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Tag: Finance

  • Australian dollar slides Again

    Australian dollar slides Again

    The Australian dollar has fallen Tuesday, buying 69.45 US cents from 69.75 US cents on Monday.

    Yesterday, the local currency lost ground as the stalemate in Sino-US trade talks clouded the outlook for the Asian giant in its demand for resources.

    The Aussie dollar slipped 0.4 percent to 69.75 US cents on Monday and ever closer to the recent four-month trough at 69.60 US cents.

    China is a major buyer of commodities from Australia so any threat to its trade is considered a potential negative for the currency.

    Investors also use the Aussie as a liquid proxy for China plays, in this case shorting it as well as the yuan.

    Joseph Capurso, a senior currency strategist at CBA, noted that Washington was due to release a “Section 232” report into the national security implications of car imports this week, which could give President Donald Trump more ammunition in his trade disputes.

    “Global stock markets, and global growth-sensitive currencies such as AUD and NZD, may be hit by fears a ‘trade war’ will spread,” Capurso said.

    “Europe, Japan, Korea, and Mexico are major exporters of cars to the US.”

    The Aussie also faces domestic hurdles from data on wages and jobs due this week, where any sign of weakness would fuel wagers on a rate cut by the Reserve Bank of Australia.

    The central bank last week emphasized that further improvement was needed in the labor market to bring unemployment down and lift inflation.

    Wage figures for the first quarter are due on Wednesday and are forecast to show modest growth for the year.

    The jobs report on Thursday is expected to show 14,000 net new hires in April, with the unemployment rate ticking up to 5.1 percent.

    “Downside surprises will raise pricing for a rate cut as soon as June,” added Capurso.

    “The AUD can drop more than one US cent if the labor data disappoints.”

    The futures market implies around a 63 percent chance of a quarter-point cut in July and is almost fully priced for a move in August.

    Yields on three-year bonds are already well below the 1.5 percent cash rate at 1.26 percent, and only just above record lows.

    Three-year bond futures were up one tick at 98.750, while the 10-year contract rose one tick to 98.2700.

  • OCBC Cycle 2019 Expands On Green Initiatives

    OCBC Cycle 2019 Expands On Green Initiatives

    The eleventh edition of OCBC Cycle featured new initiatives associated with the environment, adding on to those implemented last year.  About 6,800 cyclists, ranging from casual riders to competitive athletes, participated in the OCBC Cycle event held on Sunday. The event’s eleventh edition expanded on its green initiatives from previous years.

    Cycling is a green sport.  I am especially glad that, this year, we have planned seven new initiatives associated with OCBC Cycle for the environment. Some are modest in scope, but it is our belief that every small thing we do matters, said Samuel Tsien, Group CEO of OCBC Bank in a media statement.

    Last year, OCBC Cycle engaged the help of the Singapore Sports Hub to recycle the plastic bottles that thirsty cyclists use by the hundreds. With the increased focus on environment conservation efforts, OCBC Cycle retained the bottle-recycling arrangements and expanded on its green initiatives this year.

    These include stopping the usage of single-use plastics in its event pack, replacing trophies for the OCBC Cycle Speedway Championships with reusable steel tumblers and used plastic containers into useful items, such as tote bags and furniture.

    Our event banners will be repurposed to make useful items such as tote bags; we will compost all fruit peels to make fertilizer.  Our goal is to work with the Singapore Environment Council to be the first event in Singapore to achieve the ‘Eco Event’ certification, added Tsien.

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  • Deutsche Bank Hires Asia Fixed Income Head

    Deutsche Bank Hires Asia Fixed Income Head

    The German lender’s latest recruit from J. Safra Sarasin is the latest in a series of hires as it looks to grow in the region. Deutsche Bank has hired Eric Leung to lead its Asia fixed income team in its Wealth Management division. The news was confirmed by a representative of the bank, who said he started on Wednesday.

    Leung joins from global pure-play private bank J. Safra Sarasin, where he worked for over a decade, most recently as Executive Director and Head of Fixed Income Asia. Prior to that, he worked at HSBC Private Bank.

    He will be based in Hong Kong, reporting to Akshay Prasad, managing director, head of capital markets, Wealth Management.

    Under Lok Yim, the bank’s head of Asia, Middle East and Africa, Deutsche Bank WM has set its sights on Asia’s rich, bolstering its ranks to grow its business, particularly in North Asia.

    In an interview with Reuters in 2018, he said Deutsche Bank is focusing on ultra high net worth clients in the region, those with more than $25 million, and the top end of the $5-$25 million high net worth bracket.

    Deutsche has some $230 billion in assets under management (AUM), $56 billion of which is in Asia, according to Hong Kong-based Asian Private Banker.

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  • Mastercard to Expand Footprint in India

    Mastercard to Expand Footprint in India

    The payments giant is set to make India a vital node in its global infrastructure, which will serve other markets including Southeast Asia.

    Mastercard will invest $1 billion into its India operations as part of a five-year expansion plan, which is aimed at converting the country into a global technology node, its second after the United States, the firm announced on Monday.

    There is a very large presence that Mastercard has built, and now, after having seen the last five years, we are very bullish on the overall Indian economy and what the future looks like, and clearly very excited about the digital payments ecosystem and payments ecosystem in general,» Ari Sarker, co-president, Asia Pacific at Mastercard told.

    About $350 million will go towards setting up a new payments processing center, which is expected to open in the next 18 months and create additional employment for 1,000 people.

    The node will do more than just authorization and processing, handling tasks such as circuit switching for ATMs, prepaid and PoS, e-commerce, and services like fraud mitigation, tokenization, and authentication. It would also be used to balance the processing load between the U.S. and India, and would likely serve other markets, including Southeast Asia and Asia-Pacific.

    The firm has invested $1 billion in India in the previous five years as it built up its India workforce from 30 in 2014 to 2,000 today. It is the firm’s second-largest globally after the U.S. in terms of the size of its workforce.

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  • Alipay: Average Chinese tourist spending in Singaporehigher than in any other SEA country over Labour Day

    Alipay: Average Chinese tourist spending in Singaporehigher than in any other SEA country over Labour Day

    The data found that the number of Chinese visitors in Singapore over the Labour Day holiday period almost doubled from last year.

    In addition, the average Chinese traveler spent SGD 325 (RMB 1,611) in Singapore during the Labour Day holiday – higher than in any of the other SEA countries, and a 13% increase from the same period last year.

    Key Singapore-specific findings reveal:

    • Grocery and fresh food supermarkets, followed by department stores and fashion brands saw the highest growth among Chinese visitors during this period
    • The most popular merchants in Singapore were taxis (in-street and via taxi-hailing apps), airport merchants and resort merchants

    General findings reveal:

    • Average overseas spending per user on Alipay increased by nearly 11% to RMB 1,790 (SGD 361)
    • Spending was highest in Europe, the Middle East, and North Asia
    • In terms of the number of transactions, Thailand was the second-most popular destination for Chinese tourists
    • Malaysia and Singapore ranked seventh and ninth in terms of the number of transactions

    Key demographic findings reveal:

    • Chinese seniors are an up-and-coming tourism trend – transactions made by those born in the 1940s and 50s more than doubled, with average spending per user in this age group jumping to RMB 1,622 (SGD 327)
    • About 65% who used Alipay overseas during the Labour Day holiday were female
    • Transactions made by those born in the 2000s increased eight-fold, on average to RMB 506 (SGD 102) during the same period

    In Southeast Asia, tens of thousands of merchants already accept Alipay as a payment platform for Chinese tourists. An earlier joint study from research firm, Nielsen and Alipay found that more than 90% of Chinese tourists would use mobile payment to pay overseas if given the opportunity.

    Alipay has been working with various government bodies, financial institutions and businesses in Southeast Asian countries to further enhance guest experiences and enable seamless access to tourism attractions for Chinese visitors. As a result, they will be able to enjoy more fun in Singapore with faster and more secure mobile transactions through the Alipay smartphone app.

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  • DBS Rolls Out Customer Center of the Future

    DBS Rolls Out Customer Center of the Future

    DBS has retrained its customer center employees to take on new roles as customers become more digitally savvy. Voice biometrics specialists, live chat agents, and customer experience designers are among the 13 new job roles that DBS Bank has introduced in recent years as it creates the customer center of the future, the bank said in a media statement on Thursday.

    As it creates the customer center of the future, the bank has upskilled and retrained over 500 customer center employees and eliminated common customer pain points such as long waiting times. «By investing in our people, we have been able to transform from a labor-intensive department with a high turnover rate to one that is technology-enabled where employees are more fulfilled and armed with future-forward skills,» said Geeta Sreeraman, DBS’ Head of Customer Centre, Singapore.

    Customer centers are traditionally labor-intensive departments. At DBS Singapore, its customer center processes over four million inbound customers’ calls every year. But with new digital initiatives and new roles created, call volumes have dropped 12 percent over the last year. Over the next three years, the bank predicts call volumes will drop by a further 20 percent.

    As customers become more digitally-savvy, DBS has expanded its service channels online and on social media to serve its customers. DBS’ customer center has also incorporated technologies such as voice biometrics, chatbots, and data analytics so that callers can experience shorter call waiting times and opt to resolve their banking queries independently via the bank’s website, on their mobile banking app or through the bank’s Facebook or Twitter channels.

    In 2017, DBS committed to investing S$20 million over five years to equip employees with digital skills to become a future-ready workforce. Since then, the bank has rolled out a company-led Professional Conversion Programme (PCP), an AI-based learning tool available 24/7 and scholarships that encourage peer-to-peer learning.

    The new roles in DBS’ Customer Center are:

    1. Social media relations manager
    2. ‘Live’ chat agent
    3. Customer experience designer
    4. Demand manager
    5. Mobile app developer
    6. Business intelligence lead
    7. Content creator
    8. Knowledge platform designer
    9. Voice biometrics specialist
    10. Natural language processing engineer
    11. Scrum master
    12. Digital evangelist
    13. VTM manager
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  • Singapore May Allow Virtual Banks

    Singapore May Allow Virtual Banks

    Singapore may permit virtual banks to operate in the city-state, following in the footsteps of Hong Kong, said DBS chief executive.

    If virtual banking licenses were handed out in Singapore, it would step up the competitive pressures faced by incumbent lenders. However, those who have upgraded their digital capabilities should not fear this new form of competition, said DBS chief executive Piyush Gupta.

    To my mind, that’s just basically giving a few more banking licenses, said Gupta, who was speaking in an interview with Bloomberg. Virtual banks could typically generate $100 income at 25 to 30 percent of operating costs, according to experts. In comparison, DBS’s cost-to-income ratio stood at 44 percent last year.

    In the interview, Gupta does not see a problem with having virtual banking licenses in Singapore unless these virtual banks are allowed to operate on more lenient terms than incumbents, such as lower capital requirements held.

    The real challenge is if the regulators create an unlevel playing field, and let the new bank licensees come in and do banking on different terms, he said. However, he felt that most regulators don’t seem to be inclined to do that.

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  • Paperless Trade Financing an Inevitability

    Paperless Trade Financing an Inevitability

    The paper-filled world of trade financing is ripe for reform as the expertise of forgers in faking documents used by banks is forcing the industry to digitalize.

    Trade financing is being forced into the digital age because of the scale and expertise of forgery, said Ng Chuey Peng, Oversea-Chinese Banking Corp’s (OCBC) managing director, and head of global commodities finance, in an interview with Bloomberg.

    The widespread use of paper in trade financing – to establish the existence, ownership, and provenance of goods – stands in contrast to the high-tech world of finance, but is critical for banks to issue loans for trades. Digitalization and high levels of security can improve efficiency and help reduce fraud in trade finance by removing paper documents that are often manipulated.

    Ng said that OCBC is currently working on projects «that leverage technology in order to reduce the use of paper in commodities trade finance,» without providing further details.

    OCBC started its trade finance unit in 2014. Since then, it has tripled its number of trade financing customers, Ng said, Bloomberg reported. She added that the bank will soon add a Hong Kong and U.S.-based team for this business.

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  • ICBC Singapore Issues Bank’s First Green Bond

    ICBC Singapore Issues Bank’s First Green Bond

    State-owned bank offers green Silk Road bond in three currencies one week after a similar exercise by rival Bank of China. Acting through its Singapore branch, the Industrial and Commercial Bank of China (ICBC), the world’s biggest bank by assets, has issued its first green bond offering in three currencies totalling $2.2 billion equivalent, Reuters reported on Wednesday.

    The U.S. dollar-denominated tranche includes $900 million three-year floating rate notes priced at three-month Libor plus 72 basis points and $600 million five-year floating rate notes priced at three-month Libor plus 83 basis points. They received over $2.4 billion and $1.5 billion in orders respectively, with Asia buying 92 percent of the deal and the rest coming from EMEA in both cases, according to Reuters.

    The 1 billion yuan ($149 million) three-year tranche was priced at 3.3 percent. The 500 million euro tranche received over 1.8 billion euros in orders.

    DBS Bank was the only Singapore bank among the issue’s joint global coordinators, which also include ICBC, Credit Agricole, HSBC and Standard Chartered Bank. DBS was also the joint book runner and joint lead manager of the issue. There were 22 underwriters for the bond issue, which intends to support green projects under China’s Belt and Road Initiative.

    According to Clifford Lee, DBS Bank head of fixed income, said that ICBC Singapore’s successful issuance of its first green bond is underpinned by its commitment to financing sustainable development along the Belt and Road, «The Business Times» reported.

    A week before, Bank of China raised $3.8 billion equivalent across five currencies and eight tranches from its fifth Silk Road bond offering.

  • UBS Quarterly Profit Down Drastically

    UBS Quarterly Profit Down Drastically

    The Zurich-based bank’s net profit for the first quarter dropped to $1.1 billion Swiss francs from $1.6 billion a year ago, it said in a statement on Thursday. A 6.5 percent cut in spending wasn’t enough to offset UBS’ 16 percent tumble in revenue. Last year’s quarter also included an 241 million franc pension credit.

    The result follows a warning last month from CEO Sergio Ermotti that the first quarter – traditionally the strongest in banking – was the toughest in years. Crosstown rival Credit Suisse on Wednesday posted an 8 percent hike in profits for the same period, following an eventful three-year restructuring.

    Profit before tax at UBS’ flagship private bank slid nearly 22 percent: fees dropped because the bank managed fewer assets and commissions fell because clients stopped trading, particularly in Asia. «The first quarter of 2019 was characterized by challenging market conditions, which improved towards the end of the quarter and into April», CEO Ermotti said.

    Nevertheless, clients brought $22.3 billion in fresh assets to the wealth arm, which translates to a healthy 4 percent rate of growth. The bulk came from Asia, where UBS has banked heavily on China as the region’s biggest and fastest-growing wealth market.

    Meanwhile, profits at UBS’ investment bank plummeted by nearly two-thirds, where foreign exchange trading was the only bright spot. A downturn in Europe and the Middle East as well as Asia hit stock and bond trading and advising on deals. The unit eked out a meager 7 percent return on equity in the quarter.

    UBS said it is on track with measures such as stretching out technology projects, slowing hiring, reducing contractors, and pruning travel and entertainment costs – a bid to cut another 300 million francs in spending. «Benefits from these measures should come in the second half of the year, supporting our attractive capital return plan for the year», UBS said.

    Ermotti was more measured than Thiam’s buoyancy in his outlook, saying UBS expected global growth has slowed, but that UBS stands to gain because it is so regionally and operationally diversified. UBS’ rising asset base will bolster recurring income at its private bank and asset management units, the bank said.

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  • Singapore Banks’ FX Volumes Pushed Up

    Singapore Banks’ FX Volumes Pushed Up

    Singapore banks will enjoy increased FX volumes going forward as the country grows as a foreign exchange (FX hub), banking heads said.

    «Singapore is fast evolving into a natural hub for FX in Asia with the many initiatives to promote FX trading in the region, coupled with regulatory support to encourage key market participants to set up their pricing and matching engines in Singapore,» said Lim Wee Kian, DBS managing director, head of FX.

    «FX trading activities and volumes in Singapore have increased over the past few years due to several reasons including the strong economic growth of Asia and a larger share of global investment flows into the region,» said Jose Luis Yepez, Citi head of FX and local markets, Asia-Pacific, Singapore.

    Plus, there is significant growth in the wealth management industry in the region, added Yepez. Despite the slight decline in assets under management (AUM) from $1.69 trillion to $1.63 trillion last year, Asia’s private banks have enjoyed a 6.9 percent compounded annual growth rate over the last five years, according to data from the Asian Private Banker.

    Last year, DBS Bank reported that its consumer banking/ wealth management income rose 21 percent to S$ 5.65 billion from increases in all product categories, despite a dip in the segment’s income during the fourth quarter last year. In the FX spot space, Southeast Asia’s largest bank saw strong growth, with spot volumes for 2016, 2017 and 2018 growing by 20 percent, 28 percent and 45 percent, year-on-year,  respectively, said Lim.

    «Digitisation of DBS’ FX transactions was a key driver of the strong growth in FX volumes, which started from a lower base, coupled with the strong traction from all remittance corridors of our consumer banking group and wealth management business,»  said Lim.

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  • Indonesian Fintech Launches First Debt Services in Malaysia

    Indonesian Fintech Launches First Debt Services in Malaysia

    A fintech specialized in solving debt problems of consumers and business owners has launched its services in Malaysia, a country whose total overdue consumer loans is second highest in Southeast Asia.

    Indonesian Fintech amalan International announced on Wednesday that it has started operations in Malaysia, expanding its footprints in Indonesia and Singapore. In Malaysia, the total balance of overdue or almost overdue consumer loans is estimated to be $15 billion, the second highest in Southeast Asia.

    «In many cases, amalan is able to reduce the outstanding balance and/or the monthly installments by 50 to 90 percent in Indonesia – this would be also our target for our Malaysian clients. We want to offer a fresh start to our clients so that they can build a better financial future,» says amalan’s founder and CEO, Arne Hartmann in a statement to the media.

    amalan says that its key differentiator lies in working for borrowers to find the best solution with their lenders. As a social enterprise, amalan does not ask for upfront fees and instead uses a success fee model where the borrower only needs to pay after a restructuring plan has been agreed. The amount of the success fee is based on the savings generated through the restructuring.

    So far, the fintech said it has restructured more than 1,000 loans with all major banks in Indonesia and saved its clients more than $800,000 in the process.

    For each borrower, a restructuring plan is generated that takes into account all of the borrower’s loans to then reduce the debt balance and the monthly installments to an affordable level. These debt management programs use proprietary data and technology to get the borrowers out of debt faster, paying less.

    amlan Indonesia was selected as one of the 30 best start-ups in MaGIC (Malaysian Global Innovation & Creativity Center), a business accelerator program of the Malaysian government.

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  • UBS Signs for New Office Lease in Singapore

    UBS Signs for New Office Lease in Singapore

    UBS will move to 9 Penang Road, where the firm will take up all eight floors of office space at the redeveloped Park Mall building.

    UBS Singapore has signed a lease to take up all the office space of the redeveloped Park Mall building at 9 Penang Road, developer SingHaiyi Group and its joint venture (JV) partners Suntec Reit and Haiyi Holdings announced on Wednesday in a press release.

    The firm, which was mulling over a move to consolidate its One Raffles Quay and Suntec City offices in Singapore, will occupy 381,000 square feet of office space across two towers and eight floors at the development, which is expected to be completed by the end of the year. UBS will relocate there in the second half of 2020.

    The 10-storey grade A office building located at the gateway to the Orchard Road shopping belt and close to the Civic District and CBD will house the firm’s 4,000 Singapore employees, as well as its UBS University, which provides training and development programmes for employees across the region.

    «The move will allow us to bring employees currently working at One Raffles Quay and Suntec City under one roof to enhance collaboration, as well as offer new capacity for future growth in Asia Pacific,» August Hatecke, country head of UBS Singapore, said in the press release.

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  • Credit Cards Fight Back Against E-Wallets Wave

    Credit Cards Fight Back Against E-Wallets Wave

    As e-wallets gain popularity in the region, credit cards are fighting back in a push to stay relevant through rewards, reduced fees, and improved customer experiences on digital and mobile.

    2019 is a key year. This may be the year when mobile payments are expected to overtake credit cards as the preferred ways to pay for e-commerce, according to a UN report. In the face of rising penetration of e-wallets, traditional banks are finding new ways to innovate in the credit card space.

    «Credit cards are getting more creative. Local banks DBS and UOB offer credit cards marketed specifically to women, while others highlight the benefits of using a credit card to help offset your carbon footprint,» said Rohith Murthy, founder of SingSaver, a financial comparison platform.

    While e-wallets may be offering the ease of mobile payments through store partnerships and rewards across Singapore, credit cards are also turning to tech and digital to improve their offerings. For example, some banks are going entirely digital with virtual cards that reduce application approval times from days to minutes and are specifically aimed at e-commerce purchases.

    Others, however, are tying up with tech companies to add perks and touch points. «Apple recently partnered with Goldman Sachs in a digital tie up that removed fees, added transparency, and offered a slew of perks; a trend that will only grow,» added Murthy.

    In Singapore, 7 in 10 Singaporeans own at least one credit card, according to a study by market research company YouGov. Singaporeans had a total outstanding credit card and personal loan debts of about S$70.4 billion, according to the Department of Statistics Singapore (2017).

    Singsaver’s most recent data shows that cashback is still the top credit card reward choice among consumers as consumers continue to favor the flexibility and ease of cashback as a reward when using financial products such as credit cards.

    Nevertheless, miles, as a reward form is getting increasing traction due to many air miles credit cards lowering their annual income eligibility in the last 1-2 years and the promise of air miles for traveling and exploring new destinations.

    With better travel connectivity and affordability, as well as with the surge in travel interest in part due to social media, we think Singaporeans are going to be more knowledgeable about the benefits and attractiveness of miles as a reward,» said Murthy.

     

  • Google Pay update brings Gmail integration

    Google Pay update brings Gmail integration

    Google is trying to build an entire ecosystem that will allow users to access any important information from just about every Google app. Gmail has been integrated with many other Google apps, but other developers noticed the benefits and added integration with the email app.

    The newest app that benefits from Gmail integration is Google Pay, which doesn’t come as a surprise since the changes were spotted a few months ago. Now, Google Pay has been updated with Gmail importing, which means that the mobile payment app will browse through your emails and add the relevant information to its system.

    For example, whenever you receive loyalty cards, movie tickets, and boarding passes in the Gmail inbox, they will be automatically added in Google Pay. Keep in mind though that if you delete the email containing the information, it will disappear from Google Pay as well.

    The improvement makes it easier to access loyalty cards, tickets, and more without having to go through your emails every time you want to know something about them. It’s also easier to find coupons and boarding passes that are being sent to your Gmail inbox and make use of them.

    It’s worth mentioning that the new Gmail import feature is disabled by default, so you’ll have to enable it in Google Pay by heading to Settings / General / Gmail Imports and using the toggle available after the latest update.

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