TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issu...
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CNBC.com
07 July 2011
Regardless whether China succeeds in taming inflation, the economy is headed for a recession, says Bill Smead, Chief Investment Officer at Smead Capital Management.
“We think economic contraction in China - actual negative real growth numbers - sometime in the next two or three years,” Bill Smead, Chief Investment Officer at Smead Capital Management told CNBC on Thursday.
He expects the Chinese economy to contract 3 percent quarter-on-quarter for two straight quarters in the short to medium term. Click here for full interview.
China, Smead explained, is in a “no-win” situation because to “kill” inflation, authorities would have to tighten credit enough to invert the yield curve.
“If you do that you’re going to clobber the economy,” Smead said. “If you don’t invert the yield curve and you do these gentle quarter point raises you allow the bad behaviours to go on and it just means your bust is going to be bigger when you finally do it.”
China raised interest rates by 25 basis points on Wednesday for a third time this year, bringing the benchmark one-year lending rate to 6.56 percent, and its benchmark one-year deposit rate to 3.5 percent. The move comes ahead of key inflation data due next week where the nation’s consumer price index (CPI) in June is widely expected to surge to a 3-year high of 6.3 percent, compared to May’s 5.5 percent figure.
While analysts have been warning of the disastrous effects of a hard landing for China, Smead thinks the bust is exactly what China needs.
“For China to be a successful major player, they’re going to have to go through the cleansing,” he said, referring to the bad loans generated from the billions of dollars lent to local governments to boost growth. This week, Moody’s said that China’s local government debt may be understated by $540 billion, and warned that bad debt could reach 8-10 percent of total loans.
These loans, especially those used to fund development projects, are like a ticking bomb, Smear warned. “Most of the time, you don’t acknowledge the loans get sour till the projects get finished.”
“The problem is when homes in the big cities trade at 12 times the average household income, they’re already over-capitalized by a factor of 2 to 1,” he added. “So the problem is we’re going to wake up some time in the next couple of years and people who bought a house 6 months ago or a year ago are going to be 30 percent under water.”
China’s bust will trigger a collapse in commodities as will as currencies that have enjoyed the “incredible boomlet” from the mainland, Smead said.
“We’re in the camp that we don’t want to own Australian bonds, we don’t want to own Canadian bonds.”