MIRA INFORM REPORT

Report Date :

20^th November, 2006

IDENTIFICATION DETAILS

Name :	COMPLETION PRODUCTS PTE. LTD.
Registered Office :	5 Gul Street 1, Singapore 629318, Singapore
Country :	Singapore
Financials (as on) :	30.06.2005
Date of Incorporation :	12.05.2003
Legal Form :	^Exempt Pte Ltd
Line of Business :	Manufacturing & Trading of Oilfield Equipment for the offshore Oil Industry.

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Poor
Payment Behaviour :	Unknown
Litigation :	Clear

Company name

COMPLETION PRODUCTS PTE. LTD.

Line Of Business 

MANUFACTURING & TRADING OF OILFIELD EQUIPMENT FOR THE OFFSHORE OIL INDUSTRY.

Parent Company

-

Financial Elements

FY2005

COMPANY

Sales : S$1,290,093

Networth : -S$ 11,223

Paid-Up Capital : S$ 50,000

Net result : S$ 27,999

Net Margin(%) : 2.17

Return on Equity(%) : -249.48

Leverage Ratio : - 34.83

Note: Based on Accounting and Corporate Regulatory Authority’s (ACRA) record dated

14/11/2006, the paid-up capital has increased to S$100,000.

Rating

Credit Requested : NA

Credit Rating : Up to Sing $ 10000

Credit Opinion : NA

COMPANY IDENTIFICATION

^{Subject Company : COMPLETION PRODUCTS PTE. LTD.}

^{Former Name : -}

^{Business Address : 5 GUL STREET 1}

^{Town : SINGAPORE}

^{Postcode : 629318}

^{County : -}

^{Country : Singapore}

^{Telephone : 6897 8785/6897 8970}

^{Fax : 6897 8570}

^{ROC Number : 200304365H}

^{Reg. Town : -}

SUMMARY

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

^{Legal Form : Exempt Pte Ltd}

^{Date Inc. : 12/05/2003}

^{Previous Legal Form : -}

^{Summary year : 30/06/2005}

^{Sales : 1,290,093}

^{Net Worth : -11,223}

^{Paid-Up Capital : 50,000}

^{Employees : 2}

^{Net Result : 27,999}

^{Auditor : DAVID PEH & CO}

REFERENCES

^{CCMS Number : 702005083292}

^{Report Date : 20/11/2006}

^{Update Date : 20/11/2006}

^{Credit Requested : NA}

^{Credit Opinion : NA}

^{Litigation : No}

^{Company status : TRADING}

^{Started : 12/05/2003}

PRINCIPAL(S)

^{DOWSETT GRAEME JOHN G5659991L Director}

DIRECTOR(S)

^{DOWSETT GRAEME JOHN G5659991L Director}

^{Appointed on : 12/05/2003}

^{Street : 215 KEW CRESCENT}

^{Town : SINGAPORE}

^{Postcode : 466117}

^{Country : Singapore}

^{TAN AH CHOON JANE S0226318A Director}

^{Appointed on : 18/02/2004}

^{Street : 3 LENTOR VALE LENTOR VIEW}

^{Town : SINGAPORE}

^{Postcode : 788856}

^{Country : Singapore}

^{NG KWEE HOONG S1583313J Director}

^{Appointed on : 18/02/2004}

^{Street : 106 BUKIT PURMEI ROAD #04-138}

^{Town : SINGAPORE}

^{Postcode : 090106}

^{Country : Singapore}

^{RAGINI D/O DHANVANTRAY S2607093G Company Secretary}

^{Appointed on : 12/05/2003}

^{Street : 299 BEDOK SOUTH AVENUE 3}

^{#01-15 BEDOK COURT}

^{Town : SINGAPORE}

^{Postcode : 469298}

^{Country : Singapore}

ACTIVITY (IES)

^{OIL FIELD EQUIPMENT Code: 15270}

^{BASED ON ACRA'S RECORD AS AT 14/11/2006}

^{1) ACTIVITIES NOT ADEQUATELY DEFINED; MARKETING, ENGINEERING AND}

^{MANUFACTURE OF WELL COMPLETION PRODUCTS USED IN OIL}

CHARGES

^{Date : 23/02/2006}

^{Comments : CHARGE NO: C200601231}

^{AMOUNT SECURED: 0.00 AND ALL MONIES OWING}

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

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{UNITED OVERSEAS BANK LIMITED}

SHAREHOLDERS(S)

^{DOWSETT GRAEME JOHN 40,000 Private Person}

^{Street : 215 KEW CRESCENT}

^{Town : SINGAPORE}

^{Postcode : 466117}

^{Country : Singapore}

^{LEE KUAN SIN 26,250 Private Person}

^{Street : 83 JALAN SELAMAT}

^{KIMNAN PARK}

^{Town : SINGAPORE}

^{Postcode : 418597}

^{Country : Singapore}

^{TAN AH CHOON JANE 26,250 Private Person}

^{Street : 3 LENTOR VALE}

^{LENTOR VIEW}

^{Town : SINGAPORE}

^{Postcode : 788856}

^{Country : Singapore}

^{NG KWEE HOONG 7,500 Private Person}

^{Street : 106 BUKIT PURMEI ROAD}

^#04-138

^{Town : SINGAPORE}

^{Postcode : 090106}

^{Country : Singapore}

SUBSIDIARY (IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : LACKING}

^{Payments : SLOW}

^{Trend : UPWARD}

^{Financial Situation : BAD}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

^{Audit Qualification: GOING CONCERN GOING CONCERN}

^{QUALIFICATION QUALIFICATION}

^{Date Account Lodged: 26/01/2006}

^{Balance Sheet Date: 30/06/2005 30/06/2004}

^{Number of weeks: 52 54}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Intangible Fixed Assets: 19,022 38,044}

^{Tangible Fixed Assets: 69,816 24,518}

^{Total Fixed Assets: 88,838 62,562}

^{Inventories: 49,861 14,267}

^{Receivables: 809,865 456,179}

^{Cash,Banks, Securities: 61,019 39,999}

^{Other current assets: 32,626 22,615}

^{Total Current Assets: 953,371 533,060}

^{TOTAL ASSETS: 1,042,209 595,622}

^{--- LIABILITIES ---}

^{Equity capital: 50,000 50,000}

^{Profit & loss Account: -61,223 -89,222}

^{Total Equity: -11,223 -39,222}

^{Trade Creditors: 338,927 144,725}

^{Other Short term Liab.: 714,505 490,119}

^{Total short term Liab.: 1,053,432 634,844}

^{TOTAL LIABILITIES: 1,053,432 634,844}

^{--- PROFIT & LOSS ACCOUNT ---}

^{Net Sales 1,290,093 508,871}

^{Purchases,Sces & Other Goods: 969,795 423,527}

^{Gross Profit: 320,298 85,344}

^{Net income/loss year: 27,999 -89,222}

^{Depreciation: 8,051 1,632}

^{Wages and Salaries: 104,000 42,500}

RATIOS

^{30/06/2005 30/06/2004}

^{Turnover per employee: 645046.50 254435.50}

^{Net result / Turnover(%): 0.02 -0.18}

^{Stock / Turnover(%): 0.04 0.03}

^{Net Margin(%): 2.17 -17.53}

^{Return on Equity(%): -249.48 227.48}

^{Return on Assets(%): 2.69 -14.98}

^{Net Working capital: -100061.00 -101784.00}

^{Cash Ratio: 0.06 0.06}

^{Quick Ratio: 0.83 0.78}

^{Current ratio: 0.91 0.84}

^{Receivables Turnover: 225.99 322.72}

^{Leverage Ratio: -34.83 -8.22}

^{Net Margin : (100*Net income loss year)/Net sales}

^{Return on Equity : (100*Net income loss year)/Total equity}

^{Return on Assets : (100*Net income loss year)/Total fixed assets}

^{Net Working capital : (Total current assets-Total short term liabilities)}

^{Cash Ratio : Cash Bank securities/Total short term liabilities}

^{Quick Ratio : (Cash Bank securities+Receivables)/Total Short term liabilities}

^{Current ratio : Total current assets/Total short term liabilities}

^{Inventory Turnover : (360*Inventories)/Net sales}

^{Receivables Turnover : (Receivable*360)/Net sales}

^{Leverage Ratio : Total liabilities/(Total equity-Intangible assets)}

FINANCIAL COMMENTS

^{AUDITORS' REPORT:}

^{WITHOUT QUALIFYING OUR OPINION, WE DRAW ATTENTION TO NOTE 3 IN THE FINANCIAL STATEMENTS. THE COMPANY'S CURRENT LIABILITIES EXCEEDED ITS CURRENT ASSETS BY S$100,061 AND THE TOTAL LIABILITIES EXCEEDED ITS TOTAL ASSETS BY S$11,223. THESE CONDITIONS INDICATE THE EXISTENCE OF A MATERIAL UNCERTAINTY WHICH MAY CAST SIGNIFICANT DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE AS A GOING CONCERN.}

^{THE FINANCIAL CONDITION OF THE COMPANY WAS DEEMED TO BE LIMITED IN VIEW OF THE FOLLOWING:}

^{NET WORTH:}

^{THE BALANCE SHEET HAD IMPROVED BUT REMAINED LACKING WITH CAPITAL DEFICIENCY OF S$11,223 (2004: -S$39,222). THIS WAS DUE TO LOWER RETAINED LOSSES BROUGHT FORWARD OF S$61,223 (2004: -S$89,222).}

^LEVERAGE:

^{THE LEVERAGE RATIO WAS EXCESSIVE AT -34.83 TIMES (2004: -8.22 TIMES). THIS INDICATED THAT THE COMPANY'S TOTAL LIABILITIES WERE HIGHLY SUBSTANTIAL IN RELATION TO ITS TOTAL EQUITY.}

^{IN THE SHORT TERM, TRADE CREDITORS SURGED BY 1.34 TIMES TOTALLING}

^{S$338,927 (2004: S$144,725). OTHER SHORT TERM LIABILITIES OF}

^{S$714,505 (2004: S$490,119) COMPRISED OF:}

^{* OTHER CREDITORS AND ACCRUALS OF S$660,789 (2004: S$426,403)}

^{* AMOUNT DUE TO A DIRECTOR OF S$53,716 (2004: S$63,716)}

^LIQUIDITY:

^{THE OVERALL LIQUIDITY OF THE COMPANY WAS UNHEALTHY. BOTH THE QUICK AND CURRENT RATIOS WERE LACKING AT 0.83 TIMES (2004: 0.78 TIMES) AND 0.91 TIMES (2004: 0.84 TIMES) RESPECTIVELY.}

^{THIS WAS IN TANDEM WITH THE NET WORKING CAPITAL, WHICH REGISTERED UNFAVOURABLY AT -S$100,061 (2004: -S$101,784) AS WELL.}

^{PROFITABILITY:}

^{REVENUE FOR FY2005 SURGED BY 1.54 TIMES AMOUNTING TO S$1,290,093 (2004: S$508,871). SIMILARLY, NET INCOME IMPROVED SIGNIFICANTLY, ACCOUNTING FOR S$27,999 (2004: -S$89,222).}

^{AS A RESULT, NET MARGIN WAS POSITIVE AT 2.17% (2004: -17.53%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS WERE ANTICIPATED IN VIEW OF THE CAPITAL DEFICIENCY, UNHEALTHY LIQUIDITY AND IF TRADE RECEIVABLES WERE NON FORTHCOMING.}

^{NEVERTHELESS, THERE WERE NO INTEREST-BEARING DEBTS TO FINANCE FOR BOTH FINANCIAL YEARS.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{GOING CONCERN (NOTE 3)}

^{THE FINANCIAL STATEMENTS HAVE BEEN PREPARED ON A GOING CONCERN BASIS}

^{NOTWITHSTANDING THE DEFICIENCY IN NET ASSETS ON THE BASIS THAT THE SHAREHOLDERS WILL GIVE SUCH FINANCIAL SUPPORT TO THE COMPANY AS IT IS NECESSARY TO ENABLE IT TO CONTINUE AS A GOING CONCERN.}

^COMPARATIVES

^{THE COMPARATIVES REFER TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM 12 MAY 2003, BEING THE DATE OF INCORPORATION, TO 30 JUNE 2004.}

^{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.

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 12/05/2003 AS A LIMITED EXEMPT PRIVATE COMPANY AND IS TRADING UNDER ITS PRESENT NAMESTYLE AS "COMPLETION PRODUCTS PTE. LTD.".}

^{AS AT 14/11/2006, SUBJECT HAS AN ISSUED AND PAID-UP CAPITAL OF 100,000 SHARES OF A VALUE OF S$100,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1) ACTIVITIES NOT ADEQUATELY DEFINED; MARKETING, ENGINEERING AND MANUFACTURE OF WELL COMPLETION PRODUCTS USED IN OIL}

^{2) GAS INDUSTRY}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES IS IN THE MANUFACTURING AND TRADING OF OILFIELD EQUIPMENT FOR THE OFFSHORE OIL INDUSTRY.}

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

^{SUBJECT IS LISTED IN THE SINGAPORE LOCAL DIRECTORY UNDER THE CLASSIFICATION OF: TRADING COMPANIES.}

^{TERMS OF PAYMENT:}

^{* TRADE & OTHER RECEIVABLES: 30-90 DAYS TERM}

^{* TRADE & OTHER PAYABLES : 30-90 DAYS TERM}

^{FROM THE TELE-INTERVIEW CONDUCTED ON 20/11/2006, SUBJECT'S PERSONNEL REVEALED THAT THEY ARE INTO THE MANUFACTURING OF OILFIELD PIPES AND THERE ARE LESS THAN 20 EMPLOYEES IN THE COMPANY.}

^{NO OTHER INFORMATION WAS GATHERED VIA THE TELE-INTERVIEW CONDUCTED.}

^{NUMBER OF EMPLOYEES (30 JUNE):}

^{* COMPANY - 2005: 2 (2004: 2)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{5 GUL STREET 1}

^{SINGAPORE 629318}

^{DATE OF CHANGE OF ADDRESS: 05/10/2005}

^{-- OFFICE CUM MANUFACTURING PLANT}

^WEBSITE:

^{* www.completionproducts.com (UNDER CONSTRUCTION)}

^EMAIL:

^{* graeme@completionproducts.com}

MANAGEMENT

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

^{1) DOWSETT GRAEME JOHN, AN AUSTRALIAN}

^{- BASED IN SINGAPORE}

^{2) TAN AH CHOON JANE, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP AS RECORDED IN OUR DATABASE}

^{3) NG KWEE HOONG, A SINGAPOREAN}

^{- HOLDS NO OTHER DIRECTORSHIP AS RECORDED IN OUR DATABASE}

SINGAPORE'S COUNTRY RATING 2006

RATING: A1

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.

SOURCES: COFACE COPYRIGHT. ALL RIGHTS RESERVED.

@RATING COUNTRY RATING DEFINITION

INVESTMENT GRADE

A1 - THE STEADY POLITICAL AND ECONOMIC ENVIRONMENT HAS POSITIVE EFFECTS ON

AN ALREADY GOOD PAYMENT RECORD OF COMPANIES. VERY WEAK DEFAULT PROBABILITY.

A2 - DEFAULT PROBABILITY IS STILL WEAK EVEN IN THE CASE WHEN ONE COUNTRY'S

POLITICAL AND ECONOMIC ENVIRONMENT OR THE PAYMENT RECORD OF COMPANIES

IS NOT AS GOOD AS IN A1-RATED COUNTRIES.

A3 - ADVERSE POLITICAL OR ECONOMIC CIRCUMSTANCES MAY LEAD TO A WORSENING

PAYMENT RECORD THAT IS ALREADY LOWER THAN THE PREVIOUS CATEGORIES,

ALTHOUGH THE PROBABILITY OF A PAYMENT DEFAULT IS STILL LOW.

A4 - AN ALREADY PATCHY PAYMENT RECORD COULD BE FURTHER WORSENED BY A

DETERIORATING POLITICAL AND ECONOMIC ENVIRONMENT. NEVERTHELESS, THE

PROBABILITY OF A DEFAULT IS STILL ACCEPTABLE.

SPECULATIVE GRADE

B - AN UNSTEADY POLITICAL AND ECONOMIC ENVIRONMENT IS LIKELY TO AFFECT

FURTHER AN ALREADY POOR PAYMENT RECORD.

C - AN VERY UNSTEADY POLITICAL AND ECONOMIC ENVIRONMENT COULD DETERIORATE AN

ALREADY BAD PAYMENT RECORD.

D - THE HIGH RISK PROFILE OF A COUNTRY'S ECONOMIC AND POLITICAL ENVIRONMENT

WILL FURTHER WORSEN A GENERALLY VERY BAD PAYMENT RECORD.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMIC GROWTH MODERATED IN THE SECOND QUARTER TO 7.5% YEAR-ON-YEAR DUE TO A WEAKER MANUFACTURING SECTOR. PRELIMINARY ESTIMATES ISSUED SHOWN GROWTH IN REAL GROSS DOMESTIC PRODUCT SLOWED FROM A REVISED 10.7% IN THE FIRST QUARTER. ON A QUARTER-ON-QUARTER BASIS, SEASONALLY ADJUSTED ANNUALISED BASIS, GDP GREW 1.1% AFTER A 7% EXPANSION IN THE PREVIOUS QUARTER.

THE MANUFACTURING SECTOR IS FORECASTED TO HAVE EXPANDED BY A MORE MODERATE 10.2% IN THE SECOND QUARTER, MAINLY ATTRIBUTED TO LOWER PRODUCTION FROM THE BIOMEDICAL MANUFACTURING CLUSTER. IT FELL BY ABOUT HALF FROM THE 20.2% IN THE FIRST QUARTER BUT HIGHER THAN THE 9.3% REGISTERED FOR THE WHOLE OF 2005. THE MANUFACTURING SECTOR ACCOUNTS FOR ABOUT A THIRD OF SINGAPORE’S ECONOMY WORTH S$194 BILLION.

THE KEY ELECTRONICS SECTOR IN MANUFACTURING IS GROWING STRONGLY, AGAINST THE VOLATILE BIOMEDICAL SEGMENT. ELECTRONICS ARE SINGAPORE’S MAIN EXPORT AND THE INDUSTRY ROSE 8.6% YEAR-ON-YEAR IN MAY, BOOSTED BY A 38.9% GROWTH IN THE SEMICONDUCTOR SEGMENT.

THE ACTUAL FIGURES SHOWN THAT THE CONSTRUCTION SECTOR GREW 0.2% IN THE SECOND QUARTER OVER 2Q2005. THIS IS IN CONTRAST WITH A 0.8% DECLINE IN THE TWO PRECEDING QUARTERS AND DECLINES IN THE SIX QUARTERS BEFORE THAT.

THE SERVICES SECTOR ACTUALLY ROSE 7% FROM A YEAR EARLIER, SLOWER THAN THE 8.2% IN THE FIRST QUARTER BUT ABOVE THE 6% RECORDED IN 2Q2005. SERVICES INDUSTRIES, WHICH RANGE FROM HOSPITALITY TO TRANSPORT, MADE UP NEARLY TWO-THIRDS OF THE ECONOMY LAST YEAR. THOSE IN FINANCIAL SERVICES, PARTICULARLY BANKERS, FUND MANAGERS AND STOCKBROKERS, REPORTED STRONG GROWTH OF 9.5% FROM THE SAME PERIOD LAST YEAR AND UP FROM 8.7% IN THE PREVIOUS QUARTER.

WHOLESALE AND RETAIL TRADE ROSE 10.1% IN THE SECOND QUARTER, AGAINST 15.1% IN THE PREVIOUS QUARTER, AS WHOLESALERS WERE AFFECTED BY A SLOWDOWN IN NON-OIL RE-EXPORTS.

HOTELS AND RESTAURANTS GAINED 6.1% IN THE SECOND QUARTER SLOWER THAN 7.1% IN THE LAST QUARTER.

ON THE EMPLOYMENT MARKET, MORE JOBS WERE CREATED IN THE SECOND QUARTER BUT UNEMPLOYMENT ROSE TO 2.9% AS MORE PEOPLE, ESPECIALLY TERTIARY GRADUATES, ENTERED THE JOB MARKET. SOME 36,500 MORE JOBS WERE CREATED IN THE SECOND QUARTER, REFLECTING THE CONTINUED GROWTH IN THE ECONOMY. IT BROUGHT THE TOTAL NUMBER OF JOBS CREATED IN THE FIRST HALF OF 2006 TO A RECORD 81,500, WHICH IS ABOUT TWO-THIRDS MORE THAN THE 49,500 REGISTERED IN THE SAME PERIOD LAST YEAR.

THE SERVICE INDUSTRY CONTRIBUTED MOSTLY TO THE JOBS CREATION, ADDING 24,200 JODS, WHILE MANUFACTURING AND CONSTRUCTION POSTED INCREASE OF 8,300 AND 4,000 JOBS RESPECTIVELY.

RETRENCHED WORKERS TOTAL 3,100, LOWER THAN THE 3,500 IN THE FIRST QUARTER, BUT HIGHER THAN THE 2,100 IN 2Q2005.

AHEAD

THE OUTLOOK FOR THE ECONOMY REMAINS POSITIVE, AMID SIGNS OF A SLOWDOWN IN GLOBAL GROWTH. ON 8 AUGUST 2006, PRIME MINISTER LEE HISEN LOONG ANNOUNCED THAT THE SINGAPORE ECONOMY GREW 9.4% IN THE FIRST HALF OF 2005. AS A RESULT, BARRING AN OIL SHOCK, THE FULL YEAR OFFICIAL FORECAST IS BEING RAISED TO BETWEEN 6.5% AND 7.5% FOR 2006, UP FROM THE EARLIER 5 TO 7% RANGE.

IN THE SECOND HALF, MODERATE GROWTH WILL BE REGISTERED IN LINE WITH THE COOLING GLOBAL ECONOMY. BUT SURPRISINGLY, THE COMPOSITE LEADING INDEX (CLI), AN INDICATOR THAT LEADS ECONOMIC ACTIVITY BY ABOUT ONE TO TWO QUARTERS AHEAD, ROSE 1.5% IN ITS FASTEST GROWTH IN OVER TWO YEARS. CLI COMPRISES NINE COMPONENTS SUCH AS MONEY SUPPLY, LIQUIDITY AND STOCK PRICES.

THE GLOBAL ENERGY PRICES WILL CONTINUE TO FLUCTUATE WITH THE VIOLENCE IN THE MIDDLE EAST AND POTENTIAL SUPPLY PROBLEMS IN NIGERIA, IRAN AND IRAQ. OTHER RISK FACTORS INCLUDE AN AVIAN FLU OUTBREAK, A SLOWDOWN IN THE UNITED STATES ECONOMY, AND THE UNWINDING OF GLOBAL IMBALANCES SUCH AS THE US TRADE DEFICIT.

HOTELS AND RESTAURANTS ARE BANKING ON SEPTEMBER’S INTERNATIONAL MONETARY FUND/WORLD BANK MEETING TO MAINTAIN THE GROWTH MOMENTUM.

THE FINANCIAL SERVICES SECTOR IS HOPEFUL THAT WITH THE PICK-UP IN BUSINESS LOANS, BILLION-DOLLAR HEDGE FUNDS RELOCATING HERE FROM HONG KONG AND STRONG INSURANCE SALES, THE INDUSTRY WILL BE GROWING ROBUSTLY FOR THE REST OF THE YEAR.

SLOWER 8.4% GROWTH IN NON-OIL EXPORTS LAST MONTH

SINGAPORE’S NON-OIL DOMESTIC EXPORTS (NODX) GREW AT A SLOWER-THAN-EXPECTED 8.4% IN JULY 2006 OVER THE SAME MONTH A YEAR AGO, MAINLY DUE TO WEAKER SHIPMENTS OF ELECTRONICS, PHARMACEUTICALS AND PETROCHEMICALS.

ELECTRONICS EXPORTS, WHICH ACCOUNTED FOR SLIGHTLY LESS THAN HALF OF OVERALL NODX IN 2005, GREW 5% IN JULY TO S$6.62 BILLION. IT WAS THE 12TH STRAIGHT MONTH OF EXPANSION BUT WEAKER THAN THE 9.1% GROWTH REGISTERED IN JUNE. IT WAS HURT BY A 23% FELL IN DISK DRIVE EXPORTS, WHICH WAS BEING VALUED AT S$843 MILLION IN JULY, AND A 21% DECLINE IN PERSONAL COMPUTER SHIPMENTS VALUED AT S$86 MILLION.

NON-ELECTRONIC EXPORTS, WHICH CONSIST MAINLY OF PHARMACEUTICALS AND PETROCHEMICALS, ROSE 11.7% TO S$7.14 BILLION. PHARMACEUTICALS ROSE 7.1% TO S$1.27 BILLION IN JULY, SIGNIFICANTLY SLOWER THAN THE JUNE’S RISE OF 25% TO S$1.45 BILLION. PETROCHEMICAL EXPORTS ROSE 11.5% TO S$1.02 BILLION, IN COMPARISON WITH THE 32% GROWTH IN JUNE TO S$1.1 BILLION.

SHIPMENTS TO SINGAPORE’S MAJOR MARKETS SUCH AS MALAYSIA, HONG KONG AND THE UNITED STATES GREW IN JULY BUT THESE WERE OFFSET BY DECLINES IN OTHER DESTINATIONS, INCLUDING JAPAN, CHINA AND EUROPEAN UNION.

TOTAL TRADE IN JULY ROSE 15.9% TO ALMOST S$69 BILLION.

REGIONAL ECONOMIST SONG SENG WUN OF CIMB-GK RESEARCH PREDICTED THAT THE TECHNOLOGY SECTOR COULD ENJOY A REBOUND IN THE COMING MONTHS AS DEMAND TYPICALLY PICK UP WITH THE CHRISTMAS SEASON. THE TECHNOLOGY EXPORTS WILL GROW BY THE LOW-TO-MID TEENS RANGE AS THE DISK DRIVE EXPORTS IMPROVE.

EXTRACTED FROM : MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

IE SINGAPORE THE STRAITS TIMES TODAY

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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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