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Will we see home loan mortgage rates in Singapore drop to below 3% interest rates next year in 2024?
Recently, memories of the global financial crisis came flooding back to investors and the public as bank shares across many parts of the world dived at the news of three American banks collapsing one after another within approximately one week raising fears of a banking contagion in the making.
It started with Silicon Valley Bank, Silvergate and Signature Bank in New York and most recently the 2nd largest bank in Switzerland - Credit Suisse, a powerful bank that were deemed to be too big to fail by The Financial Stability Board (FSB) that has shortlisted 30 super important banks globally popularly known as Global Systemically Important Banks (G-SIBs). These 30 G-SIB banks are vital to the world's financial banking system and whose potential failure of any of these banks could have a systemic impact on the global financial system.
What is a Banking Contagion?
With 4 well established banks collapsing in a matter of days across America and Europe, global markets fear that other banks will continue to fail one after another impacting the banking and financial industry in a term we call "Banking Contagion" or the potential for depositors' fears about bank safety to migrate to other institutions, causing more bank runs and additional failures. No central bank will want to see such a situation.
"Even though the American and Swiss governments step in to bailout these failed banks in their efforts to contain this Banking Contagion, people wonder whether more banks are hiding unpleasant surprises. and are afraid of what they don't know." said real estate professional Kiwi Lim.
"Credit Suisse is the main shocker being among the 30 G-SIBs that is evaluated to have a high systemic importance to world banking and financial operations. Since bank runs are a crisis of confidence and confidence is at a low now, I expect to hear more news of bank failures among the thousands of small and regional banks in the United States and Europe in the upcoming months."
UBS bank appeared as the knight in white armour by agreeing to buy over rival Credit Suisse in an eleventh-hour merger engineered by the Swiss government, as the world’s central banks tries to reassure investors about the health of the banking system. Credit Suisse was 'super cheaply sold' to UBS at a bargain price of 3 billion Swiss francs (S$4.34 billion) and UBS will assume up to US$5.4 billion in losses in a deal expected to close by the end of 2023.
It started with Silicon Valley Bank, Silvergate and Signature Bank in New York and most recently the 2nd largest bank in Switzerland - Credit Suisse, a powerful bank that were deemed to be too big to fail by The Financial Stability Board (FSB) that has shortlisted 30 super important banks globally popularly known as Global Systemically Important Banks (G-SIBs). These 30 G-SIB banks are vital to the world's financial banking system and whose potential failure of any of these banks could have a systemic impact on the global financial system.
What is a Banking Contagion?
With 4 well established banks collapsing in a matter of days across America and Europe, global markets fear that other banks will continue to fail one after another impacting the banking and financial industry in a term we call "Banking Contagion" or the potential for depositors' fears about bank safety to migrate to other institutions, causing more bank runs and additional failures. No central bank will want to see such a situation.
"Even though the American and Swiss governments step in to bailout these failed banks in their efforts to contain this Banking Contagion, people wonder whether more banks are hiding unpleasant surprises. and are afraid of what they don't know." said real estate professional Kiwi Lim.
"Credit Suisse is the main shocker being among the 30 G-SIBs that is evaluated to have a high systemic importance to world banking and financial operations. Since bank runs are a crisis of confidence and confidence is at a low now, I expect to hear more news of bank failures among the thousands of small and regional banks in the United States and Europe in the upcoming months."
UBS bank appeared as the knight in white armour by agreeing to buy over rival Credit Suisse in an eleventh-hour merger engineered by the Swiss government, as the world’s central banks tries to reassure investors about the health of the banking system. Credit Suisse was 'super cheaply sold' to UBS at a bargain price of 3 billion Swiss francs (S$4.34 billion) and UBS will assume up to US$5.4 billion in losses in a deal expected to close by the end of 2023.
The FSB's list in 2022 revealed 30 G-SIBs - globally significant banks
30 Global Systemically Important Banks" (G-SIBs)
The Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, maintains a list of "global systemically important banks" (G-SIBs) that are considered to be the most systemically important institutions.
Global Systemically Important Banks (G-SIBs) are banks that are deemed to be too big to fail and whose potential failure could have a systemic impact on the global financial system. The Financial Stability Board (FSB) is responsible for identifying G-SIBs on an annual basis.
FSB member authorities apply the following requirements to G-SIBs:
The Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, maintains a list of "global systemically important banks" (G-SIBs) that are considered to be the most systemically important institutions.
Global Systemically Important Banks (G-SIBs) are banks that are deemed to be too big to fail and whose potential failure could have a systemic impact on the global financial system. The Financial Stability Board (FSB) is responsible for identifying G-SIBs on an annual basis.
FSB member authorities apply the following requirements to G-SIBs:
- Higher capital buffer: The G-SIBs are allocated to buckets corresponding to higher capital buffers that they are required to hold by national authorities in accordance with international standards. Total Loss-Absorbing Capacity (TLAC): G-SIBs are required to meet the TLAC standard, alongside the regulatory capital requirements set out in the Basel III framework.
- Resolvability: These include group-wide resolution planning and regular resolvability assessments.
- Higher supervisory expectations: These include supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls.
Governments can play a significant role in preventing a banking contagion through a variety of measures, for example:
As of now, America is debating if they need to temporarily expand Federal Deposit Insurance Corporation (FDIC) coverage to all deposits, a move sought by a coalition of banks arguing that it is needed to head off a potential financial crisis. This is a big authorities do not yet view such a move as necessary, especially after regulators took steps this month to help banks keep up with any demands for withdrawals but they too worry in case the situation worsens.
Deposit insurance is a tightrope act. On the one hand, a full deposit insurance that covers all deposits regardless of amount can significantly reduce the incidence of bank runs or even stop runs altogether in countries with strong institutions and proper safeguards. On the other hand, when not done carefully, such explicit deposit insurance can fuel bank crises by giving banks perverse incentives to take unnecessary risks.
- Bailouts: Governments can provide financial assistance to troubled banks by injecting capital or buying their assets to keep them afloat. This can help stabilize the financial system and prevent a wider economic crisis.
- Regulation: Governments can introduce regulations to ensure that banks operate in a safe and sound manner. This can include requirements for banks to maintain sufficient capital and liquidity, conduct regular stress tests, and adhere to strict lending standards.
- Deposit insurance: Governments can also provide deposit insurance to protect customers' deposits in case of bank failures. This can help maintain confidence in the banking system and prevent bank runs.
- Coordination: Governments can work together with other countries or with large banks to coordinate their responses to bank crises. This can involve sharing information, providing assistance to each other's financial systems, and collaborating on international regulatory standards.
As of now, America is debating if they need to temporarily expand Federal Deposit Insurance Corporation (FDIC) coverage to all deposits, a move sought by a coalition of banks arguing that it is needed to head off a potential financial crisis. This is a big authorities do not yet view such a move as necessary, especially after regulators took steps this month to help banks keep up with any demands for withdrawals but they too worry in case the situation worsens.
Deposit insurance is a tightrope act. On the one hand, a full deposit insurance that covers all deposits regardless of amount can significantly reduce the incidence of bank runs or even stop runs altogether in countries with strong institutions and proper safeguards. On the other hand, when not done carefully, such explicit deposit insurance can fuel bank crises by giving banks perverse incentives to take unnecessary risks.
Will Singapore's Home Mortgage Rates Fall Below 3% Next Year?
"I believe The Federal Reserve may reverse their plans and decide to lower interest rates towards the end of 2024 as inflation, employment rates, GDP growth are expected to fall next year amidst weak global economic conditions widely linked to the sharp rise in borrowing costs. We all know The Federal Reserve's primary goal is to maintain stable prices and maximum employment, and they adjust interest rates to achieve these goals. If inflation is low and the unemployment rate is high, the Fed may lower interest rates to stimulate economic growth and increase employment." said market observer - Kiwi Lim.
"The Fed's decision-making process is complex and takes into account many different factors, so it's difficult to predict with certainty whether they will lower rates in 2024. But in my own opinion, there is a very high possibility where we may see home loan mortgage rates in Singapore drop to below 3% interest rates from 3rd quarter of next year 2024 onwards as The Fed tries to stabilise the banking and financial markets as well as providing a boost to the largest economy in the world"
"I believe The Federal Reserve may reverse their plans and decide to lower interest rates towards the end of 2024 as inflation, employment rates, GDP growth are expected to fall next year amidst weak global economic conditions widely linked to the sharp rise in borrowing costs. We all know The Federal Reserve's primary goal is to maintain stable prices and maximum employment, and they adjust interest rates to achieve these goals. If inflation is low and the unemployment rate is high, the Fed may lower interest rates to stimulate economic growth and increase employment." said market observer - Kiwi Lim.
"The Fed's decision-making process is complex and takes into account many different factors, so it's difficult to predict with certainty whether they will lower rates in 2024. But in my own opinion, there is a very high possibility where we may see home loan mortgage rates in Singapore drop to below 3% interest rates from 3rd quarter of next year 2024 onwards as The Fed tries to stabilise the banking and financial markets as well as providing a boost to the largest economy in the world"
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Only about 36 per cent of respondents in Singapore felt optimistic and confident that they will be better off financially in five years’ time, according to a recent survey conducted by global communications consultancy firm Edelman. This is the lowest level of economic optimism in the 23 years that the firm has conducted the annual global 2023 Edelman Trust Barometer survey, down seven percentage points from a year ago, according to the 2023 Edelman Trust Barometer report released on 15 March, Wednesday.
This compares with 40 per cent global average across 24 markets. “Nearly half of the countries surveyed (showed) a year-over-year double-digit decline in the belief that their families will be better off in five years’ time,” said Edelman in a statement on the 2023 report.
Conducted in November 2022 by the Edelman Trust Institute, the 23rd edition of the Edelman Trust Barometer survey involved 32,000 individuals in 28 countries including Singapore, where a total of 1,135 individuals aged 18 or older residing in Singapore were interviewed.
The survey also noted that respondents in developed countries were less optimistic than those in developing ones and that respondents from the higher income group have greater trust in these societal institutions compared to respondents with low-income.
The results of The 2023 Edelman Trust Barometer survey is considered a leading indicator of trust and credibility among countries that measures levels of trust in institutions, including businesses, government, NGOs, and the media, across 28 countries around the world.
Among other questions, the respondents were given a list of four institutions — government, media, business and non-government organisations (NGOs) — and asked to indicate on a scale of 1 to 9 how much they trust each institution to do what is right, with 1 indicating a respondent does not trust them at all and 9 indicating a respondent trusts them "a great deal".
This compares with 40 per cent global average across 24 markets. “Nearly half of the countries surveyed (showed) a year-over-year double-digit decline in the belief that their families will be better off in five years’ time,” said Edelman in a statement on the 2023 report.
Conducted in November 2022 by the Edelman Trust Institute, the 23rd edition of the Edelman Trust Barometer survey involved 32,000 individuals in 28 countries including Singapore, where a total of 1,135 individuals aged 18 or older residing in Singapore were interviewed.
The survey also noted that respondents in developed countries were less optimistic than those in developing ones and that respondents from the higher income group have greater trust in these societal institutions compared to respondents with low-income.
The results of The 2023 Edelman Trust Barometer survey is considered a leading indicator of trust and credibility among countries that measures levels of trust in institutions, including businesses, government, NGOs, and the media, across 28 countries around the world.
Among other questions, the respondents were given a list of four institutions — government, media, business and non-government organisations (NGOs) — and asked to indicate on a scale of 1 to 9 how much they trust each institution to do what is right, with 1 indicating a respondent does not trust them at all and 9 indicating a respondent trusts them "a great deal".
According to the 2023 Edelman Trust Barometer, an annual global survey on trust and credibility, the Singapore Government remains the institution most trusted by people in Singapore with trust levels at a high. This is very important especially when as business leaders command more trust than their political counterparts in many other developed countries around the world.
This trend is occurring against the backdrop of a wider spread of income-based trust gap in governments, businesses, the media and non-governmental organisations (NGOs), or what is collectively referred to by the report as "societal institutions".
The survey found that developing countries showed more optimism than developed countries. The following are the top three and bottom three countries in terms of percentage of respondents indicating an optimistic economic outlook:
"At a glance, the results of this survey may give an impression that societies with more access to global news are more pessimistic while societies with fewer access to global news seem more optimistic about their future as global news has been recently focusing on rising costs, mass layoffs taking place around the world since end of last year, predictions of global economic fallout heading towards recession, etc. These negative news affects economic optimism and deepen our economic fears" said Kiwi Lim, who has been observing market trends in Singapore for more than a decade.
This trend is occurring against the backdrop of a wider spread of income-based trust gap in governments, businesses, the media and non-governmental organisations (NGOs), or what is collectively referred to by the report as "societal institutions".
The survey found that developing countries showed more optimism than developed countries. The following are the top three and bottom three countries in terms of percentage of respondents indicating an optimistic economic outlook:
- Kenya (80 per cent optimistic),
- Indonesia (73 per cent optimistic),
- India (73 per cent optimistic); compared to
- Japan (9 per cent optimistic),
- France (12 per cent optimistic)
- Germany (15 per cent optimistic)
"At a glance, the results of this survey may give an impression that societies with more access to global news are more pessimistic while societies with fewer access to global news seem more optimistic about their future as global news has been recently focusing on rising costs, mass layoffs taking place around the world since end of last year, predictions of global economic fallout heading towards recession, etc. These negative news affects economic optimism and deepen our economic fears" said Kiwi Lim, who has been observing market trends in Singapore for more than a decade.
What Is The Edelman Trust Barometer
The Edelman Trust Barometer is an annual survey conducted by the global communications firm Edelman. The survey measures levels of trust in institutions, including businesses, government, NGOs, and the media, across 28 countries around the world. The survey has been conducted for over 20 years and is considered a leading indicator of trust and credibility in society.
The survey includes both quantitative and qualitative research, including online surveys of over 33,000 individuals, as well as in-depth interviews with influential leaders and experts in different fields. The survey results are analyzed and presented in a report that includes insights into global trust trends, as well as country-specific findings.
The Edelman Trust Barometer survey covers a wide range of topics related to trust, including perceptions of the economy, government, media, and technology. The survey also looks at issues such as climate change, inequality, and diversity and inclusion, and how these issues affect trust in different institutions.
The insights from the Edelman Trust Barometer survey can be used by businesses, governments, and other organizations to understand how they can build and maintain trust with their stakeholders, and to identify areas where they may need to improve their communication or engagement strategies.
The Edelman Trust Barometer is an annual survey conducted by the global communications firm Edelman. The survey measures levels of trust in institutions, including businesses, government, NGOs, and the media, across 28 countries around the world. The survey has been conducted for over 20 years and is considered a leading indicator of trust and credibility in society.
The survey includes both quantitative and qualitative research, including online surveys of over 33,000 individuals, as well as in-depth interviews with influential leaders and experts in different fields. The survey results are analyzed and presented in a report that includes insights into global trust trends, as well as country-specific findings.
The Edelman Trust Barometer survey covers a wide range of topics related to trust, including perceptions of the economy, government, media, and technology. The survey also looks at issues such as climate change, inequality, and diversity and inclusion, and how these issues affect trust in different institutions.
The insights from the Edelman Trust Barometer survey can be used by businesses, governments, and other organizations to understand how they can build and maintain trust with their stakeholders, and to identify areas where they may need to improve their communication or engagement strategies.
Provides Valuable Insights To Organizations & Governments
The Edelman Trust Barometer provides insights into the levels of trust that people have in institutions such as businesses, government, NGOs, and the media, as well as the factors that contribute to trust or undermine it. Some of the key insights from the survey include:
Overall, the Edelman Trust Barometer provides valuable insights into the factors that contribute to trust in institutions as well as governments and recommends organizations and governments to build and maintain trust with their stakeholders. By understanding these insights, organizations and governments can develop more effective communication and engagement strategies that help to build trust over time.
The Edelman Trust Barometer provides insights into the levels of trust that people have in institutions such as businesses, government, NGOs, and the media, as well as the factors that contribute to trust or undermine it. Some of the key insights from the survey include:
- Trust in institutions is low: Across the 28 countries surveyed, trust in institutions is generally low. The survey also found that trust in traditional media is declining, while trust in social media is low but stable.
- Trust is linked to competence and ethical behavior: The survey found that trust is closely linked to perceptions of competence and ethical behavior. Organizations that are seen as competent and ethical are more likely to be trusted by the public.
- Issues such as inequality and climate change are eroding trust: The survey found that issues such as economic inequality, social injustice, and climate change are eroding trust in institutions. People are increasingly looking to businesses and other organizations to address these issues and take a leadership role in creating positive social and environmental outcomes.
- Trust can be built through engagement and transparency: Organizations can build trust by engaging with their stakeholders and being transparent about their actions and decision-making processes, e.g. communicating openly about issues such as data privacy and security, and involving stakeholders in the development of policies and programs.
Overall, the Edelman Trust Barometer provides valuable insights into the factors that contribute to trust in institutions as well as governments and recommends organizations and governments to build and maintain trust with their stakeholders. By understanding these insights, organizations and governments can develop more effective communication and engagement strategies that help to build trust over time.
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High Court Orders CPF To Release Man's CPF Savings To Daughter Instead Of Ex-Wife Despite Nomination
The late Mr Toh Kim Hiang divorced his wife Ms Yee Swee Yong in February 1985 and his family effectively cut off contact with her. On Nov 7, 2021, when celebrating his 80th birthday with his daughter and her husband, Mr Kim said he believed that his prior CPF nomination in favour of his ex-wife had been automatically voided after his divorce, such that his CPF monies would instead be inherited by his daughter - Ms Toh.
However, he later realised that his Central Provident Fund (CPF) savings would be left to his estranged ex-wife, even though he assumed it was voided after his divorce. He then tried to nominate his daughter as his CPF beneficiary, but died before he could do so successfully.
His son-in-law, Mr Ng Chye Aik, told Mr Toh that the 80-year-old would in fact have to make a fresh CPF nomination. Mr Toh then tried to do so. He made a submission online on Nov 22, 2021 to nominate his daughter as his CPF nominee but did not successfully do so.
Mr Toh fell ill shortly after and died on Jan 4, 2022 before he could successfully nominate his daughter.
However, he later realised that his Central Provident Fund (CPF) savings would be left to his estranged ex-wife, even though he assumed it was voided after his divorce. He then tried to nominate his daughter as his CPF beneficiary, but died before he could do so successfully.
His son-in-law, Mr Ng Chye Aik, told Mr Toh that the 80-year-old would in fact have to make a fresh CPF nomination. Mr Toh then tried to do so. He made a submission online on Nov 22, 2021 to nominate his daughter as his CPF nominee but did not successfully do so.
Mr Toh fell ill shortly after and died on Jan 4, 2022 before he could successfully nominate his daughter.
What is CPF nomination?
CPF nomination refers to the process of choosing a person or persons to receive the CPF savings in the event of the CPF member's death. CPF stands for Central Provident Fund, which is a mandatory savings scheme for working Singaporeans and permanent residents.
When a CPF member nominates a person to receive their CPF savings upon their death, the nominated person is called the nominee. The CPF member can nominate one or more persons as their nominee, and they can allocate the CPF savings to each nominee according to their wishes.
It is important for CPF members to make a nomination because in the absence of a valid nomination, the CPF savings will be distributed according to the Intestate Succession Act or Muslim Intestate Succession Act, as the case may be. The distribution may not be in accordance with the CPF member's wishes or may cause unnecessary delay or inconvenience to the family members left behind.
"CPF members can make a nomination at any time, and it is advisable to review and update the nomination regularly, especially after significant life events such as marriage, divorce, or the birth of a child. CPF members can make their nomination online through the CPF website or by visiting a CPF service centre." said Kiwi Lim, real estate professional from Huttons Asia.
CPF nomination refers to the process of choosing a person or persons to receive the CPF savings in the event of the CPF member's death. CPF stands for Central Provident Fund, which is a mandatory savings scheme for working Singaporeans and permanent residents.
When a CPF member nominates a person to receive their CPF savings upon their death, the nominated person is called the nominee. The CPF member can nominate one or more persons as their nominee, and they can allocate the CPF savings to each nominee according to their wishes.
It is important for CPF members to make a nomination because in the absence of a valid nomination, the CPF savings will be distributed according to the Intestate Succession Act or Muslim Intestate Succession Act, as the case may be. The distribution may not be in accordance with the CPF member's wishes or may cause unnecessary delay or inconvenience to the family members left behind.
"CPF members can make a nomination at any time, and it is advisable to review and update the nomination regularly, especially after significant life events such as marriage, divorce, or the birth of a child. CPF members can make their nomination online through the CPF website or by visiting a CPF service centre." said Kiwi Lim, real estate professional from Huttons Asia.
High Court's Judgement
After the death of Mr Toh, Ms Toh and her husband sent requests for the CPF savings to be disbursed to Ms Toh instead of Ms Yee, but the CPF Board explained that Mr Toh had not successfully made a new nomination before his passing. It was later discovered that Mr Toh had keyed in the wrong NRIC number under the details of the second witness, which was likely why the attestation could not be completed.
High Court judge - Justice Lee said it was clear that Mr Toh could not have intended for his CPF monies to pass to Ms Yee. "They had lived their lives essentially as strangers since their divorce," he said. "At the time of the deceased's passing, Ms Yee and the deceased had been divorced for over 36 years."
He added that Ms Yee had not kept in contact with her ex-husband and daughter for many years. "The completeness of her estrangement from the family can be seen from the difficulties that Ms Toh encountered in locating Ms Yee to serve the documents for the present case," said the judge.
The above case is reported in CNA news online on 8 March 2023
After the death of Mr Toh, Ms Toh and her husband sent requests for the CPF savings to be disbursed to Ms Toh instead of Ms Yee, but the CPF Board explained that Mr Toh had not successfully made a new nomination before his passing. It was later discovered that Mr Toh had keyed in the wrong NRIC number under the details of the second witness, which was likely why the attestation could not be completed.
High Court judge - Justice Lee said it was clear that Mr Toh could not have intended for his CPF monies to pass to Ms Yee. "They had lived their lives essentially as strangers since their divorce," he said. "At the time of the deceased's passing, Ms Yee and the deceased had been divorced for over 36 years."
He added that Ms Yee had not kept in contact with her ex-husband and daughter for many years. "The completeness of her estrangement from the family can be seen from the difficulties that Ms Toh encountered in locating Ms Yee to serve the documents for the present case," said the judge.
The above case is reported in CNA news online on 8 March 2023
Should a person's will supersede CPF nomination?
In general, CPF nomination supersedes the will when it comes to the distribution of CPF savings. This is because CPF savings are governed by specific CPF rules and regulations, which provide for the distribution of CPF savings based on the CPF nomination made by the CPF member.
On the other hand, a will governs the distribution of a person's assets, including those outside of the CPF system. However, if a CPF member has made a valid CPF nomination, the CPF savings will be distributed according to the nomination, regardless of what is stated in the will.
It is important to note that CPF nomination and will serve different purposes and are governed by different laws. A CPF nomination allows CPF members to choose who they want to receive their CPF savings, while a will allows a person to distribute their assets according to their wishes.
If a CPF member does not make a CPF nomination, their CPF savings will be distributed according to the Intestate Succession Act or Muslim Intestate Succession Act, as the case may be and the distribution may not be in accordance with the deceased's wishes or may cause unnecessary delay or inconvenience to the family members left behind.
Making a CPF nomination allows CPF members to choose who they want to receive their CPF savings and in what proportion. It provides certainty and peace of mind that their loved ones will receive their CPF savings in accordance with their wishes. Therefore, it is highly recommended that CPF members make a CPF nomination to ensure that their CPF savings are distributed according to their wishes.
"Therefore, it is important for CPF members to make a CPF nomination and update it regularly, as well as to make a will to distribute their other assets. By doing so, they can ensure that their loved ones will receive their assets in accordance with their wishes without the hassle of going to court ." said Kiwi.
In general, CPF nomination supersedes the will when it comes to the distribution of CPF savings. This is because CPF savings are governed by specific CPF rules and regulations, which provide for the distribution of CPF savings based on the CPF nomination made by the CPF member.
On the other hand, a will governs the distribution of a person's assets, including those outside of the CPF system. However, if a CPF member has made a valid CPF nomination, the CPF savings will be distributed according to the nomination, regardless of what is stated in the will.
It is important to note that CPF nomination and will serve different purposes and are governed by different laws. A CPF nomination allows CPF members to choose who they want to receive their CPF savings, while a will allows a person to distribute their assets according to their wishes.
If a CPF member does not make a CPF nomination, their CPF savings will be distributed according to the Intestate Succession Act or Muslim Intestate Succession Act, as the case may be and the distribution may not be in accordance with the deceased's wishes or may cause unnecessary delay or inconvenience to the family members left behind.
Making a CPF nomination allows CPF members to choose who they want to receive their CPF savings and in what proportion. It provides certainty and peace of mind that their loved ones will receive their CPF savings in accordance with their wishes. Therefore, it is highly recommended that CPF members make a CPF nomination to ensure that their CPF savings are distributed according to their wishes.
"Therefore, it is important for CPF members to make a CPF nomination and update it regularly, as well as to make a will to distribute their other assets. By doing so, they can ensure that their loved ones will receive their assets in accordance with their wishes without the hassle of going to court ." said Kiwi.
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Share buyback, also known as share repurchase, is when a company buys back its own shares from the marketplace. This can be done for a number of reasons, such as to reduce the number of outstanding shares, increase the value of remaining shares, or return capital to shareholders.
This year, Chevron announced in Jan that it would triple its spending on share buybacks to $75 billion after reporting a record full-year profit of $36.5 billion, buoyed by high oil prices. Exxon said it would issue another $35 billion in buybacks and Facebook-parent Meta Platforms saw its stock surge by 20% after the company announced plans to boost its share repurchase plan by $40 billion after seeing the company losing more than $600 billion in market value over the past year. 2023 will likely be the first fiscal year with at least $1 trillion in completed S&P 500 company buybacks, said Howard Silverblatt at S&P Dow Jones Indices.
"It is important to note that the amount of share buybacks in a given year is dependent on a number of factors, including the financial performance of companies, market conditions, and regulatory policies. While it is very highly possible that companies may engage in share buybacks totaling USD$1 trillion in 2023, it is impossible to say for certain at this time since we are only in the first quarter of 2023." said Kiwi Lim, real estate professional.
It is important to note that share buybacks are not always viewed positively by investors or analysts, as they can be seen as a way for companies to boost their stock prices artificially rather than investing in their businesses for long-term growth. Ultimately, the decision to engage in share buybacks is up to each individual company and their board of directors.
This year, Chevron announced in Jan that it would triple its spending on share buybacks to $75 billion after reporting a record full-year profit of $36.5 billion, buoyed by high oil prices. Exxon said it would issue another $35 billion in buybacks and Facebook-parent Meta Platforms saw its stock surge by 20% after the company announced plans to boost its share repurchase plan by $40 billion after seeing the company losing more than $600 billion in market value over the past year. 2023 will likely be the first fiscal year with at least $1 trillion in completed S&P 500 company buybacks, said Howard Silverblatt at S&P Dow Jones Indices.
"It is important to note that the amount of share buybacks in a given year is dependent on a number of factors, including the financial performance of companies, market conditions, and regulatory policies. While it is very highly possible that companies may engage in share buybacks totaling USD$1 trillion in 2023, it is impossible to say for certain at this time since we are only in the first quarter of 2023." said Kiwi Lim, real estate professional.
It is important to note that share buybacks are not always viewed positively by investors or analysts, as they can be seen as a way for companies to boost their stock prices artificially rather than investing in their businesses for long-term growth. Ultimately, the decision to engage in share buybacks is up to each individual company and their board of directors.
Is aggressive share buyback a good or bad sign for the economy?
Share buybacks can be seen as a positive sign by investors because they indicate that the company has confidence in its own financial position and future prospects. By reducing the number of outstanding shares, the buyback can also increase earnings per share and potentially boost the stock price, which can be beneficial for shareholders.
However, share buybacks can also be viewed as a negative sign if the company is using them to artificially boost its stock price rather than investing in its business. If the company is repurchasing shares instead of using the money to fund growth opportunities or pay dividends, it may suggest that the company is not confident in its ability to generate strong returns through these other means.
Furthermore, if a company is using debt to finance the share buyback, it could be taking on unnecessary financial risk. If the company's financial position deteriorates or if interest rates rise, the debt burden could become unsustainable.
Overall, whether share buybacks are a good sign or not depends on the context and the company's overall financial situation. Investors should evaluate the reasons behind the buyback and the potential long-term impact on the company's financial health before making any investment decisions.
Share buybacks can be seen as a positive sign by investors because they indicate that the company has confidence in its own financial position and future prospects. By reducing the number of outstanding shares, the buyback can also increase earnings per share and potentially boost the stock price, which can be beneficial for shareholders.
However, share buybacks can also be viewed as a negative sign if the company is using them to artificially boost its stock price rather than investing in its business. If the company is repurchasing shares instead of using the money to fund growth opportunities or pay dividends, it may suggest that the company is not confident in its ability to generate strong returns through these other means.
Furthermore, if a company is using debt to finance the share buyback, it could be taking on unnecessary financial risk. If the company's financial position deteriorates or if interest rates rise, the debt burden could become unsustainable.
Overall, whether share buybacks are a good sign or not depends on the context and the company's overall financial situation. Investors should evaluate the reasons behind the buyback and the potential long-term impact on the company's financial health before making any investment decisions.
Is corporate America expecting a recession soon?
During a recession, central banks may lower interest rates in order to boost the economy. The decision of a company to buy back its own shares is not necessarily directly linked to changes in interest rates. However, changes in interest rates can indirectly affect a company's decision to repurchase shares, as well as the timing and amount of any buybacks.
When interest rates go up, borrowing costs for companies typically increase, which can make share buybacks more expensive if the company is financing them with debt. As a result, companies may be less inclined to repurchase shares when interest rates are high. Conversely, when interest rates are low, companies may find it more attractive to use debt to finance share buybacks, as the cost of borrowing is lower.
However, there are many other factors that can influence a company's decision to buy back shares, including its financial position, growth prospects, and available cash flow. For example, a company with excess cash on hand may choose to repurchase shares even if interest rates are high, if it believes that this is the best use of its funds.
Overall, while changes in interest rates can indirectly affect a company's decision to repurchase shares, it is just one of many factors that can influence this decision. Companies will consider a variety of factors when making the decision to repurchase shares, including their current financial position and growth prospects, as well as broader economic trends.
During a recession, central banks may lower interest rates in order to boost the economy. The decision of a company to buy back its own shares is not necessarily directly linked to changes in interest rates. However, changes in interest rates can indirectly affect a company's decision to repurchase shares, as well as the timing and amount of any buybacks.
When interest rates go up, borrowing costs for companies typically increase, which can make share buybacks more expensive if the company is financing them with debt. As a result, companies may be less inclined to repurchase shares when interest rates are high. Conversely, when interest rates are low, companies may find it more attractive to use debt to finance share buybacks, as the cost of borrowing is lower.
However, there are many other factors that can influence a company's decision to buy back shares, including its financial position, growth prospects, and available cash flow. For example, a company with excess cash on hand may choose to repurchase shares even if interest rates are high, if it believes that this is the best use of its funds.
Overall, while changes in interest rates can indirectly affect a company's decision to repurchase shares, it is just one of many factors that can influence this decision. Companies will consider a variety of factors when making the decision to repurchase shares, including their current financial position and growth prospects, as well as broader economic trends.
Singapore's property price increase during Covid pandemic period is only considered moderate when we compare to other developed cities globally.
If recession is coming, should I sell my property now?
All across the world, countries have seen property prices rising exponentially during the past 3 years - known as the Covid Pandemic Period. However from the graph above, we can see that Singapore's property price increase during Covid pandemic period is only considered moderate when we compare to other developed cities globally. Therefore, it is safe to say that the possibility of a property bubble in Singapore is extremely low especially after the government intervened with recent property cooling measures.
Demand for property in Singapore is expected to remain strong from overseas buyers due to a combination of reasons, including strategic location, quality of life, political stability, investment potential, and diverse culture. Moreover, central banks are expected to lower interest rates, including home mortgage rates during a recession in order to boost spending" say real estate professional Kiwi Lim.
"China's reopening is set to drive more of Asia's wealthy to our shores and pent-up demand from these high net worth individuals (HNWI) is expected to boost Singapore's luxury property market. With more CCR condo projects expected to be launched this year, sales of luxury homes in Singapore may break last year's record of $3.5 billion this year."
All across the world, countries have seen property prices rising exponentially during the past 3 years - known as the Covid Pandemic Period. However from the graph above, we can see that Singapore's property price increase during Covid pandemic period is only considered moderate when we compare to other developed cities globally. Therefore, it is safe to say that the possibility of a property bubble in Singapore is extremely low especially after the government intervened with recent property cooling measures.
Demand for property in Singapore is expected to remain strong from overseas buyers due to a combination of reasons, including strategic location, quality of life, political stability, investment potential, and diverse culture. Moreover, central banks are expected to lower interest rates, including home mortgage rates during a recession in order to boost spending" say real estate professional Kiwi Lim.
"China's reopening is set to drive more of Asia's wealthy to our shores and pent-up demand from these high net worth individuals (HNWI) is expected to boost Singapore's luxury property market. With more CCR condo projects expected to be launched this year, sales of luxury homes in Singapore may break last year's record of $3.5 billion this year."
