The Migrant Workers’ Fuse is Lit
Recession is here. Business is slowing down and projects have stalled. While the foreign talent can pack and go, the bottom of the foreign workforce pyramid, the foreign worker doing menial tasks, is stuck here with no work.
They are protesting peacefully outside MOM recently. But as their frustration grows, would they become more desperate in their protests? The authorities would seize the chance to deport them once they show signs of unruliness and disturbance to law and order. Singaporeans as a whole would applaud as an angry jobless desperate foreign worker community would only mean more chances of crime, all things equal. It is stalemate for now, but as the protests increase in size and frequency, and the recession makes these workers more agitated, the situation is going to blow.
Transient Workers Count Too is trying to defuse the situation, but what can they really do besides mediating? If the government takes action on the companies not giving these workers work, it would mean more pressure on the companies that are struggling to make ends meet. How can they meet the needs of the foreign transient workers when their own survival and the livelihood of the local permanent staff is at stake? If these companies are taken to court, how would that help these stranded foreign workers get jobs? There are not enough jobs to go around now and all are victims of the recession. And I’m sure we don’t want to hand out GST credits to these foreign workers.
Jobless migrant workers protest in Singapore again
SINGAPORE (Reuters) – A group of around 100 Bangladeshi migrant workers gathered outside Singapore’s labour ministry on Friday, urging the government to give them work and retrieve overdue pay after they were laid off by shipping firms.
Protests are rare in Singapore, where public speeches and demonstrations are banned unless they are approved by the government, or take place at a designated place called Speaker’s Corner.
A representative for the Bangladeshi workers said they were promised a monthly salary of at least S$400 and a work permit of 2 years. But with no work or pay for 4 months, they felt they were in danger of being deported.
“We don’t want to go back to Bangladesh. We take loan, we cannot pay, we die,” said Rahman, who gave up his farming job in Bangladesh and took a loan of S$7000 from money lenders back home to pay an agent fee to work in Singapore.
Fifty workers gathered at the ministry earlier this month.
Local advocacy group Transient Workers Count Too said such gatherings would become more common in Singapore as workers were not being fed enough and were just sitting in dormitories, amid Singapore’s worst ever recession.
“The mood is that we are seeing a lot of people coming forward — hundreds — they don’t have work,” said the group’s Shelley Thio. “We are going to see a lot more of it — they are being shortchanged.”
Singapore’s shipyard, construction and manufacturing industries were once red hot, hiring almost 800,000 migrants in 2007. But as the economy slid into recession last year, demand for labour dived and major projects were cancelled or delayed.
“If developers can’t get money to pay construction companies, subcontractors down the line will get affected too,” said Chew Chin Hui, who heads a local building firm.
GIC Hangs On Tenaciously
GIC lost $33 billion or S$50 billion in 2008. The bigger more secretive of the two Singapore SWFs however is not cutting its losses by selling its share of the Citigroup and UBS pies. Instead GIC is sticking to its strategy of holding on to its preferred shares that earns interest and therefore income. In Citigroup, the interest is 7% per annum. Citigroup, in self-preservation mode and looking for funds from anywhere, seems intent on a US government bailout this time.
Once Uncle Sam sticks his hands inside the pie and nationalises banks in one way or another, common stocks are arguably less an investment compared to preferred stocks. If the Northern Rock nationalisation and share buy back by the UK government is anything to go by, GIC is better taking the risk of clinging on to its 7% per annum income to weather any fluctuating share price.
FEBRUARY 23, 2009,
GIC Wants to Keep Preferred Stock
Singaporean Fund Is Unlikely to Convert Its Citigroup Shares
By COSTAS PARIS in Singapore and NISHA GOPALAN in Hong Kong
A major Singaporean investor in Citigroup Inc. doesn’t currently plan to convert its preferred shares into common stock as part of a potential U.S. government effort to help the ailing bank, according to people familiar with the matter.
But Government of Singapore Investment Corp., a sovereign-wealth fund that has seen the value of its initial US$6.88 billion investment in Citigroup plunge in recent months, could face a dilemma if the bank reaches an agreement with U.S. officials that includes a greater government role.
The Wall Street Journal reported Monday that Citigroup is in talks with U.S. officials that could give the government a stake of as much as 40%, though talks could still fall apart. The news cheered investors in several Asian markets because of the potential for greater stability in the financial sector if an agreement is reached.
Citigroup’s ability to support its offshore businesses could be curtailed by a bigger U.S. government stake in the bank.
Still, it sparked wariness in other corners of Asia, both at the Singaporean sovereign-wealth fund and among market participants concerned that greater U.S. government participation could result in a pullback by the bank in favor of its domestic market.
A spokeswoman for the Singapore fund, known as GIC, and a spokesman for Citigroup in Hong Kong declined to comment.
As part of the plan, Citigroup officials hope to persuade some investors holding preferred shares to follow the government’s lead in converting some of those stakes into common stock, according to people familiar with the matter. That would bolster a key measure of the bank’s financial health.
Those investors include GIC and other sources of government-controlled wealth, such as Abu Dhabi Investment Authority and Kuwait Investment Authority. Representatives of the latter two didn’t immediately comment.
GIC holds preferred shares in Citigroup that represent a beneficial 5.3% stake if converted, according to a U.S. Securities and Exchange Commission filing late last month. The preferred shares offer an annual coupon of 7%. Converting the preferred shares into common stock would cut off that income stream.
“If GIC is to convert into common stock, the deal must be sweetened quite a lot. They want to make sure that their return will be equal or above the coupon,” said one of the people familiar with the matter.
But a greater U.S. government role could increase pressure at Citigroup to halt dividend payments. If it then converted the preferred shares to common, GIC risks being diluted or wiped out if Citigroup needs another capital injection or is nationalized by the U.S. government.
The people familiar with the matter said at least some officials were surprised by the reports that Citigroup was in talks with the U.S. government.
GIC bought the convertible preferred securities in January 2008. Based on Citigroup’s US$1.95 closing price Friday, the stake is worth US$592.4 million. Citigroup shares were up 11% to US$2.17 in midday trading Monday on the New York Stock Exchange.
Last week, people familiar with the matter said GIC had an estimated overall investment loss of 50 billion Singapore dollars (US$33 billion) in 2008 as a result of tumbling asset prices around the world.
An agreement with the U.S. government could spark regulatory reviews in some parts of Asia. Analysts also said Citigroup’s ability to support its offshore businesses could be curtailed by a bigger U.S. government stake in the bank. Banks’ lending to foreign companies can shrink when their home governments take greater roles, said Keith Pogson, partner of global financial services with Ernst & Young.
Mr. Pogson said he is advising corporate clients “to ensure that they include a locally domiciled bank in their panel of banks from which they finance themselves.”
Some analysts say Citigroup might follow other multinational financial companies in selling foreign units, including some Asian operations.
People familiar with the matter said last week that Royal Bank of Scotland Group PLC hired Morgan Stanley to explore the sale of Asian retail and commercial operations and Australian operations it acquired when it bought part of ABN Amro Holding NV in 2007.
In Japan, Citigroup is already seeking to unload Nikko Cordial Securities Inc., one of the country’s top brokerages, after spending roughly 1.5 trillion yen ($16.1 billion) in January 2008 to make it a wholly owned subsidiary.
Insurer American International Group Inc. is shopping a stake in its non-Japanese Asian business that analysts have said could be worth $20 billion.
In December, Citigroup injected $800 million into Citibank Korea Inc. — the largest Citigroup subsidiary in Asia in terms of capital and assets — in order to raise its capital base. The move was spurred by South Korea’s banking regulator. At the time, Citigroup said it was the only regional unit to receive a capital injection and that the funds didn’t come from the U.S. Treasury Department’s Troubled Asset Relief Program.
Defections and a Sex Scandal
This is what Malaysian politics is all about recently – dirt and democracy all mixed up in a dark storm. Elizabeth Wong, Parti Keadilan Rakyat Selangor state minister, tendered her political resignation after nude photos of her were exposed. The culprit, supposedly her boyfriend, is already aboard. How convenient. Many naturally suspect some dodgy BN hand in the whole scandal.
Just earlier this month, three Partai Keadilan Rakyat and one DAP state assembly members defected from the opposition government there, thus eroding their slim majority over BN there. One of the Keadilan defector joined UMNO while the remaning three are independents friendly to BN. A by-election might be the result, giving BN another chance to retain Perak. But a by-election would be risky for BN as now they have 31 over the opposition’s 28 MPs in Perak. What unethical or even illegal leverage that inspired this defection is open to guessing. Surely it was not without some dubious prodding from BN.
BN is regaining the initiative again and everything is fair in love, war and politics. Or is it? Whether there is sophistication in how BN tries to undermine the opposition’s hold in the 5 states snatched from BN last year is inconsequential for the BN.
A naked photo scandal of sorts already made one local opposition NCMP lose his seat and public confidence in him before. However, would a ruling party-opposition defection occur here? It is unthinkable under the current climate but if it did, it would more likely take the form of a PAP guy going over. Which PAP guy turning coat is hard to say. Inderjit Singh who always asks in parliament the questions we want to ask? Or some quiet allowance-pocketing backbencher whom we have never heard of?
Nude-photo politician cries conspiracy
PETALING JAYA: The Selangor state minister at the centre of a nude photo scandal has no doubt why the controversy broke out.
Miss Elizabeth Wong sees it as gutter politics at its worst.
“The events of the past two days have shown an insidious and underhanded attempt by certain quarters to smear my reputation. My personal life and privacy have been violated,” she said in a statement.
She added that though “the campaign directed towards me has caused a lot of anguish”, the “real objective” was to discredit her party, Parti Keadilan Rakyat (PKR).
“In the interest of my party, I have decided to offer my resignation,” she said.
The revelation that nude photos of Miss Wong were circulating online set Malaysia abuzz. Many quickly observed that, if she was forced to resign – as she in fact offered to do yesterday – this would lead to a by-election.
The country is already facing two such impending electoral tests.
However, PKR adviser and opposition chief Anwar Ibrahim said the party would decide whether to accept Miss Wong’s resignation only after she returns from an unspecified period of extended leave.
“No one in (opposition alliance) Pakatan Rakyat (PR) is pressuring her to leave,” he said, adding that he was concerned with a “pattern of tarnishing PKR (representatives’) reputations”.
Earlier this month, another PKR state minister – Mr V. Arumugam of Kedah state – quit after allegations of a marriage scandal arose.
Meanwhile, Selangor Menteri Besar Khalid Ibrahim said he would seek the views of the state sultan as to whether Miss Wong should resign.
The royalty in Malaysia is suffering something of a public backlash after the Sultan of Perak declined to dissolve the state assembly, allowing the PR state government there to fall because of a clutch of defecting state assemblymen.
Miss Wong, already a noted human- rights activist before she joined politics, won her Bukit Lanjan seat with the second-highest majority achieved by a PKR state-assembly candidate in Selangor.
Yesterday, Dr Chua Soi Lek, deputy chief of the Malaysian Chinese Association party – part of the national ruling coalition – wrote on his blog: “Elizabeth Wong must stay strong. This is not the end of the world.”
Dr Chua, a former health minister who had to quit all his posts after his own sex scandal in 2007, made a triumphant comeback last October.
Temasek Caught in the Maelstrom
Unfortunately, Temasek’s heavy weightage in banks resulted in some unpleasant losses. I had earlier mentioned that Temasek’s August 2008 declaration of a nice stable of $185 billion at end March 2008 was just that and had to be taken with a pinch of salt. Profits as at March 2008, and way before the slow downward market spiral became a quicker and quicker crash. It was just feel-good national day news. The stark horror is here and it will get worse before it gets better as they say. The fact that Ho Ching was made to excuse herself out of Temasek is a sign around her neck that Temasek could have done much better and the current losses intolerable.
The comparison of Temasek’s performance to the MSCI World Index as an excuse that Temasek is actually not in trouble yet, is also not ideal. Temasek seems more like a (badly) balanced fund anyway while the MSCI is an equity index. Hence, it is no surprise that Temasek would perform better in terms of smaller losses, than an equity index.
Did Temasek practice due diligence in its investments? Frankly, it is hard to say and I presume it was “yes”, to a point. There was a genuine grab-before-it-is-gone fire sale going on at Merrill Lynch etc, tempting the daring and the foolish alike with the usual high risk, high return trade-off. To be fair and coolheaded about betting on value investments, the verdict is also not out yet still although many government critics have understandably rushed to use this tempting opportunity to bash Temasek, the government and the PAP all at the same time. Bashing away can only be good actually. GIC, better watch out.
Temasek’s Investments Decline 31% Amid Stock Slump
By Chen Shiyin and Jonathan Burgos
Feb. 10 (Bloomberg) — Temasek Holdings Pte’s investments shrank 31 percent in the eight months through Nov. 30 as the global stock-market slump eroded the value of companies from Barclays Plc to Merrill Lynch & Co.
The state-owned investment company’s assets were valued at S$127 billion ($85 billion), down from S$185 billion at the end of March last year, Lim Hwee Hua, senior minister of state with the finance ministry, said today. The MSCI World Index fell 38 percent over the same period in U.S. dollar terms.
Chief Executive Officer Ho Ching, who drove Temasek’s expansion with acquisitions in China, Europe and the U.S., said last week that former BHP Billiton Ltd. head Chip Goodyear will take over the company in October. Temasek and Government of Singapore Investment Corp., the nation’s other sovereign wealth investor, have seen the value of their stakes in banks including Citigroup Inc. and UBS AG slide amid the global credit crisis.
“It’s easy to say the acquisitions were done at the wrong price but I believe Temasek and GIC took the risks based on their due diligence,” said Scott Lim, who oversees about $800 million as chief executive officer of Amanah Asset Management Bhd. in Kuala Lumpur. “The depth of the crisis is something we couldn’t have anticipated.”
Goodyear, 51, will become the first foreigner to run the company when he takes over from Ho, 55, the wife of Singapore’s Prime Minister Lee Hsien Loong. Temasek generated annual returns of 17 percent between its inception in 1974 and the end of March.
Sovereign Wealth Investors
Sovereign wealth funds in Asia and the Middle East have pumped money into global financial institutions to help replenish capital eroded by writedowns and losses. Barclays raised 5.3 billion pounds ($7.8 billion) in October by selling securities to a group of Middle-Eastern investors including Qatar Holding LLC.
Temasek said on Aug. 26 profit for the year ended March 31 doubled to S$18.2 billion as sales of energy and Chinese banking assets countered slowing returns from stock-market investments. Temasek has a controlling stake in six of Singapore’s 10 biggest companies, including DBS Group Holdings Ltd. and Singapore Telecommunications Ltd.
The company invested about $5.9 billion in Bank of America’s Merrill Lynch unit. It bought about 9 percent of the New York- based firm in December 2007 for $5 billion, or $48 a share, though its effective purchase price was reduced in July when the bank gave it a further $2.5 billion in shares. The investment bank’s shares lost 78 percent last year before the stock was delisted.
The Singapore investment company now holds about 189 million shares in Bank of America after converting its Merrill Lynch stock. Bank of America completed the Merrill Lynch purchase on Jan. 1.
Won’t Bail Out Companies
Temasek must make its investment decisions on a commercial basis, and should itself determine whether to increase investments in local companies, Lim said today in Parliament. She was responding to a question on whether the government will ask Temasek to increase its holdings in Singapore companies as economic growth deteriorates and share prices slump.
The government will instead assess whether a separate fund is needed to rescue local companies, Lim said.
“There has been a lot of talk, even at coffee shops at the grassroots level and among our residents, about the losses by our SWFs and whether this government has undone what our past government had so painstakingly built up,” said Inderjit Singh, a member of Parliament for the ruling People’s Action Party, and CEO of Infiniti Solution Pte, a provider of services to chipmakers.
Weathering the Cycles
Temasek, along with GIC, reduced its equity holdings amid the global slump last year “early in the crisis,” helping the funds post smaller losses than the MSCI World Index, Finance Minister Tharman Shanmugaratnam said on Jan. 19.
“GIC and Temasek have the ability and resources to weather the ups and downs, over multiple economic and market cycles,” Lim said. “The government is confident that they will continue to deliver good long-term returns within the risk limits set.”
GIC, overseeing more than $100 billion of reserves, has invested about $18 billion in UBS and Citigroup since December 2007. UBS, Switzerland’s largest bank, today reported a fourth- quarter loss of 8.1 billion Swiss francs ($6.9 billion) on trading losses and leveraged loan impairments, and said it plans to cut more investment banking jobs this year.
The fund said on Sept. 23 annual returns in the past 20 years averaged 7.8 percent in U.S. dollar terms, compared with 7 percent for the MSCI World Index.
GIC and Temasek both have “proper, sound” risk management practices, Lim said. The government reviews the risk limits for the two companies from time to time, she said, adding that current limits aren’t “aggressive.”
To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net
Ignorantia legis neminem excusat?
The couple supposedly used the phone book to select Muslims residents for their evangelism. The Christian duo have a good story now – that since the alleged offensive material is available at a bookstore, then it means that the content is not objectionable and they can send use it to convert and caricature Muslims. Frankly, I never could figure out how effective is it to convert someone by making fun of them.
The question is all about intention, rather than the distraction that since it is OK for the store to sell it openly, it is OK everywhere and anytime for someone to distribute it. MDA is now dragged into the story and the side plot of it being negligent in allowing objectionable material in the first place is emerging. Anyway, staying focus on the main story arc, for example, kitchen knives are sold everywhere but if we mail that blade to someone, that someone can reasonably view it as a form of not subtle intimidation. No, the Christian tract is not tantamount to intimidation, but the point of it is that an item can be supposedly innocuous until the way it is used causes offence. Was the couple guilty of intending to cause offence with The Little Bride and Who Is Allah? If not offence, then intention to ridicule at least.
Jan 29, 2009
Couple on trial for anti-Islamic tracts
Man unaware of tract contents
By Elena Chong
A TECHNICAL officer accused of distributing seditious and objectionable material to three people said in his defence on Thursday that he did not know that the envelopes he had posted contained objectionable publications.
Ong Kian Cheong, 50, said he only came to know of the existence of the objectionable comic tracts titled The Little Bride and Who Is Allah? when arrested on Jan 30 last year.
He is being tried together with his wife, Dorothy Chan Hien Leng, 45, of distributing seditious publication, The Little Bride and Who Is Allah? to two Muslim civil servants and The Little Bride, which were deemed objectionable to a Muslim woman in 2007.
The couple are also accused of having 11 seditious publications at their Maplewoods condominium on Bukit Timah Road on Jan 30 last year.
District Judge Roy Neighbour had called on their defence at the close of the prosecution’s case. Ong, who took the stand, testified that they are members of Berean Christian Church.
In 1987, he came across an evangelical tract published by American publisher Chick Publications and shared it with his wife.
From then on, they went round buying tracts at a Bras Basah Complex book shop and another at Bukit Timah Plaza. They then dropped these into letter boxes of HDB residents to spread Christianity. They stopped distributing tracts for a while when their daughter was born in 1990.
Five or six years later, they resumed. By then, his wife had begun to order the US-published tracts direct from the company. In about 1998 or 1999 when he found out that the letter boxes were not accessible, he started posting them instead.
Either he or his wife would write the addresses on the envelopes. From 2000, he said he stopped writing the envelopes while his wife continued doing so. He did the posting most of the time.
He said he was not the one who inserted the tracts into the envelopes posted to the three Muslims in 2007. He also did not read the contents of the tracts as they were the same and repetitive.
Asked by his lawyer, Mr Selva K. Naidu, Ong confirmed that he did not know that any of the envelopes he had posted contained any objectionable publication.
Neither did he know or have reason to believe that the publications he had posted might cause feelings of enmity, hatred, ill-will or hostility between different religious groups in Singapore.
Ong also said he did not know the contents of the 11 tracts listed in the last charge. The case continues on Friday.
