Sembcorp Industries and National water agency PUB have officially opened the Sembcorp Tengeh Floating Solar Farm (pictured) at the Tengeh Reservoir. The solar farm, consisting of 122,000 solar panels spanning across 45 hectares, can generate 60 megawatt-peak. It is one of the world’s largest inland floating solar photovoltaic systems. Power generated from this solar farm will be sufficient to power Singapore’s five local water treatment plants, offsetting about 7% of PUB’s annual energy needs and reducing its carbon footprint. This is equivalent to powering about 16,000 four-room HDB flats and reducing carbon emissions by about 32 kilotonnes annually, the same as taking 7,000 cars off the roads. The solar farm is a key plank contributing to Singapore’s national goal of quadrupling solar energy deployment by 2025. The launch ceremony on July 14 was officiated by Prime Minister Lee Hsien Loong. Photo: Sembcorp
Quoteworthy: "For this to now happen has been troubling and disappointing." -- Health Minister Ong Ye Kung, referring to the spike in new Covid-19 cases from the “KTV cluster"
Economists raise Singapore 2021 GDP forecasts to at least 6.5% despite 2Q2021 flash estimates missing consensus
Despite advance Singapore 2Q2021 GDP estimates coming in below consensus figures, economists remain mostly upbeat and anticipate a stronger performance in the coming months.
According to data released by the Ministry of Trade and Industry (MTI) on July 14, Singapore’s GDP grew 14.3% y-o-y in 2Q2021, compared to consensus estimates of 14.8%.
The strong growth was largely due to the low base in 2Q2020 when GDP fell by 13.3% due to the “circuit breaker” measures implemented from April 7 to June 1, 2020.
However, on a q-o-q seasonally-adjusted basis, the Singapore economy contracted by 2% in 2Q2021, a reversal from the 3.1% growth in the preceding quarter, and the first decline since 2Q2020. Economists attribute the contraction to the drag from the implementation of Phase Two and Phase Three (Heightened Alert) measures.
Nonetheless, in absolute terms, GDP in 2Q2021 remained 0.9% below its pre-pandemic level in 2Q2019.
MTI has maintained the official GDP growth forecast for 2021 at 4%-6% and highlighted that a revision to its full-year growth outlook will be made in August.
Noting that the advance estimates are based on data from the first two months of the quarter during which tighter restrictions were in
place, economists see the potential for the final 2Q2021 GDP estimates to be revised upwards. “We thus expect a modest upward revision in the final 2Q2021 GDP outcome once June data is incorporated,” says JP Morgan’s Sin Beng Ong.
UOB economist Barnabas Gan has upgraded his full-year GDP growth forecast to 6.5% from 5.5% previously, citing a “surprisingly strong performance” in 2Q2021 and a “rosier economic prognosis ahead”.
Supporting his sanguine outlook is Singapore’s manufacturing growth of 18.5% for the quarter, in line with his expectations. In addition, he sees an “encouraging” recovery in the construction and services sectors, which grew 98.8% and 9.8% y-o-y respectively.
“For the full year, we maintain our manufacturing forecast at 8%, and upgrade our services and construction growth outlook to 5% (from 4.7%) and 17.7% (from 1.1%) respectively,” he says.
Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye share a similarly bullish outlook, raising their 2021 GDP growth forecast to 6.8% from 6.2% previously. Their revised forecast reflects the stronger manufacturing performance, as well as their expectations that safe distancing measures will be further relaxed once Singapore’s vaccination rate reaches 50% in August.
Oxford Economics economist Sung Eun Jung is also optimistic about the vaccination pace, anticipating that 70% of the population will be fully vaccinated by August. While Sung has currently kept her 6.4% full-year estimate unchanged, she “will look to nudge up” her forecast given the stronger-than-expected 2Q2021 numbers.
Meanwhile, JP Morgan’s Ong has kept his GDP growth forecast unchanged at 7%, though he remains cautious on cross-border travel restrictions, which will have knock-on effects on industries reliant on foreign workers.
OCBC’s Selena Ling also believes full-year 2021 GDP growth will come in close to 7% y-o-y, in view of the 7.4% growth recorded in 1H2021. “With the global and domestic economic recovery likely to pick up speed with the ramp-up in vaccination rates, Singapore’s 2H2021 GDP growth may come in around 6.7% y-o-y, barring further Covid-related uncertainties that could warrant another tightening from Phase Three (Heightened Alert) conditions,” she says. — Atiqah Mokhtar
Netflix plans to offer video games in push beyond films and TV
Netflix, marking its first big move beyond TV shows and films, is planning an expansion into video games and has hired a former Electronic Arts and Facebook executive to lead the effort.
Mike Verdu will join Netflix as vice president of game development, reporting to COO Greg Peters, the company said on July 14. Verdu was previously Facebook’s vice president in charge of working with developers to bring games and other content to Oculus virtual-reality headsets.
The idea is to offer video games on Netflix’s streaming platform within the next year, according to a person familiar with the situation. The games will appear alongside current fare as a new programming genre — similar to what Netflix did with documentaries or standup specials. The company does not currently plan to charge extra for the content, said the person, who asked not to be identified because the deliberations are private.
Netflix shares gained as much as 2.1% to US$559.53 in late trading on July 14 after Bloomberg reported the news. The stock had been up 1.3% this year through the July 14 close.
Netflix has been seeking ways to keep growing, especially in more saturated markets such as the US. That has included building out its kids’ programming, opening an online shop to sell merchandise, and tapping Steven Spielberg to bring more prestigious movies to its line-up. The company remains well ahead of streaming rivals such as Disney+ or HBO Max, but it added fewer subscribers than expected in its most recently reported quarter. Pushing into games would be one of Netflix’s boldest moves yet. — Bloomberg
Hong Kong’s booming IPO market poised for lift from China curbs
The tailwinds lifting the Hong Kong bourse’s prospects are blowing from east and west: China is applying heavy scrutiny on overseas listings as well as its homegrown exchanges, sending companies to consider going public in the Asian financial hub.
Logistics and delivery firm Lalamove is the latest weighing moving its US initial public offering plan to Hong Kong, following Beijing’s pledge to tighten cybersecurity oversight that could block start-ups from holding first-time share sales outside the country. China’s stricter screening for its Nasdaq-style STAR board has also prompted companies such as Neusoft Medical Systems to switch to Hong Kong.
“The bulk of offshore listings are still happening in Hong Kong, so there might be a trigger for more listings,” said David Chin, head of investment banking for Asia Pacific at UBS Group AG.
The prospect of capturing re-routed activity helped make Hong Kong Exchanges & Clearing the world’s top-performing major bourse this month. The stock has gained nearly 10% in July to beat 11 of its peers with a market value of US$10 billion ($13.5 billion) and above, according to data compiled by Bloomberg.
It is not just Chinese IPO hopefuls that are looking to the city to raise funds. Hong Kong’s financing flexibility and the availability of offshore capital are drawing many A-share listed companies to seek a second listing there, according to Tucker Highfield, co-head of Asia Pacific equity capital markets at Bank of America Corp. — Bloomberg
