Retail News CRM

Tag: Finance

  • IDX Expresses Optimism in Economic Growth

    IDX Expresses Optimism in Economic Growth

    The Indonesian Stock Exchange (IDX) expressed optimism that the companies listed on the IDX would provide positive results as the national economy was predicted to grow by above 5 percent.

    “In 2015, more than 75 percent of stock issuers at the IDX booked profits. Indeed, some of them in the commodity sector recorded somewhat significant drop. Meanwhile in 2016, we believe that the economic growth will be above 5 percent,” IDX president director Tito Sulistio said in Jakarta on Wednesday, April 13, 2016. Tito added that the Bank Indonesia (BI) rate cut to 6.75 percent and the potential of capital inflow following tax amnesty policy were among the factors that would support the national economic growth.

    “Hopefully, the tax amnesty [policy] will work. Therefore, it is expected that Indonesia will see a capital inflow of about Rp 3,000 trillion (US$220.6 billion) to build infrastructures that are important for the economy. The fund could also be invested in the capital market,” Tito explained.

    He promised that he would encourage domestic companies to obtain funds for expansion by, for instance, holding IPOs. Tito added that the IDX would call on state-owned companies to conduct privatization through the IPO mechanism.

    Earlier, IDX director of corporation assessment Samsul Hidayat said that a number of regional development banks planned to hold IPO in order to increase their capital and distribute credit to wider consumers. In addition to banks, Samsul revealed that a number of state-owned construction subsidiary companies, such as PT Waskita Beton Precast, mulled to hold an IPO.

  • Anbang to buy Allianz’s South Korean operations

    Anbang to buy Allianz’s South Korean operations

    China’s Anbang Insurance Group Co. reached a deal to buy the South Korean operations of Germany’s Allianz SE, just days after it walked away from a $14 billion bid for Starwood Hotels & Resorts Worldwide Inc.

    Anbang has exploded onto the international scene in recent years by spending billions to acquire insurers and hotels throughout the world. In February 2015, it laid out nearly $2 billion to buy New York’s Waldorf Astoria, the highest price ever paid for a single U.S. hotel. It is also a big player at home, with stakes in listed Chinese developers and banks, while also investing in a traditional Chinese medicine maker and a wind-turbine manufacturer.

    Anbang made a bid in March for Starwood Hotels after the U.S. luxury hotel owner had struck a deal to sell itself to Marriott International Inc. That sparked a bidding war for Starwood that culminated in a $14 billion offer from Anbang, which dropped the bid last week citing “various market considerations.”

    The deal with Germany’s Allianz marks the Chinese insurance group’s second acquisition in South Korea. Beijing-based Anbang bought a controlling stake in South Korean life insurer Tong Yang Life Insurance Co. for $1 billion a year ago from South Korea-focused private-equity firm Vogo Investment Group and other investors.

    Allianz agreed to sell Allianz Life Insurance Korea and Allianz Global Investors Korea to Anbang for an undisclosed amount, the two companies said in a statement Wednesday. The Allianz purchase is subject to local regulatory approvals and the parties expect to complete the deal in the second half of the year.

  • Maybank to grow Singapore retail SME loan portfolio by 40% this year

    Maybank to grow Singapore retail SME loan portfolio by 40% this year

    Maybank is planning to “aggressively expand” its retail small and medium enterprises (RSME) financing across Singapore and the region, it said on Monday.

    The bank will be lending money to more businesses with revenues of up to $20 million, termed “retail SMEs” because they have simpler financing needs akin to those of retail or consumer banking.

    The move follows the implementation of its RSME model in Malaysia, which has seen a compounded annual growth rate (CAGR) of more than 30 per cent in loans since it was fully rolled out in 2013.

    Maybank Singapore said it expects to grow its total RSME loan portfolio by 40 per cent this year.

    In the two years since the RSME business was officially launched here, SME loans have increased by more than 50 per cent and deposits have risen by almost 25 per cent, according to Mr Choong Wai Hong, head of community financial services (CFS) for Maybank Singapore.

    “Our RSME business was a newly created segment which we identified as having great potential in 2011,” said Mr Lim Hong Tat, chief executive of Maybank Singapore.

    Mr Lim added that Maybank will be focusing on building its RSME portfolio regionally as the formation of the Asean Economic Community has resulted in countries placing increasing emphasis on smaller firms. “Asean economies are powered by the SME segment, which generates about 50 per cent of employment and some 40 per cent of GDP on average,” he added.

    “The SME industry itself is growing by between 8 and 28 per cent CAGR in these markets and presents an untapped potential for growth.”

    Maybank has introduced its RSME model in Indonesia, the Philippines, Cambodia, Laos and Brunei.

    The bank also has online capabilities to help small business owners improve their productivity in areas such as payroll, collections and payments. Maybank intends to devise more innovative financing solutions to help business owners manage uncertainties around their cash flow.

    “As the only bank with a presence in all 10 Asean countries, we are well-poised to help more small businesses capitalise on new opportunities to grow their business locally and access new markets in the region,” Mr Choong said.

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  • Japan’s biggest bank sees crucial role for Philippines

    Japan’s biggest bank sees crucial role for Philippines

    Japan’s biggest lender Bank of Tokyo-Mitsubishi UFJ said the Philippine market plays a crucial role in its goal to become Asia’s Tier 1 financial institution.

    BTMU, which recently bought a 20-percent stake in the Philippines’ Security Bank Corp., said it envisions surpassing three of the biggest banks in Asia (HSBC, Citibank and Standard Chartered Bank) by 2020.

    “The Philippines is one of the most important markets for the bank because the economy is strongly performing, and many Japanese companies have been advancing in the Philippines,” Go Watanabe, BTMU chief executive officer in Asia and Oceania Region, told reporters in a roundtable discussion on Tuesday.

    “The Philippines is the missing part of BTMU. That is why we have decided to have a strategic alliance with Security Bank,” he added.

    Watanabe said its P36.9-billion investment in the local lender, which is also the biggest capital infusion to date in the Philippine financial market, is part of BTMU’s strategy to identify the right partners in high growth markets and to deepen its presence in organic communities.

    He said that with the partnership BTMU could now provide its strong base of Japanese customers with retail banking services using the local network of Security Bank.

    With BTMU’s diverse global network, it can also provide global corporates and Filipino companies with services such as project and trade financing, he added.

    For his part, BTMU General Manager Tadahiro Miyamoto, said that with the large consumer market in the Philippines, many Japanese firms are showing interest in expanding operations into the country.

    Potential for auto industry
    “There are many companies interested in the Philippine market. One is the retail segment such as food and apparels, but currently, probably the most interested segment is automotive,” he said.

    Miyamoto added that if the Comprehensive Automotive Resurgence Strategy (CARS) program of the government becomes successful, there are potentially many Japanese manufacturers and suppliers that would be producing car parts in the Philippines, which would create even more investment opportunities for the sector.

    Despite this, Watanabe said that encouraging more manufacturing firms to do business in the country is a bit challenging because of the lack of incentives and persistent gaps in infrastructure and power generation.

    “The challenge for the Philippines is how to encourage overseas companies, especially manufacturing, to invest in this country. In that respect, BTMU is willing to support the country to encourage them to invest more in the Philippines,” he said.

    “More than 100 million population is a good big market. If the government will think about good incentives, I think it will be a good chance for the Philippines to increase the entry of foreign direct investments, not only from Japan but also from other countries,” he added.

    Meanwhile, Miyamoto said improvement in other areas such as infrastructure, and the cost and reliability of electricity are also needed.

    “There are a lot of projects going on. We hope that those will be realized soon so that there will be more general support for Japanese companies to invest more here,” he said.

    Interested in PPP
    In this regard, Watanabe said the public-private partnership program (PPP) of the government, particularly in infrastructure, is necessary for the country.

    “Japanese companies are showing strong interest in participating in the PPP. BTMU as the best project finance bank, together with good peso liquidity from Security Bank, means our team is the best team to support the PPP and encourage Japanese customers to participate in the PPP. This will be very beneficial to this country,” he said.

    At present, Miyamoto said BTMU has no PPP investment yet, but the bank has been looking to participate in projects included in the pipeline.

    One particular project that the BTMU is interested in is the Clark Green City, which includes access and inter-city roads, a railway system, a mixed-use residential and commercial block, business district, industrial estates, schools and centers, government offices, and other facilities that would make up a major city.

    At full development, the city is estimated to accommodate some 1.12 million residents and 800,000 workers.

    “It is a very good project. It creates a lot of positivity for the Philippines and we will see what we can do,” Miyamoto said.

    Another project that can be considered by BTMU is the North-South Railways Project, Watanabe added.

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  • German retail giant Metro to split businesses into two listed entities

    German retail giant Metro to split businesses into two listed entities

    German retail giant Metro said last week it will spin off its businesses into two separately listed units, sending its shares sharply higher.

    “The management board of Metro is preparing the creation of two independent and sector-focused companies through a demerger of the group,” Metro said in a statement.

    Metro shares were the strongest performer on the mid-cap MDAX index of the Frankfurt stock exchange on Wednesday, shooting up 7.73 per cent to €26.47 in a generally firmer market.

    A wholesale and food specialist group would be created comprising the group’s Metro, Makro and Real brands, as well as a consumer electronics products and services group centred around its Media and Saturn retail chains.

    Since there is little operational overlap between the two businesses and limited synergy effects, management felt “very strongly that a split into two independent and focused businesses would be in the best interest of all stakeholders, as it would facilitate a significant opportunity for faster and more profitable growth,” said supervisory board chief Juergen Steinemann.

    “Both entities would become individually stock-listed, with their own distinct profile, management and supervisory boards,” Metro said.

    The aim would be to give each of the companies and their respective management full control over their corporate strategies.

    “This will further increase customer focus, accelerate growth of the businesses, simplify structures and improve time-to-market and operational excellence,” it argued.

    Moreover, both entities would be able to independently pursue acquisition and partnership strategies, enabling them to define their own expansion strategies.

    Metro said its management and supervisory boards “will make a decision on the contemplated demerger of Metro group after a period of intensive consultation and review.”

    Should the boards and shareholders be in favour, “implementation of the demerger is aimed for mid-2017,” Metro said.

    “Over the past years, we have successfully revitalized our core businesses while significantly strengthening our group balance sheet,” said chief executive Olaf Koch.

    “Both our wholesale and food specialist business as well as our consumer electronics business have continued to commercially improve, are on a steady successful path and are best-equipped for an independent future,” Koch said.

    “Our shareholders would effectively own two well positioned market leaders, both of whom are increasingly focusing on their respective business areas and are generating more value for customers, employees and business partners.”

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  • OCBC launches banking app for Apple Watch

    OCBC launches banking app for Apple Watch

    Singapore’s OCBC Bank has launched a new mobile banking app designed for the Apple Watch.

    With the app, users can have instant access to their personal banking information, including the full list of their balances – bank accounts, cards and investments, recent transactions, and the location of the nearest OCBC Bank branch or ATM, on their Apple Watch.

    Customers must first perform a one-time activation on their OCBC iPhone mobile banking app before using the Apple Watch app. Once activated, account information and recent transactions can be viewed on Apple Watch, without the need to login to mobile banking.

    This service is available for customers using mobile devices such as iPhone 5, iPhone 5S, iPhone 6, iPhone 6 Plus, iPhone 6S or iPhone 6S Plus operating on iOS 9 and Apple Watch devices running on WatchOS2.

    The service can only be activated on a single pair of Apple Watch and iPhone devices at one time and all account numbers displayed on the watch are partially masked with only the last four digits revealed. No information is stored on the phone or watch and for security purposes, customers can choose to set a passcode on their Apple Watch.

    Market intelligence firm IDC estimates the worldwide wearable device market will reach a total of 111.1 million units shipped in 2016, a strong 44.4% increase from the 80 million units shipped in 2015. By 2019, the five-year compound annual growth rate (CAGR) of wearable devices would be 28%, with Apple smart watch devices taking the lion’s share of the market.

    “Smartwatches represent the next generation of personal mobile devices, and our Apple Watch app will offer the convenience, security and choice that customers demand when it comes to everyday banking on-the-go,” said Aditya Gupta, OCBC Bank’s Singapore head of e-business, said.

    “We are confident the Apple Watch app will be a big hit with our fast-growing number of customers who are mobile and digitally-savvy.”

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  • CIMB expects more conducive economy for consumer banking in 2H2016

    CIMB expects more conducive economy for consumer banking in 2H2016

    Collaboration between CIMB and Tesco Stores (Malaysia) Sdn Bhd today, the group’s CEO of group consumer banking Renzo Viegas told pressmen that while the current marketplace remains tough for business, the mass affluent community will still continue to invest.

    “It’s a tough environment, so loan growth will be slower than last year for sure (in terms of) investment products, people are really concerned about the global economy and the Malaysian economy; (there are) a lot of volatility, so people are holding back their investment decisions, but the mass affluent customers will still invest, so the second half should pick up a bit,” he said.

    “(In the) second half (of 2016), the whole economy environment should improve to become more stable and predictable; investment by consumers should also grow, and therefore our wealth management would also do well,” he added.

    On the other hand, Viegas said CIMB is also monitoring its credit quality closely, to avoid any deterioration in the group’s consumer portfolio.

    “All in all, there will still be slower growth, and we are watching the credit quality. So far, there is no deterioration to our credit quality in consumer portfolio. But there are still challenges, and there are still going to [be] opportunities like the launch today,” he said.

    Viegas said the partnership will allow CIMB to benefit from Tesco Malaysia’s three million weekly customers, by the increased accessibility to other products offer by the bank.

    “In the next two years, we hope we can garner half a million new card customers,” he added.

    Earlier at the launching ceremony today, CIMB’s CEO Tengku Zafrul Aziz announced an exclusive five-year strategic partnership with Tesco Stores (Malaysia) Sdn Bhd to come out with the new card services.

    The collaboration will also see CIMB set up its consumer banking kiosks at 38 Tesco stores nationwide. Tesco Malaysia currently operates 55 stores, with about 8,000 employees.

    Zafrul said the partnership between CIMB and Tesco Malaysia represents a winning formula in delivering value to both companies’ customers.

    “Being able to bring our vast suite of products through a seamless and paperless process to Tesco stores, make for a truly compelling value proposition to customers, both current and new. We genuinely believe that this partnership is the start of many great things ahead,” he said.

    The new CIMB Tesco MasterCard members will enjoy an annual fee waiver. From April 1, 2016 to March 31, 2017, one Tesco Clubcard point will be awarded for every RM2 spent on CIMB Tesco MasterCard at other retail outlets.

    Tesco Malaysia CEO, Paul Ritchie, also commented that the partnership, which had taken a year to materialise, is the form of bringing the best of two companies to enhance customers’ shopping trip.

    “With Tesco’s variety in range at fantastic promotions and good prices, and CIMB’s strengths in the financial and banking sector, together we will be able to reward our customers and create value to earn their long-term loyalty,” he said.

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  • HSBC sets sights on Vietnam

    HSBC sets sights on Vietnam

    HSBC Bank (Vietnam) chief executive Pham Hong Hai (right) and Kelvin Tan, chief executive of HSBC Thailand, say HSBC aims to capitalise on its presence in seven of the 10 Asean countries.

    HSBC seeks to offer a better integrated regional service with the increase of cross-border investment following the formation of the  Asean Economic Community (AEC).

    The bank in particular is looking at Vietnam, where investment is set to surge under government policies to attract foreign investment.

    Kelvin Tan, chief executive of HSBC Thailand, said the company aimed to capitalise on its presence in seven of the 10 Asean member countries. Only Myanmar, Cambodia and Laos do not have branches of HSBC.

    “We made it very clear to our investors since last year that Asean will be one of our main focuses to help HSBC’s future growth,” said Mr Tan.

    HSBC will also focus on the Pearl River Delta, which consists of Hong Kong and Guangzhou, China.

    Mr Tan said the company will enhance the connectivity between its subsidiaries in each country to serve customers better and expand business.

    “We add value to our services by offering well-connected financial services in this region.”

    When a Thai customer expresses an interest in investing in another country in which HSBC operates, the bank will refer the customer to the office in that country, which can provide local information for doing business.

    Many HSBC customers have already expanded their businesses in other countries, especially Vietnam, to tap into a bigger market as well as take advantage of low labour costs, he said. Thai investors should benefit from the cheaper labour by setting up production bases there and using Thailand as their regional headquarters, which is the policy that the Thai government is promoting.

    “Thailand is in a very strategic location for logistics and air transport so pushing the RHQ concept is a step in the right direction, but the government will also have to include stakeholders as part for this development,” said Mr Tan.

    Pham Hong Hai, chief executive of HSBC Bank (Vietnam), said Vietnam had attracted heavy investment from Asean countries over the past few years as well as from other Asian countries such as South Korea, Japan, Taiwan and China.

    Vietnam’s low labour costs and political stability are the major draws that attract a huge amount of foreign direct investment, he said. Given the low wage rate for unskilled labour, the country has attracted a lot of labour-intensive industries.

    “Cambodia, Laos and Myanmar also have cheap labour, but Vietnam has the added positive factors of political stability and good infrastructure,” said Mr Pham.

    He said the low wage rate would last for about five years.

    However, one problem that has emerged in Vietnam is a shortage of workers at management level. Mr Pham said he expected the AEC integration to attract more white-collar workers to the country.

    He said Vietnam’s ruling party just elected a new central committee, which is expected to maintain the current policies to strengthen the country’s economy.

    The policies that will be continued include privatisation of state enterprises, modernising the banking sector, enhancing the effectiveness of fiscal policy and improving the business environment, he added.

    Vietnam’s state enterprises contribute 35% of GDP. The government is due to allow private firms to gradually own bigger stakes in the enterprises in order to enhance their effectiveness.

    The government is improving Vietnam’s business environment by passing new laws that will shorten the time required to start a new business and also to obtain a licence, Mr Pham said. There there are a lot of opportunities in businesses such as logistics, retail and manufacturing, which are growing quickly.

    “When the manufacturing sector grows it is always followed by logistics services to support the industries,” he said. “We also see that the retail sector’s growing fast with Thai companies such as Central and TCC Group investing in Vietnam.”

    He said with a population of 90 million, with young people forming a large proportion, Vietnam’s demographic make-up offers great opportunities for retail businesses to benefit from their purchasing power, which will grow significantly.

  • BNI Set to Penetrate ASEAN Market

    BNI Set to Penetrate ASEAN Market

    Bank Negara Indonesia (BNI) president director Achmad Baiquni said that state-owned lender BNI would expand its business in other Southeast Asian countries, in addition to Myanmar.

    “There are some countries targeted by BNI, but we can’t reveal them yet, because it’s too early,” Baiquni told us during a tree-planting event at kilometer 59 of the Jakarta-Cikampek toll road on Saturday, March 26, 2016.

    Baiquni added that the expansion plan would be executed based on existing business potentials. Myanmar was selected since other state-owned companies were expanding their business in the country.

    “We have to follow our customers,” Baiquini explained.

    Baiquni admitted that BNI had looked into the business potential in Myanmar. He also expected that the expansion plan would be realized this year.

    BNI and Bank Mandiri are preparing to expand their businesses in the ASEAN market prior to Financial Services Authority’s agreement signings with Central Bank of Myanmar and Bank Negara Malaysia.

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  • Maldives laments HSBC retail banking loss

    Maldives laments HSBC retail banking loss

    Maldives central bank on Thursday lamented the decision by Banking giant Hong Kong and Shanghai Banking Corporation (HSBC) to cease retail banking in the Maldives from April.

    Speaking at the parliamentary finance committee governor Azeema Adam insisted that the Maldives Monetary Authority (MMA) does not wish HSBC to cease retail banking services in the Maldives but said the country still needed the bank’s other services.

    Male branch of HSBC had decided to cease retail banking operations from April 28 and is now informing its customers.

    An official from the Maldives Monetary Authority (MMA) also confirmed the plans by HSBC’s Male branch to shift to corporate-only operations. The official, however, did not give details.

    HSBC was not available for comment.

    HSBC operates in Maldives as a trading desk of the HSBC branch in Sri Lanka.

    The governor however, pointed out that HSBC’s decision was not limited to the Maldives.

    “Every bank has its own standards. Certain services that they offer. Instead of forcing something on them we look to find out how it could prosper as a business. We put in a lot of effort to bring HSBC to the Maldives,” Azeema explained.

    “Even when they [HSBC] first came they had sought to serve high net worth customers and individuals. We had given them the operating license knowing that all those years ago.”

    Azeema also revealed that several challenges had prompted the bank to adopt cost cutting measures.

    “It’s not something we also want. But if we look at the services provided by the banks in Maldives, HSBC is the third largest bank in the country. In terms of deposit size and loan size,” she continued.

    HSBC is the second highest banking profit tax payer in the Maldives, she added.

    An account in HSBC has to be opened with an initial deposit of MVR 50,000; the highest initial deposit required of any bank that operates in Maldives. The bank also pays the lowest deposit interest rate at 1 – 1.75 percent. Deposit interest rate on US Dollar accounts is 0.10 percent.

    As the bank charges a high amount in fees, the bank mainly hosts Maldivian businesses.

    In May 2014, complaints mounted over the bank’s decision to close down accounts held by many small and medium businesses citing administrative reasons. The businesses had complained that the move was made without prior notice.

    The decision by one of the biggest banks in the world comes a week after it was revealed that the Maldives had lost a major international banker.

    President Abdulla Yameen Abdul Gayoom told residents of Gaafu Dhaal atoll Gadhdhoo on February 15 that one of the major correspondent banks had dropped Maldives from its client list, while another one is considering a similar move. The reason, according to the president, is false claims made about Maldives, including threats posed by home-grown jihadists.

    “When we make such claims without considering the repercussions, it’s the people of Maldives that has to suffer,” he said, after inaugurating a project to establish a clean water system in the island.

    The president did not identify the bank that had dropped the Maldives. Haveeru, however, understands that US-based JPMorgan Chase had terminated its dealings with Maldivian banks in 2013.

    A correspondent bank is a financial institution that provides services on behalf of another, equal or unequal, financial institution. It can conduct business transactions, accept deposits and gather documents on behalf of the other financial institution.

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  • QNB chosen ‘Best Retail Bank in Qatar’

    QNB chosen ‘Best Retail Bank in Qatar’

    QNB has been recognised as the “Best Retail Bank in Qatar” by the Asian Banker Magazine.
    The prestigious award was received during The Asian Banker’s International Excellence in Retail Financial Services Awards 2016 ceremony held recently in Hong Kong.

    The awards ceremony was held in conjunction with The 15th Annual Excellence in Retail Financial Services Convention. It is considered an important financial event in the global retail banking agenda, where regional and global elite retail bankers can come together and enjoy unprecedented networking opportunities.

    According to The Asian Banker, QNB, a leading financial institution in the Middle East and Africa, received the “highly competitive award after successfully undergoing all the stringent valuation” for the international excellence in Retail Financial Services Programme.

    “The award is a true testament to the excellence of QNB’s retail services, given that the programme is considered the most prestigious, comprehensive and anticipated awards programme that recognises excellence amongst the world’s leading retail financial institutions as well as the undisputed performance benchmark of the best retail banks in an increasingly fierce marketplace,” QNB said.

    As a leading provider of strategic intelligence on the financial services industry, The Asian Banker facilitates awards programmes known for their rigor, impartiality and transparency.

    QNB is a previous recipient of these distinguished awards, gaining such recognitions as “Best Transaction Bank in the Middle East & Africa”, “Best Direct Bank”, “Best Cash Management Bank in Qatar”, and “Best Trade Finance Bank in Qatar”.

    QNB Group’s presence through its subsidiaries and associate companies extends to some 27 countries across three continents providing a comprehensive range of advanced products and services.
    The total number of employees is more than 15,200 operating through more than 635 locations, with an ATM network of 1,390 machines.

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  • Asian banks fear impact of negative interest rates

    Asian banks fear impact of negative interest rates

    Central banks in emerging Asia that are struggling to revive growth and keep their financial systems stable are facing new risks as their counterparts in Europe and Japan plunge deeper into uncharted policy territory.

    The Bank of Japan in February joined several European central banks in turning policy on its head with a radical prescription of negative interest rates to revive flagging economies, prompting calls from emerging markets for some form of global coordination to avoid a race to the bottom for rates and currencies.

    Concerns about potentially destabilising spillovers into the rest of the world are likely to be a key talking point over the coming week as central banks in Indonesia, Thailand, the Philippines and Taiwan hold policy reviews.

    All four central banks have seen volatile swings in their currencies and stock markets over the past year as the world’s major central banks have taken markedly divergent policy paths.

    Yesterday, Bank Indonesia cut its benchmark interest rate by 25 basis points to 6.75 per cent, its third straight reduction of that size this year as it tries to lift sluggish economic growth.

    While many Asian economies have strengthened their defences since the 1997/98 regional financial crisis, they remain vulnerable to sudden capital outflows.

    Reserve Bank of India governor Raghuram Rajan, a critic of the massive stimulus rolled out in developed economies, has called on global central banks to adopt a system for assessing the wider impact of unconventional monetary policies.

    “It seems fair to say that the benefits seem to be diminishing after years of effort, and the costs increasing,” Mr Rajan said at a three-day International Monetary Fund (IMF) event in New Delhi.

    Low rates have created problems for savers around the world, and debt levels are continuing to rise to unsustainable levels from China and Japan to Europe – feeding fears of a fresh blow to the global economy from financial market dislocation.

    Mr Rajan’s concerns were echoed by his peers in emerging markets such as Indonesia and Malaysia, but few if any in the region expect the likes of the European Central Bank (ECB) to give priority to any nasty side effects for other economies when setting policy.

    “The potential for this (to manage economic crises) is becoming more and more limited as monetary policy rates have already trended closer to zero and quantitative easing is becoming more significant,” Bank Negara Malaysia governor Zeti Akhtar Aziz said.

    She said there is a need for greater policy coordination among countries to prevent over-reliance on monetary policy.

    Mr Juda Agung, Bank Indonesia’s executive director for monetary and economic policy, agreed. “A low-yield environment encourages excessive risk-taking behaviour. At the end, the credibility of the central bank is at stake,” he said.

    Mr Frederic Neumann, co-head of Asian economic research at HSBC, said that emerging economies are right to raise a voice of caution over unconventional policies.

    “Policymakers are backpedalling because it’s not entirely clear what the benefits of negative rates would be,” he said, referring to ECB president Mario Draghi’s suggestion last week that further rate cuts were probably off the table.

    Indeed, a recovery in the euro zone has flagged over the past year and deflation looms large, while Japan’s economy is teetering on the brink of its fourth recession in five years. The IMF has cut its global growth projections for 2016 and 2017, with a slowdown in China rippling across producers of oil, cars and a range of consumer products.

  • SM Investments Corporation wins two Anvil Awards for its Annual and ESG Reports

    SM Investments Corporation wins two Anvil Awards for its Annual and ESG Reports

    SM’s first 2014 ESG report with the theme, “Working Together for a Sustainable Future”, earned a Gold Anvil Award for manifesting the company’s commitment to sustainability practices and for providing accurate disclosure and integrated reporting of its ESG policies. It is a group-wide report highlighting good governance, social development and environmental consciousness of SM companies such as SM Retail, SM Prime Holdings, and BDO Unibank. SM recognizes that adhering to ESG global best practices is a journey as global guidelines and the needs of SM’s stakeholders continue to evolve.

    The 2014 Unified Annual Reports bagged a Silver Anvil Award for featuring inter-related themes of the company and its subsidiary on new opportunities for growth.

    The 2014 Unified Annual Reports consist of the Annual Report of SM with the theme, “Pursuing New Opportunities for Growth” and that of SM Prime Holdings, Inc. that carried the theme, “Building New Opportunities for Growth”.

    Dubbed as the “Oscars” of the public relations industry in the Philippines, the Anvil is presented to the outstanding public relations tools and programs that have met the high standards set for each category.  PR practitioners, industry communications specialists, academicians and business persons attended the event.

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  • Indonesia to reopen banking transactions with Iran

    Indonesia to reopen banking transactions with Iran

    Indonesia said it is open to resume banking transactions with Iran following the lifting of economic sanctions against Iran.

    “Banking relations, an obstacle we are facing, will soon be resumed,” President Joko Widodo said after receiving Irans Foreign Minister Mohammad Javad Zarif on the sidelines of the 5th Organization of Islamic Cooperation Extraordinary Summit on Palestine and Al Quds here on Monday.

    The President said economic and investment cooperation between the two countries had been hindered because banking transactions were closed due to the imposition of economic sanctions against Iran.

    He said Indonesian banking authorities had agreed to follow up on the cooperation plan.

    “The chairman of the Financial Service Authority (OJK) said just now that the banking transactions would soon be resumed to develop and strengthen economic relations between the two countries,” he said.

    Bank Indonesia (the Central Bank) and OJK would discuss the mechanism for cooperation with Iranian banking officials.

    Due to the imposition of economic sanctions several years ago, Iranian banks were unable to conduct transactions with overseas banks.

    Since Irans nuclear program came to be known in 2002, the United Nations, the European Union, the US and several other countries had imposed economic sanctions on Iran.

    After these sanctions were revoked, the flow of trade to and from Iran is expected to become easier.

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  • HSBC, Standard Chartered Caught Between ‘Brexit’ and China

    HSBC, Standard Chartered Caught Between ‘Brexit’ and China

    Two big U.K. banks’ shares tanked over the past couple of days, and unlike the British pound, they’re not weakening because of the so-called “Brexit” referendum — although that certainly doesn’t help.

    Instead, their fall may have a lot to do with the market and economic turmoil that has been taking place in China.

    The London-listed shares of emerging markets-focused bank Standard Chartered (SCBFF) fell by 10% at one point on Tuesday morning after it reported its first annual loss in more than 25 years.

    The bank reported a loss before tax of $1.5 billion last year, in sharp contrast to 2014’s profit of $4.2 billion.

    On Monday, HSBC’s (HSBC) shares fell in an otherwise rising market after the bank, which is the biggest in Europe and one of the biggest in the world by assets, reported a loss of $858 million before tax in the fourth quarter of last year, vs. a profit of $1.7 billion in the fourth quarter of 2014.

    HSBC, which is doing a lot of business in Asia and was even thinking of moving its headquarters there before deciding earlier this year to remain in London, eked out a 1% increase in pretax profit for full 2015 to $18.87 billion, but its adjusted loan impairment charges were up 17% at $3.7 billion over the period.

    The weak results of the two banks chime with rising investor worries about the exposure of U.K. banks to Asia, and particularly China, at a time when European banks have been making investors nervous again.

    Richard Barnes, senior director at Standard and Poor’s credit rating agency, received many questions about the risk of European banks’ exposure to Asia last week during an analyst call, and said the region was important particularly for HSBC and Standard Chartered.

    However, “we’ve seen European banks generally retrenching from a number of regions in the world including Asia … banks are trying to reduce exposure,” Barnes said, adding that, in China, “banks look again at their exposure to state-owned enterprises and are focusing on the ones that are likely to be supported by the government in a downturn.”

    HSBC has been deeply involved in the liberalization and deepening of China’s capital markets, having successfully negotiated a majority stake in a new, nationally licensed securities joint-venture in the mainland. HSBC Group Chairman Douglas Flint acknowledged in a statement on Monday that “China’s slower economic growth will undoubtedly contribute to a bumpier financial environment,” but he added that the country “is still expected to be the largest contributor to global growth as its economy transitions to higher added value manufacturing and services and becomes more consumer-driven.”

    He said this transition is driving the bank’s focus on the Pearl River Delta as a priority growth opportunity, as the area is a concentration of high-tech, research-focused and digital businesses.

    HSBC’s exposure to mainland China is around $143 billion, according to its annual report; of these, $135 billion are loans to other banks or non-bank financial institutions, sovereign and corporate loans, while $8 billion are loans to retail clients.

    China is perhaps even more important for Standard Chartered and has helped reduce the bank’s loss over the past year. Its Greater China business showed a pre-tax profit of $1.37 billion last year, compared to a loss of $1.33 billion in its European operations. In terms of exposure to China, Standard Chartered listed $77.67 billion in loans to customers in the country.

    The two banks would normally be sheltered from fears over their exposure to China by their presence in one of the strongest financial centers in the world, London. But with uncertainty in the U.K. rising because of the referendum on EU membership, expect a few particularly volatile months ahead for HSBC and Standard Chartered.

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