SVB collapse: No other lender ‘steps in to fill those shoes’ says investment firm
Startups will soon feel the secondary effects of the Silicon Valley Bank collapse in “very essential ways,” said Matt Higgins, CEO and co-founder of personal investment firm RSE Ventures.
Chatting with CNBC’s “Street Signs Asia,” Higgins explained that SVB is “very paternalistic” for the sector, providing not only payroll services and loans to founders, but more importantly, lines of credit as well.
“A lot of these firms have already had problems raising capital. They usually were counting on these lines to increase their runway to push out [their] burn money outside of the recession all of us expect,” Higgins said.
Nonetheless, with the closure of the SVB, “that has evaporated overnight and there isn’t any other lender stepping in to fill those boots.” He says.
– Lim Hui Jie
Consumer sentiment in Australia stays exceptionally weak
Consumer sentiment in Australia remained unchanged in February at a 30-year low of 78.5.
This marks the second month in a row of “extremely weak consumer sentiment”, the Westpac Melbourne Institute said.
“Index readings below 80 are rare, back-to-back readings are even rarer. Indeed, each the Covid shock and the worldwide financial crisis only saw one month of sentiment at these levels,” Westpac chief economist Bill Evans wrote.
Given Australia’s lower-than-expected wage, employment and inflation figures, Evans stood by his forecast of a 0.25 percentage point rate hike in May.
– Lim Hui Jie
CNBC Pro: As technology advances, strategists say these stocks represent a buying opportunity
The collapse of Silicon Valley Bank added to the woes of the tech sector, following expectations that rates of interest would likely stay high for a while.
But some strategists double the sector.
“We imagine that for medium to long-term investors, the recent bout of volatility you have seen represents a buying opportunity,” Anthony Doyle, head of investment strategy at Firetrail Investments, told CNBC on Monday.
Pro subscribers can read more here.
— Zavier Ong
Oil prices fall as SVB fallout spreads
Oil prices have fallen as the collapse of the Silicon Valley Bank continues to resonate in global markets.
Brent crude oil futures recently fell 0.49% to $80.32 a barrel, while US West Texas Intermediate futures fell 0.6% to $74.35 a barrel.
National Australia Bank expects prices to fall further after stronger-than-expected US inflation figures on account of be released later.
“Oil prices are falling as a results of market declines following the collapse of the US Bank of Silicon Valley. Today’s US CPI report, stronger than expected, will put further downward pressure on short-term prices,” NAB wrote in a every day note.
While energy prices have seen some relief on the back of declining scarcity concerns, upside risks remain, the Commonwealth Bank of Australia said.
“We see an upward risk to our prospects on account of a sustained decline in Russian oil and diesel exports,” the CBA said.
—Lee Ying Shan
Topix falls, led by cyclical financial, energy and consumer exchanges
Refinitiv data showed that the declines in Japan’s Topix were driven by cyclical funds, energy and consumers in Tuesday morning trading.
The index fell by greater than 3%, reaching the bottom level since mid-January – shares of economic firms lost greater than 6%. Energy stocks recorded a 4.26% loss and cyclical consumption fell by 3.15%.
Basic materials and real estate inventories fell by almost 3%, followed by industry and utilities.
Based on index points, Toyota Motor Corp it lost essentially the most and was listed 4.37% lower. Next Mitsubishi UFJ financial group AND Sumitomo Mitsui Financial Group, Sony Group it also lost essentially the most and fell by 3.1%.
– Jihye Lee
Singapore funds result in STI losses; DBS’s biggest loser
Singaporean bank shares were amongst the most important losers within the Straits Times Index on Tuesday, despite the country’s monetary authority saying it had “slight exposure” to the fallout of U.S. banks
Actions DBS, UOB AND OCBC bank it fell by 2.2%, 1.24% and 1.81% respectively, with DBS being the second biggest loser in STI.
The Singapore dollar also fell 0.1% against the US dollar to 1.3474.
– Lim Hui Jie
Asia-Pacific banks proceed to post losses on account of the consequences of SVB
Asia-Pacific banks continued to post steep declines in Tuesday morning trading.
Japanese soft bankfell greater than 3% in the primary hour of trading in Tokyo as investors continued to weigh concerns about Japan’s investment powerhouse.
Banks also saw sharp losses, with Mitsubishi Ufj Financial Group down 6.92%, SMFG down over 7%, Mizuho Financial down 7.34% and Nomura down 4.6%.
South Korean Defense Company Firstec Grows 9% After North Korea Launches Missiles
Shares in South Korean defense technology company Firstec rose greater than 9%, countering the sell-off seen within the broader market.
Firstec manufactures components utilized in South Korean weapon systems, such as guided munitions and ground combat vehicles.
The surge in motion got here after North Korea fired two short-range ballistic missiles from its east coast on Tuesday, and as Seoul and Washington will conduct the biggest joint military exercise in five years.
Hanhwa Aerospace, which makes artillery and anti-aircraft systems, also rose 0.63%.
– Lim Hui Jie
China will ease visa restrictions for foreigners
China is to resume issuing “various” visas for foreigners to enter the country — said the US embassy in a notice in Chinese translated by CNBC.
The changes announced overnight are on account of come into effect Wednesday, Beijing time.
Visas to enter China that were issued before March 28, 2020 can be valid again, and foreign nationals will have the option to enter the mainland visa-free from Hong Kong, amongst others, the notice said.
The statement indicated that China will even resume programs allowing residents of the US and other major countries to go to cities such as Beijing for a number of days – no visa. The precise implementation remained unclear.
Mainland China tightened border controls in March 2020 in an try and limit the domestic spread of Covid-19. The country lifted quarantine requirements for those arriving in early January.
— Evelyn Cheng
Dollar index lowest since February, mixed Asian currencies
The dollar index was at 103.68, oscillating across the weakest level since mid-February.
Asian currencies traded mixed on Tuesday morning, with the Latest Zealand dollar and Australian dollar strengthening to 0.6210 and 0.6651 respectively against the dollar.
The Japanese yen weakened barely to 133.24 against the US dollar and the overseas Chinese yuan also weakened to six.8591 against the dollar.
The Korean won also weakened barely to 1,297.49 against the US dollar.
US inflation to fall in February, Dow Jones estimates
The US consumer price index in February is anticipated to be 0.4% m/m or 6% y/y, in keeping with Dow Jones estimates.
This is simply barely lower than January’s inflation data, which amounted to 0.5% and 6%, respectively.
The CPI can be one other data point that might provide insight into the Federal Reserve’s move ahead of its meeting on March 21 and 22.
A hot inflation report will boost expectations that the Fed may raise rates of interest by 50 basis points, up from the 25 points introduced in February.
— Lim Hui Jie, Academician Patti
Singapore says it has “negligible” exposure to failed US banks
Singapore’s monetary authority said its exposure to the Silicon Valley Bank was “insignificant”.
“Singapore’s banking system has negligible exposure to those failed US banks,” MAS said in a Monday statement.
“Singapore’s banks are well capitalized and conduct regular stress tests for rate of interest and other risks,” it said, adding that their liquidity positions are sound and supported by a “stable and diversified funding base.”
— Jihye Lee
The Barr Fed will lead a review of the SVB regulation
The Federal Reserve’s top regulator can be conducting a review of the events that led to the implosion of Silicon Valley Bank, the central bank announced Monday.
Vice Chairman of Oversight Michael S. Barr has been assigned to the investigation, the outcomes of which can be made public on May 1. The review will concentrate on the review and oversight of the SVB, which the Fed oversees in its role as regulator.
“Events surrounding the Silicon Valley Bank require an intensive, transparent and timely assessment by the Federal Reserve,” said Chairman Jerome Powell.
—Jeff Cox
Biden says banking system is protected, urges Congress to strengthen rules after setbacks
President Joe Biden said Monday that Americans can rest assured that the US banking system is protected after regulators scrambled over the weekend to create a plan to secure deposits at Silicon Valley Bank and Signature Bank.
“Your deposits can be there once you need them. Small businesses across the country with deposit accounts with these banks can breathe easier knowing they may have the option to pay their employees and pay their bills,” he said in a temporary remark Monday ahead of the market open.
Biden stressed that American taxpayers wouldn’t suffer any losses. He also said that the leadership of the banks can be modified and bank investors wouldn’t be protected.
Biden also urged Congress to hunt ways to strengthen banking rules to forestall these events from happening again.
—Christina Cheddar Berk
CNBC Pro: SVB crisis shows how tough higher stakes might be – but these 3 stocks are resilient, says strategist
Many firms will find the environment with higher rates of interest very difficult to operate in, as the Silicon Valley Bank crisis has shown, said Anthony Doyle, head of investment strategy at Firetrail Investments.
“There can be winners and there can be losers, and a part of the challenge for today’s investors is determining which firms could have a much tougher time than in a world with zero rates of interest,” he said.
Still, he identified three stocks that he believes look resilient on this recent market environment.
CNBC Pro subscribers can read more here.
— Weizhen Tan