Tag: Finance

  • Vietnam stock market reaches new historic peak

    Vietnam stock market reaches new historic peak

    Vietnam’s benchmark VN-Index surged 2.07 percent to a new historic peak of 1,216.10 points Thursday, driven by Vingroup and Vietcombank tickers.

    The index rose throughout the day after breaking the 2018 peak of 1,204 points in the morning. It continued to surge in the afternoon and ended with a near 25-point gain.

    This is its biggest daily gain in six weeks. The index has ended in the green four sessions in a row.

    Trading value on the Ho Chi Minh Stock Exchange (HoSE), on which the index is based, surged 16 percent to VND16.94 trillion ($735 million). The bourse saw 334 stocks gain and 106 lose.

    VIC of the biggest conglomerate Vingroup contributed most to the VN-Index gain with 4.6 points. The ticker rose 4.3 percent, its seventh gaining session in a row, up by a total 15 percent since March 23.

    VCB of state-owned lender Vietcombank pulled the index up by 2.1 points with volume tripling from Wednesday to rise 2.2 percent.

    Other major contributors included HPG of steelmaker Hoa Phat Group, VHM of real estate giant Vinhomes and VNM of dairy giant Vinamilk, together pushing the index up by 4.4 points.

    The strongest blue-chip gainer was SSI of leading brokerage SSI Securities Corporation with a ceiling increase of 6.9 percent, followed by TCH of real estate company Hoang Huy Investment Financial Services JSC with a 5.9 percent gain.

    Foreign investors broke off four consecutive net selling sessions with a net buying value of VND45 billion. They focused on VIC, HPG and STB of Ho Chi Minh City-based lender Sacombank, which surged 17 percent in the last six sessions.

    The HNX-Index for stocks on the Hanoi Stock Exchange, home to mid and small caps, surged 2 percent, while the UPCoM-Index for the Unlisted Public Companies Market added 0.37 percent.

  • PGBank pulls plug on merger plans after 2nd debacle

    PGBank pulls plug on merger plans after 2nd debacle

    After calling off its merger with HDBank, lender PGBank does not plan to look for other partners and will remain independent, its chairman, Nguyen Quang Dinh, has said.

    “In the last six years, PGBank planned to merge with VietinBank and HDBank, but both deals were unsuccessful, which has been affecting the bank’s business.”

    “So the board of directors now aims to develop the bank as an independent entity,” he said at the lender’s annual general meeting on March 30.

    Shareholders approved rescindment of the merger plan, which never received approval from the State Bank of Vietnam.

    PGBank’s proposal to merge with state-owned VietinBank collapsed in 2014 after two years of negotiations.

    The bank targets a 46 percent rise in pre-tax profits this year to VND310 billion ($13.4 million).

    First-quarter profit was up 5 percent year-on-year to VND80 billion, according to its CEO, Nguyen Phi Hung.

  • AXA IM Nabs Ex-Picet Asset Management Exec

    AXA IM Nabs Ex-Picet Asset Management Exec

    AXA Investment Managers hires a former executive from Pictet Asset Management as its Asia head of institutional sales. AXA IM has hired Carmen Lai as its head of institutional sales for Asia, according to a statement, reporting to APAC head of client group core Terence Lam in the Hong Kong-based role.

    Lai will oversee the development of AXA IM’s institutional business and client relationships in Asia, tasked initially to build a dedicated sales team for the North and Southeast Asia markets.

    Lai is a veteran in the asset management industry in the region, joining from Pictet Asset Management where she spent a decade, last as its Asia ex-Japan head of institutional sales. Previously, she also worked for Blackrock.

    In addition, AXA IM also appointed Kyle Wang as Asia head of sovereign and supranational Entities (SSE). Wang will report to Lam and work closely with Lai.

    Institutional clients remain a key focus for AXA IM’s Asian growth strategy, where we continue to see robust momentum, said Matt Lovatt, global head of client croup core and member of AXA IM’s management board.

    The enhanced team will reinforce the business coverage of AXA IM Core across the region, as we uphold our pledge to uncover global investment opportunities and offer active, long-term, and responsible investment solutions for our valued clients.

  • UBS Singed by Archegos

    UBS Singed by Archegos

    Switzerland’s largest bank didn’t escape the Archegos wreckage unscathed. UBS’ singing is however far from the burn that rival Credit Suisse is nursing. Zurich-based UBS, the sixth-largest prime broker according to data provider Preqin, also catered to troubled hedge fund Archegos. Yet the Swiss bank was mum as its crosstown rival Credit Suisse warned of a major hit against its first-quarter results.

    The damage unleashed at Credit Suisse by the hedge fund now reportedly tallies at as much as $5 billion. How did UBS, which ranks directly behind Credit Suisse in catering to hedge funds, escape a similar fate?

    The answer is that the Swiss wealth management giant didn’t entirely, according to a person familiar with the matter. UBS, silent this week as Credit Suisse issued its profit warning, is reportedly still unwinding a series of complicated instruments when it called margin on the hedge fund.

    Though estimates vary, the bank believes it will be left nursing losses of not more than low-three-digit millions from business with Archegos, the person said. The damage isn’t such that it will neither torpedo UBS’ quarterly profits nor trigger a warning, the person noted. A spokeswoman for UBS declined to comment.

    Analysts expect a quarterly profit of $1.44 billion from UBS when it reports on April 27, according to a consensus compiled by the bank itself. Executives at both banks scrambled late last week to evaluate the Archegos debris, with Swiss regulator Finma intervening early on.

    UBS’ top investment banker Rob Karoskfy, risk chief Christian Bluhm, and finance overseer Kirt Gardner were among the top executives involves. The Swiss bank apparently feels confident enough it can extricate itself from the wreckage without wiping out the quarterly progress.

    This puts UBS squarely in the camp of Goldman Sachs and Morgan Stanley, which were both able to offload their Archegos holdings quickly. By contrast, Credit Suisse and Japan’s Nomura, which on Monday flagged a $2 billion hit, weren’t as fast.

    The episode illustrates that UBS’ risk limits held in this case, while raising manifold questions about Credit Suisse’s limits. The latter’s shares slumped more than 16 percent since the bank disclosed the Archegos hit on Monday; investors sent UBS’ shares just three percent lower over the same period.

  • DBS Adds Public Sector Veteran as Board Member

    DBS Adds Public Sector Veteran as Board Member

    DBS has named a senior civil servant and former top aide to the Singapore Prime Minister to be a non-executive director on its boards.

    Chng Kai Fong will join the boards of DBS Holdings and DBS Bank, according to a statement, effective March 31 this year. He will also serve as a member of DBS’ audit committees and nominating committees.

    As part of the Singapore bank’s renewal process, longstanding board members Euleen Goh, Ow Foong Pheng and Andre Sekulic will step down on March 30.

    According to DBS chairman Peter Seah, Chng’s appointment is expected to help further DBS’ status in global banking and digital leadership.

    Chng, 42, is currently the managing director of the Singapore Economic Development Board (EDB) after first taking on the role in October 2017. Prior to joining the EDB, he was the principal private secretary to the Prime Minister of Singapore.

    Chng also serves on the boards of EDB Investments Pte Ltd, EDBI Pte Ltd, Manakin Investments Pte Ltd, Singapore Israel Industrial Research and Development Foundation (SIIRD), Singapore Symphonia Company Limited, and Agency for Science, Technology and Research (A*STAR).

    He is also an advisory board member of Singapore Management University’s Lee Kong Chian School of Business, Shell Gas & Power Development B.V.’s New Energies Advisory Board as well as a member of the Board of Trustees of Singapore University of Technology and Design.

  • Citi Launches Hiring Spree in Hong Kong

    Citi Launches Hiring Spree in Hong Kong

    Citi will hire up to 1,700 for its Hong Kong unit, partly in anticipation of the upcoming Greater Bay Area opportunities.

    Citi will add 1,500 to 1,700 in Hong Kong, according to a report citing Hong Kong and Macau chief executive Angel Ng Yin-yee.

    The expansion follows a 44 percent surge from net new money in Hong Kong and revenue increases across business units, in contrast with the bank’s global financial performance.

    According to Ng, the majority of the new hires will be focused on frontline staff. In addition, Citi will also hire for middle and back-office roles in areas like product development, digital channel development and compliance.

    The bank plans to fill most of the positions this year and also boost tech spending by 28 percent.

    One of the major Greater Bay Area opportunities in the making is the ‘Wealth Management Connect’ scheme – a cross-border channel that will allow mainland residents of the 11-city cluster to invest in Hong Kong and Macau-based wealth management products.

    The scheme is currently being delayed due to the pandemic and Hong Kong officials have said the launch will wait until travel bans are lifted.

    According to Ng, she doesn’t expect the scheme to start with a «big bang» but instead grow gradually to reach multiples of the Hong Kong market.

  • CIMB Restructuring Sees Lay-Offs in Singapore

    CIMB Restructuring Sees Lay-Offs in Singapore

    The Malaysian lender is revising its strategy to emphasise sustainable growth, in line with the group’s vision to be a «leading focused Asean bank.»

    CIMB Singapore is laying off staff and will close its Orchard Road branch as part of a restructuring exercise, which will see it optimise its functional set-up and leverage its group strengths through regionalization.

    These will make us more resilient, more productive and better positioned for growth going forward,» CIMB Singapore chief executive Victor Lee said in an internal memo.

    CIMB Singapore will be positioned as an Asean banking hub for the group, with a focus on wealth management, SME (small and medium-sized enterprises) banking, regional corporates and treasury and markets. According to the report, the bank had 1,200 staff in Singapore. Only its Raffles Place branch will remain following the exercise.

    Singapore is a core and important market to the CIMB Group, and we will continue to invest in our key growth areas, CIMB Singapore said in a statement.

    The bank let go of three of its business heads in Singapore in November 2020, following a review of its operations that cited the poor performance brought about by the pandemic.

  • HSBC Reopens Hong Kong Headquarters

    HSBC Reopens Hong Kong Headquarters

    HSBC has reopened its main Hong Kong office but is only advising critical staff to come in for work, according to an internal memo.

    Precautionary measures – such as wearing masks, pre-entry temperature screening, hand sanitizers, spaced queuing and portable acrylic screens at open banking counters – will continue to be in place, according to a statement from the bank, adding that it conducted deep cleaning and disinfection last week.

    The bank closed the office last week following a recent outbreak in a local gym popularly frequented by expatriates. Visitors who stayed within the building for over two hours between March 3 and 16 were required to undergo coronavirus tests.

    The gym-linked cluster has resulted in nearly 150 cases and has prompted other financial firms, including Goldman Sachs and UBS, to encourage more work-from-home measures.

  • UBS Loses China Private Banker

    UBS Loses China Private Banker

    A private banker covering the China market has left UBS Global Wealth Management.

    Payling Lee, market team head for China international, has left UBS Global Wealth Management.

    When contacted, a spokesperson for the bank declined to comment.

    Lee rejoined UBS in 2017 after serving a four-year stint between 2003 and 2007 in its investment banking arm where she was focused on the fixed income and derivative sales business in Taiwan. Previously, she also spent a decade with Barclays.

  • Stocks, cryptocurrencies the new darlings as other assets remain in deep slump

    Stocks, cryptocurrencies the new darlings as other assets remain in deep slump

    With most traditional asset classes taking a beating from the economic downturn caused by Covid-19, investors are flocking to the stock and cryptocurrency markets.

    At lunchtime on a regular working day, a smartly dressed young woman was sitting in a corner in a downtown HCMC cafeteria, staring at a laptop in front of her. She was going back and forth between charts and messaging apps to check what her broker was sending.

    She was a newbie on the stock market, having begun just two weeks earlier.

    Thanh Dang, 26, a full-time administrative assistant, explained her decision: “These days no one in my office does any work except text or talk to each other about stocks, forex and cryptocurrencies.

    “Most investors I know follow others’ advice and learn things on the fly. Some of them initially made profits and became even keener. So I decided to give it a try and started modestly.”

    Doan Duong, 37, a Hanoi architect, quit the forex derivatives market after making a huge loss but shows no signs of being discouraged. When the stock market surged in 2020 and everyone seemed to make a lot of profits, he decided to jump in.

    When talking about a 20 percent profit he made in four months, he smiles confidently and asks rhetorically, “If you want to get rich then you need to take risks, right?”

    Doan and Thanh are just two of the millions of people who have begun to trade stocks and cryptocurrencies in the past few months.

    According to the Vietnam Securities Depository (VSD), they opened 393,659 securities trading accounts last year, a 20-year high in a market that is less than 21 years old.

    In February, they opened another 57,000 accounts, tripling that of the same period last year.

    The vast majority of domestic accounts, 2.73 million, belongs to individual investors.

    In the last six or seven months, retail investors have been piling into the market, helping it shrug off the effects of a sell-off by foreign investors. In fact, the Vietnamese stock market was one of the five biggest gainers in the world, according to StockQ.org.

    In the first quarter of this year retail investors kept the market up while trading value was consistently at VND18-19 trillion ($778.12-821.3 million) per session.

    German data company Statista said following a recent survey of 1,000-4,000 respondents each in 74 countries that Vietnam ranks second globally in terms of ownership of Bitcoin and other cryptocurrencies.

    Nhan Trong Nguyen, a financial consultant, skims through hundreds of messages daily from stock traders, brokers and cryptocurrency sellers, almost all asking him to represent consultancies or trading platforms for cryptocurrencies, derivatives and binary options.

    His blog on finance and banking has more than 50,000 followers.

    Nhan says: “If you look closely, Vietnamese are consistently in the top three list of most frequent traders at global BitCoin exchanges such as Poloniex and Bittrex.”

    In recent conversations with his followers he learned that Vietnamese are frantically switching from Bitcoin to other newer cryptocurrencies because it has become increasingly challenging to mine.

    PI is the most popular of the alternatives, supposedly mineable on smartphones.

    There are hundreds of groups calling on people on social media and online forums to join Pi mining networks.

    Dominic Scriven, chairman of HCMC asset management company Dragon Capital, explains: “This is a logical choice to cope with the changes in monetary policy worldwide and in Vietnam to protect their money.”

    Since the onset of Covid-19 in early 2020, the State Bank of Vietnam has cut its policy rates four times to keep the economy afloat, driving banks’ deposit interest rates to all-time lows in February 2021 before they recovered slightly this month.

    The real estate and gold markets too are stagnant and are also beset with difficulties.

    A note by the HCM City Real Estate Association said the number of property transactions plummeted between March and August 2020 before making a marginal recovery since September.

    All this meant that since the start of the pandemic only a tiny portion of investments have been flowing into traditional asset classes as investors sought profitable alternatives like stocks and cryptocurrencies.

    Many stocks gained sharply, making newcomers even more impatient and afraid of missing out, further increasing the number of accounts and causing a cycle in the market.

    In the beginning Vietnamese used the likes of Bitcoin, Ethereum, Litecoin, and Ripple to receive money from abroad since it meant no more bank hassles and exorbitant fees. But it is no longer the main reason for investing in them.

    Lawyer Truong Thanh Duc says: “The State Bank of Vietnam has warned that owning, trading and using cryptocurrencies are risky and not protected by the law, but that does not seem to deter investors.”

    A large number of people are investing now in cryptocurrencies because they want to get rich fast despite a sluggish economy.

    This is also true of stock investors, many of whom seem to believe they can somehow predict market movements and make big profits from short-term trading.

    Though it might be too early to hark back to the stock market bubble of 2007-08 the relentless rise in the market is definitely cause for wariness, according to some economists.

    “It is never a good idea to try to guess the market’s movements, and investors should have a long-term view instead,” Nhan warns.

    Cryptocurrencies are not protected by law, and so all trading in them need to be done with great caution and, most preferable, expertise.

    Decisions driven by rumors and greed might see inexperienced investors burn their fingers.

    The enthusiasm retail investors have had for stocks and cryptocurrencies since 2020 continues to draw in more newbies.

    But one piece of good news for those who fear they have missed out on the action is the prediction by Finland’s PYN Elite Fund that the market will continue to grow, with the VN-Index possibly reaching 1,800 points.

    Nevertheless, new entrants need to move their goalpost from “get rich quickly” to increasing the value of their assets over the long term and hedging inflation.

    Another sensible piece of advice from experts is to diversify one’s investment portfolio.

    Nhan says: “The ideal return from shares should be around twice the bond interest rate. Any broker who promises you way more than that could be scamming you.

    “VN30 stocks and companies with an excellent reputation are always a good choice for beginners.”

  • Time to Unlock the Payments Pocessing Conundrum

    Time to Unlock the Payments Pocessing Conundrum

    To say the industry has been through some seismic changes over the past decade is an understatement, to put it mildly. From ever-increasing defaults and regulatory changes to clearing and collateral, not to mention the continued use of technology and automation.

    Global financial markets have been exposed to a series of changes in what is an incredibly vast and complex landscape. However, if there is one thing that has remained constant is processing and lots of it.

    Processing, the plumbing that underpins the entire financial system, is vital to ensuring the health and stability of markets. It needs to be done in a timely fashion, and the data needs to be correct and in-line with any regulatory obligations. Some parts of the post-trade lifecycle are well-oiled, mainly due to regulatory pressures on specific focus points as well as the central network effect and interoperability between both asset-classes and process types. Others, though, simply are not.

    The evolution of derivatives has in other areas resulted in continued layered manual processing. Not only does it still rely heavily on email and excel spreadsheets, but also offers relatively low levels of control. If this was not enough, ever-rising volumes and the fragmented nature of these processes have led to costly and unscalable workloads. We all know volumes can be erratic.

    Too many factors to list constitute an impact on volumes, but decisions are often made that result in ‘quick and dirty’ layered manual processes that become really challenging to manage over time. Factor in the current global pandemic that has now surpassed a year in the making and the challenge only gets harder.

    The payments and settlements space is not only huge but also fundamental to all other parts of the trade-lifecycle. Ultimately, trades need to settle, yet a lot of inefficiencies exist. Traiana’s research from 2019 showed that $500 million a year is spent supporting certain inefficient payment and settlement processes for the top 450 financial firms (50 global investment banks/400 Global Investment management firms) and could be higher with continued challenges.

    The bulk of this is centered around the messaging and matching of cashflows. There are several key challenges and inefficiencies when it comes to the messaging and matching of these cash flows, including:

    • Different cashflows: these can be handled by different internal systems, which can use various data types. Typically, inefficiencies exist in uncleared products.
    • Margin management: inefficiencies exist in uncleared products. Depending on the asset class and the regulated domicile of the entities there may be some level of margin management occurring, but these are large exposures, often running uncovered and into the tens of millions of dollars that can remain unsettled past the expected settlement date due to the manual nature of the confirmation/affirmation process.
    • Settlement errors: with an increase in regulatory focus for late or incorrect settlement fines, inefficiencies can soon cost more than just the cost to manage.
    • Uncleared headaches: the OTC world, while under tighter controls from the phased-in uncleared margin rules (UMR), remains fairly antiquated in part. Many banks and buy-side firms are still using email and excel based processes to agree to, and then often instruct cashflow movements across all asset classes, including in OTC where products could be cleared but aren’t. These flows are often mismatched, unmatched, or sent to the wrong place entirely to agree and confirm.

    Large banks and buy-side firms are still using email and excel based processes to agree to, and then often instruct cashflow movements across all asset classes, including in OTC where products could be cleared but aren’t. These flows are often mismatched, unmatched, or sent to the wrong place entirely to agree and confirm.

  • Citi Private Bank Loses China Heavyweight

    Citi Private Bank Loses China Heavyweight

    Citi Private Bank loses several within its mainland China coverage team, including a veteran relationship manager.

    Citi Private Bank’s global market manager for southern mainland China, Kevin King, has resigned from the bank, sources said. In addition, another four have also left the China team at the private bank.

    A spokesperson for the bank declined to comment.

    King spent a decade with Citi Private Bank covering the China market after kicking off his private wealth career with UBS and J. Safra Sarasin. Prior to joining the industry, he worked at the Hong Kong Trade Development Council where he focused on developing relations with the Greater China business community.

    The departures occurred in the midst of a new organizational structure for Citi’s private banking arm.

    Previously a standalone business, the American lender will now run all its wealth management businesses under a single unit, merging teams that cover the full range of clients from retail to ultra-high net worth individuals. The new unit will be led by ex-global head of investor sales and relationship management Jim O’Donnell.

    Last year, Citi’s merged wealth management businesses in Asia Pacific posted record-high net new money of $20 billion, a 10 percent year-on-year increase, according to the bank. This led assets under management to grow to $238 billion with a client base that includes approximately one-third of all billionaires in the region.

  • HSBC Launches Fund Administration Services in Thailand

    HSBC Launches Fund Administration Services in Thailand

    This move is in line with the change in the securities services landscape in Thailand, which has relaxed outsourcing rules to boost the efficiency of local fund managers’ operations.

    By outsourcing their back-office operations to HSBC, asset owners and managers will be able to focus on their core offerings, the bank said in an announcement on Tuesday.

    The service will be available on HSBC’s Multifonds fund administration platform. HSBC clients already have access to custody and fund supervisory services offered by the bank.

    “Our clients have expressed a keen desire to improve efficiency and reduce cost, reduce operational risk, adapt to their investors’ need and manage regulatory changes effectively, Utumporn Viranuvatti, HCBC head of securities services, Thailand, said in the announcement.

    The bank said it has many other offerings planned a part of HSBC Securities Services’ Asia-first strategy to accelerate growth in the region by ramping up its investment in additional solutions and capabilities.

    HSBC has been expanding its offerings in Thailand as part of its bid to strengthen its Asean coverage. HSBC Private Bank launched its onshore business in the kingdom in February 2021, the bank’s second onshore business in the region after Singapore.

  • Hong Kong Cross-Border Wealth Scheme Delayed by Pandemic

    Hong Kong Cross-Border Wealth Scheme Delayed by Pandemic

    Banks looking to capitalize on wealth management opportunities from the Greater Bay Area will have to wait until travel bans are lifted, according to the Hong Kong Monetary Authority.

    HKMA chief executive Eddie Yue said that the existing travel bans make it difficult to launch the ‘Wealth Management Connect’ scheme – a cross-border channel that will allow mainland residents of the 11-city cluster to invest in Hong Kong and Macau-based wealth management products.

    Under the current rules, investors seeking such products must physically open an investment account in person for the financial firm to share relevant information and risks.

    The overall scheme allows an individual investor quota of 1 million yuan ($150,000) each and an aggregate quota of 300 billion yuan (US$45 billion) for north and southbound fund movements.

    While it remains to be seen when travel restrictions will be removed – Hong Kong recently recorded another wave of coronavirus cases that led multiple banks to advise employees to work from home – HKMA is actively working with Beijing to simply the process for cross-border account opening.

    According to Yue, a simpler process could be introduced which would require only one-time cross-border travel, compared to the current practice which requires a plethora of documents and often multiple visits.

    Other cross-border initiatives that the HKMA is focused on include the southbound segment of the bond connect scheme which is planned for a launch in the second half of 2020 after the northbound segment was introduced in 2017. Unlike the wealth management connect scheme, cross-border trading does not require physical travel.

  • HSBC Scales Up Structured Product Capabilities

    HSBC Scales Up Structured Product Capabilities

    Luxury as an investment theme is poised to benefit from strong economic recovery led by Asian economies in the post-COVID-19 world. Against this background, HSBC has rolled out a new structured product linked to a customized index.

    In an effort to further the bank’s ambition of becoming Asia’s leading wealth management bank, HSBC scales up its structured product capabilities in Hong Kong and Malaysia. In addition to a wide array of products linked to standard and thematic market indices, the bank has rolled out a new structured product linked to a customized index, providing an investment opportunity for wealthy clients to capitalize on the growing luxury consumption in Asia, HSBC announced in a statement on Monday.

    Luxury spending from Asia, and in particular mainland China, already accounts for a significant portion of global luxury consumption. Luxury as an investment theme is poised to benefit from strong economic recovery led by Asian economies in the post-COVID-19 world.

    The growth of the wealth management market is unparalleled in Asia, underpinned by the expansion in high net worth population and the increase in their sophistication. Therefore, we are working closely with our Global Markets colleagues to bring innovative structured products to our customers. This index-linked structured product exemplifies our commitment to meet customers’ diverse wealth management needs aligned to prevalent investment themes, Maggie Ng, Head of Wealth and Personal Banking, Hong Kong, HSBC, said,

    HSBC’s new luxury index provides investors dynamic exposure to a list of global stocks that have high exposures to the luxury sector.

    To accelerate the growth of the wealth business in Asia, Global Markets continues to invest in our product manufacturing capabilities leveraging our market expertise, and deliver bespoke solutions for wealth clients, said Justin Chan, Head of Greater China, Global Markets, Asia-Pacific, HSBC.

    HSBC Global Research estimates that the luxury goods market in mainland China will likely achieve 48 percent growth in 2020, doubling its overall share of the global luxury market in 2020, with further growth expected through to 2025. We are also bullish on the sector due to the likely consolidation seen in the industry and the use of more affordable online sales channels», he added.