04 Nov 2013 ~ Good Morning Singapore!
Central Execution Team - The Excellence of Execution
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Global Flash: While You Were Sleeping
Source: Marketwatch
Quote for the day : Continuous effort - not strength or intelligence - is the key to unlocking our potential.
- WINSTON CHURCHILL
Singapore: The Day AheadSINGAPORE DAYBOOK :The Valley of choice for Singapore professionals. High salaries, flexible hours, progressive culture make Silicon Valley a major draw [SINGAPORE] More Singaporeans have moved to Silicon Valley (SV) for work in the last decade, according to people who have worked or are working there. And while information technology (IT) and engineering professionals are known to command higher salaries, those who move cite other reasons.
"As a trend, I do see it increasing; we actually try to keep track of the numbers," said Vinnie Lauria, founding partner of tech incubator Golden Gate Ventures (GGV) which has offices in Singapore and SV.
"As the Singaporean network in SV gets stronger, it encourages more folks to make the jump - something they were afraid to do earlier."
Although there are no absolute numbers to show, Mark Sin, president of SingaporeConnect, a grassroots organisation that supports Singaporeans living in San Francisco, noted that he is seeing more Singaporeans at get-togethers.
For James Chan, the founder-CEO of tech incubator Silicon Straits who studied and worked in SV from 2005 to 2009, said the increase was not obvious to him - until he came home.
"It got a lot more obvious after I returned to Singapore and tried to wrap my head around the shortage of startup-compatible software engineers here. Those who were sufficiently exposed to Western tech media tended to aspire to leave Singapore to work at startups in SV," he said.
Why SV? A major pull factor mentioned by many is surprisingly not the salary, but that there is a greater respect for tech and engineering professions there.
Said Shaun Lim, who moved to SV to work at PayPal after graduating from the National University of Singapore (NUS) in 2010: "I'm a software engineer and this is arguably the best place to be for my profession.
"The work here is more interesting and meaningful. Even as a junior engineer, I was able to start projects of significant size from scratch and be responsible for design and implementation. I don't believe this is something engineers in Singapore enjoy."
Caleb Chao, a fellow NUS graduate and now a software engineer at Google, said he appreciated the opportunity to develop and work on established and complex IT systems there.
"Large IT companies have offices in Singapore mainly for sales, marketing and technical support; development is mostly non-existent and at the very most a token presence," Mr Chao said.
The Valley's open, welcoming and progressive culture is another much-talked-about pull factor.
"Hours are flexible. If people want to take time off for appointments or errands, there's no need to specifically take vacation hours," Mr Sin said.
"SV is an inspirational place to be in. Words like 'disrupt', 'change' and 'new technologies' are all the rage; coffee shops are always packed with entrepreneurs working on startup ideas or pitching to investors. We also get to be at the forefront of and use the latest technologies before others do," said Jenn Ng, who worked at DBS and PwC Singapore before joining SV-headquartered software company Intuit.
"It's the only spot in the world that has kept up with its virtuous cycle of paying it forward, and celebrates failure as much as it celebrates successes," said Silicon Straits' Mr Chan.
Agreeing, GGV's Mr Lauria said: "It's a culture that rewards risk-seekers. Most people in the Valley are from somewhere else; 52 per cent of startups are by foreign-born entrepreneurs. These are the people who aren't scared of failure and will dare take a jump into the unknown."
In fact, one of the reasons why SV thrives is that it is a land of equal opportunities for immigrants, said Tan Yinglan, author of The Way of the VC and venture partner at Sequoia Capital.
"Anecdotally, immigrants in SV have been entrepreneurial, motivated, hungry and eager to improve their lot in life. This creates economic dynamism in the Valley," Mr Tan noted.
"It can be a pretty competitive place to be in. Analysts are expected to have a certain level of technical abilities such as coding skills. Many interns don't mind working for free, and it is still a male-dominated industry," Ms Ng pointed out.
For those who work for pay, the US Bureau of Labor Statistics showed that the software engineer in SV commanded an average annual wage of US$100,049 last year. This compares with the average annual salary of $57,936 drawn by a software engineer in Singapore.
Human resource consulting firm Robert Half International also ranked SV as the fourth metro area in the United States likely to offer the biggest pay raise in 2014.
And while many places, including Singapore, have aspired to learn from SV's successes, observers said the island-state should not aspire to be the next SV. It has made significant strides in maturating its tech and startup ecosystem, and is better-placed to be Asia's startup hub instead.
"The 'SV label' carries with it a heavy burden of expectations that Singapore is still far from meeting. A good amount of entrepreneurial talent bled out of our ecosystem after the dotcom bust.
"We're only just beginning to see a revival of key elements in our ecosystem over the past two years - designers, engineers, entrepreneurs, capitalists, investments, acquisitions - yet, much remains to be done before Singapore becomes the 'SV of Asia'," said Mr Chan.
Mr Sin added it is difficult for Singapore to claim the title with competition from bigger markets such as China and India.
Another hindrance to the startup scene here is that most people live with their families, unlike in the US, and this inhibits entrepreneurship and risk appetite, Mr Lauria said.
"The number of start-up teams that live and work out of the same apartment in SV is very high. It's amazing what you can do when you're all forced into a small apartment 24/7," he said.
Mr Lim of PayPal added: "I do feel that like many things, entrepreneurship in Singapore is being driven largely from a top-down approach, and that can't be too healthy."
But many cited Singapore's stable economic and political systems, high cultural acceptance, strong government funding support and startup events such as Echelon and TechVenture, as beneficial in growing its tech ecosystem.
Said Steve Leonard, executive deputy chairman of Singapore's Infocomm Development Authority, at the 2013 TechVenture in September: "It is not Singapore's goal to be another version of SV. We should find something to create for ourselves."
"It is great that Singaporeans are moving to SV. I anticipate that some of them will return home to start their new venture or work for local startups. But as the region's startup hub, it is good for Singapore to have close ties with the Valley," said Mr Tan.
Mr Lauria, who travels frequently to look up the startup scene in each country, said: "Singapore really stood out for me because of the startup community here - it reminds me of SV in terms of openness and enthusiasm. There are few global cities as international and diverse as Singapore, and that's an asset for the startup scene.
"That said, I don't think being the 'SV of Asia' is a great goal to set. Singapore should figure out its place in the region and execute as a startup hub."
(Source: The Business Times)
MARKET SCOOP
Oxley makes inroads into London with S$397.1m property deal
CH Offshore Q1 net profit falls 20%
SingLand Q3 profit down 13% to S$49.4 million
CAO Q3 profit up 65%, thanks to associates
United Industrial Corp Q3 profit up despite lower revenue
F&N plays hardball with bond investors
DBS sees 2013 loans growth at 15%: Piyush
Vallianz posts US$2.14m profit for Q3
Gems TV plans S$571.38m RTO to be agri product trader
(Source: The Business Times)
DBS VICKERS Securities says ...
OVERSEA-CHINESE BANKING CORP | BUY | TP: S$12.40
Non-interest income significantly improved q-o-q mainly from Great Eastern Holding's (GEH) non-par fund performance as markets recovered
Other fee income was stable despite headwinds in the operating environment during the quarter
Wealth management income fell 12% q-o-q on slower activities; Bank of Singapore's (BoS) assets under management was flat q-o-q but grew 15% y-o-y. Expenses edged lower largely from staff costs
NIM remained stable at 1.63% while loans grew 2% q-o-q and 16% y-o-y, largely driven by its non-S$ portfolio
With a corresponding growth in deposits, loan-to-deposit ratio stayed below 90%
The increase in absolute NPLs came mainly from its Malaysian steel industry portfolio (a couple of other Malaysian banks have showed similar trends)
In Greater China, there was an uptick from the transportation sector, while in Singapore there were small delinquencies in housing loans
Elsewhere, capital ratios were lower due to the redemption of its S$1bn preference shares, which offset lower risk weighted assets
Particularly in Malaysia, revenues were driven by strong Islamic banking income while NIM increased 3bps q-o-q. In Indonesia, NIM rose 10bps to 4.33% with non-interest income as its key earnings driver
OCBC NISP derives most of its funding from its SME customers
We still believe in OCBC's ability to derive a greater boost from its non-interest income franchise, particularly from GEH and BoS
Already firmly established in Singapore and Malaysia, OCBC has introduced its bancassurance model to OCBC NISP, which should pick up speed over time
The BoS franchise is still largely ASEAN-centric
Judging from the early part of 4Q13, activities have resumed, which should provide a positive bias
Management guides for high single-digit loan growth and expects NIM to improve as credit spreads increase, but there may be pockets of funding cost pressures
Credit cost and NPLs should have fairly stable trending patterns over the past six quarters
Maintain BUY, S$12.40 TP based on the Gordon Growth Model with 12% ROE, 5% growth and 9.3% cost of equity equivalent to 1.6x FY14 P/BV
CREDIT SUISSE Securities says ...
OSIM INTERNATIONAL | OUTPERFORM | TP: S$2.50
OSIM reported 3Q13 net profit of S$22.7 mn (-13% QoQ, 16% YoY) in line with our expectations (3Q is seasonally the weakest), 9M13 profit came in 74% of our FY13 estimates
OSIM continues to show strong top-line performance, with 3Q13 marking the 19th consecutive quarter of YoY profit growth
uInfinity, OSIM's super premium massage chair launched in 3Q13 is showing good momentum across all markets, according to management
Our channel checks also indicate strong demand for uInfinity across markets with overall chair volumes improving
uAngel, OSIM's entry level massage chair continues to see very strong demand across markets
OSIM has also refreshed its smaller massage products for the holiday season
We expect strong volumes and revenue pickup in the coming quarters
We increase our EPS estimates by 1-7% on higher sales volumes and TWG consolidation
We expect consensus EPS upgrades to follow. At 13x 2014E P/E, valuations remain attractive
We increase our TP to S$2.50 (from S$2.20). Maintain OUTPERFORM
UOB KAY HIAN says...
OVERSEA-CHINESE BANKING CORP | BUY | TP: S$11.84
OCBC reported net profit of S$759m for 3Q13 (+5% yoy, +27% qoq), above our expectations of S$688m and consensus estimate of S$651m.
Loan growth moderated to 1.9% qoq in 3Q13 with expansion largely driven by a 17.8% qoq increase from Greater China
Loans in Singapore surprisingly contracted by 1.7% qoq
Loans in Malaysia and Indonesia declined 1.7% and 3.5% qoq respectively due to depreciation of regional currencies
Net interest margin (NIM) was relatively unchanged at 1.63%
Fee income increased 1% qoq and was more resilient than we had expected
Contribution from wealth management decreased 12% qoq but was offset by strong performance from investment banking, where contribution increased 52% qoq
Contribution from Great Eastern rebounded to S$240m (our forecast: S$150m) due to a reversal to mark-to-market (MTM) gains for non-participating fund
Net trading income was inconspicuous at only S$47m
NPL ratio has risen slight from 0.7% to 0.8%
The stress on asset quality came from Malaysia, where NPL ratio has increased from 1.9% to 2.2%
The better performance was largely due to higher-than-anticipated contribution from Great Eastern (refer to RMN dated 27th September) |
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