| Market Development
Four Islamic banks form consortium The Star 20th Oct 2015
Affin Islamic Bank Bhd, Bank Islam Malaysia Bhd, Bank Muamalat Malaysia Bhd and Maybank Islamic Bhd have established a consortium to develop a multi-bank platform to market investment account products. The consortium, known as Raeed Holdings Sdn Bhd, is equally owned by the four banks. The board of Raeed comprises CEOs of the four banks. Raeed chairman Datuk Zamani Abdul Ghani said the establishment of the consortium is a ground-breaking initiative in the Malaysian Islamic finance industry. "This is the first time for Islamic banks in Malaysia to come together and establish an entity to undertake business activities which are of common interest to the banks," he said in a statement on Tuesday.
Finance sector at a crossroads The Straits Times 20th Oct 2015
A global banking industry conference may sound like a rather dull affair unlikely to set the pulse racing. But last week's gathering of more than 8,000 industry types at Marina Bay Sands for Sibos 2015, a premier finance industry event, was far from tedious. The digital revolution is now well under way and the industry both in Singapore - a leading financial centre - and around the world is at a significant crossroads. Established banks are anxiously hoping for Asia's growth to drive their corporate and consumer franchises forward, at a time when the global outlook remains stagnant. But a new threat is emerging from shiny new outfits deploying new financial technology - known in industry speak as fintech - to challenge banking's status quo. DBS Group Holdings chief executive Piyush Gupta opened the conference with a rousing speech stressing that big banks remain in the industry's driver seat. And of course traditional players are using the new technology in a big way too - as online and mobile banking become ubiquitous.
Myanmar’s conglomerates hope to re-engage foreign investment Financial Times 19th Oct 2015
If you believe the official trade data, China’s import of gems, jade and other precious stones from Myanmar ballooned to $12.3bn last year, up tenfold from just $1.2bn in 2013. Yet such figures are likely to reveal an increase in transparency as much as in the trade in precious stones. For many years, this massive trade has mostly been unofficial and under the radar, with estimates of Myanmar’s gem industry at somewhere between $15bn and $20bn a year. High quality global journalism requires investment. If anything, in fact, the trade has begun to decline. In part, this is a result of the slowing Chinese economy. Increasingly, however, some of Myanmar’s biggest conglomerates, such as Max Myanmar, claim to be exiting or divesting from gem mining businesses in an effort to get themselves off a US sanctions list. Many of Myanmar’s conglomerates thrived during the country’s two decades of international isolation, cultivating close ties with the military and securing lucrative concessions in resource and trading industries. Cash from these operations was then recycled into a vast array of other businesses. Yet lucrative extractive industries have been particularly controversial due to their association with land grabbing and environmental degradation. This extends beyond mining to other industries such as timber and agribusiness. In a recent report, environmental watchdog Global Witness estimated that at least 5.3m acres of land had been awarded to agribusiness concessions in recent years, mostly without the consent of local villagers and with almost no compensation.
Islamic banking players urged to expand overseas The Star 16th Oct 2015
The domestic Islamic banking industry players should be brave enough to tap into foreign markets to expand their businesses and grow the industry, says Datuk Dr Mohd Daud Bakar, group executive chairman of Amanie Advisors, syariah advisory firm. Daud said that companies were too afraid to face the potential risks in the foreign markets. "They are too obsessed with their own success stories and tend to focus on setting up their businesses only in Malaysia. They should use their expertise to explore outside market. "In this segment, we have the experts and many countries hope that we bring our capital as well as expertise to set up a Malaysian bank," he told Bernama.
Bank of China Malaysia completes first renminbi margin collateral on Bursa The Star 16th Oct 2015
Bank of China Malaysia recorded the first margin collateral in renminbi terms in Bursa Malaysia Derivatives. Busa Malaysia Derivatives chairman Datuk Tajuddin Atan said the bank had on Friday completed the first transfer of the margin collateral to its customer Oriental Pacific Futures Sdn Bhd. Bank of China Malaysia was appointed as a clearing bank by the exchange in April 2015 to settle all the nine margin currencies. Oriental Pacific Futures is a Kuala Lumpur-based futures brokerage firm. Tajuddin said the appointment of Bank of China Malaysia as the clearing bank for the renminbi currency in April this year had paved the way for the exchange to offer participants opportunities arising from the internationalisation of the renminbi.
OJK expects to bag deal with Myanmar soon Jakarta Post 15th Oct 2015
The Financial Services Authority (OJK) expects to seal a bilateral deal with Myanmar’s banking regulator before year-end to help safeguard a local bank that will operate in the neighboring country. OJK chairman Muliaman D. Hadad said the bilateral agreement would be the first deal between the banking regulators of the countries, as ASEAN members prepare to liberalize their financial industries by 2020 as part of the ASEAN Economic Community agenda. “We are actively seeking opportunities to discuss with Myanmar’s banking regulator, because one of Indonesia’s state banks is preparing to operate in that country and we hope the future agreement will provide protection for that,” Muliaman said. State-owned Bank Negara Indonesia (BNI) recently received approval for its Myanmar representative office from the Central Bank of Myanmar, paving the way for the lender to begin operations there in the second half of the year.
Asset Management
Stock Market Gets Its Groove Back, Slowly, Under Jokowi Jakarta Globe 20th Oct 2015
One year after taking office with bullish sentiment from the stock market, President Joko Widodo now faces growing scrutiny from investors to make good on his reform promises amid a stuttering market, a battered rupiah and a shaky global economy. Indonesia’s main stock index ended 2014 up 24 percent, buoyed in large part by optimism among investors about Joko’s economic plans and track record on executing reforms. Nearly half of the gains on the Jakarta Composite Index last year occurred in the last three months of the year, amid his inauguration on Oct. 20. That rosy outlook has since turned hazy as the president tackles hurdles in pushing through his infrastructure agenda, endless politicking by his own party, and a nationwide economic slowdown. In the year since Joko became president, the JCI is down 13 percent, with foreign investors pulling a net Rp 10 trillion ($733 million) from the local bourse.
Bourse working to prevent technical glitches from recurring -- PSE chief Business World 18th Oct 2015
The Philippine Stock Exchange (PSE) has tapped a third party to assist the bourse in resolving technical issues that disrupted trading at the height of the stock market sell-off in August. PSE President Hans B. Sicat told reporters last week the exchange will name the company soon, with the analysis expected to be completed in three to five weeks. “Obviously, the review will focus on what happened. They will take a look at computer logs, the operational symptoms around those days and do some reverse engineering or reverse analysis just to make sure that what we corrected for is indeed what needs to be corrected,” Mr. Sicat said. “If there is anything else, we will be happy to take the comments so we can also plug any other items.” SEC Chairperson Teresita J. Herbosa said in a recent interview that the corporate regulator may require the bourse to change some of the components of the trading infrastructure.
Biggest state bond issue to be launched this month The Nation 17th Oct 2015
The Finance Ministry will issue government bonds worth Bt50 billion, the highest ever, with three-year maturity and 3-per-cent interest, to apply to the 2016 fiscal budget deficit of Bt390 billion, while the Government Pension Fund is set to pay back Bt54 billion to retired civil servants. "We expect more retired civil servants to buy this round of government bonds that will be offered from October 19 to February 29, 2016, with a minimum purchase of Bt1,000 and a maximum of Bt2 million per person per account," said Suwit Rojanavanich, director-general of the Public Debt Management Office. The four banks that will offer the bonds are Krungthai Bank, Siam Commercial Bank, Bangkok Bank and Kasikornbank. Meanwhile, the amount of public debt reached Bt5.73 trillion or 42.81 per cent of gross domestic product at the end of August, of which Bt5.3 trillion was domestic debt and Bt352 billion foreign debt.
Thai stock inflows to rise bourse chief The Star 16th Oct 2015
Thailand's stock inflows are poised to extend the biggest monthly gain this year as the government takes steps to boost the economy and the United States delays an increase in interest rates, according to the head of the nation's bourse. It will continue to lure back overseas funds as government incentives for home purchases and increased spending in rural areas will spur the economy and earnings growth, Sathit Limpongpan, chairman of the Stock Exchange of Thailand, said in an interview in his Bangkok office on Wednesday. Foreigners are also chasing higher yields as the Federal Reserve is seen maintaining borrowing costs this year, he said. Thailand’ benchmark SET Index has gained 4.2% this month through Wednesday, after three straight monthly declines, the longest losing streak since January 2014. The advance has been fueled by inflows, with the US$147mil plowed into the market in October heading for the most since November 2014. The purchases come after foreigners pulled as much as US$2.9bil from stocks in the previous four months, prompting a 7.3% slump in the baht, and the World Bank to join the Bank of Thailand in reducing growth forecasts amid sliding exports and lackluster local demand.
S&P warns of defaults after Indonesia telecoms firm seeks debt restructuring Reuters 16th Oct 2015
Ratings agency Standard & Poor's warned on Friday of potential defaults by Indonesian firms after mobile phone retailer PT Trikomsel Oke Tbk prepared to meet lenders to restructure around $155 million of debt. Trikomsel said earlier this week it may restructure S$215 million in outstanding bonds, which S&P said would be the first of its kind in Singapore's bond market since the global financial crisis. Jakarta-based Trikomsel, which is 19.9 percent-owned by Japan's SoftBank Group Corp, said the restructuring was necessary as the rupiah's decline against the U.S. dollar and the slowdown in Indonesia's economy had resulted in "substantially weakened earnings and significantly reduced cash flow".
China's yuan initiatives could be a boon for Singapore: Observers Channel NewsAsia 16th Oct 2015
Singapore’s position as the top offshore yuan hub outside Greater China could get a boost, following new initiatives to promote the international use of the currency through the Republic, said industry observers. Banks in the Republic will now be able to lend to companies in Suzhou and Tianjin. This was one of the key initiatives agreed upon at the 12th Joint Council for Bilateral Cooperation, which was co-chaired by Deputy Prime Minister Teo Chee Hean and China’s Vice Premier Zhang Gaoli. Previously, this was restricted to only companies in the China-Singapore Suzhou Industrial Park and the Singapore-Sino Tianjin Eco-City. In addition, companies in Suzhou and Tianjin will also now be able to issue yuan-denominated bonds in Singapore. "They have expanded the scope where for companies in Suzhou as well as Tianjin - if they issue a bond in Singapore, they will be able to fully repatriate 100 per cent of the proceeds back into China,” said Mr Benjamin Quek, OCBC Bank’s Head of China Business Office.
Currency hedging urged before baht The Nation 16th Oct 2015
Standard Chartered Bank urges traders to consider currency hedging again because the market could send the baht back on an upward trajectory by the end of this year and into next year after turning pessimistic on the US dollar's prospects. The market had been bullish on the greenback since last year as it expected the US Federal Reserve to start normalising interest rates, making the baht and other regional currencies turn to weakness. However, the Fed has taken no action yet. It has delayed its decision on raising interest rates because the economic data of the US do not look great. If the Fed does not make a move this December, the US dollar bullishness will end and the Fed will hold the current rate throughout next year, Callum Henderson, head of foreign-exchange research at Standard Chartered, said yesterday. Southeast Asian currencies will gain the most if the Fed holds rates throughout next year because the prices of commodities will pick up and exports will recover.
New, flexible bond to be issued against banks' bad debts Vietnam Investment Review 16th Oct 2015
The Vietnam Asset Management Company has begun to issue a new class of bond against bad debts it buys from credit institutions, one that can be traded between the central bank and lenders as well as among the latter. Earlier the VAMC was issuing special bonds that could not be traded and could only be used as collateral to secure funding from the central bank. Another benefit for credit institutions from the new bonds is that they carry a risk ratio of zero per cent when calculating their capital adequacy ratio. Like the old bonds, they too carry a zero interest rate. Their maturity date will be negotiated between the VAMC and the lenders, but will have a minimum tenor of one year.
Offshore funds flood bond market Bangkok Post 16th Oct 2015
Offshore capital is rapidly flooding the Thai bond market, with half of the first nine months' fund outflows from the market turning back during the first 12 days of October. The return had been buoyed by hopes of the US Federal Reserve (Fed)'s rate hike delay. Offshore funds flowing into the local bond market amounted to 52.2 billion baht for the first 12 days of this month, compared with 104 billion yanked out during the nine months to September, Thai Bond Market Association (TBMA) president Tada Phutthitada said. Of the total inflow between Oct 1 and 12, 41.2 billion baht was spotted in short-term bonds, classified as debt instruments with a tenor of one year or less, and the remaining 11 billion in longer maturity bonds. In comparison, foreign investors cashed out 68.9 billion baht from long-term bonds and another 35.5 billion from short-term ones in the first nine months.
Standard Chartered predicts baht fightback Bangkok Post 16th Oct 2015
The baht's rise against the US dollar is becoming a trend, with the appreciation expected to continue for the rest of the year as the delay of the US Federal Reserve's first rate rise since the global financial crisis continues, says Standard Chartered Bank. The baht could rise to 35 versus the greenback at the end of this year, strengthening to 34 in 2016 if the Fed maintains its ultra-low rate in December's policy rate call, said senior economist Usara Wilaipich. Should the Fed nudge up the policy rate in December's meeting, the baht could still hit 34.75 at the end of next year, she said, adding this scenario is based on a dollar bull market ending by the first half of next year. "We expect it is more than 50% likely the US central bank will keep its policy rate unchanged in December after the Fed members hinted as much for a while. If this view holds, US bond yields will spike while foreign capital will flow into emerging markets," said Mrs Usara.
Malaysian equity mart attracts greater inflows - StanChart The Star 15th Oct 2015
Malaysia, which had seen bigger relative outflows in equity previously, has attracted greater inflows in the past week, said Standard Chartered Bank (StanChart). A reversal in risk sentiment had led to inflows into Malaysia and across the region, the bank’s research house said in a statement on Thursday. “The markets that saw the heaviest outflows earlier this year are now attracting the biggest inflows in the current relief rally,” it said. StanChart’s special report titled “Equity flows - A break from the gloom” revealed that Malaysia, Indonesia and Taiwan are attracting the biggest inflows relative to foreign exchange (FX) volume, after seeing the biggest relative outflows in the period since June 2015.
Stock inflows to rise with better economy, SET chief says Bangkok Post 15th Oct 2015
Stock inflows are poised to extend the biggest monthly gain this year as the government takes steps to boost the economy and the US delays an increase in interest rates, according to the head of the Stock Exchange of Thailand. The nation will continue to lure back overseas funds as government incentives for home purchases and increased spending in rural areas will spur the economy and earnings growth, SET chairman Sathit Limpongpan said in an interview in his Bangkok office on Wednesday. Foreigners are also chasing higher yields as the Federal Reserve is seen maintaining borrowing costs this year, he said. The benchmark SET Index has gained 4.2% this month through Wednesday, after three straight monthly declines, the longest losing streak since January 2014. The advance has been fuelled by inflows, with the US$147 million ploughed into the market in October heading for the most since November 2014.
Banking
Central bank predicts loan growth will remain above 11 percent Jakarta Post 20th Oct 2015
Bank loan growth is predicted to stay above 11 percent during the final months of the year, with the country’s economy expected to grow at a higher rate, according to Bank Indonesia’s (BI) latest assessment. BI spokesperson Tirta Segara said the central bank was maintaining its prediction that bank loans would stay in the range between 11 and 13 percent year-on-year (yoy) this year, higher than the 10.9 percent yoy and 9.4 percent yoy as of August and July, respectively. The prediction was based on BI’s assessment that the economy would grow between 4.7 and 5.1 percent this year, Tirta said, as investment in cement and heavy equipment industries was starting to pick up, indicating some progress in government projects. “In accordance with economic activity and the central bank’s more relaxed macro-prudential policy, loans will continue to grow to above 11 percent yoy,” Tirta said recently.
Vietcombank chief suggests reduced state holding of 51% in Vietnam banks Deal Street Asia 19th Oct 2015
Vietnam’s fourth largest lender Vietcombank chairman Nghiem Xuan Thanh has proposed that the government ownership in state-owned commercial banks should come down to 51 per cent, from the current minimum state holding of 65 per cent, allowing them more freedom in restructuring their operations. Such a proposal will reduce the hurdles in the restructuring operations of the local banking system, according to the state media VnEconomy, which reported a meeting between government officials and state-owned businesses on Wednesday. Thanh also expressed his wish to accelerate the process of making state-owned enterprises (SOE) more transparent and efficient, which will, in turn, make it easier for banks to address the bad debt and credit growth issues. In addition, he also proposed consolidation of the banking sector, which will help in creating banking giants, to carry out M&A plans.
Philippine banks immune from contagion, says Moodys The Philippine Star 19th Oct 2015
Credit rating agency Moody’s Investors Service believes Philippine banks are immune from external shocks brought about by the global economic slowdown. In its latest credit analysis on the Philippines, Moody’s said the country’s banking system is a source of credit strength as it is “virtually immune to contagion from external shocks.” Moody’s said the country’s banking system is largely deposit-funded and aided in part by the steady flow of remittance from overseas Filipinos. It added the local banking system exhibits a lack of dependence on external funding and low exposure to the export sector.
GH Bank may increase stimulus mortgage lending Bangkok Post 19th Oct 2015
The Government Housing Bank (GH Bank) will consider increasing lending under the government stimulus measures from 10 billion baht following a strong demand from homebuyers. Within two hours of launch, 2,000 people, half of whom were in Bangkok, applied for loans totalling 2 billion baht on Monday, said GH Bank president Angkana Pilun-wad Chaimanat. The bank estimates applications for 1 billion baht daily and the approval process takes three days, she said. GH Bank set aside 10 billion baht for the one-year mortgage programme, part of the government's economic stimulus measures to help low- and mid-level income earners own a house and bolster the property industry.
Bank NPLs not likely to reach previous downturn levels The Edge Markets 19th Oct 2015
Malaysian banks’ asset quality is likely to deteriorate as the economy slows over the next two years, but the non-performing loan (NPL) ratio isn’t expected to rise to levels seen in past downturns, says Japanese investment bank Nomura. “We’re going into a phase where economic growth is going to slow. And in any downturn, you’re bound to have NPL formation. We think credit charge-off will most likely go up because banks have been enjoying a very benign environment where you have strong recoveries, very low NPL formation. So, I think, coming off a low base — credit charge-off rates fell to near historical lows in recent years — is where banks are at right now. But I don’t see NPLs reaching the peak of the 2008/09 levels,” Julian Chua, its Kuala Lumpur-based analyst who tracks Malaysian banks, tells The Edge in an interview. Chua, who has been covering the Malaysian banking sector for close to 20 years, has seen it go through two major downturns. The sector’s gross NPL ratio crept up slightly to 1.6% as at August this year, compared with 1.56% earlier in April.
Bank targets growth regions New Straits Times 19th Oct 2015
Malayan Banking Bhd (Maybank), the country’s largest lender, will focus more on the Asean region, China and India. Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said the three areas are among the world’s fastest growth regions with the strongest gross domestic product and could bolster recovery for the rest of the world. “Maybank has been gradually consolidating its position in Asean over the last few years under a five-year growth plan launched in 2010. “We expect to finalise the next phase of our business plan (2016-2020) by end of this month. “We are now at the stage of looking over the next five years and we expect to continue the kind of growth that we have been making the last five years.
BKPM Links Up With Three South Korean Lenders Jakarta Globe 18th Oct 2015
Indonesia's Investment Coordinating Board, or BKPM, has signed a memorandum of understanding with three South Korean banks in its bid to court more investment from overseas businesses into Southeast Asia's largest economy. In a recent statement, BKPM chief Franky Sibarani said that the government agency seeks to partner with KEB Hana Bank, Woori Bank and Shinhan Bank in efforts of increasing trade and investment relations between Indonesia and South Korea. Both KEB Hana Bank and Woori Bank have established local presence in Indonesia as the former acquired small-sized lender back in 2007 and the latter bought a stake at a local bank last year. Meanwhile, Shinhan Bank is slated to close its acquisition of two local lenders by the end of the year. Franky also sealed a partnership with South Korea's business lobby group the Federation of Korean Industries, whose members include South Korean giants like Samsung Electronics, Hyundai Motor and Lotte Corporation, according to a statement.
Maybank Indonesia vying with corporate heavyweights ahead of AEC Jakarta Post 17th Oct 2015
Maybank Indonesia’s global sector will focus on increasing its number of big-company clients next year by providing improved integrated financial services under its group for clients in the ASEAN scope, an executive says. “We will target big companies in growing sectors, such as property, transportation, manufacturing, crude palm oil [CPO], agriculture, power plants and infrastructure,” Maybank Indonesia’s director of global banking, Eri Budiono, told reporters after the signing of a memorandum of understanding (MoU) on online corporate payments with Kalstar Aviation and several travel agencies. Eri added that Maybank Indonesia — a rebranding of PT Bank International Indonesia instigated by major shareholder Maybank Group — would increase fee-based income from business-to-business transactions, especially in ASEAN, as it plans to strengthen its presence in the region, moreover with the full implementation of the ASEAN Economic Community (AEC) set for next year.
Philippine banks 9th strongest in Asia Pacific The Philippine Star 16th Oct 2015
Philippine banks have been ranked 9th in Asia Pacific in terms of strength, The Asian Banker reported yesterday. The Philippines got a score of 2.90 in the Asian Banker (AB) 500 Strongest Bank by Balance Sheet Ranking 2015. The AB 500 is an evaluation of the 500 largest banks in the Asia Pacific region. When measured on an asset-weighted basis, banks in Hong Kong achieved an average strength score of 3.74 out of five. Hong Kong had the largest number of banks in the top 10 strongest banks list, with four banks in total. Singapore placed second with a score of 3.7 followed by China with 3.3, Macau with 3.3, New Zealand with 3.2, Malaysia with 3.2, Thailand with 3, and Australia with 3.
All eyes on asset quality as Singapore banks unveil results, say analysts Singapore Business Review 16th Oct 2015
Topline growth is usually the focal point of when banks release their results for the quarter, but analysts say asset quality may be worth investors’ spotlight this time around. According to analysts from RHB research, the gripping macroeconomic outlook both domestically and regionally has stoked investor concerns over potential loan book stress. RHB research says the recent resilience of asset quality will be tested, as banks have not materially changed their guidance on NPLs and credit costs except to say that there would be some deterioration in asset quality in the quarters ahead. “We believe the rise in impaired loans would be moderate given SG Banks’ stringent credit risk management. Macroeconomic indicators have weakened but not to levels that would precipitate sharp rise in NPLs,” RHB said.
Govt expands micro loans in the latest economic policy package Jakarta Post 16th Oct 2015
The government expands microloans (KUR) to bolster the productive economy, Coordinating Economic Minister Darmin Nasution said on Thursday. Darmin said that considering the current high risk and cost, the government plans to distribute the microloans with bigger interest rate subsidies along with guarantees. "Like we have announced before, we decreased the rate from 22 percent to 12 percent. Moreover, we also expanded the scope of KUR recipients," Darmin said in a statement from the presidential policy team to thejakartapost.com. The government will revise the 2015 ministerial decree on KUR to bolster the KUR. The revisions include KUR for micro, small and medium enterprises (UMKM), candidates of Indonesian migrant workers, family members of Indonesian migrant workers and family members of retired Indonesian workers.
KBank sees SME rush for soft loans Bangkok Post 15th Oct 2015
Small and medium-sized entrepreneurs (SMEs) are rushing to apply for the state-owned Government Savings Bank's (GSB) 100-billion-baht soft-loan scheme, with 1,800 of Kasikornbank's customers seeking a combined 15 billion in loans. Some 70-80% of the loan amount is expected to be approved, said Patchara Samalapa, a KBank executive vice-president. It has already granted 2 billion baht of the 15 billion worth of loan applications. The government's soft-loan scheme is aimed at helping SMEs that have been battered by the economic slowdown and weak purchasing power. Applications for the programme began in mid-September. Under the scheme, the GSB will charge commercial banks interest at 0.1% and the latter will relend to SMEs at 4%. The GSB recently forecast the entire 100 billion baht in loans would be taken out by year-end.
E-Payments
Vietnam’s e-commerce lags, but ready to take off Voice of Vietnam 20th Oct 2015
Online retail is a recent phenomenon in Vietnam but more and more businesses are coming online the Vietnam E-commerce and Information Technology Agency (VECITA) reported in a recent survey. An ever increasing number of companies have been increasing their online presence, with 45% of 3,500 companies surveyed reporting they have a website, up from 43% in 2013. In addition, more companies are selling products through the use of social networks, with 24% of those surveyed saying they’re currently doing so and 8% expecting to start sometime in 2015. As well, the percentage of those selling products through online marketplaces is growing and is now 15%, up from 12% in 2013.
Vietnam International Bank bags MasterCard’s innovation award VietnamPlus 16th Oct 2015
MasterCard gave its Best Segment Solution Award to Vietnam International Bank (VIB) for its Classic debit card, making VIB the first Southeast Asian bank to win a prize from the world’s leading financial services corporation. The award, among 20 categories in the annual Banking Innovation awards, aims to honour MasterCard’s important partners in the Asian-Pacific region, who have created innovative solutions to better their card services and meet the demands of different customers. The award is based on four criteria: strategy, innovation, influence and achievements. VIB became dominant in the category thanks to its policy to refund up to 5 percent of each transaction, which is billed as an efficient strategy to change Vietnamese people’s cash-spending habits.
Nationwide e-payment system on the cards Bangkok Post 15th Oct 2015
Thailand needs to develop a countrywide integrated e-payment system to encourage people to pay more electronically and to reduce costs, according to Finance Minister Apisak Tantivorawong. Most people use cash as the major payments means but there were high costs involved in getting cash into people’s hands such as those on ATM machine installation and refilling, banknote printing, etc. All related private and public agencies have already met to set the goal of having all registered shops in Thailand accept electronic payments. Cash top-ups for e-payment cards would be made easier by allowing card holders to use their 13-digit identification numbers at banks or convenience stores. E-payments will also help the government focus their aid on low-income earners as registering them is difficult now. "If the system is implemented, only eligible people will get the assistance," he said.
Insurance
Thailand: Insurance Institute signs new partnership pact with ANZIIF Asia Insurance Review 20th Oct 2015
The Thai Insurance Institute (TII) has signed a new international partnership agreement with the Australian and New Zealand Institute of Insurance and Finance (ANZIIF). The pact, signed in Melbourne last Friday, will see ANZIFF provide education and training for insurance professionals across Thailand and increased collaboration between the two bodies which have worked together for seven years. The new deal will see ANZIIF expand its educational offerings in Thailand as training staff will be required to hold ANZIIF equivalent or higher insurance qualifications alongside significant industry experience. Mr Tadthep Sujitjorn of the Thai Insurance Institute said that the partnership will help the Thai insurance industry continue its growth and development.
OJK initiates consortium for infrastructure insurance Jakarta Post 20th Oct 2015
The government now has another way to guarantee that public infrastructure contractors will not run away from their responsibility to finish projects as it has authorized an insurance consortium to issue surety bonds for the projects. Sumito, the Public Works and Public Housing Ministry’s head of the state property management and procurement services bureau, said that the consortium was authorized by the Financial Services Authority (OJK). “The consortium is one answer for us as we seek ways to ensure the completion of projects that are in the public interest,” he said recently after a seminar on the consortium’s establishment. The new business entity was created under Ministerial Regulation No. 31/2015 on Standards and Principles of Procurement in Construction Projects and Consultancy Services. Article 4 of the regulation stipulates that surety bonds for projects worth more than Rp 2.5 billion (US$186,500) can be issued by banks, insurance companies, surety companies or insurance consortiums.
Cambodia: Bank deposit insurance proposed Asia Insurance Review 15th Oct 2015
A deposit insurance scheme is deemed as needed in Cambodia, which is the only country in ASEAN with the exception of Myanmar that has yet to implement such a scheme. The debate over a deposit insurance scheme arose following a proposal put forward at a recent banking conference organised by the National Bank of Cambodia (NBC), the Kingdom’s central bank. The proposal is for the deposit insurance fund to be administered by a legally separate entity within the central bank that would step in to pay depositors in the event of a bank’s collapse, reported the Phnom Penh Post.
Market Regulation
Myanmar Curbs Foreign-Exchange Use The Wall Street Journal 19th Oct 2015
Myanmar’s central bank has canceled foreign-exchange licenses issued to thousands of businesses including hotels, restaurants and supermarkets in a bid to curb the growing use of U.S. dollars in the economy as the domestic currency tumbles. The move comes three weeks before Myanmar holds crucial elections that will act as a litmus test of how normal the country has become since decades of military rule ended in 2011. The move has caused confusion among many businesses, who say the policy was enacted suddenly Monday and without sufficient clarity. Businesses including hotels, restaurants, airlines and souvenir shops have to give up their licenses, according to the Central Bank of Myanmar’s new policy, and will no longer be able to trade in U.S. dollars. The businesses have to return their licenses by the end of November. “The Central Bank aims to promote the kyat, and to…promote domestic debit cards and credit cards, payment cards and online payment systems,” said a letter from the bank to businesses that was published on its website. A growing preference for U.S. dollars by these businesses has spurred demand for the currency in favor of the kyat and is “leading to exchange rate instability,” the bank added.
Malaysian Economic Association wants halt to questions over BNM's autonomy, independence The Star 19th Oct 2015
The Malaysian Economic Association (MEA) or Persatuan Ekonomi Malaysia wants an immediate halt to questions about the independence of Bank Negara Malaysia (BNM) and its governor. In its statement issued on Monday, the association cautioned that actions and words of this nature should stop, as they are likely to create the impression that BNM is in danger of losing its powers or that its governor will no longer be independent, unlike all the other central bank governors in the world. “Should such an impression persist, and gain traction, it will lead to an erosion of confidence among investors and the international community, with negative consequences on the integrity of our banking and financial system, leading to serious implications for the economy,” it said.
Bank Negara can take action under Financial Services Act The Star 19th Oct 2015
Bank Negara, clarifying its powers to enforce compliance, said it can take action against those found to have not complied with the rules and regulations. These are administrative actions administered by the bank itself. Below is the full statement issued by the central bank on Monday.
Hundreds of forex licences revoked Myanmar Times 19th Oct 2015
The new policy is effective from today. Companies must return their licences to the Foreign Exchange Management Department (FEMD) by November 30, a Central Bank official told The Myanmar Times. Banks and money changers can still exchange foreign currencies, but others such as communication services, airlines, tour companies, hotels, hospitals, freight forwarders, supermarkets, duty-free and souvenir shops must give up their licences, said the official. The military-owned Union of Myanmar Economic Holdings will also have to return its licence, he said. An announcement published on the CBM website on October 16 confirmed the decision. The Central Bank official said he hopes the new policy will encourage more card payments, particularly in the tourism industry. Point-of-sale systems are gaining traction but are still not widely used. Non-banking businesses have been allowed to deal in foreign exchange since the Foreign Exchange Management Law was enacted in 2012.
Congress willing to lift bank secrecy on deposits The Philippine Star 16th Oct 2015
The House of Representatives is willing to consider the proposal of the Bureau of Internal Revenue (BIR) to lift bank secrecy on deposits, particularly in the case of suspected tax evaders. BIR commissioner Kim Henares floated the proposal apparently in exchange for moves in the House and the Senate to reduce individual and corporate income tax rates. “We can consider it. I am personally willing to sponsor the bill so it can be discussed as soon as possible. If it is truly the solution for BIR to finally meet its targets, then we should take a look at it seriously,” Marikina Rep. Miro Quimbo, ways and means committee chairman, said. “But the status quo on individual income tax is unacceptable. We cannot let our salaried workers keep shouldering 90 percent of the tax burden while many entrepreneurs and professionals do not pay taxes,” he said.
Finance dep’t signals backing for 30% public float Business World 15th Oct 2015
Minimum public ownership of listed companies should rise to at least 30% to improve price discovery and deepen the country’s capital markets, Finance Secretary Cesar V. Purisima said yesterday. Mr. Purisima said in his keynote speech at the Corporate Governance Forum 2015 that the current average of 25% for public float should rise. “The float is still not deep enough. To be truly public, I think we need to further expand that. The market needs to be deep enough so that there is real price discovery,” Mr. Purisima said. He added the minimum public ownership should be increased to “maybe 30%.” “It’s a step at a time. Other countries have higher public float,” he said. Mr. Purisima said it will be up to the Securities and Exchange Commission (SEC) to decide whether it will increase the minimum public float by at least 10% for listed companies.
IDX Calls on House to Simplify SOE Listing Process Tempo 15th Oct 2015
Indonesia Stock Exchange (IDX) president director Tito Sulistio called on the House of Representatives to simplify regulations for state-owned enterprises listed in the IDX. “Honestly, we see this as government unpreparedness. We have conducted a study so that the process can be faster,” Tito said at the House of Representatives on Thursday, October 15. Tito also called on the government to pass the law on the SOE privatization, which regulates companies to go public, as a standalone bill. According to Tito, a company that will go public is an absolute and technologically capable one.
|
