SINGAPORE (June 3): “MAS does not and cannot use the exchange rate to gain an export advantage or achieve a current account surplus.” — The Monetary Authority of Singapore, responding to the US’ inclusion of Singapore on a watch list for exchange rate and macroeconomic policies.
Wages up in 2018
A higher number of workers in Singapore was paid more in 2018 than the year before, according to a new report on wage practices released by the Ministry of Manpower. According to MOM, total wage continued to grow, and at a faster pace than in 2017, even after accounting for inflation. This was attributed to an improved economy and labour market during the year.
In the private sector, total wages, including employer contributions to the Central Provident Fund, grew 4.6% in 2018, higher than the 3.8% growth in 2017. The highest growth was in financial and insurance services, which saw wages rise 6.3%, followed by the professional services sector, where wages rose 5.4%. Wages in the information and communications sector rose 5%.
However, workers in F&B services saw wages grow only 3.8%, slower than the 4.2% experienced the year before. Wages in retail trade rose 3%, slower than the 3.6% in 2017. Employees in construction saw the lowest wage growth, at 2.8%, though it is higher than the 2% experienced in 2017. Additionally, average wage cuts were also higher in 2018, at 4.3%, than in 2017, at 3.9%.
Singapore tops IMD competitiveness index
The city state has overtaken Hong Kong and the US to emerge at the top of an annual ranking of the world’s most competitive economies, published by Switzerland-based IMD Business School.
The ranking assesses 63 economies in four categories — economic performance, infrastructure, government and business efficiency. There are 235 indicators. These include data on unemployment, economic growth and public spending on healthcare and education, as well as a survey of business executives on corruption, globalisation and social cohesion.
The US slipped to the third spot, as the confidence boost from tax cuts and high-tech exports weakened, in the light of the protracted trade war with China. The UK fell to No 23 from No 20 last year, owing to Brexit uncertainties.
EU retreats on post-Brexit share trading limits
European Union regulators have backtracked on a policy to impose curbs on trading on London stock exchanges after Brexit. After protests from industry players and officials in the UK, the European Securities and Markets Authority said investors in the EU would be able to trade all UK stocks on exchanges in London, even if the UK left the bloc without an agreement. However, they would still be barred from trading 6,200 European stocks in the UK, under a no-deal Brexit.
Under the initial guidelines that were issued in March, EU investment firms would have had to trade within the bloc, even if the company’s main listing is in London. The proposed limits would have affected shares in companies such as Vodafone Group, Rio Tinto and AstraZeneca.
“This approach would place restrictions on a company’s access to investors and freedom to choose where they seek a listing on a public stock market,” the UK Financial Conduct Authority said in a statement.
Boeing 737 jet grounded for at least 10 more weeks
The International Air Transport Association has warned that commercial operations for the Boeing 737 Max are not expected to resume for at least another 10 to 12 weeks, owing to disagreement among regulators globally. IATA CEO Alexandre de Juniac says the association is preparing a meeting among regulators, Boeing and airlines to make an assessment of the situation.
The 737 Max, Boeing’s newest and fastest-selling single-aisle product, was grounded after two fatal accidents that killed nearly 350 people. A software system, MCAS, has been linked to the crashes. The aircraft manufacturer is facing a criminal probe, as well as civil inquiries from the US Congress and the Securities and Exchange Commission, over its role in the accidents and close ties with federal regulators.
The 737 Max was operated by more than 100 customers worldwide, including Singapore Airlines’ regional subsidiary SilkAir, which had six of the aircraft in service. SilkAir also has 17 of the earlier-generation Boeing 737-800s. The company has yet to announce whether it is cancelling its order for 31 more of the jets.
‘Aporkalypse’ as swine flu spreads
The deadly African swine flu has spread throughout China, where as many as 200 million pigs, or about half of the country’s total pig population, have been lost to the disease. It was recorded in northeast China in August last year and reached Hong Kong in May. Epidemiologists say the swine flu could soon surface in Myanmar and Laos, and become an epidemic in Southeast Asia. Already in Vietnam, some 1.7 million pigs have been culled because of the disease.
The disease is physically harmless to humans, but people could nonetheless be affected as prices of pork soar or negative sentiment about the meat hits companies that manufacture pork products.
Mahathir backs Huawei
Malaysian Prime Minister Dr Mahathir Mohamad has pledged support for embattled Chinese telecommunications equipment company Huawei Technologies. Huawei has been placed on the US Bureau of Industry and Security’s Entity List, which effectively bars any US company from doing business with the Chinese firm. While in Tokyo at the Future of Asia conference, Mahathir said Malaysia would make use of Huawei’s technology “as much as possible” because of how advanced the company is in telecommunications network technology.
Mahathir also urged the US and China to make concessions in their disputes with each other, noting that a failure in negotiations could lead to military conflict.
On the home front, Mahathir told reporters that there was no fixed timeline for his former rival Anwar Ibrahim to take power. After Pakatan Harapan swept to power in May last year, Mahathir said he expected to stay in power for a year or two.
