MIRA INFORM REPORT

Report Date :

17.06.2008

IDENTIFICATION DETAILS

Name :	SPECTRUM GLOBAL PTE. LTD.
Formerly Known As :	^NEOTERIC ASIA PTE. LTD.
Registered Office :	^18 Kaki Bukit Place ^#07-00 ^Eunos Techpark
Country :	Singapore
Financials (as on) :	31.03.2007
Date of Incorporation :	^21.07.2001
Com. Reg. No.:	^200104828R
Legal Form :	^Pte Ltd
Line of Business :	Trading in Computer Hardware

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

SPECTRUM GLOBAL PTE. LTD.

Line Of Business 

TRADING IN COMPUTER HARDWARE

Parent Company

SPECVISION HOLDINGS PTE. LTD. (PERCENTAGE OF SHAREHOLDINGS: 75.00%)

Financial Elements

FY 2007

COMPANY

Sales : US$ 63,954,522

Networth : US$ 1,262,840

Paid-Up Capital : US$ 995,584

Net result : US$ 151,002

Net Margin(%) : 0.24

Return on Equity(%) : 11.96

Leverage Ratio : 7.62

COMPANY IDENTIFICATION

^{Subject Company : SPECTRUM GLOBAL PTE. LTD.}

^{Former Name : NEOTERIC ASIA PTE. LTD.}

^{Business Address : 18 KAKI BUKIT PLACE}

^#07-00

^{EUNOS TECHPARK}

^{Town : SINGAPORE}

^{Postcode : 416196}

^{Country : Singapore}

^{Telephone : 6547 2025}

^{Fax : 6745 0061}

^{ROC Number : 200104828R}

^{Reg. Town : -}

PREVIOUS IDENTIFICATION

^{NEOTERIC ASIA PTE. LTD. DATE OF CHANGE OF NAME: 25/01/2006 NEOTE}

SUMMARY

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

^{Legal Form : Pte Ltd}

^{Date Inc. : 21/07/2001}

^{Previous Legal Form : -}

^{Summary year : 31/03/2007}

^{Sales : 63,954,522}

^{Networth : 1,262,840}

^{Capital : -}

^{Paid-Up Capital : 995,584}

^{Employees : 25}

^{Net result : 151,002}

^{Share value : 1}

^{Auditor : SASHI KALA DEVI ASSOCIATES}

^{BASED ON ACRA'S RECORD}

^{NO OF SHARE CURRENCY AMOUNT}

^{ISSUED ORDINARY 1,600,000 SGD 1,600,000.00}

^{PAID-UP ORDINARY - SGD 1,600,000.00}

REFERENCES

^{Litigation : No}

^{Company status : TRADING}

^{Started : 21/07/2001}

PRINCIPAL(S)

^{MAMIDANNA SURYKALI PRASAD F1602252R Director}

DIRECTOR(S)

^{HARSHAD DIPCHAND SHAH B2173258 Director}

^{Appointed on : 21/07/2001}

^{Street : 1402 RAJUL-A 9 HARKNESS ROAD}

^{GAMDEVI MALBARHILL}

^{Town: MUMBAI}

^{Postcode: 400 006}

^{Country: India}

^{MAMIDANNA SURYKALI PRASAD F1602252R Director}

^{Appointed on : 18/04/2005}

^{Street : 105 CECIL STREET}

^#05-01

^{THE OCTAGON}

^{Town: SINGAPORE}

^{Postcode: 069534}

^{Country: Singapore}

^{SHRENIK HARSHADKUMAR SHAH S7362782F Director}

^{Appointed on : 14/09/2001}

^{Street : 20 SIMEI STREET 1}

^#09-06

^{MELVILLE PARK}

^{Town: SINGAPORE}

^{Postcode: 529944}

^{Country: Singapore}

^{JAMES METHODIUS S/O CYRIL METHODIS S0680660J Company Secretary}

^{Appointed on : 01/04/2003}

^{Street : 132 GRANGE ROAD}

^{Town: SINGAPORE}

^{Postcode: 249606}

^{Country: Singapore}

^{KANWAL NAIN SAHNEY S2616608Z Director}

^{Appointed on : 18/04/2005}

^{Street : 70A BOURNEMOUTH ROAD}

^{BOURNEMOUTH EIGHT}

^{Town: SINGAPORE}

^{Postcode: 439720}

^{Country: Singapore}

^{PARAS HARSHAD SHAH Z004494 Director}

^{Appointed on : 21/07/2001}

^{Street : 1402 RAJUL-A 9 HARKNESS ROAD}

^{GAMDEVI MALBARHILL}

^{Town: MUMBAI}

^{Postcode: 400 006}

^{Country: India}

ACTIVITY(IES)

^{IMPORTERS And EXPORTERS Code: 11760}

^{COMPUTERS, PERSONAL - HARDWARE - DEALER And/OR AGE Code: 5105}

^{BASED ON ACRA'S RECORD}

^{1) DEVELOPMENT OF E-COMMERCE APPLICATIONS}

^{2) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS & EXPORTERS);}

CHARGES

^{Date: 27/12/2005}

^{Comments : CHARGE NO : C200508068}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : MALAYAN BANKING BHD}

^{Date: 26/09/2006}

^{Comments : CHARGE NO : C200606452}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{Date: 31/07/2006}

^{Comments : CHARGE NO : C200604982}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : ABN AMRO BANK N.V.}

^{Date: 19/07/2006}

^{Comments : CHARGE NO : C200604712}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{Date: 04/04/2006}

^{Comments : CHARGE NO : C200602154}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : CITIBANK N.A.}

^{Date: 21/01/2006}

^{Comments : CHARGE NO : C200600551}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : THE BANK OF EAST ASIA LIMITED}

^{Date: 26/09/2007}

^{Comments : CHARGE NO : C200707992}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : STANDARD CHARTERED BANK}

^{Date: 27/11/2007}

^{Comments : CHARGE NO : C200710388}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

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

^{Date: 26/11/2007}

^{Comments : CHARGE NO : C200710354}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

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

^{Date: 13/05/2005}

^{Comments : CHARGE NO : C200502765}

^{AMOUNT SECURED : 0.00 AND ALL MONIES OWING}

^{CHARGEE(S) : MALAYAN BANKING BHD}

PREMISES/PROPERTY INFORMATIONS

No Premises/Property Information In Our Databases

BANKERS

^{OVERSEA-CHINESE BANKING CORPORATION LIMITED}

^{ABN AMRO BANK N.V.}

^{CITIBANK N.A.}

^{THE BANK OF EAST ASIA LIMITED}

SHAREHOLDERS(S)

^{SPECVISION HOLDINGS PTE. LTD. 1,200,000 Company}

^{Street : 18 KAKI BUKIT PLACE}

^#07-00

^{EUNOS TECHPARK}

^{Town: SINGAPORE}

^{Postcode: 416196}

^{Country: Singapore}

^{NEOTERIC INFOMATIQUE PRIVATE LTD 400,000 Company}

^{Street : 225 2ND FLOOR, CHINTHAMANI PLAZA}

^{OFF ANDHERI KURLA ROAD}

^ANDHERI(E)

^{Town: MUMBAI}

^{Postcode: -}

^{Country: India}

HOLDING COMPANY

^{SPECVISION HOLDINGS PTE. LTD. 200403417H % : 75.00}

SUBSIDIARY(IES)

No Participation In Our Database

PAYMENT HISTORY AND EXPERIENCES

^{Trade Morality : AVERAGE}

^{Liquidity : SUFFICIENT}

^{Payments : REGULAR}

^{Trend : UPWARD}

^{Financial Situation : AVERAGE}

FINANCIAL ELEMENTS

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

^{Date Account Lodged: 02/10/2006}

^{Balance Sheet Date: 31/03/2007 31/03/2006}

^{Number of weeks: 52 52}

^{Consolidation Code: COMPANY COMPANY}

^{--- ASSETS ---}

^{Tangible Fixed Assets: - 238}

^{Total Fixed Assets: - 238}

^{Inventories: 1,083,557 2,409,391}

^{Receivables: 8,495,870 3,195,944}

^{Cash,Banks, Securitis: 1,271,205 433,096}

^{Other current assets: 39,165 96,266}

^{Total Current Assets: 10,889,797 6,134,697}

^{TOTAL ASSETS: 10,889,797 6,134,935}

^{--- LIABILITIES ---}

^{Equity capital: 995,584 361,784}

^{Profit & lost Account: 267,256 116,254}

^{Total Equity: 1,262,840 478,038}

^{Trade Creditors: 4,010,420 2,463,501}

^{Due to Bank: 5,098,191 2,712,062}

^{Provisions: 33,085 15,548}

^{Other Short term Liab.: 404,592 444,125}

^{Prepay. & Def. charges: 80,669 21,661}

^{Total short term Liab.: 9,626,957 5,656,897}

^{TOTAL LIABILITIES: 9,626,957 5,656,897}

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

^{Net Sales 63,954,522 28,112,703}

^{Purchases,Sces & Other Goods: 62,011,178 26,916,653}

^{Gross Profit: 1,943,344 1,196,050}

^{Result of ordinary operations 588,507 205,976}

^{NET RESULT BEFORE TAX: 168,539 99,578}

^{Tax : 17,537 15,548}

^{Net income/loss year: 151,002 84,030}

^{Interest Paid: 419,968 106,398}

^{Depreciation: 1,529 237}

^{Directors Emoluments: 64,421 46,107}

^{Wages and Salaries: 262,890 159,143}

^{Financial Income: 32,361 8,018}

RATIOS

^{31/03/2007 31/03/2006}

^{Turnover per employee: 2558180.88 1124508.12}

^{Fin. Charges / Turnover(%):0.01 0.00}

^{Stock / Turnover(%): 0.02 0.09}

^{Net Margin(%): 0.24 0.30}

^{Return on Equity(%): 11.96 17.58}

^{Return on Assets(%): 1.39 1.37}

^{Net Working capital: 1262840.00 477800.00}

^{Cash Ratio: 0.13 0.08}

^{Quick Ratio: 1.01 0.64}

^{Current ratio: 1.13 1.08}

^{Receivables Turnover: 47.82 40.93}

^{Leverage Ratio: 7.62 11.83}

^{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 PASSABLE WITH NET WORTH IMPROVED SHARPLY BY 1.64 TIMES FROM US$478,038 IN FY 2006 TO US$1,262,840 IN FY 2007. THIS WAS DUE TO HIGHER RETAINED EARNINGS OF US$267,256 (2006: US$116,254); A RISE OF 1.30 TIMES FROM THE PRIOR FINANCIAL YEAR.}

^LEVERAGE:

^{IN THE SHORT-TERM, SUBJECT WAS LARGELY FINANCED BY AMOUNTS DUE TO BANKS WHICH MADE UP 52.96% (2006: 47.94%) OF THE TOTAL CURRENT LIABILITIES AND AMOUNTED TO US$5,098,191 (2006: US$2,712,062).}

^{SUBJECT DID NOT INCUR ANY LONG TERM LIABILITIES DURING BOTH THE FINANCIAL YEARS UNDER REVIEW.}

^{IN ALL, LEVERAGE RATIO FELL FROM 11.83 TIMES TO 7.62 TIMES AS A RESULT OF MORE THAN PROPORTIONATE RISE IN TOTAL EQUITY AS COMPARED TO THE RISE IN TOTAL LIABILITIES.}

^LIQUIDITY:

^{IN GENERAL, SUBJECT'S LIQUIDITY SITUATION WAS PASSABLE AS SEEN FROM THE RISE IN NET WORKING CAPITAL BY 1.64 TIMES TO US$1,262,840 (2006: US$477,800).}

^{SIMILARLY, CASH AND CASH EQUIVALENTS ROSE BY 1.94 TIMES TO US}

^{$1,271,205 (2006: US$433,096). THE BREAKDOWN WAS AS FOLLOWS:}

^{*CASH AT BANK - CURRENT A/C - 2007: US$368,216 (2006: US$74,688)}

^{*CASH AT BANK - FIXED DEPOSIT - 2007: US$902,291 (2006: US$357,982)}

^{*CASH IN HAND - 2007: US$698 (2006: US$426)}

^{BOTH CURRENT AND QUICK RATIOS ROSE TO 1.13 TIMES (2006: 1.08 TIMES) AND 1.01 TIMES (2006: 0.64 TIMES) RESPECTIVELY.}

^{PROFITABILITY:}

^{REVENUE ROSE SHARPLY BY 1.27 TIMES FROM US$28,112,703 IN FY 2006 TO US$63,954,522 AND NET PROFIT INCREASED BY 79.70% TO US$151,002 (2006: US$84,030). HOWEVER, NET MARGIN FELL TO 0.24% (2006: 0.30%).}

^{DEBT SERVICING:}

^{DEBT SERVICING PROBLEMS MIGHT NOT BE EXPECTED IF REVENUE AND EARNINGS CAN BE MAINTAINED AND PAYMENTS BY TRADE DEBTORS ARE FORTHCOMING. IN ADDITION, THE AVERAGE COLLECTION PERIOD WAS LENGTHENED TO 48 DAYS (2006: 41 DAYS).}

^{NOTES TO THE FINANCIAL STATEMENTS:}

^{SHARE CAPITAL}

^{ISSUED AND FULLY PAID}

^{*1,000,0000 (600,000) ORDINARY SHARES - 2007: US4995,584 (2006: US}

^$361,784)

^{400,000 ORDINARY SHARES WERE ISSUED AS FULLY PAID FOR CASH DURING THE YEAR. SUBSEQUENT TO YEAR-END THE COMPANY ISSUED 600,000 ORDINARY SHARES AS FULLY PAID FOR CASH.}

^{AMOUNTS OWING TO BANKS}

^{*TRUST RECEIPTS - 2007: US$4,904,094 (2006: US$2,552,120)}

^{*BANK OVERDRAFT - 2007: US$194,097 (2006: US$159,942)}

^{THE AMOUNTS OWING TO BANKS ARE SECURED BY FIXED DEPOSITS AND JOINT}

^{AND SEVERAL PERSONAL GUARANTEES OF THE DIRECTORS.}

^{CONTINGENT LIABILITY}

^{*BILLS DISCOUNTED - 2007: US$661,880 (2006: NIL)}

BACKGROUND/OPERATION

^{THE COMPANY WAS INCORPORATED IN THE REPUBLIC OF SINGAPORE ON}

^{21/07/2001 AS A LIMITED PRIVATE COMPANY AND WAS TRADING UNDER THE}

^{NAMESTYLE OF "NEOTERIC PTE LTD".}

^{IT CHANGED TO THE NAMESTYLE OF "NEOTERIC ASIA PTE. LTD.".}

^{SUBSEQUENTLY ON 25/01/2006, THE COMPANY CHANGED TO ITS PRESENT NAMESTYLE OF "SPECTRUM GLOBAL PTE. LTD.".}

^{AS AT 12/06/2008, THE COMPANY HAS AN ISSUED AND PAID-UP CAPITAL OF 1,600,000 SHARES, OF A VALUE OF S$1,600,000.}

^{PRINCIPAL ACTIVITIES:}

^{SUBJECT IS REGISTERED WITH THE ACCOUNTING AND CORPORATE REGULATORY}

^{AUTHORITY (ACRA) BE PRINCIPALLY ENGAGED IN THE BUSINESS OF:}

^{(1) DEVELOPMENT OF E-COMMERCE APPLICATIONS}

^{(2) GENERAL WHOLESALE TRADE (INCLUDING GENERAL IMPORTERS & EXPORTERS);}

^{IMPORT AND EXPORT OF COMPUTER PARTS & ACCESSORIES}

^{DURING THE FINANCIAL YEAR(S), UNDER REVIEW, SUBJECT'S PRINCIPAL}

^{ACTIVITIES ARE TO CARRY ON THE BUSINESS OF TRADING IN COMPUTER}

^HARDWARE.

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

^{SUBJECT ENGAGES IN THE FOLLOWING ACTIVITIES:}

^{* TRADING OF COMPUTER PERIPHERALS.}

^{PRODUCT DEALINGS:}

^{* INTEL CPU}

^{* MOTHERBOARD HARD DISK DRIVE}

^{* KINGSTON & SAMSUNG MEMORY}

^{* ALL BRANDED PRODUCTS}

^{* UMAX PRODUCTS}

^{THE GROUP HAS OFFICES IN INDIA, SINGAPORE, DUBAI, NEPAL, & REPRESENTATIVS IN SRI LANKA, PAKISTAN, BANGLADESH.}

^{TRADE NAMES/BRANDS:}

^{* AMD}

^{* APPLE}

^{* ASUS}

^{* BENQ}

^{* EPSON}

^{* HITACHI}

^{* HEWLETT PACKARD}

^{* INTEL}

^{* IOMEGA}

^{* KODAK}

^{* LACIE}

^{* LEXAR}

^{* LOGITECH}

^{* LSILOGIC}

^{* MATROX}

^{* PHILIPS}

^{* SAMSUNG}

^{* UMAX}

^{MARKET PRESENCE:}

^{* INDIA}

^{* VIETNAM}

^{* SRI LANKA}

^{* PAKISTAN}

^{* BANGLADESH}

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

^{IMPORT COUNTRIES:}

^{* ASIA PACIFIC}

^{* VIETNAM}

^{* INDIA}

^{* UNITED STATES}

^{EXPORT COUNTRIES:}

^{* INDIA}

^{NUMBER OF EMPLOYEES:}

^{2008: 25}

^{NO OTHER TRADE INFORMATION WAS AVAILABLE}

^{THE IMMEDIATE AND ULTIMATE HOLDING COMPANY IS SPECVISION HOLDINGS PTE. LTD., A COMPANY INCORPORATED IN SINGAPORE.}

^{REGISTERED AND BUSINESS ADDRESS:}

^{18 KAKI BUKIT PLACE}

^{#07-00 EUNOS TECHPARK}

^{SINGAPORE 416196}

^{DATE OF CHANGE OF ADDRESS: 01/07/2007}

^{- PROPERTY RECORD WAS NOT AVAILABLE}

^{ADDRESS PROVIDED BY CLIENT:}

^{10 KAICIBUICIT PLACE}

^{SINGAPORE 416196}

^{- INCORRECT}

^WEBSITE:

^{http://www.spectrumglobal.com.sg/index.asp}

^EMAIL:

^-

MANAGEMENT

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

^{1) HARSHAD DIPCHAND SHAH, AN INDIAN}

^{- BASED IN INDIA.}

^{2) MAMIDANNA SURYKALI PRASAD, AN AMERICAN}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:}

^{SPECTRA INNOVATIONS PTE LTD}

^{SPECVISION HOLDINGS PTE. LTD.}

^{3) KANWAL NAIN SAHNEY, A SINGAPOREAN}

^{- HOLDS OTHER DIRECTORSHIPS AS RECORDED IN OUR DATABASE:}

^{INGRAM MICRO SINGAPORE (SOUTH ASIA) PTE LTD}

^{SPECTRA INNOVATIONS PTE LTD}

^{SPECVISION HOLDINGS PTE. LTD.}

^{4) SHRENIK HARSHADKUMAR SHAH, A SINGAPORE PERMANENT RESIDENT}

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

^{5) PARAS HARSHAD SHAH, AN INDIAN}

^{- BASED IN INDIA.}

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.

OVERVIEW OF SINGAPORE

PAST PERFORMANCE

SINGAPORE’S ECONOMY GREW BY 5.4% IN 4Q 2007, SLOWER THAN THE 9.5% GROWTH IN 3Q 2007. GROW MOMENTUM WAS LED BY CONSTRUCTION AND FINANCIAL SERVICES. FOR THE WHOLE OF 2007, THE ECONOMY GREW BY 7.7%, DOWN FROM 8.2% IN 2006.

THE MANUFACTURING SECTOR ROSE BY 0.2% IN 4Q 2007, SLOWER THAN THE 11.0% IN 3Q 2007. THE SMALL GROWTH WAS ATTRIBUTED TO A 28.0% CONTRACTION IN THE BIOMEDICAL MANUFACTURING SECTOR. ON THE OTHER HAND, ELECTRONICS, CHEMICALS, PRECISION ENGINEERING AND TRANSPORT ENGINEERING SECTOR PERFORMED BETTER. OVERALL, THE MANUFACTURING SECTOR POSTED A 5.8% GROWTH IN 2007, DOWN FROM 12.0% IN 2006.

THE FINANCIAL SERVICES SECTOR ROSE SIGNIFICANTLY BY 16% IN 4Q 2007, FOLLOWING A 20% GROWTH IN THE PREVIOUS QUARTER. MOST SECTORS EXPERIENCE STRONG EXPANSION WITH THE EXCEPTION OF STOCK BROKING AND FUND MANAGEMENT ACTIVITIES WHICH HAVE SLOWED DOWN. OVERALL, THE FINANCIAL SERVICES SECTOR POSTED A 17% GROWTH IN 2007, HIGHER THAN 11.0% IN 2006.

THE CONSTRUCTION SECTOR REGISTERED A STRONG GROWTH. THE SECTOR GREW BY 24%, FOLLOWING 20% GAIN IN 3Q 2007. GROWTH MOMENTUM FOR THE WHOLE YEAR GREW 20%, ITS FASTEST GROWTH SINCE 1996.

THE WHOLESALE AND RETAIL TRADE SECTOR GREW BY 6.0% IN 4Q 2007, SLOWER THAN THE 6.8% GROWTH IN 3Q 2007. NON-OIL RE-EXPORTS SAW GROWTH REDUCED FROM 9.0% IN 3Q 2007 TO 7.0% IN 4Q 2007. RETAIL SALES FELL BY 2.5% IN 4Q 2007, FOLLOWING A 1.5% GROWTH IN 3Q 2007. OVERALL, THE WHOLESALE AND RETAIL TRADE SECTOR POSTED A 7.3% GROWTH IN 2007, DOWN FROM 10.0% IN 2006.

THE TRANSPORT AND STORAGE SECTOR ROSE BY 5.4% IN 4Q 2007, FROM 5.0% IN 3Q 2007. HIGHER GROWTH IN THE SEA TRANSPORT SEGMENT WAS OFFSET BY SLOWER GROWTH IN THE AIR TRANSPORT SEGEMENT. OVERALL, THE TRANSPORT AND STORAGE SECTOR POSTED A 5.1% GROWTH IN 2007, UP FROM 4.7% IN 2006.

THE HOTELS AND RESTAURANTS SECTOR GREW BY A SMALLER 2.5% FROM 4.9% IN 3Q 2007. VISITOR ARRIVALS ROSE 5.5% IN 4Q 2007, SIMILAR TO 5.4% RISE IN 3Q 2007. HOWEVER, THE AVERAGE OCCUPANCY RATE OF HOTELS DIPPED TO 86.0% IN 4Q 2007 FROM 88.0% IN 4Q 2006. VISITOR ARRIVALS ROSE 5.4% TO REACH A RECORD OF 10.3 MILLION IN 2007. OVERALL, THE HOTELS AND RESTAURANTS SECTOR POSTED A 4.4% GROWTH IN 2007, DOWN FROM 4.8% IN 2006.

THE INFORMATION AND COMMUNICATIONS SECTOR ROSE 6.1% IN 4Q 2007, SLIGHTLY SLOWER THAN THE 6.6% IN 3Q 2007. BOTH THE TELECOMMUNICATIONS AND IT SERVICES SEGMENTS REMAINED HEALTHY DURING THE QUARTER. FOR THE TELECOMMUNICATIONS SEGMENT, THE GROWTH OF INTERNATIONAL TELEPHONE CALLS DURATION AND NUMBER OF SUBSCRIBERS FOR BOTH MOBILE PHONE SERVICE AND BROADBAND INTERNET REMAINED STRONG. OVERALL, THE INFORMATION AND COMMUNICATIONS SECTOR POSTED A 6.3% GROWTH IN 2007, UP FROM 4.6% IN 2006.

THE BUSINESS SERVICES SECTOR EXPANDED BY 8.7%, HIGHER THAN THE 7.5% GAIN IN 3Q 2007. GROWTH WAS HEALTHY ACROSS ALL SEGMENTS, WITH GOOD PERFORMANCES IN THE BUSINESS REPRESENTATIVE OFFICES AND REAL ESTATE SEGMENTS. OVERALL, THE BUSINESS SERVICES SECTOR POSTED A 7.8% GROWTH IN 2007, UP FROM 6.9% IN 2006.

NEWS

SINGAPORE ECONOMY GROWS 7.2% ON STRONG SHOWING IN MANUFACTURING

SINGAPORE’S ECONOMY TURNED OUT TO BE SURPRISINGLY RESLIENT IN THE FIRST QUARTER, EASILY BEATING MARKET EXPECTATIONS WITH STRONG GROWTH OF 7.2%.

THE ADVANCE ESTIMATES ISSUED BY THE MINISTRY OF TRADE AND INDUSTRY (MTI) REPORTED YESTERDAY WERE A MARKED IMPROVEMENT OVER THE 5.4% POSTED IN THE FINAL QUARTER OF LAST YEAR. EARLIER REPORTS HAD SUGGESTED MARKET EXPECTATIONS OF 5.9% GROWTH. ON A SEASONALLY ADJUSTED ANNUALISED BASIS, THE ECONOMY GREW AT A BREAKNECK RATE OF 16.9% QUARTER-ON-QUARTER. IT SHRANK 4.8% IN 4Q 2007.

HOWEVER, ECONOMISTS DO NOT BELIEVE THE STRONG PERFORMANCE SIGNIFIES AN UPTREND FOR THE REST OF THE YEAR. THEY POINT TO A POTENTIAL RECESSION IN THE UNITED STATES AND RISING GLOBAL INFLATION.

MANUFACTURING AND SERVICES WERE CONTRIBUTORS TO THE BETTER-THAN-EXPECTED FIRST QUARTER GROWTH.

MANUFACTURING IS ESTIMATED TO HAVE EXPANDED BY 13.2% IN THE FIRST QUARTER, COMPARED TO A SMAL 0.2% RISE IN THE PREVIOUS THREE MONTHS. IT WAS ALSO CONSIDERABLY HIGHER THAN THE 3.9% REGISTERED IN 1Q 2007.

THIS WAS LARGELY DUE TO A SURGE IN BIOMEDICAL MANUFACTURING OUTPUT. THE REST OF THE MANUFACTURING CLUSTERS ALSO ENJOYED BETTER PERFORMANCES

WITH THE EXCEPTION OF TRANSPORT ENGINEERING AND PRECISION ENGINEERING CLUSTER WHO ENJOY MODERATE GROWTH.

SERVICES INDUSTRIES GROW 7.6%, SIMILAR TO THE 7.7% IN 4Q 2007 AS WELL AS IN 1Q 2007. FINANCIAL SERVICES CONTINUED TO BE THE FASTEST-GROWING AMONG THE SERVICES SECTORS.

HOWEVER, THE FIGURE FOR THE SLOWING CONSTRUCTION SECTOR WAS LESS ROSY WITH GROWTH SLIPPING TO 14.6% FROM 24.3% IN 4Q 2007.

UNITED OVERSEAS BANK ECONOMIST HO WOEI CHEN SAID THIS WAS DISAPPOINTING,

AFTER THREE QUARTERS OF GROWTH ABOVE 20.0%. BUT SHE STILL EXPECTED THE SECTOR TO CONTRIBUTE TO GROWTH THIS YEAR, ON THE BACK OF INFRASTRCTURE PROJECTS SUCH AS THE INTEGRATED RESORTS AND THE PROPOSED SPORTS HUB IN KALLANG.

ECONOMISTS WERE SURPRISED BY WHAT THEY SAID AMOUNTED TO A CONTRACTION IN THE INDUSTRY BUT THEY REMAINED CONFIDENT THAT GROWTH WAS STILL HEALTHY AND IN LINE WITH THEIR FORECASTS FOR THE YEAR, WHICH RANGED FROM 10.0%

TO 25.0%.

CIMG-GK ECONOMIST SOGN SENG WUN SAID THAT RISING INFLATION, ESPECIALLY FOR FOOD PRICES, WILL BE A MAJOR CONCERN. “PEOPLE ARE FOCUSING ON ISSUES SUCH AS THE RISING PRICE OF RICE AND THIS IS SOMETHING THAT COULD PERSIST FOR THE REST OF THE YEAR”.

NONE OF THE ECONOMISTS INTERVIEWED REVISE FULL-YEAR GROWTH FORECASTS WHICH RANGE FROM 4.7% TO 5.5%. MTI HAS FORECAST A RANGE OF 4.0% TO 6.0% FOR THE YEAR.

OUTLOOK

AFTER THE LAST REVIEW IN NOVEMBER 2007, THE OUTLOOK FOR EXTERNAL DEMAND IN 2008 HAS WORSENED AND THERE ARE INCREASED DOWNSIDE RISKS.

COMPARED TO THE FORECAST THREE MONTHS AGO, THERE IS BROAD CONSENSUS NOW THAT THE US ECONOMY IS ENTERING A SLOWDOWN. THE LENGTH AND SEVERITY OF THE SLOWDOWN REMAINS TO BE SEEN, AND IT WILL AFFECT COUNTRIES WORLDWIDE AND KEY INDUSTRIES.

TAKING INTO ACCOUNT THE RISE IN DOWNSIDE RISKS, THE MINISTRY OF TRADE AND INDUSTRY LOWERED THE ECONOMIC FORECAST FOR THE SINGAPORE ECONOMY TO GROW BY 4.0-6.0% IN 2008, DOWN FROM THE GROWTH FORECAST OF 4.5-6.5% EARLIER.

CURRENT CONDITIONS INDICATE THAT THE US ECONOMY WILL LIKELY ENTER A MILD RECESSION IN THE FIRST HALF BUT ITS STRONG FUNDAMENTALS, COUPLED WITH FISCAL AND MONETARY STIMULUS, WILL ASSIST TO SUPPORT RECOVERY IN THE SECOND HALF. REGIONAL ECONOMIES WILL HAVE MODERATE BUT HEALTHY GROWTH. SINGAPORE’S GDP GROWTH WILL THEN BE IN THE UPPER HALF OF THE FORECAST RANGE. HOWEVER, IF THE US FALLS INTO A MORE SEVERE RECESSION, THE REGION WILL BE MORE SIGNIFICANTLY AFFECTED. THE IMPACT ON THE SINGAPORE ECONOMY WILL ALSO BE STRONGER, PARTICULARLY IN THE SENTIMENT-SENSITIVE AND EXPORT-ORIENTED SECTORS LIKE FINANCIAL SERVICES, WHOLESALE TRADE AND ELECTRONICS. IN THIS ENVIRONMENT, THE SINGAPORE ECONOMY WILL GROW AT A SLOWER PACE, NEARER THE LOWER END OF THE FORECAST RANGE.

IN THE FINANCIAL SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 19% OF FIRMS, ESPECIALLY INSURANCE COMPANIES AND FIRMS PROVIDING CREDIT CARD SERVICES, REMAINS POSITIVE ABOUT THE BUSINESS OUTLOOK IN THE MONTHS AHEAD.

IN THE REAL ESTATE INDUSTRY, A NET WEIGHTED BALANCE OF 17% OF FIRMS,

EXPECT BUSINESS TO BE BRISK FOR THE COMING MONTHS.

MANUFACTURING FIRMS ARE CAUTIOUS ABOUT BUSINESS CONDITIONS FOR THE PERIOD ENDING JUNE 2008. A NET WEIGHTED BALANCE OF 2% OF MANUFACTURERS FORECAST BETTER BUSINESS, LOWER THAN THE 7% REGISTERED IN THE SAME PERIOD LAST YEAR AND THE 25% RECORDED IN THE PREVIOUS QUARTER.

GENERALLY, WHOLESALERS ARE POSITIVE ABOUT THEIR BUSINESS PROSPECTS IN THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 4% OF FIRMS EXPRESSING POSITIVE BUSINESS SENTIMENTS. THE MAJORITY OF WHOLESALERS OF PETROLEUM AND PETROLEUM PRODUCTS, CHEMICALS AND CHEMICAL PRODUCTS, INDUSTRIAL MACHINERY AND EQUIPMENT AND COMPUTERS AND ACCESSORIES FORECAST BUSINESS OUTLOOK TO REMAIN THE SAME IN THE FIRST SIX MONTHS OF 2008 COMPARED WITH THE LAST SIX MONTHS IN 2007.

A NET WEIGHTED BALANCE OF 12% OF RETAILERS PREDICTS LESS FAVOURABLE BUSINESS CONDITIONS FOR THE PERIOD ENDING JUNE 2008. AS A RESULT OF THE REDUCED CERTIFICATE OF ENTITLEMENT (COE) QUOTA, MOTOR VEHICLES RETAILERS ARE ESPECIALLY CONCERNED WITH THE SALES.

IN THE TRANSPORT AND STORAGE INDUSTRY, A NET WEIGHTED BALANCE OF 5% OF FIRMS FORECASTS LESS FAVOURABLE BUSINESS CONDITIONS FOR THE COMING MONTHS.

IN THE SERVICES INDUSTRY, A NET WEIGHTED BALANCE OF 8% OF FIRMS,

EXPECT BUSINESS TO BE BRISK FOR THE COMING MONTHS. THIS IS SMALLER THAN THE 18% REGISTERED IN THE SAME PERIOD LAST YEAR AND THE 23% RECORDED IN THE PREVIOUS QUARTER. HOTELIERS REMAIN BULLISH ON BUSINESS CONDITIONS FOR THE COMING MONTHS, WITH A NET WEIGHTED BALANCE OF 35% OF HOTELIERS EXPECTING THEIR BUSINESSES TO RISE IN ANTICIPATION OF EXPECTED INCREASES IN ROOM RATES AND HIGHER OCCUPANCY RATES. IN THE CATERING TRADE INDUSTRY, A NET WEIGHTED BALANCE OF 27% OF CATERERS ANTICIPATES MORE FAVOURABLE BUSINESS CONDITIONS.

IN THE INFORMATION AND COMMUNICATIONS INDUSTRY, A NET WEIGHTED BALANCE OF 9% OF FIRMS PREDICTS A HIGHER DEMAND FOR THEIR SERVICES, IN PARTICULAR THE NETWORK OPERATORS.

IN THE BUSINESS SERVICES INDUSTRY, AN OVERALL NET WEIGHTED BALANCE OF 19% OF FIRMS EXPECTS POSITIVE SENTIMENTS. THESE INCLUDE ACCOUNTING, BOOK-KEEPING AND AUDITING, RENTING OF CONSTRUCTION AND INDUSTRIAL MACHINERY AND RENTING OF TRANSPORT EQUIPMENT.

EXTRACTED FROM: MINISTRY OF TRADE AND INDUSTRY, SINGAPORE

SINGAPORE DEPARTMENT OF STATISTICS

THE STRAITS TIMES

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%)

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