SINGAPORE: As major economies mobilise large sums of money to build up their own strategic industries, Singapore “cannot afford to outbid the big boys” to attract investments from multinational corporations, said Deputy Prime Minister Lawrence Wong on Monday (May 1).
Singapore is already feeling the impact as competition for investments becomes tougher, said Mr Wong, as he laid out several challenges that Singapore faces in a world that is “in dire straits”.
“We won’t have enough money to match the competition but what we must have enough of are ingenuity and innovation, guts and gumption,” he said, addressing 1,400 labour movement leaders, workers and tripartite partners at the NTUC May Day Rally.
“That’s the only way we can and will prevail, even when the odds are stacked against us.”
This is the first time Mr Wong, who is expected to be Singapore’s next Prime Minister, is delivering the keynote speech at the annual May Day Rally in place of Prime Minister Lee Hsien Loong. He had spoken alongside Mr Lee in last year’s rally.
Mr Lee delivered his May Day message on Sunday, where he described how the external environment remains volatile and fraught with geopolitical tensions. But he said Singapore can be “cautiously optimistic” about its immediate economic prospects.
STIFFER COMPETITION FOR INVESTMENTS
In a wide-ranging speech lasting for about 40 minutes, Mr Wong noted that advanced economies are rolling out massive subsidies to build up their own domestic production capacities, especially in strategic industries like semiconductors and clean energy.
He cited Germany as an example, which is negotiating with Intel to establish a large semiconductor plant in Eastern Germany. The deal involves S$10 billion (US$7.5 billion) in financing support.
“Ten billion dollars for just one project. That’s almost double what MTI (Ministry of Trade and Industry) will spend this year to grow our entire economy,” he said.
“Can we afford to outbid the big boys – not only the Germans, but also other Europeans, the Americans, the Chinese, the Japanese? Outbid all of them for the investments we want?”
Singapore is already feeling the impact, said Mr Wong, citing conversations with MNCs about raising Singapore’s effective corporate tax rates to 15 per cent in line with an overhaul of global tax rules.
“They tell us: Yes we understand this is happening worldwide. Singapore’s incentives used to be ‘best in class’. But if your tax rates go up, then Singapore will become less competitive compared to other places.
“Besides, my home jurisdiction is offering such large subsidies for my next investment. So please tell me what Singapore can offer to persuade my HQ to locate the next investment project here,” said Mr Wong.
“Some politicians go around telling Singaporeans: ‘Don’t worry, raise corporate tax to 15 per cent. You will have lots of revenue and anyway, we also have lots of reserves so we can merrily spend more’. Unfortunately, they don’t understand the magnitude of the challenges we face,” he added.
“So let me tell you plainly: We cannot afford to outbid the big boys just to get the MNCs to invest here.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
