PM Lee identifies 3 areas of priority for govt

SINGAPORE: Singapore’s Prime Minister Lee Hsien Loong on Monday identified three areas of priority for the government: restructuring the economy, addressing the population shortfall and updating the political system.

In a wide—ranging speech to the annual Singapore Perspective Conference organised by the Institute of Policy Studies, Mr Lee said Singapore’s economic policies must enable the country’s economy to perform to its limits and help Singaporeans thrive in the new world.

He said the Economic Strategies Committee will publish its recommendations next week and the government will respond to them in the Budget.

On the population shortfall, Mr Lee said Singapore’s birth rates are not improving despite the government’s best efforts.

Last year, there were about 170 fewer live births than in 2008.

This would mean that the total fertility rate would have gone down further.

PM Lee stressed that while the decline could have been due to the global economic downturn, it was still a grave trend. If left unchecked, Singapore will face not just an ageing, but a shrinking population.

Therefore, he said the government needs to encourage Singaporeans to start families with parenthood benefits and other incentives.

However, he added that the country must also top up the population and talent pool with immigration in a measured and calibrated manner.

Turning to the subject of updating the political system, Mr Lee said that while having a sound system is essential, that in itself is not enough to produce political stability and good governance.

He said that the nation is still dependent on having the right people in charge and an able and committed team coming forward to lead the country.

The Prime Minister said a key task for his predecessors and himself has always been to identify promising people to form the next team.

He said good progress has been made in this area but he does not have a complete next team lined up in Cabinet yet.

He is confident that by the next general election, the People’s Action Party (PAP) will field a team which will consist the core of the next generation leadership.

Mr Lee also stressed that leadership renewal will be a major issue in the next general election.

Stock markets around the world slumped Friday after President Barack Obama unveiled plans to limit the size and scope of US banks and financial firms in a fresh offensive against Wall Street excesses.

Markets from New York to Tokyo reacted with barely-restrained panic to Obama’s drive to limit the size of the largest banks and introduce measures to curb “excessive” risk taking.

“Never again will the American taxpayer be held hostage by a bank that is too big to fail,” vowed Obama, flanked by former Federal Reserve chief Paul Volcker who advised the president on the rules.

He promised to “protect” taxpayers by preventing banks or financial institutions from owning, investing in or sponsoring hedge fund or private equity funds.

Wall Street gave an immediate thumbs down to the plans as US stocks plunged, with the blue-chip Dow Jones Industrial Average down more than 200 points or two percent in Thursday trading.

The news then sent shockwaves though Asian stock markets with the region’s financial centers suffering heavy losses in Friday trading. European exchanges later opened under pressure.

Obama’s measures would effectively force financial firms to choose between lucrative proprietary activities — trading in stocks and sometimes risky financial instruments for their own benefit — and traditional activities, like making loans and collecting deposits.

The initiative, which must be approved by Congress, includes a new proposal to limit the consolidation of the finance sector, placing broader limits on “excessive growth of the market share of liabilities” at the largest financial firms.

Obama blamed banks for sparking the worst economic crisis since the Great Depression with “huge reckless risks in pursuit of quick profits and massive bonuses” in a “binge of irresponsibility.”

“My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform and when I see record profits at some of the very firms claiming that they cannot lend more to small business, cannot keep credit card rates low, and cannot refund taxpayers for the bailout,” the president said.

He vowed to enact the reforms in Congress, even if Wall Street deployed an army of lobbyists to kill them.

“If these folks want a fight, it’s a fight I’m ready to have,” he vowed defiantly.

The announcement was the latest attempt by the White House to harness public rage at Wall Street bonuses and the financial crisis.

David Easthope, analyst with Celent, a research and consulting firm, said the effort could hit the banks in one of their most profitable areas.

Proprietary trading “has been the sweet spot for leading investment banks over the last few years, and executives will be concerned that Washington will be taking away the frosting,” he said.

The Financial Services Roundtable, which represents 100 of the largest integrated financial firms, said the proposal would do little to improve risk management or protect consumers from irresponsible loans and trades.

“The proposal will restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs,” said Steve Bartlett, president and chief executive for the Roundtable.

The group represents 100 top financial services firms providing banking, insurance, and investment products and services.

Obama’s first year in office was dominated by efforts to rescue a handful of banks that threatened to topple the US economy after being exposed to massive losses on the subprime mortgage market.

According to Treasury officials, about 205 billion dollars was pumped into 707 banks under the government rescue plans.

Obama has sounded a tougher tone towards banks in recent weeks as he faced widespread voter anger at the massive government bailout, which came as Americans faced surging unemployment, home foreclosures and national debt.

Top Obama economic aide Austan Goolsbee sought to counter criticism that the plan is returning to the Depression-era law creating a wall between investment and commercial banks.

“It’s not returning to Glass-Steagall,” Goolsbee said.

While the act repealed in 1999 forbid underwriting securities or investing in securities by any commercial bank, Goolsbee said, “This is not that. This says a bank cannot own a hedge fund, cannot own a private equity fund or do trading for its own account that is not related to its client business.”

He added that the goal is “to get back to the fundamental nature of the bank, which is serving its clients, rather than investing for its own profit.”

Outlook & Forecasts for 2010

• Global growth to normalize at around 4% GDP, mainly driven by growth in emerging markets
• Equity markets to rise another 10%-20% in coming months due to increased corporate profitability and operating leverage
• Re-pricing of risk in bond markets, especially sovereign debt
• Short-term rates to remain low for another few months but to rise strongly later in the year
• Long-term rates to move higher, but more moderate than short-term rates
• Inflation to remain at very low levels for another 12-18 months
• Energy prices to move higher with oil breaking USD 100/barrel in the first half of 2010
• Soft commodities to move sharply higher with upside potential of 30%+ in 2010
• Gold to consolidate after strong upward move, trading in narrow range in Q1/2010
• Gold to continue upward trend in second half of 2010
• U.S. Dollar to move lower, despite temporary upward bounces

As you can see, we’re expecting a rapidly shifting financial landscape to persist throughout the year (as it has since 2007/2008). We covered some of the broader points in last week’s macro-view, but this week I wanted to drill down and focus on just a few major trends that could be immensely profitable for you as the year wears on…

Gold Finds a New Kind of Value in the Wake of a
“Once-in-a-Century” Crisis

As we anticipated in previous A-Letter outlooks, gold has recently moved to record levels and it has been one of the best performing investments in the recent past. But should investors be worried about the upward trend of gold and take it as a sign that there is trouble ahead for markets in general?

In our view the answer is no.

We’ve written about the changing importance of gold in our previous reports, and we don’t think that gold is all that expensive at current levels. Again, once current prices are seen in a historical context, considering inflation and the weakening U.S. Dollar, gold is not expensive at all.

Also the obvious willingness of emerging markets and their central banks to use gold as an additional way of diversifying their reserves will be highly supportive for the yellow metal in the years to come…

Global Investor: Earnings Falsely
Discount a Strong Recovery in 2010

Thus far into the corporate earnings season, the results have best unimpressive. And U.S. Treasuries have noticed, as the benchmark yield on ten-year paper declines from 3.84% on December 31 to 3.70% this morning.

For the most part, revenues are flat to slightly higher while net income has indeed increased – but compared to 12 months ago that comparison is pretty easy. Combined with fudged accounting rules in the United States since May and creative accounting elsewhere, it’s no wonder banks have recovered sharply. Plus, let’s not forget the Fed’s greatest gift of all – providing a remarkably profitable spread trade where banks received near-zero percent money and thereafter reinvest in longer dated paper or make loans at a sharply higher rate of return.

With the exception of China, India and several other advanced emerging markets like Chile and Brazil, the global economy is not booming any time soon.

The West remains stuck in a debt-infested rut and the markets have begun to protest the mountains of money created since late 2008 to arrest falling prices; government bond yields are now rising over the last six weeks as the risk of a sovereign default grows. Dubai, Iceland and Greece are just the tip of the iceberg or the hors d’oeuvre before the main course.

In the United States, still nursing deep wounds inflicted by the credit crash, consumption is still largely impaired. Consumers have boosted spending compared to 12 months ago and that’s normally a good sign. However, the big gains in retail are coming from the likes of discount stores, not high-end retailing or even Wal-Mart Stores. Consumers are frugal. I suppose the “feel good” factor is long gone and won’t make a comeback until real estate recovers combined with jobs growth.

Finally, it’s noteworthy to point out again that following big declines in U.S. economic output over the past 100 years, the economy has always recovered sharply. Actually, a boom is more accurate…

The bigger the drop in GDP, the bigger the bounce. Indeed, as outlined here recently, courtesy of Grant’s Interest Rate Observer, the U.S. economy went through the roof starting in 1934 following a massive 27% crash in output from 1929 to 1933. The same story, though not as sexy, occurred in prior booms and busts.

If the above historical association is true then what can we expect in 2010? Will the United States post a significant economic recovery?

Increasingly, even amid a wall of government stimulus spending, the economy is not bouncing back vigorously. You have to wonder what lies ahead once Washington starts pulling back on spending or if the Fed is forced by the markets to start raising interest rates. There’s not much juice left here unless business spending really takes off.

singapore stock market news,australia stock market ,china stock market ,usa stock market

we’ll start with the question everyone’s asking this time of year—what should we be expecting in 2010?

A: The basic story hasn’t changed; the global economy is going through a period of rapid change and the center of the world – both economically and strategically – is shifting to the East, mainly Asia. We’re moving toward a multi-polar world order, much different from the world we have been living in at the end of the last century.

We expect that world GDP growth will accelerate to about 4% in 2010 and that more than 70% of that growth will come from new markets such as China, India and Brazil. Meanwhile, immense amounts of capital will flow to markets that experience a stronger economic growth pace…it’s just a basic law of finance and is proven by the growing capital flows to these markets.

These capital inflows have helped push up equity prices in emerging markets by 50% to 100% in the last couple of months. As a result, many investors now believe that these markets are overvalued. We strongly disagree with that assertion…

We admit that these markets might look expensive when compared to Western markets. However, investors need to realize that we are dealing with a strong and very powerful paradigm shift here, which could result in chronically high demand for investments in these regions for many years to come.

Q: What’s your take on this equity rally?

A: Many investors missed the rally (or a good portion of it ) and are still on the sidelines, waiting to enter the market when markets consolidate. This seems to be one of the reasons why markets seem so well supported against the downside at the moment. I mean; when was the last time you saw a significant 3%+ move to the downside? It’s been a while.

And, when stories like Dubai – the darling of investors– running out of money don’t even cause a market sell-off…well, the market is probably too protected on the downside. With the global economy in recovery mode, ample cash sitting on the sidelines and corporate profitability on the rise, we believe there is a good chance to see further upward momentum in equity markets next year.

Of course, our scenario is based on the assumption that we don’t get any surprise shocks next year – internal or external to financial markets. What could be a possible shock in the future? A terrorist attack, a pandemic flu or another geopolitical event? It could be any of those things. But markets are showing signs of resilience…and we think even the consequences of such an event should be predictable and manageable.

Q: How are the Western countries – Europe…the U.S., the UK – looking to you right now?

A: We do believe that Western economies will recover as global growth once again accelerates. Accelerating growth combined with a generally high degree of operating leverage means we’ll likely see corporate profits that surprise to the upside over the next couple of quarters.

There are; however, going to be significant differences in countries’ relative performance during this economic rebound…we’re most concerned about the United States as well as some European nations.

On the other hand we’re very upbeat on countries such as Australia, Norway and Switzerland for various reasons.

Q: Any other trends you’re looking out for?

A: We’re expecting a relatively strong upward pressure on energy and commodity prices. More than what most investors might be expecting. A normalization of global growth – combined with the unique supply and demand curves for energy and commodities – is set to result in an exponential price increase. Gold and other precious metals are a special case and are driven by other factors.

The concern about the global financial system and the generation of ample (and probably excess) liquidity by central banks around the world has increased concerns about paper money as a store of value. These concerns are valid in our view and we don’t think gold is overvalued at current prices considering all the factors previously explained. We can see gold prices taking a breather here for a couple of months with the most likely scenario being trading within some range.

Rising inflationary pressures, which we can see emerging in the next 2-3 years could eventually, help in driving the price of gold to $2,000…

Platinum has the makings of being the commodity story of 2010. Right now, the stars are aligned for this super rare metal, and this year I expect it will even outperform gold and silver.

Over the last three months Platinum prices have already risen 15.8%. And that’s set to continue.

So why are investors worldwide getting so excited about platinum? Let me tell you.

First of all, the supply of platinum is really tight.

When the world asks for more of the stuff, the industry is stuck in first gear and just can’t increase the supply. For instance, it’s taken the industry thirty years to just double production.

This is partly because it’s so rare. For every trillion particles in the earth’s crust, just three parts of them are platinum. Last year the entire industry managed to squeeze out just six million ounces, which would fit in a box measuring two metres on each side!

Second, demand is rising fast.

The four main groups of users take everything the industry can provide already. With demand rising, a global platinum deficit is on the way.

Autocatalyst manufacturers are the most notorious users of platinum, but last year they used just over a quarter of the supply. Between them and other industrial users, such as computer hard disk manufacturers, they bought about half of global platinum supply last year.

If the global economy continues to recover, these two groups will need more platinum.

Funnily enough, the biggest users of platinum were jewellery manufacturers. They took up 42% of supply last year.

They mopped up what other industries didn’t need that year.

And now the world has got an increasing taste for platinum jewellery. The Chinese platinum market is in its early days but is taking off fast. This has the scope to be a huge destination for the world’s platinum.

But the most exciting source of platinum demand by a mile is the new kid on the block - the Exchange Traded Funds (ETFs).

Between 2006 and 2009 they have gone from zero, to ten per cent of the market. They buy the metal and hold it on behalf of investors. The Investors can then buy a portion of the platinum, like they were buying a share in a company. It’s an easy way to invest directly in the metal.

For example, Gold ETFs do this and have been a massive winner. The one on the New York Stock Exchange has now got the sixth largest gold holdings in the world.

And platinum ETFs are also growing rapidly. A new platinum ETF (ETFS Physical Platinum shares) listed on the New York Stock Exchange earlier this month.

Investors buy in for one reason - they expect future price rises. This new ETF has been given a whopping seven percent allocation of the world’s platinum supply.

This is game-changing news for two reasons.

Firstly there isn’t a spare seven percent to go around. It’s just not there.

Secondly the ETF puts a massive investor base in front of the platinum market which is basically miniscule. It’s just a tenth of the size of the gold market which in the big picture is also tiny.

So ETFs will mop up at least 17% of the market this year. If the new ETF is a success, it will grow and others may follow its footsteps.

Make no mistake; demand for platinum is on the rise.

So we have the makings of a perfect storm:

• Super-tight supply.
• Rising demand from multiple users.

This is exactly what I’m always searching and hoping to uncover for Diggers and Drillers readers: A commodity right in the centre of a perfect storm.

In mid-December, platinum was ticking all the boxes and then some. So, I tipped a stock that was well placed to reap the benefits. Already, Diggers & Drillers readers that acted on the tip are already enjoying fifty percent gains on their investment within a month.

From where I’m sitting, platinum looks like it is going to have a great ride well beyond the end of this year as well. Even before the new ETF burst onto the scene, there was already a forecast platinum shortage for the next few years. The ETF will only multiply this shortage.

And where there’s a shortage there’s a price rise.

Global Investor ,Silver must  confirm the Gold Rally

To confirm gold’s bull market run, silver must settle above $20.78 an ounce.

Silver hit $20.78 an ounce back in March 2008; while gold also hit a nominal high that month, it surpassed contract highs 12 months later while silver stalled.

If there’s an ounce of doubt still apparent in the nine-year bull market for the precious metals it’s silver’s failure to confirm the primary trend in gold prices. Silver has failed to confirm the rising trend in gold over the last four months because it didn’t hit a new high last year whereas gold did.

Historically, gold and silver have rallied together in all precious metals’ bull markets since WW II. I can’t find a period when one metal rallied at the same time the other declined. Though gold is a monetary metal – silver is more tied to the economic cycle because of its industrial usage – the latter nevertheless plays a role amid an uncertain monetary environment. Supplies for both metals remain at historically low levels as production continues to decline.

Any bear market rally for the dollar must be viewed as yet another opportunity to sell the dollar in exchange for gold, silver and the mining shares. I would also add to my holdings in Canadian dollars and Norwegian kroner on any intermittent dollar rally.

Singapore’s first casino resort to open January 20

SINGAPORE (AFP) - – Singapore’s Resorts World Sentosa said Tuesday it will open phase one of the city-state’s first casino complex on January 20, beginning operations at four luxury hotels.

Festive Hotel, Hard Rock Hotel Singapore, Crockfords Tower and Hotel Michael will open their doors on January 20, offering 1,350 rooms and 10 restaurants, it said in a statement.

Resorts World Sentosa said it is working with authorities to obtain approvals for its Universal Studios Singapore theme park and will announce the opening date for the casino when its receives notice of its licence.

The casino and theme park are expected to open in “early 2010,” it said.

A marine life park, expected to be the biggest in the world, a maritime museum, a spa and two more hotels will be launched after 2010.

The development, located on Singapore’s Sentosa island, is built by Malaysian gaming giant Genting Group at a cost of 4.4 billion US dollars.

Marina Bay Sands, another casino resort being built by US gaming tycoon Sheldon Adelson’s Las Vegas Sands, is scheduled to open in April following delays in the construction.

Adelson said last month that the delays were caused by monsoon rains and financial problems facing some subcontractors.

Singapore in 2005 gave the go ahead for legalised casino gambling, allowing two casinos to be built in the city-state.

The government hopes the casinos will boost the country’s tourism appeal and draw more visitors to the small island-republic which relies mainly on man-made attractions to entice tourists.

Oil hovers above $73 ahead of OPEC meeting

Dubai + Iceland = Bubble Posterboys

When it’s all said and done, these economies personify the bubble more than even Bernie Madoff.

Instead of inflating the expectations of an individual or group of individuals, these were entire countries who hoodwinked the rest of the world. They made legitimate plans for their sustained meteoric rise, and they believed what they were selling.

This wasn’t a matter of Tom, Dick or Harry living outside of his means and buying a house he couldn’t afford…we’re talking about institutions that affect the lives of millions of people. Fueled by cheap borrowing costs and wildly irresponsible appetite for greater and greater risk on the part of investors, these countries built delusions so grand that they’ll go down in anecdotal history as symptoms of the bubble.

In five years, someone might ask you, “Remember Dubai?” If so, you’ll probably just chuckle in disbelief at the kinds of things people used to believe.

Will the Third Bubble Brother Please Step Forward?

But as we said above…these things tend to come in threes. If so, then who’s the next bubble brother? Which country only seems to have palpable value today, and when we look back we’ll see only bubble-era hopes and dreams?

Our top candidate in this race is currently Venezuela.

To be sure, the US, the UK and Japan are loaded to the gills with debt. The PIGS in the EU aren’t much better off. But compared to Iceland and Dubai, each one of those economies is a leviathan. They’re in the major leagues. And in keeping with Iceland and Dubai, we’re looking for someone out on the fringes. That someone is Hugo Chavez, the self-proclaimed “Socialist Revolutionary” down in Venezuela.

Hugo took over Venezuela in 1999, and he’s been making an awful stink down there ever since. He’s the type of leader who never would’ve lasted during the Cold War…mainly because of his (debatable) successes with implementing socialist policies.

He’s endured strikes and coup attempts, nationalized industry in everything from telephones to cement…and he’s managed to maintain the popular favor far longer than most Latin American dictators – largely thanks to his entitlement programs and food price controls that benefit the poor.

But any Latin American history buff will tell you these things never last forever. And Chavez’ administration is starting to show its age…

His price controls have lead to sporadic food shortages, with companies consistently operating at a loss to meet his price targets. The state-run oil company has started to falter in production, failing to meet the nation’s OPEC quotas. Even with oil exports fetching near US$80 a barrel, the country’s still on the eve of crisis.

In a recent interview regarding the deteriorating situation at the nation’s banks, Chavez was quoted as saying, “You can be sure that if I need to intervene in all the banking system, I will do it.” That threat of bank nationalization caused yields on the country’s debt to skyrocket immediately after the interview, as investors started pricing in the possibility of a default.

For years now, Chavez has been America’s unnerving, south-of-the-border Socialist neighbor. His reign has already outlasted so many other comparable regimes in the continent’s history. Looking back five years from now, you probably won’t have a hard time believing that even that was a byproduct of the bubble.

The last few years have seen Exchange Traded Funds or ETFs, become exceptionally popular, especially in the United States. This popularity is well justified as ETFs offer an easy way of gaining exposure to stock groups and commodities.

Broad market and industry group based funds attract the most volume, but there are also ETFs on currencies, a wide range of other commodities and even short positions. This makes matching an index like the S&P 500, hedging currency risk or profiting from a falling market far more accessible - and cheaper - for the average investor than ever before.

A good example is the iShares FTSE/Xinhua China ETF. This matches the movement of the top 25 Chinese shares and can be traded in the US via the symbol FXI (NYSE) or in Australia through IZZ (ASX). The FXI is currently up 97.5% from its March low, outperforming the SPX which is up 66%.

US FTSE China ETF vs. S&P 500

click to enlarge

However, as with any financial instrument or investment, it is vital that investors do their homework before diving in. In Australia, one consideration for ETFs is dividends and more importantly, if the dividends are franked. For those unfamiliar with franking credits, the ASX website defines a fully franked dividend as:

“Dividend paid by a company out of profits on which the company has already paid tax. The investor is entitled to an imputation credit, or reduction in the amount of income tax that must be paid, up to the amount of tax already paid by the company.” www.asx.com.au

Franking credits are part of the dividend imputation system and both avoid the double taxation of company profits and offer a tax incentive to invest in shares.

Checking the specifications of the IZZ (ASX) ETF reveals that the dividends are not franked. While not a show stopper, this could make a significant difference at tax time and therefore should be understood in advance.

Of more concern is the way that some ETFs are calculated. Take the Ultra-short Oil & Gas ETF (DUG:NYSE). As the word ‘short’ suggests, the DUG is designed to move inverse to the Oil & Gas sector. Not only that, ‘ultra’ means it will move twice the distance in the opposite direction, or will it?

The chart below shows the Oil & Gas Index (DJUSEN: CBOT) compared to the DXD. Note that in 2008, while the DJUSEN made a lower low in November than in October, the ‘ultra-short’ DUG failed to make a higher high.

Ultra-Short Oil & Gas ETF vs. Oil & Gas Sector Index

click to enlarge

This can be taken a step further by introducing the Ultra (long) Oil & Gas ETF (DIG:NYSE) which is designed to give double the long exposure. Now, one would quite naturally expect that if you bought both the DIG and DUG on the same day, you would be perfectly hedged (obviously this would not be done in practice) and therefore whatever loss was made on one leg would be balanced out by an equal sized profit on the other leg. Not the case! Buying both on October 10th 2008 could have resulted in a loss on both positions as the chart shows.

Ultra Oil & Gas vs. Ultra-short Oil & Gas

click to enlarge

Essentially, the reason for this abnormality is the method used to calculate the movement of ETFs. So the simple solution is always to check the performance of an ETF to see what it is based on. This can be done easily in products like ProfitSource via the overlay feature used in the charts above. One instrument can even be inverted when comparing short ETFs.

There are also indicators like Relative Strength Comparison that will compare the performance of one symbol to another. If a symbol is exactly correlated to the comparison symbol, the RSC will have a value of 100. The chart below illustrates just how well correlated the SPY (S&P 500) ETF is to the S&P 500 Index.

S&P 500 ETF vs. S&P 500 Index

click to enlarge

An ETF with the kind of correlation above, makes for a very simple way to match the performance of an index – the goal of many fund managers – at a low cost when compared to other alternatives.

All-in-all, exchange traded funds are very useful. However, like anything, it is important to understand what you are trading.

SINGAPORE: Visitors to Sentosa island could soon hop onto coaches from Changi Airport, Orchard Road and Marina areas, to various drop—off points on the island.

The Sentosa Development Corporation has called for a tender for “experienced and established coach operators” to operate a shuttle service network from March 1, as new attractions and Resorts World Sentosa come on board next year.

Sentosa welcomed 6.1 million visitors last year, but this is expected to grow to around 10 million when Singapore’s second integrated resort opens in the first quarter of next year.

The proposed shuttle service is aimed at providing convenience for tourists and includes the development of tours and packages for overseas guests to experience the resort network, said Sentosa Leisure Group commercial director Susan Ang.

But tender documents show plans to run ad—hoc services from “key heartland hubs” to Sentosa, which will be activated on peak periods and events such as school holidays, public holidays and long weekends.

Operators will propose the bus frequencies, operating hours and ticket prices for the routes. Sentosa is targeting an annual ridership of 300,000 in the shuttle service’s first year of operation, with a 15 per cent annual increase planned for the second year.

Although mainly targeted at overseas visitors, regulars to the island welcomed more public transport options to get on the island. Visitors travelling via public transport to the island now have to alight at HabourFront and catch either the Sentosa Express or the Sentosa Bus.

Sales manager Leonard Ho, who remembered being caught in traffic jams entering the island during peak festive periods, said: “It will be a big turn—off if the island becomes a car park. I will gladly leave my car at home if more bus services can promise me a smoother ride in.”

Besides the proposed Shuttle Network, Sentosa has also embarked on a S$300—million Transport Management Plan to improve mobility and connectivity for guests in and around the island. Measures include boosting the monorail and bus fleets, building a new $70 million boardwalk by next year, and improving roads.

Slated to open by November next year, the 620—metre long Sentosa Boardwalk — designed to carry 8,000 guests per hour, in each direction — will allow visitors to walk onto the island.

On Tuesday, two new trains were added to the Sentosa Express fleet, raising its total carrying capacity to 4,000 guests per hour, in each direction.

Island entry has also been made easier — guests can now tap their way into Sentosa with their ez—link cards when they connect to the monorail at VivoCity, and skip the step of buying separate admission tickets.

The flight from Vienna to London Heathrow was barely half full. And tThe usual hustle and bustle so typical of Heathrow was mysteriously absent that afternoon when I arrived.

Indeed, London is not beating to the same rhythm it was just three years ago.

For all intents and purposes, the United Kingdom is basically bust. Its banking system is desperate for capital and has been heavily reliant on The Bank of England for support. This applies mainly to RBS and Lloyd’s – both insolvent. The credit crisis almost destroyed the country’s financial system by early October 2008; almost 13 months later, this government is printing gobs of money and remains the single biggest purchaser of gilts (their own government bonds).

In 2008, the United Kingdom spent more than its entire gross domestic product or more than $400 billion dollars recapitalizing the financial sector.

The United Kingdom will recover. Britain is still home to the second-largest financial center in the world and though it will lose that status to Beijing over the next decade and beyond, New York’s standing won’t be far behind. American financial power since 2008 isn’t even based in New York or what’s left of Wall Street anyway; it resides in Washington.

We are at the “beginning of the end” after 300 years of Anglo-Saxon financial domination…and nowhere is this reality more apparent than in London in late 2009. The city’s big buzz has been cooled by the financial crisis. You feel a chill.

Finally, as an investor, there’s absolutely nothing I’d buy in the United Kingdom after a huge rally for sterling. Not real estate, not stocks and certainly not gilts. I would, however, short the pound.

Genesis, the rock group, couldn’t have said it better when they released their 1973 seminal album – Selling England by the Pound. Perhaps today it would be more appropriately entitled “Selling England Short by the Pound.”

But while Russia and China are leading the charge against the “‘anti US Dollar as a reserve currency”’ sentiment, India has not lagged too far behind. The Indian Government has made its views known at various global gatherings including the latest G20 meeting held a few weeks ago.

The RBI decided to take the public step of announcing its purchase of gold for its reserves. It chose to diversify its reserves by buying Gold rather than the U.S. Dollar. While India’s reserves are not huge ($300 Billion), they have been growing steadily over the past few years (except for the collapse of the financial markets in September 2008).

But the story does not end there folks. Its gets much more interesting…

The RBI decided to buy the block of Gold (200 Tons) from the IMF in SDRs, not U.S. Dollars.

For those who are new to class, let me explain what an SDR actually is. SDR stands for Special Drawing Rights. It’s an artificial currency that the IMF created to transact its business. When the IMF lends money or gets paid back, it does its math in SDR’s. And the SDR is a basket of currencies…currently 44% USD, 34% Euro’s, 11% Yen, and 11% British Pounds.

Again the spin doctors in the U.S.said, “We instructed the IMF to sell the Gold in SDRs, not U.S Dollars.” That, my dear reader, is utter nonsense. Would you believe that the U.S. would instruct any global agency to use non-dollar denomination for an asset that is traditionally priced in U.S. Dollars?

What’s next? Instruct Iran to start its Oil exchange and buy/sell Oil in Euro’s?

India has a central bank that is considered by some to be the best in the world. To quote The Economist, the Royal Bank of India is “conservative and not impressed by fads.” True to that trait, India’s central bank made headlines last month when it became the first central bank to diversify in a serious way away from fiat currencies. It did so by buying 200 tons of gold from the IMF.

India’s stock market, meanwhile, is up five-fold in the last seven years and the economy has been growing at over 7% a year, including throughout the global recession. The World Bank now expects it to overtake China next year as the world’s fastest growing economy.

As market-based economic reforms continue in that country and foreign investment hits new highs, the prospects for long-term growth of the economy and earnings of its major companies remain very good.

Indian investors should do well in the coming years. Yet thanks to the bull-market multiplier of an appreciating rupee, foreign investors in Indian shares may do even better.

TRINIDAD AND TOBAGO: Singapore Prime Minister Lee Hsien Loong on Friday urged members to actively engage in the issue of climate change at the Commonwealth Heads of Government Meeting (CHOGM) in Trinidad and Tobago.

The Commonwealth gathering is the last international meeting before the Copenhagen summit next month.

Reflecting the urgency in talks, UN Secretary General Ban Ki—Moon, French President Nicolas Sarkozy and Denmark’s Prime Minister Lars Lokke Rasmussen have all made their way to Trinidad.

The Commonwealth Summit is on the back of a post—crisis landscape and at a time when world leaders are struggling to reach a global consensus on climate change.

Britain’s Queen Elizabeth II opened the meeting, and said the Commonwealth has an opportunity to shape world response to the challenge.

“The Commonwealth has an opportunity to lead once more. The threat to our environment is not a new concern, but it is now a global challenge which will continue to affect the security and stability of millions for years to come,” said the Queen, who is also Commonwealth Head.

“Many of those affected are among the most vulnerable, and many of the people least well able to withstand the adverse effects of Climate Change live in the Commonwealth.”

Speaking at the leaders’ retreat, PM Lee said countries should do what is practical and sensible, keeping in mind the costs, trade—offs and political realities.

He added Singapore will do its part but developed countries will have to take the lead because they are major emitters of carbon.

Island states, he noted, are particularly worried about rising sea levels.

Mr Lee said developing nations must too share in this effort as their populations are equally, if not more vulnerable.

The Commonwealth includes countries such as Australia, Canada, India, South Africa and Britain — important members of the Group of 20 (G20).

Analysts will look to statements from the Commonwealth as an indicator of what the more influential G20 may reach on climate change.

The 53—member Commonwealth is a diverse group, and includes some of the world’s richest and poorest countries, accounting for one—third of the world’s population and one—fifth of global trade.

PM Lee is set to attend next month’s UN meeting on climate change in Copenhagen.

Leaders will try to agree on a pact to reduce carbon emissions during the Copenhagen meet.

Whether that will take the form of a legal treaty or a mere political declaration remains to be seen, but what leaders want is a significant agreement to reduce the ill effects of climate change.