Rating agency Standard & Poor's downgraded 34 Italian banks on Friday, including heavyweights UniCredit and Intesa Sanpaolo, citing a reduced ability to roll over their wholesale debt and expected weak profitability.
The move follows S&P's downgrade of Italy's sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries.
In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 -- out of 10 groups -- reflecting its more negative view on Italy's banking system.
"Italy's vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks' significantly diminished ability to roll over their wholesale debt," it said.
"We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital.
We believe this may be negative for the Italian banking industry's stability."
Italian banks have borne the brunt of a sell-off in Italian assets since the euro zone's third-largest economy was dragged into the single currency bloc's debt crisis last summer.
Because of their vast holdings of domestic government bonds, Italy's top five banks have been asked to find some 15 billion euros by June to meet tougher capital requirements set by the European Banking Authority.
Lenders have also been effectively shut out of wholesale debt markets and have increased their reliance on cheap funds from the European Central Bank.
Italian banks tapped a whopping 116 billion euros of nearly 500 billion euros of three-year funds offered by the ECB last December, easing funding strains.
Sunday, 12 February 2012
Singapore Foreign Minister on India's Bihar visit
Singapore Foreign Minister Masagos Zulkifli, currently on a visit to Bihar, today met Deputy Chief Minister Sushil Kumar Modi. Zulkifli, also the Home minister of that country, is now in India and just visited 'Bodh Gaya'. During his meeting with Modi at secretariat he apprised the deputy chief minister about the enthusiasm among the people in Singapore to know about the "development taking place in Bihar," an official release said. Zulkifli invited Kumar and Modi to a seminar being organised in Singapore in September on water management. During his meeting with Modi that lasted for an hour, Zulkifli evinced Singapore's interest for reaching help to Bihar in water management. Zulkifli informed that Singapore, facing acute shortage of drinking water, was involved in recycling and storage of rain water to meet its requirement. He also told Modi that Singapore was ready to assist in setting of the International University of Nalanda. He also wanted to know about the 'success story' of Bihar that led to improvement on law and order front and development of roads and improvement in health care in Bihar. Modi briefed about steps taken for women's empowerment providing them 50 per cent reservation in Panchayati Raj institutions and the 'CM's cycle scheme' which helped in increasing enrollment in government schools. (PTI)
Beijing appreciates Singapore's stance on US-China relations
In remarks made by Singapore's K Shanmugam on the conclusion of his back-to-back introductory visits as foreign minister to the United States and China, he noted that comments he made on the US-China relationship during his visit to Washington were warmly welcomed in Beijing.
Speaking at the Center for Strategic and International Studies’ Singapore Conference in Washington, Shanmugam had offered the United States a warning on anti-China rhetoric. “Americans should not underestimate the extent to which such rhetoric can spark reactions that create a new and unintended reality in the region,” he said.
“It is quite untenable to speak in terms of the ‘containment’ of China… (China) is determined to progress in all fields and take its rightful place in the community of nations,” added Shanmugam.
This was a reiteration of an earlier point Shanmugam made during an earlier visit to the Washington Post, “Containment does not work, will not work... Once you get into Cold War rhetoric, then you get everyone else into a Cold War framework, and it takes on a logic of its own.”
Back home in Singapore, Shanmugam said he was "struck by how carefully [Chinese officials] had read my speech because every single one of them spoke about it some detail", and that he thought "the Chinese leaders appreciated that frankness coming from Singapore which is both a good friend of US and China."
Shanmugam's carefully-worded stance comes three years after Singapore's first prime minister Lee Kuan Yew earned the wrath of Chinese netizens for suggesting that Asia needed the United States "to strike a balance" in the Pacific given the unstoppable rise of China. The response of the Chinese foreign ministry was fairly muted in that incident, however.
While some of Singapore's southeast Asian neighbours have echoed its call to the two giants to not make them choose sides, others, such as the Philippines have recently allowed the US to build a greater military presence, alarmed by China's expansive territorial claims in the South China Sea.
Reports the Shanghaiist
Speaking at the Center for Strategic and International Studies’ Singapore Conference in Washington, Shanmugam had offered the United States a warning on anti-China rhetoric. “Americans should not underestimate the extent to which such rhetoric can spark reactions that create a new and unintended reality in the region,” he said.
“It is quite untenable to speak in terms of the ‘containment’ of China… (China) is determined to progress in all fields and take its rightful place in the community of nations,” added Shanmugam.
This was a reiteration of an earlier point Shanmugam made during an earlier visit to the Washington Post, “Containment does not work, will not work... Once you get into Cold War rhetoric, then you get everyone else into a Cold War framework, and it takes on a logic of its own.”
Back home in Singapore, Shanmugam said he was "struck by how carefully [Chinese officials] had read my speech because every single one of them spoke about it some detail", and that he thought "the Chinese leaders appreciated that frankness coming from Singapore which is both a good friend of US and China."
Shanmugam's carefully-worded stance comes three years after Singapore's first prime minister Lee Kuan Yew earned the wrath of Chinese netizens for suggesting that Asia needed the United States "to strike a balance" in the Pacific given the unstoppable rise of China. The response of the Chinese foreign ministry was fairly muted in that incident, however.
While some of Singapore's southeast Asian neighbours have echoed its call to the two giants to not make them choose sides, others, such as the Philippines have recently allowed the US to build a greater military presence, alarmed by China's expansive territorial claims in the South China Sea.
Reports the Shanghaiist
Thursday, 9 February 2012
Singapore’s Marina Bay Sands Sees More Foreign Gamblers.
A worker directs visitors into the casino during the grand opening of the Marina Bay Sands resort and casino in Singapore.Singapore’s efforts to dampen local demand for gambling may be working – at least according to new numbers from the operator of one of the island’s two casino resorts.
Foreign visitors to Marina Bay Sands, which is run by U.S. gaming group Las Vegas Sands Corp., now account for about four out of five visitors to the resort’s casino, the group’s chairman Sheldon Adelson says.
This suggests a decline in the proportion of local visitors to the US$5.5 billion property to 20% from about 38% indicated by Mr. Adelson in October 2010.
Las Vegas Sands didn’t provide any absolute visitor numbers for its Singapore casino and the company doesn’t regularly disclose the foreign-domestic visitor split.
But analysts say the growth in the foreign share suggests traffic from Singaporeans–a political hot potato in the city-state–is at least stabilizing.
That would be welcome news to lawmakers, who have anxiously watched local patronage at Singapore’s two casinos since they opened in early 2010, and to Marina Bay Sands, which is betting on a greater contribution from Asia’s more lucrative VIP gaming market for earnings momentum.
“The foreigners come in with more money than the local Singaporeans…it’s commonsense that somebody that comes in from a foreign territory will carry more money with them because they’re there less frequently,” Mr. Adelson told analysts in a conference call late Wednesday after his company reported its fourth quarter earnings.
Singapore authorities have sought to temper enthusiasm for the casinos in the nation of five million since gambling was legalized, partly to prevent locals from losing big sums of money and also in response to citizens who oppose the existence of the casinos on moral grounds. Singapore officials have consistently tried to impress on locals that the new casino resort attractions are mostly there to draw in high-end tourism, not help Singaporeans make fast fortunes.
A S$100 entry levy or a S$2,000 annual membership fee applies to citizens and permanent residents.
Locals initially appeared undeterred: in the seven months since the first casino opened, Singaporeans made more than one million trips to the two gaming houses.
But while the cash rush from local punters may have provided a nice tailwind for casino operators, the government has been quick to halt promotional efforts–such as free bus services—designed to reach out to locals.
According to CLSA gaming analyst Aaron Fischer, it makes sense that local demand should level off after the rapid growth of Singapore’s nascent gaming sector in less than two years.
“The key point is really that the mass market or locals is fully penetrated – the incremental growth has to come from overseas visitors,” he said.
Singapore’s gaming success, with its two licensed casinos at Marina Bay Sands and Resorts World Sentosa, has defied the expectations of many cynics and has helped fuel a resurgence in the island’s tourism sector.
The city-state took in S$17 billion in tourism receipts in the nine months to Sept. 30., up 22% from the same period a year earlier while total international visitor arrivals climbed 15% to 9.8 million.
Marina Bay Sands reported US$2.99 billion in gross gaming revenue for 2011, equivalent to almost 50% of the total gaming win for the Las Vegas Strip over the 12 month period to Nov. 30.
The resort’s hotel facilities have also been struggling to keep pace with demand, running at an occupancy rate of 98.8% in the three months ended Dec. 31. Mr. Adelson said he has made requests to the Singapore government for more land to allow his resort to add hotel capacity.
There have been no indications to date the government in the land-poor country will oblige, especially as it continues to monitor the social impact of the new industry on its population.
Foreign visitors to Marina Bay Sands, which is run by U.S. gaming group Las Vegas Sands Corp., now account for about four out of five visitors to the resort’s casino, the group’s chairman Sheldon Adelson says.
This suggests a decline in the proportion of local visitors to the US$5.5 billion property to 20% from about 38% indicated by Mr. Adelson in October 2010.
Las Vegas Sands didn’t provide any absolute visitor numbers for its Singapore casino and the company doesn’t regularly disclose the foreign-domestic visitor split.
But analysts say the growth in the foreign share suggests traffic from Singaporeans–a political hot potato in the city-state–is at least stabilizing.
That would be welcome news to lawmakers, who have anxiously watched local patronage at Singapore’s two casinos since they opened in early 2010, and to Marina Bay Sands, which is betting on a greater contribution from Asia’s more lucrative VIP gaming market for earnings momentum.
“The foreigners come in with more money than the local Singaporeans…it’s commonsense that somebody that comes in from a foreign territory will carry more money with them because they’re there less frequently,” Mr. Adelson told analysts in a conference call late Wednesday after his company reported its fourth quarter earnings.
Singapore authorities have sought to temper enthusiasm for the casinos in the nation of five million since gambling was legalized, partly to prevent locals from losing big sums of money and also in response to citizens who oppose the existence of the casinos on moral grounds. Singapore officials have consistently tried to impress on locals that the new casino resort attractions are mostly there to draw in high-end tourism, not help Singaporeans make fast fortunes.
A S$100 entry levy or a S$2,000 annual membership fee applies to citizens and permanent residents.
Locals initially appeared undeterred: in the seven months since the first casino opened, Singaporeans made more than one million trips to the two gaming houses.
But while the cash rush from local punters may have provided a nice tailwind for casino operators, the government has been quick to halt promotional efforts–such as free bus services—designed to reach out to locals.
According to CLSA gaming analyst Aaron Fischer, it makes sense that local demand should level off after the rapid growth of Singapore’s nascent gaming sector in less than two years.
“The key point is really that the mass market or locals is fully penetrated – the incremental growth has to come from overseas visitors,” he said.
Singapore’s gaming success, with its two licensed casinos at Marina Bay Sands and Resorts World Sentosa, has defied the expectations of many cynics and has helped fuel a resurgence in the island’s tourism sector.
The city-state took in S$17 billion in tourism receipts in the nine months to Sept. 30., up 22% from the same period a year earlier while total international visitor arrivals climbed 15% to 9.8 million.
Marina Bay Sands reported US$2.99 billion in gross gaming revenue for 2011, equivalent to almost 50% of the total gaming win for the Las Vegas Strip over the 12 month period to Nov. 30.
The resort’s hotel facilities have also been struggling to keep pace with demand, running at an occupancy rate of 98.8% in the three months ended Dec. 31. Mr. Adelson said he has made requests to the Singapore government for more land to allow his resort to add hotel capacity.
There have been no indications to date the government in the land-poor country will oblige, especially as it continues to monitor the social impact of the new industry on its population.
Lee Kuan Yew calls for understanding towards immigration policy
SINGAPORE: Former Minister Mentor Lee Kuan Yew has called for the understanding of Singaporeans towards the government's decision to continue taking in immigrants.
Speaking at a Lunar New Year gathering in his constituency of Tanjong Pagar on Friday, Mr Lee said Singapore's per capita income is one of the highest in Asia.
But it faces an ageing and shrinking population. Last year, the birth rate was 1.15, with the Chinese leading the decline among other races.
Mr Lee said Japan also suffers from similar problems. But its decision not to take in migrants has contributed to economic stagnation.
He said: "Our choice must be the other one - taking in immigrants. I know Singaporeans do not feel very comfortable seeing so many strange new faces, but the alternative is economy stagnation and worse, nobody to look after our old people later on."
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