Fixed Deposits   

$$$$ F D Interest Abnormalisation MLM BUBBLE $$$

 

Asia jolted by fleeing funds and rising US$

THERE is growing alarm in Asia that capital is flowing too quickly out of the region, after major Asian currencies saw their biggest weekly drop in almost three years.

 

1.28% is for a  minimum sum of S$25,000 for a period of  36 months. Rate for 1-month placement is 0.98%. Check it out )

pharoah88      ( Date: 18-Aug-2011 12:02) Posted: STATE BANK OF INDIA  [SBI] https://www.sbising.com/ AMK                      6506 4255 TPY                          6506 4233 Cecil Street    6506 4220   SGD Deposit 1.28% USD Deposit  2.35% AUD Deposit  5.8%

 

what is the possible reason they give so high interest rate? is going to affect stocks if more banks give good interest rate.,isn't it

 

STATE BANK OF INDIA  [SBI]

https://www.sbising.com/

AMK                      6506 4255

TPY                          6506 4233

Cecil Street    6506 4220

 

SGD Deposit 1.28%

USD Deposit  2.35%

AUD Deposit  5.8%

 

CIMB Squawk Box...

Singapore Banks

What happened? MAS sets the rules for Basel III capital requirements. Minimum tier 1 will be 6%, core tier-1 will be 4.5% from Jan1, 2013. Additionally, it will bring Tier-1 to 8% and minimum Tier-1 to 6.5% by Jan1, 2015. There will also be a capital conservation buffer of an additional 2.5%, phased in from 2016 to 2019, meaning that the banks will have to hold core Tier-1 of 9% by 2019. What we think? The official rules by MAS are a non-event. It was widely discussed as new proposals since Basel III proposals were put up, post-crisis. All Singapore banks already meet it, even including the buffer capital requirement to be phased in by 2019. All three banks have core capital above 10%. The problem was that banks in Europe and US had trouble to meet it and had resistance. The additional core equity (2.5%) was meant to address the grouse that Basel II was pro-cyclical. Risk-weighted assets had a 'loss history' element that tend to push RWA up and lower capital ratio in times of distress, deepening the recession. This additional buffer capital was meant for the global banking system to have a lower minimum capital requirement in times of distress, when BIS deems it necessary. These official rules are a non-event. The more interesting rules to watch out for are 1) the liquidity ratio requirement 2) the buffer capital required for critical/too-big-to-fail banks and the definition of who is " critical" . Nobody wants to be handicapped by further capital requirements because they are big. What you should do? No change to our OW position and top pick DBS. The news should do nothing to dampen banks' share price. Singapore banks are cheap both relative to their own historical valuation bands and vs. other Index sectors in SG. DBS - Technical BUY Prices have been trading sideways since DBS hit a high of S$15.80 in January 2010. This long term sideways movement appears to be a huge triangle pattern and this allows prices a chance to push on to new highs in the coming weeks. The MACD has just reconfirmed its golden cross, supporting the triangle view. Both its indicators are still in neutral zone. Aggressive traders may opt to go long with a stop placed below the S$13.98 key support levels. If prices can hold above this support then, it increases the odds for a bullish breakout above the triangle resistance S$14.98-15.05 in the weeks ahead. Taking out this resistance is bullish for the stock, targeting S$15.80 and S$16.50 next. Anything below the key support would mean that another consolidation pattern is taking place.

 

Tougher capital rules for banks

RACHEL ADRIENNE KELLY

rachel@mediacorp.com.sg

 

SINGAPORE

Basel III is the new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision in the wake of the 2008/2009 financial crisis.

Singapore has set its capital adequacy requirements (CAR) two percentage points above what is required by Basel III. The MAS will require Singapore-incorporated banks to meet a minimum Common Equity Tier 1 (CET1) CAR of 6.5 per cent. Meanwhile, Tier 1 CAR will be increased to 8 per cent from 6 per cent. The total CAR will remain unchanged at 10 per cent. These compare with the Basel IIIBloomberg, based on figures compiled by the financial news and data services provider. DBS and UOB were ranked fifth and sixth, respectively.

minimum requirements of 4.5, 6 and 8 per cent for CET1 CAR, Tier 1 CAR and total CAR.

Oversea-Chinese Banking Corp (OCBC), United Overseas Bank (UOB), DBS and Citi Singapore fall under the new rules and the MAS wants them to meet its higher minimum requirements by 2015. The lenders are already believed to meet the new Basel III standards.

Explaining the move, Mr Lim Hng Kiang, Minister for Trade and Industry and deputy chairman of MAS, said that each of the local banks was systematically important to Singapore, as they collectively accounted for more than half of the total non-bank resident deposits and loans in Singapore.

As such, higher capital levels are required to strengthen their ability to absorb unexpected losses effectively in a crisis.

“Capital requirements that are significantly above Basel III will not result in a large reduction in economic output but would be beneficial in reducing the likelihood and cost of a crisis,” Mr Lim said last night at the 38th Association of Banks in Singapore (ABS) annual dinner.

Banks that are well-capitalised, prudently regulated, and located in stable financial centres such as Singapore, present an attractive value proposition to depositors and investors, the MAS said.

OCBC CEO David Conner said: “We expect to be able to meet [bUt nOt  a gUArAntee ?]CAR requirements comfortably without having to raise any additional equity, undertake any rights issue, cut any dividends, or change our strategic plans.”  the MAS revised

OCBC was ranked last month as the strongest bank in the world by — The Monetary Authority of Singapore (MAS) yesterday announced tougher capital rules for Singapore banks, raising them to a higher level than those rolled out for Basel III, but the regulator noted that the local lenders were well positioned to meet the new requirements.

 

SUB-PRIME  CAR  2011  ? ? ? ?

BASEL  III    CAR  6%  [2017]

BASEL  IV    CAR  7%

BASEL V      CAR  8%

BASEL VI    CAR  9%

BASEL  VII  CAR 10%

BASEL VIII CAR  11%

CHINA  CAR  AbOve  11.5%  [2011]  = BASEL IX

SINGAPORE  CAR  8% [WHY 2019 ?]

O V E R H E A R D :

SINGAPRE    Financial FallOut  2017  ? ? ? ?

 

Lowest CAR for China's five commercial banks unchanged

0 CommentsPrint E-mail Xinhua, April 26, 2011

pharoah88         ( Date: 29-Jun-2011 09:31) Posted: Singapore incorporated banks will soon [2019 sO sOOn ? ? ? ?] be required to hold more capital exceeding the amount required under the new Basel III rules. Minimum tier-1 capital ratio would be 8% compared to 6% Basel III.

 

 

Friday: 7 May 2011

Malaysia Raises Interest Rates to 3% BLOOMBERG

Malaysia yesterday raised interest rates for the first time this year and asked banks to set aside more cash as reserves for a second time, joining India in stepping up the fight against inflation, amid surging oil and food prices worldwide.

Bank Negara Malaysia (BNM) increased its overnight policy rate to 3 per cent from 2.75 per cent. The statutory reserve requirement level will rise to 3 per cent from 2 per cent, effective on May 16.

BNM governor Zeti Akhtar Aziz, the first to raise rates in Asia last year as the region led a recovery from the global recession, is resuming rate hikes after pausing since July as inflation accelerated to a 23-month high.

India boosted borrowing costs this week for the ninth time since mid-March of last year as rising prices force nations to tighten monetary policy at the risk of slowing growth. The South-east Asian nation’s economy may expand 5 to 6 per cent this year, easing from a decade-high of 7.2 per cent last year, according to the central bank.

 

 

Regulatory consistency needed to avert crisis repeat SINGAPORE — Experts have called for a global central bank and financial authority to monitor and regulate markets to help avoid a recurrence of the 2008 to 2009 worldwide crisis.

Christopher Howells

christopherh@mediacorp.com.sg

 

Speaking at a conference organised by the Singapore Management University (SMU) yesterday, central bankers and academics said that leveraging by so-called “shadow banks”, such as hedge funds and investment banks, had made it difficult to track money globally.

Mr Ravi Menon, managing director of the Monetary Authority of Singapore, called for greater global consistency in regulation.

“This high degree of interdependence means that governments in major economies can no longer act in isolation. Regulatory policies must be globally consistent to minimise the risk of arbitrage.

Supervisory actions must be internationally coordinated to maximise their effectiveness,” he said.

Mr Menon added that regulators used to worry about institutions that were too big to fail but now they are more worried about those too interconnected to fail.

This is because cross-border bank lending has exceeded 40 per cent of world gross domestic product.

He stressed, however, that although global policies should be consistent, regulation and supervision must also cater to domestic context and circumstances to be effective.

Mr Andrew Sheng, chief advisor to the China Banking Regulatory Commission, said, “Finance has created a life of its own. It has become very abstract, very virtual and we can create liabilities as if there’s no tomorrow, because we can leverage this.

And the result is, of course, that we now have a crisis of fiat money, money created by the shadow banking system, global credit creation, with no global institution to maintain the hard budget constraint. And the reflexivity between credit creation globally drives interest rates lower and lower and then creates that asset bubble.”

Participants also noted that the rebalancing in the global economy is still ongoing, with the right recipe of regulation, capitalisation and minimising risk still to be addressed.

 

China extends reserve requirements for top banks

BEIJING

Three industry sources told

The required reserve ratio [CAR] for major banks will stand at a record high of 19 per cent and locks up about 180 billion yuan ($35.4 billion) in deposits that the banks would otherwise have had available to lend.

By locking up a chunk of cash, the moves help absorb some of the liquidity that drove inflation last month to a 28-month peak of 5.1 per cent. Inflation data on Saturday showed signs that price pressures are broadening beyond food, raising the prospect that the government will soon roll out more measures to temper the rising costs of living. These may include interest rate increases, currency appreciation and lending restrictions.

The extension of the reserve requirement increase, which was initially ordered in October, acts as a holding measure while Beijing weighs more aggressive policy options.

— China’s central bank has told six of the country’s biggest lenders that a special increase in required reserves will be extended, the latest step to try to quell inflation in a campaign that leaders this weekend suggested would be intensified.Reuters that the special increase in reserves that was due to expire this week will be extended for three months. That followed an official reserve requirement increase for all banks — the third in a month — that was announced on Friday.

REUTERS

pharoah88      ( Date: 14-Dec-2010 11:52) Posted: .

 

.

 

Higher rates or stronger currencies?

Christopher Howells christopher@mediacorp.com.sg

SINGAPORE — Asian central banks will have to find the balance between raising interest rates and letting their currencies rise next year, analysts say, noting that

the former strategy could put domestic demand at risk

while the latter could crimp competitiveness of exports.

Doing nothing is not much of an option.

Mr David Carbon, head of economic and currency research at DBS Bank, says Asian central banks are behind the curve, with inflation in China running some three times higher than the average rate that has prevailed since the Asian financial crisis in 1997.

In India, the rate is averaging 2.5 times higher than in the same 13-year period.

“More rate hikes and/or currency appreciation is needed in all countries if growth and inflation are to be kept on a steady keel,” said Mr Carbon.

“We saw 21 hikes or currency moves in Asia this year; we expect another 24 in the first two quarters of next year.”

Although more rate increases are expected in Asia next year, currency appreciation may be a preferred strategy for policy makers, analysts say. With most countries in the region pursuing the strategy, there may not be much of an impact on export competitiveness.

[CURRENCY PRICE FIXING  CARTEL    ? ? ? ?]

The pace of appreciation, however, may be tightly controlled by monetary authorities. That is because while stronger currencies do help absorb capital inflows [QE2 & QE3 are WELCOME ?] , if they are allowed to rise too fast and too quickly, they may end up becoming a one-way bet for speculators, inviting even more speculative inflows.

“If you’re facing very large real flows, currency undervaluation and to some extent inflation risks on a headline basis, then allowing for gradual currency appreciation makes sense and I think that’s what will come through - gradual appreciation,” said Mr Craig Chan, executive director of foreign exchange research at Nomura. He added monetary authorities in the region might also resort to “administrative measures” to reduce currency volatility.

According to Nomura, foreign financial investors brought US$372 billion ($587 billion) into Asia in the year ended June 2010, compared with an outflow of US$136 billion in the previous year.

The Japanese brokerage says Asian currencies are as much as 10.7 per cent undervalued at current levels and may gain about 4.5 per cent next year, the same as this year.

 

Higher rates or stronger currencies? Christopher Howells christopher@mediacorp.com.sg SINGAPORE — Asian central banks will have to find the balance between raising interest rates and letting their currencies rise next year, analysts say, noting that the former strategy could put domestic demand at risk while the latter could crimp competitiveness of exports. Doing nothing is not much of an option. Mr David Carbon, head of economic and currency research at DBS Bank, says Asian central banks are behind the curve, with inflation in China running some three times higher than the average rate that has prevailed since the Asian financial crisis in 1997.

 

Higher rates or stronger currencies? Christopher Howells christopher@mediacorp.com.sg SINGAPORE — Asian central banks will have to find the balance between raising interest rates and letting their currencies rise next year, analysts say, noting that the former strategy could put domestic demand at risk while the latter could crimp competitiveness of exports. Doing nothing is not much of an option. Mr David Carbon, head of economic and currency research at DBS Bank, says Asian central banks are behind the curve, with inflation in China running some three times higher than the average rate that has prevailed since the Asian financial crisis in 1997. In India, the rate is averaging 2.5 times higher than in the same 13-year period. “More rate hikes and/or currency appreciation is needed in all countries if growth and inflation are to be kept on a steady keel,” said Mr Carbon. “We saw 21 hikes or currency moves in Asia this year; we expect another 24 in the first two quarters of next year.” Although more rate increases are expected in Asia next year, currency appreciation may be a preferred strategy for policy makers, analysts say. With most countries in the region pursuing the strategy, there may not be much of an impact on export competitiveness. The pace of appreciation, however, may be tightly controlled by monetary authorities. That is because while stronger currencies do help absorb capital inflows, if they are allowed to rise too fast and too quickly, they may end up becoming a one-way bet for speculators, inviting even more speculative inflows. “If you’re facing very large real flows, currency undervaluation and to some extent inflation risks on a headline basis, then allowing for gradual currency appreciation makes sense and I think that’s what will come through - gradual appreciation,” said Mr Craig Chan, executive director of foreign exchange research at Nomura. He added monetary authorities in the region might also resort to “administrative measures” to reduce currency volatility. According to Nomura, foreign financial investors brought US$372 billion ($587 billion) into Asia in the year ended June 2010, compared with an outflow of US$136 billion in the previous year. The Japanese brokerage says Asian currencies are as much as 10.7 per cent undervalued at current levels and may gain about 4.5 per cent next year, the same as this year.

 

Bank staff enjoy pay boom but ROE lags

Christopher Howell s

christopherh@mediacorp.com.sg

Under the intense scrutiny from regulators and the public, the cash bonus pool for bankers in Western financial centres is estimated to shrink drastically, with the

There is no such rage against well-paid bankers in Asia, where bonuses are on the rise as business improves and competition for talent heats up.

In Singapore, though, there is a disconnect between what bankers are being paid and what shareholders in banks are earning. Bank wages in Singapore have seen a full recovery from the pre-Lehman days but shareholders are still wondering when their return on equity will get back to their 2007 highs.

In the last quarter, combined pay and accrued bonuses at the three local banks was $1 billion, a rise of 38 per cent from the third quarter of 2008, when US investment bank Lehman Brothers collapsed.

The average return on equity (ROE) for the three banks, however, remains well below those pre-Lehman days.

For the three local banks, the average ROE was just above 10 per cent in the last quarter, well below levels that were as high as 16 per cent in the first quarter of 2007.

Meanwhile, all three local banks reported in their last earnings statements that expenses rose partly due to higher bonuses, salaries or increased headcount.Fundsupermart.com.

Analysts say banks don’t have a choice.

[SINGAPORE  BANKS do not have TALENTED  PRODUCTS ?]

Rising competition is forcing them to pay top dollar for talent.

”The competition in Asia is generally quite stiff, especially for top talent. And if you don’t pay competitively then you will actually lose your top talent to other competing banks,” said Mr Wong Sui Jau, general manager at

But while bank employees will probably take home even bigger checks next year, analysts are not convinced that investors in Singapore lenders will also do so.

As investments, Singapore banks here “have been significant underperformers.

This has to do with the fact that the margins of profitability for banks on their lending operations have been extremely squeezed because of very, very low interest rates both in Singapore and developed markets.

And I think this will continue to lead to bank share underperformance”, said Mr Arjuna Mahendran, head of investment strategy for Asia at HSBC Private Bank.SINGAPORE — There may be less cash to go around this holiday season for bank employees in New York and London, but not for their counterparts in Asia.New York Times estimating the decline in London to be between 20 and 30 per cent as compared to last year.

 

Cheque deposit still faster than onl ine bank transfer

I recently did an online bank transfer from Bank A to Bank B. The money was debited from my account with Bank A straightaway.

However, after waiting for two days, I found that the money was still not credited to my account with Bank B. I find that online bank transfer is so much slower than if I were to write a cheque.

In that case, the money would be credited on the next working day if the cheque was received by the transferring bank before 3pm.

If we want to encourage paperless banking, this is one area for improvement. Letter from Boon Chuan Jian

 

AUSTRALIA  should  be  LONG  UPTREND

It  normalised  its  interest rate  by another 0.25% point  to 4.75%.

AUD / USD  brOke  OUt  USD1.000  decIsIvely.



DespIte  sIngapOre's  sO called  STRONG  S$ Exchange Rates,  sIngapOreans  keep  payIng  hIgher  prIces  fOr  bOth  Australian and  US  prOdUcts  sOld  In  sIngapOre    ? ? ? ? 

sO  lame    ? ? ? ?

wIth  nOn-stOp  rIsIng  retaIl  prIces and  near  ZERO  deposit interest rates,  sIngapOre  depOsItOrs  are  in  the prOcesss Of  beggarIng    ? ? ? ?  

lOsIng  WEALTH  everyday    ? ? ? ?

 

 

Any  BANK  withOUT  nOrmalised  Interest  Rate  wIll  nOt  recOver.

When  Interest Rate is  NEAR-ZERO,  ecOnOmy  is  sIck  and eXtremely  FRAGILE,  bank  is  at  hIghest  rIsk  Of  DEFAULT.

STAY  CLEAR  OF  NEAR-ZERO  INTEREST  RATE  BANKS