Singapore Economic News

[BlueKelah]

Some bright spots still in the manufacturing sector

It seems the biomedical and semicon sector(no wonder, SDRAM prices are going through the roof!!)  is doing VERY VERY well. Are there any stocks on SGX in this sector? or is it owned by MNC pharmaceutical companies?

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SINGAPORE - Singapore's factory output stunned with its best monthly growth showing in years with a strong 6.7 per cent jump from a year ago, figures from the Singapore Economic Development Board showed on Wednesday (Oct 26).

The performance defied the median forecast by economists polled by Bloomberg for a rise of 1 per cent given the trend of sluggish exports and depressed demand for offshore drilling rigs.

Of note though, output in September 2015 provided a rather weak base for the the year on year comparison. Even after excluding biomedical output, which tends to be more volatile, production grew 3.5 per cent. On a seasonally adjusted month on month basis, manufacturing output rose 3.3 per cent in September compared to August. Economists were tipping a decline of 1.2 per cent. Excluding biomedical manufacturing, output grew 0.9 per cent.

Biomedical manufacturing output grew 22.2 per cent in September, compared to the same month last year. The pharmaceuticals segment expanded 26.9 per cent due to higher production of active pharmaceutical ingredients and biological products, while the medical technology segment grew 9.6 per cent with higher export demand for medical instruments. Cumulatively, output from this cluster rose 8.2 per cent in the first nine months of the year compared to the same period in 2015.

Electronics, the biggest manufacturing cluster here, enjoyed its fourth straight month of double-digit percentage growth. Its output in September rose 15.9 per cent year on year. The semiconductors segment grew 34.8 per cent, but this was partially offset by declines in the rest of the electronic segments. On a year-to-date basis, electronics output expanded 9.8 per cent from the same period a year ago.

Transport engineering was the only cluster that saw output contract, with production down by 18.9 per cent year on year in September. The land transport and aerospace segments rose 9.1 per cent and 0.9 per cent respectively, with the aerospace segment recording higher engine repair jobs from commercial airlines.

However, this was offset by decline in the marine & offshore engineering segment (31.5 per cent) as rig building activities and demand for oilfield & gasfield equipment remained weak amidst the low oil price environment. In the first nine months of the year, output from transport engineering fell 17.9 per cent compared to the same period a year ago.

[specuvestor]

I can sense crowds are getting smaller... by walking around. See the shorter queues at restaurants. Feels like it peaked about 2 years ago.

(Bloomberg) --
Singapore mall vacancies rose to the highest level in a decade in the third quarter as an oversupply of shop spaces added to muted spending by shoppers.

A gauge of mall vacancies rose 0.6 percent to 8.4 percent in the three months ended Sept. 30, even as rents declined 1.5 percent in the quarter, data from the Urban Redevelopment Authority showed Friday. That’s the highest vacancy rate since Sept. 2006.

Demand for shopping space is being dented as consumers rein in spending amid slowing growth and buyers increasingly turn to shopping online. That’s converging with a rising supply of mall space, which threatens to further squeeze rents. Singapore will add almost 4 million square feet of retail space over the next three years, according to data from Cushman & Wakefield.

Singaporeans are among the most tech-savvy spenders in Asia, with a greater percentage shopping online than customers in Hong Kong and Malaysia, according to data from MasterCard. Singapore’s retail market is also reeling from the impact of China’s slowing economy, and a pullback in spending by tourists, especially those from the mainland. Tourism spending fell for the first time in six years in 2015, even as tourist arrivals rose.

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[Big Toe]

There is a general overcapacity issue going on in the world right now.
Too many companies providing almost the same products and services.
I keep track of certain segments/market in Singapore. In terms of store count and product availability, many segments have increased tremendously over the past 7 years. It far outstripped population growth and demand. More companies are sharing the same piece of pie, everyone gets a smaller slice.

When growth is still acceptable, the excess could absorbed. When there is flat or negative growth, the thinning margins(due to competition) and risings costs would not be able to cover the overheads. It is quite difficult to react to market slowdowns. I.e it takes time for the lease to run out, for the machines to be sold/fully depreciated, for headcount to be reduced. Expansion is easy, reduction is a huge headache due to the commitments. Also many small and medium businesses are simply not sustainable in such a razor thin margin, high cost environment.

Many businesses also make unrealistic assumptions. When there is a good year and profits jumped >50%, the management would draw a straight line to the heavens on growth and profitability. Hence the aggressive expansion plans with borrowed cheap money. Depending on the industry, it does not take long for competitors to take notice and catch up and share the pie. And by then the demand may have peaked and unless another exciting product/service takes over, it is downhill from there on.

Yesterday I went to a company who is all excited about the new 2017 products etc How it is rated in the best in the segment and on lovely it looks. As the sales guy is a good friend, I told him, that the new stuff are very exciting, and a lot of effort and money has gone into making it happen. The only thing lacking now are buyers.

[BlueKelah]

I keep track of certain segments/market in Singapore. In terms of store count and product availability, many segments have increased tremendously over the past 7 years. It 

Which segments and markets that you keep track off are currently still doing well? Or is everything doing badly? It would be interesting to know as we can then look see any undervalued co. operating in those segment.

[Big Toe]

Cant share all the data as it is my hard work.
In any case it tallies with the economic indicators.
Non essential goods and services are being hammered at the moment.
The sharp slow down is evident from ard June this year, real time data so far in Oct is especially bad and looks set to continue into Nov.

[BlueKelah]

Cant share all the data as it is my hard work.
In any case it tallies with the economic indicators.
Non essential goods and services are being hammered at the moment.
The sharp slow down is evident from ard June this year, real time data so far in Oct is especially bad and looks set to continue into Nov.

yah i think with interest rate rise coming from FED a lot of capital will be flowing back to USA from emerging economies. Add to that China clampdown on outward fund flows / ECB run out of bonds to buy and Japan not able to do much more from negative rates, the amount of liquidity slooshing around the world is slowly drying up.

For COE prices, CAT A is downtrend since june, CAT C also trending down, CAT B and E are flat. We can see some pattern emerging from there.

LOL I am not asking for your data, just rough view on which sector is good. For me i mainly invest in tech sector so i do know SEMIcon/electronics are still doing well and still quite fairly priced.

[Big Toe]

For myself i am more familiar with discretionary spending. 1st Hand information, can't go wrong
Also familiar with contract manufacturers(foxconn, flextronics, venture, etc) and the automotive manufacturers, buyers of ICs produced by the semi-con companies but I have no idea how to value the semi-cons. I do know that semi-cons require huge amounts of capital expenditure and machines depreciate much faster. Not an industry I would put my money in, no matter how well they are doing at the moment. I clearly remember Chartered Semi-con. The bulls got killed, the bears made a killing.

[sgmystique]

Cant share all the data as it is my hard work.
In any case it tallies with the economic indicators.
Non essential goods and services are being hammered at the moment.
The sharp slow down is evident from ard June this year, real time data so far in Oct is especially bad and looks set to continue into Nov.

Well one can look at it from a different viewpoint as well. I would not mind sharing my picks once I have collected enough. It would be great if my thoughts are agreed upon by many and help my selections improve their market value faster. 

Anyways, to each his own!

[BlueKelah]

Singapore bank lending falls for 12th straight month in September but decline is smallest since May
SINGAPORE - Bank loans fell year on year for the 12th straight month in September as uncertain economic conditions force lenders and businesses to stay cautious.
Total bank loans fell to S$603.43 billion, down 0.8 per cent compared from S$608.28 billion in September 2015, according to preliminary data from the Monetary Authority of Singapore on Monday (Oct 31).

The September data marks the smallest year-on-year decline in loans since May this year. The rate of decline eased from August's when total bank loans fell 1.6 per cent year on year.

Compared to August, lending was flat. Total loans in September inched down 0.07 per cent from S$603.85 billion recorded in August.
Year on year, business loans fell 3.4 per cent in September to S$355 billion, with large declines recorded in sectors such as agriculture, mining and quarrying, manufacturing and general commerce.

The drop in business loans was mitigated by the continued rise in consumer lending. Supported by increases in increases in mortgages and credit card interest payments, consumer loans rose to S$248.4 billion, up 3.1 per cent from the same month last year.

[cfa]

http://www.todayonline.com/singapore/sin...t-scramble

Singapore Inc faces S$16.69b debt scramble