| Market Development
OJK gains wider access to Australia The Jakarta Post 21st Mar 2016
The Financial Services Authority (OJK) has signed an agreement with the government of the state of Victoria and a financial center in Australia as part of the efforts to help local financial services expand their businesses there. The agreement with the financial center aims to help OJK staffers improve their capacity by learning from the Australian institution.
10 financial advisers fined for anti-competitive behaviour Channel NewsAsia 17th Mar 2016
In the first case of anti-competition in the financial services sector, the Competition Commission of Singapore (CCS) on Thursday (Mar 17) penalised 10 financial advisers for collectively pressurising a competitor to withdraw an offer from the life insurance market. They were ordered to pay fines totalling about S$900,000, after being found guilty of engaging in anti-competitive behaviour.
Capital market promotion in Laos for AEC integration The Nation 16th Mar 2016
The Lao Securities Exchange (LSX) is promoting the capital market to give more choices to Lao people in terms of investment after Laos became a full member of the Asean Economic Community (AEC) last year. The LSX on Saturday hosted the Investment Gateway: Opportunities to Wealth in AEC, with the aim of providing information on capital market investments and fundraising for people looking for opportunities to expand their business within the AEC. Participants browsed various product exhibits set up by government and private organisations involved in the cap ital market. They also listended to a talk on investment opportunities in the stock market and learned from the experiences of the speakers.
Philippines still safe from FATF blacklist PhilStar 16th Mar 2016
The Philippines is safe for now from getting blacklisted by the global body on anti-money laundering and terrorist financing even as policymakers scramble to trace and retrieve $81 million in funds sent to the country. The Financial Action Task Force (FATF), in an e-mail to The STAR, stressed the country would need to enact further reforms to cover casinos as reporting bodies left out in amendments passed in 2012. “In June 2013, the FATF determined that the Philippines had made significant progress in improving its AML/CFT (anti-money laundering/countering financing terrorism) and noted the Philippines had established the legal and regulatory framework to meet its commitments in its FATF Action Plan,” the agency said.
BSP adopts agriculture financing framework The Manila Times 16th Mar 2016
To grow the agriculture and fisheries sector, monetary authorities approved a value chain financing framework to improve the stakeholders’ access to finance. Despite the impact of agriculture and fisheries sectors on the Philippine economy, obtaining credit remains a challenge, the central bank said in a statement Wednesday. The lack of access to finance places smallholder farmers at a disadvantage that stymie their integration into higher value markets.
Trust issues may hamper RI financial inclusion campaign The Jakarta Post 16th Mar 2016
The government’s joint effort with banking institutions to promote financial inclusion across the archipelago is facing a major hurdle as most people from low-income households are reluctant to let individual agents take care of their savings under the government-endorsed branchless banking program, a recent study has revealed. The Financial Services Authority’s (OJK) branchless banking program, locally known as Laku Pandai, offers banking and financial services to all Indonesian citizens through the help of other parties, including individual and institutional agents, whose work is supported by cellphones and other IT facilities.
FX rate stablised but dollarisation continues Vietnam Investment Review 16th Mar 2016
Viet Nam has succeeded in stabilising the foreign exchange rate, but the rate of dollarisation has not decreased as expected, experts said in a meeting on Monday. Director of the Viet Nam Institute for Economic and Policy Research, Nguyen Duc Thanh, said that people now tend to keep their savings in US dollars and wait for the currency to appreciate. In reality, it is likely that the Viet Nam dong will be depreciated as the currency is quite strong, putting enterprises under much more pressure, he said.
SET plans to launch service platform Bangkok Post 16th Mar 2016
The Stock Exchange of Thailand (SET) is set to roll out a mutual fund service platform early next year in a move that could shake up the industry's landscape. The system will sharpen the competitiveness of small mutual fund companies against large firms, particularly bank subsidiaries, senior executive vice-president Pakorn Peetathawatchai said.
Singapore's financial services sector resilient amid new challenges The Straits Times 16th Mar 2016
Renowned economist Song Seng Wun was not surprised at all to learn, in March last year, that he was among 15 employees being let go from CIMB Securities. After 25 years in Singapore's financial services industry, Mr Song has endured enough business cycles to understand that job cuts come hard and fast in his field when business conditions sour. Fortunately for Mr Song, his jobless status was short-lived; within weeks, he was offered the chance to rejoin CIMB as an economist for its private banking unit.
Push for mobile banking growth The Phnom Penh Post 16th Mar 2016
Cambodia's central bank wants to increase the usage of mobile banking services, especially in far-flung rural areas, by encouraging Cambodians to open bank accounts and avail the convenience and secure nature afforded by digital banking. Speaking yesterday during the “National Summit on the Development of Microfinance Sector in Cambodia”, Ouk Sarat, director of the payment system department at the National Bank of Cambodia (NBC), said mobile banking could bring more people into the formal banking segment. He admitted, however, that mobile banking services in the Kingdom needed much improvement..
More funding options sought to finance infrastructure projects The Jakarta Post 15th Mar 2016
The government needs to explore funding options to fill the gap between financing demands and available funds for numerous construction projects, bankers and regulators have said. Alternative funding options, such as the issuance of project-based debt papers, are needed, with the government earlier estimating the total funding needs for infrastructure projects over the next five years at Rp 5.5 quadrillion (US$421.9 billion). The government is seen to provide less than a quarter of that amount through the state budget, with the remainder intended to be filled through public-private partnerships (PPP) and other funding mechanisms.
OJK Launches OJK-Proksi to Improve Micro Finance Sector Tempo 15th Mar 2016
The Financial Services Authority (OJK) recently launched the OJK International Center for Micro Finance and Financial Inclusion (OJK-Proksi). OJK Chairman Muliaman D. Hadad said that OJK-Proksi is expected to answer various challenges faced in developing micro-financing sector and financial inclusion. "We know that one of the main issues is high interest rate for micro finance, we will find a solution. Not only for the national scale, but also international," Muliaman said during the OJK-Proksi launching event on Tuesday, March 15, 2016.
Microfinance sector praised, but some lenders called out The Phnom Penh Post 15th Mar 2016
Prime Minister Hun Sen has lauded the microfinance sector’s efforts to increase rural access to finance, while blasting certain unnamed microfinance institutions (MFIs) and NGOs he accused of gouging consumers with high-interest loans and confiscating land assets when they failed to pay them back. Speaking at the “National Summit on the Development of Microfinance Sector in Cambodia” yesterday, the prime minister acknowledged the sector’s contribution to providing capital for farmers and small firms, but said some institutions were still taking advantage of consumers’ low financial education.
IMF head presses Laos to deepen reforms Yahoo News 15th Mar 2016
Communist-ruled Laos must deepen reforms to maintain its rapid expansion, the IMF chief said Tuesday at the end of a rare visit to one of the world's fastest growing economies. Resource-rich Laos has an annual growth rate of around 7.4 percent, but gains have not been evenly distributed and poverty remains widespread among its 6.8 million people, the majority of whom work in agriculture.
Accountant group meets in Viet Nam Viet Nam News 14th Mar 2016
Members of the Chartered Accountants Worldwide in Việt Nam last week met for the first time in Viet Nam to develop a chartered accountants’ community in the country. The prestigious title of chartered accountant is earned by leading professionals in accounting, finance and business. They often hold high positions including business leaders, decision makers and trusted consultants in the largest listed firms.
PH, Peru partner in improving credit access Manila Bulletin 14th Mar 2016
The Philippines has partnered with Peru in improving credit access in the Asia Pacific by sharing knowledge and experience in implementing best practices in an international workshop it is hosting. The ‘Conference on Credit Infrastructure’ held in Makati has been organized under the Financial Infrastructure Development Network (FIDN) initiative of the APEC Cebu Action Plan (CAP), developed during the Philippines’ APEC chairmanship in 2015. “Peru, in its chairmanship this year of the APEC Finance Ministers’ Process, has committed to driving implementation of the Cebu Action Plan’s initiative,” Finance Secretary Cesar Purisima said.
Credit guarantee funds operate inefficiently The Saigon Times 14th Mar 2016
The role of credit guarantee funds is to help small and medium enterprises (SMEs) gain access to financing sources but they have been operating inefficiently, heard a conference in HCMC last week. Speaking at the conference on models and measures to develop guarantee funds, experts said SMEs have found it hard to take out bank loans due to the lack of assets for collateral. Credit guarantee funds are desgined to support SMEs without assets for mortgage but with feasible production plans. However, they have proven ineffective in playing this role due to a number of reasons, including banks’ distrust in them.
KPK, OJK team up to combat graft The Jakarta Post 11th Mar 2016
The Corruption Eradication Commission (KPK) and the Financial Services Authority (OJK) have agreed to improve their joint efforts in fighting graft, particularly in the financial services sector. KPK chairman Agus Rahardjo and OJK chairman Muliaman signed on Thursday a memorandum of understanding for the collaboration of various measures to eradicate corruption. These measures include the exchange of data and information, gatherings and program implementation as well as supplying OJK personnel to the KPK as experts during the handling of corruption-related cases in the financial services sector.
The Bourses of ASEAN: A round-up of development in 2015 Lexology 8th Mar 2016
2015 was a mixed year for the world’s capital markets and the story was no different across ASEAN. Spread across two client alerts, we take a brief look at the capital markets of each of the ASEAN members, how they fared in 2015 and the outlook for 2016. In the first alert we looked at the markets of the wider Mekong region. In this second alert we consider the markets in ASEAN’s more southerly member nations.
Deputy PM wants ministries to minimise stakes in SOEs Viet Nam News 7th Mar 2016
Deputy Prime Minister Vu Van Ninh has called on ministries and agencies to minimize the controlling stake of the State in State-run enterprises (SOEs). This would open more opportunities for private investors to invest in equitised SOEs in Viet Nam, he said.
Indonesian Stock Exchange to Speed Up IPO Process The Jakarta Globe 5th Mar 2016
The Indonesia Stock Exchange (IDX) plans to speed up market flotations this year by letting companies avoid a laborious paper-based process by registering their initial public share offers online instead, its president said on Friday. "We are discussing how to ease this. We are talking to [the financial services authority] OJK to digitize the registration process," Tito Sulistio told Reuters. In an interview in his car on the way to a meeting with the OJK, Sulistio said by moving part of the IPO process online companies can cut at least two weeks off the 13 weeks it usually takes to get from registration to launching the offer. He said he hoped the change would be approved by the end of the month as it did not require big regulatory changes.
Incentives needed to make sukuk more attractive: OJK The Jakarta Post 4th Mar 2016
The Financial Service Authority (OJK) expects tax incentives for sukuk to lift the sharia financial industry from the doldrums given that Indonesia has the world’s largest Muslim population. OJK's deputy commissioner for stock market supervision, Sardjito, said the Finance Ministry should issue a new regulation on incentives in the near future. Outstanding corporate sukuk in Indonesia are currently worth Rp 9.9 trillion (US$761.5 million), only 3.95 percent of total corporate debt securities.
Establishing stock exchange will boost economic growth The Brunei Times 4th Mar 2016
The establishment of Brunei’s own stock exchange will support the country’s economy and allow Bruneians to invest in shares conveniently, a senior official at the Autoriti Monetari Brunei Darussalam (AMBD) said recently. AMBD’s Managing Director Yusof Hj Abd Rahman said the central bank is collaborating with the Ministry of Finance to set up the country’s own bourse and the exchange “can act as a significant catalyst” to grow Brunei’s economy.
Indonesia Plans to Create Startup IPO Market to Draw Investors Bloomberg 3rd Mar 2016
Indonesia plans to establish a dedicated section within its main stock exchange to host initial public offerings by startups, as Southeast Asia’s largest country pursues its vision of becoming a regional cradle of technology entrepreneurs. It wants to set up a new trading market -- tentatively called the “‘technology board” -- at the Indonesia Stock Exchange so founders and investors can more easily take their companies public, Communications and Information Technology Minister Rudiantara said.
Philippines sees growth in microinsurance products Business World 3rd Mar 2016
Increased product awareness and sustained economic expansion are fueling double-digit growth in the Philippine insurance sector, as the emergence of microinsurance products helps boost penetration rates and premiums. The industry posted a record performance in 2015, as total premium income rose by 18.2% to reach P233 billion, according to the sector regulator, the Insurance Commission (IC).
CSX signs data-sharing deal with Laos, Vietnam The Phnom Penh Post 2nd Mar 2016
Cambodia Securities Exchange (CSX) has signed two memoranda of understanding (MoUs) on information and experience sharing with Lao Securities Exchange (LSX) and Hanoi Stock Exchange (HNX). The MoUs, signed here last Friday, aim to increase cooperation in the sharing of market data and disclosure information, as well as public awareness activities and investor education programs.
Asset Management
China Railway Group to invest US$2bil in Bandar Malaysia The Star Online 21st Mar 2016
China Railway Group Ltd has announced that it will invest US$2bil (RM8.1bil) to build its own regional centre in Bandar Malaysia. This comes three months after it won the bid with joint-venture partner Iskandar Waterfront Holdings (IWH) to acquire 60% of equity in Bandar Malaysia for RM7.41bil from 1MDB Real Estate. The announcement was made in the presence of Prime Minister Datuk Seri Najib Razak earlier on Monday.
FMI to Commence Trading in YSX on March 25 Myanmar Business Today 21st Mar 2016
Trading on the Yangon Stock Exchange (YSX) will commence with the trading of First Myanmar Investment (FMI) Co Ltd on March 25, the company said. Dr Maung Maung Thein, deputy minister for finance, confirmed that at a seminar held at YSX premises. “Share trading will start on March 25, that’s for sure. It will start with FMI, which will be followed by Myanmar Thilawa SEZ Holdings Public Limited, Myanmar Citizens Bank and First Private Bank. “We cannot start two or three companies simultaneously. If we start with three companies it will be complicated. However, it will not take months, only days between the successive opening of the trading,” Dr Maung Maung Thein said.
Executives from Thailand’s richest families guilty of insider trading Thailand Business News 19th Mar 2016
Earlier this week, the Securities and Exchange Commission (SEC) again demonstrated to its state regulating peers that it is doing its job to enforce rules reported the Bangkok Post The capital market fined top executives and shareholders of five companies listed on the Stock Exchange of Thailand for insider trading, its second crackdown in three months on top managers who have abused their power in publicly traded firms for their own benefit or for their cronies.
Helping US investors understand the rights challenges in Myanmar Mizzima News 19th Mar 2016
Efforts are being made to help US companies interested in investing in Myanmar to understand the ongoing challenges in terms of human rights in the country. In this interview with Mizzima’s Aung Thura, Miss Claudia Flores from the International Human Rights Clinic talks about the purpose of the group’s programme, during a visit to Myanmar in the middle or March.
China firm to buy Thai security assets Bangkok Post 19th Mar 2016
China Security & Fire Co Ltd plans to acquire security assets in Australia and Thailand for more than $150 million, the latest example of Chinese companies expanding overseas through acquisitions. Chinese companies have been actively making foreign acquisitions in sectors such as property, consumer, financial and commodities. China's Anbang Insurance is leading a group which agreed on Friday to buy Starwood Hotels & Resorts in a $13.16-billion deal.
Stock investor confidence returns Bangkok Post 15th Mar 2016
Thai shares briefly surpassed the 1,400-point level on Monday, with stock investor sentiment for the three months to May rising for the first time in five months in the wake of the government's clearer infrastructure policy and a set of measures to help small and medium-sized enterprises (SMEs). The Fetco Nida Investor Confidence Index for the three months to May surged 31.15% to 94.30 from last month's 71.9, said Kanate Wangpaichitr, president of the Federation of Thai Capital Market Organizations (Fetco).
Scrapping foreign ownership cap boosts stock prices Viet Nam News 14th Mar 2016
On February 21 Vĩnh Hòan Fisheries Joint Stock Company (VHC) became the third listed company to offer 100 per cent of its ownership to foreign investors after Government Decree 60/2015/ND-CP took effect. The decree, which took effect in September, allows unlimited foreign investment in public companies that are not in certain sectors and in Government and corporate bonds. The sectors where caps still exist are meant to remain under Government control to safeguard national security and social safety and order.
Myanmar's new stock exchange prepares for first listing Reuters 14th Mar 2016
Myanmar's new stock exchange plans its first listing on March 25, the deputy finance minister told Reuters on Sunday, more than three months after it launched. The Southeast Asian country's economy was devastated by nearly 50 years of military rule and rapid reforms since the junta handed over power in 2011 have included the development of capital markets to help finance growth, such as the new stock market. But with challenges ranging from governance standards to inexperience and lack of capacity, progress has been slow. Since the exchange's official opening in December, there have been no transactions because there is nothing to trade.
Malaysian capital market seen resilient The Star 11th Mar 2016
PETALING JAYA: Malaysia’s capital market will continue to be affected by the volatility in global liquidity flows from the effects of China’s slowdown, US interest hike and weak commodity prices.
New range of hedge products for investors The Star Online 11th Mar 2016
Increasing volatility in traditional asset classes has given rise to a new range of hedge fund-type products in Asia marketed at individual investors, from short-selling funds to football-backed securities. In particular, an unusually high correlation between stock and bond prices has driven investors to so-called liquid alternative funds, which employ hedge fund strategies but are more easily available to high net worth and retail investors.
Indonesia ETFs Are a Bastion of Strength in Emerging Market ETF Trends 9th Mar 2016
The emerging markets may be finally turning around, but Indonesian stocks and country-specific exchange traded funds have been a standout in the developing world. Over the past three months, the iShares MSCI Indonesia ETF (NYSEArca: EIDO) increased 14.1% and Market Vectors Indonesia Index ETF (NYSEArca: IDX) gained 14.3%. Both EIDO and IDX recently saw their 50-day moving average break above their long-term, 200-day moving average, forming a bullish golden cross. “Indonesia for 2016 could turn out to be the story India was supposed in 2015,” Herald van der Linde, Asia equity strategist at HSBC, told the Financial Times.
Which Indonesian Companies Are Yet to Comply with 7.5% Minimum Free Float? Indonesia Investments 8th Mar 2016
The Indonesia Stock Exchange (IDX) will summon 18 listed companies to explain why they did not comply with the new minimum 7.5 percent free float regulation (free float is the number of companies' outstanding shares available to the public for trade). This new regulation, announced in January 2014, stipulates all listed companies on the IDX to have a minimum free float ratio of 7.5 percent per 31 January 2016 (BEI No. Kep-00001/BEI/01-2014). This regulation was designed in an attempt to boost market liquidity and raise trade volume on the IDX.
Fintech in Islamic Finance as Malaysia Launches Investment Account Platform Islamic Finance 8th Mar 2016
Malaysia continues to lead in the innovation of Islamic financial products with the recent launch of an Investment Account Platform (IAP) which is envisaged to become a cross border multi-currency channel linking into regional and global economies. The Islamic finance market is currently characterised by a collection of domestic markets with little cross border activity, and faces challenges of financial intermediary, that of effectively matching investors seeking Sharia compliant opportunities to businesses seeking funding. Speaking at the launch of the IAP product, Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia) stated the IAP is “more than a new and innovative medium for Shariah-compliant investments and fund raising initiatives”, but “signifies a fundamental shift towards providing solutions that addresses the prevailing gap in the current risk-transfer financial regime to one that now allows for financial institutions to include a wider range of investment intermediation activities that emphasises risk-sharing and thus facilitate a stronger linkage of finance and the real economy.”
New DICA Website Aims to Make Investment, Company Registration Easier Myanmar Business Today 4th Mar 2016
The Directorate of Investment and Company Administration (DICA) has launched a new website in a bid to give easier access for local and foreign businesses to relevant information on investments and company registration in Myanmar. The new website will be accessible on www.dica.gov.mm starting March 7, DICA said. The development of the new website was conducted by an interdivisional DICA team, supported by German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
Indonesia's Rallying 8% Bonds Lure Funds in Negative-Rate World Bloomberg 3rd Mar 2016
Indonesia’s sovereign bonds are Asia’s best performers this year and strategists say global funds are still hungry for benchmark debt that yields 8 percent in a world of negative interest rates. The yield on the 10-year 8.375 percent rupiah notes fell 80 basis points this year through Feb. 11 to a nine-month low of 7.95 percent before rising to 8.01 percent. ING Groep NV lowered its year-end yield forecast to 7 percent from 7.5 percent on Thursday on the prospect of more interest-rate cuts, while State Street Global Markets and Russell Investments are also bullish.
Govt Agrees to Demands to Lower REIT Taxes The Jakarta Globe 3rd Mar 2016
The government has agreed to lower taxation tariffs imposed on property acquisitions under the local version of real estate investment trusts, or REIT, on Wednesday (02/03), paving the way for more that $3.6 billion in total issuances of the investment instruments. The move is part of the government's economic stimulus package, which seeks to rejuvenate property sector that suffered from slowing demand last year. The government will impose a 0.5 percent final income tax (PPh) on sales of property to REIT, from a previous 5 percent, Chief Economics Minister Darmin Nasution said after a meeting with property business lobby Real Estate Indonesia on Wednesday (02/03). During the meeting officials and REI agreed to impose a 1 percent fee on land and building rights acquisition (BPHTB), up from a current 5 percent.
Banking
Digital banking may help lower interest rates: OJK The Jakarta Post 20th Mar 2016
The Financial Services Authority (OJK) is to encourage bankers to optimize digital banking in their financial services to maximize efficiency, helping to lower interest rates and increase competitiveness. OJK commissioner for banking supervision Nelson Tampubolon said the optimization of digital banking was in line with President Joko "Jokowi" Widodo's policy to develop the digital economy in Indonesia. "The optimization of digital technology is expected to increase efficiency in the banking industry, which in turn can lower interest rates," Nelson said after a discussion on digital banking in Jakarta on Thursday, adding that efficient digital banking would speed up financial transactions.
Foreign banks slow to offer support, say local lenders Myanmar Times 18th Mar 2016
Foreign bank branches operating in Myanmar for almost a year have proved slow to support local lenders although they have brought others benefits, said financial industry sources. Nine foreign banks from Japan, Singapore, China, Malaysia, Thailand and Australia were awarded licences in late 2014, and each opened a branch last year. A second round of bids followed earlier this year from which four banks – from India, South Korea, Taiwan and Vietnam – received provisional licences. Those banks are expected to open branches within the next 12 months.
BI urge banks to cut deposit and loan rates immediately The Jakarta Post 18th Mar 2016
Bank Indonesia (BI) urges the nation’s lenders to immediately adjust their deposit and loan rates with the central bank's benchmark interest rate that has been slashed 25 basis points (bps) to 6.75 percent. BI’s economy and monetary policy executive director Juda Agung said the central bank has accumulatively slashed its key rate by 75 bps since November 2015. At the same time, the primary reserve replacement ratio (GWM) has been cut by 150 bps. However, the banking industry has, on average, only cut their deposit rate by 7 bps and loan rate by 4 bps.
BSP to keep overnight rates on hold, likely to hike in H2 2016 EconoTimes 17th Mar 2016
The Philippines’ central bank is likely to keep its overnight rates on hold again at 4% (RRP) and 6% (RP) together with the special deposit account at 2.50%. The BSP is not expected to change rates in H1 2016 with the upcoming Presidential elections and the shift to the interest rate corridor (IRC) that is likely to happen in April. Domestic conditions continue to be steady for Philippines in spite of headwinds from the external sector. The Philippines’ economy had expanded 6.3% y/y in Q4 2015, more than market consensus of 5.9% y/y. The GDP growth for entire 2015 was 5.8% y/y. Even though exports were soft in 2015, government and consumer expenditure increased the growth figures along with a considerable 14% growth in gross fixed capital formation. The recent exports data indicated that the country is being plagued with weak trade conditions.
PNoy urged to sign DICT bill to protect PH banking system Manila Bulletin 16th Mar 2016
The $81-million money laundering incident allegedly from the hacked Bangladesh Bank system has made the creation of the Department of Information and Communications Technology (DICT) imperative to prevent the scam from happening again in the future. “We need to pass the proposed law to prevent any potential hacking of our banking system which could lead to tremendous financial losses like what happened to Bangladesh ,” Valenzuela City Rep. Sherwin Gatchalian, said as he appealed to President Aquino to sign the DICT bill. The senatorial candidate of the Nationalist People’s Coalition is referring to Senate Bill No. 2686 and House Bill No. 6198, both seeking to create the Department of Information and Communications Technology (DICT), which will take over the “communications” function of the would-be Department of Transportation (DOT). The Senate already adopted the House bill as an amendment to its version last month.
Brazen Heist of Millions Puts Focus on the Philippines The New York Times 16th Mar 2016
It is a financial whodunit for the digital era: More than $80 million of Bangladesh’s money vanished last month after it was electronically transferred out of that country’s account at the Federal Reserve Bank of New York. As officials around the world search for the money and place blame, the caper is highlighting what looks like a weak point in the global financial system that allowed the money to get by regulators: the murky banking system of the Philippines.
Philippines, Malaysia ink banking pact PhilStar 15th Mar 2016
The central banks of the Philippines and Malaysia have signed an agreement aimed at greater financial integration and economic development among members of the Association of Southeast Asian Nations. Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said both the BSP and the Bank Negara Malaysia have agreed on the guidelines regarding the entry of qualified ASEAN banks between the Philippines and Malaysia under the ASEAN Banking Integration Framework (ABIF). “By signing this agreement, the BSP manifests its commitment to support greater regional financial integration and economic development through the ABIF,” Tetangco said. Tetangco and Bank Negara Governor Zeti Akhtar Aziz signed the Heads of Agreement (HOA) in Kuala Lumpur yesterday.
Incentives prepared for banks to make loans affordable The Jakarta Post 14th Mar 2016
The government is bombarding the banking industry with concerted efforts to push down lending rates as the banking regulator prepares a new policy to encourage banks to reduce their profit margins to make loans more affordable. The policy is currently being drafted by the Financial Services Authority (OJK) and is expected to be issued by the end of the month, which is a slight delay from the initial release schedule of early this month.
Banking On Better Times Frontier Myanmar 14th Mar 2016
The people of Myanmar have always had a wary relationship with banks. The slightest rumour of trouble in the banking industry can trigger a run. The big run in 2003 shocked many depositors and left many people with no trust of banks. The wariness about banks is one reason why the financial sector in Myanmar is the least developed in Southeast Asia. Only 16 percent of adults have a bank account, according to a report last year by New Crossroads Asia, a research firm, and the World Bank says less than 20 percent of the population has access to formal financial services. New Crossroads Asia said its survey found that 37 percent of the people who visited banks did not have an account and were only using them to collect remittance transfers. The country’s largest bank, state-owned Myanma Economic Bank (MEB), has 307 branches throughout the country, far fewer than a bank of comparable size in neighbouring Thailand.
CIMB Bank and CIMB Thai appointed as cross currency dealers The Star Online 14th Mar 2016
Bank Negara Malaysia (BNM) and Bank of Thailand (BOT) have each appointed CIMB Bank and CIMB Thai as cross currency dealers (ACCD) for the settlement of ringgit-baht trade under the newly launched Local Currency Settlement Framework. The framework was established by BNM and BOT to promote the use of Malaysian ringgit and Thai baht between Malaysia and Thailand to settle cross-border trade and direct investments. This is the first bilateral currency settlement framework within Asean, with the aim of providing an alternative settlement framework for the US$22bil trade between Malaysia and Thailand.
Short-term deposits hit 5.5% cap chasing long-term highs Vietnam Investment Review 14th Mar 2016
After pushing long-term rates to a two-year high of 8.38 per cent, some commercial banks continue to raise short-term deposits to the 5.5 per cent cap. Currently, the central bank sets the cap of 5.5 per cent per year only for short-term deposits of below six months while it floats the rate for medium- and long-term deposits. It is estimated that 13 banks list the ceiling rate for short-term deposits. Most of them are small and medium size.
Banks sell non-performing loans to reduce bad debt Vietnam Investment Review 14th Mar 2016
Commercial banks offloaded a large volume of non-performing loans (NPLs) to the Viet Nam Asset Management Company (VAMC) in 2015 to reduce the bad debt rate to below 3 per cent. This was the rate required by the central bank. Online business website Bizlive.vn quoted recent financial reports from banks as saying that by the end of 2015, BIDV topped the list of banks those sold bad debts to the national debt trading company with a sale of roughly VND22 trillion (US$977 million), equal to 3.7 per cent of the bank's total outstanding loans in the year.
Philippines, Malaysia lead ASEAN cross-border banking Nikkei 14th Mar 2016
The Philippines and Malaysia signed a bilateral agreement on Monday that leads the way for banks to do business in neighboring countries based on a new regional economic integration framework. Amando Tetangco Jr., governor of Bangko Sentral ng Pilipinas, and Zeti Akhtar Aziz, governor of Bank Negara Malaysia, on Mar.14 signed the agreement to allow three qualified banks from each country access and operational flexibility in the counterpart country.
Domestic banks look hard for foreign strategic partners Viet Nam News 14th Mar 2016
Domestic commercial banks are finding it hard to look for foreign strategic partners due to difficulties in the financial market and the current rules on foreign ownership limits. Restrictions in finance and governance force domestic banks to look for support from foreign partners to help them grow rapidly in the context of rising competition from the country’s integration into the world market. The Bank for Investment and Development of Việt Nam (BIDV), for example, early last year planned to find foreign strategic partners, selling a 15 per cent stake to a foreign strategic partner and 10 per cent to a foreign financial investor. However, it failed in its search.
PDIC dangles perks to prompt mergers among rural banks The Philippine Star 13th Mar 2016
State-run Philippine Deposit Insurance Corp. (PDIC) is urging rural banks to avail of incentives dangled by the Bangko Sentral ng Pilipinas (BSP) to further strengthen the country’s banking industry. PDIC president Cristina Que Orbeta said rural banks should take advantage of the Consolidation Program for Rural Banks (CPRB) especially in the face of increased competition brought about by the integration of financial markets in the Association of Southeast Asian Nations (ASEAN) region. “I trust that rural banks will endeavor to expand their horizons, create the possibilities and opportunities for their business and look at CPRB as a window of opportunity to expedite their decision-making process,” she said.
Banks fear giving up licences Myanmar Times 9th Mar 2016
Commercial banks have asked for clarity on a requirement to surrender their licences before mid-June, with a new one to be issued at the discretion of the Central Bank. The new Financial Institutions Law, enacted on January 25, states that banks have to give up their old licences within six months and will be issued with a new one “subject to such terms and conditions imposed by the Central Bank”. Lenders have asked for a detailed breakdown of these terms and conditions before they hand back their licences. Some hold two or three licences – for investment banking or development banking – though they operate solely as a commercial bank.
New branches risky for local banks Vietnam Investment Review 9th Mar 2016
Many banks have recently opened numerous branches and transaction offices, causing concerns about safety for the banks and unhealthy competition within the banking system. It is estimated that more than 20 banks were licensed to open over 100 branches and offices during the first two months of this year. In January and February, Nam A Bank, for example, opened 9 new branches and offices, while Viet Capital Bank opened ten sites. The number of new branches and offices opened by Kien Long Bank, PG Bank and Vietcombank was 14, 9 and 5, respectively.
Singapore Banks Eye Barclays’ Private Bank Barrons 8th Mar 2016
Barclay’s Asian private banking business is up for sale; Bernstein highlights in this report what the SG banks are after, and gives their thoughts on the implications of a potential transaction for each. Overall, a good acquisition for either DBS (D05.SG) or OCBC (O39.SG) (assuming reasonable pricing), even more so but a tricky one to consider for UOB (U11.SG).
Govt, House reach impasse over use of state funds for bailouts The Jakarta Post 8th Mar 2016
The government and legislators failed on Monday to agree on the use of state funds to salvage banks in times of crisis, forcing a delay to the deliberation of the financial system crisis prevention bill. Talks on the bill, officially known as the financial system crisis prevention and mitigation bill (PPKSK), will resume on Friday at the House of Representatives. Monday’s deliberation was attended by Finance Minister Bambang Brodjonegoro, Bank Indonesia (BI) Governor Agus Martowardojo, Financial Services Authority (OJK) chairman Muliaman D. Hadad and Deposit Insurance Corporation (LPS) chairman Halim Alamsyah.
Risk looms in OJK’s call for loan rate cuts The Jakarta Post 7th Mar 2016
Calls for the Financial Services Authority (OJK) to cut lending rates may backfire, with loan growth stymied and bad debt increased. The call was conveyed in a circular distributed by the OJK to major banks, following repeated statements from Vice President Jusuf Kalla that he wanted to see a decline in lending rates across the banking industry. According to a copy of the circular, the OJK asks for the lenders’ “attention and commitment” to gradually reduce lending rates to a single digit by year-end, beginning as soon as they implement the latest OJK policy on deposit rates.
Credit institutions reduce cross-ownership Viet Nam News 7th Mar 2016
On February 19 Viet Nam Maritime Joint Stock Bank (MaritimeBank) sold 64.2 million shares of Military Bank (MB), accounting for 4 per cent of the military-owned lender’s registered capital. The buyers were a group of investors from Dragon Capital Fund. Viet Nam Investment Fund Management Company (VEIL) bought 25.2 million shares while Amersham Industries Limited and Norges Bank bought 13.58 million and 25.5 million shares. The move helped MaritimeBank pare its ownership of MB to 4.96 per cent, bringing it within the central bank’s ownership cap of 5 per cent.
BSP cites healthier banking sector Manila Bulletin 6th Mar 2016
The country’s 36 large banks and their subsidiary and quasi banks continue to report stable capital health as of end-September 2015 because of profits and capital infusions. The Bangko Sentral ng Pilipinas (BSP) reported that capital adequacy ratio (CAR) – which covers solvency issues and risks – improved a bit to 15.55 percent on solo basis from end-June’s 15.48 percent. However, on consolidated basis which includes subsidiaries, banks’ CAR slipped to 16.40 percent from the previous quarter’s 16.42 percent. The banks’ latest CAR on solo basis is also lower compared to the same period in 2014 of 16.32 percent and 16.99 percent on consolidated basis.
Myanmar admits more foreign banks ahead of NLD accession Nikkei Asian Review 6th Mar 2016
Myanmar has given preliminary operating licenses to four more foreign banks, following the government's decision in late 2014 to grant licenses to an initial nine foreign banks. The move -- just before a new administration led by Aung San Suu Kyi takes over on April 1 -- highlights a rush by the incumbent administration of President Thein Sein to push through commercial contracts and key decisions in the final weeks of his five-year term. It also reflects continuing strong interest among foreign banks in Myanmar's nascent market for banking and financial services. The country's first stock market is set to begin trading stocks by the end of March -- albeit with the listing of just one Myanmar company, First Myanmar Investment. A gold and metals exchange is planned for later this year. The insurance and telecommunications sectors are among those set for further liberalization and foreign investment. And new laws recently passed by parliament or being drafted will introduce further reforms to investment, tax, markets and financial regulation.
Arm-twisting Singapore over bank secrecy laws won't work The Straits Times 6th Mar 2016
Singapore, by and large, is a very serious nation. Asia's richest country by per capita income ranked 24th in a recent World Happiness Report, behind much poorer Brazil, Costa Rica and Venezuela. In this sombre city-state of 5.5 million, money is no laughing matter, and the same is true for its bank secrecy laws. Which at least partly helps explain why Singapore is fastest growing among the five biggest wealth centres globally. Now, however, there is a fly in the ointment. This week, the Internal Revenue Service (IRS) sought to make UBS turn over the Singapore bank account records of US citizen Hsiaw Ching-Ye. The Swiss lender refused. UBS has until March 31 to explain its reasons and the outcome could set the stage for a testy showdown.
Only 1.3% of PSA loans turned sour Bangkok Post 3rd Mar 2016
Of the 789 billion baht in loans in the public service account (PSA), more than 500 billion was extended by the state-backed farm bank to finance the Yingluck Shinawatra administration's rice pledging scheme, says a senior Finance Ministry official. Of the total, only a meagre 1.3%, or 10.4 billion baht, have turned sour, said Krisada Chinavicharana, director-general of the Fiscal Policy Office. The PSA loans, extended by state-controlled banks, have funded government policies since 2009 and are guaranteed by the state. Despite the scheme's setback, the Bank for Agriculture and Agricultural Cooperatives (BAAC) bonds funding it have been guaranteed and paid by the Finance Ministry. A breakdown by lenders to the PSA shows BAAC's lending amounts to 706 billion baht or 89%.
Singapore banks credit profiles remain resilient but headwinds are rising: Fitch The Straits Times 2nd Mar 2016
The credit profiles of Singapore banks are likely to remain resilient despite macroeconomic headwinds in 2016, said rating agency Fitch Ratings on Tuesday. It noted that their 2015 fullyear results were solid on the whole, but macro headwinds were already contributing to slower loan growth and higher credit costs. Fitch Ratings said: "Cyclical risks in Singapore and other key regional markets are rising amid a slowing economy and continued volatility in commodity prices."
Banks may ship millions in cash overseas Myanmar Times 2nd Mar 2016
Myanmar's banks could soon be loading aircraft with tens of millions of dollars and sending them out of the country. They are considering clubbing together to ship large amounts of US dollars to their offshore bank accounts as the result of a new Central Bank policy toward physical notes. The Central Bank recently stopped accepting physical dollar deposits from commercial banks, said several bankers at private lenders, who were not aware of why the Central Bank had adopted this policy.
E-Payments
Philippines’ mobile wallet providers announce interoperability Enterprise Innovation 21st Mar 2016
Mobile money interoperability in the Philippines took a step forward with the successful integration of the digital payments mobile app of Paymaya Philippines, the digital financial services arm of PLDT and Smart Communications, Inc. (Smart), with Globe Telecom’s mobile money service GCash. It is seen to boost the local digital commerce ecosystem. The interoperability agreement is part of an initiative of the GSM Association (GSMA) and the Philippine Central Bank in making mobile money services more inclusive and accessible to more people in the country. With the interoperability in place, users of the PayMaya app can soon send funds to users of other mobile money systems, including GCash, and vice-versa. This move is seen to boost the growth of mobile money usage in the country, and in turn, expand the local digital commerce ecosystem.
The new payment systems bill: e-payments and beyond Bangkok Post 18th Mar 2016
In recent months, there has been excitement about the prospect of new electronic payment services in Thailand. News reports have described a system that will enable instantaneous funds transfer using only ID cards. From a public policy standpoint, it is challenging to move small payments to the electronic space. When that is accomplished, however, it can result in substantial benefits. For example, reducing the usage of cash can reduce the yield of robberies on the street and ultimately reduce the occurrence of robberies.
Nominee probe increases Bangkok Post 15th Mar 2016
The Bank of Thailand and the Finance Ministry have been asked to help investigate payment behaviour among foreign visitors, including the use of free messaging and calling applications to pay for goods and services. Deputy Commerce Minister Suvit Maesincee said such payments did not pass through the banking system and made it hard to discern the effect on tax collection. "The number of foreign tourists, particularly from China, Japan, South Korea and the United States, increases significantly every year, and authorities have found that many of them opt to pay using free applications such as WeChat," Mr Suvit said during a visit to Chiang Mai to investigate nominees after growing complaints from Thai business operators about foreign businessmen having Thais act as nominees.
MOIT issues warning on virtual currencies Vietnam Investment Review 14th Mar 2016
Specifically, some websites, forums and social networks provide information on virtual currencies such as Swisscoin, Bitcoin, Onecoin and Gem coin, besides IL coin with offers of huge profits. However, the State Bank of Viet Nam said on February 27, 2014 that Bitcoin and other virtual currencies were not legal currency and payment tools in Viet Nam. The ownership, purchase and use of virtual currencies are risky and not protected by law. In addition, VECITA said organisations and individuals should not do transactions relating to virtual currencies.
MOB to launch unsecured credit card Myanmar Times 10th Mar 2016
Myanmar Oriental Bank is planning to issue unsecured credit cards to customers with a monthly income of more than K150,000, becoming the first bank in the country to make the service widely available. With an unsecured card, customers do not have to put up collateral, said U Aung Htet Paing, deputy general manager of the bank’s card department. Without a credit bureau in Myanmar many banks have deemed it too risky to issue unsecured cards, as they are unable to accurately assess the creditworthiness of their customers. A number of banks including MOB, AYA Bank and CB Bank circulated between 500 and 1000 cards each last year to select customers and staff, as a test run.
First Visa Checkout in Malaysia launched New Straits Times 8th Mar 2016
Visa Inc has launched its first Visa Checkout in Malaysia, building on the success of the mobile commerce platform globally. Visa Checkout is a fast and easy payment service that allows Malaysian consumers to pay for goods online, on any device, in just a few clicks. The new service aims to address the frustation experienced by many online and mobile shoppers by reducing the number of steps required to complete a purchase online. Maybank has emerged as Visa's first financial institution to enroll Visa cardholders for the service and offer Visa Checkout acceptance to merchants across the country.
State banks integrate toll road e-payments by mid-March The Jakarta Post 7th Mar 2016
Users of prepaid cards issued by state-owned banks will be able to start using the products to pay fees at a number of toll-road gates by mid-March, as the lenders prepare to launch a newly integrated system. Until now, only Bank Mandiri has been providing an electronic payment option for tolls to its prepaid card users under a long-term contract with state-owned toll-road operator Jasa Marga since 2009.
Micropay Gateway on acquisition drive New Straits Times 7th Mar 2016
Online micropayment system services provider Micropay Gateway Sdn Bhd is on a merger and acquisition (M&A) drive and plans to take over the entire stake in a stored value card services provider. The company said the multi-million ringgit deal will change the transport industry in Malaysia. Other players with online micropayment systems include MOL AccessPortal Sdn Bhd, Touch ‘n Go Sdn Bhd and Managepay Systems Bhd.
Apex launches m-banking service in Myanmar Telecompaper 4th Mar 2016
Myanma Apex Bank has introduced a SMS-based mobile banking service dubbed ‘MAB Mobile Bank’ in Myanmar. Service users will be able to top up their mobile service, as well as pay bills, and make other payments, Myanmar Times reports. MAB Mobile Bank is compatible with SIM cards, on both smartphones and features phones.
LTA explores bank cards for alternative fare payment system Singapore Business Review 2nd Mar 2016
Upfront top-ups may become a thing of the past. Singapore commuters may soon be able to ditch the hassle of upfront top-ups as the Land Transportation Authority (LTA) intends to roll out a pilot for account-based ticketing system in Q4 this year. According to LTA’s announcement, the pilot is an effort to examine the feasibility of implementing such a system in the future. With account-based ticketing, commuters can use contactless debit or credit cards for fare payments. Like utility bills or post-paid mobile phone subscriptions, transactions will be processed and charged to the commuter in subsequent credit or debit card bills.
Fare payments: LTA studying 'contactless' credit and debit cards The Straits Times 2nd Mar 2016
Commuters may be able to use their "contactless" credit and debit cards to pay for bus and train rides in future, as part of a new payment option the Land Transport Authority (LTA) is exploring. With the system, commuters can tap their credit cards in and out at train station fare gates or on bus card readers, just like using stored- value fare cards. And there will be no need for top-ups. Commuters will be charged for their trips through their credit or debit cards, similar to a post-paid telco subscription or an utility bill. Details of the payment process for debit cards are still being worked out.
Insurance
Thailand: relaxation of Foreign Shareholding Limit for Non-Life Insurance Companies Clifford Chance 18th Mar 2016
The Ministry of Finance has issued a notification which relaxes the foreign shareholding limit for non-life insurance companies. Under the notification, which took effect on 10 March 2016, foreigners may be permitted to hold up to 75 percent of the voting shares and foreign directors may comprise up to three-fourths of the directors. In addition the Finance Minister has the power to fix different limits for the foreign shareholding and directors in cases where damage may be caused to the insured or the public. This briefing provides an outline of the conditions under the notification.
Singapore's general insurance profit slips on economic slowdown, competition The Business Times 17th Mar 2016
Increased competition and the economic slowdown hurt underwriting profit of Singapore's general insurance industry in 2015, even as total gross premiums rose. Total underwriting profit last year fell 17.1 per cent to S$325 million on a 2.6 per cent increase in total gross premiums to S$3.618 billion. According to the General Insurance Association of Singapore (GIA), the various classes in the industry posted mixed performances depending on how each was affected by the downturn, external headwinds and increased competition from existing and new players.
AIA eyes Myanmar, Cambodia licenses Nikkei 17th Mar 2016
Asia's largest insurer is interested in making a full-fledged entrance into Myanmar, where the first civilian president in more than five decades takes office at the end of this month. "At the right time, when they open up, we are committed to building a business in Myanmar," Mark Tucker, chief executive of the AIA Group, told the Nikkei Asian Review in Bangkok on Wednesday. Cambodia is another market AIA is waiting to "open more fully."
Government Updates the Premiums and Benefits for Public-Health Insurance Hukum Online 15th Mar 2016
The Government has just issued Presidential Regulation No. 19 of 2016 (“Second Amendment”), which amends Presidential Regulation No. 12 of 2013 on Public-Health Insurance (“2013 Regulation”).[1] In essence, the Second Amendment aims to improve the public-health insurance program organized by the Social Security Agency for Health (Badan Penyelenggaran Jaminan Sosial Kesehatan – “BPJS for Health”) by amending provisions relating to the following matters: (i) prevention of fraud; (ii) participants; (iii) registration; (iv) premiums; (v) benefits; and (vi) disbursement of compensation to health-facility providers by the BPJS for Health. The Second Amendment is of relevance to employers, employees, workers in the informal sector, and non-employees (investors, employers, pensioners, and veterans).
Laos: Country's first composite insurer to be established Asia Insurance Review 14th Mar 2016
Lao's Phongsavanh Group (PSVG) has signed a partnership agreement to appoint Singapore's Mekong Group and Deloitte & Touche Business Advisory to set up the first life and non-life insurance company in the Indochinese country. The company is to be called Phongsavanh Insurance Company (APA). Under the agreement, which was signed last week, Deloitte will conduct a feasibility study to determine the current needs of the local community before setting up the required insurance framework, systems and distribution network to serve both the local population as well as companies doing business in Laos.
90 Per Cent Of Life-Insured Malaysians Under-Insured, Says LIAM Malaysian Digest 14th Mar 2016
Up to 90 per cent of the life-insured Malaysians are under-insured, which could result in inadequate protection to the family members, says Life Insurance Association of Malaysia (LIAM) Industry Promotion Committee Chairman Ramzi Toubassy. "In 2015, about 50 per cent (around 12.5 million) of Malaysia's population had life insurance coverage protection but 90 per cent of them were under-insured, which means their insurance coverage may be only at one or two times of their annual income," he said.
FPG Insurance to diversify for surge in revenue The Nation 11th Mar 2016
FPG Insurance(Thailand), formerly known as Chubb Insurance (Thailand), aims to grow organically through diversifying its product portfolio in the retail field, as opposed to Chubb’s preference for corporate clients, aiming for premium income of Bt1 billion within five years, double this year’s target. The Hong Kong-based Zuellig Group recently submitted a proposal to the Office of the Insurance Commission (OIC) to hold a 49-per-cent stake in FPG Insurance (Thailand). Zuellig had acquired a 24.9-per-cent stake after Switzerland's Chubb Group decided to exit the Thai insurance business. The OIC caps foreign ownership of Thai insurance companies at 49 per cent.
EU insurance firms to get SEZ green light Eleven Myanmar 11th Mar 2016
The Insurance Business Supervisory Board (IBSB) says it is planning to grant licences to European insurance companies which have had offices in Myanmar for three years to operate in Thilawa Special Economic Zone (SEZ). Three Japanese companies, Tokia Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance, are already licensed to operate in the SEZ. “The western companies mostly meet the criteria. They need to have had offices in Myanmar for three years. Some of them will reach three years this year. If so, they can apply to operate in the SEZ when they meet the criteria,” said an official from the IBSB.
Domestic insurers see AEC potential Viet Nam News 10th Mar 2016
Vietnamese insurers have been offered great opportunities to expand their market share in the regional market thanks to the formation of the ASEAN Economic Community (AEC). With total gross domestic product of US$2.6 trillion, ASEAN will represent a large market for insurance products to a population of 625 million. According to Milliman – a US-based multinational consultancy provider, life insurance penetration rates in ASEAN markets are still at very low levels relative to those in more developed economies.
Indonesia: General insurance market forecast to grow by 20% this year Asia Insurance Review 10th Mar 2016
The Indonesian General Insurance Association (AAUI) expects gross premiums in the non-life sector to grow by 15-20% this year, tripling last year's growth pace on the back of government infrastructure developments. AAUI has projected that general insurance gross premiums will reach IDR58.9 trillion (US$4.5 billion) by the end of the year, the association's Chairman Yasril Y Rasyid said last week. The industry expanded by 6.7% last year to IDR55.2 trillion, in line with the slowing sales of cars, homes and apartments, reported the Jakarta Globe.
Singapore: Insurers need to reposition for the future Asia Insurance Review 10th Mar 2016
"Insurers, especially those with traditional business models, will need to rethink and sharpen strategies, and reposition for the future," said Mr Chua Kim Leng, Assistant Managing Director, Banking and Insurance, Monetary Authority of Singapore, at Life Insurance Association Singapore's 14th annual luncheon yesterday. He said, PwC’s Annual Global CEO Survey indicated that insurance is set to become one of the most disrupted business sectors, with CEOs expressing concerns over shifts in consumer spending and behaviour, as well as threats from new entrants and regulations. The 2016 EY Asia Pacific Insurance Outlook highlighted similar trends, namely, rising consumer demand for digital products and services, increasing competition and more complex regulations. These trends equally apply to the Singapore market.
Travel insurance makes comeback TTR Weekly 10th Mar 2016
Thailand’s Ministry of Tourism and Sports has discussed with the Ministry of Public Health and Office of Insurance Commission ways to offer travel insurance for visitors to Thailand. Media reports recently focused on private hospitals complaining they were left with unpaid bills after treating foreign tourists involved in accidents. Most of the accident victims had no travel insurance. In one media report a hospital said it was owed THB2 million last year. In just one case it was able to recover THB100,000 from a Ministry of Tourism and Sports special fund of THB200,000,000. The fund paid for the treatment of an Italian tourist. The report was posted on Thai Visa.com prompting reader comments asking how the ministry spent the balance of so called tourist compensation fund.
Panel eyes binding insurance Bangkok Post 10th Mar 2016
The government's reform steering committee on the economy has proposed a law to make crop insurance mandatory to shield farmers from the impact of natural disasters and secure their income. A working panel on crop insurance reform in the committee agreed crop insurance should be permanent, said Luck Wajananawat, president for Bank for Agriculture and Agricultural Cooperatives (BAAC). BAAC is a member of the working panel along with the Fiscal Policy Office and the Office of the Insurance Commission (OIC).
Micro-insurance in the Philippines: growth opportunities Fintech Innovation 9th Mar 2016
Microinsurance is the protection of low-income people against specific mishaps in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved. This definition is essentially the same as one might use for regular insurance except for the clearly prescribed target market: low-income people. According to the Philippine Insurance Commission (IC), the country’s insurance sector saw record performance in 2015 with total premium income rising by 18.2% to reach P233bn ($4.9bn). The growth was attributed to increased product awareness, sustained economic expansion, and the emergence of microinsurance products.
Philippines: Total premium forecast for 2016 lowered marginally Asia Insurance Review 9th Mar 2016
Total premiums in the Philippine insurance industry will likely hit PHP280 billion (US$5.9 billion) this year, marginally lower than the PHP300 billion originally forecast. Insurance Commissioner Emmanuel Dooc told Business World that he would like to adopt PHP280 billion as the forecast volume because it stands at the lower end of a targeted range. In January, he said that he believed PHP300 billion was achievable this year.
More transparency in healthcare insurance premiums needed, association says Channel NewsAsia 9th Mar 2016
One way to improve price transparency could be to enhance benefit illustrations to make it easier for consumers to understand, says Life Insurance Association Singapore President Khoo Kah Siang.
Singapore remains top re/insurance hub in Asia Intelligent Insurer 3rd Mar 2016
Singapore is likely to maintain its position as the pre-eminent re/insurance hub in Asia, despite the emergence of rival centres in the region, according to Axco Insurance Information Services. There are two distinct forces driving the Singapore market, which are diametrically opposed to each other, according to Axco’s latest report. The Competition Commission is active in trying to ensure personal lines business remains as affordable as possible. At the same time, the regulator is under pressure from international financial institutions to ensure the enhanced solubility of the market by introducing stricter solvency rules and enterprise risk management regimes, said Axco. Capacity is increasing all the time in respect of the number of companies operating, both for domestic and regional business, and also in terms of individual company underwriting capacity and the scope and breadth of classes offered, according to the report.
Market Regulation
Philippine central bank chief wants secrecy law lifted after heist Nikkei 18th Mar 2016
Philippine central bank Gov. Amando Tetangco on Friday made a fresh call to relax the country's bank secrecy law in the wake of an $81-million digital heist that has raised questions about the country's ability to block illicit fund transfers. "Right now, the prevention of this particular illegal activity like money laundering is being hampered by the very strict bank deposit secrecy law," Tetangco told reporters.
New Payment Systems Bill Lexology 17th Mar 2016
In recent months, there has been excitement about the prospect of new electronic payment services in Thailand. News reports have described a system that will enable instantaneous funds transfer using only ID cards. From a public policy standpoint, it is challenging to move small payments to the electronic space. When that is accomplished, however, it can result in substantial benefits. For example, reducing the usage of cash can reduce the yield of robberies on the street and ultimately reduce the occurrence of robberies.
Anti-financial crime arm in BAP eyed Inquirer 16th Mar 2016
The outgoing head of the Bankers Association of the Philippines (BAP), whose bank is now embroiled in alleged money laundering, on Monday sought the creation of an anti-financial crime committee within the industry group whose members include the top executives of the country’s biggest lenders. After three consecutive terms as BAP president, Rizal Commercial Banking Corp. (RCBC) president and chief executive Lorenzo V. Tan turned over the position to his elder brother, Nestor, who is the president and chief executive of BDO Unibank Inc., the biggest bank in the country.
CDA, BSP prepare implementing rules for Credit Surety Fund Cooperative Act Business Mirror 16th Mar 2016
The Cooperative Development Authority (CDA) and the Bangko Sentral ng Pilipinas (BSP) are jointly crafting the implementing rules and regulations (IRR) for the new Credit Surety Fund Cooperative Act of 2015, which that will provide collateral for loans contracted by cooperatives to increase their productivity. CDA Chairman Orlando Ravanera told the BusinessMirror the IRR will be finished in two months. This will allow cooperatives to borrow capital from the formal banking system with the fund acting as a surety to ensure payment to the creditor banks in case of default by the debtor-cooperative.
Initiatives underway to attract more funds to set up in Singapore Channel NewsAsia 16th Mar 2016
The Monetary Authority of Singapore (MAS) is working on initiatives to support Singapore's asset management industry and attract more funds to set up here, said Senior Minister of State for Finance Indranee Rajah on Wednesday (Mar 16). MAS and the Accounting and Corporate Regulatory Authority (ACRA) are studying the introduction of a framework for open-end investment companies (OEICs), she said at the 17th IMAS Annual Conference. OEICs are structures that cater to investment funds, whose core activities include the issuance and redemption of shares on a regular basis, valuation of net assets, and the appointment of fund managers and custodians.
MAS rolls out measures to boost Singapore's asset management industry Singapore Business Review 16th Mar 2016
The Monetary Authority of Singapore (MAS) is working on initiatives to provide greater support to the city-state's asset management industry. Speaking at the Investment Management Association of Singapore's (IMAS) 17th Annual Conference, Senior Minister of State for Law and Finance Indranee Rajah said that the central bank will roll out a couple of new measures initiatives to support the industry. First, the central bank will introduce a new regulatory framework for open-ended investment companies (OEIC).
SEC mulls harsh penalty Bangkok Post 16th Mar 2016
Heavier penalties, including a blacklist, for listed companies' executives found guilty of unfair securities trading practices will be the top agenda in April's meeting of the Securities and Exchange Commission's board of directors. Whether the new punishment will come into force immediately or in the future depends on the board of directors, said SEC secretary-general Rapee Sucharitakul.
CBM vows minimal disruption as banks prepare for new law Myanmar Times 16th Mar 2016
The Central Bank of Myanmar has pledged to ensure that the normal course of business is not disrupted as banks prepare to operate under the new Financial Institutions Law, an official at the monetary authority said yesterday. The Central Bank and the World Bank held a forum to discuss the banking industry on March 14 and 15 in Yangon and Nay Pyi Taw, to address concerns among local lenders that adapting to the new law, enacted on January 25, would be challenging.
Firms in ROC & Indonesia urged to expand after pact China Post 15th Mar 2016
Top financial supervisor, the Financial Supervisory Commission (FSC), has urged financial institutions in Taiwan and Indonesia to open outlets in each other's country after they signed an memorandum of understanding (MOU) to speed up cooperation in supervising financial businesses. The FSC inked the cooperation MOU Friday with its Indonesian counterpart the Financial Services Authority of Indonesia or Otoritas Jasa Keuangan (OJK). The MOU focuses on supervision cooperation in banking, securities and insurance businesses between the two countries. FSC Chairwoman Wang Li-ling (王儷玲) told the CNA that the cooperation MOU will no doubt facilitate financial development between the two countries.
Govt left toothless by financial crisis bill The Jakarta Post 15th Mar 2016
The current framework laid out by the financial system crisis prevention and mitigation bill (PPKSK), which leaves little room for the President to take action during any future financial crises, has raised concerns among analysts over how effectively crises can be managed should anything unprecedented occur. The PPKSK bill — formerly known as the financial stability safety net (JPSK) bill — prevents any government intervention or financial assistance in the event of a financial crisis that may lead to the collapse of one or more systematically important domestic banks (DSIBs).
Govt to Issue New Ministerial Regulation on Receivers’ Fees Hukum 15th Mar 2016
The government has been intending to revise controversial Minister of Law and Human Rights Regulation No. 1 of 2013 on Guidelines for Determining Service Fees for Receivers and Administrators (2013 Regulation) for a while now. The government’s ultimate goal is to improve the ease of doing business within Indonesia and this plan is also supported by a Supreme Court ruling which approved the judicial review of the 2013 Regulation and which mandates for its revision. Daulat P. Silitonga, Director of Civil Law Affairs at the Ministry of Law and Human Rights (Ministry), recently commented on this matter at a seminar entitled “Discourse for the Revision of Law No. 37 of 2004 on Bankruptcy and the Postponement of Debt Settlement Obligations.” The event was held at Sentul in West Java on Friday, 11 March 2016.
Regular rate cut meetings planned The Jakarta Post 12th Mar 2016
In its latest effort to push down lending rates to a single digit by year-end, the government will hold regular meetings with monetary and bank officials to monitor the situation. One such meeting was held on Thursday evening at the Office of the Coordinating Economic Minister and attended by State-Owned Enterprises Minister Rini Soemarno, top officials of Bank Indonesia (BI), the Financial Services Authority (OJK) and the Deposit Insurance Corporation (LPS) as well as top executives of state-owned banks.
OJK drafts rule on bail-in scheme to salvage ailing banks The Jakarta Post 11th Mar 2016
The Financial Services Authority (OJK) is preparing a regulation that will provide details of the necessary steps to be taken to salvage ailing banks and prevent the crisis from spreading further. The regulation will be a follow-up of the financial system crisis prevention and mitigation bill (PPKSK) currently being deliberated at the House of Representatives.
Ex-Goldman Banker to Malaysia Fund Subpoenaed in U.S. Probe Bloomberg Business 8th Mar 2016
A former Goldman Sachs Group Inc. banker has become entangled in a sprawling investigation of the Malaysian state investment fund as U.S. authorities turn to him for information. Tim Leissner was issued a subpoena about the Malaysia matter in late February, according to three people briefed on the matter, just days after Goldman Sachs confirmed he had left the firm. Leissner, a German national, was most recently chairman of the firm’s Southeast Asia operations but had taken personal leave and relocated to Los Angeles by early this year, according to people with knowledge of the move.
Thailand seeks to crack down on insider trading as backlash grows Financial Times 6th Mar 2016
Thai executives face an insider trading crackdown amid a growing backlash over a high-profile scandal in the leading Southeast Asian emerging market. The head of the stock market regulator has called for stronger action on market manipulation after CP All, operator of the 7-Eleven convenience store franchise in Thailand, allowed three board members who were fined for the offence to keep their jobs.
More lenders sought to help low earners Bangkok Post 4th Mar 2016
The Finance Ministry will lower the minimum registered capital requirement of nanofinance companies to 10 million baht from 50 million. The move is a bid to attract more firms to join the sector to help provide low-income earners with better access to formal borrowing and avoid underground lenders or loan sharks. The ministry is also considering loosening a restriction on loan use to allow people easier access to loans, Fiscal Policy Office director-general Krisada Chinavicharana said without elaborating.
BSP eases rules on foreign loans Business World 4th Mar 2016
The government has made it easier for private companies to tap foreign loans by relaxing rules on their documentation, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Friday. Specifically, the BSP said its policy-making Monetary Board has lifted the prohibition on notarization of documents for foreign loans, deferred payment and other foreign currency-denominated obligations that private companies tap in order to help them comply with offshore regulations. “Previously, such documents for both the public and private sectors were prohibited from being notarized,” the BSP said in a statement, explaining: “The move is part of continuing efforts to have an appropriate regulatory framework for foreign exchange transactions.”
State banks to deal with loan sharks Bangkok Post 3rd Mar 2016
Finance Minister Apisak Tantivorawong has instructed two state-controlled banks to set up a permanent unit tasked with solving underground lending problems. Establishment of the permanent unit and availability of loans to those who are in dire need are integral parts in uprooting loan sharks, he said. The two state-backed banks assigned to handle underground lending problems are the Government Savings Bank (GSB) and the Bank for Agriculture and Agricultural Cooperatives (BAAC). In parallel with the planned incorporation of units to cope with the issue, the government will tighten measures in a bid to get rid of underground lending, said Mr Apisak.
BI issues measure to allow hedging for Islamic banks The Jakarta Post 3rd Mar 2016
Bank Indonesia (BI) has issued a regulation to provide a hedging facility for Islamic banks to mitigate potential losses due to exchange rate fluctuations. BI director for financial market broadening program Edi Susianto said the 2016 BI Regulation (PBI) on sharia hedging was issued as a result of increasing demand for foreign exchange (forex) services at Islamic banks, amid a low forex offer. It consequently led to rupiah fluctuations.
Banking Amendment Bill 2016 Lexology 2nd Mar 2016
The Banking (Amendment) Bill 2016 (“the Bill”) has been presented to Parliament for First Reading. The Monetary Authority of Singapore (“MAS”) has proposed making several legislative amendments to enhance prudential safeguards, corporate governance and risk management controls in the banking industry. These amendments are aimed at strengthening MAS’ regulatory and supervisory framework, and aligning them with international best practice. Certain amendments have also been proposed to formalise MAS’ existing regulatory expectations and to clarify the regulatory policy intent on certain matters.
Financing firms join PBK to meet OJK’s requirement The Jakarta Post 2nd Mar 2016
PT Adira Dinamika Multi Finance, PT Bussan Auto Finance, PT Bank Commonwealth and PT Nissan Financial Services Indonesia, have agreed to become members of PT Pefindo Biro Kredit (PBK) credit bureau as a requirement of the Financial Services Authority (OJK). Adira finance director I Dewa Made Susila said these multifinance companies chose to join the credit bureau because it fulfilled the authority’s obligation that all financing companies should be members of the credit bureau. According to the regulation, financing companies are required to become a member of the Credit Information and Management Bureau (LPIP).
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