Archive | December, 2011

TOC: Sorry MACIAM the hardest word

29 Dec

Aiyah no wonder, I finally understand why TOC make this type of bobo mistake and make Prof Cherian George write until 1, 2, 3 pieces to explain to them nicely where they have gone wrong but still TOC don’t accept. Even Ministar Senior conslut K Shanmugam and his kakis Halimah, Baey, Singh, Kumar, Zainal etc all come out to help (or sabo) Ah Seng. This is because TOC commander-in-chief former NMP Siew Kum Hong was away for most of Dec 2011 so he cannot guide his Interim Chief Editor Ravi Philemon.

Siew also say until sibeh carefully he is a core member, but does not do the editing, although he will give his comments when asked…wah this lawyer speak is sibeh confusing. So he mean he got nothing to do with the Seng Han Thong saga?? Or he mean ok lah TOC got a bit wrong but it is not my fault and here I try to explain to you why we are still right…

Indian Senior Conslut and Indian Senior academic say already, u still wanna argue, sure they more right than any Chinese. They say right is consperm right one. My mother say don’t quarrel with Indians, they very good at arguing and debating, white also can say until black. Aiya aiya sorry sorry, this one is racist thought…monotyping races…my bad…

Now Singapore internet with weakened Temasek Review and Yahoo kena sue by former company of current president is become left with TOC as the big boy of alternative news. TOC becometh shining bacon of pro-opposition and anti-pap view, if they don’t start whack Ah Seng then nobody can follow. But whack also must see how lah…this Ah Seng racist remark is so lame and weak that even Joanne Peh don’t want to pay for plain water also more exciting. Then this TOC machar Ravi still put up article to thank readers who support them. Machar, when you whack PAP sure got about hundreds of comments support u one, like GE sure got about 30% will vote oppsition even if they are monkeys in human clothings.You gibe bananas, monkeys will jump.

So like Prof Cherian say, got strong alternative media like TOC is good one, they can check the government. But they also must have high standard and especially when it comes to race issues because it only takes a spark to get the fire going. When you make mistake then come out and say sorry plainly and gracefully, why must twist and turn the words.

When Ah Seng say sorry for his racist remark then if TOC come out to say sorry to Ah Seng for their mistaken reporting then I think this type ending we all learn something. So Siew must guide his machar Ravi more carefully then he can faster become permanent instead of interim chief editor. He almost singled handedly change the whole issue of SMRT operational failure to AH SENG IS A RACIST and I think Senior Conslut and Pinky Loong secretly thanked him for that. Btw, why call him interim when Machar do this job for most of 2011 already??

So now my england also like Ah Seng, Ah Beng, can understand right…mrt spoil simple england like take smrt taxi or walk home also can understand right…haha…

Yaw Shin Leong: Who is he representing?

27 Dec

The party that takes on the cause of the workers and stands against the hegemonic might of the MIW is somehow getting its priorities wrong; or at least one of its MP. Workers’ Party’s Yaw Shin Leong has put up on his blog a series of informal dialogues which he is leading with a group of about 30 real estate agents who are unhappy with the Council for Estate Agencies (CEA).

The CEA was established in Oct 2010 to regulate the real estate industry (especially rogue real estate agents) and protect the consumer from unfair business practices as property transactions are often very expensive and can be complicated. Before the CEA, there was no licensing of real estate agents and the industry had very low barriers of entry leading to many agents who are not only uncommitted to their trade but also devised various means to extract unfair commission and fees from unsuspecting consumers, property owners and even banks.

I bought my first house, a re-sale HDB directly from a seller and we did not engage any agents on both sides. It was pretty neat and clean as we decided on an agreeable price rather quickly although we have not met previously. HDB assisted in us completing the transaction and while it was complicated at first, it was not rocket science, you just needed some effort. Most of all, it saved buyer and seller a combined agent commission fees of $10K on a $350K apartment that is leasehold in the first place!

NOW Mr Yaw and his group of real estate agents is proposing that the CEA ban individual seller and buyer from any property transaction.

On Yaw’s blog: The Council should not permit sellers, buyers, landlord and tenants to transact any property deals themselves, as they are not trained; they do not attend classes; they do not sit the examinations such as Common Examination for Housing Agents(CEHA), Common Examination for Salespersons(CES) etc, and they are not registered with the Council. Therefore, the seller, buyers, landlord and tenants are not licenced to transact any deal with regards to property transactions. If a seller who is not licenced, sells his property to a buyer, essentially, the buyer is not protected, he is not being served by a licence agent.

IMHO, this is the most ridiculous of suggestions, it is anti-consumer and gives an unfair unending meal ticket to real estate agents. If seller and buyer are known to one another, relatives etc, they can just settle the deal at HDB or engage a conveyance lawyer in the case of a private property. Buyers, like me, who approached the seller directly can currently settle the transactions ourselves. If the seller is hard on cash, such a rule would force him to part with more cash and worsen his financial position. Why should a fee be paid to the property agent when he/she had made no introductory at all?? This also increases the cost of business as the property agent would get a cut of every rental property deals. Ultimately, such a suggestion is most damaging to consumer interest, dampens business environment, and basically creates a monopoly for very very small segment of interested persons.

Another ridiculous suggestion found in Mr Yaw’s blog states that real estate agent must be compensated half of the deposit forfeited by the seller if the deal is aborted. Currently, compensation to agents for aborted deals are non-obligatory.

On Yaw’s blog: As stated in Form 1-Estate Agency Agreement for the Sale of Residential Property and Form 3-Estate Agency Agreement for the Lease of Residential Property by a Landlord. Sellers and landlords are not obligated to pay commission to the real estate agents if the sale and the leasing of the property fall through. The real estate agents must be compensated half of the deposit that is forfeited by the sellers and the landlords when deals are aborted, as the real estate agents have successfully secured the deals, and cost spent in marketing the property.

The question of compensation should be a private arrangement open for negotiation between interested parties. If the agent did not perform his role adequately and cause the deal to fall through, why should he/she be compensated half the deposit?? The agent should stipulate in his contract with the seller that any marketing costs should be borne by the seller if the deal does not eventually succeed. Stipulating that real estate agents must be compensated half the deposit of any fallen through deal again grants them an unfair meal ticket.

Mr Yaw together with his group of real estate agents also proposed that the annual license fee for real estate agents imposed by the CEA be amended to a one-off payment.

On Yaw’s blog: The Council imposes an annual licence fee of $246.10 including GST should be amended to a one-off license fee, as agents are paying fees for courses, examination as well as the yearly Continuing Professional Development (CPD). The fees of these courses, examination and CPD amount to more than $500. Currently, if a new agent obtains the relevant certification, say in October 2011, upon registration with CEA, he has to fulfill the full amount of $246.10 for the entire year of 2011. Come January 2012, which is just 3 months after his registration on October 2011, the same agent has to fulfill another payment of $246.10 for the entire 2012. The new agent should only make a full payment of $246.10 as a one-off licence fee regardless the date of registration.

Next thing we know, Yaw would be joining pubs, karaoke and coffeeshops owners asking the government to make their entertainment and liquor licenses one-time payment also. This is part of their business costs and real estate agents should acknowledge it. Real estate agents should bear part of the costs of licensing, enforcement and administration of CEA as they are the ones that benefit from a well-regulated industry. If the CEA license fee is only one-time payment then the long-term buget of the CEA would be borne by taxpayers!!

Is Mr Yaw telling us that real estate agents who earned ten of thousands a year cannot afford a few hundred in licensing fees. If these real estate agents don’t earn a decent salary annually then perhaps they can consider changing jobs. The government can consider waiving the annual license fee if the economy is really bad and there is a drastic drop in volume of property transacted.

There are many other points worth countering in Mr Yaw’s suggestions but I won’t do them here (maybe he would be write to me if he is interested…haha). Is Mr Yaw still in the GE mode where he is opposing zheng hu for the sake of opposing?? Consumers now have more protection with the CEA established as it provides a platform for aggrieved consumers to lodge a complain, meditations to be carried out and rogue real estate agents turfed out. Workers’ Party and Mr Yaw should concentrate on fighting for everyday Singaporeans and the interest of normal consumers rather than the 30-odd real estate agents. And maybe one way of really helping the 30-odd real estate agents would be keeping the dialogue out of blogosphere and addressing it directly with the relevant interested parties together with perhaps the Institute of Estate Agents, a professional body of real estate agents. 30-odd agents out of the tens of thousands in Singapore is really a tiny tiny dot in the little red dot.

SMRT: On the wrong track?

22 Dec

When it was first listed on the Singapore Stock Exchange in 2000, it prided itself as the world’s first listed metropolitan rail company that was publicly listed.  More than a decade down the road, with epic disruptions during the peak shopping period, cracks are appearing on this grand experiment once lauded as a world class public transport system. Rather than criticise SMRT’s operational incompetence, this post will explain how SMRT was structurally ill-conceived by the government and SMRT itself. 

All graphics in this post are from SMRT had used these graphics to explain and attract shareholders and potential investors.

The argument for privatization was that it improved efficiency and sustainability in the long-term while ensuring that operators stay on their toes and continue to reinvest profits into the business (which is after all a public service).  It’s pretty hard to disagree as capitalism and its related ideas has been prevalent in our time. Being a private company does have its advantages over a state-owned enterprise; although many continue (including premium blogs) to criticise the fact that SMRT is making a profit!

The weakest argument is that since it is providing a public service, it should not be making a profit at the expense of the commuters. However, we all know that without decent profits, the rail system would gradually fall in derelict (unless we would want govt to subsidise it endlessly). The problem really lies in how much profit it should make and how it should distribute its profits as a company that provides a public service.

SMRT’s Dividend Policy

SMRT has a policy that guides it to distribute at least 60% of their profits as dividends. In fact, it has consistently (since 2006) distributed about 75% or more of their profits. For example, in 2010, it earned 10.7c per share and distributed 8.5c as dividend, amounting to almost an 80% distribution of its profits. Hence, if SMRT consistently distributes most of its profits back to its shareholders, how much does it have to to competently maintain, renew, reinvest and innovate on its operations?? Does it then go against the whole purpose of why it was privatised in the first place?  In the years when Singapore’s population was booming due to immigration policies, why didn’t SMRT retain and reinvest more of its profits rather than continue to distribute high dividends (and continue to stress the rail systems)??


Besides an internal policy to distribute 60% of its profits, SMRT can propose a special dividend to enhance shareholder value.

Since 2006 SMRT has distributed more than 75% of their profitsas dividends to shareholders except in 2009 where the distribution was 72%.

An indirect taxation

So, since so much of its profits are distributed as dividends to shareholders, who are SMRT’s shareholders? Almost everyone on the street would say it belongs to zheng hu and they are right.Temasek owns 55% of SMRT and the amount they get yearly in dividends is princely. What a brilliant method to impose an indirect tax on commuters while recouping its investment for building the rail infrastructure!! (Great thinking by the scholars!) Hence, with a majority chunk of SMRT owned indirectly by the government, should it not be responsive to realise that the re-investment into existing rail infrastructure was inadequate and incommensurate with the population growth?? Perhaps it is also because SMRT was seeking to maximise profits while ensuring that they distributed high dividends that basic security requirements of a public rail operator were ignored which led to the cases of vandalism earlier this year.

Temasek owns almost 55% while the other big money shareholders make up almost 74%.

Fare hikes and increasing ridership

With fare hikes almost every 2, 3 years since it was listed in 2000 and an increasing train ridership, SMRT’s dependency on fare-based revenue is still a high of about 80%. That is to say 80% of their revenue is derived from commuters paying public fares for trains and buses. Theoretically, if SMRT is able to reap handsome profits from its advertising, commercial rental and overseas operations, it would be able to delay fare hikes to commuter. But due to its inability to do so, SMRT had to time and time again request for a fare hike (which would invariably be given by PTC) in order to maintain its profit margins and maintain its dividend policy. For this reason alone and not the service disruptions, CEO Saw Piak Hwa should vacate the post as she had enough time to proved her mettle, or lack of it. Until today, Raffles Xchange remains the only notable commercial development of SMRT while other Xchanges such as the Dhoby Gaut one remains dearth of traffic.


Hence, after a decade of high dividends and increasing shareholder value, the government and Temasek should take this opportunity to review this model of ownership where a public service company is listed on the stock exchange. It is also ironic that many who can only depend on public transport, cannot afford equities that are listed to provide them this essential service. No doubt, public transport companies should be profit making, but should they be publicly listed? Should they choose to maximise profits at all costs and maintain a dividend policy that would seek to make the rich richer? Should they have a guidance on the rate of return on equity (for fare-based revenue) so as to prevent over-exuberance profit making?

Perhaps even SMRT should be delisted and privately owned by Temasek and cornerstone investors. Ever more should employees of SMRT begin to own part of their company (in terms of shareholding) so that they can feel proud to work in the public service and provide commuters with a “world class experience” – something which was sorely missing from recent events.

Trains are after all machines and it is without a doubt that breakdowns would occur but are the policies and  long structure of SMRT and its symbiotic relationship with the government at the expense of the commuters??

PS: Commuters should also learn to be more gracious as there were many reports of abusive and abrasive commuters and people who ignored children and elderly.

Singapore Day Dreaming

14 Dec

When I was growing up, once in a long while, you would hear of stories during family gatherings that some uncle and auntie or distant cousin had finally bought a condo in newton or apartment along river valley. It was still possible, one could still dream and work hard to achieve that lofty dream. But with the growing income gap (growth at all costs) and unrestrained foreigner buying in the prime property districts of Singapore (district 9, 10 and 11 and Sentosa), buying a condo in the suburbs nowadays and paying thru your bloody nose for a 1+million pigeon hole is now considered a ‘big thing’! Apparently, you have made it!

If this continues, in 5 to 10 years time, we will most likely see the prime districts an enclave of the rich and/or famous with close to 30% of them holding passports other than the Singapore red. Less and less would you hear of the success stories floating around in your social circles. You either stay in Pasir Ris HDB or Pasir Ris Condo XXX. Nothing wrong staying in a Pasir Ris HDB or condo, but the country would be divided starkly along have and have-nots, our meritocracy a myth, and a huge chunk of the island owned by a minute segment of the population – some of whom don’t even stay here much less belong here.

Images courtesy of

Many of our next generation, especially lower-middle income and below, would worry about affording a home in their country. And even if they do, mortgage payments would take away most of their disposable income leaving less for a higher standard of living or expenses which would otherwise be invested into their children so that they may do better than their parents and compete against foreign talent. This excludes the fact that property rentals have been rising in tandem with property prices to further exacerbate the costs of business.

The recent steps to increase various forms of taxes for foreign buyers, PRs buying 2nd properties and citizens buying 3rd properties are in the right direction. Land is limited in Singapore and Singaporeans should have a stake in Singapore, and not just through HDB! The price to pay for such anti-free market moves is of course limiting the potential for Singapore as an investment friendly country. But the price for not doing so is limiting the potential of Singaporeans which would have a long detrimental effect to our country.

Should we look at other measures such as limiting foreigners to buying new properties only (just as in Australia)? Implementing a minimum holding period for foreigners buying properties? Especially those who buy in the prime districts. Implementing a compulsory lower charity tax in lieu of a higher property tax when foreigners sell their properties at a profit (i.e. capital appreciation)?

The Govt should not stop making the Singapore dream achievable to all Singaporeans…as it is the dream of making it as an entrepreneur is already difficult with a small market and big-business-friendly government.  We are not yet a 1% country but many of us are being squeezed by big businesses and big money.