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Economics

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Singapore’s Q1 2023 GDP growth increase by mere 0.1%, manufacturing sector contracts sharply

Singapore’s economy grew by 0.1% YoY in Q1 2023, slower than the previous quarter’s 2.1%, as the manufacturing sector contracted by 6.0%. The construction sector continued to grow, while the services sector saw mixed performance.

Chinese Wealthy in Singapore: Spending lavishly, but not investing locally

Despite the surge in ultra-wealthy Chinese entrepreneurs moving to Singapore, money managers claim little investment is being made in local funds and private equity firms. Bloomberg reports that the tiny capital markets in Singapore and Southeast Asia, coupled with the time needed for tycoons to feel comfortable with advisers they barely know, have contributed to the reluctance. The limited investment is surprising, given the increase of Chinese tycoons setting up bases and spending loads of money on mansions, luxury cars, and golf club memberships in Singapore.

World Bank, IMF spring meetings to get underway in complex economic environment

The IMF and World Bank’s spring meetings will focus on an ambitious reform and fundraising agenda, but concerns over high inflation, rising geopolitical tension, and financial stability are likely to overshadow discussions. The IMF predicts global growth to fall below 3% this year, with close to 90% of the world’s advanced economies experiencing slowing growth. The meetings also provide an opportunity to reform the World Bank to better tackle long-term issues like climate change, with the US pushing for changes to the bank’s mission statement and financial capacity.

Sanctions-hit Russian bank VTB reports huge loss

VTB, Russia’s second-largest bank, reported a $7.7 billion loss in 2022 due to Western sanctions imposed after Moscow’s offensive in Ukraine, resulting in its exclusion from the SWIFT global payments system and the individual sanctions against its chief, Andrei Kostin, by the UK and US.

UBS shareholders to weigh in on Credit Suisse mega-merger

UBS shareholders confront the bank’s leadership over the hastily arranged merger with Credit Suisse, engineered by the Swiss government, central bank, and financial regulators. Concerns arise about the risks and “bad culture” from Credit Suisse bleeding into UBS, as well as the disputes and risky business sectors UBS will inherit. Credit Suisse shareholders express disappointment as the value of their investment plunges, and some UBS shareholders seek a review of the exchange ratio. The AGM takes place in Basel, with former CEO Sergio Ermotti returning to handle the integration process. UBS becomes a banking colossus with $5 trillion of invested assets. UBS shares close slightly up, while Credit Suisse’s value has plummeted. The Ethos foundation considers legal action for a review of the exchange ratio.

Malaysia’s PM proposes ‘Asian Monetary Fund’ to reduce dependence on US Dollar

Malaysian Prime Minister Datuk Seri Anwar Ibrahim has called for the country to stop relying on the US dollar for investment negotiations and instead use Malaysia’s currency and the currency of the countries involved. Anwar also proposed the idea of the Asian Monetary Fund (AMF) at the Boao Forum in Hainan. The AMF was first proposed by Japan in 1997 during the early stages of the Asian financial crisis but failed to materialize. Anwar is now revisiting the idea to strengthen the buffer against economic crises, particularly with the economic strength of China and Japan.

China Renaissance suspends trading as chairman’s disappearance sparks regulatory fears

Investment bank China Renaissance has suspended trading in its shares due to the disappearance of its chairman, Bao Fan, who is reportedly cooperating in an official investigation, raising concerns over a renewed regulatory crackdown on China’s finance sector.

Swiss prosecutors say investigating UBS-Credit Suisse merger

Swiss prosecutors are investigating the UBS takeover of Credit Suisse, following pressure from authorities and media leaks. The probe aims to identify any criminal offences and ensure Switzerland’s financial centre remains “clean.” The merger was arranged by the government to prevent a global financial meltdown after Credit Suisse’s share price collapsed due to a series of scandals. The rescue merger is not only “the biggest transaction” since the 2008 financial crisis but also “the first time” two systemically important banks at the global level will merge.

US senators slam regulators for SVB oversight failures

US lawmakers accused regulators of failing to prevent the collapse of Silicon Valley Bank, which sparked a broader sell-off of banking stocks. The Senate Banking Committee grilled senior Federal Reserve, Treasury and Federal Deposit Insurance Corporation officials about their inability to prevent the Californian lender’s collapse on 10 March, with regulators promising to investigate any failings they may have made in their oversight of SVB.

China ramping up bailout loans to ‘Belt and Road’ countries: report

China has provided $240 billion in bailout loans to 22 developing countries in danger of default, mainly in Belt and Road Initiative (BRI) countries like Sri Lanka, Pakistan, and Turkey, according to a report by AidData, the World Bank, Harvard Kennedy School, and the Kiel Institute for the World Economy. The report noted that China’s bailout loans have accelerated between 2016 and 2021, with Beijing distributing 80% of its rescue lending during that period. Critics have accused China of luring developing countries into debt traps by providing massive, unaffordable loans.