Goldman Sachs sees rate hikes

Goldman Sachs sees rate hikes

HONG KONG (Reuters): Goldman Sachs banking research head Roy Ramos said yesterday he had underweighted the banking sector in Hong Kong, Singapore, Thailand, Indonesia, Malaysia and South Korea.

Ramos said he had gone underweight on Indonesia, Malaysia, and Korea, citing concerns about a continued liquidity crunch in Indonesia, rising non-performing loans in all these countries, and foreign debt rescheduling expected in Indonesia.

In Hong Kong, Ramos said he expected the prime lending rate to rise to 11 percent from 10.25 percent for an extended period while economic growth would fall to two percent and property prices would slump by 50 percent.

In Singapore, Ramos forecast continued high interest rates, a sharp slowdown in economic growth and a big rise in non- performing loans to about 10 percent.