MIRA INFORM REPORT

Report Date :

2^nd February, 2007

IDENTIFICATION DETAILS

Name :	HONEST TRADING COMPANY (PRIVATE) LIMITED
Registered Office :	11 Syed Alwi Road, #02-03, Teck Heng Long Building, Singapore 207629, Singapore
Country :	Singapore
Financials (as on) :	31.12.2005
Date of Incorporation :	08/04/1969
Legal Form :	Pte Limited
Line of Business :	General Merchandising, Installation of Teak Parquet, Joinery and Other Woodworks and Acting As Agents

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

Company Name

HONEST TRADING COMPANY (PRIVATE) LIMITED

Line Of Business 

GENERAL MERCHANDISING, INSTALLATION OF TEAK PARQUET, JOINERY AND OTHER WOODWORKS AND ACTING AS AGENTS

Parent Company

GAMA HOLDINGS CO PTE LTD

(PERCENTAGE OF SHAREHOLDINGS: 99.99%)

Financial Elements

FY 2005

COMPANY

Sales : S$7,112,160

Networth : S$3,370,125

Paid-Up Capital : S$1,600,300

Net result : S$200,496

Net Margin(%) : 2.82

Return on Equity(%) : 5.95

Leverage Ratio : 1.40

Rating

Credit Rating : Sing $ 1 000 001 – Sing. $ 5 00 000

BUSINESS INFORMATION REPORT

COMPANY IDENTIFICATION

Subject Company : HONEST TRADING COMPANY (PRIVATE) LIMITED

Former Name : -

Business Address : 11 SYED ALWI ROAD, #02-03, TECK HENG LONG BUILDING

Town : SINGAPORE

Postcode : 207629

County : -

Country : Singapore

Telephone : 6292 9888

Fax : 6292 8666

ROC Number : 196900192K

Reg. Town : -

SUMMARY

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

Legal Form : Pte Ltd

Date Inc. : 08/04/1969

Previous Legal Form : -

Summary year : 31/12/2005

Sales : 7,112,160

Net worth : 3,370,125

Capital : 2,000,000

Paid-Up Capital : 1,600,300

Employees : Not Available

Net result : 200,496

Share value : 100

Auditor : NG, LEE & ASSOCIATES –DFK

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 08/04/1969}

PRINCIPAL(S)

^{TAN CHIAH WAH S0101027A Director}

DIRECTOR(S)

TAN CHIAH WAH S0101027A Director

Appointed on : 20/05/1986

Street : 6 BUKIT TUNGGAL ROAD

Town : SINGAPORE

Postcode : 309692

Country : Singapore

TAN YEOW WAH S0122183C Director

Appointed on : 20/09/1976

Street : 6 BUKIT TUNGGAL ROAD

Town : SINGAPORE

Postcode : 309692

Country : Singapore

TAN SOON HUA S0150401J Director

Appointed on : 20/05/1986

Street : 376 THOMSON ROAD, #08-03, THE ALBANY

Town : SINGAPORE

Postcode : 298130

Country : Singapore

CHIA HUI SIANG S0944615Z Director

Appointed on : 28/09/1970

Street : 6 BUKIT TUNGGAL ROAD

Town : SINGAPORE

Postcode : 309692

Country : Singapore

TEOH CHYE HUAT S1057675Z Director

Appointed on : 12/07/1971

Street : 73 JALAN CHENGKEK

Town : SINGAPORE

Postcode : 369296

Country : Singapore

TAN SEOW HUA S1105118I Director

Appointed on : 15/10/1986

Street : 6 BUKIT TUNGGAL ROAD

Town : SINGAPORE

Postcode : 309692

Country : Singapore

TAN JIAK HWA S1298554A Director

Appointed on : 20/05/1986

Street : 62 PEMIMPIN PLACE, CORAL PARK

Town : SINGAPORE

Postcode : 576059

Country : Singapore

ALISON SEE LAY ENG S2092542F Company Secretary

Appointed on : 02/05/1984

Street : 218 ANG MO KIO AVENUE 1, #08-909

Town : SINGAPORE

Postcode : 560218

Country : Singapore

TAN YEOW WAH S0122183C Manager

Appointed on : 01/08/1982

Street : 6 BUKIT TUNGGAL ROAD

Town : SINGAPORE

Postcode : 309692

Country : Singapore

ACTIVITY(IES)

^{IMPORTERS And EXPORTERS Code:11760}

^{WOODWORKERS Code:24140}

^{COSMETICS And TOILET PREPARATIONS - WHSLE And MFRS Code:5810}

^{GENERAL MERCHANDISE - WHSLE Code:10220}

^{BASED ON ACRA'S RECORD AS AT 31/01/2007}

^{1) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS & EXPORTERS)}

^{GENERAL MERCHANDISE INCLUDE BEAUTY PRODUCTS & SERVICES,}

^{INSTALLATION OF TEAK PARQUET FLOORING JOINERY & OTHER WOODWORKS}

CHARGES

No Charges On Premises/Property In Our Database

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{UNITED OVERSEAS BANK LIMITED}

^{OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{DBS BANK LTD.}

ASSOCIATED COMPANY(IES)

^{CHANSON COSMETIC SDN BHD}

^Malaysia

SHAREHOLDERS(S)

GAMA HOLDINGS CO PTE LTD 16,002 Company

Street : 11 SYED ALWI ROAD, #02-03, TECK HENG LONG BUILDING

Town : SINGAPORE

Postcode : 207629

Country : Singapore

CHIA HUI SIANG 1 Private Person

Street : 6 BUKIT TUNGGAL ROAD

Town : SINGAPORE

Postcode : 309692

Country : Singapore

HOLDING COMPANY

^{GAMA HOLDINGS CO PTE LTD 196300207D %: 99.99}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

LITIGATION(S)

No Litigation In Our Database

FINANCIAL ELEMENTS

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

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

^{Date Account Lodged: 14/09/2006}

^{Balance Sheet Date: 31/12/2005 31/12/2004 31/12/2003}

^{Number of weeks: 52 52 52}

^{Consolidation Code: COMPANY COMPANY COMPANY}

ASSETS

^{Tangible Fixed Assets: 274,582 377,891 465,786}

^{Investments 120,054 33,687 94,715}

^{Total Fixed Assets: 394,636 411,578 560,501}

^{Inventories: 749,429 887,832 857,317}

^{Receivables: 1,458,986 1,520,513 1,924,588}

^{Cash,Banks,Securities: 5,178,965 5,510,054 4,294,639}

^{Other current assets: 311,010 345,004 323,462}

^{Total Current Assets: 7,698,390 8,263,403 7,400,006}

^{TOTAL ASSETS: 8,093,026 8,674,981 7,960,507}

LIABILITIES

^{Equity capital: 1,600,300 1,600,300 1,600,300}

^{Reserves: -27,671 -9,086 -}

^{Profit & loss Account: 1,797,496 1,534,395 1,559,467}

^{Total Equity: 3,370,125 3,125,609 3,159,767}

^{L/T deferred taxes: 22,600 22,600 22,600}

^{Total L/T Liabilities: 22,600 22,600 22,600}

^{Trade Creditors: 638,426 943,210 1,010,665}

^{Prepay. & Def. charges: 207,573 207,178 246,153}

^{Short term liabilities: - - 1,658}

^{Advanced payments: 1,645,777 1,625,882 547,095}

^{Due to Bank: 52,846 - 249,669}

^{Provisions: 92,796 68,022 28,676}

^{Other Short term Liab.: 2,062,883 2,682,480 2,694,224}

^{Total short term Liab.: 4,700,301 5,526,772 4,778,140}

^{TOTAL LIABILITIES: 4,722,901 5,549,372 4,800,740}

PROFIT & LOSS ACCOUNT

^{Net Sales 7,112,160 6,285,103 7,508,242}

^{Result of ordinary operations - - 4,393}

^{NET RESULT BEFORE TAX: 239,932 22,764 3,980}

^{Tax: 39,436 47,264 28,488}

^{Net income/loss year: 200,496 -24,500 -24,508}

^{Interest Paid: - - 413}

^{Depreciation: 66,169 87,965 109,511}

^{Directors Emoluments: 316,374 289,821 328,476}

^{Wages and Salaries: 680,239 712,048 796,911}

^{Financial Income: 78,436 36,811 411}

RATIOS

^{31/12/2005 31/12/2004 31/12/2003}

^{Net result / Turnover(%): 0.03 -0.00 -0.00}

^{Stock / Turnover(%): 0.11 0.14 0.11}

^{Net Margin(%): 2.82 -0.39 -0.33}

^{Return on Equity(%): 5.95 -0.78 -0.78}

^{Return on Assets(%): 2.48 -0.28 -0.31}

^{Net Working capital: 2998089.00 2736631.00 2621866.00}

^{Cash Ratio: 1.10 1.00 0.90}

^{Quick Ratio: 1.41 1.27 1.30}

^{Current ratio: 1.64 1.50 1.55}

^{Receivables Turnover: 73.85 87.09 92.28}

^{Leverage Ratio: 1.40 1.78 1.52}

^{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

^{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 7.82% FROM S$3,125,609 IN 2004 TO S$3,370,125 IN 2005.}

^{THIS WAS DUE TO HIGHER RETAINED EARNINGS OF S$1,797,496 (2004: S$1,534,395); A RISE OF 17.15% FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY OTHER SHORT TERM LIABILITIES WHICH MADE UP 43.89% (2004: 48.54%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO S$2,062,883 (2004: S$2,682,480). THE BREAKDOWN IS AS FOLLOWS:}

^{-AMOUNT OWING TO HOLDING COMPANY - 2005: S$2,049,924 (2004: S$2,667,843)}

^{-AMOUNT OWING TO ASSOCIATED COMPANY - 2005: S$6,546 (2004: S$4,578)}

^{-AMOUNT OWING TO DIRECTORS - 2005: S$6,413 (2004: S$10,059)}

^{TRADE CREDITORS AND BILLS PAYABLES FELL BY 32.31% TO S$638,426 (2004: S$943,210).}

^{AMOUNTS DUE TO BANKS, WHHICH CONSIST OF TRUST RECEIPTS, AMOUNTED TO S$52,846 IN 2005 (2004: - ).}

^{SUBJECT'S LONG TERM LIABILITY, WHICH CONSIST OF DEFERRED TAXATION, REMAINED AT S$22,600.}

^{IN ALL, LEVERAGE RATIO FELL FROM 1.78 TIMES TO 1.40 TIMES AS A RESULT OF A RISE IN TOTAL EQUITY AND A FALL IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL BY 9.55% TO S$2,998,089 (2004: S$2,736,631)}

^{CURRENT RATIO ROSE TO 1.64 TIMES, UP FROM 1.50 TIMES AND QUICK RATIO IMPROVED TO 1.41 TIMES FROM 1.27 TIMES IN 2004.}

^{PROFITABILITY:}

^{REVENUE POSTED AN INCREASE OF 13.16% FROM S$6,285,103 IN 2004 TO S$7,112,160 AND SUBJECT ACHIEVED A NET PROFIT OF S$200,496, AS COMPARED TO THE NET LOSS OF S$24,500 IN 2004.}

^{HENCE, NET MARGIN ROSE TO POSITIVE REGION OF 2.82% (2004: -0.39%).}

^REVENUE:

^{-SALE OF GOODS - 2005: S$6,818,270 (2004: S$5,582,818)}

^{-CONTRACT REVENUE - 2005: S$196,291 (2004: S$608,179)}

^{-AGENCY FEE - 2005: S$97,599 (2004: S$94,106)}

^{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, SUBJECT DID NOT INCUR ANY INTEREST EXPENSES DURING THE FINANCIAL YEAR UNDER REVIEW.}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{TRUST RECEIPTS}

^{TRUST RECEIPTS AND OTHER BANKING FACILITES ARE SECURED BY CORPORATE GUARANTEE GIVEN BY THE ULTIMATE HOLDING COMPANY AND PERSONAL GUARANTEES GIVEN BY CERTAIN DIRECTORS OF THE COMPANY.}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON 08/04/1969 AS A LIMITED PRIVATE COMPANY AND ITS TRADING UNDER ITS PRESENT NAMESTYLE OF "HONEST TRADING COMPANY (PRIVATE) LIMITED".}

^{AS AT 30/01/2007, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 16,003 SHARES OF A VALUE OF S$1,600,300.}

^{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 & EXPORTERS)}

^{GENERAL MERCHANDISE INCLUDE BEAUTY PRODUCTS & SERVICES, CONSULTANTS ON SALON AND}

^{SPA SETUP}

^{2) JOINERY AND OTHER WOODWORKS (EG LAMINATED OR PARQUET FLOORING) INSTALLATION OF}

^{TEAK PARQUET FLOORING JOINERY & OTHER WOODWORKS}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL ACTIVITIES ARE THOSE OF GENERAL MERCHANDISING, INSTALLATION OF TEAK PARQUET, JOINERY AND OTHER WOODWORKS AND ACTING AS AGENTS.}

^{FROM THE RESEARCH DONE, SUBJECT IS AN IMPORTERS, EXPORTERS AND DISTRIBUTORS OF SUNDRY GOODS, TEAKWOOD PRODUCTS, HOUSEHOLD WARES, KITCHEN UTENSILS, AQUACULTURE AERATORS, COSMETICS, GUM RESIN, GUM TURPENTINE, ETC.}

^{TRADE NAMES:}

^{*CHANSON--COSMETICS,SKIN CARE,MAKE UP,ETC. (JP)}

^{*COOKVESSEL--ALUMINIUM FANCY WHISTLING KETTLE (JP)}

^{*LEC--PLASTIC,STAINLESS STEEL HOUSEHOLD WARES (JP)}

^{*MEIWA--TABLECOTH,RUNNER,ETC. (JP)}

^{*MYODO--KETTLE,PAN,CUTLERY,KITCHEN TOOLS,ETC. (JP)}

^{*LENDAN--SKIN CARE (ES)}

^{AGENTS FOR:}

^{*CHANSON COSMETICS INC. (JAPAN)}

^{*LEC INC. (JAPAN)}

^{*MYODO & CO.LTD (JAPAN)}

^{*COOKVESSEL CO.LTD (JAPAN)}

^{*MEIWA GRAVURE CO.LTD (JAPAN)}

^{*BEE PRODUCTS INDUSTRY CO., LTD (THAILAND)}

^{SUBJECT IS A MEMBER OF THE FOLLOWING ENTITY:}

^{*SINGAPORE CHINESE CHAMBERS OF COMMERCE & INDUSTRY}

^{NO OTHER TRADE INFORMATION WAS MADE AVAILABLE AS TELE-INTERVIEW WAS NOT GRANTED ON 02/02/2007.}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY IS GAMA HOLDINGS CO (PTE) LTD, A COMPANY INCORPORATED IN SINGAPORE.}

^{NUMBER OF EMPLOYEES (31 DECEMBER):}

^{- COMPANY - 2005: NOT AVAILABLE (2004: 26; 2003: 27; 2002: 27; 2001: 30)}

^{REGISTERED AND BUSINESS ADDRESS:}

^{11 SYED ALWI ROAD}

^#02-03

^{TECK HENG LONG BUILDING}

^{SINGAPORE 207629}

^{DATE OF CHANGE OF ADDRESS: 05/12/1988}

^{- RENTED PREMISE}

^{- OWNED BY: GAME HOLDINGS CO. (PTE) LTD.}

^{OTHER BUSINESS ADDRESS:}

^{11 SYED ALWI ROAD}

^#02-00

^{TECK HENG LONG BUILDING}

^{SINGAPORE 207629}

^WEBSITE:

^NIL

^EMAIL:

^{honest@pacific.net.sg}

MANAGEMENT

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

^{1) TAN CHIAN WAH, A SINGAPOREAN}

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

^{2) TAN YEOW WAH, A SINGAPOREAN}

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

^{3) TAN SOON HUA, A SINAGPOREAN}

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

^{4) CHIA HUI SIANG, A SINGAPOREAN}

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

^{5) TEOH CHYE HUAT, A SINGAPOREAN}

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

^{6) TAN SEOW HUA, A SINGAPOREAN}

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

^{7) TAN JIAK HWA, A SINGAPOREAN}

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

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}

^{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 JOBS, 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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