Quoteworthy: "This generation sees discriminatory laws and regulations as unjustifiable, and they’re calling for a more inclusive and fair Singapore.” — Clement Tan, Pink Dot SG spokesperson at the Pink Dot 2022 Pride Parade on June 18
Singapore all-items CPI up 5.6% y-o-y in May; MAS core inflation up 3.6% y-o-y
Singapore’s core and headline inflation continued to grow in the month of May, with core inflation reaching its highest level in 13 years, since December 2008.
During the month, Singapore’s CPI-all items inflation rose to 5.6% from April’s 5.4% increase, while MAS core inflation grew 3.6% y-o-y, up from the 3.3% growth seen in April.
Both figures have now surpassed the Monetary Authority of Singapore’s (MAS) full-year headline inflation estimate of between 4.5% and 5.5%. The central bank had previously estimated core inflation to come in between 2.5% and 3.5% for the full year.
On an m-o-m basis, CPI-all items and core CPI increased by 1.0% and 0.4% respectively.
See also: BOK surprises with rate cut as Trump win boosts trade risks
The release of the May CPI (Consumer Price Index) figures on June 23 came two days after the government announced a $1.5 billion package for households and specific sectors such as taxi drivers, to help defray the rising costs of living.
According to MAS and the Ministry of Trade and Industry (MTI), core inflation rose due to the stronger inflation across the broad categories of food, services, retail & other goods, as well as electricity & gas.
The pick-up in headline inflation was due to the higher core inflation, as well as higher inflation in accommodation and private transport.
See also: ECB’s Schnabel sees only limited room for further rate cuts
In May, the price of food services rose, while services inflation increased slightly due to a faster pace of increase in the costs of holiday expenses and point-to-point transport services. Accommodation prices grew due to a larger increase in housing rents.
Inflation in retail & other goods rose on the back of a steeper increase in the prices of clothing & footwear, personal effects and personal care products.
Inflation in private transport increased, thanks to higher petrol costs amid higher global oil prices. Electricity & gas inflation edged up as the average prices of electricity plans offered by Open Electricity Market retailers rose at a faster pace.
In their joint outlook statement on June 23, MAS and MTI say they are expecting the MAS core inflation to pick up further in the coming months. The figure is likely to moderate towards the end of the year as some of the external inflationary pressures die down.
However, there may be upside risks to inflation due to “geopolitical and pandemic-related shocks”. External inflationary pressures continue to be strong due to the higher global commodity prices and supply chain frictions driven by the RussiaUkraine conflict. The regional pandemic situation is another cause.
In the near term, MAS and MTI expect heightened geopolitical risks and tight supply conditions to keep crude oil prices elevated.
“Prices of other commodities, such as food, are also expected to stay high amid supply-demand mismatches, as well as disruptions to global transportation and regional supply chains,” say MAS and MTI.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
On the domestic front, the labour market is expected to remain tight, which will support a firm pace of wage increases.
“Alongside improving demand, a greater passthrough of accumulating business costs to consumer prices is likely to occur, thus keeping core inflation significantly above its historical average through the year,” continues the statement.
“With private transport and accommodation inflation expected to stay firm in the near term, headline inflation will pick up by more than core inflation this year,” it adds.
MAS and MTI’s estimates for 2022’s CPI-all items inflation and MAS core inflation remain unchanged. — Felicia Tan
MAS grants in-principle digital payment token licences to three crypto firms
The Monetary Authority of Singapore (MAS) has granted in-principle approvals for digital payment token (DPT) licences to three crypto firms. This means that these firms will be able to offer digital payment token services, such as cryptocurrency payment services and operating crypto exchanges.
Under the new Payment Service Act that came into effect in 2020, all providers of DPT services operating in Singapore must be registered and licensed.
Singapore-based Crypto.com revealed that it was one of the recipients, and The Edge Singapore understands that the other two are trading platforms Genesis and Sparrowtech.
Including these three new in-principle approvals, the total number of approvals (licences plus in-principle approvals) in Singapore comes up to 14. Other DPT licence holders include crypto exchange Coinhako, fintech firm Revolut and DBS brokerage arm DBS Vickers.
In a release issued by Crypto.com, Kris Marszalek, co-founder and CEO, says: “MAS sets a high regulatory bar that cultivates innovation while protecting consumers, and their in-principle approval of our application reflects the trusted and secure platform we have worked diligently to build.”
The company adds that it continues to actively grow and expand its ecosystem, and boasts more than 50 million users worldwide.
Crypto.com also recently announced that it has received provisional approval for its Virtual Asset MVP Licence from the Dubai Virtual Assets Regulatory Authority and plans to launch its cryptocurrency exchange service in Dubai. — Lim Hui Jie
Switzerland imports Russian gold for first time since war
Switzerland imported gold from Russia for the first time since the invasion of Ukraine, showing the industry’s stance towards the nation’s precious metals may be softening.
More than three tonnes of gold were shipped to Switzerland from Russia in May, according to data from the Swiss Federal Customs Administration. That is the first shipment between the countries since February.
The shipments represent about 2% of gold imports into the key refining hub last month. It may also mark a change in perception of Russian bullion, which became taboo following the invasion. Most refiners swore off accepting new gold from Russia after the London Bullion Market Association removed the country’s own fabricators from its accredited list.
While that was viewed as a de facto ban on fresh Russian gold from the London market, one of the world’s biggest, the rules do not prohibit Russian metal from being processed by other refiners. Switzerland is home to four major gold refineries, which together handle two-thirds of the world’s gold.
Almost all of the gold was registered by customs as being for refining or other processing, indicating one of the country’s refineries took it. The four largest — MKS PAMP SA, Metalor Technologies SA, Argor-Heraeus SA and Valcambi SA — said they did not take the metal.
In March, at least two major gold refineries refused to remelt Russian bars even though market rules permit them to do so. Others, such Argor-Heraeus, said they would accept products refined in Russia prior to 2022, so long as there were documents proving that doing so would not financially benefit a Russian person or entity.
Some buyers remain wary of Russian precious metals, including bars minted prior to the war which are still tradeable in western markets. In palladium, it has created a persistent dislocation between spot prices in London and futures in New York, due to the greater risk of receiving ingots from Russia in the latter.
Switzerland has been importing small quantities of palladium from Russia — the world’s biggest miner of the metal — since April. — Bloomberg
Chinese investors to have better access to SGX securities market data
Chinese investors will now enjoy better access to information on Singapore Exchange’s (SGX) securities market data.
In a June 21 release, SGX announced that CITIC Securities, Guotai Junan Securities and ShenZhen Fortune and Information Union will be the first batch of brokers and vendors to avail real-time SGX securities data in mainland China.
The move is part of an agreement between SGX and Shanghai Stock Exchange’s wholly-owned subsidiary, China Investment Information Services. The agreement, which was first made in November 2021, was done in a bid to distribute SGX’s securities market data within mainland China.
The real-time access to prices on SGX will allow market participants to better understand the diverse investment opportunities across SGX-listed REITs with global exposure and companies with Asean exposure across growth sectors. — Felicia Tan
