growth outlook.

Singapore's economic growth is likely to ease in the next few quarters, says the central bank in its monetary policy statement.

Global growth prospects have worsened significantly of late, but regional resilience should continue to support Singapore's growth, MAS says.

And while maintaining the official forecast of 4-6 per cent growth for 2008, it adds: 'A more severe global downturn cannot be ruled out if there is a further escalation of the financial crisis in the US. If this occurs, Singapore's growth will be adversely affected.'

Related link:
Click here for MTI's advance Q108 GDP estimates

Meanwhile, global inflationary pressures remain high, and Singapore's consumer price inflation is expected to remain elevated in the first half of 2008, MAS says.

It now projects Singapore's 2008 inflation rate to come in at the upper half of the 4.5-5.5 per cent forecast range.

'Against this backdrop of continuing external and domestic cost pressures, an upward shift of the policy band at this point will help to moderate inflation going forward,' it says.

While surprised by the Q1 GDP figures, economists are a little divided about how much the economy will be hit by the US recession that will likely show its hand in Asia later in the year.
Standard Chartered Bank's forecasts for Singapore see GDP growth slowing sharply to just 2.8 per cent by Q4, averaging 4.5 per cent for the year.

On the other hand, HSBC economist Robert Prior-Wandesforde maintains that 'domestic fundamentals remain highly supportive of growth' and is sticking to his forecast of 6 per cent growth for 2008. He also expects no reversal of the monetary tightening at the next review in October - and sees the inflation rate easing to about 3 per cent in Q1 2009.

For at least one economist, though, the Q1 7.2 per cent GDP growth is simply 'not high enough'.
Given the robust flash estimates for manufacturing, services and construction, the numbers just do not 'add up', says Daiwa Institute of Research's P K Basu, who had forecast 8.4 per cent GDP growth for the quarter.

Could there have been a 'computation error' somewhere, he wondered. Asked about this, an MTI officer ran through the data, and found nothing amiss.

The full details of Q1 economic performance, including March figures, will be released next month.

曹仁超—投資者日記: 越南隨時變世界工廠

11/04/2008

越南人口八千四百萬，較成個廣東省仲多，70％都係戰後嬰兒（越戰响1975年結束）。全國人口平均年齡二十四點五歲，公民識字率94％，越南嗰邊英文程度好高。家吓一個越南工人月薪响50至80美元，只及珠三角一帶嘅人工一半。自從越南加入WTO後，一排排灰白色廠房喺城市郊區建起嚟，成為中國珠三角工業最佳嘅轉移點。台灣商人更早喺1998年已响越南開始投資，例如造鞋、家具及成衣，依家估計已達四千家左右；今天台商對越南嘅興趣大過中國大陸。除咗工資夠平外，仲有豐富嘅天然資源及國內市場。今天胡志明市（往日西貢）到處都係建築工地，情況好似九十年代嘅珠三角。越南起步大約遲中國十多年，1986 年先實行革新開放政策（中國喺1978年宣布改革開放），中國1992年已宣布建立有社會主義特色嘅市場經濟體制，越南喺2001年先提出以社會主義為方向嘅市場經濟。2003年高盛證券首次發布以越南為核心嘅研究報告，佢地估計不出十年，越南將超越印尼同菲律賓，成為東盟十國中經濟實力最強勁嘅經濟體。

2007年越南GDP上升8.5％响全球中僅次於中國。自1986年宣布革新開放後，越南國內人口每日生活費唔足1美元嘅人口比例由51％降至2007 年8％，速度較中國快。過去二年越南股市總值由10億美元升至146億美元，但去年8月起又大幅回落，外國投資者以中國人為主。越南房價已直逼東京同紐約，例如胡志明市商業中心濱城市場商舖，每平方米賣17.3萬美元；胡志明市城郊房價，每平方米賣2000美元。越南基建至今仲好落後，電力缺口達十億度一年，道路仍以泥路為主，高速公路只得一條。

依家投資越南應以建廠為主，不宜涉足股票及房地產；相信越南可成為另一個世界工廠。

BT: Worst from credit crisis yet to come: George Soros

Business Times - 10 Apr 2008

Worst from credit crisis yet to come: George Soros

SHANGHAI - The credit crisis is far from over, billionaire financier George Soros warned on Thursday, urging regulators to move faster to contain damage from the collapse of the housing finance markets.

'I think the situation is more serious than the authorities admit or recognise,' Mr Soros told journalists in a conference call.

Measures taken so far to slash interest rates and stimulate the economy were 'necessary but not sufficient,' he said.

'Because of that, I think the situation is going to get worse before it gets better.'

Mr Soros is promoting a new book, 'The New Paradigm for Financial Markets: The Credit Crisis and What It Means.'

He has urged regulators to move more aggressively to improve market oversight to curb risks from excessive reliance on debt for financial speculation.

He said that he agreed with the International Monetary Fund's estimate of more than US$1 trillion in losses linked to the collapse of mortgage-backed securities.

Losses disclosed by financial institutions so far are related only to the decline in value of those financial instruments, Mr Soros said.

'They do not reflect in any way a possible decline in the value of the loans held by the banks,' he said. 'We have not yet seen the full effect of the possible recession.'

Mr Soros pointed to the potential for massive losses from complex investments linked to the US sub-prime mortgage market, such as credit default swaps, or CDS, which allow investors to put bets on the likelihood that companies will default on bond payments.

He described as a 'Sword of Damocles' the US$45 trillion worth of credit swaps.

'That's more than five times the entire government bond market of the United States. It's almost equal to the entire household wealth of the United States,' Mr Soros said.

'This US$45 trillion market is totally unregulated,' he said. -- AP

Singapore Advance GDP Estimates for First Quarter 2008

Advance GDP Estimates for First Quarter 2008

Gross Domestic Product at 2000 Prices
(Percentage change over corresponding period of previous year)

1Q07 2Q07 3Q07 4Q07 2007 1Q08*
Overall GDP
7.0 9.1 9.5 5.4 7.7 7.2

Goods Producing Industries
Manufacturing
3.9 8.6 11.0 0.2 5.8 13.2
Construction
14.4 22.4 20.1 24.3 20.3 14.6
Services Producing Industries
7.7 8.6 8.5 7.7 8.1 7.6

* Advance estimates

1. Economic growth picked up pace in the first quarter of 2008. Advance estimates1 show that real gross domestic product (GDP) rose by 7.2 per cent on a year-on-year basis in the first quarter, faster than the 5.4 per cent gain in the final quarter of 2007. On a quarter-on-quarter seasonally adjusted annualised basis, real GDP expanded by 16.9 per cent, after declining by 4.8 per cent in the previous quarter.

2. The manufacturing sector is estimated to have expanded by 13.2 per cent in the first quarter, compared with a 0.2 per cent growth in the fourth quarter of 2007. This was largely due to a surge in the output of the biomedical manufacturing cluster, following its contraction in the previous quarter. The rest of the manufacturing clusters also enjoyed better performance in the first quarter with the exception of the transport engineering and precision engineering clusters whose growth moderated.

3. The construction sector is estimated to have grown by 14.6 per cent in the first quarter, after a 24.3 per cent gain in the preceding quarter.

1 The advance GDP estimates for first quarter 2008 are computed largely from the first two months of the quarter (i.e. January and February 2008). They are intended as an early indication of the GDP growth in the quarter, and are subject to revision when more comprehensive data becomes available.

4. The services producing industries are estimated to have grown by 7.6 per cent in the first quarter, similar to the 7.7 per cent in the previous quarter. Financial services continued to be the fastest growing among the services sectors.

5. The preliminary GDP estimates for the first quarter of 2008, including performance by sectors, sources of growth, inflation, employment and productivity, will be released in May 2008 in the Economic Survey of Singapore.

MINISTRY OF TRADE AND INDUSTRY
10 April 2008

GENTING International has awarded a $340 million contract to Singapore-listed Low Keng Huat

Hard Rock Hotel contract awarded

By ARTHUR SIM

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GENTING International has awarded a $340 million contract to Singapore-listed Low Keng Huat (S) Ltd to build the Hard Rock Hotel at Resorts World at Sentosa (RWS).

Rock on: It will also have conference facilities, more than 20 meeting rooms and a large ballroom with seating for 7,300 guests
The latest construction award brings the tally of construction contracts to over $1 billion.

The Hard Rock Hotel will be the first and only such hotel here. It is also one of six hotels at the $6 billion RWS development.

Expected to open in early 2010, the Hard Rock Hotel will have 360 keys (rooms), including nine suites and 351 rooms.

It will also have conference facilities, more than 20 meeting rooms and a large column-free ballroom with seating for 7,300 guests.

Michael Chin, executive vice-president of projects at RWS, said that Low Keng Huat was selected from a tender exercise which drew 'several bids'.

He added that the construction of the resort is entering a new phase in which the superstructures such as the hotels will be built.

'Low Keng Huat's proven track record and expertise in building construction and property development, especially in hospitality-related sectors, were the key factors in our selection,' Mr Chin said.

One of the challenges in the construction of the Hard Rock Hotel will be the ballroom.

Low Keng Boon, managing director at Low Keng Huat, said the difficulty in constructing the ballroom lies in the fact that it is completely column-free, without the support of beams for a foundation.

With a floor area of 6,500 sq m and at a height of 11m, Mr Low explained that extremely large trusses will have to be specially manufactured to withstand the weight of the entire structure.

RWS will have some 1,800 rooms, spread across its six hotels of varying themes. Topping the list are Maxims Residences, Hotel Michael and the Hard Rock Hotel.

BT: Analysts staying upbeat on construction stocks

Business Times - 07 Apr 2008

Analysts staying upbeat on construction stocks

By LYNETTE KHOO

DESPITE the upward cost spiral of raw materials such as steel and granite, analysts believe strong orders from both the public and private sector will underpin the construction sector.

In its 'Building Blocks for Growth' investment seminar over the weekend, OCBC Investment Research highlighted the growth prospects in the sector to its preferred clients, pointing to the string of contracts pouring into the local construction sector from public projects to re-invent Singapore as well as jobs from the property sector.

CIMB-GK analyst Lawrence Lye reiterated his 'overweight' rating on the sector in his report dated April 4.

Last year's brisk construction activities brought total contracts awarded to a new record high of $24.5 billion, breaching the previous peak in 1997 of $24.4 billion.

The Building and Construction Authority (BCA) is projecting that some $23-27 billion worth of contracts will be awarded this year.

But analysts are also pointing to the challenges ahead for this sector. Recent downside risks are emerging in the form of higher raw material costs. The upward pressure on prices of construction materials such as steel is further exacerbated by increased global demand for building materials.

'The strong growth in Asia has also buoyed demand for most building materials,' OCBC said in its report. 'In Singapore, the growth in construction demand in 2008 is likely to be broad-based, stretching from residential, commercial, industry to the civil engineering segments.'

Escalating construction costs are leading to higher breakeven prices, Mr Lye of CIMB-GK said, estimating that the construction cost for an average luxury condominium development is at least $450 per square foot.

Another sticking point is coming from the easing of residential property prices, he added. This has recently been reflected in the delay in property launches, lower transaction volumes, as well as the lower-than-expected prices for en bloc sales and aborted en bloc sales.

Mr Lye noted that rising property prices over the past few years have prompted many non-traditional property developers, such as construction companies, media and publishing companies and hotel groups, to jump into the fray to capitalise on quick profits.

The success of these 'newbie developers' hinges on their ability to speed-to-market - to sell their properties quickly before the market turns down and prices fall to below their costs.

But the tide is now turning against them, given the US sub-prime problems in mid-2007 that have led to a substantial weakening in consumer sentiment, and escalating construction costs since early 2007 when the Indonesian government started the export ban on sand and granite to Singapore.

'With continued rising construction costs exacerbated by higher steel prices, these construction companies-turned-developers are likely to be saddled with properties that are below current benchmark prices,' Mr Lye said.

While expressing caution on such companies, Mr Lye recommends that investors focus on pure-play construction companies or specialist contractors. His top picks are Holdings, Tat HongTiong Woon Corporation and CSC Holdings.

OCBC is initiating a 'buy' rating on Pan-United Corp and upgrading its call on Tee International to 'buy' from 'hold'. It does not have a rating for the sector yet.

Warren Buffett

1943: (13 years old)

Buffett filed his first income tax return, deducting his bicycle as a work expense for $35. [21]
1945: (15 years old)

In his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.
1949: (19 years old)

In 1949, he was initiated into Alpha Sigma Phi Fraternity while an undergraduate at the Wharton Business School at the University of Pennsylvania. His father and uncles were also Alpha Sigma Phi brothers from the chapter at Nebraska, where Warren eventually transferred.
1950: (20 years old)

Buffett enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.
1951: (21 years old)

Buffett discovered Graham was on the Board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO's headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the Vice President, who was to become a lasting influence on him and life-long friend.[22]
Buffett graduated from Columbia and wanted to work on Wall Street. Buffett offered to work for Graham for free but Graham refused. He purchased a Sinclair gas station as a side investment, but that venture did not work out as well as he had hoped. Meanwhile, he worked as a stockbroker. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, "Investment Principles." The average age of the students he taught was more than twice his own.
1952: (22 years old)

Buffett married Susan Thompson.
1954: (24 years old)

Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss.
Susan had her first child, Howard Graham Buffett.
1956: (25 years old)

Benjamin Graham retired and folded up his partnership.
Buffett's personal savings are now over $140,000.
Buffett returned home to Omaha and created Buffett Associates, Ltd., an investment partnership.
1957: (27 years old)

Buffett had three partnerships operating the entire year.
Buffett purchased a five-bedroom, stucco house on Farnam Street for $31,500.
Susan was about to have her third child.
1958: (28 years old)

Buffett had five partnerships operating the entire year.
1959: (29 years old)

Buffett had six partnerships operating the entire year.
Buffett was introduced to Charlie Munger.
1960: (30 years old)

Buffett had seven partnerships operating the entire year.
The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.
Buffett asks one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.
1961: (31 years old)

Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships' assets.
Buffett explained that in 1958, Sanborn sold at $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant buyers valued Sanborn at "minus $20" per share, and buyers were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing.
Buffett reveals that he earned a spot on the board of Sanborn.
1962: (32 years old)

Buffett's partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 belonged to Buffett.
Buffett merges all partnerships into one partnership.
Buffett discovered a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share.
1965: (35 years old)

When Buffett's partnerships began aggressively purchasing Berkshire they paid $14.86 per share while the company had working capital (current assets minus liabilities) of $19 per share, this did not include the value of fixed assets (factory and equipment).
Buffett took control of Berkshire Hathaway at the board meeting and named a new President, Ken Chace, to run the company.
1966: (36 years old)

Buffett closes the partnership to new money.
Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”
In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn, and Co, a privately owned Baltimore department store.
1967: (37 years old)

Berkshire paid out its first and only dividend of 10 cents.
1969: (39 years old)

Following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.
1970: (40 years old)

As chairman of Berkshire Hathaway, began writing his now-famous annual letters to shareholders.
1973: (43 years old)

Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.
1974: (44 years old)

The SEC opens a formal investigation into Warren Buffett and one of Berkshire's mergers.
1977: (47 years old)

Berkshire indirectly purchases the Buffalo Evening News for $32.5 million. Anti-trust charges brought.
1979: (49 years old)

Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett's net worth neared $140 million. However, he lived solely on his salary of $50,000 per year.
Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.
1988: (58 years old)

Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which he still holds.
1990: (60 years old)

Scandals involving Greenberg and Gutfreund appear.
1999: (69 years old)

Buffett is named the top money manager of the 20th century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton.[23]
2002: (72 years old)

Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.
2004: (73 years old)

His wife, Susan, passes away.
2006: (75 years old)

Buffett announced in June that he would gradually give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution will go to the Bill and Melinda Gates Foundation.[24]
2007: (76 Years old)

In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps successors to run his investment business.[25] Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.
2008: (77 Years old)

Buffett becomes the richest man in the world according to Forbes.[26]

Economist: Wall Street's crisis

Wall Street's crisis

Mar 19th 2008
From The Economist print edition

What went wrong in the financial system—and the long, hard task of fixing it


THE marvellous edifice of modern finance took years to build. The world had a weekend to save it from collapsing. On March 16th America's Federal Reserve, by nature hardly impetuous, rewrote its rule-book by rescuing Bear Stearns, the country's fifth-largest investment bank, and agreeing to lend directly to other brokers. A couple of days later the Fed cut short-term interest rates—again—to 2.25%, marking the fastest loosening of monetary policy in a generation.

It was a Herculean effort, and it staved off the outright catastrophe of a bank failure that had threatened to split Wall Street asunder. Even so, this week's brush with disaster contained two unsettling messages. One is analytical: the world needs new ways of thinking about finance and the risks it entails. The other is a warning: the crisis has opened a new, dangerous chapter. For all its mistakes, modern finance is worth saving—and the job looks as if it is still only half done.

Rescuing Bear Stearns and its kind from their own folly may strike many people as overly charitable. For years Wall Street minted billions without showing much compassion. Yet the Fed put $30 billion of public money at risk for the best reason of all: the public interest. Bear is a counterparty to some $10 trillion of over-the-counter swaps. With the broker's collapse, the fear that these and other contracts would no longer be honoured would have infected the world's derivatives markets. Imagine those doubts raging in all the securities Bear traded and from there spreading across the financial system; then imagine what would happen to the economy in the financial nuclear winter that would follow. Bear Stearns may not have been too big to fail, but it was too entangled.

Gordian conduits

As the first article in our special briefing on the crisis explains, entanglement is a new doctrine in finance (see article). It began in the 1980s with an historic bull market in shares and bonds, propelled by falling interest rates, new information technology and corporate restructuring. When the boom ran out, shortly after the turn of the century, the finance houses that had grown rich on the back of it set about the search for new profits. Thanks to cheap money, they could take on more debt—which makes investments more profitable and more risky. Thanks to the information technology, they could design myriad complex derivatives, some of them linked to mortgages. By combining debt and derivatives, the banks created a new machine that could originate and distribute prodigious quantities of risk to a baffling array of counterparties.

This system worked; indeed, at its simplest, it still does, spreading risk, promoting economic efficiency and providing cheap capital. (Just like junk bonds, another once-misused financial instrument, many of the new derivatives will be back, for no better reason than that they are useful.) Yet over the past decade this entangled system also plainly fed on itself. As balance sheets grew, you could borrow more against them, buy more assets and admire your good sense as their value rose. By 2007 financial services were making 40% of America's corporate profits—while employing only 5% of its private-sector workers. Meanwhile, financial-sector debt, only a tenth of the size of non-financial-sector debt in 1980, is now half as big.

The financial system, or a big part of it, began to lose touch with its purpose: to write, manage and trade claims on future cashflows for the rest of the economy. It increasingly became a game for fees and speculation, and a favourite move was to beat the regulator. Hence the billions of dollars sheltered off balance sheets in SIVs and conduits. Thanks to what, in hindsight, has proven disastrously lax regulation, banks did not then have to lay aside capital in case something went wrong. Hence, too, the trick of packaging securities as AAA—and finding a friendly rating agency to give you the nod.

That game is now up. You can think of lots of ways to describe the pain—debt is unwinding, investors are writing down assets, liquidity is short. But the simplest is that counterparties no longer trust each other. Walter Bagehot, an authority on bank runs, once wrote: “Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.” In our own entangled era, his axiom stretches to the whole market.

A question of priorities

This mistrust is enormously corrosive. The huge damage it could do to the world economy dictates what must now be done first. No doubt, there are many ways in which financial regulation needs to be fixed; but that is for later. The priority for policymakers is to shore up the financial system. That should certainly be done as cheaply as possible (after all, the cash comes from the public purse); and it should avoid as far as possible creating moral hazard—owners and employees should bear the costs of their mistakes. But these caveats, however galling, should not get in the way of that priority.

To its credit, the Fed has accepted that the new finance calls for new types of intervention. That is the importance of its decision on March 16th to lend money directly to cash-strapped investment banks and brokers and to accept a broader array of collateral, including mortgage-backed and other investment-grade securities. If investment banks can overcome the stigma of petitioning the central bank, this will guard them against the sort of run that saw Bear rejected by lenders in the short-term markets. Henceforth, the brokers will be able to raise cash from the Fed. The Fed is now lender-of-last-resort not just to commercial banks but to big investment banks as well (a concession that will surely in time demand tighter regulation).

Even if that solves Wall Street's immediate worries over liquidity, it still leaves the danger that recession will lead to such big losses that banks are forced into insolvency. This depends on everything from mortgages to credit-card debt. These, in turn, depend on the American economy's likely path, the depth to which house prices decline and the scale of mortgage foreclosures—and none of these things is looking good. Goldman Sachs's latest calculations, which suppose that American house prices will eventually fall by 25% from their peak, suggest that total losses will reach just over $1.1 trillion. At around 8% of GDP that is not to be sniffed at. But it includes losses held by foreigners, and “non-leveraged institutions” such as insurers. Goldman expects eventual post-tax losses for American financial firms to be around $300 billion, just over 2% of GDP, or about 20% of their equity capital.

The rebuilders' dilemma

That suggests a serious problem, but not a catastrophic banking crisis. And with the world awash with savings, banks ought to be able to raise new capital privately and continue lending. Unfortunately, things are not quite so simple. It would not take many homeowners to walk away from their debts for the losses to grow rapidly. Also, bank shareholders may prefer to cut back on lending rather than raise new equity. That would suit them, as equity is expensive and dilutes their stake. But it would not suit the economy, which would be pushed further into recession by sudden cuts in leverage.

By lending money to more banks for longer against worse collateral, the Fed hopes to stem panic and buy time. It wants Wall Street's banks to assess their losses and strengthen their balance sheets without the crippling burden of dysfunctional markets. And it hopes that cheaper money will ease that recapitalisation, inject confidence and cushion the broader economy. But that lingering risk of insolvency means that the state needs to be ready to take yet more action.

One option is to keep on intervening as events unfold. The other is to shock the markets out of their mistrust by using public money to create a floor to the market, either in housing or in asset-backed securities. For the moment, gradualism is the right path: it is cheaper and less prone to moral hazard (ask investors in Bear Stearns). Yet it is not easy to pull off—again, ask Bear Stearns's backers, who could possibly have been saved had the Fed begun lending to brokers sooner. If the crisis drags on and claims more victims, gradualism could yet become more expensive than a more ambitious approach.

Something important happened on Wall Street this week. It was not just the demise of a firm that traded through the Depression. Financiers discovered that they had created a series of risks that the market could not cope with. That is not a reason to condemn the whole system: it is far too useful. It is a sign that the rules need changing. But, first, stop the rot.

CSC: INSTALL FOUNDATION PILES FOR WORLD'S LARGEST RENEWABLE BIO-DIESEL PLANT $33M

PRESS RELEASE
CSC TO INSTALL FOUNDATION PILES FOR WORLD’S LARGEST RENEWABLE BIO-DIESEL PLANT

SINGAPORE, March 6, 2008 – Finland’s Neste Oil OYJ is building the world’s largest renewable bio-diesel plant in Tuas and has commissioned one of CSC Holdings Limited’s (“CSC” or “the Group”) wholly owned subsidiaries to construct the foundation for the facility.

When completed the bio-diesel plant is capable of converting renewable feedstock like palm oil into some 800,000 tonnes of bio-diesel annually. The contract for the foundation work is worth approximately S$33 million.

Work at the site will involve the installation of a large number of driven piles and some civil engineering work and is scheduled to commence in early March and be completed by the end of the year.

CSC is delighted and honoured to work with Neste Oil to construct the foundation for this esteemed project and looks forward to securing more of such exciting contracts in the future.

This contract adds to CSC’s list of foundation contracts for projects in the energy related industries and enhances the reputation and track record of the Group.

In addition to this contract win, the Group has also recently secured several other foundation engineering, geotechnical investigation and instrumentation jobs worth approximately S$30 million collectively. These include works at the proposed Woodsville Interchange, the ITE campus at Bukit Batok and public housing development at Sengkang.

With these recently secured contracts amounting to S$63 million, the Group’s order book now stands at approximately S$435 million. Most of the projects are expected to be completed within the next 12 months.

BT: Freedom at 44

Business Times - 03 Mar 2008

Freedom at 44

Last week, we discussed how retiring young and rich can be an attainable goal if one plans early and invests wisely. Today, we run a personal letter from RONALD HEE, who shows it is possible to become financially free as a hardworking salaryman, without needing to rob a bank or be a corporate high-flier

To the graduating class of 2008:

YOU are entering a world of amazing possibilities - possibilities that people of my generation barely believed would be possible. The world is, quite literally, your oyster. You also enter a world fraught with challenges and dangers, and ever rising costs of everything.

In our day, the options were limited, but inflation remained low most of the time, and there was job security. I still have friends who are in the same company since they graduated 20 years ago. For you today, inflation is roughly twice the interest the banks are giving you. You will probably change jobs every two to three years. And you can be fired from any of them at any time. Or, any company you work for could downsize or close down just when you least expect it.

So, for middle-class working Joes like us, does it mean that just to survive, we will be chained to our desks until the day we die - if we're lucky and not get replaced or downsized? Is financial freedom at the tender age of 44 - for you, 20 years of earning - an impossible dream? It really boils down to one simple formula. Earn more than you spend; invest what you save.

The first thing, of course, is to find a good job. There will be many, here and around the world. But don't rely on your company or your boss to take care of you. You have to take care of yourself, regardless of the profession you choose. Assuming you are not in the lucky handful who will inherit a fortune or get a job that pays you in the six figures, or win the lottery, the career you choose is what makes your path to financial freedom possible. But you have to plan that path.

Let's first look at the cost side of the equation. Buy what you need and some of what you want and know the difference. Do you really need a 200-inch high-definition plasma TV, complete with state-of-the-art home theatre system? And how many hours per day are you going to enjoy that system? Instead of spending tens of thousands on something you will use for a few hours a week, consider instead how that money could work for you.

One thing that surprises me about the younger generation is your propensity to spend on credit. Why buy things you don't need, with money you don't have? To impress people you don't like? Here's a crazy idea: Have the bank pay you interest for your money, rather than you pay the bank interest for their money. Twenty-four per cent interest? That's approaching loan shark rates. Always, always, pay your credit card bills in full. Can't afford to pay? Simple solution. Spend less. Be low maintenance.

At some point, you'd probably want to buy a car. With an excellent MRT and bus system, and taxis when you need them, is it worth getting a car? Unless you have a real need - you're a salesman, you have a family to ferry around, your child is sick all the time, your mum is old, your girlfriend will leave you otherwise - the reality is that a car is simply not worth it. Over 10 years, a $50,000 car will cost you about $130,000, once you factor in petrol, road tax, repairs, car payments and interest on the payments, parking tickets, a few minor accidents... Again, it's better for that money to work for you. (See Table 1)

Like most people, your biggest purchase will probably be a home. For most of us, our first home will be a government flat. Whether you buy public or private, consider buying something that you can continue to pay for, for at least six months, should you be suddenly out of work. If you don't mind the loss of privacy, consider renting out any spare rooms. It's not impossible for your rental income to match your mortgage payments.

Now let's look at the income side. Your basic fallback is your CPF account. Let's assume that by age 44, you've worked 20 years. Assuming an average of $1,000 a month, you will accumulate $240,000, not including interest. Invest it if you wish, but the main use of CPF should be to pay for your home, so your cash outlay is minimised. In 20 years, with $240,000, you could quite easily pay off your flat. With your spouse also chipping in 50 per cent for the flat, you should have more than enough.

If you've managed your expenses right, it's quite possible to save an average of $1,000 a month. This, of course, gets easier as you grow older and earn more. Put some away into a savings account as your rainy day fund, eventually building up enough to keep you going for six months or more. Put the rest in the hands of a good financial planner. This is someone who should be able to give you an average return of at least 10 per cent a year. The miracle of compound interest will yield you $756,030 at the end of 20 years, more than three times what you put in! (See Table 2)

It's now 2028. Twenty years have passed and it's your 44th birthday. You are into your second or third home by now, or maybe even have a spare house, each time either breaking even or making a small profit. You have a healthy CPF balance that covers basic needs. You've taken care of some health risks by buying insurance policies when you were young and they were cheap. And your investment portfolio is chugging along very nicely, yielding around $70,000 a year, without depleting your capital, so it's sustainable for the long-term. $70,000 a year is equal to a tax-free monthly 'salary' of $5,800. Not too bad.

CPF + savings + especially your investments = financial freedom. Work part time. Start your own business. Do something else that pays a lot less but fulfils you more, such as church or charity work. Become a beach bum in Bali. Or travel round the world for six months. Financial freedom means the freedom to make these kinds of choices.

So, my young friends, my wish for you as you embark on the next stage of your life is that you will plan from the beginning to be financially free. May you have the discipline and luck to accomplish it!

Ronald Hee, 44, is a freelance writer, and just a little shy of financial freedom