Top Story: West Could Learn Lessons from Asia, Says IMF Chief
Advanced economies could learn from Asia's experience to develop more resilient, sounder economies, says IMF chief Christine Lagarde, at the beginning of a week-long visit to Southeast Asia. Addressing the Malaysian Economic Association in a packed session in the Malaysian capital, Kuala Lumpur, during her first visit to the country as head of the IMF, Lagarde said that in the face of slowing growth, the United States and Europe had "a special responsibility to act." "The West can learn from Asia's own brush with crisis in the 1990s," said Lagarde. "Asia's economic foundations became safer, sounder, and more resilient-but still open to the world and open for business. This has important lessons for the advanced economies currently facing severe challenges," she said.
HIGHLIGHTS:
- "Asia and the Promise of Economic Cooperation" By Christine Lagarde, Managing Director, International Monetary Fund - Lagarde's speech discusses three themes: 1) the policy agenda for advanced economies and the implications for Asia; 2) the virtues and benefits of further economic cooperation within Asia; and 3) the broader importance of international policy cooperation.
- IOSCO emerging markets prepare for bigger role in the global economy - During its Annual Conference on 19 - 21 November, members of IOSCO's Emerging Market Committee (EMC) debated its future within IOSCO, while stressing the importance of building regulatory capacity and developing safe and robust securities markets in emerging economies. Ranjit Ajit Singh, the Vice Chair of the EMC and Chairman, Securities Commission Malaysia, said: "Our role as securities regulators in emerging markets has become undeniably more challenging as capital markets in emerging economies grow in size and take on a more significant role in financing global economic growth. The Emerging Markets Committee will therefore need to play an increasingly more significant role within IOSCO and the wider regulatory policy framework to contribute to international efforts in regulatory reform and market stability."
Int'l delegates to gather in Vietnam to discuss financial stability in East Asia - Over 400 domestic and international delegates will gather in Vietnam's capital Hanoi from Nov. 27-28 for East Asia Conference for Financial Stability. Under the theme "Financial Stability Framework and Supervision in a Changing Environment", the conference will focus on major issues of risks to East Asia's financial stability, the role of the East Asian economies to the global economic recovery, strengthening cooperation between relevant agencies, legal frameworks, models and monitoring capabilities as well as the ability to respond to changes in external markets.
Matterhorn: New investment ave. in ASEAN | WSJ, Nov 20
Southeast Asia is one of the next growth markets where smart stock pickers can invest in emerging companies that are about to take off as the region's economies evolve, said Matterhorn Investment Management LLP. The London-based emerging-market fund management company plans to launch a new long-short hedge fund early next year to give investors a new avenue to invest in Southeast Asia. The fund will invest mostly in Indonesia and the Philippines and focus on growth opportunities in the consumer, infrastructure and banking sectors, said Paul Bate, Matterhorn's founder and chief investment officer, in an interview with The Wall Street Journal.
SGX seeks infrastructure bonds as IPOs slump | Bloomberg, Nov 15
Singapore Exchange Ltd. (SGX), Southeast Asia's largest bourse operator, is seeking to become a venue for infrastructure bonds as a slump in initial public offerings of shares threatens earnings.
Local-currency debt issuance in Singapore, one of seven nations with AAA ratings and stable credit outlooks, reached a record S$30.7 billion ($25 billion) so far this year, beating an annual high of S$24.7 billion in 2010, according to data compiled by Bloomberg News. The amount raised in Singapore IPOs slumped 62 percent this year compared with the same period last year. SGX reported a 19 percent drop in first-quarter revenue from equities trading.
More Asian companies turning to bond market | Channel News Asia, Nov 20
More Asian companies are turning to the bond market for a cheaper source of long-term financing. This following rising liquidity in the region as major central banks in the United States, Europe and Japan undertake quantitative easing measures. Bonds issued in Asia, excluding Australia and Japan, have increased some 55 percent from US$461 billion in the first 10 months of 2011 to US$706 billion till end of October this year. Looking ahead, rising investor demand for safe assets will boost the Asian bond market further.
Franklin Templeton launches global fund in M'sia | The Edge, Nov 14
Franklin Templeton Asset Management (Malaysia) Sdn Bhd launched a new fund in Malaysia, offering local investors the opportunity to tap into global fixed income portfolio. Named The Templeton Global Total Return Fund (the Fund), the new fund is a Malaysia-domiciled fund that invests in a full-range of global fixed income instruments, according to a statement from Franklin Templeton. Citibank Bhd has been appointed as Franklin Templeton Malaysia's first distribution partner. The Fund is available through Citibank and will be offered to qualified investors with a minimum initial investment of RM10,000.
Yingluck: TPP 'not on agenda' | Bangkok Post, Nov 17
The US-led Trans-Pacific Partnership (TPP) will not be on the agenda of talks with US President Barack Obama, says Prime Minister Yingluck Shinawatra. The country at this stage is only studying the pros and cons of entering talks, the premier said as activists prepared to stage a rally against the pact at Don Mueang airport on Sunday afternoon when Mr Obama arrives.
Market Regulation
TFEX to establish investor protection fund | Mondovisione, Nov 14
The Thailand Futures Exchange PCL (TFEX), under The Stock Exchange of Thailand (SET) group, joins hands with 33 brokers members to set up a Derivatives Investor Protection Fund (DIPF), with an initial worth of THB 100 million (approx. USD 3.23 million), aiming at building the confidence of investors, who trade derivatives on the exchange, as they will be protected against member broker bankruptcy or broker inability to return assets or compensate for loss in price of assets to investors. The fund, approved by Securities and Exchange Commission, will be effective from November 15, 2012.
Volcker Rule to prompt bank exodus from US | IFLR, Nov 19
US lawyers have warned the Volcker Rule may prompt foreign banks to exit the US. The Volcker Rule was originally proposed to prevent a repeat of 2008. At its heart is a rule banning US banks from proprietary trading, ensuring that US banks wouldn't take excessive risks with US taxpayer money in the form of deposit insurance or other US government support. All foreign banks with a branch in the US are subject to the Volcker Rule, resulting in onerous compliance issues. US lawyers have questioned the regulation's relevance to foreign banks and warned the Rule could foreshadow their exit from US markets.
Regional Affairs
Asean bourses to stay bullish over near term | Business Times, Nov 16
HWANG Investment Management Bhd believes the reelection of President Barack Obama and the transition of China's leadership will provide Malaysia's and other stock markets in the region a boost over the near term. Stock markets in Asean have become one of the top performing markets so far this year. Malaysia's benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index has risen by about seven per cent year-to-date.
Asean: Deepening regional integration | The Star, Nov 17
The RCEP is Asean's initiative to leverage on the strengths of the region, and drive regional economic growth, counter-balancing the lethargy in the EU (European Union) and the United States. RCEP is envisaged as an open economic integration agreement, initially involving Asean's FTA (free trade agreement) partners, namely, Australia, China, India, Japan, South Korea and New Zealand, and later, expanding to include other dialogue partners. Obviously there are questions about the rationale for such an initiative, given that the Asean Economic Community (AEC) is still a work-in-progress. Why start on RCEP? What's in it for Asean?
RI to lead talks on forming big trade bloc RCEP | Business Times, Nov 19
Indonesia will lead the negotiation between the Association of Southeast Asian Nations and six of its dialogue partners early next year on a proposed economic partnership that will form the world's largest economic bloc. Negotiations on the Asean Regional Comprehensive Economic Partnership (RCEP), an initiative involving the 10 Asean members and its partners - Australia, China, India, Japan, New Zealand and South Korea - are expected to start in April. "Indonesia has been elected as the lead negotiator in RCEP," Trade Minister Gita Wirjawan told reporters on Saturday, following the Asean economic ministers' preparatory meeting here.
ASEAN seen resilient as Indonesia outperforms | Businessweek, Nov 18
Southeast Asia is emerging resilient from a period of global turmoil, with rising investment and domestic consumption that will propel growth in coming years, the Organization for Economic Cooperation and Development said.
ADB: Asia must transform financial landscape | Business Times, Nov 19
Asia must transform its financial landscape to grab opportunities and meet challenges ahead, the Vice-President of the Asian Development Bank (ADB), Bindu N. Lohani said. He said the objective of the next wave of policy reforms in Asia should be to improve the ability of the financial sector to efficiently intermediate capital into productive investments and provide financial services to a majority of the population. Speaking at the Asia Finance Forum here, today, Lohani added that Asia would need to sustain high growth rates, address widening inequities and mitigate degration, amid a race for resources in its march towards becoming a poverty-free region.
ADB: Developing Asian economies must focus on greener, more inclusive growth | ADB, Nov 20
While advanced economies gradually rebuild their balance sheets, Asia's emerging markets need to diversify sources of growth to boost GDP, Asian Development Bank (ADB) President Haruhiko Kuroda said today during an address at the Association of Southeast Asian Nations (ASEAN) Global Dialogue in Phnom Penh, Cambodia. "Tomorrow's successful economies will focus on effectively transforming themselves through growth that reaches more people, especially the poor," Mr. Kuroda said. "Growth must be more inclusive, green and knowledge-led."
Banking
RI bank practices prudent, Fitch says | Jakarta Globe, Nov 20
Indonesia's commercial lenders are expected to maintain their stellar performance in Southeast Asia's largest economy next year, thanks in part to prudent banking practices, according to Fitch Ratings. The rating agency said on Monday that most Indonesian commercial banks should maintain their profitability in 2013, reflecting their sound loss-absorption capacity, which balances risks from rapid growth.
New BI policy could reduce interest rates | Jakarta Globe, Nov 20
Bank Indonesia is studying a policy that will require domestic lenders to impose a rating system for customers of corporate loans in a bid to improve prudent banking practices in the country. Mulya Effendi Siregar, a director for banking research and regulation at Bank Indonesia, said a rating system would allow banks to reduce loan provisions for companies, based on the assessed risks.
Insurance
Thailand promoted as Asean insurance hub | Asia News Network, Nov 14
The World Bank and Japan will promote Thailand as the insurance centre of the Association of Southeast Asian Nations (Asean) to help develop the industry in neighbouring countries and provide professional services to the more advanced economies. The move is also expected to upgrade the insurance industries in Laos, Vietnam and Cambodia to be compatible with Thailand's and in line with the policies of this country's Office of the Insurance Commission (OIC).