SVB collapse will have limited impact on Asia, but one analyst says it could be a warning sign

Analysts accidental the illness of Silicon Valley Bank is not apt to person a large contagion effect successful Asia, but 1 idiosyncratic says it could beryllium seen arsenic a "warning" — particularly for economies that haven't hiked involvement rates aggressively.

China and Japan person bucked the inclination arsenic planetary cardinal banks hike rates – with the People's Bank of China keeping its indebtedness premier rates unchanged, portion the Bank of Japan maintaining a antagonistic involvement complaint of -0.1%.

On Monday, markets successful China traded higher, portion Japan's Topix scale led declines successful a wider sell-off successful Asia's greeting trade. It came aft U.S. regulators announced measures to further stem systemic risks from Silicon Valley Bank's collapse.

"As for China and Japan, the divergence successful monetary argumentation whitethorn not origin a akin situation but it is simply a informing for the policymakers successful the 2 influential economies," Tina Teng, markets expert astatine CMC Markets told CNBC successful an email.

Teng added that the absorption successful Asian equities – task money focused banks, successful peculiar – would mostly beryllium connected "how they negociate their involvement complaint risks for those countries that look akin issues."

"Credit risks mightiness beryllium the large contented that Asian banks look astatine the backmost of a gloomy economical outlook and dampened user demands," she said.

The latest measures announced by U.S. regulators could enactment arsenic a method to incorporate further contagion risk, IG expert Tony Sycamore said.

"This morning's announcement by the FDIC and the Fed volition spell a bully mode to ring-fencing the fallout from Silicon Investment Banks' failure, peculiarly for the broader economy," helium said, adding that helium doesn't expect the fallout successful the portion to deepen overmuch further.

"I expect markets to rapidly determination connected and absorption connected the broader macro issues this week, including time night's ostentation study and the upcoming FOMC report," Sycamore said.

Meanwhile, Moody's Investors Service said Asian banks are not apt to beryllium affected by the fallout of SVB, fixed their deposits are mostly successful loans alternatively of Treasurys.

"If you look astatine the emblematic loan-to-deposit ratio successful Asia, it's astir 90%, truthful astir deposits are invested successful loans," elder recognition serviceman Eugene Tarzimanov astatine Moody's told CNBC's "Squawk Box Asia."

"Banks evidently bash put successful authorities securities — section bonds, overseas bonds, but that stock is not that significant," helium added.

While a fig of companies wrong Asia's task superior and tech start-up assemblage bash person vulnerability to Silicon Valley Bank, not galore person openly admitted to seeing large losses from SVB's bankruptcy.

SPD Silicon Valley Bank, a associated task betwixt Shanghai Pudong Bank and Silicon Valley Bank sought to reassure investors implicit the play and said its operations person been "independent and stable."

The slope said successful a statement connected its website it "has ever operated successful a unchangeable mode successful accordance with Chinese laws and regulations, with a modular governance model and autarkic equilibrium sheet."

Hong Kong markets led gains alongside indexes successful mainland China connected Monday, with the Hang Seng index gaining implicit 2%.

The marketplace is "choosing to overlook" troubles that could originate portion taking steps to incorporate further hazard from SVB's fallout, Hao Hong, main economist of Grow Investment Group told CNBC successful an email.

He acknowledged that "the implementation could person hiccups from however champion to pledge the present marked-down treasury enslaved portfolio arsenic collateral to get from the peculiar lending installation acceptable up by the Fed – but for now, the marketplace is choosing to place these method details."

For China's growth, helium emphasized fiscal information volition stay the starring indicator, and pointed to the system seeing a grounds successful lending for the archetypal 2 months of 2023.

While equities proceed to spot volatility, Goldman Sachs' main Asia-Pacific economist Andrew Tilton said the macroeconomic outlook for the portion is improbable to beryllium profoundly affected by the illness of SVB.

"To the grade that this is addressed comparatively rapidly by regulators and doesn't dispersed to further entities beyond the ones that person been noted truthful far, past we're little apt to spot a important interaction connected Asia maturation outlook," Tilton told CNBC's "Squawk Box Asia."

"We proceed to expect 5.5% maturation for China this year, mostly driven by the reopening and astir apt little delicate to this peculiar issue," Tilton said.

— CNBC's Lim Hui Jie and Sumathi Bala contributed to this story.