Dec 11, 2010
Widening wage gap. Does it matter?
As Singapore's economy powers ahead at full steam this year, the income gap between the top and bottom earners continues to widen. Is it cause for concern? Does it really matter? And if so, what more can be done about it?
By Li Xueying, Political Correspondent and Zakir Hussain, Political Correspondent

A SOBERING statistic is casting a shadow over the headline-making reports of record gross domestic product growth, record household wealth and record bonuses.

The widening gap between Singapore's rich and poor is now the second largest among the world's developed economies, according to a United Nations report last month.

The Government has flagged it as a concern that it is addressing through education and training. The opposition is calling for more to be done to help those at the bottom. Economists and scholars are exercising their minds on the issue.

But is it really cause for concern? Does it matter if those at the bottom have a reasonable standard of living? If yes, what more can be done?

Singapore's growing inequality has been borne out most recently by the UN Development Programme's ranking of developed economies. It shows Singapore coming in second - after Hong Kong - in income inequality.

Singapore's Gini coefficient - which measures inequality on a scale of 0 to 1 (0 means that income is shared equally among all; 1 means one person has all the income and everyone else none) - for the decade up to this year stood at 0.425, below Hong Kong's 0.434.

Tracking the Gini year by year, Singapore's inequality has increased steadily since 2000. That year, it stood at 0.444, before hitting a peak of 0.489 in 2007. It dipped to 0.478 last year because of the recession.

The situation is, however, leavened by government transfers: After taking into account taxes and social aid such as ComCare payments and Workfare supplements, the coefficient fell to 0.453.

But it remains high - comparable to that of Latin American countries like Argentina (0.457), higher than that of liberal market economies such as the United States (0.408) and Britain (0.36) and heads and shoulders above those in Europe such as Germany (0.283) and France (0.327).

Other statistics point in a similar direction. Last year, managers - Singapore's best-paid group of workers - earned a median wage of $6,300. This is 6.3 times more than what cleaners and labourers, with a median wage of $1,000, earned. In 1997, the gap was 4.13 times.

Slice the data another way, and the same trend stands. Singapore's richest 20 per cent of residents saw their estimated real median monthly income increase from $5,328 in 1996 to $7,278 last year.

In contrast, the poorest 20 per cent struggled to keep up with inflation, with their wages increasing by a mere $32 - from $711 to $749, according to computations by economist Hui Weng Tat of the Lee Kuan Yew School of Public Policy, based on data from the Manpower Ministry's Labour Force surveys.

This means that Singapore's richest 20 per cent earn 9.7 times more than the poorest 20 per cent. In contrast, Japan's gap is 3.5 times, Germany's is 5.2, and the US, 8.5.

Statistical limitation

THERE are, however, certain limitations to the statistics.

For one thing, the Gini coefficient is a relative measure. It 'does not locate where in the distribution the inequality occurs', notes Professor Augustine Tan, an economics professor at the Singapore Management University (SMU).

This means that it is possible for both a very rich country and a very poor one to be deemed equally unequal.

Also, to place the ranking in context, Singapore, as a city-state, accommodates its population's wide spectrum of skills within a limited space compared to larger countries that have non-urban areas for people out of the rat race.

Another shortcoming cited by Professor Tan Khee Giap of the LKY School and Mr Liang Eng Hwa, a PAP MP, is that the statistics do not fully capture non-monetary aspects of the Singapore social safety net such as public housing and subsidised health care.

Noting that 95 per cent of Singaporeans own their homes, Mr Liang, a DBS Bank managing director, says: 'At retirement, most would have owned a fully paid HDB flat. This wealth would be the envy of low-income groups in many countries. If the home owner chooses to monetise his flat, he could receive a steady stream of income for many years.'

That said, those who do not own their homes - usually the poorest with little or no Central Provident Fund (CPF) savings for the down payment for a flat - would not have recourse to this avenue. Housing Board figures for the last financial year show there are 47,532 rental flats.

SMU assistant professor of economics Davin Chor says: 'For just about any conceivable measure of inequality, the message has been very uniform: Inequality has indeed been widening in Singapore, and this increase has been especially sharp in the last 10 years.'

Another worried about the situation is Dr Khor Hoe Ee, previously chief economist at the Monetary Authority of Singapore.

'When you compare the situation of Singapore with other advanced, high income countries, it looks like we're really way behind in terms of the income distribution relative to our per capita standard of living,' he says, referring to countries such as Japan and Germany.

At the same time, the story of inequality is not simply about the bottom 20 per cent, say those interviewed.

While the wages for the middle rungs have increased, the rise fell far short of that for the top earners. The real median monthly income of employed residents grew from $1,876 in 1997 to $2,420 last year.

In comparison, top honchos such as those in the banking sector took home US$3 million to US$4 million (S$4 million to S$5.2 million) last year.

'The perfect storm'

A TRINITY of inter-related factors led to the situation today, according to those interviewed.

First, the rise of globalisation from 20 years ago saw low-end jobs in manufacturing leaving for much cheaper labour in China and India.

As a result, Singapore workers in this sector are caught in a bind. Their pay stagnates, often dips - and that is if they keep their jobs.

The second factor is that Singapore's growth today is propelled by technology, which favours the skilled and displaces those who are not.

The third is the influx of foreign workers to fill unmet demand in certain sectors, which placed a cap on the earning power of lesser-skilled Singaporeans. As of the end of last year, 856,000 Work Permit holders and 82,000 S-Pass holders made up one-fifth of the population.

Meanwhile, the open-door policy increases the pool of high-income earners which in turn raises the Gini co-efficient, says Bank of America Merrill Lynch economist Chua Hak Bin.

Underlying these developments is the Government's philosophy that Singapore must enlarge the overall pie as much as it can. It can then share the success by redistributing some of the gains to help the less successful help themselves.

But while the three trends helped power the economy's robust growth, they also created what Dr Chor calls a 'perfect storm' of negative shocks for those at the bottom.

Alarmingly, the pool of workers affected by such competition has also grown. Those whose pay stagnated include not just those right at the bottom, but also the lower-skilled professionals, managers, executives and technicians facing competition from S-Pass holders.

As Dr Chor sees it, the pace of economic developments over the last 10 years has made it difficult for Singapore to balance competing priorities.

For instance, the inflow of foreign labour was partly occasioned by the Government wanting to grow the economy as much as possible to make up for several downturns over the past decade.

What's the fuss?

SOME may wonder what all the fuss over inequality is about.

After all, by one broad measure, Singaporeans across the board are better off. The country's GDP per capita rose from $40,364 in 2000 to $53,143 at the end of last year.

Indeed, some argue, it is surely better for people to be richer across the board than they were 10 or 20 years ago - even if some lag far behind the top-earners - than it is for everyone to be more equal but to see slower growth overall.

The rapid growth allows for more jobs to be created across the board, even if they are low-paying ones, they contend.

Mr Liang notes that Singapore enjoys very low unemployment, which is a key measure of social well-being.

Others, like Prof Augustine Tan, feel that some inequality motivates individuals to do better for themselves. 'Some inequality is needed to provide inducements to get better education or training, work harder, be more entrepreneurial,' he says.

Adds Dr Tan Ern Ser, a sociologist at the National University of Singapore: 'As long as all Singaporeans enjoy a decent quality of life and possess the hope that they and/or their children can still move up the ladder, I don't see inequality as a big issue.'

The threshold, he feels, is where the bottom can survive reasonably well, while the middle and top thrive.

The question is, are the bottom fifth of society surviving 'reasonably well' in Singapore? And how does one measure that?

Based on government surveys, a household of four needs a minimum of $1,700 to cover basic costs of living like food and utilities, as LKY School dean Kishore Mahbubani noted in a recent article in The Straits Times.

The numbers affected are significant. The Singapore Workforce 2010 report noted that some 400,000 workers - 20 per cent of the resident workforce - earn $1,200 or less a month.

If there is a glimmer of hope, it is that although these Singaporeans' wages have stagnated, their material standard of living - from upgraded homes to possession of mobile phones - has improved.

As observers note, Singaporeans do generally accept some level of inequality because they believe they have a chance of moving up over time.

So yes, they may be poor today, but they or at least their children can make it tomorrow.

What really matters

WHAT matters therefore is equality of opportunity - rather than equality of income.

However, this hope of mobility is undermined when the latter affects the former: when gaps in income widen to the point that they become ever harder to bridge and the relative poverty of those at the bottom undercuts social mobility.

For instance, when the bottom 20 per cent of households struggle to make daily ends meet, they are hard-pressed to set aside extra for what some call investments in human capital - to nurture their children in education, improve their own skills, or buy a computer and subscribe to broadband access for the home.

While government schemes go some way towards helping such families, the reality of Singapore - with its tuition culture, for example - is that such enrichment extras matter.

So over and beyond the 'minimum subsistence line' of $1,700, a family of four would need the 'social inclusion level' of $2,500 to $3,000 a month, as some economists calculate, to have a fighting chance of having their children move up in life.

A prolonged exclusion of these children from equal opportunities of moving up in life - occasioned by wage stagnation and growing inequality - could, in the words of social work academics Irene Ng and David Rothwell, 'signal that economic mobility may be less common, a trend that threatens Singapore's venerated notion of meritocracy'.

'Intergenerational economic mobility - the extent to which children's economic outcomes depend on parents' economic status - is relatively low,' they wrote in a 2009 article. 'It is lower than most developed countries and similar to the United States and United Kingdom - two countries where concerns have been expressed over their low intergenerational mobility.'

Inequality, in and of itself, also matters when it comes to social cohesion. Left unchecked, it could entrench a class divide.

It is human nature to compare oneself to one's neighbours, colleagues, countrymen. As Prof Augustine Tan puts it: 'Inequality is always an emotive issue because of envy.'

And in a small, densely populated city like Singapore, where inevitably urban poverty runs up against displays of wealth and affluence, such relative inequality could breed social tension.

The implications are worse if such inequality is more pronounced along ethnic lines. Already, minorities have lower median incomes and are disproportionately represented among low-wage earners.

Nanyang Technological University economist Ho Kong Weng says that, based on national surveys of youth, minorities appear to have a lower level of intergenerational social mobility. If such trends are left uncorrected, the risk of racial cleavages will grow and the social compact could unravel.

Psychologically, worker morale could also be affected. Scholars note that it is more stressful living in a more unequal society, as there is a greater struggle to achieve a certain level of income.

A more equal society - where the lot of the bottom is nearer the median, would raise the level of the country's competitiveness if the skills levels of the poorest are also lifted.

But the way forward, caution those interviewed, should not be to cap the income levels of the rich, who create jobs and contribute a large share of tax revenues.

The challenge, instead, is to raise the boat for the bottom fifth of households.

Minding the gap

INDEED, the Government is lifting the boat through a variety of schemes.

Its social safety net is upheld by four key pillars: public housing (HDB), affordable health care (the 3Ms - Medisave, MediShield, Medifund), enforced retirement savings (CPF), and a wage supplement for low-wage workers (Workfare Income Supplement).

Then, there are the initiatives to equip Singaporeans for a knowledge economy: education for the young (top-ups and bursaries) and training for the workers (from the Skills Programme for Upgrading and Resilience to the Workfare Training Scheme).

Cash handouts are given out as a last resort through ComCare (limited to three months of aid although there is flexibility for deserving cases) and Public Assistance for the old and disabled.

At the same time, the Government is tightening the flow of foreign workers, forcing employers to boost productivity - leading, hopefully, to higher wages.

All those interviewed are unanimous in giving the Government credit, saying it is on the right track. But more, they argue, should be done (see other report).

What would happen if Singapore maintains the status quo?

The pragmatic may note that natural attrition will take place - it is a matter of time before the generation of older, poorer-educated Singaporeans passes on.

Yet not addressing the problem now will mean not according due respect and recognition to the pioneers who helped to build Singapore with their blood, sweat and tears.

And if wage stagnation at the low end becomes persistent, there will be long- term trickle-down effects for future generations.

Says Dr Chor: 'One of my greatest fears would be if the children of low-income earners themselves become discouraged in the face of the large income divide, and view their own chances for social mobility to be low.

'If this is not addressed, it could really undermine our ethos of meritocracy of opportunity, at least in people's minds and perceptions.'

On a more philosophical level, as Singapore moves ahead, the problem of inequality strikes at the heart of the country's perennial policymaking struggle between two competing demands:

How can it continue to seize opportunities in a globalised economy and still ensure that no segments of society are left trailing far behind?

xueying@sph.com.sg

zakirh@sph.com.sg

Attached Files

  Real Median Monthly Income 1996-2009.pdf (Size: 66.22 KB / Downloads: 2)

http://news.yahoo.com/s/ap/us_madoff_son

Frankly maybe I shouldn't post this up cos this is pretty irrelevant to investment but I felt it does involves a huge scandal in the financial sector.

One man's greed lead to his loved one demise. Even though Mark may be involved as an accompliance in his father shadow dealings (or may not), it betrays the lack of courage in him and perhaps in alot of us out there.

Would we have the courage to do the right thing at the right time? Or would our seven sins consume our very soul and conscious when nobody is looking.

RIP.

Update: We have since contacted Cycle & Carriage and a spokesman has said no owners will be affected in terms of warranty and servicing. Their quotes are added below.

THE Japanese car brands are taking it hard.

Automotive group Cycle & Carriage will let go its 20-strong Mitsubishi sales force and administrative support team after the Chinese New Year, according to a Straits Times (ST) report today.


Mitsubishi will also vacate its Alexandra showroom and shift to Fulco, a sub-dealer located in Kampong Ubi. The current location has been described by as "expensive".

Cycle & Carriage is the authorised distributor and importer of Mitsubishi vehicles here.

According to the report, the group has also retrenched a number of other employees earlier this year.

Mr Cheah Kim Teck, motor operations chief executive of Cycle & Carriage, told ST the cost-cutting measures were necessary as the market share of Japanese cars had plunged in the last one year.

However Cycle & Carriage will continue its role as importer and marketer of Mitsubishi, the report said.

When queried by AsiaOne, a Mitsubishi spokesman said no Mitsubishi owners will be affected in terms of warranty and servicing.

Mitsubishi owners can continue to send their cars for servicing at Mitsubishi's four service centres: Alexandra Road, Pandan Gardens, Eunos, and Upper Thomson.

The Alexandra space vacated by Mitsubishi will be used to house Cycle & Carriage's used-car operations.

The report also mentioned that another round of retrenchments could take place at Toyota agent Borneo Motors, the largest car distributor in Singapore.

The Japanese brands have been facing a number of problems.

A weak euro and a strong Japanese yen have conspired to erode the Asian brands' profit margins and market share while at the same time, strengthening the European brands as they become relatively more affordable, the report said.

Related stories


Govt should not release more COEs: Dr Lim
The expected contraction in the number of certificates of entitlement (COEs) do not help either.

An estimated reduction in quota by more than two-thirds the average annual supply between 2003 and 2008 caused the premiums to spike to $64,900.

Amazing statistics! Singaporeans change mobile phones every 12 to 16 months? I think I've used my current phone for nearly 5 years (i.e. 60 months) without feeling a need to change. And penetration rate here is the highest in the world? It seems we are trying to carve out a reputation for being materialistic; in that case we will probably succeed in this respect!

Dec 11, 2010
IN: Newer, smarter phones
OUT: Dealers of used handsets

Mobile lifestyle offered by smartphones a big click with consumers
By Irene Tham

AS MORE people hook up with newer and 'smarter' phones, cash registers have stopped ringing at many second-hand shops.

The falling demand for used handsets has led to dozens of outlets closing in the past year or two, a check with people in the trade reveals.

Market research firm GfK put the 'substantial' drop at about 20 per cent but declined to provide exact numbers.

One casualty is Mr Alex Tan, who used to run a shop in Golden Mile Complex.

'There is no business. Even foreign workers buy new phones,' said the 40-year-old, who closed his shop six months ago after running it for five years.

Mobile Forces, a shop in Toa Payoh Central, said it sells fewer second-hand phones these days. A staff member said blue-collar foreign workers no longer scout for used basic models. Now, it sells premium models like iPhone 3GS, BlackBerry Onyx and Nokia N Series phones.

Changing consumer preferences is seen in the case of Filipino maid Crecilia Ellema, 38. She favoured used phones in the past but paid $75 for a new Motorola model - without contract - three months ago. 'It is cheap so I'd rather buy a new one,' said Ms Ellema, who has been working here for five years.

GfK said a third of mobile phones sold from January to October this year were smart types, compared with 12 per cent in the same period a year ago.

Buyers snapped up more than 553,000 smartphones in the first 10 months of this year, compared with about 221,400 units over the same period a year ago.

These devices have been more popular since late last year, driving ownership to one of the world's highest. About 40 per cent of the seven million mobile phones in use here are smart versions, based on telco estimates.

Users connect with these phones because they can get driving directions, check e-mail, read online news, watch a movie and play games on the go. Their larger screen size also makes surfing the Internet less of a strain on the eyes.

'Smartphones have introduced a completely new mobile lifestyle which traditional mobile phones are unable to satisfy,' said Ms Shirleen Kok, general manager of GfK.

Another big hook is that all three telcos - StarHub, SingTel and M1 - trotted out generous data price plans for all models of smartphones in January this year. Generally, they offer a basic $39 subscription plan with 100 minutes of outgoing calls and 12GB of data usage.

All three telcos have placed a price cap of $30 for any extra data usage, a change from when customers had to pay more - either pay-per-use or via a separate data bundle package.

On average, Singapore residents change mobile phones every 12 to 16 months, said GfK. Research firm The Nielsen Company said the country's mobile penetration rate is 142.1 per cent, the highest in the world. This means that some people own two handsets or more.

The evolving consumer behaviour means remaining second-hand dealers face further disconnection from the market if they do not do anything.

Another pressure they face is high rents, especially so with a buoyant economy. Which is why, to get a lifeline, many have gone into the phone repair business.

One shop in Toa Payoh charges $10 to send customers' defective handsets - which are still under manufacturers' warranty - to the service centres and collect them after repairs.

itham@sph.com.sg

Dec 11, 2010
You play, you pay
MBS sues 'premium' player over debts - a move that's usually a last resort
By Ng Kai Ling

THERE is an old saying in the gaming world: When it comes to big-spending 'premium' players, casinos must win the money twice - first at the tables and second by collecting the credit lent to the gambler.

This has been thrown into sharp relief by recent news that Marina Bay Sands (MBS) is suing a player for unpaid debt of $240,868, in Singapore's first such case (see other story).

Suing players for debts is usually the last resort for casinos.

Before taking such a step, they will contact players and ask them to pay up.

In some cases, they also work out a payment plan if the customer needs more time. They might even give a discount on the money owed.

But Las Vegas-based casino consultant Andrew Klebanow said: 'Ultimately, if the customer does not pay back the debt, the casino will sue the customer in court, just as any business would when it is owed money.'

He said it is not the casino's intention to embarrass customers, but it does happen in the process of operating the business.

Mr Klebanow added: 'It is up to the customers if they would like to avoid embarrassment by paying their debts or risk public exposure. Players that do not pay their debts risk never being able to get credit in any other casino.'

MBS and Singapore's other integrated resort, Resorts World Sentosa, declined to reveal the exact process they follow when recovering debts.

Under Singapore's Casino Control Act, the casinos can extend credit to only 'premium' players, defined as patrons who have accounts with the casinos amounting to at least $100,000.

Industry players say that before credit can be extended to the players, both parties have to sign a written agreement stating the player's maximum credit limit and other terms and conditions.

Mr Klebanow explained that the agreement signed when credit is extended is called a 'marker'.

It is essentially a post-dated cheque or promise to pay back the credit within a stipulated time.

When the payment date is near, casinos advise players that if the money is not returned, they will deposit the cheque.

'If the player is intent on paying, he may ask the casino for more time or establish a payment plan,' he said.

Dealers told The Straits Times that in the private rooms where premium players wager, it is common to see players who were cleaned out signing markers.

Once these are signed, players can continue gambling without leaving the tables - and that is when debts can roll in.

'I have seen players who have signed marker after marker. Each marker can be as high as $500,000. To the high rollers, it is just 10 rounds at the table,' said a 30-year-old croupier.

Players here say it is in their best interests to pay back any credit extended. A player, who declined to be named, said that since some of these premium players are prominent businessmen, news about their losses may mean bad business.

Mr Dennis Foo, 57, who wrote a White Paper on the possibility of having casinos here, said that when it comes to debt, the same business principle applies: 'You have to make good what is due.'

The head of St James Holdings lost $250,000 to Wrest Point Hotel Casino in Australia while researching for the paper.

He added: 'Everybody should go in with their eyes open. When you are playing on credit, you have to be prepared to pay.'

kailing@sph.com.sg

Business Times - 09 Dec 2010

IPO fever expected to keep raging next year

Industry sources say the pipeline is healthy and some big listings are on the cards

By LYNETTE KHOO

(SINGAPORE) This year's great IPO revival is expected to carry its momentum into 2011 with more new listings streaming in.

Professionals linked with initial public offerings (IPOs) say that after a seasonally slow December, many companies are raring to go to the market next year.

But the big question is whether 2011 will match up to 2010 in terms of funds raised, as this year has seen some blockbuster offerings, including Singapore's second-largest IPO from Global Logistic Properties.

David Hoon, director for corporate clients solutions at CIMB Bank Berhad, said that judging from the inquiries received, there are many companies still keen on tapping public funds.

This interest is coming from companies in China, South-east Asia, and even Russia. Some companies are also interested in undertaking inbound dual listings on the Singapore Exchange (SGX), he said.

George Lee, head of group investment banking at OCBC, noted that there are a few real estate investment trusts (Reits) in the IPO pipeline.

One highly anticipated IPO is the commercial Reit from Mapletree Investments early next year, which is expected to raise at least $500 million. This follows its industrial Reit launched in a $1.19 billion IPO in October.

JPMorgan also told reporters this week that more than a dozen IPOs are expected to be launched here in the coming months, raising at least US$300 million to US$400 million each, with billion-dollar listings from a Singapore company and a non-Southeast Asian company.

Despite a slow start this year, 2010 still turned out to be a stronger year than 2009, thanks to a spate of deals in recent months. A total of $6.38 billion of funds were raised from 31 listings, compared to $3.21 billion from 23 listings last year, SGX data shows.

This is in line with global trends. According to data provider Dealogic, 1,241 IPOs raised a total of US$253.87 billion in the past 11 months, bolstered by the world's largest IPO from Agricultural Bank of China's US$22.1 billion offering. This compares to 597 IPOs that raised US$114.84 billion for the whole of 2009.

Ernst & Young said that by year-end, the total global IPO values will exceed the previous record of US$295 billion raised at the peak of 2007.

More than half of these funds are coming from Asia, where issuers have outstripped the US$98.2 billion of funds raised in the peak of 2006 with a total of US$164.5 billion being raised so far this year.

But market condition is still the wild card determining whether the pipeline will translate into real deals. Korean tensions and the European debt crisis recently saw some IPOs fall below their offer prices.

Some IPO professionals say that the recent dismal performance of IPOs has hurt the listing aspirations of some companies here.

Robson Lee, an equity partner at Shook Lin & Bok LLP, said two clients decided to pull back upon seeing recent IPOs slipping below their offer prices.

IPO markets elsewhere have also been spooked. Faltering stock prices in Hong Kong prompted Bluestar Adisseo Nutrition Group and China Datang Corp's renewable energy unit to delay or withdraw their share sales.

If upcoming IPO deals materialise and perform well, that will 'set the tone for the overall market', said Goh Chyan Pit, DBS managing director of equity capital markets and global financial markets.

Hopefully, there will be good news for the market next year, Mr Lee of Shook Lin & Bok added, pointing to pre-election Budget goodies here, easing tensions in the Korean peninsula and a stabilisation of Europe's debt problem.

He noted that should the proposed merger between SGX and Australia Stock Exchange (ASX) go through, it will also provide a major uplift for the Singapore market. For one thing, this will open the door for resource and mining companies in Australia to consider Singapore as a potential listing venue.

Over 700 companies are currently listed on SGX and this number could cross 1,000 if companies on SGX and ASX are allowed to cross-list, he said. But before this can happen, one area that requires a closer look is how both exchanges could ensure consistency in listing rules and regulation.

In addition, SGX has to grapple with the pronounced trend of companies seeking to delist, particularly S-chips or Chinese firms listed here. This has stoked concerns over a potential hallowing out of undervalued companies.

Some 14 privatisations have taken place this year, the latest involving S-chip Reyoung Pharmaceutical Holdings, while Financial One, the only Taiwanese financial firm listed on SGX, is mulling over a delisting.

Bankers note that low valuations have also made it easier for controlling shareholders to take their companies private.

'As long as you have companies that are not trading well and attracting attention, there will always be opportunities for delistings to take place,' Mr Goh said.

On a brighter note, Mr Hoon said that with valuations between the Singapore and Hong Kong markets seen narrowing, as reflected among S-chips in the shipbuilding space versus their Hong Kong-listed peers, the commercial interest for a delisting or dual listing is diminishing.

This is a case of "you die already, they still won't let you off!". Quite sad for this man to be made a bankrupt even after he passed away.

Dec 4, 2010
Man declared bankrupt after his death
[i]Court case throws up question of whether debts can be recovered[/i
By K. C. Vijayan, Law Correspondent

DBS BANK went after a debtor in court and got him declared a bankrupt in the middle of last month - only to find out he had died about six months ago.

The debtor, China-born businessman Wang Sam Lin, 60, died in Tonga in May this year from complications related to throat cancer, according to a copy of a death certificate issued by Tonga's Health Ministry.

The case raises a couple of interesting issues.

Lawyers say a dead man's debt does not die with the person, even if he has been declared a bankrupt, as the monies owed can be paid from his estate.

'Debts incurred in person by the deceased cannot be sued upon but what creditors will do is to sue his estate,' said lawyer Mark Goh.

This happens when the next of kin of the dead man applies to court for a probate to administer his estate and personal wealth. A creditor would then give notice by lodging a caveat in court against the estate of the dead man.

The estate administrator, tasked with distributing the proceeds of the dead man to his next of kin or in accordance with the will, will have to see that the debts are cleared first before distributing the remainder among the beneficiaries.

But the consequence of a dead man being declared a bankrupt may not be fully clear until settled by a court.

This is because when a person is declared bankrupt, the Official Assignee's Office takes charge of his assets for distribution to creditors.

'An interested third party may have to apply to the court to set aside the bankruptcy order that is irregular - in this case, a dead man being made bankrupt - and then serve the order on the (Official Assignee),' reckoned lawyer S. Karthikeyan.

Bankers told The Straits Times that while this is rare, it was not inconceivable that DBS ended up trying to recover a loan from a dead man.

This is because a bank is not informed of a customer's death until his next of kin or solicitor contacts the bank.

In some cases, where instalment payments cease upon death, a bank may try to contact the customer. This is typically when it learns of his or her passing.

Said an OCBC Bank spokesman: 'We will (then) verify the information by requesting the customer's next of kin to visit the nearest OCBC Bank branch with a true, certified copy of the death certificate.'

A DBS spokesman said yesterday that the bank sought many ways to reach Mr Wang for repayment, since the amount owed was quite substantial and the loan had been in arrears since last year.

'The bank then served a statutory demand on him in May this year. There was no contact from any family or next of kin to update us of his status.

'Going forward, the bank shall assist once an executor or administrator of the late Mr Wang's estate is appointed.'

At least two other creditors have already gone after Mr Wang's estate.

One of the creditors, OCBC, obtained a court order for repossession of a condominium unit in Bukit Timah, following a mortgage default.

In the second case, the lawyer acting for prize-winning horse trainer Steven Burridge went after Mr Wang, who had lost a suit against Mr Burridge last year over the treatment of a race horse Mr Wang owned.

Justice Judith Prakash had ordered that Mr Wang pay the cost of the suit against Mr Burridge.

In a bid to recover the monies, Mr Burridge's lawyer S. Karthikeyan last month obtained court approval to serve an order on Mr Wang's representative, such as his wife, to lay claim to whatever can be salvaged from Mr Wang's estate.

According to court documents filed by DBS to support the bankruptcy application, Mr Wang had lived in Singapore for at least a year at a condominium unit in Bukit Timah Road.

He owed some $148,441 to DBS, which served a formal demand for repayment by pasting the document on the front door of the flat.

vijayan@sph.com.sg

Additional reporting by Yasmine Yahya

Memo to: Oaktree Clients
From: Howard Marks
Re: Open and Shut

Quote:The mood swings of the securities markets resemble the movement of a pendulum. Although the midpoint of its arc best describes the location of the pendulum "on average," it actually spends very little of its time there. . . . This oscillation is one of the most dependable features of the investment world, and investor psychology seems to spend much more time at the extremes than it does at the "happy medium."

Quote:The capital market oscillates between wide open and slammed shut. It creates the potential for eventual bargain investments when it provides capital to companies that shouldn't get it, and it turns that potential into reality when it pulls the rug out from under those companies by refusing them further financing. It always has, and it always will.

Quote: Overpermissive providers of capital frequently aid and abet financial bubbles. . . . In Field of Dreams, Kevin Costner was told, "if you build it, they will come." In the financial world, if you offer cheap money, they will borrow, buy and build , often without discipline, and with very negative consequences.

Quote: Look around the next time there's a crisis; you'll probably find a lender. The above citations provide the themes for this memo. I'll just update them, put them into the current context and discuss the ramifications for investing today. We'll see how it goes. If it works well this time, readers may conclude that in the future they can fashion their own memos from bits and pieces of my old ones.

Attached Files

  Open and Shut 12_01_10.pdf (Size: 44.18 KB / Downloads: 13)

The only "shopping" I've ever done online is for movie tickets at Golden Village and Cathay!

Nov 30, 2010
Big surge in online shopping
Internet-savvy shoppers spend $690m online, 15 times more than in 1999
By Jessica Lim & Alexandra Jen Wong

The online shopping phenomenon is becoming much more ingrained here, new figures reveal.

People here spent about $689 million online last year - 15 times more than in 1999.

And this year's sum is expected to exceed $716 million.

The numbers were compiled by market research firm Euromonitor International. It derived them by adding up all individual online transactions made with Singapore credit cards throughout the year. This includes transactions made on both local and international websites.

The biggest sectors were clothing and footwear, and consumer electronics. Together they accounted for more than 60 per cent of Singapore residents' online transactions last year.

Other growing sectors include health-care products and grocery items.

There are many reasons for the surge in online shopping, said Euromonitor. These include more households having Internet access and people here becoming more technology-savvy.

Figures from the Infocomm Development Authority of Singapore (IDA) show that household Internet access has increased from 65 per cent in 2003 to 81 per cent last year.

Other reasons include the relatively low prices of products online compared to those in the shops and better variety as more retailers open up online stores.

Ms Sarah Lim, a senior lecturer in retail management at Singapore Polytechnic, said: 'Shoppers are becoming more acquainted with the format of online purchasing. A decade ago, the trend was only just taking off. Now it is in full flight.

'Consumers nowadays are spending much more time on computers and (are) exposed to the Internet. They are no longer apprehensive.

'There are also so many online stores now, from established retailers to young entrepreneurs testing the market.'

New entrants to the online retail scene here include Challenger Technologies, which set up online store 12buy.sg six months ago.

Its acting director for group marketing and e-commerce Loo Pei Fen said the amount spent on Internet transactions has been growing by about 20 per cent a month.

Smaller businesses such as food store Chan Ah Beng Trading are also joining the fray. Its owner Desmond Chan opened online store bestorganicfood.sg four months ago. He said the response has been good.

Online shopping directories are also signing up more members.

According to directories such as emall.sg and fashionfanatics.com.sg which list online retailers on their website, numbers are booming. Both websites are adding three new online stores a day.

In the meantime, existing online stores are experiencing swifter business.

NTUC FairPrice, which set up its online store fairprice.com.sg in 2003, said the site has been gaining popularity over the years.

Online sales have increased by 30 per cent compared to last year, said the chain's spokesman. Popular items bought online include drinks, milk powder, toilet paper, detergent and rice.

Business has also been good at Far East Flora's online store, set up in 2000.

Ms Sarah Yong, senior manager of FarEastFlora.com, said that online sales have more than doubled over the past five years. More than 60 per cent of the company's total sales transactions are now made online, she added.

The growth in Singapore is in line with that in other countries in the region. Internet retailing in Malaysia, for instance, has increased from RM243 million (S$100 million) in 1999 to RM4.2 billion last year.

In Hong Kong, Internet retailing has gone up from HK$115 million (S$20 million) in 1999 to HK$4.1 billion.

Ms Jennive Piak, 34, an administrator, first chanced upon online shopping while browsing the Internet in 2007.

She now spends two to three hours a day shopping online, buying things about one to two times a week. She spends $10 to $200 each time on items such as shoes, bags, and clothes.

'I seldom shop in stores here now because things online are a lot cheaper,' she said.

limjess@sph.com.sg

ajenwong@sph.com.sg

Anyone analyse this?

http://www.temasekreport.com/2010/perfor...ments.html

In S$ million
For year ended 31 Mar 2005 2006 2007 2008 2009 2010
Revenue 67,520 79,822 74,563 83,284 79,615 76,658
Cost of sales (43,780) (53,309) (49,282) (53,290) (57,477) (50,679)
Gross profit 23,740 26,513 25,281 29,994 22,138 25,979
Other operating income 3,334 7,678 8,370 15,870 16,198 4,518
Expenses: Selling & Distribution (3,939) (4,086) (4,278) (5,197) (5,042) (5,318)
Administrative (7,003) (8,040) (8,104) (8,619) (8,068) (8,723)
Finance (2,120) (2,415) (2,611) (3,207) (2,727) (2,432)
Other operating expenses (4,648) (4,758) (5,053) (8,681) (15,333) (9,937)
Profit before exceptional items 9,364 14,892 13,605 20,160 7,166 4,087
Exceptional items 404 1,666

Profit after exceptional items 9,768 16,558 13,605 20,160 7,166 4,087
Share of results of associated
companies and partnerships 1,410 1,163 (830) 3,187 1,333 2,374
Share of results of joint ventures 1,037 1,263 1,566 2,182 1,870 2,013
Profit before income tax 12,215 18,984 14,341 25,529 10,369 8,474
Income tax expense (1,837) (2,518) (1,381) (3,055) (1,280) (1,682)
Profit from continuing operations 10,378 16,466 12,960 22,474 9,089 6,792
Profit from discontinued operations 31 67 16

Total profit 10,409 16,533 12,976 22,474 9,089 6,792

Profit attributable to:
Equity holder of the Company 7,521 12,827 9,112 18,240 6,183 4,593
Minority interests 2,888 3,706 3,864 4,234 2,906 2,199
Total profit for the financial year 10,409 16,533 12,976 22,474 9,089 6,792