MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
Instead, central bankers need to adopt ôa selective use of transparencyö if they want to maximize outcomes stemming from their operations, argues Tony Hughes, MoodyÆs Economy.comÆs director of Asia-Pacific economics. (Moody's Corporation acquired Economy.com for $27 million in November 2005)
He points to Japan and the United States as prime examples of countries who should take cover rather than go streaking with their central bank plans.
In the case of Japan, Hughes argues that the BoJÆs policy of ôquantitative easingö and its eagerness to reveal the extent of its thoughts and actions may actually be undermining the nation's success in ending deflation.
ôBy engaging in actions to boost the short-term cost of capital, the BoJ is effectively dampening demand and thus reducing the likelihood of a near-term end to deflation. Despite better data of late, this is in no way a fait accompli,ö Hughes says. ôInstead, the BoJ should just keep its mouth shut, its hands tied and just say and do nothing.ö
As for the US Fed, Hughes reckons that too much transparency has led to market over-confidence in its ability to fight inflation. He points to the flat yield curve that currently prevails in financial markets. Instead, it would be in the FedÆs interests to ôpull up a shroud around at least some aspects of its operationsö to gain greater control over long-term bond rates, argues Hughes.
ôUltimately, market faith in the FedÆs ability to fight inflation must equate with its actual ability, which is partially determined by its ability to affect long-term yields,ö says Hughes. ôConsequently, if faith rises above ability, as seems to be the case at present, and inflationary shocks hit, then inflation will appear and the Fed will be revealed as `a mere mortalÆ.ö
He reasons that the subsequent return of market scepticism in the Fed would allow it to then push up long-term bond yields as a counter to inflation. It could short-circuit this potential inflationary outbreak by opting to be more opaque in its dealings with markets.
Perhaps mum was right.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
Insto roundup: GPIF staff say J-Reits more attractive than traditional assets; Hong Kong's strict Spac criteria
EISS Super hit by another scandal; China's CSRC launches consultation on disclosure requirements for new BSE securities; Hong Kong issues consultation paper on Spacs; New World Development partners with China Taiping to focus on Greater Bay Area projects; GPIF employees say Japanese Reits have grown more attractive; Taiwan's BLF invites bid for $1.7 billion mandate; and more
SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.