Kenya readies 2bn bond sale as public debt rises

The good news is that yields in US Treasury securities may be near their peak. The bad news is that makes the recession I’ve been forecasting since February more likely. The current campaign by the US Federal Reserve to raise its main policy interest rate — the overnight federal funds rate — in response to rapid inflation normally precipitates a business downturn. Since the central bank adopted this measure in 1954, there have been 11 recessions, and only three exceptions, or soft landings — in 1966, 1984 and 1996. A soft landing occurs as the central bank lowers the funds rate after a series of increases with no recession unfolding. Until the Fed cuts rates, it’s uncertain as to whether its credit-tightening campaign is over or has merely paused. My analysis of post-World War II history reveals that a 100-basis-point rise in the funds rate is linked to a 36-basis-point rise in the 10-year Treasury note yield, and a 24-basis-point increase in the 30-year Treasury bond yield. … [Read more...] about Bond market rally signals an impending economic recession

Bloomberg filepix for illustration purpose only - A + A HONG KONG (June 30): In 1996, the year before Hong Kong’s historic return to Chinese rule, two property tycoons from the British colony — Lee Shau Kee and Li Ka-shing — broke into the list of the world’s top 10 richest people for the first time. A quarter century later, that exclusive club no longer features anyone from the city, showing how the territory has failed to keep up with creating wealth. Despite being touted as one of the world’s freest markets, Hong Kong has barely seen any new homegrown billionaires reach the world’s top 500 in the past 25 years, barring a handful, including a son of Li’s and some mainland entrepreneurs with local citizenship running businesses outside Hong Kong. The reason, in part, is due to the special role real estate has continued to play in Hong Kong’s US$368 billion economy. Under a colonial-era policy, the government for decades has relied heavily on land auctions to … [Read more...] about Hong Kong’s broken billionaire factory shows city losing step

This article first appeared in The Edge Malaysia Weekly, on June 20, 2022 - June 26, 2022. - A + A ALL eyes are on RHB Banking Group’s newly minted group managing director (MD) and group CEO Mohd Rashid Mohamad as he steers the fourth-largest banking group by assets forward in a tough operating landscape. “It’s very challenging, especially now in a fast-changing market environment, and as we face potential risks such as geopolitical and inflationary,” acknowledges Rashid in his first exclusive interview as group MD/CEO. Competition has intensified, given new entrants into the market, which are not just new banks but also technology companies that compete for the same pie. Rashid adds that this has partly affected the profitability of the industry, along with many other factors. He notes that banks globally no longer see “high ROEs” as before. For RHB Bank Bhd, its return on equity (ROE) in the past 10 financial years hit a high of 13.4% in FY2012 before … [Read more...] about Cover Story: RHB’s Game Plan in ‘fast-changing’ new normal