By Andrea Sohsandrea@sph.com.sg@AndreaSohBT

SingaporeCRUDE oil prices continued its rallyon Monday as Opec gave a brighteroutlook for market fundamentals thisyear, but analysts warned that theboost in themarket is likely tobetem-porary.

The drop in the rig count in the US– the main factor that propelled oilprices higher earlier last week –would result in a cutback in produc-tion only much later, they said, withsome cautioning that the oil pricecould pull back in the weeks to come.

The international oil benchmarkBrent crude on Monday was up 73 UScents at US$58.53 a barrel at 8pm Sin-gapore time. The Nymex West TexasIntermediate was 17 US cents higherat US$52.86 a barrel.

The Organizationof the PetroleumExporting Countries (Opec) in itsmonthly report on Monday revisedupwards the demand forecasts for itsoil by 430,000 barrels to average29.21 million barrels per day (bpd).

At the same time, capital expendi-ture cuts by international oil compa-nies and the reduced number of ac-tive rigs in the US and Canada led theoil cartel to sharply lower the rate ofgrowth in non-Opec supply to850,000 bpd.

Prior to Opec’s announcement,Brent crude rose more than 9 per centlast week, its largest rise in a weeksince February 2011. This came afternews that the number of active rigs inthe US had dropped by 94 for theweek ended Jan 30 – the largest de-

cline since oilfield services firm BakerHughes started such data in 1987.

Thefall in thenumberof rigs inser-vice continued last week in its ninthstraight decline, falling by 83 to1,140, the lowest level since Decem-ber 2011, in an indication that fallingoil prices were starting to hurt USshale producers.

Last week’s oil price bounce wasnot driven by market fundamentalsbut by changes in market sentimentand paper trading, analysts said. Rigsthathave been idled so far were large-ly in the less productive wells, saidVictorShum,vice-presidentatconsul-tancy IHS Energy, and as oil explora-tion firms continue to drill the bestprospects, US oil production wouldstill grow this year. “US productiongrowth will likely only decline laterthis year and towards the end of theyear, it will be close to zero on amonth-on-month basis,” he said.

Concurring, Phillip Futures ana-

lyst Daniel Ang said that US oil pro-duction remains strong for now,pointing to the 9.1 million barrelsthat it continues to pump out eachday. This, coupled with poor demandfrom the major importers of Chinaand Japan, means that crude pricesare “still consolidating”, he added.

In the near future, the abundanceof oil supply and the continued build-up of crude oil inventory will pushprices lower. Said Jeff Brown, presi-dent of oil and gas consultancy FGE:“We expect oil price to drop again inMarch or April, possibly below US$40a barrel. This will be short-lived, how-ever, and in H2 2015 (the) price willbounce back.”

Analysts widely agree that the oilpricewillpick up in the second halfofthe year, when a reduction in oil sup-ply will coincide with higher seasonaldemand.

The hedges that US oil producershave entered into protecting themfrom lower oil prices would expire bythen, exposing them to the full im-pact of the oil price slump, said OCBCeconomist Barnabas Gan.

Opec’s June meeting could also bea contentious one, where smallerOpec members bearing the brunt ofthe lower oil price would likely pushfor a reduction in the cartel’s produc-tion quota again, he added.

In the meantime, the oil marketwill continue to be whipsawed as un-certainty remains.

“We are likely to have multiplefalse rallies and continued high vola-tility as the market sorts out the ef-fects of reduced drilling budgets,”said Mr Shum.

Finance ministers from theG-20 group of advanced andemerging economies areexpected to renew theircommitment to “going forgrowth” in their economiesduring their two-day meetingin Istanbul Tuesday.

TOP STORIES / 2

A burst of local innovation, interms of products andservices, is expected as thepush to make Singapore theworld’s first Smart Nationgathers pace. TOP STORIES / 4

British sports car marqueMcLaren is understood to begetting a new dealer threeyears after WearnesAutomotive introduced it toSingapore, and that an officialannouncement will be madeshortly. TOP STORIES / 6

Hutchison Port Holdings Trustlost ground on Monday asanalysts slashed earningsforecasts, following a HK$19billion (S$3.32 billion)impairment charge ongoodwill allocated to itscash-generating unit in HongKong, which dragged the trustinto a net loss of HK$18.6billion in Q4 FY14.

COMPANIES & MARKETS / 10

Australia’s 25-basis-point ratecut to a record low of 2.25 percent last week is expected tobenefit developers withproperty assets and buildingprojects Down Under, as wellas those eyeing acquisitions.

REAL ESTATE / 14

By Kelly Taykellytay@sph.com.sg@KellyTayBT

SingaporeTHE Auditor-General’s Office (AGO)has found several major lapses in thegovernance of the Aljunied-Hou-gang-Punggol East Town Council (AH-PETC) run by the opposition Workers’Party (WP).

The AGO concluded in a report re-leased on Monday: “Until the weak-nesses are addressed, there can be noassurance that AHPETC’s accountsare accurate and reliable, or that pub-lic funds are being properly spent, ac-counted for and managed.”

Observers told The Business Timesthat the “damning” findings will inevi-tably create a dent in the public’s con-fidence in the WP, and urged the gov-ernment to strengthen its powers forregulatory oversight. Several of thesecommentators described the existingTown Councils Act as “toothless”.

The AGO’s report will be discussedin Parliament on Thursday, as a mo-tiononitwillbetabledbyNationalDe-velopment Minister Khaw Boon Wan.

AHPETCremained largelysilentonthe content of the AGO report, but itschairman Sylvia Lim issued a state-ment in the evening saying: “We un-derstand that there will be a motionfiled in Parliament to debate the mat-ter on Thursday, Feb 12, 2015. Thatbeing the case, the town council willgive its response in Parliament.”

MsLim,who isalsoWP’s chairman,told Channel NewsAsia before herMeet-the-People session that mem-bers of the public should “look be-yond the headlines and summaries”and read the details of the report toget a better understanding of the is-sues at hand.

In its main report, the AGO flaggedfive broad areas of “major lapses”:� Management of sinking funds;� Governance of related party trans-actions;� Management of arrears of conserv-

ancy and service charges;� Internal controls and procurement;and� Record management and account-ing systems.

Singapore Management UniversitylawprofessorEugeneTansaid the “re-lated party transactions” category ispotentially the most damaging of thelot: “One can put in place measuresand processes to deal with the otherfour lapses; it’s not too difficult. Butthe ‘related party transactions’ issueraises themore importantquestion ofhow they could’ve been allowed tohappen in the very first place – theirchairman (Sylvia Lim) is a legal-ly-trained person.

“I’m not at all suggesting there’swrongdoing, but I think this particu-lar lapse does raise questions of whe-ther residents’ interestswerecompro-mised in the process ... It does raisequestions about integrity and trust –and these are harder to deal with.

“It’s something the WP and AH-PETCwillhave todealwith resolutely,effectively, and quickly.”

The AGO report said that AHPETCdid not comply with the Singapore Fi-nancial Reporting Standards, whichrequire a reporting entity to discloserelated-party transactions in its finan-cial statements.

The related parties, known as FMSolutionsandIntegratedServices (FM-SI) and FM Solutions and Services PteLtd (FMSS), were two companies en-gaged by the AHPETC to carry outmanaging agent services and essen-

tial maintenance and lift rescue (EM-SU) services.

The secretary of AHPETC was theowner of FMSI, a sole proprietorship;the secretary, general manager, and adeputy general manager of AHPETCwere directors and shareholders ofFMSS.

AHPETC’s secretary, Danny Loh,and its general manager, How WengFan, are husband and wife.

The audit report said: “First, AH-PETC did not disclose in itsFY2012/13 financial statements theamount of fees for project manage-ment services rendered by FMSS,amounting to S$223,000. AHPETC al-so did not disclose that FMSS and FM-SI had provided EMSU services to AH-PETC in FY2012/13 for a total fee ofS$1.28 million ...

“Second,AGOfoundthat therewasno open competition for the procure-ment of EMSU services in 2011.Hence, there is no assurance that AH-PETC had obtained competitive pric-es for the services.”

Referring to instances where MsHow had issued payment claims asthe owner of FMSI and director ofFMSS, and later certified these claimsand approved the payment vouchersin her capacity as general manager ofAHPETC, Institute of Policy Studies(IPS) senior research fellow GillianKoh said: “You don’t need to be a pro-

fessor in corporate governance toknow that you can’t be writing yourown cheques, (especially) when thereare not just monies from residents,but also public money (involved).”

While the AGO said it would haveliked to see AHPETC put in place “ade-quate mitigating controls to managethe conflicts of interests”, the towncouncil said – in a response givenwithin the report – that it “would liketo see a consistent standard appliedto all town councils on this matter”.

Another key lapse flagged by theAGO pertains to AHPETC’s failure totransfer monies into the sinking fundbank accounts as required by theTown Councils Financial Rules.

These fundscannot beused to payfor daily operating expenses, andmust be separately maintained forthe long-term maintenance of proper-ties. Transfers are to be made withinonemonth from the endof eachquar-ter.

The AGO report showed that AH-PETC did not make any transfers tothe sinking fund bank accounts forthe last three quarters of FY2011/12.FollowingAGO’squery,AHPETCtrans-ferred S$7.44 million on June 30,2014. However, the AGO found errorsin AHPETC’s computation, which re-sulted in a shortfall of S$469,000.� Continued on Page 4

Oil price continues rally, buton weak fundamentals

�� DAILYDIGEST Official audit finds ‘major lapses’ in

Workers’ Party town council booksThe Auditor-General’s Office says ‘there is no assurance that council’s accounts are accurate and reliable, or that public funds are properly managed’

Pullback imminent?

62.00

58.00

54.00

50.00

Source: Bloomberg

FebJan

Brent crude oil(US$)

US$58.53(+US$0.73)

Feb 9

STOCKEXCHANGESNo looking backafter adventof Internet AgeOPINION / 27

STI 3418.02 -13.34

KL COMP 1,811.58 -1.67

NIKKEI 225 17,711.93 +63.43

HANG SENG 24,521.00 -158.39

SHENZHEN B 1,072.74 +2.21

DOW (11am EST) 17,736.76 -87.53

MARKETSMonday Change

CHILICRABSChallengesfacingRedHouse SME / 30

WEALTH MANAGEMENTSingapore’s ranking as a hub falls to 6th spotTOP STORIES / 2

FINANCEBanks’ Q4 results: eyes on loan guidance, asset quality COMPANIES & MARKETS / 8

Source: Auditor-General’s Office

Key lapsesThe Auditor-General’s official audit highlighted five major lapses of the WP-run town council:

1 Management of sinking funds*

� Failed to make required transfers to sinking fund bank accounts for last three quarters of FY2011/12

� Transfers made for FY2012/13 were late and under the required amounts

2 Related party transactions

� Failed to fully disclose related party transactions

� Inadequate governance to manage conflicts of interests

3 Management of arrears � No system to monitor the scale of conservancy & service arrears accurately

� Significant discrepancies in different arrears reports

4 Internal controls and procurement � Failed to comply with Town Councils Financial Rules for approvals of procurement

5 Accounting systems � Amounts collected and paid out not properly recorded and accounted for

* Sinking funds cannot be used to pay for daily operating expenses, and must be separately maintained for long-term projects

S$1.00 MCI (P) 051/08/2014 Tuesday, February 10, 2015

LEO Melamed has been described asthe founding father of futures mar-kets, a label thatmightsound likeabitof hype but is in fact not far off themark. His role in developing theChicago Mercantile Exchange (CME) asa premier futures market and in thesetting up of the International Mone-

tary Market (IMM) is the stuff of legend in financial mar-kets,andthepartheplayed inelevatingSimex (SingaporeInternational Monetary Exchange), now part of SingaporeExchange (SGX), intoaworld-classAsianmarket forderiv-atives deserves to be more widely publicised.

Now CME Group’s Emeritus Chairman, he shares histhoughts on the past, present and future of futures trad-ing with BT’s R Sivanithy via an email interview.

RS: You were instrumental in Simex developing from afledgingorganisation intoaworld-class futuresexchangewhen you helped set up the historic CME-Simex link in1983totradeyourEurodollarcontract.Alsocritical in thesuccess of that link was the revolutionary mutual offsetsystem. What made you pick Singapore?

LM: My quest was to find the right venue in Asia for theIMM Eurodollar (ED) futures contract in order to combatthe very serious competitive threat posed by the Liffe(London International Financial Futures and Options Ex-change) of Great Britain. There is some irony here since Iwas pivotal in helping the London futures exchange getstarted. My rationale was that the more futures exchang-es that are initiated, the bigger the universe of userswhich is bound to be to the benefit of the IMM as well asfutures markets generally. In other words, I welcomedcompetition.

I expected our ED contract to be a huge winner (ashistory proved I was very right.) Liffe, however, hadlisted an identical copycat IMM ED contract. Trouble wasthatLondon sits in rather aperfect timezone (remember,this was long before Globex) covering part of the Asianmarketzone, allof theEuropeanmarketzone,andpartofthe US market zone. On top of that, I was aware that Asiawas awakening to futures and represented fertile groundfor futures business.

A new futures exchange in Asia might very well alsolist a similar ED contract. So my idea was to “partner”withanAsianexchange, first, topromote thesuccessofthe ED contract; second, to deter the creation of a com-petitive start-up in Asia; and, third, to stem the poten-tial growth of the Liffe ED contract.

So the issue was where in Asia and with whom couldI talk about the revolutionary idea I wanted to sponsor.There were three natural venues: Tokyo, Hong Kong,and Singapore. Of course I visited all three venues andlearned the following: Japanwas still mired in a regulatorymorass, with conflicting regu-lations and with governmentagencies fighting each otherfor jurisdictional turf.

InHongKong,whichevery-one thought was the mostpromising venue since it em-braced a “free market” regula-tory culture, however, I founditdifficult toknow whoto talkto. There were British marketofficials, there were estab-lishedHong Kong marketoffi-cials, and there were main-land China officials.

Everyone was anxious todo business with the CME butthere was no central voice that I could deal with. In Sin-gapore, I found the opposite. Although Singapore hadlittle futuresmarketexperience, thecommunityof trad-ers, especially at the Gold Exchange, all spoke with onevoice. Most important, the MAS (Monetary Authority ofSingapore) was the only regulator involved and itsvoice was the law. In other words, Singapore represent-edthemostunifiedvenueandwillingto trytheoutland-ish idea Iwasproposing.More thanthat, Singaporeoffi-cials, both in the public and private sector, were eagerto make the deal. Thus, Singapore became my choice.

RS: It is often said that an organisation is only as goodas its people. Who were the personalities that stood out

during your visits to Singapore and your dealings withSimex?

LM:The personalities inSingapore withwhom we dealtwere well versed in trading and willing to give up theirGold Exchange in favour of a new Simex entity. Ilearned to like them all. Of particular note was Lim HoKee,who was then deputy chief at MAS,who impressedme with his full understanding of how a Mutual OffsetSystem (MOS) would work. He was ready to embracethe risks involved in order to partner with the veryprominent and successful CME/IMM. There were alsomany members of the Gold Exchange who impressedme with their zeal; among their leadership, Koh BengSeng and Elizabeth Sam stick out in my memory. Final-ly, Ng Kok Song, who was chief of market operations atMAS, came on the scene. He quickly became the mostauthoritative voice in the creation of the Simex and un-derstoodthe conditions Iwould require inorder togainapproval from both the CME/IMM board as well as theCFTC (Commodity Futures Trading Commission). Heunderstood that a revolutionary MOS system was agreat risk for both of us but if successful could prove toputSingaporeonthemap. Iwas impressedwithhisacu-men, his integrity, and his drive to make it all happen.

We quickly became the best of friends. Most impor-tant,MrNghadtheconfidenceandsupportof thepoliti-cal (leadership), without whom we could not have doneanything. Indeed, Mr Ng understood that for this ven-ture to be launched, Singapore had to 1) accept theharsh margin requirements and financial guaranteesthe IMM demanded, and 2) it must adopt the interna-tional trading rules and standards the CFTC required.

RS: Looking at present-day Simex, now part of SGX, didyou ever foresee it becoming Asia’s largest provider ofAsian equity derivatives?

LM: I knew that if MOS proved to work, we would haverevolutionisedthe tradingof futuresbyconnecting twotime zones and bringing business and respect to Singa-pore shores. I also was fully aware of the brilliance ofthe (then) Prime Minister, Mr Lee Kuan Yew, and hisdream to make Singapore a financial centre.

Did I foresee that the Simex would someday become

part of SGX and a centre for Asian equity derivatives?Of course not. But in a very real sense I understood thatthe success of our agreement would be fundamental toSingapore’s future growth as a centre of finance inSouth-east Asia. Here is a portion of my 1984 congratu-latory remarks to the members of Simex:

To put it as succinctly as I can, it is my fervent beliefthat not only will our revolutionary innovation prosper,not only will it be a model for the world to follow, it willprove to be the foundation upon which Singapore canbuild a financial infrastructure as it assumes a pivotalrole in the markets of Southeast Asia.

RS:You areagreatbeliever innotbeing trapped by“thetyranny of the status quo”, ie that one should not reston one’s laurels but, instead, push boundaries in orderto survive. Applied to exchanges, this means the needto constantly grow or risk demise. Indeed, theCME-Simex link was born from the competitive threatposed by London to your Eurodollar contract. Bearingin mind the need to grow and fend off competitivethreats, what advice would you give SGX today?

LM: My advice to SGX today is no different than whathas been the driving force in my life, the willingness toinnovate and accept change and transformation aseventsdictate. Nobody canreally predict the future. Nooneforesaw the Internet until it happenedand changednearly everything. Exchanges can prosper and expandonly if they are constantly mindful of the potential ofchange in economics and world markets and willing toadopt innovations as necessary.

RS: When you started out, futures trading was exclu-sively via the open outcry system. Today, technologyhas taken over and the trading pit is a thing of the past.Even though technology allows faster and more effi-cient trading, do you think somehow, something hasbeen lost in the shift?

LM: As history is witness, I was an early believer in thecoming of a technological era that would sweep overworld markets. As early as 1986 I visualised the adventof an automated transaction system for futures. In-deed, our embrace of Globex, albeit with a great deal ofbattle and pain, is central to the CME Group’s over-whelming success. Sentimental resistance, a conse-quence of what Milton Friedman called the “Tyranny ofStatus Quo”, should never be allowed to deter change.Clearly, technology forged enormous transformationseverywhere. Yes, something was lost in the shift.

Yes, runners and floor brokers lost out. So did eleva-tor operators, telegraph operatives, print setters, andon and on. It will not stop. People will continue to in-vent, innovate, andchange.The Internet, artificial intel-ligence, big data, and improved analytics will continueto provide cheap computing power that will continueto displace humans in the workplace. But that is thebeauty of the human condition. Jobs will be lost, butnew ones will blossom. And of course something willbe lost in that shift. But we are online with the world24-7-365. We text, we Twitter, we email, we Google, weYahoo, we Facebook, we iPad, we iPhone, we YouTube,we BlackBerry, we Android, and now we even Alibaba.We cannot go back to the way it was.

RS: One of the biggest problems in all markets is rig-ging and manipulation, something which was presentwhen trading was by open outcry. Even with technolo-gy, it is still possible so how does the CME guardagainst these activities given the widespread depend-ence on high-speed trading to keep markets liquid?

LM: It is true that we face new problems in the market-place as a consequence of new technologies. There is afair debate going on whether advanced technologicalcapabilitieshavebroughtaboutnewformsofmanipula-tion and market rigging. Indeed, the advance of artifi-cial intelligence and robotics is bound to complicatethis issue. But, let’s face it, there was manipulationduring the era of open-outcry as well. And before thattoo. We always had to be on guard and find ways andmeasures to deal with violators. And we did.

No different today. Rather than curse or preventtechnological advancements, it is imperative that ex-changes,brokerage firms,and regulators learn toapplymodern tools with which to catch violators. What I amsaying is that we innovate and produce advanced tech-nological tools with which to seek and find would-beadvanced technological manipulators. In simplelanguage, I submit we fight fire with fire.

By Andrew Hammond

THE leaders of Russia, Germany, Franceand Ukrainewillmeet inMinsk, the Bela-rusian capital, on Wednesday to discuss

a Ukrainian peace plan being championed byFrench President Francois Hollande and Ger-man Chancellor Angela Merkel. The session fol-lows a conference call on Sunday between thefour.

Wednesday’s meeting comes at a moment ofsignificant escalation in the crisis with some, in-cluding Mr Hollande, warning of “total war”.While the Merkel-Hollande plan has now beendiscussed with multiple other world leaders, in-cluding on Friday in Moscow with PresidentVladimir Putin and Monday in Washington withPresident Barack Obama, there is no clear signyet of a genuine breakthrough. The peace planis believed to be based upon last year’s Minskagreement which called for a ceasefire, with-draw of artillery, prisoner exchanges and otherconcessionsthatwerenever fully implemented.It reportedlyoffersseparatistssignificantauton-omy in theareas under their controlunderacal-culation that many rebels might be willing to re-main part of a more decentralised country.

The plan also reportedly includes a pro-posed demilitarised zone of 50-70 kilometresaround the present front line. The emphasis onthe current front line has alarmed Ukrainewhich asserts that the demarcation lines fromMinsk (which came before recent separatistgains) are the ones that should be respected.

With the conflict now at a potential tippingpoint, more than a million people have fledtheir homes, and an estimated 5,400 lives havebeen lost since April 2014 when separatists

seized significant portions of the Luhansk andDonetsk regions (which Mr Putin has called“New Russia”), following the annexation of Cri-mea. With rebels having captured more territo-ry since, there are fears that the Ukrainian statecould be unviable if these separatist gains con-tinue apace.

Moreover, the country’s economy faces col-lapsewith its foreignexchangereservescurrent-ly less than US$8 billion. The conflict is costingKiev roughly US$5-7 million a day. Moscow ap-pears to be calculating that intensification ofeconomic, military and political pressure willlead to a loss of support within Ukraine for theKiev government’s pro-Western orientation.This, and the possibility that the conflict mayspiral out of control, reflects the urgency of dip-lomatic activity recently, and the growing de-bate in Washington about providing greater USmilitary support to Kiev.

Last week, US Secretary of Defense-desig-nate, Ashton Carter, announced his preferenceto provide greater military support for Ukraine,but Mr Obama has yet to make a public an-nouncement. This was a key topic of conversa-tion on Monday with Mrs Merkel, who is strong-ly opposed to such a move.

PROXY WARMrs Merkel fears that, given current mistrustwith Moscow, arming the Ukrainian rebels willonly intensify theconflict whichrisksbecomingaproxy warbetween Russia and the US and wid-er West.

Nato (North Atlantic Treaty Organization) al-ready estimates that up to 1,000 Russian mili-

tary intelligencepersonnelareassistingthesep-aratists. Mr Putin is unlikely to want to be per-ceived to capitulate to any additional Westernpressure, and may double down on his supportfor the rebels.

His calculus appears to be that, as troublingas the economic problems are that are now fac-ing the Russian economy, they are worse inUkraine. Moreover, Moscow sees more upsidethan disadvantage in separatists expanding ter-ritory under their control (a key objective is be-lieved to be creating a corridor to the Black Seaport of Mariupol, thus opening a potential landbridge to Crimea), as this may give greater trac-tion in any post-conflict negotiations.

In response to the escalating conflict, the EUis tightening its sanctions regime and on Mon-day, a new round of measures were agreed totarget a list of around 19 Ukrainian separatistsand Russian officials and nine organisations,with sanctions including travel bans to EUstates. Moreover, the EU’s 28 country leadersmeet on Thursday to discuss a wider suite ofmeasures, including Russia’s exclusion fromthe Swift payments system.

Welcome as this will be in Washington, if theMerkel-Hollandepeace initiativeyieldsnosignif-icant dividends, there is likely to be growingsupport in the US for boosting military support,especially as it has been repeatedly requestedby Kiev itself. Republican Senator John McCain,the chair of the US Senate Armed Services Com-mittee, has called Mrs Merkel’s opposition as“horriblywrong”and“unacceptable”,andreport-edly compared her peace plan to the 1938 Mu-nich agreement which appeased Adolf Hitler.And fuelling this debate, a report last week by

eight former US military and political officialscalled for Washington to give some US$3 billionof military equipment over the next three years.

Intheunpredictabilityandtensionof thecur-rent moment, careful decision-making is nowneeded by Mr Obama as he thinks through hisarray of options. On the financial aid front, he ispushing for increased international financialaid and pushing for European support for a newIMF multi-billion dollar financial package forKiev.

MILITARY ASSISTANCEThe president is also reviewing a range of mili-tary assistance options, including so-called“non-lethal” equipment such as reconnaissancedronesandradarscreens.Cognisantof theespe-cially strong concerns in much of Europe aboutthe provision of “lethal” equipment, such as an-ti-tank weapons, Mr Obama would seek to pitchany assistance that is ultimately provided hereas a way for Ukraine to re-establish military bal-ance on the ground between its own andseparatist/Russia forces, rather than a means toachieve more ambitious, potentially risky mili-tary goals. Taken overall, the fate of the Mer-kel-Hollande initiative will helpshape the USde-cisionon whether toprovidefurthermilitaryas-sistance to Ukraine. Given the escalation in thecrisis, Mr Obama faces a difficult balancing actbetween responding to domestic US pressure,and fomenting division in Western strategy to-wards Ukraine which may only benefit Russiaand the separatists.� The writer is an associate at LSE Ideas (theCentre for International Affairs, Diplomacy andStrategy) at the London School of Economics,and a former UK government special adviser

The personalities in Singapore with whom we dealtwere well versed in trading and willing to give uptheir Gold Exchange in favour of a new Simexentity, says Mr Melamed (right), seen here withMr Ng. PHOTO COURTESY OF NG KOK SONG

No looking back for exchangesafter entering the Internet age

�� COMMENTARY

Ukraine crisis may be near tipping pointIf the Merkel-Hollande peaceinitiative yieldsno significantdividends, thereis likely to begrowing supportin the US forboosting militarysupport,especially as ithas beenrepeatedlyrequested byKiev itself.

By R Sivanithysivan@sph.com.sg

@RSivanithyBT

Bourses can prosper and expand only if they are constantly mindful of the potential of change in economics andworld markets and willing to adopt innovations as necessary, says the founding father of futures markets

The Business Times | Tuesday, February 10, 2015 �OPINION | 27