DBS China signs MOU with two other parties to advance carbon credit trading
This venture establishes a framework to explore and assess the demand for carbon credit or renewable energy certificate (REC) trading, as well as related services, in the Suzhou Industrial Park (SIP). CSSD's subsidiary China-Singapore Suzhou Industrial Park Green Development Company (CSSGD) will lead local engagement and market research among enterprises, while CIX will contribute technical insights.
CIX is a global environmental markets exchange co-founded by DBS Group, the Singapore Exchange, Temasek and other Singapore institutions.
DBS said that it will act as a green finance adviser to both parties, providing strategic guidance and sustainable financial solutions.
This assessment of demand will allow the involved parties to co-develop a pilot programme tailored to the needs of SIP companies seeking access to global carbon credit markets. The programme is said to have the potential to be scaled more broadly across China and on other international fronts.
Han Kwee Juan, group head of DBS' institutional banking group, said: 'The partnership combines DBS' Asian network and institutional banking expertise with CIX's technical leadership in carbon markets and SIP's sustainable ecosystem, for us to develop scalable carbon solutions that connect domestic sustainability goals with global carbon standards.'
Xiao Jianzhong, vice-president of CSSD and chairman of CSSGD, also said: 'SIP has a highly developed outward-oriented economy, offering broad market demand for international carbon asset trading, carbon credit development, RECs and related services. Through this collaboration, we aim to further enhance CSSGD's green service system and capabilities, adding new value to China-Singapore cooperation in green development.'
The SIP was launched in 1994, and houses a wide range of companies from around the world, including Chinese enterprises on top of those from Singapore, the US and Europe. It is the first government-to-government project between Singapore and China.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
35 minutes ago
- CNA
Hong Kong property sector clouded by rising debt repayment risks
HONG KONG: Hong Kong's debt-laden developers and their creditors are set to face intensifying financial pressure as bond maturities are slated to jump by nearly 70 per cent next year amid falling sales and valuations for the city's economically crucial property sector. Road King last week became the first city-based developer to default on bond coupons since China's property debt crisis began in 2021, following the first loan default by listed peer Emperor International earlier this year. Slim prospects for a revival in the commercial property sector in the near term and fewer sources of raising fresh capital mean more developers would struggle to meet repayment obligations in Hong Kong, analysts said. Property and its related sectors account for roughly a quarter of Hong Kong's GDP, and the industry's rising non-repayments will not only weigh on its economic prospects but also cast a cloud over creditors, including HSBC, with sizeable exposure to developers in the Asian financial hub. Local property developers' bond maturities will climb to US$7.1 billion in 2026 from US$4.2 billion this year, according to LSEG data and Reuters calculations. S&P Global Ratings analyst Edward Chan said that he would not rule out the possibility of more small-sized developers defaulting in the next 12-24 months because banks are cutting their loan exposure to them. "It will be at a point where there is actually no chance for them to repay such loans," Chan said. Developers, which hold mainly office and retail assets, are under huge pressure due to the challenge to sell assets to raise cash in those two segments that have seen valuations drop more than 50 per cent from 2019 peaks and with no recovery in sight, he said. More fire sales, on the other hand, would further depress the valuations and affect the overall industry, including cash-rich developers, analysts said. Among the cash-strapped debt issuers, New World Development, one of Hong Kong's top four developers, will face bond repayment obligations of US$168 million next year and of another US$630 million in 2027, while Lai Sun Development will have US$524 million due next year. New World, seen as one of the biggest risks to the city's financial and property markets due to its HK$180 billion (US$23 billion) borrowings, averted default by sealing a US$11.2 billion debt refinancing deal in June. New World did not respond to a request for comment. Lai Sun declined to comment. HEFTY CHARGE The majority of Hong Kong developers' debt comes from bank borrowings. In a sign of the growing bad loans in the sector, Hang Seng Bank took a hefty HK$2.5 billion charge on Hong Kong commercial real estate in the first six months of this year - up 224 per cent from a year ago. Its parent HSBC updated its internal model that resulted in its Hong Kong commercial real estate loans with significant credit risk, but those that had not yet defaulted, tripling to US$18.1 billion at end June this year. HSBC said the classification of problematic loans that saw a big rise was not an absolute indicator of credit quality, and that it was common for external events and market conditions to lead to increases in that classification without resulting in actual defaults. Hang Seng Bank declined to comment beyond its public comment after its earnings during which it said the rise in expected credit losses was due to a prudent approach amid an increase in allowances for new defaulted exposures, and other factors. Commercial real estate accounts for around 9 per cent of total bank lending in Hong Kong and up to 70 per cent of these loans are secured with around 45 per cent - 55 per cent loan-to-value ratio, according to S&P, which has forecast a rise in impaired loan ratios for the local banking sector. But Eddie Yue, the head of Hong Kong's de-facto central bank, said the banking system is "well-capitalised and has sufficient provisions and good financial strength to withstand market volatilities", citing key indicators including capital adequacy and provision coverage ratio. Some banks have decided not to categorise a defaulted loan as such or demand immediate repayments from distressed developers on worries about a worsening asset quality and the domino effect it could have across the sector, said market observers. And some have also refrained from seizing pledged assets on defaulted loans of developers on concerns it would be hard to recover the debt and crowd-out a market that has already seen commercial asset prices plunge, they said. "Now banks are actively deciding not to recall these loans too much - they want to buy time for a market recovery," said JLL Hong Kong's chair Joseph Tsang, adding curtailing lending to developers could hurt economic activity as a whole.
Business Times
35 minutes ago
- Business Times
Hong Kong property sector clouded by rising debt repayment risks
[HONG KONG] Hong Kong's debt-laden developers and their creditors are set to face intensifying financial pressure as bond maturities are slated to jump by nearly 70 per cent next year amid falling sales and valuations for the city's economically crucial property sector. Road King last week became the first city-based developer to default on bond coupons since China's property debt crisis began in 2021, following the first loan default by listed peer Emperor International earlier this year. Slim prospects for a revival in the commercial property sector in the near term and fewer sources of raising fresh capital mean more developers would struggle to meet repayment obligations in Hong Kong, analysts said. Property and its related sectors account for roughly a quarter of Hong Kong's GDP, and the industry's rising non-repayments will not only weigh on its economic prospects but also cast a cloud over creditors, including HSBC, with sizeable exposure to developers in the Asian financial hub. Local property developers' bond maturities will climb to US$7.1 billion in 2026 from US$4.2 billion this year, according to LSEG data and Reuters calculations. S&P Global Ratings analyst Edward Chan said that he would not rule out the possibility of more small-sized developers defaulting in the next 12 to 24 months because banks are cutting their loan exposure to them. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'It will be at a point where there is actually no chance for them to repay such loans,' Chan said. Developers, which hold mainly office and retail assets, are under huge pressure due to the challenge to sell assets to raise cash in those two segments that have seen valuations drop more than 50 per cent from 2019 peaks and with no recovery in sight, he said. More fire sales, on the other hand, would further depress the valuations and affect the overall industry, including cash-rich developers, analysts said. Among the cash-strapped debt issuers, New World Development, one of Hong Kong's top four developers, will face bond repayment obligations of US$168 million next year and of another US$630 million in 2027, while Lai Sun Development will have US$524 million due next year. New World, seen as one of the biggest risks to the city's financial and property markets due to its HK$180 billion (S$29 billion) borrowings, averted default by sealing a US$11.2 billion debt refinancing deal in June. New World did not respond to a request for comment. Lai Sun declined to comment. Hefty charge The majority of Hong Kong developers' debt comes from bank borrowings. In a sign of the growing bad loans in the sector, Hang Seng Bank took a hefty HK$2.5 billion charge on Hong Kong commercial real estate in the first six months of this year, up 224 per cent from a year ago. Its parent HSBC updated its internal model that resulted in its Hong Kong commercial real estate loans with significant credit risk, but those that had not yet defaulted, tripling to US$18.1 billion at end June this year. HSBC said that the classification of problematic loans that saw a big rise was not an absolute indicator of credit quality, and that it was common for external events and market conditions to lead to increases in that classification without resulting in actual defaults. Hang Seng Bank declined to comment beyond its public comment after its earnings, during which it said the rise in expected credit losses was due to a prudent approach amid an increase in allowances for new defaulted exposures, and other factors. Commercial real estate accounts for around 9 per cent of total bank lending in Hong Kong and up to 70 per cent of these loans are secured with around 45 to 55 per cent loan-to-value ratio, according to S&P, which has forecast a rise in impaired loan ratios for the local banking sector. But Eddie Yue, the head of Hong Kong's de-facto central bank, said that the banking system is 'well-capitalised and has sufficient provisions and good financial strength to withstand market volatilities', citing key indicators including capital adequacy and provision coverage ratio. Some banks have decided not to categorise a defaulted loan as such or demand immediate repayments from distressed developers on worries about a worsening asset quality and the domino effect it could have across the sector, said market observers. And some have also refrained from seizing pledged assets on defaulted loans of developers on concerns it would be hard to recover the debt and crowd out a market that has already seen commercial asset prices plunge, they said. 'Now banks are actively deciding not to recall these loans too much – they want to buy time for a market recovery,' said JLL Hong Kong's chair Joseph Tsang, adding that curtailing lending to developers could hurt economic activity as a whole. REUTERS
Business Times
35 minutes ago
- Business Times
Dongfeng Motor to sell 50% stake in joint venture with Honda
[HONG KONG] State-owned Chinese automaker Dongfeng Motor is selling its 50 per cent stake in a joint venture with Honda Motor, in a reflection of the country's rapid shift away from petrol-powered vehicles. Guangzhou-based Dongfeng Honda Engine was founded in 1998 and produced engines for Honda vehicles in China. Dongfeng listed its stake for sale on the Guangdong United Assets and Equity Exchange on Monday (Aug 18), according to the exchange website. A reserve price has yet to be set, and the listing deadline is Sep 12. The company's assets were valued at 5.4 billion yuan (S$964 million) last year, when it recorded a loss of 227.8 million yuan, and it has debts of 3.3 billion yuan, according to audited results included in the listing document. The factory employs 827 workers. The plan to divest the business highlights how cut-throat the Chinese market has become in its fast-paced shift to electric vehicles (EVs). Japanese brands, including Honda, Toyota Motor and Nissan Motor, have been caught flatfooted and now face the tough task of trying to make up ground lost to domestic champions such as BYD. Honda slashed production capacity at the Guangzhou engine plant by half earlier in the year, according to Japanese media reports. It set up an EV production line in the same city with another Chinese automaker partner, which started operations late last year. Competition has intensified among Chinese firms, too. Dongfeng, which has joint ventures with both Honda and Nissan, has seen annual deliveries slump from a peak of 3.8 million vehicles in 2016 to 1.5 million last year, according to data from the China Automotive Technology and Research Center. BLOOMBERG
