MIRA INFORM REPORT

Report Date :

24^th November, 2006

IDENTIFICATION DETAILS

Name :	CARGILL INTERNATIONAL TRADING PTE LTD

Registered Office :	300 Beach Road, # 23 – 01, The Concourse, Singapore – 199555

Date of Incorporation :	^05/12/1967

Com. Reg. No.:	^196700442D

Legal Form :	^{Pte Ltd}

Line of Business :	^{Commodities Trading}

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Subject Company

CARGILL INTERNATIONAL TRADING PTE LTD

Line Of Business

^{COMMODITIES
TRADING}

Parent Company

^{CARGILL ASIA PACIFIC HOLDINGS PTE. LTD.}

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2005

Sales	US$3,474,942,496
Net worth	US$94,879,426
Paid-Up Capital	US$7,676,243
Net result	US$8,088,165

Net Margin(%)	0.23
Return on Equity(%)	8.52
Leverage Ratio	4.13

Rating

Credit Rating : + Sing $ 50000001

COMPANY IDENTIFICATION

^{Subject Company}	^{CARGILL INTERNATIONAL TRADING PTE LTD}
^{Former Name}	^{CARGILL COMMODITY TRADING PTE. LTD.}
^{Business Address}	^{300 BEACH ROAD}
	^#23-01
	^{THE CONCOURSE}
^Town	^SINGAPORE
^Postcode	¹⁹⁹⁵⁵⁵
^County	^-
^Country	^Singapore
^Telephone	^{6295 1112}
^Fax	^{6393 8898}
^{ROC Number}	^196700442D
^{Reg. Town}	^-

PREVIOUS IDENTIFICATION

^{CARGILL
COMMODITY TRADING PTE. LTD.
29/07/1993}

SUMMARY

^{Legal Form}	^{Pte Ltd}
^{Date Inc.}	^05/12/1967
^{Previous Legal Form}	^-
^{Summary year}	^31/05/2005
^{All amounts in this report are in}	^USD
^Sales	^{3,474,942,496}
^{Net worth}	^94,879,426
^Capital	^17,480,902
^{Paid-Up Capital}	^7,676,243
^Employees	¹¹⁶
^{Net result}	^8,088,165
^{Share value}	^-
^AUDITOR	^KPMG

^{BASED ON
ACRA'S RECORD AS AT 17/03/2006}

^{NO. OF
SHARES CURRENCY AMOUNT}

^{ISSUED/PAID-UP
ORDINARY : 1,650,000 SGD
1,650,000}

^{ISSUED/PAID-UP
PREFERENCE : 145,565
SGD 14,556,500}

REFERENCES

^{Litigation : No}

^{Company
status : TRADING}

^{Started :
05/12/1967}

PRINCIPAL(S)

^{SYED
MUNIR-UL HASAN
003270 Director}

DIRECTOR(S)

^{SYED
MUNIR-UL HASAN 003270 Director}

^{Appointed
on : 21/04/1994}

^{Street
: 99 MEYER ROAD}

^{#27-02
THE SOVEREIGN}

^{Town: SINGAPORE}

^{Postcode: 437920}

^{Country: Singapore}

^{MARIAN
VERONICA PESTANA S1419613G Company Secretary}

^{Appointed
on : 24/06/1985}

^{Street
: 149 TAMPINES STREET 12}

^#09-104

^{Town: SINGAPORE}

^{Postcode: 521149}

^{Country: Singapore}

^{JERAL
SYLVESTER D'SOUZA 500024487 Director}

^{Appointed
on : 06/08/1997}

^{Street
: 19 BINJAI WALK}

^{Town: SINGAPORE}

^{Postcode: 589748}

^{Country: Singapore}

^{LYE PENG
YEE S2501597E Director}

^{Appointed
on : 02/06/2003}

^{Street
: 18A JALAN TUA KONG}

^{Town: SINGAPORE}

^{Postcode: 457211}

^{Country: Singapore}

^{PAUL JOHN
HICKMAN 761033346 Director}

^{Appointed
on : 23/01/2006}

^{Street
: 23 GREENWOOD CRESCENT}

^{Town: SINGAPORE}

^{Postcode: 286986}

^{Country: Singapore}

^{JITESH S/O
KANTILAL AVLANI S2531131J Director}

^{Appointed
on : 23/01/2006}

^{Street
: 9 AMBER ROAD}

^{PARKWAY MANSION}

^{Town: SINGAPORE}

^{Postcode: 439854}

^{Country: Singapore}

FORMER DIRECTOR(S)

^{AAMIR
ZAHEER FAROOQI 029638}

^{MICHAEL
JOSEPH COLEMAN B372949}

^{DANIEL R
HUBER 022948116}

^{ROBERT
EDWARD MCRAE 026089418}

^{DARRELL
GENE GILMORE 152661542}

ACTIVITY(IES)

^{COMMODITY
BROKERS}^Code:5000

^{BASED ON
ACRA'S RECORD AS AT 17/03/2006}

^{1) COMMODITY
BROKERS & DEALERS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{JPMORGAN
CHASE BANK}

^{CITIBANK NA}

ASSOCIATED COMPANY(IES)

^{CARGILL
PRESIDENT HOLDINGS PTE LTD}

^Singapore

SHAREHOLDERS(S)

^{CARGILL
ASIA PACIFIC HOLDINGS PTE. LTD.}^{16,206,500
Company}

^{Street
: 300 BEACH ROAD}

^#23-01

^{THE
CONCOURSE}

^{Town: SINGAPORE}

^{Postcode: 199555}

^{Country: Singapore}

FORMER SHAREHOLDER(S)

^{CARGILL
INTERNATIONAL S A}^25,372,300

^{CARGILL
INCORPORATED}^16,206,500

HOLDING COMPANY

^{CARGILL
ASIA PACIFIC HOLDINGS PTE.
200401312G}^{% : 100}

SUBSIDIARY(IES)

^{CARGILL
GLOBAL TRADING INDIA PVT LTD}

^India

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : LEVEL

Financial Situation: AVERAGE

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

^{Audit Qualification: UNQUALIFIED (CLEAN)
UNQUALIFIED (CLEAN) UNQUALIFIED (CLEAN)}

^{Date Account Lodged: 16/02/2006}

^{Balance Sheet Date: 31/05/2005 31/05/2004 31/05/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

^---
ASSETS

^{Tangible Fixed Assets: 1,193,242 1,238,221
852,927}

^{Investments 6,991,096 8,646,968
19,787,137}

^{Total Fixed Assets: 8,184,338 9,885,189 20,640,064}

^{Inventories: 89,899,755 22,806,715 25,085,589}

^{Receivables: 204,051,481 317,274,289 123,619,178}

^{Short Term Fin.
Assets: 61,876,773 67,549,073 16,412,398}

^{Cash,Banks, Securitis: 720,974 1,945
5,809,549}

^{Other current assets: 121,684,458 148,442,705
47,243,287}

^{Total Current Assets: 478,233,441 556,074,727
218,170,001}

^{TOTAL ASSETS: 486,417,779 565,959,916 238,810,065}

^{--- LIABILITIES}

^{Equity capital: 7,676,243 7,676,243 7,676,243}

^{Profit & lost Account: 87,203,183
97,115,018 37,840,567}

^{Total Equity: 94,879,426 104,791,261 45,516,810}

^{L/T deffered taxes: 35,000 35,000 2,016,079}

^{Other long term Liab.: 471 5,535}

^{Total L/T Liabilities: 35,000 35,471 2,021,614}

^{Trade Creditors: 127,618,657 175,270,253 48,222,692}

^{Prepay. & Def.
charges: 146,525,673 115,604,838 45,135,216}

^{Short term
liabilities: 484 7,350
89,175}

^{Advanced payments: 5,919,665 614,964}

^{Provisions: 7,921,515 5,652,548 2,186,324}

^{Other Short term Liab.: 103,517,359 163,983,231
95,638,234}

^{Total short term
Liab.: 391,503,353 461,133,184 191,271,641}

^{TOTAL LIABILITIES: 391,538,353 461,168,655 193,293,255}

PROFIT & LOSS ACCOUNT

^{Net Sales 3,474,942,496 2,740,982,651
1,928,348,883}

^{Gross Profit: 27,500,910 30,085,436
13,707,449}

^{Result of ordinary operations 15,468,301 62,159,041 14,000,834}

^{NET RESULT BEFORE TAX: 12,488,959
60,753,348
12,701,950}

^{Tax : 4,400,794 1,478,897
2,284,794}

^{Net income/loss year: 8,088,165
59,274,451
10,417,156}

^{Interest Paid: 2,979,342 1,405,693
1,298,884}

^{Depreciation: 722,914 1,026,909}

^{Dividends: 18,000,000}

^{Wages and Salaries: 9,821,874
9,797,848
6,799,332}

^{Financial Income: 723,079 270,884 371,595}

RATIOS

^{31/05/2005 31/05/2004 31/05/2003}

^{Turnover per employee: 29956400.83
23629160.78 16623697.27}

^{Net result / Turnover(%): 0.00
0.02 0.01}

^{Stock / Turnover(%): 0.03
0.01 0.01}

^{Net Margin(%): 0.23 2.16 0.54}

^{Return on Equity(%): 8.52
56.56 22.89}

^{Return on Assets(%): 1.66 10.47 4.36}

^{Dividends Coverage: 0.45
0.45 0.45}

^{Net Working capital: 86730088.00
94941543.00 26898360.00}

^{Cash Ratio: 0.00
0.00 0.03}

^{Quick Ratio: 0.52 0.69 0.68}

^{Current ratio: 1.22 1.21 1.14}

^{Receivables Turnover: 21.14
41.67 23.08}

^{Leverage Ratio: 4.13 4.40 4.25}

^{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}

^{Dividends Coverage :
Net income loss year/Dividends}

^{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

^{THE
FINANCIAL CONDITION OF THE COMPANY WAS SEEN TO BE FAIR IN VIEW OF THE
FOLLOWING:}

^{NET WORTH}

^{THE BALANCE SHEET WAS CONSIDERED
PASSABLE WITH NET WORTH DECLINED BY 9.46% FROM US$104,791,261 IN FY 2004 TO
US$94,879,426 IN FY 2005. THIS WAS DUE TO LOWER ACCUMULATED PROFIT OF
US$87,203,183 (2004: US $97,115,018); A DECLINE OF 10.21% FROM THE PRIOR
FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS
LARGELY FINANCED BY ACCRUALS WHICH MADE UP 37.43% (2004: 25.07%) OF THE
TOTAL CURRENT LIABILITIES AND AMOUNTED
TO US$146,525,673 (2004: US$115,604,838).}

^{IN ALL,
LEVERAGE RATIO FELL FROM 4.40 TIMES TO 4.13 TIMES AS A RESULT OF A GREATER
RELATIVE DECLINE IN TOTAL EQUITY THAN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY
SITUATION WAS PASSABLE AS SEEN FROM THE NET WORKING CAPITAL AND LIQUIDITY
RATIOS. CURRENT RATIO ROSE MARGINALLY TO 1.22 TIMES, UP FROM 1.21 TIMES AND
QUICK RATIO FELL TO 0.52 TIMES FROM 0.69 TIMES IN FY 2004.}

^{SIMILARLY, NET WORKING CAPITAL FELL
BY 8.65% FROM US$94,941,543 IN FY 2004 TO US$86,730,088.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF
26.78% FROM US$2,740,982,651 IN FY 2004 TO US$3,474,942,496 BUT NET PROFIT
DROPPED BY 86.35% TO US$8,088,165 (2004: US$59,274,451). HENCE, NET MARGIN FELL
TO 0.23% (2004: 2.16%).}

^{DEBT
SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT
BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE
DEBTORS ARE FORTHCOMING.}

BACKGROUND/OPERATION

^{THE COMPANY
WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 05/12/1967 AS A LIMITED
PRIVATE COMPANY AND WAS FORMERLY KNOWN AS "CARGILL COMMODITY TRADING PTE.
LTD.".}

^{ON
29/07/1993, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE OF "CARGILL
INTERNATIONAL TRADING PTE LTD".}

^{AS AT
17/03/2006, THE COMPANY HAS ISSUED AND PAID UP ORDINARY OF 1,650,000 SHARES OF VALUE 1,650,000 AND
ISSUED AND PAID UP PREFERENCE OF 145,565 SHARES OF VALUE S$14,556,500.}

^{PRINCIPAL ACTIVITIES:}

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

^{1)
COMMODITY BROKERS AND DEALERS}

^{DURING THE FINANCIAL YEAR UNDER
REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF THOSE RELATING TO
THE BUSINESS OF COMMODITIES TRADING.}

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

^{SUBJECT ENGAGES IN THE
FOLLOWING ACTIVITIES:}

^{*COMMODITIES
TRADERS}

BACKGROUND

^{SUBJECT HAS
BEEN AWARDED APPROVED INTERNATIONAL TRADE ("AIT") INCENTIVE TILL MAY
2003. UNDER THE AIT INCENTIVE, INCOME DERIVED FROM QUALIFYING TRADING
TRANSACTIONS IN APPROVED PRODUCTS BY THE COMPANY ARE TAXED AT THE CONCESSIONARY
RATE OF 10%.}

^{SUBJECT
ACTS AS THE REGIONAL HEADQUARTERS FOR CARGILL'S ASIA-PACIFIC OPERATIONS AND IS
MAINLY INVOLVED IN TRADING OF COMMODITIES SUCH AS STEEL, FOOD AND FEED GRAINS,
TROPICAL OILS, RUBBER AND COCOA.}

^{IT FOCUSSES
LARGELY ON COMMODITY TRADE FINANCE AND MERCHANTING IN THE REGION.}

^{RAW MATERIALS ARE IMPORTED FROM
SOUTH EAST ASIAN COUNTRIES SUCH AS INDONESIA AND MALAYSIA AND RE-EXPORTED IN
RESPONSE TO OVERSEAS DEMAND.}

^ACTIVITIES:

^{* ASIAN
TRADING AND MARKETING ARM OF CARGILL INTERNATIONAL SA}

^{*
COMMODITIES TRADING (SUCH AS FOOD, RICE, MINERAL, RUBBER, TEEL, ETC.)}

^{FROM THE
TELE-INTERVIEW CONDUCTED, THE FOLLOWING WAS GATHERED:}

^PURCHASES

^{*IMPORTS (%): -}

^{*TERMS OF IMPORT: TELEGRAPHIC TRANSFER,
ETC}

^{*IMPORT COUNTRIES: WORLDWIDE (MALAYSIA,
INDONESIA, ETC)}

^MARKETS

^{*LOCAL (%): -}

^{*TERMS SALES: -}

^{*EXPORT(%): -}

^{*TERMS OF EXPORT: TELEGRAPHIC TRANSFER,
ETC}

^{*EXPORT COUNTRIES: ASIA-PACIFIC REGION
(CHINA, THAILAND,}

^ETC).

^{SUBJECT IS A MEMBER OF
FOLLOWING ENTITIES:}

^{*PALM OIL REFINERS ASSOCIATION OF
MALAYSIA}

^{*SINGAPORE CHINESE CHAMBERS OF COMMERCE
& INDUSTRY}

^(SCCCI)

^{DURING THE
FINANCIAL YEAR, CARGILL ASIA PACIFIC HOLDINGS PTE LTD, INCORPORATED IN THE
REPUBLIC OF SINGAPORE, BECAME THE IMMEDIATE HOLDING CORPORATION BY ACQUIRING
THE SHARES OF THE COMPANY FROM CARGILL INCORPORATED, INCORPORATED IN THE UNITED
STATES OF AMERICA.}

^{THE
ULTIMATE HOLDING CORPORATION IS CARGILL INCORPORATED, INCORPORATED IN THE
UNITED STATES OF AMERICA.}

^{NUMBER OF EMPLOYEES: (31 MAY)}

^{*COMPANY - 2005: 116 (2004: 111; 2003:
92; 2002: 81; 2001: 115;}

^{2000: 112)}

^{*GROUP
- 2005: - (2004: -)}

^{REGISTERED AND BUSINESS
ADDRESS:}

^{300 BEACH ROAD}

^#23-01

^{THE CONCOURSE}

^{SINGAPORE 199555}

^{-OFFICE (RENTED PREMISE)}

^{-OWNED BY HONG FOK LAND PTE LTD}

^{-DATE OF CHANGE OF ADDRESS: 16/08/1993}

^WEBSITE:

^{http://www.cargill.com}

^EMAIL:

^{Geraldine_DeSouza@cargill.com}

MANAGEMENT

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

^{1) SYED MUNIR-UL HASAN, A PAKISTANI}

^{-BASED IN SINGAPORE.}

^{2) JERAL SYLVESTER D'SOUZA, A BRITISH}

^{-BASED IN SINGAPORE.}

^{3) PAUL JOHN HICKMAN, A BRITISH}

^{-BASED IN SINGAPORE.}

^{4) LYE PENG YEE, A SINGAPOREAN}

^{-HOLDS NO OTHER DIRECTORSHIP IN OUR
DATABASE.}

^{5) JITESH S/O KANTILAL AVLANI, A
SINGAPORE PERMANENT}

^RESIDENT

^{-HOLDS NO OTHER DIRECTORSHIP IN OUR
DATABASE.}

Singapore’s Country Rating 2005

Investment Grade

The steady political and economic environment has positive effects on an already good payment record of companies. Very weak default probability.

AFTER THE ROBUST ECONOMIC RECOVERY IN 2004, GROWTH SHOULD BECOME MORE MODERATE AMID A LIKELY SLOWDOWN OF WORLD DEMAND FOR ELECTRONIC PRODUCTS, WITH THAT SECTOR REPRESENTING NEARLY TWO-THIRDS OF SINGAPORE'S EXPORTS. THAT SLOWDOWN SHOULD NONETHELESS NOT JEOPARDISE THE SATISFACTORY PAYMENT RECORD OF MOST COMPANIES.

MOREOVER, PUBLIC SECTOR ACCOUNTS SHOULD AGAIN SHOW A SLIGHT SURPLUS, WITH THE PERSISTENCE OF SUBSTANTIAL EXTERNAL ACCOUNT SURPLUSES, LIMITED FOREIGN DEBT, AND COMFORTABLE FOREIGN EXCHANGE RESERVES. FURTHERMORE, THE BANKING SYSTEM HAS REMAINED ONE OF ASIA'S SOUNDEST, DESPITE STIFF DOMESTIC COMPETITION AND AN APPRECIABLE PROPORTION OF NON-PERFORMING LOANS.

HOWEVER, SINGAPORE'S RE-EXPORT ACTIVITY HAS BEEN SAGGING AND THE CURRENT DEVELOPMENT MODEL HAS REACHED ITS LIMITS. TO OFFSET THAT TREND, THE CITY-STATE HAS BEEN WORKING TO IMPROVE ITS POSITIONING. TO ENHANCE SINGAPORE'S ATTRACTIVENESS COMPARED TO OTHER REGIONAL COUNTRIES, GOVERNMENT AUTHORITIES HAVE BEEN REDUCING TAXES ON COMPANIES AND INCREASING THE NUMBER OF INCENTIVES AVAILABLE TO THEM. THEY HAVE ALSO BEEN PROGRESSIVELY PRIVATISING STATE-OWNED ENTERPRISES. FINALLY, WHILE DIVERSIFYING ITS INDUSTRY TOWARD PETROCHEMICAL AND PHARMACEUTICAL PRODUCTS, THE CITY-STATE HAS BEEN FOCUSING ON HIGH VALUE-ADDED SERVICES, BIOTECHNOLOGY DEVELOPMENT, AND ADVANCED RESEARCH.

ASSETS

A STRATEGIC REGIONAL HUB, SINGAPORE HAS ATTRACTED INVESTORS THANKS TO THE QUALITY OF ITS INFRASTRUCTURE AND FINANCIAL SYSTEM.
THE WORKFORCE IS VERY WELL TRAINED AND HIGHLY SKILLED.
ECONOMIC FUNDAMENTALS HAVE BEEN PARTICULARLY GOOD.
THE BUSINESS ENVIRONMENT HAS BEEN VERY FAVOURABLE.
POLITICAL CONTINUITY HAS BEEN REMARKABLE.

WEAKNESSES

THE ECONOMY'S SPECIALISATION IN ELECTRONIC HAS TENDED TO INCREASE ITS EXPOSURE TO SHIFTS IN WORLD ECONOMIC CONDITIONS.
THE DIVERSIFICATION UNDER WAY, NOTABLY IN SERVICES, SHOULD BE ACCELERATED TO BOLSTER THE ECONOMY'S COMPETITIVENESS IN A REGIONAL ENVIRONMENT UNDERGOING PROFOUND CHANGE.
REFORMS ARE STILL NEEDED TO FOSTER ENTREPRENEURIAL SPIRIT AND INNOVATION AS WELL AS MODERNISATION OF THE EDUCATION SYSTEM.

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
s56-70	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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