17 September 2018 edition


Singcham Weekly: Higher Consumer Goods Import Tax

Monday, 10 September 2018

Airport operator invites investors to develop 11 airports

State-owned airport operator PT Angkasa Pura II (AP II) is inviting private investors to take part in the development of 11 airports under its management. AP II said the development of five airports — Tjilik Riwut in Palangkaraya, Fatmawati Soekarnoputri in Bengkulu, Hanandjoedin in Belitung, Radin Inten in Lampung and Sibolga in North Sumatra — would be given priority with a total capital expenditure of Rp 1.6 trillion.

Youth most pessimistic in the region about tech’s impact on jobs

As rapid digitalisation disrupts jobs, Singapore’s youths are among the most pessimistic in the region about the impact of technology on their employment prospects and earning potential, a new survey by the World Economic Forum and regional Internet firm Sea has found.

The findings of the survey showed that only three in 10 Singapore youth (31.2%) believe technology will increase the number of jobs available. This stood in stark contrast to the optimism recorded in the Philippines, where six in 10 youth (60.3%) felt the same. The survey done in July took the pulse of young people across Asean — via Sea’s e-commerce service Shopee and gaming platform Garena.

Spore could become ‘brilliant but brittle’

Asserting that not enough discussions are being fuelled about where Singapore is going as a society, prominent businessman Ho Kwon Ping said that he fears his fellow citizens will “sleepwalk” into the country’s next 50 years to become a “rich” and “brilliant” society that also happens to be “very brittle”. Mr Ho, who is chairman of SMU and executive chairman of Banyan Tree, said: “I fear the group-think that we have in Singapore, this coddled little space where we do not question…We will lack resilience, and when a severe crisis hits, we will be running around with our heads cut off, simply because of the lack of diversity.”

Political office holders received average of 4-months bonus in last 5 years

Political office holders of all grades in Singapore received an average annual performance bonus of around four months’ salary in the last five years, with the amount given to each individual ranging between three and six months of their pay each year, said PM Lee. The average performance bonus hit a high in 2015, when political office holders received 4.4 months of bonus, while the lowest bonus in the last five years was in 2017, when they received 4.1 months of bonus. Political office holders include parliamentary secretaries, ministers of state and Cabinet ministers. Lee formed a committee in 2017 to review the salary framework.

Most Singaporeans still support law banning gay sex

A slim majority of Singaporeans still support a law that bans gay sex, amid renewed debate on whether it should follow India’s footsteps and scrap similar British colonial-era legislation. Previous legal challenges to overturn the ban failed but a prominent Singapore diplomat called on the gay community to renew legal action against the law, a day after India’s top court decriminalized gay sex in a landmark ruling. 55% of 750 Singaporeans surveyed by independent market research and consulting firm, Ipsos still supported the ban. The Ipsos poll 12% opposed the law, while 33% were either for or against it.

Tuesday, 11 September 2018

South Korean Firms Commit to Invest $446m in Indonesia

Six South Korean companies, ranging from a cable manufacturer to a venture capital firm, have made commitments to invest a total of $446m in Indonesia, Industry Minister Airlangga Hartarto said.

The investment deals resulted from the 2018 Indonesia-Korea Business and Investment Forum, which took place in Seoul last week to coincide with 45th commemoration of diplomatic relations between Indonesia and South Korea.

New regulation requires all crude to be offered to Pertamina

As part of its measures to reduce fuel imports, the government last Thursday issued a ministerial regulation that requires private oil companies to offer all crude oil to state energy holding company Pertamina. The new regulation projects a daily purchase of 225,000 barrels of oil for Pertamina. The regulation applies to all private oil companies, including the local subsidiaries of a foreign parent companies.

Hyundai, LG to construct biodiesel factories in Indonesia

West Kalimantan Governor Sutarmidji has said Korean companies Hyundai and LG will construct biodiesel factories in the province amid the government’s effort to expand the domestic use of the fuel through its mandatory 20% blended biodiesel (B20) policy. He said the Korean investors would apply environmentally friendly technology as they would manufacture the waste of oil palm bunches into biodiesel.

HSBC to bolster Asia private banking headcount, double client assets

HSBC Holdings Plc aims to increase its Asia private banking headcount by two-thirds in five years and double client assets in eight as it eyes a bigger share of the business in the world’s fastest-growing wealth market, top executives said. HSBC’s Asia private bank will add 700 people by 2022 from a headcount of 1,100 at the end of 2017. The increase will add staff in various roles including relationship managers, product specialists and family wealth planners, said Siew Meng Tan, Asia Pacific head of private banking. HSBC’s global private banking business manages $330bn worth of clients assets, and Asia accounts for 39% of the total, making it the single largest market for the bank.

Wednesday, 12 September 2018

Indonesia’s ‘Avengers’ President stands ready to defeat trade wars 

Speaking at the World Economic Forum in Hanoi, Jokowi said trade wars between countries only led the world’s population towards “infinity wars,” referring to a blockbuster film from the Marvel Cinematic Universe franchise. “Not since the Great Depression of the 1930s have trade wars erupted with the intensity that they have today,” said Jokowi, speaking from a podium before the leaders of countries including China, Myanmar, Singapore, Thailand and Vietnam.

“But rest assured, myself and my fellow Avengers stand ready to prevent Thanos from wiping out half the world’s population,” he added, to laughter and applause from the audience.

Go-Jek launches services in Hanoi amid $500m overseas expansion drive

Ride-hailing firm Go-Jek Indonesia launched its services in Hanoi under the brand Go-Viet, as part of its $500m international expansion.

The app-based on-demand service Go-Viet, driven by a Vietnamese founding team, with Go-Jek providing technology, expertise and investment, offers services ranging from transport and logistics to food-delivery and mobile payments. Go-Viet grabbed a 35% share of the market for motorbike ride-hailing services in the economic hub of Ho Chi Minh City just six weeks after launching there on Aug. 1, Go-Jek founder and chief executive Nadiem Makarim said.

Electronic registration for next General Election

The Elections Department (ELD) plans to introduce electronic voter registration at the next General Election (GE). Previously, the Government already announced plans to pilot e-registration at a few constituencies during the Presidential Election last September, but it did not materialise as there was no contest. If the system is not in place by the next polls, which must be called by January 2021, ELD will continue using the current system, where election officials will search for and strike off a voter’s name from a physical copy of the polling station register.

ELD said that under the new workflow, an election official will scan a voter’s national registration identity card using a barcode scanner to register the voter. The equipment will not be connected to the Internet for cyber-security reasons, and there is also no change to the voting process, which will still be done by paper ballot. It is only the medium for registering voters that is different.

Chicken distributors fined record S$27m for price fixing, market sharing

Thirteen fresh chicken distributors that engaged in price fixing & market sharing have been fined a total of S$26.9m – the highest financial penalty meted out by the Competition and Consumer Commission of Singapore (CCCS) for a single case. For nearly 7 years, the suppliers had discussed and coordinated the amount and timing of price increases ranging from 10-30 cents/kg on at least 7 occasions. They also agreed not to compete for each other’s customers. CCCS said the “seriousness and long duration” of the cartel conduct, alongside other factors such as the distributors’ high market share and the large size of the industry, contributed to the heavy fines.

NETS to handle transactions on unified e-payment platform at hawker centres

NETS has been appointed to unify the e-payment landscape at hawker centres, coffee shops and industrial canteens, announced Enterprise Singapore. This means NETS will be the only touchpoint to reconcile accounts and earnings by participating stall holders who accept payment via the various cashless systems, eliminating the need for multiple terminals or quick response (QR) codes. For customers, they can choose to pay using 20 different e-payment options, including EZ-Link, NETS FlashPay, WeChat Pay, Singtel Dash and GrabPay.

The appointment of NETS as “master acquirer” follows a call for collaboration in April by several government agencies for a commercially viable, interoperable and open access e-payment solution. Food businesses eligible for the unified system are those which operate under the Housing and Development Board, National Environment Agency and JTC Corporation.

Thursday, 13 September 2018

Higher consumer goods import tax effective on Sept 13

Under a recently issued finance ministry regulation, the government has imposed a 10% on consumer goods range from cosmetics to household appliances, to clothes, hobby equipment, electronics, automotive products, and to food and beverages.

The new import policy affects 1,147 consumer goods. The move is part of a concerted effort to reduce the swollen current account deficit, which has been deemed one of the major triggers of the negative market sentiment that has contributed to the steep rupiah depreciation. 

Garuda Indonesia drops 2018 profit hopes, Aims for losses under $100m

Ari Askhara was announced as chief executive on Wednesday (12/09) following a shareholder meeting. He replaces Pahala Mansury, who was in the job for just 17 months and said in July he still hoped the airline could break even this year.

Pahala had been criticized by staff for his cost-cutting. The Garuda Pilot Association (APG) briefly threatened in July that at least 1,300 pilots and 5,000 cabin crewmembers from the carrier would go on strike over complaints about management, a reduction in flight hours and the removal of annual raises. The flag carrier reported a $116.86m net loss for the first six months of the year, versus a $281.8m net loss in the same period last year, when the company was hit by big one-off costs related to Indonesia’s tax amnesty program.

Bali airport wins big at Airport Service Quality Awards

Ngurah Rai International Airport in Bali has been recognized as the 2017 world’s best airport at the Airport Service Quality Awards for the category of airports serving 15 to 25m passengers per year. The airport also bagged two other awards, namely Asia-Pacific’s best airport by size and region in the 15-25m passengers per year category and the 2nd-best airport in Asia-Pacific among those serving over 2m passengers per year. The annual survey was conducted by Montreal-based Airport Council International (ACI) and involved around 600,000 passengers.

SGX share buyback boom

Singapore-listed companies have been repurchasing more of their own shares this year, with stock buybacks hitting a near three-year high last month, and analysts think this trend could continue for the rest of 2018 amid a volatile market. As many as 30 companies bought back 44m shares worth S$245m in August – the highest value of corporate share buybacks in 35 months, according to a recent market update from bourse operator Singapore Exchange (SGX).

This more than doubled July’s buyback consideration of S$109m, and marked an increase of over four-fold from the same period last year. In August 2017, share buybacks totalled S$59.7m.

New York overtakes London as top financial center

New York has overtaken London as the world’s most attractive financial center, as Britain’s decision to leave the European Union prompts banks to shift jobs out of the city to preserve access to Europe’s single market. Brexit poses the biggest challenge to the City of London’s finance industry since the 2007-9 financial crisis, since it might mean banks and insurers lose access to the EU, the world’s biggest trading bloc.


New York took first place, followed by London, Hong Kong and Singapore in the Z/Yen global financial centers index, which ranks 100 financial centers on factors such as infrastructure and access to quality staff. London’s ranking fell by eight points from six months ago, the biggest decline among the top contenders. The survey’s authors said this reflected the uncertainty around Britain’s EU departure on March 29 next year.

Friday, 14 September 2018

Auditor qualifies opinion on Resources Prima

Resources Prima Group’s independent auditor, Baker Tilly, has qualified its opinion on the Indonesian coal mining company’s 2017 accounts and raised a significant doubt about the company’s ability to remain a going concern. Baker. A reported US$14.8m (S$20.2m) loss from discontinued operations in Resources Prima’s accounts were, therefore, based on unaudited numbers from Rinjani. The auditor also highlighted significant doubt about the company’s ability to remain a going concern.


BI says Alipay, WeChat non-compliant with e-transaction regulations

Bank Indonesia has said that foreign consumer payment applications, like China’s Alipay and WeChat that Chinese tourists reportedly used in Bali, are not approved for local use. The central bank said the applications did not comply with regulations, in particular because they did not have a cooperation with local payment systems. Under the National Payment Gateway (GPN) system, any foreign principles involved in retail transactions are required to cooperate with local switching companies.

Makassar New Port to be completed in October: Minister

Transportation Minister Budi Karya Sumadi has said the construction of the Makassar New Port on 60 hectares of reclaimed land in the South Sulawesi provincial capital of Makassar had reached the finishing phases and would soon be completed.

The Makassar New Port, whose construction cost reached Rp1.6tr (US$108m), will be integrated with a bonded zone logistics center and with a 150-kilometer railway network from Makassar to the town of Parepare, which is now under construction.

Trump’s Iran Sanctions Trigger a Booming Cash Smuggling Business

For traders in Afghanistan’s main currency exchange, US sanctions against Tehran have created the ultimate arbitrage play — one that involves frequent trips to neighboring Iran with smuggled cash. The trade is part of $4bn in annual illicit outflows deepening the strain on Afghanistan’s war-ravaged economy and undermining Iran’s attempts to halt the decline of its battered rial. Despite official attempts to curb the activity, traders see no sign it will slow down: Afghanistan’s government is preoccupied with battling the Taliban and Islamic State, while Iran is overextended dealing with US President Donald Trump’s fresh wave of sanctions.

China investment growth falls to new record low in August

China’s fixed-asset investment growth slowed to 5.3% in the first eight months of the year, below forecasts and hitting a new record low. But industrial output grew 6.1% in August from a year earlier, and retail sales rose 9.0%, both beating expectations. Investment growth had been expected at 5.5% in the first eight months of the year, matching a record low in January-July.

CDL buys Aldgate House in London

City Developments Limited (CDL) announced that it has acquired a prime freehold Grade A commercial building in London for £183m (S$328m). The project, Aldgate House, is located in the district of Aldgate, right beside Aldgate Underground Station and with six other stations within a five-minute walk. CDL said the acquisition was undertaken “as part of its focus on expanding recurring income in global gateway cities”. Aldgate House has a net lettable area (NLA) of 211,000 sq ft including Grade A office, retail and ancillary spaces over two basements, ground, mezzanine and eight upper floors. It has an occupancy rate of 88% and is achieving a passing yield of about 5%.

The last Volkswagen Beetle will roll off the line next year

Volkswagen (VLKAF) said it will retire the bulbous car, one of the most recognizable vehicles ever made, next year. For its grand finale, the German carmaker said it will produce a “Final Edition” Beetle series. It will be available in convertible or hardtop, with base prices of $23,045 for a coupe and $27,295 for a convertible.

The Beetle’s legacy harkens back to the 1930s, when Ferdinand Porsche, the prolific engineer behind the famed luxury vehicle brand, decided to design a “People’s Car” or “Volkswagen” in German. The car entered mass production after World War II, and it debuted in North America in 1949, and within two decades, became one of the world’s best-selling vehicles.