Daily Update: November 9, 2022


Start each business day with our analyzes of the most pressing developments affecting the markets today, along with a curated selection of our latest and most important news on the global economy.

Singapore’s red dot turns green

Amid the fallout from the 1998 Asian financial crisis, former Indonesian President BJ Habibie coined a term for Singapore that at first proved controversial but later celebrated.

Writing in the Wall Street Journal Asia, Habibie compared the size of the two countries, describing Singapore as a “red dot” on the map. Years later, the name gained wide acceptance, with the Singapore government using a red dot as its logo to mark the city-state’s 50th anniversary.

Now, amid the fallout from climate change, the red dot is turning green. Singapore’s government is accelerating the decarbonization of business, energy and shipping, while in the private sector, the country’s largest banks aim to increase sustainability-related lending volumes.

Speaking at Singapore’s International Energy Week on October 25, Deputy Prime Minister Lawrence Wong said the government planned to accelerate Singapore’s energy transition. The country would now peak emissions before a prior deadline of 2030, Wong said, and achieve net zero emissions by 2050. Meanwhile, the public sector would try to reach net zero around 2045, depending on the technology and international cooperation on mitigation measures. .

Wong noted that Singapore had already surpassed its previous carbon reduction targets, giving it the confidence to submit more aggressive plans to the United Nations Framework Convention on Climate Change under the Kyoto Protocol.

Singapore’s largest lenders by assets — DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. ltd. and United Overseas Bank Ltd. – have wrote tens of billions of dollars in sustainable loans during the last years. These include green loans, which require all proceeds to be spent on environmental or climate-related projects, and sustainability-linked loans, which can be used for general purposes but are tied to sustainability goals. .

The banks hope to grow their sustainable loan portfolios to between 30 and 50 billion Singapore dollars (21 to 35 billion US dollars) each by 2024 – larger sums than expected, according to S&P Global Market Intelligence.

Singapore’s private sector should also become increasingly involved in the country’s low-carbon future, as it adopts a climate reporting system based on the recommendations of the Task Force on Climate-related Financial Disclosures. The Singapore Stock Exchange is phasing in climate disclosures for securities issuers in FY 2022, with requirements becoming mandatory in certain sectors from 2023.

The country’s small size, which has earned it the nickname of the red dot, will play an important role in how the transition unfolds. On the Singapore power grid, more than three quarters of the operating capacity is provided by natural gas — a transitional fuel that is cleaner than oil and coal, but still produces a significant amount of emissions. With limited access to renewable energy resources, this dominance is set to continue. Nevertheless, project developers have come up with creative ways to deal with space constraints, including floating solar installations and undersea transmission cables.

A minnow compared to its neighbours; Singapore is a giant when it comes to ship fuel. It is home to the world’s largest bunker port, which last year distributed 50 million tonnes of not-so-clean fuel oil. It is therefore not surprising that the port is called upon to make a tangible contribution to Singapore’s climate commitments. As in the electricity sector, plans for the industry involve a range of creative ideas, from electric harbor craft to incentives for clean ship operators, as well as a continued role for transition fuels such as liquefied natural gas.

The challenge for the island nation to reach net zero by 2050 remains daunting, but it is not the first time that Singapore’s ambitions have eclipsed its physical scale.

Today is Wednesday, November 9, 2022and here is today’s essential intelligence.

Written by Mark Pengelly.


Some Central Asian and Caucasian currencies are unexpected emerging market outperformers

Against the tide, the currencies of Armenia, Georgia and Tajikistan have steadily appreciated over the course of 2022. The exchange rates for these currencies are now significantly above their pre-Russian conflict levels. -Ukrainian and are among the best performers in emerging markets. away this year.

—Read the report of S&P Global Ratings

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Capital markets

COP27: Banks come under scrutiny over fossil fuel decarbonization targets

As the world’s largest banks set targets to decarbonize their most polluting portfolios, some institutions are opting for measures that allow them to expand fossil fuel financing, according to environmental and shareholder groups. Banks including US-based Bank of America Corp., JPMorgan Chase & Co. and UK-headquartered Standard Chartered PLC have set intensity-based interim targets for their oil and gas portfolios. gas companies while having no absolute emissions reduction targets to complement them, according to new research by ShareAction, which coordinates investor campaigns.

—Read the article by S&P Global Market Intelligence

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International trade

Asia’s appetite for African crude slows as Ukraine conflict reshapes trade flows

Asia could end 2022 with a sharp decline in crude inflows from Africa as relatively higher freight rates, a wider Brent-Dubai gap and increased competition from European refiners looking for ‘Alternatives to Russian supplies have created hurdles, a trend that isn’t expected to change anytime soon, analysts told S&P Global Commodity Insights.

—Read the article by S&P Global Commodities Outlook

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The climate and conflicts invite a new look at the old nuclear

Climate change and the global energy crisis are making nuclear power attractive again for countries and utilities that were once keen to shift away from nuclear generation. Across Europe, countries are reconsidering plans to dismantle parts of their nuclear fleets after Russia’s invasion of Ukraine dramatically reduced the continent’s natural gas supply. Japan has started restarting the reactors it shut down following the Fukushima Dai-ichi disaster in 2011. In the United States, a wave of retirements has stalled, states and now the government federal government offering new subsidies to keep factories online.

—Listen and subscribe to Energy Evolution, a podcast from S&P Global Commodities Outlook

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Energy and raw materials

Weekly Price Impulse: Commodities Lower on Bearish Demand Outlook

The Materials Price Index fell 3.4% last week, the eighth drop in the past ten weeks. The decline was significant, with nine out of ten sub-components falling. Last week’s drop is further evidence of how commodity markets are moving, with the IPM down 34% from its all-time high set in early March. However, commodity prices, as measured by the IPM, remain 38% higher than the pre-pandemic level in January 2020.

—Read the article by S&P Global Market Intelligence

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Technology and media

Business Cyber ​​Risk Insights: The Potential Impact of Cyber ​​Threats is Growing

The cyber threat to issuing companies is primarily concentrated in industries with critical infrastructure systems that are highly susceptible to business interruptions or that have extensive and sensitive customer data, technology or intellectual property. S&P Global Ratings credit analysts believe that business interruption and reputational damage are the most acute cyberattack-related credit risks for businesses.

—Read the report of S&P Global Ratings

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