| Market Development
Regulator Looks to Boost Islamic Financial Markets Jakarta Globe 16th Nov 2015
Indonesian finance regulators are preparing to roll out new rules that should make it easier for companies to market shariah-compliant financial products to the world’s biggest Muslim population. Nurhaida, a commissioner at the Financial Services Authority (OJK), said on Thursday that the new regulations would help companies looking to issue asset-backed securities, Islamic bonds, or sukuk, and Islamic mutual funds. They will also set the criteria for shariah experts assisting in any Islamic-based financial products. The regulations will be released as soon as next week, Nurhaida said. Islamic-based financial products are meant to comply with religious precepts, including a prohibition on usurious interest charges and steering clear of alcohol-related business and any form of high-risk speculation.
Myanmar to launch its first capital The Nation 13th Nov 2015
Myanmar is ready to launch its first capital market by next month, but the new bourse will not be fully operational until next year, said Kesara Manchusree, president the Stock Exchange of Thailand. "Myanmar has been preparing to launch its bourse for two or three years and will be the last newcomer in the CLMV," she told reporters at an economic seminar held by the Thammasat Economics Association yesterday. CLMV stands for Cambodia, Laos, Myanmar and Vietnam. "The SET has been in constant contact and discussion with our Myanmar counterpart along with other bourses in the sub-region, including Laos, Cambodia and Vietnam, on cooperation in terms of training, market operations, investors' knowledge, and how to manage an exchange properly.
BI to Start Using New RTGS on Monday Jakarta Globe 11th Nov 2015
Bank Indonesia is ready to kick off on Monday the second generation of its so-called real-time gross settlement system (BI-RTGS) -- which forms the backbone for non-cash financial transactions -- in a bid to improve its service for banking customers, an official at the central bank said on Wednesday. Bramudija Hadinoto, department head of payment systems at the central bank, said BI launched the first generation of its RTGS almost 15 years ago. The system was never upgraded, making it less efficient than comparable systems in use abroad and also prone to financial fraud. “We’ve been upgrading our infrastructure every five years, but not the system ... We need to make it more efficient and we need to anticipate potential risks,” he said. Along with the BI-RTGS update, the central bank also revamped its scripless securities settlement system (BI-SSSS) and its electronic trading platform (BI-ETP).
Sukuk issues in Malaysia faces challenge amid weak ringgit Nikkei Asian Review 9th Nov 2015
Islamic bonds, or sukuk issuances in Malaysia in 2015 are likely to be about 20% lower than last year's as expectations of higher interest rates in the U.S., a battered ringgit and local political tumult have kept many investors on the side lines. Uncertainty over timing of a U.S. interest rate hike and ongoing political jitters in Southeast Asia's third largest economy will likely weigh on its financial markets, clouding prospects of any brisk uptick in sukuk deals at least in the early part of next year, analysts said. Malaysian issuers, including the government, have raised about $12.02 billion from 67 Islamic Islamic bond deals between January and October, according to data from Dealogic. That compares to nearly $15 billion raised through 72 transactions during the same period last year and $17.9 billion in the whole of 2014.
Islamic Crowdfunding Takes Root in Asia in Boon to Entrepreneurs Bloomberg 8th Nov 2015
Muslim entrepreneurs and the less wealthy, increasingly shut off from bank loans by stricter capital rules, can take heart in a new form of financing taking root in Asia -- Islamic crowdfunding. The practice of raising funds from a pool of investors via the Internet is emerging in Singapore and seeking to comply with Shariah principles. Ethis Pte, set up in the city state in March 2014, has raised S$2.5 million ($1.8 million) to finance buyers of affordable new homes in Indonesia and is seeking another S$50 million by 2017, Director Umar Munshi, 32, said in a Nov. 3 interview. It plans to expand to Malaysia next year. Kapital Boost Pte started on the island in July to fund small businesses in Southeast Asia. The crowdfunding industry worldwide reached $16.2 billion in 2014, pioneered by online hubs like Kickstarter, according to California-based research company Massolution.
UOB, ICBC complete Singapore’s first offshore RMB bond-pledged repurchase agreement Singapore Business Review 7th Nov 2015
The Industrial and Commercial Bank of China (ICBC) Singapore revealed that it has completed Singapore’s first offshore RMB bond-pledged repurchase agreement, or repo, involving the use of RMB pledged bonds, using offshore RMB liquidity as collateral. The transaction marks another breakthrough for Singapore as a leading offshore RMB hub, with the introduction of a new financing avenue now available to offshore RMB market participants in the city-state. The repo, completed between ICBC Singapore and United Overseas Bank (UOB), was made on a two-year offshore RMB financial bond issued by the Agricultural Development Bank of China, with an issuer and debt rating of Aa3 on Moody's.
Central Bank Encourages Interbank Market Cambodia Daily 6th Nov 2015
Over two years after launching Negotiable Certificates of Deposit (NCDs), a security meant to encourage interbank lending and reduce the role of the state in the financial sector, the National Bank of Cambodia (NBC) announced new measures to catapult the effort on Friday. In late 2013, in a bid to reduce the amount of surplus funds deposited with the NBC, it began issuing NCDs, which can be sold by cash-strapped banks to banks with high liquidity, who can then cash them in with interest upon maturity. In order to encourage movement in the still-stagnant interbank market, the NBC announced in a statement on Friday that the minimum investment to start an NCD would be drastically lowered and fixed-term deposits with the state-run bank would no longer be offered as of November 1. “By closing the fixed deposits (but allow existing ones to reach maturity), we expect to see more investment into NCD,” NBC Director-General Chea Serey said in an email yesterday. “But at the same time we need to make NCD more convenient in term of maturity and face value.”
Banks push for more trade in yuan The Phnom Penh Post 6th Nov 2015
With trade between Cambodia and China steadily growing, banking sector players have put out a call to increase facilities for businesses using Chinese currency to pay for imports and exports. Speaking at a workshop organised by the Bank of China, Chen Chang Jiang, CEO at the Bank of China in Phnom Penh, said the use of the yuan in business transactions had progressed steadily since the bank was appointed by the National Bank of Cambodia (NBC) to be a clearing bank for local and cross-border yuan transactions. “The internationalisation of the yuan will not only help China increasingly integrate with the world, but can provide more channels for cross-border investments, trade and financial dealing,” Chen said. He added that the Bank of China’s branch in Phnom Penh had settled 35 million yuan, the equivalent of $5.5 million, in cross-border remittance settlements during the first six months of the year.
Islamic finance central to Malaysia's ongoing economic growth New Straits Times 4th Nov 2015
Sharia compliant finance, a sector with global assets in excess of US$2 trillion, is at something of a cross roads. While the concept of banking and finance activities that are consistent with the principles of sharia may be relatively obscure to many in Australia, that’s far from the case in Malaysia which is one of the undisputed Islamic finance superpowers. Despite Malaysia‘s ambitious plans to achieve this leadership and impressive successes, including an average of 12 per cent annual growth over the last five years, the current challenges are real. Low oil and commodity prices are squeezing available capital and globally, total issuance of Islamic bonds or sukuk has dropped by around 40 per cent.
Asset Management
Zeti says ringgit significantly undervalued amid growth New Straits Times 12th Nov 2015
The Malaysian ringgit remains "significantly undervalued" and risks to economic expansion are unlikely to materialize with exports still strong, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said. The ringgit doesn’t reflect fundamentals with the nation’s current account in surplus, unemployment at about 3 percent and inflation within Malaysia’s long-term average, Zeti said in an interview in Kuwait City on Wednesday. The currency may recover when the U.S. Federal Reserve normalizes interest rates and as "domestic issues" in Malaysia are resolved, she said. Malaysian policy makers have been struggling to boost confidence in its economy and finances since oil prices started to fall last year and as allegations of financial irregularities at a state investment company hurt sentiment.
Post-election, kyat resumes its weakening trend Myanmar Times 11th Nov 2015
The kyat weakened against the US dollar this week as the greenback strengthened in international markets and business resumed in Myanmar following the November 8 election. Fears the election could spur currency volatility have not materialised, indicating a certain level of confidence in political developments and a likely National League for Democracy win. The US dollar rose in international markets on November 4 in response to US Federal Reserve chair Janet Yellen’s indication of a possible rate hike next month, a Central Bank of Myanmar official said. Rates in the US have remained in the 0-0.25 percent range since the 2008 global financial crisis.
More yuan products for investors The Straits Times 10th Nov 2015
Asset managers here will be able to offer investors more yuan fund products under new cross- border initiatives announced yesterday. The change involves a doubling of Singapore's quota under the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme from 50 billion yuan (S$11 billion) to 100 billion yuan. The higher quota is "in response to the strong interest by Singapore-based asset managers and investors to invest in China. This larger quota will allow more fund managers in Singapore to offer investors a wider range of yuan fund products", said the Monetary Authority of Singapore (MAS) yesterday. It added that the move will bring greater liquidity to China's capital markets and help broaden their investor base.
Vietnam to emulate Malaysia in developing its bond market The Rakyat Post 10th Nov 2015
Vietnam wants to emulate Malaysia’s model in developing the bond market to fund its expanding economy and growing appetite for long-term infrastructure funds, said Vietnam Bond Market Association (VBMA) General Secretary, Do Ngoc Quynh. The country has been relying on bank financing, but with demand for growth, especially funding for medium- to long-term infrastructure projects, it needs to further establish its debt market, as banks constrained by a single customer limit cannot lend unless they increase their capital. Quynh noted Malaysia is currently the best in the region in terms of bond market size relative to gross domestic product (GDP). “I think the government and the central bank of Malaysia have performed very well in developing the domestic bond market.” “We got very good support during our visits to Bank Negara Malaysia, the Securities Commission (SC), PPKM (Financial Markets Association of Malaysia), bankers and especially RAM (Holdings Bhd), who shared with us their experiences on how the Malaysia bond market was developed,” he told Bernama in an interview here, after completing a two-day field trip.
Third quarter roundup: Disappointing, but bottoming out Jakarta Post 5th Nov 2015
Domestic equity markets have just seen their corporate reports for the third quarter of the year. Eighty -four out of 99 companies within our coverage booked earnings. Those 99 companies represent 85 percent of the Jakarta Composite Index (JCI) market cap. While most corporate earnings were disappointing, with 45 companies, or more than half, reporting results below our expectations, we found that for the market as a whole, the third quarter performance bottomed out and increased from the second quarter on a year-on-year (yoy) basis. Actual operating profit growth in the third quarter yoy thus far has reached 6.1 percent (second quarter: -5.0 percent), vs. 8.8 percent in third quarter of 2014 (Table 1). On the bottom line, net profit growth decelerated from 10.9 percent in third quarter of 2014 to negative 5.9 percent in the third quarter of this year (second quarter of 2015: -7.5 percent).
Asean's own funding pool still in the shallows The Straits Times 4th Nov 2015
The Cebu Action Plan approved by finance ministers of the Asia-Pacific Economic Cooperation (Apec) on Sept 11 is an important step in developing a more integrated Asean capital market. The roadmap calls for financial integration, fiscal transparency, financial resiliency, and infrastructure development and financing for the region. This is an important step, but developing deep, liquid cross-border capital markets in Asean requires significant regulatory intervention, as well as political commitment. To date, regulators are still in the process of building consensus on relatively simple issues, such as common prospectus and issuance rules. These are essential to kick-start the markets and begin addressing thornier issues, such as a tax, accountancy and insolvency treatment. True, from humble beginnings, the bond markets of Asean have flourished in recent years. However, the vision of a deep and liquid pan-Asean funding pool is yet to materialise, and still seems some distance away.
New SGX CEO Loh Boon Chye seeks to overcome fallout from 2013 stock rout The Straits Times 4th Nov 2015
Singapore Exchange chief executive officer Loh Boon Chye says his top priority is to restore confidence in South-east Asia's biggest stock market, where turnover is yet to recover from a mystery penny-stock crash more than two years ago. Since taking the helm in July, Mr Loh has been discussing "to-do lists" from investors, brokers and listed companies that want him to revive interest in equities, he said in an interview this week at SGX's headquarters. His predecessor Magnus Bocker drew criticism for focusing on his derivatives business while investors and stockbrokers suffered an unexplained freefall in three commodity companies in 2013 that wiped out US$6.9 billion (S$9.63 billion) in market value. "I like challenges," said Mr Loh, a veteran banker who used to run Asia-Pacific global markets for Bank of America. Even though the penny-stock slump happened well before his tenure, he is so aware of the fallout that he has an acronym to describe it: ABL, the initials of the companies that plunged.
BSP sees short-term volatility The Philippine Star 4th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) expects short-term volatility ahead of the proposed changes in the framework for monetary operations designed to enhance the effectiveness of monetary policy in the second quarter of next year. BSP Deputy Governor Diwa Guinigundo said there could be some volatility due to the migration of funds from the special deposit account (SDA) facility to higher yielding term auction deposit facility under the interest rate corridor (IRC) system. “There will be some volatility but the difference of the interest rates between SDAs and term auction deposit facility will be minimal,” Guinigundo said. Guinigundo said the IRC system calls for the shift to the use of floor and ceiling rates for short-term financing to be determined through the auction of seven- and 28-day deposit maturities initially set at once a week.
Banking
President’s Office and Central Bank discuss regulations Myanmar Times 18 Nov 2015
Union ministers and private sector bankers met with the Central Bank of Myanmar earlier this week to discuss rules and regulations for the entire banking industry, as well as the development of mobile banking in the country. Ministers in the President’s Office have met with the Central Bank periodically since June, when the official exchange rate set by Central Bank auctions began to depart from the market rate. “The meetings were instigated by the President’s Office,” said U Mya Than, chair of Myanmar Oriental Bank, who attended. “Ministers are willing to help with the country’s financial problems – they highlight the weak points and encourage the Central Bank to intervene more in the market.” They provide the Central Bank with alternative advice to that given by international financial institutions, he said.
Improved economy helps Vietnamese banks VietnamPlus 16th Nov 2015
Improved macroeconomic stability was likely to help Vietnamese banks curb new non-performing loans (NPL), Fitch Ratings said in its latest Asia-Pacific Banks Chart of the Month report on Vietnam. A sustained improvement in the domestic property sector and measures to increase foreign property ownership may also be positive developments for collateral recovery, the US rating agency said. According to government data, the NPL ratio in the Vietnamese banking system fell to 2.93 percent at the end of September, below the 3 percent target set to be achieved by the end of 2015. However, Fitch also said the asset quality of the Vietnamese banking system remained a concern, despite the recent implementation of effective regulations that helped align loan-classification standards across banks.
Risks facing Asian investment banks The Star 14th Nov 2015
The dilemma facing Asian central banks is the ability to adapt to the risk of normalisation of monetary policy in advanced economies, in particular the United States. Years of expansionary monetary policy in the US, with policy rates at almost zero, low long-term interest rates and expansionary balance sheet of the US Federal Reserve Bank, has reinforced a puzzling trend, the secular decline in real long term interest rates. Given financial market interconnectedness, Asian financial markets are now more closely linked to long term interest rates in the US and this has introduced new constraints for Asian central banks’ monetary and policy choices. The dilemma potentially facing Asian investment banks however are different. A trend that has occurred due to decline in real long term interest rates in the US, is increased borrowing in international bond markets by Asian corporates. The money raised in the US is parked as deposits in Asian investment banks. This allows the Asian investment banks to expand their balance sheet.
PM calls on Singapore banks to keep up to date with changes The Straits Times 13th Nov 2015
With technology rapidly disrupting the financial industry, it is imperative that Singapore's banks and regulators keep up to date with the changes, Prime Minister Lee Hsien Loong said yesterday. Mr Lee told guests at United Overseas Bank's (UOB) 80th anniversary dinner at the Marina Bay Sands Convention Centre that lacklustre global growth, a regional economic slowdown and a prolonged period of low interest rates have crimped net interest and investment income. Tighter regulations after the financial crisis of 2008 have also contributed towards a more challenging operating environment today. On top of all these, technology is moving very fast with new business models disrupting traditional banking, Mr Lee noted. For example, more and more people are making payments - for everything from movie tickets to restaurant meals - through their smartphones.
Philippine banks performing broadly steady near-term Business Mirror 13th Nov 2015
The local banking sector remains healthy as shown by the robust loan growth and continued profitability of its members, according to Fitch Ratings. Fitch Ratings Singapore Financial Institutions Director Elaine Koh said the banks were seen to report broadly steady performance this year. “The resilient domestic economic growth and liquidity inflows are likely to underpin sustained loan growth and moderate asset quality conditions for the Philippine banks,” Koh told the BusinessMirror. According to him, Philippine Banks remain well capitalized and profitable and that asset quality has been improving since 2013.
Major banks make profit at end-Sept. Philippine Daily Inquirer 12th Nov 2015
Major Philippine banks ended September with higher profits as the cost of holding deposits remained low while lending rose sharply, disclosures this week showed. This continued a reversal from last year’s industry-wide profit slump—a result of volatile interest rates eating into bottom lines. Bank of the Philippine Islands (BPI), the latest of the industry’s three leaders to release quarterly results, on Wednesday said its net income rose to P13.84 billion in the nine months to September. BPI is the country’s third-largest bank. Total revenues increased by P3.67 billion, or by 9.1 percent, to P44.10 billion, as both net interest income and non-interest income grew by P2.98 billion and P680 million, respectively. Both total loans and total deposits grew in the double digits year-on-year. Total loans stood at P780.07 billion, with a 76.6 percent-23.4 percent corporate-retail mix. Total loans grew 11.2 percent.
Loan growth may shrink further in 2016 The Star 11th Nov 2015
Loan growth for next year are projected to further shrink to an average 6% to 7% from the estimated 8% to 9% growth this year due to stronger headwinds affecting the Malaysian banking sector. With the softer global economic landscape and heighten asset quality concerns, banks are bracing for a tougher year. OCBC Bank (M) Bhd country chief risk officer Jeroen Thijs said the key factor affecting loan growth among individuals would be tightened underwriting criteria. “For corporates and small and medium enterprises (SMEs), we see the slowdown coming from, among others, the impact of the weakening ringgit (which will affect) borrowers with large foreign currency borrowings, cutback on expenditure by oil majors, and the Government’s cut in its operational expenditure.
Maybank IB Gives 'Neutral' Call On Banking Industry Bernama 11th Nov 2015
Maybank Investment Bank Research (Maybank IB) has given a 'neutral' call on the banking industry following the selling pressure on some local banks' equities. In a research note Wednesday, Maybank IB said the aggregate foreign shareholdings in banks had declined from 34 per cent at end-June 2007 to 23.8 per cent end-September 2015. "October was a period of relief for domestic equities with net foreign inflows of RM600 million as opposed to persistent outflows since April this year. "Much as we hoped for a similar trend for the banking sector, this was not to be," it said. Maybank IB said using its foreign shareholding movements as a guide, the co-relation between weekly foreign fund flows into the market and Maybank's foreign shareholding change was a weak 0.4 time. "While foreign funds were net buyers of the Malaysian market in the first three weeks of October 2015, they were net sellers on Maybank.
Bank rediscount loans fall 63% in 10 months The Philippine Star 11th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) reported yesterday the amount of rediscount loans extended to local banks to finance the needs of businesses and households fell 63 percent in the first 10 months of the year. Availments under the BSP’s peso rediscount facility by thrift and rural banks amounted to P418 million from January to October this year or P699 million lower compared to P1.12 billion in the same period last year. Of the total amount, the BSP said 88.1 percent went to commercial credits followed by 4.8 percent for production credits, 4.2 percent to housing, 1.6 percent for working capital of businesses, and 1.3 percent for capital expenditures. The BSP has pegged the rates for the rediscounting windows I at 6.125 percent for 30 days; 6.1875 percent for 90 days; and 6.25 percent for 180 days as well as for the rediscount windows II at four percent for both 30 days and 90 days; 4.0625 percent for 180 days; and 4.125 percent for 360 days for the month of September.
Fitch says Asean banks enter tough environment from strong position The Star 10th Nov 2015
A tougher operating environment amid sluggish economic growth, depreciating currencies and softer commodity prices will continue to challenge banks in many parts of the ASEAN region, says Fitch Ratings. Currency, credit and liquidity risks are increasingly coming into focus, and asset quality is likely to deteriorate - particularly in Indonesia and Malaysia. That said, most banking systems are coming from a position of strength, and are reasonably well-positioned to manage the likely risks. ASEAN banks are better positioned than prior to the previous regional financial crisis in 1997. Banks now rely less on foreign capital, have better hedged their foreign exposures, and have more stringent regulatory frameworks.
Lending rates unlikely to change before year end Jakarta Post 9th Nov 2015
Several major lenders predict that their lending rates will change little before the end of this year as credit risks remain high amid economic uncertainties despite the cost of funds declining. Bank Mandiri finance director Kartika “Tiko” Wirjoatmodjo said lending rates could stay relatively unchanged in the fourth quarter as quality of assets in the banking industry had been deteriorating due to weak economic growth as well as global uncertainties. The declining quality of assets, indicated by a rising non-performing loan (NPL) ratio, could force banks to increase their risk premium percentages, one contibuting factor to the prime lending rate (SBDK) for each type of credit, Tiko said. “Worsening asset quality over the past nine months has triggered risk premium increases. I don’t remember the exact figure, but the proportion of risk premium is quite high as it can reach around 3 to 4 percent in smaller loans,” Tiko said.
Regulators tell rural banks to be vigilant at all times Business Mirror 9th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) said rural banks need to become better, be more competitive and take pains to ensure services are actually delivered as competition among second- and third-tier lenders heat up. “Banks have their own responses to competition. What’s important is that better banking service is being delivered. Competition is a positive thing for consumers,” Deputy BSP Governor Nestor A. Espenilla Jr. told the BusinessMirror. This developed in the wake of the BSP approval on the acquisition of One Network Bank, a rural bank with 105 branches and microbanking offices in the Mindanao and Panay areas, by BDO Unibank. Observers said the move was a game changer and should encourage greater competition among rural banks. Some claimed small rural bank depositors might transfer to One Network, it being a rural bank backed by the country’s largest lender.
Local banks draw foreign interest Vietnam Investment Review 9th Nov 2015
Commercial banks expect to attract foreign investment in their newly-established financial companies thanks to the profitable domestic consumer financial market, according to Dau tu (Investment) newspaper. Despite concerns by shareholders, banks have still tried mergers and acquisitions (M&As) with ailing financial companies, whose non-performing loans even rose to between 30 per cent and 40 per cent. The move for M&As between banks and financial companies has become a major trend this year. In 2015, Techcombank, Maritime Bank and VP Bank bought Viet Nam Chemical Finance JSC (VCFC), Textile Finance JSC (TFC) and Viet Nam Coal and Mineral Industries Financial Company, respectively, while the HCM City Housing Development Joint Stock Bank (HDBank) and the Japanese Credit Saison Company Ltd also formed the HD Saison Finance. Many other banks such as Vietinbank, BIDV, and Vietcombank, along with Sacombank and ACB have also planned to set up financial companies or own financial companies through M&As.
BSP revives merger program for coop banks The Philippine Star 9th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) has revived a program to promote mergers and consolidations with, and acquisition of cooperative banks by “white knights” following the entry of foreign banks amid the integration among members of the Association of Southeast Asian Nations. BSP Deputy Governor Nestor Espenilla Jr. said state-run Philippine Deposit Insurance Corp. (PDIC) and Land Bank of the Philippines have mutually agreed to revive the Strengthening Program for Cooperative Banks (SPCB) Plus for one more year. The SPCB Plus aims to promote mergers and consolidations with, and acquisition of cooperative banks by stronger partner. The program would be revived until end September next year after expiring last Sept. 30. Espenilla said same terms and conditions of the existing program would still apply.
Fitch says Malaysian banks have sound buffer to cushion against risks Malaysian Insider 9th Nov 2015
Fitch Ratings said Malaysian banks have sound buffers with adequate system profitability, capitalisation and liquidity, which will help cushion against rising asset-quality, funding and liquidity risks. This follows a report earlier today where some analysts said that Malaysia is once again facing a perilous combination of heavy short-term overseas borrowings by banks and scarce foreign exchange reserves. The international rating agency said financial and natural hedges also serve to reduce the risk inherent in external borrowings by Malaysian corporates. "Nonetheless, the weaker credit outlook and a further tightening of system liquidity could test Malaysia's buffers," Fitch said in a statement today.
Kenanga bullish on Malaysian business, with eye on global economy and US$ Malaymail 9th Nov 2015
Kenanga Investment Bank Bhd expects the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to trade between the 1,785 and 1,795 levels next year. This depended on the decision of the US Federal Reserve on raising interest rates, it said. Director and head of dealing, equity broking, Chan Tuck Kiong, said the overall local market sentiment was considerably good, but both the global economy and the US interest rate direction would still have an influence. “We saw a sharp drop after the first quarter this year when retailers pulled out and are seeing a comeback. Hopefully, the momentum would grow. “If you notice, all the stocks being heavily traded, are penny stocks and lower liners. They are all retail stocks,” he added.
ABM: Foreign currency deposits not sign that local banks are in distress Malaymail 9th Nov 2015
Malaysia’s move to allow local banks to accept deposits in foreign currency does not signify that the financial industry here is facing instability, said the Association of Banks in Malaysia. Commenting on speculation over Bank Negara Malaysia’s decision following the continued decline of the ringgit, the ABM also insisted that the measure did not pose an increased risk of exposure to the country’s foreign currency reserves. “While some residents have recently increased their foreign currency deposits due to the depreciation in ringgit for reasons such as immediate business needs and children’s education, we wish to highlight that the Malaysian banking system’s foreign currency deposits remain relatively small at about 7 per cent of total deposits,” it said in a statement. The ABM also stated that foreign currency liabilities at local banks were offset by their external assets, which it said has expanded due to their growing regional trade as well as the centralised management of liquidity.
Retail banking income expected at P470B by 2020 The Philippine Star 8th Nov 2015
Philippine banks could see their retail revenues surge by 127 percent over the next five years amid the continued rise in banked population and higher per capita income, a think tank said. In a survey by The Asian Banker released Friday, it was revealed that the gross income of retail banking in the country would hit P470 billion by 2020 from the projected P207 billion this year. The industry is expected to grow at a steady pace with a compounded annual growth rate of 17.8 percent between 2015 and 2020 as the country’s banked population rises to 45 percent from 30 percent. Likewise, the country’s per capita income is seen to increase to $1,951 from $1,689.
RI banks able to manage tail risks: Moody’s Jakarta Post 6th Nov 2015
The Indonesian banking system has solid buffers and is in a strong enough financial condition to counter contagion risks amid concerns about market volatility, according to Moody’s rating agency. The agency’s latest report published recently revealed that 10 Indonesian banks rated by Moody’s and 20 others that were unrated by the agency had been shown to be sufficiently strong in the face of a contagion risk posed by weaker lenders. The 10 Moody’s-rated Indonesian banks, which accounted for 65 percent of the country’s total banking assets as of September, possessed solid buffers in the form of substantial capital and profitability to withstand pressures on their asset quality. “The Indonesian banking system has strong buffers even outside of our rated universe. Most of the large banks that are not rated by Moody’s are owned by foreign parents, which are themselves highly rated,” Srikanth Vadlamani, vice president and senior credit officer at Moody’s, said.
BSP chief sees need for more bank strengthening The Philippine Star 5th Nov 2015
The Bangko Sentral ng Piipinas (BSP) stressed the need for Philippine banks to shape up amid intense competition from the entry of foreign banks into the country and economic integration in the region. BSP Governor Amando Tetangco Jr. said banks operating in the country need to beef up and strengthen their operations to survive intense competition from regional banks. “In an increasingly integrated regional setup, there is wisdom for further beefing up, given current size of our banks and the system as a whole,” he said. Tetangco also cited the entry of more foreign banks into the Philippines after President Aquino signed RA 10641 in July last year amending the foreign banks law by removing the limit of foreign banks in the country.
Local banks' profitability falls Vietnam Investment Review 5th Nov 2015
Profitability of domestic commercial banks has reduced compared to previous years due to rising risk provisions for non-performing loans, according to a report from the National Financial Supervisory Commission (NFSC). The October report of the Government's financial watchdog NFSC on the country's economy in the first ten months this year showed that the return on equity (ROE) of commercial banks in 2015 through October 31, continuously slid to 4.16 per cent from 4.6 per cent in 2014, and 6.4 per cent in 2013. The return on assets (ROA) of banks also reduced to 0.32 per cent from 0.36 per cent in 2014, and 0.6 per cent in 2013. Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, admitted that risk provisions for bad debts were the cause for low profits at commercial banks as they had to allocate sizeable resources to resolve the bad debts.
Banks advised to continue to beef up capacity, capability The Star 4th Nov 2015
The banking industry should continue to develop the capacity and capability to manage risks arising from domestic as well as cross-border operations. Asian Institute of Chartered Bankers chairman Tan Sri Azman Hashim said the industry should invest more in technology and enhance operational processes to reduce costs and improve service delivery to meet the needs of the customers. He said the industry has become more complex. "It is operating in a highly-regulated environment and the competitiveness of banks is defined by their ability to innovate and maximise their assets. "They have also invested in human capital to ensure their risk and compliance practices and policies are established in order to keep pace with the fast-changing environment," Azman said.
More challenges ahead for state-owned banks Myanmar Times 4th Nov 2015
Challenges for state-owned banks are likely to increase after the election, with their future tied to economic decisions made by the new government. The restructure of Myanmar’s uncompetitive state banks is likely initially to take a back seat to more important reforms such as addressing the illicit jade trade or the issue of political prisoners, said a former general manager of Myanma Economic Bank, the country’s largest state lender. In the meantime, public sector banks will continue to lose out as commercial rivals improve their services and splash out on technology, and foreign banks look to increase their own market share, said an official at the Central Bank of Myanmar. “They need to make a lot of improvements to become competitive,” he said. “Firstly they need to focus on developing human resources and infrastructure, as well as policy reforms. Secondly, they need to be corporatised or reformed through public-private partnerships, which will hopefully happen at some stage under the next government.”
E-Payments
Mobile networks team up for e-payment Bangkok Post 18 Nov 2015
Mobile users will be able to conduct money transfers across the three leading mobile networks from next month, thanks to the collaboration of mobile money systems among operators. The development by the three major mobile operators -- Advanced Info Service (AIS), Total Access Communication (DTAC) and True Move -- is an attempt to nudge the country towards a cashless society. Starting from Dec 1, mobile users can directly transfer money across the three mobile networks to a receiver simply by entering the receiver's mobile number without a bank account. The maximum amount of transfers is limited to 10,000 baht per transaction, with maximum transfers capped at 30,000 baht per day. Operators will charge a fee of five baht per transaction, good until the year-end.
Lenders work on e-banking products, services to grow fee-based income Jakarta Post 16th Nov 2015
State-owned and private lenders are moving to improve their electronic banking (e-banking) products and services with innovations that are part of efforts to grow fee-based income. Anggoro Eko Cahyo, consumer banking director at state-owned Bank Negara Indonesia (BNI), said the e-banking business would continue to be a major contributor to the lender’s total fee-based income. “BNI has seen 54.2 percent year-on-year growth to Rp 817 billion [US$59.9 million] in fee-based income from the e-banking business as of September. That is why we will increase our penetration in e-banking for existing and new customers,” Anggoro said. As part of the efforts, Anggoro said BNI, along with three other state lenders — Bank Mandiri, Bank Rakyat Indonesia (BRI) and Bank Tabungan Negara (BTN) — was finalizing an integrated ATM system, under the supervision of the State-Owned Banks Association (Himbara), which would be called Himbara Link.
Vietnam seeks to develop cross-border e-commerce VietnamPlus 16th Nov 2015
Vietnam should develop cross-border e-commerce, a growing trend, according to experts. Tran Huu Linh, head of the Vietnam E-commerce and Information Technology Agency under the Ministry of Industry and Trade, said developing cross-border e-commerce will help enterprises export more goods through online transactions. Cross-border e-commerce has been growing strongly in the world, as well as in the Asia-Pacific, with many successful models such as coordination between the US’s eBay and Japan’s NetPrice, or between China’s Alibaba and NetPrice, Linh said. Vietnam needs to build bilateral and multilateral environments to help foreign customers buy Vietnamese commodities.
Digital payment startups awaiting momentum Jakarta Post 13th Nov 2015
Amid the burgeoning growth of e-commerce in Indonesia, new digital payment services and methods are struggling to penetrate a market still dominated by cash, according to financial technology experts. Online payment gateway provider VeriTrans CEO Ryu Suliawan said that Indonesian online shoppers still preferred to pay for their online transactions with cash on delivery. Ryu attributed the low popularity of online payments to the failure of many e-commerce merchants to offer digital payment options. He stressed that change would have to be effected by online e-commerce merchants themselves, as they are ultimately the ones who utilize payment services such as VeriTrans and Bitcoin in their transactions.
E-commerce shipping service needs improvement VietnamPlus 12th Nov 2015
Shipping services have been developing in recent years, however, the service still has not caught up with the development of Vietnam's e-commerce sector, said Nguyen Thanh Hung, General Secretary of the Vietnam E-Commerce Association (Vecom). The association cooperated with the Vietnam E-commerce and Information Technology Agency (Vecita) organising a conference titled "From shipping service to order fulfillment" in Hanoi on November 10 with the participation of relevant agencies, e-commerce enterprises and post and fulfillment service companies. The number of post enterprises in Vietnam increased about three times from 40 in 2010 to 110 in 2013 but the total turnover of shipping companies just increased 1.5 times in the period, according to statistics from the Department of Posts under the Ministry of Information and Communications.
Vietnam e-commerce developing Voice of Vietnam 10th Nov 2015
E-commerce has developed vigorously in Vietnam in recent years and has helped Vietnamese companies improve their businesses. "Since using e-commerce, our revenue increased up to 10 times", Nguyen Ba Toan, director of Vietnamese Speciality Trading JSC (Dasavina) told Vietnam News. "We used oral advertisements, leaflets, online newspapers or Facebook but the economic efficiency is very low, we even suffered losses", he added. The company's main product is Vietnamese Vu Dai village's braised fish in clay pot, which makes up half of the company's revenue.
IE Singapore and ICBC cooperate to promote e-commerce The Straits Times 7th Nov 2015
Singapore companies may now find it easier to break into the fast growing e-commerce space in China and the region. The Industrial and Commercial Bank of China (ICBC) and IE Singapore inked a deal on Saturday (Nov 7) to cooperate on promoting cross border e-commerce. Singapore companies can tap on ICBC's wide network for "low-cost and effective means" of selling online to customers in China as well as Asean, said press statement jointly issued by the two parties on Saturday. "China's e-commerce market is currently the largest in the world, and strong domestic consumption is expected to continue in the coming years given China's rapid urbanisation and the growth of the Chinese middle class," said Mr Zhang Weiwu, general manager of ICBC Singapore.
Mandiri, Indomaret team up on e-payment Jakarta Post 5th Nov 2015
As part of efforts to reduce cash transactions, state lender Bank Mandiri is cooperating with minimart chain Indomaret in the use of “Mandiri e-cash” payments. “With this payment system, people can go to the store and make transactions on their mobiles,” Mandiri senior vice president for electronic banking Rahmat Broto Triaji said on Wednesday. Indomaret market director Wiwiek Yusuf said, “Cash means we have to be ready with small change all the time and the balance in the company’s account isn’t automatically updated. [...] We believe this new payment system will help us in this case.” Wiwiek said the payment system would be available in all 11,700 Indomaret stores nationwide.
Cheque usage declines, electronic fund transfers grow The Star 4th Nov 2015
Since the implementation of the Pricing Reform Framework in May 2013 and the e-Payment Incentive Fund (ePIF) Framework in January 2015, cheque usage which had only declined at a marginal rate of 2% on average from 2011 to 2013, had dropped at a higher rate of 10% in 2014, said Bank Negara deputy governor Datuk Muhammad Ibrahim. The decline in cheque usage had accelerated to 16% for the first nine months of this year, said Muhammad during his keynote speech at the 2015 Payment System Forum and Exhibition 2015. Consequently, the number of cheques cleared is projected to fall from about 207 million in 2010 to 149 million by the end of 2015. If the decline rate is sustained, the target of reducing cheques to 100 million per year by 2020 will be achieved. “The reduction of about 100 million cheques above saves a minimum of RM300mil not taking into account other savings in terms of efficiency and security,” he said.
Mobile commerce on rise Bangkok Post 4th Nov 2015
Mobile commerce in Thailand has continued to cement itself as a significant online marketplace thanks to the greater availability of high-speed wireless broadband internet and affordable smartphones, say global internet and online retail companies. Attractive mobile commerce campaigns by e-commerce operators is also attributed to the surge in mobile commerce. Compared with the US, Japan and South Korea, Thailand's online retail industry remains tiny, accounting for less than 1% of the total retail market, Lazada Thailand chief executive Alessandro Piscini told a seminar yesterday entitled "E-Commerce: The Secret Success for the Online Generation". However, he said imminent fourth-generation commercial wireless broadband service was expected to boost the number of mobile internet users and lower mobile tariff rates.
Insurance
Philippines: New rules to spur launch of cheaper micro products Asia Insurance Review 13th Nov 2015
Insurance players are expected to issue cheaper "micro pre-need" and agricultural microinsurance products and services after the Insurance Commission (IC) released rules last month guiding their sale. The Micro Pre-need Regulatory Framework issued by the IC in October aims to “provide an opportunity to the low-income sector to have access to pre-need products and services that will cater to their needs”, reported the Philippine Inquirer. The framework would also “encourage the participation of the pre-need industry in offering micro pre-need products and services to promote the financial well-being of the low-income sector” while also ensuring that plan holders’ rights would be protected.
Singapore: AIA sets up innovation insurance lab with university Asia Insurance Review 13th Nov 2015
To identify innovative ways of addressing evolving healthcare challenges, AIA Group (AIA) and Nanyang Technological University (NTU Singapore) have launched the EDGE LAB, an innovation centre which seeks to deliver consumer-centric solutions that will help people in Singapore and around the Asia-Pacific region to get the insurance cover they need to lead longer, healthier and better lives. A key focus of the lab is to find ways to make insurance more accessible and to better manage issues around rising healthcare costs and improving patient outcomes by leveraging technology, big data and analytics. The EDGE LAB will explore how customer experience and engagement can be improved and find ways to help the life insurance sector adapt to changing technologies, customer expectations and needs in the digital world.
Malaysia: Takaful grew at faster pace than conventional insurance Asia Insurance Review 11th Nov 2015
Malaysia's takaful segment has seen a 12.4% compounded annual growth rate (CAGR) over the last five years, compared with the conventional insurance's CAGR of 7.8% over the same period. Malaysian Takaful Association Chairman Ahmad Rizlan Azman said that last year, takaful insurance products saw a net contribution of MYR6.3 billion (US$1.44 billion) or 13% of market share, while the conventional insurance segment posted MYR42.5 billion, reported The Edge Markets. He said that takaful has significant opportunities for growth as its penetration rate is still low in addition to the country's young demographics.
Insurance market grows by 40 percent Myanmar Times 10th Nov 2015
In 2013, state-owned Myanmar Insurance relinquished its monopoly to allow a private market to emerge, with the participation of foreign companies, 21 of which have since opened representative offices here. “Foreign companies have been opening one new representative office a month. That shows they trust the Myanmar insurance market,” said deputy finance minister U Maung Maung Thein at the launch of Marsh Insurance’s representative office in Yangon. “Although they are not yet allowed to operate, their presence supports growth in a market in which they will one day be allowed to compete,” said the deputy finance minister.” They are training staff and sharing experience that will build and develop Myanmar’s insurance market.”
Pira says no to cartelized motor insurance contract monopoly Business Mirror 9th Nov 2015
The Philippine Insurers and Reinsurers Association (Pira) opposes the move of the Land Transportation Office (LTO) to introduce a cartel that would monopolize the issuance of third-party liability insurance to motor vehicle owners. In an interview, Pira Chairman Michael Rellosa said insurance companies have voted overwhelmingly to take all possible legal measures to oppose the imposition of LTO’s Memorandum Circular (MC) 2015-1975. The circular creates an entity that would administer the issuance of compulsory third-party liability (CTPL) insurance to motor vehicle owners. Rellosa said 44 out of 55 Pira member-companies that attended the association’s special membership meeting voted to oppose the LTO’s order, and 40 of these companies expressed support for a legal action to stop the order.
ABAC: Insurance for small companies high on agenda Brunei Times 9th Nov 2015
Insurance for small companies is needed in the Asia-Pacific to strengthen their resiliency against disasters, a member of the APEC Business Advisory Council (ABAC) said recently. In an interview, Haslina Taib said that insurance takeup among small and medium enterprises (SMEs) remains high on the agenda for the council which is also pursuing other forms of alternative financing to help the growth of SMEs. SMEs account for about 98 per cent of the total businesses in APEC and contribute 41 per cent to APEC economies’ gross domestic product. The sector also makes up over 60 per cent of the labour force in APEC and accout 30 per cent of APEC’s total exports. “The idea is to try and match the insurance risk and encouraging micro insurance to grow among SMEs as a way to make them more resilient,” she said.
Asia: Region's youthful population a good fit for usage-based insurance Asia Insurance Review 9th Nov 2015
Asia has the potential to lead the way in telematics-based insurance due to the number of younger and more tech-savvy customers, and enterprising insurers have the opportunity to gain first-mover advantage in this area, participants of the Asian Actuarial Conference (AAC) held last week in Bangkok were told. Mr Roberto Malattia, Director, General Insurance Consulting (Southeast Asia), at Towers Watson, said that companies in Asia have started pilot programmes for telematics or usage-based insurance (UBI) in Asia, though the region lags behind North America and Europe in UBI penetration and development. He added that UBI provides a win-win outcome for both insurers and customers, and it has received widespread acceptance by regulators in places like the United States.
Foreign insurance companies partially granted permission in Thilawa SEZ Eleven 9th Nov 2015
Foreign insurance companies have been granted permission to work in Thilawa Special Economic Zone together with Myanma Insurance. The foreign insurance companies must pay 10 per cent of the quota to Myanma Insurance if a company buys insurance from them. “They will have to pay 10 per cent of the quota to Myanma Insurance. Myanma Insurance will have a 10 per cent of premium fee. If they have to pay compensation for a loss, Myanma Insurance will have to pay their quota. The arrangement has been made by the supervisory committee of Myanma Insurance,” said an official from Myanma Insurance. Myanma Insurance given permits to three Japanese insurance companies – Tokio Marine & Nichido Fire Insurance Co Ltd, Sompo Japan Insurance Inc and Mitsui Sumitomo Insurance Co Ltd – among the foreign insurance companies to work in the Thilawa SEZ. According to the supervisory committee, the companies have been granted one-year temporary licences. The committee will oversee the companies, which will later be granted permanent licences. The insurance companies are required to pay US$30,000 to Myanma Insurance in license fees and a US$10,000 annual fee.
Thailand: Call for stronger ties between actuaries and decision makers Asia Insurance Review 5th Nov 2015
There is a need for stronger links between actuaries, regulators and governments to ensure that analysed data are utilised effectively in policymaking to avert future crises or disasters, according to Thailand's former finance minister Korn Chatikavanij in a special address at the opening ceremony of the 19th Asian Actuarial Conference (AAC) in Bangkok yesterday. Mr Korn, who was Finance Minister from 2008-2011, said events such as the Thai Floods of 2011 and the Asian Financial Crisis in 1997 could have been mitigated or averted if governments and the analyst community, including actuaries, had better coordination. In that regard, regulators need to play the role of middleman to compel policymakers to act on data which illustrate predictable disasters.
Singapore: Reinsurance body ties up with London underwriting assn Asia Insurance Review 5th Nov 2015
The International Underwriting Association of London (IUA) and the Singapore Reinsurers' Association (SRA) have announced an affiliated partnership that will enable the two organisations to better serve their common membership. The relationship will enable a broader range of services for multinational companies with offices in both underwriting hubs. Together the IUA and SRA will cooperate to provide enhanced research facilities, improved statistical data and responses to regulatory developments affecting their respective international (re)insurance markets. In addition, the partnership will enable Singapore companies to tap into ongoing developments on the London Market’s modernisation initiatives.
Life insurance industry notches up steady third quarter growth The Straits Times 5th Nov 2015
The life insurance industry achieved a 15 per cent increase in weighted new business premiums to $813 million for the three months ended Sept 30, partly owing to a significant uptake in savings-type products through banking channels. During the same period, annual premiums products jumped 21 per cent to $541.9 million while single premium investment linked insurance products (ILPs) grew 13 per cent to $60.6 million, from the corresponding quarter last year. According to the Life Insurance Association (LIA), the sales of annual premium products are also higher when compared to the second quarter of this year. The association attributed the performance to new product launches, sales and marketing initiatives and an increased take-up in savings-oriented products through bancassurance.
Life insurers bullish on 2015 prospects Business World 5th Nov 2015
The Philippine life insurance industry expects 2015 to be another record year, with total premiums seen surpassing the previous year’s and 2013’s banner level. Philippine Life Insurance Association (PLIA) President Rizalina G. Mantaring, who is also Sun Life of Canada (Philippines), Inc. President and CEO, said yesterday that the current performance of the industry already surpassed total premiums earned in 2014. “It should be a record, we’re already at almost the level of last year as of the third quarter and you have one quarter to go, which is traditionally good for a lot of companies so, hopefully it would be a record year,” Ms. Mantaring said in interview at the sidelines of the latest insurance advocacy campaign launch of PLIA called LifeGoalsInASnapshot. “We’re very positive... hopefully we’ll end with a very good year. Very optimistic. We’re almost certain to beat 2014,” she added.
SIRC: MAS touts blue ocean strategy with new initiatives Asia Insurance Review 4th Nov 2015
Amidst the current backdrop of emerging risks, new capital and new technology, it is not sufficient to rely on a red ocean strategy; there is a need to "open new horizons" and to "open them together", said Monetary Authority of Singapore (MAS) Deputy MD Jacqueline Loh in her keynote address yesterday. Sharing observations on the current (re)insurance landscape, she also outlined several initiatives spearheaded by the Authority to tackle today's challenging trends including a cyber risk test bed alliance, a Nat CAT data analytics exchange platform, and a new varsity major in risk management and insurance. Of new risks being faced, Ms Loh noted that cyber risk is the “new catastrophe” and is a risk that is largely underestimated by many corporates. As users and abusers of technology get smarter, the extent of the impact from cyber will correspondingly rise. “Businesses must prepare for this era of cyber risks, with cyber insurance as a critical component of a comprehensive risk management strategy.” To aid the development, MAS has launched a cyber risk test bed project – of which SCOR was announced as the first founding member to participate – aims to be a common data platform to encourage pooling of data; to help corporates understand their potential exposures and losses; and to allow industry players to come together to establish industry standards on definitions of cyber risks, coverage limits and terms & conditions. She added that MAS is still in discussion with a number of industry partners and welcomes greater participation from the industry.
Insurance industry income up 65% in 9 months The Philippine Star 4th Nov 2015
The country’s insurance industry recorded a 65-percent increase in net income, while premiums ballooned nearly 30 percent in the first nine months. This development prompted Emmanuel Dooc of the Insurance Commission (IC) to forecast total premium income to surpass the 2013 record performance of P198.1 billion. “The year 2015 promises to be the best year ever for the insurance industry in the Philippines,” Dooc said. Earlier this year, the IC commissioner projected a combined premium income of P240 billion. “Taking into account the industry’s consistent performance during the first three quarters, our target is still achievable if both the life and non-life sectors will have a strong finish during the fourth quarter,” he said.
Asia Pacific: Asian reinsurance capacity share to rise Asia Insurance Review 4th Nov 2015
Over the next 12 months, the share of Asian reinsurance capacity in the region is expected to increase to 28%, driven by regulations that favour or require a higher involvement of local reinsurers as well as additional capacity from Chinese sources, according to the inaugural issue of the Asia Reinsurance Pulse launched yesterday that offers unique insights into the region's US$50-billion non-life reinsurance market. At present, on average, capacity from non-Asian sources is estimated to account for 74% of the region’s total. Carriers headquartered in the region contribute the remaining 26%. “Alternative capital, however, is not believed to make any direct impact beyond well-modelled Japanese catastrophe exposures. In general, it is important to note that in Asia’s environment of rapid economic and direct insurance market growth, additional capacity is needed to meet additional demand, without necessarily translating into a more competitive market,” said the report.
Market Regulation
Banks and regulators need to keep up with changes in technology: PM Lee The Straits Times 12th Nov 2015
With technology rapidly disrupting the financial industry, Singapore's banks and regulators have to keep up to date and up to scratch with these changes, Prime Minister Lee Hsien Loong said on Thursday night. For the banks, this is a business imperative. Speaking at United Overseas Bank's 80th anniversary dinner at the Marina Bay Sands Convention Centre, PM Lee noted that lacklustre global growth, a regional economic slowdown and a prolonged period of low interest rates have crimped net interest and investment income. The tightening of regulations after the financial crisis of 2008 has also contributed towards a more challenging operating environment today. On top of all this, technology is moving very fast with new business models disrupting traditional banking, PM Lee noted.
SEC to allow transfers from provident funds to RMFs Bangkok Post 11th Nov 2015
The Securities and Exchange Commission (SEC) will permit provident fund members whose membership has lapsed to transfer their contributions and benefits to retirement mutual funds (RMFs). The move is a bid to provide them with an investment channel for retirement. The SEC's Capital Market Supervisory Board recently approved the transfer of money in provident funds to RMFs to support long-term savings and investment of employees. That move will take effect on Nov 20. "Promoting long-term savings and long-term investment has always been an important part of the SEC mission. The latest milestone is permission for transfer from provident fund to RMF," SEC secretary-general Rapee Sucharitakul said. "This will allow employees to maintain the total sum of their ongoing savings in a long-term investment vehicle as long as they wish should they find themselves in an unfavourable position."
Vietnam expedites drastic banking system’s shake-up Voice of Vietnam 9th Nov 2015
The State Bank of Vietnam (SBV) and relevant financial organisations need to take drastic measures to push the banking sector’s restructuring process in its final year. During the process, self-restructuring, and merger and acquisition (M&A) are encouraged among Vietnamese commercial banks, said SBV Deputy Governor Nguyen Thi Hong. She said SBV will keep track of the progress to tackle arising difficulties and foster comprehensive restructuring while enhancing the credit institutions’ governance capacity through new mechanisms on information transparency, stock market listings, sound internal business policies and the development of risk management systems. According to economic expert Vu Dinh Anh, the banking system’s competitiveness capacity needs to be ensured not only in the domestic market, but also in foreign markets amid regional and global integration, with various bilateral and multilateral commitments to be implemented after 2015.
Moneylenders Credit Bureau to be set up next year The Straits Times 6th Nov 2015
A central repository of information on loans from licensed moneylenders will be set up next year in a bid to curb excessive borrowing. Moneylenders will have to provide information about loans they have made and customers' payment behaviour to the Moneylenders Credit Bureau, which will be developed and run by DP Information Group (DP Info). The bureau will allow licensed moneylenders to view a debtor's unsecured loans from other moneylenders and provide up-to-date details about a borrower's creditworthiness and indebtedness. If the extension of more credit pushes the debtor's borrowing beyond acceptable risk levels, the moneylender could refuse a request for credit. The move is part of a slate of tougher new rules on moneylending, which includes an interest rate cap of 4 per cent.
Singapore moneylenders' credit bureau to start operations in 2016 The Business Times 5th Nov 2015
Singapore's moneylenders' credit bureau will begin operations next year, DP Information Group (DP Info) said on Thursday. DP Info has been appointed to run the new credit bureau. The Ministry of Law (MinLaw) will require all licensed moneylenders to provide information of their loans and the payment behaviour of their customers to the bureau. This information can then be accessed by other licensed moneylenders when evaluating a credit application. This fixes a problem now, where an individual may approach different moneylenders to take out multiple loans and moneylenders have no access to information on whether the borrower is overstretched. Information on borrowers will not be made available to other entities besides licensed moneylenders, unless MinLaw grants approval.
BSP issues new rules on sale of financial products The Philippine Star 4th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) has issued new guidelines governing the sales and marketing of financial products by banks amid the heightened risks arising from clients investing in unsuitable products. BSP Governor Amando Tetangco Jr. said the risks arising from clients transacting in unsuitable products have intensified with the distribution of financial products gaining more significance as a business line for BSP-supervised financial institutions and the increasing complexity of financial products being offered in the market. “They (banks) have to have policies and procedures in place for the marketing of financial products particularly on the specifications of information that would have to be gathered for the client suitability,” Tetangco said.
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