| Market Development
Financial-Services Sector Master Plan for Indonesia Hukumonline 23rd Nov 2015
Support from the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) for the development of Indonesia’s domestic economy remains ongoing, and in the near future the OJK is planning to roll out a Financial Services Sector Master Plan across the country. This Master Plan is expected to offer support for the government's development programs, with the eventual goal in mind of boosting public welfare. “During the fourth quarter of 2015, the OJK plans to launch the Financial Services Sector Master Plan, which will cover the Financial Services sector here in Indonesia,” explained the Chairman of the OJK’s Board of Commissioners, Muliaman D. Hadad, in a keynote address delivered at the recent Economic and Capital Market Outlook 2016 event, which was held in Jakarta on Thursday 19 November 2015. The new master plan will introduce a series of policies and initiatives aimed at bolstering the main pillars of the Indonesian financial-services sector. These pillars relate to matters of economic development, endurance, stability, financial inclusion, and equity. Support from the OJK for increasing economic stimulus across Indonesia was formalized through the publication of 52 stimulus policies aimed at the financial services sector between June and October of 2015. According to Mr. Hadad, these policies are not only intended to increase consumption in the country, but also to help the government as regards the financing of its infrastructure development program. The expansion of Indonesia’s capital markets is also being targeted. During his address, Mr. Hadad stated that the OJK would continue to develop infrastructure that supported industrial development across the country’s capital market. In 2016, for example, provisions pertaining to repo transactions and bond trading through the organized OTC market will be introduced.
Guiding principles eyed for Islamic capital marts Business World 23rd Nov 2015
The Kuala Lumpur-based Islamic Financial Services Board (IFSB) plans to develop guiding principles for capital markets and insurance, seeking to encourage regulatory consistency across new and established markets, its secretary general said. The new guidelines from the 188-member IFSB, one of the main standard-setting bodies for Islamic finance, will complement existing ones which cover commercial banking. A wider set of standards could assist the International Monetary Fund which plans to include Islamic finance in its surveillance work, known as the Financial Sector Assessment Program (FSAP). “Before the FSAP there has to be a set of core principles and that really is the instrument that we feel is going to point the way and facilitate consistency across borders,” IFSB secretary-general Jaseem Ahmed told Reuters.
Difficulties Inherent in Developing National Sharia-Banking Sector Hukumonline 23rd Nov 2015
As the country with the largest Muslim population in the world, Indonesia has naturally seen a rapid development in its sharia-banking and financing industries over the course of the last decade. However, when viewed in terms of the overall size of the industry and the impact that it is having upon the national economy, the growth in sharia banking and financing industries in Indonesia remains insignificant when compared to conventional banking and financing industries. According to Dhani Gunawan Idhat, the Financial Services Authorities’ (OJK) Director of Sharia Banking, at least seven main obstacles are preventing sharia banking from growing at an optimal rate. The first obstacle is the lack of coordination and agreement on goals that exists between the government and the relevant stakeholders.
Asean financial integration to be expedited, says 2nd finance minister Malaysian Insider 22nd Nov 2015
Efforts to expedite financial integration between Asean member countries is currently underway as many of the nations require support in terms of banking facilities, says Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah. He said the move was a crucial step forward towards 100% Asean integration and in strengthening trade in the region. "At the moment banking integration is a bit slow... the lack of facilities also deprives investors and this also affects small enterprises. "We are looking into the recommendation to set up an Asean small and medium enterprise (SME) bank," he said in Ipoh today.
Financial Integration Vital For Asean Businesses The Malaysian Reserve 20th Nov 2015
Financial inclusion and integration among Asean countries are vital to spur development of entrepreneurship and businesses in the region. Finance Ministry Treasury Secretary General Tan Sri Dr Mohd Irwan Serigar Abdullah said member countries need to leverage on Asean Economic Community platform to collaborate and share knowledge, especially in providing banking and financing facilities for entrepreneurs in the region. “Financial inclusion is a thing need to promote among Asean members. Once, we have the banking facilities, then more businesses will flow in and create a multiplier effect on our economy,” he told reporters at a roundtable dialogue on transformation and innovation businesses and social enterprise policy held in conjunction with 1Asean Entrepreneurship Summit in Kuala Lumpur yesterday. The event, held in conjunction with the 27th Asean Summit, also saw Mohd Irwan launching the Asean Entrepreneurship Report 2014/2015.
Asset Management
Kyat Continues Slide as Central Bank Mulls Options The Irrawaddy 23rd Nov 2015
Two weeks since Burma’s general election on Nov. 8, the country’s reference foreign exchange rate has slid further against the US dollar, sitting at just under 1,300 kyat against the dollar as of Monday. While the exchange rate hovered at around 1,270 kyat during the election period, as of Monday it was 1,299 kyat against the dollar, while the black market rate was believed to have tipped over 1,300 kyat for the first time since late October. “The black market rate is over 1,300 kyat today because of the [higher] Central Bank rate,” said one speculator in Rangoon Division’s Pabedan Township. At a meeting with tourism operators on Saturday, Central Bank of Myanmar (CBM) deputy governor Sett Aung told reporters the bank was seeking to reverse the local currency’s months-long depreciation in several ways, including by selling US dollars to local private banks in an attempt to drive down the value of the greenback.
Ringgit extremely undervalued, says StanChart The Star 20th Nov 2015
The ringgit is extremely undervalued - by 15% to 20% - and expected to make a turnaround in the second half of next year, Standard Chartered analysts said. Standard Chartered group chief investment strategist/wealth management, Steve Brice, said the ringgit would probably be weaker in the next three months, by three to five per cent from where it was now. “But when it rebounces, it will be better than its regional peers. It is not the time to get excessively concerned over the weakness of the ringgit as it will probably get stronger towards year-end. “We have seen significant weakness in Asian currency in the past two years but not looking at something similar in the coming 12 months,” he told reporters at a briefing on currency investment outlook in Kuala Lumpur on Friday.
SGX to open dark pool in bond trading push The Straits Times 19th Nov 2015
Singapore Exchange (SGX) will open a dark pool for bonds as the 42-year-old bourse prepares to enter the institutional fixed-income trading business for the first time next year. The venue, which allows traders to flag interest in a security without indicating the size or the price of their desired transaction, will form part of SGX's Bond Pro platform scheduled for the first quarter of 2016, Mr Tsai Li Renn, the bourse's head of fixed income, said in an interview on Monday. Designed to minimise the price impact of buy and sell orders, the dark pool will be the first of its kind set up by an exchange operator, according to SGX. "We asked participants, 'How would you like to access liquidity in this marketplace?' " Mr Tsai said. "We found that they really wanted a dark pool."
Manila already exploring ways to boost renminbi holdings Business Mirror 19th Nov 2015
Although relations between Manila and Beijing are somewhat strained at the moment, the monetary authorities are beginning to take appropriate steps necessary in the pursuit of making the renminbi, also called the yuan, a part of its foreign-currency holdings. This was learned on Thursday from Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. himself, and came in the wake of an International Monetary Fund (IMF)decision recently allowing the Chinese currency to form part of a basket of currencies, known as the special drawing rights. Such are effectively the currency of the IMF that member-countries use to supplement their official reserves. Tetangco on Thursday acknowledged the BSP is looking for ways to expand its currency holdings of the renminbi as part of the larger plan of diversifying its currency holdings.
SGX plans bond trading platform launch in Q1 Brunei Times 18th Nov 2015
Singapore Exchange Ltd (SGX) is looking to launch a corporate bond trading platform in the first quarter of 2016 as it seeks to expand its product suite in an effort to boost revenue, its CEO said. SGX is seeing a business opportunity in offering a platform for fixed income as regulatory changes prompt global investment banks to scale back in this segment. “Other than revenue diversification, we look at this also in terms of SGX being a multi-asset platform,” Loh Boon Chye, 51, said in an interview conducted as part of the Reuters Global Investment Summit in Singapore. The veteran banker, known for his close ties with financial institutions at home, took the helm at SGX in mid-July from Magnus Bocker, who over five years built the derivatives business into the main source of revenue for the bourse.
Banking
S. Korean finance firm to buy 40% stake in Bank Andara Jakarta Post 24th Nov 2015
South Korean finance firm APRO Financial Co. Ltd. has announced its plan to acquire a stake in Indonesian micro lender Bank Andara as it eyes the potential market in the country. The Seoul-based company, a subsidiary of APRO Services Group focusing on consumer financing, will purchase a 40 percent stake, or equal to 202,923 shares, which will be issued by Bank Andara, according to a prospectus published on Saturday. The prospectus showed that both parties had signed a conditional share purchase agreement on Friday, so that APRO would become the bank’s controlling shareholder. “The purchase will be completed after prerequisites are met, such as the results of fit and proper tests and an acquisition permit issued by the Financial Services Authority [OJK] as well as approval from a shareholders meeting,” the prospectus revealed. It was stated in the prospectus that the bank planned to hold an extraordinary shareholders meeting to decide on the purchase on Dec. 23 and the acquisition process would be complete on Feb. 24 next year. “The publication is part of the requirements for acquisition, which will be followed by a fit and proper test by the OJK, and we hope to complete the entire process in the first quarter next year,” Bank Andara technology and operations director Irianto Kusumadjaja said in a text message.
Outlook on Philippine banks stable – Moody’s The Philippine Star 24th Nov 2015
Moody’s Investors Service has given Philippine banks a stable outlook for the next 12 to 18 months on the back of the country’s robust economic growth. Simon Chen, vice president and senior analyst at Moody’s, said the Philippine banking system is expected to benefit from the country’s continued economic expansion amid external shocks. “We expect the credit profiles of the Philippine banks to remain stable over the next 12 to18 months, supported by steady domestic economic growth, stable asset quality, and strong funding and liquidity profiles,” Chen said. Chen said Moody’s expects the economy to maintain growth at 5.7 percent this year and six percent next year.
Double or Nothing Is Way Into Lucrative Indonesian Banking Bloomberg 24th Nov 2015
Foreign banks that have been frustrated trying to break into one of the world’s most-profitable countries for banking, Indonesia, now may have a way. Buy two lenders, merge them -- you may get management control while Indonesia gets to cut its weakest players and consolidate its banking sector. After Indonesia imposed rules three years ago that limited foreign ownership of its banks to 40 percent, the ground shifted again this year. Regulators started saying that bidders could go above the threshold if they bought and merged two local lenders. At least two deals, by China Construction Bank Corp. and Korea’s Shinhan Bank, have been given the go-ahead. “It may be an odd way of being allowed to enter the market, but maybe it’s a relatively small price if you are taking a long-term perspective on Indonesia,” said Mark Young, the Singapore-based head of Fitch Ratings’ Asia-Pacific financial institutions group. “This market is something that any regional bank that has ambitions would look to enter.”
Bad debts eating bank profits Voice of Vietnam 23rd Nov 2015
A series of banks are facing towering bad debt provisions that ate up their profits for the first three quarters of the year, which had been promisingly reported. Vietcombank, for instance, reported an additional VND2.9 trillion (US$133 million) of bad debts as of the end of September. The bank, as such, had a total of VND7.1 trillion (US$325.7 million) worth of bad debts for the first three quarters, up 24.6% on-year. The bank’s profit was much better compared to the same period in previous years. However, as the provision for bad debts added up, its profit fell significantly as a result. Specifically, post-provision profit was reported at VND4.65 trillion (US$213.3 million), up only 11% on-year, while the pre-provision value was at a high of VND9.4 trillion (US$431.2 million), up 21.7% on-year. According to its consolidated financial report, Vietcombank’s nine-month credit growth was 10.2%, with mobilised deposits up 15.5% in comparison to the beginning of 2015.
Thrift banks record rise in non-performing loans Business World 22nd Nov 2015
Bad debts held by thrift banks slightly went up relative to their total loan portfolio as of September from a year ago, latest data from the Bangko Sentral ng Pilipinas (BSP) Web site showed. Non-performing loans (NPL) -- obligations that remained unpaid for at least 30 days after their due date -- made up 4.56% of thrift banks’ entire lending business at end-September, a tad higher than the 4.52% ratio recorded in the comparable 2014 period. However, this was lower than the 4.76% NPL ratio recorded at end-August. The NPL ratio is a key indicator of the quality of assets held by the banking industry. The rise in the ratio for the first nine months came as banks’ loan books grew at a slower pace than their soured debts, BSP data showed.
Banks rush to meet SBV ownership limits rules Viet Nam News 21st Nov 2015
Some commercial banks are racing to withdraw invested capital from other banks to ensure compliance with the State Bank of Viet Nam (SBV)'s regulations on ownership limits in early 2016. Under the SBV's Circular No 36, which will take effect on February 1, 2016, one commercial bank can hold a stake in no more than two other banks, unless the other banks are its subsidiaries. The proportion of shares of other credit institutions must not be higher than 5 per cent of the shares with voting rights. Only some banks will sigh with relief after buying finance companies to which they had contributed capital. For example, Techcombank bought Vinachem Finance Company, VPBank bought Vinacomin Finance Company, and HDBank bought SGVF. Vinaconex Viettel Finance Company was also taken over by SHB, and Maritime Bank merged with both MDB and Vinatex Finance Company, in which it holds 10 and 11 per cent of stake, respectively. However, some other banks have not successfully withdrawn capital yet to reduce the ownership ratio to below 5 per cent as stipulated, according to Nguoi Lao Dong (Labourers) newspaper. Vietcombank currently still holds a stake in two banks, in which its ownership ratios are higher than the permitted level.
Bank Sinarmas to increase microlending Jakarta Post 21st Nov 2015
Private lender PT Bank Sinarmas (BSIM) is aiming to expand microlending services next year by reaching out to more micro, small and medium enterprises (MSMEs) in regional areas. To achieve its aim, the lender will introduce branchless banking to reach micro and small businesses as well as cooperatives. “We will focus on growing our microlending to 10 percent from its current level of around 8 percent,” BSIM president director Freenyan Liwang said after a press conference on Friday. The target is part of the lender’s efforts to meet the Financial Services Authority (OJK) regulation that requires local banks to channel 20 percent of their lending to MSMEs by 2018. As of September, Bank Sinarmas had disbursed Rp 17 trillion (US$1.2 billion) of loans, about 80 percent of which went to corporations, 12 percent to retail and 8 percent to MSMEs. “Our MSMEs and cooperative customers are mostly in Java and Sumatra. We will increase our customer numbers in Sulawesi and Kalimantan next year,” Freenyan said. According to him, the lender was focusing on certain sectors like retail and wholesale trade, accommodation, food and beverages, processing, agriculture and construction. “Our customers from the cooperatives are mainly oil palm farmers,” he added.
Bank Loans to Increase by 13 Percent Next Year: OJK Jakarta Globe 21st Nov 2015
Indonesia's commercial banks are expected to maintain their loan growth next year, with lenders still taking the cautious approach amid persistently high interest rates, chairman of the country's finance authority said on Thursday. The Financial Services Authority (OJK) estimates outstanding commercial loans to expand at 12 percent-13 percent next year, according to OJK chief Muliaman Hadad. Total outstanding loans as of end of September stood at Rp 3,987 trillion ($289.4 billion), a growth of 11 percent on a year-on-year basis. OJK revised its loan growth target for this year to between 13 percent and 15 percent from the initial 16 percent-17 percent. Economists call the prediction "realistic enough," but both the financial regulator and Indonesia's central bank may actually set a higher target next year as Bank Indonesia should be able to boost lending growth by the end of 2016 through a rate adjustment.
Banks remain concentrated in urban areas The Philippine Star 21st Nov 2015
Banking presence in the Philippines remained concentrated in highly urbanized and higher income areas particularly in the National Capital Region, data from the Bangko Sentral ng Pilipinas (BSP) showed. The BSP reported the banking system’s landscape in the country is now leaner and attuned to market needs as the number of operating banks have declined to 638 as of end June from 664 in the same period last year. The figure is way below the peak of 996 operating banks in 1998 when the central bank started rationalizing the merger and consolidation incentives for banks. “Amid an evolving global financial landscape, banks were compelled to streamline their operations and seek alternative ways to grow their market. This strategy has led to the ongoing industry consolidation which contributed to a leaner operating network,” the BSP said.
BMI cuts loan growth forecast to 5% for S'pore banks The Business Times 20th Nov 2015
Research firm BMI has cut its forecast for loan growth of Singapore banks to 5 per cent from 10 per cent, citing economic headwinds ahead. Singapore's banks are expected to be more cautious about extending credit as the Chinese and South-east Asian economies slow down, BMI said in a report. Demand from borrowers could decline as well as the tepid economy cools the growth of housing and bridging loans. "Overall, we believe that loan growth will remain subdued throughout 2016, and have lowered our forecast to 5.0 per cent, versus 10.0 per cent previously," BMI wrote.
Major banks expect to scale down spending in 2016 Jakarta Post 19th Nov 2015
Major banks expect to scale down their spending on business expansion and technological advancement next year, as subdued economic growth is seen to cloud the country’s banking industry. Bank Negara Indonesia (BNI) president director Achmad Baiquni said the lender was still in the process of determining next year’s capital expenditure (capex), which is to be included in the business plan submitted to the Financial Services Authority (OJK) by the end of November. Baiquni said BNI’s capex, which included IT expenditure, would be slightly lower than the Rp 3 trillion (US$218 million) earmarked for capex in 2015, as the bank had already renewed some of its IT infrastructure through previous investment. “We will allocate more of our 2016 capex on purchasing buildings for some of our existing branches, which are currently renting office space,” Baiquni said. According to Baiquni, BNI’s spending on IT infrastructure next year would mainly serve to “create more features in our products.”
Banks face capital hit as Basel overhauls risk rules Business World 19th Nov 2015
Banks face higher capital requirements under an overhaul of market-risk rules that the Basel Committee on Banking Supervision plans to complete by the end of the year, though the increase will be less dramatic than industry groups warned, according to the regulator. The new rules result in a 4.7% increase in overall capital requirements, the Basel Committee said Wednesday in a study based on a 44-bank sample, meaning a bank with a hypothetical total capital requirement of 10% would face a 47-basis-point surcharge. Yet this average conceals wide variations: the changes for individual banks range from a 20% reduction to an increase of nearly 80%. “We’ve seen regulators come out with proposals that have headline-grabbing numbers quite a lot,” Steve Hussey, head of financial institutions credit research at AllianceBernstein, said by telephone. “What tends to happen is the banks push back, over time the proposal gets watered down and in the interim the banks pre-position for it.
DBS surprise leads quarter of stellar performances for Singapore’s banking triumvirate Singapore Business Review 18th Nov 2015
Singapore’s top 3 banks, DBS, UOB, and OCBC, exhibited resilience this quarter, with operating income edging up to a combined S$7.01b from S$6.98b, buttressed by a growth in net interest income. According to analysts from SNL Financial, however, the growth in operating income was outweighed by a 9.07% increase in expenses that totalled S$4.13b in the third quarter. “Asset write-downs expanded to S$488 million from S$436 million, while operating costs grew to S$3.09 billion from S$2.79 billion,” SNL Financial said. Meanwhile, aggregate net profit also fell by 9% to S$2.83 billion for the three months through September from S$3.11 billion for the prior-year period, SNL Financial added.
Banking sector must accelerate reform efforts, say experts Viet Nam News 18th Nov 2015
The banking sector has experienced dramatic changes this year but has more reform is needed, delegates heard at the Viet Nam Retail Banking Forum 2015 held yesterday in HCM City. Tran Thi Hong Hanh, general secretary of the Viet Nam Banks Association, said: "The restructuring process with merger & acquisitions, efforts and steps taken by the State Bank of Viet Nam to bring the bad-debt ratio under 3 per cent, and the preparation for financial integration of ASEAN are the three factors motivating transformation and innovation in the banking sector and retail banking." Also speaking at the forum, Le Thanh Tam, CEO of International Data Group (IDG) ASEAN, presented the Viet Nam Banking Report 2015 at the forum, which discussed customer-centric and tech-savvy models for next-generation banking.
Banks See Surge in Deposits Khmer Times 18th Nov 2015
The surge in deposits at commercial banks is accelerating as the per capita gross domestic product rises and trust in the banking system increases, representatives of commercial banks said yesterday. “Rising domestic deposits reflect better living standards, the growth of the banking and finance sector and more trust from people," Heng Thida, head of retail and financial services at CIMB Bank, said yesterday. She made the comments during the launch of the CIMB Preferred Visa platinum credit card. The bank has more than $200 million in deposits, with about 99 percent from Cambodians, she said. Ms. Thida added that since its arrival in Cambodia five years ago, CIMB has accumulated assets of more than $400 million. It plans to inject more capital to meet rising demand for banking services, she said, without disclosing a figure. Leading domestic bank Acleda is also seeing swift growth in domestic deposits, according to its executive vice president So Phonnary. She said that the growth is due to the expansion of banks and microfinance institutions, which has raised awareness about the advantages of keeping cash in banks.
Bad debts bedevil Vietnam’s banks Financial Times 18th Nov 2015
Vietnam is viewed as one of Southeast Asia’s bright spots during a tricky and uncertain time for emerging markets. The country’s gross domestic product is predicted to exceed expectations and expand by as much as 6.5 per cent this year. Since the global financial crisis, however, its banks have been shackled by bad debts that have dragged on growth. Vietnam’s communist government claims progress has been made in addressing the problem, and the economy is flourishing as a result. In September, the official rate of non-performing loans (NPLs) stood at 2.9 per cent of total loans, down from 4.2 per cent in December 2012. The State Bank of Vietnam, the central bank, is trying to slash the number of banks in the country — from 40 to 15 over a two-year period — by forcing takeovers of ailing banks by better-capitalised state lenders. In addition, it has established the Vietnam Asset Management Company, a state fund focused on restructuring bad debts to reduce the amount of NPLs in the financial system.
Malaysia To Continue With Pro-Investment Approaches, Says Wahid Bernama 17th Nov 2015
Malaysia plans to continue with its pro-investment approaches to attract more foreign direct investment (FDI) into the country amid the stronger Unites States economy. Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar said there would be a reversal of funds away from emerging markets, including Malaysia, back into the US when the Federal Reserve raises interest rates. "However, this is more in the spectrum of portfolio investment and beyond this, what we are more keen on would be to attract FDI. "If we continue with our pro-investment policies, and as Malaysia becomes part of the larger ASEAN community, if we become part of the Trans-Pacific Partnership Agreement, this will bring great opportunities for us," he told reporters after opening the Malaysia Statistics Conference 2015.
OCBC Expands Islamic Banking Network To Sabah, Sarawak Bernama 17th Nov 2015
OCBC Bank Malaysia Bhd (OCBC Bank) is expanding its Islamic banking branch network to Sabah and Sarawak next month with the opening of its inaugural OCBC Al-Amin branches in Sibu and Sandakan. It said the new branches add to the existing three in Sabah and Sarawak (one each in Kuching, Miri and Kota Kinabalu), bringing the total to 45 branches nationwide comprising 13 Islamic and 32 conventional. OCBC Al-Amin Director & Chief Executive Officer Syed Abdull Aziz Syed Kechik said OCBC Al-Amin has progressively built a stable of 49 products involving 15 key principles of Shariah compliance, ranging from simple deposit and financing offerings to investment banking solutions.
Maybank Expands Private Wealth To Sarawak Bernama 17th Nov 2015
Maybank has expanded its wealth management business to Sarawak with the opening of a new Private Wealth Centre in Kuching and located within the existing Maybank Crown Towers Premier Centre. Maybank's global network of private wealth centres now stands at five with its other centres in Kuala Lumpur, Singapore, Hong Kong and London, the bank said. In a statement today, Maybank said wealth management remains a key pillar of its growth over the next few years. As at September 2015, its total private wealth business recorded some RM20 billion in total financial asset (TFA). Combined with its premier wealth segment, the total wealth management business tipped the scale at RM150 billion. Head of Regional Private Wealth, Alvin Lee said the Kuching centre is the first such facility in East Malaysia, and it complements the existing network of six Premier Wealth Centres in Sabah and Sarawak.
E-Payments
BI to extend deadline for card chip implementation Jakarta Post 21st Nov 2015
Bank Indonesia (BI) may extend the deadline for the country’s commercial banks to use chip technology for their debit cards in response to the need for a longer migration period from the current technology, the central bank’s senior official executive has said. According to a central bank regulation issued in 2014, all debit cards issued by local banks should use chip technology beginning Jan. 1, 2016. “However, our evaluation showed that the migration needs a longer time, so we are reviewing the policy, which will be revised and issued as a new regulation before the end of this year,” said BI deputy governor Ronald Waas. All existing ATM and debit cards using “magnetic stripe” technology must be withdrawn and replaced with new ones by Dec. 31 this year at the latest, while ATMs and electronic data capture (EDC) units should be upgraded to accommodate the new cards.
Myanmar card payments on the rise as MPU widens network Myanmar Times 20th Nov 2015
Card payments in Myanmar are set to rise over the next few months as local shops and supermarkets sign up to Myanmar Payment Union, signalling the beginning of a shift in one of the world’s last cash-based economies. MPU got off to a slow start when it launched in 2012, but with the rise of connectivity, this is starting to change. Card transactions jumped from K40 million in September to K70 million in October, said MPU chair U Mya Than. Growth is driven by the participation of large retail chains, he said. Myanmar’s largest supermarket group City Mart Holding began accepting MPU payments in April, and now gives customers the option to pay by card in seven of its 20 outlets.
Prepaid Mobile Payments Out to Conquer Cash in Southeast Asia Establishment Post 20th Nov 2015
Mobile payments in Southeast Asia are on the rise. With fintech startups and banks competing for a piece of the pie in the digital wallet space, there have never been so many payment methods. Consumers now have more say as to how to pay with for their goods and services. More so, digital wallets are in pent-up demand because consumers today have the opportunity and convenience to carry out transactions anywhere with a few clicks on their mobile phone. While credit and debit cards are at the forefront powering the digital wallet phenomenon in the US, UK and Europe, mobile payments in Southeast asia tread a different path – one that is heading towards prepaid mobile payments.
E-commerce infrastructure lagging within Asean The Rakyat Post 20th Nov 2015
The Asean Business Advisory Council (Asean-BAC) is calling for an improvement in the logistics industry and e-commerce systems in the 10-Asean member countries to boost economic growth in the region. Chairman Tan Sri Mohd Munir Abdul Majid said there’s up to nine times growth potential in the e-commerce sector in Asean alone. “In the US, UK and China, the total turnover in e-commerce in the retail industry is about 8% to 9%. But in Asean, it’s only 1%,” he said after the launch of Asean Business and Investment Summit 2015 today. In terms of logistics, Mohd Munir said there should be an improved logistics system so that goods can be delivered on time and in good condition.
TPP a boon for e-commerce Brunei Times 19th Nov 2015
A landmark US-backed Pacific trade deal will give a boost to an already booming e-commerce industry in the region, executives at global delivery firms FedEx Corp and Deutsche Post DHL Group told Reuters. The Trans-Pacific Partnership (TPP) agreement, which seeks to liberalise commerce across 12 Pacific Rim nations accounting for 40 per cent of the world’s economy, was reached last month. The deal has yet to be ratified by each country. “E-commerce is huge. It’s a US$2 trillion economy in itself,” David Cunningham, chief operating officer of FedEx Express, the air and ground delivery arm of FedEx Corp, said on the sidelines of an Asia-Pacific Economic Cooperation summit in Manila. “As long as we continue to advance trade liberalisation and make substantial steps forward like TPP, then I think we are going to see e-commerce continuing to grow,” he added.
Mobile networks team up for e-payment Bangkok Post 18th 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.
Study shows growing preference for mobile shopping The Nation 18th Nov 2015
The growth of Thailand's eCommerce industry continues as consumers show growing preference for mobile payments, according to the Visa Consumer Payment Attitudes Study 2015 . The study revealed that two-thirds of Thai consumers shop online at least once a month, and more than half (53 per cent) have used their mobile devices to shop online. The study identified trends in |payments behavior among consumers |in six Southeast Asian markets including Thailand. It showed categories where consumers are more likely |to shop via mobile devices as well |as determining emerging categories. "Though Thailand's eCommerce industry is still in its nascent stage, it is growing rapidly. Categories such as fashion and accessories, movie tickets, and bill payments will become key growth drivers as they have low online share but high frequency of purchase. The high proportion of transactions made via smartphones also presents a strong opportunity for growth," said SuripongTantiyanon, Visa Country Manager, Thailand.
Insurance
Thailand: Insurers keen to raise and liberalise auto premiums Asia Insurance Review 24th Nov 2015
The Thai General Insurance Association is eyeing premium increases for some vehicle categories, to better reflect actual repair costs. The association's President, Mr Anon Vangvasu, said that premiums should be increased for cars with higher repair costs, reported The Bangkok Post. Statistics show that the highest costs are for repairs to vehicles with engines below 1,500cc and for pickup trucks Mr Anon also said that the association wants the Office of the Insurance Commission to allow insurers to set their own premium rates. Prices for automobile parts have risen by about 10% every year, but insurance premiums have not been adjusted accordingly.
Cambodia: New investments fuel non-life insurance growth Asia Insurance Review 20th Nov 2015
Gross premiums in Cambodia's non-life insurance industry surged by 20% in the third quarter to more than US$46 million from the corresponding period last year, fuelled by new business investments. Marine, property and fire, and medical insurance are driving the growth, according to a report from the Insurance Association of Cambodia (IAC). Pointing to the increased number of new enterprises in the country, Mr Huy Vatharo, IAC Chairman, said: “The growth of insurance business in this market has so far come from the increase of new businesses across the lines, meaning more new customers have access to insurance.” Property and fire insurance premiums, which account for slightly more than 40% of total insurance premiums, rose by 44.1% or more than US$6 million from about $13.3 million in the third quarter of last year, reported the Phnom Penh Post citing the data.
Thailand: New regulatory chief focuses on regulations to hone competitiveness Asia Insurance Review 19th Nov 2015
Mr Sutthipol Taweechaikarn, the newly appointed Secretary-General of the Office of Insurance Commission (OIC), aims to strengthen the insurance industry's regulatory framework so as to sharpen the competitiveness of the sector. Mr Sutthipol, who assumed the OIC's top position on 1 November replacing Mr Pravej Ongartsittigul, plans to improve industry regulations by amending existing laws and creating new ones, while striking a balance with business operations and consumer protection, reported The Bangkok Post. For instance, the OIC plans to develop a new law, the Marine Insurance Act.
Philippines: 2015 set to be the best year ever for insurers Asia Insurance Review 18th Nov 2015
The Philippine insurance industry saw total premiums climb by 29.8% to PHP172.40 billion for the first nine months of this year from PHP132.87 billion posted during the corresponding period last year. The performance has fuelled hopes that 2015 will be the best year ever for insurers in the country. In a statement, Insurance Commissioner Emmanuel F. Dooc said: “This year, the insurance industry shall surpass its highest premium production of PHP198.1 billion total premium recorded in 2013. The year 2015 promises to be the best year ever for the insurance industry in the Philippines.” Earlier this year, he forecast a combined premium of PHP240 billion for 2015. “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 but it will be a tall order,” he said.
Market Regulation
OJK preps single licensing for banks, markets Jakarta Post 23rd Nov 2015
The Financial Services Authority (OJK) is currently building a system that will integrate the licensing process for companies wishing to operate either in banking, capital markets or the financial sector. In so doing, the OJK hopes to increase efficiency in financial markets. OJK director of banking licenses Ahmad Berlian said the new system, expected to be ready by the end of this year, would receive license-related documents from and to those three sectors through a “single window”. The OJK is currently discussing with industry players how to most effectively implement the new system. “We will build an integrated system and an IT-based single window that will serve activities related to permits in banking, capital markets and the financial sector,” Ahmad said at a press gathering in Bogor, West Java, on Saturday. Ahmad said the legal basis for the “single window” system linked back to the agency’s mandate to create an integrated supervision process in the overall financial sector as stipulated in Article 5 of the law on the OJK. Through the system, all proposals for acquisitions, expansions and new management in banking, capital markets and the financial sector can be submitted to the OJK’s licensing department.
Indonesia to Make Green Financing Compulsory for Banks by 2018 Bloomberg 23rd Nov 2015
Indonesia’s financial regulator will introduce rules to restrict banks’ lending to environmentally-damaging projects by 2018, which may eventually help the nation curb the forest fires that choke parts of Southeast Asia with thick haze for months each year. The Financial Services Authority, known locally as OJK, is aiming to draft regulations by next year to target agriculture, energy, fishery and microfinance companies, Edi Setijawan, the regulator’s deputy director for banking architecture, said by phone on Monday. The rules would build on guidelines for sustainable financing in the palm oil industry that the nation’s eight largest banks will test starting in January, he said. While not specifically directed at the forest fires, policing the environmental impact of projects and activities of companies that borrow funds from its banks will help Indonesia curb the burning that this year covered an area four times the size of Bali island. Lit to clear land for plantations, the fires caused a smoky haze that spread as far as southern Thailand and the Philippines, and turned Indonesia into the world’s worst greenhouse gas polluter.
Securities Exchange Commision discusses derivatives rules The Phnom Penh Post 20th Nov 2015
The Securities Exchange Commission of Cambodia (SECC) officially launched derivatives trading yesterday and held a consultation meeting with financial firms and investors to review a draft prakas on qualified investors in the securities market. Feedback from the public forum will be used to help formulate regulations to be included in the prakas, which will be issued “soon," said SECC director-general Sou Socheat. “After announcing [a plan to introduce] derivatives trading, we received many applications,” he said. “Many companies contacted us. Some are qualified and some are not, and all derivatives traders will be required to have a license.” Derivatives come in many forms, but all are essentially financial contracts between two parties that derive their value from the performance of an underlying asset such as a commodity, index, currency or stock.
OJK to Simplify Regulations for Corporate Bond Issuance Jakarta Globe 19th Nov 2015
The Financial Services Authority, or OJK, is cooking up plans to simplify regulations for issuing corporate bonds in an effort to cut on costs and encourage more companies to raise funds from the debt market, according to a top government official. OJK chief Muliaman Hadad said he frequently receives concerns from local companies over the cost and administrative hurdles involved in selling bonds at the local bourse, leading businesses to opt for bank loans instead. "This is an urgent matter that we are going to work on ahead. Hopefully, this will contribute to the growth of the national bond market," Muliaman said in Jakarta on Thursday. "The more companies issue bonds the better, since this is an option for long-term financing. "There may even be a significant secondary market and liquidity will improve."
President’s Office and Central Bank discuss regulations Myanmar Times 18th 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.
Indonesia to end 'bank secrecy' in 2017 Jakarta Post 18th Nov 2015
Indonesia is set to end its “bank secrecy” policy in September 2017, allowing the country to exchange tax information with other countries, which would be a major step in the fight against tax evasion and financial fraud. Finance Minister Bambang Brodjonegoro said that Indonesia would be an early adopter of the global initiative. Fifty-one countries have signed up to the multilateral competent authority agreement, under which respective tax authorities will exchange information automatically from September 2017. "Automatic exchange of information will be effective in 2018 globally, but some countries, including Indonesia, will adopt it earlier, in September 2017,"Bambang told Kompas.com in Jakarta on Friday. However, he added that some laws would have to be amended before the bank secrecy principle could be abolished permanently.
NLD committed to financial sector reform: party adviser Myanmar Times 17th Nov 2015
U Soe Win of the NLD’s economic committee said the party is now collecting facts and data and discussing its priorities, following its landslide win in the November 8 election. The election result has removed a huge amount of political risk for financial institutions and markets, which “depend on trust and other ephemeral aspects of a country’s political economy”, said Sean Turnell, who is advising the party on economic policy. Firstly the elections themselves are now over, removing an unresolved question and reducing the chance of populist policies being rolled out, he said. Secondly, the comprehensive nature of the NLD victory removes a source of instability. “Many had expected a long period of coalition building and horse-trading as the different parties tried to form a viable government. This is no longer an issue. The NLD will form the government, and will determine economic policy.” A third factor to affect the financial sector is NLD policy itself, he said. “On this front I think the financial sector can take great comfort.”
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