Bloomberg
Singapore
Standard Chartered should relocate to Asia as the expense of being based in London has become punitive after the UK raised its bank levy an eighth time, according to a managing director of its second-largest shareholder Aberdeen Asset Management.
“Given the penal cost of being based in London, they should consider the move,” it “makes sense,” Hugh Young, a Singapore-based managing director at Aberdeen, said in a phone interview. The bank doesn’t have a huge business in the city, he said.
After falling earnings and a 39% share-slump in the past two years, Standard Chartered overhauled its management last month, with Bill Winters, 53, a former co-chief executive officer of JPMorgan Chase & Co’s investment bank, replacing CEO Peter Sands. The UK levy on banks’ balance sheets cost the firm $366mn last year, accounting for about 9% of its $4.2bn of pretax profit, company filings show.
Moving the headquarters has been a long-standing debate for Standard Chartered because it gets the majority of its revenue from Asia, and its two largest offices are in the region. The bank employs 7,400 in Singapore and 6,000 in Hong Kong, compared with 1,736 people in London, according to its website.
Spokesman Jon Tracey declined to comment on any potential change in the bank’s headquarters.
The stock has surged 19% since Winters was named successor on February 26. It rose 0.6% to 1,110 pence at 11:05 am in London.
The UK government increased the tax on banks’ assets for the eighth time on March 18, to 0.21% from 0.16%, seeking to raise an extra £900mn ($1.34bn) annually from the country’s biggest lenders.
“They’ve got to look at it and make a decision,” Aberdeen’s CEO Martin Gilbert said on the sidelines of the Investment Management Association of Singapore conference held in the city. “I don’t expect a shift in strategy. Bill Winters is a very good CEO.”  Aberdeen owns 9.59% of Standard Chartered’s stock, making it the second-largest shareholder after Temasek Holdings with 17.7%, according to the bank’s annual report.

BoJ chief’s optimism on inflation goal challenged
Bloomberg
Tokyo


Bank of Japan Governor Haruhiko Kuroda’s optimism that he can meet a 2% inflation target is getting a reality check at the nation’s cash registers.
Analysis of scanner data for about 350,000 products at 300 supermarkets across Japan shows costs are falling, said Tsutomu Watanabe, an economics professor at the University of Tokyo. A report on Friday showed gains in consumer prices excluding fresh food slowed for a seventh month in February to a one-year low. The cost of cereals, household durable goods and rents fell last month from a year ago, the data showed.
Japan’s bond market is also betting that Kuroda won’t be able to meet his inflation goal during the fiscal year starting April. The break-even rate, which signals bond investors’ inflation expectations, remains at half the BoJ’s target. Sovereign debt has recouped most of the losses it made last month as global central banks responded to slumping commodity prices by keeping monetary policy easy.
“It’ll take at least two to three more years for inflation expectations to be anchored stably at 2%,” Watanabe, a former BoJ official, said in a March 20 interview. “Prices didn’t fall sufficiently during the deflation years, with wages probably putting a floor, and that created a huge gap between where prices should have been and where they actually stayed.”
 Slowing Inflation  Consumer prices excluding fresh food climbed 2% in February, after gaining 2.2% in January, Friday’s government report showed, compared with a median estimate for a 2.1% increase in a Bloomberg survey of 32 economists. The central bank’s measure that strips out last year’s sales-tax increase showed inflation at zero.
Prices, which fell 0.4% in April 2013 at the start of Kuroda’s term, have gained at a slower pace for almost every month since peaking at 3.4% in May 2014.
The University of Tokyo’s measure tends to be about 0.5 percentage point lower than the CPI, Watanabe said. The school is Japan’s top university, according to QS Quacquarelli Symonds, an education-consulting company based in London.
Japanese government bonds completed a 10-month advance in January as the slowdown in inflation continued even as Kuroda pledged to expand the nation’s monetary base at an annual pace of ¥80tn ($671bn). The Bloomberg Japan Sovereign Bond Index rose 0.5% this month, recouping some of the 0.7% loss in February. The 10-year bond yield, which was at 0.38% at 11:05 am in Tokyo, touched a record low of 0.195% in January.
“It’s impossible to stably sustain 2% inflation in Japan, 1% may be possible but 2% is not,” said Makoto Yamashita, strategist for Japanese interest rates at Deutsche Securities Inc in Tokyo. “Globalisation makes it difficult for the price of goods to rise much.” There are signs that Kuroda’s effort to keep Japan out of a deflationary spiral is making progress. Japanese labour-union members are on course to get a pay increase of about 2.4%, the biggest in 17 years, the Japanese Trade Union Confederation said on March 20. Ichibanya Co, which runs a nationwide restaurant chain, in February said it planned to increase prices of toppings for curry dishes by as much as 16% from this month.