True face of China -- A Modern Kaleidoscope Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : True face of China -- A Modern Kaleidoscope

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: RealMuLan who wrote (3719)	7/16/2008 11:38:14 PM
From: RealMuLan	Read Replies (1) of 12464

Yam calm about Fannie, Freddie Katherine Ng Thursday, July 17, 2008 thestandard.com.hk The impact of Fannie Mae and Freddie Mac's woes will be limited in Hong Kong because only 0.1 percent of the assets of local banks are invested in the two beleaguered US home loan companies, said Hong Kong Monetary Authority chief executive Joseph Yam Chi-Kwong. He also dismissed worries the city's Exchange Fund would suffer more losses due to its holdings in the two firms. "The [fund] committee has a prudent strategy in managing the fund, minimizing any [possible] losses that might be incurred," said Yam. But he declined to disclose how much of the fund has been involved in mortgage bond investment, saying it was sensitive information. ADVERTISEMENT He added: "It would be difficult to keep profits amid such a volatile market situation, but [Hong Kong people should not worry so much] as we will do our best [to maintain a good result]." He agreed the subprime crisis was "critical" but remained confident as both mortgage firms have the support of the US government. "Credit risk should not be a problem," he said. "The risk premium of both home loan companies is only dozens of basis points above the Treasury's and is on a decreasing trend after the US government vowed support." Meanwhile, analysts said market worries that mainland banks stand to be hit by the US woes would be severe only for Bank of China (3988), because the lender may own about US$20 billion of debt issued by Fannie Mae and Freddie Mac. That would represent two thirds of total holdings among the six largest Chinese banks. "Our estimates suggest the exposure in bonds issued by Freddie Mac and Fannie Mae at most banks is between 0-1 percent of total assets, except for BOC where it is estimated to make up around 2.6 percent of total assets respectively," said CLSA banking analyst Kevin Chan in a report. A Bank of Communications (2388) spokesman yesterday denied reports the bank holds 7.5 billion yuan (HK$8.55 billion) in bonds with the two firms.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next