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Broker's take: Singapore Inc due for makeover amid tech lag, says Deutsche Bank

Thursday, December 8, 2016 - 09:54

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Singapore Inc is due for restructuring amid heightened competition from its regional peers, said Deutsche Bank in a report this week.

SINGAPORE Inc is due for restructuring amid heightened competition from its regional peers, said Deutsche Bank in a report this week.

"Singapore Inc, especially Temasek-linked companies (TLCs), was once a success story in the region with a number of them being leaders in their respective sectors. Most recently however, Singapore Inc has lagged behind due to technology disruptions and intensified competition from regional players," the German bank said.

The technology and productivity drive, together with the change in return assessment for Temasek, could see the next phase of rebuilding Singapore Inc, it said.

This comes especially as there has been a shift towards focusing on return on equity by several TLCs since the application of the net investment returns framework to Temasek's expected returns, it said. "The over-capitalisation of TLCs and Singapore Inc in general could result in better capital management initiatives in 2017."

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CapitaLand, Genting Singapore, Global Logistic Properties and SATS are among those under its coverage likely to look to improve their capital structure, Deutsche Bank added.

The city-state is also poised to put technology and innovation at the forefront of its economic restructuring, it said. "We expect Singapore to continue with the current structural reform and to shift towards building a Smart Nation. Restructuring and rebuilding Singapore champions could be a key focus in 2017."

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