Briefs

In an unusual public announcement, the Monetary Authority of Singapore says it is transferring $45 billion from its so-called “official foreign reserves” to be managed by sovereign wealth fund GIC. The central bank explains that the amount represents an excess in reserves beyond what is deemed necessary to maintain confidence in Singapore’s exchange rate policy. OFR managed by MAS as at April 2019 stood at $404 billion, equivalent to 82% of Singapore’s GDP.

Following the latest review of its reserve buffers, MAS says it wants to keep that ratio to a minimum of 65% of GDP from now. This level “will provide a sufficiently strong buffer against stresses in the global economy and markets, and underpin confidence in Singapore’s exchange rate-centred monetary policy”, it says, adding that the current level of OFR “is in excess of that required by MAS”.

Singapore is gearing up for higher government spending in areas such as healthcare and infrastructure. The government has been tapping contributions from MAS, GIC and Temasek Holdings for a growing share of operating revenue each year. Under the so-called Net Investment Returns Contribution framework, these three entities will be chipping in $17.17 billion to the FY2019 budget, up from $16.44 billion in the previous fiscal year. This amount is bigger than the next largest source of government revenue: corporate tax, which is seen to be $16.72 billion, up slightly from $16.14 billion collected in FY2018.

Dyson urges earlier fossil fuel car ban; Singapore plant on schedule

James Dyson has lobbied the UK government to bring forward a 2040 sales ban of fossil-fuel cars by a decade to 2030 as he unveils patents for his first range of electric vehicles, which will be built in a Singapore plant. “My own amateur view of the electric cars market is that it has been underestimated,” says the eponymous founder and CEO of household appliances company Dyson in an interview with the Financial Times. “I believe it’s driven not so much by subsidies as by genuine desire of the public to have silent and non-polluting vehicles.”

Dyson plans to launch the first in a suite of vehicles by 2021, leaping into the increasingly crowded electric-car market, where Elon Musk’s Tesla is battling Chinese start-ups such as NIO and Byton, as well as established carmakers such as BMW and Daimler. “You can build factories much more quickly here [in Singapore] than in other places,” says Dyson.

The manufacturer has an existing facility in Singapore. It announced plans to build electric cars here last October. The Dyson factory for electric car assembly is in the final stages of being designed, and construction work will begin soon, says its CEO.

Trump lost more than US$1 bil in decade to 1994

US president Donald Trump, who campaigned on being a successful businessman, lost more than US$1 billion between 1985 and 1994, reported the New York Times. The sum was calculated using documents obtained from his official Internal Revenue Service tax transcripts, with the figures from his federal 1040 tax form for 1985 to 1994. In 1985, Trump reported US$46.1 million in losses from his business operations. A lawyer representing Trump calls the tax information “demonstrably false” and statements about the returns inaccurate, although no specific errors were identified, reported NYT.

PSA and SATs link ‘yard to port’ deal

Port operator PSA International and airport services provider SATS are collaborating to help cargo owners and logistics services providers improve supply chain efficiency and boost Singapore’s position as a transshipment hub for both air and sea cargo.

PSA and SATS will work together on a wide range of “yard to port” and cross-industry initiatives, where data will be pooled and operating efficiency improved. This will benefit shippers of particular perishables, electronics and e-commerce cargo owners and logistics providers.

Vodafone’s US$7.7 bil merger in Australia with TPG blocked

A planned US$7.7 billion ($10.5 billion) merger of Vodafone Group’s struggling Australian business with TPG Telecom has been blocked by Australian regulators. The news was out via a bungled announcement that was published earlier than planned, before the end of the stock market trading day. On news of the blocked merger, shares of Australia-traded TPG Telecom crashed 14% on May 8.

The merger is seen to “substantially lessen competition” for Australia’s mobile market, according to the Australian Competition and Consumer Commission. TPG was Australia’s best — and probably last — chance to gain a new cellular network operator, ACCC chairman Rod Sims said in the statement.

TPG is also slated to be the latest entrant into the equally saturated mobile market of Singapore. The prospects of this entry have sent the share prices of local telecommunication companies down.

Next BOE governor: Raghuram Rajan?

Renowned economist Raghuram Rajan is reportedly a leading contender to be the next Bank of England (BOE) governor, succeeding Mark Carney later next year, reported Bloomberg News. The current favourite to succeed Mark Carney is Andrew Bailey, head of the UK’s Financial Conduct Authority. Raghuram is a former chief of the Reserve Bank of India (RBI). He is now teaching at the University of Chicago, itself famed for having Nobel Prize in Economics winners among its alumni.

Last year, however, Raghuram said he did not intend to apply for the BOE job. “I have a very good job at the University of Chicago and I actually am an academic, not a professional central banker. I am very happy where I am,” Raghuram told reporters.

Raghuram was the 23rd governor of RBI, between September 2013 and September 2016. From 2003 to 2006, he was chief economist and director of research at the International Monetary Fund. During his time there, he had warned of financial imbalances in the run-up to the 2008 global financial crisis.