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Top Story of the Week: Bloomberg Keen on Boosting Local Financial Sector
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· The proliferation of the Bloomberg terminal, ubiquitous in financial firms worldwide, throughout Southeast Asia has prompted Bloomberg LP to focus more closely on the ASEAN market. Trade made in the region on the Bloomberg platform have increased 50 percent year-on-year, accompanied by a 35 percent increase in users. Nitin Jaiswal, Bloomberg’s head of sales in Asia, stated, “Asean is one of the best performing regions in the world from Bloomberg’s business perspective.”
Top Story of the Week: Indonesia’s Tax Break Process May Get More Transparent
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· The Indonesian Investment Coordinating Board announced recently that it will institute an online service by which foreign and domestic investors can track the status of their applications for tax allowances and holidays. The leader of the agency, Mahendra Siregar, stated that along with increased transparency for the applicants themselves, this system will put Indonesian officials’ activity and efficiency in the spotlight and disincentivize corruption. It should be noted that initiation of the system does not signal changes in tax rates themselves.
Top Story of the Week: Najib Sees Malaysia Escaping Fitch Rating Cut
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· Malaysian Prime Minister Najib Razak stated this week that the country can avoid its own self-imposed debt ceiling, and, like the United States, avoid a downgrade in its credit rating by Fitch and other agencies. Malaysia maintains a 53.3 percent debt to GDP ratio, has run a government budget deficit every year since 1998, and has seen the value of the ringgit decline 3.9 percent this year. Nonetheless, Prime Minister Najib assures the downgrade will not happen given the government’s close management of its macroeconomic position.
Top Story of the Week: Yellen Fed Choice Spurs Indonesian Optimism
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Indonesia and the Philippines, among other ASEAN countries, were pleased this week with President Obama’s nomination of Janet Yellen as next Chairwoman of the Federal Reserve. Yellen is expected to maintain economic stimulus in the US that has proven friendly to both growth and stability in ASEAN countries. Asian leaders including South Korean President Park Geun Hye have voiced support for a US monetary policy made with full consideration of the effects on the wider global economy.
Top Story of the Week: Philippine investment-grade climb complete as Moody’s raises
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This week Moody’s Investors Service upgraded the Philippine’s credit rating one level, to Baa3. The nod from Moody’s makes the Philippines an investment-grade destination for investment and comes on the heels of positive economic performance, improving governance and fiscal consolidation under the Aquino administration.
Malaysia, Singapore and Thailand have signed a memorandum of understanding to integrate their capital markets by the first half of 2014. The framework will allow fund managers in each of the jurisdictions unencumbered access to investors outside their own countries, resulting in more flexible investment options across the three countries.
Top Story of the Week: Singapore IPOs raise record $4.3b
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IPO's in Singapore rose 6% relative to the first nine months of 2012 to set a record for the Singapore exchange. Fuelled primarily by real estate investment trusts, listings in Singapore created the most value in the world outside the US from July to September. Singapore's record-setting IPO pace comes amidst a broad slowdown in Asian IPO activity over the period, caused in large part by the suspension of IPO's originating from China.
Myanmar's Ministry of Finance will open a stock exchange in the country by 2015 in the wake of the Security Exchange Law passed by parliament this past July. Rising property values in the country are expected to fall upon introduction of the exchange.
Top Story: OJK and BI to sign MoU on transfer of authority
The Financial Services Authority (OJK) and Bank Indonesia (BI) will sign a Memorandum of Understanding (MoU) to transfer supervision authority of financial institutions, said Muliaman D. Hadad, head of OJK`s board of commissioners. "BI and OJK plan to sign the MoU next week," he said. "OJK focuses on micro (economy) while BI focuses on macro (economy), but the details are yet to be finalised. Mr Agus Martowardojo and I have come to an agreement on a number of terms, which will be stated in the MoU," he said.
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Financial Services Clippings will be on a two week break and return September 3.
Top Story: Singapore Bourse embracing derivatives over M&A
Singapore Exchange Ltd. (SGX), Southeast Asia’s biggest bourse, is relying on derivatives for growth amid a dearth of merger and acquisition candidates in Asia. SGX is planning energy and bond futures, Chief Executive Officer Magnus Bocker said. The bourse’s revenue from derivatives climbed 50 percent to S$234.5 million ($183.7 million) in the five years through June 2013, outpacing the 4.4 percent increase in equity trading to S$469.50 million, according to data compiled by Bloomberg.
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Top Story: OJK issues regulation on consumer protection
The 2013 POJK (Financial Services Authority regulation) which was signed on July 26 is the first ever regulation on financial services issued by the OJK. Muliaman Hadad, Head Commissioner of the OJK, said the POJK contained three main aspects, which were improvements in transparency and the pronouncement of benefits, risks, and fees for products and services delivered by financial service providers. He added that the regulation was effective for all financial services, such as banking, non-bank financing and capital markets.
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Top Story: Singapore to widen its RMB liquidity pool
Singapore's central bank governor says the island state plans to widen its liquidity pool of the Chinese currency as part of extended efforts to turn itself into a major offshore yuan market. Ravi Menon said the country is also developing hedging instruments as part of these efforts. "The critical factors that will determine how well Singapore develops as an RMB hub are liquidity and a range of hedging products," said Menon, managing director of the Monetary Authority of Singapore, the central bank and financial regulatory authority.
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