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Singapore Economic News
29-01-2015, 03:52 PM,
Post: #21
RE: Singapore Economic News
(29-01-2015, 09:37 AM)edragon Wrote: I think bilateral Trade will be affected adversely if the slope is not eased as the biggest trading partner is severely affected by the oil price and the exchange between the Sing Dollar and Ringgit appreciated too steeply against the band. The MAS must have no other option but take this "unscheduled" "surprised" easing.
This must be a last resort as big investors may switch out with this minor shock.

But but but...... I suspect that the bulk of Sing and Malaysia trade are in USD wor....Big Grin e.g. at least the electronics industry typically price products in USD.

My gut feel is that this is a pre-preemptive step against speculative pressure surfacing a la the Swiss Franc.

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29-01-2015, 06:14 PM, (This post was last modified: 29-01-2015, 06:15 PM by AlphaQuant.)
Post: #22
RE: Singapore Economic News
(29-01-2015, 09:20 AM)gzbkel Wrote: I understand the general idea, but not the part about "slope, width and center of the band."
The Business Times actually had a graphic to explain it quite nicely

the downloadable file attached (in case the url is invalid):

.pdf   How Singapore's monetary policy works.pdf (Size: 698.25 KB / Downloads: 16)

For blokes more interested, there's a pretty neat monograph from MAS in 2013, explaining the linkage between the banks, SGD liquidity, repos, fxswaps, sterilisation via SGS etc - quite a read but concise enough i think.

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29-01-2015, 08:10 PM,
Post: #23
RE: Singapore Economic News
AlphaQuant, thanks alot for the links. Very useful.

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06-02-2015, 10:39 AM,
Post: #24
RE: Singapore Economic News
Singapore Isn’t Greece, Temasek Tells S&P in 29 Pages
This way to Bloomberg
(Bloomberg) -- Singapore’s Temasek Holdings Pte has told Standard & Poor’s in 29 pages why it shouldn’t mess with the state-owned investor’s AAA rating.

Temasek, which managed S$223 billion ($165 billion) of assets as of last March, said the rating firm’s proposed new rules for grading investment holding companies lump Singapore with riskier nations such as Greece and Jamaica, according to a Feb. 2 response to the changes. S&P’s new criteria take into account the firms’ lack of direct ownership of assets, the challenges they face when selling in illiquid markets and volatility of assets they hold.

Part of S&P’s proposal groups Singapore, which has had a AAA rating for 20 years, alongside Greece, a nation that may run out of cash this month. While Temasek would probably still enjoy the government’s top-grade overall rating, a weaker risk profile would be unwelcome at the company which has been considering offering bonds to individuals in Singapore.

“A triple-A credit rating is a rare thing in today’s markets, and there is a prestige element to it,” Veljko Fotak, assistant professor of finance and managerial economics at the University at Buffalo, New York, said in a Feb. 5 e-mail. “Any chink in that armor, even if only in the stand-alone, rather than overall, rating, could have image consequences.”

Temasek dollar bonds due in 2019 yielded 39 basis points more than U.S. Treasuries yesterday and its credit-default swaps were at 38.7, compared with 35.5 for Australia.

Four Baskets

S&P published in November proposed new criteria for assessing credit risk at IHCs, defined as firms holding equity stakes across at least three sectors. The ratings company asked for feedback from affected parties by Jan. 30.

The new framework grades IHCs’ asset liquidity by splitting their main countries of operation into four baskets, based on a 30-year history of those nations’ share market swings, according to Temasek. Singapore falls into the third basket with markets including Hong Kong, Saudi Arabia and Cyprus. The measure should instead “be assessed based on the number of days needed to divest assets” on those exchanges, said Temasek.

“With its statement, Temasek is indirectly defending the standing of Singapore as a financial center,” Sven Behrendt, managing director at Geneva-based GeoEconomica, which researches sovereign wealth funds, said in a Feb. 4 phone interview. “It’s understandable to me that Temasek doesn’t want the country to be put in the same category as Greece, Jamaica and Trinidad and Tobago.”

Asia, America

Temasek had 31 percent of its assets in Singapore as of March 31, according to its last annual report published in July. Investments in the rest of Asia stood at 41 percent and those in North America, Europe, Australia and New Zealand at 24 percent. About 70 percent of its assets were listed.

The firm’s biggest holdings include a 52 percent stake in Singapore Telecommunications Ltd., valued at $25 billion, data compiled by Bloomberg show. It owns a 6 percent stake in China Construction Bank Corp., worth $11.6 billion, and 29 percent of DBS Group Holdings Ltd., valued at $10.4 billion.

“S&P regularly requests comments from market participants on proposed changes to its methodologies and assumptions,” Bertrand Jabouley, the Singapore-based S&P analyst who follows Temasek, said in a Feb. 5 e-mail. “The objective of this proposed criteria is to help the market better understand key risk drivers for investment holding companies, enhance global comparability of our ratings and improve transparency.”

Stephen Forshaw, a spokesman for Temasek, declined to comment beyond the company’s statement when contacted by e-mail.

Riskier Basket

Under the criteria, S&P also assumes that firms such as Temasek operate in a “moderately high risk” industry. That puts IHCs in a basket riskier than pharmaceutical and oil and gas companies, said Temasek. S&P has downgraded 18 energy firms this year in North America as lower oil prices curb their cash flows and ability to pay debt, data compiled by Bloomberg show.

The proposed industry classification could see a capping of IHCs’ so-called anchor ratings, which help determine stand-alone scores, at levels that don’t reflect the individual firms’ ability to pay debt, according to Temasek.

“In our view, classifying IHCs as a uniform, homogeneous industry is not meaningful,” Temasek said in the statement. “A company should be assessed objectively, based on its individual credit quality, without being constrained by any cap.”

S&P assigns an “extremely high likelihood of extraordinary government support” to Temasek, which means the investment firm’s corporate score would reflect Singapore’s AAA rating even if its stand-alone grade dropped.

Surprise Easing

The city’s economy grew an annualized 1.6 percent in the three months to Dec. 31 from the previous quarter, less than analysts estimated, after its manufacturing industry weakened with slowing growth in China. The country unexpectedly eased monetary policy last month, allowing the Singapore dollar to drop 1.7 percent versus the greenback this year.

Temasek said in January 2014 it was looking at ways to offer bonds to individual investors in Singapore. Issuing fixed-income products will provide an “alternative investment opportunity” for investors seeking stable returns with lower risks, the company said in a statement that month.

S&P’s proposed new criteria for IHCs “is part of a bigger focus on how to evaluate liquidity risk as it has been deteriorating across the world,” Jean-Charles Sambor, Singapore-based Asia Pacific director of the Institute of International Finance, said by phone Feb. 4.

“It’s healthy that rating companies and firms such as Temasek are having a public discussion about these issues.”
The only way to avoid making mistakes is not to do anything. And that … will be the ultimate mistake. - Goh Keng Swee
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人生最大錯誤,用健康換取身外之物。 ^ 人生无常,珍惜当下。 ^ 放弃固执,适时变通。 ^ 前面是绝路,希望在转角。

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13-03-2015, 01:29 PM,
Post: #25
RE: Singapore Economic News
Billions of reserves being used to prop up weak SGD
You can find more of my postings in

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01-05-2015, 04:41 PM,
Post: #26
RE: Singapore Economic News
Marine and offshore firms extremely downbeat about prospects in Q2
You can find more of my postings in

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04-05-2015, 12:25 AM,
Post: #27
RE: Singapore Economic News
(01-05-2015, 04:41 PM)Behappyalways Wrote: Marine and offshore firms extremely downbeat about prospects in Q2

Agree and as per discussed in the oil thread:

(21-04-2015, 06:26 AM)jjlim84 Wrote: I dun see oil n gas counters always in uptrends when oil prices are rallying. Oil price rises, buy oil n gas counter, oil price drops, sell them for profit, i hope it was that easy

My company clients are big oil n gas companies and their substantially decreased orders for the past few months which I think have not been reflected yet, will soon kick in
(21-04-2015, 08:27 AM)specuvestor Wrote: ^^agree. Capex cycle is not going to restart just because oil hits $80. It will only restart when majors see oil price sustainable at >$70 for next 18 months. There is a difference. So choose and TIME the instruments carefully. I wont be surprised most will rise in tandum but i wont be holding them for quarterly results
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

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29-05-2015, 10:40 AM,
Post: #28
RE: Singapore Economic News
Competition watchdog rebukes ten financial advisory firms for teaming up against iFAST
You can find more of my postings in

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02-06-2015, 07:17 PM,
Post: #29
Business loan growth sinks into the red for the first time since Lehman crisis
Business loan growth sinks into the red for the first time since Lehman crisis
Weighed down by cloudy global outlook.

Business loan growth in Singapore dipped into the red for the first time since the Lehman crisis in April, according to a report by DBS Vickers.

DBS noted that this reflects significant downside risk to growth if the downward trend persists in the coming months.
“ While global outlook remains cloudy, pressure from domestic restructuring and risk of higher interest rate are weighing down on business confidence and affecting companies’ willingness to invest,” said the report.

The faster pace of consumer loan growth is also a cause for concern, the report added.

“The concern on household leverage continues to linger April marks the fourth consecutive months whereby consumer loan growth outpaced business loan growth. Indeed, businesses are responding to the risks of higher interest rates and dicey growth outlook more spontaneously than consumers,” said DBS.

That's why SGX dropped?
Virtual currencies are worth virtually nothing.

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02-06-2015, 09:01 PM,
Post: #30
RE: Singapore Economic News
One possibility of STI retreated by -1.5% today, is due to last Friday announcement on new liquidity requirement on STI component stocks. Jardine Matheson, Jardine Strategic and Cycle & Carriage are stocks most concerned, due to their liquidity record. Of course, I can't explain why SingTel and banks are also affected?

The next review cycle is Sep 2015. Those in the standby list, includes YZJ, which is my core holding at the moment.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡

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