| Market Development
Indonesia: Takaful market grows with more demand Asia Insurance Review 10th Aug 2015
Islamic life insurance premiums soared by 50.35% to IDR2.12 trillion (US$156.8 million) in the first three months of this year, compared to the corresponding period last year, according to the Financial Services Authority (OJK) in its report on the first quarter of this year. The takaful life insurance industry increased in its assets and investments by 35.2% and 37.5% to IDR19.39 trillion and IDR 17.70 trillion, respectively, during the quarter, reported The Jakarta Post. These figures back the results of a recent survey carried out by private life insurer Allianz Life Indonesia in Jakarta, Bandung in West Java, Padang in West Sumatra and Samarinda in East Kalimantan, which showed a high demand for Islamic insurance products.
SMEs can raise capital via crowdfunding platform The Star 10th Aug 2015
Beginning September, small and medium enterprises (SMEs), can raise capital using the crowdfunding platform. Individuals can invest from RM500 to RM5,000, said the Secretariat for the Advancement of Malaysian Entrepreneurs (Same) chief executive officer, Neil Foo. He said a company could raise up to RM3 million within a 12-month period and thereafter, up to RM2 million. "Among the sectors that can invested in, includes, information technology, retail, manufacturing and food and beverages. "With crowdfunding, the public have an opportunity to invest in a private company," Foo told a media conference here on Monday.
VN's derivatives market to open with future contracts Vietnam Investment Review 6th Aug 2015
The finance ministry has asked the State Securities Commission (SSC), Ha Noi Stock Exchange and Vietnam Securities Depository to prepare for the derivatives market launch by the end of 2016. A derivative is a financial instrument that derives its value/price from underlying assets such as stocks, bonds, currencies and interest rates, as well as commodities and market indices. The most common types of this product are futures, options, forwards and swaps. The ministry requested SSC to complete the draft circular to provide guidelines for the implementation of Decree 42/2015/ND-CP, which sets the rules for the organisation and operation of the derivatives market, as well as builds regulations and a cohesive operation process for this business.
Step-by-step awareness campaign for stock exchange Myanmar Times 5th Aug 2015
The backers of the Yangon Stock Exchange are putting together a crash course to introduce it to the public. Dr Maung Maung Thein, chair of the Securities and Exchange Commission of Myanmar, said in the coming months, various stakeholders will be given a look at how the systems behind the exchange work. “We will introduce to the media how the systems of IT processes of the Yangon Stock Exchange work through a press show on around August 21,” he said on the sidelines of the Financial Inclusion Conference on August 2. “After that, we will introduce the system to business leaders like Mr Serge Pun and then university students who are studying economic-related majors can observe our stock exchange,” he said.
OJK ramps up companies’ good governance The Jakarta Post 4th Aug 2015
The Financial Services Authority (OJK) has kicked off training sessions for publicly listed companies on good corporate governance practices in anticipation of fierce competition in the ASEAN Economic Community (AEC). The training sessions for 400 representatives of 200 listed companies cover areas such as transparency and disclosure, risk management and shareholders rights. The OJK aims to train all of the country’s more than 500 listed firms in separate sessions.
Debt trading market likely to be opened in 2016 Intellasia 1st Aug 2015
HCM City Securities Company (HSC) has published a daily report which mentioned about SBV’s issuance of Circular No. 09 on the debt trading of credit organisations. The Circular will take effect from September 1, replacing Decision No. 59/2006/QD-NHNN issued on January 21, 2006. Specifically, the Circular specifies that before selling, all bad debts need to have full records, vouchers and other relevant legal documents.
New panel to advise MAS on strategies The Straits Times 29th Jul 2015
The Monetary Authority of Singapore (MAS) said yesterday that a new advisory panel has been formed to help the central bank better engage and develop the financial industry here. The 26-member Financial Centre Advisory Panel (FCAP) "will strengthen the dialogue and partnership between MAS and the financial industry, to drive the growth and development of Singapore's financial centre''. Among the panel members are key financial industry figures such as the chief executives of all three local banks - DBS Group Holdings' Mr Piyush Gupta, OCBC's Mr Samuel Tsien and United Overseas Bank's Mr Wee Ee Cheong.
Myanmar can look forward to more credit cards, bank branches and ATMs Nikkei Asian Review 29th Jul 2015
In late May, Kanbawza Bank, Myanmar's leading private lender, began issuing credit cards, initially focusing on its affluent customers. A standard plan sets the credit limit at up to 300,000 kyat (about $241). The bank received 600 applications in the first week. "Helped by strong consumer spending," said Ashis K Sharma, head of cards and electronic payments at the bank, "we can expect growth in our services for individual customers. We plan to issue 5,000 cards in the first year." Earlier in May, Myanmar's central bank had removed its ban on issuing credit cards, hoping to make shopping more convenient for consumers, who are spending more than ever. The ban was a reaction to a financial crisis in 2003.
Asset Management
Malaysian stocks fall as investors pull funds over political scandals concerns Malay Mail 10th Aug 2015
Malaysian stocks fell, with the benchmark gauge poised to enter a technical correction, as investors pulled funds amid concern about the political scandal enveloping Prime Minister Najib Razak and the worsening economic outlook. The FTSE Bursa Malaysia KLCI Index slid 1 per cent to 1,666.345 at 9.36am local times. The measure has lost more than 10 per cent from its April 21 peak. The ringgit was little changed at its lowest level since 1998. Foreign funds have dumped US$3 billion (RM11.78 billion) of the nation’s shares this year amid concern the crisis will distract Najib as a commodities rout and the prospect of higher US interest rates threaten economic growth. The prime minister is fighting off a scandal linked to 1Malaysia Development Bhd., a debt-ridden state investment company.
Weakening Remittances Take Sheen off Philippine Peso Jakarta Globe 10th Aug 2015
The Philippine peso, languishing at a five-year low against the dollar, will lose more ground to the greenback in the coming months as remittances from millions of Filipinos overseas slow and foreign investors rotate out of the Manila stock market. The Philippines is one of the fastest-growing economy in the region thanks to strong private demand. The peso , unlike many emerging-market currencies in Southeast Asia, has been relatively resilient in the face of volatile capital flows ahead of an eventual rise in US interest rates. While it has weakened more than 2 percent against the greenback so far this year, the decline is less than the falls in the Thai baht, Indonesian rupiah and Malaysian ringgit.
Ringgit hits 17-year low vs US dollar The Brunei Times 8th Aug 2015
The ringgit hit another pre-peg 17-year yesterday, hours before the release of Malaysian foreign-exchange reserves data that will be closely watched. If the reserves drop further, that could increase concern about how much ammunition the central bank has to defend the currency. Most emerging Asian currencies eased yesterday, and will have weekly losses. Investors were awaiting US jobs data that might cement expectations the Federal Reserve will raise interest rates next month. The ringgit fell as much as 0.6 percent to 3.9280 per US dollar, its weakest since Sept. 2, 1998, the day before the government pegged it at 3.8000 per dollar to put a floor under the currency during the Asian financial crisis. Malaysia lifted the peg in 2005.
Foreign Investors Exit Thai Stocks, Bonds as Economy Flounders Jakarta Globe 7th Aug 2015
Foreign investors have sold a net $1.46 billion of Thai shares and bonds this year as Thailand’s military government struggles to pull Southeast Asia’s second-largest economy out of a rut a year after seizing power. Selling accelerated in July, when investors unloaded a net 22 billion baht ($625.89 million) of shares amid a slew of worse-than-expected economic data which led the Finance Ministry to cut its growth forecast for the third time this year. “Economic weakness is certainly disappointing,” said Orsen Karnburisudthi, senior investment manager at Aberdeen Asset Management in Bangkok. Aberdeen still saw some value in retail stocks and large banks, he said, despite subdued second-quarter earnings.
Indonesia Stocks Seen Extending Asia’s Worst Drop on Growth Risk Bloomerg 6th Aug 2015
The lowest Indonesian stock valuations in six years aren’t cheap enough for Samsung Asset Management Ltd. and Standard Chartered Plc as the economy slows and the U.S. gets ready to raise borrowing costs. The Jakarta Composite Index has dropped 13 percent from its April 7 record high, the biggest retreat among Asian benchmark stock gauges and dragging its price-to-book ratio to the cheapest since July 2009. President Joko Widodo is struggling to push through much-needed spending plans to revitalize the economy, while the weakest currency in 17 years is limiting scope for the central bank to cut interest rates. The Jakarta Composite needs to fall a further 17 percent before shares become attractive enough to consider buying, said Alan Richardson, who helps manage about $112 billion as a money manager at Samsung.
SGX says securities, derivatives, commodities trading increased in July The Straits Times 6th Aug 2015
Singapore Exchange (SGX) said securities, derivatives and commodities activities in July increased from a year ago. The average daily trading value of securities last month was S$1.1 billion - down 7 per cent month on month but up 15 per cent year on year, SGX said on Thursday. Total turnover for securities was S$24.2 billion, down 2 per cent month on month but up 15 per cent from the year-ago period. In July, ETF trading increased 24 per cent to $256 million year on year. Catalist had three new companies, raising S$47 million and bringing total number of listed companies to 162. The total number of listed securities is now 770.
Stock exchange delists 26 firms in first half of year Viet Nam News 5th Aug 2015
The HCM Stock Exchange (HSX) and the Ha Noi Stock Exchange (HNX) delisted 26 companies, with 438 million shares, in the first six months of this year. Twenty of these companies were delisted because they had suffered losses for at least three consecutive years recently and their losses had exceeded their capital. Among these companies, Vitranschart JSC (VST) was delisted on May 8. VST suffered a loss of VND125 billion to VND223.65 billion (US$5.73-10.2 million) between 2012 and 2014. This year, the company has reported a loss of VND109 billion ($5 million) so far. Huu Lien A Chau Corporation (HLA) was delisted from the HSX on February 12. Last year, the company posted losses of VND656.42 billion ($30 million), which exceeded its capital of VND344.6 billion ($15.8 million).
Banking
BRI Aims for 25% Increase in Fee-Based Income Jakarta Globe 10th Aug 2015
State-owned lender Bank Rakyat Indonesia is aiming for a 25 percent increase in fee-based income to compensate for sluggish loan growth in first half 2015, an official of the lender revealed. Fee-based income contributed 7.7 percent to the lender’s total income in first half 2015 or Rp 3.5 trillion ($258 million), up 32.4 percent from the same period a year earlier, BRI corporate secretary Budi Satria said in a statement on Monday. BRI’s outstanding loans stood at Rp 503.6 trillion at the end of June, up 9.7 percent from the same period a year earlier. That compares to 17 percent year-on-year growth last year. “[BRI's] fee-based income comes from various transactions but our main focus, which has the potential to develop, is from the e-banking transactions,” said Budi.
Loan growth risks up for debate The Phnom Penh Post 10th Aug 2015
Bank deposits and loans during the first half of this year grew significantly as compared with the same period in 2014, with loans alone increasing over 30 per cent, drawing mixed reactions from industry insiders on the risks of this rapid credit growth. A report released last week by the National Bank of Cambodia shows that deposits rose to $11.93 billion, or 26 per cent over the same period last year, and the total loan portfolio was $13.03 billion, up 33.4 per cent, as reported by state-run media agency AKP. In Channy, CEO of Acleda Bank, said this growth in loans was expected taking into account the performance of Cambodia’s garment and tourism sectors, which are driving this loan spurt. He added that the more than 30 per cent growth in loans, which includes those given by microfinance institutions, was needed given that rice millers and other small and medium enterprises have complained of inadequate access to financing.
Bad loans ratio eases to record low in June The Philippine Star 10th Aug 2015
Soured loans of major universal and commercial banks in the Philippines plunged to a record low in end June as financial institutions continued to tighten their lending standards, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend. The non-performing loans (NPLs) ratio of universal and commercial banks eased to 1.80 percent in June from 1.84 percent in May. This erased the previous record low of 1.82 percent recorded in November last year. NPLs are obligations that remain unpaid for at least 30 days after the due date. The NPL ratio pertain to the amount of bad loans over the total loan portfolio.
Another Asian bank could enter market Business World 9th Aug 2015
Another Asian bank could secure regulatory approval this week to set up shop in the country after rules on the entry of offshore lenders were liberalized last year, a senior Bangko Sentral ng Pilipinas (BSP) official said. “One more is under process now,” BSP Deputy Governor Nestor A. Espenilla, Jr. said in a text message on Thursday, adding that the Monetary Board could approve the bank’s application “maybe next week.” Mr. Espenilla, however, would not identify the prospective entrant, but noted that it is from Asia. The bank could be the sixth foreign lender to enter the country one year after Republic Act (RA) 10641, or An Act Allowing the Full Entry of Foreign Banks in the Philippines, was enacted in July last year.
Credit growth lifts bank profits VietnamPlus 9th Aug 2015
High credit growth has helped many commercial banks to gain impressive profits this year despite having to provide a larger amount for provisional fund. By July 20, credit growth of banks was estimated to rise by 7.32 percent against late last year, with Hanoi registering a 12.4 percent increase. The credit growth has contributed significantly to the banks' profits, which mainly come from lending. Vietcombank had, by the end of June, gained a pre-tax profit of more than 3 trillion VND (138.24 million USD), up 7 percent against the same period last year. The result helped the bank meet 51.5 percent of its yearly target.
Loans, Deposits Soar in First Six Months Cambodia Daily 7th Aug 2015
The country’s banking sector saw robust expansion in the first six months of the year, with loan disbursements growing by more than 33 percent and deposits growing by 26 percent, according to a report released on Tuesday by the National Bank of Cambodia (NBC). Loan disbursements increased to about $13 billion, compared to $9.75 billion in the first six months of 2014, while customer deposits rose to $12 billion, compared to $9.54 billion, the report says. “This semester, the banking system continued its development in both coverage and operation scope, and collected idle savings to finance all economic sectors, especially investments in manufacturing,” NBC governor Chea Chanto said in the report. However, Grant Knuckey, CEO of ANZ Royal bank, said the continued trend of loans outpacing deposits needed to be kept in check.
BI forecasts credit growth at 11-13 percent Antara 7th Aug 2015
Bank Indonesia (BI) has forecast that credit growth this year will reach 11 to 13 percent, which is better than 10 percent recorded in the first semester. The central banks deputy governor Erwin Rijanto stated that the bank initially predicted credit growth to reach 15 percent, but as the budget absorption was not yet maximal, thus the growth would be affected. "The fact is that the government has actually taken efforts by urging regions to increase budget absorption, but they were not able to maximally spend the funds allocated in the budget. So, we have been forced to revise our prediction down to 11-13 percent," he stated here on Friday.
Indonesian Banks Boost Bad Loan Provisions, Fret About Mining Sector Impact The Jakarta Globe 5th Aug 2015
Several Indonesian big banks have sharply hiked bad loan provisions, helping push combined first-half profits to their first decline in almost a decade, as they fret about the impact of a troubled mining sector and weaker commodity prices on the economy. State-owned lender Bank Negara Indonesia nearly tripled its provisions to Rp 6 trillion ($445 million) in the six months to end-June, while net profit fell 51 percent. At Bank Mandiri, the nation’s biggest lender by assets, provisions jumped 41 percent to Rp 4 trillion while net profit growth slowed to 3.5 percent from 16 percent in the same period a year earlier. “The economy may not recover quickly, so we need to have a bigger piggy bank,” Budi Gunadi Sadikin, Mandiri’s president director, told reporters after its earnings last week.
Bad debts in Thailand spread from retail to small companies Reuters 5th Aug 2015
Hopes that bad debts in the Thai financial system may have peaked this year are fading as more small companies and medium-sized enterprises default on their bank loans, hit by slowing domestic consumption and falling exports, particularly to China. The rising tide of non performing loans (NPLs) is spurring analysts to downgrade their outlook for Thai banks. Both the sector and individual banks such as Bangkok Bank and Siam Commercial Bank have been downgraded at least twice this year as souring loans and a stuttering economy eat into their profits. Thailand's central bank has already twice lowered its forecast for the country's economic growth, and is expected to cut its estimate for the third time in September.
Business loans and capital market activities in M'sia seen to be slow this year The Star 5th Aug 2015
Business loan growth is expected to be slow for the remainder of 2015, while capital market activities are likely to stay flat due to continued market volatility, according to MIDF Research. It also expected Bank Negara to maintain the overnight policy rate (OPR) at 3.25% throughout the year. “We do not expect a cut in the benchmark interest rate in view of the weaker ringgit as well as on grounds that the interest rate remains accommodative while gross domestic product (GDP) growth is still expected to be decent at 4.7% for 2015 considering the economic challenges,” MIDF said in a report yesterday. The research house also said it expect overall asset quality for the banking system to remain stable.
Deteriorating ASEAN loans threaten Singapore’s largest lenders Singapore Business Review 5th Aug 2015
The rising number of ASEAN non-performing loans (NPLs) is a key threat for Singapore’s three largest banks, a report by Credit Suisse revealed. In particular, UOB's and OCBC's ASEAN exposure is likely to remain under the scanner in the second half, as any deterioration could increase earnings risks. Credit Suisse noted that UOB is most exposed to ASEAN among peers, while DBS is the least exposed to ASEAN-related credit risks and NIM pressure. “While we remain comfortable about UOB's relatively better liquidity and provisioning levels, the market sentiment is likely to be muted. [UOB’s] management appears quite confident about the asset quality of the Malaysia book, it appears more concerned about Indonesia,” the report said.
PHL banks doing comparatively well despite increased foreign competition Business Mirror 4th Aug 2015
Philippine banks compare favorably with the rest of the banks in the Asean no matter that they are among the smallest in the region. Bangko Sentral ng Pilipinas (BSP) Managing Director for International Sub-sector Wilhelmina Mañalac acknowledged local lenders are small in size, saying that the three largest banks in the Philippines in terms of resources are only equivalent to the largest bank in either Malaysia, Singapore or Thailand. “If we look at the capital adequacy ratio [CAR], which shows how banks can actually absorb losses arising from its operations, we see that the banks in the Philippines in general compare favorably with the rest of the Asean banks,” the central bank official said at a public forum on an integrated Asean on Friday.
Maybank opens 1st Malaysian bank branch in Myanmar The Rakyat Post 3rd Aug 2015
Maybank has opened the first Malaysian banking branch in Myanmar today, as the final licence to commence operations from the Central Bank of Myanmar was awarded last week. In a statement, Maybank said the Central Bank of Myanmar had awarded it a banking licence to Maybank on Oct 1 last year as part of its move to liberalise the banking sector in that country. Southeast Asia’s fourth-largest bank by assets said its Yangon branch will serve wholesale and corporate clients as well as domestic banks in Myanmar with a range of services such as deposit accounts, working capital financing, cash management, treasury and capital market solutions.
Bad loans ratio at big banks stays below 2 percent, but picks up for thrifts InterAksyon 29th Jul 2015
The non-performing loans (NPLs) ratio of the country's biggest banks remained below 2 percent for the sixth straight month, while that of thrift lenders rose. In a statement, the Bangko Sentral ng Pilipinas said the gross NPLs of universal and commercial banks represented 1.96 percent of their total loan portfolio at end-April this year. The industry’s gross NPL ratio in April was practically unchanged from the 1.95 percent recorded in March. The loan quality indicator has been below two percent since November last year. The ratio moved sideways month-on-month with both the industry’s gross NPLs and loan portfolio showing marginal increases.
E-Payments
E-commerce shines as economy dims Jakarta Post 8th Aug 2015
E-commerce players in the country saw their sales and revenues climb in the first six months of this year, demonstrating the resilience of the infant industry amid an economic slowdown and weakening consumer purchasing power during the period. Online business platforms from marketplaces to ticket-booking sites have reaped more than what they expected, a contrast to the lackluster performances recorded by many brick-and-mortar retail giants. Elevenia, a marketplace jointly operated by telecommunications operator XL Axiata and South Korea’s SK Planet, has even raised its sales target.
Leverage on e-payment for transactions — BNM The Borneo Post 7th Aug 2015
Malaysians are encouraged to leverage on electronic payment (e-payment) as the upcoming approach for transactions as it provides greater benefits. Bank Negara Malaysia (BNM) Payment Systems Policy Department director Tan Nyat Chuan said the bank has implemented several regulatory frameworks to foster an enabling environment for small and medium enterprises (SMEs) and individuals to have convenient access to safe, efficient and affordable e-payment services. The central bank has adopted a three-pronged approach to create an enabling environment that would further accelerate the country’s migration to e-payments, he added.
67% Smartphone Users Shop Online Using Phones Antara 6th Aug 2015
Google Asia Pacific's chief marketing officer Simon Kahn said that 67 percent of smartphone owners in Indonesia shop directly using their mobile phones. This high percentage serves as a golden opportunity for e-commerce businesses and SMEs in Indonesia to enhance their operations and book higher profits. Madelaine Ong, VP Marketing of marketplace platform elevania.com, said there are about 55.2 million SMEs in Indonesia. But unfortunately, only 0.05 percent had tapped the online market. This shows that the high use of Internet in Indonesia is not followed by a business model migrate to digital by SMEs, which is unfortunate considering the sector has an opportunity to increase sales from the online market.
UnionBank issues credit cards with Visa payWave Business Mirror 5th Aug 2015
UnionBank of the Philippines has started offering contactless technology and so-called EMV chip-enabled cards to its customers for a more convenient and secure way for clients to pay for everyday transactions. “We want our customers to experience a convenient and secure way to do their transactions. This inspired us to reissue new credit cards bearing the latest contactless technology of Visa, the Visa payWave, and the latest security standard, EMV chip,” said Ana Aboitiz Delgado, UnionBank Cards Business head. The combination of Visa payWave technology and EMV-chip security will ensure that UnionBank credit-card holders can take full advantage of the convenience of contactless payments.
E-commerce leaders to convene in Manila Business Mirror 4th Aug 2015
Running on September 2 and 3 at the SMX Convention Center and bringing together over 1,000 attendees, 60 expert speakers and 40 international and local exhibitors, Cards & Payments Philippines and the E-Commerce Show Philippines will be the premier meeting places for the entire payments and e-commerce ecosystems from across the country.
SE Asian consumers switch to ecommerce Financial Times 29 Jul 2015
Economies across Southeast Asia have endured weaker growth this year. But one sector is powering ahead nevertheless: ecommerce. A surge in internet penetration has encouraged a raft of start-ups across the region. In Indonesia, for example, the number of internet users has risen 150 per cent a year over the past decade to reach 90m. The government has set a target of 150m by 2019. International information technology players have been piling in. Japanese telecoms group Softbank has made a string of acquisitions across Asia. It invested $250m in the region’s ride-hailing app GrabTaxi at the end of last year. In Indonesia, it invested $100m in online marketplace Tokopedia and mobile device retailer Trikomsel.
Insurance
Singapore: 1H private health premium down 34% y-o-y ahead of launch of public health plan Asia Insurance Review 7th Aug 2015
New health insurance premiums in Singapore saw a 34% y-o-y drop for the first six months of 2015. A slow-down in the sales of Integrated Shield Plans (IP) has been observed as consumers adopt a wait-and-see approach with the impending start of MediShield Life - a mandatory universal health insurance scheme administered by the Central Provident Fund (CPF) Board - on 1 November this year, according to Life Insurance Association (LIA) of Singapore. New health insurance premium recorded was S$91 million (US$66.75 million), of which 87% went to IPs and IP riders which cover deductibles and/or co-insurance. Dr Khoo Kah Siang, President of LIA Singapore, said: “We believe that as more people gain clarity on the benefits provided by MediShield Life, there will be those who will seek to satisfy their needs for higher levels of coverage and additional benefits through Integrated Plans and other health insurance plans available in the market.”
Vietnam: Non-life sector grows by 16% in first 4 months Asia Insurance Review 7th Aug 2015
Vietnam's non-life insurance sector reported premiums of VND9.93 trillion (US$455.2 million) for the first four months of this year, 16.5% higher than for the corresponding period last year, according to data from the Insurance Supervisory Authority (ISA) at the Ministry of Finance. This growth is modest in comparison with the 20.75% increase in premiums for the insurance market as a whole and the 25.71% increase in premiums in the life insurance sector from January to April, reported VietnamNet Bridge citing the ISA data. The estimated total revenue of the insurance sector as a whole in the first four months was VND19.1 trillion, with VND9.16 trillion from life insurance. The non-life market is dominated by five insurers: PetroVietnam Insurance, Bao Viet Vietnam Insurance, Bao Minh Insurance, PJICO Insurance and the Post & Telecommunication Joint Stock Insurance.
Direct purchase insurance sees fair progress The Straits Times 7th Aug 2015
The launch of Direct Purchase Insurance (DPI) by life insurers in early April resulted in fewer than 200 policies being sold up to June 30 amounting to almost $200,000 in weighted new premiums. The Life Insurance Association (LIA) disclosed the numbers at a briefing yesterday on its performance in the first half of the year. DPI products are basic life plans sold without financial advice and bought directly from insurers' customer service centres or websites. From April 7 to June 30, 193 of these policies were sold, of which 97 per cent were regular-premium term-life policies. These plans provide affordable protection and are suitable for people looking for basic family protection.
ASEAN: Minimum operating standards an aid to integrating life insurance in AEC Asia Insurance Review 5th Aug 2015
As the establishment of the ASEAN Economic Community (AEC) in December draws nearer, regulators in the 10 member states could introduce minimum standards of operation for the life insurance industry to overcome current concerns over their lack of coherence in preparing for AEC integration, according to Milliman, a global provider of actuarial and related products and services. In a new report, titled “Potential Implications of the ASEAN Economic Community for the Life Insurance Industry”, Milliman shows its ‘Milliman ASEAN Liberalisation Index’ (MALI) which attempts to measure the openness of life insurance regulatory regimes in the 10 ASEAN countries, having regard to their alignment with international standards. To determine MALI, Milliman assessed the relative stage of development of the life industry in each ASEAN country. A score of 100 indicates a perfectly liberal market while low scores indicate more tightly controlled industries, with typically less exposure to foreign participation.
Cautious outlook seen for insurance sector The Star 5th Aug 2015
Analysts expect single digit expansion in the premium income of the life and non-life insurance sectors in Malaysia over the next few years. Therefore, CIMB Research analysts urged investors to focus on insurance companies that have exposure to overseas markets and the takaful business, given the cautious outlook for growth in the conventional insurance sector. It has kept an “overweight” rating on Malaysia’s insurance sector, naming Tune Ins Holdings Bhd and Syarikat Takaful Malaysia Bhd as its top picks. The research house said growth in the insurance sector’s premiums was weak in 2009-14, at compounded annual growth rates of only 7.7% for general insurance and 3.5% for life insurance (new premiums).
Higher five-year penetration rate traced to microinsurance Business Mirror 4th Aug 2015
The number of Filipinos having some form of risk cover, or insurance against contingent events, as a fraction of total population improved dramatically over a five-year period to 34.27 percent as of end-2014. Also called market penetration, this compares with only 14.08 percent in 2009, when the number of Filipinos with risk cover, also called market penetration, equaled 14.08 percent in 2009, the Insurance Commission (IC) said. Insurance Commissioner Emmanuel F. Dooc said that as of end-2014, some 34.23 million Filipinos have some form of insurance cover. The high penetration rate in the Philippines was traced to the high incidence of microinsurance cover in the country, which, according to estimates by the IC, is around 28 percent of the total population.
Malaysia: Lloyd's to apply for onshore reinsurance licence Asia Insurance Review 3rd Aug 2015
Lloyd's, the world's specialist insurance market, intends to apply for an onshore reinsurance licence in Malaysia, the UK and Malaysian governments have confirmed. The announcement that Lloyd’s will apply for a licence, and open an office in Kuala Lumpur, follows some months of discussions between Lloyd’s and the Malaysian authorities. Lloyd’s intends to submit an application shortly. The proposed new licence will enable Lloyd’s to increase the support it can offer in Malaysia. Lloyd’s is already an important insurer and reinsurer in Malaysia, writing Malaysian business from London, Singapore and an offshore office in Labuan. This new licence will give Lloyd’s a significant opportunity to develop its marine, energy, construction, engineering and liability business, as well as introduce new products to the market, according to a statement issued by Lloyd's.
Insurance industry expanded 42% in Q2 Manila Standard Today 3rd Aug 2015
The insurance industry grew 42 percent in terms of premium income in the second quarter, on the back of the rapid expansion of the life sector, the Insurance Commission said. Insurance Commissioner Emmanuel Dooc said total premium income grew 42 percent in the April-June period to P116.1 billion from P81.761 billion in the same period last year. The agency said based on quarterly reports submitted by life and non-life companies, the industry’s total net income in the second quarter also grew 32.7 percent to P10.85 billion from P8.18 billion a year earlier. Total assets in the second quarter rose 12.8 percent to P1.073 trillion from P951.66 billion in the same period a year ago.
Singapore: UK govt, MAS and Lloyd's pledge to build nat cat resilience across Asia Asia Insurance Review 29th Jul 2015
The British Government, the Monetary Authority of Singapore (MAS) and Lloyd's have signed a Statement of Intent (SOI) to aid the understanding of risk exposures in Asia and support and nurture insurance markets across the region. Asia is the world's most natural catastrophe-prone region. However, on average, less than 5% of likely economic losses are insured when disaster strikes. This means that one major catastrophe could wipe out decades of economic progress. The three parties committed to working together to share knowledge and expertise with partners across the region. They hope this will help to identify threats facing regional economies and support the development of new risk transfer solutions. Other firms in the insurance industry across Asia are now invited to join the commitment and sign the SOI.
Market Regulation
SSC to outline details of foreign ownership Viet Nam News 10th Aug 2015
This week, the State Securities Commission (SSC) will hold a meeting with the two local exchanges, companies and investors to provide instructions to implement decree 60, issued in June to raise foreign ownership in Vietnamese companies. That meeting, with some market moves, is expected to help the VN Index and the HNX Index gain this week. The decree had positive impacts on the market in July. The BIDV Securities Corporation (BSC) predicted that the stock market would likely continue to fluctuate this week to test the benchmark of 600 points. BSC said that the market could stay above the benchmark if foreign investors remained as net buyers like they were last week.
SEC overhauls securities law’s implementing rules Philippine Daily Inquirer 10th Aug 2015
The Securities and Exchange Commission has overhauled the implementing framework for domestic securities regulation to give corporations more leeway in raising funds, plug regulatory loopholes and incorporate global best practices. The SEC en banc recently approved the 2015 Securities Regulation Code (SRC) which expands the shelf registration program and streamlines certain requirements on the public offering of debt or equity securities. The new implementing rules and regulations (IRR) also refine the tender offer requirements, oftentimes a contentious issue during corporate take-overs. The 2015 SEC rules also addresses regulatory gaps and boosted market and regulatory structures. The adoption of global best practices was also meant to ensure that the players would be able to meet the challenges posed by increasing market sophistication and regional integration.
Final Financial Safety Bill Draft Focused on Banking Tempo 9th Aug 2015
Muliaman Dharmansyah Hadad, the head of the Board of Commissioners at the Financial Services Authority (OJK), said the Financial System Safety Net (JPSK) bill draft has been finalized and was ready to be approved by the House of Representatives. “I think it’s just a matter of time. The [bill] draft is ready,” he said. According to Muliaman, the discussion in the bill draft is focused on the banking industry due to its significant role in the national financial system. Muliaman added that public trust in the deposit insurance has improved. “The time deposit really depends on public trust in banks,” he said.
E-vendors must have ID numbers Jakarta Post 6th Aug 2015
The government plans to require all vendors that carry out electronic transactions to be registered and have identification numbers in a bid to protect consumers. “With this mechanism, we will not only encourage protection of consumers, but also boost their confidence when shopping online,” said the Trade Ministry’s director for business development, Fetnayeti, as quoted by kompas.com on Wednesday. Fetnayeti added that each e-commerce business player would have to secure permits before engaging in transactions. The obligations are specified in the draft of the government regulation on e-commerce transactions, which divides online business players into three categories — merchants, e-commerce transaction providers and intermediary service providers.
Indonesia's constitutional court rejects challenge to financial regulator's role Reuters 4 Aug 2015
Indonesia's constitutional court threw out a legal challenge to the role of the financial services authority (OJK) in supervising lenders, the court's chief said on Tuesday. One of the plaintiffs, researcher Salamuddin Daeng, had said earlier this year that the central bank, not the OJK, should supervise the banking industry. The constitutional court chief, Arief Hidayat, rejected the challenge on Tuesday, saying that "both macro and micro supervision that is currently done by the two institutions, the central bank and the OJK, is an open legal policy".
BI: Draft Bill Revision to Affirm Power Division Between BI, OJK Tempo 3rd Aug 2015
The hearing on Financial Commission last June ended up with heat as some members of the commission protested revision of the the Bank Indonesia draft bill that they had never heard before. “We have never had any discussion. How can it be a design already,” said House member from the National Democratic Party of Struggle, Maruarar Sirait. “Whose interest is this?” The draft actually came from a familiar figure in the commission, chief Fadel Muhammad. He claimed that the draft was made so that his friend at the commission had a guideline in designing bills. “Anyone can propose. We are still expecting inputs,” he said. Nevertheless, Maruarar’s protest is not merely on procedural matterm instead it is about the content. “The draft seems like a competition. We can see conflict of interest."
Govt Readies Draft Bill on Banknote Restrictions Hukum 31st Jul 2015
With the ultimate aim of creating a cashless society, the government is continuing to reduce the number of banknotes available for daily transactions. In order to consolidate this goal, the government is also currently preparing a Draft Bill on the Restriction of Banknote Transactions (Draft Bill). The Draft Bill will complement existing legislation regulating banknotes, such as Law No. 7 of 2011on Currency, and Law No. 8 of 2010on the Prevention and Eradication of Money Laundering Crimes, and will restrict the use of banknotes for transactions above a certain value. The government considers such restrictions to be highly beneficial and the Draft Bill is seen as an integral part of an ongoing effort to eradicate corruption and money laundering.
Stimulating the Economy: OJK Issues 35 New Regulations Hukum 30th Jul 2015
The nation’s current economic growth rate of just 4.7 percent is raising concern among stakeholders, including the Financial Services Authority (OJK). In order to promote growth, the OJK is taking proactive measures by issuing 35 new regulations for all of the financial sectors under its supervision. Muliaman D. Hadad, Chairman of the OJK’s Board of Commissioners, asserted that the new regulations are being issued in a bid to support the national economy in the hope that the financial industry will become the engine that produces a faster and more stable national economy, thus improving social welfare.
Indonesia regulator open to higher foreign stakes in local banks The Business Times 29th Jul 2015
Indonesia's financial regulator is open to allowing a higher percentage of foreign ownership in local banks as the country wants to tap international funds for trade and project finance. The Southeast Asian nation currently limits foreign purchases of domestic banks to 40 per cent and will consider more than that depending on an investor's business plan, Muliaman Hadad, chairman of the Financial Services Authority, said on Wednesday in an interview. "I think we are quite open to the next step of more than 40 per cent," Mr Hadad said in Singapore, where he attended the opening of a PT Bank Rakyat Indonesia branch. "Basically we asked foreign banks to go into areas that we want to see domestically, in particular to support trade finance, project finance."
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