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Mint
23-05-2025
- Business
- Mint
India-US Yield Gap at 20-Year Low Spurs Concern of Fund Outflows
(Bloomberg) -- Follow Bloomberg India on WhatsApp for exclusive content and analysis on what billionaires, businesses and markets are doing. Sign up here. India's bond yield premium over the US has narrowed to its smallest in two decades, likely risking fund outflows from local debt. The spread between the benchmark 10-year India debt and the US has shrunk to about 173 basis points, a level last seen in 2004, according to data compiled by Bloomberg. Indian bond yields have been declining, driven by the country's strong fiscal position, easing inflation, and expectations of lower interest rates, according to DBS Bank Ltd. This trend diverges from the US, where unfunded tax cuts have sparked fiscal concerns. The contrast has even led billionaire banker Uday Kotak to wonder whether Indian yields could eventually dip below those in the US. 'This compression is likely to hold given a favorable change in India's rates backdrop at this juncture, while investors' worries over US' fiscal strains are still to be addressed,' Radhika Rao, senior economist wrote in a note. Foreign funds have poured a net $2.3 billion in rupee debt so far this year, though the current quarter has seen about $4 billion of outflows. While a shrinking yield advantage is negative for emerging markets, India's strong macros may still ensure some inflows, traders say. 'Though the narrowing spread normally reduce the fund flow to Indian market, this time with sound fiscal position and less riskier currency dynamics we may still get flows in debt market,' said Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Bank. Indian bonds are more integrated with global markets after the addition of local sovereign bonds to key emerging market indexes including those managed by JPMorgan Chase & Co. More stories like this are available on
Malay Mail
28-04-2025
- Business
- Malay Mail
GE 2025: How markets and investors are preparing in Singapore
SINGAPORE, April 28 — Assurances of policy continuity and economic support will be critical for investors ahead of Singapore's general election as markets face pressure from US-imposed tariffs. According to Bloomberg, Saturday's vote could boost shares of domestically-driven companies in sectors like retail, construction, and infrastructure due to potential policy support. The Singapore dollar may also strengthen, as it typically trends higher during election periods, according to DBS Bank Ltd. The stakes are high for the city-state as trade uncertainty threatens an economic slowdown and deepens cost-of-living concerns among voters. Since peaking in March, the benchmark Straits Times Index has fallen about 4 per cent, lagging behind a broader regional gauge. Investors will closely watch how policymakers respond to global headwinds and whether they introduce timely fiscal interventions. 'Should global conditions deteriorate, the Singapore government has a track record of timely fiscal intervention to buffer the economy,' Kenneth Tang of Nikko Asset Management, was quoted saying. Such measures could include job protection, wage support, and investments in infrastructure to counteract negative sentiment and reduced business confidence, Tang added. Sectors that benefited from Singapore's February budget announcement, which included household handouts and green energy incentives, are expected to perform well. Retailer Sheng Siong Group Ltd. and companies in construction and infrastructure may see gains from public transport and coastal flood protection projects.
Bloomberg
27-04-2025
- Business
- Bloomberg
An Investor's Guide to Navigating Singapore's General Election
By and Eduard Gismatullin Save Assurances of policy continuity and supportive measures for the economy will be top of mind for many investors ahead of Singapore's elections as markets remain pressured from US-imposed tariffs. Saturday's vote may help boost shares of domestically-driven companies in sectors including retail, construction and infrastructure on potential policy support. It could also spur the local dollar, which tends to trend higher in the period leading up to and after an election, according to DBS Bank Ltd.
Malaysian Reserve
24-04-2025
- Business
- Malaysian Reserve
Singapore, Malaysia banks to jump on supply chain shifts, says BI
Malaysia's JSSEZ will be attractive, given its myriad tax perks and its strategic location, supporting the region's status as a supply-chain hub IF SUPPLY chains shift to South-East Asia from China due to tariff differentials, Singapore and Malaysia banks might have an edge, according to Bloomberg Intelligence (BI). DBS Bank Ltd, the largest bank asset-wise in Singapore as well as ASEAN, is well-placed to compete for cross-border and investment-banking transactions with a big Greater China business making up 24% of revenue, a strong balance sheet and access to US dollar funding at a 39% deposit mix. 'Malaysia's Johor-Singapore Special Economic Zone (JSSEZ) could become more attractive, given its myriad tax perks and its strategic location, supporting the region's status as a supply-chain hub. 'With 55% revenue from Singapore and Malaysia, United Overseas Bank Ltd is ideally situated to win project-finance deals in the SEZ — alongside home-grown corporate lenders Malayan Banking Bhd and CIMB Group Holdings Bhd — supporting 5%-7% loan-growth goals and fee-income generation ahead of the central bank's pending policy rate pivot,' the report said. At the same time, it noted that Singapore banks appeared less vulnerable to US tariffs than South-East Asian rivals, despite shares falling 18% the week tariffs were announced, as supply-chain shifts are set to promote cross-border business. Thai banks could be hardest hit among the region's major markets, with an influx of cheap products from China likely to compound bad-debt stress, it added. In a report released on April 10, RHB Investment Bank Bhd (RHIB) talked about dark clouds gathering in the banking sector, with the US tariff policy decision a dampener to macroeconomic growth. 'The recent US tariff decision, assuming no meaningful de-escalation anytime soon, will likely be a dampener for the banks,' it said. Already, it noted that RHB Economics has revised Malaysia's GDP growth forecast to 4.5% from 5% for 2025, with the balance of risk leaning towards a 4% growth should tariff and trade tensions escalate further. For now, the 2025 Overnight Policy Rate (OPR) expectation has been kept at 3%, but there is a possibility of a 25-basis point cut in the second half of 2025 (2H25) should the GDP growth fall below the officially projected range of 4.5%-5.5%. As a proxy to the economy, the report noted that Malaysia banks will also likely be impacted by a slower macroeconomic environment. For instance, it said the slower GDP growth is expected to translate to a slowdown in non-household loan demand, investment — as well as working capital loans. 'Banks may also curb growth due to a reduction in risk appetite. Loans to the household segment, though, are expected to be more resilient, backed by healthy mortgage loan pipelines. 'However, a moderation in loans growth may not be all that bad as it will help ease pressure on deposit gathering given the system loan-to-deposit ratio has been trending close to the upper end of its historical range. Furthermore, should expectations of an OPR cut build up, banks may pre-empt and cut deposit rates ahead of Bank Negara Malaysia's (BNM) actual move,' it said. On the whole, RHIB said while Malaysia banks' operating income growth may slow down during recessionary periods, overall operating income tends to be fairly resilient. 'Instead, the key swing factor to sector earnings has been loan impairments. At this stage and barring a significant decline in GDP, we believe the risk of a spike in loan impairments can be contained. A number of banks continue to hold on to sizeable overlay buffers that can be utilised to help cushion against a deterioration in asset quality,' it said. — TMR This article first appeared in The Malaysian Reserve weekly print edition
