Quoteworthy: “If you look at the Philippines — [with] very strong GDP growth, a great demographic and a young population — its companies are exhibiting strong growth and there is innovation and disruption”— Udhay Furtado, Citi’s Asia head of equity capital market origination and solutions
Biden faces mounting pressure as report says he is weighing exit
The drumbeat of pressure on Joe Biden to drop out of the US presidential race intensified on July 3 with a bombshell report in The New York Times that he had conceded the possibility to a key ally, as well as movement within his own party to demand his withdrawal.
The White House and Biden’s campaign quickly denied the Times report suggesting the president had vocalised to a supporter that he could ill-afford another misstep that would irrevocably damage his campaign. Biden himself insisted to campaign staff he intended to remain in the race.
“I’m in this race to the end and we’re going to win because when Democrats unite, we will always win,” Biden said in a call alongside Vice President Kamala Harris.
Yet time is running out for the beleaguered president to convince anxious Democratic officials, donors and voters that he remains viable in his effort to keep former President Donald Trump from returning to office. In another blow, dozens of Democratic lawmakers are considering signing a letter demanding Biden withdraw from the race, a senior party official said.
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That anxiety has only been fuelled by a flood of recent reporting suggesting other Democrats are eyeing possible replacement candidates — and by the Times reporting.
Biden told his ally the race would be in a “different place” if upcoming events went poorly, the Times reported. White House Press Secretary Karine Jean-Pierre subsequently said Biden had flatly denied making such a comment.
Biden has been calling senior Democratic lawmakers — including Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries — in a bid to shore up support on Capitol Hill, even as members of his party are publicly expressing dismay about his campaign.
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So far, only one sitting House Democrat — Lloyd Doggett of Texas — has publicly called for Biden to step aside. But the president may not be able to survive a coordinated revolt among Democratic lawmakers worried that his poor performance could cost them seats or a shot at control of the House and Senate in the upcoming election.
Jean-Pierre said Biden had told her the calls with congressional Democrats were “strong.”
“He’s moving forward as being president. He’s moving forward with his campaign,” she added. — Bloomberg
Singapore stocks jump to two-year high as DBS, OCBC hit records
Singapore stocks rose to the highest level in two years, helped by optimism over major banks’ dividend payouts and elevated Federal Reserve interest rates hopes.
“Clients are rotating to play the higher-for-longer interest rate theme. The banks are big beneficiaries,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities Pte. “Over the past two days, we have been actively purchasing shares for global funds and regional asset managers.”
Shares of DBS Group Holdings climbed 2.3% and Oversea-Chinese Banking Corp (OCBC) added 1.2%, with both extending record highs. United Overseas Bank U11 (UOB) rose 2% to its highest level in more than two years.
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While higher interest rates help banks’ profitability, they can also translate into capital returns for shareholders “as the sector has [the] capacity to improve already very attractive dividend yields,” Horchani said.
The 12-month projected dividend yield for OCBC was 5.6% compared with about 4.3% for the MSCI Asia Pacific Financials gauge, according to data compiled by Bloomberg. Singapore banks are set to report results early next month. — Bloomberg
Tokenisation, AI and quantum computing are best prospects for transforming finance: Ravi Menon
Whether tokenisation achieves its potential to transform finance depends on the underlying networks on which digital token operates, but existing digital networks are not fit-for-purpose as a global infrastructure for a tokenised financial system, says Ravi Menon, former managing director of the Monetary Authority of Singapore (MAS).
Menon was delivering a plenary address at the Point Zero Forum in Switzerland on July 2, about the convergence of AI, quantum computing as drivers of innovation reshaping the finance landscape. The forum is a three-day policy-technology dialogue, convening central banks, regulators and industry leaders.
Instead, to realise the vision of seamless financial transactions globally, we need open and interoperable digital asset networks that are compliant with regulatory requirements, Menon continues. Already, there are a couple of promising efforts internationally, he says.
The Bank of International Settlement has proposed the concept of “Finternet” as a vision for the future financial system in which multiple financial ecosystems are interconnected with one another through unified ledgers.
The MAS, together with industry partners like BNY Mellon, Citi, Société Générale-Forge (SG Forge), JP Morgan and MUFG, has initiated the Global Layer One (GL1) project.
A white paper that details the design principles, objectives, considerations and potential uses of GL1 was published last week.
“This is a global public-good digital infrastructure, through which cross-border transactions and trading of a range of tokenised assets can be done seamlessly,” says Menon.
On AI, Menon stresses that the technology and governance must be gotten right in order to unlock the potential it can bring to enhance financial services. Four key governance issues are pertinent in the quest to adopt AI globally, he adds. They are the privacy of data, the explainability of results, accountability for decisions, and the acceptability of outcomes.
“We need regulation of AI; we need it fast and we need it harmonised,” says Menon. “The approaches taken by the EU, the US, and China offer interesting contrasts, and things to learn from.”
Finally, Menon addresses the possibility of revolutionising financial services through the principles of quantum mechanics — quantum computing can optimise complex financial processes like portfolio management, trading strategies and fraud detection; and quantum simulation can simulate complex financial systems and models more accurately than classical computers.
Yet, this technology poses existential risks, such as the compromise of interbank system interfaces, and public key cryptography that wholesale payment systems heavily rely on.
Menon also notes that the global fintech wave continues to grow. “There are deeply impactful benefits to harness from these technologies. But that depends critically on how we manage the substantial risks associated with these technologies. The answer lies in us, not the technologies.” — Nicole Lim
Singapore proposes tougher law to catch money launderers
Singapore has introduced legislation designed to tighten gaps around policing illicit money flows after a high-profile case that rocked the Asian financial hub.
The new bill will allow the authorities to prosecute suspected offenders more effectively, without the need to directly link illicit gains to the original crime, according to the Anti-Money Laundering and Other Matters Bill proposed in parliament on July 2.
Currently, law enforcement authorities face challenges in obtaining evidence from victims and authorities overseas, especially when criminal proceeds come from other jurisdictions, according to a press release from the Ministry of Home Affairs.
The planned legislation is the latest example of Singapore’s attempts to police the influx of foreign wealth after the nation’s biggest-ever money-laundering case last year. The $3 billion online gambling case accounted for about half of some $6 billion seized in total in such cases over the past five years, official data show.
The bill will also allow law enforcement officers to investigate money-laundering linked to serious environmental crimes in other jurisdictions such as illegal mining, by designating them as serious offences under Singapore’s laws. Singapore can currently only investigate a crime outside the country if it is also a serious offence under its own law.
The government vowed to identify and address any gaps exploited by money launderers after the case broke in August. An inter-ministerial committee has since been in discussions with banks, family offices, real estate agents and precious metals dealers to strengthen checks on clients.
Singapore has also been demanding more information from family offices and hedge funds while stepping up closures of dormant firms, Bloomberg News has reported. — Bloomberg
Google’s emissions shot up 48% over five years due to AI
Google’s emissions climbed by almost half over five years, as the company has infused AI throughout many of its core products — making it harder to meet its goal of eliminating carbon emissions by 2030, according to a new environmental report from the tech giant.
The annual report was released on July 2 and covers Google’s progress toward meeting its environmental goals last year. The Alphabet Inc unit said its greenhouse gas emissions totalled 14.3 million metric tons of carbon dioxide equivalent throughout 2023. This is 48% higher than in 2019, the company said, and 13% higher than in 2022.
Google said that higher energy consumption at its data centres and emissions from its supply chain were to blame, and that its push to add AI to its products could make it more difficult to reduce emissions going forward. For several years, the company has said it plans to eliminate such emissions from its operations by 2030.
AI — and in particular generative AI, which takes in user inputs and spits out new content like text, images or songs — is extremely resource-intensive, as a recent Bloomberg News investigation showed. As the technology grows rapidly, more and more data centres are needed to build and run it, leading to surging power requirements.
The dramatic increase in power demands from Silicon Valley’s growth-at-all-costs approach to AI threatens to upend the energy transition plans of entire nations as well as the clean energy goals of trillion-dollar tech companies.
In some countries, including Saudi Arabia, Ireland and Malaysia, the energy required to run all the data centres they plan to build at full capacity exceeds the available supply of renewable energy, according to a Bloomberg analysis of the latest available data.
Google is not the first major technology company to cite the rapid growth of AI as an obstacle to achieving environmental goals. In May, Microsoft said its carbon emissions climbed 30% since 2020, as the company increasingly invested in AI. The increase made that company’s target of getting to below net-zero emissions by 2030 even harder than it was when it announced its carbon-negative goal. — Bloomberg
