Mllcg 3rd Gear July 15, 2013 Share July 15, 2013 SINGAPORE: Interest rates in the US and in turn, Singapore, are likely to pick up over the next one to two years, said DBS CEO Piyush Gupta. This means now could be a particularly good time for borrowers to lock in loans at current interest rates. Borrowers can look at switching from floating to fixed rate loans, added Mr Gupta. But that is a hard appeal to make to Asian investors, who prefer not to fix their interest rates. "In Asia, pardon me, but most of us tend to be punters...Anecdotally, the easiest way to think about this - We go to the US, the most popular mortgage in the US is the 30-year fixed rate mortgage. In Asia, we at DBS tried pushing two years ago a 5-year fixed rate mortgage...almost no takers. So Asians don't like fixing, Asians don't like hedging," said Mr Gupta. "However, given where we are in terms of our view in the world and the fact that there's likely to be a steepening bias over 12, 24 months, I would suggest it might be worthwhile to think about it." Speaking at an event for his private bank clients, Mr Gupta also warned of risks brought about by over-borrowing in the Chinese economy. Total borrowing in the economy currently makes up 214% of GDP, up from 170% of GDP in the 2000s. Mr Gupta said: "It is not impossible that some small state-owned enterprises, some small regional banks go into an element of restructuring. "They won't let it go bankrupt but the restructuring might mean bail-in, might mean some creditors. And I think that will be part of this restructuring of the system over the next couple of years. "So my thoughts on China is - I don't think it will fall off a cliff, but since there will be winners and losers, you'd better be very thoughtful and careful about your selection of counterparties...who do you really do business with." Overall, Mr Gupta sees a "slow bias" in the economy in Asia. This is largely due to a restructuring in the Chinese economy, as policymakers opt for quality growth over high growth. "If China runs at 7 or 7.5% (full year GDP growth), I think it always spills over into our part of the world. There will be some volatility and up and down - Singapore surprised with the latest GDP number - but overall I really see a slow bias in the economy in this part of the world," said Mr Gupta. - CNA/ir http://www.channelnewsasia.com/news/busine...ent/745500.html ↡ Advertisement Link to post Share on other sites More sharing options...
Felipe 3rd Gear July 15, 2013 Share July 15, 2013 sounds like car salesman. better buy now or coe will keep going up Link to post Share on other sites More sharing options...
Neost 6th Gear July 15, 2013 Share July 15, 2013 Our govt already taking actions in anticipation on this. If not, what do you think all the recent loan curbing, housing policies are for? Two biggest purchase items of most household - house and car Link to post Share on other sites More sharing options...
RadX Moderator July 15, 2013 Share July 15, 2013 Our govt already taking actions in anticipation on this. If not, what do you think all the recent loan curbing, housing policies are for? Two biggest purchase items of most household - house and car car has aldy gone up. A matter fo time. I see it coming. Then, time to go in as there will be fire sales! Tahan tahan Link to post Share on other sites More sharing options...
Chrispie 5th Gear July 16, 2013 Share July 16, 2013 (edited) car has aldy gone up. A matter fo time. I see it coming. Then, time to go in as there will be fire sales! Tahan tahan sigh.. good for rich people like you.. even if there is fire sales.. I also cannot afford another condo because of the ABSD. Think need to work a lot harder and amass more money before that sale comes. Edited July 16, 2013 by Chrispie Link to post Share on other sites More sharing options...
Sugar Neutral Newbie July 16, 2013 Share July 16, 2013 (edited) but the sibor hasnt moved much right? Edited July 16, 2013 by Sugar Link to post Share on other sites More sharing options...
Duckduck Turbocharged July 16, 2013 Share July 16, 2013 but the sibor hasnt moved much right? Won't happen until later this yr imo. Likely US fomc will announce tapering in Sept, after that SG bank assoc will start to charge sibor liao in anticipation of zirp cancelation, d actual US$ libor increase trigger Link to post Share on other sites More sharing options...
Toapayohkid 1st Gear July 16, 2013 Share July 16, 2013 this dbs ceo saying things we already know. bernanke early said up us fed rates by 2015 so that means singapore also up by then. already the signs are there. us econ tampering on then off that means us economy picking up and would increase rates soon. Link to post Share on other sites More sharing options...
Yeshe Turbocharged July 16, 2013 Share July 16, 2013 car has aldy gone up. A matter fo time. I see it coming. Then, time to go in as there will be fire sales! Tahan tahan standing by standing by [laugh] Link to post Share on other sites More sharing options...
Mustank Hypersonic July 16, 2013 Share July 16, 2013 this dbs ceo saying things we already know. bernanke early said up us fed rates by 2015 so that means singapore also up by then. already the signs are there. us econ tampering on then off that means us economy picking up and would increase rates soon. no lah, he telling you to buy his fixed rate package Link to post Share on other sites More sharing options...
Staff69 Hypersonic July 16, 2013 Share July 16, 2013 But it's no secret , think even the uncle at the coffee shop also know . Interest rate is set to increase Link to post Share on other sites More sharing options...
ShepherdPie 5th Gear July 16, 2013 Share July 16, 2013 (edited) no lah, he telling you to buy his fixed rate package yup... why take 5 yr fixed when the mortagage is 30yrs? 5 yrs later still have to source for new bank and subject to higher rates ? ppl dun take up their 5yr fixed simply because its not attractive enough.. ha ha ha... If they have 30-yr fixed at reasonable rate, i'll sure switch. I believe many will too.. if not why so many ppl on hdb loan... I dun know abt coffee shop talk.. but my recent instalment drop again because of lower sor/sibor. Interest rate standing at <1% p.a. SGD still strong. Edited July 16, 2013 by ShepherdPie Link to post Share on other sites More sharing options...
Toapayohkid 1st Gear July 16, 2013 Share July 16, 2013 no lah, he telling you to buy his fixed rate package hahahaha i think this fixed and floating all nonsense. what is impt is lock-in how long and prepayment penalty, best if none. Link to post Share on other sites More sharing options...
ShepherdPie 5th Gear July 16, 2013 Share July 16, 2013 hahahaha i think this fixed and floating all nonsense. what is impt is lock-in how long and prepayment penalty, best if none. yeah man.. a friend just swtich bank from dbs to a foreign bank with fixed spread. Got to cough out quite alot for switching.. Link to post Share on other sites More sharing options...
Duckduck Turbocharged July 16, 2013 Share July 16, 2013 yup... why take 5 yr fixed when the mortagage is 30yrs? 5 yrs later still have to source for new bank and subject to higher rates ? ppl dun take up their 5yr fixed simply because its not attractive enough.. ha ha ha... If they have 30-yr fixed at reasonable rate, i'll sure switch. I believe many will too.. if not why so many ppl on hdb loan... I dun know abt coffee shop talk.. but my recent instalment drop again because of lower sor/sibor. Interest rate standing at <1% p.a. SGD still strong. sibor dropped to 1% coz US Fed fund rate is on a ZIRP(zero interest rate policy) now, hence our banks cost of funds is close to zero thats y u get 1% floating mortgage. D guidance is earliest 2014 before ZIRP is cancelled, finally sibor will go up. All depends on US economy. So its a matter of when, not if it will go up. Even if rates dont go up, asset prices have more than adjusted for the low rates n basically risks r equally dangerous if u get wat i mean. Link to post Share on other sites More sharing options...
Maxus-MIFA9 Supersonic July 16, 2013 Share July 16, 2013 hmmmm....... so ppl quickly borrow now to avoid interest hike ... Link to post Share on other sites More sharing options...
Toapayohkid 1st Gear July 16, 2013 Share July 16, 2013 hmmmm....... so ppl quickly borrow now to avoid interest hike ... which is the property bubble problem now. can and should borrow if do maths and tahan interest rates of up to 5% like 10 years ago interest rates. Link to post Share on other sites More sharing options...
Duckduck Turbocharged July 16, 2013 Share July 16, 2013 which is the property bubble problem now. can and should borrow if do maths and tahan interest rates of up to 5% like 10 years ago interest rates. my guess is even if sibor hits 4%, there will still b pple chasing property all d way up. Look at 2006-2007, so many pple still buying. If cash purchase ok, if high loan good luck. sibor will hit 4% if US economy recover alot more than now, by then S&P500 maybe 2000 liao, but also means its close to global economy overheating. Thats wat im looking for. ↡ Advertisement Link to post Share on other sites More sharing options...
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