| Market Development
Removing capital barriers for SMEs PPP 2nd Oct 2015
FASMEC Microfinance, which opened its doors last month, was created by the Federation of Associations of Small and Medium Enterprise of Cambodia (FASMEC) as an independent entity to service the financing needs of the organisations’s members. The Post’s Sor Chandara sat down with FASMEC Microfinance’s president Te Taing Por to discuss how Cambodia’s 54th microfinance institution will separate itself from the pack, as well as governmental efforts to bring more formality to the small and medium enterprise sector.
Philippines seeks linkup with ASEAN bourses next year AsiaOne 30th Sep 2015
The Philippine Stock Exchange aims to join a cross-border stock trading platform in Southeast Asia as early as next year, CEO Hans Sicat said Tuesday. Exchanges in Singapore, Malaysia and Thailand launched the so-called ASEAN Trading Link in 2012. The platform is designed to allow investors to use a bourse in their home country to trade stocks listed in other members of the Association of Southeast Asian Nations, but it has struggled to increase membership. The Philippine bourse will hitch onto the platform as early as 2016, Sicat said. If such countries as the Philippines and Indonesia join, the combined market capitalisation of the trading link could top $2 trillion, close to the Hong Kong market's US$3 trillion.
Credit Bureau Targets Students With Workshops Cambodia Daily 30th Sep 2015
Hoping to increase university students’ knowledge of Cambodia’s credit reporting system, the Credit Bureau of Cambodia (CBC) on Tuesday launched a series of workshops in Phnom Penh aimed at boosting financial literacy. Oeur Sothearoath, head of business development at the CBC, said the first seminar, held Tuesday at Build Bright University and attended by about 120 students, sought to engage young people before they start careers. “Each consumer has the right to get information about their credit, but they don’t seem to know what rights they have…. Students have not used credit much, but they will become potential credit users in the future,” Mr. Sothearoath said.
Takaful: Re/takaful operators urged to consider centralised technology platform Brunei Times 30th Sep 2015
Takaful and retakaful operators have been urged to increase their collaboration as a means to optimise efficiency and accelerate growth in Islamic insurance, said Bank Negara Malaysia at the Takaful Rendezvous 2015 organised by Asia Insurance Review. The collaboration could be in the form of a centralised technology platform. Speaking in Kuala Lumpur yesterday, Mr Wan Mohd Nazri Wan Osman, Director, Islamic Banking and Takaful Department, Bank Negara Malaysia, proposed ways in which takaful and retakaful players can better partner each other to achieve strategic objectives. One of the proposals include the pooling of resources to create a centralised technology platform which helps organise and streamline operational processes.
Banking on better SME financing in ASEAN East Asia Forum 29th Sep 2015
Concerns about moderating economic growth and rising income inequality in ASEAN economies have brought small and medium-sized enterprises (SMEs) into the policy limelight. Arguing that SMEs have significant potential for creating jobs, some commentators are suggesting a host of industrial policies such as financial subsidies and local content rules to promote SMEs. But this risks heavy-handed state intervention in SMEs. One possible alternative is to reform access to finance for SMEs — particularly from commercial banks — in ASEAN economies. SMEs — firms with fewer than 100 workers — make up most enterprises, 74 per cent of total employment and about 41 per cent of GDP in ASEAN economies. But these contributions are not reflected in trade, where SMEs make up only 21 per cent of direct exports across the ASEAN region.
Asset Management
Stocks out to hurdle 7000-level this week The Philippine Star 5th Oct 2015
The Philippine Stock Exchange index (PSEi) is expected to hurdle the 7,000 level this week. “Failure to recover would lead to deeper corrections, back to weekly lows of 6,720, possibly extending to 6,600,” said Luis Limlingan, managing director at Regina Capital. He said the rally is crucial because prices are on a downward, bearish slope. “We advise to stay light on positions or accumulate issues which are still holding above long-term moving averages. Our strong buy trigger is raised to 7,020 so until this is breached, we expect the index to have sideways volatility this week — a breakout would extend rallies to 7,119 to 7,211,” Limlingan said.
Philippine Pension Buys Stocks Amid Record Foreign Outflows Bloomberg 5th Oct 2015
For the largest Philippine pension fund, record foreign outflows are making the nation’s equities a more attractive investment. As the Philippine Stock Exchange Index surged to a record in April, the Government Service Insurance System was selling, according to its President Robert Vergara. Since then, the benchmark gauge has fallen every month, its longest losing streak in 13 years, and the fund has been purchasing shares -- spending a third of its annual equities budget in a 5 billion peso ($107 million) buying spree in August alone, he said. "This year we were really behind our investment program, we were actually taking profit as the market was going up," Vergara said in an interview in Manila. Now, the fund is "predominantly buying" and there’s "a possibility that we will bottom out, maybe in the next couple of weeks," he said.
Forex volatility to drive M'sian bonds, no major sell-off seen The Star 5th Oct 2015
Demand for debt financing remained resilient, especially in communications, construction and infrastructure sectors, despite weak market conditions. CIMB Group head of treasury and markets Chu Kok Wei said that in the short term, volatility in foreign exchange would continue to drive sentiment in Malaysian bonds, mainly from the concerns of foreign holding of ringgit debts. “However, we think the real risk is smaller than what the market volatility is pricing in,” he said. “We do not foresee a significant sell-off by foreign holders and in the medium term, economic fundamental will prevail. Malaysia is a current account surplus country,” he added.
Singapore Exchange to offer custom indexes to expand The Straits Times 5th Oct 2015
Singapore Exchange will offer custom indexes services as the bourse seeks to broaden its earnings base. "Offering index services to diversify the market data business is common amongst exchanges," Tinku Gupta, head of market data and connectivity at the exchange said in a statement Monday. "It helps us in attracting new institutional channels." Singapore Exchange, which enjoys a monopoly over share trading in the Asian city, joins peers elsewhere in expanding into the indexes space and wants to build it into a regional business.
Bond mart expected to remain intact The Straits Times 1st Oct 2015
MALAYSIA’S bond market would remain intact even if there should be a sell-off by foreign investors, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz. She said it is not a concern because the bonds are ringgit-denominated instruments, adding that domestic institutional investors, such as the Employees’ Provident Fund (EPF), Permodalan Nasional Bhd (PNB), Tabung Haji and the insurance industry will step in to purchase these bonds. “If foreign investors sell the bonds, Malaysia still has institutional investors, such as EPF, PNB and Tabung Haji. “The insurance industry is a major player in the bond market, so our own institutional investors will step in to purchase them (bonds). “We don’t expect any collapse of our bond market,” she told reporters at the Malaysia-OECD High-Level Global Symposium on Financial Well-Being, here, yesterday. Zeti was asked about a Reuters report on the redemption of RM11 billion Malaysian government bonds which matured yesterday and its impact on foreign reserves.
Indonesia moves to stabilise rupiah Brunei Times 1st Oct 2015
Indonesia's central bank unveiled yesterday a set of measures intended to stabilise the country’s beleaguered currency, which tumbled to its lowest levels since 1998 in the third quarter. Key steps include the planned issuance of Bank Indonesia certificates in foreign currency and central bank intervention in the forward market for rupiah, in order contain expectations on how much more it might depreciate. The focus of the package “is to maintain rupiah stability, manage foreign exchange liquidity, and manage supply and demand for dollars,” said Perry Warjiyo, a Bank Indonesia (BI) deputy governor. Saktiandi Supaat, head of FX research for Maybank in Singapore, said the moves could ensure greater dollar supply in the forward market to meet any increase in demand.
Foreigners pull $1.3b from PH Manila Standard Today 30th Sep 2015
Foreign investors are selling Southeast Asian stocks at the fastest pace on record as the region’s economic outlook worsens and the US gets closer to raising interest rates. Overseas funds unloaded a net $5.1 billion of Indonesian, Thai and Philippine shares in the third quarter as the MSCI Southeast Asia sank 21 percent. The combined outflows are poised to be the largest since Bloomberg began collecting the data in 1999. In the Philippines, international investors have pulled $1.3 billion from shares, heading for a quarterly record. The benchmark Philippine Stock Exchange Index is poised for a sixth straight monthly drop in September, the longest losing streak in 13 years, while the peso has declined 3.6 percent.
PDS seeks lifting of trading restrictions on listed bonds The Star 29th Sep 2015
The country’s trading platform for bonds and currencies said it aims to allow tax-exempt institutions to buy and sell corporate debt papers as early as first quarter next year. Philippine Dealing System Holdings Corp. and Subsidiaries (PDS Group) president and CEO Cesar Crisol told reporters yesterday the company wants to lift trading restrictions on corporate bonds, following what was implemented for government debt papers earlier this year. “It was always part of the program to integrate both the taxable and tax-exempt markets. It just happened the government securities moved ahead of the corporate (issuances),” Crisol said on the sidelines of the 2nd Asean Fixed Income Summit in Manila.
Banking
Malaysian banks may raise rates to woo deposits The Rakyat Post 7th Oct 2015
Bank deposits in Malaysia are growing at their slowest pace in more than a decade as retail funds flee to higher-yielding avenues, weakening banks’ buffers against any unforeseen funding needs at a time when the economy is losing steam. “We do not discount the possibility of these banks paying up (raising rates) for deposits, and this would be negative even for banks with more liquid balance sheets, as these banks would likely need to pay up for deposits as well, in order to defend their market share,” said an analyst with RHB Bank Bhd. Total deposits at commercial banks rose 4.8% in July, the least since September 2002, according to the latest central bank data. Growth is expected to slacken further, with banks offering unattractive interest rates of 3.1% to 4% per annum. Those rates are barely above the inflation rate of around 3%.
Indonesia Offers Loans to Help Companies Prevent Layoffs Jakarta Globe 6th Oct 2015
The Indonesian government is willing to provide companies in labor-intensive sectors with cheap loans to help prevent more mass layoffs, a minister said on Friday. Finance Minister Bambang Brodjonegoro said the offer of working capital loans applies only to companies in labor-intensive and export-oriented industries. Bambang said the government will provide the Indonesian Export Financing Agency (LPEI) with Rp 1 trillion ($68 million) from the 2015 state budget for this purpose. "Companies could use the working capital to continue their production," the minister said.
Lending picks up, HSBC says VietnamPlus 6th Oct 2015
Lending by banks has been accelerating, growing at 18.2 percent in the year-to-date compared to the same period last year, according to HSBC's monthly report Vietnam at a Glance released on October 2. The pick-up in lending is partly reflective of the central bank's efforts to free up liquidity – in July it lifted the 2015 credit growth ceiling for several major banks. The State Bank of Vietnam has said credit growth could surpass the 13-15 percent annual target set early this year and top 16.5 percent. Growth had been 14.2 per cent last year. The stronger than expected GDP growth in the third quarter, coupled with the nascent pick-up in bank lending and domestic demand, has prompted HSBC to raise its 2015 GDP forecast to 6.6 percent from the earlier 6.3 per cent.
BSP says local banks in no rush to go overseas amid integration Business World 6th Oct 2015
The Bangko Sentral ng Pilipinas (BSP) is not rushing to forge a bilateral deal with another Southeast Asian country as part of an effort towards an integrated banking system in the region given local banks’ preference to expand locally. Still, the industry regulator is continuously preparing for the entry of more foreign banks into the domestic market, a senior official yesterday said. BSP Deputy Governor Nestor A. Espenilla, Jr. said surveys from banks showed domestic players are inclined to expand locally before going overseas. “Right now, the reaction of local banks is to focus on the domestic first. You’ll see big banks trying to cover their bases first. Before they even go regional, let me secure the market first,” Mr. Espenilla told reporters on the sidelines of a forum in Makati City yesterday.
Banks set up strategy to counter declining transactions Jakarta Post 5th Oct 2015
Banks are seeking ways to maintain their revenue growth this year as the country’s sluggish economy has curbed transactions in various banking channels. Lower volume of transactions impacts fee-based income, which is part of a bank’s source of revenue aside from interest rates, according to Bank Mandiri vice president for e-banking Budi Hartono. Budi said that he had realized the fact that there existed a lower frequency in electronic channel transactions in a one-month figure between August and September, even though he could not tell exactly whether it was due to a sluggish economy or seasonal factors related to the end of the Idul Fitri holidays. “Perhaps, it was a mixed result between both factors. In terms of amount, it is still growing year-on-year because the number of customers has increased,” Budi said.
Banks look to govt projects for loan growth Jakarta Post 5th Oct 2015
Banks continue to hold out hope that the government’s efforts to step up infrastructure projects will provide a final pick-up in loan disbursement in the final quarter of this year. Bank Central Asia (BCA), the country’s biggest private lender by assets, maintains the belief that lending can only grow if the government accelerates spending, according to president director Jahja Setiaatmadja. Loan draw-down from customers, Jahja said, remained low as purchasing power declined, leading to sluggish conditions in trade and other sectors. “What we need right now is more disbursement of government spending to spur projects and increase the workforce, which in turn will increase purchasing power and loan growth,” he told The Jakarta Post recently.
Banks keep bad loans level low The Philippine Star 5th Oct 2015
Soured loans of major banks rose marginally in July but remained below two percent for eight straight months since November last year, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend. Data from the central bank showed the gross non-performing loans (NPL) ratio of universal and commercial banks inched up to 1.90 percent of the banks’ total loan portfolio (TLP) as of end July this year from 1.84 percent in end June. “The latest NPL figures indicate U/KBs’ continued adherence to high credit underwriting standards,” the BSP said. A loan that is non-performing is in default or close to being in default as the debtor has not made his or her scheduled payments for at least 30 days.
Foreign divestments still hitting VN shares Viet Nam News 5th Oct 2015
Vietnamese stocks may not see significant improvements this week, as the local market faces large-scale divestments by foreign investors from local companies, brokerage firms wrote in their weekly reports. Last month, foreign investors divested VND1 trillion (US$44.4 million) from Vietnamese companies, brokerage VNDirect Securities JSC (VNDirect) reported.
Lao central bank proposes to stop direct lending VietnamPlus 5th Oct 2015
Laos’ central bank (BOL) has proposed to postpone direct lending for new state investment projects in a bid to safeguard the country’s banking and financial system. BOL Governor Somphao Phaysith suggested these projects should now seek funding from commercial banks in line with market mechanisms and commercial banks policies. Over the past years, the central bank has provided large amounts of special loans for dozens of state investment projects, Somphao said, adding that the bank has offered the Lao Ministry of Finance 20 loans, worth 2,885 billion kip or 360 million USD, which allow the ministry to pay back construction firms that have financed the state investment projects.
Maybank officially launches Myanmar operations The Star 5th Oct 2015
Malayan Banking Bhd has officially launched its Myanmar operations to offer transaction banking, corporate lending and treasury services. It said on Monday this was part of its objective to establish itself as a leading cross-border bank in Myanmar. The Maybank Yangon branch, which has a registered capital of US$75mil (RM330mil), was officiated by the Myanmar Central Bank deputy governor U Set Aung and Bank Negara Malaysia deputy governor Datuk Muhammad Ibrahim. Also present at the event were Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor, Maybank International CEO Pollie Sim, Myanmar Energy Minister U Zar Yar Aung and Malaysian Ambassador to Myanmar Mohd Haniff Abdul Rahman.
Experts optimistic about consumer finance industry Viet Nam News 5th Oct 2015
Consumer credit is expected to grow strongly in Viet Nam thanks to the many advantages the country possesses, economists have said. Senior financial expert Can Van Luc told Dau Tu (Vietnam Investment Review) that Viet Nam's consumer financial services industry has great potential. Consumer lending accounts for just 6 per cent of total outstanding loans in Viet Nam compared to 15-20 per cent in many countries and as high as 35-40 per cent in the US, he added. The most common forms of consumer credit include credit cards, auto finance, personal loans, consumer lines of credit, retail loans, and mortgages. Economist Dr Nguyen Minh Phong agreed with Luc saying the country has a population of 93 million, which is expected to top 100 million by 2025, with the majority being young people.
Local banks ready to face Asian peers Manila Standard Today 4th Oct 2015
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said Philippines banks are ready to face the challenges of foreign lenders entering the country under the Asean financial integration because of stronger and established presence in the domestic market. “Is the Philippine banking system ready? We are clearly in a position of strength as an industry and, individually our banks have been enlarging their domestic footprint... and capitalizing on e-banking technology,” Tetangco said in a speech during the Philippine International Banking Convention held in Makati last week. “... The Philippine boat may not be the large vessel of other jurisdictions but the fact that we have been able to steer through the turbulent and uncertain waters of the last decade is itself the testament of our resolve and our strength as a market,” Tetangco said.
Philippine banks lead in retail financial services The Philippine Star 4th Oct 2015
Singapore-based publication The Asian Banker sees the Philippines leading the strong growth in the retail financial services market in Asia Pacific on the back of increasing consumption and improved access. A study conducted by Asian Banker Research showed the income of commercial banks from retail financial services in Asia Pacific growing 77.5 percent to $824 billion by 2020 from the projected $464 billion this year. “Asia Pacific’s retail financial services market will be worth $824 billion by 2020. Increasing consumption and improved access to financial services in combination with mobile banking technologies, will be key catalysts in driving retail banking income between 2015 and 2020,” The Asian Banker said. Retail banking income was defined as business from retail deposits, mortgages, credit cards/unsecured lending, wealth management and, wherever possible, small and medium enterprises banking.
Loan growth eases in August as consumer lending falters Singapore Business Review 4th Oct 2015
Total lending grew 0.5% last month. Domestic banking units (DBUs) saw a slower increase in bank lending during the month of August. Preliminary data from the Monetary Authority of Singapore (MAS) showed that total loans inched up 0.5% to $613 billion last month, compared to a 0.6% growth in July. This compares with a growth of 0.6% in July. The softer month-on-month figure was driven by a lack of growth in consumer lending, which stayed flat in August. Business loans rose 0.8% to $373 billion, driven by higher loans to financial institutions as well as to transport, storage, and communication companies. Consumer lending growth was flat. The slight increase in housing loans was offset by a decrease in car loans.
Bank of Thailand Believes Rates Are Low Enough After Cuts--4Q Central Bank Outlook Nasdaq 2nd Oct 2015
The Bank of Thailand appears to be in no hurry to cut interest rates further. The central bank unanimously decided in the third quarter to keep its benchmark rate at 1.5%. And many economists say it isn't likely to budge through at least the end of the year. In a statement Sept. 25, the central bank said the steady rate would "preserve financial market stability and would not pose additional risks and volatility to the economy amidst rising global financial market fluctuations in the near term."
Fitch issues warning on banking sector turbulence Bangkok Post 2nd Oct 2015
Despite the current resilience and strong financial buffers of Thai financial institutions, the country's banking sector will face a negative outlook if sluggish economic growth becomes prolonged, warns Fitch Ratings Inc. Domestic financial institutions' immunity to Thailand's tepid economic conditions could deteriorate in the coming periods if the lethargic pace of growth is protracted, said Ambreesh Srivastava, Fitch's Singapore-based senior director and head of financial institutions for South and Southeast Asia. He said since credit growth had expanded considerably in the past five or six years, a slowdown in the country's economic growth potential could trigger problems associated with bank loans.
Asian banks to withstand currency depreciation: S&P Brunei Times 2nd Oct 2015
Banks in Asia-Pacific appear fairly well-padded against recent currency depreciations, according to Standard & Poor’s (S&P) Ratings Services report. The report, titled ‘Asia-Pacific Banks Seem Sufficiently Cushioned Against Currency Depreciation’, was published yesterday. S&P credit analyst Geeta Chugh said: “Many banks in key Asia-Pacific markets are sufficiently insulated against the strain on their local currency typically because of their low foreign currency exposure and hedging policies.” She said the effect of currency volatility on banks’ corporate borrowers in most countries will have limited impact on the banking sector’s asset quality.
Domestic liquidity, bank lending growth quicken Business World 1st Oct 2015
Money supply growth picked up in August as liquidity continued to expand due to sustained demand for credit, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday. Domestic liquidity or M3 -- the broadest measure of money within an economy -- grew by 9% year on year in August to P7.8 trillion, faster than the downward-revised 8.4% expansion recorded the month prior. Month on month, M3 increased by 0.9%. “Money supply continued to expand due largely to sustained demand for credit,” the BSP said in a statement. Growth of domestic claims continued to pick up, expanding by 13% from the revised 11.3% in July.
Banking industry gears up for ASEAN Voice of Vietnam 1st Oct 2015
Vietnam banks have been in a restructuring mode lately as part of their attempt to get the banking system in shape for the Association of Southeast Asian Nations (ASEAN) economic integration at the end of the year, say leading industry analysts. Under the ASEAN Banking Integration Framework (ABIF) agreement, which was signed earlier this year— by 2020 members are required to have banking arrangements in place with regional neighbours. Further, the agreement mandates the establishment of banking services within that neighbour’s borders operating on the same terms as domestic financial institutions opening the ASEAN region up to unrestricted free flow of capital, labour, goods and services.
Singapore bank loans growth slowed to 0.5% in August: MAS The Straits Times 30th Sep 2015
Singapore's bank lending growth slowed in August, as both business and consumer loans moderated, preliminary data from the Monetary Authority of Singapore (MAS) showed on Wednesday (Sept 30). Year-on-year, total bank loans rose 1.5 per cent in August down from the 2.2 per cent gain in July. Business loans growth decelerated to 0.2 per cent year-on-year from 1.1 per cent the previous month as general commerce and manufacturing loans contracted further. Building/construction and transport/storage loan momentum also eased. Compared to July, loans to most business industries still saw modest growth with the exception of manufacturing and business services.
ANZ receives final Myanmar banking license approval Eleven 30th Sep 2015
ANZ today announced that it has received the final regulatory approval from the Central Bank of Myanmar to open a branch in Myanmar, deepening its presence in the Greater Mekong following the recent branch opening in Thailand. The bank opened the representative office in Myanmar in June 2013 and it was one of the nine foreign banks winning banking licenses. The license came shortly before the one-year deadline will end. Announcing the license winners in October 2014, the central bank required them to open branches within a year. The branch will be officially opened on October 2. In a press release, ANZ said that through its branch, it aims to service multinational and joint venture companies with a presence in Myanmar as well as international companies looking to enter Myanmar from ANZ’s network countries. It will offer specialist banking services for natural resources, utilities and infrastructure, telecommunication, consumer goods and other global diversified sectors that are expanding in Myanmar.
Banks’ foreign currency loans rise Business World 30th Sep 2015
Approved foreign currency-denominated loans of banks increased as of the first half from a year ago as businesses borrowed funds to finance their capital needs, even as some shifted to domestic financing, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday. Funds released by banks’ foreign currency deposit units (FCDU) totaled $12.13 billion as of end-June 2015, 4.72% more than the $11.583 billion seen in the same period last year. This was, however, 2.67% lower than the $12.463 billion logged at end-March 2015 as repayments exceeded disbursements, the central bank said. FCDUs are bank units that are authorized to conduct foreign currency-denominated transactions, including deposit-taking and loan-granting.
E-Payments
Asia Pacific will lead the world in e-commerce over the next five years The Nation 1st Oct 2015
The Asia-Pacific region will lead the world in e-commerce over the next five years, MasterCard predicts, urging merchants to prepare for the changes in technology and in consumer behaviour. Sam Ahmed, MasterCard's head of marketing for Asia-Pacific, said the region had become the largest e-commerce region in the world, turning over US$567 billion (Bt20.6 trillion) in such transactions last year. With 60 per cent of the world's population, the region has a growing consumer base that is twice as likely to buy online than any other group in the world. "Asia-Pacific's e-commerce will set the agenda for the next five years," he said. The Asia-Pacific middle class is projected to expand to more than| 1.7 billion people within three years, and China, India and Indonesia |will be the top three countries |for e-commerce growth during the period.
Insurance
Deputy Governor's Keynote Address at the 5th Malaysia Insurance Summit Bank Negara Malaysia 7 Oct 2015
I am delighted to join you today at the 2015 Malaysia Insurance Summit themed “Beyond Borders: Bridging New Horizons in Asia Pacific”. I understand that this is the fifth year the Malaysian Insurance Institute has organised this event which brings together insurance and takaful professionals from around the region and beyond to discuss key developments in the industry. The world is undergoing rapid structural changes amidst a rapidly evolving Asia Pacific as an important centre of growth. The International Monetary Fund has projected a growth of 5.6 per cent for the Asia and Pacific region in 2015 and 5.5 per cent in 2016, with the region expected to remain the global growth leader over the medium term. Growth is primarily driven by domestic demand of Asia’s 4.3 billion inhabitants who account for 60 per cent of the world’s population. The region is also expected to be the strong driver of world insurance growth, with its share of the global insurance market likely to rise to 40 per cent in the next five years.
Indonesia: Regulator proposes pool to cover forest fire losses Asia Insurance Review 6th Oct 2015
The Financial Services Authority (OJK) has proposed a fire insurance pool to help the government mitigate risks arising from forest and land fires. OJK Deputy Commissioner for non-bank financial institutions, Mr Dumoly F Pardede, said that the insurance would pay claims to companies affected by the frequent forest and land fires, Bisnis Indonesia reported yesterday. "We have conveyed this idea to the Ministry of Politics, Law and Human Rights. If the government asks, we will be ready to design the product," Mr Dumoly said.
Life insurance for ‘kasambahays’ Philippine Daily Inquirer 5th Oct 2015
Manulife Philippines and BDO Insurance Brokers Inc. (BDOI) have teamed up to make life protection products affordable to people at the bottom of the economic pyramid, especially household staff “kasambahays” and blue-collar workers. Manulife and BDOI unveiled “Kasambahay Plan” and “Pinoy Protect” products, both of which are annual renewable insurance plans providing coverage for accidental death and dismemberment, death (due to all causes), total permanent disability (TPD) and burial. The premium is worth as low as P285 per year for the “Kasambahay Plan” and as low as P600 per year for “Pinoy Protect.” “The Kasambahay Plan promotes responsible household employment by encouraging employers to include life insurance as one of the benefits of their household help, while Pinoy Protect enables Filipino workers to sign up for life insurance,” Ryan Charland, Manulife Philippines president and chief executive officer said in a press statement on Monday.
Insurers race to increase capital in competitive market VietNamNet Bridge 5th Oct 2015
The potential of the Vietnamese insurance market is great: total insurance premiums in 2014 reached VND52.68 trillion, an increase of 13.2 percent over 2013. Before its annual shareholders’ meeting in 2015 took place, PTI found a foreign strategic shareholder, Dongbu, an insurer from South Korea, which now holds 37 percent of PTI’s stake. PTI then issued 30 million shares to receive VND1.077 trillion from Dongbu. A part of the money has been used to raise charter capital from VND504 billion to VND804 billion. Many other deals have also been successful this year. BIDV Insurance Corporation (BIC) decided to issue 41 million, or 35 percent of total shares, to FairFax Asia Limited, a subsidiary of Canadian Fairfax Financial Holdings.
Singapore: Biggest Mideast financial advisory firm expands in city state Asia Insurance Review 2nd Oct 2015
UAE-based Nexus Financial Services, the largest financial advisory firm in the Middle East, is taking over Zurich Life Insurance (Singapore)'s appointed financial representatives, the Swiss insurer said in a statement yesterday. The advisor force will be joining Nexus Singapore, a new financial advisory firm in Singapore established by the Nexus Group, with no ownership by Zurich Life Singapore. Nexus Singapore is led by CEO, Mr Gary Harvey, who has more than 26 years of experience in the financial services industry of which 13 years have been in Singapore. Nexus Singapore has ambitious expansion plans for the local market and it intends on building a strong adviser network across multiple client segments in Singapore. Advising on life, savings and investment products, Nexus Singapore will initially focus on the mass affluent market and will look to expand into the high net worth market segments in due course.
5th Malaysia Insurance Summit (MIS) in Kuala Lumpur, Malaysia Antara 1st Oct 2015
The 5th Malaysia Insurance Summit (MIS) will take place from 7-8 October 2015 at the InterContinental Hotel, Kuala Lumpur, Malaysia. The event is organized by the Malaysian Insurance Institute and co-organized by Fleming Gulf. The insurance industry is faced with pressing issues that are creating new market opportunities for insurance providers in the region. These issues include growth in customer sophistication, the implementation of technology and big data analytics, regulatory compliance and more.
Market Regulation
Strengthening securities, corporate governance in PH Philippine Daily Inquirer 7th Oct 2015
After a lot of brainstorming and private sector consultation, the Securities and Exchange Commission (SEC) has taken the big step of rewriting the implementing framework for domestic securities regulation to give corporations more leeway in raising funds while plugging regulatory loopholes and incorporating global best practices. The implementing rules and regulations (IRR) of the 2015 Securities Regulation Code (SRC)–as approved by the SEC en banc– expands the shelf registration program and streamlines certain requirements on the public offering of debt or equity securities. This new rulebook also refines the tender offer requirements, which are sometimes contentious during corporate takeovers. The 2015 SEC rulebook also sought to address regulatory gaps and boost 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.
BoT helps overseas investment Bangkok Post 7th Oct 2015
The Bank of Thailand will allow qualified investors to directly invest abroad from 2016 before allowing retail investors to do so in 2017 as part of its effort to cut curbs on overseas investments and capital flows. However, the central bank will initially place limits on minimum and maximum overseas investments by retail investors, said Pariya Techamuanvivit, director of corporate affairs at the Securities and Exchange Commission (SEC). Qualified investors are defined as individuals who have liquidity of more than 100 million baht and companies with assets of 1-5 billion baht. The Bank of Thailand recently said their overseas investments will be capped at US$5 million a year. The plan is in line with the Bank of Thailand's roadmap to open up opportunities for Thai investors to balance their portfolios by allowing them easier access to overseas market and better returns.
BSP eases rules on dividend declaration The Philippine Star 6th Oct 2015
The Bangko Sentral ng Pilipinas (BSP) has further eased the regulations on dividend declaration of banks and quasi-banks on shares of stock and similar capital instruments. The BSP’s Monetary Board has approved the policy liberalization to align the dividend declaration standards of banks and quasi-banks in the Philippines with international standards on the rights of shareholders. BSP deputy governor Nestor Espenilla Jr. said the revised policy holds more accountable the board of directors and management of the bank and quasi-banks on the declaration of dividends and makes more transparent to the public the dividend declaration in view of the required disclosures.
Money launderer’s dream PPP 5th Oct 2015
Cambodia's anti-money laundering agency is unable to investigate or penalise financial institutions that break the law, leaving the country open to exploitation by organised crime, according to a senior official in the unit. The Financial Action Task Force (FATF) – the top international anti-money laundering and counterterrorism financing body – ceased its monitoring of Cambodia in February, even though the Financial Intelligence Unit (CAFIU), the state agency tasked with investigating and prosecuting financial crimes, was so under-staffed and under-resourced it had not investigated a single financial institution since its founding in 2008. In early 2014, Cambodia was downgraded to FATF’s “dark-grey list” for lacking an asset-freezing instrument or a currency declaration system. The downgrade left the Kingdom just one step away from being blacklisted as a high-risk jurisdiction. The government passed a sub-decree only a month later, which amended the 2007 Anti-Money Laundering Law to meet FATF’s requirements, leading the body to remove Cambodia from the list. However, despite the progress on paper, CAFIU adviser Phan Ho told Daniel Glaser, assistant secretary for terrorist financing at the US Treasury Department, that while the unit was “working very hard to enforce” the law it “had only 10 people to inspect 38 banks and 37 [micro-finance institutions]”.
Vietnam cbank tightens foreign currency trading rules to curb dollarization Tuoi Tre News 5th Oct 2015
The State Bank of Vietnam (SBV), the country’s central bank, has stepped up its anti-dollarization drive by tightening rules on the trade of foreign currencies in a circular that takes effect on Oct 5. According to Circular 15 issued by the SBV on Friday, when conducting foreign exchange transactions with banks, businesses and individuals are required to present papers and documents proving the purpose of the transactions and the amount and timing of the payments.
Finance Commission Lawmaker: Tax Amnesty Needs Faster Political Process Jakarta Globe 3rd Oct 2015
A legislator from the House Commission XI, which oversees finance and banking affairs, unveiled some details of a draft law on tax amnesty set to be discussed by the House of Representatives. Muhammad Misbakhun, who sits on the House Commission XI, said the planned law is aimed to help boost tax collection next year. He said discussion for such a policy "needs a faster political process" at the House for it to come in to effect before the 2016 tax collections begin. Previously, the finance ministry's tax directorate general unveiled that the government is proposing a bill which will grant amnesty for tax evaders — except drugs offenders and terrorists — as long as they agree to bring their ill-gotten money in to Indonesia under the government’s terms and conditions.
Bank deposit insurance proposed for riel security The Phnom Penh Post 2nd Oct 2015
Cambodia has yet to establish a deposit insurance scheme, which means if a bank has a run on deposits or goes belly up, its customers could lose all their savings. Stephen Higgins, managing partner of Mekong Strategic Partners, says it is time the Kingdom joins the 122 countries that have instituted a mechanism to protect the deposits of bank customers from loss in the event of a bank’s insolvency. “Cambodia is the only country in ASEAN with the exception of Myanmar that has not implemented deposit insurance,” he said in a phone interview yesterday. “Myanmar’s banking sector is 10 years behind Cambodia’s, so it is not a country we should compare it to.” Higgins has proposed instituting a national deposit insurance scheme based on international models that imposes a nominal tax on banks and microfinance institutions (MFIs) to build an insurance fund that covers their customers’ deposits in part or in full.
Central Bank issues anti-money laundering guidelines Myanmar Times 2nd Oct 2015
The Central Bank of Myanmar (CBM) has published guidelines for financial institutions on managing the risks of money laundering and terrorist financing. Guidance on customer due diligence for banks, finance companies and money changers, will also be announced soon, said Daw May Toe Win, director at the Central Bank’s financial institutions regulation and anti-money laundering department. “Our initial guidelines have been recognised by inter-governmental organisations, and we will announce details of customer due-diligence guidelines for combating money laundering very soon,” she said.
Proposed credit card industry rules move forward Business World 1st Oct 2015
Lawmakers are moving to consolidate eight separate Senate bills intended to regulate the local credit card industry, with the final measure likely to include provisions on mandating credit companies to issue important notifications, as well as prohibiting them from harassing debtors and imposing extra charges on cardholders’ purchase of goods. During a hearing of the Senate Committee on Banks, Financial Institutions & Currencies on Wednesday, Committee Chair Senator Sergio R. Osmeña III convened representatives from the local credit card industry and regulator Bangko Sentral ng Pilipinas to hear their thoughts on the eight bills filed with the chamber. With opposition on four of the discussed bills, Mr. Osmeña told BusinessWorld that the committee will “probably” only incorporate those proposals that received no resistance during the hearing in the committee report on the measure.
Stock exchange publishes entrance rules Eleven 1st Oct 2015
Publicly owned companies which want to float on the Yangon Stock Exchange have to provide evidence of business profits for two years before the application, the Myanmar Exchange Certificate Supervision Board has announced. They must be registered in accordance with the Myanmar Companies Act, must operate under the rules and regulations with at least 100 shareholders and have in excess of Ks500 million in capital. Firms must have been in profit for two years with evidence of a stable income. The board of directors and leaders must have integrity, no criminal records and face no outstanding legal proceedings. They cannot be on the government’s blacklist. They must comply with the nation’s tax laws and auditing standards. Before floating they must publish all necessary information in a prospectus. Firms must employ a compliance officer to implement a business plan and establish a system to prevent insider trading. There are more than 45,000 companies in Myanmar but only about 200 are publicly owned. They have until October 16 to apply.
Central bank rules out capital control to support ringgit Nikkei Asian Review 30th Sep 2015
Malaysia's central bank Wednesday ruled out any possibility of imposing capital controls even as the ringgit hovered near its life-time low, bruised by weak crude prices, foreign outflows and political scandal. Bank Negara Malaysia's Governor Zeti Akhtar Aziz reiterated today there was no move to re-peg the ringgit to the dollar. Malaysia had tied its local currency at 3.8 to the greenback in 1998 during the Asian Financial Crisis. The ringgit had plummeted to 4.88 on January 7, 1998, its lowest intraday level. However, Malaysia's central bank "is there to ensure that the market will remain orderly," Zeti told reporters on the side lines of a finance conference. Capital control measures aren't necessary as the current flexible exchange rate regime will allow the ringgit to strengthen when the uncertainty surrounding global and domestic developments subsides, Zeti said.
Central bank urges riel spending The Phnom Penh Post 30th Sep 2015
Cambodia’s central bank yesterday again raised the issue of the country’s highly dollarised economy, suggesting that government policies and action plans will be enforced over the long term to promote the use of the riel, giving the National Bank of Cambodia (NBC) more monetary control. Speaking at the Second NBC Macroeconomic Conference yesterday, Neav Chanthana, deputy governor of the NBC, said that while Cambodia’s economy has reaped the benefits of dollarisation it was also a key challenge now. “Dollarisation presents risks and vulnerabilities, given the size of the economy and financial sector has grown remarkably,” Chanthana said.
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