MIRA INFORM REPORT

Report Date :

27^th June 2006

IDENTIFICATION DETAILS

Name :	ESCO MICRO PTE LTD

Registered Office :	^{Capri Marketing Services Pte Ltd} ^{21 Changi South Street 1, 486777, Singapore}

Country :	^Singapore

Date of Incorporation :	^12/01/1984

Legal Form :	^{Exempt Pte Ltd}

Line of Business :	Engaged in the business of manufacturing & distribution of micro contamination control equipment

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

ESCO MICRO PTE LTD

Line Of Business

MANUFACTURING & DISTRIBUTION OF MICRO CONTAMINATION CONTROL EQUIPMENT

Parent Company

Financial Elements

Sales : NA

Networth : NA

Paid-Up Capital : S$1,505,035

Net result : NA

Net Margin(%) : NA

Return on Equity(%) : NA

Leverage Ratio : NA

Rating

Credit Requested : NA

Credit Rating : Singapore $ 1000001 to Singapore $ 5000000

Credit Opinion : NA

BUSINESS INFORMATION REPORT

COMPANY IDENTIFICATION

^{Subject Company :
ESCO MICRO PTE LTD}

^{Former Name :
CAPRI MARKETING SERVICES PTE LTD}

^{Business Address :
21 CHANGI SOUTH STREET 1}

^{Town :
SINGAPORE}

^{Postcode :
486777}

^{County :
-}

^{Country :
Singapore}

^{Telephone :
6542 0833}

^{Fax :
6542 6920}

^{ROC Number :
198400165W}

^{Reg. Town :
-}

PREVIOUS IDENTIFICATION

^{CAPRI MARKETING SERVICES PTE LTD
(DATE OF CHANGE OF NAME: 14/06/1994)}

SUMMARY

^{Legal Form :
Exempt Pte Ltd}

^{Date Inc. :
12/01/1984}

^{Previous Legal Form :
Pte Ltd}

^{Summary year :
NA}

^{All amounts in this report are in : SGD}

^{Sales :
NA}

^{Paid-Up Capital :
1,505,035}

^{Net Worth :
NA}

^{Employees :
NA}

^{Net Result :
NA}

^{Auditor :
S K LAI & CO}

REFERENCES

^{CCMS Number :
702000072853}

^{Report Date :
27/06/2006}

^{Update Date :
27/06/2006}

^{Credit Requested :
NA}

^{Credit Opinion :
NA}

^{Litigation :
No}

^{Company status :
TRADING}

^{Started :
12/01/1984}

PRINCIPAL(S)

^{LIM LAY YEW S0005859I Director}

DIRECTOR(S)

^{LIM LAY YEW
S0005859I Director}

^{Appointed on :
24/01/1984}

^{Street :
26 SENNETT TERRACE}

^{SENNETT VILLE}

^{Town :
SINGAPORE}

^{Postcode :
466721}

^{Country :
Singapore}

^{CHAN LAI YIN S1296164B Company Secretary}

^{Appointed on :
28/02/2000}

^{Street :
349 WOODLANDS AVENUE 3}

^#13-51

^{Town :
SINGAPORE}

^{Postcode :
730349}

^{Country :
Singapore}

^{LOW YAE FOONG
S2554224Z Director}

^{Appointed on :
24/01/1984}

^{Street :
26 SENNETT TERRACE}

^{SENNETT VILLE}

^{Town :
SINGAPORE}

^{Postcode :
466721}

^{Country :
Singapore}

FORMER DIRECTOR(S)

^{AU CHOI GOA S0001723Z}

^{CHEW SIOK HONG S0043824C}

^{CHER LEW HIONG JAMES S1208854Z}

ACTIVITY(IES)

^{CLEAN ROOMS - INSTALLATION And EQUIPMENT}^{Code: 4530}

^{CONTAMINATION CONTROL EQUIPMENT And SUPPLIES}^Code:
5455

^{TRADING COMPANIES}^Code:
22190

^{BASED ON ACRA'S RECORD AS AT 21/06/2006}

^{1) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS),
HOLDING COMPANIES}

CHARGES

^{Date : 18/10/1995 Amount:
113,000}

^{Comments : CHARGE
NO: 9506433 (DISCHARGED)}

^{SECURED: ALL MONIES
OWING}

^{CHARGEE(S): THE
DEVELOPMENT BANK OF SINGAPORE LTD}

^{Date : 23/06/1995 Amount:
445,500}

^{Comments : CHARGE
NO: 9503776 (DISCHARGED)}

^{SECURED: ALL MONIES
OWING}

^{CHARGEE(S):
OVERSEAS UNION BANK LIMITED}

^{Date : 07/02/1995}

^{Comments : CHARGE
NO: 9500753 (DISCHARGED)}

^{SECURED: 0.00 AND
ALL MONIES OWING}

^{CHARGEE(S):
OVERSEAS UNION BANK LIMITED}

^{Date : 08/08/1997}

^{Comments : CHARGE
NO: 199704828}

^{SECURED: 0.00 AND
ALL MONIES OWING}

^{CHARGEE(S):
OVERSEAS UNION BANK LIMITED}

PREMISES/PROPERTY INFORMATIONS

^{Date :
27/06/2006}

^{Tax rate :
10}

^{Site Address :
21 CHANGI SOUTH STREET 1}

^{Town :
-}

^{Postcode :
486777}

^{Country :
Singapore}

^{Annual Value :
404,000}

* TAX RATE OF 4% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS OWNER OCCUPIED.

* TAX RATE OF 10% MEANS THE ADDRESS (I.E RESIDENTIAL PROPERTY) IS PARTIALLY OR FULLY RENTED OUT BY THE OWNER/OWNED BY COMPANY.

* FOR PROPERTIES OTHER THAN RESIDENTIAL PROPERTIES REGARDLESS RENTED OUT OR NOT, THE TAX RATE IS 10% (I.E INDUSTRIAL AND COMMERCIAL PROPERTY).

* ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT THE PROPERTY CAN FETCH IF IT WERE RENTED OUT. THE ANNUAL VALUE IS DETERMINED IN THE SAME MANNER REGARDLESS OF WHETHER THE PROPERTY IS LET-OUT, OWNER-OCCUPIED OR VACANT.

BANKERS

^{KTB LIMITED}

^{ABN AMRO BANK NV}

^{UNITED OVERSEAS BANK LIMITED}

^{OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{OVERSEAS UNION BANK LIMITED}

SHAREHOLDERS(S)

^{LIM LAY YEW}^{301,007 Private Person}

^{Street :
26 SENNETT TERRACE}

^{SENNETT VILLE}

^{Town :
SINGAPORE}

^{Postcode : 466721}

^{Country :
Singapore}

^{LOW YAE FOONG}^{1,204,028 Private Person}

^{Street :
26 SENNETT TERRACE}

^{SENNETT VILLE}

^{Town :
SINGAPORE}

^{Postcode : 466721}

^{Country :
Singapore}

FORMER SHAREHOLDER(S)

^{ESCO HOLDINGS PTE LTD}^529,600

^{PHUAR BOON CHIN SALLY}¹

^{CHER LEW HIONG JAMES}^40,000

^{LOW CHIEW TIP DOREEN}¹

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality :
AVERAGE}

^{Liquidity :
UNKNOWN}

^{Payments :
REGULAR}

^{Trend :
LEVEL}

^{Financial Situation :
UNKNOWN}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL COMMENTS

^{LIMITED EXEMPT
PRIVATE COMPANY}

^{WHERE THE SHARES OF A PRIVATE COMPANY ARE NOT OWNED BY ANY CORPORATE
BODY AND THERE ARE NO MORE THAN 20 MEMBERS, THE PRIVATE COMPANY IS KNOWN AS AN
EXEMPT PRIVATE COMPANY.}

^{AN EXEMPT PRIVATE COMPANY ENJOYS A GREATER AMOUNT OF PRIVACY THAN A
PRIVATE COMPANY. IT IS NOT REQUIRED TO FILE ACCOUNTS WITH THE REGISTRAR IF IT
CAN PRODUCE A CERTIFICATE SIGNED BY ONE OF ITS DIRECTORS, SECRETARY AND AUDITOR
CONFIRMING THE FOLLOWING POINTS:}

^{1. THE COMPANY IS AN EXEMPT PRIVATE COMPANY.}

^{2. THE AUDITED ACCOUNTS HAVE BEEN TABLED BEFORE THE SHAREHOLDERS}

^{AT THE ANNUAL GENERAL MEETING.}

^{3. THE COMPANY IS ABLE TO MEET ITS LIABILITIES.}

^{THERE IS THEREFORE NO DISCLOSURE TO THE PUBLIC OF THE ACCOUNTS OF THE
COMPANY ALTHOUGH THE ACCOUNTS STILL HAVE TO BE AUDITED EVERY YEAR AND APPROVED
AT AN ANNUAL GENERAL MEETING OF THE COMPANY.}

^{A PRIVATE COMPANY THAT IS WHOLLY OWNED BY THE GOVERNMENT MAY BECOME AN
EXEMPT PRIVATE COMPANY IF THE MINISTER FOR FINANCE, IN THE NATIONAL INTEREST,
DECLARES IT TO BE SUCH BY A GAZETTE NOTIFICATION.}

^{EXEMPT FROM AUDIT}

^{AN EXEMPT PRIVATE COMPANY IS EXEMPT FROM
AUDIT REQUIREMENTS IF THE STARTING DATE OF ITS FINANCIAL YEAR IS BETWEEN 15 MAY
2003 AND 31 MAY 2004 AND ITS TURNOVER FOR THAT FINANCIAL YEAR DOES NOT EXCEED
$2.5 MILLION. FOR FINANCIAL YEARS STARTING 1 JUNE 2004, THE AMOUNT OF THE
TURNOVER HAS BEEN RAISED TO $5 MILLION. THESE COMPANIES ARE STILL REQUIRED TO
MAINTAIN PROPER ACCOUNTING.}

^{* THE LATEST FINANCIAL STATEMENTS FILED IN BY THE COMPANY AS AT YEAR}

^{ENDED 31/12/2004 ARE NOT AVAILABLE. AS SUCH, ADVERSE CHECKS ON THE}

^{LOCAL DIRECTORS WILL BE CONDUCTED.}

BACKGROUND/OPERATION

^{THE SUBJECT WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 12/01/1984
AS A PRIVATE COMPANY LIMITED BY SHARES AND WAS FORMERLY KNOWN AS "CAPRI
MARKETING SERVICES PTE LTD".}

^{SUBSEQUENTLY, ON 14/06/1994, SUBJECT CHANGED TO ITS PRESENT NAMESTYLE AS
"ESCO MICRO PTE LTD" AND IS TRADING AS A LIMITED EXEMPT PRIVATE
COMPANY.}

^{AS AT 21/06/2006, SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL OF 1,505,035
SHARES OF A VALUE OF S$1,505,035.}

^{PRINCIPAL ACTIVITIES:}

^{SUBJECT IS REGISTERED WITH THE ACCOUNTING & CORPORATE REGULATORY
AUTHORITY (ACRA) TO BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

^{1) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS AND EXPORTERS),
HOLDING COMPANIES}

^{2) BANK/FINANCIAL HOLDING COMPANIES}

^{FROM THE RESEARCH CONDUCTED, THE FOLLOWING INFORMATION WAS GATHERED:}

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE
CLASSIFICATION OF: CLEAN ROOM FACILITIES.}

^{SUBJECT IS A COMPANY FOCUSED ON CLEAN AIR AND CONTAINMENT EQUIPMENT
TECHNOLOGY. IT IS HIGHLY ORIENTED TOWARDS THE INTERNATIONAL MARKETPLACE WITH
SALES IN MORE THAN 60 COUNTRIES.}

^{SUBJECT IS STRUCTURED INTO 5 DISTINCT BUSINESS DIVISIONS:}

^{* BIOTECHNOLOGY EQUIPMENT}

^{* FUME FILTRATION}

^{* LABORATORY FUME HOODS}

^{* CLEANROOM EQUIPMENT}

^{* PERFORMANCE CLEANROON APPAREL}

^{* OEM CONTRACT MANUFACTURING}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* SUPPLY OF COMPLETE RANGE OF CLEAN ROOM RELATED PRODUCTS AND SUPPLIES}

^{* STATIC ELIMINATION/ESD EQUIPMENT & PRODUCTS, CLEAN ROOM APPAREL,
COMPLETE RANGE OF FILTERS (HEPA/ASHRAE/VILEDON FILTERS) AND WATER PURIFICATION
SYSTEMS.}

^{* SUPPLY AND INSTALLATION OF LAMINAR FLOW DEVICES, BIOHAZARD CABINETS,
AIR-SHOWER AND PASS BOXES}

^{* CERTIFICATION/CALIBRATION SERVICES FOR CLEAN ROOMS/LAMINAR FLOW
DEVICES/BIOHAZARD CABINETS/FUME CUPBOARDS/ESD EQUIPMENT.}

^{* COMPLETE RANGE OF SERVICES FROM EVALUATION TO ASSESSMENT TO
RECTIFICATION OF INDOOR AIR QUALITY PROBLEM/SICK BUILDING SYNDROME}

^PRODUCTS:

^{* LABORATORY EQUIPMENT}

^{* CLEANROOM CONSTRUCTION COMPONENTS}

^{* CLEANROOM EQUIPMENT & SUPPLIES}

^{* CLEANROOM APPAREL}

^{* CLEANROOM FILTERS}

^{* HORIZONTAL LAMINAR FLOW CABINETS}

^{* VERTICAL LAMINAR FLOW CABINETS}

^{* CLASS II SAFETY CABINETS}

^{* CLASS III SAFETY CABINETS}

^{* CYTOTOXIC CABINETS}

^{* PCR CABINETS}

^{* ANIMAL HANDLING CABINETS}

^{* IVF CABINETS}

^{* WEIGHING CABINETS}

^{* ERGONOMIC ACCESSORIES}

^{* ACCESSORIES}

^BRANDS:

^{* ESCO}

^{* ISOCLEAN (CLEAN ROOM WIPES,
STATIONERY & GLOVES, ETC)}

^{* ISOSTAT (ANTI-STATIC SOLUTIONS)}

^{* ISOTACK (STICKY MATS)}

^{* SIMCO (STATIC CONTROL
PRODUCTS & EQUIPMENT)}

^{* LAL (TEST KITS)}

^{* LIFE CORPORATION (OXYGEN PAC)}

^{* MOLNLYCKE (BURN DRESSING)}

^{* SOFILTRA CAMFIL (AIR FILTERS)}

^{* UNWIN (SAFETY DEVICES
FOR REHAB)}

^PURCHASES:

^{* IMPORTS (%): NOT PROVIDED}

^{* TERMS OF IMPORT: 30-180 DAY TERM, ETC}

^{* IMPORT COUNTRIES: UNITED STATES, FRANCE, ETC.}

^MARKETS

^{* LOCAL (%): LESS THAN 50}

^{* TERMS SALES: 30-180 DAY TERM, ETC}

^{* EXPORT(%): MORE THAN 50}

^{* TERMS OF EXPORT: 30-180 DAY TERM, ETC}

^{* EXPORT COUNTRIES: UNITED STATES, UNITED KINGDOM, AUSTRALIA,}

^{NEW ZEALAND, ETC.}

^{INDUSTRIES SERVED:}

^{* MICRO-ELECTRONICS}

^{* SEMICONDUCTOR}

^{* LIFE SCIENCES}

^{* BIOTECHNOLOGY}

^{* PHARMACEUTICALS}

^{* RESEARCH}

^{* EDUCATION}

^{SUBJECT IS A MEMBER OF FOLLOWING ENTITIES:}

^{* THE PHARMACEUTICAL SOCIETY OF SINGAPORE}

^{* SINGAPORE MANUFACTURERS' FEDERATION}

^{AGENTS & DISTRIBUTORS OF:}

^{* SIMCO (UNITED STATES)}

^{* SOFILTRA-CAMFIL & ENVIRCO (FRANCE)}

^{REGISTERED & BUSINESS ADDRESSES:}

^{21 CHANGI SOUTH STREET 1}

^{SINGAPORE 486777}

^{DATE OF CHANGE OF ADDRESS: 08/08/1997}

^{-- WORLDWIDE HEADQUARTER (OWNED PREMISE)}

^WEBSITE:

^{* http://www.escoglobal.com}

^EMAIL:

^{* mail@escoglobal.com}

MANAGEMENT

^{THE DIRECTORS IN OFFICE AT THE TIME OF THIS REPORT ARE:}

^{1) LIM LAY YEW, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS IN OUR DATABASE}

^{AIRCELL ASIA PTE LTD}

^{ESCO TECHNOLOGY CENTRE (S) PTE LTD}

^{ESCO HOLDINGS PTE LTD}

^{ESCO MICRO (M) SDN BHD}

^{2) LOW YAE FOONG, A SINGAPORE PERMANENT RESIDENT}

^{- HOLDS OTHER DIRECTORSHIPS IN OUR DATABASE}

^{AIRCELL ASIA PTE LTD}

^{ESCO TECHNOLOGY CENTRE (S) PTE LTD}

^{ESCO HOLDINGS PTE LTD}

ADVERSE ON DIRECTORS

^{DIRECTOR'S NAME: LIM LAY YEW}

^{ADVERSE REPORT AGAINST DIRECTOR: NIL}

^{PROPERTY OWNERSHIP: OWNS 1}

^{ANNUAL VALUE: S$33,000}

^{CO-OWNER(S): LOW YAE FOONG}

^{DIRECTOR'S NAME: LOW YAE FOONG}

^{ADVERSE REPORT AGAINST DIRECTOR: NIL}

^{PROPERTY OWNERSHIP: OWNS 1}

^{ANNUAL VALUE: S$33,000}

^{CO-OWNER(S): LIM LAY YEW}

^{* ANNUAL VALUE IS THE ESTIMATED ANNUAL RENT
THE PROPERTY CAN FETCH IF IT WERE RENTED OUT. THE ANNUAL VALUE IS DETERMINED IN
THE SAME MANNER REGARDLESS OF WHETHER THE PROPERTY IS LET-OUT, OWNER-OCCUPIED
OR VACANT.}

SINGAPORE'S COUNTRY RATING 2006

INVESTMENT GRADE

IN SINGAPORE, THE POLITICAL SITUATION APPEARS TO BE VERY STABLE.

ECONOMIC GROWTH IS BECOMING MORE MODERATE AS INVESTMENT HAS BEEN FLAT DUE TO INCREASING OIL PRICES AND LESS BUOYANT DEMAND FOR ELECTRONIC PRODUCTS.

ECONOMIC PERFORMANCE HAS REMAINED STRONG, UNDERPINNED BY PHARMACEUTICALS AND SERVICES. EXPORTS HAS BENEFITED FROM THE STEADINESS OF DEMAND FROM ITS MAIN TRADING PARTNERS, MALAYSIA, THE UNITED STATES, CHINA AND HONG KONG. OTHER THAN ITS BALANCED PUBLIC SECTOR ACCOUNTS, LIMITED FOREIGN DEBT AND COMFORTABLE FOREIGN CURRENCY RESERVES HAVE CONTRIBUTED TO SINGAPORE'S STRONG FINANCIAL CONDITION.

AS THE ELECTRONICS SECTOR FACES COMPETITION FROM THE ASIAN ECONOMIES, SINGAPORE HAS BEEN PURSUING DIVERSIFICATION STRATEGY THAT HAS BEEN CONSOLIDATING ITS POSITION. PHARMACEUTICALS ALREADY REPRESENT 10% OF EXPORTS IN COMPARATIVE TO ITS INSIGNIFICANT CONTRIBUTION IN YEAR 1995. ELECTRONICS SECTOR SECTOR'S SHARE HAS DECLINED FROM 80% TO 60% DURING THE SAME PERIOD. THERE IS HIGH RELIANCE ON DEVELOPMENT OF PETROCHEMICAL PRODUCTS, HIGH VALUE-ADDED SERVICES AND BIOTECHNOLOGIES.

ASSETS

- ONE OF THE MOST OPEN ECONOMIES IN THE WORLD WITH EXPORTS PLAYING A MAJOR

ROLE IN ITS PERFORMANCE.

- ONE OF ASIA'S MOST ADVANCED COUNTRIES IN QUALITY COMPETITIVENESS TERMS.

- WORKFORCE'S EDUCATION AND SKILL LEVEL IS VERY HIGH.

- A MAJOR EXPORT OF CAPITAL IN ASIA, PARTICULARLY THE STATE-OWNED HOLDING

COMPANY, TEMASEK.

- THE BUSINESS ENVIRONMENT HAS BEEN VERY FAVOURABLE.

- GREAT POLITICAL STABILITY.

WEAKNESSES

- ECONOMY REMAINED OVERSPECIALISED IN THE ELECTRONICS SECTOR.

- MUST ACCELERATE DIVERSIFICATION IN SERVICES TO MAINTAIN ITS LEAD OVER OTHER ASIAN ECONOMIES

- REFORMS ARE STILL NEEDED TO FOSTER INNOVATION AND EDUCATION-SYSTEM MODERNIZATION.

- AGING POPULATION COULD ULTIMATELY AFFECT ECONOMIC PERFORMANCE.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

THE SINGAPORE ECONOMY GREW BY 7.0% IN 3Q2005, AN IMPROVEMENT OVER THE 5.4% GROWTH IN THE SECOND QUARTER. GROWTH MOMENTUM (ON AN ANNUALISED QUARTER-ON-QUARTER BASIS) REMAINED STRONG AT 7.1%, ALTHOUGH IT SLOWED FROM THE 19% REGISTERED IN 2Q2005.

TOTAL DEMAND POSTED AN 8.7% RISE IN 3Q2005, FOLLOWING A GAIN OF 6.8% IN 2Q2005. THIS REFLECTED STRONGER CONTRIBUTIONS FROM BOTH EXTERNAL AND DOMESTIC DEMAND IN THE THIRD QUARTER. EXTERNAL DEMAND EXPANDED BY 11%, UP FROM 9.6% IN THE SECOND QUARTER. STRONGER EXPORT PERFORMANCE OF BOTH GOODS AND SERVICES UNDERPINNED THIS IMPROVEMENT. EXPORTS OF GOODS WERE LIFTED BY HIGHER SHIPMENTS OF SEMICONDUCTORS AND TELECOM EQUIPMENT WHILE SERVICES EXPORTS BENEFITED FROM STRONG RECEIPTS IN FINANCIAL SERVICES. TOTAL DOMESTIC DEMAND GREW BY 1.1%, COMPARED TO A CONTRACTION OF 1.6% IN 2Q2005. THE TURNAROUND REFLECTED MAINLY A SMALLER DRAWDOWN IN BUSINESS INVENTORY, COMPARED WITH 3Q2004. THIS RAISED THE CONTRIBUTION OF INVENTORY CHANGES TO ECONOMIC GROWTH.

EMPLOYMENT CREATION CONTINUED TO BE STRONG IN 3Q2005, SUBSTAINING THE TREND IN THE PAST EIGHT QUARTERS. EMPLOYMENT GREW BY 28,700 IN 3Q2005, WHICH WAS DOUBLED THE 14,100 IN 3Q2004.

THE BULK OF EMPLOYMENT GAINS ARE IN THE SERVICES SECTOR (18,400). THE MAJORITY OF JOBS CREATED IN THE SERVICES SECTOR WERE IN BUSINESS SERVICES (8,000), WHOLESALE AND RETAIL TRADE (2,700), AND THE OTHER SERVICES INDUSTRIES COMPRISING HEALTH, EDUCATION AND PERSONAL SERVICES (3,500). MANUFACTURING JOBS ALSO ROSE BY 8,000, DRIVEN MAINLY BY GAINS IN THE MARINE INDUSTRIES. CONSTRUCTION SECTOR CONTINUED TO ADD 2,300 JOBS FOR THE THIRD CONSECUTIVE QUARTER.

PRELIMINARY FINDINGS FROM A SURVEY OF PRIVATE SECTOR ESTABLISHMENTS EACH WITH AT LEAST 25 EMPLOYEES SHOW THAT 2,500 WORKERS WERE RETRENCHED IN 3Q2005. TOTAL RETRENCHMENT HAS BEEN GENERALLY ON A DOWNWARD TREND, ALTHOUGH 3Q2005 POSTED A RISE OF 18% FROM THE PREVIOUS QUARTER AND 27% FROM THE SAME QUARTER A YEAR AGO.

THE MANUFACTURING SECTOR LAID OFF 1,700 OR SLIGHTLY MORE THAN TWO-THIRDS OF THE TOTAL WORKERS RETRENCHED IN THE QUARTER, MAINLY IN ELECTRONICS INDUSTRIES (43% OF TOTAL RETRENCHEMENTS) AND ELECTRIAL PRODUCTS MANUFACTURING (11%). THE REMAINING 800 OR ONE-THIRD OF THE LAYOFFS WERE CONTRIBUTED BY THE SERVICES SECTOR MAINLY FROM BUSINESS SERVICES (9.5%), WHOLESALE AND RETAIL TRADE (7.6%), FINANCIAL SERVICES (5.0%) AND COMMUNITY ANS PERSONAL SERVICES (4.2%).

OVERALL PRODUCTIVITY ROSE BY 2.1% IN 3Q2005, FROM 1.2% IN 2Q2005. IT WAS MAINLY DUE TO A SHARP TURNAROUND OF PRODUCTIVITY IN THE MANUFACTURING SECTOR, WHILE MOST OF THE OTHER SECTORS RECORDED WEAKER PRODUCTIVITY GAINS. WITH SOLID OUTPUT GROWTH, MANUFACTURING PRODUCTIVITY GROWTH ROSE TO 6.2%, REVERSING THE 0.3% DECLINE IN 2Q2005. IN CONTRAST, THE CONSTRUCTION SECTOR REGISTERED A LARGER 1.5% FELL IN PRODUCTIVITY IN 3Q2005, FOLLOWING THE 1.2% FALL IN 2Q2005.AS A RESULT OF STRONG EMPLOYMENT GROWTH, WHOLESALE AND RETAIL TRADE (3.8%), TRANSPORT AND COMMUNICATIONS (1.9%) AND HOTEL AND RESTAURANTS (0.9%) SECTORS REGISTERED SLOWER PRODUCTIVITY GROWTH AS COMPARED TO 2Q2005. PRODUCTIVITY FELL IN THE BUSINESS SERVICES (-3.4%), OTHER SERVICES (-1.1%) AND FINANCIAL SERVICES (-0.3%) SECTORS.

THE CONSUMER PRICE INDEX ROSE MARGINALLY BY 0.7% IN 3Q2005, COMPARED TO 2Q2005.

HIGHER ELECTRICITY TARIFFS AND PETROL PRICES CONTRIBUTED LARGELY TO THE INCREASE.

ON A YEAR-ON-YEAR BASIS, THE CPI WAS 0.5% HIGHER, COMPARED TO THE 0.1% GAIN IN 2Q2005. THE RISE IN PRICES WAS UNDERPINNED BY HIGHER ELECTRICITY TARIFFS AND PETROL PRICES, AS WELL AS DEARER CIGARETTES. IN CONTRAST, LOWER CAR PRICES AND FOREIGN MAID LEVY CONTINUED TO RESTRAIN OVERALL CONSUMER PRICE INFLATION.

AMONG THE MAJOR SEGMENTS OF CONSUMER ITEMS, EDUCATION AND STATIONERY COSTS ROSE BY 2.4%, WHILE RECREATION AND OTHERS COSTS WAS 1.9% HIGHER. BOTH FOOD AND HOUSING COSTS ROSE BY 1.1% EACH DURING THE QUARTER. THE INCREASE IN FOOD COSTS REFLECTED MAINLY HIGHER PRICES OF COOKED FOOD. AS A RESULT OF THE GREATER DISCOUNTS ON THE PRICES OF READY-MADE GARMENTS DURING THE GREAT SINGAPORE SALE, THE PRICE INDEX FOR CLOTHING AND FOOTWEAR DECLINED BY 1.3%. A LARGER 2.3% DIP IN TRANSPORT AND COMMUNICATION COST WAS DUE TO THE CONTINUING DOWNWARD TREND IN CAR PRICES.

AHEAD

THE COMPOSITE LEADING INDEX (CLI), AN INDICATOR THAT LEADS ECONOMIC ACTIVITY BY ABOUT THREE QUARTERS AHEAD, REGISTERED A RISE OF 1.2% IN 3Q2005, FOLLOWING A 0.9% RISE IN THE SECOND QUARTER.OF THE NINE COMPONENTS WITHIN THE INDEX, ONLY THE BUSINESS EXPECTATIONS FOR WHOLESALE TRADE SHOWED A DECLINE THE PERIOD.

THE OTHER COMPONENTS - BUSINESS EXPECTATIONS FOR STOCK OF FINISHED GOODS, MONEY SUPPLY, STOCK PRICE, NEW COMPANIES FORMED, US PURCHASING MANAGERS’ INDEX, NON-OIL SEA CARGO HANDLED, DOMESTIC LIQUIDITY AND NON-OIL RETAINED IMPORTS EITHER REMAINED UNCHANGED OR ROSE FROM THE PREVIOUS QUARTER.

THE SLOW ECONNOMIC GROWTH RECORDED IN THE EARLY PART OF THE YEAR HAS BEEN OFFSET BY THE STRENGTH OF THE REBOUND IN THE SECOND AND THIRD QUARTERS. THIS RESURGENCE WHICH WAS LED BY MANUFACTURING, FINANCIAL SERVICES AND ENTREPOT TRADE REFLECTED THE IMPROVING GLOBAL ECONOMY.

THE HEALTHY GROWTH TREND IS LIKELY TO BE SUBSTAINED IN THE COMING MONTHS. DESPITE THE DISRUPTIONS OF SEVERE WEATHER CONDITIONS (PARTICULARY TO THE OIL AND NATURAL GAS INDUSTRIES), US ECONOMIC GROWTH IS FORECASTED TO REMAIN STRONG. EASING INVENTORY PROBLEMS IN THE GLOBAL ELECTRONICS INDUSTRY IS ALSO EXPECTED TO BOOST ELECTRONICS PRODUCTION IN SINGAPORE. A SIMILAR OUTLOOK IS SUGGESTED BY THE COMPOSITE LEADING INDEX FOR THE THIRD QUARTER, WHICH REGISTERED THE LARGEST QUARTERLY GAIN SINCE 1Q2004.

THE LATEST BUSINESS EXPECTATIONS SURVEY CONTINUES TO SHOW POSITIVE SENTIMENTS IN ALL MAJOR INDUSTRY SEGMENTS. NEVERTHELESS, WITH THE STRONG GAINS MADE IN THE PAST HALF YEAR OR SO, SOME CAUTION HAS TEMPERED WITH THE OPTIMISIM.

FOR 2006, SINGAPORE SHOULD BE ABLE TO ACHIEVE ITS MEDIUM TERM GROWTH POTENTIAL AS OUTLOOK FOR GLOBAL ECONOMY AND ELECTRONICS INDUSTRY REMAINS SANGUINE.GROWTH RATES IN BOTH THE DEVELOPED AND EAST ASIAN DEVLEOPING ECONOMIES ARE PREDICTED TO BE LITTLE CHANGED FROM 2005. THE SALES OF GLOBAL SEMICONDUCTOR IS EXPECTED TO PICK UP IN 2006. THIS WOULD BOOST MANUFACTURING AND TRADE-RELATED ACTIVITIES IN SINGAPORE. THE IMPROVING LABOUR MARKET AND THE LOW INFLATIONARY ENVIRONMENT SHOULD ALSO LIFT DOMESTIC DEMAND FURTHER.

NEVERTHELESS, RISKS TO ECONOMIC GROWTH ARE MOUNTING. LIMITED SPARE CAPACITIES IN THE GLOBAL OIL INDUSTRY MEANT THAT SUPPLY DISRUPTIONS WOULD CONTINUE TO SEND PRICES UPWARDS. IN VIEW OF RISING INFLATION, TIGHTENING MONETARY CONDITIONS IN THE DEVELOPED ECONOMIES COULD DAMPEN REAL ESTATE PRICES, WHICH WOULD REMOVE AN IMPORTANT SUPPORT FOR CONSUMER DEMAND IN THESE ECONOMIES. FINALLY, SHOULD THE AVIAN FLU OUTBREAK ESCALATE INTO A PANDEMIC, IT COULD SEVERELY DISRUPT ECONOMIC ACTIVITIES WORLDWIDE.

IN VIEW OF THE ABOVE CONSIDERATIONS, THE MINISTRY OF TRADE AND INDUSTRY

HAS RAISED THE 2005 GDP GROWTH FORECAST TO AROUND 5.0%. ECONOMIC GROWTH IN 2006 IS EXPECTED TO BETWEEN 3.0% AND 5.0%.

SINGAPORE’S FOURTH QUARTER GDP UP BY 7.7% ON-YEAR:ESTIMATES

ADVANCE ESTIMATES RELEASED SHOW THAT THE SINGAPORE’S ECONOMY GREW 7.7% IN 4Q2005, COMPARED TO A YEAR EARLIER. THIS BROUGHT THE FULL-YEAR ECONOMIC GROWTH TO 5.7%.

THIS BETTER-THAN-EXPECTED FULL-YEAR NUMBERS HAD ALREADY BEEN ANNOUNCED BY PRIME MINISTER LEE HSIEN LOONG IN HIS NEW YEAR’S DAY MESSAGE.

SINGAPORE’S ECONOMY ENDED THE YEAR 2005 WITH A BANG, DUE TO THE STRONG SHOWING BY THE MANUFACTURING SECTOR. MANUFACTURING SURGED IN 4Q2005, EXPANDING AT AN ESTIMATED 11.5% FROM A YEAR AGO. THE CONSTRUCTION SECTOR ALSO GREW BY AN ESTIMATED 0.8% - ITS SECOND STRAIGHT QUARTER OF GROWTH AFTER 5 CONSECUTIVE QUARTERS OF CONTRACTION. MEANWHILE, THE SERVICES SECTOR ALSO PUT IN A CREDIBLE PERFORMANCE, GREWING BY 7%, ITS BEST SHOWING IN 6 QUARTERS.

SOME ECONOMISTS SAID THAT WHEN THE FINAL NUMBERS ARE TAILLED, THE GROWTH DATA MAY BE EVEN STRONGER. SONG SENG WUN, REGIONAL ECONOMIST, CIMB-GK RESEARCH MENTIONED THAT “THE DATA FOR 4Q2005 ARE BASED ON ESTIMATES OF DATA AVAILABLE TO DATE IN OCTOBER AND NOVEMBER, THERE ARE STILL PLENTY OF HOLES TO FILL FOR A GREAT CHUNK OF GROWTH FROM THE SERVICES SECTOR. IF THE DECEMBER MANUFACTURING DATA PROVE TO BE BETTER THAN EXPECTED, THERE’S A POSSIBILITY THAT THE FINAL QUARTER GROWTH COULD BE HIGHER THAN 7.7%. IT COULD BE CLOSER TO 8% OR MORE AND FOR THE FULL-YEAR GROWTH, IT COULD BE CLOSER TO 6% OR EVEN HIGHER THAN 6%.”

BASED ON ADVANCE ESTIMATES, MANUFACTURING GREW BY 8.6%, WHILE SERVICES GREW BY 5.4%. ON THE OTHER HAND, CONSTRUCTION CONTRACTED BY 1.5%. GIVEN A RATHER LOW BASE IN 1Q2005, WHEN THE ECONOMY GREW BY JUST 2.7%, ECONOMISTS NOW EXPECT 1Q GDP TO RISE BY 8 TO 10% - WITH INDICATORS POINTING TO A STRONG TECH SHOWING IN THE COMING MONTHS.

WITH THE POSITIVE ECONOMIC OUTLOOK, SOME ECONOMISTS HAVE UPGRADED THEIR GDP FORECASTS FOR 2006. BASED ON THE GOVERNMENT ESTIMATES THAT GDP GROWTH FOR 2006 WILL BE BETWEEN 3 AND 5%, PRIVATE SECTOR ECONOMISTS SAID THAT THE HIGH END OF THIS RANGE IS STILL CONSERVATIVE. DAVID COHEN, DIRECTOR OF ASIAN ECONOMIC FORECASTING AT ACTION ECONOMICS MENTIONED THAT “ 6% IS WITHIN REACH, THAT WOULD REQUIRE ONLY MODERATE QUARTER-ON-QUARTER GROWTH THROUGHOUT 2006.BUT IN VIEW OF THE RISK OF OTHER SHOCKS THAT COULD DRAG DOWN SINGAPORE’S GROWTH RATE AND WORLDWIDE, THE LOWER END OF THE RANGE SEEMS APPROPRIATE. FOR EXAMPLE, THERE COULD BE A BIRD FLU PANDEMIC OR OIL PRICE SHOCK THAT COULD DERAIL THE OPTIMISTIC PROJECTIONS IN 2006.”

WITH THE CURRENT GROWTH OUTLOOK LOOKING POSITIVE, ECONOMISTS HAVE RAISED THEIR GROWTH FORECASTS FO 2006 TO BETWEEN 5.5% AND 7%.

EXTRACTED FROM : MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

CHANNEL NEWSASIA

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

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