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Straits Times
12 hours ago
- Business
- Straits Times
Singapore's banking hub has a corner where cash is still king
Travelers with cash also avoid the higher exchange rates and foreign transaction fees imposed by many credit cards. PHOTO: ST FILE SINGAPORE - In the heart of Singapore, a financial hub where billions of dollars zip around the world over computer screens in nanoseconds, there's a crowded building where cash still reigns. Six days a week, hundreds of people line up at The Arcade, a narrow, three-story plaza abutting Raffles Place square, to buy and sell hard currency at one of around 30 money changer stalls. All manner of notes can be had in minutes: Singapore dollars for British pounds? Coming right up. Indonesian rupiah for Vietnamese dong? Icelandic króna? Maldivian rufiyaa? No problem. Some 150 currencies are available. 'Cash will remain forever,' said Abdul Haleem, 65, a veteran of the industry whose kiosk sits at the entrance to the The Arcade. The towering offices of global banking giants JPMorgan Chase & Co. and Bank of China are just steps away. The number of licensed money changers in Singapore dropped during the Covid-19 pandemic when many people were unable to travel and retail shops struggled to pay rent. But there are close to 250 physical stalls still operating, and new ones continue to spring up across Singapore. That's even though multi-currency payment apps such as YouTrip, Wise and Revolut have grown in popularity. To understand how so many money changers can survive the digital age, you need to know a bit about Singapore's place in the world. Though it's now among the richest countries – where financial titans from UBS Group to BlackRock manage more than US$4 trillion and billionaires including James Dyson, Ray Dalio and Sergey Brin have set up family offices – the nation remains a shipping and transit hub at its core. Hundreds of vessels anchor in Singapore's harbour each day, many waiting to load and unload cargo at one of the world's busiest ports. For decades, that's made Raffles Place a prime location for money changers, just a few blocks from where the Singapore River empties into the Singapore Strait. Many sailors need to swap cash from their previous locations, and change money for their next destination. 'They get off the boat and come right here,' said Mr Haleem, whose uncle Abdul Gaffoor, now 99, started City Money Changers on the Arcade's ground floor in 1980. Old-world relic Many office workers also come in search of the best exchange rates – which are often better than what banks offer. Mohamed Rafik, 55, a partner at Arcade Money Changers, a stall opposite Haleem's, remains optimistic. His evidence is that there are new licensees entering the industry who wouldn't do it if they couldn't make a living. 'Money changers won't go out of business,' said Mr Rafik, while handling cash and paper receipts on a busy afternoon. Digital payment wallets may seem attractive now, but the companies also have overheads and may try to increase rates in the long run, he predicted. Right now, a thriving tourism industry is driving demand during the June school holidays. Singapore is close to South-east Asian holiday hotspots like Phuket in Thailand, Vietnam's Ha Long Bay and Bali, Indonesia, where cash is still needed to pay for food at street stalls or small restaurants, or to offer tips. Travelers with cash also avoid the higher exchange rates and foreign transaction fees imposed by many credit cards. For Christina Ng, a teacher in her 40s who came to Haleem's stall for Korean won, cash gives a sense of security while traveling. Paying with notes and coins is also a lesson for her three children. 'I want them to learn how to use the cash and do the transaction, so they need to see the physical money,' she said. 'We don't want them to just tap, tap, tap without actually knowing what they're spending on.' The money changers are good leading indicators of travel trends. Whereas demand used to be strongest for US dollars and Malaysian ringgit, the Japanese yen is now most sought-after, along with Korean won and Taiwanese dollars, Mr Haleem said. At the Arcade, the money changers carve out an existence on the fringes of the multi-trillion dollar global foreign-exchange market. Frugality gives them an edge against the financial institutions that occupy the opulent towers surrounding Raffles Place, according to Mr Rafik at Arcade Money Changers. The changers will survive even if digital platforms cut their margins to zero to gain market share, he said. Congregating in one location attracts more customers, but it also pares margins to the bone. Foreign currency bought at a commercial bank can cost 1 per cent to 4 per cent or more once you factor in a poorer exchange rate and transaction fees. At City Money Changers, it's a high-volume, low-margin business where Mr Haleem typically makes fractions of a penny on the dollar in a swap. 'Everybody wants to see the best price so they will shop around,' he said, while taking a break from his tiny kiosk. On the afternoon of June 19, Haleem's stall was selling the US dollar at S$1.2900, versus the S$1.2972 offered by DBS Group Holdings, Singapore's largest bank, on its retail app. The cash exchange rate wasn't as favourable as YouTrip's rate of S$1.2877 per US dollar. With all this cash on hand – some changers can turn over $500,000 a day, he says. Regulators have scrutinized the industry in the past, concerned about the potential for money laundering. In 2016, the Monetary Authority of Singapore (MAS) cited a Raffles Place currency changer, along with other banks, for their roles in the scandal at 1MDB, the Malaysian sovereign wealth fund. The probe revealed inadequate risk management practices at the changer, and failure to identify the beneficial owners of funds. Money changers are now required to conduct customer due diligence measures for cash transactions exceeding $5,000, or for those topping $20,000 where the money is funded from an identifiable source like a bank account. That includes verifying customers' identities and keeping proper transaction records. The industry poses a 'moderate level' of money-laundering threats due to its cash-intensive nature, said an MAS spokesperson. Mr Haleem, who's been at this trade for 40 years, concedes that the future isn't all bright for his industry. Business is about half that of pre-Covid levels, and the increased competition is eroding margins, while wild currency swings can leave him sitting on devalued cash overnight. He predicts the trend toward digital payments is only going to accelerate. 'It will become worse and worse,' he said, though he thinks there will always be a little room in people's wallets for cold hard cash. One floor up at Crown Exchange, Thamim A.K., a money changer in his 60s, is more sanguine. Sitting in a backroom surrounded by wads of Korean won and Indonesian rupiah, he says his 40 years of trading, with all its ups and downs, gives him hope for the future. 'I've seen everything, all the currencies, fluctuations,' Mr Thamim said. 'The bank notes business is still there. It's growing, in fact. It's fighting with digital.' BLOOMBERG Join ST's WhatsApp Channel and get the latest news and must-reads.
Hindustan Times
4 days ago
- Business
- Hindustan Times
American Express plans 'largest investment ever' in platinum credit card
American Express Co. teased updates coming later this year to its travel-focused Platinum credit cards, announcing what it called its 'largest investment ever' in a credit-card refresh. 'We're going to take these cards to a new level, not only in what they offer in travel, dining and lifestyle benefits, but also in how they look and feel,' Howard Grosfield, Amex's group president for US consumer services, said in a statement Monday. Amex raised its Platinum card annual fee to $695 in July 2021, when it also added $200 in annual hotel credits. Since then, the New York-based company has faced intensifying competition for premium credit-card customers, including from JPMorgan Chase & Co.'s Sapphire Reserve card and Capital One Financial Corp.'s Venture X Rewards card. The Amex update will apply to both the US consumer and business Platinum cards, the company said. It didn't provide more specifics on what changes are coming. Card upgrades are critical for new-card acquisition and fees to fuel Amex's revenue growth targets, Bloomberg Intelligence analyst Ben Elliott wrote in a note to clients. 'Consumers' appetite for ever-higher annual fees and complex, incentive-driven rewards structures could be tested if demand slows, but the formula has driven growth consistently for decades,' Elliott said. Access to Amex's global lounges is one of the benefits linked to the Platinum card. A new Centurion lounge will be opening at Tokyo's Haneda Airport in the next year, Amex said in the statement, in addition to already-announced plans for new ones in Salt Lake City and Newark, New Jersey.
Fashion Network
4 days ago
- Business
- Fashion Network
JPMorgan readies $6.5 billion Skechers debt sale for next week
JPMorgan Chase & Co. plans to kick off a $6.5 billion debt offering to support private equity firm 3G Capital's purchase of footwear maker Skechers as soon as next week, according to a person with knowledge of the matter. The financing is expected to include $4 billion of secured debt and $2.5 billion of unsecured debt, the latter of which would allow for a 'payment-in-kind' feature with a toggle option, Bloomberg previously reported. The PIK component means the borrower can choose whether to pay interest in cash or by issuing more debt. It's not clear if next week's offering will include all or some of that debt package, said the person, who was not authorized to discuss the transaction publicly. A JPMorgan representative declined to comment. Representatives for 3G Capital and Skechers didn't immediately respond to requests for comment. Risky debt offerings have rebounded in the past few weeks as markets stabilized from tariff-induced volatility. Deals that have launched have been mostly well-received by investors. The Skechers deal had been expected to launch after the May 26 Memorial Day holiday. 3G Capital expects its $9.4 billion Skechers buyout, which also includes an equity component, to close during the third quarter, according to a company statement. Founded in the early 1990s and based in Manhattan Beach, California, Skechers is now the third-largest global sports footwear retailer. It has nearly doubled revenue over the past five years, and is on the path to reach $10 billion in sales by 2026, according to Abigail Gilmartin, Bloomberg Intelligence's retail analyst, in a report last month.
Straits Times
5 days ago
- Business
- Straits Times
Oil extends rally as escalating Israel-Iran conflict stokes supply disruption fears
An oil storage facility in Iran burns after being hit by Israeli airstrikes on June 15, 2025. PHOTO: ARASH KHAMOOSHI/NYTIMES TOKYO - Oil prices climbed in early Asian trade on June 16 after Israel and Iran launched fresh attacks on June 15, heightening fears that escalating battle could trigger a broader regional conflict and widely disrupt oil exports from the Middle East. Brent crude futures were up US$1.70, or 2.3 per cent, to US$75.93 a barrel by 6.53am Singapore time, while US West Texas Intermediate crude futures gained US$1.62, or 2.2 per cent, to US$74.60. They had surged more than 5.5 per cent earlier in the morning. Both benchmarks settled 7 per cent higher on Friday (June 13), having surged more than 13 per cent during the day, the most in three years. The latest developments have stoked concerns about disruptions to the Strait of Hormuz, a vital shipping passage. About a fifth of the world's total oil consumption passes through the strait, or some 18 to 19 million barrels per day (bpd) of oil, condensate and fuel. A closure of Hormuz could propel international prices to as high as US$130, JPMorgan Chase & Co. has predicted. A jump in oil would add to inflation pressures around the world. Widely watched market metrics are pointing to panic over prompt supply risks, as well as growing fears of a protracted conflict in the Middle East. The gap between the grade's two nearest December contracts – a key indicator on long-term balances – rose by as much as US$1.29 a barrel to US$3.48. Israel temporarily knocked out a natural gas processing facility linked to the giant South Pars field, Iran's biggest, in an attack on June 14, and targeted fuel storage tanks during strikes as part of its campaign against Tehran's nuclear programme. While the attack was concentrated on the Islamic Republic's domestic energy system rather than exports to international markets, oil traders and analysts are preparing for more turmoil. 'Now that threshold has been crossed, there will be questions about whether Israel is going to target more Iranian energy infrastructure,' said Richard Bronze, head of geopolitics at consultant Energy Aspects. 'We appear to be in an escalatory cycle.' Despite US sanctions, Iran remains the third-biggest producer in the Organization of the Petroleum Exporting Countries (Opes. Its allies in Yemen, the Houthi militants, have harassed ships in the region and Tehran has in the past threatened to halt the Strait of Hormuz, a critical transit point in the Persian Gulf. It has, however, never blockaded the key maritime chokepoint. If oil supplies are disrupted, President Donald Trump will likely call on the Opec+ alliance led by Saudi Arabia to tap its considerable spare production capacity, Helima Croft, head of global commodity strategy at RBC Capital Markets, and a former CIA analyst, said in a note on June 13. But it's unclear whether the Opec could offset a severe and prolonged outage in Iran, which pumps around 3.4 million barrels a day. The attempt alone could put the energy infrastructure of the Saudis and the United Arab Emirates into the cross-hairs. After Riyadh backed Mr Trump's earlier crackdown on Tehran during his first term, its critical oil-processing installation at Abqaiq was blown up by the Houthis in 2019. 'Opec spare capacity could be brought online to offset a reduction in Iranian barrels,' said Clay Seigle, senior fellow at the Center for Strategic and International Studies in Washington DC. 'But it would be politically dicey for Saudi Arabia and UAE to benefit in this way at Tehran's expense.' The fact that major oil facilities have so far been spared in the current tumult may offer markets some reassurance. 'We would probably need to see evidence of an intensifying war – with far more widespread damage and mass civilian casualties – for that expectation to change and the risk premium in crude to spike further,' said Vandana Hari, founder of Singapore-based energy consultancy Vanda Insights. The International Energy Agency, the Paris-based watchdog set up by consuming nations, said that global oil markets are well supplied amid slowing fuel demand and recent production increases by Opec+. The agency said it's prepared to tap emergency stockpiles if necessary. On June 15, President Trump said in a Truth Social post that the two belligerent countries should and will make a peace deal. Mr Trump had said before Israel's attacks that he was dissatisfied with rising oil prices. Fears over the Strait of Hormuz are probably excessive too, Ms Hari added. Such an extreme step would cut off Iran's own export route and alienate its biggest customer, China. 'Iran has never actually blocked the channel despite many threats to do so down the years and I don't expect it will do so now,' she said. BLOOMBERG, REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Fashion Network
5 days ago
- Business
- Fashion Network
JPMorgan readies $6.5 billion Skechers debt sale for next week
JPMorgan Chase & Co. plans to kick off a $6.5 billion debt offering to support private equity firm 3G Capital's purchase of footwear maker Skechers as soon as next week, according to a person with knowledge of the matter. The financing is expected to include $4 billion of secured debt and $2.5 billion of unsecured debt, the latter of which would allow for a 'payment-in-kind' feature with a toggle option, Bloomberg previously reported. The PIK component means the borrower can choose whether to pay interest in cash or by issuing more debt. It's not clear if next week's offering will include all or some of that debt package, said the person, who was not authorized to discuss the transaction publicly. A JPMorgan representative declined to comment. Representatives for 3G Capital and Skechers didn't immediately respond to requests for comment. Risky debt offerings have rebounded in the past few weeks as markets stabilized from tariff-induced volatility. Deals that have launched have been mostly well-received by investors. The Skechers deal had been expected to launch after the May 26 Memorial Day holiday. 3G Capital expects its $9.4 billion Skechers buyout, which also includes an equity component, to close during the third quarter, according to a company statement. Founded in the early 1990s and based in Manhattan Beach, California, Skechers is now the third-largest global sports footwear retailer. It has nearly doubled revenue over the past five years, and is on the path to reach $10 billion in sales by 2026, according to Abigail Gilmartin, Bloomberg Intelligence's retail analyst, in a report last month.
