Briefs

The price gauge, which registers inflation levels excluding accommodation and private transport costs, came in at –0.2% for March 2020, according to the consumer price index (CPI) released by the Department of Statistics on April 23.

This is slightly below the –0.1% recorded in February, and is in line with the expectations of private sector economists’ responses to a Bloomberg poll.

Meanwhile, headline inflation — the measure of total inflation in the economy — remained unchanged, a downward easing from the 0.3% uptick registered the month before. This surpasses the 0.2% contraction forecast by market watchers.

Data from the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) shows that the slip in overall inflation follows steeper declines in the cost of services such as education, telecommunication, healthcare and point-to-point transport.

See also: ECB delivers landmark rate cut but few signals top

For now, MAS and MTI expect inflationary pressures to remain subdued in April, following the “circuit breaker” measures that kicked off on April 7.

The consequential safe-distancing measures and weaker labour market “will dampen consumer demand, thereby capping prices increases for discretionary goods and services”, the authorities note in a joint statement.

“Domestic cost pressures are likely to remain low as some degree of spare capacity in the economy emerges. Inflation is thus expected to remain subdued.”

See also: ECB holds rates and signals cuts are still some way off

MAS and MTI are maintaining their fullyear core and headline inflation forecast to be between –1% and 0%. The view is echoed by private sector economists.

United Overseas Bank (UOB) economist Barnabas Gan has pencilled in a 0.3% contraction this year amid expectations of a continuation in deflationary pressures.

OCBC bank chief economist Selena Ling agrees, noting downside risks to both headline and core inflation for the upcoming months.

“The extension of the circuit breaker, coupled with tightening of the commuting workforce from 20% to 15%, is also likely to dampen business confidence, weigh on hiring intentions and further curb consumer appetite for discretionary spending,” Ling adds. — Amala Balakrishner

Singapore sees sharper economic slump on global virus spread

Singapore is bracing herself for a sharper economic contraction this year than an earlier forecast of a slump of as much as 4%, as the coronavirus pandemic continues to spread globally and disrupts supply chains.

The city-state is “very likely” to see a steeper fall in GDP, said trade and industry minister Chan Chun Sing in an April 23 interview with Bloomberg. “We are really concerned that worldwide, this is going to lead to a more serious problem than many had anticipated just a month ago.”

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The minister refrained from giving a new official forecast for GDP, but noted that connectivity among the major economies has been unsettled, hurting the short-term capacities and long-term capabilities of countries. The nation’s GDP contracted an annualised 10.6% in the first quarter — the most in a decade — with the government in March forecasting a contraction of 1% to 4% for the year.

Singapore on April 21 extended its “circuit-breaker” measures for a further four weeks until June 1 in a bid to “decisively” bring down coronavirus cases within the community. Schools remain shut, foreign workers are now confined in their dormitories and more workplaces are closed, with only the most essential services operating.

There could be some delays to projects in the shipyard and construction sector, though the city-state hopes to regain momentum once the crisis abates, Chan said. He added the country hopes to “progressively reopen” its economy in about a month’s time and said Singapore is planning “much more testing” for the entire population.

Citigroup Inc economists on April 21 warned that Singapore will witness a deeper recession because of the extended circuit breaker, with the economy now seen contracting 8.5% for the year.

Initially seen as a global model for how to contain the pandemic, Singapore now has the most reported infections in Southeast Asia as Covid-19 cases among foreign labourers living in densely packed dormitories have surged. — Bloomberg

Keppel-led consortium secures $1.5 bil contract to develop Tuas facility

A consortium headed by Keppel Corp has received a letter of acceptance from the National Environment Agency (NEA) for an engineering, procurement and construction contract worth $1.5 billion.

The consortium comprises Keppel Infrastructure’s environmental engineering unit Keppel Seghers Engineering Singapore, China Harbour (Singapore) Engineering Company and ST Engineering Marine.

The contract will see the trio develop both a waste-to-energy (WTE) facility and a materials recovery facility (MRF) for Singapore’s new Nexus Integrated Waste Management Facility in Tuas.

Keppel Seghers, China Harbour and ST Engineering Marine will be responsible for 48%, 31% and 21% of the works under the EPC contract respectively. As the consortium lead, Keppel Seghers will also be responsible for the overall project management.

The companies will jointly design and build a 2,900 tonnes per day (tpd) WTE facility and a 250 tpd MRF as part of the facility’s Phase 1 development.

Both the WTE and MRF facilities, which will be co-located with PUB’s Tuas water reclamation plant at the Tuas View Basin site, will be among the largest of such facilities in Singapore following their completion in 2024.

The WTE facility will generate sufficient electricity to sustain the operations of Tuas Nexus IWMF Phase 1 and the initial phase of Tuas WRP, with excess electricity for export to the grid.

Meanwhile, the MRF will utilise advanced technologies to sort metals, paper, cardboard and plastics automatically, thereby contributing towards the overall recycling rate in Singapore.

China Harbour will undertake the civil, structural and landscaping scope of the project, while ST Engineering Marine will be responsible for the construction of the MRF, power island and the balance of plant. — Uma Devi

Q&M in joint venture to manufacture Covid-19 test kits, vaccines

Shares in Q&M Dental Group surged as much as 65% on April 23, after the company announced it is investing $3 million in a joint venture to manufacture, sell and distribute diagnostic test kits and vaccines, including for Covid-19.

Under a business transfer agreement with Acumen Research Laboratories (ARL) and its sole shareholder, Dr Ong Siew Hwa, the joint venture company will acquire the parts of ARL’s businesses that deal with diagnostic test kits and vaccines, as well as clinical vaccine trials.

The purchase consideration for the ARL business transfer comes up to $400,000, which will be paid fully in cash on completion of the proposed acquisition.

Q&M notes that ARL’s Acu-Corona 2.0 Diagnostic Test has been given provisional authorisation by the Health Sciences Authority (HSA).

“As the Acu-Corona 2.0 Diagnostic Test has received such provisional authorisation, it can be supplied to healthcare institutions, private hospitals, medical clinics and clinical laboratories in Singapore,” the group says.

Following the transaction, Q&M will hold a 51.0% stake in the joint venture, while Ong, her sister-in-law Amy Zeng Wei Yi, and investment holding company Acumen Holdings will hold interests of 30.672%, 5.0%, and 13.328%, respectively.

Ong will also serve as chief executive officer of the joint venture.

“The board believes there is a market demand for diagnostic test kits and vaccine trials as well as vaccines due to the ongoing Covid-19 pandemic and other similar future events,” Q&M says. “[It is] not just a business opportunity but an opportunity to provide an essential capability to Singapore in the fight against the Covid-19 pandemic.” — Felicia Tan