| Market Development
AYA Bank opens underwriting business, eyes IPO Myanmar Times 1st Feb 2016
AYA Bank has officially launched its new underwriting business, AYA Trust Securities Company, and is planning to make its own IPO further down the line, the group’s chair said. AYA Trust Securities will be able to offer its underwriting services in time for the start of trading on the Yangon Stock Exchange (YSX), which is expected to start in mid-March, according to officials at the launch of AYA Trust Securities on January 30.
Mandiri, BRI, BNI, BCA Spearhead New National Repo Protocol The Jakarta Globe 30th Jan 2016
The country's fourth largest banks by assets, Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia and Bank Central Asia, on Friday (29/1) signed an agreement to mark the implementation of a new repurchase protocol in Indonesia, aiming to deepen the money market and reduce bank interest rates. The new protocol, called Global Master Repurchase Agreement Indonesia, or GMRA Indonesia, has already been in effect since Jan. 1, to set a national standard for repurchase transactions. A repurchase agreement, or repo, is a money-market instrument used for short-term borrowing, in which a dealer or any government bondholder sells securities to a lender and agrees to repurchase them at an agreed date, from overnight to around 30 days, at an agreed price.
KUR involves finance companies, eyes Rp8 trillion/month The Jakarta Post 29th Jan 2016
Several multi-finance companies will soon enjoy a new role as lenders in the people’s business loan (KUR) program, despite their non-bank status, as part of the government's efforts to disburse at least Rp 8 trillion (US$578.7 million) of KUR per month. Financial Services Authority (OJK) chairman Muliaman Hadad said the institution had selected multi-finance companies that complied with certain requirements in terms of financial strength and business portfolio. "It starts this year. Tomorrow, we will submit the names of the multi-finance companies," he said after a limited meeting at the State Palace in Jakarta on Thursday, adding that those companies had to be in a healthy condition and have sufficient experience in micro loans.
Bank Indonesia predicts credit growth in 2015 to reach 11% Antara News 29th Jan 2016
The Indonesia's Central BankBank Indonesia has predicted that credit growth in the banking industry will reach between 10 to 11 percent in 2015. "As per the latest figure, it was at 9.8 percent in November, while there was a slight increase in December," deputy governor of the central bank, Perry Warjiyo, said at his office here on Friday. He said the slow bank credit growth was inseparable from the slow domestic economic growth.
Apec states nod to ease rules on financial product sales The Nation 27th Jan 2016
Seven members of the Asia-Pacific Economic Cooperation (Apec) forum have agreed to liberalise cross-border sales of investment products by financial-services professionals in the region. Finance officials and regulators from seven Apec economies, namely Australia, Japan, South Korea, New Zealand, the Philippines, Singapore and Thailand, signed on January 18 in Singapore a memorandum of cooperation on the content of the Asia Region Funds Passport.
Regulators to beef up resilience The Jakarta Post 22nd Jan 2016
Capital market regulators from developing countries have committed to work together to strengthen resilience and help sustain economic growth amid global challenges. The commitment was reiterated during the annual meeting and conference held by the International Organization of Securities Commissions’ (IOSCO) Growth and Emerging Markets Committee (GEM-C) and hosted by Indonesia’s Financial Services Authority (OJK) in Bali on Thursday.
ASEAN next to lead Asian story – Citi exec Inquirer 22nd Jan 2016
It's bound to be an “evolution” than a “revolution” but the newly-created ASEAN Economic Community (AEC) may become the “center of the universe” and replace what used to be a China-dominated Asian narrative, said a regional executive of American banking giant Citibank. Singapore-based Melvyn Low, Citi head for treasury and trade solutions for ASEAN and Singapore, said in a press chat yesterday that ASEAN would likely be the next major growth hub in three to seven years. The Philippines, with its competitive advantage in the services sector and particularly in business process outsourcing (BPO) industry, is standing out as a potential growth market and thereby has a big opportunity now that the Asian narrative has shifted to ASEAN, Low said.
Asset Management
Sceptical foreigners could cut short Indonesian stock market rally The Malaysian Insider 2nd Feb 2016
Indonesia's stock market has outperformed its Asian peers over the past six months on hopes of an earnings boost from President Joko Widodo's long-promised reforms and lower borrowing costs. But foreign investors aren't betting on it. The apathy shown by foreigners could spell trouble for the market facing off against a surfeit of challenges including plummeting prices for Indonesia's key commodities, a slowdown in key trading partner China and red tape and reactionary politics at home.
SGX to change method to calculate minimum trading price after market feedback The Straits Times 2nd Feb 2016
The Singapore Exchange (SGX) is changing the methodology used to determine whether a company share price meets the 20 cent minimum trading price (MTP) requirement, following market feedback. The change comes after SGX's extension last month to Sept 1, 2016 - the date of the review of the volume weighted average price (VWAP) of shares of companies which consolidate their shares before March 1, 2016.
Exchange Commission Mulls More Licenses as YSX Preps for Trade The Irrawaddy 1st Feb 2016
At least three to four more companies are contenders to be listed for the newly formed Yangon Stock Exchange (YSX), Chairman of the Securities and Exchange Supervisory Committee and Deputy Finance Minister Maung Maung Thein said on Thursday. The first group of YSX-listed companies was announced in December, but trading is not expected to begin until March, Maung Maung Thein has previously said. He added that several additional companies would also be issued licenses to participate in YSX transactions by then, though he declined to reveal any further details.
More inflows to Thai capital market expected: TMB The Nation 1st Feb 2016
The Thai stock and bond markets are expected to witness new investment inflows in the short term following the Bank of Japan's decisions last Friday, said TMB research. "Expectations run high that other central banks in Asia including the People Bank of China and Bank of Thailand would boost the economy in a similar manner," it said. The BOJ last week decided to keep the policy rate at the negative territory for the first time in its history. TMB noted that a sharp drop in Japanese and US bond yields on Friday, minus 14 and 13 basis points respectively, indicated inflows into global bond markets. Thai treasury yield also fell by 19 basis points to 2.30 per cent.
Yangon Stock Exchange to open amidst suspicion Eleven Myanmar 1st Feb 2016
Many analysts believe the Yangon Stock Exchange, which will be fully operational by March this year, is opening with unfair advantages and possible conflicts of interests. The Yangon Stock Exchange (YSX) automatically entered the US sanctions blacklist as the Myanmar Economic Bank, an entity already sanctioned by the US Treasury Department’s Office of Foreign Assets Control (OFAC), claims ownership of the market by virtue of its 51 per cent stake.
Thailand eyes more investment from China The Nation 1st Feb 2016
Thailand anticipates more investment from China as a number of enterprises there have expressed interest in various areas, said Finance Minister Apisak Tantivorawong. Leading the pack is China Investment Corporation (CIC), the sovereign wealth fund, which expressed strong interest in investing in Thailand Infrastructure Fund, established to raise capital from both individual investors and institutional investors in order to finance infrastructure projects across the country. The minister, who led a mission to Beijing during January 29-30, said the fund matches CIC’s goal in seeking stable and long-term returns.
Thailand’s Siam Commercial Bank to launch VC arm to fund tech startups Deal Street Asia 29th Jan 2016
The Siam Commercial Bank (SCB) is setting up its first venture capital fund, with a target size of up to $50 million, focussed on startups raising Series A or higher stage capital, a source familiar with the development told DEALSTREETASIA. SCB is currently in the process of seeking approval from the Bank of Thailand, and it expects to launch the fund in the first quarter of this year. The contours of the new fund are currently being worked out, it is learnt. “The fund size will be around $30-$50 million and it will invest in technology-focused startups,” the source said.
Exchange classifies share indices Viet Nam News 29th Jan 2016
The HCM City Stock Exchange (HOSE) this week announced the classification of listed companies into industries, launching 10 sector indices using the Global Industry Classification Standard. The industry taxonomy, better known as GICS, was developed by portfolio management tools provider MSCI and financial services company Standard & Poor's (S&P) for use by the global financial community. Its structure consists of 10 sectors, 24 industry groups, 68 industries and 154 sub-industries, into which S&P has categorised all major public companies, according to the southern exchange.
SCB tells investors to adapt to global challenges The Brunei Times 28th Jan 2016
Standard Chartered Bank Brunei (SCB Brunei) last night held a seminar on market outlook for its clients which focused on sharing the bank’s refreshed investment strategy amid challenging global markets. As the investment environment is poised to remain challenging in 2016, the bank recently released an investment framework – known as ADAPT – which is geared towards lowering risks and capturing key market forces currently at play. Under the new strategy, investors were told to adapt to a changing landscape.
Targeting the growing middle class Nikkei Asian Review 28th Jan 2016
The Indonesia Stock Exchange is courting ordinary investors with mutual funds that have recently gained favor among the middle classes as a small and affordable investment option. IDX kicked off its Mutual Fund Festival on Wednesday as part of its wider Yuk Nabung Saham (Let's Save in Stocks) campaign, which targets the general public -- everyone from office workers to housewives.
Is there value in oil and gas stocks? The Star Online 28th Jan 2016
The slump in crude oil prices has analysts and fund managers seeing potential value in selected oil and gas (O&G) stocks. Maybank Investment Bank Bhd (Maybank IB) said in a report that the steep correction in O&G share prices offered “periodic, alpha opportunities” to pick up oversold, undervalued and sentiment-depressed stocks.
Bank Mandiri forms subsidiary to invest in startups The Jakarta Post 27th Jan 2016
State-owned lender Bank Mandiri has officially launched a new subsidiary, Mandiri Capital Indonesia, which will focus on venture capital, which is aimed at supporting startup companies. Mandiri Capital will inject equity investment in startup companies, which banks normally consider high risk, said Bank Mandiri director of treasury and markets Edi Sunaryo. Bank Mandiri owns 99 percent of the company while Mandiri Sekuritas owns the remainder.
Fresh measures needed to support G-bond market Viet Nam News 25th Jan 2016
The Ha Noi Stock Exchange (HNX) would co-ordinate with the State Treasury of Viet Nam to boost up this year's issuance of G-bonds. During a conference on the Government bond market held last week, HNX said it would also complete a scheme to develop the local corporate bond market that is expected to be operated in 2017. The conference, with representatives of the Ministry of Finance (MoF), also sought solutions for market development in 2016 with focus on boosting technical issues on disclosure and reporting regimes to ensure convenient issuance of treasury bills and matching mechanisms. The HNX said it helped mobilise VND249.6 trillion (USVND248,640 billion) in G-bonds in 2015, up 3.7 per cent compared with 2014, adding that more insurance and retirement funds took part in the market instead of only commercial banks.
BI to monitor liquidity as govt front-loads bonds The Jakarta Post 25th Jan 2016
Bank Indonesia (BI) will intensify its monitoring of liquidity in the banking system in the first half of this year as the government’s front-loading bond issuance scheme may crowd out the market. According to BI Governor Agus Martowardojo, the central bank will carry out expansionary measures if the government’s financing efforts result in higher liquidity than predicted. “What we must watch out for is the first half because there will already be the Idul Fitri holidays and tax payment obligations. But the government’s funding disbursements may not be that high yet,” he said on Friday.
As oil prices tumble, Moody’s puts 120 energy firms on downward review The Malaysian Insider 22nd Jan 2016
Rating agency Moody's today placed large parts of the global oil and gas sector on review for a downgrade, as a crash of more than 70% in oil prices over the last 18 months has pulled down energy company stocks as well. The reviews affect oil and gas companies across the world, including the United States and Canada, Latin America, the Asia-Pacific region (APAC) as well as Europe, Middle East and Africa (EMEA). "Moody's Investors Service has placed the ratings of 120 oil and gas companies on review for downgrade," the rating agency said in a statement.
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.
Banking
Bahrain's Al Baraka Islamic Bank eyes France, Indonesia for expansion Reuters 31st Jan 2016
Al Baraka, which has operations across the Middle East, Asia and Africa including Pakistan, Jordan and South Africa, also plans to acquire a bank in Indonesia either this year or in 2017 and was in talks with the Indonesian central bank governor, Yousif said. Indonesia has been seeking to boost its Islamic banking sector, which is small despite being the world's largest Muslim nation, by adjusting rules including loosening foreign ownership limits on local banks. "We have a representative office in Indonesia, and now is the right time to buy a bank there," Yousif said.
Indonesia Loan Growth Misses 2015 Target The Jakarta Globe 30th Jan 2016
The growth of outstanding loans in Indonesia slowed in 2015, due to weaker demand for property and working capital loans, reflecting the country's muted economic expansion. The total number of outstanding loans grew 10 percent to Rp 4,083 trillion ($292 million) in 2015, according data from Bank Indonesia, the country's central bank, on Friday. That compared to 11 percent growth a year earlier. The central bank had previously set a target of 11-13 percent growth for 2015. Property loans expanded by 12 percent — compared to 17 percent in 2014 — to Rp 620 trillion, with weak demand observed across construction and mortgage debtors.
HSBC, Bank Ekonomi to merge in 2017 The Jakarta Post 29th Jan 2016
HSBC Indonesia will complete its integration with Bank Ekonomi Raharja by April 2017 after discussions with the Financial Services Authority (OJK) intensified last year. By integrating with Bank Ekonomi, HBSC would be able to expand its operations and offer services in 31 cities, from the current six, under Bank Ekonomi branches, as well as give Bank Ekonomi access to wealth management services, said HSBC Indonesia head of retail banking and wealth management Blake Hellam.
Thai bank buys local MFI in mammoth deal The Phnom Penh Post 28th Jan 2016
In what may be the biggest deal in Cambodia’s financial sector history, Thailand-based Bank of Ayudhya has reached an agreement to acquire the local microfinance institution (MFI) Hattha Kaksekar, with the deal expected to be valued at upwards of $140 million. In a statement released yesterday, the Thai bank, commonly referred to as Krungsri, confirmed the agreement to buy Cambodia’s fourth-largest microfinance institution, paving the way for its entry into the Kingdom’s crowded and highly competitive micro-lending sector.
BAY to own Cambodian microfinance firm Bangkok Post 28th Jan 2016
SET-listed Bank of Ayudhya (BAY) has clinched a deal to fully acquire Hattha Kaksekar Ltd (HKL), Cambodia's fourth-largest microfinance lender, to capitalise on that country's solid growth prospects. The transaction is subject to regulatory consent and fulfilment of certain conditions, including shareholder approval, president and chief executive Noriaki Goto said in a release. The acquisition amount was not disclosed.
Philippine Banks Need Foreign Capital to Thrive, Regulator Says Bloomberg 24th Jan 2016
Wealthy families running some of the largest Philippine banks need to attract foreign capital and know-how if they are to withstand growing competition from overseas lenders, the country’s bank regulator said. "If they think they can continue to grow at the pace that protects their position in the market using only internal resources, good luck to them," Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla said in an interview in Manila last week. "Banks today with a relatively close ownership may want to take a more open view. Or, they face stagnation, shrinkage." Philippine banks are facing a new wave of competition from foreign lenders, with Japan’s Sumitomo Mitsui Financial Group Inc. and Singapore’s United Overseas Bank Ltd. among six foreign banks which have received approval to open branches. The banks are entering the market after the government loosened its rules on foreign ownership in 2014.
Creditors may be allowed to go bankrupt Viet Nam News 22nd Jan 2016
The State Bank of Viet Nam (SBV) would consider allowing some ailing financial companies and people's credit funds to declare bankruptcy this year, according to Deputy Governor Nguyen Phuoc Thanh. The plan is to gradually inform the market about the bankruptcy in the banking system and warn bank owners to be much more serious in doing business, Thanh said. Though there had been some distressed credit institutions in the domestic banking system, the country had not seen any bankruptcy issues for the past years as the central bank was concerned that it could have a negative effect on the entire banking system.
Barclays to Shut Indonesia Investment Bank Unit, Slash About 1,000 Jobs Worldwide The Jakarta Globe 22nd Jan 2016
Barclays will cut about 1,000 jobs in investment banking worldwide and close its cash equities business in Asia as new Chief Executive Jes Staley wields the axe in a bid to reduce costs and boost returns. The harsher-than-expected cuts are among the most sweeping by an investment bank in recent years and follow similar moves by other European lenders seeking to cut costs in a tough global environment for banks. Barclays will shut its investment banking businesses in countries including Australia, Indonesia, Malaysia, Philippines, South Korea, Taiwan and Thailand, an internal memo seen by Reuters showed, with those markets to be covered from financial hub cities in their respective regions. The axe will also fall across central and eastern Europe, and South America, with offices closing and activity routed back through the lender's home base in London.
Indonesia to Weigh Freeport’s $1.7 Billion Offer for Stake in Local Unit The Wall Street Journal 20th Jan 2016
Indonesia said on Wednesday it would study Freeport-McMoRan Inc.’s offer to sell a stake in the U.S. mining company’s local unit to the government for $1.7 billion, a price tag that several state officials have called unreasonable. During a parliamentary meeting with Freeport’s local unit, the Indonesian energy ministry’s director general of coal and minerals, Bambang Gatot Ariyono, said Freeport and the government could reach an agreement on the purchase price for a stake in PT Freeport Indonesia in March. “The government’s position is to make a calculation and evaluate the price offered,” Mr. Ariyono said.
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.
E-Payments
Tighten rules for credit cards, NUBE urges Malaysian banks Borneo Bulletin 1st Feb 2016
Banks should tighten the rules and regulations for the issuance of credit cards and personal loans to help reduce the increasing number of young bankrupts in Malaysia, National Union of Bank Eamployees (NUBE) General Secretary J Solomon said yesterday. He told Bernama that the present lax rules and the “easy one-hour” personal loan approval methods are tempting young workers to get into debt.
Mobile financial services promising in Myanmar The Nation 1st Feb 2016
A boom in mobile financial services (MFS) is anticipated, thanks to the rapid increase in penetration rate and poor infrastructure in Myanmar, according to Takashi Shigeno, director of KDDI Summit Global Corporation. He cited three main reasons for this. "Firstly, more than 70 per cent of the population live in rural areas. Secondly, only 20-25 per cent of adults have bank accounts. Thirdly, Myanmar has a lot of infrastructure deficiencies. There are a lot of difficulties to access banking facilities and power shortages," Shigeno said at the Mobile Money & E-Commerce Summit 2016 last week.
Bt100 million budget for e-payment system The Nation 1st Feb 2016
National ITMX will allocate a budget of around Bt100 million to provide an interface for banks so they can access and manage information as part of preparation for a national e-payment system. Piti Tantakasem, chief wholesale banking officer at TMB Bank and also a director at ITMX, said the latter would use its existing capital, provided by commercial banks that are shareholders in the firm, to run the payment gateway.
Online marketplace helps SMEs find investors The Manila Times 31st Jan 2016
Small and medium enterprises (SMEs) and startups that are in a critical stage of their business and may be needing loans, investors, or links with other businesses now have an online lifeline. EntrepZone.com is an online marketplace for business owners looking for loans, investors, or other businesses to buy and is mainly targeted at SME owners who want to sell their business and those who want to reach out to banks and financial institutions.
E-commerce market poised for strong growth The Malaysian Insider 27th Jan 2016
The e-Commerce market in Malaysia, excluding eServices, is poised for strong growth with a projected revenue of US$991.1 million (RM4.210 billion) this year. In a statement, iPay88 Sdn Bhd Executive Director Chan Kok Long said even when the economy is not performing well, there would still be growth in e-Commerce and mobile commerce (mCommerce) for Malaysia this year. "The time if ripe for Malaysia whereby domestic market demand is well-supported by wide and stable online connectivity and broadband solutions," he said.
Baiduri rolls out second phase of Online Banking The Brunei Times 27th Jan 2016
Baiduri Bank has rolled out the second phase of an enhanced version of its Baiduri Online Banking. The local bank’s redesigned online banking platform integrates exciting features that enhance the online experience for its customers, the bank said in a media statement yesterday. The bank has added a new feature in the online banking system with the availability of the Car Hire Purchase payment which now updates in real-time. For such payments via the bank’s mobile app, customers can earn points under their HP Auto Direct Card, the bank said. Baiduri said there is also an option to make payment to multiple payees at one time, providing convenience to customers who process high volumes of payment.
Hopes High for Burma’s Burgeoning Credit Card Industry The Irrawaddy 27th Jan 2016
With credit card options proliferating in Burma, many of the country’s private banks are hoping to see more buzz within the industry in the months ahead. Last year the Central Bank of Myanmar greenlighted the use of credit cards by private banks, a move that led to various types of credit cards being issued to clients. In May, the Central Bank allowed domestic banks to issue quasi-credit cards that function like debit cards. Aung Kyaw Myo, general manager of Kanbawza (KBZ) Bank, said the bank’s so-called “secure credit cards” are already in distribution, but an upgrade to fully functioning credit cards is now in the works.
Millions of issued ATM cards remain unused VietNamNet 27th Jan 2016
A report from the Vietnam Banking Card Association shows that 86 million cards had been issued by 2015, an increase of 30 percent compared to 2013. These include 80 million domestic debit cards (ATM), more than 2.5 million credit cards and some other types of cards. However, only 65.3 million cards have been used in reality, while inactive cards account for 26 percent. However, bankers said that the proportion of inactive cards was higher than reported, which could be up to 50 percent of the issued cards. Nguyen Phuong Nam in district 9 in HCM City said she now has four bank cards in her handbags, but she only regularly makes transactions with two of them.
Banks must move past PIN, OTP to ensure mobile security ZD Net 27th Jan 2016
No longer secured, PINs and one-time passwords should be abolished as a form of authentication for mobile banking apps, and replaced by biometrics such as facial and voice recognition. Asian banks need to stop using PINs and SMS-based OTPs, which no longer provide adequate security and user assurance, and start tapping biometrics to authenticate mobile users. In fact, the future of authentication resolves around biometrics on smartphones and banking apps must support the technology, sooner rather than later, urges Tony Chew, Citibank's global head of cybersecurity regulatory strategy.
SCB plans huge IT investment Bangkok Post 21st Jan 2016
Siam Commercial Bank (SCB) plans to raise investment in its infrastructure base to cash in on the digital banking trend and sustain its profitability in the long term, says president Yol Phokasub. SCB's cost-to-income ratio still has room to facilitate higher investment, he said. Its ratio was 37% last year compared with the 44% average of the country's four largest banks. This is expected to increase to around 40% this year, a level that will not have an impact on the bank's profitability, said Mr Yol.
Insurance
More microinsurance products in pipeline Philstar News 2nd Feb 2016
Proponents of microinsurance are working on frameworks for the development of micro-agri, micro-health and micro-preneed that would soon lead to new “sachet-sized” insurance products for the general population. In a microinsurance summit held recently, Emmanuel Dooc, commissioner of the Insurance Commission (IC) said government and private sector advocates have enhanced the regulatory framework for microinsurance to open the doors for new products.
OJK Set to Finalize Four Remaining Insurance-Sector Regulations Hukum Online 2nd Feb 2016
Law No. 40 of 2014 on Insurance (the Insurance Law) mandates for the Financial Services Authority (OJK) to issue a number of OJK Regulations which will set out the basic guidelines for parties involved in the insurance sector. Firdaus Djaelani, Chief Executive of the Non-Bank Financial Industry (IKNB) Supervisory Body at the OJK is optimistic that his institution’s so-called “pending task,” namely the issuance of these regulations, will have been completed by April 2016. “We will ensure that what is mandated by Law No. 40 of 2014 will be completed within the two-and-a-half-year deadline. In fact, it should be finished early this year,” asserted Mr. Djaelani in Jakarta on Monday, 1 February 2016.
Japan tops foreign insurer list Eleven Myanmar 1st Feb 2016
The number of foreign insurance companies in Myanmar has reached 22, with Japan topping the list, according to Myanmar Insurance Business Supervision Committee. A committee member said: “Foreign companies are becoming interested in the country’s insurance services. They have opened branches as Myanmar has good prospects for development in the future.”
Indonesia: Insurers must invest at least 30% in govt bonds Asia Insurance Review 1st Feb 2016
Government bonds will have to make up at least 30% of the portfolio of insurance firms and pension funds, the Indonesia Financial Services Authority (OJK) Chairman Muliaman Hadad has said. The relevant OJK regulation will be released this year and will apply in stages, Reuters reported citing Mr Muliaman.
Muang Thai wants to expand its life insurance presence in AEC markets The Nation 1st Feb 2016
Muang Thai Life Assurance has announced its new vision to become a truly regional life insurance company with a target of over Bt100 billion in total premium in 2016. Sara Lamsam, president and CEO of the company revealed that MTL has developed its core value namely The M Power C with an aim to reflect the character of MTL. It comprises Customer Centric, Creativity, Commitment to Success, and Caring. In addition, MTL recently set up Innovation Centre to monitor and study on changing trends including consumer behaviour and financial technology to cope with the changing business landscape.
Philippines: Insurance industry to see premiums rise by 28% this year to US$6 bln Asia Insurance Review 1st Feb 2016
The Philippine insurance industry is tipped to sustain its robust growth with regulators expecting premium revenue to increase by 28% this year to PHP300 billion (US$6.3 billion). Insurance Commissioner, Mr Emmanuel Dooc, said that a 28% growth is an ambitious goal for the insurance sector as growth in premium income traditionally averages only around PHP58 billion annually, reported the Manila Bulletin.
Thailand: Notification on Foreign Ownership of Insurance Companies Clifford Chance 30th Jan 2016
The Insurance Commission (IC) has issued a Notification prescribing its rules, procedures and conditions for exercising the IC's power to approve foreigners holding up to 49% of the voting shares of an insurance company (foreigners are normally limited to 25%) and to foreigners comprising more than a quarter (which is the normal limit) but less than half of the total directors, of both life and non-life insurance companies. The Notification will come into effect on the day following its announcement in the Royal Gazette, which is expected to occur within February 2016.
Allianz Ayudhya aims to increase protection cover Bangkok Post 29th Jan 2016
Allianz Ayudhya Assurance Plc plans to raise the ratio of protection insurance premiums contributed from the agent channel to 33% this year from 31.5% last year. The low-interest-rate environment and rising medical costs are expected to support growth in protection products. A 7.8% increase in medical costs in 2014 and Thailand's ageing society will encourage consumers to pay more attention to protection insurance, particularly life and health policies, said president and chief executive Bryan Smith.
Indonesia to cap foreign ownership in insurance firms at 30 pct -regulator Reuters 28th Jan 2016
The Indonesia Financial Services Authority (OJK) will limit foreign ownership of insurance firms to 30 percent, chairman Muliaman Hadad told reporters on Friday.
Thai Life to develop new products, streamline claims process The Nation 28th Jan 2016
THAI LIFE Insurance will mine all distribution channels, develop products and speed up its claims process to tap the new lifestyles of consumers and achieve its premium-income target of Bt17.30 billion this year. President Chai Chaiyawan said yesterday that the life-insurance industry was expected to grow by at least 10 per cent this year as targeted customers enjoy higher income from the government's stimulus packages launched last quarter. Insurers are also expected to develop new products and services to meet customers' requirements, making the competition in this industry tough. However, the uptrend in interest rates in the second half might not support savings-oriented insurance policies.
Insurance premiums expected to grow to P285 billion this year InterAksyon 28th Jan 2016
The insurance industry is set to grow by over a fifth this year in total premium income, sustaining its record in 2015 according to the Insurance Commission. “This year I am looking at possibly from P285 to P300 billion,” Insurance Commissioner chief Emmanuel Dooc said on the sidelines of a conference. “That’s a tall order, hitting the higher end, but I think P285 is a reasonable target.” The regulator’s forecast in total premium income this year is up P52 billion or 22% from the record high P233 billion logged last year, which was within the target of P230-P240 billion. Dooc said he expects single premium or variable life insurance products to be the industry’s core driver this year.
Frost & Sullivan: Malaysia - The 20 by 2020 Inevitability PR Newswire 27th Jan 2016
Malaysian healthcare expenditure could rise as high as USD20 billion by 2020 due to the rising incidences of chronic diseases, increasing healthcare costs especially in Wilayah Persekutuan and Selangor due to urbanisation, and a weak ringgit. While the public sector is hampered by limitations in healthcare budget and the ability to retain experienced talent, the private sector is gearing up to meet competitive challenges with a stronger, more innovative play that is targeted to provide both financial and social returns. One of the key areas for development is further public and private healthcare integration and a social health insurance platform that can enable a more balanced healthcare environment within the country.
Market Regulation
Task force eyes illegal securities activities The Phnom Penh Post 2nd Feb 2016
Cambodia's securities regulator has announced the formation of a task force to crack down on unlicensed operators in the securities sector, as well as a hotline for consumers to report any illicit activity. A 21-member task force will monitor illegal activity in the trading of securities and investigate cases of unlicensed operators, including the source and amount of capital invested in these firms, according to a joint statement from the Securities Exchange Commission of Cambodia (SECC) and the Ministry of Interior issued on Friday.
Senate approves bill regulating credit-card industry Business Mirror 1st Feb 2016
The Senate approved on Monday a House bill regulating the Philippine credit-card industry, spelling out the Bangko Sentral ng Pilipinas (BSP) supervisory powers over all credit-card issuers, acquirers and transactions. Sen. Sergio Osmeña III, principal sponsor of House Bill (HB) 5417, sought approval of the remedial legislation he said was needed to “protect the rights and interests of credit-card holders against excessive charges and harassment from collection agents.”
Bank Negara governor's imminent exit highlights succession risks The Star Online 1st Feb 2016
For 16 years, Malaysia's internationally-lauded central bank governor bolstered the economic credibility of a country otherwise facing a slew of emerging market challenges, ranging from currency crises to a commodities markets crash. As Tan Sri Dr Zeti Akhtar Aziz prepares to step down as head of Bank Negara in April, questions about succession are framed by uncertainties clouding the country, notably a collapse in commodity prices and a political scandal that has drawn international scrutiny, according to market participants.
Yangon Stock Exchange weak on corporate governance rules: observers Myanmar Times 1st Feb 2016
While globally an initial public offering usually means throwing the doors to your company wide open and letting investors poke around, industry observers say the Yangon bourse has not gone far enough on provisions for transparency. According to listing criteria published in state media last August, companies that wish to go public on Yangon’s stock exchange need to submit “relevant corporate information” and facts the public should know to the Securities and Exchange Commission of Myanmar and the Yangon Stock Exchange. “For disclosure of corporate information, it [the company] shall prescribe especially and precisely on the matters which have a considerable impact on investment decisions” such as risk factors and basic potential business activities, said the criteria.
SEC crackdown on false information Bangkok Post 29th Jan 2016
The Securities and Exchange Commission (SEC) wants to impose penalties against executives falsifying information about their listed companies' prospects and securities brokers engaging in front-running. The move is aimed at protecting retail investors' interests. Assistant secretary-general Somchai Pongsattanasin said listed companies' executives who gave unwarranted information about their companies' financial outlook could face both a fine and imprisonment.
House passes bill granting BSP powers over payment systems Business World 29th Jan 2016
The House of Representatives approved on third and final reading a measure to regulate and supervise payment systems. The proposed Payment Systems Act (House Bill No. 6197) states that the Bangko Sentral ng Pilipinas (BSP) shall oversee the payments system in the Philippines to ensure the stability and effectiveness of the monetary and financial system. The bill defines payment systems as the set of payment instruments, processes, procedures, and participants that ensures circulation of money or movement of funds. Examples of payment systems include debit and credit cards and electronic systems.
Capital-Market Lawyers at Odds with OJK over General Meeting of Shareholders Hukum 29th Jan 2016
Capital market legal consultants are currently at odds with the Financial Services Authority (OJK) regarding the quorum requirement for general meetings of public companies, as regulated under OJK Regulation No. 32/POJK.04/2014 on the Planning and Organization of General Meetings of Shareholders for Public Companies (2014 OJK Regulation). The current disagreement emerged during a discussion event organized by Hukumonline, in Jakarta on Wednesday, 27 January 2016. During the event, Indra Safitri, Chairman of the Capital-Market Lawyers Association (HKHPM), asserted that Article 27, part (a) of the 2014 OJK Regulation did not explicitly stipulate any quorum requirement as regards any potential amendments made to a company’s articles of association performed without the approval of the Minister of Law and Human Rights (Minister). Mr. Safitri emphasized that the provision only stipulated that the quorum requirement as regards this type of amendment required approval to be granted by at least two-thirds of the total number of shareholders in possession of legitimate voting rights.
Thai SEC Relaxes Mutual Fund Rules Law360 29th Jan 2016
The Thailand Securities and Exchange Commission said Tuesday it has relaxed certain rules on the investment policies of the country’s growing mutual fund industry, in ways that purportedly will increase flexibility for investors and bring Thai standards more in line with international norms. The regulator said the amendments, which span from promoting more investment diversity to increasing choices for retail investors, were approved recently by the agency’s Capital Markets Supervisory Board.
Parliament passes Financial Institutions Law Myanmar Times 28th Jan 2016
After years of back and forth, the Banks and Financial Institutions Law of Myanmar has been passed by parliament and is now awaiting the president’s signature, with banks to face more stringent rules on raising paid-up capital and on reserve requirements. Lenders will have to keep 5 percent of customer deposits as cash with the Central Bank, despite petitioning the regulator to enforce a lower reserve requirement.
Financial safety net bill may be passed in first quarter The Jakarta Post 27th Jan 2016
Lawmakers at the House of Representatives hope to pass the Financial System Stability Net (JPSK) bill into law in the first quarter to provide legal certainty for policy makers when making crucial financial decisions in times of need. According to Hendrawan Supratikno of the Indonesian Democratic Party of Struggle (PDI-P), also a member of Commission XI overseeing finance and banking, deliberations on the bill are almost complete. “We’re making good progress. We’re certain that we can pass it into law in February; in the third week of February at the latest,” he said on Tuesday.
VN central bank to soon clarify regulations for property loans Viet Nam News 26th Jan 2016
The State Bank of Viet Nam will issue instructions about loans for property when seeking mortgages, in a bid to clear misunderstandings, a representative said. Nguyen Tien Dong, Head of the central bank's Credit Department, said that future property was an asset of home buyers, adding that home buyers could use it when seeking mortgages, following established regulations. This was in response to information that several commercial banks had temporarily ceased accepting future property for approving mortgages for home purchases. The information concerned both home buyers and property developers because it triggered fears that the capital flow into the property market would stall, even as the realty market has shown sign of recovering.
Certain Banking and Insurance Activities Soon to be Exempt from FBL Requirements Lexology 26th Jan 2016
The Office of the Council of State approved the draft ministerial regulation exempting commercial banking and representative offices of foreign banks and life and non-life insurance from the restricted business activities under Schedule 3 of the Foreign Business Act (FBA), after the matter was approved by the Cabinet last year. The exemption will ease some restrictions on banking and insurance sectors and facilitate foreign investment in these sectors in Thailand.
Parliament: Changes proposed to Singapore's banking, tax systems Channel News Asia 25th Jan 2016
Three Bills were introduced in Parliament on Monday (Jan 25) to make changes to Singapore's banking and tax systems. In a statement on Monday, the Monetary Authority of Singapore (MAS) said the Banking (Amendment) Bill 2016 is aimed at three key areas: Strengthening prudential safeguards, corporate governance and risk management controls in the banking industry. The Bill will enable MAS to require foreign banks to locally incorporate all or part of their banking business, subjecting them to Singapore's capital and corporate governance standards. MAS will also be allowed to set requirements on banks' leverage and liquidity in line with international standards.
SMEs soon to access capital markets The Jakarta Post 23rd Jan 2016
The Financial Services Authority (OJK) is set to finalize a rule that will allow small-scale enterprises to source funding from the capital market in a bid to boost economic activity. OJK chairman Muliaman D. Hadad said the financial regulator and the Indonesian Stock Exchange (IDX) were currently preparing the policy, which would allow small and medium enterprises (SME) to conduct initial public offerings (IPO) and have their shares traded on the local stock exchange. Muliaman said the OJK had previously expected to announce the new rule in the first quarter but decided to delay the issuance due to some changes in regulations.
SGX Seeks Feedback on Proposed Amendments to Align Listing Rules with Changes to the Companies Act Lexology 22nd Jan 2016
In October 2014, the Companies (Amendment) Act 2014 (“Amendment Act”) was passed by Parliament to amend the Companies Act (“Companies Act”). The Amendment Act was the result of a series of comprehensive public consultations, including the report of the Steering Committee for Review of the Companies Act (the “Steering Committee” and the report, the “Report”) published in June 2011. The Singapore Exchange (“SGX”) is now seeking feedback on proposed amendments to the SGX-ST Listing Rules (Mainboard) (“Mainboard Rules”) and the SGX-ST Listing Rules (Catalist) (“Catalist Rules” and together with the Mainboard Rules, the “Listing Rules”) for alignment with the Companies Act as amended by the Amendment Act. SGX is also consulting on policy positions that are highlighted by other recent statutory amendments. The consultation ends on 12 February 2016.
Three Things About the New SBV Regulations on Mergers of Credit Institutions Lexology 21st Jan 2016
After five years implementing the Government’s plan to restructure Vietnamese banking system and slashing the number of commercial banks operating in the country by one-fifth , the State Bank of Vietnam (the “SBV”) has upgraded its regulatory arsenal to move to the next phase of the banking structural reform. On the last day of 2015, the SBV issued one of its final pieces of legislation of the year – Circular 36/2015/TT-NHNN regulating the reorganisation of credit institutions (“Circular 36”). The new circular will take effect shortly after the traditional Lunar New Year on 1 March 2016. Here are three things you should know about this circular which the SBV hopes will help it in reaching the ambitious target set by the SBV Governor to reduce the number of commercial banks to under 20:
OJK Re-regulates Venture Capital Business Akset Law 20th Jan 2016
On December 28, 2015, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) issued new regulations governing venture capital business, which was previously regulated by the Ministry of Finance (“MOF”). The venture capital sector was previously regulated under MOF Regulation No. 18/PMK.010/2012 on Venture Capital Companies (“Old Regulation”). The New Regulations are intended to revitalize the venture capital sector and elaborate more detailed requirements in response to the rapid increase of venture capital activities in recent years.
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.
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