Local Retail Sales Dip During November
The Department of Statistics’s latest figures on retail sales registered a 0.6% month-on-month fall. This is in sharp contrast to October’s rise of 6%, painting a grim picture of a weakening consumer sentiment in Singapore. Recreational goods recorded the worst numbers, registering a 5.9% drop month-on-month. Elsewhere, new product launches such as Apple’s iPhone 4S help buoy telecommunications equipment and computers sales as that segment recorded the only month-on-month double digit growth of 10.7%. All other retail activities failed to maintain October’s momentum. However, analysts feel that the dip in retail sales numbers do not spell all doom and gloom as they point to the need to contextualize November’s statistics in the face of a strong base in terms of October’s rise. CIMB’s head of research, Song Seng Wun opined that while retail sales may not be as strong, he opines that the local economy will see ‘modest spending’.
Significance: Although economists expect the weak consumer sentiment to put downward pressures on GDP growth into 1Q12. However, a strong local labour market will continue to support a degree of spending, providing a significant cushion to retail sales from negative headwinds.
S i2i Launches Models In Bid For Cheap Handset Market
Locally listed handset maker and Internet telephony company, S i2i, has launched two smart-feature phone models in a bid to cater to the masses for whom the latest iPhone or Blackberry is too expensive to. The Racer and the Latte which are priced at less than $100 are also seen as part of the firm’s intention to fatten its margins as it makes inroads into a higher-end phone market. The handsets will be available in retail stores such as 7-Eleven in March and will come bundled with the firm’s own app store. The S Apps Planet offers a mix of in-house work and agreements with app developers. S i2i chairman and Indian billionaire Bhupendra Jumar Modi is upbeat about the prospects of the lower end smart-feature phone market. He said that 60-70% of the handset market in Indonesia and India are priced at less than US$70.
Significance: Prior to the release of the Racer and the Latte, S i2i has spent a large sum on an acquisition spree in 2011 resulting in a net loss of US$24.4 million. The firm will need to undertake cost cutting measures in a bid to stem its loss position which it feels will likely take one to two years to turn around while depending on the retail success of its new handsets.
Hiap Seng Establishes Strategic Alliance With COSCO (Shanghai)
Hiap Seng Engineering (Hiap Seng), a specialist integrated engineering group for the oil and gas, petrochemical and pharmaceutical industries, announced on 13 January that its 87%-owned subsidiary, HS Compression & Process (HSCP), has entered into a strategic alliance agreement with COSCO (Shanghai) Shipyard. Together, both parties currently intend to collaborate on a tender for Topside modules for a floating, production, storage and offloading project. In the longer term, both companies plan to form a joint venture to develop projects in the oil and gas markets. HSCP will be the Topside Alliance Partner for compression and process systems for COSCO Shanghai, providing a working model and assistance to revamp the shipyard facilities in order to incorporate capabilities to handle modularized packages for process equipment.
Significance: The strategic alliance with COSCO Shanghai allows Hiap Seng to leverage on its partner’s expertise and local knowledge and network. Hiap Seng also looks to add to its technological and engineering know-how and thus be able to collaborate with more partners in the exploration of other projects.