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HSBC Sticking its Plans in Singapore

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HSBC Sticking to its plans for Singapore

By Harsha Jethnani

It has been reported :


BRITISH bank HSBC still ha ambitious plans for Singapore, despite announcing on Wednesday that it is scaling back in some markets.

The lender will steadily increase its headcount here and hopes to double pre-tax profits to more than US$1 billion (S$1.23 billion) over the next five years from the US$524 million recorded last year.

Its chief executive in Singapore, Mr Alex Hungate, told The Straits Times yesterday that HSBC has the potential to step up its expertise in trade, financial markets and wealth management, the areas where Singapore has the potential to be a hub.

Singapore's role as a trading hub, particularly for energy and commodities, is growing both within Asia and across the world, Mr Hungate added.

As the largest trade bank in the world, HSBC will continue to grow in this segment by providing specialised expertise to trading companies in those sectors, he said.

"A lot of investment we've been making in Singapore and across Asia and other parts of the world in the second half of last year was putting equity research in place," Mr Hungate said.

HSBC has also been working over the past 12 months to compile an equity sales team, he added.

And the bank will place focus on "increasingly important mass affluent segment" to build its wealth-management-strength.

Its HSBC Premier service serves people with at least $200,000 in assets to invest.

Separate Premier teams here serve both local as well as regional clients who manage their wealth here.

"That part of the business is growing very rapidly," said Mr Hungate.

There was a 25 percent growth in premier customers here at the end of last yer, with 64 per cent of those clients new to HSBC.

The bank will look to hire more people but at a steady pace, Mr Hungate said. It employs over 3,500 now, up from about 3,300 at the end of the first quarter last year.

"I think you can expect a similar rate of growth going forward," said Mr Hungate.

The Singapore growth plans are part of the bank's global strategy outlined on Wednesday that will see HSBC aggressively focus on faster-growing markets, including Asia, while reviewing its operations in less profitable ones.

It aims to lift pre-tax earnings in India to more than US$1 billion and achieve the same for its combined Malaysian and Indonesian operations.

HSBC's operations in Hong Kong and mainland China already generate more than US$1 billion in pre-tax profits each, the group said yesterday.

It hopes to break into China's insurance and equity markets segment. It will also expand its wealth-management and wholesale business in that region.

Earlier in the week, the HSBC group posted a 14 per cent dip in first-quarter profit to US$4.9 billion due to escalating costs.

The Straits Times 13 May 2011

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Bosses upbeat amid global concerns

It has been reported :


Most in expansionary mode with services, construction among most bullish: Survey

By FRANCIS CHAN& JONATHAN KWOK

BOSSES are staying optimistic as they head into the second quarter despite the concerns and uncertainties arising from the unrest in the Arab world and the continuing fallout from the nuclear crisis in Japan.

Most even expect better sales, profit and employment activities, according to a survey out yesterday from credit rating firm D&B Singapore.

Services and construction firms were the most bullish, according to the poll of 200 bosses.

'Singapore's economy may suffer temporary slowdown as trade is disrupted due to Japan's recent disaster,' said D&B.

'But with an increase in new orders expected, the general outlook of the manufacturing industry remains upbeat, although a decline in inventory level is to be anticipated.'

D&B's quarterly Business Optimism Index, as the survey is called, compares net percentages of respondents' expectations in areas such as sales, profits and hiring against the previous quarter.

A positive reading indicates optimism, zero means no change and a negative number flags that the respondent expects a drop in performance.

The net profit index for the second quarter was 29 per cent, up from 16 per cent in the first quarter.

This was driven mainly by the strong showing of the services and construction industries, which both tip even better days ahead.

Manufacturers also saw marked improvements in their order books, said D&B.

The new orders index for the second quarter came in at 36 per cent compared with negative 11 per cent in the last quarter.

In terms of hiring, services and manufacturing firms were strongest, both recording around a 37 per cent and 36 per cent in the employment index respectively.

This means they plan to increase their headcounts in the second quarter, mostly to meet growing demand.

Similarly, the sales volume index was also higher overall at 33 per cent compared with 19 per cent in the previous quarter.

D&B also said it expects gradual shifts in policymaking following the election with more efforts targeted at generating sustainable growth for a more robust economy.

'The economy is expected to be less reliant on foreign workers and the priorities for the next few years would be focused on boosting labour productivity and increased investments in research and development,' it said.

The outlook is similarly upbeat across South-east Asia, with a separate study by Ernst & Young (E&Y) showing that corporate confidence is high.

Ernst & Young polled about 1,000 senior executives of mid-to-large sized companies around the world, including 80 from South-east Asia in March.

The findings out yesterday showed that 68 per cent of the respondents from the region expressed optimism about their domestic economies while 45 per cent believe the downturn is over in their respective industries.

The survey also found that most firms polled are focused on organic growth while also eagerly looking for possible acquisitions for growth.

These companies also say they do not have funding problems, with 45 per cent of executives saying that access to finance for their firms is not a problem.

Despite the strong demand for assets and a rise in takeovers, firms are paying 'more realistic prices' compared with before the financial crisis, said Mr Harsha Basnayake, E&Y's transaction advisory services leader for Singapore and Southeast Asia.

He said that just before the crisis, the prices firms were willing to pay 'blew (away) every fundamental logic that was underpinning the business'.

'We are not in that environment (and) while pricing remains realistic, I think boardrooms and business development teams that are looking for opportunities are also very cautious in the amount of money that they are willing to spend,' said Mr Basnayake.

'They don't want to pay too much of a premium, given that there is a bit of uncertainty beyond a 12-month period as to how the global economy will pan out.'

The Straits Times 11 May 2011

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Singapore businesses to sustain growth in Q1- D&B Singapore Business Optimism Index

It has been reported :

Singapore, 26 January 2011 – Despite the weakened economic outlook in the United States and Europe, Singapore businesses remain confident of the local economic growth.


D&B Singapore’s first BOI survey for 2011 continues to report positive sentiments from all industries except for the manufacturers. Employment prospect also looks favorable across most industries with active hiring expected to continue through this quarter.


Underpinned by a number of industry-specific factors and an expected correction from its double-digit growth in the first half of last year, expectations for a continual robust economic performance have tapered down. Growth can still be expected this quarter, albeit at a slower pace as compared to previous year.

Overview (Sector Breakdown)


Business sentiments remain optimistic among local businesses with a majority expecting moderate increase in overall sales volume, net profit, selling price, employment and inventory in Q1 2011.


The financial, agriculture and services sectors have been earmarked to lead this quarter’s growth, with increases in sales volumes and higher selling prices expected. Robust performance in sales volume is expected from the financial sector, given the buoyant market sentiment and a higher loan growth. A favourable employment outlook is also expected from the services sector in the period ending March 2011 complimented by a higher sales volume with tourism-related segments benefiting from a steady growth in the number of tourist arrivals.


Owing to unfavourable external economic conditions, the manufacturing sector has indicated a pessimistic outlook towards its sales volume, net profit, inventory level and selling price with a decline in new orders and no hiring intentions for the first quarter. Similarly, the construction sector is anticipating a general lack of business activities despite hiring intentions.


The details on the indicators are discussed in the following sections:



Net Profits


A positive optimism index of +16% (compared to Q4 2010 +22%) amongst companies surveyed, mainly driven by the agriculture, financial and services sectors.


The overall sentiment remains in the expansion region for the seventh quarter running but less bullish when compared with Q4 2010.

Volume of Sales


A positive optimism index is maintained at +19%.


The growth is observed in all sectors, except for the manufacturing sector (net -11%). Notably, the agriculture and financial sector is anticipating robust performances with an optimism index of +83% (compared to Q4 2010 +60%) and +40% (compared to Q4 2010 +42%) respectively.


The overall sentiment remains in the expansion region for the seventh quarter running since its decline in Q2 2009(- 34%).

volume-of-sales-for-all-sectors

Selling Prices


A moderate increase of +5% (compared to Q4 2010 +5%) optimism amongst companies surveyed.

Relative to the past quarters of last year, the situation is more encouraging with a higher optimism index (+10%) as compared to the previous quarter.

New Orders

A decline in the manufacturers’ order book position with a negative optimism index of -11% (compared to Q4 2010 +11%).

The index falls into the contraction region for the first time since Q2 2009 (-59%).

The manufacturing sector is the only sector that supplied the information about their expectation on new orders.

Employment

A positive optimism index of +15% (compared to Q4 2010 +14%) for the seventh quarter running.

Employer hiring expectations are strongest in the mining (+40%) and construction sectors (+27%).

Manufacturers have no active hiring intentions with a negative index of -17% (compared to Q4 2010 +17%).

Inventory Levels

A moderate increase of +5% (compared to Q4 2010 +6%) optimism amongst companies surveyed.

The growth is mainly driven by the agricultural (+67%), while manufacturers expect a decline in inventory at -27%(compared to Q4 2010 -11%).

Commentary

This is the 7th D&B Singapore Business Optimism Index (BOI) released (1st issue was released in July 2009).

The D&B Business Optimism Index (BOI) is a measure of business confidence in the economy. Released quarterly, it is based on a business sentiment survey that is designed to capture business expectations and is one of the most effective ways to track how the business community perceives the business environment, and where they think it is moving. This is commonly used, worldwide, to assist in analyzing major trends and issues concerning the business community through tracking business parameters including net profits, selling prices, new orders, inventory levels, and employee count.

About the Survey

D&B Singapore conducts latest Business Expectations Surveys every quarter. Each quarter, 200 business owners and senior executives representing major industry sectors across Singapore are asked if they expect increases, decreases or no changes in their upcoming quarterly Sales, Profits, Employment, New Orders, Inventories and Selling Prices.

Note: The index figures used in the survey represent the net percentage of survey respondents expecting higher sales, profits, etc., compared with the same quarter of the previous year. The indices are calculated by subtracting the percentage of respondents expecting decreases from the percentage expecting increases.

About D&B

D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world's most valuable commercial database with information on more than 145 million companies.

Information is gathered in over 200 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than one million times daily as part of D&B's commitment to provide accurate, comprehensive information for its customers around the world.

Contact Penny Phua at 6513 8336/ This e-mail address is being protected from spambots. You need JavaScript enabled to view it for more information.

http://www.dnb.com.sg/pdf/BOIQ1_2011_press%20release.pdf

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Loan Calculators

http://www.singaporehousingloan.sg/housingloancalculator.aspx

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Keppel Towers and GE Tower to be redeveloped

It has been reported :


More residential developments in the CBD area ( Tanjong Pagar) coming as Keppel Group announced asset-swap deal with K-Reit Asia.

News extracts from TODAYonline:

Keppel‘s asset swap deal will give Tanjong Pagar another boost


SINGAPORE – The once sleepy Tanjong Pagar district looks set for another boost that could turn the area into one of the most prized downtown residential districts.

The Keppel group yesterday unveiled a billion-dollar asset reshuffle that will see it put up a massive residential development at its flagship buildings – Keppel Towers and GE Tower – in the heart of the area, whose skyline already boasts the Icon Loft private apartments and the 50-storey Pinnacle@Duxton Housing and Development Board project.

“The rapid transformation of the business district into an area for live-work-play and future development plans for the Tanjong Pagar precinct present good investment opportunities into the future,” said Mr Kevin Wong, group chief executive officer of Keppel Land.

The new high-rise residential project with commercial space on the first level, along Hoe Chiang Road and Tanjong Pagar Road near the Tanjong Pagar MRT Station , will have a plot ratio of 5.6 and total gross floor area of 481,800 sq ft, yielding about 620 residences.

Keppel Land’s asset-swap deal with K-Reit Asia will see it sell a third of its interest in Phase One of the Marina Bay Financial Centre (MBFC) for about $1.4 billion. In turn, it will acquire K-Reit Asia‘s Keppel Towers and GE Tower for $573 million.

The 27- and 13-storey office buildings were completed in 1991 and 1993. Keppel plans to develop them in two to three years, possibly into 46- and 26-storey high rises.

Keppel Tower and GE Tower to be Redeveloped in Singapore

http://www.edirectory.sg/2010/10/12/kepland-k-reit-shuffle-assets-in-2b-deal/

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Singapore 'set to be top private banking centre'

It has been reported:

But bankers say it's not guaranteed as assets in Switzerland still high


By Gabriel Chen, Finance Correspondent


SINGAPORE will become the world's top wealth management centre by 2013, thanks to growth in emerging markets, and the decline of Switzerland and London in the wake of tougher regulations.

The findings came from a PricewaterhouseCoopers (PwC) report out yesterday that pointed to the changing balance of power in financial markets.

It said Singapore will leapfrog both European centres in the next two years, with Hong Kong in third spot behind Switzerland and ahead of London.

The findings in PwC's Global Private Banking and Wealth Management report were based on a survey of wealth managers and private bankers between December last year and April. The questionnaires were completed by 275 institutions in 67 countries - 62 per cent from Europe, 24 per cent from the Americas and 14 per cent from Asia-Pacific.

'For many years, we have asked respondents to indicate which financial centres they viewed as the main wealth management and private banking hubs,' PwC said. 'The historical answer was Switzerland, London and New York. This is now changing. This year, we asked our ranking question again, but we also explored the impact of increased regulation.

'In response to increased regulatory pressures, our respondents see Switzerland, London and, to a lesser extent, New York all being challenged by the rise of Singapore and Hong Kong in the coming two years.'

Private bankers told The Straits Times that while Swizerland has traditionally been the dominant centre for wealth management and a safe haven for high net worth individuals to park money, Singapore is closing the gap due to the growing number of rich here.

After the global crisis, demands for more transparency have forced Switzerland to agree to share more bank client data with the tax authorities abroad. The Swiss also seek to avoid a repeat of the legal action that led to the country's largest bank, UBS, paying a US$780 million (S$962 million) fine in 2009 for helping Americans evade taxes.

"The range and quality of services today are very much the same between the two countries," said Mr Hanspeter Brunner, chief executive for Asia for Swiss private bank BSI. "A growing number of European clients are also booking their assets in Singapore, as they want an Asian-centric portfolio."

A recent Boston Consulting group report found that 15.5 per cent of households here have wealth of more than US$1 million - defined as investable assets, exclusive of owner-occupied property and items like art.

Still, some top bankers say it is by no means guaranteed that Singapore will upset Switzerland soon.

"I don't think Singapore will overtake Switzerland in absolute terms in the foreseeable future," said Mr Rolf Gerber, chairman of LGT Bank (Singapore). "The growth rates in Asia and Singapore are higher as long as the next crisis does not destroy a lot of wealth... but there is still a huge gap in terms of private banking assets managed in Switzerland and Singapore."

Singapore's private banking assets under management are estimated to be about one-third of Switzerland's.


Morgan Stanley's chairman for South-eat Asia, Mr Ronald Ong, said that while wealth management activity in Singapore will increase, it will play "partner" to Switzerland.

"Switzerland still has a lot of money," Mr Ong Said.

The Straits Times News Paper (22 June 2011)


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Trade between emerging markets to flourish: HSBC

It has been reported :

THE global economy will change in the next 40 years with a Southern Silk Road developing among emerging markets while North America and Europe will be left in the slow lane, according to a report from HSBC.

Such an outcome might be hampered by existing economic barriers but these can be overcome, it said.

HSBC said "South-South" connections - essentially trade relationships, including capital flows, between emerging markets like China and India - will flourish over the next decades.

"From the perspective of global trading and capital flows, these economic connections which are formed will bypass North America and Europe," said chief economist Stephen King in a conference call briefing from London yesterday.

"We expect enormous change with trade between countries like China and Brazil to dominate trade flows in 30 or 40 years."

This change would resemble the explosion of trade between developed nations in the 1950s and 1960s, HSBC said.

However, the report pointed out that trade between emerging markets along this new Southern Silk Road - referring generally to trading routes connecting Asia, the Middle East, Africa and Latin America - is limited by such challenges as tarriffs and migration curbs.

There are three main incentives for emerging markets to overcome these challegnes and facilitate more "South-South" connections, said Mr King.

These are investing in infrastructure to better receive Chinese investment, developing capital markets to facilitate both domestic and trade growth and developing unique versions of common products like cars to suit the specific needs of domestic markets.

The factors will help bring about a huge expansion of South-South trade despite the current barriers, he said.

The Straits Times (16 June 2011)

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Singapore Attractions bag 6 of 7 Asian awards

It has been reported that :


SINGAPORE Cable Car was named the overall grand winner among Asian visitor destinations at the Asian Attractions Awards ceremony yesterday.

It garnered the most votes of the 60,000 cast in an online poll and also took the prize in the medium-sized attractions category for attractions with between one and two million visitors each year.

Its two accolades were among the six prizes Singapore attractions swept at the Asian Attractions Expo at the Resorts World Convention Centre.

Seven awards were at stake.

The awards were handed out by the International Association of Amusement Parks & Attractions (IAAPA), which has more than 4,300 members in 100 countries.

Other Singapore attractions which also took awards were:

  • Resorts World Sentosa, which won in the large-attractions category for destinations with more than two million visitors annually;
  • Sentosa 4D Magix, the multi-sensory adventure ride which took the prize in the small-attractions category for attractions with less than a million annual visitors;
  • Universal Studios Singapore, which took the honours in the theme-park category, and
  • Singapore Zoo, which was top in the wildlife-park category.

The seventh award, that for water parks, was won by Malaysia's Sunway Lagoon.

IAAPA organised the four-day expo, a trade show for Asia's attractions industry.

The event drew some 236 exhibitors and 4,000 buyers and exhibitors from more than 40 countries. The expo ends today.

The Strait Times (24 June 2011)


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