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Bangkok Post
07-07-2025
- Business
- Bangkok Post
Thai Baht's surge at risk from turmoil, top forecaster says
The Thai baht's four-month rally is likely to falter as political turmoil is expected to weigh on the economy, according to the currency's top forecaster. The local currency may trade at 32.30 per dollar at the end of the year and into the first quarter of 2026, said Christoper Wong, senior FX strategist at Oversea-Chinese Banking Corp. That implies the baht would be just 0.7% stronger than its level on Monday, after surging more than 5% in the four months through June. 'In the coming months, slower tourism, subdued domestic demand, political developments and tariff uncertainty are some factors that may hinder the baht's appreciation path,' Wong said in an interview on Friday. 'Relative to other Asian peers, I'm of the view that the baht may continue to stay back-footed.' The outlook comes as a suspension of Prime Minister Paetongtarn Shinawatra from office sparks concern over a delay in the new budget and economic stimulus, potentially worsening the country's already lagging growth. That may prompt the central bank to deliver deeper interest rate cuts, Wong said. Most Asian currencies have strengthened against the dollar in recent months as US growth and fiscal concerns weighed on the greenback. The baht has also typically been supported by gold prices, though a recent breakdown in correlation between the two indicates that domestic issues are of a bigger concern to investors, Wong said. Wong, who has yet to make any client-related work trips to Thailand, was the topped-ranked baht forecaster in the three months through June and the second best in the first quarter, according to data compiled by Bloomberg. The ranking is based on criteria such as margin of error, timing and directional accuracy. Investors are going to wait out how tariffs and politics play out, given that there's 'too much uncertainty to pre-position for,' Wong said.
New Straits Times
06-06-2025
- Business
- New Straits Times
Singapore's Great Eastern proposes delisting with OCBC's US$700mil offer
KUALA LUMPUR: Great Eastern is proposing to delist from the Singapore bourse by way of its largest shareholder Oversea-Chinese Banking Corp offering S$900 million (US$699.9 million) to buy the rest of the insurer it does not already own, according to joint statement and filings on Friday. Trading in Singapore-based Great Eastern's shares was suspended on July 15, 2024, after its free float fell below 10 per cent following an offer by OCBC to acquire an 11.56 per cent stake at S$25.60 apiece in May 2024. OCBC, Singapore's second-largest lender, had obtained acceptance from some shareholders and currently owns 93.72 per cent of Great Eastern. Under the new proposal, it is offering S$30.15 a share for the 6.28 per cent of the insurer's stock that it does not own. The latest offer is 17.8 per cent higher than last year's offer and values Great Eastern at S$14.27 billion. Independent financial adviser EY has assessed the offer is fair and reasonable and OCBC does not intend to revise it, according to the statement. It is OCBC's fourth attempt to fully acquire Great Eastern, following three bids since 2004. OCBC owns 93.72 per cent of the insurer, but that stake still falls short of the threshold needed to delist the company or launch a compulsory acquisition. Two companies controlled by Lee Thor Seng and his sons —members of the founding family behind OCBC — own nearly 2 per cent of Great Eastern, making them the second-largest shareholders, according to the insurer's annual report. Wong Hong Sun and Wong Hong Yen hold about 1 per cent, while Palliser Capital, which has criticised the latest takeover bid as unfair to shareholders, owns a 0.27 per cent stake, the report showed. Great Eastern proposed the delisting after assessing options available to resolve its shares trading suspension. The delisting offer is conditional upon at least 75 per cent backing from minority shareholders. OCBC will not be able to vote. If delisting cannot be achieved, Great Eastern would seek shareholders' approval on a second proposal to restore its free float by way of a one-for-one bonus issue comprising new listed shares with voting rights, and new non-listed shares without voting rights. According to the statement, OCBC intends to vote in favour of the bonus issue if the delisting proposal is not approved. OCBC would opt to receive the non-voting shares, which would dilute the bank's shareholding in Great Eastern to 88.19 per cent to help restore the free float and a resumption in trading.
Straits Times
22-05-2025
- Business
- Straits Times
Ringgit may gain most in South-east Asia on exporter conversion
The Malaysian ringgit was the second-biggest gainer among emerging market currencies in South-east Asia so far this year with a rise of 5 per cent. PHOTO: ST FILE SINGAPORE – Malaysia's ringgit stands to gain the most among its South-east Asian peers if the nation's exporters convert their overseas earnings to the local currency, thanks to the nation's outsized foreign-currency deposits. Such deposits in Malaysia, Thailand, the Philippines and Indonesia combined have jumped to US$62.2 billion (S$80.53 billion) as of March, close to a record high set in the previous month, according to Bloomberg calculations. Malaysia made up almost all of it and the nation's foreign deposit growth also outpaced most of its peers. Foreign deposits in the region are coming under greater focus as investors watch for signs of companies converting them to local currencies, as market perception of the dollar sours due to concern over US policymaking and its economic outlook. Heavy foreign-exchange sales by Taiwanese exporters earlier this month helped the local dollar post its biggest single-day jump since 1988. 'Acceleration in broad dollar softness may risk triggering exporters rushing to sell their dollar holdings and that cycle, if it happens, it may result in excessive local currency strength,' said Mr Christopher Wong, a senior foreign-exchange strategist at Oversea-Chinese Banking Corp. Most major South-east Asian currencies have already rallied to their highest levels this year amid the dollar's decline and as a temporary trade truce between the US and China improved market sentiment. While excessive currency gains may invite the ire of local authorities, some appreciation may be welcomed as it would open the door for further interest-rate cuts by reducing the depreciation pressure on local currencies. The Malaysian ringgit was the second-biggest gainer among emerging market currencies in South-east Asia so far this year with a rise of 5 per cent. Earlier this year, the nation's policymakers urged exporters to convert their earnings into ringgit in a more timely manner to help buoy the local currency. Malaysia's foreign deposits grew to 10.6 per cent of the total as of March, according to latest data from the nation's central bank. That is 1.6 standard deviations higher than the five-year average. The same gauge for Thailand, the Philippines and Indonesia stood at 2, 1.3 and 1.1, respectively. South-east Asian investors loaded up on dollar-denominated investments during a period of rising returns on US assets. The US Federal Reserve's aggressive rate hike cycle in 2022 and 2023 took the upper bound of the Fed fund rate to 5.50 per cent – higher than even the policy rates in Thailand and Malaysia. Currency returns provided another incentive, with the Bloomberg Dollar Spot Index rising 10.5 per cent in the five years to the end of 2024. While investors have pared extreme bearishness over dollar assets seen in April – when US President Donald Trump announced reciprocal tariffs and spurred doubts over the Fed's independence – the US fiscal stance is giving investors another reason to shun the greenback. 'Asian exporters should continue to convert their dollars into local currencies, after several years of building up dollar deposits,' Goldman Sachs Group strategist Danny Suwanapruti wrote in a note last week. The bank favors the ringgit, Singaporean dollar, won and the Taiwanese dollar if trade deals are reached, the yuan rallies to 7 per dollar and if exporters continue to sell the greenback. BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
Malaysian Reserve
22-05-2025
- Business
- Malaysian Reserve
Ringgit may gain most in Southeast Asia on exporter conversion
MALAYSIA'S ringgit stands to gain the most among its Southeast Asian peers if the nation's exporters convert their overseas earnings to the local currency, thanks to the nation's outsized foreign-currency deposits. Such deposits in Malaysia, Thailand, the Philippines and Indonesia combined have jumped to $62.2 billion as of March, close to a record high set in the previous month, according to Bloomberg calculations. Malaysia made up almost all of it and the nation's foreign deposit growth also outpaced most of its peers. Foreign deposits in the region are coming under greater focus as investors watch for signs of companies converting them to local currencies, as market perception of the dollar sours due to concern over US policymaking and its economic outlook. Heavy foreign-exchange sales by Taiwanese exporters earlier this month helped the local dollar post its biggest single-day jump since 1988. 'Acceleration in broad dollar softness may risk triggering exporters rushing to sell their dollar holdings and that cycle, if it happens, it may result in excessive local currency strength,' said Christopher Wong, a senior foreign-exchange strategist at Oversea-Chinese Banking Corp. Most major Southeast Asian currencies have already rallied to their highest levels this year amid the dollar's decline and as a temporary trade truce between the US and China improved market sentiment. While excessive currency gains may invite the ire of local authorities, some appreciation may be welcomed as it would open the door for further interest-rate cuts by reducing the depreciation pressure on local currencies. The Malaysian ringgit was the second-biggest gainer among emerging market currencies in Southeast Asia so far this year with a rise of 5%. Earlier this year, the nation's policymakers urged exporters to convert their earnings into ringgit in a more timely manner to help buoy the local currency. Malaysia's foreign deposits grew to 10.6% of the total as of March, according to latest data from the nation's central bank. That's 1.6 standard deviations higher than the five-year average. The same gauge for Thailand, the Philippines and Indonesia stood at 2, 1.3 and 1.1, respectively. Southeast Asian investors loaded up on dollar-denominated investments during a period of rising returns on US assets. The Federal Reserve's aggressive rate hike cycle in 2022 and 2023 took the upper bound of the Fed fund rate to 5.50% — higher than even the policy rates in Thailand and Malaysia. Currency returns provided another incentive, with the Bloomberg Dollar Spot Index rising 10.5% in the five years to the end of 2024. While investors have pared extreme bearishness over dollar assets seen in April — when President Donald Trump announced reciprocal tariffs and spurred doubts over the Fed's independence — the US fiscal stance is giving investors another reason to shun the greenback. 'Asian exporters should continue to convert their dollars into local currencies, after several years of building up dollar deposits,' Goldman Sachs Group Inc. strategist Danny Suwanapruti wrote in a note last week. The bank favors the ringgit, Singaporean dollar, won and the Taiwanese dollar if trade deals are reached, the yuan rallies to 7 per dollar and if exporters continue to sell the greenback. –BLOOMBERG
New Straits Times
22-04-2025
- Business
- New Straits Times
Singapore stocks headed for sixth day of gains; Asian currencies slip
KUALA LUMPUR: Singapore stocks rose for a sixth straight session on Tuesday, marking their longest winning streak in over four months, while recent gains in emerging Asian currencies fizzled out as the dollar steadied after a sharp drop. Singapore's Straits Times index rose up to 1.7 per cent, their highest since April 4, driven by top banks DBS Group and Oversea-Chinese Banking Corp. The city-state's defensive and high-yielding stocks, once sidelined for their limited growth outlook, have drawn renewed interest from foreign investors seeking steadiness through rampant volatility. "Singapore can be viewed as a safe haven in the current turbulent environment. It has an attractive dividend yield, resilient currency and multi sectors that are not directly exposed to tariffs," said Paul Chew, Head of Research at Phillip Securities. Investors were likely to remain focused on defensive sectors, with global markets expected to stay volatile in the coming months, said Carmen Lee, Head of OCBC Investment Research. Elsewhere in Southeast Asia, markets were mixed, with Jakarta up 0.9 per cent and Bangkok flat, while Taiwan fell 1.6 per cent to a near two-week low, tracking weak cues from Wall Street. In Malaysia, both the ringgit and the local benchmark index were trading in the red after an advance print on Monday showed gross domestic product moderating in the first quarter and prompted brokerages to revise their annual growth expectations. Brokerages Barclays and CGS International Securities downgraded their annual gross domestic product growth estimates for Malaysia, while Citigroup saw "downside risks" to annual growth. Currencies in the Philippines and Taiwan edged lower after hitting multi-month highs in earlier sessions. The South Korean won drifted marginally higher. Mizuho Bank's chief Asian FX strategist, Ken Cheung Kin Tai, said the lingering concerns over US reciprocal tariffs and US recession could dampen the risk appetite for emerging currencies. The Indonesian rupiah, among the worst-performing emerging market currencies globally, has depreciated around 5 per cent this year amid concerns over fiscal spending plans and capital flight driven by tariff fears. The currency was trading 0.3 per cent lower ahead of Bank Indonesia's policy decision on Wednesday, where the central bank is widely expected to stay pat on interest rates. The US dollar was trading 0.2 per cent lower at 98.18.
