Quoteworthy: "Singapore is very fortunate to have two of the best people I know running for President." –— says hedge fund billionaire Ray Dalio, as former CIO of GIC Ng Kok Song plans to run for president alongside Tharman Shanmugaratnam
GXS raises deposit limit to $75,000, savings accounts now open to public
The Grab- and SingTel-backed digital bank GXS has raised the deposit limit on its savings accounts from $5,000 to $75,000, signalling that the Monetary Authority of Singapore (MAS) has raised the deposit cap on Singapore’s digital full banks (DFBs).
GXS’s higher deposit limit is effective from July 19, and users who move their funds into the digital bank’s savings pockets can earn interest of 3.48% per annum.
A notice on GXS’s website states that it is “working towards increasing this limit even further”.
Users will continue to earn interest even after they have hit their maximum deposit cap of $75,000, the bank clarifies. However, the deposits with GXS are only aggregated and insured up to $75,000 by the Singapore Deposit Insurance Corp.
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In a July 19 statement, GXS also announced that its savings account is now open to all eligible individuals in Singapore.
GXS launched in August 2022 as Singapore’s first DFB after receiving its regulatory licence in December 2020. The digital bank says all available slots were taken up “within months of the product launch”.
GXS says the registration waitlist for its savings account has grown more than 2.5 times since March.
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The digital bank will launch a debit card “in the coming months”, teasing rewards and cashback for savings account users.
Under MAS regulations, DFBs have to adhere to a set of restrictions in their initial years, such as capping deposits at $50 million in aggregate and at $75,000 per individual customer, along with an initial paid-up capital of $15 million.
MAS’s regulations state that it will “progressively increase” the deposit cap and the minimum paid-up capital requirement, but not on a pre-determined timeline.
GXS CEO Charles Wong told The Edge Singapore in April that the digital bank was “very near” this deposit cap and had stopped accepting new customers for its “oversubscribed” savings accounts.
Wong added that a quarter of GXS’s deposit account holders were “very close” to the $5,000 cap. “We do have regular calls from customers asking us when we’re lifting the cap so that they can top up [their accounts].”
Singapore’s two DFBs, which also includes Sea’s MariBank, have been urging MAS to raise this deposit cap, according to a July 13 report by Bloomberg. Both banks are approaching the $50 million limit and have been lobbying MAS to review its stance, reports Bloomberg, citing people with knowledge of the matter.
MariBank started taking deposits for its employees in 2022 before expanding to business loans in June on an invite-only basis for users of its Shopee marketplace app.
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The Edge Singapore has reached out to GXS and MAS for comment.
Earlier this week, venture capital database VentureCap Insights reported that Grab had invested $137 million into GXS via its wholly-owned subsidiary A5-DB Holdings, according to filings with Singapore’s Accounting and Corporate Regulatory Authority.
Neither Grab nor SingTel have revealed how much they respectively invested into GXS, but Grab holds a 60% stake while SingTel holds the remaining 40%. — Jovi Ho & Khairani Afifi Noordin
EY cautions on valuations ahead of Sabana REIT’s Aug 7 EGM
The court has dismissed ESR Group’s application in restraining Sabana Industrial REIT’s manager, Sabana Real Estate Investment Manager (SREIM), from taking steps to convene an extraordinary general meeting (EGM). The EGM is scheduled for 10 am on Aug 7 and the circular was issued on July 20.
Quarz Capital Asia has requisitioned the EGM to get unitholders to vote on two resolutions. Resolution 1 is to remove SREIM. Resolution 2 is to direct Sabana REIT’s trustee, HSBC Institutional Trust Services (HSBC Trustee), to “effect internalisation”. Both are ordinary resolutions.
Subsequently, HSBC Trustee issued a draft letter on July 15, which is likely to be in the circular, outlining the various steps that need to be taken for internalisation. While removing SREIM is an ordinary resolution, the internalisation process requires additional EGMs including extraordinary resolutions. HSBC Trustee said that the timeline and cost of internalisation cannot be estimated at this stage. However the timeline is likely to be “at least 12 months”, HSBC Trustee said.
The fees, costs and expenses of lawyers, financial advisers and financial institutions, and the cost of appointing or directing an interim manager for the REIT — whether SREIM or another party — will be charged to the REIT’s assets.
On July 19, in Sabana REIT’s financial statement, its independent external auditors Ernst & Young said: “We draw your attention to the interim financial statement which explains a material uncertainty exists that may cast doubt on the group and trust’s ability to continue as a going concern depending on the outcome of the EGM.
“In the event that the group and trust are unable to continue as a going concern, adjustments may have to be made to reflect the situation that assets may need to be realised at than the amounts at which they are currently recorded in the balance sheet.”
EY’s caution arises because of certain financial covenants relating to Sabana REIT’s unsecured loans. As such, all the lenders need to agree on new terms should resolution 1 be effected.
ESR says: “The court’s decision today has given Sabana REIT unitholders, the trustees, and the REIT manager a clear direction on how the EGM will proceed and how the resolutions are to be read. What is clear is that the resolution for internalisation or any amendment to the trust deed must be done as an extraordinary resolution, with a 75% vote needed. It is also important to note that the resolution as presented by Quarz is merely a direction to the trustee to explore the option of internalisation. The resolution as it stands is not for the immediate implementation of internalisation.”
Quarz and Volare — which are not concert parties — voted together during Sabana REIT’s AGM in April. As such, they may well vote together, although not in concert, during the upcoming EGM. Together Quarz and Volare own a tad more than 30% of Sabana REIT. Concert parties whose ownership cross 30% are directed to make an offer for the company.
“Unitholders now have a simple choice to make at the EGM: do they keep the Sabana REIT Manager, which was the best performing industrial REIT in 2022, or do they remove the manager with no replacement ready. Removing the manager now will cause significant unitholder value destruction and appointing a replacement is estimated to take more than one year, with unitholders bearing the costs,” ESR says.
A previous internalisation by the owners of Croesus Retail Trust’s manager cost its unitholders $50 million. Other cases where the trustee has been directed to oversee the REIT, including identifying a suitable manager and negotiating with banks are believed to have run into millions. Sabana REIT’s income available for distribution in 1HFY2023 was $17.82 million.
Singapore politicians resign over affairs
Politicians from the People’s Action Party (PAP) and Workers’ Party (WP) have resigned at about the same time after having extramarital affairs. On July 17, Speaker of Parliament Tan Chuan-Jin and Member of Parliament (MP) Cheng Li Hui submitted their resignations, which Prime Minister Lee Hsien Loong accepted. Tan and Cheng’s resignations were “necessary to maintain the high standards of propriety and personal conduct which the PAP has upheld all these years”, says Lee.
In a subsequent update, Lee revealed, via a press conference, that Tan and Cheng had been in an “inappropriate relationship”. Both Tan and Cheng were counselled by Lee in February but continued their relationship.
On July 19, WP’s Secretary-General Pritam Singh announced that senior members Leon Perera and Nicole Seah have resigned after having an extramarital affair. Perera, an MP for Aljunied, has also resigned from his seat in Parliament.
Both are members of WP’s central executive committee; Perera heads the party’s media team, while Seah is the party’s Youth Wing president. “The constitution of the Workers’ Party requires candidates to be honest and frank in their dealings with the party and the people of Singapore,” says Singh.
This is the latest controversy involving local politicians, following Tan’s hot mic comment during a Parliament sitting on April 17, Transport Minister S Iswaran’s arrest on July 11 and allegations of corruption relating to the rentals of heritage bungalows in Ridout Road by Cabinet ministers K Shanmugam and Vivian Balakrishnan.
Seemingly sterile, Singapore politics is not free from eyebrow-raising episodes over the years. In November 1986, former Minister for National Development Teh Cheang Wan allegedly received bribes. He was found dead on Dec 14, 1986, due to suicide. — The Edge Singapore
