Singapore Bonds Decline to Become Second-Worst Debt Market in the World

Singapore Bonds Decline to Become Second-Worst Debt Market

By Kenneth Foo  Jun 12, 2013

Singapore bonds fell for a fourth day, making their loss for the past three months the second-biggest in the world, as investors gird for the possibility that the U.S. Federal Reserve could slow bond purchases. The price of Singapore’s 3.125 percent note due in September 2022 tumbled to S$107.30 as of 3:27 p.m. local time from S$108.24 yesterday, based on data compiled by Bloomberg and the Monetary Authority of Singapore. The yield rose 10 basis points, or 0.1 percentage point, to 2.24 percent, a level not seen since July 2011. “The only reason for this is the speculation of Fed tapering,” said Michael Wan, an economist at Credit Suisse Group AG in Singapore. “There’s pretty much a sell-off across all countries and markets.” The Bloomberg Singapore Sovereign Bond Index (BSIN) has declined 2.4 percent over three months. The only other sovereign index among 33 tracked by Bloomberg that fell more was Slovenia’s with a 4.3 percent decline. The Bloomberg U.S. Treasury Bond Index fell 0.2 percent. The Fed buys $85 billion of Treasuries and mortgage-backed securities each month to support the economy by putting downward pressure on borrowing costs. It will probably reduce its purchases to $65 billion a month at its Oct. 29-30 meeting, according to the median estimate in a Bloomberg survey of 59 economists last week. To contact the reporter on this story: Kenneth Foo in Singapore at kfoo23@bloomberg.net

Asia’s ticking time bonds; Time to cut and run?

Asia’s ticking time bonds; Time to cut and run?

1:28am EDT

By Saikat Chatterjee and Umesh Desai

HONG KONG (Reuters) – Efforts to make the global financial system safer could be making Asia more – not less – vulnerable to any credit market shocks, leaving bond traders worried that a sharp selloff since late May could turn into a rout. Low global interest rates have made it easier than ever to sell new bonds denominated in dollars, euros or yen, resulting in a boom in issuance that has made Asia and its companies ever more dependent on debt. But the market for trading those bonds is slowly drying up, leaving it susceptible to a sharper selloff if holders of these so-called G3 bonds decide it is time to head for the exit. “The issue is that if any of them choose to sell their holdings, the market may not have the capacity to absorb these flows. If we reach a stage like that then liquidity could dry up very quickly and that can have a spiraling effect,” said Dhimant Shah, a fund manager at Mackenzie Investments in Singapore. Read more of this post

A business owner fleeing 800 million yuan in debt from China’s Jiangsu highlights financial transparency issues the city is having

Company Head Flees 800 Million Yuan Debt – Economic Observer Online 

By Jing Tian (景天)
Issue 623, June 10, 2013

Xu Cailiang (许才良), owner of Rong Tai Oil Technology Ltd. (融泰石油科技股份有限公司), fled to the U.S. last month leaving behind 800 million yuan in debt. A source at the local financing office said that the company was founded in 2007 in Jiangyin (江阴), Jiangsu and has been losing money ever since. It’s been able to receive loans from banks because of its close relationship with Jiangyin City Construction and Comprehensive Development Ltd. (江阴市城镇建设综合开发有限公司), also known as City Constriction. “The owner of Rong Tai and the owner of City Constriction are the same person: Xu Cailiang,” the source said. The state-run City Construction was founded in 1984 and Xu became its CEO in 1998. Then in 2007, he bought it for 20 million yuan in cash and became the company’s sole shareholder. Xu was also a supervisor in Jiangyin Agricultural Bank, one of Rong Tai’s investors. City Construction provided 470 million yuan to Rong Tai as a loan guarantee on top of a 3.2 million yuan deposit and a mortgage guarantee allegedly worth 763 million yuan. However, according to a source in a local bank, the mortgage written in the loan application was much higher than the actual value. Two similar cases have happened in Jiangyin within the past six months. A local official said that the economic environment of Jiangsu is much less transparent than that of its neighbor, Zhejiang, making problems like these less likely to be discovered before it’s too late. Jiangyin, a town with 34 public corporations, has been held up as a model for economic development in recent years. However, it’s likely that the city’s economy isn’t as healthy as it appears on the surface.

China microlenders get death threats as they try to recover bad loans; “Some of the borrowers are steel traders, toy makers, or plain loan sharks. Everything is fine when the economy grows robustly and liquidity is plentiful.”

China microlenders get death threats as they try to recover bad loans

Saturday, 08 June, 2013, 12:00am

Jane Cai in Beijing xuejun.cai@scmp.com

Threatening messages are routine for Miao Qiang these days.

“A killer from Beijing will take your life if you don’t withdraw the lawsuit,” a message on his mobile phone reads.

Miao, co-owner of a microcredit company in Jiangsu province, laughs helplessly. He has brought a dozen companies and individuals to court since the beginning of the year as loan defaults surged. But little of the money has been collected. Read more of this post

If you can’t buy them, bankrupt them; Private Equity Capitalizes on Chinese Firms’ Depressed Shares

JUNE 11, 2013, 9:10 AM

Private Equity Capitalizes on Chinese Firms’ Depressed Shares

By NEIL GOUGH

HONG KONG – If you can’t buy them, bankrupt them.

Three months ago, Ambow Education Holding, a troubled operator of tutoring centers in China that was listed on the New York Stock Exchange, was the target of a $108 million privatization bid by Baring Private Equity Asia.

On Monday, Baring emerged as one of several big shareholders that had succeeded in pushing Ambow into provisional liquidation by a court in the Cayman Islands, where the company is registered, after a dispute with management over an investigation into possible financial misconduct. Read more of this post

India’s Small-Change Problem; Ever been given a candy instead of a rupee for change? Here’s why.

June 12, 2013, 11:02 AM

India’s Small-Change Problem

Top of Form

By Anant Vijay Kala

If you’ve shopped in India you likely know the problem. You go to a store to buy a few things and when it’s time to pay, you hand over the cash. But the cashier’s run out of change. Instead of the few rupees you’re owed, the cashier gives you one or two candies, or a stick of chewing gum, to make up the shortfall. You want those coins, the exchange doesn’t feel quite fair – and it’s bad for your teeth – but you’re reluctant to make a fuss. And so you walk out, feeling a little short-changed. If this chimes with you, then you’re not alone. A survey conducted in 2012 by the Reserve Bank of India, in response to complaints from the public, found that 44% of people in 12 Indian cities had the same experience; candies instead of coins for change. Read more of this post

Becoming ‘Asia Literate’: Learn Chinese, but Don’t Stop There

JUNE 11, 2013, 2:20 AM

Becoming ‘Asia Literate’: Learn Chinese, but Don’t Stop There

By SUE-LIN WONG

BEIJING — While studying abroad at Peking University in Beijing, Andrew Stead didn’t expect to find a job at Burton, one of the top snow boarding brands in the world.

“In my spare time on exchange, I would go skateboarding around Beijing with friends, including one who worked at Burton. A few months later, I was offered a job at their Beijing office because of my interest in snowboarding and China,” said Mr. Stead, 23, who is majoring in engineering and finance and speaks solid Chinese. He plans to return to Beijing after he graduates soon from an Australian university.

Governments are increasingly recognizing the opportunities that exist for people like Mr. Stead who are able to marry technical skills or hobbies with “Asian literacy.” Also called “global competence,” it represents an understanding of other cultures and languages; but China isn’t the only nation in Asia and people should also be looking more broadly, to Japan, India and Indonesia, to name just three other places, according to some experts. Read more of this post

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