SG Morning Highlights | SVB fallout spreads around world from London to Singapore

Advancers / Decliners is 65 to 88, with 120.15 million securities worth S$108.91 million changing hands.

The fallout from the collapse of Silicon Valley Bank (SBV) is beginning to spread around the world.

Startup founders in California's Bay Area are panicking about access to money and paying employees. Fears of contagion have reached Canada, India and China. In the UK, SVB's unit is set to be declared insolvent, has already ceased trading and is no longer taking new customers. On Saturday (Mar 11), the leaders of roughly 180 tech companies sent a letter calling on UK Chancellor Jeremy Hunt to intervene.

"The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years," they said in the letter seen by Bloomberg. "Many businesses will be sent into involuntary liquidation overnight."

US financial regulators moved on Sunday (Mar 12) to protect depositors' funds following the collapse of Silicon Valley Bank (SVB) and set up a new financial backstop, seeking to stem fears that households and businesses would flee smaller lenders.

The Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) jointly announced the efforts Sunday aimed at strengthening confidence in the banking system after SVB's failure spurred concern about spillover effects.

SVB's collapse into FDIC receivership — the second-largest US bank failure in history behind Washington Mutual in 2008 — came suddenly on Friday, following a frenetic couple of days where its long-established customer base of tech startups yanked deposits. After SVB's collapse, a number of other regional lenders saw their shares plunge amid concerns about the financial stability of smaller banks.

The best solution for resolving the failure of SVB Financial Group's Silicon Valley Bank "would be a merger occurring today", said Jefferies Financial Group chief executive officer Rich Handler, who said he doesn't see a repeat of the 2008 global financial crisis emerging from the past week's events.

"In 2008, almost the entire financial system was over-leveraged and filled with mismarked complex illiquid assets," Handler and Jefferies president Brian Friedman said in a letter to clients and employees of their New York-based investment bank. "This is not the case today. Our sense of the range of institutions under scrutiny is that any issues are finite and idiosyncratic — in other words, they don't threaten the whole system and should not lead to endless contagion, as long as we remain calm."

The Federal Deposit Insurance Corporation (FDIC) kicked off an auction process late Saturday (Mar 11) for Silicon Valley Bank, with final bids due by Sunday afternoon, according to people familiar with the matter. The FDIC is aiming for a swift deal, but a winner may not be known until late Sunday, according to one person, who asked to not be identified because the matter isn't public. No final decision has been made and it's possible that no deal will be reached, said the people.

It was commenting on whether the China-focused player with e-commerce, supply-chain management and logistics properties would be able to meet its short-term liabilities of about S$818.5 million. The bourse regulator noted that the group's liabilities stood at S$1.1 billion but only had cash of S$113.3 million, as shown in the group's condensed interim financial statements.

EC World Asset Management replied on Friday (Mar 10) that 64 per cent and 82 per cent of lenders involved in existing onshore and offshore bank loans respectively have obtained internal approvals and are agreeable to a new repayment plan. The remaining lenders, stated EC World Reit's manager, are "in the process" of obtaining internal approvals for the new repayment plan.

In the filing by the listed acquirer on Friday (Mar 10), the total number of shares owned, controlled or agreed to be acquired by Boustead Singapore and its concert parties as well as valid acceptances of the offer amounted to 86.55 per cent as at 6 pm that day.

The offer to acquire Boustead Projects at S$0.95 a share – raised from the initial price of S$0.90 – was launched in February. Boustead Singapore has stated that it intends to take Boustead Projects private and seek a delisting, should the option become available.

The Catalist-listed company attributed the losses for H1 FY2023 to a decrease in iron ore production as a result of intense overburden removal activities, in accordance with the group's mining schedule.

Lower sales volume of iron ore, coupled with a lower average realised selling price for iron ore concentrate and iron ore tailing, also resulted in a lower revenue for the group.