| Market Development
Myanmar to start govt bond auctions this month – c.bank The Burma Times 2nd Jan 2016
Myanmar will formalise sales of government debt via an auction system in Yangon this month, a central bank official said on Friday, the latest move to boost overstretched state coffers and reform the country’s fledgling economy. “Government treasury bonds will be auctioned electronically there (Yangon) among local private banks in the beginning and in the bigger market later,” Set Aung, the deputy central bank governor, told Reuters. He said interest rates on treasury bonds were fixed at present, but when the market is opened – tentatively on Jan. 28 – bond prices would be floating and dependent on supply and demand, interest rates and market trends.
Brunei moves closer to setting up bourse The Brunei Times 30th Dec 2015
As the curtain draws to a close on 2015, we look back at some of the initiatives carried out throughout the year by the financial regulators and industry players towards developing the country’s financial sector. The establishment of a capital market and having its own stock exchange is imminent with the sultanate’s central bank, the Autoriti Monetari Brunei Darussalam (AMBD), informing global news agency Reuters in May this year that it plans to have it operational by 2017. The regulator has set up a team to oversee the project with groundwork set to begin this year and targeting a launch in two year’s time, the AMBD said in a statement to Reuters.
OJK Targets Bilateral Cooperations With Thailand, Myanmar in New Year The Jakarta Globe 29th Dec 2015
Indonesia's financial regulator, the Financial Services Authority, known as OJK, has set a target to seal bilateral cooperations with two Association of Southeast Asian Nations in the first quarter of the new year. Thailand and Myanmar will be the first two nations in the Asean bloc to form such cooperations with Indonesia ahead of the 2020 target of wider banking sector liberalization as set out by the Asean Banking Integration Framework. OJK Chairman Muliaman D. Hadad said Indonesia is committed to solidifying bilateral cooperations with all countries in the bloc, so Asean members can enjoy reciprocal interactions. By the first quarter of next year only two nations — Thailand and Myanmar — can settle banking sector bilateral cooperations with Indonesia, while the remaining nations still needing further discussions. "Currently, we are awaiting for answers from Malaysia. There are things cannot be settled right now about the payment system. Overthere, the payment system also involves the private sector," Muliaman said recently.
Asean Trading Link falters Bangkok Post 21st Dec 2015
Attempts to build a trading platform linking Asean stock markets have faltered at the first stage. The failure is due mainly to the uneven technological development among members, says Pattera Dilokrungthirapop, chairwoman of the Association of Securities Companies. Launched in September 2012, the Asean Trading Link has faced technical problems, especially with the clearing and settlement system. In addition, the different laws and regulations concerning capital control of each country have hindered cross-market trading.
Laos issues first US$ notes in Thailand The Nation 18th Dec 2015
Laos’ Finance Ministry has issued its first US dollar-denominated floating-rate notes in Thailand, worth $182 million (about Bt6.5 billion). The dual-tranche issuance was rated "BBB+" by Tris Rating on December 9. The maturities are 10 and 12 years and the coupons are six-month Libor (London Interbank Offered Rate) plus 3.38 percentage points and 3.48 percentage points. The notes were distributed to institutional investors under the Thai Securities and Exchange Commission's foreign-exchange bond regulations. The success of this transaction highlights the Laotian government's strong credit as an issuer in the increasingly integrated intra-regional capital markets as well as the depth, strength and liquidity of Thailand's debt capital markets, Rithikone Phoummasack, deputy director-general of External Finance Department of the ministry, said yesterday.
DBS, StanChart partner on distributed ledger for trade finance The Straits Times 17th Dec 2015
DBS Group Holdings is working with Standard Chartered on developing distributed ledger technology for trade finance in Singapore. The banks have completed tests on the technology and will start collaborating with other companies next year, Mr Shirish Wadivkar, head of payables, receivables & flow FX at Standard Chartered, and Ms Lum Yin Fong, DBS's global head of client management and implementation, said on a call with Bloomberg on Thursday (Dec 17). Estimates on development costs are not available yet, they said.
Indonesia and Australia Seal Currency Swap Agreement The Jakarta Globe 16th Dec 2015
Indonesia and Australia agreed on a three-year bilateral currency swap deal worth up to Rp 100 trillion ($7.13 billion) on Tuesday, in a bid to boost bilateral trade between the countries and help defend the rupiah against capital outflow. "This bilateral currency agreement shows a commitment between two central banks to keep the macroeconomy and regional finance stability in facing global uncertainty," Bank Indonesia Governor Agus Martowardojo said in a statement. Agus signed the deal alongside Governor Glenn Stevens of the Reserve Bank of Australia . The deal, which was immediately effective from Tuesday, adds to similar agreements with China, Japan and South Kore
Transaction banking tackles the challenges of the AEC Global Capital 16th Dec 2015
With a self-imposed deadline looming for the formal launch of the Asean Economic Community(AEC),transaction bankers are still frustrated about the lack of progress on financial integration. But rather than wait for politicians to act, bankers and their clients are pushing a head with developing cross-border solutions. PaoloDanesereports.
Indonesia pushes back deadline for Islamic megabank merger The Star 15th Dec 2015
The difficulties in forming a megabank in the US$2 trillion (RM8.7 trillion) Islamic finance industry are becoming clear as Indonesia pushes back deadlines for its plan after failures in Malaysia and the Middle East. Financial Services Authority Director Dhani Gunawan Idat is the latest official to repeat Indonesia’s goal for such an entity after two years of trying, with a plan to merge the syariah-compliant units of PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia and PT Bank Tabungan Negara. He put the time frame as 2017 in an interview Friday, while his chairman Muliaman Hadad said in January it may happen this year. Gatot Trihargo, deputy minister for government-run enterprises, said in June that 2016 was the target. Indonesia’s falling Islamic banking assets highlight the need to create an institution with the financial clout to contend with bigger conventional rivals and achieve its aim of competing as a syariah-compliant hub with Malaysia, which has unsuccessfully tried to get a megabank off the ground for at least six years.
Brunei: New financial reforms will provide more options for consumers, enterprises ASEAN Briefing 15th Dec 2015
The Autoriti Monetari Brunei Darussalam (AMBD) recently announced new regulatory financial reforms. The changes will make a wider variety of financial products accessible to consumers. Meanwhile, the reforms will also ease the access to financing for entrepreneurs. The central bank amended several regulations to relax the conditions to obtain unsecured personal credit, financing and credit cards. In addition, the new regulations will include variable, rental and business income in the ‘gross monthly income,’ thus making it easier for financial institutions to access credit. Local experts believe that the new changes will make the financial climate more conducive for businesses. Easier access to financing will allow businesses to expand their operations. In addition, easy availability of credit for consumers will ensure a robust domestic demand for goods and services, which will contribute to a healthier economic climate. The new regulatory reforms are a part of Brunei’s larger project of modernizing the financial market to bring it at par with other developed markets.
Asset Management
Foreign flight poses threat to stock market Bangkok Post 4th Jan 2016
The persistent exodus of foreign investors is of the greatest concern to the Thai stock market in 2016 after around 400 billion baht was cashed out over the past three years. Analysts expect the SET index will continue to be highly volatile in the first half for lack of any signs of a strong economic recovery, plus the potential impact of US interest rate rises on capital movements after the Federal Reserve's first rate increase on Dec 16. Thailand's economic recovery is expected to pick up in 2017. Key concerns: DBS Vickers Securities, Thanachart Securities and Bualuang Securities agree that the most worrying factor is fund flows as the US central bank's rate increase has affected all currencies, particularly in emerging markets. Another concern is the tumbling crude oil price due to supply glut and heightening geopolitical risks.
Pre-election months may see rush of fund raising Business World 3rd Jan 2016
The capital market may see a flurry of deals ahead of the national election, with bonds and preferred shares being the desired fund-raising mode for corporates even as first-time equity issuers line up to beef up their war chest. Jose Luis F. Gomez, president of RCBC Capital Corp., said a number of issuances -- mostly involving debt and preferred shares -- are being considered in the first quarter of 2016. “I think the rush is for the first quarter. Thereafter, there may be a wait-and-see period,” Mr. Gomez said in a mobile phone message.
Weak rupiah helps push down RI’s liabilities The Jakarta Post 31st Dec 2015
The sharp drop in the rupiah against the US dollar during the third quarter this year caused a decline in Indonesia’s net foreign financial liabilities from the previous quarter, the latest report from Bank Indonesia (BI) has shown. According to the International Investment Position (IIP) report that was published on Wednesday, net foreign liabilities fell 11.3 percent on a quarterly basis to US$327.37 billion. Foreign liabilities comprise several components, namely foreign direct investment (FDI), portfolio investment, financial derivatives and other forms of investment.
VN shares up after investor rules clarified Viet Nam News 30th Dec 2015
Vietnamese shares rose on both local markets yesterday after the Government clarified investment conditions for overseas investors in local firms. The benchmark VN Index on the HCM Stock Exchange gained 1.1 per cent to close at 576.29 points, extending a rally of 2.1 per cent during the last four days. The HNX Index on the Ha Noi Stock Exchange was up 1 per cent to end at 78.61 points, ending a two-day losing streak of 0.6 per cent.
KWAP plans UK sale in asset repatriation move New Straits Times 30th Dec 2015
Malaysia’s second-largest pension fund is planning a 270 million pound (USD402 million) sale of an office building in central London, responding to a government call to repatriate funds to prop up the country’s ailing stock and currency markets. Kumpulan Wang Persaraan (Diperbadankan), which has about RM120 billion (USD28 billion) of assets, is finalising an agreement to sell an office building at 88 Wood Street in the City of London that it bought in 2013 for 215 million pounds, according to the fund’s chief executive officer Wan Kamaruzaman Wan Ahmad. As well as getting a higher sale price, the fund will benefit from the sharp rise in sterling against the ringgit over the past two years.
Economists concerned about dong devaluation, FDI drain on US rate hike Than Nien News 21st Dec 2015
The interest rate hike by the US Federal Reserve (FED) is expected to increase pressure on the dong in the context that Vietnam is trying to push economic development and employment by seeking export-led growth. The FED raised the range of its benchmark interest rate, for the first time in nearly a decade, by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs, Reuters reported. It has indicated that it would raise interest rates four more times before the end of 2016.
Fed hike: Asian markets to experience short term gain, medium term pain, says Barclays New Straits Times 17th Dec 2015
Barclays Research says there will be no medium-term respite for Asian currencies following the announcement of a rate hike by the US Federal Reserve yesterday. This follows the earlier period of endless speculation about the possibility of a Fed rate hike for a considerable part of 2015 which generated strong headwinds for Asian foreign exchange. In a research note, Barclays said it expects three Fed rate hikes totaling 75 basis points (bp) over the course of 2016 compared with market pricing of around 50bp.
Market ready to absorb impact of Fed rate hike, says IDX The Jakarta Post 16th Dec 2015
As the US Federal Reserve is holding a crucial policy meeting and set to announce the first Fed Fund Rate hike in over nine years, the Indonesia Stock Exchange (IDX) projects minimum impacts on the market. IDX trade and membership director Alpino Kianjaya said that the Fed Fund Rate hike is likely to be followed with higher interest rates. However, he believed that both the market and investors had anticipated such an increase. "So, it’s not a problem if it is going up or down by 25 basis points, as the market or investors are already aware since [the plan] has been acknowledged for a long time. It’s not terrifying the market," Alpino told to thejakartapost.com on Wednesday.
More incentives needed to attract REIT investment The Jakarta Post 15th Dec 2015
The government may have to offer more incentives to attract investors and boost issuance in the local Real Estate Investment Trust (REIT) market, as current regulations are deemed unattractive compared to other countries, according to a Financial Services Authority’s (OJK) official. Fahri Hilmi, supervisor for capital market II at the OJK, said the agency and the Finance Ministry were discussing plans to revise a new tax incentive for REIT, so that local REITs could be appealing for both investors and companies.
New foreign bank licences to be granted in 2016 Myanmar Times 15th Dec 2015
The aim is to licence banks from “additional neighbouring and important trading partner economies”, the Central Bank said. “The main objective of the second round of licensing is to further promote existing economic cooperation.” Foreign banks headquartered in countries that successfully obtained a licence in the first round – namely Australia, China, Japan, Malaysia, Singapore and Thailand – will not be allowed to participate in the second round, the notice said. Foreign banks with representative offices in Myanmar or which are in the process of obtaining one will be permitted to participate. The licence will be for onshore wholesale banking through a branch, and a call for expressions of interest will be made in early 2016, the Central Bank said. In the last, hotly-contested bidding round, nine foreign banks won licences on October 1 last year, and winners were given a year to prepare operations to meet the approval of the Central Bank.
Banking
OJK invites more players to join branchless banking program The Jakarta Post 5th Jan 2016
The Financial Services Authority (OJK) is planning for more banks to join its campaign to provide financial services without physical branches to boost wider access to banks across the country. The OJK’s branchless banking program, dubbed Laku Pandai, offers banking and financial services to all residents through the help of other parties, such as individual and institutional agents, supported by cell phones and IT facilities. The program is based on the National Strategy of Financial Inclusion (SNKI) launched by the government in June 2012 to help increase financial access in Indonesia, where only 20 percent of the country’s 250 million citizens have access to banks.
RI’s first private credit bureau launched The Jakarta Post 5th Jan 2016
Pefindo Biro Kredit (Pefindo Credit Bureau), the country’s first private credit bureau, has launched operations that will provide enhanced information on customers to banks and financial services firms. Pefindo Biro Kredit president director Ronald T. Andi Kasim said the company had already obtained an operation permit from the Financial Services Authority (OJK) on Dec. 22, 2015, having acquired a principal license in August 2014. “We’ve just received OJK’s announcement letter about our operation permit today [Monday] and we hope that this new industry will greatly help banks and multi-finance companies with conduct customer-checking,” Ronald said at a press conference on Monday.
BSP expands MBOs’ financial inclusion role The Manila Times 5th Jan 2016
Micro-banking offices (MBOs) have been allowed to approve and open deposit accounts for clients with their allowable activities having been expanded as part of the Bangko Sentral ng Pilipinas’ (BSP) financial inclusion efforts. The central bank said on Tuesday that it had recently approved a measure that would enable MBOs to complete the process of account opening, from application up to the acceptance of initial deposit, provided that the necessary controls are in place. MBOs are scaled-down offices that provide a specified range of activities and services, such as the acceptance of micro-deposits, disbursements of micro-loans, selling of microinsurance, purchase of foreign currency, bills payments, government pay-outs and e-money conversion.
Barclays to cut Asia investment banking jobs next week: sources The Straits Times 5th Jan 2016
Barclays will announce investment banking job cuts across Asia next week, including closures in South Korea and Taiwan, sources with direct knowledge of the matter told Reuters. The British bank's latest cost cuts as part of its global restructuring will include corporate finance and advisory staff in South Korea and Taiwan, as well as equities sales and research staff among a total of at least 50 job losses throughout the region. In common with other European lenders, Barclays is facing up to a harsh environment for investment banks in Asia after the region's economies and markets failed to deliver sustained growth after the 2008 financial crisis.
More banks, finance firms allowed to channel govt-backed loans The Jakarta Post 4th Jan 2016
The government is allowing more banks and multi-finance firms to take part in its subsidized loan program in an effort to boost small and micro businesses amid a sluggish economy. “The government has arranged certaiThe government is allowing more banks and multi-finance firms to take part in its subsidized loan program in an effort to boost small and micro businesses amid a sluggish economy. “The government has arranged certain measures to increase participation in the public business credit [KUR] program in 2016, including by adding more banks as providers,” Coordinating Economic Minister Darmin Nasution said recently. In 2015, only three state-owned lenders — Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI) – participated in the KUR program, which failed to meet the government’s target.n measures to increase participation in the public business credit [KUR] program in 2016, including by adding more banks as providers,” Coordinating Economic Minister Darmin Nasution said recently. In 2015, only three state-owned lenders — Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI) – participated in the KUR program, which failed to meet the government’s target.
Banks’ real estate exposure up 23.6% The Manila Times 4th Jan 2016
Philippine banks’ exposure to real estate surged by 23.6 percent year on year as of end-September 2015, data from the Bangko Sentral ng Pilipinas (BSP) showed, with loans accounting for the bulk but also marking a drop with respect to soured transactions. An analyst said the rise in banks’ real estate exposure (REE) could have driven by investors anticipating higher global interest rates. Latest central bank data showed the REE of universal, commercial and thrift banks at P1.432 trillion as of the end of September, up by P273 billion from the P1.159 trillion recorded a year earlier. From the previous quarter, the REE was up 5.4 percent from P1.359 trillion.
How capable are Vietnamese banks? VietNamNet 2nd Jan 2016
An analyst commented that compared with the trade sector, the integration in financial and banking has been going more slowly. The banks in Singapore, for example, have applied Basel III standards, while Vietnamese now apply Basel II. Within the framework of TPP, the biggest challenge for Vietnamese banks would be in the competition for services as TPP allows the banks of 12 TPP member countries to provide banking services across the border. This means that the banks in the US can provide remittance and card services to Vietnamese citizens while there is no need to set up their bank branches in Vietnam. The competition for staff is also believed to be very stiff in the time to come as TPP stipulated that there will be no discrimination in hiring people of different nationalities for high-ranking personnel.
Blessing or curse? A reflection on Indonesian banks ahead of AEC The Jakarta Post 31st Dec 2015
Media tycoon Dahlan Iskan, during his time as state-owned enterprises minister, said that the executives of four state-owned banks did not seem happy with the government’s plan to merge their banks as part of efforts to strengthen competitiveness ahead of ASEAN Economic Community (AEC). “None of them want to lose their job as CEO,” Dahlan told a televised economic talk show in early 2014. Dahlan expressed one of the many concerns that have arisen ahead of the integration of Indonesia into AEC. Local players seem unwilling to beef up their competitiveness.
25 banks to disburse micro loans next year The Jakarta Post 31st Dec 2015
In an effort to develop small and micro businesses, 25 banks have been approved to take part in the government-supported people’s business credit (KUR) micro loan program, with a total target of Rp 120 trillion (US$8.67 billion) loan disbursements next year. This year, only three state-owned banks -- the BRI, the BNI and Bank Mandiri – took part in the program. Coordinating Economic Minister Darmin Nasution said on Thursday that the government had set a target of disbursing Rp 30 trillion in micro loans this year, but total disbursements reach only Rp 21.4 trillion, with 960,424 debtors.
Vietnam’s banking restructuring scheme fruitful, with important targets met Tuoi Tre News 29th Dec 2015
Vietnam’s banking restructuring scheme, launched by the central bank four years ago, has achieved almost all of its important objectives, a senior official of the State Bank of Vietnam (SBV) said at a press conference in Hanoi last week. Solutions adopted to reduce bad debts have taken effect, helping significantly improve credit quality and lower the ratio of non-performing loans to total outstanding loans, SBV Deputy Governor Nguyen Thi Hong said on Thursday last week. The conference was held to review the country’s monetary policy and banking operations in 2015 and map out plans and targets for 2016.
KTB expects quantum leap in SME loans Bangkok Post 28th Dec 2015
Krungthai Bank (KTB) foresees a huge jump in loan growth for small and medium-sized enterprises (SMEs) but flat growth for retail, corporate and government loans next year. Given strong demand, KTB expects at least 25% SME loan growth next year, said Vorapak Tanyawong, president of the country's second-largest lender by assets. The bank's outstanding SME loans surged 30% from the end of last year to 406 billion baht as of Sept 30.
Credit growth expected near 20% next year Viet Nam News 25th Dec 2015
The State Bank of Viet Nam (SBV) yesterday targeted credit growth between 18 per cent and 20 per cent for next year, with possible adjustments depending on the actual situation. At a conference to review the performance of the banking industry in 2015 and prepare for next year, in Ha Noi yesterday, SBV Deputy Governor Nguyen Thi Hong said that the estimate was based on targets of the GDP and inflation approved by the National Assembly. The central bank would ensure an active and flexible monetary policy next year, in close co-ordination with fiscal and other macro policies, to meet the NA's targets of inflation at less than 5 per cent, and economic growth at roughly 6.7 per cent, Hong said.
More may opt for mortgages tied to fixed deposit rates The Straits Times 23rd Dec 2015
The threat of rising interest rates is prompting more home owners to re-finance their mortgages by tying them to fixed deposit rates. This means the repayment rate is directly related to the interest banks pay customers who deposit cash. As any bank customer knows, deposit rates have been at rock-bottom levels for several years, but that can spell stability and lower costs for mortgage holders. Fixing home loans to bank deposit rates is a relatively new option here, with only DBS Bank and OCBC Bank offering the option. Mortgages are usually pegged to fixed rates or float in step with the Singapore interbank offered rate (Sibor) or swap offer rate (SOR).
People trust banking system thanks to improved policies Viet Nam News 19th Dec 2015
Improved monetary policies in the past five years have helped increase the trust of people in the banking system, a conference heard yesterday. At the conference on the management and regulation of monetary policies from 2011 to 2015, and its effects on the economy, held in Ha Noi yesterday, participants said that for the past five years, the monetary, fiscal and other economic policies have contributed in controlling inflation, stabilising the macro-economy, supporting economic growth and ensuring the safety of the banking system.
Annual interest rate on dollar deposits cut to zero percent The Voice of Vietnam 18th Dec 2015
The maximum interest rate paid to individuals depositing US dollars in local banks will be zero percent per year from December 18, the central bank announced. Organisations, excluding credit institutions or branches of foreign banks, will also not receive interest for dollar accounts. This notice was confirmed in Decision No.2589/QD-NHNN released on late December 17. Prior to the change, the maximum interest rate for individuals was 0.25% per annum. The central bank said the decision was made to continue implementing concerted measures to increase the value of Vietnam dong and curb the dollarisation of the economy.
Banking sector still tied up in red tape Nikkei 17th Dec 2015
While manufacturers gush over the abolition of tariffs within the ASEAN Economic Community, companies in the service sector see relatively little reason for optimism. Banks, in particular, are unhappy with the pace of progress. Yes, the AEC aims to free up the flow of capital. Yet after a long preparatory period, the establishment of the community is close at hand and banks are still looking for tangible benefits. "I am not seeing any signs on the horizon that the situation is going to change very rapidly," Piyush Gupta, CEO of Singapore's DBS Group Holdings, said at the end of August. "Banking is the most protected industry," he added.
Are local banks safe from the China slowdown? Singapore Business Review 16th Dec 2015
Non-performing Chinese assets will rise. Singapore banks are protected from China’s slowdown because of their selective lending to mainland corporates, according to a report by Fitch. Fitch believes that the three largest banks’ credit profiles will remain sound despite a more challenging operating environment, as they are supported by strong loss-absorption cushions in the form of healthy pre-provision profitability and capital adequacy, together with policy buffers introduced by proactive and prudent regulators. “Banks’ selective lending in China – focusing on SOEs, large corporates and short-term trade loans – is another protection,” Fitch said. However, Fitch warns that the average non-performing asset (NPA) ratio of the three Singapore banks will rise modestly to 1.1% by end-2015 and 1.2% by end-2016.
Myanmar to grant new foreign banking licences in 2016 Reuters 16th Dec 2015
Myanmar will open a second roundof foreign bank licensing early next year, its central banksaid, in the hopes of attracting further foreign investment intoan economy emerging from five decades of military rule andisolation. Banks from countries that have already been granted licenses- Australia, Japan, Malaysia, China, Singapore, and Thailand -will not be eligible for the new licenses.
Wholly-foreign owned banks land in Vietnam Viet Nam Net 15th Dec 2015
Foreign banks are flocking to Vietnam. Specifically, this year Kasikorn Bank (Thailand) has opened two representative offices in Hanoi and HCM City. Public Bank Berhad (Malaysia) has completed procedures to become the 6th wholly-foreign owned bank in Vietnam. DBS Bank (Singapore) and Maybank (Malaysia) have opened more branches in Vietnam. UOB Bank (Singapore) has asked to upgrade from a branch into a wholly-foreign owned bank.
E-Payments
KBank keeps a finger on digital pulse with new unit Bangkok Post 4th Jan 2016
Kasikornbank (KBank) is making a further push into digital banking by setting up a new subsidiary, Kasikorn Business-Technology Group (KBTG), with president Teeranun Srihong taking charge. The new unit's incorporation is aimed at capitalising on the fast-growing online banking segment after the government's national e-payment system won cabinet approval on Dec 22. KBTG had been upgraded from the bank's IT unit with total staff of around 600. It plans to hire more employees from the business sector in addition to IT employees, said Mr Teeranun, who is also the new unit's chairman.
Retailers shouldn’t impose credit card surcharges to consumers: AMBD The Brunei Times 1st Jan 2016
The Autoriti Monetari Brunei Darussalam (AMBD) has issued a notice reminding the public that merchants need to shoulder the payment for card terminals and not pass on the additional cost to customers by imposing surcharges. The country’s financial regulator warned retailers that imposing surcharges on credit or debit card purchases is illegal. The practice can lead to punitive action, such as the revocation of the services of card terminals. AMBD issued this statement yesterday in response to a letter sent to The Brunei Times wherein the letter sender expressed concern that retailers and merchants continue to practice the use of credit-card surcharges.
Mobile money transfer heats up The Phnom Penh Post 29th Dec 2015
True Money, a new entrant to Cambodia’s growing mobile money-transfer market, said yesterday it will start operations across the Kingdom from January 1, with the first phase focusing only on local transfers, according to a company official. The money-transfer service, which comes under the Thailand-based Charoen Pokphand Group conglomerate, has invested $15 million under its first phase and will have 5,000 agents across the country, said Kong Mean, commercial director at True Money. “This investment is only a starting point. We plan to expand to international money transfers soon, and in 2016 we will complete [our service expansion] in all ASEAN countries”, he added.
BSN introduces first Virtual Teller Machine in Malaysia New Straits Times 28th Dec 2015
BANK Nasional (BSN) recently became the pioneer bank in Malaysia to introduce the unique Virtual Teller Machine (VTM) service. The VTM allows its bank tellers in Malaysia to serve customers in multiple other locations remotely and concurrently via live virtual banking operation. The launch was officiated by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi accompanied by BSN chairman Tan Sri Abu Bakar Abdullah and BSN chief executive Datuk Adinan Maning.
Ooredoo Selects GoSwiff as Mobile Payments Partner Myanmar Business Today 26th Dec 2015
Qatari mobile carrier Ooredoo said it has selected GoSwiff, a Singaporean mobile payments and marketing solutions provider, as its partner for the implementation of its international mPOS (mobile point of sale) platform. The partnership will cover nine markets – Myanmar, Algeria, Indonesia, Iraq, Kuwait, Maldives, Oman, Qatar and Tunisia. The deal includes recruiting merchants to the platform, from large corporates to micro-merchants. According to the agreement, GoSwiff will provide an integrated multi-payment solution including mPOS, mobile money and airtime top-up for Ooredoo’s merchant clients.
State banks integrate ATMs in cost-cutting move to help customers The Jakarta Post 22nd Dec 2015
Four state-owned banks launched on Monday their new integrated ATM network, which will help them reduce operating costs so as to increase efficiency and strengthen their presence in the regional market. The ATM Himbara Link is a joint effort by state-owned lenders; Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN) incorporated in the State-Owned Banks Association (Himbara).
BSP governor opens cybersecurity summit Business Mirror 22nd Dec 2015
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. (center) leads the ceremonial ribbon cutting to open the Cyber Security Summit and Expo for the financial services industry held recently at the BSP headquarters in Manila. The summit featured international and local experts who discussed the rapidly evolving and growing threats to the security of electronic financial transactions and how banks and other financial organizations can fight these threats. The expo showcased the latest cybersecurity solutions available to the industry. The summit and expo were coorganized by the BSP, electronic-banking network BancNet, and the Information Security Officers Group. Assisting Tetangco are (from left) BancNet President Ricardo Chua, BSP Deputy Governor Nestor Espenilla Jr., BancNet General Manager Aristeo Zafra Jr. and Information Security Officers Group President Joey Regala.
Vietnam seeks to reduce cash transactions The Nation 18th Dec 2015
Ministries and businesses are being urged to reduce the prevalence of cash payments and create conditions that encourage people to use electronic payment systems. Speaking at the Vietnam E-Payment Forum 2015, Deputy Prime Minister Vu Duc Dam said that although Vietnam's e-commerce market has seen recent growth, in-cash habits in Vietnam are still overwhelmingly popular, accounting for 65 per cent of total payment transactions. "This habit has hampered the country's economic development as well as people's living standards," he said. Dam highlighted how other countries' electronic payment behaviour accounts for 90 per cent of their total payment values and helped increase their GDP by about 1 per cent.
Cash payment habit still popular Vietnam Investment Review 16th Dec 2015
Speaking at the Viet Nam E-Payment Forum 2015 held in Ha Noi, Dam said that although Viet Nam's e-commerce market has seen recent growth, in-cash habits in Viet Nam is still overwhelmingly popular, accounting for 65 per cent of total payment transactions. "This habit has hampered the country's economic development as well as people's living standards," he said. Dam highlighted how other countries' electronic payment behaviour accounts for 90 per cent of their total payment values and helped increase their GDP by about 1 per cent. With more than 120 million mobile subscriptions and more than 40 million Internet users in Viet Nam at present, electronic transaction processes have a lot of potential, he said.
Insurance
Register for unclaimed life insurance proceeds launched Channel News Asia 4th Jan 2016
Members of the public who wish to find out if they have unclaimed life insurance proceeds now have a register to do so. Announced by the Life Insurance Association, Singapore (LIA) on Monday (Jan 4), the “LIA Register of Unclaimed Life Insurance Proceeds” is "for members of the public to search and contact the respective insurer or insurers directly should they have policies with unclaimed death proceeds of deceased relations or unclaimed maturity proceeds that have been outstanding for more than 12 months".
Insurers urged to tap digital technology amid challenges faced by industry The Nation 4th Jan 2016
The slowing pace of economic growth and a decline in auto sales over the past two years gave the insurance industry a critical lesson that it must shift its business by leveraging digital technology to realise underwriting profits. For the non-life sector, auto insurance plays a critical role. The sector enjoyed premium-income growth of 28 per cent in 2012 and 13.15 per cent in 2013 thanks to the previous elected government's first-car-buyer tax-break scheme. Auto sales in 2014 and 2015 fell sharply because of the market saturation resulting from the scheme. The non-life insurance industry during those years witnessed growth of 1.13 and 2 per cent respectively.
RI’s insurance industry pins its hopes on 2016 The Jakarta Post 4th Jan 2016
The domestic insurance industry and financial regulators expect insurers to maintain premium revenue growth and improve investment next year, as volatility in both stock and bond markets had previously affected performance. The Financial Services Authority (OJK) commissioner for non-banking financial institutions, Firdaus Djaelani, said that the agency projected that the domestic insurance industry would experience an improvement in 2016 thanks to a positive economic growth outlook. “We have found that, among insurers, there is a general assumption that the previous global uncertainty has started to stabilize and that next year will show an improvement,” Firdaus said recently.
Myanmar seen as promising market for insurance The Nation 4th Jan 2016
The Financial Services Agency and Japanese insurers have been extending support to Myanmar in developing its insurance market, with an eye on the Southeast Asian nation’s possible opening of the market to foreign companies in the future. The FSA has been working with both life insurers and general insurers in supporting Myanmar, which is likely to achieve high economic growth. The agency believes that Myanmar will keep its open stance toward foreign investment even after next year's planned handover of power to the Aung San Suu Kyi-led National League for Democracy.
PNB, Allianz form bancassurance venture Business Mirror 22nd Dec 2015
Philippine National Bank (PNB) has sold its 51-percent stake in life insurer PNB Life to Munich-based Allianz S.E. to form a joint venture called Allianz PNB Life Insurance Inc. The pact is a 15-year bancassurance agreement with Allianz, one of the strongest financial services company offering property and casualty insurance, life and health insurance, as well as asset management. Under the terms of the agreement, Allianz acquired 51 percent and management control of PNB Life, the 10th-largest life insurance company in the Philippines.
Government merges two state-owned reinsurers The Jakarta Post 21st Dec 2015
State-owned reinsurance firm Reasuransi Umum Indonesia (RUI) has been merged into its counterpart Reasuransi Indonesia Utama (Indonesia Re) as part of the government’s drive to establish a unified national reinsurer. State-Owned Enterprises Minister Rini Soemarno said the merger, based on a 2013 policy of combining related state-owned enterprises to reduce administrative overhead, marked a “historic moment” in the country’s reinsurance industry. The merger was expected to pave a way for the establishment of a local giant reinsurer that would be able to compete at the regional level, Rini said during the launch on Friday.
Vietnam: 2015 represents insurance industry's best showing in 5 years Asia Insurance Review 18th Dec 2015
The Vietnamese insurance market has this year achieved its best performance in five years, growing at nearly 22% and earning revenue of over VND68.3 trillion (US$3.1 billion), according to the head of the insurance regulator Mr Phung Ngoc Khanh, Director General of the Insurance Supervisory Authority, speaking at an insurance conference, said that non-life premiums this year are expected to reach nearly VND31.4 trillion (US$1.4 billion), an increase of 14% year-on-year, reported Viet Nam News. Life insurance premiums would total VND37 trillion this year, a surge of nearly 30% over 2014.
Muang Thai Life to expand into Cambodia in early 2016 The Nation 18th Dec 2015
Muang Thai Life Assurance (MTL) aims to open its first life-insurance business outside the country in Cambodia early next year. Sara Lamsam, president and chief executive officer, said yesterday that the company has formed a 49:51 joint venture called Sovannaphum Life Assurance with its partner Canadia Investment Holding, the holding company of Canadia Bank, Cambodia's second-largest bank. The JV, with registered capital of US$7 million, is applying for a life-insurance licence in Cambodia, which it expects to be granted early next year. MTL hopes to start operating in the period.
Singapore: 1 in 7 smaller firms lack business insurance totally Asia Insurance Review 17th Dec 2015
As many as in one in seven smaller companies in Singapore do not have any business insurance at all with most small and medium-sized enterprises (SMEs) in Singapore remaining underprepared for dealing with significant business risks and threats, according to a survey by global insurer QBE. The 1 in 7 ratio for smaller companies, defined as SMEs with 5-20 staff or annual revenue of less than S$1 million (US$710,000), represents around 21,183 firms when extrapolated across Singapore. There is a prevailing perception among the majority of SMEs that insurance is a ‘commodity’ product, where a basic level of cover is perceived to be sufficient, said QBE.
General Insurance Industry Likely To Pick Up Next Year Bernama 16th Dec 2015
The general insurance industry is expected to pick up in 2016, especially in the first half, said Malaysian Insurance Institute (MII) Chief Executive Officer (CEO), Datuk Syed Moheeb. He said some people had been holding back the purchase of new cars for at least two years. "Their old cars need to be replaced, so the industry is going to pick up," he told reporters after witnessing the signing of a memorandum of understanding between MII and Allianz General Insurance Bhd here today. General Insurance Association of Malaysia (PIAM) CEO, Mark Lim Kian Wei, said despite a moderate slowdown, the industry still maintained continuous grow. "The gross written premiums slowed down in the first half of 2015 and we hoped they will pick up in the last quarter of this year," he said. In August, PIAM had revised the growth for the gross written premiums to three to four per cent for 2015 from 5.5 per cent to 6.5 per cent previously. Meanwhile, Allianz General CEO, Zakri Khir, hoped the sector's growth would reach about four per cent next year. "Usually, it (the sector) grows in tandem with the gross domestic product (GDP), sometimes it grows even better than that.
Trend in new premiums positive again despite economic slowdown The Jakarta Post 15th Dec 2015
Despite the economic slowdown, new premium income at the country’s life insurance companies bounced back during the first nine months of this year after declining by nearly 10 percent last year. Indonesian Life Insurance Association (AAJI) chairman Hendrisman Rahim said in Jakarta on Monday that the group recorded 16.7 percent growth in new premium income to Rp 57.60 trillion (US$4.1 billion) in the Jan-Sept period this year from about Rp 49.35 trillion in the same period last year. The growth in new premiums this year is in stark contrast to the performance in the same period last year, during which new premiums went down by 9.6 percent year-on-year (yoy) to Rp 49.35 trillion from Rp 54.58 trillion.
Life Insurers Shift Fund to Properties, Time Deposits After Shock in Stocks The Jakarta Globe 15th Dec 2015
Indonesian life insurers have shifted investment allocations to mutual funds, properties and time deposits after market volatility led to large losses in investment revenue. Insurers booked total losses of Rp 15.9 trillion ($1.13 billion) from investments in the second quarter of 2015, compared to Rp 30.21 trillion in the same period a year ago, according to the Indonesian Association of Life Insurers, or AAJI. AAJI chairman Hendrisman Rahim said the drop was caused by volatility in the stock market, exacerbated by the rupiah’s decline against the US dollar. “That’s when investment revenues started falling,” he said on Monday. The rupiah has lost 13 percent of its value against the greenback this year, trading at 14,076 on Monday.
Market Regulation
SGX unveils step-by-step guidelines for Mainboard firms seeking to transfer to Catalist Singapore Business Review 5th Jan 2016
Mainboard-listed firms which seek to transfer to the Catalist board can do so as long as they follow SGX rules and undergo a review, the regulator said in a column. The Catalist board provides greater flexibility for a company to raise funds either to implement its growth strategy or to improve its financials. Mainboard firms which seek to transfer to the Catalist are usually those which have difficulty meeting the Minimum Trading Price (MTP) rule or those which have been placed on the Watch-list after failing to meet financial entry criteria.
New rules laid out for foreign financiers Vietnam Investment Review 5th Jan 2016
Foreign credit institutions intending to contribute to establishing non-banking financial companies will be required to have a minimum US$10 billion of assets at the end of the previous year as of February 8. Under Circular 30/2015/TT-NHNN recently issued by the State Bank of Viet Nam, these institutions also have to operate profitably for three consecutive financial years prior to the year they file for licensing. Meanwhile, in order to be eligible to become a founding member of a non-banking financial establishment, domestic enterprises must possess at least VND500 billion ($22 million) worth of ownership capital and VND1 trillion ($44 million) worth of assets in three consecutive financial years, along with meeting other requirements related to safe financial operation.
SGX to seek feedback for sustainability report guidelines The Straits Times 5th Jan 2016
Singapore Exchange (SGX) is tabling a set of guidelines that will ask listed companies here to conduct sustainability reporting - and to explain their failure to do so - starting from 2018. The "comply or explain" guidelines require companies to identify risks involving environmental, social and governance (ESG) factors in a framework selected by the firms. These are to be disclosed in an annual report which will be published within five months of the financial year end. The companies must also set out policies and performance relevant to the issues disclosed in the report, while putting forth targets to achieve for the following year, SGX said on Tuesday (Jan 5). The bourse is now seeking feedback for these guidelines in a public consultation from now until Feb 5.
SBV drafting policy to help local industries access loans Viet Nam News 4th Jan 2016
State Bank of Viet Nam (SBV) is drafting a circular guiding credit policy to make it easier for local supporting industries to access loans and make them more competitive during integration. The Decree No 111/2015/ND-CP released in November, with regard to the development of support industries states that they can access assistance, funds, and other sources for research, development, and training. The support industries include textiles and garments, leather and footwear, electronics, and automobile manufacture and assembly, in addition to mechanical engineering and products of support industries for hi-tech, and individuals and organisations conducting production research and developing products on the priority list.
SBV’s statement on new exchange rate raises concerns VietNamNet 4th Jan 2016
The big change in the exchange rate, if it is made, would cause many depositors to withdraw dollar deposits before maturity, experts have warned, which would create market chaos. The Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh, in an interview to Tuoi Tre, said SBV was planning a new foreign exchange policy under which people would have to pay a fee for deposits in foreign currencies, while dollar depositors would receive dong when they get deposits back instead of dollars. “This is not good news for the market,” the representative of an investment fund told Thoi Bao Kinh Te Sai Gon. “This would cause worries especially to foreign investors, because they don’t know how much money they have,” he said. “It is because they have to receive dong instead of foreign currencies, while the dong price is defined by the State Bank which is unpredictable.”
OJK starts listing ’important’ banks The Jakarta Post 4th Jan 2016
The Financial Services Authority (OJK) has postponed the completion of a list of the country’s major banks pending the endorsement of a financial system bill by the House of Representatives sometime in early 2016. The financial authority is preparing the list of the banks, known as domestic systemically important banks (DSIB), while at the same time drafting a regulation requiring those lenders to increase their capital. OJK chairman Muliaman D. Hadad said the list of the important lenders needed to await the passing of the Financial System Safety Net (JPSK) bill. The government and the House are expected to resume deliberations on the bill soon.
Indonesia's Conventional Banks to Spin Off Islamic Units by 2024 Indonesia Investments 4th Jan 2016
Indonesia's Financial Services Authority (OJK), the government agency that regulates and supervises the nation's financial services sector, is preparing a new regulation that requires conventional financial institutions in Indonesia to spin off their Islamic financial units before 17 October 2024. Islamic finance or Islamic banking is a type of banking that is in accordance to the principles of sharia (Islamic law). Based on the regulation, those financial institutions that generate at least 50 percent of their capital through Islamic finance have to comply with the new rule.
Vietnam begins setting central rate for VND-USD transactions in de-dollarization bid Vietnam Investment Review 1st Jan 2016
The new policy, unveiled by the central bank late last year and officially taking effect on Monday, replaced a fixed VND-USD rate, which the SBV adjusted only occasionally in the past. Monday’s central rate, VND21,896, is VND6 higher than the erstwhile fixed rate of VND21,890. With the VND-USD trading band kept at three percent, banks in Vietnam are allowed to trade the greenback within a range of VND21,239 to VND22,553 until a new rate is set tomorrow. SBV Governor Nguyen Van Binh said late December that the fixed rate would be replaced by the central rate to manage the forex market more flexibly, at a time when people are still hoarding the foreign currency, going against the central bank’s de-dollarization plan. The central bank is also expected to slash interest on deposits in U.S. dollars to even below the current rate of zero percent to continue its de-dollarization drive.
Old bills no longer valid for purchases The Manila Times 31st Dec 2015
New Design Series (NDS) banknotes that have been in circulation for almost three decades can no longer be used for purchases starting today in line with a central bank demonetization program. The old banknotes, which consist of 5-, 10-, 20-, 50-, 100-, 200-, 500- and 1,000-peso denominations, were first issued on June 12, 1985. They can still be exchanged at authorized financial institutions for the New Generation Currency (NGC) series but will become worthless beginning 2017. Government institutions holding old banknotes that cannot be exchanged during the prescribed period, such as money being used as evidence in a lawsuit, will have to request the BSP Cash Department in writing, also within the period of exchange, for a special exchange arrangement.
Foreign venture capital funds obliged to join with local companies The Jakarta Post 30th Dec 2015
The Financial Services Authority (OJK) plans to coordinate foreign venture capital funds operating in Indonesia by obliging them to cooperate with local companies in the future, in a bid to develop local entities amid a huge market. OJK commissioner Firdaus Djaelani welcomed the fast-growing investment environment that venture capital funds had brought to support startup companies in Indonesia. However, he expressed his concern about the limited market that local venture capital funds could win.
Settlement of stock trades cut one day Viet Nam News 29th Dec 2015
The settlement cycle for securities has been officially reduced from the current three business days (T+3) to two (T+2) after the trade is executed, effective from January 1, 2016. Meanwhile, the settlement period for the bond trade is the next business day following the trade, as referred to as T+1. According to Decision 112/QD-VSD on the regulations of clearance and settlement of securities transactions, issued on December 18 by the Vietnam Securities Depository Centre (VSD), the settlement time will shorten from 9am on T+3 to 4pm on T+2, 30 minutes earlier than the original plan of 4.30pm on T+2.
OJK Sets New Capital Norms for Financial Conglomerates The Jakarta Globe 28th Dec 2015
Indonesia's financial regulator has changed requirements around how the country's banking and financial services conglomerates report their capital buffers in an effort to make capital risks more transparent. Under the new rules, a conglomerate's aggregate net equity must be at least as much as the total required regulatory capital of each of its business units, Indonesia's Financial Services Authority (OJK) said in a document posted on its website last week. Most of Indonesia's financial assets are managed by conglomerates and OJK has previously said they need to tighten regulation for those firms as they have a systemic impact to the sector. Previously, financial conglomerates did not have aggregate capital requirements. As part of capital calculations, the OJK will require conglomerates to measure net equity as the total capital of the parent company and its units, minus the injection or fund placement from parent companies to the units.
Government restricts forex to banks Myanmar Times 23rd Dec 2015
Exporters and importers must use banks for foreign currency transactions, according to new government regulations. The new rules would be another step toward a functioning interbank currency market, but bankers are doubtful they can be immediately enforced. The government amended its 2012 Foreign Exchange Management Law last week to prevent exporters from selling foreign currency. The amendment also requires lenders with foreign exchange licences to check that exporters with foreign currency accounts deposit export earnings in their bank account. Any discrepancies must be reported to the Central Bank.
Easing financial regulations will benefit banks and consumers The Brunei Times 21st Dec 2015
When the country’s central bank, the Autoriti Monetari Brunei Darussalam (AMBD) loosened up several financing regulations last month, many wondered if the move would go against the national agenda of reducing household debts and promoting financial literacy. In a statement issued last month, AMBD said credit card accounts secured by fixed deposits won’t be included in the computation of the borrower’s TDSR. The AMBD is also allowing an individual to restructure or top up his/her loan after 50 per cent of the original tenor has lapsed subject to certain conditions on the borrower’s payment history. Banks may also offer credit cards without requiring their clients to assign their salary or place a fixed deposit under lien to the credit card issuing bank.
OJK to stop using state funds next year The Jakarta Post 18th Dec 2015
The House of Representatives has approved the 2016 budget proposed by the Financial Services Authority (OJK), including stipulations that it will no longer use state funds as fees collected from financial companies will be enough to support the agency’s activities. During a hearing on Wednesday, House Commission XI approved the OJK’s Rp 3.93 trillion (US$281 million) budget proposal for 2016, a 9.8 percent increase from this year’s allocation of Rp 3.58 trillion. The hearing session, attended by 31 lawmakers from 10 factions, was the conclusion of prolonged discussions of two committees, which have been reviewing the proposal’s revenues and expenses since June.
State of Bank of Vietnam adjusts maximum USD mobilizing interest rates The Asian Banker 18th Dec 2015
In order to continue implementing consistent measures of preventing dollarization, and changing the relation of mobilizing and lending in foreign currencies into the relation of buying and selling in foreign currencies, the State Bank of Vietnam (SBV) issued Decision No. 2589/QĐ-NHNN on December 17, 2015 on the maximum USD mobilizing interest rates for entities and individuals with credit institutions and foreign bank branches prescribed in Circular No.06/2014/TT-NHNN dated March 17, 2014. Accordingly, the maximum USD mobilizing interest rate for entities (excluding credit institutions and foreign bank branches) is 0% p.a and the maximum USD mobilizing interest rate for individuals is 0.% p.a.
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