Quoteworthy: "We want good luck and good things to happen." –— Presidential candidate Tharman Shanmugaratnam (pictured) as he unveiled his Presidential Election 2023 pineapple symbol
Singapore seeks financial firms’ documents in laundering case
The Singapore police are waiting for documents from at least nine financial institutions in its probe into one of the biggest money laundering cases in the country.
Investigations are still at an early stage, according to public prosecutors at a court hearing on Aug 23. They argued for extending the remand of those arrested and said luxury cars and properties have been seized.
The number of firms in Singapore being questioned highlights growing scrutiny on the extent to which the financial system was used for illicit activities in this case. The authorities last week confiscated more than $1 billion of properties, luxury cars, cash and other assets, and charged 10 foreigners for allegedly laundering the proceeds of crime from activities such as scams and online gambling.
More than 100 properties, including seven detached houses at Sentosa Cove, 79 condominium units and 19 commercial or industrial spaces, have been banned from disposal by the police.
See also: ECB’s Schnabel sees only limited room for further rate cuts
The police did not immediately respond to a request for additional comment. The Monetary Authority of Singapore referred Bloomberg News to an earlier statement last week where it said it takes this case seriously and has been in touch with firms where potentially tainted funds have been identified. The regulator also said it will take firm action against firms if there are breaches of anti-money laundering rules.
So far, charge documents have shown that Citigroup’s local subsidiary and CIMB Group Holdings were allegedly used by some of those arrested in 2020 and 2021. Deutsche Bank is also a creditor to a Singapore investment holding company whose two directors were among those arrested. — Bloomberg
SGX RegCo issues ‘trade with caution’ on Dasin Retail Trust
See also: Stubborn US inflation set to reinforce Fed’s go-slow approach
SGX RegCo has issued a “trade with caution” alert on units of Dasin Retail Trust, after observing that an “individual” has been buying up units of the trust to “maintain its unit price”.
SGX RegCo, citing its review of trading activity, notes that Dasin’s closing price stayed in the 8.9 cents to 9.4 cents range between July 17 and Aug 17.
“The purchasing activity of the individual was particularly unusual and aggressive following negative announcements by Dasin regarding the receipt of notices of demand,” says SGX RegCo.
Specifically, on Aug 11, Dasin announced the receipt of a notice of demand dated Aug 4, issued by Bank of China declaring that events of default had occurred and are continuing under a credit line dubbed Offshore Facility 3.
The total outstanding amounts of $55.6 million and HK$297.6 million ($51.7 million) under the Offshore Facility 3 as at July 25 plus all additional interest and applicable default interest calculated in accordance with the Offshore Facility 3 until payment is made, plus indemnity obligations arising under the Finance Documents (as defined in the Offshore Facility 3), are immediately due and payable by the trustee-manager, according to Dasin’s Aug 11 announcement.
Next, on Aug 14, Dasin announced the receipt of a notice of demand dated Aug 10 from Maybank, declaring that one or more events of default has or had occurred and are continuing under another credit line called Offshore Facility 1.
The outstanding principal sums of US$129.9 million ($176.8 million) and $234.1 million plus interest (including default interest) of US$6.8 million and $10.8 million as at Aug 10, which shall continue to accrue until full repayment is made, are immediately due and payable by the trustee-manager, according to the Aug 14 announcement.
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Following the announcements, between Aug 14 and 17, there were seven instances when the price of Dasin units fell to intraday lows, and the individual made purchases that pushed up the unit price, says SGX RegCo.
In particular, when Dasin’s unit price fell to an intraday low of 6.3 cents on Aug 16, the individual made purchases that pushed up the unit price to close at 9.2 cents.
“Our initial findings suggest that the individual appears to be connected to Dasin,” says SGX RegCo. “SGX RegCo has referred the matter to the authorities for their necessary actions.”
Dasin Retail Trust closed at 9.3 cents on Aug 22, before the trade with caution alert was issued. — The Edge Singapore
Fed can’t celebrate yet as investors expect rates, inflation to remain elevated
If they had been offered today’s economy a year ago — with inflation downgraded from emergency to mere headache, still-low unemployment, and growth that has slowed without stalling — the world’s top central bankers would have taken it like a shot.
That does not mean anyone at Jackson Hole, where Federal Reserve chief Jerome Powell and his peers meet this week, is likely to declare mission accomplished.
One example of the fragile backdrop to this year’s gathering: Even in the US, which has the rosiest numbers among major economies, two-thirds of 602 respondents in Bloomberg’s latest Markets Live Pulse (MLIV Pulse) survey say the Fed has yet to conquer inflation.
Powell and company cannot be sure they have raised interest rates high enough to tame prices. They are even less clear about how long policy will have to stay tight — increasingly the dominant question for financial markets.
Global government bond yields have already surged to the highest in more than a decade — with rates on benchmark 10-year debt reaching as high as 4.33% this month in the US and 4.75% in the UK — on expectations that the Jackson Hole crew are not done hiking yet.
If those bets are on point, few corners of the financial world will escape the consequences.
Even without further hikes, the monetary medicine that central banks have already doled out could yet have the lagged effect of tipping economies into a slump, or blowing up some more banks.
About 80% of the MLIV Pulse respondents expect a euro-area recession in the coming year. Most forecasters are more optimistic than that — but Germany, Europe’s largest economy, has already suffered a winter downturn and has little prospect of growth for the rest of the year.
For the US, the survey split exactly 50-50 on the chance of a downturn over the next 12 months. More than half of respondents said it is financial-market turbulence that will likely prompt the next Fed rate cut, rather than labour-market weakness or easing inflation.
In the US, markets see a better-than even chance that central bank interest rates have already peaked. That is not the case elsewhere.
The UK has the worst of all worlds on inflation — with high energy prices like continental Europe, and rising wages like the US — meaning the Bank of England has more work to do. In Japan, new central bank governor Kazuo Ueda shows signs of shifting back into the mainstream of monetary policy a little faster than expected.
After the European Central Bank’s (ECB) last hike in July, President Christine Lagarde said the region’s near-term economic outlook had deteriorated, and subsequent ECB research suggests that underlying inflation may have peaked. Lagarde’s speech in Jackson Hole may offer early clues following the European summer break about whether policymakers are leaning toward another rate increase, or a pause.
Either way, a cut in European borrowing costs is not in the cards anytime soon. About 30% of MLIV Pulse respondents said that will not happen before at least the fourth quarter of next year, compared with just 21% who said the same about the Fed.
Of course, much of this debate is based on textbook monetary-policy calculations — which could easily get blown off course. There is growing alarm that a China downturn will send shockwaves through the world economy. Russia’s war in Ukraine could still trigger commodity turmoil. Unprecedented US budget deficits are starting to worry investors in the US$25 trillion Treasury market, and Europe just got hit by another energy-price spike.
“The economy has surprised on the upside and inflation on the downside,” says Gian Maria Milesi-Ferretti, a senior fellow at the Brookings Institution and former deputy research director at the International Monetary Fund. “Things obviously look much better than they did even a few months ago. But we really don’t know.” — Bloomberg
