MIRA INFORM REPORT

Report Date :

23.08.2007

IDENTIFICATION DETAILS

Name :	ALPHA INVESTMENT PARTNERS LIMITED
Registered Office :	^230 Victoria Strret, #15-03/04, Bugis Junction Tower, Singapore – 188024
Country :	Singapore
Financials (as on) :	31.12.2006
Date of Incorporation :	^16/06/2001
Com. Reg. No.:	^200103980D
Legal Form :	^Pub Ltd Co
Line of Business :	Fund Management Company

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear

Subject Company

ALPHA INVESTMENT PARTNERS LIMITED

Line Of Business 

FUND MANAGEMENT COMPANY

Parent Company

KEPPEL LAND LIMITED

(PERCENTAGE OF SHAREHOLDING: 100%)

Financial Elements

FY 2006

COMPANY

Sales : S$16,169,997

Networth : S$9,915,820

Paid-Up Capital : S$1,000,000

Net result : S$9,703,397

Net Margin(%) : 60.01

Return on Equity(%) : 97.86

Leverage Ratio : 0.45

COMPANY IDENTIFICATION

^{Subject Company : ALPHA INVESTMENT PARTNERS LIMITED}

^{Former Name : KEPPEL LAND FUND MANAGEMENT LIMITED}

^{Business Address: 230 VICTORIA STRRET}

^#15-03/04

^{BUGIS JUNCTION TOWER}

^{Town: SINGAPORE}

^{Postcode: 188024}

^{County: -}

^{Country: Singapore}

^{Telephone: 6433 7887}

^{Fax: 6334 0908}

^{ROC Number: 200103980D}

^{Reg. Town: -}

PREVIOUS IDENTIFICATION

^{KEPPEL LAND FUND MANAGEMENT LIMITED}

^{ALPHA INVESTMENT PARTNERS LTD.}

SUMMARY

^{All amounts in this report are in: SGD unless otherwise stated}

^{Legal Form: Pub Ltd Co}

^{Date Inc.: 16/06/2001}

^{Previous Legal Form: -}

^{Summary year : 31/12/2006}

^{Sales: 16,169,997}

^{Networth : 9,915,820}

^{Capital: -}

^{Paid-Up Capital: 1,000,000}

^{Employees: 17}

^{Net result : 9,703,397}

^{Share value: -}

^{AUDITOR: ERNST & YOUNG}

^{BASED ON ACRA'S AS AT 20/08/2007}

^{NO. OF SHARES CURRENCY AMOUNT}

^{ISSUED ORDINARY 1,000,000 SGD 1,000,000}

^{PAIR-UP ORDINARY - SGD 1,000,000}

REFERENCES

^{Litigation: No}

^{Company status : TRADING}

^{Started : 16/06/2001}

PRINCIPAL(S)

^{CHOO CHIN TECK S0557266E Director}

DIRECTOR(S)

^{TIMOTHY GRAHAM BRUCE WHITE M6790789 Director}

^{Appointed on : 01/01/2004}

^{Street : 17 DRUMCLIFF AVE KILLARNEY HEIGHTS}

^{Town: NEW SOUTH WALES}

^{Postcode: 2087}

^{Country: Australia}

^{CHOO CHIN TECK S0557266E Director}

^{Appointed on : 26/06/2001}

^{Street : 16A JEDBURGH GARDENS}

^{Town: SINGAPORE}

^{Postcode: 457110}

^{Country: Singapore}

^{LOH CHIN HUA S2183169G Director}

^{Appointed on : 14/01/2003}

^{Street : 51 UNIVERSITY ROAD}

^{Town: SINGAPORE}

^{Postcode: 297879}

^{Country: Singapore}

^{KEVIN WONG KINGCHEUNG S2221951J Director}

^{Appointed on : 26/06/2001}

^{Street : 25 CLAYMORE ROAD}

^#16-03

^{THE CLAYMORE}

^{Town: SINGAPORE}

^{Postcode: 229543}

^{Country: Singapore}

^{CHAE YOON BYUNG KN0639256 Director}

^{Appointed on : 02/12/2005}

^{Street : #2501 LOTTE CASTLE PINEHILL}

^{79 KARAKDONG, SONGPAGU}

^{Town: SEOUL}

^Postcode:

^{Country: Korea, Republic of}

^{TAN HUA MUI CHRISTINA S1707279Z Director}

^{Appointed on : 16/04/2007}

^{Street : 20 LORONG M TELOK KURAU}

^{Town: SINGAPORE}

^{Postcode: 425306}

^{Country: Singapore}

^{TANG KOK PENG S1758316F Director}

^{Appointed on : 16/04/2007}

^{Street : 32 ENG KONG GARDEN}

^#02-03

^{ENG KONG PARK}

^{Town: SINGAPORE}

^{Postcode: 599248}

^{Country: Singapore}

^{NG YU ENG S7601859F Company Secretary}

^{Appointed on : 01/07/2005}

^{Street : 123 MEYER ROAD}

^#17-02

^{THE MAKENA}

^{Town: SINGAPORE}

^{Postcode: 437934}

^{Country: Singapore}

^{LEONG FANG YUN S7715331D Company Secretary}

^{Appointed on : 18/10/2004}

^{Street : 47 NIM GREEN}

^{SELETAR HILLS ESTATE}

^{Town: SINGAPORE}

^{Postcode: 807629}

^{Country: Singapore}

^{ASAO MIKAMI TF9038555 Director}

^{Appointed on : 18/04/2005}

^{Street : 972-502 KAMIYABE-CHO}

^{TOTSUKA-KU, YOKOHAMA-SHI}

^{Town: KANAGAWA-KEN}

^{Postcode: 245-0053}

^{Country: Japan}

FORMER DIRECTOR(S)

^{LEE PIN LORRAINE S7036977Z}

^{LAURA LOW SHUEK LIN S7322075J}

ACTIVITY(IES)

^{MANAGEMENT CONSULTANTS Code:13355}

^{BASED ON ACRA'S RECORD AS AT 20/08/2007}

^{1. FUND MANAGEMENT ACTIVITIES; FUND MANAGEMENT}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

No Bankers Information In Our Database

SHAREHOLDERS(S)

^{KEPPEL LAND LIMITED 1,000,000 Company}

^{Street : 230 VICTORIA STREET}

^#15-05/08

^{BUGIS JUNCTION TOWERS}

^{Town: SINGAPORE}

^{Postcode: 188024}

^{Country: Singapore}

HOLDING COMPANY

^{KEPPEL LAND LIMITED 189000001G % : 100}

SUBSIDIARY(IES)

^{ALPHA INVESTMENT PARTNERS JAPAN KABUSHIKI KAISYA}

^Japan

^{ALPHA REITS MANAGER LTD}

Singapore

PAYMENT HISTORY AND EXPERIENCES

Trade Morality: AVERAGE

Liquidity : SUFFICIANT

Payments : REGULAR

Trend : UPWARD

Financial Situation:

AVERAGE

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 31/07/2007}

^{Balance Sheet Date: 31/12/2006 31/12/2005}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS}

^{Preliminary Exp 276,271 221,972}

^{Tangible Fixed Assets: 190,720 166,621}

^{Investments 1,125,312 1,243,904}

^{Total Fixed Assets: 1,592,303 1,632,497}

^{Receivables: 8,052,461 2,519,561}

^{Cash,Banks, Securitis: 2,805,052 1,125,661}

^{Other current assets: 1,942,628 787,419}

^{Total Current Assets: 12,800,141 4,432,641}

^{TOTAL ASSETS: 14,392,444 6,065,138}

^{--- LIABILITIES}

^{Equity capital: 1,000,000 1,000,000}

^{Profit & loss Account: 8,915,820 -787,577}

^{TOTAL EQUITY: 9,915,820 212,423}

^{Other long term Liab.: - 3,200,726}

^{Total L/T Liabilities: - 3,200,726}

^{Provisions: 1,454,786 317,943}

^{Prepay. & Def. charges: 2,882,048 1,298,995}

^{Other Short term Liab.: 139,790 1,035,051}

^{Total short term Liab.: 4,476,624 2,651,989}

^{TOTAL LIABILITIES: 4,476,624 5,852,715}

^{PROFIT & LOSS ACCOUNT}

^{Net Sales 16,169,997 6,021,501}

^{Gross Profit: 9,534,790 2,367,173}

^{NET RESULT BEFORE TAX: 10,967,066 3,494,663}

^{Tax : 1,263,669 317,943}

^{Net income/loss year: 9,703,397 3,176,720}

^{Interest Paid: 127,280 140,838}

^{Depreciation: 94,450 76,848}

^{Directors Emoluments: 1,237,443 673,895}

^{Purchases,Sces & Other Goods: 6,635,207 3,654,328}

^{Wages and Salaries: 4,371,076 2,338,299}

^{Financial Income: 49,149 12,848}

RATIOS

^{31/12/2006 31/12/2005}

^{Turnover per employee: 951176.29 354205.94}

^{Net result / Turnover(%): 0.60 0.53}

^{Fin. Charges / Turnover(%):0.01 0.02}

^{Net Margin(%): 60.01 52.76}

^{Return on Equity(%): 97.86 1495.47}

^{Return on Assets(%): 67.42 52.38}

^{Net Working capital: 8323517.00 1780652.00}

^{Cash Ratio: 0.63 0.42}

^{Quick Ratio: 2.43 1.37}

^{Current ratio: 2.86 1.67}

^{Receivables Turnover: 179.28 150.63}

^{Leverage Ratio: 0.45 27.55}

^{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}

^{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 IMPROVED BY 45.68 TIMES FROM S$212,423 IN FY 2005 TO S$9,915,820 IN FY 2006. THIS WAS DUE TO HIGHER ACCUMULATED PROFIT OF S$8,915,820 (2005: S$-787,577); A RISE OF 12.32 TIMES FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY ACCRUALS WHICH MADE UP 64.38% (2005: 48.98%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$2,882,048 (2005: S$1,298,995). IN ALL, LEVERAGE RATIO FELL FROM 27.55 TIMES TO 0.45 TIMES AS A RESULT OF A DECLINE IN TOTAL LIABILITIES AND A SUBSTANTIAL RISE IN TOTAL EQUITY.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL AND LIQUIDITY RATIOS. CURRENT RATIO ROSE TO 2.86 TIMES, UP FROM 1.67 TIMES AND QUICK RATIO IMPROVED TO 2.43 TIMES FROM 1.37 TIMES IN FY 2005.}

^{SIMILARLY, NET WORKING CAPITAL IMPROVED BY 3.67 TIMES FROM S$1,780,652 IN FY 2005 TO S$8,323,517.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 1.69 TIMES FROM S$6,021,501 IN FY 2005 TO S$16,169,997 AND NET PROFIT ROSE BY 2.05 TIMES TO S$9,703,397 (2005: S$3,176,720). HENCE, NET MARGIN ROSE TO 60.01% (2005: 52.76%).}

^REVENUE:

^{-MANAGEMENT FEE INCOME - 2006: S$16,096,981 (2005: S$5,907,557)}

^{-OTHER INCOME - 2006: S$73,016 (2005: S$113,944)}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENT BY TRADE DEBTORS ARE FORTHCOMING. IN ADDITION, ITS INTEREST COVERAGE WAS HEALTHY CONSIDERING THAT ITS INTEREST EXPENSES WERE LOW AT S$127,280 IN FY 2006 (2005: S$140,838)}

^{AVERAGE COLLECTION PERIOD HAS INCREASED FROM 150.63 DAYS TO 179.28 DAYS. A HIGHER AVERAGE COLLECTION PERIOD POSES GREATER RISK OF TURNING INTO BAD DEBTS. HOWEVER, IT IS STILL WORTH NOTING THAT DEBT SERVICING ABILITY MAY NOT BE AFFECTED IF TRADE RECEIVABLES ARE FORTHCOMING.}

^{NON-CURRENT ASSETS:}

^{THE FOLLOWING ITEMS ARE CLASSIFIED UNDER PRELIMINARY:}

^{-DEFERRED EXPENDITURES - 2006: S$276,271 (2005: S$221,972)}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{SUBSEQUENT EVENT}

^{SUBSEQUENT TO THE FINANCIAL YEAR END, THE COMPANY HAS INCORPORATED A SUBSIDIARY COMPANY, ALPHA INVESTMENT PARTNERS KOREA PRIVATE LIMITED, IN KOREA.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 16/06/2001 AS A PUBLIC COMPANY LIMITED BY SHARES AND IS TRADING UNDER ITS NAMESTYLE AS "KEPPEL LAND FUND MANAGEMENT LIMITED".}

^{SUBSEQUENTLY, THE COMPANY CHANGED TO ITS NAMESTYLE AS "ALPHA INVESTMENT PARTNERS LTD.".}

^{SUBSEQUENTLY, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE AS "ALPHA INVESTMENT PARTNERS LIMITED."}

^{AS AT 20/08/2007, THE COMPANY HAS ISSUED AND PAID-UP CAPITAL OF 1,000,000 SHARES OF A VALUE OF S$1,000,000.}

^{PRINCIPAL ACTIVITIES:}

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

^{1. FUND MANAGEMENT ACTIVITIES; FUND MANAGEMENT}

^{DURING THE FINANCIAL YEAR UNDER REVIEW, THE PRINCIPAL ACTIVITIES OF THE COMPANY CONSIST OF A FUND MANAGEMENT COMPANY. THE PRINCIPAL ACTIVITIES OF THE COMPANY'S SUBSIDIARY COMPANIES ARE THAT OF REAL ESTATE INVESTMENT ADVISORY AND THAT OF INVESTMENT COMPANY.}

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

^{BACKGROUND OF THE SUBJECT:}

^{REAL ESTATE INVESTMENT ADVISORY FIRM MANAGED BY A TEAM OF ESTABLISHED PROFESSIONALS WITH PROVEN FIDUCIARY EXPERIENCE. AS AT JUNE 2007, GROSS VALUE OF ASSETS UNDER AIP'S MANAGEMENT AMOUNT TO USD1.6 BILLION.}

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* FUND MANAGEMENT COMPANY}

^{PRODUCTS AND SERVICES:}

^{ASIA NO.1 PROPERTY FUND}

^{THE ASIA NO.1 PROPERTY FUND IS AN OPPORTUNISTIC DIRECT PROPERTY FUND. THE FUND HAS A PAN-ASIA STRATEGY FOR HIGHER RETURNING INVESTMENTS. THIS CLOSE-ENDED FUND HAS SUCCESSFULLY INVESTED IN A NUMBER OF ASIA CITIES INCLUDING BANGKOK, BEIJING, HONG KONG, TOKYO, SINGAPORE AND SEOUL. THE FUND IS FULLY COMMITTED AND HAS ALSO BEGUN TO REALIZE SOME OF ITS INVESTMENTS.}

^{ALPHA CORE-PLUS REAL ESTATE FUND}

^{THE ALPHA CORE-PLUS REAL ESTATE FUND IS A DIRECT PROPERTY FUND THAT TARGETS THE MATURE MARKETS OF JAPAN, SINGAPORE, HONG KONG AND SOUTH KOREA. THE FUND EMPHASIZES A BALANCE BETWEEN INCOME AND APPRECIATION RETURNS. ALPHA CORE-PLUS REAL ESTATE FUND IS CLOSED. THE INVESTMENTS MADE BY THE FUND ARE BENEFITING FROM THE ECONOMIC GROWTH OF THESE ASIAN COUNTRIES AND ARE EXPERIENCING GOOD OCCUPANCY AND RENTAL GROWTH}

^{ALPHA REAL ESTATE SECURITIES FUND}

^{THE ALPHA REAL ESTATE SECURITIES FUND IS AN OPEN-ENDED FUND THAT INVESTS IN LISTED REITS AND REAL ESTATE SECURITIES GLOBALLY. ESTABLISHED MORE THAN THREE YEARS AGO, THE FUND HAS CONSISTENTLY OUTPERFORMED ITS TARGET RETURN.}

^{AIB ALPHA JAPAN FUND}

^{THE AIB ALPHA JAPAN FUND IS A SINGLE COUNTRY DIRECT PROPERTY FUND. THE FUND WILL INVEST IN JAPAN ONLY. THIS CLOSE-ENDED FUND WAS RAISED TOGETHER WITH AIB PRIVATE BANKING, ONE OF IRELAND'S LARGEST BANKS.}

^{FROM THE TELE-INTERVIEW CONDUCTED ON 23/08/2007, THE FOLLOWING WAS GATHERED:}

^{NUMBER OF EMPLOYEES:}

^{* COMPANY - 2007: 17}

^{NO OTHER TRADE INFORMATION IS AVAILABLE ON 23/08/2007.}

^{THE COMPANY IS WHOLLY-OWNED BY KEPPEL LAND LIMITED, INCORPORATED IN SINGAPORE. THE ULTIMATE HOLDING COMPANY IS KEPPEL CORPORATION LIMITED, INCORPORATED IN SINGAPORE.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{* COMPANY - 2006: NOT AVAILABLE (2005: NOT AVAILABLE; 2004: NOT AVAILABLE; 2003: 9)}

^{* GROUP - 2006: - (2005: -)}

^{REGISTERED ADDRESS:}

^{1 HARBOURFRONT AVENUE}

^{#18-01 KEPPEL BAY TOWER}

^{SINGAPORE 098632}

^{- DATE OF CHANGE OF ADDRESS: 09/05/2003}

^{BUSINESS ADDRESS:}

^{230 VICTORIA STREET}

^{#15-03/04 BUGIS JUNCTION TOWER}

^{SINGAPORE 188024}

^{- RENTED PREMISE}

^{- OWNED BY BCH OFFICE INVESTMENT PTE LTD}

^WEBSITE:

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

^EMAIL:

^-

MANAGEMENT

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

^{1) CHAE YOON BYUNG, A SOUTH KOREAN}

^{- BASED IN SOUTH KOREA.}

^{2) TIMOTHY GRAHAM BRUCE WHITE, AN AUSTRALIAN}

^{- BASED IN AUSTRALIA.}

^{3) CHOO CHIN TECK, A SINGAPOREAN}

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

^{4) TAN HUA MUI CHRISTINA, A SINGAPOREAN}

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

^{5) TANG KOK PENG, A SINGAPOREAN}

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

^{6) LOH CHIN HUA, A SINGAPOREAN}

^{- OTHER DIRECTORSHIP(S) IN OUR DATABASE:}

^{INTER-ROLLER ENGINEERING LIMITED}

^{ALPHA INVESTMENT PARTNERS LIMITED}

^{ASIA REAL ESTATE FUND MANAGEMENT LIMITED}

^{7) KEVIN WONG KINGCHEUNG, A SINGAPOREAN}

^{- OTHER DIRECTORSHIP(S) IN OUR DATABASE:}

^{KEPPEL LAND LIMITED}

^{SAFE ENTERPRISES PTE LTD}

^{KEPPEL BAY PTE LTD}

^{D. L .PROPERTIES LTD.}

^{BINTAN LAGOON RESORT LTD}

^{SEDONA HOTELS INTERNATIONAL PTE LTD}

^{BCH HOTEL INVESTMENT PTE LTD}

^{WISELAND INVESTMENT PTE LTD}

^{BINTAN RESORT MANAGEMENT PTE LTD}

^{SINGAPORE SUZHOU INDL HOLDINGS PL}

^{8) ASAO MIKAMI, A JAPANESE}

^{- BASED IN JAPAN.}

Singapore’s Country Rating 2007

Investment Grade

IN SINGAPORE, THE POLITICAL SITUATION REMAINS STABLE.

SINGAPORE BOASTS THE BEST GOVERNANCE IN ASIA, WITH AN EFFECTIVE LEGAL SYSTEM FACILITATING DEBT COLLECTION AND TO A HIGH DEGREE OF FINANCIAL TRANSPARENCY.

EXTERNAL ACCOUNTS HAVE REMAINED SUBSTANTIALLY IN SURPLUS, CONTRIBUTED TO THE DYNAMISM OF THE ELECTRONICS AND PHARMACEUTICALS SECTORS AND TO REPATRIATION OF PROFITS FROM SINGAPORE INVESTMENTS. THE FINANCIAL AND TOURISM SECTORS HAVE ALSO CONTRIBUTED TO THE LARGE CURRENT ACCOUNT SURPLUS.

SINGAPORE CONTINUES TO KEENLY WELCOME FOREIGN INVESTMENT AND OFFERS A VERY OPEN AND WELL-PLANNED ECONOMIC AND POLITICAL ENVIRONMENT. IT HAS BEEN IMPLEMENTING AMBITIOUS DIVERSIFICATION STRATEGY, FOCUSED PARTICULARLY ON THE CHEMICALS AND PHARMACEUTICAL SECTORS.

THE GOVERNMENT USES FOREIGN DIRECT INVESTMENT TO DEVELOP PRIORITY SECTORS (ELECTRONICS, CHEMICALS, BIOTECHNOLOGY). THE AIM IS TO ENCOURAGE THE GROWTH OF HIGH ADDED-VALUE ACTIVITIES AND TURN SINGAPORE INTO A REGIONAL HUB FOR FOREIGN INVESTORS INTERESTED IN ASIA.

CERTAIN SECTORS (MEDIA, LEGAL AND FINANCIAL SERVICES) ARE HOWEVER ONLY PARTIALLY OPEN TO FOREIGN INVESTMENT. THESE SECTORS ARE SLOWLY OPENING UP, BUT THE PROGRESS IS SLOW.

AFTER HIGH GROWTH IN 2006, BUOYED BY THE DYNAMISM OF BOTH EXPORTS AND HOUSEHOLD CONSUMPTION, A SLOWDOWN IS EXPECTED IN 2007.

ASSETS

• MAJOR EXPORTER OF CAPITAL IN ASIA, NOTABLY VIA THE STATE-OWNED TEMASEK HOLDING COMPANY.
• HIGH QUALITY COMPETITIVENESS IN ASIA
• EXCELLENT BUSINESS CLIMATE
• POLITICAL STABILITY.

WEAKNESSES

• SKILLED MANPOWER HAS BEEN LACKING IN THE SECTORS TARGETED FOR DEVELOPMENT.
• AN AGEING POPULATION COULD, ULTIMATELY, AFFECT ECONOMIC PERFORMANCE.
• GROWING INEQUALITY AND THE EMERGENCE OF LONG-TERM UNEMPLOYMENT AMONG THE LEAST SKILLED COULD GENERATE SOCIAL TENSIONS.
• BEING THE WORLD’S MOST OPEN ECONOMY, IT HAS BEEN VULNERABLE TO WORLD ECONOMIC DOWNTURNS.

FINANCIAL SERVICES SECTOR

PAST PERFORMANCE

THE FINANCIAL SERVICES SECTOR CONTINUED TO GROW RAPIDLY IN THE FIRST QUARTER FOLLOWING A 9.2% EXPANSION FOR THE YEAR 2006. ON A YEAR-ONYEAR BASIS, THE SECTOR EXPANDED BY 13%. ON A SEASONALLY-ADJUSTED QUARTER-ON-QUARTER BASIS, GROWTH CAME IN AT 21%.

ALL MAJOR FINANCIAL CLUSTERS SAW STRONG PERFORMANCES, WITH ROBUST EXPANSIONS IN THE CAPITAL AND MONEY MARKETS. THE DOMESTIC STOCK MARKET RECORDED A 69% JUMP IN TURNOVER VALUE IN THE FIRST QUARTER OF THE YEAR, DESPITE THE BRIEF BUT SHARP CORRECTION TO STOCK PRICES IN LATE FEBRUARY. THE WEALTH ADVISORY CLUSTER REMAINED BUOYANT, IN LINE WITH CONTINUED STRENGTH IN THE REGIONAL AND DOMESTIC ECONOMIC ENVIRONMENT. ACTIVITY IN THE FOREX MARKETS ALSO ROSE BY 20% DURING THE QUARTER. AT THE SAME TIME, THE BANKING CLUSTER SAW STRONG GROWTH IN BOTH THE ASIAN DOLLAR MARKET AND DOMESTIC SEGMENT.

LOANS TO NON-BANK CUSTOMERS GREW BY 10% IN THE QUARTER 1. THE STOCK OF TOTAL LOANS IN THE DOMESTIC BANKING SECTOR STOOD AT $201 BILLION AT THE END OF MARCH, $6.8 BILLION HIGHER THAN THE LEVEL AT THE END OF 2006.

CREDIT GROWTH WAS BROAD-BASED, ALTHOUGH BUSINESS LOANS ACCOUNTED FOR THE BULK OF THE INCREASE, RISING BY 17%. LENDING TO THE TRANSPORT AND STORAGE, AND BUSINESS SERVICES SEGMENTS WAS ROBUST, RECORDING INCREASES OF 48% AND 29%, RESPECTIVELY. CREDIT EXTENDED TO THE BUILDING AND CONSTRUCTION SECTOR ALSO ROSE BY 24%, REFLECTING IN PART THE ACCELERATION IN COMMERCIAL BUILDING ACTIVITY. IN COMPARISON, CONSUMER-RELATED LENDING RECORDED A 3.4% EXPANSION DURING THE PERIOD, AS HOUSING LOANS CONTINUED TO SEE RELATIVELY SLUGGISH GROWTH.

LOANS BY FINANCE COMPANIES ROSE BY 5.3% IN QUARTER 1. HOUSING AND HIRE-PURCHASING LOANS DECLINED BY 1.1% AND 6.0% RESPECTIVELY, ALTHOUGH THIS WAS MORE THAN OFFSET BY THE STRONG EXPANSION IN LOANS TO THE OTHERS CATEGORY (LIKE PERSONAL AND HOUSEHOLD SERVICES). THE OVERALL STOCK OF LOANS EXTENDED BY FINANCE COMPANIES INCREASED BY $421 MILLION FROM END-MARCH 2006 TO $8.4 BILLION AS AT END-MARCH 2007.

THE STOCK OF TOTAL ASSETS/LIABILITIES IN THE ASIAN DOLLAR MARKET ROSE BY 20% TO REACH US$739 BILLION IN THE FIRST QUARTER, UP FROM US$699 BILLION AS AT END-DECEMBER 2006. THE INCREASE CAME ON THE BACK OF STRONG LENDING ACTIVITY IN BOTH THE INTERBANK AND NON-BANK MARKETS. THE LATTER RECORDED A MARKED 22% EXPANSION, AS LENDING TO REGIONS SUCH AS EAST ASIA AND EUROPE CONTINUED TO GATHER PACE. LOANS IN THE INTERBANK SEGMENT ALSO ROSE BY 19%, COMPARED WITH GROWTH OF 11% IN THE PRECEDING QUARTER.

OUTLOOK

WITHIN THE FINANCIAL SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 29% OF FIRMS, INCLUDING BANKS AND FINANCE COMPANIES, FUND MANAGEMENT FIRMS AND INSURANCE COMPANIES, EXPECTS AN IMPROVEMENT IN THE BUSINESS INDUSTRY FOR THE NEXT QUARTER.

SOURCES: DEPARTMENT OF STATISTICS, SINGAPORE

MONETARY AUTHORITY OF SINGAPORE

MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

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.	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

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions