Major Singapore industries in
peril
Thursday, 12 February 2009
Saudi Gazette
Falling profits,
a weakened currency and decreased international
travel all plagued Singarpore from its largest
airline to its telecom company and its sovereign wealth fund.
The sovereign wealth fund Temasek Holdings, which helped bail out
Wall Street icon Merrill Lynch, fell 31
percent over eight months last year, a minister
said Tuesday, according to local radio.
Senior Minister of State for Finance Lim Hwee Hua told parliament
that Temasek’s portfolio of investments fell to $84.7 billion, 31
percent down from $185 billion, in the eight months to the end of
November.
But Lim said the fall in Temasek’s portfolio value was less than
declines in two stock indices, including the MSCI Singapore Index,
which she said dropped 44 percent in Singapore dollar terms over
the same period, the report said.
Last August Temasek announced that in the year to March its
portfolio rose in value to 185 billion dollars, up 13 percent from
164 billion dollars the previous year.
GIC, one of the world’s largest sovereign wealth funds, in
September said its nominal rate of return over the past 20 years
was 7.8 percent in US dollar terms.
It said it
managed well over $100 billion in
investments.
Singapore Airlines (SIA) said its net profit came in to $225
million, from $590 million, on revenue of $4.16 billion, which was
down 2.6 percent year on year, the airline said in a statement,
Tuesday
SIA, one of Asia’s major airlines, blamed the decreased earnings on
decreasing numbers of international passengers which it said were
down 4.2 percent to 4.8 million from the October to December period
the year before.
It also said it was carrying 14 percent less freight during the
quarter.
“Demand for air transportation is expected to remain weak for much
of 2009,” SIA warned.
Last month SIA announced the suspension of some international
flights, saying it did not want to fly half-empty planes around the
world. Flights to India, Southeast Asia, the United States and
Europe were among those affected.
Southeast Asia’s largest telecom company was also in trouble,
reporting a 16 percent fall in third-quarter net profit blaming it
on a depreciating currency which weighed heavily on earnings.
SingTel said its performance was strong in Singapore and Australia,
but some of its regional mobile associates in Indonesia, the
Philippines and Pakistan were weaker.
“The global economic slowdown has started to impact the group,”
added the company, which is majority-owned by Temasek
Holdings.
Net profit in the three months to December 31 was 799 million
Singapore dollars (532.7 million US), down from 952 million during
the same quarter a year earlier, the company said.
The net profit was better than the $774 million forecast in a poll
of analysts by Dow Jones Newswires.
Operating revenue fell by 3.2 percent to 3.7 billion dollars but
would have risen by 14 percent if the Australian dollar - which
dropped 23 percent against the Singapore currency - had remained
stable, SingTel said.
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