AEC Feed

Singapore’s next leg of growth depends on local companies spreading their wings overseas, which would mark a shift from the strategy of simply pulling in more foreign investment, says the Singapore Business Federation (SBF).

Its strategy was outlined this week in the business chamber’s new economic position paper, which offered a raft of suggestions to support business growth.

“If you look at Singapore now, most of the resources are still concentrated on bringing in foreign investment. But we now need an equivalent set of institutions and policies to help our companies go overseas,” said Oversea-Chinese Banking Corporation (OCBC) board member Teh Kok Peng, who chaired the SBF’s focus group on competing on a global platform.

A key thrust in the report was that Singapore needs to take a decisive shift towards building a strong base of local enterprises with a global reach, or risk losing its slice of the pie in a fast-changing world economy. – The Straits Times

The SBF also proposed investing part of workers’ Central Provident Fund money in the local bourse. This would boost the limping share market’s ability to fund the expansion of listed companies.

The SBF identified a growing number of "middle class" companies with stable earnings that exceed the bar of the Singapore Exchange’s Catalist junior board, but are not quite big enough for an SGX main-board listing. A new market platform could be developed for these firms, it said. – The Straits Times

Taiwan, Japan establish another venture capital fund

Taiwan’s Industrial Technology Research Institute and Japan’s Mitsubishi UFJ Financial Group have teamed up for the second time to set up a venture capital fund that is projected to scale to 2.5 billion New Taiwan dollars (Bt2.7 billion) in size.

The announcement was made on Wednesday in a press event attended by officials from both Japan and Taiwan.

The two organisations have pulled in NT$1.5 billion during initial funding, three times the size of the first fund they established.

The money will be provided to Taiwanese or Japanese companies with high growth potential. The fund will target firms that aim to create value and consequently realise higher profit.

More specifically, companies that offer high-end materials, cloud applications, big data, precision instruments and healthcare are regarded to have higher potential.

The fund is estimated to earn a 15-per-cent or higher internal rate of return, much higher than the 8-10 per cent normally posted by most mutual funds. – The China Post

Indonesian airlines’ low safety ratings met with criticism

Indonesian airline safety is under the spotlight again after AirlineRatings.com, an independent plane-safety and product-rating website, named eight of the country’s airlines as the least safe in the world.

The rating, however, was met with scepticism from Indonesian carriers, which questioned the survey’s parameters and the 407 major airlines it monitored.

“INACA [the Indonesian National Air Carriers Association] seriously questions the criteria of the rating that was done by foreign media on aspects of national airline safety, considering there should be clear methodology that is measurable and accountable,” the association stated on Wednesday after the release of the survey.

Along with airlines in Nepal and Suriname, eight Indonesian airlines were considered the least safe. They were the country’s biggest budget carrier Lion Air along with its full-service Batik Air and Wings Air; Citilink, the low-cost arm of national flag carrier Garuda Indonesia; Kalstar Aviation; Sriwijaya Air; TransNusa; and Trigana Air Service.

The airlines received zero or one star out of a maximum seven stars based on audits from aviation governing bodies such as the International Civil Aviation Organisation and the US Federal Aviation Administration, as well as whether the airlines had been certified by the International Air Transport Association. – The Jakarta Post

The survey also took into account whether airlines were on the European Union’s blacklist, government audits and fatality records.

The safest airline was Australia’s Qantas, with 148 of the airlines monitored getting the maximum seven-star safety ranking.

"We don’t really mind being graded, as long as it is done objectively, transparently and in an accountable way," Citilink president director and CEO Albert Burhan said, while comparing the results to a review of airlines and airports by UK-based consultancy Skytrax.

Similarly, Lion Air public relations manager Andy M Saladin questioned the rating method. – The Jakarta Post