DBS CEO down­plays im­pact of trade war

The Myanmar Times - - Business | International -

SIN­GA­PORE bank DBS Group Hold­ings’ chief ex­ec­u­tive of­fi­cer said fears about the im­pact of the United StatesChina trade war are “some­what overblown” for now as the flow of goods and ser­vices re­mains largely in­tact.

“The di­rect im­pact will not be very ma­te­rial,” chief ex­ec­u­tive of­fi­cer Piyush Gupta said in an in­ter­view with Bloomberg Tele­vi­sion on Tues­day (Nov 6). It’s “very hard to shift sup­ply chains.”

Mr Gupta, 58, spoke on the side­lines of a Bloomberg fo­rum in Sin­ga­pore, where par­tic­i­pants are de­bat­ing the eco­nomic and com­mer­cial ef­fects of trade fric­tion stem­ming from the Trump ad­min­is­tra­tion’s poli­cies.

The stakes are high for DBS, which is among the five big­gest trade fi­nance banks in Asia by mar­ket share, ac­cord­ing to Green­wich As­so­ci­ates re­search.

Mr Gupta said in tech­nol­ogy, for ex­am­ple, it takes three to four years to ad­just man­u­fac­tur­ing sup­ply chains, and even for lower-end goods like re­frig­er­a­tors and vac­uum clean­ers it may take 12 to 18 months. The big­ger con­cern is the po­ten­tial for things like the fi­nan­cial-mar­ket sell-off to cre­ate a “feed­back loop,” he said. South-east Asia’s big­gest bank is keen to seize busi­ness op­por­tu­ni­ties from China’s grow­ing global foot­print, Mr Gupta said.

Most of DBS’s ac­tiv­i­ties “tend to be out­ward bound” in China, where the bank serves cor­po­rate cus­tomers, he said. Pres­i­dent Xi Jin­ping’s Belt and Road in­fra­struc­ture ini­tia­tive and the in­ter­na­tion­al­i­sa­tion of the yuan present op­por­tu­ni­ties, he said.

DBS has ar­ranged eq­uity cap­i­tal fund­ing and real es­tate in­vest­ment trust trans­ac­tions for Chi­nese com­pa­nies out­side their home mar­ket, Mr Gupta said. The do­mes­tic Chi­nese REIT mar­ket could be­come big­ger than the US’s at some point, he added.

Still, he said it will re­main tough for for­eign banks to pen­e­trate the do­mes­tic mar­ket given that they only have a com­bined 1 per cent share. “Your abil­ity to be rel­e­vant to lo­cal com­pa­nies tends to be some­what lim­ited,” he said.

The New Econ­omy Fo­rum is be­ing or­ga­nized by Bloomberg Me­dia Group, a di­vi­sion of Bloomberg, the par­ent com­pany of Bloomberg News.

Photo: EPA

DBS’ CEO Piyush Gupta.

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