Muted ef­fect:

CEO says flow of goods and ser­vices re­mains largely in­tact

The Star Malaysia - StarBiz - - Front Page -

DBS Group Hold­ings Ltd chief ex­ec­u­tive of­fi­cer Piyush Gupta says fears about the im­pact of the US-China trade war are ‘some­what overblown’ for now as the flow of goods and ser­vices re­mains largely in­tact.

SIN­GA­PORE: DBS Group Hold­ings Ltd’s chief ex­ec­u­tive of­fi­cer said fears about the im­pact of the US-China 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,” CEO Piyush Gupta said in an in­ter­view with Bloomberg Tele­vi­sion yes­ter­day.

It’s “very hard to shift sup­ply chains”.

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.

Gupta said that 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, Gupta said.

Most of DBS’ 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 (REIT) trans­ac­tions for Chi­nese com­pa­nies out­side their home mar­ket, Gupta said.

The do­mes­tic Chi­nese REIT mar­ket could be­come big­ger than the US’ 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% share. “Your abil­ity to be rel­e­vant to lo­cal com­pa­nies tends to be some­what lim­ited,” he said.

Mean­while. Europe’s Air­bus SE in­di­cated yes­ter­day that it did not ex­pect a sales wind­fall from trade ten­sions be­tween China and the United States, with the man­u­fac­turer’s China head say­ing there would be “no win­ner” from a pro­longed eco­nomic con­flict.

Air­bus China CEO Ge­orge Xu said such ten­sions would hurt avi­a­tion growth by de­press­ing mid­dle class in­comes.

“I am Chi­nese and we don’t like this kind of trade war,” Xu said at a news con­fer­ence in Zhuhai, China.

“No­body will be the win­ner in this kind of trade war.”

Air­bus has been try­ing to un­lock talks with China over a long-de­layed deal to sell up to 180 jets, and its board in Septem­ber held an un­usual meet­ing in China. — Agen­cies

— AFP

High stakes: Peo­ple mak­ing trans­ac­tions at DBS bank ATMs in Sin­ga­pore. The stakes are high in the en­su­ing China-US trade war for DBS, which is among the five big­gest trade fi­nance banks in Asia by mar­ket share.

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