MAS watches impact on Singapore closely
Investors here have been told to stay vigilant in light of fears that US mortgage giants Fannie Mae and Freddie Mac were in trouble.
The Monetary Authority of Singapore said yesterday that it was closely monitoring developments in global financial markets and their impact on Singapore.
It also warned that ’significant challenges and downside risks in the international financial markets remain and that financial institutions and investors should stay vigilant’.
‘The direct impact of the credit crisis on financial markets and financial institutions in Singapore has been relatively modest so far,’ it added.
Freddie Mac and Fannie Mae together hold US$5 trillion (S$6.75 trillion) in debt.
On Sunday, the US government moved to shore up the two beleaguered companies by injecting billions through investments and loans.
It brought calm to regional investors, who kept Asian markets fairly flat yesterday.
The Straits Times Index lost just 22.72 points to close at 2,904.12 after being down more than 50 in early trade.
CIMB-GK’s regional economist, Mr Song Seng Wun, welcomed the central bank’s statement.
‘Given that Freddie Mac and Fannie Mae own or guarantee almost half of US home loans, it is inevitable that some of these guarantees are bundled and sold to financial centres around the world.’
It is not clear if any local banks have invested in the companies. Temasek Holdings yesterday said it does not have any exposure to these investments.
Source : Straits Times - 15 Jul 2008
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