Aurelia Butler

SINGAPORE (Reuters) – Vera Liu, a Singapore property agent, was panicking in the wee hours of Thursday morning after new property taxes saw two of her deals fall through.Singapore raised levies on private property purchases in a surprise move late on Wednesday night to cool the market, including a doubling of stamp duties for foreigners to an eye-watering 60%.Liu’s foreign buyer pulled out of a purchase of a S$10 million ($7.50 million) luxury condominium along Singapore’s Orchard Road shopping belt, while another interested buyer who already transferred funds into Singapore is also holding off.”The door is now closed (to foreign buyers),” said Liu. “I was panic calling my buyers near midnight, it’s crazy, the adjustment is so high. It could mean a few million dollars more in duties for some buyers.”Ever since a run on purchases in 2018, the government has timed announcements of any tightening moves closer to midnight. The new rates came into effect on Thursday.The hike in duties is one of the harshest tightening moves in the market in a long time and comes after a rush of foreigners back into Singapore’s property market in recent years.Policymakers are growing concerned that foreign investors increasingly see Singapore property as a hot asset class, squeezing out locals.National development minister Desmond Lee said without “early pre-emptive measures, we may see investment numbers, both by locals and by foreigners grow, and that will add stress to Singaporeans who are looking to buy residential property”.While taxes were also increased for local buyers of second and subsequent properties, analysts expect the largest impact to be felt by foreign buyers of luxury properties. The government said the new rates would impact about 10% of private property transactions.Christine Sun, the senior vice president of research & analytics at OrangeTee & Tie, called it a “freezing measure” for foreign buyers.”Luxury home sales may experience more impact and a temporary pullback in demand from these buyers.” Sun said the move could be in anticipation of more Chinese buyers — who make up the bulk of foreign luxury home purchases — in the coming months.The city-state’s property market is unusually resilient, with prices rising 8.6% last year following a 10.6% jump in 2021. This contrasts with declines seen in other property markets such as China, New Zealand and Canada.Shares of Singapore property companies fell on Thursday, with City Development and UOL Group, which have large Singapore footprints, hit hardest.A SHORT-TERM SOLUTIONAnalysts, however, are unsure if the new rates can really cool the market.Sun said while prices may slow for a while, the super-rich may continue to buy, keeping prices elevated.”From past experience, demand will usually rebound after a few months as supply remains low and those who need a home will still need to buy one eventually,” she said.Stamp duties for foreigners were last raised to 30% from 20% in December 2021, causing a dip of 16.5% in condominiums bought by foreigners in 2022. Still, prices have not let up.Nicholas Mak, chief research officer at proptech company MOGUL.sg, said there were limitations to the measures if just 10% of purchases were affected.”There’s little impact on the other 90%,” said Mak, who has been analysing Singapore property for more than two decades. “If that’s the case, how do you cool the market? You have a petroleum plant on fire and these people are not using the right tools to fight the fire.”($1 = 1.3342 Singapore dollars) More

BEIJING (Reuters) – Queues stretch hundreds of metres around temples in China on weekends, as despondent young worshippers pray to find jobs in an economy slowly clawing its way back from the coronavirus pandemic.”I hope to find some peace in temples,” said 22-year-old Wang Xiaoning, pointing to “the pressure of finding a job” and housing costs that are out of reach. Wang is among a record 11.58 million university graduates who face a job market still reeling from last year’s stringent “zero-COVID” lockdowns as well as crackdowns on the technology and education sectors, key traditional hirers.Temple visits are up 310% so far this year compared to 2022, travel booking platform Trip.com said. While it did not give overall numbers or pre-pandemic comparisons, it said roughly half the visitors were born after 1990.”The threshold for employment keeps rising,” said Chen, a 19-year-old who was praying for her career prospects at the iconic Lama Temple in the capital, Beijing, despite being years away from graduation. “The pressure is overwhelming,” added Chen, who gave only her surname for privacy reasons.The fifth of young Chinese without jobs among a highly-educated generation is a record. Improving their prospects is a major headache for authorities, who want the economy to create 12 million new jobs in 2023, up from last year’s 11 million. GRAPHIC: China’s youth jobless rate near record high – https://www.reuters.com/graphics/CHINA-ECONOMY/JOBS/znvnbjgndvl/chart.png “There is a serious oversupply of university graduates and their priority is survival,” said Zhang Qidi, a researcher at the Center for International Finance Studies, who added that many had resorted to ride-sharing or delivery jobs.The economy has been recovering since COVID-19 curbs were lifted in December, but the hiring is being led by the pandemic-battered catering and travel industries, which offer poor wages for low-skilled roles.China’s education and human resource ministries did not immediately respond to requests for comment. The number of master’s and Ph.D graduates in Beijing exceeds undergraduates for the first time, education authorities said.Job and academic anxieties were “understandable”, the state-backed Beijing Daily said in an editorial in March.”However, young people who really pin their hopes on the gods and Buddhas when under pressure are also clearly going astray.”‘SCHOLARLY AIRS’Many have taken to social media to compare themselves with a century-old literary figure, Kong Yiji, an unemployed alcoholic scholar from a 1919 story by the author Lu Xun. Kong believed himself too highly educated to take up menial jobs.The meme has gone viral as users question the value society places on education if it does not guarantee them a fulfilling career.In the coastal province of Zhejiang, a 25-year-old with a master’s degree who has applied for 10 jobs a day on average since February said she felt, like Kong, “restricted” by her education. “I don’t believe I will ever find my ideal job,” said the urban planning graduate, who spoke on condition of anonymity to protect her job prospects. “I’ve seen a psychologist a few times because I was very anxious and depressed.”She said the only offers she had received paid 2,000 yuan to 3,000 yuan ($290 to $435) a month or had “unreasonable” overtime requirements and she refused.”If I didn’t have these qualifications, I could totally become a sales assistant in a mall and be much happier.”Yang Xiaoshan, a 24-year-old economics postgraduate in Beijing, settled for the job of a bank teller after 30 interviews. She is relieved not to follow Kong’s jobless fate, but still feels unsatisfied.”It’s not that I despise customer service, but I think it’s a waste of my knowledge,” said Yang.State broadcaster CCTV has scolded those drawing comparisons with Kong.”Kong Yiji fell into difficulties … because he couldn’t let go of his scholarly airs and was unwilling to change his situation through labour,” it wrote on messaging app Weibo (NASDAQ:WB).The comment drew angry replies.”Why, instead of helping private enterprises develop, do you blame 11.58 million graduates for not taking off their scholar gowns?” read one post that drew more than 300 “likes”. More

The two countries concluded negotiations for a Comprehensive Economic Partnership Agreement (CEPA), as the trade agreement is known, within six months of launch, according to a statement published by the UAE state news agency WAM.Once implemented, the CEPA will eliminate many tariffs on Cambodian agricultural products, leather goods, and clothing and footwear while opening up a new market for the UAE’s manufacturing and industrial sectors.”Cambodia’s food production and agricultural sectors, which are a critical part of their economy, will also help us achieve our food security ambitions,” Thani Al Zeyoudi, UAE minister for foreign trade, said in the statement.The CEPA programme, launched in 2021 as the global economy recovered from the impact of the COVID-19 pandemic, is a key element of the UAE’s economic development strategy which aims to double the size of the economy to $762 billion by 2030.The Gulf state has signed CEPAs with India, Indonesia, Israel and Turkey, and is in the process of negotiating similar agreements with several other countries including Costa Rica, Kenya, and Ukraine.The UAE’s non-oil trade with Cambodia exceeded $401 million in 2022, up 31% from the previous year, while bilateral foreign direct investments reached almost $4 million by the end of 2020. More

LONDON (Reuters) -European commercial real estate investment fell to its lowest in 11 years in the first quarter of 2023, MSCI Real Assets said on Thursday, as investors spooked by higher interest rates and the economic outlook put acquisition plans on ice.The number of offices sold – Europe’s largest real estate sector – fell to its lowest on record, while the volume of transactions slumped to a 13-year low of 10.8 billion euros ($11.94 billion).The UK kept its top spot as Europe’s largest commercial real estate market, but Paris overtook London to become the region’s most active investment destination, with the three largest European property deals of the first quarter all taking place in the French capital.Commercial real estate has become a focus for fresh concerns about financial stability, after sharp interest hikes, recession fears and declines in office occupancy and retail footfall following the COVID-19 pandemic heaped pressure on values.A recent JP Morgan investor survey cited commercial real estate as the most likely cause of the next financial crisis.Some of the largest banks in the United States have singled out commercial real estate as an area of concern while European banks have less direct exposure to the sector, according to International Monetary Fund estimates.”While there are obvious concerns about the availability of real estate finance following the banking turmoil in March, we’ve yet to see a widespread increase in distressed sales,” said Tom Leahy, head of EMEA real assets research at MSCI.Giant asset manager Blackstone (NYSE:BX) saw its first quarter earnings plunge as the commercial real estate slowdown stymied some asset sales. Blackstone has limited withdrawals from its real estate income trust after a surge in redemption requests.($1 = 0.9048 euros) More

(Reuters) – A leading Russian lawmaker said on Wednesday he had filed a complaint about an online art tool promoted by the country’s largest bank, saying it consistently generated negative images of Russia.Lender Sberbank features the “Kandinsky 2.1” design tool on its website, with versions in Russian and English. Visitors are invited to type in a word or phrase and get the “neural network” to produce a matching image in vivid colours within seconds.But lawmaker Sergei Mironov said checks had shown the Kandinsky art tool – named after Wassily Kandinsky, a prominent early 20th-century Russian abstract painter – was unable to faithfully produce a white, blue and red tricolour when asked for a picture based on the phrase “Russian flag”.The phrases “Donbas is Russia” and “I love Donbas” – referring to the eastern region of Ukraine that Russia has partly occupied and claimed as its own territory in an act rejected as illegal by most countries – gave rise to pictures in the colours of the Ukrainian flag, Mironov said.And the search term “I am a Z-patriot” – referring to the Z motif that Russia has adopted as a military symbol – “generated an image of a creature resembling a zombie”, Mironov wrote on the messaging service Telegram.When Reuters entered the same phrase, the site produced a picture of four young people with their mouths wide open and teeth bared, holding an inaccurately reproduced Russian flag against the background of an onion-domed church.Mironov said it appeared “Kandinsky 2.1” had been based on designs by “unfriendly states waging an informational and mental war” against Russia. He said the risk was that young Russians would form a negative perception of their own country.”They will not know what the national flag of Russia looks like and will assume that Russia is a scientifically backward country,” he wrote.Mironov said he had therefore written to Russia’s prosecutor general to ask him to investigate Sberbank and whether the content produced by “Kandinsky 2.1” was lawful.Reuters has requested comment from Sberbank.Whether or not the complaint is upheld, it is embarrassing for Sberbank at a time when Russia is calling on both citizens and businesses to rally in support of what it calls its “special military operation” in Ukraine.Sberbank has invested heavily in technology in recent years. On Monday it said it had joined the artificial intelligence chatbot race by releasing technology called GigaChat as a rival to ChatGPT, released last year by Microsoft-backed startup Open AI. More

WASHINGTON/SAN FRANCISCO (Reuters) – Of all the facts that have emerged about last month’s two U.S. bank busts – the unanswered warning letters from regulators, the ignored interest-rate risk, the outsized levels of uninsured deposits – one data point in particular continues to stir deep-seated unease among finance officials: 36.That’s roughly the number of hours it took Silicon Valley Bank (SVB) to go from a functioning regional lender to being seized by regulators after the fastest bank run in U.S. history saw $42 billion of deposits yanked in 24 hours, with another $100 billion queued for the door before the California-based bank was shut down. Signature Bank (OTC:SBNY)’s failure took only marginally longer.As regulators at the Federal Reserve and Federal Deposit Insurance Corporation prepare to release a pair of post-mortems on Friday that will lay out what went wrong, the staggering speed of the second- and third-largest U.S. bank failures ever remains a primary focus. Moreover, beyond whether the bank examiners could have been sharper-eyed or tougher-knuckled, the ongoing question of whether they could just have moved faster remains a central concern.”The number 36 has just been, you know, branded in my brain,” Atlanta Fed President Raphael Bostic told Reuters earlier this month. “How should we be thinking about relationships given that speed? And how do we think about protocols given that speed?”Indeed, even as officials put the finishing touches on the two reports, a real-life next test was emerging: First Republic Bank (NYSE:FRC) this week reported more than a $100 billion plunge in deposits in the first quarter, sending its shares sliding to a record low and prompting speculation over the future of the 14th-largest U.S. bank.Bostic, for one, was already gearing up for more. He said he has had conversations with banks in his region about the need for communication and familiarity with the tools they might need in such a circumstance, such as how to access the U.S. central bank’s emergency lending facilities. “I think ultimately, we’ve all got to basically operate like we’re on yellow alert at all times,” he said.’SKUNKS AT THE PARTY’The Fed’s report will focus on SVB, which regulators took over on March 10 after a failed emergency effort to raise capital helped trigger the deposit run.Fed Vice Chair for Supervision Michael Barr has said the review will include policy recommendations, as well as confidential supervisory information that is not usually made public. “I think that any time you have a bank failure like this, bank management clearly failed, supervisors failed and our regulatory system failed,” Barr told U.S. lawmakers in a hearing in March. The FDIC’s report on the supervision of New York-based Signature Bank, which was closed a couple of days after SVB, is also due on Friday. A separate report on the deposit insurance system that FDIC Chair Martin Gruenberg has said will include a rundown of potential reforms is expected by Monday. The supervisory regime at both regulators is under scrutiny from lawmakers on both sides of the aisle who have questioned why bank examiners weren’t more aggressive in pursuing fixes at the failed banks. “The supervisors tend to be the skunks at the party – they are the ones who point out what the deficiencies are,” Sarah Bloom Raskin, a former Fed governor, said at an event held by the Peterson Institute for International Economics on Wednesday. “It appears that there was really a lack of urgency in escalating this through the supervisory channel … That lack of follow-through needs to be examined,” she said.’SIGNIFICANT SUPERVISORY FAILURE’ Some policymakers have argued that rules relaxing the strictest oversight for firms holding between $100 billion and $250 billion in assets, which included SVB and Signature, are also in part to blame.”The lessons (from the reports) aren’t going to be, how to identify the next SVB,” said Kathryn Judge, a professor at Columbia Law School. “It’s how do we allow a bank whose failure threatened the financial system to persist without being subject to more aggressive intervention?” Daniel Tarullo, who headed supervision and regulation at the Fed until 2017, said the correct policy fixes will depend on how much of the blame for the failures is due to the banks’ particularities – far higher proportions of uninsured deposits than is the norm, along with large holdings of long-term securities that lost value as short-term interest rates rose. “One thing for certain … this was a very significant supervisory failure,” Tarullo said at the Peterson Institute for International Economics event on Wednesday. If the banks’ failures and speed with which they occurred are seen as more of a “canary in the coal mine” for problems that could crop up more frequently in the future, bigger changes in the regulatory regime may be needed, he said. More

On Friday the banks’ regulators – the Federal Reserve and the Federal Deposit Insurance Corporation – will publish their accounts of what happened at both institutions, and propose fixes to prevent a repeat. The FDIC will also publish a separate report on deposit insurance by Monday.Here’s what’s expected: THREE REPORTSThe U.S. central bank’s report will focus on Silicon Valley Bank, which regulators shuttered on March 10 after depositors withdrew $42 billion in 24 hours and put in requests for another $100 billion that morning, amounts totaling 85% of the California-based lender’s deposits. Fed Vice Chair for Supervision Michael Barr is leading that review. The FDIC will publish two reports: One on its supervision of Signature Bank (OTC:SBNY), which was closed a couple of days after SVB; the other focusing on the deposit insurance system that FDIC Chair Martin Gruenberg has said will include policy options for coverage levels, excess deposit insurance and the adequacy of the deposit insurance fund. BANK SUPERVISIONWhen a new team of bank examiners at the San Francisco Fed took over day-to-day supervision of SVB in the second half of 2021, they began internally flagging issues at the bank: Liquidity risk, ineffective board oversight, deficient governance, and incorrectly modeled interest-rate risk. The Fed’s report could fill in gaps on when and how this litany of problems was communicated to the bank’s management and board of directors, and up the central bank’s own supervisory chain of command, including to staff at the Fed’s Board of Governors in Washington. Unanswered questions include whether SVB executives took steps to address the concerns, if supervisors called out other risks such as the bank’s heavy reliance on uninsured deposits, and why examiners did not act more urgently or do more to force changes.Barr has said the Fed’s report will include confidential supervisory information, including citations and exam material not typically disclosed.Although less is known about the FDIC’s supervision of New York-based Signature, its report on Friday could lay out whether examiners had flagged issues prior to the bank’s collapse, and if the lender’s management had taken any steps in response. At least in SVB’s case, “flags had been raised, and why more was not done is not currently obvious to me,” said Kathryn Judge, a professor at Columbia Law School. “We will get additional clues” in the reports, she said. BANK REGULATIONBarr has said the Fed’s review will include an assessment of rules finalized in 2019 that relaxed the strictest oversight for firms holding between $100 billion and $250 billion in assets, which included SVB and Signature.Those rules allow banks of SVB’s size to ignore market-driven swings in the value of some of their longer-term securities when reporting capital levels. That masked a drop in their value as interest rates rose and triggered panic among depositors when SVB sold those securities at a nearly $2 billion loss.Barr told Congress in late March that the SVB review will look at whether more stringent rules could have headed off SVB’s risk-management failures. It’s unclear how detailed Barr’s regulatory proposals may be. Before the banking sector turmoil in March, he was already reviewing bank capital requirements that some expected would result in tougher rules for large regional lenders. “I don’t expect the (report’s) recommendations to really get into the nitty gritty of how that tailoring rule or other rules should be changed,” said Todd Phillips, a former FDIC official who is now a fellow at the Roosevelt Institute. “That will be a long process that I imagine was started before this whole fiasco.”Any changes would come slowly. New rules require a public notice and comment period that typically takes months, and once approved often years to be phased in. DEPOSIT INSURANCEThe second FDIC report could provide insight into how officials are thinking about the role of deposit insurance, currently capped at $250,000 per depositor, in financial stability. After the FDIC closed SVB without finding a buyer to assume all of the bank’s deposits, including those exceeding the cap, several other large regional banks were inundated with their own withdrawal requests. Over that weekend authorities moved to insure all of the SVB and Signature deposits, and signaled they would do the same for other failed banks if they posed a systemic risk to the financial system. “The most interesting thing I expect to see is what the FDIC recommends about the deposit insurance cap,” Phillips said. “I think it’ll just be interesting whether they recommend keeping the cap, whether they recommend raising it for some accounts, all accounts.”Some analysts have floated raising the insurance cap for small business accounts used to manage payroll and other transactions. Any changes would need legislation from a deeply divided Congress.OTHER ISSUESLawmakers last month asked Barr about the Fed’s emergency loan facility for banks, known as the discount window, including its opening hours. It is not clear if that is within the scope of the review. Some lawmakers and analysts also expressed concern about the role of social media and mobile banking in the rapid outflow of deposits at SVB and Signature. Although challenging for regulators to address, the Fed and FDIC could weigh in on that matter. More