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Daily Dispatches – Asia battens down the hatches against US debt default

Asia prepares for US falling from fiscal cliff

Asia prepares for US falling from fiscal cliff

The Wall Street Journal reports that Hong Kong’s stock exchange is asking investors who post US Treasury bills as collateral to provide more of the securities, in one of the first actions by a regulator bracing against a possible US default.

The decision is expected to have a broad impact on investors, because T-bills are often used as collateral at clearing houses, which will now be required to put up additional securities or cash.

RT.com says this decision by the Hong Kong exchange came after the Asia Securities Industry & Financial Markets Association (Asifma) warned of the possible consequences of a default.

“It has the potential to cause chaos and people may dump Treasuries because they won’t know whether they (will) exist the next day. They [Treasury] need to make that call early and not late,” said Mark Austen, chief executive of Asifma.

Other countries are standing by to make similarly critical calls in the event of a default.

The Japan Securities Clearing Corporation (JSCC), the clearing house in Japan, said it was getting ready for “anything that might happen”.

Major acolade for NTU’s Nanyang Business School

Singapore Business Review reports that The Economist has placed Nanyang Technological University (NTU)’s business school 64th in its 2013 global rankings of  full-time MBA programmes.  This is the highest placing ever by a Singapore business school, improving on its rank of 72nd last year.

For the 10th straight year, Nanyang Business School has been ranked the best in Singapore by The Economist.

Singapore holding steady

Singapore’s central bank maintained its existing pace of currency appreciation, forgoing stimulus as inflation risks crimp scope to revive a shrinking economy.

Bloomberg says that the Lion City has resisted monetary easing since October 2011 as a tight labour market and record homes prices fuelled inflation pressures.

China to allow insurers to increase share of shares

The China Insurance Regulatory Commission (CIRC) plans to allow insurers to increase their stakes in equities and property in a bid to boost their investment returns, according to Asia Insurance Review.

The mainland Chinese insurance regulator plans to extend the limit on insurers’ investments in equities to 30% of total assets from the current 25%.

Another Hong Kong bank on the block 

Chong Hing Bank has hired investment bank UBS to advise it on a potential sale and China’s state-backed conglomerate Yuexiu Group is raising funds for a possible bid, people with knowledge of the matter have told the Wall Street Journal.

Chong Hing would be the latest of Hong Kong’s handful of family-owned lenders to move forward with a sale as interest in them heats up.

Asia still global growth leader

Singapore’s Business Times says that the IMF and World Bank believe that Asia “will remain the global growth leader” in 2013 and next year, growing about 5% this year and more in 2014, despite risks for the region.

The IMF said that a further tightening of global funding conditions was possible and could trigger renewed portfolio outflows, falling asset prices and tighter financial conditions, especially in Asian economies with “weaker fundamentals”.  

UBS outlines ambitious plans for Asia

The South China Morning Post says UBS, Switzerland’s biggest bank, plans to double the invested assets of clients in Asia in the next five years, despite cutting 10,000 jobs and restructuring its investment banking business globally.

New foreign banks signed up to Shanghai Free Trade Zone

HSBC and Bank of East Asia have won approval to set up a presence in the Shanghai free-trade zone, putting them among the first foreign banks there following similar approval granted to DBS and Citi, according to the South China Morning Post.


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