| Market Development
House seeks to strengthen Islamic banking Business Mirror 20th Sep 2015
The House Committee on Banks and Financial Intermediaries has created a technical working group (TWG) to further study how the government can strengthen the Islamic banking in the Philippines. The TWG was created after the Bangko Sentral ng Pilipinas (BSP) presented to the committee the status, trends, challenges and opportunities of Islamic banking in the country and its global implications during the recent deliberation of House Bill (HB) 5989. “We need to set up a more dynamic and responsive national regulatory framework on Islamic banking,” the central bank admitted.
Over 200 new bank branches open in Q2 The Philippine Star 17th Sep 2015
The Bangko Sentral ng Pilipinas (BSP) has given major banks as well as thrift, rural, and cooperative banks the green light to open more than to 200 branches nationwide in the second quarter of the year. In a circular, the BSP approved the applications of 15 banks to open 111 new branches nationwide as well as the opening of 91 branches. The regulator approved the application of Union Bank of the Philippines of the Aboitiz family to open 20 new branches in the cities of Taguig, Muntinlupa, Marikina, Malolos, Sto. Tomas, Tagaytay, Cebu, and Davao.
Advancing financial inclusion in Southeast Asia, Central Asia, and the Middle East Brookings 16th Sep 2015
Of the 21 countries ranked in the 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard, no countries in Asia placed in the top 5 in the overall ranking. However, all of the FDIP Asian countries have demonstrated progress within at least one of the four dimensions of the 2015 Scorecard: country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services. This blog post will dive into a few of the obstacles and opportunities facing FDIP countries in central Asia, the Middle East, and southeast Asia as they move toward greater access to and usage of financial services among marginalized groups.
Malaysia Making A Bid For World Islamic Finance Capital Mondaq 15th Sep 2015
Islamic finance is the fastest-growing sector in the global financial services industry with a double digit growth rate over the past five years - and that is set to continue. But where is it centred? Our Malaysian MD argues her country is a good home. Malaysia is fast becoming an international centre for Islamic finance thanks to its religious heritage, strategic location and progressive regulatory structure. And while Malaysia faces competition from financial capitals such as London and Dubai to become the premier global Islamic financial centre, it remains at the forefront of the development of this market. Islamic finance is the fastest growing sector in the financial services industry with an impressive growth rate of 17.3% over the past five years despite the gloomy global economic outlook.
New bourse rules to lure SMEs The Phnom Penh Post 15th Sep 2015
Cambodia’s market regulator has released listing criteria for a new trading platform – with reduced accounting and capital requirements – aimed at making it easier for small- and mid-sized firms to list on the fledgling stock exchange, Sok Dara, deputy director general of the Securities and Exchange Commission of Cambodia (SECC), said yesterday. The new “Growth Board”, to be launched on the Cambodia Stock Exchange (CSX), will require small- and medium-sized enterprises (SMEs) to have a minimum operating capital of $500,000, down from the $10 million for the main board, Dara said. The companies will be required to release only one year of audited financial results, as compared to the three years required for bigger companies.
Funds passport pushed Sun Star 15th Sep 2015
The Philippines, together with five economies in the Asia Pacific, signed on Friday the Statement of Understanding for the Asia Regional Funds Passport. Department of Finance Secretary Cesar Purisima represented the country during the signing at the Shangri-La Resorts and Spa in Lapu-Lapu City, on the same day the Cebu Action Plan (CAP) was launched. Other economies that signed were Australia, South Korea, New Zealand, Thailand, and Japan. First initiated by Australia, the ARFP will open the Philippine market to investments from across participating Asian economies. In exchange, the ARFP will allow local investment product providers to sell to the regional market.
Philippines urged to enact reforms on bank secrecy, money laundering The Philippine Star 14th Sep 2015
Remittance senders could face higher costs and the country could again be proclaimed a tax haven come 2018, if the Philippines fails to enact reforms on bank secrecy and money laundering laws necessary to pass two international evaluations. The Global Forum on Transparency and Exchange of Information is currently conducting a pilot program on the Philippines to prepare the country’s compliance to the automatic exchange of information (AEOI) tax standard, Bureau of Internal Revenue (BIR) Commissioner Kim Jacinto-Henares said. The AEOI, according to the Forum’s website, mandates the automatic sharing of tax information between the BIR and its global counterparts.
Asset Management
Ringgit Falls Most in Two Weeks as Stocks Drop on Growth Concern Bloomberg 21st Sep 2015
Malaysia’s ringgit fell the most in two weeks as Asian shares tracked Friday’s U.S. losses after the Federal Reserve’s decision to keep interest rates unchanged reignited concern that global growth is slowing. Malaysia’s benchmark stock index also dropped on Monday as odds of a Fed rate increase at this year’s two remaining meetings receded after Chair Janet Yellen noted China’s slowing economy and financial market turmoil when she left borrowing costs near zero. The ringgit is already Asia’s worst-performing currency in 2015 as falling Brent crude prices weigh on the oil exporter’s earnings. The currency closed down 1.4 percent at 4.2635 a dollar in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It rallied 2.7 percent last week, halting the longest run of weekly losses since 1971, as the Fed’s rate decision brought relief to emerging markets before the growth concern set in.
Listed firms well capitalized Manila Standard Today 20th Sep 2015
Trading participants in the Philippine Stock Exchange remain well capitalized, despite the recent sharp volatility in the equities market, the Securities and Exchange Commission said over the weekend. SEC said in a statement trading participants were compliant with the risk base capital adequacy requirements mandated by the corporate regulator. “This demonstrates the strong resiliency of the trading participants amid the recent sharp volatility in the prices of PSE listed stocks,” SEC said.
Finance Minister: Unchanged Fed Rate Prolongs Rupiah Volatility Jakarta Globe 18th Sep 2015
Finance Minister Bambang Brodjonegoro on Friday said pressure on the rupiah and other currencies in the region will remain as the US Federal Reserve announces it will not change interest rates. "The speculation between US dollar to all currencies in the world will continue... Therefore the government, Bank Indonesia and the Indonesian Financial Services Authority will maintain economic stability and stability in the financial sector so we can get through this uneasy time," said Bambang. He said both the government and the central bank will keep the currency at a level able to maintain Indonesia's economic resilience against the global economic turbulence and will use "any instrument needed."
Expect market volatility until year-end – PSE The Philippine Star 17th Sep 2015
The volatility in the local stock market is expected to continue until the end of 2015 but opportunities still abound, according to the head of the Philippine Stock Exchange. PSE president Hans Sicat said while financial markets are overreacting, investors still have reasons to stay invested in the stock market. “I think the view that the economy is going to grow by at least 5.5 to six percent (this year) is not too radically different from a six percent expectation. It may be lower but it’s certainly not fatal,” Sicat said. Sicat believes the markets will eventually calm down. “Hopefully it will be sooner rather than later,” he said.
Picking Indonesia Winners Is Harder for Top Funds on Rupiah Rout Bloomberg 17th Sep 2015
Top fund managers say picking winners in Indonesia has become harder -- but not impossible -- as the rupiah extends declines from a 17-year low. PT Sinarmas Asset Management favors snack maker PT Mayora Indah because of its high proportion of overseas revenues and low foreign debt. The top pick for Samsung Asset Management is PT Sri Rejeki Isman, a supplier to Hennes & Mauritz AB, because a falling rupiah boosts its dollar earnings and competitiveness. Picking winners in Indonesia was lot easier when record-low U.S. borrowing costs fueled an almost 300 percent surge in the Jakarta Composite Index in the six years through 2014 and gross domestic product expanded at an average 5.7 percent. Now, the benchmark gauge is the world’s worst performer after Peru and Egypt as the Federal Reserve gets closer to raising interest rates and the economy is growing at its slowest pace since 2009.
Corporate Sleuths Target Indonesia as Cheaper Assets Lure Investors Jakarta Globe 16th Sep 2015
Business is booming for corporate investigators in Indonesia, where the sharp decline in global commodity prices has triggered a spate of defaults and distressed asset sales that has attracted foreign investors to Southeast Asia's biggest economy. Specialist corporate intelligence firms that cut their teeth in China like Blackpeak Group and Control Risks say the number of inquiries related to asset sales and commercial disputes in Indonesia has shot up over the past year. And while there is no independent data about the size of the industry, experts say corporate intelligence is particularly important for investors going into Indonesia, where disclosure laws are lax and inconsistently enforced.
SGX to tackle listings woes Brunei Times 16th Sep 2015
Singapore Exchange Ltd (SGX), which is facing a dearth of initial public offerings (IPOs), is setting up three independent listings committees in an attempt to address investor concerns about its independence. The formation of the committees, which will comprise senior bankers, lawyers and chief executives of companies, is the most significant strategic announcement made by SGX since veteran banker Loh Boon Chye became its CEO in July. “SGX’s long-term success depends on our having and maintaining a solid record as a market regulator and operator,” chief regulatory officer Tan Boon Gin told a briefing on Tuesday. Unlike other major financial markets, Singapore does not have a dedicated securities watchdog. Instead SGX is the front-line regulator and is in turn regulated by the central bank, the Monetary Authority of Singapore (MAS). SGX also so far did not have an independent committee looking at listings.
It's Not 1997: Southeast Asian Currencies Slump Isn't a Crisis Bloomberg 16th Sep 2015
Southeast Asian currencies are tumbling, and that may be a good thing. Indonesia’s rupiah and Malaysia’s ringgit have fallen to levels hit during the Asian financial crisis of 1997-98, leading a decline in the region’s currencies. The drop won’t spark the same economic meltdown this time around, according to analysts who watched the disaster unfold almost two decades ago. In fact, it could be a healthy realignment that helps boost exports. The slide in currencies, exacerbated by China’s surprise devaluation of the yuan by the most in two decades last month and a strengthening U.S. dollar, is occurring amid lower external debt burdens, more flexible exchange rates and higher foreign-currency reserves than before. Most Southeast Asian economies now run current-account surpluses instead of the deficits they had before the late 1990s crisis.
Bank Indonesia: Rupiah to Trade at 13,400-13,900 Next Year Jakarta Globe 15th Sep 2015
Bank Indonesia Governor Agus Martowardojo said on Tuesday that the central bank believes the rupiah to trade at the range of 13,400 to 13,900 per dollar next year due to uncertainty in the United State's monetary policy and Chinese economy. "We've included the uncertainty factors from the global market volatility into our estimate," said Agus. Bank Indonesia on Tuesday presented its new rupiah assumption for the 2016 fiscal year to House of Representatives' Commission XI, which supervises the banking and finance sector. Agus said Bank Indonesia's new rupiah assumption offers a wider range than the bank's initial estimate of 13,400 to 13,700 against the greenback.
Proactive measures lift ringgit higher New Straits Times 15th Sep 2015
The ringgit opened stronger against a basket of major currencies as demand was fueled by growing optimism over a robust domestic economy following the proactive measures announced by the Prime Minister yesterday. At 9 am, the ringgit was quoted at 4.2950/3030 against the US dollar from 4.3060/3140 on Monday. A dealer said the short- and medium-term initiatives to protect the real economy somehow managed to restore investors’ confident on the country’s economic growth. The ringgit appreciated against the yen to 3.5602/5683 from Monday’s 3.5836/5908, rose against the British pound to 6.6255/6400 from 6.6519/6647 and strengthened versus the euro to 4.8568/8667 from 4.8817/8912 yesterday.
Malaysian PM announces $4.6 billion boost to share market The Jakarta Post 14th Sep 2015
Malaysian Prime Minister Najib Razak said Monday the government will pump 20 billion ringgit (US$4.6 billion) into an equity fund to support the stock market and ruled out capital controls despite the ringgit's plunge. The Malaysian ringgit is down 26 percent from a year earlier, breaching 4 ringgit to the dollar last month, it's weakest level in 17 years. The stock market is down 7.5 percent in the past three months. Najib reiterated the government has no plans to bring back capital controls as Malaysia's economy and financial system are in far better shape than during the Asian financial crisis. Malaysia pegged the ringgit at 3.80 to the US dollar and imposed capital curbs in September 1998 during the crisis.
Banking
State financial agencies prods Senate to lifting bank secrecy laws Manila Bulletin 21st Sep 2015
The government’s financial managers pushed for the approval of the measure lifting the bank secrecy law in order which the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF) is pushing as a means to mitigate the impact of a reformed tax system. But BIR Commissioner Kim Henares and Finance Secretary Cesar Purisima were no-shows at the joint hearing of the Senate committee on ways and means, banks and financial institutions and currencies. Both agencies suggested the lifting of the bank secrecy laws for tax evasion cases and including tax evasion as a predicate crime under the Anti-Money Laundering Act of 2001 to alleviate the projected P30-billion revenue loss they expect when the measure adjusting the income tax brackets is approved into law.
The Banking Outlook for Vietnam International Banker 21st Sep 2015
Vietnam’s banking sector began 2015 on a positive note, with Moody’s having upgraded the financial system from “negative” to “stable” in mid-December. According to the credit-ratings agency, the improvement reflected the “increased stability in the operating environment for the banks, as well as in Vietnam’s macroeconomic situation, and a reduction in liquidity stress in the system”. Since 2012, inflation and interest rates in Vietnam have stabilised significantly, dropping from double digits to fairly constant, sustainable levels, while higher amounts of foreign direct investment (FDI), a decisive shift from deficit to surplus in the country’s current account, and new government policies specifically aimed at promoting economic stability have all played their part in providing a brighter outlook.
VietinBank tops domestic banks in financial strength rating VietnamPlus 20th Sep 2015
Credit ratings agency Moody’s has recently ranked the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) the first among nine rated Vietnamese banks in terms of financial strength. It was followed by VIB, BIDV, Sacombank, Techcombank, ACB, MB, VPBank and SHB. Moody’s also listed Vietinbank among those with “positive” outlook. The bank, together with BIDV and VIB, was also given a B1 rating in local currency deposit and B2 grade in foreign currency deposit. Currently, VietinBank has the largest registered capital among domestic banks in Vietnam.
Banks expect resurgence in SME lending under stimulus schemes The Nation 19th Sep 2015
Commercial banks are upbeat about the government's Bt100-billion soft-loan programme and the new guidelines for loan guarantees as they believe these stimulus measures will spur demand for loans and attract small and medium-sized enterprises into the formal banking system. The Government Savings Bank yesterday signed a memorandum of understanding with 18 financial institutions. Under the soft-loan programme, GSB will lend a total of Bt100 billion to commercial banks, which will re-lend the money to SMEs at an interest rate of 4 per cent per annum for seven years. Yol Phokasub, president of Siam Commercial Bank, said it expected its new loans to SME clients this year would reach Bt120 billion, up from the previous forecast of Bt100 billion, with the additional Bt20 billion stimulated by the soft-loan and loan-guarantee programmes.
VPBank offers preferential loans Voice of Vietnam 18th Sep 2015
Vietnam Prosperity Bank (VPBank) is offering a preferential programme for small and medium-sized enterprises (SMEs) with the aim of helping them access loans for production and business. Under the SME Success 2015 programme, which is running from August 24, 2015, to February 24, 2016, the bank will lend SMEs up to VND2 trillion (US$88.8 million) at preferential interest rates of 1.8 to 2% less than the normal rate. The programme will reportedly help importers to take advantage of the low-cost loans for their operations during the last few months of the year. In addition, SMEs can also access preferential loans in US dollars for an average annual interest rate of 3.2%. The loans are expected to help local firms in import-export payments.
Five more banks now offer FAST transfers The Straits Times 18th Sep 2015
Five more banks will now allow customers to tranfer Singdollar funds almost immediately between the accounts of the participating banks from today. Bank of China, BNP Paribas, The Bank of Tokyo-Mitsubishi UFJ, Hong Leong Bank and Mizuho Bank will join 14 other banks in offering the Fast And Secure Transfers (FAST) service, said the Association of Banks in Singapore (ABS) in a statement. There has been a steady increase in customers using the round-the-clock electronic fund transfer service since its launch in March last year, said the association, with 18 million transactions recorded.
KBank works with state for small business liquidity Bangkok Post 18th Sep 2015
Kasikornbank (KBank), the country's biggest SME lender, aims to make 60 billion baht in loans to small and medium-sized enterprises during the final three months of the year. Half the amount will be derived from the government's 100-billion-baht soft loan scheme. The remaining 30 billion baht will come from the bank's funds set aside for SME loans, said executive vice-president Patchara Samalapa. Out of the latter 30 billion, 2 billion will be lent to SME operators who need fresh working capital or liquidity at a maximum of 30 million baht each. The bank will charge 4% interest for the first six months, with loans available until the end of the year.
Stronger lending to SMEs expected Bangkok Post 18th Sep 2015
The Thai Bankers' Association now estimates that lending to small and medium-sized enterprises could grow more than previously projected, while the rate of non-performing loans (NPLs) in the SME segment should improve under a new programme of the Thai Credit Guarantee Corporation (TGC). Yesterday was the first day of the new NPL guarantee arrangement for SME loans under the Portfolio Guarantee Scheme (PGS5) offering Bt100 billion in NPL coverage, one of the measures initiated by the government to help SMEs. Under PGS5, the TGC will absorb higher proportions of participating banks' bad SME loans, on a varying scale. TBA chairman Boontuck Wungcharoen said this meant the average NPL rate in the SME segment could improve from 3.5 per cent currently, while lending is expected to become more active.
New stimulus will help boost micro, SME loans: OJK Jakarta Post 17th Sep 2015
The Financial Services Authority (OJK) is upbeat a recently introduced stimulus program will encourage banks to spur loan growth in micro and small and medium enterprise (SME) segments, which has dropped significantly due to the country’s economic slowdown. OJK deputy commissioner for banking supervision Irwan Lubis said the stimulus program, which includes a relaxation on micro and SME loan disbursement, would encourage banks to boost their lending activities in the two business segments. “The stimulus offers lower risk-weighted asset [RWA] calculations for micro and SME loans that are insured by regional credit insurance [Jamkrida], which is owned by several regions. So, it will push credit growth to those segments at a regional level,” Irwan said at a press conference on Thursday.
Rural, cooperative banks’ bad loans up in Q1 The Philippine Star 16th Sep 2015
Soured loans of rural and cooperative banks inched up in the first quarter after sliding to its lowest level in two years, prompting banks to jack up their loan loss reserves, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. The central bank said the gross non-performing loans (NPLs) of rural and cooperative banks inched up to 12.04 percent of the banks’ total loan portfolio as of end March from 11.85 percent in end 2014. The NPL ratio booked in end December was the lowest level recorded by rural and cooperative banks since September 2012. Data from the BSP showed soured loans of rural and cooperative banks inched up 2.2 percent to P16.76 billion in end March from P16.4 billion in end December.
Exporters lured to place dollars in local banks Jakarta Post 16th Sep 2015
Large banks are persuading their large corporate customers, especially those involved in export activities, to deposit their foreign exchange earnings in local banks in a bid to help stabilize the rupiah, which has been under pressure on account of the global market rout. The persuasive approaches were taken following President Joko “Jokowi” Widodo’s call to the country’s major banks last week to make their banking products more attractive to exporters so that they keep their dollars in local banks instead of depositing their export earnings in banks overseas. Budi Gunadi Sadikin, president director at state-owned Bank Mandiri, said his bank did not have any plans yet to offer new banking products to lure the dollars of exporters, but had instead, used persuasive approaches to get them to place their export proceeds in domestic banks.
NPL ratio of rural and coop banks rises slightly InterAksyon 15th Sep 2015
The gross non-performing loans (NPLs) of rural (RBs) and cooperative banks (CBs) represented 12.04 percent of the banks’ total loan portfolio (TLP) at end-March 2015. The latest NPL ratio increased marginally from the 11.85 percent posted at end-2014, the lowest quarterly NPL ratio recorded by RBs and CBs since end-September 2012. The rise in the NPL ratio was caused by gross NPLs growing by 2.17 percent while TLP increased by only 0.51 percent. Among economic sectors, the largest recipients of loans from RBs and CBs at end-March 2015 were agriculture, forestry and fishing; wholesale and retail trade; loans to individuals for consumption purposes; and real estate activities.
DBS named Asia’s safest bank for seventh year running Singapore Business Review 15th Sep 2015
DBS continued to defend its spot as Asia’s safest bank for the seventh consecutive year, according to rankings published by Global Finance. The bank also moved up one place to the 11th spot on the global list of safest banks. DBS also retained its 2nd place position on the list of World’s Safest Commercial Banks, which comprises financial institutions which are not backed by government guarantees. “The past year has been a rollercoaster for companies and investors, as some of the region’s biggest markets have seen intense volatility and major market changes,” said Joseph Giarraputo of Global Finance.
BTN to cash in on foreign apartment ownership rule The Jakarta Post 14th Sep 2015
State-owned Bank Tabungan Negara (BTN) expects that the government’s plan to allow foreigners to own luxury apartments will help boost mortgages in the upscale segment, an executive has said. The planned policy, which is part of the government’s policy package to revive the country’s sluggish economy, will open foreign ownership for apartments worth at least Rp 10 billion (US$697,329). BTN mortgage and consumer lending director Mansyur Nasution said the bank, whose core business is mortgages, welcomed the government’s plan as it would increase financing for the higher segment. “The planned policy can help us keep up our loan growth across all segments, from low to high-end as we want to cater to all demand,” Mansyur said on Thursday. Despite being known for providing mortgages for low- to mid-income borrowers, Mansyur said BTN was also eager to grow its high-end segment as part of its long-term efforts to increase its market share to 30 percent by 2019.
E-Payments
E-commerce contributes to growth VietnamPlus 21st Sep 2015
After five years of implementation of the General Plan to Develop Electronic Commerce 2011-15, e-commerce has contributed greatly to the country's socio-economic growth. A new general plan for the next five years, to be released by the Ministry of Trade, was discussed at the seminar "Policies for E-Commerce in Vietnam 2015" held in HCM City recently. "By 2020, e-commerce will strongly develop in all cities and provinces," Tran Huu Linh, head of the Ministry of Trade's E-Commerce and Information Technology Department, said at the seminar.
BSP readying payments system Business World 17th Sep 2015
The Bangko Sentral ng Pilipinas (BSP) aims to finish laying the foundation of an envisioned national retail payments system (NRPS) by yearend, a senior official yesterday said, in line with the financial industry’s goal to have an integrated cashless framework in the next three to five years. “We’re actually working on the constitution of the NRPS. Basically, it’s a partnership of many actors: bank, payments providers, telcos (telecommunication companies). So you need to have a good constitution so people will properly coordinate and compete in a healthy way,” Deputy Governor Nestor A. Espenilla, Jr. told reporters at the sidelines of an event in Makati yesterday.
Emerging Asia on the Cusp of Mobile Finance & Commerce Philippine Daily Inquirer 16th Sep 2015
Although mobile money is most commonly associated around the world with East Africa, its origins lie in services that went live in the Philippines several years before African MNOs launched that continent’s first deployments. In 2004, Globe Telecom launched GCash, the Philippines’ second mobile money deployment. In the decade since then, the mobile finance and commerce (MFC) ecosystem in the Philippines and across Emerging Asia has grown to the point where it is on the verge of producing “MFC 2.0”, leading the world in MFC innovation. The rapid pace of technological change and falling smartphone and data prices are enabling companies in Southeast Asia and beyond to take advantage of the popularity of social media and new patterns in m-commerce to deliver more advanced MFC services.
Insurance
Vietnam: Life insurance market to see robust growth Asia Insurance Review 21st Sep 2015
The life insurance sector in Vietnam is expected to rake in total premiums of VND34 trillion (US$1.51 billion) this year, an increase of 20% compared to last year. In addition, premium revenue is expected to grow by 15% next year, according to a forecast by the Insurance Supervisory Authority of the Finance Ministry. With six million people with insurance policies out of a population of 90 million, the domestic life insurance market still has great potential to grow, said Mr Phung Dac Loc, General Secretary of the Viet Nam Insurance Association, in an interview with Vietnam News Agency.
Thailand: Finance Ministry eyes insurance funds for projects Asia Insurance Review 18th Sep 2015
Thailand's Ministry of Finance plans to set up infrastructure funds to attract long-term capital from the insurance sector to finance the government's mega projects. Finance Minister Apisak Tantivorawong said this might take the form of infrastructure funds for each project or just one infrastructure fund for all, reported The Nation newspaper. Currently, the finer points of each option, such as fund structure and size, are being scrutinised in detail.
'Crucial for S-E Asia firms to be adequately insured' AsiaOne 18th Sep 2015
Companies in South-east Asia are facing increased risk from threats ranging from floods to terrorist attacks, making it imperative for them to ensure they have adequate insurance coverage. And experts say it is an ideal time for businesses to ensure their coverage is sufficient, as premiums are falling amid rising competition in the insurance sector. A recent study by specialist insurance market Lloyd's showed that the economies of South-east Asia's 15 largest cities stand to lose some US$300 billion (S$420 billion) owing to threats over the next decade. These include both natural and manmade threats, such as wind storms, market crashes, human pandemics, earthquakes, floods and terrorism.
Life insurance market has room to grow Voice of Vietnam 17th Sep 2015
Vietnam's life insurance sector has registered significant growth in recent years though the domestic growth is still facing hurdles. With six million out of 90 million people with insurance contracts, the domestic life insurance market still has great potential to grow. Phung Dac Loc, general secretary of the Vietnam Insurance Association, spoke to the Vietnam News Agency about those issues.
Mantaring says: Tax burden makes PH insurance sector an ASEAN laggard Manila Bulletin 15th Sep 2015
Although the local insurance sector is growing rapidly, it still cannot compete under the ASEAN Economic Community because it has the highest tax burden among countries in the region. Rizalina Mantaring, CEO of Sun Life Financials Philippines, told reporters covering the Legacies of Women Forum organized by the Global Summit of Women and the Asian Institute of Management that the local insurance sector has been overburdened with taxes making its products more expensive than those sold in other countries. “We are the most heavily taxed in the region so our products become more expensive,” said Mantaring, who cited the various tiered taxes imposed on the sector including taxes on invested assets, creditable withholding taxes, corporate loans, and final withholding tax on bonds.
Vietnam: Draft decree proposes mandatory construction insurance Asia Insurance Review 15th Sep 2015
Project owners and contractors undertaking construction work will be required to purchase insurance for their work and workers, according to a draft government decree issued by the Ministry of Finance. Compulsory construction insurance would be required for important national projects, large-scale complex construction works and works that may potentially affect community safety or the environment, and works subject to special technical requirements, reported Vietnam News citing the draft. Contractors undertaking construction survey and design for construction works of a specified grade would be obliged to buy professional liability insurance, while construction contractors would have to purchase insurance for their construction workers.
Market Regulation
Bourse softens listing criteria The Phnom Penh Post 18th Sep 2015
For companies looking to float shares on Cambodia’s fledgling stock exchange, the rules have just been made easier. After three years and only two listings, the Securities and Exchange Commission of Cambodia (SECC) has revamped the listing criteria, in a bid to increase the number of companies traded on the Cambodia Securities Exchange (CSX). This comes on the heels of a new regulatory framework for a “Growth Board” on the CSX – aimed at attracting small- and mid-cap companies – that was announced last week.
OJK Smooths the Way for Foreigners to Open USD Account Jakarta Globe 18th Sep 2015
The Financial Services Authority has eased requirements for foreigners to open a domestic, US dollar bank accounts with savings of up $50,000, as part of the country's efforts to boost its foreign exchange reserves. Under the rule, which came into effect on Wednesday, foreigner can open a foreign currency account just by showing a passport if they intend to deposit between $2,000 and $50,000, the financial body (OJK) said in a statement on Thursday. "This policy is intended to attract foreign funds into the Indonesian banking system," OJK communication director M. Jufrin said in the statement.
Indonesia to overhaul bank rules The Star 17th Sep 2015
Indonesia is preparing a major overhaul of financial safety regulations to guard against the potential for bank collapses. Regulators were working on a list of systemically important banks, likely to include the country’s top 15 by assets, and parliament might pass a law this year setting out rules for bailouts, said Fauzi Ichsan, who heads the Indonesia Deposit Insurance Corp. The agency guarantees bank deposits and would take over any lenders in the event of a failure. Indonesian banks including biggest lenders PT Bank Central Asia and PT Bank Rakyat Indonesia are facing slower loan growth and a weakening economy at a time when the Federal Reserve is preparing to lift US interest rates, a move that has the potential to create more disruption in emerging markets.
Dooc adopts clean-slate rule for insurance agents Business Mirror 17th Sep 2015
The Insurance Commission (IC) has warned that it will continue to prosecute complaints against erring insurance agents, especially those accused of misappropriating funds held in a fiduciary capacity, even if such complaints were subsequently withdrawn as a result of a compromise agreement. Insurance Commissioner Emmanuel F. Dooc has issued Circular Letter 2015-45 expanding the jurisdiction of the IC on complaints filed against insurance agents subsequently withdrawn due to a settlement or compromise between the private complainant and the insurance agent. The circular amends Circular Letter 17-2006 to provide that complaints against erring insurance agents may still be pursued by the IC, despite any agreement to the contrary between the private complainant and the insurance agent in their compromise agreements.
International investors wary of Burmese law Eleven 17th Sep 2015
International investors have told the Myanmar Global Investment Forum that even though Burma generates much interest, there are a multitude of challenges that foreign investors face. The challenges, discussed on the panel held on the second day of the forum, were mainly a lack of transparency, unfinished ceasefire deals, and other restrictions not limited to laws. Foreign consulting attorney Pedro Jose Fausto Bernardo, who was moderating the panel, said, “I believe that a look at Myanmar’s current landscape will reveal that protectionism still exists. There are also reports that two laws are being merged into one, and there are still no known guarantees against protectionism when the new law comes out. Those policies are due to structural legal limitations. There are also many other sectors which limit the involvement of foreign investors.” Sunil Seth, TATA International’s representative in Burma, said, “My opinion is that trading is also restricted, not only investments. For example, our international company wants to purchase beans from here and export them to India, but foreigners are still prohibited from doing so.”
OJK Allows Foreigners to Have Savings Balance above $1mn Tempo 17th Sep 2015
The Financial Services Authority (OJK) announced Wednesday, September 16, that foreign nationals residing in Indonesia are allowed to have bank savings accounts under a number of requirements. The OJK allows foreigners to have a savings balance of more than US$1 million. The provisions are stipulated in POJK's circular number S-246/s.01/2015 on the simplification of opening a savings account in foreign currencies by non-Indonesians. The circular was issued on September 15, 2015.
Policy issued to ease restrictions on foreigners’ bank accounts The Jakarta Post 16th Sep 2015
The Financial Services Authority (OJK) has issued a circular letter regarding a less strict policy imposed on foreign individuals wishing to open dollar savings accounts in local banks. OJK chairman Muliaman D Hadad said the new regulation was a follow up to the economic policy package announced by the government on Sept. 9, which aimed to accelerate economic growth. "The circular letter No. S-246/S.01/2015, which was issued on Tuesday and signed by me, has been sent to all local banks' board of directors that conducted business in foreign currency," said Muliaman in a press release on Wednesday as quoted by tempo.co. Previously, foreign individuals were required to provide numerous administrative documents besides passports when opening a forex savings or time deposit accounts at local banks, including temporary stay permits (Kitas).
OJK to upgrade banking IT rule to fight digital crime Jakarta Post 15th Sep 2015
The Financial Services Authority (OJK) will soon revise its banking IT systems rules in an attempt to counter the rising trend of digital crime, its official says. OJK deputy commissioner for banking supervision Irwan Lubis said the rules, which regulates the usage of IT systems in banks, needed several improvements. Irwan said the revision would include better mitigation of digital crimes and would also aim to speed up the return of money to owners in any cases of banking fraud. “One of the new articles in the regulation will help accelerate the process of returning funds belonging to the victims of digital crime,” Irwan said after a seminar on electronic banking security on Monday.
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