<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD height=8></TD></TR><TR><TD class=msgtxt>Is there a S'pore Superman?
September 28, 2008
ONE is popularly referred to as Guru, the other as Superman. Both boast the kind of gravitas from reputations that are able to change sentiment and save troubled institutions.
Mr Warren Buffet proved as much when he 'saved' Goldman Sachs, injecting a US$5 billion ($7b) vote of confidence that is largely attributed to having saved the company.
For Hong Kong, and Bank of East Asia, enter Mr Li Ka-Shing.
Does Singapore have a similar, singular saviour (if the need arises)?
A SMS-initiated run on Bank of East Asia, one of Hong Kong's biggest and best-known banks, was stopped in its tracks a mere day after depositors began panicking, thanks to Mr Li.
The Hong Kong billionaire moved quickly to buy shares in the bank, shoring up confidence.
The bank's stock rallied on Thursday and investors were placated.
Cash infusions
The New York Times reported that a series of measures were taken within a few hours to protect the bank, each aimed at addressing different potential problems.
The banking authorities not only gave a full-throated defence of the bank but also made preemptive cash infusions into money markets.
By late Thursday morning, there were no lines at the bank's stately headquarters in the heart of Hong Kong's financial district.
And two black-and-gold armoured trucks were conspicuously parked across the street with their engines running, a reminder that more cash would be available if anyone else wanted to withdraw money.
The response to the Bank of East Asia showed 'a very well-oiled system of support for banks,' Mr Leo Goodstadt, who was the government's top policy planner in 1991, told The New York Times.
The bank's problems started late Tuesday with a flurry of handphone text messages suggesting that the bank was in difficulty.
Soon after lines formed outside the bank on Wednesday, the chief executive of the Hong Kong Monetary Authority, Mr Joseph Yam, and the financial secretary of Hong Kong, John Tsang, issued statements saying that the city stood behind the institution.
Mr Yam took the unusual step - for the head of what is essentially a central bank - of going on television immediately to discuss the finances of the Bank of East Asia in clear but detailed terms, including how the bank's capital adequacy and liquidity ratios compared with local and international standards.
But many of the people in line outside the bank's headquarters were those less likely to have heard of MrYam - they were mostly retirees, housewives and blue-collar workers.
But they have heard of the man they call Superman - Mr Li Ka-shing.
A poor immigrant who started off making plastic flowers in the 1950s, he has built Hong Kong's largest fortune and was listed by Forbes magazine last spring as the world's 11th-richest billionaire, with a net worth of $26.5 billion.
When the bank's chairman, Mr David Li, arrived late Wednesday night from New York, he immediately told reporters at the airport that Mr Li Ka-shing had been buying shares in Bank of East Asia.
It was a move that aides to MrLi Ka-shing began confirming immediately to anyone who called, in a departure from their usual reticence about his stock investments.
By late Thursday morning, confidence was restored and the only crowd outside the Bank of East Asia's headquarters, reported NYT, consisted of reporters and press photographers with no one to interview.
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TYCOON SAVIOURS
THE US: Mr Warren Buffet 'saved' Goldman Sachs, injecting $7b that is largely attributed to having saved the company.
IN HK: Mr Li Ka-shing moved quickly to buy shares in Bank of East Asia. Its stock rallied and investors were placated a day after depositors began panicking.
IN S'PORE: Does Singapore have a similar, singular saviour (if the need arises)?
</TD></TR></TBODY></TABLE>
September 28, 2008
ONE is popularly referred to as Guru, the other as Superman. Both boast the kind of gravitas from reputations that are able to change sentiment and save troubled institutions.
Mr Warren Buffet proved as much when he 'saved' Goldman Sachs, injecting a US$5 billion ($7b) vote of confidence that is largely attributed to having saved the company.
For Hong Kong, and Bank of East Asia, enter Mr Li Ka-Shing.
Does Singapore have a similar, singular saviour (if the need arises)?
A SMS-initiated run on Bank of East Asia, one of Hong Kong's biggest and best-known banks, was stopped in its tracks a mere day after depositors began panicking, thanks to Mr Li.
The Hong Kong billionaire moved quickly to buy shares in the bank, shoring up confidence.
The bank's stock rallied on Thursday and investors were placated.
Cash infusions
The New York Times reported that a series of measures were taken within a few hours to protect the bank, each aimed at addressing different potential problems.
The banking authorities not only gave a full-throated defence of the bank but also made preemptive cash infusions into money markets.
By late Thursday morning, there were no lines at the bank's stately headquarters in the heart of Hong Kong's financial district.
And two black-and-gold armoured trucks were conspicuously parked across the street with their engines running, a reminder that more cash would be available if anyone else wanted to withdraw money.
The response to the Bank of East Asia showed 'a very well-oiled system of support for banks,' Mr Leo Goodstadt, who was the government's top policy planner in 1991, told The New York Times.
The bank's problems started late Tuesday with a flurry of handphone text messages suggesting that the bank was in difficulty.
Soon after lines formed outside the bank on Wednesday, the chief executive of the Hong Kong Monetary Authority, Mr Joseph Yam, and the financial secretary of Hong Kong, John Tsang, issued statements saying that the city stood behind the institution.
Mr Yam took the unusual step - for the head of what is essentially a central bank - of going on television immediately to discuss the finances of the Bank of East Asia in clear but detailed terms, including how the bank's capital adequacy and liquidity ratios compared with local and international standards.
But many of the people in line outside the bank's headquarters were those less likely to have heard of MrYam - they were mostly retirees, housewives and blue-collar workers.
But they have heard of the man they call Superman - Mr Li Ka-shing.
A poor immigrant who started off making plastic flowers in the 1950s, he has built Hong Kong's largest fortune and was listed by Forbes magazine last spring as the world's 11th-richest billionaire, with a net worth of $26.5 billion.
When the bank's chairman, Mr David Li, arrived late Wednesday night from New York, he immediately told reporters at the airport that Mr Li Ka-shing had been buying shares in Bank of East Asia.
It was a move that aides to MrLi Ka-shing began confirming immediately to anyone who called, in a departure from their usual reticence about his stock investments.
By late Thursday morning, confidence was restored and the only crowd outside the Bank of East Asia's headquarters, reported NYT, consisted of reporters and press photographers with no one to interview.
--------------------------------------------------------------------------------
TYCOON SAVIOURS
THE US: Mr Warren Buffet 'saved' Goldman Sachs, injecting $7b that is largely attributed to having saved the company.
IN HK: Mr Li Ka-shing moved quickly to buy shares in Bank of East Asia. Its stock rallied and investors were placated a day after depositors began panicking.
IN S'PORE: Does Singapore have a similar, singular saviour (if the need arises)?
</TD></TR></TBODY></TABLE>
