SINGAPORE (Aug 19): “We have a history of losses and, especially if we continue to grow at an accelerated rate, we may be unable to achieve profitability at a company level… for the foreseeable future.” — Co-sharing space provider WeWork’s IPO prospectus, in which it disclosed full-year net losses of US$1.9 billion for 2018, up from 2017’s US$900 million.
Singapore slashes growth forecasts as economy stalls
Singapore has further cut its GDP and trade growth projections for 2019, amid continued global economic uncertainty over escalating US-China trade tensions. The Ministry of Trade and Industry (MTI) on Aug 13 downgraded the GDP growth forecast to between 0% and 1%. Growth is expected to come in at around the mid-point of the forecast range. This is the second straight quarter that Singapore has slashed its growth expectations.
In May, MTI had lowered the GDP growth forecast to between 1.5% and 2.5%, down from an upper bound of 3.5%. The steep decline, especially compared with full-year GDP growth of 3.1% in 2018, comes on the back of further weakening of the global growth outlook. “In particular, the growth prospects of key emerging markets and developing economies such as Asean-5 and China have worsened, owing partly to the escalation in the US-China trade conflict in recent months,” MTI says.
For the 2Q2019 ended June, the Singapore economy grew marginally by 0.1% y-o-y, moderating from the 1.1% y-o-y growth in 1Q2019. This brings GDP growth for 1H2019 to 0.6%, compared with the corresponding period last year.
The manufacturing sector contracted 3.1% y-o-y, sharper than the 0.3% y-o-y contraction in the previous quarter. Manufacturing output was largely weighed down by output declines in the electronics, transport engineering and precision engineering clusters. Other major sectors were a mixed bag. For example, the wholesale and retail trade sector contracted 3.2% y-o-y, while the finance and insurance sector increased 5.2%.
Oxford Economics says it will be hard for Singapore to avoid slipping into a technical recession, with the US-China trade tensions unlikely to abate soon. Singapore’s weakness in exports and trade-related services will be a drag on its economy, likely pulling it into contraction in 3Q, the economics consultancy states.
OCBC expects the Monetary Authority of Singapore to ease its fiscal policy: either by creating a flatter slope for the Singapore dollar’s nominal effective exchange rate band or be even more dovish by shifting to a neutral slope with a re-centring of the band. — By Stanislaus Jude Chan
Malaysian court upholds RM11.26 mil compensation to The Edge Communications
The Malaysian High Court has on Aug 14 agreed to award an additional RM500,000 ($166,000) in exemplary damages — in addition to its deputy registrar’s earlier decision to award RM11.26 million in general damages for loss of revenue — to The Edge Communications, publisher of The Edge Malaysia (TEM), The Edge Singapore and The Edge Financial Daily, over the three-month suspension of its publications (except TES) from July to September 2015.
“There [are] exceptional circumstances for the court to grant exemplary damages sought as the publication has been a victim of reckless and unconstitutional act of the respondent [Home Ministry in ordering the suspension]. Hence, the appeal for exemplary damages is allowed and a sum of RM500,000 is an appropriate sum,” High Court judge Nordin Hassan ruled.
The judge also dismissed the ministry and government’s cross-appeal over the quantum of RM11.26 million awarded in general damages and ordered them to pay costs of RM15,000 to The Edge Communications. The publishing group had named the home minister and the ministry’s secretary-general as the respondents.
The suspension follows a series of reports published by TEM four years ago about 1Malaysia Development Bhd. It was previously reported that the company was awarded RM11.26 million by the High Court deputy registrar Norazlin Othman in damages for loss of revenue only on Dec 17 last year. Meanwhile, it was not awarded other damages sought.
This resulted in the business publication’s appeal, while the ministry and government also filed a cross-appeal via the Attorney General’s Chambers, citing that the publishing group was not entitled to damages.
Justice Nordin also noted that while the company had furnished details of its losses in advertising and publishing revenue following the suspension from July to September 2015 through the publisher’s financial controller to the sum of RM11.26 million and this was independently verified through an expert report, the government had not produced any evidence to dispute the figures. The Edge Communications was represented by lawyer Amanda Loh while senior federal counsel Alice Loke appeared for the ministry and minister. Loke said she would have to look at the full judgment and would seek instructions on whether to appeal. — By Hafiz Yatim
New Zealand legalises salaries paid using cryptocurrencies
New Zealand has become the first country to make it legal for companies to pay salaries in cryptocurrencies starting from Sept 1. Currently, cryptocurrencies such as bitcoin are largely unregulated and not easily tracked. This new ruling was outlined by New Zealand’s Inland Revenue in a bulletin dated Aug 7. The use of cryptocurrencies is allowed if the payments are made in fixed, regular amounts. The cryptocurrencies must be also pegged to at least one regular currency and convertible to a standard form of payment. In a further boost, companies that choose to pay their employees in crypto will be able to deduct tax under New Zealand’s pay-as-you-earn income tax scheme.
More Singaporeans see importance of digital, STEM skills at work
If Singaporeans could turn back time and be 18 years old again, a whopping 83% would focus on a field of study within the digital or online realm, according to a survey by HR services firm Randstad Singapore.
In addition, three-quarters of those surveyed say they would also have studied something in science, technology, engineering and mathematics. The same percentage of respondents say they believe more students should focus on a career in STEM.
These sentiments were highest in China, where 91% of those surveyed would go into STEM if they were 18 again, and 95% would focus on digital or online skills.
More than half of employees in Singapore feel that their companies face an increasing demand for STEM profiles. Yet, more than two-thirds think their companies are having trouble finding people with the right STEM skills today, and that it will only get harder in the future.
While 79% feel equipped to deal with digitisation within their jobs, 83% think their companies can do more to develop employees’ digital skills.
Interestingly, some 63% of Singapore respondents whose companies do not provide training say they have taken to investing in themselves by learning about artificial intelligence such as machine learning.
“Many companies in Singapore are on a digital transformation journey. Not only are firms investing in new technology, they are also hiring professionals to develop and market innovative products and solutions to stay competitive,” says Jaya Dass, managing director at Randstad Singapore and Malaysia. “As a result, employees expect their employers to invest in their professional development and equip them with the skills required [for future work],” he adds.
The 2Q2019 Randstad Workmonitor study was conducted between April 23 and May 9. The online survey polled at least 400 employees aged 18 to 65 who work a minimum of 24 hours a week in a paid job. — By Kok Xinghui
