Latest news with #US-dollar-denominated
Mint
08-05-2025
- Business
- Mint
Asian banks see big boost to wealth business as currencies rally
Asian currency rally boosts demand for wealth, forex products Trump's tariffs push investors from U.S. assets to Asia Currency volatility drives demand for Asia banks' forex services By Selena Li, Yantoultra Ngui and Anton Bridge HONG KONG/SINGAPORE, May 8 (Reuters) - A sharp rally in Asian currencies is set to boost demand for wealth and forex products as clients seek alternatives to U.S. dollar-denominated assets and demand for hedging grows amid trade tariff uncertainties, bankers and analysts say. The rally in the currencies since last week, starting with the Taiwan dollar and spreading outwards to those of China, Hong Kong, Malaysia, Singapore and South Korea, sounds a warning for the greenback, and is seen as an "Asian crisis in reverse". "Most of our clients are Asian, so if their own currency is growing, that gives them more purchasing power for wealth management products," Tan Su Shan, chief executive of Singapore's biggest bank DBS Group, said on Thursday. A strong Singapore dollar would help bring a "pool of wealth" into the leading global wealth management hub said Leong Yung Chee, the chief financial officer of its United Overseas Bank or UOB. Singapore's currency has risen more than 4% since U.S. President Donald Trump hiked tariffs on April 2. "We hope to benefit from that in terms of the wealth management of some businesses that we do for retail clients," Leong said, during the bank's earnings briefing on Wednesday. The expectations underscore how President Donald Trump's trade policies are pushing investors out of U.S. assets and moving their money into Asia, amid growing questions about the status of the greenback as a safe haven. A weaker dollar is expected to cloud demand for popular U.S. fixed-income assets among wealth management clients in Asia, who may now be more open to investing in local currency denominated assets, analysts said. The return of assets to Asia will further bolster the allure of the region as a leading global wealth hub. Between 2025 and 2028, Asia is set to account for nearly half of all new high-net-worth individuals, or those with more than $10 million in assets, according to Knight Frank's 2025 Wealth Report issued in March. The Asian currency swings have not yet hugely influenced investor sentiment, said Morningstar senior analyst Michael Makdad. However, over the long term, currency trends could affect flows as investments are allocated out of U.S. assets. In Taiwan, a substantial portion of household financial assets has traditionally been allocated to life insurance products that invest heavily in dollar assets, and a leap of 8% in its currency within two days sent tremor across the sector. "If Taiwanese life insurers struggle to generate attractive returns from U.S. fixed-income investments, it may open the door for banks to offer more alternative wealth management solutions instead," Makdad said. Chinese exporters have accumulated a substantial amount of money in US-dollar-denominated assets, previously on the expectation of the yuan getting weaker, said Christopher Beddor, deputy China research director of Gavekal Dragonomics. If currency expectations shift and the interest-rate gap narrows, there could be "a quite meaningful amount of money suddenly flowing into yuan-denominated Chinese bank accounts", he said. "We're not there yet, but it's in the back of the mind for many investors." The heightened volatility in currency markets is also expected to drive demand for regional banks' forex services, bankers said, though local clients' exports made less competitive by stronger currencies is a concern. "They will provide both tailwind and headwinds," said DBS's Tan. "A stronger currency does affect their ability to export. It will affect their cost curves as well, and so the impact will depend on whether you're a net exporter or importer." In Japan, banks may benefit from corporate clients looking beyond usual hedging tools to reduce foreign exchange risks. Japanese firms have generally gone for the simplest hedging strategy - selling dollars and buying yen - but the urgency of the tariff situation is prompting them to consider other derivatives, said Noriaki Masuda, deputy manager in the transaction banking department of Mitsubishi UFJ Bank. Company profitability will be affected when exchange rates fluctuate sharply, Masuda said, adding, "There may be cases where companies will be forced to restructure business distribution or raise prices." (Reporting by Selena Li in Hong Kong, Yantoultra Ngui in Singapore, Anton Bridge and Miho Uranaka in Tokyo, Ziyi Tang in Beijing; Editing by Sumeet Chatterjee and Clarence Fernandez)
Yahoo
08-05-2025
- Business
- Yahoo
Asian banks see big boost to wealth business as currencies rally
By Selena Li, Yantoultra Ngui and Anton Bridge HONG KONG/SINGAPORE (Reuters) -A sharp rally in Asian currencies is set to boost demand for wealth and forex products as clients seek alternatives to U.S. dollar-denominated assets and demand for hedging grows amid trade tariff uncertainties, bankers and analysts say. The rally in the currencies since last week, starting with the Taiwan dollar and spreading outwards to those of China, Hong Kong, Malaysia, Singapore and South Korea, sounds a warning for the greenback, and is seen as an "Asian crisis in reverse". "Most of our clients are Asian, so if their own currency is growing, that gives them more purchasing power for wealth management products," Tan Su Shan, chief executive of Singapore's biggest bank DBS Group, said on Thursday. A strong Singapore dollar would help bring a "pool of wealth" into the leading global wealth management hub said Leong Yung Chee, the chief financial officer of its United Overseas Bank or UOB. Singapore's currency has risen more than 4% since U.S. President Donald Trump hiked tariffs on April 2. "We hope to benefit from that in terms of the wealth management of some businesses that we do for retail clients," Leong said, during the bank's earnings briefing on Wednesday. The expectations underscore how President Donald Trump's trade policies are pushing investors out of U.S. assets and moving their money into Asia, amid growing questions about the status of the greenback as a safe haven. A weaker dollar is expected to cloud demand for popular U.S. fixed-income assets among wealth management clients in Asia, who may now be more open to investing in local currency denominated assets, analysts said. The return of assets to Asia will further bolster the allure of the region as a leading global wealth hub. Between 2025 and 2028, Asia is set to account for nearly half of all new high-net-worth individuals, or those with more than $10 million in assets, according to Knight Frank's 2025 Wealth Report issued in March. The Asian currency swings have not yet hugely influenced investor sentiment, said Morningstar senior analyst Michael Makdad. However, over the long term, currency trends could affect flows as investments are allocated out of U.S. assets. In Taiwan, a substantial portion of household financial assets has traditionally been allocated to life insurance products that invest heavily in dollar assets, and a leap of 8% in its currency within two days sent tremor across the sector. "If Taiwanese life insurers struggle to generate attractive returns from U.S. fixed-income investments, it may open the door for banks to offer more alternative wealth management solutions instead," Makdad said. 'TAILWIND AND HEADWINDS' Chinese exporters have accumulated a substantial amount of money in US-dollar-denominated assets, previously on the expectation of the yuan getting weaker, said Christopher Beddor, deputy China research director of Gavekal Dragonomics. If currency expectations shift and the interest-rate gap narrows, there could be "a quite meaningful amount of money suddenly flowing into yuan-denominated Chinese bank accounts", he said. "We're not there yet, but it's in the back of the mind for many investors." The heightened volatility in currency markets is also expected to drive demand for regional banks' forex services, bankers said, though local clients' exports made less competitive by stronger currencies is a concern. "They will provide both tailwind and headwinds," said DBS's Tan. "A stronger currency does affect their ability to export. It will affect their cost curves as well, and so the impact will depend on whether you're a net exporter or importer." In Japan, banks may benefit from corporate clients looking beyond usual hedging tools to reduce foreign exchange risks. Japanese firms have generally gone for the simplest hedging strategy - selling dollars and buying yen - but the urgency of the tariff situation is prompting them to consider other derivatives, said Noriaki Masuda, deputy manager in the transaction banking department of Mitsubishi UFJ Bank. Company profitability will be affected when exchange rates fluctuate sharply, Masuda said, adding, "There may be cases where companies will be forced to restructure business distribution or raise prices." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Saudi Gazette
10-04-2025
- Business
- Saudi Gazette
Zimbabwe makes first compensation payments to white farmers over land grabs
HARARE — Zimbabwe's government has announced an initial pay-out of US$3m (£2.3m) to white farmers whose farms were seized under a controversial government program more than two decades ago. It is the first payment to be made under the 2020 compensation agreement signed between the state and the local white farmers in which Zimbabwe committed to pay $3.5bn (£2.6bn) for seized farmland. Thousands of white farmers were forced from their land, often violently, between 2000 and 2001. The seizures were meant to redress colonial-era land grabs but contributed to the country's economic decline and ruined relations with the West. The payment announced on Wednesday will cover the first 378 farms, out of a total of 740, for which compensation had been approved. It represents 1% of the total $311m allocated for the first batch of payments. The remainder will be paid through US-dollar-denominated Treasury bonds, said Finance Minister Mthuli Ncube. "One of our commitments as we try to reform the Zimbabwe economy, to clear our arrears, is really to compensate the former farm owners who lost their farms during the land reform program," he said. "We have now begun to honor that agreement." Harry Orphanides, one of the farmers' representatives, told the BBC that more farmers have now indicated an interest in signing up for the compensation. However, the majority of former farmers have not signed up to the deal, and are still holding onto their title deeds. The government has only agreed to compensate former farm owners for "improvements" made on the land and refused to pay for the land itself, arguing it was unfairly seized by colonialists. It had prioritized foreign-owned farms under separate negotiations. In January, Zimbabwe began paying compensation to foreign investors whose farms were protected under bilateral investment agreements. In 1980, Zimbabwe gained independence, ending decades of white-minority rule. At that time, most of the country's most fertile land was owned by some 4,000 white farmers. Land reform was focused on redistributing white-owned land to black farmers, following colonial-era policies when thousands of black farmers were forced from their land and the country's most fertile areas were reserved for white people. In 2000, then President Robert Mugabe supported land invasions by a mix of government forces and vigilante groups, sparking international condemnation. President Emmerson Mnangagwa, who replaced Mugabe in a 2017 coup, has sought to engage Western governments to restore ties. Mnangagwa has previously said land reform cannot be reversed, but committed to paying compensation as a key way of mending ties with the West. The southern African country has been locked out of the global financial system for more than two decades, leaving the struggling economy with a huge foreign debt. Analysts say the land payment marks an important step in repairing relations with Western nations and avoiding international judgments against Zimbabwe. — BBC
