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HKEX selects Euroclear's international ETF structure
May 7, 2019--Euroclear Bank, the Brussels based international central securities depository (ICSD), and Hong Kong Exchanges and Clearing Limited (HKEX) have collaborated to enhance the distribution of European ETFs in Asia.
HKEX has become the first stock exchange in Asia to adopt the ICSD ETF settlement model in Euroclear Bank.
European ETF issuers will now be able to expand their distribution network to Asia and grow ETF liquidity. Investors will benefit from improved settlement efficiencies and a reduction of costs and risks.
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Source: Euroclear Bank
IMF Working Papers-The Turning Tide: How Vulnerable are Asian Corporates?
May 6, 2019--Summary:
Using a new firm-level dataset with comprehensive information on Asian firms' FX liabilities, we show that Asia's nonfinancial corporate sector is vulnerable to a tightening of global financial conditions. Higher global interest rates and exchange rate depreciation increase the probability of default of Asian firms.
A 30 percent currency depreciation is associated with a two-notch downgrade in the corporate credit rating (e.g., from A to BBB+), resulting in 7 percent of Asian firms falling into bankruptcy. But the impact is nonlinear-as the firms' FX liability increases, the balance sheet channel of exchange rate offsets, then dominates, the competitiveness channel. The balance sheet channel offsets the competitiveness channel when the share of U.S. dollar debt is between 10 and 20 percent. We also find that currency depreciation increases firm-level investment on average, but for firms with the share of FX liabilities above 20 percent, investment contracts with depreciation.
view the IMF Working Papers-The Turning Tide: How Vulnerable are Asian Corporates?
Source: IMF
NSE tightens trading margins for derivatives segment under new framework
April 25, 2019--Under the new framework, derivatives market participants will have to provide margins 300% higher than the normal applicable amount, if the MWPL for a security is high.
The National Stock Exchange (NSE) on Wednesday increased trading margins for the derivatives segment.
"In a joint meeting of exchanges and the Securities and Exchange Board of India, it has been decided that the markets should be altered at different levels of MWPL," the NSE said in a circular.
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Source: Business Standard
World Bank-East Asia and Pacific Growth Expected to Moderate as Global Headwinds Persist, World Bank Says
April 24, 2019--Growth in developing East Asia and the Pacific (EAP) is projected to soften to 6.0 percent in 2019 and 2020, down from 6.3 percent in 2018, largely reflecting global headwinds and a continued gradual policy-guided slowdown in China.
Still, the region's economies weathered the financial markets volatility of 2018 relatively well largely due to effective policy frameworks and strong fundamentals, including diversified economies, flexible exchange rates, and solid policy buffers.
While trade policy uncertainty has abated somewhat, global trade growth is likely to moderate further, according to Managing Headwinds, the April 2019 edition of the World Bank East Asia and Pacific Economic Update released here today. Domestic demand has remained strong in much of the region, the report adds, partly offsetting the impact of slowing exports.
A href="http://www.worldbank.org/en/news/press-release/2019/04/24/east-asia-and-pacific-growth-expected-to-moderate-as-global-headwinds-persist-world-bank-says" TARGET="_blank">view more
view the Managing Headwinds, the April 2019 edition of the World Bank East Asia and Pacific Economic Update
Source: World Bank
Thai, Shenzhen bourses ink deal to help SMEs, securities
April 24, 2019--The Stock Exchange of Thailand (SET) on Tuesday signed a memorandum of understanding (MoU) with the Shenzhen Stock Exchange (SZSE) to expand opportunities supporting small and medium-sized enterprises (SMEs) and securities cross-listing between Thailand and China.
The MoU, which covers a five-year period starting on Tuesday, will support the SET's strategic plan to explore new opportunities by connecting with international partners.
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Source: bangkokpost.com
IMF Staff Completes 2019 Article IV Mission to Vietnam
April 23, 2019--The economy remains resilient to external headwinds to date, supported by robust domestic demand from a growing, urbanizing middle class and by rising inflows from tourism, remittances and direct investment.
Fiscal policy consolidation during 2016-18 together with strict policies on new government guarantees and robust economic growth have put public and publicly guaranteed debt on a firmly downward trajectory.
The move away from administered allocation of credit and the adoption of Basel II standards by 2020 will require steps to strengthen the state owned commercial banks.
An International Monetary Fund (IMF) team led by Alex Mourmouras visited Hanoi and Ho Chi Minh City during April 3-19, 2019, to conduct discussions for the 2019 Article IV consultation with Vietnam.[1]
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Source: IMF
IBF-MAS study identifies skills for more competitive financial sector workforce
April 23, 2019--A study1 commissioned by the Institute of Banking and Finance Singapore (IBF) and the Monetary Authority of Singapore (MAS) has set out how data analytics and automation are likely to augment or transform 121 job roles in Singapore's financial sector over the next 3 to 5 years.
The study, conducted by Ernst & Young over the last nine months and released today by Minister for Manpower, Mrs Josephine Teo, also identified the skills necessary to perform the new tasks enabled by data analytics and automation.
The impact of data analytics and automation on manpower in the Singapore financial sector
The IBF-MAS study found that about half of the 121 job roles analysed would be augmented as individuals leverage these technologies to amplify their performance. Another one third of job roles would be transformed, as technology substitutes a significant proportion of job tasks, and remaining tasks across synergistic job roles converge into new roles. Across all job roles, individuals would be required to take on new or expanded tasks that have a higher element of judgement and creativity, while tasks of a more repetitive and rules-based nature are automated. view more
Source: Monetary Authority of Singapore (MAS)
Establishment of Japan-China ETF Connectivity
April 22, 2019-Japan Exchange Group, Inc. (JPX) and Shanghai Stock Exchange (SSE) will establish "Japan-China ETF Connectivity", a scheme for creating ETFs that link the ETF markets of both exchanges.
Aimed at increasing opportunities for cross-border investment between the Chinese and Japanese securities markets, this scheme is the result of negotiations with the authorities and market participants based on the Memorandum of Understanding concluded between the two exchanges in October 2018. Please see the Appendix for an outline of the scheme.
Under this scheme, a Japanese or Chinese ETF provider will be able to develop a feeder ETF that mainly invests in the counterparty's ETF after additionally obtaining special investment quota* for this scheme from the State Administration of Foreign Exchange of China.
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Source: jpx.co.jp
China further relaxes rules for index futures trading
April 19, 2019--China's financial futures exchange said on Friday it was further relaxing index futures trading rules，reducing margin requirements, cutting fees and allowing more trading activities.
The China Financial Futures Exchange said in a statement the rule change, which will take effect on April 22, is aimed at meeting investors' risk-hedging needs and will help introduce more long-term capital into the market.
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Source: Reuters
China's economic growth steady amid tariff fight with US
April 17, 2019--China's economic growth held steady in the latest quarter despite a tariff war with Washington as Beijing's efforts to reverse a slowdown started to gain traction.
The world's second-largest economy expanded by 6.4% over a year before in the three months ending in March, the government reported Wednesday. That matched the previous quarter for the weakest growth since 2009.
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Source: AP