Will the Tiger get its claws on the kangaroo with its IPO?

Will the Tiger get its claws on the kangaroo with its IPO?


Tiger Airways, the budget carrier in which Singapore Airlines has a stake of 49 percent, may sell shares in an initial public offering within the next two years, as it plans to expand overseas.


“Conditions must be right and we have to have an agreement with all the shareholders,” Singapore Airlines' Chief Executive Officer Chew Choon Seng said. He added that a sale this year will be “unrealistic”.


Tiger Airways plans to open as many as five bases overseas within three years, as it faces increasing competition Asia from at least 17 other budget carriers within Southeast Asia such as Jet Star Asia. Tiger Airways said it has received Australian approval to fly to the western city of Perth in Western Australia state, the carrier's second destination after Darwin. Starting March 23, the carrier will fly four times a week to Perth and intends to expand the schedule to a daily basis from May onwards.


“They will be well-received by the market because of their position in Singapore, who their shareholders are, their fleet expansion and their move into Australia,” said Peter Drolet, an analyst at UOB Kay Hian.


Tiger Airways’ decision to expand overseas has drawn mixed reactions. Critics say that Tiger Airways’ entrance into the Australia might trigger the mother of all low-cost domestic airfare wars against Virgin Blue and Qantas. Tiger is also expected to test the nerves of unions, given signs it could seek individual workplace agreement.


Since its birth, the budget airline industry has been increasingly competitive in most countries. With a history of other budget airlines such as Valuair making huge losses, is Tiger Airways’ decision to go ahead with its plans to expand overseas, risking unreasonable protectionist measures and fatal price wars? Your thoughts.

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Is this the first step in Singapore’s path to F1 victory?

Is this the first step in Singapore’s path to F1 victory?



Singapore will be host to Royal Bank of Scotland Group’s (RBS) global RBS Grand Prix Challenge from March 28 to April 4. The Grand Prix Challenge will be open to members of the public competing to set their fastest lap time in a state-of-the-art AT&T Williams F1 simulator based around a full-size F1 show car.

The three fastest drivers will compete against F1 drivers, Alex Wurz and Narain Karthikeyan, in the grand final on April 4. The overall winner from each country will then be flown to Europe to represent their country and compete in a real car, on a real race track, under the guidance and tuition of racing experts.

Three times F1 World Champion and RBS Global Ambassador, the legendary Sir Jackie Stewart will be on hand to greet fans on April 4 from 10:00 am.

Singapore’s Minister of State for Trade and Industry, S. Iswaran, said that the government was "willing to support such a venture up to a level commensurate with the broader benefits to the economy."

Iswaran believes that the attention and buzz that it generates will expose Singapore to a very different audience from that in the business and financial world, ultimately bringing about benefits to Singapore’s hospitality, retail and travel industries.

Do you think that the increased tourism revenue from F1 sports will bring about spill-over gains for associated industries in the long term, or will it reap an insignificant boost for Singapore’s economy? What are your thoughts?

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Can the Singapore economy continue to prosper?


It seems like it's going to be a rosy year for Singapore's economy with domestic spending likely to strengthen. In addition, inflation is expected to be contained even though the government lifted tax on goods and services. Trade and Industry Minister Lim Hng Kiang said that Singapore is in "good shape" and the island-nation will see another year of "robust" growth.

"Global economic growth is expected to be slower, but overall the external environment is still positive," Lim said. "Domestically, consumption is likely to strengthen, while investments will remain firm. We expect inflation to remain in check even with the impending GST increase in July." The labour market is "tight" with the unemployment rate at 2.7 percent last year and wages are rising, Lim said. According to the Ministry of Manpower, employers added 173,300 workers to payrolls last year. The marine industry will require about 15,000 new workers this year.

Singapore's economy is now more cushioned against volatile business cycles because the government has diversified the island's growth drivers. Singapore will focus on education, health care, water and environmental technology, alternative energy and digital media as future growth drivers, Lim said.

The government also said it concluded the seventh round of discussions with Canada for a free-trade accord that will boost business and investment between the two nations. "Our international trade linkages have never been stronger," Lim said. "Our FTAs have helped our companies achieve tariff savings of over S$470 million ($308 million) in 2006 alone. We are in active negotiations for 10 more free trade agreements."

There seems to be good news all around. However, things may not remain positive forever. Globalization ensures that no nation stands in isolation and an economic slowdown for a major power like the U.S. may change Singapore’s economic climate rapidly. Singapore is doing well in diversifying. It may be a sufficient measure for now but how long it will last still remains to be seen. What do you think?

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Will Genting miss the Singapore jackpot?




Just when the casino projects are starting to gain momentum, a bombshell has been dropped on the proceedings. In an officially released statement, it said that Singapore awarded the Genting International-led group the right to develop an "integrated resort" on the city's Sentosa island and the issuance of a casino license was a "separate matter." What this means that even after they have fully constructed everything, they might still not be allowed to operate the casino.

"The procedure is when they finish building everything, they have to apply for a casino license and based on the criteria the government judges them by, they will grant the license," said Winston Liew, an analyst at OCBC Investment Research. "That's the original tender conditions. It's not new."

While the statement is in conflict with general belief that Genting, with its partner Star Cruises, will be running the show in Sentosa, it is consistent with the government's earlier statements. When the Singapore Tourism Board asked for bids for both resorts in 2005 and 2006, it said the operators could only apply for a casino license when at least half of the proposed gross floor area had been completed, and at least half of the committed investment had been expended.

The statement was in response to media queries after newspapers reported the government was concerned over the group's partnership with Macau casino owner Stanley Ho. Ho and other investors said they will hold a combined 6.99 percent stake in Star Cruises, which in turn owns 25 percent of Singapore's second casino-resort. The Singapore government said that it will not grant the gaming license unless the operator and its associates have a good reputation and sound financial background. It defined an associate as anyone who holds "any relevant financial interest," or holds the position of a director or manager, or has voting rights.

While the apparent lack of assurance in securing a casino license caused a drop in the shares of Genting International and Star Cruises, Genting International said in response it's "committed" to the resort and to meet the "suitability requirements" of the authorities for a casino license in Singapore. Perhaps it is not time yet for Genting to be cashing in their chips. What do you think?

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