| Market Development
Interbank specialist eyes PH expansion The Manila Times 19th Jan 2016
The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is looking to expand in the Philippines. In a statement, SWIFT said it would help the connectivity and optimization of operations of banks in the Philippines through a new initiative intended for the Filipino market called Philippines Cooperative-to-Bank (C2B) Initiative. The C2B will provide a platform to help banks and financial institutions in the Philippines improve consolidated cash visibility, auto-reconciliation of bank statements, standardized payment formats supporting ERP systems, digital confirmation of treasury transactions (for foreign exchange and money markets), as well as a single platform of communication with multiple banking partners.
Banks tap into technology as they prepare for the future Channel News Asia 19th Jan 2016
Banks in the Republic are gearing up for the future, tapping into technology to provide more inclusive services and improve the customer experience. As consumer preferences evolve, lenders said it has led to a shift in demand for new skills and infrastructure at the banks. For example, POSB automated tellers machines (ATMs) are now more friendly for the visually handicapped, with new audio and Braille instructions recently added to 86 of them in Singapore. DBS Bank said it is among measures to provide more inclusive services as Singapore's demographics evolve.
Govt insists on opening financial services for AEC The Jakarta Post 19th Jan 2016
The government has called on the House of Representatives to ratify the sixth package of protocols for the ASEAN Framework Agreement on Services (AFAS), which obliges ASEAN members to liberalize several sectors for each other, including financial services. The protocols are among the ASEAN programs that are gradually opening services among its members in relation to the ASEAN Economic Community (AEC). The House’s approval is expected before April, said Finance Minister Bambang Brodjonegoro.
Regus sees better business outside Metro Manila Business Mirror 18th Jan 2016
Global workplace provider Regus sees more growth in its business outside Metro Manila, as it embarks on an aggressive expansion plan in key countries, including the Philippines. Congestion and competition in Metro Manila’s major cities are encouraging the space supplier to look at the areas at the cusp of growth, beyond the borders of the bustling metropolis. “We’re looking at places outside of Metro Manila. I see at the moment several tier-2 cities: Zamboanga, General Santos, Davao, Cagayan de Oro, Naga, expanding more in Cebu, Bacolod , Iloilo. In addition to Clark, there’s Subic and Baguio,” said Lars Wittig, country manager of Regus Philippines.
Vietnam’s stock market loses $2bn in capitalization during 2016’s first six sessions Tuoi Tre News 14th Jan 2016
Vietnam’s stock market saw VND46.16 trillion (US$2.05 billion) worth of capitalization vanish into thin air in the first six sessions this year. The capitalization of the southern bourse, the Ho Chi Minh City Stock Exchange (HoSE), fell by VND39.66 trillion ($1.78 billion) against the end of 2015.
Proposal to set up CLMV fund before cabinet soon: Sitharaman Web India 123 12th Jan 2016
Union Commerce and Industry Minister Nirmala Sitharaman on Tuesday said a proposal for setting up a Project Development Fund to boost investments in Cambodia, Laos, Myanmar and Vietnam (CLMV) will be submitted to the cabinet soon. Speaking at the 3rd India-CLMV Business Conclave held at Mamallapuram near here, she said the proposal will reach the union cabinet and get the clearance next month. The fund is expected to have a corpus of Rs.500 crore and is part of the Act East policy. The idea is to assist Indian companies to set up manufacturing base in the CLMV countries.
No surprises yet for BoT boss Bangkok Post 11th Jan 2016
After three months at the helm of the Bank of Thailand, Veerathai Santiprabhob spoke to the Bangkok Post about steering the economy during such a difficult time. One key item is bilateral negotiations with Malaysia and Indonesia on reciprocity under the Qualified Asean Banking (QAB) framework. Those guidelines are expected to become clearer by mid-year. "We are interested in clarifying the QAB framework, which would allow Thai banks and banks in our negotiating partners to gain easier access to each other's financial markets," Mr Veerathai said. The bilateral arrangement is part of an umbrella agreement for the 10-member bloc called the Asean Banking Integration Framework (ABIF).
Govt to form committee to develop sharia finance industry The Jakarta Post 6th Jan 2016
The government decided on Tuesday to immediately establish a new national committee to develop the sharia financial industry, which still holds a small market share. The committee is to be led by President Joko “Jokowi” Widodo and will comprise a number of relevant ministers. The Indonesian Ulema Council (MUI) will act as its advisory board. Among the committee’s tasks is to harmonize laws, National Development Planning Minister Sofyan Djalil said. “Matters related to wakaf [money for religious purposes] and alms, as well as raising awareness of the products, will also be pushed by the committee,” Sofyan told a press conference after the meeting at the Presidential Office.
Asset Management
OJK issues rules on venture capital for small enterprises, startups The Jakarta Post 20th Jan 2016
The Financial Services Authority (OJK) has issued a package of regulations on venture capital to support alternative financing for the country’s small enterprises and startups. The financial regulator issued on Dec. 31 last year four regulations on venture capital that require investors or companies wishing to finance traditional and non-traditional small businesses to establish legal business entities. The policies regulate four matters related to the venture capital sector, namely licensing and institutional matters, doing business, good corporate governance as well as direct supervision by the OJK.
Fund management industry still growing: IMAS Channel News Asia 19th Jan 2016
Concerns over China have resulted in an outflow of funds from Asia, hurting fund management firms based in the Republic. However, the Investment Management Association of Singapore (IMAS) has said the industry is still growing, as more fund managers set up operations in Singapore. Citing a recent survey, IMAS said 85.1 per cent of fund managers listed China's weakening economy as one of their top three concerns. IMAS added that the industry faces increasing regulatory obligations which are costly, as well as rising competition from other financial centres.
Ringgit to stabilise at 4.40 to US dollar, says HSBC The Malaysian Insider 19th Jan 2016
The ringgit is expected to stabilise to the 4.40 level against the US dollar this year, said HSBC Hong Kong's head of foreign exchange research for Asia-Pacific, Paul Mackel. However, a key risk factor for the ringgit is weaker commodity prices. "China's renminbi is also an important part of the story. Its volatility, change in behaviour and nature. "I think it is a cause of concern for many, as acknowledged in the last few weeks," Mackel told a media briefing on economic and foreign exchange outlook today. Mackel was also of the view that the ringgit remains "fundamentally undervalued".
SECM Warns Against Illegal Trade as Stock Exchange Readies for Business The Irrawaddy 15th Jan 2016
RANGOON — The Securities and Exchange Commission of Myanmar (SECM) issued a warning on Wednesday against illegal trading through unofficial channels. An announcement published in state-run daily The Global New Light of Myanmar cautioned that action will be taken against those caught selling stocks through illegal or “non-transparent means,” including over social media sites. The Yangon Stock Exchange (YSX) launched in December with six listed companies, but shares are not yet for sale. Trading is expected to begin in March, pending settlement of outstanding issues with the bourse’s underwriters.
Bank Indonesia Says Liquidity May Tighten Despite Policy Easing Jakarta Globe 15th Jan 2016
The governor of Indonesia's central bank said on Friday there should be room to loosen monetary policy further, but cautioned that lenders might face a near-term liquidity squeeze due to increased government bond issues. On Thursday, Bank Indonesia (BI) cut its benchmark interest rate for the first time in 11 months by 25 basis points to 7.25 percent. The bank has previously reduced commercial lenders' reserve requirements and relaxed some lending rules in order to lift up sagging economic growth. But despite the rate cut, BI said market liquidity could still tighten because of "government operations" and slower growth of banks' deposits. "In general, the condition is a bit tighter," said Governor Agus Martowardojo, referring to banking liquidity. "BI will respond with monetary operation to ensure enough liquidity is in the market. We can do monetary expansion if needed."
Myanmar Opens New Stock Exchange – Beginning of New Economic Era? ASEAN Briefing 13th Jan 2016
On December 9, 2015, Myanmar’s new stock exchange – the Yangon Stock Exchange (YSX) – opened with big expectations. However, despite the grand opening and the US $24 million investment, the bourse will not be operational until February of 2016, or later. So is this really the beginning of a new economic era, or is the new move by the administration being rushed before the country is ready?
Vietnamese central bank stops currency devaluation The Brunei Times 13th Jan 2016
VIETNAMESE central bank yesterday adjusted down the central rate between Vietnamese dong (VND) and US dollar (USD), stopping the devaluation of the currency since the beginning of 2016. Accordingly, the State Bank of Vietnam (SBV) quoted the central rate of VND versus USD on Friday at 21,909 VND for one USD, a decrease of 10 VND compared to Thursday. During the week since the SBV started implementing the daily adjustment, before falling on Friday, the central rate has been increased on Monday, Tuesday and Thursday, while it remained unchanged on Wednesday.
Homegrown Start-Up Modalku Aims to Help SMEs With Crowdfunded Loans The Jakarta Globe 13th Jan 2016
Jakarta. Modalku, a homegrown marketplace for peer-to-peer lending, wants to give Indonesia's small-and medium enterprises more access to funding through loans pooled from crowdfunding, joining a slew of startups financial services startups, also known as fintech, that have popped up in the past year. The start-up officially launched its services on Wednesday, offering businesses swift access to non-collateral loans with interest rates between 15 percent and 20 percent at the click of a button. At the same time, it's promising and annual return of up to 18 percent to individual lenders who participate in crowdfunding the SMEs through the online platform.
Banking
Khazanah invests in China’s WeLab, eyes growing consumer loan market The Star Online 20th Jan 2016
Khazanah Nasional Bhd has invested in WeLab, one of China’s largest mobile lending and credit analytics platforms, to gain exposure to the country’s growing consumer loan market. The sovereign wealth fund said on Wednesday its special purpose vehicle, Bukit Galla Investments Ltd. and several other parties were in a US$160mil Series B fundraising exercise. Khazanah managing director, Tan Sri Azman Mokhtar said the investment in WeLab continued to strengthen Khazanah’s presence in the innovation and technology sector internationally. “WeLab’s business model is attractive because the company cooperates with financial institutions to provide banking solutions on a purely online and mobile platform, while providing affordable credit to people who are unable to obtain financing through traditional channels,” he said.
With AIIB, Nation Diversifies Funding Options The Cambodia Daily 20th Jan 2016
Though it’s extremely early days, experts this week welcomed Cambodia’s membership to the nascent China-led Asian Infrastructure Investment Bank (AIIB), saying it would provide much-needed diversity of funding for the nation’s infrastructure and connectivity needs. Launched in Beijing last weekend, the multilateral development bank aims to support infrastructure growth in the Asia-Pacific region through the provision of loans, and supports China’s ambitious “One Belt, One Road” initiative to boost trade and connectivity across the Eurasian landmass.
Liquidity to affect lending rate moves by banks The Jakarta Post 19th Jan 2016
Despite the recent cut in Bank Indonesia’s (BI) interest rates, domestic lenders will not rush to lower their lending rates as they will first monitor costs of funds and liquidity in the market, according to bankers and analysts. Bankers contacted by The Jakarta Post said they were still in wait-and-see mode as liquidity in the banking system was expected to tighten as a result of a government bond-issuance program and the low growth in third-party funds since last year. Bank Tabungan Negara (BTN) finance and treasury director Iman Nugroho Soeko said the BI rate cut would not necessarily lower the cost of funds for the domestic banking industry as lenders were still anticipating the impact of the government’s front-loading strategy in bond issuance.
StanChart urges Thai customers to seize China’s RQFII The Nation 19th Jan 2016
Standard Chartered Bank (Thai) is encouraging its commercial and institutional customers to seize the opportunity presented by the opening of direct access to the onshore securities market in China as renminbi qualified foreign institutional investors. China has granted a 50-billion-yuan (Bt273 billion) quota to Thailand to invest in yuan-denominated securities in China under the RQFII programme, Yuthadej Putamanonda, managing director and head of transaction banking, said yesterday. That indicates the deepening of financial cooperation between Thailand and China, which investors should welcome and prepare to seize the benefits of this great opportunity, he said. The programme's flexibility has opened up the potential for interesting and innovative investment products for fund managers to create a new offshore product from onshore Chinese securities, Yuthadej said.
Singapore says core central bank policies should not change ‘fundamentally’ The Malaysian Insider 19th Jan 2016
Singapore's central bank will provide an effective anchor for economic and financial stability amid global and regional uncertainties, Tharman Shanmugaratnam, a deputy prime minister said. "Our core MAS policies should not change fundamentally. Our monetary policy decisions recognise that inflation is low today, but is likely to rise over the medium term amidst a tight labour market," Shanmugaratnam, who is also Minister in Charge of the Monetary Authority of Singapore (MAS) said in a statement late on Tuesday. "They aim to secure price stability during a period of transition when cost pressures are still significant, while as the economy moves gradually towards productivity-led growth," he said.
Credit bureau expects review requests to jump The Nation 18th Jan 2016
The National Credit Bureau (NCB) expects a record number of requests for credit reviews of banks’ existing customers this year because financial institutions will increase their monitoring of the credit of small enterprises, which pose the highest risk of default in a fragile economy. The number of credit-review requests last year reached 31 million, the highest in five years, but the NCB believes the number of inquiries this year will jump to 36 million. Most will be for small enterprises outside of supply chains, Surapol Opasatien, chief executive officer of the bureau, said. The current fragile economy is not conducive for financial institutions to chase new customers, so the banks have to maintain the quality of their existing customer bases, leading to more requests for credit reviews, he said.
Shoppers Pay 0%, Retailers 10% in Strained Asean Credit Market Bloomberg Business 18th Jan 2016
Families buying televisions are getting lower borrowing costs than the stores selling them, a reflection of the toll taken on Southeast Asia retailers by flagging consumer demand and e-commerce rivalry. Courts Asia Ltd., which offers shoppers zero percent long-term credit on higher-end products, has seen its Singapore dollar bond yields rise 26 basis points to 4.32 percent in the past six months and is trying to refinance the note ahead of its May repayment. The yield on U.S. currency bonds of Parkson Retail Group Ltd., part of a Malaysian retailer which operates across Southeast Asia, has soared 321 basis points to 10.23 percent.
OJK says financial conglomerates have adequate capital The Jakarta Post 16th Jan 2016
Financial conglomerates have adequate capital as they prepare for an upcoming regulation to soon be introduced by the Financial Services Authority (OJK), a top official says. The OJK’s deputy commissioner for banking supervision, Irwan Lubis, said the agency had found that the 50 financial conglomerates under its supervision had sufficient capital ratios in accordance with the proposed policy. However, he said, the OJK would require an entity in a conglomerate to add more capital if it found the ratio inadequate according to the upcoming regulation.
Vietnam's banks forecast strong credit, deposit growth Thanh Nien News 14th Jan 2016
Banks in Vietnam are aiming for an average increase of 17.46 percent in deposit and 21.4 percent in credit this year, following their "improved" performance last year, according to a survey released by the central bank on Tuesday. Both the figures are much higher than the central bank's estimates of 13.59 and 18 percent, respectively, for last year.
Government Green Lights Bank Banten The Jakarta Globe 13th Jan 2016
The Internal Affairs Ministry has retracted its discountenance of the controversial Bank Banten, allowing the province to continue the process of setting up its first wholly-owned regional lender, an official said on Tuesday. The news could redirect the spotlight to Bank Panin Syariah, Bank Pundi, Bank MNC International and Bank Windu Kencana, all of which have been shortlisted as potential acquisition targets that may be transformed into Bank Banten. The Internal Affairs Ministry advised against setting up the bank in December after the Corruption Eradication Commission (KPK) arrested one of its executives for bribing Banten legislators, raising doubts about the new endeavor's good governance. Still, Banten Governor Rano Karno and Asep Rahmatullah, Banten House of Representatives speaker, met Internal Affairs Minister Cahyo Kumolo on Tuesday, asking him to acknowledge the legal and political repercussions should they fail to carry out the plan.
Banks to issue more loans despite lower rates Vientiane Times 13th Jan 2016
Despite the fact that the Bank of the Lao PDR (BOL) recently declared a lower interest rate for deposits and loans, many banks in Laos believe the number of depositors and borrowers will not decrease in the years to come. ACLEDA Bank Lao Ltd. is one of several banks that have expressed confidence that the lower interest rate will not cause a decrease in customers because client numbers have in fact been increasing since the central bank announced the change in rates last August. “Our bank has been issuing loans of US$7 million to US$8 million to 2,000 customers a month since the announcement of lower rates for deposits and loans by the BOL in August. We also looked at issuing loans of US$10 million a month this year,” an official said. This year, the bank also expects to issue loans valued at US$135 million to 58,000 families, which will be calculated in Lao currency.
Big banks eye higher increase in corporate lending The Jakarta Post 12th Jan 2016
Indonesia’s larger banks expect higher corporate loan growth this year as the government’s ongoing program to boost infrastructure projects is likely to trigger higher borrowing demand. Bank Mandiri corporate banking director Royke Tumilaar said the lender was convinced that its corporate loans would grow by above 10 percent this year as it saw greater opportunities in infrastructure development. “Corporate loans usually never grow by double-digits, but I’m optimistic about this year as more and more infrastructure projects will emerge, such as power plants, toll roads, seaports and airports,” Royke said in Jakarta recently.
Loan-easing program could backfire, banks warned The Jakarta Post 12th Jan 2016
A loan-easing program launched last year by the Financial Services Authority (OJK) to help borrowers hit by the economic slowdown could backfire, an analyst at the Deposit Insurance Corporation (LPS) has warned. According to a recent assessment of banking system stability in the fourth quarter of 2015 conducted by the LPS, the OJK’s stimulus last year to hold back declining credit quality has born fruit. LPS analyst Seno Agung Kuncoro added, however, that banks would need to stay aware of moral hazard arising from the stimulus, despite it lasting just two years.
The potential for P2P lending in Singapore ASEAN Up 12th Jan 2016
Peer-to-peer lending is an alternative form of finance for people and businesses who want to avoid traditional credit institutions. In Singapore, this innovative and direct approach to lending and borrowing spurs a new line of financial services where technologies and trust come together to challenge large banking and finance firms.
Focus on e-banking as Acleda profits soar The Phnom Penh Post 12th Jan 2016
On the back of a 28 per cent increase in profits last year, the country’s largest bank Acleda Bank said it would increase its focus on development of its electronic banking infrastructure in the ASEAN region, but had no plans of going public yet, according to the bank’s CEO In Channy. The bank’s unaudited financial results show that the bank increased profit after tax from $82 million in 2014 to $105 million last year. Bank deposits grew 18 per cent to $2.6 billion in 2015, whereas outstanding loans saw a 23 per cent uptick and stood at $2.4 billion, Channy told the Post. “The factor contributing to profit growth is the efficient management of our expenditure last year,” Channy said. “And if you look at the loan growth, we see that it has not increased as much as it had in 2014, when we had 30 per cent growth.”
Indonesia's Bank Rakyat Said to Scrap $500 Million Insurer Sale Bloomberg 8th Jan 2016
PT Bank Rakyat Indonesia, the country’s most profitable lender, has canceled the sale process for a 40 percent stake in its life insurance arm, people with knowledge of the matter said. The state-controlled bank will try to boost the business’s value internally before any future sale, the people said, asking not to be identified as the details are private. Hong Kong billionaire Richard Li’s FWD Group, South Korea’s Hanwha Life Insurance Co. and BNP Paribas Cardif were vying for the holding, valued at $400 million to $500 million, in an auction process that started nearly a year ago, the people said.
Don’t bank on Vietnam’s financial reform East Asia Forum 7th Jan 2016
Since March 2012 when the Vietnamese government announced their so-called ‘road map’ for bank re-structuring, the number of banks in the system has been reduced by 15 out of a total of 37 domestic banks. This includes the mergers of nine ‘weak banks’. The Vietnam Asset Management Corporation (VAMC) was set up in July 2013 and, according to the State Bank of Vietnam (SBV), the ratio of non-performing loans (NPLs) to total banking assets has been reduced from 17.21 per cent in September 2012 to 3.72 per cent at the end of June 2015. But bank mergers solve only the immediate problem of insolvent banks. The long term viability of the banking sector depends, as everywhere else in the world, on the profitability of its customers. In Vietnam’s case, these customers are predominantly the large conglomerates (the 13 so-called ‘economic corporations’) and other state-owned enterprises (SOEs).
Myanmar’s new era of banking World Finance 7th Jan 2016
Following years of political and financial unrest, changes are now sweeping across Myanmar. A series of legal transformations display the country’s commitment to improving its economic standing When visiting a remote village in Myanmar, it is no longer uncommon to be greeted by a series of mobile-connected billboards. The frequency with which these billboards have begun to appear across Myanmar is indicative of the country’s growing affluence, which is now at a level unseen for decades. If only in a very subtle way, such billboards reflect the changing nature of Myanmar itself, which in 2010 emerged from half a century of military rule. Ever since, the nation has witnessed significant economic changes; from the establishment of the present democratic government and the country’s transformation into an open market economy, to national reconciliation and ethnic and communal integration.
TBA outlines 5 themes for banking industry The Nation 6th Jan 2016
Digital business in CLMV countries (Cambodia, Laos, Myanmar and Vietnam) offer opportunities for this country’s banking industry, said Thai Bankers’ Association (TBA) chairman Boontuck Wungcharoen. He believes the TBA has to embrace five major themes and |13 initiatives. The five themes are digitisation and next-generation payment infrastructure; financial inclusion and supporting the |real economy; contributing to society; preparing for regional integration; and legal and regulatory enabling. The association assigned seven sponsors to draft frameworks to cover the five themes. For example, Chartsiri Sophonpanich, president of Bangkok Bank, is the sponsor for financial inclusion and supporting the real economy. Teeranun Srihong and Predee Daochai, co-presidents of Kasikornbank, are the sponsors for financial literacy. Vorapak Tanyawong, president of Krungthai Bank, is the sponsor for a banking-industry code of conduct.
SMEs still struggle to source financing Myanmar Times 6th Jan 2016
Small and medium enterprises (SMEs), the backbone of Myanmar’s economy, say they are still struggling to source financing for start-ups and business expansion with insufficient funding made available by banks. President U Thein Sein’s government has recognised the importance of SMEs, the pillar of the private sector which accounts for 90 percent of economic output, and has established an SME Development Center under the Ministry of Industry. Part of its mandate is to provide training to SMEs on understanding banking regulations and processes required to obtain bank loans.
E-Payments
Foreign operations, digital service KBank's new focus Bangkok Post 15th Jan 2016
Kasikornbank (KBank) will shift more towards information technology, life insurance and foreign banking operations to tap the trend in digital banking including e-payments. These three areas will become stronger in the next three years, said Banthoon Lamsam, chief executive of the country's fourth-largest commercial lender by assets. Recent changes in the bank's top executives and a restructuring to direct holding in Muang Thai Group Holding, a major shareholder in Muang Thai Life Assurance, are part of KBank's strategic plan. KBank recently set up a new subsidiary, Kasikorn Business-Technology Group, with president Teeranun Srihong taking charge following higher demand for digital banking services in all segments -- corporate, small and medium-sized enterprises and individual customers.
Worker remittances rise on Thai transfers The Phnom Penh Post 15th Jan 2016
Remittances received by Acleda Bank and Western Union, two of Cambodia’s leading institutions for cross-border money transfers, increased significantly last year, consistent with the World Bank’s estimate for rapid remittance growth in 2015, new data shows. Despite a decline in remittances from Malaysia and South Korea, the two financial institutions experienced a combined increase of $333.8 million in 2015, up 10 per cent over the previous year, according to So Phonnary, executive vice president of Acleda Bank. She said that much of this growth could be attributed to a surge in money transfers by Cambodians working in Thailand. The two financial institutions reported a combined $140.8 million in remittances from Thailand last year, up 47 per cent from the $95.5 million recorded in 2014.
Credit cards top customer complaint list The Jakarta Post 11th Jan 2016
Customer complaints in the banking industry are higher than in any other industry, with most issues relating to the safety of credit cards, according to the Indonesian Consumers Foundation (YLKI). Of the 1,030 reports received by the foundation last year, 176 were about banks. The number of complaints on banks has fluctuated in recent years, from 115 in 2013, 192 in 2013, 210 in 2014 to 176 in 2015. “The number doesn’t necessarily mean that one institution is bad, it could also be a reflection of the complaining habits of one’s customers. However, we need to take note of the still unsafe credit card system, given the high number of overcharges and unauthorized auto debits,” said Sularsi, YLKI’s complaints and legal division head.
Central bank delays chip tech, PIN regulation until 2021 The Jakarta Post 8th Jan 2016
Bank Indonesia (BI) announced on Thursday that it would postpone the rolling out of chip-technology debit cards until 2021 because of technical issues in nationwide implementation. In a circular published on Dec. 30, BI revised a regulation stipulating that all debit cards issued by local banks should use chip technology beginning Jan. 1 in order to reduce digital crime in payment systems. Under the revision, banks are now required to implement chip-technology debit cards and six-digit PINs from Dec. 31, 2021, replacing the old “magnetic stripe” cards.
Insurance
IC eyes bill of rights for insurance policyholders Business World 19th Jan 2016
The Insurance Commission (IC) is looking at drafting a bill of rights for policyholders of insurance products. “We will craft the bill of rights for policy owners so it will be enshrined and adopted by all insurance companies,” Insurance Commissioner Emmanuel F. Dooc told reporters Monday on the sidelines of the 2016 Strengthening Week in Manila. The proposed bill of rights, which the IC may issue through a circular, will tackle fraud and unethical business conduct of sales agents of insurance products, Mr. Dooc said.
Thailand: Licensing rules to ease for life and non-life insurance businesses Asia Insurance Review 19th Jan 2016
Thailand will soon allow freer foreign investment in four business areas: life insurance, non-life insurance, commercial banks, and representative offices of foreign banks. Foreign investors in these sectors in Thailand will no longer need to seek a licence from the Foreign Business Act (FBA) committee to hold stakes of more than 50%, when they are removed from the list of businesses requiring such permission. The objective of this move is to promote competition, particularly in commercial banking and insurance services, and support investment in the country. The Council of State has vetted the Commerce Ministry's draft regulations designed to remove these business from the list and the draft will soon be sent to the Cabinet, reported The Nation newspaper. The relaxation will take effect once the changes are officially published in the Royal Gazette.
Mingalar fire puts focus on insurance Myanmar Times 18th Jan 2016
Following the disastrous blaze at Mingalar Market, the spotlight has turned to the need for insurance. Insurance companies say less than 1 percent of the shops at the market were insured. The January 9 blaze destroyed 1630 shops and left hundreds of others with damaged stock, at an estimated cost of more than K36 billion. It was the second major fire at the market in six years. Though President U Thein Sein was quick to visit the scene and offer some financial assistance, many stallholders will struggle to get back on their feet. U Than Zaw, general manager of the claims department of IKBZ insurance company, said, “Very few SMEs carry insurance. For the cost of just over 1pc of the value of their stock they could recover their losses from an accident.”
Vietnam: Insurance body forecasts double-digit industry growth this year Asia Insurance Review 12th Jan 2016
The life insurance sector in Vietnam is expected grow by more than 25% this year while the non-life sector is forecast to expand by more than 18%, according to Mr Phan Kim Bang, Chairman of the Insurance Association of Viet Nam (IAV). He said that the growth would be on the back of a stronger Vietnamese economy this year, which is expected to be boosted by the ASEAN Economic Community (AEC) and the Trans-Pacific Strategic Economic Partnership (TPP) agreement, reported the Vietnam News Agency. The life insurance sector reported growth of 29.5% in premium income, which topped VND36.6 trillion, last year. This is the highest growth rate in life insurance during the last 10 years, he said. Non-life insurance premiums reached VND31.3 trillion last year, an increase of 14%.
Singapore: MSIG to run usage-based auto insurance pilot study Asia Insurance Review 12th Jan 2016
MSIG Insurance will embark in March on a Usage-Based Insurance (UBI) pilot study targeted at the local consumer market, the company said in a statement yesterday. UBI is a programme where drivers allow their driving data to be shared with insurance companies who will review the driver’s eligibility for discounts on insurance premiums. MSIG Insurance's six-month pilot study will test the feasibility of using telematics in Singapore, in a partnership with the automotive technology supplier, the CSE Group.
Philippines: Up to 8 capital-shy non-life insurers could go on the block Asia Insurance Review 11th Jan 2016
Up to eight non-life insurance companies may be up for sale this year as they are unlikely to be able to comply with the higher capitalisation requirement set by law, a ranking official of the Insurance Commission (IC) said. Deputy Insurance Commissioner, Mr Ferdinand George A. Florendo, told reporters that five to eight companies have informed the IC that they are considering offering themselves for sale or to be merged with another firm. “They were asking the Commission the process of how they [can] convert to a servicing company and stop selling,” Mr Florendo said.
Thailand: Non-life insurance sector approaching turning point Asia Insurance Review 8th Jan 2016
The non-life insurance industry in Thailand is nearing a turning point because the economy is no longer growing as quickly as in the past, according to Mr Arnon Vangvasu, President of the Thai General Insurance Association. The sector, in which motor insurance plays a critical role, also saw a decline in auto sales over the past two years, reported The Nation newspaper. The sector enjoyed premium income growth of 28% in 2012 and 13.15% in 2013 due to the previous elected government's first-car-buyer tax-break scheme. However, 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% respectively.
Malaysia: Insurance sector growth affected by GST & ringgit value Asia Insurance Review 8th Jan 2016
The insurance industry in Malaysia is projected to grow by 4% to 5% this year, with personal insurance lines expected to see some challenging times, according to MSIG Insurance (M) CEO, Mr Chua Seck Guan. The 2016 growth forecast is regarded as lower than usual with Mr Chua telling the Bernama News Agency in an interview: “We used to plan for 6% to 8% growth on a good year but then, moving forward, we had to change our figures due to the impact of the goods and services tax (GST), weakened currency and the dampened market.”
Malaysia: Upbeat prospects for takaful sector Asia Insurance Review 7th Jan 2016
Malaysia's takaful sector has favourable growth potential, particularly due to encouraging demographics and government support. Wider product innovation and distribution coverage is likely too to drive sector growth as public acceptance of the model increases, according to Fitch Ratings in its report, "Malaysia Takaful Dashboard". The takaful industry grew faster than conventional insurance, with general and family takaful recording 8.3% and 9.7% growth, respectively, at end-June 2015, compared with conventional general and life insurance growth of 6.6% and -0.4%, respectively.
Vietnam’s New Decree Creates More Opportunities for Non-Life Insurers on the Provision of Compulsory Insurance Products in Construction Projects Lexology 6th Jan 2016
Effective from 10 February 2016, Decree No. 1191 imposes new requirements for compulsory insurance products in construction and investment activities. The overarching aim of Decree No. 119 is to address practical issues and improve the effectiveness in the implementation of these types of insurance products. Accordingly, this can create more opportunities for non-life insurers in the market. In particular, it aims to improve support from the insurance market to cover risks for construction facilities, repair damages quickly and sufficiently to ensure the thorough implementation of investment projects. It is also intended to help investors, contractors and workers feel more secure when participating in construction and investment activities in Vietnam. With these aims in mind, Decree No. 119 provides for, among others, certain regulations on investors and contractors’ responsibility for purchasing compulsory construction insurance products, as well as the conditions for insurers to provide such products, and standards for premiums and minimum insured amounts.
Market Regulation
Rule on margin trading in Indonesia to be eased The Jakarta Post 20th Jan 2016
The Indonesia Stock Exchange (IDX) has announced that there will be a drastic change in margin trading in which more flexibility will be given to stock brokerage firms with higher working capital to facilitate investors in buying any stocks under a specialized trading scheme. Currently, only securities with net adjusted working capital (MKBD) of more than RP 5 billion can facilitate such trade, in which investors borrow money from the broker to purchase particular stocks listed on the bourse. The IDX will classify brokerage houses according to requirements in the new rule. The higher a brokerage’s working capital, the more freedom it will have in choosing stocks for its clients or investors in margin trading, said IDX director Hamdi Hassyarbaini on Tuesday.
Bill opens up ownership of financial firms Manila Bulletin 19th Jan 2016
The Senate has approved a measure that would make the Philippines an investment-friendly country, increase the flow of foreign capital and create jobs. This followed its approval on third and final reading of a bill which would open up financing companies, investment houses, lending companies and adjustment companies to foreign ownership. The measure, Senate Bill No. 3023, sponsored by Sen. Joseph Victor Ejercito, seeks to amend foreign ownership restrictions in specific laws governing adjustment companies, lending companies, financing companies and investment houses cited in the country’s Foreign Investment Negative list.
Congress moves forward on foreign ownership liberalization measures Business World 19th Jan 2016
An administration priority measure and one of the reform measures being pushed by the Joint Foreign Chambers of the Philippines, Senate Bill No. 3023 or the Act Amending the Foreign Ownership Restrictions on Financing and Lending Houses and Investment Houses, passed on third reading after it received 19 affirmative votes in plenary session. The bill lifts foreign ownership restrictions on adjustment companies, lending companies, financing companies, and investment houses. Government agencies, which include the National Economic and Development Authority, the Securities and Exchange Commission, and the Insurance Commission, have backed the measure.
SEC: Corporate governance blueprint for ASEAN needed Business World 19th Jan 2016
The Philippine Securities and Exchange Commission (SEC) plans to take the lead in crafting a regional blueprint that will adopt a holistic approach to corporate governance. The Philippine SEC has assumed the chairmanship of the ASEAN Capital Markets Forum (ACMF) Corporate Governance Initiative, comprising the ASEAN Corporate Governance Scorecard (ACGS) and the ranking of ASEAN publicly-listed companies.
SEC to stiffen unfair trading penalties Bangkok Post 15th Jan 2016
The Securities and Exchange Commission (SEC) is set to tighten the penalty for listed companies' executives found guilty of unfair securities trading practices. The move follows strong public criticism over four of CP All's top executives being slapped with only fines for insider trading. Guidelines for new punishment are expected to be finalised this year, secretary-general Rapee Sucharitakul said. He said the new penalties might be similar to those used for securities and mutual fund companies' executives, banning them from holding management positions in any securities-related company if they were found guilty.
Microfinance NGO accreditation relaxed The Manila Times 14th Jan 2016
The Securities and Exchange Commission is giving non-governmental microfinance enterprises three years from their initial registration to comply with the accreditation requirements imposed by the regulator. Armando Pan Jr., officer-in-charge of the Office of the Commission Secretary, said in an interview the objective of the newly-enacted Microfinance NGOS Act is to pursue poverty eradication. The corporate regulator said it is letting microfinance non-governmental organizations to register even before getting accredited.
Government Unveils Regulation to Keep Dollars Inside Country The Jakarta Globe 13th Jan 2016
Jakarta. The Indonesian government issued a new regulation at the end of last year cutting taxes for exporters in a bid to boost the country's foreign exchange reserves and reduce volatility in the local exchange rate, according to a statement on the Cabinet Secretariat website on Wednesday. The cut, mentioned in a stimulus policy package issued last September, lowers income tax rates on interest that exporters earn when they deposit their income in both US dollar and rupiah longer in local banks. The move appears to be aimed at keeping more dollars inside the country. Under the new regulation, the government charges 10 percent income tax on bank interest from one-month dollar-denominated deposit accounts − half of the the previous figure of 20 percent income tax on bank interest from any deposit accounts.
Bank Indonesia Resists New Challenge to Independence The Jakarta Globe 13th Jan 2016
Jakarta. Indonesia’s central bank is resisting calls from lawmakers for an audit of its foreign-exchange transactions, a proposal that could crimp its ability to intervene in the market to stabilize the often-fragile rupiah. Unhappy about the rupiah’s pace of weakening against the dollar in 2015, some members of parliament’s finance commission want the country’s Supreme Audit Agency to vet Bank Indonesia’s forex activity. The central bank’s chief is pushing back, arguing the additional scrutiny might spook already-shaky markets. “An investigative audit of BI is not necessary,” Governor Agus Martowardojo, who spent two days this week defending his policies in closed-door meetings with the commission, told reporters.
New OJK Rule on Disclosure of Material Information or Facts Lexology 11th Jan 2016
On 22 December 2015, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan "OJK") issued OJK Rule No.31/POJK.04/2015 on Disclosure of Material Information or Facts ("POJK 31/2015"). POJK 31/2015 replaces Bapepam-LK Rule No. X.K.1, as attached to Decision of the Chairman of Bapepam No.Kep-86/PM/1996 on Disclosure of Information that Must be Made Public Immediately ("Rule X.K.1"). Compared to Rule X.K.1, POJK 31/2015 provides more clarity on the definition of Material Information or Facts (“Material Information”), and the procedure of disclosing the Material Information as well as examples of Material Information to be disclosed by a listed company.
Singapore Reviewing Quarterly Financial Reporting Rule Bloomberg 10th Jan 2016
Singapore Exchange Ltd. is reviewing a 13-year-old rule requiring listed companies to provide quarterly financial reports in light of moves by other regulatory jurisdictions including the U.K. to drop the practice. “We are aware that there are strong proponents and arguments on both sides of the quarterly reporting debate,” SGX said in an e-mail. “The arguments need to be viewed against a regulatory landscape that has changed since 2003. We will consult the public if there is to be any change in the listing rules.” Companies with a market value of at least S$75 million ($52 million) are currently required to provide quarterly financial reports.
OJK, Communications Ministry to Partner Up in Monitoring Fintech Startups Jakarta Globe 6th Jan 2016
Indonesia's financial regulator, or OJK, is planning to work with the Ministry of Communications and Information to regulate online companies offering various financial services, also known as "fintech startups," with their increased presence in the country, said a government official. "Many online companies have approached me, saying that they've received a permit from the Co-operatives Ministry, but their banking partner refuses to participate unless there's a license from OJK, so they want that as well," Firdaus Djaelani, OJK chief executive in charge of monitoring non-bank financial services, said in Jakarta on Tuesday. Indonesia has seen a wave of fintech startups in the past year, from those focused on financing weddings to crowd-funding sites, seeking to tap into its ever-expanding pool of affluent and tech-savvy middle class.
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