Is Creative in big trouble?




Creative Technology, which makes accessories for Apple's iPod, forecast the lowest sales in almost five years and said it will lose money on operations in the current third quarter.

Revenue may drop 18 percent to $150 million in the three months ending March 31, lower than an unspecified target, the Singapore-based company said in a statement. Creative said it expects to have an operating loss, or sales minus the cost of goods sold and administrative expenses, because currency exchange rates resulted in higher-than-expected expenses.

Chief Executive Officer Sim Wong Hoo, 52, has cut prices of the Zen digital music players by as much as half to revive sales amid waning consumer demand. Creative said it's also selling its headquarters in Singapore for S$250 million ($179 million) and other investments in a bid to boost profit.

“It's not surprising that the quarter is weak but it's even weaker than expected,” said Tan Ai Teng, a Singapore-based analyst at DBS Group Research, who has a “hold” rating on Creative. “It doesn't look particularly hopeful going forward and it's still going to be challenging.”

Creative reiterated it expects to be profitable in the third quarter. The maker of Muvo digital music players posted a net loss of $23.6 million on sales of $183.8 million a year earlier.

The company expects the sale of the headquarters to result in a S$200 million gain, which will be amortized and recognized over five years. Creative said it will rent the property from the unidentified buyer.

Will this one-off gain really help Creative in the long run?

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Will the offer keep on going up?




The Al-Futtaim Group raised its offer for Robinson by 12 percent as it seeks to expand its Middle East franchise of Marks & Spencer stores to Singapore.

ALF Global Private, a unit of Al-Futtaim, raised its bid to S$7 a share from the January offer of S$6.25, it said in a statement to the Singapore exchange. The price, which values Robinson at S$601.6 million ($434 million), is 3.1 percent higher than the last traded price of S$6.79 before the midday break.

Al-Futtaim, which operates nine Marks & Spencer stores in the Middle East, hopes to gain control of Robinson's seven clothing stores operating under the brand in Singapore as well as its department-store chains.

“This revision represents a full price for the business and a compelling opportunity for shareholders to realize value,” James Gillespie McCallum, director of ALF Global, said in the statement.

Al-Futtaim said it has secured acceptances for 26.7 percent of Robinson's stock, compared with 23.2 percent when it first made the offer. The bid is conditional upon ALF receiving acceptances for 50 percent of the stock, it said in January. The buyer also reiterated the April 3 deadline for the bid to close.

Indonesia's Lippo Group owns 29.9 percent of Robinson after paying S$203 million for the stake from Oversea-Chinese Banking and Great Eastern Holdings in 2006. Oversea-Chinese still owns 6.05 percent, according to Robinson's annual report

Standard Chartered Plc is advising ALF Global in its bid for Singapore's oldest retailer.

Eventually, will Al-Futtaim secure the required number of acceptances?

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Is this a sign that Singapore’s biomedical sciences push is paying off?



British pharmaceutical giant GSK opened its first and only pilot plant in Singapore.

With the opening of this 82-million-U.S. dollar pilot plant, GSK's operations in Singapore has spanned the entire value chain of activities, including drug discovery, clinical research, manufacturing and regional headquarters, S. Iswaran, Singapore's Minister of State for Trade and Industry, said at the opening ceremony.

"The pilot plant will facilitate the design of manufacturing processes, to bring the latest drugs discovered at GSK into commercial production for the first time," said the minister.

It will involve new process development, process scale-up to handle large-scale drug production.
"Hence, this pilot plant is an important addition to GSK's manufacturing capabilities here, enabling it to transcend traditional manufacturing excellence into the realm of manufacturing innovation," he added.

Many pharmaceutical companies in Singapore are increasingly placing greater emphasis on manufacturing innovation by establishing pilot plants here to complement their commercial-scale manufacturing facilities.

Last year, biomedical sciences (BMS) manufacturing output reached a high of 24 billion Singapore dollars, with a value add of 13.4 billion Singapore dollars. This amounts to almost a quarter of the country's total manufacturing value added.

Will this innovation push spread to other industries too?

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Will City Developments continue exceeding expectations?




City Developments, Singapore's second-largest developer, said 2007 profit more than doubled after home prices rose to an 11-year high in the city state.

Net income climbed to S$725 million ($519 million), or 76 cents a share, from S$351.7 million, or 36.6 cents, in 2006, the company said in a statement to the Singapore stock exchange.

That's higher than the average estimate of S$616.6 million complied by Bloomberg from eight analysts. Sales rose 22 percent to S$3.11 billion from S$2.55 billion.

City Developments and rivals CapitaLand and Keppel Land may face declining demand in Singapore this year amid concerns the economy could fall into a recession. Singapore property prices may climb 8 percent to 10 percent this year, after surging 31 percent last year, London-based real estate consultant Savills said.

“Moving forward, the performance of the property market will largely depend on how the sub-prime crisis pans out and its impact on global economies,” the company said in the statement.

“Transaction volume and rental increase have slowed down in the fourth quarter.”

City Developments last year sold 1,655 homes worth S$3.38 billion, with 95 percent of these sold in the first nine months.

In 2006, it sold 1,337 units worth S$2.77 billion. The company may offer 427 homes for sale in the first half of this year.

“Compared to Keppel Land and CapitaLand, they have a larger exposure to Singapore,” Fera Wirawan, an analyst with ABN Amro NV in Singapore, said of City Developments. “They have traditionally held a pretty big land bank in the city.”

ABN Amro expects the luxury segment of the market to decline 10 percent to 20 percent by the end of the year. The lower end and mass-market will climb 10 percent, Wirawan said.

Developers have announced plans or are already building 65,400 private homes as of the third quarter, with about 41,600 units scheduled for completion by 2010, the Urban Redevelopment Authority, the government agency in charge of real estate, said Jan 2. About 58 percent of those projects, or 38,000 homes, haven't been sold, the authority said.

City Developments is also benefiting from a pickup in the global travel industry. The company controls about 53 percent of Millennium & Copthorne Hotels, the Horley, England-based chain that owns 110 hotels worldwide, including the Biltmore in Los Angeles.

The hotel operator said that fourth-quarter profit rose 36 percent as customers paid more for rooms in New York and Singapore. It also made a gain from selling three properties to a real estate trust in Singapore.

So will the property market optimism in Singapore hold up?

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