Wed, Nov 07, 2018 - Page 10 News List

Trade war fears ‘overblown’: DBS CEO


Fears about the effects of the US-China trade war are “somewhat overblown” for now as the flow of goods and services remains largely intact, DBS Group Holdings Ltd CEO Piyush Gupta said yesterday.

“The direct impact will not be very material,” Gupta said in an interview with Bloomberg Television, adding that it is “very hard to shift supply chains.”

Gupta, 58, spoke on the sidelines of a Bloomberg forum in Singapore, where participants were debating the economic and commercial effects of trade friction stemming from the policies of US President Donald Trump’s administration.

The stakes are high for DBS, which is among the five biggest trade finance banks in Asia by market share, Greenwich Associates research showed.

For example, in technology it takes three to four years to adjust manufacturing supply chains, and even for lower-end goods like refrigerators and vacuum cleaners it might take 12 to 18 months, Gupta said.

The bigger concern is the potential for things like a financial market sell-off to create a “feedback loop,” he said.

Southeast Asia’s biggest bank is eyeing business opportunities from China’s growing global footprint, Gupta said.

Most of DBS’ activities “tend to be outward bound” in China, where the bank serves corporate customers, he said.

Chinese President Xi Jinping’s (習近平) Belt and Road Initiative and the internationalization of the yuan present opportunities, he added.

DBS has arranged equity capital funding and real-estate investment trust transactions for Chinese companies outside their home market, Gupta said, adding that the domestic Chinese real-estate investment trust market could become bigger than the US’ at some point.

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