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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Jacqueline Cowhig and Alison Leung | Reuters
04 July 2012
LONDON/HONG KONG (Reuters) - China’s huge fleet of coastal ships, usually confined to plying the Chinese seaboard, has sailed out of the shadows to seek international business in yet another sign that China’s economy is slowing.
The fleet, previously unnoticed by the global market, is suffering from a slowdown in China’s coastal trade amid weaker domestic demand from utilities and steel mills and a growing glut in Chinese coal and iron ore stockpiles.
The vessels are now being forced to seek new business such as in the Indonesian coal trade, dealing a further blow to the depressed global dry bulk shipping market.
“There are many more ships lying idle at Chinese ports now - the environment for making money is not so good,” said a source at one of the big five coastal shippers, who asked not to be identified.
The slowdown of the Chinese economy has been among the main worries for global markets in general and commodities markets in particular.
China, the world’s biggest coal producer, is also the biggest single coal and iron ore importer and freight user and a small change in its buying or freight use sends ripples around the world markets.
China’s coastal trade existed for decades on a small scale, but began to boom when power generation needs in the country’s south took off due to mass industrialization and coal was urgently needed from the northern mines.
China’s coastal coal trade soared by 88 percent from 2006 to move 639 million metric tons (704 million tons) in 2011, according to securities group Jefferies. Shipbroker Clarksons estimates China’s coastal trade of coal, steel, grains and fertilizers at over 1 billion metric tons.
But in the first four months of 2012, coastal coal trade shrank by 3 percent versus last year, says Jefferies.
“The iron ore and coal inventories at Chinese ports are very high,” said Moses Ma, a Hong Kong-based shipping analyst at ICBC International, a subsidiary of the Industrial and Commercial Bank of China. He says he has a bearish view on the dry bulk and the coastal trade markets this year.
HIGH COAL STOCKS
China’s economic growth is expected to slide to 7 percent this year, the weakest since 2009. On an annualized basis, China still seems set for record imports of coal for steelmaking and power generation this year.
But as power demand dipped with the slowing economic growth high stocks have amassed at ports.
This has in turn led to delays in cargoes discharging and pushed coal prices to a two-year low, prompting Chinese buyers to renegotiate contracts.
“China seems to have reached its limit for bringing in imported and domestic coal to the south and until that clears, they are not buying,” said a veteran coal supplier to China.
At the same time as renegotiating import deals, Chinese utilities and traders were also pulling out of domestic supply deals, leaving increasing numbers of coastal ships at anchor.
“There have been defaults and deferrals to imports but also around 20 percent of our domestic sales to utilities have been cancelled or delayed for months because of high inventories - there are more ships idle,” a Chinese coal supplier said.
The troubles on the Chinese shores have pushed its coastal fleet further afield in a development that has generated more pain for the already depressed shipping industry.
“We’ve seen these Chinese vessels in the market, attacking the Indonesian coal business and undercutting everybody,” said an Asia-based shipbroker with RS Platou.
The Chinese involvement in Indonesia, the world’s biggest thermal coal exporter, happened at the worst possible time as rival shipping companies were betting on coal to help replace the lost nickel ore volumes from Indonesia.
Exports of nickel ore from Indonesia have fallen after it imposed a 20 percent tax on shipments as part of its strategy to limit exports of raw commodities.
Indonesia is also considering curbing coal exports, meaning Chinese ships may have to sail to new destinations again.
The global shipping industry has been crippled by low freight rates in recent years and the emergence of vessels from China could aggravate the downturn, which has already led to bankruptcies and ship seizures worldwide.
The scale of the impact might be very large, say experts as the industry is awakening to the fact the Chinese fleet has become relatively modern in recent years, including by absorbing new ships unwanted by the oversupplied international market.
The total number of vessels involved in China’s coastal trade is estimated at 1,500-2,000 with deadweight ranging between 10,000 and 50,000 metric tons. Many of the 20,000-tonnes or smaller ships are unregistered and unclassified anywhere.
“These smaller ships don’t get released into the spot market, they’re often very old and only fit to hug the coast,” said one shipping source.
Two-thirds of the fleet are up to 20 years old but it is the remaining third which worries industry players as they are newer, bigger and more fuel-efficient vessels.
Those Supramax and Handymax vessels with deadweight of 50,000-60,000 and 40,000-50,000 metric tons are mainly owned by large Chinese firms such as China Shipping, COSCO, Fujian Guohang Ocean Group, DeQin Group Corporation and Sinotrans Ltd.
“It’s not a tiny ghost fleet. They can have a massive impact on the international freight market,” said a senior shipping source.
(Reporting by Jacqueline Cowhig; Additional reporting by Jonathan Saul; Editing by Dmitry Zhdannikov and Alison Birrane)