Singapore's banks remain well braced for the coming rise in interest rates, the Monetary Authority of Singapore says, noting favorable results from stress tests. The MAS statement comes after Moody's lowered its outlook for the city-state's banks from stable to negative.
Singapore's non-oil exports slumped 8.8% in June from a year earlier, the fifth consecutive month of decline. Noting that poor demand for electronics exports is unlikely to change anytime soon, DBS economist Irvin Seah said "external headwinds remain strong. Data from the U.S. have been mixed, and Europe is still stuck in recession."
Falling profits at financial companies require action to overhaul fee structures, said Choi Soo-hyun, chief of South Korea's Financial Supervisory Service. Choi also said the FSS plans to encourage banks to increase interest rate risk management to ensure stable interest income while helping them look into new services, including asset management consulting.
Foreign direct investment in China jumped 20.1% in June from a year before, helping boost FDI for the first six months by 4.9% from the year-earlier period. June's gain was the largest in more than two years, suggesting a foreign vote of confidence in Beijing's new focus on balanced development, said Li Wei, China economist at Standard Chartered Bank in Shanghai.