Cyprus news dominated headlines
Bloomberg reported on Monday that Cyprus got its bailout funds after agreeing to shrink its banking system. It was the second time in nine days that Cyprus needed to strike a deal as the first deal made on 16 March was rejected by the parliament as the term to impose a tax on all bank accounts were unjust to smaller depositors.

The revised aid package would not affect deposits below the insured amount of 100,000 euros. However, uninsured depositors at the Bank of Cyprus would be imposed a loss as high as 40% while uninsured depositors and bondholders at Popular Bank of Cyprus would be largely wiped out as it is targeted to be wound down.

At the height of the crisis, Cyprus’ central bank implemented a daily withdrawal limit of 100 euros of the 2 largest banks to prevent a bank run by depositors.
 
Without the 10 billion euro bailout package, Cyprus could be forced to abandon the euro currency and is now the fifth country to seek for financial aid since the crisis broke out in Greece in 2009.

Regional markets rallied upon the bailout news with the HSI gaining 0.6% to 22,251.2 while the STI climbed 0.3% to 3,267.5 for the trading day.

Singapore’s 30.6% drop in non-oil exports
Singapore faced its worst slump in its non-oil exports since the last recession as nearly all export categories fell sharply, data released on 18 March showed.

The fall of 30.6% year-on-year (yoy) greatly underperformed against the median estimate of 16%. This slump is the most severe since January 2009, with non-oil exports falling 34.9% during the midst of the financial crisis, reported the Straits Times.

Pharmaceuticals shipments fell 56.5% while rigs and other ship structures plunged 99.4% year-on-year. Non-oil exports to Europe declined 52.2% with exports to the US falling by 52.1% yoy.

Source: Macquarie Research - 26 Mar 2013