Aurelia Butler

It said an earlier routine inspection had found some insurance institutions had serious compliance issues. Institutions now have to formulate rectification plans – including holding accountable staff responsible for violations or lapses – deeply analyse the root causes of problems, re-examine assets and promote reasonable capital replenishment, the newspaper said. More

BENGALURU (Reuters) – Australia’s soaring house price inflation rate will lose altitude next year and in 2023, but prices are still expected to rise in one of the hottest property markets in the world, a Reuters poll has found.In response to the pandemic-induced economic slowdown, the Reserve Bank of Australia slashed interest rates to a record low and flooded the financial system with cash — a potent stimulus for a housing market in which prices have nearly doubled since the global financial crisis of 2007-09.That property boom has been a windfall for existing homeowners but has made housing unaffordable for many, widening the divide between those with substantial home equity and those struggling to put together a deposit to get on the property ladder.”The Australian housing market is in the twilight of an incredible boom that has been fuelled by record low mortgage rates. The phenomenal lift in prices is not over yet given dwelling prices are still rising briskly in most capital cities,” said Gareth Aird, head of Australian economics at CBA.Average growth in home prices was expected to slow to 6.0% next year after surging an estimated 18.0% this year, according to a Nov. 18-24 Reuters survey of 11 property analysts. Those estimates were largely unchanged from an August poll.But that blistering pace of house price appreciation was expected to slow dramatically to 2.0% in 2023 and 2024, roughly matching core consumer price inflation. Four analysts predicted outright falling house prices in 2023, ranging from -2.5% to -10.0%.”We expect an orderly correction in home prices of around 10% in 2023. The extent to which prices correct lower will depend in large part on the speed and magnitude at which the RBA lifts the cash rate,” CBA’s Aird added.Asked what would have the biggest impact on house prices next year, six of nine property market analysts said higher interest rates or tighter monetary policy. The remaining three cited supply constraints, lower immigration and macro-economic policy.Eight analysts who answered a follow-up question on how many basis points of interest rate hikes would significantly slow housing market activity gave a median forecast of 100, with predictions in a range of 25-400 basis points.”If the RBA hiked rates by nearly 200bp as the financial markets were anticipating until recently, households’ debt servicing burden would hit an all-time high and housing would become the least affordable since the global financial crisis,” said Marcel Thieliant, economist at Capital Economics.”That would slow the recovery in consumption and could prove a formidable headwind to the housing market.”The RBA’s cash rate is not set to rise from a record low of 0.10% until 2023 according to the latest Reuters poll https://www.reuters.com/article/australia-economy-rates-idUSL4N2RN1DH of economists.But affordability is an increasing problem for a majority of first-time homebuyers as prices have climbed well beyond their reach. Six of nine analysts who answered a question about affordability over the next 2-3 years said it would worsen. The remaining three said it would improve.”Affordability constraints are biting, new listings have lifted strongly, and macroprudential tightening and higher mortgage rates are set to constrain lending over the coming year,” said Adelaide Timbrell, senior economist at ANZ.”And while a return to immigration in 2022 will be a plus, these negatives are likely to more than offset that positive.” More

MEXICO CITY (Reuters) – The Mexican government’s pick to be the next central bank governor, Victoria Rodriguez, said on Wednesday that if ratified in the post, she was committed to combating inflation and would not touch Mexico’s international reserves.Rodriguez spoke in a brief video address flanked by Finance Minister Rogelio Ramirez de la O. More

Rodriguez would be the bank’s first female governor.The turn of events rattled investors wary of politicization of the monetary authority, whose governor has straddled the terms of presidents from rival administrations in the past.Here are a few facts about Rodriguez: * She has extensive financial experience, mainly in the areas of public budget and debt management, according to a short bio shared by the finance ministry’s press office. * She holds a degree in economics from the prestigious Tec de Monterrey (ITESM) university and a master’s degree in economics from the Colegio de Mexico. * So far, Rodriguez, who would be the fifth governor since the bank became independent in 1994, has kept a low profile, making few public appearances and declining interview requests. * She was deputy finance minister under then-Mexico City Mayor Miguel Ángel Mancera from 2012 to 2018. * Rodriguez also served as a finance and budget official with the Mexico City government between 2009 and 2011, in addition to a previous post heading finances for the capital’s subway system. * Former Finance Minister Arturo Herrera’s predecessor Carlos Urzua had in 2018 nominated Rodriguez https://www.reuters.com/article/uk-mexico-economy-rodriguez-exclusive-idUKKCN1NW06B as his deputy responsible for public spending. * Initially, she had been tapped to serve as director of the finance ministry’s budget control unit, a less senior post, but moved up after Gerardo Esquivel was picked to serve on the central bank’s board. * If ratified by the Senate, Rodriguez will take charge with annual inflation at 7.05% for the first half of November, after already having risen steadily this year beyond the bank’s 3% target. * Following the news of Lopez Obrador’s change of mind, Mexico’s peso further weakened against the dollar on Wednesday, hitting an eight-month low. More

Announcing a plan to rebrand government-owned development investment company CDC as British International Investment (BII), the Foreign Office said the move was part of a strategy to deepen economic, security and development ties globally.”Too many countries have become indebted with strings-attached investment and we want to provide an honest, reliable alternative that is going to enable those countries to grow,” Foreign Secretary Liz Truss told Reuters ahead of Thursday’s launch at an event at the London Stock Exchange.BII will have 9 billion pounds ($12 billion) of finance by 2025, Truss said. Alongside continuing with CDC’s current remit of Africa and South Asia, BII will also invest in low and middle income countries in the Indo-Pacific and Caribbean.It will be headed by Diana Layfield, President, EMEA Partnerships at Google (NASDAQ:GOOGL), and will also partner with capital markets and sovereign wealth funds to scale up financing, the government said.Established in 1948, CDC has investments in more than 1,000 businesses in emerging economies, with total net assets of 6.8 billion pounds and a portfolio of 5.2 billion pounds.Truss said the BII would focus on investing in the transition to clean energy and the infrastructure to support that, and she expected the investments would also have trade benefits for Britain over time.”It goes very much hand in hand with our trade agenda,” she said. “This is all about helping countries get the trade and investment they need to be able to stand on their own feet. To be able to give opportunities to people in those countries to set up enterprises, to grow, develop and ultimately become more prosperous.” ($1 = 0.7503 pounds) More

OTTAWA (Reuters) – Canadian housing prices are set to surge again in the coming months as investors and first-time buyers scramble to buy before interest rates go up, ignoring a warning from the Bank of Canada that there is a high risk of a sudden price drop.Central bank Deputy Governor Paul Beaudry told would-be home buyers on Tuesday to consider if it is a “good time to buy or not,” pointing to market frothiness in certain cities and renewed investor activity.Those conditions could “expose the market to a higher chance of a correction,” he said.The Bank of Canada last month signaled the overnight rate, currently at a record low 0.25%, could start rising in the “middle quarters” of 2022. Another rush to buy is probably already under way, analysts said.”Whenever interest rates start rising, people get into the market, including investors. So you will see an acceleration in activity over the next few months,” said Benjamin Tal, deputy chief economist at CIBC Capital Markets.Canadian house prices skyrocketed 31.6% year-over-year in March to hit a record high before softening a bit over the summer. Prices are now accelerating again, with October’s average price barely below the March peak.Ratings agencies are taking notice. Fitch has pegged Toronto’s housing market at 32% overvalued and Vancouver’s at 23%. Moody’s (NYSE:MCO) Analytics also has Vancouver 23% overvalued, Toronto 40% and Hamilton, Ontario, 73%.The average price of a home in Toronto, Canada’s biggest city, hit C$1.2 million ($947,493) in October, up 19.3% from the previous year, and detached homes now average C$1.5 million.Canadian Prime Minister Justin Trudeau has pledged to act on the runaway market, but critics note prices have climbed 77% nationwide since he took office in 2015.Toronto mortgage broker Ron Butler says he is getting busier by the hour with clients desperate to get into the market.”We see it, literally, hourly here … people who have simply given up and say: ‘The prices are going to go up forever, I have to buy now,'” he said. Butler said he is working with one longtime Toronto renter who has been waiting years for prices to fall so he could get into the market. Now he is buying an hour’s drive west in Hamilton because he is worried he will never own a home otherwise.Fear “is not a good motivator when you’re buying a house,” said Butler, adding that investors too are increasingly gripped by the “fear of missing out,” or FOMO.’RUSH TO BEAT RATE HIKES’Butler estimates that investors – those who buy properties to rent out or to hold for speculative gains – make up about 25% of housing demand at this point, with that number far higher in major cities and particularly in pre-sale condo markets.The Bank of Canada said investor buying has doubled since the onset of the COVID-19 pandemic, but economists see demand holding up. “We don’t expect a collapse. But we see prices being close to flat next year,” said Jimmy Jean, chief economist at Desjardins Group in Montreal, adding that demand is expected to remain “pretty decent,” pointing to strong immigration.Doug Porter, chief economist at BMO Capital Markets, also expects a short-term “rush to beat rate hikes,” but then only a moderate pullback in markets that were supercharged by the pandemic. “The history of the last 15 years has been cluttered with those calling for a crash in the Canadian housing market to be proved wrong time and time again,” Porter said. ($1 = 1.2665 Canadian dollars) More

The UK is to overhaul its development investment arm in a move designed to counterbalance China’s influence in emerging countries by offering “alternatives” to taking on “strings-attached debt”. Liz Truss, UK foreign secretary, will launch British International Investment (BII) on Thursday, a body that will leverage private capital to invest in countries across Asia, Africa and the Caribbean, offering an alternative to Chinese loans, which are seen by some in the west as a tool to spread Beijing’s influence.The BII is a revamped version of the government’s Commonwealth Development Corporation Group, which has been historically criticised for investing in purely commercial projects, such as hotels and shopping centres, and for concentrating on more advanced economies. Under plans for the BII, which will be launched at the London Stock Exchange, the UK will mobilise at least £9bn of investment a year by 2025. Officials said this would include partnering with capital markets and sovereign wealth funds to scale up financing and help the private sector move in.Truss told the Financial Times in an interview that the new body would prioritise infrastructure investment, offering low- and middle-income countries “alternatives” to taking on “strings-attached debt from autocratic regimes” and non-market economies. She signalled that using economics as a foreign policy tool to exert more global influence was a “core part of the Global Britain agenda”. Truss added: “We want to build a network of liberty around the world with our friends and partners. That involves closer economic partnerships. It’s a positive agenda. It’s not a confrontational agenda. It’s about giving countries alternatives.”Joe Biden, US president, has led calls for a “build back better world” plan that will offer poorer countries a new source of infrastructure finance, providing a “democratic” alternative to Chinese loans. In June, leaders at the G7 summit in Cornwall backed a western rival to China’s Belt and Road Initiative — Beijing’s pledge to spend about $1tn on building infrastructure in developing countries — with a plan to deploy billions of dollars to help poorer countries tackle climate change. “The overall ‘build back better world’, which is a number of different countries working together to create reliable, honest investment around the world, is about pulling more countries or more investment into the positive circle of influence,” Truss said.

The CDC, the UK’s development finance institution, received £650m from the UK government in 2020 as part of a gradual shift of UK development funds into so-called impact investments, which also bring a commercial return. Over the past 10 years it has received about 3 per cent of Britain’s overseas development budget.Officials said the exact amount of funding the new BII would receive would depend on a “range of factors” and would be agreed by the government in the new year.“More money for developing countries, especially focused on infrastructure and green investment, is a good thing,” said Ranil Dissanayake, a policy fellow at the Center for Global Development think-tank.“But the inference that this will allow countries to replace Chinese debt is pure rhetoric — £9bn a year is peanuts compared to the size of the Chinese Belt and Road Initiative.“The most valuable part of this idea is the concept of the UK acting as a catalyst to encourage private sector investment and drive down the cost of new technologies. It is through this that British innovation could indeed compete with the brute force financing methods of China.”A China hawk, Truss has previously railed against “economic coercion”, especially with regard to some of Beijing’s controversial trading practices. The BII would operate under a defined set of clear standards, Truss said. “Standards over transparency, standards over property rights, and standards over the protection of personal freedoms.“That will help those countries get the infrastructure and other finance they need to develop in a way that doesn’t have the strings attached or the opacity of other finance offers.” More