interest rates

Private equity in Asia hits record deal, exit values; uncertainty in the region still looms

SINGAPORE (Mar 15): The private equity (PE) industry in Asia Pacific (APAC) reached new highs in 2018, after a record-breaking 2017, according to the annual Asia Pacific Private Equity Report by Bain & Company.

Now, the region represents 26% of the global PE market, a 9% increase from a decade ago, with $833 billion in total assets under management.

Deal value across the region peaked $165 billion in 2018, above the previous record high of $159 billion last year, and 48% higher than five years ago.

Fed's Powell says US outlook 'remarkably positive'

BOSTON (Oct 3): US Federal Reserve Chairman Jerome Powell on Tuesday hailed a “remarkably positive outlook” for the US economy that he feels is on the verge of a “historically rare” era of ultra-low unemployment and tame prices for the foreseeable future.

It is a view, he said, based on how a changed economy is operating today, with businesses and households immunized by strong central bank policy from the inflationary psychology that caused unemployment, inflation and interest rates to swing wildly in the 1960s and 1970s.

Speculative buying & housing price growth to decline by year-end: UBS

SINGAPORE (Sept 28): Singapore’s housing market remains fairly valued even after inflation-adjusted prices have risen 9% over the past year, following six years of correction.

According to a recent report by UBS, housing prices in the city state are currently 5% below their 2011 peak, with its price-income ratio still shy of the long-term average.

Tech bloodletting nears US$300 bil since Facebook reported

NEW YORK (July 31): The rush to get out of US tech stocks entered its third day Monday as concerns mounted over how the storied FAANG bloc will fare amid rising interest rates and slower growth.

All of the FAANGs retreated, with Facebook Inc. sinking 3.3% and Netflix Inc. falling as much as 5.3%. The FANG index retreated 2.5%, widening its three-day loss to 9%. This compares with a 1.4% loss for the S&P 500 over the same time.

How will higher interest rates affect REITs?

SINGAPORE (July 9): Real estate investment trusts as measured by the FTSE ST Real Estate Investment Trust Index have fallen by 6.6% since the start of the year despite a rise in the yield of 10-year Singapore Government Securities — from 2% at the start of the year to around 2.5% currently. A strengthening US dollar is likely to exert upward pressure on the Singapore Interbank Offered Rate (Sibor) and the Swap Offer Rate (SOR) and these will continue to have an indirect effect on the 10-year SGS yield, which some market observers expect to rise towards the 2.8% to 2.9% range.

Emerging Asia hit by biggest foreign investor exodus since 2008

BANGKOK (June 18): A falling tide lowers all boats, it seems. Amid an exodus from emerging markets, investors are pulling out of even Asian economies with solid prospects for growth and debt financing.

Overseas funds are pulling out of six major Asian emerging equity markets at a pace unseen since the global financial crisis of 2008 -- withdrawing US$19 billion from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand so far this year, according to data compiled by Bloomberg.

3 reasons for the global equity rally to continue despite rising rate fears

SINGAPORE (Feb 6): Global equities may have corrected over the past week on inflation and rates concerns, but this does not herald the start of a bear market, says the CIO office of DBS Bank.

In a Tuesday report, Hou Wey Fook says he remains constructive on equities amid low recession risks and robust earnings momentum.

More pressure on bonds

SINGAPORE (Jan 30): The Federal Reserve has been happy to raise interest rates very slowly despite tight labour markets because of low inflation. However, there are now signs that the underlying pace of price rises is close to the Fed target. This means that interest rate hikes will have to continue and we will see more pressure on bonds.

Inflation has been running well below the Fed’s 2% target over the past year, but this is set to change over the next few months, for three reasons.

Malaysia faces higher rates, currency risks and an election battle

KUALA LUMPUR (Jan 4): Malaysia faces higher interest rates, currency risks and a contentious election battle in 2018 that will test Prime Minister Najib Razak’s grip on power.

Malaysia has benefited from a global trade recovery and a pickup in domestic spending, with economic growth probably reaching 5.8% last year, according to the median estimate in a Bloomberg survey of economists. Growth is seen moderating to 5.3% in 2018.

Central banks find that a tool to curb bubbles is doing the job

SINGAPORE (Dec 4): Central bankers are starting to see promising results from one of the recent additions to their monetary policy toolbox.

Lending curbs to stem financial risk -- so-called macroprudential limits -- have helped slow risky borrowing and temper property price bubbles in countries from New Zealand to Canada, a host of financial stability reports showed this week. While there hasn’t been uniform success -- Hong Kong’s housing market shows no signs of cooling -- it’s given central banks some breathing space to be more gradual in tightening monetary policy.

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