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...
Comments
David Brown
16 August 2015
China’s currency devaluation is not the end of the matter. And nor its recent stock market mayhem. They are clear symptoms of a deeply troubled world economy, and investors need to wake up to the risk that market jitters will get a lot more serious in coming months.
Another global economic crisis looms and there are no circuit breakers left to stop it.
World policymakers have run out of conventional remedies and quantitative easing infusions are having less effect. If China is a barometer of heavy weather ahead, then welcome to the bear market.
China is clearly feeling the pinch as leading economic indicators show a steep decline. As a global export powerhouse, it is feeling early warning signs of a global downturn. Exports have fallen 8.3 per cent year on year, no surprise considering world trade is languishing 13.6 per cent lower than a year ago.
Global economic confidence has been heavily sideswiped by a number of adverse factors. The impending US rate tightening, Greek debt crisis, trade sanctions on Russia and rising tensions in the Middle East have all hurt growth prospects. Worries about a slowdown in China simply add to the gloom.
Set against such an uncertain backdrop, it is no surprise companies are less inclined to invest, while consumer spending intentions are under a cloud.
The downturn in the outlook is also dampening the mood in stock markets. Six years on from the global financial crisis, pre-conditions look set for tougher times ahead.
The US recovery may be going from strength to strength, but there are signs the global economy is hitting the skids. The euro zone is stagnating, despite negative interest rates and a surfeit of easy money from the European Central Bank.
Emerging markets are taking a tumble, Russia is in dire straits and the outlook is worsening for resource-exporting countries such as Australia and Canada, as commodity prices fall. A US rate rise next month could be the catalyst for a full-scale rout.
No wonder China is under pressure to pull out all the stops to get the economy back on track to hit this year’s 7 per cent growth target, or, in the worst case, prevent a disorderly hard landing. The panoply of short and long-term policy options must be harnessed to get the economy motoring again.
Last week’s devaluation was an obvious policy choice given the mounting pressure on the country’s manufacturers. Unfortunately, it is a palliative that is unlikely to make much difference in the long term. The price of Chinese exports is not the problem. It is the lack of demand in the global economy.
China probably needs a “shock and awe” 10 per cent or more depreciation to stand any chance of making more than a marginal difference. So, it is no wonder some pundits predict there is more to come on the yuan devaluation front.
It is pointless blaming China for potentially opening up a pandora’s box of competitive devaluations. US lawmakers might have railed against China’s move, but they were hardly heard complaining when the US dollar sank more than 40 per cent between 2002 and 2011. In fact, the weaker dollar was tacitly encouraged to promote America’s export drive.
Germany is a much worse culprit. It is the world’s biggest trade surplus country, taking full advantage of the chronically weakened euro to boost export growth but doing precious little to help promote global stimulus efforts. Germany has escaped under the radar screen.
In its latest review, the IMF said China must do more to rebalance domestic growth away from exports and investment, and towards a more sustainable, consumer-led economy. But that will take time and a host of difficult structural market reforms.
In the meantime, world policymakers need to act fast. Individual countries like China can make stop-gap actions with a devaluation to buck a short-term trend, but in the longer run, it is a zero-sum game.
David Brown is the chief executive of New View Economics