FT News Briefing Can Singapore remain Asia’s ‘safe haven’?
9 snips
Sep 19, 2023 Instacart's IPO could tilt the scales in the fierce rivalry between Nasdaq and the New York Stock Exchange. Hedge funds are under scrutiny as their heavy betting on U.S. Treasuries raises red flags. Meanwhile, Singapore's status as a neutral 'safe haven' faces challenges due to a surge in wealthy Chinese migrants. This migration raises questions about the city-state's diplomatic balance amid tense U.S.-China relations. Will these dynamics change Singapore's reputation in the region?
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Exchange Competition
- Instacart's IPO on NASDAQ intensifies the competition with NYSE for new listings.
- This competition is driven by prestige and substantial listing fees for exchanges.
Basis Trade Explained
- Hedge funds are shorting treasury futures while being long in cash treasuries, creating a basis trade.
- This is driven by market volatility and aims to exploit price discrepancies between the two.
Central Bank Concerns
- Central banks are worried about the basis trade because of its role in past market crises (2019 repo market, March 2020).
- Hedge funds' leveraged positions can lead to rapid unwinding during stress, impacting treasury rates.