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Singapore lifts taxes, Deutsche Bank slashes investment banking jobs and most Asian markets return after the Lunar New Year celebrations. Here are some of the things people in markets are talking about.
Singapore tax hikes
The island nation unveiled sweeping new taxes, including lifting property levies and increasing the goods and services tax by 2 percentage points to 9 percent in its latest budget. The government is moving to become less reliant on investment returns as it seeks to shore up savings to cope with a rapidly aging population. The stamp duty on residential properties in excess of S$1 million goes up immediately to 4 percent from 3 percent.
Deutsche Bank job cuts
Germany’s largest lender has begun cutting at least 250 corporate and investment bank jobs globally. Cuts could rise to more than 500, according to one person with knowledge of the matter, as the bank struggles to rein in expenses amid a slump in trading at the securities unit. People with knowledge of the cuts said that in the past two weeks the bank had trimmed senior and mid-level investment banking positions in locations including London and the U.S. The investment bank has been struggling to improve revenues and returns. Trading at the securities unit slumped 27 percent last quarter and fees from advising on deals and arranging debt and equity sales dipped 3 percent. Those declines were coupled with bonus payments that Chief Executive Officer John Cryan said were on the “generous” side, helping push the business into the red.
Hong Kong returns Tuesday after the Lunar New Year break saw stocks power ahead in Asia. Hang Seng Index bulls will be eyeing an ascent back above 32,000 and on toward January's record high. China remains absent until Thursday, but most of the rest of Asia will be back in full swing and eager to see if markets have indeed moved on from the painful corrections at the start of this month. Reserve Bank of Australia minutes and Japanese machine orders are the main highlights in the Asia session. RBA Governor Philip Lowe is expected to reiterate that interest rates probably won’t rise until the unemployment rate falls and inflation returns to the middle of its 2 percent to 3 percent target. Mega earnings that will be closely watched include BHP Billiton, the world's largest miner, Walmart and HSBC.
In the absence of American traders celebrating Presidents’ Day on Monday, U.S. stock futures headed lower as the surge that handed the S&P 500 its best week in five years appeared to fade and before the U.S. Treasury opens its auction floodgates this week. The Stoxx Europe 600 index fell for the first time in four days. Japanese and Aussie futures point downwards. The dollar was steady, oil climbed and Bitcoin briefly broke through $11,000.
Noble’s dire profit warning
The commodity trader unveiled a raft of dismal numbers on Monday that could further complicate its already immense restructuring challenge. The eye-watering figures include fresh write-downs of about $1.5 billion that will mean an annual loss approaching $5 billion, leaving the Asian commodity trader with negative assets of up to $850 million. Of concern to creditors and managers trying to keep the troubled company afloat through the debt restructuring was the $100 million quarterly loss posted by continuing operations, principally coal and iron ore. The businesses are meant to service the remaining debt once lenders take control of Noble through an equity swap. The company has been mired in a three-year crisis marked by losses, writedowns and controversial accounting.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
- The U.K.’s secret plan to withhold Brexit cash to get EU trade deal.
- South African fund manager’s bounty for Guptas.
- Ellerston Capital betting bond market selloff not over yet.
- Hedge funds turning short miss out on tech-stock rally.
- Richard Branson’s Hyperloop transportation plan for India.
- #MeToo may have finally reached corporate Japan.
- Chinese, Indian tourists visiting Australia at record.