Singapore bank shares may drag on Evergrande fallout; but analysts don't see direct risk
SINGAPORE banks have limited onshore China exposure and so will likely avoid direct hits from the Evergrande fallout, said analysts. But investors should watch share price impact, as the bank stocks are vulnerable to a drag from negative sentiment.
China’s property giant Evergrande is teetering on bankruptcy as the world's most indebted property developer, buckling under more than US$300 billion of liabilities. It comes as in 2020, China regulators stepped in with new rules to curb excessive leverage taken by developers.
Singapore banks have benefited greatly from Greater China growth for a decade, by tapping on flows between China and Asean. But Hong Kong is a typical entry point, working with network customers, China state-owned enterprises (SOEs) and top-tier corporates. This means limited onshore exposure, said Citi analyst Robert Kong in a report. The non-performing ratios (NPLs) of loans related to their Greater China book are also relatively low.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Booking says room reservations to slow amid Middle-East conflict
CapitaLand India Trust to acquire 2.5 million sq ft of IT buildings in Hyderabad
Block raises annual forecast on resilient consumer spending
Live Nation’s revenue beats estimates as boom in concerts drive ticket sales
Apple profit ebbs as iPhone sales under pressure
DBS customers unable to log into digibank, PayLah! on Thursday