The last 6-7 years saw much of the liquidity in Asia gravitating towards supporting property loans. Hence equity markets did not get much of a boost from the excess liquidity in the system. There has been a dramatic shift in property outlook in HK, Singapore and Malaysia. Most have gone neutral or hold from buys. What that means is that banks are too flushed with liquidity and have to keep them working.
Local banks are doing the same but apparently the foreign banks are a bit more aggressive. Ringgit loans of RM50m to RM300m can be had at 2% or 3% below BLR. The juiciest one is USD loans can be had at just 0.1%. Many of the top tier companies do not really need the funds, so the bankers are going second tier and soon I think not so blue companies as well.
The natural chain of events would be that once they take the loans, they have to put it to work, usually expansion or asset acquisition, hence more corporate developments. I see this as the beginning of a bull run cycle and it would probably take another 2-4 months to ripen.
Liquidity is a massive force in charging a bull run. You have been warned.
5 comments:
Hi SD,
Where can you get USD loan for 0.1%?
Is this with huge fees? What is the duration? (Is this a overnight financing rate? )
This Jesicca also not bad..
Chia cha better
I would like to have whatever you are smoking there. Banks are facing liquidity crunch and pricing is on the uptrend.
Depending on banks of which country. From what I got, banks such as those in australia are flushed with liquidity. It's not a liquidity issue, it's a confidence issue. Investors and corporations are scared like hell over the past few months that everyone puts money into the bank, dun dare to invest, dunno where to invest.
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