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Philippines Seeks to Join ASEAN Trading Platform
On June 23 at the Philippine Capital Markets Forum in Hong Kong, the Filipino government updated the progress being made in the of the domestic capital market development agenda and noted that the Philippines Stock Exchange (PSE) expects to joining the ASEAN Trading Link by 2016. Philippines National Treasurer Roberto Tan noted that the Capital Market Development Plan (CMDP) has been updated to include new financial products such as exchange-traded funds and derivatives as well as new services such as online trading. The CMDP has been used to enhance and update the exchange in anticipation of regional integration next year. As part of this modernization process, the Philippine Stock Exchange started using a new trading system PSEtrade XTS utilizing NASDAQ’s X-stream Trading technology, on June 21. In addition to touting the progress of its capital markets, Filipino officials have been promoting the overall economic strength of the country. At the Forum, Finance Secretary Cesar Purisima highlighted the growing local currency corporate bond market, which has more than doubled from $7.6 billion in 2009 to $17 billion at the end of last year. Secretary Purisima was also recently interviewed by The Wall Street Journal, where he pointed out that external debt, as a percentage of GDP, has been halved from 30 percent to 15 percent since 2005 and the Philippines has reported a current-account surplus for the last 13 years. He also expects GDP to grow 7 percent this year. Government and business leaders from the Philippines are also wrapping up a three-city trade and investment mission through the U.S. to highlight the development of the economy, including a fast growing IT/BPO sector and increasing investments in infrastructure and reassuring investors of the government’s commitment to reforms despite a change in administration after presidential elections next year. This optimism comes as a recent report issued as part of the Advancing Philippine Competitiveness project warned that the Philippines must continue to enact financial sector reforms, such as easing restrictions on foreign equity for investment houses and increasing access to local credit. More information on the ASEAN Trading Link can be found here.
Bank Negara Issues Press Release to Depoliticize Currency Fluctuation Debate
On June 18, Bank Negara issued a press release that dismissed “recent inaccurate and misleading media reports” that have disproportionately emphasized Malaysia’s domestic political climate as the source of the decline in the ringgit. According to Thompson Reuters, the ringgit is the worst-performing Asian currency this year, with nearly a 5 percent loss against the Dollar. Bank Negara’s press release followed a flurry of reports quoting the Deputy Finance Minister Ahmad Maslan, who in statements made to Parliament, attributed the slump in the ringgit to Former Prime Minister Mahathir. Maslan said that Mahathir’s criticism of Prime Minister Najib had created political instability, leading to uncertainty amongst foreign investors and a fall in the ringgit. When providing foundation for these claims, Maslan stated the Bank Negara had briefed him on the impact of Mahathir. Immediately following Maslan’s statements, Bank Negara issued the press release in order to clarify its role and depoliticize the debate over the weakening ringgit. Bank Negara stated that it would “not be drawn into any political agenda,” and went on to say that, “the current movements of the Ringgit are affected by both global and domestic developments. Global developments would include investor expectations relating to monetary policies of major central banks and global trends in crude oil and gas prices. Domestic factors include concerns about government linked entities and ratings related issues.” The Bank called for the quick resolution of domestic pressures on the ringgit, believing that settlement of these issues would allow the ringgit to rebound. On June 23, while speaking on the 11th Malaysia Plan, Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar echoed Bank Negara’s confidence in Malaysia’s sound economic fundamentals and growth prospects. Minister Wahid stated that current fluctuations in the ringgit are still manageable and its impact on companies is minimal. He said that the government has taken the measures to diversify the economy by reducing its dependency on commodities as well as oil and gas. The financial services sector has been a critical component of this economic transformation. According to the Ministry of Finance’s most recent annual economic report, Malaysia’s financial services sector now accounts for about 8.5 percent of GDP. Malaysia’s recent economic growth is evidence of its economic resilience and sound fundamentals. Between 2009 and 2014, Malaysian Gross National Income grew by 47.7 percent. Malaysia’s growth last year was 6 percent and over the next four years the OECD predicts Malaysia will enjoy annual growth of 5.6 percent. In the last 5 years, annual investment growth has been 2.5 times more than in the preceding years. Therefore, despite recent the fluctuations in the value of the ringgit, the upward trend of Malaysia’s economy is likely to continue.
Atlantic Council White Paper on RMB
The Atlantic Council, in collaboration with several other organizations, has released a white paper outlining the path for greater Renminbi (RMB) acceptance in the global financial system. The report argues that the rise of the RMB as an international currency of trade holds numerous potential benefits for governments and private investors. It cautions, however, that this process is likely to "[create] a number of challenges from the standpoint of global governance and international economic cooperation." To address these obstacles, the report identifies several broad strategies, including enhanced coordination among national and transnational monetary bodies. The report also advocates steady and credible institutional and regulatory reforms on the part of the Chinese government. The Atlantic Council’s report comes less than a month after the IMF publicly rescinded its long-held view of the RMB as deliberately undervalued. That announcement was seen to coincide with the RMB’s possible inclusion in the IMF’s basket of Special Drawing Rights currencies later this year. The Atlantic Council’s white paper, titled “Renminbi Ascending: How China’s Currency Impacts Global Markets, Foreign Policy and Transatlantic Financial Regulation,” can be found here.
Indonesia’s Financial Safety Net Bill
President Joko Widodo is seeking to present the Financial Safety Net Bill (JPSK) to the House of Representatives. This bill has been in discussion since the onset of the Global Financial Crisis of 2008, and aims to create a framework which will protect Indonesia from possible crises in the financial sector. The Chairman of the National Commercial Banks Association (Perbanas), Sigit Pramono, views the Bill as vital, as it will clarify the roles various authorities will play in crises, and what authority each institution will have. As such, many hope that the Bill will be included in the agenda for the national legislation program team this year. The JPSK will focus on four major points: effective bank regulation and supervision, lenders of last resort, adequate deposit insurance schemes, and effective crisis resolution policy. Through these objectives, the Bill will stipulate banks who qualify as domestically systematic important banks, which institutions have the authority to mandate bailout duties, how banks may be classified as ‘failed banks’ during times of crisis, and establish set crisis resolution procedures, among other salient points. Many have argued that the introduction of this Bill will ensure greater financial stability in Indonesia, ensuring that finances are safe during times of crisis, and will safeguard stability to allow the economy to grow and contribute to sustainable economic development.
Indonesia Removed from Money-Laundering Blacklist
The Financial Action Task Force (FATF) on June 26 said it would remove Indonesia from its blacklist of nations that fail to meet international money-laundering standards. Indonesia had been on the FATF’s blacklist since 2012, as the nation was assessed to be non-cooperative in combating transfers of illegal funds. While the FATF itself cannot impose sanctions, a jurisdiction placed on the group’s blacklist faces difficulty in conducting international financial transactions. Officials from Indonesia’s Financial Transaction Reports and Analysis Centre (PPATK) hailed the FATF’s decision as the culmination of several years of reform. Recent legislative efforts have given PPATK progressively greater powers to detect and prevent transfers of terrorist-related monies. In April, the PPATK announced that it had frozen at least 20 bank accounts belonging to al-Qaeda and Taliban-affiliated terrorist groups operating in the country.
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Market Development
Indonesia no longer on money laundering black list The Jakarta Post 26th Jun 2015
The global task force for money laundering and terrorist financing has officially cleared Indonesia from its black list due to the country’s overall progress in preventing terrorist-related financial crimes. The Financial Action Task Force of Money Laundering (FAFT) announced on Thursday in Brisbane, Australia, that Indonesia had complied with FAFT’s requirements on financial securities, thus removing the country from its black list. “Indonesia is no longer on the list of countries that receive warnings from FAFT on financial security and financial transactions,” Financial Transaction Reports and Analysis Centre (PPATK) chairman Muhammad Yusuf said as quoted by tempo.com on Friday. Yusuf added that Indonesia had been on FATF’s black list since 2012 because there were risks that it could facilitate terrorism funding and money laundering. Since then, FATF has issued a global warning against doing financial and banking transactions with Indonesia.
Banks keen to experiment before credit bureau arrives Myanmar Times 25th Jun 2015
Banks are tentatively beginning to offer new types of products, but it would be easier with a credit bureau, according to banking sources. Work on a credit bureau is under way, though insiders say developing the bureau and the regulations surrounding means it is not likely to arrive for a year. In the meantime, banks can have difficulty determining whether they are lending to the same customer twice. They are generally reluctant to accept collateral that is not a document proving ownership of land, or items like gold, as otherwise banks do not know if a person has borrowed from more than one institution using the same collateral.
Hubs like Singapore vital to internationalisation of Renminbi: Atlantic Council Channel NewsAsia 25th Jun 2015
China's internationalisation of its currency is gathering steam. The Atlantic Council, an international think-tank, has released a white paper outlining the path for greater Renminbi (RMB) acceptance, saying RMB hubs like Singapore will play a key role moving forward. China's central bank appointed Industrial and Commercial Bank of China (ICBC) as the RMB clearing bank for Singapore two years ago. This has helped Singapore-based banks offer a wider variety of RMB-denominated instruments, such as deposits, bonds and stocks. While Singapore lags Hong Kong in RMB-denominated dim sum bond issues, industry experts said the city-state's strengths lie more in trades settled in RMB.
Brunei Darussalam looks to a new bourse to diversify economy Oxford Business Group 25th Jun 2015
Plans to launch a stock exchange in Brunei Darussalam by 2017 will bolster its capital markets in line with plans for regional market integration as well as aid the broader drive to diversify its economy away from dependence on oil and gas. In mid-May, the Autoriti Monetari Brunei Darussalam (AMBD) said it was researching the possibility of establishing a bourse in the next two years, building on new capital market rules introduced by the central bank in February. Brunei Darussalam and Myanmar are the last two ASEAN members without a stock exchange, but this is set to change shortly following Myanmar’s announcement that it intends to launch a bourse later this year.
SGX sets aside S$1.5m to support SME fund-raising platform Channel NewsAsia 24th Jun 2015
Singapore Exchange (SGX) will provide a S$1.5 million grant over three years to support the development of CapBridge, a capital-raising platform for fledgling small- and medium-size enterprises (SMEs), the bourse announced on Wednesday (Jun 24). CapBridge is expected to become operational by the second half of 2015. The grant for the fund-raising platform follows a Memorandum of Understanding signed in January between SGX and Clearbridge Accelerator (CBA). SGX and CBA are also in discussions with financial institutions to develop demand for CapBridge, from enterprises and investors.
PH aims to join Asean trading platform Philippine Daily Inquirer 24th Jun 2015
In line with the integration of Asean economies by the end of the year, the government eyes a merged domestic capital market exchange integrated with a regional trading platform by next year to provide local firms with a bigger financing source. “We find the approaching establishment of the Asean Economic Community (AEC) at the end of this year to be an opportunity for the Philippines to continue and exert more efforts in its reforms toward a better developed financial markets to sustain capital inflows,” National Treasurer Roberto B. Tan told the Philippine Capital Markets Forum held in Hong Kong on Tuesday. In this regard, Tan said the Philippine government had been updating its Capital Market Development Plan (CMDP), which had a component aimed at preparing the domestic capital markets for regional integration.
OJK May Ease Foreign Ownership Rules for Islamic Banks Jakarta Globe 23rd Jun 2015
Indonesia’s financial regulator said it may ease foreign ownership restrictions for Islamic banks — a move that could attract Middle Eastern lenders such as Bahrain’s Al Baraka Banking Group. Under a 2012 rule introduced amid calls by nationalist politicians to limit foreign ownership, an overseas bank can only own up to 40 percent of an Indonesian lender. Nelson Tampubolon, banking supervisor at Indonesia Financial Services Authority (OJK), said the regulator is looking at relaxing overseas ownership requirements in cases where a foreign bank plans to convert an Indonesian commercial lender to an Islamic one.
Asset Management
SGX trading glitch: MAS reprimands SGX for lapses; directs it to improve technology infrastructure The Straits Times 25th Jun 2015
The Monetary Authority of Singapore (MAS) has reprimanded the Singapore Exchange (SGX) for lapses related to the market outages on 5 November and 3 December 2014 and directed the exchange to improve its recovery capabilities and processes. There will be a moratorium on fee increases for the securities and derivatives markets with immediate effect until the improvements are completed, MAS said in a statement, which was accepted by the bourse on Wednesday. SGX also said it accepted recommendations by its Board Committee of Inquiry to eliminate the root cause for the power outage and will invest S$20 million to improve and strengthen its technology infrastructure in their acceptance of full responsibility for the outage incident.
HNX to launch online G-bond transaction system VietnamPlus 24th Jun 2015
The Hanoi Stock Exchange (HNX) said it will officially launch an Electronic Bond Trading System (E-BTS) on June 26 to enable domestic and foreign investors to easily access and join the Government-bond (G-bond) market. The E-BTS will not limit transactions on fixed computers registered with HNX. Investors who download the E-BTS software from the HNX website and install it on computers to connect to the HNX’s system will be able to check and update G-bond trading-related information at any time in any place. The system will provide investors with updated information on its members, market demand and supply, interest rate fluctuations and bond offerings, helping members make the right decisions for their investments and businesses.
Singapore Exchange Reveals Cause of Trading Outage The Wall Street Journal 24th Jun 2015
Singapore Exchange said Wednesday it would invest 20 million Singapore dollars (US$14.9 million) in its technology infrastructure and apologized for a power outage late last year that halted trading in its securities and derivatives markets for more than two hours. The exchange also said it would contribute S$1 million to an investor education fund and freeze any increases to securities and derivatives markets fees until Singapore’s central bank was satisfied the exchange operator had met all its obligations. Singapore Exchange, also known as SGX, said it “regrets and fully accepts responsibility” for the power outage, following an internal investigation that blamed the outage on a design fault in the exchange’s power infrastructure and the failure of a backup generator to operate correctly.
Banking
SBV looks to drop bad debt below 3 per cent by Sept Viet Nam News 26th Jun 2015
Governor of the State Bank of Viet Nam Nguyen Van Binh has set a new target to bring down non-performing loans (NPLs) to less than 3 per cent by September. The previous target of the banking industry was to bring down the rate by the end of this year. According to the central bank's statistics, NPLs stood at 3.81 per cent by the end of March this year. Binh said that the new target is feasible, provided that all credit institutions step up and take drastic measures to handle NPLs to meet the new deadline.
Singapore banks need to quicken response to disruptive innovations AsiaOne 26th Jun 2015
There have been some interesting developments in the world of finance over the past few months, which have led to a clarion call for change being sent out across the banking industry. Piyush Gupta, the CEO and director of the DBS Group, sounded the warning in a keynote speech at Singapore Management University's (SMU) Sim Kee Boon Institute for Financial Economics' (SKBI) 5th annual conference in early May. In a thought-provoking speech, he predicted that unless traditional banks adapt, innovate and harness digital technology, they would perish sooner than they could realise any threat. Indeed, the pace of change is so fast that it prompted Mr Gupta to declare that DBS' goal in the next five years was to become an "invisible" bank. Vivian Balakrishnan, minister-in-charge of the Smart Nation initiative, appeared to concur with Mr Gupta's viewpoint, and in his keynote address at the conference dinner, said: "If our banks, financial institutions and businesses are doing exactly the same thing next year as they were doing last year, we are going to be swamped, because the pace of change is not slowing down."
Hong Leong Bank’s footprint ahead of ASEAN integration The Phnom Penh Post 26th Jun 2015
As ASEAN integration is expected to take noticeable effect by the end of this year, commercial banks have already started to set themselves up in Southeast Asia’s diverse markets, eagerly anticipating business opportunities from regional affiliation in trade, infrastructure and a pan-ASEAN labour force. But more than just capital banks have to front a great deal of trust in the economic potential of the region. “[It is expected that the ASEAN economic community will] facilitate intra ASEAN trading exchange, better infrastructure and people movement. Hence, it will provide opportunities for banks to grow in our domestic market and across the region,” Hong Leong Bank (Cambodia) CEO Joe Farrugia told Post Plus. Malaysian Hong Leong Bank is among the regional banks that trusts the market potential outside their home country. It has started leaving its footprint in Southeast Asia’s less developed countries and has been operating in Cambodia since 2013.
Banking industry on the forefront of integration The Phnom Penh Post 26th Jun 2015
As the countdown to the ASEAN Economic Community integration nears an end, Cambodia’s banking sector is gearing up for the entry of new players and a realignment of business models to compete on a regional level. Cambodia currently has 36 commercial banks bringing in $311 million in profits and a credit portfolio exceeding $9 billion, fueled by a boom in construction, real estate and housing mortgages. Given that AEC’s successful implementation partly hinges on financial and banking integration, Cambodia’s open and free market model is already conducive to ASEAN banks setting up in the Kingdom.
Fitch confirms Vietnam’s bank ratings VietnamPlus 25th Jun 2015
Fitch Ratings this week affirmed the ratings for four major Vietnamese banks. The long-term issuer default ratings (IDR) on Agribank and Vietinbank were affirmed at ‘B+' with stable outlooks, while the IDRs on ACB and Military Bank were affirmed at ‘B'. According to Fitch, the ratings of Agribank and Vietinbank, which are the two largest banks by asset size in Vietnam with strong domestic franchises, are driven by the agency's expectation that the Government would provide extraordinary support as both entities are important for facilitating certain types of policy functions that affect the domestic economy.
Association of Banks in Singapore to charge fees for Sibor and SOR data from Oct 1 The Straits Times 25th Jun 2015
From Oct 1, all data on the Singapore Interbank Offered Rate (Sibor) or ABS Swap Offer Rate (SOR) will be subject to a usage fee of US$1,500 (S$2,015) monthly for each, the Association of Banks in Singapore (ABS) announced on Thursday (June 25). In addition, subscribers who receive real-time Sibor or SOR data from a market data vendor will be required to pay end-user fees of US$5 a month each. But data delayed by 24-hours or more will be available for free to end users.
Maybank Private Wealth eyes regional expansion AsianInvestor 25th Jun 2015
Maybank Private Wealth is in expansion mode and looking to hire across Asia as it develops its new high-net-worth business, its head of private wealth told AsianInvestor. The unit of Malaysia’s largest bank plans to open a desk in London, expand its Singapore proposition and hire dozens of relationship managers as part of its bid to grab a slice of the Asia HNW market. After only opening for business 18 months ago, the private banking unit is also investing in technology platforms as part of its regional build-out. Alvin Lee, group head of private wealth for Maybank, said that its planned initiatives were part of developing its regional private banking proposition.
Foreign banks enter Vietnam Stoxplus 24th Jun 2015
As Vietnam will integrate into the ASEAN Economic Community (AEC) in 2015, not only large corporations but also foreign banks plan to strengthen their presence or expand their scale in Vietnam. In early March this year, Kasikorn - one of the leading banks of Thailand - established representative offices in Hanoi and HCM City. The bank also said it would expand operations in Vietnam by opening more offices and branches after being licenced by the State Bank of Vietnam (SBV). Also in March, the Public Bank Berhad (PBB) of Malaysia was approved by SBV in principle for acquiring the capital of the Bank for Investment and Development of Vietnam (BIDV) in VID Public Bank and conducting procedures for turning this bank into a wholly foreign-owned bank in Vietnam. This will be the sixth wholly foreign-owned bank in Vietnam after HSBC, ANZ, Standard Chartered Bank, Shinhan Vietnam and Hong Leong Bank.
Moody's: Outlook for Indonesia's banking system remains stable Moody's Investment Service 23rd Jun 2015
Moody's Investors Service says the outlook on Indonesia's (Baa3 stable) banking system remains stable, reflecting an expectation that the country's banks will withstand a challenging operating environment owing to their strong buffers. "Nonperforming loans will likely rise, given slowing economic growth," says Srikanth Vadlamani, a Moody's Vice President and Senior Credit Officer. Nonetheless, the banks are well-positioned to withstand any deterioration in asset quality and will maintain strong capital levels. "In particular, Indonesian banks have strong buffers in terms of high profitability and capital. Moreover, both corporate and household balance sheets remain healthy," adds Vadlamani.
State banks look to integrate electronic services in July Jakarta Post 23rd Jun 2015
Four state-owned banks are looking to integrate their electronic services in July to reduce costs and maximize efficiency for the banks, while at the same time providing more affordable and convenient services for customers. The initial stage of the consolidation will integrate the ATMs of Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN), according to a government roadmap. Subsequently, the electronic data capture (EDC) machines of all four state banks are expected to be integrated, allowing one machine to process transactions from any of the banks’ customers.
E-Payments
KBZ launches credit card after 12-year hiatus Myanmar Times 25th Jun 2015
Kanbawza bank marked the return of credit cards to Myanmar yesterday, along with a slate of other products including online and mobile banking. Kanbawza, which usually brands as KBZ, has received approval from the Central Bank of Myanmar and begun re-issuing credit cards, said senior managing director U Than Cho yesterday. Domestic credit cards had proliferated over a decade ago, but the 2003 banking crisis brought a halt to the product. U Than Cho said KBZ’s credit cards have been available since June 18 at its branches.
Credit-card business grew modestly in first three months Business Mirror 25th Jun 2015
The country’s credit-card industry saw a modest growth in credit-card issuance and card billings in the first quarter, according to the Credit Card Association of the Philippines (CCAP). There is also optimism the industry should continue to expand and report double-digit growth performance this year, the umbrella organization said. According to CCAP, the number of cards issued and card billings for the period showed minimal growth, registering only 3.3 percent and 2.5 percent in terms of the number of cards and in card billings, respectively. CCAP Executive Director Alex Ilagan noted that domestic interest rates for the period proved relatively stable and soured card debts under control.
Economics
Ringgit Declines on Speculation Fitch Will Downgrade Malaysia Bloomberg 24th Jun 2015
Malaysia’s ringgit fell for a third day on speculation Fitch Ratings will downgrade the country as the U.S. moves toward raising interest rates. Fitch, which ranks Malaysia at A-, the fourth-lowest investment grade, with a negative outlook, will review its assessment before the end of June, Andrew Colquhoun, head of Asia Pacific sovereign ratings in Hong Kong, said Wednesday. There’s more than a 50 percent chance the country’s credit rating will be downgraded, he said in March. The Bloomberg U.S. Dollar Index, which tracks the greenback versus 10 major currencies, rose 1.1 percent in the week through Thursday. “Asian currencies are falling because of the dollar strength and on speculation that the U.S. will raise interest rates as early as September,” said Wong Chee Seng, a foreign-exchange strategist at AmBank Group in Kuala Lumpur. “The ringgit fell more because people are expecting Fitch to downgrade the country’s rating next week.” The ringgit declined 0.2 percent to 3.7575 a dollar in Kuala Lumpur, data compiled by Bloomberg show. It dropped to 3.7690 earlier, the weakest since June 15, and has lost 6.9 percent this year in Asia’s second-worst performance.
Insurance
Singapore: Labour body lobbies for portable medical plans Asia Insurance Review 26th Jun 2015
The National Trades Union Congress (NTUC), an umbrella body of labour unions, is redoubling its efforts to urge employers to subscribe to portable medical insurance plans for their employees which the latter can turn to even when they are out of work or in between jobs. At present, less than 10% of unionised companies in Singapore have adopted a portable medical benefits scheme, despite more than 10 years of lobbying by the NTUC, reported Channel News Asia. To get more companies on board, NTUC is calling for tax or cash incentives for companies that switch to portable medical benefits plans. For a start, it wants to work with 10 to 15 companies and start a fund, on which these companies can draw down to offset the cost of paying for their workers' insurance co-payment and deductibles.
Carrier liability insurance to play a crucial The Nation 26th Jun 2015
Carrier liability insurance will play a crucial role in the non-life insurance industry in response to the government's efforts to develop the country as a trading nation through investment in rail links, according to Viriyah Insurance, the leading non-life insurer. Thailand is the geographical centre of Asean. China and Japan are seriously interested in joining the government in constructing dual-track railroads to transport goods to Europe, the Middle East and Asean. Arnon Opaspimontum, deputy managing director, said yesterday that the heavy shipping traffic in the Strait of Malacca - the main channel for transporting goods from Asia to the EU and the Middle East - makes China and several countries in Asia look for new transportation routes. Dual-track railways from southern China to Asean via Thailand are the right solution.
Vietnam: Non-life insurers face shortage of qualified actuaries Asia Insurance Review 23rd Jun 2015
Non-life insurance companies in Vietnam are facing a shortage of actuaries who meet national standards, according to a senior official of the Viet Nam Insurance Association. This puts in doubt plans for these insurers to meet actuarial requirements due to be implemented with effect from next year. Beginning in January 2016, non-life insurance companies are required to use actuaries who meet national standards, including being a fellow of international actuary societies, having at least five years of work experience and at least two certificates in the field issued by international actuary societies. There is a severe dearth of qualified actuaries in the country at present, reported the Vietnam News Agency, citing Mr Ngo Trung Dung, Deputy General Secretary of Viet Nam Insurance Association.
Market Regulation
Indonesia Regulator to Issue Rules to Manage Risk at Financial Conglomerates Jakarta Globe 26th Jun 2015
Indonesia’s financial regulator said on Friday it is planning to issue rules in September to manage systemic risk at financial conglomerates. The rules are aimed at improving the management of risk such as in terms of liquidity and non-performing loans (NPLs), Nelson Tampubolon, banking supervisor at the Indonesia Financial Services Authority, told reporters. For example, the regulator may ask a parent company to boost the capital of a troubled subsidiary, he added. “There is more risk in the financial conglomerates because their groups are getting bigger.” The authority oversees 50 financial conglomerates including 35 banks, according to its statement released on Friday.
Govt Proposes Repealing Perppu on Financial Safety Net Tempo 26th Jun 2015
Finance Minister Bambang Brodjonegoro today officially filed for the revocation of Government Regulation in Lieu of (Perppu) Law No. 4/2008 on the Financial System Safety Net (JPSK). This submission, he said is aimed at providing a legal certainty in drafting the JPSK Act. This Perppu revocation proposal will be discussed in a meeting between the House of Representatives' Finance Commission and the Ministry of Finance. If at the Commission approves, the revocation will be ratified by the DPR's plenary session. Bambang said that the JPSK bill had finished being drafted. Although the Perppu revocation is still in process, Bambang said the bill the JPSK bill will be filed before the DPR's plenary session ends.
Personal loans eyed for business purposes Bangkok Post 26th Jun 2015
The Bank of Thailand has requested the Finance Ministry include occupational purpose as part of personal loan information. The move would make it clear to small businesses that personal loans can be used for work purposes as some are already doing. Ronadol Numnonda, an assistant governor in the supervision group, said the central bank submitted the request to the Finance Ministry last month. The ministry will assess the request on widening the stipulations for personal loan applications. "Ambiguity is not preferred, so there is a need to change the regulation governing personal loans to indicate borrowing for occupational purposes," Mr Ronadol said.
BSP requiring banks to enhance BCM plans The Philippine Star 25th Jun 2015
The Bangko Sentral ng Pilipinas has issued draft guidelines requiring banks to strengthen further their business continuity management (BCM) plans designed to help them deal with risks and hazards following catastrophic events such as an earthquake. “To further boost disaster resilience of the banking sector, the BSP recently exposed draft guidelines on BCM to the industry which aim to enhance BCM processes of BSP-supervised financial institutions,” the central bank said. The BSP said the new guidelines would include strategies and actions meant to help banks deal with risks and hazards following “catastrophic events” such as an earthquake.
Appeals Court upholds stay order on hike in insurers' capital InterAksyon 25th Jun 2015
The Court of Appeals (CA) has upheld the Quezon City Regional Trial Court (RTC) in stopping the Department of Finance (DOF) from requiring insurance companies to hike their minimum paid-up capital. In a 10-page ruling written by Associate Justice Stephen Cruz, the CA’s 7th Division dismissed the petition for certiorari filed by DOF Secretary Cesar Purisima and Insurance Commissioner Emmanuel Dooc. The CA affirmed the rulings of Quezon City RTC Branch 80 Presiding Judge Charito Gonzales dated Dec. 5, 2012 and Feb. 15, 2013, respectively. The members of the Philippine Insurers and Reinsurers Association, Inc. (PIRA) received a letter on Oct. 28, 2011 from Dooc reminding them that their paid-up capital must be at least equal to the amount stipulated in Department Order (DO) No. 27-06.
Companies called to use rupiah for transactions Jakarta Globe 24th Jun 2015
Bank Indonesia (BI) says it is hoped that all companies in Indonesia can use rupiah for all daily transactions starting from July 1. “In the short term, there might be some obstacles to overcome because the companies will have to convert their US dollars into rupiah before making payments and this demands additional costs,” the central bank’s assistant director of money management department, Agustinus Fajar Setiawan, said as quoted by Antara in Semarang on Wednesday. However, he said, BI hoped that this would not be used as an excuse by companies to avoid using rupiah for transactions because this regulation must be upheld.
Indonesia c.bank increases amounts that buyers of cars, homes can borrow Reuters 24th Jun 2015
Indonesia's central bank, hoping to spur economic growth, has reduced the minimum downpayments consumers have to pay for cars and motorcycles while increasing the percentage of a home price that a buyer can borrow. A new regulation loosening rules for automotive and mortgage lending took effect on June 18, it said on Wednesday. "Our economy is slowing... Bank Indonesia wants to contribute to encouraging credit growth while staying prudent," said Yati Kurniati, its director of macroprudential department, told a media briefing. Bank Indonesia now requires customers to pay a minimum downpayment of 20 percent for motorbikes, down from 25 percent previously.
Indonesia Considers Tax Amnesty for Financial Crimes, Tax Office Chief Says The Jakarta Globe 24th Jun 2015
Indonesia’s tax office is considering a tax amnesty for financial crimes, in a move that could bring at least 100 trillion rupiah ($7.5 billion) into state coffers, the director-general of taxes said on Wednesday. Southeast Asia’s biggest economy is grappling with its weakest growth in six years and a huge budget deficit, while its tax collection rate is one of the lowest in the region as a proportion of gross domestic product. President Joko Widodo’s administration has an ambitious tax revenue target of 1,489.3 trillion rupiah this year, up 30 percent from last year’s collection. Under the tax office’s proposal, the perpetrators of financial crimes including corruption and money laundering can pay a 10-15 percent tax on the assets they bring back to Indonesia, in return for a pardon from criminal prosecution, Sigit Priadi Pramudito told reporters.
Banks forced to merge to settle circular ownership status Stoxplus 23rd Jun 2015
The State Bank of Vietnam (SBV) has taken a series of actions to clear cross-ownership which has existed in the banking system for many years. The merger of Mekong Bank into Maritime Bank, the two banks with the same owner, is expected to be followed by five to six merger deals, Dau Tu has quoted its sources as saying. These include the merger deal of Southern Bank and Sacombank. The merger has attracted the special attention from the public because they both relate to a big name – Tram Be, one of the most influential businessmen in Vietnam. Tram Be and his family members are reported to hold 20 percent of Southern Bank shares and 6 percent of Sacombank’s. Once the two banks merge with each other, the expected share conversion ratio is 1:0.75 (Southern Bank/Sacombank).
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