AMITY GLOBAL BUSINES SCHOOL

A COUNTRY REPORT ON

SINGAPORE IT SECTOR

SUBMITTED BY:
VIRAG SHAH [Master Charlie]
Enrolment No.: A30801916029
Serial No.: 14
SUBMITTED TO: Dr. Ajit Mittal
IT sector in Singapore
Singapore is a prominent part of APAC IT industry supply chains, both for hardware and
software/services, as well as being a lucrative domestic market. The outlook is broadly positive,
where enterprise demand for the latest software and services solutions will drive IT spending
growth, but the hardware segment will be more subdued as a result of saturation and the squeeze
on retail PC spending from smartphones.

Latest Updates And Industry Developments

Computer Hardware Sales: Forecast to decrease from SGD2.0bn in 2017 to SGD1.9bn in 2021, a
compound annual growth rate (CAGR) of -0.6%. Affluent consumers and a large enterprise market
are positives for premium demand, but there is a growing threat to tablet and low-end notebook use
cases from smartphones.

Software Sales: Forecast to increase from SGD3.0bn in 2017 to SGD3.7bn in 2021, at a CAGR of
5.3%. The sophisticated enterprise base including a large financial sector will be a positive for the
adoption of advanced technologies around data analytics and cybersecurity.

IT Services Sales: Forecast to increase from SGD5.6bn in 2017 to SGD6.7bn in 2021, a CAGR of
4.8%. Singapore is one of the leading hubs for cloud computing services in APAC, which will provide
strong growth impetus even as the local market matures over the medium term.

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It Industry Singapore
Singapore is the world's leader in the ease of doing business. The city-state's unmatched
global and regional connectivity, its highly productive workforce with a mix of local and
foreign talent, and a business-friendly regulatory environment have made Singapore the go-
to destination for global businesses.

Entrepreneurs looking to kick start their ventures in 2016 should consider these sector:

Information Technology

Singapore is an established IT hub. It continues to attract major global players. Twitter

officially opened its headquarters here this year. Next year, Netflix is expected to establish
its Asian regional hub in the country.

Singapore government recently launched Smart Nation, a vision of harnessing technology to

improve the lives of its citizens and create more opportunities for businesses. In 2015, the
government launched $2.2 billion worth of ICT tenders in digital, data and web services, and
IT infrastructure.

It is also encouraging firms to embrace cloud computing, with the market expected to grow
to about US$1 billion by 2017. Entrepreneurs should look closely at cloud computing, data
analytics, cyber security, design, and a variety of other IT services.

IT sector to bolster Singapore's growth this year

As global trade stays downbeat, domestic firms in the information technology services and
infrastructure sectors will play a key role in supporting the nation's growth this year, the
Monetary Authority of Singapore (MAS) said yesterday.

"Demand for information and communications services is expected to be firm, with the
Government's Smart Nation initiative, which includes procurement of a wide range of IT
services and infrastructure, providing the boost," MAS said in its quarterly report on recent
economic developments.

"Meanwhile, the life insurance industry should continue to register healthy gains, given
Singapore's relatively lower life insurance penetration rate as compared to other advanced
Asian economies."

Singapore's economy is expected to grow at a modest pace this year, said MAS, maintaining
the Government's forecast for gross domestic product (GDP) to grow between 1 and 3 per
cent this year.
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MAS also expects job creation to remain subdued and wage pressures to ease in line with
the tepid economic environment in the near term. Overall, wages grew by 3.5 per cent over
last year.

Estimates in January put employment growth at 0.9 per cent or 31,800 jobs created last
year, from 3.7 per cent growth and 130,100 jobs added in 2014.

"Labour demand will continue to be uneven across sectors and wage increments will be
larger in industries where manpower shortages are more acute, such as community, social
and personal services," said MAS.

The central bank also flagged "labour supply constraints" as a short-term challenge as
Singapore presses on with restructuring towards productivity-led growth. But if it can
transform itself into a knowledge- and skills-intensive economy over the medium term, this
will prepare the Republic for the next phase of sustainable growth, even as it faces binding
resource constraints in a mature economy.

On the regional outlook, MAS expects growth in Asia excluding Japan this year to come in "a
shade lower" than in the last, as the region continues to contend with a slowdown in China
and low commodity prices. Recent data such as February's purchasing managers' index
reading also points to a slackening in growth momentum for the Chinese economy, MAS
noted.

"As the authorities pursue structural reforms and implement plans to reduce excess
capacity in the economy, workers could be laid off from heavy industry, posing a downside
risk to household consumption," said MAS, noting the consensus forecast for China's GDP to
grow at 6.5 per cent this year, at the lower end of Beijing's 6.5 to 7 per cent target.

"Nonetheless, the central government is expected to buffer slowing growth by introducing

more targeted fiscal support," added MAS.

MAS also expects economic activity in the United States to rebound soon, supported by
resilient household spending that surveys show has held up despite the stock market rout at
the start of the year.

The steady decline in America's unemployment rate to a post-crisis low of 4.9 per cent in
January also backs the case for stronger consumer spending, said the MAS.

Meanwhile, the growth outlook in the euro zone has "weakened slightly" although the
region's recovery remains largely on track, and Japan could see a "modest recovery" in the
second half of this year when domestic demand picks up.

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Singapore IT sector set for job growth in 2017
IT sector set for recruitment rise as Facebook secures bigger office space in Marina One

With the global economic slowdown and political uncertainty, Singapore is set for a
slowdown this year, with employment prospects for the year hardly rosy.

But there are bright spots, according to the latest report by recruitment firm Robert
Walters. In particular, technology specialists, digital marketers and regulatory and
compliance project professionals are in high demand.

Recruitment in the tech sector is set for an uptick with the Government's plan to boost the
local start-up ecosystem, said the report, which was released yesterday.

As more firms shift from traditional retail to e-commerce, professionals with experience in
developing the latest technology and platforms will be highly sought after.

"There will be cautious hiring activity in some sectors while employers in other booming
industries might be ramping up their recruitment efforts," said Mr Toby Fowlston, managing
director of Robert Walters South-east Asia.

Based on its Asia Job Index, the number of IT jobs advertised in Singapore in the fourth
quarter of last year surged 30 per cent year-on-year, despite a decline of 1.4 per cent in the
overall number of jobs advertised here for the same period of time, reported The Straits
Times.

Information Technology Ranked as

Singapores Strongest Sector in July
Information Technology (IT) was Singapores best performing Sector in July, with
a 5.3% market capitalisation weighted total return. For the first seven months of
2017, the IT Sectors indicative return came to 47.7%.

The 10 largest capitalised stocks of the IT Sector have also averaged a 47.9% total
return in the first seven months of 2017, with performances ranging from a 101.0%
gain for Hi-P International to a 2.6% gain for GP Industries.

Over the last seven months, net institutional inflow into the IT Sector totalled +$65.2
million, which was the third highest sectoral net inflow after Financials at +S$2.2
billion, and Real Estate Management & Development at +S$300.9 million.

In addition to the stocks that represent the IT Sector, there are a number of stocks
that have IT exposure - two examples include two of Julys debutants - Net Link NBN
Trust and Y Ventures Group.
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 Singapores Information Technology (IT) Sector maintains a combined market
capitalisation of $12.6 billion, with Venture Corporation (Venture) being the
largest stock of the sector. For the first seven months of 2017, the IT Sectors
indicative capitalisation-weighted total return came to 47.7%. By comparison the
Straits Times Index (STI) had generated a total return of 17.6% over the first seven
months of 2017.

First 7 Months of 2017 Indicative Sector Total Returns (%)

Singapore Information Technology

Report By BMI
The Singapore Information Technology Report features BMI Research's market
assessment and independent forecasts covering personal computers and software; semi-
conductors, memory chips, integrated circuits and general components; the internet and IT
solutions. It analyses regulatory changes (licensing, customs and intellectual property
protection) and competitive landscapes comparing IT companies by products, sales, market
share, investments, projects and expansion strategies.

BMI's Singapore Information Technology Report provides industry professionals and

strategists, corporate analysts, IT associations, government departments and regulatory
bodies with independent forecasts and competitive intelligence on the IT industry in
Singapore.

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Key Benefits

Benchmark BMI's independent IT Industry forecasts for Singapore to test other

views - a key input for successful budgetary and strategic business planning in the
Singaporean IT market.
Target business opportunities and risks in Singapore's IT sector through our reviews
of latest industry trends, regulatory changes, and major deals, projects and
investments in Singapore.
Assess the activities, strategy and market position of your competitors, partners
and clients via our Company Profiles (inc. KPIs and latest activity).

Coverage
BMI Industry View

Summary of BMIs key industry forecasts, views and trend analysis covering IT, regulatory
changes, major investments and projects and significant national and multinational
company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the IT sector
and within the broader telecommunications, political, economic and business environment.

BMI Industry Forecast

Historic data series (2010-2013) and forecasts to end-2019 for all key industry and economic
indicators, supported by explicit assumptions, plus analysis of key downside risks to the
main forecast, including:

IT Sector: Industry value (USDmn); IT sector contribution to GDP (%); value of

hardware, software and services industry (USDmn); PC, peripherals and software
imports and exports (USDmn); PC, peripherals and software sales (USDmn); number
of PCs (000); PCs per 100 inhabitants; internet users (000); internet users per 100
inhabitants; broadband subscribers (000); broadband subscribers per 100
inhabitants.
Economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest
rates (%); exchange rate (against USD).

Information Technology Risk Reward Index

BMIs Risk Reward Indices provide technology manufacturers, service providers, and IT
vendors/leasing agents looking for opportunities in the region with a clear country-
comparative assessment of a markets risks and potential rewards. Each of the country
markets are scored using a sophisticated model that includes more than 40 industry,
economic and demographic data points to provide indices of highest to lowest appeal to
investors, with each position explained.

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Country Market Overview

Structure, size and value of the industry sectors including hardware, software and services;
overview of the industry landscape and key players; assessment of the business operating
environment and the latest regulatory developments and government authority.

BMI Macroeconomic Forecast

BMI forecasts for all headline macroeconomic indicators to end-2019 including real GDP
growth, inflation, fiscal balance, trade balance, current account and external debt.

Competitive Landscape

Full analysis of the competitive landscape within the hardware, software and services
sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key
industry players. Strategy is examined within the context of BMIs industry forecasts, our
macroeconomic views and our understanding of the wider competitive landscape. The latest
financial and operating statistics and key company developments are also incorporated
within the company profiles, enabling a full evaluation of recent company performance and
future growth prospects.

Regional Overview

Cross-border analysis of country markets in the region, commenting on IT penetration (PC

and internet) and market growth drivers (IT market size and IT market compound growth).

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BIBLIOGRAPHY
http://www.straitstimes.com/business/it-sector-to-bolster-singapores-growth-this-year

http://sbr.com.sg/economy/commentary/singapores-6-key-growth-industries-in-2016

https://store.bmiresearch.com/singapore-information-technology-report.html

http://www.tnp.sg/news/singapore/singapore-it-sector-set-job-growth-2017

https://sginvestors.io/sgx-mygateway/2017/08/information-technology-ranked-as-singapore-
strongest-sector-in-july