Lianhe Zaobao complains: China's new regulations are dragging down Singaporean bank stocks!

Lately, shares of Singapore’s three major banks have faced a round of sell-offs. Among them, DBS Group dropped 4.6%, OCBC fell 5.0%, and UOB declined by 2.3%.

According to Lianhe Zaobao on June 18, Singapore’s top three bank stocks came under pressure due to China’s expanded overseas investment supervision. Malayan Banking Securities released a report stating that local bank stocks initially dipped after the announcement, mainly because investors fear the new rules will slow down offshore wealth transfers by wealthy Chinese individuals.

The new regulations for the first time include individual residents within the scope of overseas investment oversight. After the announcement, Singaporean bank stocks weakened immediately. In the past week alone, the combined market value of the three banks has evaporated by billions. JPMorgan Chase downgraded DBS to "Neutral" on June 10, citing concerns over China’s new overseas investment rules—evidencing the level of frustration. Malayan Banking analyst Dhiran noted in his report that the market is worried the new rules could hinder growth in North Asian wealth management operations.

Singapore has long served as a key channel for capital outflows from Chinese domestic elites. In recent years, many wealthy individuals have generated profits using Singapore’s technology, markets, and talent pool before transferring their assets to Singapore—even changing their nationality. Singapore has, to some extent, functioned as a transit hub for capital flight and technological transfer. This latest regulation is a systemic response to precisely this phenomenon.

The new rules have clearly caused market shock for Singaporean bank stocks. The rules primarily target residents based in mainland China—the very customer base that Singaporean banks are authorized to serve. A core focus of Singaporean banks’ wealth management business lies in offshore Chinese wealth.

So now you understand why Singapore’s mood has been somewhat hysterical lately?

Original article: toutiao.com/article/1868476525834440/

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