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Tuesday, March 31, 2015

Remembering Lee Kuan Yew

"I have spent my life, so much of it, building up this country. There's nothing more I need to do.
At the end of the day, what have I got? A successful Singapore. What have I given up? My life."

The Great Singapore Queue from docthwong on Vimeo.

Frontline 2015 - EP1 Queue for 8 Hours (Chinese)

Mr Lee's final gift: One united people
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MPs laud the man who cared

Dr Ng Eng Hen said Mr Lee never had the time for the question of how history would judge him. Once, he replied: "I'll be dead by then."

"Mr Lee, we would like to tell you that Singaporeans have decided," said Dr Ng. "Thousands upon thousands have lined the streets. They queued for hours under the hot sun to pay their respects here. They did so spontaneously (in) an outpouring of gratitude and admiration for what you have done for their lives." He added: "They have pronounced the final judgment on your life's work. It is a great work that has surpassed all expectations. It is called Singapore, and filled with Singaporeans who love and revere you."

'Build on his legacy' 
"Some say that he was ruthless, unforgiving, unrelenting. But the children of his political foes had rights and opportunities like any other children. They were able to enter professions, able to become lawyers, doctors, public servants - because, this is Singapore.

 Did he do well for Singapore? Look around us. We can say what we will, history shall be the judge. 

History will judge those who act, and history will judge those who only speak. As for me, I am convinced that if I were born in Singapore in an earlier era, or if I were born in a similar era but in another Asian country, I would not, being a girl with a disability coming from a poor family with no connections, I would not have been able to go to school, enter a profession and serve the community today. 

Shortly after he took office, he said he had the lives of a few million people to account for. He said Singapore would survive. By any measure, Singapore has more than survived. Today, we are a reckoned player in the international scene. 

Today, our lives have improved, and Singaporeans have a strong foundation upon which to work hard, to make life better for ourselves and our children. 

He has completed his sojourn with us. But his journey, and the journey that he and our forefathers began, has not ended. That journey will continue. This is our Singapore. And we will build it, and we will protect it." - 

Nominated MP Chia Yong Yong, a wheelchair-user, on how people here can do well, regardless of their background

Lee Kuan Yew: Legacy in numbers
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A lion among leaders: Tributes from global leaders
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In his own words: Lee Kuan Yew never shied away from saying exactly what he thought
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A lasting legacy: Key socio-economic policies Lee Kuan Yew launched or oversaw
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The Singapore that Lee Kuan Yew built
The Singapore that Lee Kuan Yew built

Free Download: The Straits Times' Full Print Coverage Over Eight Days
The Straits Times' Full Print Coverage Over Eight Days

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Free Download: Today Special Editions

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Two e-books on the late Mr Lee Kuan Yew free for download
How to download the e-book for free: Go to Apple App store on your iPad or Google Play Store on your Android tablet or smartphone Type “The Straits Times Star” to search for The Straits Times Star E-books app Download it onto your iPad or Android device Go to "browsing" You will find Lee Kuan Yew: The Final Journey and Lee Kuan Yew: The Man And His Ideas inside The app is designed to work on iPad devices running iOS 6 and above. It is best viewed on tablets. Because of its size, you might want to download it using a wifi connection

Read More

Straits Times March 30 edition

Straits Times March 29 edition

Straits Times March 28 edition

Straits Times March 27 edition

Straits Times March 26 edition

Straits Times March 25 edition

Straits Times March 24 edition

Interesting Articles

By gum, the West is wrong about Singapore

Calvin Cheng rebuts critics on Singapore trading freedom for economic success

Lee Kuan Yew, truly the father of Changi airport

Singapore's Chief Gardener

The love of his life

Devoted husband and caring father


On Time Magazine Cover

Monday, March 23, 2015

Help people choose right healthcare plan

By Salma Khalik, Senior Health Correspondent
Mar 23, 2015
The Straits Times

WITH the launch of MediShield Life later this year, everyone can expect to pay significantly more in health insurance premiums, regardless of

whether they are on the basic scheme or on one of the private Integrated Shield Plans (IPs) offered by five insurance companies.

Those on the basic scheme need not worry as the entire premium will be payable with Medisave money. Those in the middle- to lower-income

brackets will also get permanent subsidies to help them defray the cost of the higher premiums.

But the last time MediShield rates went up, in 2013, some IP premiums shot up by more than 100 per cent - more than $1,000 in dollar

increase for some - even though the actual MediShield increases were lower.

This will likely happen again with the higher MediShield Life premiums the IPs have to pay on behalf of their policyholders - since it became

compulsory in 2005 for all IPs to incorporate the national healthcare insurance.

It therefore becomes even more important that people choose the health plan that best suits them. Buying too expensive a plan would mean

wasting Medisave money unnecessarily.

That is why the Ministry of Health (MOH) must be lauded for introducing a two-tier scheme for payment of health insurance premiums.

The first tier pays for the MediShield Life portion of the premium. The second tier for the add-on IP portion.

This second tier is unlikely to completely pay the entire IP portion for the more expensive schemes pegged at A-class treatment at public

hospitals or private hospital care.

This means that the majority, if not all, of IP policyholders will have to pay part of their premiums in cash - bringing their attention annually to

the amount they are paying in premiums.

Today, the vast majority of IP holders whose entire premium is paid for with Medisave have no idea what they are paying in premiums.

That is, until the premium tops the $800 cap on Medisave payment. At that point, many are shocked to realise the amount they have been

disbursing, unknowingly, for their health insurance coverage.

The change in the amount of Medisave that can be used for IPs will vary with age - which likely means that even the young on more expensive

schemes will have to pay part of their premiums in cash - making them fully cognizant of what they are paying.

Today, this usually hits home only when they are in their 50s or 60s when their premiums are higher than the amount of Medisave money they

can use, and a cash top-up is needed.

The MediShield Life Review Committee found that some people "have overstretched themselves to buy the most expensive product for higher


This is borne out by their finding that seven in 10 people with insurance coverage pegged at public hospital A-class wards opted for lower-

class wards when they actually needed hospital care.

Similarly, six in 10 with private hospital insurance plans opted for public hospital care.

The committee said this mismatch of insurance coverage and usage stemmed largely from poor understanding of their health plans and what

they covered.
It suggested pegging Medisave coverage of IP premiums at B1 coverage, and recommended that this level of cover be standardised across

all five insurance companies providing IPs.
While in theory this is a good suggestion as it will cover only the lowest IP category, it will likelly see many people opt for it simply because

premiums for this category of IP can be entirely paid for with Medisave for their whole lives, and not because it is what is best suited for them.
Pegging the Additional Withdrawal Limit to slightly below the B1 premiums - say at 90 per cent - means some cash outlay.

This way no one, except for those on the compulsory basic MediShield, can totally ignore the amount of premiums that need to be paid every


In other words, choosing even a B1 class coverage is a decision they made consciously, and not a default simply because premiums can be

entirely covered by Medisave.

It is also fairer to all if everyone on an IP has to pay some of the premium in cash, even if for some, the amount is very small. People who find

it difficult paying the cash outlay have obviously chosen the wrong cover.

By choosing the cover best suited to their financial circumstances, they would also ensure that Medisave money goes further. That is

especially important for people who have retired and are no longer growing their Medisave accounts.

Having insurers spell out how much of the premiums is for MediShield Life and how much is for the IP portion; and similarly how much of

claims come from the basic scheme and how much from the add-on IP, will help people decide if they are getting value for money on their IPs.

While it might be a hassle for people who can clearly afford the best, and have hefty Medisave accounts they would like to use for this, their

inconvenience is a small matter against the millions of dollars insurance firms have been raking in from people who have bought coverage way

above their need, or their ability to pay.

Many of the people who have IPs do not have hefty Medisave accounts. Some do not even meet the Medisave minimum sum of $43,500

required at the age of 55.

For them to buy upmarket insurance coverage is obviously a mistake, for they are unlikely to be able to afford to pay their share of big

hospital bills in that class of ward. Many do realise that, which is why more than half end up in a lower ward than their insurance allows.

Insurance, like the provision of healthcare itself, is an uneven playing field with knowledge residing almost entirely with the supplier. Giving

consumers more information is a good way of balancing this inequality and allows for real informed choices.

Making them pay in cash, no matter how small the sum, is a good way of forcing people to choose rationally.

Monday, March 2, 2015

The road to riches isn't just paved with keys of condos

02 Mar 2015 16:41
The Business Times

AS the Central Provident Fund (CPF), Singapore's pension scheme, was in the news recently, I was having a debate with a colleague on whether restrictions should be placed on the use of CPF savings to buy property, especially private property. It was not financially smart to commit that money - meant for retirement savings - to buy a pricey apartment, I said.

She responded: "Why deny people the chance to break into the upper classes? You'll exacerbate inequality if you prevent people from buying private property."

But the bigger issue is retirement adequacy, which is the original goal of the CPF - and remains the main goal - I argued. After wiping out your CPF savings to help pay for the S$240,000 downpayment on a S$1.2 million home, as well as your monthly CPF Ordinary Account contribution to help pay for the $4,000-a-month 30-year mortgage (on a 3 per cent interest rate), how much will you have left by the time you're 55 when you have to pay for CPF Life? You might still be paying the mortgage by then. Will you still have a job?

People can choose to pay their mortgage in cash instead of using their monthly CPF contributions, she countered. And the mortgage won't necessarily last 30 years if people pre-pay after some more years of working and saving. Salaries can still go up. And as for prudence concerns, loan curbs are already in place.

What is important, she maintained, is that people be allowed to use the CPF to help with the lump-sum downpayment first. And as for whether CPF should be allowed to be used to buy private property, that ship has sailed a long time ago - in 1981, to be exact, when the Residential Properties Scheme was introduced to let people do so.

The CPF has become such a big part of most people's savings that people expect to be able to use it to pay for whatever they wish, including an expensive piece of physical property.

Property always goes up? But so do other assets
It takes a brave and politically suicidal government, perhaps, to reintroduce restrictions on the CPF's use.

A strong argument can be made for the use of CPF to finance government Housing Board (HDB) flats for people to stay in. There are socio-economic benefits to home ownership. Political stability is arguably fostered. Build-to-order (BTO) flats, priced cheaper than the resale market, have generally gone up in value when they can be sold.

Yet the same story of price appreciation cannot be said of private property, which people also buy for investment purposes.

Despite a slowdown in the housing market, the urge to buy private property remains extremely strong today. Many people are waiting for prices to crash or, at least, correct by a larger amount, so they can jump in. Others have already bought their condos in the low interest rate environment. Some have stretched their finances to do so.

There are two premises to their views: First, private property prices will always go up; and second, it is therefore the best investment one can make.

Is that so?
It depends on the time period and measure used.

Statistics on the Singapore Exchange (SGX) website compiled from Bloomberg show that if you take a 10-year view from 2005 to 2014, property, as measured by the URA Private Property Price Index, has returned an average of 6.1 per cent a year. Blue chip Singapore stocks, as measured by the Straits Times Index (STI), returned 5.3 per cent a year, which is slightly lower. Both indices exclude rent or dividends.

Yet the property figures might be skewed. The mid-2000s saw a long period of stagnation for Singapore property. By taking 10-year returns now, we are benchmarking returns from a low base. By contrast, the STI had begun rising from their 2003 lows by 2005.

Measure property returns from the last major market top at end-1996 to end-2014, and returns will average just under 1 per cent a year. Measure them after the Asian financial crisis, at end-1998 to end-2014, and property returns average 4.6 per cent a year.

Meanwhile, on a shorter, two-year time horizon, the STI comes out ahead. It returned 3.1 per cent a year on average, while property has lost 1.5 per cent a year in 2013 and 2014.

Yet the STI lost to pretty much every developed or Asian market. The S&P 500 index returned 25.1 per cent a year in Singapore dollar terms, the FTSE 100 returned 7.6 per cent, the Nikkei 225 returned 14.3 per cent, India's Nifty index returned 15.4 per cent, and the top 50 A-shares on the Shanghai Stock Exchange, 18.3 per cent.

If you had spent a fortune buying a private property in Singapore two years ago, you would have regretted it. You bought at a temporary top. If you had put the money in US stocks, you would have made over half your money back.

Peak to peak: property versus stocks
Statistics can be used to prove almost anything. But it is clear that based on Singapore's experience with property in the last 20 years, buying a property is anything but a sure bet to riches. It took 14 years after the last market top in mid-1996 before prices in mid-2010 surpassed their old levels.

Of course, go back 40 years and prices increased more than 16 times at an average annual increase of 7.3 per cent a year.

Yet stock perma-bulls also have history on their side. US stocks, which we have the biggest set of data for, have returned 5-7 per cent a year in the long run of up to 80 years. On that grand, historical scale, what looks like a flat period of returns (see charts) actually represent a boom.

Where returns are concerned between property and stocks, we have a tie.

Complicating the issue is how there are so many different types of property, from mass-market to high-end, with different rental markets and locations. Everybody who bought property would have had a different experience.

It would not be surprising if there are people who bought at the last market top almost 20 years ago, and have just broken even. Others might have reaped big rewards.

Property, just like stocks, foster a get-rich-quick mentality.

Singapore property prices more than tripled between 1989 and 1996, and almost doubled between the end of the financial crisis in 2009 and the last market top in 2013. The story for stocks can be equally dramatic. For five years in the 1990s, the S&P 500 gained 20 to 30 per cent a year, an increase of almost four times.

Taxi and bus company ComfortDelGro, a blue chip that many investors know well, notably gained 50 per cent in 2014.

People fear buying assets at a peak. So how long does it take before the last peak gets surpassed for property versus stocks?

Singapore property took 14 years before prices went past the 1996 top. The STI took seven years to go past the 1999 top in 2006.

It's been more than seven years since the last top in 2007, and the STI is still below where it was then.
The question for most property investors is whether we have reached a price peak a year ago that might not be seen again for some time. As for the US, the S&P 500 took seven years to go past its early-2000 top, and less than six years to go past the 2007 top.

Yet history also offers a cautionary tale. Those who bought US stocks at their 1929 peak had to wait 25 years before values recovered.

It seems that both Singapore property and stocks can stagnate for a long time, possibly beyond the time horizon which investors are prepared to wait it out.

Asset class characteristics
Investors comparing stocks with property have to keep in mind differences between the two asset classes.

Price drivers differ. For stocks, price changes are usually driven by investor expectations on the stock's underlying business. For property, prices depend on interest rates, the state of the economy, disposable incomes, and land supply.

Investment cost is a bigger issue for property. While one can invest in a company with just a few hundred to a few thousand dollars, physical property requires a substantially bigger commitment, as well as the assumption of debt.

Property investors also have to watch out for interest rates, which will affect their mortgage payments. On a S$1 million, 30-year loan, a 2 percentage point interest rate increase means mortgage payments go up by S$1,000 each month. On the flip side, you don't need to commit as much of your own money to reap the rewards of a property bull run.

The ease of purchase differs. Where one can buy a stock any time during trading hours, it can take months before a purchase or sale in a property is closed.

Liquidity might matter. Property is not easily bought and sold, though the same can be said of certain small-sized stocks in the market. If sellers need cash urgently from the sale of their property, they will have to offer a discount. Yet if you want to liquidate your blue chip holdings immediately, you can easily do so and get your money back at a price that is fairly, efficiently determined.

Yield characteristics differ. It is more troublesome to squeeze yield from your property. To rent out a place, you need to advertise online or go through an agent, negotiate the right price, entertain viewings, and finally prepare a contract to sign.

Landlords need to maintain their property and be on hand to address issues such as damaged furniture, leaking pipes, electrical faults or Internet subscriptions.

By contrast, getting a yield from a stock requires no work on the part of the investor. If the business is profitable, and dividends are declared, money is automatically deposited into your bank account.

Another way to evaluate the two asset classes is by their volatility, or how much prices fluctuate. If the price of an asset changes rapidly, with large price movements, the asset might not be a suitable investment for an investor that cannot stand the thought of his investment losing value.

This is the issue with stocks in general. Most stocks change hands thousands of times a day, each trade being an opportunity to sniff out a fair price.

By contrast, property tends to be less volatile. Assets can get traded only once every few years. You will not know exactly how much your property is worth. This is not necessarily a bad thing from a psychological point of view: If prices are falling, you won't know how much your net worth has decreased by until you have to sell.

Price transparency is thus different in both markets. In the stock market, prices are clearly displayed and updated every second. Historical data is readily available. By contrast, the property market is opaque because many factors go into determining even the price of units in adjacent developments.

Because physical properties get traded infrequently, buyers and sellers generally refer to the last-traded price of a similar unit nearby, before making adjustments based on the floor, view, location, and other tangibles and intangibles.

Nobody really does a discounted cash flow calculation based on expected rental income and risk to come up with a shoebox apartment's value.

Finally, stocks are risky because companies can go bankrupt, leaving shareholders with nothing. By contrast, the value of a property will not fall to zero.

However, because people usually take out debt to buy property, the risk is that you cannot meet your monthly mortgage payments. If that happens, the bank that lent you money will have the right to reclaim your property and sell it off.

You can always try to sell your property to someone else in the hope of making a profit from the transaction after paying back the debt you owe the bank. Unfortunately, it is also likely that the property is worth less than what you bought it for, or what you owe the bank. In this case, you will be left with nothing.

In reality, if you are staying in the property you bought, the banks or HDB are likely to allow you to renegotiate your loan on a case-by-case basis. Repossession is a last resort.

Intangibles matter
Given its illiquidity, high costs and lack of transparent pricing, property does not seem to be a suitable investment for beginner investors. They can buy a place to stay within their means, but buying for investment is another matter.

Stock investors can implement strategies such as buying more of a blue chip stock they have assessed to be able to thrive, when the stock is hit by negative sentiment and is trading cheaply against historical norms. You can't really dollar-cost average houses, buying an additional one every month into the dips.

However, people buy property for non-financial reasons. Own a condo and you think you move one rung up the social hierarchy.

You own a tangible asset that you can touch, and the opportunity to enjoy amenities such as a swimming pool and BBQ pit.

If you are buying a place to stay in, then financial reasons matter less. The emotional value you get from owning a place goes beyond the rental you would otherwise have paid every month. People buy property to pass on to their children, as well as to diversify their wealth and hedge against inflation.

Ultimately, young investors have to understand various aspects of both the stock and property market before they decide which path to take with their money.

Both are not mutually exclusive.

But if you do buy a property, be honest - don't think of it as an investment. The purchase is likely not a purely financial transaction. There is no guarantee that you will make a profit.

Property price returns, like the stock market, look attractive only if your time horizon is long enough and if Singapore remains the financial and commercial centre it is today. But in a declining market, you are likely to get worried after just two years.