SINGAPORE NEWS HIGHLIGHTS

• DBS to wind down commodity derivatives trading business
• EFG accelerates BSI Singapore unit purchase after license loss
• Bunge and Wilmar lead Vietnam consolidation
• Singapore’s Olam issues USD500.0m perpetual capital securities
• M1 Q2 revenue down on lower handset sales
• Free mobile data and more for National Day

INDONESIA NEWS HIGHLIGHTS

• Jakarta's tax amnesty to start on July 18
• BCA picks Sitecore to handle its online banking system
• Newmont takeover deal hinges on government shares allotment
• Indonesian coal association against possible moratorium on Philippines
• Sarana Menara closes USD121.0m sale of Protelindo to Spain’s Cellnex
• Indonesia's Telkom launches high-speed internet for businesses

THAILAND NEWS HIGHLIGHTS

• BMW Group Thailand announces opening of new parts distribution center
• Mazda in new pickup deal with Isuzu
• Thai banks increasingly concerned about BCBS 239, IFRS 9
• BoT: Thai economic stability still high
• Thai broadcast regulators authorised to shut down TV, radio stations
• Reform panel demands refund of phone fees

Singapore’s Corporate News

Banking

DBS to wind down commodity derivatives trading business

DBS Group Holdings, Singapore's biggest lender, said it will be progressively wind down its commodity derivatives trading business over the next six months. The move comes as many foreign banks have exited the commodities derivatives trading business, which is capital intensive and where margins are under pressure. They expect shortterm market making activities in commodity derivatives to be costly to maintain, said a DBS spokeswoman. (The Business Times)

EFG accelerates BSI Singapore unit purchase after license loss

EFG International International AG will accelerate its purchase of private bank BSI SA’s Singapore business after the country’s financial regulator stripped the unit of its banking license for breaching money laundering rules. The unit will now be acquired from BTG Pactual Group by the end of November at the latest, the Swiss bank said. The overall terms of the deal between EFG and BTG for the purchase of the entire BSI business won’t change. (The Edge)

Plantation

Bunge and Wilmar lead Vietnam consolidation

Commodities giant Bunge is selling part of its Vietnam-based crush operations to rival Wilmar International. The deal highlights a trend across Asia, whereby commodity traders are divesting assets or setting up joint ventures with a view to reduce their costs and exposures. The sale will lead to a three-way joint venture with local soybean meal distributor Quang Dung retaining a 10.0% stake alongside the larger partners, which will hold 45.0% each. (Global Trade Review)

Singapore’s Olam issues USD500.0m perpetual capital securities

Singapore-based agri business major Olam International Limited, has announced the issue of USD500.0m of perpetual capital securities under its USD5.0b Euro Medium Term Note (EMTN) programme. Over 115 investors participated resulting in an order book that was approximately 3.4 times oversubscribed. There is no maturity date for the capital securities. The capital securities were also priced at par and bear a distribution rate of 5.4% for the first five years which was below the initial pricing guidance. (Deal Street Asia)

Telecommunications

M1 Q2 revenue down on lower handset sales

M1 on Friday posted a net profit of SGD41.0m for the three months ended June 30 (Q2 2016). This marked a 7.5% year-on-year fall from last year's SGD44.3m. Total revenue in Q2 slipped 13.2% to SGD240.4m - down from SGD276. 8m a year ago - primarily on lower handset sales. Handset sales decreased 49.9% year-on-year to SGD36.4m due to lower sales volume. Earnings per share fell 6.9% from 4.7 Singapore cents last year to 4.4 Singapore cents in Q2. (The Business Times)

Free mobile data and more for National Day

Telcos Singtel, StarHub and M1 have all rolled out mobile data promotions to celebrate Singapore's 51st birthday on Aug 9. Singtel's postpaid mobile customers can enjoy free data usage on National Day from 12.01am to 11.59pm, the telco said last week. M1 customers will get free local calls, free SMS and MMS messages, and unlimited mobile data on that day. Meanwhile, StarHub's postpaid mobile customers will receive an additional 1GB of free data for the month of August. (The Straits Times)

Indonesia’s Corporate News

Banking

Jakarta's tax amnesty to start on July 18

Indonesia's tax amnesty scheme, touted as the silver bullet to help the country raise billions of dollars in revenue, begins on July 18, said Finance Ministry Secretary. They will be ready for taxpayers who wish to register, declare and make (tax) redemptions, he said. President of Indonesia is banking on the landmark tax amnesty to recover billions of dollars Indonesia had lost over decades to widespread tax evasion and in assets hidden overseas by wealthy citizens and businesses. (The Straits Times)

BCA picks Sitecore to handle its online banking system

Bank Central Asia, one of Indonesia's largest private banks, is taking the lead in the nation's Internet banking system with its Sitecore Experience Platform software. Invented by a Danish company with the same name, Sitecore is experience management software that combines web content management and customer intelligence to create a seamless online customer service experience. (Jakarta Globe)

Mining

Newmont takeover deal hinges on government shares allotment

Government approval on the shares sale of Indonesia's second largest gold and copper mine in Sumbawa to local energy firm Medco Energi International would hinge on whether it could get a small portion of shares in the mine. Mine operator Newmont Nusa Tengara (NNT) works under a 1986 working contract that requires its parent company, US mining giant Newmont Mining, to relinquish 51.0% interest to central government, local governments or local firms. Since then, Newmont Mining has sold off 44.0%. (Jakarta Globe)

Indonesian coal association against possible moratorium on Philippines

Indonesian coal mining association (ABKI) is urging the government not to suspend its supply of coal to the Philippines as this will hurt the industry amid weak demand and low commodity prices. Jakarta is considering stopping shipments of coal to Philippines following a spate of abductions of Indonesian citizens. Indonesia exports about 15.0m tonnes of the commodity to Philippines a year - almost all of the imported coal for the latter. Coal contributes to 34.0% of Philippines' energy needs. (Channel News Asia)

Telecommunications

Sarana Menara closes USD121.0m sale of Protelindo to Spain’s Cellnex

Indonesia’s PT Sarana Menara Nusantara Tbk and its partner Management Tower Europe SARL have agreed to sell 100.0% stake in Protelindo Netherlands BV to Spanish Cellnex Telecom S.A. The transaction involves an investment of EUR109.0m (USD121.1m) and the integration of Protelindo’s existing 261 telecommunication sites into the Cellnex portfolio. (Deal Street Asia)

Indonesia's Telkom launches high-speed internet for businesses

Telecommunications firm Telekomunikasi Indonesia launched a new high-speed internet service for enterprise customers -- the company's latest move to expand its data traffic, the largest contributor to its revenue. Telkom, as the company is better known, said its new Smart Office Pro allows internet access speeds of up to 1GB per second. The product is bundled with 78 channels of internet protocol television and 1,000 minutes of free voice calls, among other services, in a single package. (Nikkei Asian Review)

Thailand Corporate News

Automobile

BMW Group Thailand announces opening of new parts distribution center

BMW Group Thailand has officially announced the opening of its new parts distribution center in Bangkok Free Trade Zone on Bangna-Trad Road Km.23, spanning 14,000 square meters and backed by a THB220.0m investment. The new parts distribution center is almost three times as large as the previous facility. The complex will enhance BMW logistical efficiency as it is capable of handling over 40,000 different part models. (Pattaya Today)

Mazda in new pickup deal with Isuzu

Japanese carmaker Mazda Motor Corporation plans to relocate production of its next-generation pickup truck models to Thailand, possibly by 2018-20. Mazda and Isuzu announced a "basic agreement" on next-generation pickup truck collaboration. This will allow Isuzu to enhance its product competitiveness and Mazda to strengthen its product line-up and maintain own-brand market coverage. Production will be at Isuzu's Thai factory. The deal signals a shift away from a long-running arrangement with Ford. (Bangkok Post)

Banking

Thai banks increasingly concerned about BCBS 239, IFRS 9 New, pressing regulatory issues are an increasing concern for Thai financial institutions. Basel Committee on Banking Supervision (BCBS) 239, for example, aims to improve data consistency and clarity in line with its 14 principles. The aim of BCBS 239 is to enable better assessment of risk and profitability at the bank’s group level. Another area of concern is International Financial Reporting Standards 9 (IFRS 9) which kicks in January 1, 2019 in Thailand. This new accounting standard carries with it a whole set of changes including changes in classification, hedging and the adoption of an expected credit loss model for assessing impairment. (CFO Innovation Asia)

BoT: Thai economic stability still high

The Bank of Thailand (BoT) has confirmed Thailand’s financial and economic stability is at a high level while playing down the rising unemployment rate. Governor of the BoT said Thai financial institutions had high reserves and capital to offset against lower loan quality caused by the slowly recovering economy. He warned of uncertainty from other factors such as financial policy of large industrial countries and Brexit. (Thai Visa News)

Telecommunications

Thai broadcast regulators authorised to shut down TV, radio stations

Thailand's military government has authorised broadcast regulators to shut down any television and radio stations that they consider a threat to national security. The order came from Prime Minister through the use of Article 44 of the interim constitution which gives the military government far reaching powers. This has now extended to the Thai National Broadcasting and Telecommunications Commission, which will be protected from any legal action whenever it reprimands any broadcast media reports ”deemed as threatening national security or instigating unrest”. (Channel News Asia)

Reform panel demands refund of phone fees

The National Reform Steering Assembly's anti-corruption panel has urged telecom authorities to quickly order three big mobile phone operators to repay overcharged phone fees of up to THB10.0k to customers. Deputy head of the panel said that representatives of the National Broadcasting and Telecommunications Commission had admitted that Advanced Info Service Plc (AIS), Total Access Communication (dtac) and True Corporation had charged clients more than the regulated rates. (Bangkok Post)

Source: Kenanga Research - 18 Jul 2016