Europe leaders to unveil half-trillion-euro bank rescue
BERLIN (AFP) - Governments in Berlin, Paris and Rome were Monday to announce more than half a trillion euros in rescue funds for Europe's stumbling banking sector, as each puts a price tag on a joint bail-out plan.
Leaders of the 15-country eurozone single currency bloc, following the lead of Europe's financial giant Britain, agreed Sunday on a high-stakes joint bid to pull the world financial system back from the brink of collapse.
Stock markets in London, Paris, Amsterdam, Milan and Frankfurt, reeling from their blackest week since the crash of 1929, rebounded sharply even before full details of the rescue were unveiled, soaring by more than 5.0 percent.
Meeting in Paris, the leaders agreed to plough funds into struggling banks and guarantee inter-bank lending, which all but dried up in the panicked four weeks since the collapse of US bank Lehman Brothers, threatening the health of the wider economy.
No global price tag was announced for the enterprise -- modelled on a similar scheme adopted by London last week -- but the German package alone was set to reach 470 billion euros (640 billion dollars), government sources said.
In Berlin, Chancellor Angela Merkel's cabinet was to meet and at 3:00pm (1300 GMT) announce the rescue, set to include around 70 billion euros in fresh capital and 400 billion euros in loan guarantees, according to officials.
In France, whose major banks have so far pulled through the crisis relatively unscathed, President Nicolas Sarkozy will address the nation at 3:00 pm (1300 GMT), after an emergency cabinet meeting.
At the same time in Austria, the government was to announce a bail-out, which Chancellor Alfred Gusenbauer has said could involve part-nationalisation of the worst-hit banks.
Portugal has already offered a 20-billion-euro guarantee for endangered banks, while Italy's cabinet was to meet Monday to "update" bail-out measures already taken.
All 15 eurozone members are to release full details before a summit Wednesday of the 27 European Union members in Brussels, where more non-euro-spending states are expected to sign on.
The European plan, coming two days after the Group of Seven richest economies pledged similar action to shore up the financial sector, won plaudits from International Monetary Fund (IMF) chief Dominique Strauss-Kahn.
"Guarantees have been given, there is complete political determination," he told French radio Europe 1. "There is no reason today, for either depositors, market actors or businesses to have anything to fear."
Strauss-Kahn said the plan "should provide the elements to reassure, in a situation that is highly irrational," reaffirming the need for "massive," "global and coordinated" action.
The head of the eurogroup, Luxembourg prime minister Jean-Claude Juncker, said the bail-out was "essential" to prevent a global financial meltdown.
"This is not about handing out gifts to bankers," he told RTL radio. "The banks we help will have to pay. This is about ensuring that consumers and investors can keep on functioning in a rational way."
"If we just stand back and do nothing, everything will collapse."
European leaders took example from a 500-billion-pound (630-billion-euro, 850-billion-dollar) British rescue plan.
London on Monday ploughed 37 billion pounds into a trio of banks, Royal Bank of Scotland, HBOS and Lloyds TSB, the first to benefit from the scheme.
And European central banks moved to free up frozen lending by providing commercial banks with unlimited amounts of dollars in a joint operation that might be reinforced by Japan.
The Bank of England, European Central Bank and Swiss National Bank will loan dollars to commercial banks for periods of seven, 28 and 84 days "at fixed interest rates for full allotment," an ECB statement said.
Banks worldwide need dollars to finance operations, but the market on which they would normally borrow them has seized up following the collapse in the US subprime mortgage market.
The European Union also said it was ready to help Hungary's government after its currency, the forint, slumped last week.
So much $
The Package:
Bristain: Total 500 b pound (630 b euro/850 b dollars)
200 b pound (short term)250 b pound ( guarantee loan between bannks)
Germany
70 b euros (fresh capital)400 b euros (loan guarantee)
France
Austria
Portugal 20 b euro (guarantee)
Tuesday, October 14, 2008
DBS says Indian JV to close branches, layoff staff
DBS says Indian JV to close branches, layoff staff
SINGAPORE, Oct 14 - DBS Group, Singapore's biggest bank, said on Tuesday that its Indian joint venture Cholamandalam DBS Finance is closing 75 branches in India.
"The business has to adapt to prevailing conditions in India," a DBS spokesman said, confirming an earlier report in the Times of India newspaper that its subsidiary will close 75 of its 260 branches and 200 people will lose their jobs.
DBS, which is Southeast Asia's biggest lender, has a 37.5 percent stake in Cholamandalam DBS Finance.
DBS and Cholamandalam Investments and Finance Company agreed to form the joint venture in the middle of 2005.
Quoted from yahoo news
Why closing these at this time? To take advantage of the current crisis to cut and streamline processes ? Or they are really losing grounds in India?
SINGAPORE, Oct 14 - DBS Group
"The business has to adapt to prevailing conditions in India," a DBS spokesman said, confirming an earlier report in the Times of India newspaper that its subsidiary will close 75 of its 260 branches and 200 people will lose their jobs.
DBS, which is Southeast Asia's biggest lender, has a 37.5 percent stake in Cholamandalam DBS Finance.
DBS and Cholamandalam Investments and Finance Company agreed to form the joint venture in the middle of 2005.
Quoted from yahoo news
Why closing these at this time? To take advantage of the current crisis to cut and streamline processes ? Or they are really losing grounds in India?
Friday, October 10, 2008
Interesting Articles
This is a summary of articles that may be of interest to you
Global Economy
1. US Senate approves economic bailout plan
2. UBS cuts 2000 more jobs in investment bank unit
3. Central banks unleash rate cut offensive against finance turmoil AFP
About Singapore
1. Singapore being top meeting place
2. Recession looms for Singapore: economists AFP
Singapore's property market
1. URA releases 3rd quarter 2008 private residentail property price index
2. Singapore home prices see first drop in 4 years
3. MRT guide to home prices
4. Tharman says global economic crunch could impact job market
Global Economy
1. US Senate approves economic bailout plan
2. UBS cuts 2000 more jobs in investment bank unit
3. Central banks unleash rate cut offensive against finance turmoil AFP
About Singapore
1. Singapore being top meeting place
2. Recession looms for Singapore: economists AFP
Singapore's property market
1. URA releases 3rd quarter 2008 private residentail property price index
2. Singapore home prices see first drop in 4 years
3. MRT guide to home prices
4. Tharman says global economic crunch could impact job market
Thursday, October 9, 2008
Central banks unleash rate cut offensive against finance turmoil AFP
Central banks unleash rate cut offensive against finance turmoil AFP -
LONDON (AFP) - - Major central banks launched coordinated interest rate cuts on Wednesday in a new gamble to counter the global financial crisis but failed to quell panic on global stock markets.
The rate cuts and Britain's move to pump 87 billion dollars into stricken banks were designed to underpin shaky confidence in the financial system.
But while the move brought temporary respite, London's main index soon fell back again and US stocks endured another rollercoaster ride, while Tokyo saw its biggest one-day fall in two decades.
The US Federal Reserve, the European Central Bank , Bank of England and central banks in Sweden and Switzerland all joined the new interest rate offensive, cutting rates by half a percentage point. China joined in cutting 27 basis points off its key rate.
The central banks highlighted in a joint statement that they had cooperated in "unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets" during the crisis.
They said inflationary pressures were easing as oil and other commodity prices fall due to the credit crunch cutting demand and so "some easing of global monetary conditions is therefore warranted."
Political leaders welcomed the cuts. "It is important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," White House spokesman Tony Fratto said.
German Chancellor Angela Merkel said it would "help build confidence" in the global economy and French President Nicolas Sarkozy, current EU president, called it a "very important decision."
Neither the rate cut nor Britain's costly initiative to hold up the banking system could halt another market freefall.
Panic selling hit Asian stock exchanges and a drop of 9.38 percent in Tokyo prompted Japanese Prime Minister Taro Aso to voice "huge fears" for the future of the world's second biggest economy. Hong Kong fell 8.2 percent and Sydney 5.0 percent.
While the initial impact of the central banks' move was to breathe some life back into the main European markets, the relief was only temporary.
The London stock market plunged 5.38 percent, with dealers saying investors were unconvinced that the rate cuts would stop the rot.
Wall Street also remained volatile, rebounding from an opening plunge. The Dow Jones Industrial Average was trading 89.28 points (0.95 percent) higher at 9,536.39 around 1350 GMT, after initially plummeting 149.34 points.
"The central banks have to cut their rates further ... we have lost too much time," Robert Halver, a strategist at Baader Bank in Frankfurt told AFP.
Unveiling a package which will see Britain's eight main banks part-nationalised, Prime Minister Gordon Brown said "the global financial market has ceased to function" and needed "bold and far-reaching solutions."
The government said it would use 50 billion pounds (64 billion euros, 87 billion dollars) to buy stakes in HSBC, Royal Bank of Scotland, Barclays, HBOS, Lloyds TSB, Standard Chartered, Abbey and Nationwide Building Society.
It would also make available 200 billion pounds in short-term loans and issue 250 billion pounds to guarantee loans between banks.
Royal Bank of Scotland and HBOS, whose shares have suffered heavy recent losses, said they would take part in the recapitalisation part of the scheme but other banks including HSBC and Standard Chartered said they would not.
It hoped the measures will overcome the banks' reluctance to lend to each other -- the root of the financial crisis.
Brown also called for a "European-wide funding plan" to help ease the global financial crisis and said proposals had been made to other nations.
Britain's initiative followed desperate efforts by other governments and institutions.
The European Central Bank said it would pump 70 billion dollars into interbank money markets in one-day loans Wednesday, raising the daily amount by 20 billion dollars.
The US Federal Reserve said Tuesday it would buy up short-term corporate debt -- sharply extending its role in the economy -- and central bank chairman Ben Bernanke strongly hinted that a US interest rate cut was on the cards.
President George W. Bush discussed the economic meltdown with leaders of Britain, France and Italy, seeking a common strategy ahead of crisis talks between the Group of Seven major economies in Washington on Friday
LONDON (AFP) - - Major central banks launched coordinated interest rate cuts on Wednesday in a new gamble to counter the global financial crisis but failed to quell panic on global stock markets.
The rate cuts and Britain's move to pump 87 billion dollars into stricken banks were designed to underpin shaky confidence in the financial system.
But while the move brought temporary respite, London's main index soon fell back again and US stocks endured another rollercoaster ride, while Tokyo saw its biggest one-day fall in two decades.
The US Federal Reserve, the European Central Bank , Bank of England and central banks in Sweden and Switzerland all joined the new interest rate offensive, cutting rates by half a percentage point. China joined in cutting 27 basis points off its key rate.
The central banks highlighted in a joint statement that they had cooperated in "unprecedented joint actions such as the provision of liquidity to reduce strains in financial markets" during the crisis.
They said inflationary pressures were easing as oil and other commodity prices fall due to the credit crunch cutting demand and so "some easing of global monetary conditions is therefore warranted."
Political leaders welcomed the cuts. "It is important and helpful that central banks are working in a coordinated way to deal with stress in the financial system," White House spokesman Tony Fratto said.
German Chancellor Angela Merkel said it would "help build confidence" in the global economy and French President Nicolas Sarkozy, current EU president, called it a "very important decision."
Neither the rate cut nor Britain's costly initiative to hold up the banking system could halt another market freefall.
Panic selling hit Asian stock exchanges and a drop of 9.38 percent in Tokyo prompted Japanese Prime Minister Taro Aso to voice "huge fears" for the future of the world's second biggest economy. Hong Kong fell 8.2 percent and Sydney 5.0 percent.
While the initial impact of the central banks' move was to breathe some life back into the main European markets, the relief was only temporary.
The London stock market plunged 5.38 percent, with dealers saying investors were unconvinced that the rate cuts would stop the rot.
Wall Street also remained volatile, rebounding from an opening plunge. The Dow Jones Industrial Average was trading 89.28 points (0.95 percent) higher at 9,536.39 around 1350 GMT, after initially plummeting 149.34 points.
"The central banks have to cut their rates further ... we have lost too much time," Robert Halver, a strategist at Baader Bank in Frankfurt told AFP.
Unveiling a package which will see Britain's eight main banks part-nationalised, Prime Minister Gordon Brown said "the global financial market has ceased to function" and needed "bold and far-reaching solutions."
The government said it would use 50 billion pounds (64 billion euros, 87 billion dollars) to buy stakes in HSBC, Royal Bank of Scotland, Barclays, HBOS, Lloyds TSB, Standard Chartered, Abbey and Nationwide Building Society.
It would also make available 200 billion pounds in short-term loans and issue 250 billion pounds to guarantee loans between banks.
Royal Bank of Scotland and HBOS, whose shares have suffered heavy recent losses, said they would take part in the recapitalisation part of the scheme but other banks including HSBC and Standard Chartered said they would not.
It hoped the measures will overcome the banks' reluctance to lend to each other -- the root of the financial crisis.
Brown also called for a "European-wide funding plan" to help ease the global financial crisis and said proposals had been made to other nations.
Britain's initiative followed desperate efforts by other governments and institutions.
The European Central Bank said it would pump 70 billion dollars into interbank money markets in one-day loans Wednesday, raising the daily amount by 20 billion dollars.
The US Federal Reserve said Tuesday it would buy up short-term corporate debt -- sharply extending its role in the economy -- and central bank chairman Ben Bernanke strongly hinted that a US interest rate cut was on the cards.
President George W. Bush discussed the economic meltdown with leaders of Britain, France and Italy, seeking a common strategy ahead of crisis talks between the Group of Seven major economies in Washington on Friday
Recession looms for Singapore: economists AFP
Recession looms for Singapore: economists AFP - Wednesday, October 8
SINGAPORE, Oct 8, 2008 (AFP) - Singapore appears headed for its first recession since 2002 as the city-state suffers from a US economy wilting under its worst financial crisis since the Great Depression, economists say. Southeast Asia's wealthiest economy in terms of GDP per capita is heavily dependent on trade, which makes it sensitive to hiccups in developed economies, particularly key export markets the US and Europe.
The crisis that began last year in the US subprime, or higher-risk, mortgage sector is now infecting European shores, and Singapore may very likely find itself in an extended downturn, economists said.
They expect this Friday's release of preliminary economic data for the third quarter to confirm Singapore is in a technical recession, generally defined as two consecutive quarters of quarter-on-quarter contractions in economic output.
"We are pencilling in the worst for Singapore.... We might see two straight years of (economic) contractions (from 2009 to 2010)," said Song Seng Wun, a regional economist with CIMB-GK Research.
While the last technical recession came six years ago, the most recent full-scale recession was in 2001 when the economy contracted 2.4 percent during the year.
After years of growth, signs of a slowdown emerged with recent disappointing trade data and contractions in the important manufacturing sector, which includes the country's export-dependent electronic and pharmaceutical industries.
In August, key non-oil domestic exports fell for the fourth straight month, with electronic shipments continuing a decline begun in February 2007, and manufacturing dropped by 12.2 percent.
The August fall in output followed a 21.5 percent decline the previous month.
In the second quarter to June, Singapore's economy contracted 6.0 percent on an annualised, quarter-on-quarter basis and the negative trend likely extended into the third quarter, said economists.
"Things are bad globally," said Kit Wei Zheng, Citigroup's vice president for regional economics and market analysis.
"There are a lot of downside risks and in such a scenario, one cannot hope for a quick recovery," he said in Singapore.
Kit is optimistically forecasting a fourth-quarter recovery, with full-year growth at 2.8 percent.
Song said his revised 2009 forecast would likely be for negative growth.
He said that given the rarity of the global crisis, "the numbers we may be looking at may be once in a century for Singapore."
According to economists' calculations, more than two-thirds of the country's economy, valued at 243.17 billion Singapore dollars in 2007 (166.46 billion US), is driven by external demand.
The island nation has no significant domestic economic drivers to lean on because its market of almost five million is simply too small, said economists.
"If the world is in a recession, there is little that we can boost," said Song. "Our plan B is really to try to make the local population bigger."
Economists from Credit Suisse also see Singapore's economy slowing further next year.
"Signs that growth will be lower in 2009 than in 2008 are everywhere... lower job and income growth, falling asset prices, and flat to negative export growth," they said in a report.
"By sector, the global financial turmoil could hit financial services growth hard, exports are likely to drag down manufacturing, and the biomedical sector is expected to remain under pressure from competition from generic drugs."
In early August Singapore's government cut its forecast for economic growth this year to between four and five percent.
But Finance Minister Tharman Shanmugaratnam warned this week that the country could be stuck in an economic downturn that may last "several quarters" as the global crisis evolves.
"It is now an economic crisis," he was quoted as saying Monday in The Straits Times.
"So globally the economy is slowing down. This is a fact that we cannot escape."
SINGAPORE, Oct 8, 2008 (AFP) - Singapore appears headed for its first recession since 2002 as the city-state suffers from a US economy wilting under its worst financial crisis since the Great Depression, economists say. Southeast Asia's wealthiest economy in terms of GDP per capita is heavily dependent on trade, which makes it sensitive to hiccups in developed economies, particularly key export markets the US and Europe.
The crisis that began last year in the US subprime, or higher-risk, mortgage sector is now infecting European shores, and Singapore may very likely find itself in an extended downturn, economists said.
They expect this Friday's release of preliminary economic data for the third quarter to confirm Singapore is in a technical recession, generally defined as two consecutive quarters of quarter-on-quarter contractions in economic output.
"We are pencilling in the worst for Singapore.... We might see two straight years of (economic) contractions (from 2009 to 2010)," said Song Seng Wun, a regional economist with CIMB-GK Research.
While the last technical recession came six years ago, the most recent full-scale recession was in 2001 when the economy contracted 2.4 percent during the year.
After years of growth, signs of a slowdown emerged with recent disappointing trade data and contractions in the important manufacturing sector, which includes the country's export-dependent electronic and pharmaceutical industries.
In August, key non-oil domestic exports fell for the fourth straight month, with electronic shipments continuing a decline begun in February 2007, and manufacturing dropped by 12.2 percent.
The August fall in output followed a 21.5 percent decline the previous month.
In the second quarter to June, Singapore's economy contracted 6.0 percent on an annualised, quarter-on-quarter basis and the negative trend likely extended into the third quarter, said economists.
"Things are bad globally," said Kit Wei Zheng, Citigroup's vice president for regional economics and market analysis.
"There are a lot of downside risks and in such a scenario, one cannot hope for a quick recovery," he said in Singapore.
Kit is optimistically forecasting a fourth-quarter recovery, with full-year growth at 2.8 percent.
Song said his revised 2009 forecast would likely be for negative growth.
He said that given the rarity of the global crisis, "the numbers we may be looking at may be once in a century for Singapore."
According to economists' calculations, more than two-thirds of the country's economy, valued at 243.17 billion Singapore dollars in 2007 (166.46 billion US), is driven by external demand.
The island nation has no significant domestic economic drivers to lean on because its market of almost five million is simply too small, said economists.
"If the world is in a recession, there is little that we can boost," said Song. "Our plan B is really to try to make the local population bigger."
Economists from Credit Suisse also see Singapore's economy slowing further next year.
"Signs that growth will be lower in 2009 than in 2008 are everywhere... lower job and income growth, falling asset prices, and flat to negative export growth," they said in a report.
"By sector, the global financial turmoil could hit financial services growth hard, exports are likely to drag down manufacturing, and the biomedical sector is expected to remain under pressure from competition from generic drugs."
In early August Singapore's government cut its forecast for economic growth this year to between four and five percent.
But Finance Minister Tharman Shanmugaratnam warned this week that the country could be stuck in an economic downturn that may last "several quarters" as the global crisis evolves.
"It is now an economic crisis," he was quoted as saying Monday in The Straits Times.
"So globally the economy is slowing down. This is a fact that we cannot escape."
Monday, October 6, 2008
Tharman says global economic crunch could impact job market
Tharman says global economic crunch could impact job market
Channel NewsAsia - Monday, October 6
SINGAPORE: Finance Minister Tharman Shanmugaratnam said on Sunday that the global economic crunch could impact Singapore’s job market, but he is confident that the country has the right fundamentals to sail through the rough patch.
Even as American lawmakers gave their approval for the US$700 billion bailout programme to save the country’s financial institutions, Mr Tharman said US needs to do more to solve the lingering crisis.
After visiting the Toa Payoh East neighbourhood on Sunday, the finance minister sat down for a discussion about the global economic crisis with residents.
He said: "Our confidence in Singapore is very high. Across the board, manufacturing, services, people are confident about Singapore. Our property market is not as overvalued as many other countries, including some others in Asia.
"We have a strong fiscal system. It’s just as well we didn’t spend all our surplus last year. We were conservative. We preserved some for the future and that’s the right approach."
Residents were also concerned about the failure of US banks, insurance companies and money matters — big and small. They questioned the integrity of Singapore’s banking system and insurance companies’ ability to honour their obligations.
Mr Tharman said: "I can assure you that our Singapore banks are well regulated and there is no risk and no reason whatsoever to have a run on our banks. More importantly, the banks themselves have good risk management.
"So frankly, you need not worry about how solid our banks are, your money is safe. We are not in the same situation as the US, we need not panic.
"Our regulations are stricter compared to Ireland, the United States, in fact compared to many developed countries. We have always been old—fashioned in our regulatory approach."
The minister added that Singaporeans can have the same confidence in insurance companies, which also have to abide by strict regulations.
As for Singapore’s full—year economic growth forecast, Mr Tharman said the Trade and Industry Ministry will reveal the numbers on October 10. Singapore’s monetary policy update would also be out by then.
We have so many big company "streamlining" their local operations in Singapore and globally, it will definitely create a massive number of unemployment
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