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Daily Dispatches – Singapore should prepare for slow recovery

Lion City to grow slower than expected

Lion City to grow slower than expected

Singapore Business Review reports that the Lion City should be prepared for a slow economic recovery, with the long-term growth prediction likely to be flat.

DBS Bank, which is quoted in the article, says August industrial output has more or less confirmed a GDP contraction in the third quarter, and on a year-on-year basis, output, while 3.5%higher, was below the market expectation of a 4.9% expansion.

“This set of numbers has confirmed our long held view that the global outlook remains dicey and the growth path ahead is not that rosy. Expectation has run ahead of underlying fundamentals in the developed economies and Asia is grappling with some of its own domestic consolidations.

“Ultimately, this will affect the growth outlook of the Singapore economy. While there are nascent signs of recovery, high frequency data will be constant reminders that it is going to be a slow grind instead. The longer term growth trajectory will remain flat.”

UOB and ANZ team up for Wing Hang bid

Singapore’s United Overseas Bank and Australia & New Zealand Banking Group Ltd are considering a bid for Hong Kong’s Wing Hang Bank Ltd, according to people familiar with the matter.

Reuters reports that Wing Hang, which has a market capitalisation of US$4.7 billion, announced earlier this month that its controlling shareholders had received preliminary offers from independent third parties to purchase their shares in the bank. It did not name the bidders.

People familiar with the matter told Reuters on Saturday that ANZ and UOB were among the companies considering a bid for the Hong Kong bank.

Shanghai’s market ‘guinea pig’ is launched

Bloomberg reports that Citigroup and Bank of China will participate in Shanghai’s free trade zone as the Chinese government inaugurated the 11-square-mile experiment in more relaxed financial and investment controls.

The two banks were among the first to announce their participation in the zone, which opens with the aim of creating a more efficient and open economic system, Commerce Minister Gao Hucheng said at a ceremony yesterday.

Shanghai’s free trade zone is a testing ground for free-market policies that Premier Li Keqiang has indicated might be implemented in the world’s second-largest economy. 

House sister sent to the big house

A former Chinese banker was sentenced to three years in prison on Sunday for using forged documents to amass a portfolio of more than 40 Beijing properties, according to a report by the Financial Times.

Gong Aiai, better known by her public nickname “house sister”, is the former vice-president of a small rural bank in Shanxi province, and was found guilty of using fake IDs while purchasing flats and shops in the capital worth Rmb395 million (US$64 million).

Vietnam to build financial centres

Asian Banking & Finance says Vietnam plans to boost its banking sector, with help from the UK, by building financial centers in Hanoi and Ho Chi Minh City and in personnel training for the banking and finance sector.

India’s veto against new bank licenses

Some 26 banking licence applications from industrial groups in India are now in jeopardy after the country’s Parliamentary Standing Committee on Finance came out against the Reserve Bank’s move to grant new bank licenses to business firms.

The committee said that bank licenses are not given to business firms anywhere in the world and such a practice should not be allowed in India. It also recommended the minimum capital requirement of US$79 million should be doubled to ensure the sustainability of the new banks.


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