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230 laid-off workers found jobs through taskforce for 'responsible retrenchment'

SINGAPORE: Mandatory retrenchment notifications have helped organisations under the Labour Movement provide assistance to retrenched workers more effectively, according to Mr Tan Choon Shian, chairman of the Taskforce for Responsible Retrenchment and Employment Facilitation.

The mandatory retrenchment notification kicked off in January this year. It requires employers to submit a notification to the Manpower Ministry within five working days after the employee has been alerted to their retrenchment.

This applies to employers who employ at least 10 employees and retrench five or more employees within any six month period beginning Jan 1, 2017.

“In our experience, if we are able to reach out to workers earlier, our success rates improves,” said Mr Tan, who is also the CEO of Workforce Singapore. “So we are particularly happy that the mandatory notification is now in place, so we can reach out to the larger group of workers as soon as possible.”

The taskforce, which was set up a year ago, comprises members from the Manpower Ministry, Workforce Singapore, National Trade Union Congress and the Employment and Employability Institute (e2i).

According to Mr Tan, the taskforce has helped about 230 retrenched workers find jobs since the start of this year.

Its formation comes at a time when redundancy numbers in Singapore have reached more than 19,000, the highest since the global financial crisis in 2009, when almost 23,500 people were retrenched. 

Number of redundancies from 2006 to 2016 (Source: Manpower Ministry)

Mr Tan explained how the taskforce gets involved: “With the company’s permission, and if the affected number of employees is large, we will try to organise an onsite event within the company – to explain (what’s happening) to the affected staff. And for many of the staff, I think it’s possibly the first time they are looking for a job after many years.”

That’s where career coaches will also be deployed to help such workers who may not be familiar with the job search process and the current job market, he added.

Mr Tan said that the agencies are also prepared to bring in employers of a similar sector to help the retrenched. “We’ve done our research so that even on the spot, they can start some of the discussions.”

SECTORS AFFECTED

NTUC’s Assistant Secretary-General Patrick Tay said some of the sectors that had seen layoffs include the financial institutions, as well as retail businesses that had been hit hard by competition from e-commerce platforms.

Offshore and marine industries were also been hit by low crude oil prices.

Said Mr Tay: “Moving ahead in 2017, of course many quarters are not optimistic that oil prices will jump up to US$ 70, to US$ 80 dollars per barrel, so oil and gas and offshore and marine – these few sectors – continue to face its challenges.

“The foreign financial institutions have also been rolling out some announcements in the past 18 months, so we do see some consolidation there.”

One of the people affected was Mr Ganesan Kasinathe, who said he was one of 30 people retrenched from his job in the offshore and marine industry. His company halved its staff strength in a downsizing exercise.

Mr Ganesan has since found a job with the help of career coaches from e2i. 

“As you’re aware, the oil and gas industry is not exactly doing very well, and it’s not exactly a crisis happening in Singapore,” he said. “It’s actually worldwide crisis.

“I’m not angry with my ex-company for retrenching me, because if you look at it from a business point of view, I kind of feel it’s fair. It’s not exactly their fault.”

JOB MARKET VOLATILITY

Economists recently made an upwards revision on their forecast on economic growth in Singapore, but Mr Tan said the job market outlook “will remain volatile”.

“We think there is still the risk of restructuring the companies going forward. We are prepared in case the scenario gets worse, although based on what we are seeing, it’s not getting worse,” he said.

Mr Tan added that inter-agency coordination is now smoother, one year into the taskforce’s operations. “For our taskforce, it’s not about whether it will get worse (or not). If it gets worse, we are ready,” he said.

Agreeing, NTUC’s Patrick Tay said it is key retrenchments be made only as a last resort. “I think the key thing is when we face any challenges, including retrenchments or lay-offs, my appeal to employers as well as companies is that they do carry this out as a final option, to do it fairly, responsibly, progressively and also importantly, in compliance to our tripartite guidelines on managing excess manpower.”

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Commentary: Smart Nation 2.0? Three ideas to keep Singapore smart

SINGAPORE: The provocative power of digital advances lies in the novel ways we can use them to improve lives. The newly announced Smart Nation and Digital Government Office under the Prime Minister’s Office, is recognition of this transformative power. 

Digital advances push us to think more expansively about what is smart. Building on recent major government initiatives, the following possibilities outlined here present opportunities to think beyond physical places and infrastructure constraints and build a more inclusive society. They aim to tackle job disruption precisely, nurture each student’s strength by drawing on global resources, and scale-up solutions more readily.

IDEA 1: THINK TASKS ON TOP OF SKILLS

“The top priority for the Smart Nation (initiative) has to be jobs, jobs, jobs,” Minister-in-charge of the Smart Nation initiative Vivian Balakrishnan stressed during the Budget 2017 debates.  

Global debates about digital disruption and jobs are divided. Techno-pessimists warn us that all jobs are at risk. Techno-optimists assure us jobs will evolve. There is a divergence in thinking on how we should approach these disruptive forces.

Automation has transformed the productivity of manufacturing since industrial robots first started painting, cutting, welding and assembling in the 1960s. (Photo: AFP)

Can we tackle disruption better? We have so far focused primarily on skills. However, emerging evidence suggests we should focus on tasks too, because tasks add precision to skills.

Massachusetts Institute of Technology Economics Professor David Autor points out tasks “have played a key role in reshaping the structure of labour demand in industrialised countries in recent decades”. Stanford University’s report Artificial Intelligence and Life in 2030 states “AI systems are specialised to accomplish particular tasks”. The consultancy McKinsey concluded last year that analyzing “work activities rather than occupations is the most accurate way to examine the technical feasibility of automation”.

Digital advances break down jobs into tasks, which are automated or performed by humans. When all tasks are automated, humans lose jobs. But humans also create new tasks, turning them into new jobs.

By examining tasks, we can see which tasks, and subsequently which jobs, workers, and companies are more likely to be disrupted. We can thus better prepare them for the future and take corresponding steps to do so.

For example, the chart below details the tasks an information security analyst carries out, and shows which of these are shared with other IT professions. Professionals in the latter who wish to become an information security analyst can see which tasks they have experience in, and which they need training in. Workers and companies can thus target their training better.

Chart showing tasks performed by professionals in the IT sector. (Source: SUTD)

There are potential wider economic benefits to adopting such an approach. The Netherlands Bureau of Economic Analysis conducted a study of cities, tasks and skills. They concluded that tasks explained a “significant part of the changes in employment”, and cities with more tasks connected to each other had higher employment growth. Examining how connected tasks are could target economy-wide job growth better.

IDEA 2: FROM MORE TO ALL – GLOBAL MENTORS FOR EVERY STUDENT

Budget 2017 saw greater emphasis on nurturing students’ strengths. More students can now stretch and develop their talent.

The story of an eight-year-old Singaporean I met during our projects suggests we could nurture all students according to their unique diverse strengths.

Adi lives in a HDB flat and attends a neighborhood school. He also represented Singapore at the Asian Youth Chess Championships last year. Interestingly, he picked up chess by chance only three years ago.

How did Adi become championship-ready so quickly? Indeed, he has sparred online against algorithms and top chess players worldwide (who did not know his age).  

But Adi made the most progress with his online coach, Prab. Other coaches – in person and online – had not worked out.

Coach Prab is based in India. He also suffers from double kidney failure. To reduce infection risks, he started coaching online. He watches, reviews and discusses Adi’s online chess games with him. He even uses AI analysis to augment his feedback.

File photo of chess board. (Photo: AFP)

Consider for a moment what has happened.

Now imagine assembling, for each student, their own individual global team of mentors, augmented by technology, to pursue their unique talent.  Imagine what each student could achieve. Each could pursue excellence and become as good as they can be. Some might even be among the best in the world.

Trends in the global gig economy and talent marketplace suggest such global teams of mentors could be affordable: they can come from any part of the world, are hired for only part of their time, and are mentoring digitally. 

Large countries will find it challenging to do this. But a small Smart Nation with annual Primary One cohort sizes of forty thousand can. If we do, imagine the impact we could have on the world.

IDEA 3: GOING GLOBAL – SCALE-OUT BEFORE SCALE-UP

The Committee on Future Economy highlights that Smart Nation digital solutions “can be exported to rapidly urbanising cities in Asia”. The current model: test-bed in Singapore, scale-up here and then scale-out to the region. 

Singapore’s size and single-layer governance offers speed and simplicity for test-bedding and scaling up. But the market is small, and scaling out to cities with more complicated governance is challenging.  

Moreover, our infrastructure and environment have been so carefully honed, that solutions which work well here, might work less well elsewhere. “The environment exacts a price for the survival of the fittest: it captures them,” says Jacob Bronowski in The Ascent of Man. He draws an analogy: the Grant gazelle was “gracefully adapted” to the savannah to escape predators, but “its lovely leap never took it out of the savannah”.

What if for digital solutions, we flipped the current model to first scale-out test-beds concurrently to Singapore and two regional cities, then scale-up in all three? We can still exploit Singapore’s strengths, and concurrent regional test-beds could yield versatile solutions more easily deployed to different cities.

The Marina Bay central business district is home to many businesses in Singapore. (Photo: REUTERS)

Adopting this model means changing how we invest, recruit, and educate. Funding and financing will have to account for additional risks. Companies will need multi-city expertise. And tertiary institutions will have to immerse students in multi-city projects. 

Current business models suggest we cannot afford to do this. But for long-term economic prospects, can we afford not to? 

GET SMART BY DISAGREEING TO AGREE

We often need novel and provocative possibilities to think expansively.

One way to find them might be to disagree to agree. Nobel Laureate Daniel Kahneman and pioneering psychologist Gary Klein, who respect each other’s work, arrived at differing conclusions about how people make snap decisions. They did not choose to agree to disagree, and move on with their own work. Instead, they examined together why they disagreed. They found that they “agree(d) on most of the issues that matter”, and collaborated to elaborate on this. They chose to disagree, and used that to subsequently find agreement, and a superior outcome.

Disagreements between citizens, companies, cities and countries are inevitable. We could choose to agree to disagree, and leave it at that. Or if we respect each other, we could do the smart thing: choose to first disagree to agree, so as to search for subsequent agreement and a superior outcome.

Like what Kahneman and Klein did.

That will make our nation really smart. 

Poon King Wang is Director of the Lee Kuan Yew Centre for Innovative Cities at the Singapore University of Technology and Design. 

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Singapore's manufacturing output up 12.6% in February

SINGAPORE: Singapore’s manufacturing output in February rose 12.6 per cent from a year ago, on the back of strong growth in the electronics and precision engineering clusters.

Excluding the more volatile biomedical manufacturing cluster, output grew 17.1 per cent, according to data released on Friday (Mar 24) by the Singapore Economic Development Board (EDB).

On a month-on-month seasonally-adjusted basis, industrial production fell 3.7 per cent in February, it added. 

Output of the electronics cluster jumped 39.8 per cent on-year last month, mainly due to robust growth of 63.6 per cent in the semiconductors segment. The other electronic modules and components and infocomms and consumer electronics segments also grew 16.5 per cent and 8.3 per cent respectively. 

The output of the precision engineering cluster also expanded 26.2 per cent over the same period, with the machinery and systems segment posting strong growth of 33.2 per cent on the back of higher export demand for semiconductor-related equipment. The precision modules and components segment also grew 16.4 per cent with higher output of dies, moulds, tools, jigs and fixture, optical instruments and metal precision components. 

There were also increases in output in the general manufacturing industries cluster (3.3 per cent) and chemicals cluster (1.9 per cent), but declines in the biomedical manufacturing cluster (-2.6 per cent) and transport engineering cluster (-9.6 per cent). 

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Singapore's consumer prices rise for third consecutive month

SINGAPORE: Consumer prices in Singapore rose for the third straight month in February, due in part to increases in transport and education costs. 

The consumer price index (CPI) – a key measure of headline inflation – rose 0.7 per cent in February from a year ago, up from the previous month’s 0.6 per cent, according to figures from the Department of Statistics on Thursday (Mar 23). 

This was mainly due to year-on-year increases in costs related to transport (4.2 per cent), education (3.6 per cent) and healthcare (2.6 per cent). 

However, there were drops in the prices for housing and utilities (-3.1 per cent), miscellaneous goods and services (-0.6 per cent) and clothing and footwear (-0.2 per cent). 

Consumer prices rose for the first time in December 2016 after a record two years of negative inflation.

MAS Core Inflation, which excludes the cost of accommodation and private road transport, rose 1.2 per cent year-on-year in February, slightly lower than the previous month’s 1.5 per cent.

Looking ahead, MAS Core Inflation is expected to average 1–2 per cent for the whole of 2017, compared with 0.9 per cent in 2016. CPI-All Items inflation is projected to pick up to 0.5–1.5 per cent this year, from -0.5 per cent in 2016.

“The firmer rate of inflation in 2017 largely reflects the contribution of energy-related components, as well as some administrative price increases, rather than generalised demand-induced price pressures,” MAS and MTI said.

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SGX told to enhance recovery process following trading disruption last year

SINGAPORE: The Monetary Authority of Singapore (MAS) has ordered the Singapore Exchange (SGX) to implement measures to enhance its recovery processes and operational resilience following a supervisory investigation into a trading disruption that affected the securities market on Jul 14, 2016.

The incident saw trading suspended for more than half a day and was traced to a hardware problem, the SGX CEO said a day after the disruption.

MAS said it has accepted an industry working group’s recommendations on measures that need to be taken and directed SGX to implement them within 24 months. This will involve changes to systems and processes of both SGX and brokerage firms, MAS noted.

SGX will contribute S$ 1.5 million to co-fund the costs that may be incurred by brokerage firms in implementing the measures.

The industry working group – made up of SGX and industry stakeholders – recommended that the bourse make improvements in areas such as the restoration of corrupt data, market recovery procedures, market closure and resumption timelines, trade assumption, incident communication and business continuity scenarios.

“MAS has determined that while SGX has met its primary obligation as an exchange to maintain fair, orderly and transparent markets, it did not restore the proper functioning of its critical system within four hours as required by MAS,” the regulator said.

It noted that SGX has since taken steps to address the hardware and software errors which led to the trading disruption.

“MAS takes a serious view of trading disruptions. Technology system-related breakdowns can never be zero-probability occurrences and this is why SGX should strengthen its recovery process,” said deputy managing director of financial supervision at MAS, Ong Chong Tee. “Both SGX and brokerage firms have a shared responsibility to establish clear processes for timely recovery of our securities market in the event of an incident.” 

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StarHub opens new facility to drive innovation and test Smart Nation solutions

SINGAPORE: From intelligent homes and connected buildings to virtual reality, Singapore has a new facility to test Smart Nation solutions.

Called Hubtricity, the 58,000 square feet facility at one-north is managed by local telco StarHub. It provides co-working spaces for companies to engage in innovation and is set up with capabilities to track activity in the social media space to provide analysis for businesses.

The facility, costing more than S$ 250 million, was launched by Communications and Information Minister Yaacob Ibrahim on Friday (Mar 17). It went fully operational in December 2016 and some projects on trial include smart home systems like voice-activated locks and sensors to automatically light up rooms at night when elderly residents move about.

Said StarHub CEO Tan Tong Hai: “We believe that having a place where the businesses can come together to understand firstly, what technology is available – be it 5G, or mobile technology, digital capabilities like big data analytics, cyber security – all these you put together, let them understand what is available. Then from there, how to use it?

“Now if you do not know how to use it (but) you see other businesses who have used it … you will be motivated to say: ‘Hey, I also can use it.’”

StarHub said it is also working with partners on other projects covering intelligent vehicles and smart retail to support Singapore’s drive to be a digitally savvy nation. They include a collaboration with the National University of Singapore to monitor the use of campus shuttle buses, and the data gathered could be used to better plan transport schedules within the varsity.

The facility also has a central operations cockpit where the telco can monitor – from one location – how its fixed, mobile and pay TV networks and services are performing.

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Analysts boost Singapore's 2017 growth forecast to 2.3%: MAS survey

SINGAPORE: Analysts have boosted their growth forecast for Singapore’s economy for 2017 to 2.3 per cent, up from 1.5 per cent, according to a quarterly survey released by the Monetary Authority of Singapore (MAS) on Wednesday (Mar 15).

This reverses a trend of declining expectations in the industry. Economists had forecast growth of 2.5 per cent in 2017 in March last year, then 2.1 per cent, 1.8 per cent and 1.5 per cent respectively in the following quarters. The Government has forecast 1 per cent to 3 per cent growth for the year. 

The economy expanded by 2 per cent in 2016, above the forecasted 1.4 per cent. This was mostly due to a better-than-expected showing of 2.9 per cent in the fourth quarter, above the median forecast of 0.8 per cent in the last survey. 

For the first quarter of this year, survey respondents had a median expectation of 2.6 per cent growth. They also projected growth of 2.4 per cent in 2018. 

Analysts were bullish about the performance of the manufacturing sector, forecasting growth of 4.5 per cent compared to 1.1 per cent in the previous survey. Their expectations for finance and insurance, as well as wholesale and retail trade, also edged up slightly from 1.8 per cent to 2 per cent and from 1 per cent to 1.1 per cent respectively. 

However, forecasts for the construction sector were much lower than the previous survey, plunging from 2.4 per cent to 0.3 per cent. Economists also were less optimistic about the accommodation and food services sector, revising the growth forecast for 2017 from 1.7 per cent to 1.3 per cent. 

INFLATION FORECAST AT 1% FOR 2017

Inflation for the year is expected to come in at 1 per cent, unchanged from the analysts’ forecast in the previous survey. For the first quarter of this year, inflation is expected to be 0.8 per cent.

Core inflation – which excludes accommodation and car prices – is expected to be 1.5 per cent for the whole year, slightly above the 1.3 per cent predicted in the previous survey. It is also predicted to come in at 1.3 per cent for the first quarter.

For 2018, headline inflation is expected to be 1.3 per cent while MAS core inflation is forecast at 1.7 per cent.

Economists polled said they expected the unemployment rate to be 2.4 per cent at year-end, unchanged from the previous prediction in December. 

The MAS Survey of Professional Forecasters is conducted every quarter after the release of detailed economic data for the preceding three months. The median forecasts in the latest report were based on the estimates of 23 economists, MAS said.

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Tweaks to some property cooling measures will not have significant impact: Analysts

SINGAPORE: The Government’s tweaks to some residential property cooling measures on Friday (Mar 10) are a timely move, but observers said these adjustments are unlikely to have a significant impact on the local property market.

Even as the announcements marked the Singapore Government’s first relaxation of the property cooling measures rolled out since 2009, market participants should not expect further easing, analysts told Channel NewsAsia.

In a joint statement on Friday, the Ministry of Finance, Ministry of National Development and the Monetary Authority of Singapore (MAS) said “calibrated adjustments” will be made to the seller’s stamp duties (SSD) and total debt servicing ratio (TDSR) framework. 

With effect from Saturday, home owners will only have to wait three years before selling their properties to avoid paying the SSD, down from four years currently. The rate will also be cut by four percentage points for each tier.

The TDSR will also be eased, with the 60 per cent TDSR threshold no longer applicable to mortgage equity withdrawal loans with loan-to-value (LTV) ratios of 50 per cent and below. These refer to loans where borrowers borrow against the value of their properties.

NO SIGNIFICANT IMPACT ON PROPERTY MARKET ACTIVITY, PRICES: OBSERVERS

Cushman & Wakefield’s research director, Christine Li, said the cut in the SSD is timely given that newer measures, including the Additional Buyer’s Stamp Duty (ABSD), have “overlapped” with the SSD’s aim to clamp down on speculative property investments. The SSD was first introduced in 2010.

“There’s no need to have different sets of measures that do the same thing … but the Government will want to introduce changes gradually. They don’t want the market to have a knee-jerk reaction.”

Meanwhile, the SSD has been “rather punitive” for home owners looking to sell their properties in circumstances such as death, divorce and job losses. Amid a slowing economy with rising redundancies, this adjustment will be welcome news for people looking to cash out of their properties to tide over a difficult period, Ms Li added.

“The previous four-year holding period is just too long and such home owners have been hit by a double whammy. They have had to sell their properties at a loss and the SSD made it worse,” she explained.

Similarly, ERA’s key executive officer, Eugene Lim, said the lowered stamp duty will “bring relief and a way out” for home owners who have to dispose their properties within three years. But given that the new rule is only applicable to all homes bought on and after March 11, the adjustment is a “forward-looking measure” and is unlikely to have the effect of pushing up property prices in both the primary and secondary market, Mr Lim said.

“This is because there is still abundant supply in the residential property market and the demand-cooling ABSD rates and loan-to-valuation limits remain unchanged. Developers and sellers are expected to remain realistic when pricing their units for sale,” he explained.

PropNex Realty’s CEO Ismail Gafoor agreed, noting that the change is also unlikely to have a significant impact on transaction volumes. He attributed that to the presence of “minimal speculative activities” in the market, with most buyers now taking a “mid- to long-term view” towards property investments.

Likewise for the TDSR, most observers said the latest adjustment emulates previous rounds of “targeted tweaks”, such as the fine-tuning of refinancing rules in 2016 to allow borrowers more flexibility in managing debt obligations.

The latest tweak is similarly a minor change and will only affect a small group of home owners, said Mr Ismail. “We feel that changes to the TDSR framework will help home owners to monetise their properties in their retirement years.”

Still, some observers like R’ST Research’s director, Ong Kah Seng, think the cut in the SSD could have a “positive knee-jerk effect” on new home sales for some property developers.

“We may see developers (being) able to clear stock rapidly at least in these two months. This includes projects that were launched a while ago and saddled with substantial unsold stock, as well as projects with strong selling points.”

Mr Ong Teck Hui, national director of research and consultancy at JLL, echoed that view, noting that the adjustments are sending out a positive signal.

“The policy relaxation is likely to be seen as the beginning of the unwinding of cooling measures and this is expected to lead more buyers back to the market. Buyers would perceive the market as bottoming and be hopeful of a price recovery,” he wrote in a note.

FURTHER LIFT OF COOLING MEASURES IN THE PIPELINE?

Even with Friday’s surprise announcement, most observers noted that a broad-based easing of property market curbs remains unlikely in the near term.

“The statement from the Government shows a holistic review, with the mention of other measures like the ABSD and how they remain relevant,” Ms Li told Channel NewsAsia. “With responses for recent property launches being quite positive, the Government will remain cautious and that’s why they’ve made the small moves today which will have minimal impact on the property market.”

For ERA’s Mr Lim, the odds of further easing remain a “wait-and-see game” after authorities maintained the current ABSD rates and LTV limits. “It’s a calibrated step-by-step approach that the Government is adopting so as not to unravel the stabilisation efforts that have (borne) fruit over the last three years. I do not think further easing will come so soon.”

UOB’s senior economist, Alvin Liew, expects the cooling measures to remain in place unless significant changes, such as a spike in Singapore’s interest rates and unemployment figures, occur.

For the former, Mr Liew expects the three-month Singapore Interbank Offered Rate (SIBOR) to follow US interest rates higher and reach 1.45 per cent by end-2017. But even so, it may not be “high enough for the Government to unwind some of the measures like ABSD or LTV”, he said.

SINGAPORE PROPERTY SHARES GET A BOOST

Nonetheless, shares of property developers, which have already been on an upward trend, got a further boost following the announcement.

Among the biggest gainers in the sector, City Developments (CDL) jumped 5.62 per cent to close at S$ 10.15. UOL Group rose 4.53 per cent to finish at S$ 6.92, while CapitaLand gained 3.64 per cent to S$ 3.70.

An index of 44 Singapore real estate companies rallied to the highest since July 2015, according to Bloomberg.

CDL said in a statement that it welcomes the adjustments, which are “both measured and prudent”. The revised SSD, in particular, “will provide flexibility for property investment and is expected to inject increased activity into the residential property market”, the spokesperson added.

Follow See Kit on Twitter @SeeKitCNA

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At least 5% of SGX mainboard IPOs to be set aside for retail investors

SINGAPORE: Starting May 2, all companies aiming to list on the Singapore Exchange’s (SGX) mainboard will have to set aside at least 5 per cent of their stock offering – or S$ 50 million, whichever is lower – for retail investors.

The new rule is aimed at having greater retail participation in Singapore’s equities market, the exchange operator said in a press release on Wednesday (Mar 8).

“Retail investors are important participants in the Singapore markets and giving them access to at least 5 per cent of each mainboard initial public offering will encourage more to consider equity investing,” said SGX’s executive vice-president and head of equities and fixed income, Chew Sutat.

“If market conditions permit, we encourage companies to make available more shares than the floor to retail investors,” added Mr Chew.

Mr David Gerald, CEO and president of the Securities Investors Association (Singapore), said the move is a “step in the right direction”.

“This initiative provides individuals, especially newcomers, with more choice when considering ways to diversify their savings,” he said.

SGX received formal feedback from 20 respondents via the public consultation which ended in March. Informal engagements with stakeholders were also held to gather feedback, the exchange operator said.

“We recognise that market forces are dynamic and will continue to monitor the public subscription trends of IPOs to ensure that the minimum allocation amounts are appropriate for the Singapore market,” said Mr Chew.

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More co-working spaces sprouting up in CBD as demand rises

SINGAPORE: Property developers are leasing more space to co-working space operators, even as demand rises from businesses in the new economy looking for flexible work areas.

Currently, there are 53 co-working space locations in Singapore, almost one-third of which are in the Central Business District (CBD) – up from about one-fifth of the overall 40 co-working offices a year ago, according to real estate company Cushman and Wakefield.

This number is set to grow, with relative newcomers Spacemob jostling into the space with more established property players such as Frasers Centrepoint.

Industry watchers cited a growing interest among landlords to lease to co-working space operators, despite initial concerns that new players will not stay through their full tenure, which is aiding this growth.

Cushman and Wakefield’s Singapore research director Christine Li said “there is not a lot of track record” among these operators, and “the last thing landlords want is to get a tenant in, and after a few months, pre-terminate the lease”.

“Particularly when times were good and there was no shortage of tenants knocking on their doors, they did not have to go out to attract these co-working operators,” she said.

CHANGING VIEW ON CO-WORKING SPACES

However, as the property market has “softened”, she has seen a healthy take-up of such co-working spaces around the CBD.

In 2016 and 2017, Ms Li estimated that an average of 2 million sq ft of office space is expected to be completed each year in the CBD, double the annual average of 1 million sq ft over the past 10 years. And having such operators will help soak up the market supply, she added.

Industry watchers also note the new concept can help to optimise yield, while providing startups and freelancers access to prime locations and regional networks.

Frasers Centrepoint’s Singapore commercial head Low Chee Wah said that having a co-working space can give tenants more flexibility, particularly amid the changing nature of work.

“As work becomes more complex, the need to have discussions, brainstorm, and the need to work together increases,” Mr Low explained. “Because of that, a lot of companies are building more flexible work spaces – for example, break out areas within their office space.”

Having a serviced office provider or co-working space within the building, he added, provides tenants who are working with startups the space to “encourage their partners to occupy that area and work closer together on projects”. 

TAPPING ON GROWING DEMAND

One operator that is hoping to tap on this demand is Spacemob, which recently signed a partnership with property developer Ascendas-Singbridge to open a new 14,000 sq ft office.

Located at Ascent in Singapore Science Park 1, the space is said to provide more than 100 companies with close proximity to key research and tertiary institutions, research and development, high-tech innovation and startup communities for as little as S$ 350 a month.

The new co-working space will open by end-March, adding on to Spacemob’s first office at Claymore Hill in Orchard.

Spacemob founder and CEO Turochas Fuad estimates that startups can save up to 40 per cent per employee by working out of a co-working office, “instead of spending their funding money on capital expenditure of building their own space”.

The Skype alum said he aims to set up 30 offices across Asia, with new co-working spaces slated to open in Jakarta, Thailand, Vietnam and Japan this year.

“It’s a platform that allows SMEs, MNCs, and freelancers to discover one another,” Mr Fuad said.

Frasers Centrepoint, too, has signed its first lease for its upcoming office building, Frasers Tower, with serviced office provider The Executive Centre. The new tenant will occupy approximately 20,000 sq ft at the Cecil Street building, which is expected to be completed in 2018.

The Executive Centre provides infrastructure to run a business including workstations, meeting rooms, and IT and telecommunications systems, but also allows for collaboration through shared and social workplaces, broad networks and interactive events.

The company’s regional director for Australia, Indonesia and Singapore Yvonne Lim said they chose Frasers Tower as the building will provide four common areas where executives can work from, and Wi-Fi will also be available throughout the building.

“The space is clearly designed with the users in mind and we see the potential of customising our space to meet our clients’ demand for exclusive corporate and recreational spaces,” said Ms Lim.

Homegrown space provider JustGroup had earlier shared that it was planning to open two shared offices with a combined floor area of more than 100,000 sq ft in the CBD come April, while property developer CapitaLand is also looking to provide more co-working spaces in its real estate portfolio.

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