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Daily Dispatches – Thailand goes into recession

Thai growth in negative territory

Thai growth in negative territory

Thailand cut its 2013 growth forecast as the country entered recession for the first time since the global financial crisis, with rising household debt limiting central bank scope to support the economy, according to Bloomberg.

Gross domestic product unexpectedly shrank 0.3% in the three months to June from the previous quarter, when it contracted a revised 1.7%, the National Economic and Social Development Board announced. Only one of 11 analysts surveyed had predicted a decline. The economy rose a less-than-estimated 2.8% from a year earlier.

Thai policy makers are struggling to sustain growth as government spending plans are delayed, while a slowdown in China curbs demand for exports from Southeast Asian nations. The Bank of Thailand will hold the policy interest rate at 2.5% at its August 21 meeting, a Bloomberg survey showed, after Assistant Governor Paiboon Kittisrikangwan said last month that household debt at 80% of GDP limited the scope for further easing.

Gloomy day for Everbright

Bloomberg reports that Everbright Securities Co. has been banned from proprietary trading for three months by Chinese regulators after placing US$3.8 billion in erroneous buy orders that caused the wildest stock swings in four years.

The China Securities Regulatory Commission has started an investigation into the state-controlled brokerage. Everbright is also barred from creating new stock-index futures positions starting today, the China Financial Futures Exchange said in a statement.

JPMorgan hiring under Chinese scrutiny

US regulators are investigating the hiring practices of JPMorgan Chase in Hong Kong, the Financial Times reports. The move that could cast an unflattering light on the relationships between Wall Street banks and the sons and daughters of Chinese government officials.

JPMorgan disclosed in a recent regulatory filing that it has received a request from the US Securities and Exchange Commission “seeking information and documents relating to, among other matters, the firm’s employment of certain former employees in Hong Kong and its business relationships with certain clients”.

Singapore shift

Singapore’s prime minister, Lee Hsien Loong, promised a “strategic shift” in his country’s approach to “nation building” as he laid out plans to address widening income disparity and other threats to the island nation’s economic miracle of the past 20 years.

The Financial Times reported that Lee said there would be more government spending on healthcare, including a “pioneer package” of benefits for the older generation of Singaporeans who helped build the country in the 1960s. Housing would be made more affordable and social safety nets improved.

Juneyao moots private bank

A consortium of investors led by Juneyao Group is spearheading a move to set up a privately owned bank on the mainland, in line with the leadership’s attempt to introduce new competitors in the sector dominated by state-owned players, according the South China Morning Post..

Juneyao, which runs airlines and dairy businesses, along with other privately owned companies including Fosun Group and Shanda Interactive Entertainment, plans to establish a bank with an initial investment of 5 billion yuan (HK$6.3 billion). It is apparently still in the application process and it is unclear when the investors will receive the go-ahead from regulators.

Juneyao, founded by Zhejiang businessman Wang Junyao, is one of the most prominent privately owned business empires on the mainland.

New Nomura hires

Finance Asia reports that Nomura has boosted its ranks with more hires, poaching two more people from Bank of America Merrill Lynch for its Asia ex-Japan equity sales and trading team.

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