Singapore not a model for post-Brexit Britain, forum told

Britain's Prime Minister Theresa May leaves 10 Downing Street in London in a week dominated by Brexit negotiations. (AFP)
Updated 07 November 2018
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Singapore not a model for post-Brexit Britain, forum told

  • Trade relationships dominate discussions at Singapore forum
  • Singapore has no immediate plans for closer ties with Britain

SINGAPORE: Singapore is not an appropriate model for the UK as it seeks to find a post-Brexit economic path, according to the prime minister of the Southeast Asian island state.
Lee Hsien Loong told the Bloomberg New Economy Forum that Britain “would have to find a different way to prosper having made the decision to leave the European Union.” Some UK politicians have argued that a Singapore-type model — a small trading hub unaligned to major power blocs — would be a possible economic template for the UK, which voted two years ago to leave the EU and is currently negotiating the terms of its exit.
“Maybe if you look at Singapore, you might think you have some ideas that you can use, we hope so. But I don’t think you can take one society’s solution and just plonk it on a different society.”
Singapore left the Malaysian Federation soon after it got independence from the UK in the 1960s, but became a major trading and financial hub in Southeast Asia.
But such a role for Britain would require big sacrifices of the UK’s developed system of state benefit, Long argued.
“Britain has developed a system of state welfare, a government role where the state accounts for 45 percent of the gross domestic product. The Singapore government accounts for maybe 17 percent of the GDP. So to be like Singapore, are you going to give up two thirds of your government spending, state pensions and national health?” Loong asked.
Singapore has no immediate plans for a closer relationship with post-Brexit UK, he added.
Global trading relationships have been the main theme of the two-day forum. Hank Paulson, former US treasury secretary and one of the co-chairs of the event, said that there was the risk of an: “economic iron curtain” coming between the US and China if they could not find a way to resolve their economic differences, which have threatened to erupt into a full-blown trade war over US imports from the Asian economic giant.
“The prospect of an economic iron curtain that throws up new walls on each side and unmakes the global economy, as we have known it, is very real,” Paulson told the forum.
Pauson said that President Trump should consider rejoining the Trans Pacific Partrnership, the trading alliance from which he withdrew soon after entering the White House, in order to influence Beijing economic policy.
Even if the US and China reached a deal on the commercial dispute between them, there was still the risk of a major confrontation between them due to differing geo-strategic interests, he said.
But he added that China was not a real enemy of the US. “China does not pose an existential threat to American civilization,” he said.


SoftBank mobile unit to go for $21bn IPO

Updated 13 November 2018
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SoftBank mobile unit to go for $21bn IPO

  • The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations
  • SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies, and e-commerce behemoth Alibaba Group Holding

TOKYO: SoftBank Group Corp. has won approval to conduct a 2.4 trillion yen ($21.04 billion) initial public offering (IPO) of its domestic telecoms business, in a deal that will seal the group’s transformation into a top global technology investor.
The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations that CEO Masayoshi Son predicts will drive future tech trends.
SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies, and e-commerce behemoth Alibaba Group Holding.
SoftBank Group aims to raise 2.4 trillion yen through the sale of 1.6 billion SoftBank Corp. shares at an tentative price of 1,500 yen each, a filing with the Ministry of Finance showed on Monday.

 

 The amount could rise by 240.6 billion yen if demand triggers an overallotment, taking the total closer to the $25 billion that Alibaba raised in 2014 in the biggest-ever IPO.
The final IPO price will be determined on Dec. 10, and SoftBank Corp. will list on the Tokyo Stock Exchange on Dec. 19 with an initial market value of 7.18 trillion yen — about 1 trillion yen above that of rival KDDI Corp, which has about 10 million more subscribers.
The parent will retain a stake of around two-thirds, depending on the overallotment.
The mammoth offering comes at a time when investors have begun questioning the outlook for Japan’s telecoms companies.
The IPO was initially expected to appeal to investors seeking stability, but the government has recently called on carriers to lower fees while backing more wireless competition, sending shockwaves through the industry.
Yet SoftBank’s brand is still likely to draw retail investors long accustomed to using SoftBank’s phone and Internet services. Many still see CEO Son as a tech visionary who brought Apple’s iPhone to Japan.
Japanese households are commonly seen as an attractive target in IPOs with their 1,829 trillion yen in financial assets, even if they are traditionally risk-averse with over 50 percent of assets in cash and deposits. More than 80 percent of the shares will be offered to domestic retail investors, a person with knowledge of the matter told Reuters.
“I think a reasonable amount of money will be attracted to this one,” said Tetsutaro Abe, an equity research analyst at Aizawa Securities. “It’s a mobile company, so the cash flow is steady.”

FACTOID

SoftBank to sell 1.6 billion shares at a tentative price of 1,500 yen ($13) each.