SIIA corporate member Tham Sai Choy, Managing Partner at KPMG, was quoted recently on the issue of corporate earnings. The article appeared in the Business Times (Singapore) on February 14, 2011.
"The general consensus is that the global economy will grow at a pace that will result in overall better corporate earnings. A strong Singapore dollar naturally has its pros and cons. With a currency appreciation, local firms will find it hard to compete with imports. On the flipside, it could indicate government stability and good business infrastructure, both of which are attractive to investors.
Indeed, as a law firm, we are seeing increasing M&A activity across a spectrum of industries and in particular, inward investment from overseas. This coupled with, hopefully, what we expect to be a business friendly 2011 Budget, would mean heightened foreign investments into Singapore.
As Singapore is an export-oriented economy, the strengthening Singapore dollar will have an impact. Therefore, CEOs need to recognise the value of demonstrating value-add and innovativeness in their approach to maintain their competitive edge, rather than to focus on cost competitiveness.