Finance

Fri, Feb 21, 2020 – 3:07 PM

INSURANCE provider Gigacover on Friday said it is extending its Covid-19 coverage further, at no additional cost, to freelancers on its income protection insurance plans, a key group of which includes Gojek drivers.

The Gigacover income protection insurance policies will now provide cover to insured freelancers for Covid-19 related stay-home notice (SHN) and leave of absence (LOA).

Those eligible will get a one-time payout of S$400, if they are diagnosed with Covid-19 between Feb 21 and March 31, 2020. This is in addition to previously announced coverage for quarantined orders related to the virus.

With the extension, eligible insured freelancers can claim for SHN/LOA if they had travelled to mainland China on or before Jan 31, 2020; and they were placed on SHN or placed themselves on LOA, upon their return to Singapore on or after that same date.

The additional coverage is extended on a "goodwill basis" by Gigacover and the insurer of the product, Etiqa Insurance, Gigacover said in a press statement.

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Under the partnership between Gigacover and Gojek, Gojek drivers will now be able to claim a payout of up to S$6,500 if they are placed on hospitalisation leave due to Covid-19; up Read More – Source

Finance

Fri, Feb 21, 2020 – 2:03 PM

HSBC Singapore will provide cash management advice and speed up the handling of urgent payments for Singapore businesses, among other measures to help firms manage cash and liquidity amid the novel coronavirus (Covid-19) outbreak.

"In the face of Covid-19, many Singapore businesses are facing payment disruption and challenges in transitioning to their liquidity management business continuity plans (BCP)," the bank said in a media statement on Friday.

"HSBC Singapore's measures are designed to ease the impact felt by corporate treasuries and support the ongoing collection, handling and deployment of cash," it added.

For instance, businesses may find themselves having to establish new services such as virtual cards and virtual accounts, or move procurement, expense claims and cash monitoring from paper-based systems to digital platforms quickly.

To help address such issues, HSBC assembled a liquidity and cash management BCP advisory team that will help clients identify and solve gaps in their treasury BCP models.

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In addition, the bank will prioritise clients that require expedited manual payment handling on a case-by-case basis. For example, businesses may require urgent support due to order cancellations.

HSBC will also allow documents to be submitted digitally, so that physical meetings will not be required. Given that there may be delays caused by the virus outbreak, the bank will aRead More – Source

Finance

Fri, Feb 21, 2020 – 7:10 AM

UNITED Overseas Bank (UOB) will launch its digital bank, TMRW, next in Indonesia this year.

In a results presentation deck to be presented to media and analysts, UOB chief executive officer Wee Ee Cheong is set to pinpoint Indonesia as the next market for TMRW.

This follows from TMRW's first launch in Thailand in March 2019, and is part of the regional bank's march to capture a S$10 billion market opportunity in Asean.

The digital bank's S$10 billion projection reflects the lifetime value of young professionals in Asean, given an expected surge in demand for more complex financial instruments that will ramp up TMRW's asset base. To be clear, this is after about five years of transacting with TMRW on plain-vanilla services.

TMRW's expansion comes as the 84-year-old bank looks to tap the millennial market in the region, where six in 10 are under 35 years old.

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TMRW is due to run at a 35 per cent cost-to-income ratio after five years. With an aim to be the world's most engaging bank, TMRW is also "well-within" its target to be marginal-cost positive in five years, group head of TMRW digital group Dennis Khoo had told The Business Times in January.

The bank aims to scale TMRW with actively engaged customers and recoup total costs from a broader client base of a projected three to five million new customers from this region.

UOB's Singapore banking peer, DBS, earlier launched its digibank in Indonesia.

UOB posted a 10 per cent rise in net profit for its fourth quarter. Net profit for the three months ended Dec 31, 201Read More – Source

Finance

Fri, Feb 21, 2020 – 5:50 AM

Singapore

THE Singapore dollar plunged to 1.40 against the US unit on Thursday, reflecting growing recession fears as new reported cases of Covid-19 – while slowing down inside China – seem to be picking up pace in the rest of the world.

The SGD's slide on Thursday was in tandem with broad weakness in Asian currencies due to concerns stemming from the novel coronavirus outbreak, said Peter Chia, United Overseas Bank FX strategist.

As a whole, the Asia Dollar Index has retreated to 103.50, its lowest levels in more than two months.

"The USD/SGD move from 1.35 to 1.40 in the past month has been one of the steepest climbs in recent years," Mr Chia pointed out.

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The battered SGD has lost 3.9 per cent since the 1.35 level at the end of 2019. Against its peers, the SGD is among the worst performers, ranking 16th out of 20. Only the Thai baht, New Zealand dollar and Australian dollar have fallen more.

The Covid-19 outbreak has achieved what the US-China trade war did not, said Philip Wee, DBS Bank FX strategist. Last May, Mr Wee had expected the SGD to weaken to 1.40 by the third quarter of 2019.

This month, the epidemic has weakened the SGD NEER (nominal effective exchange rate) into the lower half of its policy band and led the Singapore government to warn of a possible recession in 2020, he said.

This year's official growth forecast was downgraded on Feb 17 to between -0.5 per cent and 1.5 per cent from 0.5-2.5 per cent previously.

"Covid-19 has not only delayed the recovery from the Phase One trade deal signed in mid-January but also broadened the economic weakness into domestic demand, for example tourism and retail sales," said Mr Wee.

The government expects it will hit the economy harder than Sars (Severe acute respiratory syndrome) in 2002-2003, he added.

Back then, real GDP growth had slipped to -0.3 per cent year-on-year (y-o-y) in Q2 2003 from 6.1 per cent in Q4 2002 but rebounded thereafter on China's post-World Trade Organisation ascension.

"Unfortunately, China's economy is still slowing amid an ongoing trade war today. Unless Covid-19 stabilises quickly in Q1 and does not extend into Q2, the door remains open for a shift to a neutral or zero appreciation stance at the next SGD policy review in April," Mr Wee said.

The yen has also lost its safe-haven appeal; it has depreciated 2.8 per cent against the USD since the beginning of the year.

Outside of China, Japan has reported the most coronavirus cases.

Having fallen into recession in Q4 2019 on quarter after a sales tax hike in October, Japan is expected to post negative growth in subsequent quarters due to Covid-19.

Talk of a possible contraction is also in Europe and the euro has declined 3.8 per cent since the end of 2019, falling to levels which reflect recession risks, noted Mr Wee.

How much more can the local unit fall?

While the SGD has moved very sharply in the past several weeks, and there is a technical resistance at 1.41, Mr Wee said he'd be a bit cautious of a strong rebound.

Some market watchers point to the V-shape recovery back in 2003 after the Sars outbreak was contained. But China then posted 10 per cent growth, he recalledRead More – Source

Finance

This article is part of POLITICOs Changemakers series, looking at the players driving European policy.

Green and sustainable finance is all the rage in Brussels.

The new European Commission is promising to present a second legislative package in the fall, including an EU standard for green bonds, a sustainability label for retail investment products and a revision of corporate disclosure duties regarding their environmental impacts.

Green finance is growing fast, pushed by high demand and a heightened policy focus on climate change. In Europe, total assets committed to sustainable and responsible investment strategies grew by 11 percent from 2016 to 2018 to reach €12.3 trillion, about half the Continents total assets under management.

A lot of that money is going to have to be invested in the EUs decarbonization strategy to hit the European Commissions Green Deal goal of becoming climate-neutral by 2050.

The European Green Deal Investment Plan aims to mobilize at least €1 trillion in sustainable investments over the next decade, but more cash will be needed.

Revamping the worlds financial architecture needs a lot of deft plumbers. Here are five people and organizations contributing to greening money flows.

Mark Carney

Pool photo by Jonathan Brady/Getty Images

One person has helped more than most to make green financing the agenda-topping issue it is today: Bank of England Governor Mark Carney.

Carney took what was still a relatively fringe issue and gave it a huge blast of publicity, spelling out the stakes in a 2016 speech.

Calling climate change “the tragedy of the horizon,” he went on to say that its worst effects would be felt by our descendants.

“Sadly, with respect to climate, history repeats itself — not as farce but as tragedy, with growing frequency,” Carney said at the time. For many in the financial sector, the speech marked the moment when big money started paying attention to sustainability.

Carney used his authority as both the chief of one of the worlds leading central banks and the head of the global regulatory body, the Financial Stability Board, to push through rule changes aimed at making banks and investors aware of the risks of climate change.

The Bank of England launched stress tests to determine which institutions would be worst affected by a warming planet.

The U.K. and EU are well on the way to imposing binding environmental disclosure requirements on companies and legislating toward net-zero economies, in no small part thanks to Carneys persistence in highlighting these problems before they were mainstream concerns.

“A question for every company, every financial institution, every asset manager, pension fund or insurer: Whats your plan?” Carney told the BBC in December.

Carney isnt dropping climate. When he exits the Bank of England next month, hell become U.N. green finance envoy and adviser to the British government for Novembers COP26 climate summit in Glasgow.

Christine Lagarde

John Thys/AFP via Getty Images

The European Central Banks new president is determined to make a difference in the fight against climate change — but shes not using the banks €2.7 trillion bond-buying program to do so.

EU lawmakers in Brussels had hoped the Frankfurt-based institution would use the program to favor greener investments, while scrapping carbon-intensive assets from its massive portfolio.

They had good reason to; last September, Lagarde suggested using the ECBs so-called asset purchase program to fight climate change in her Parliament hearing as a candidate for the presidential post.

“Im fundamentally convinced that fighting climate change has to be a central plank of policy,” she said at the hearing.

Lagarde has since pulled back on focusing firepower on green goals, promising instead to preserve market neutrality in the ECBs portfolio and keep the eurozones economy ticking over.

This doesnt mean shes scrapped her green intentions. The ECB has introduced climate change into its macroeconomic forecasts under her presidency, and ensures that eurozone banks take environmental risks seriously.

Closer to home, Lagarde has said the ECBs corporate pension portfolio for employees could hold more green assets.

There has also been talk within the ECB of demanding greener collateral from banks wanting to borrow from the central bank.

An unlikely parliamentary duo

European Union

An ideological gulf separates Sirpa Pietikäinen, a former environment minister and MEP for Finlands conservative-liberal National Coalition Party, and Bas Eickhout, the combative Dutch deputy leader of the Greens in the Parliament.

This didnt stop them from forging an unlikely alliance in the European Parliament last year on the issue of sustainable finance. The so-called taxonomy regulation sets rules for financial operators to measure investment products marketed as green against a binding EU standard for sustainable investments, and disclose to what extent they align with it.

When Eickhout got the rapporteurship of the sustainable finance regulation, he brought along the Finn from the European Peoples Party. The reason? To seek out a compromise that would allow them to push the file through Parliament, presenting a united front in the face of a highly divided Council.

The effort worked well.

Both sit on the ECON and ENVI committees and have been MEPs for over a decade, giving them heft both within their political groupings and negotiations with the Commission and Council.

Despite occasional disagreements over the scope of the regulation the two achieved their goal Read More – Source

Finance

FINTECH investments in Singapore more than doubled to US$861 million in 2019 from the year before, led by big gains in funding to payments and insurtech startups.

The number of deals in Singapore rose 52 per cent to 108, according to Accenture, which analysed data from CB Insights, a global venture-finance data and analytics firm.

With US$861 million in funding bagged in 2019, Singapore is now the fifth-largest fintech market by funds in the Asia-Pacific, behind India, China, Australia and South Korea.

The country saw seven deals of US$25 million or more, which together made up 77 per cent of total deal value last year.

About 39 per cent of the total funds raised went into payments startups, while insurtechs raked in 25 per cent of the investments. Fintechs in lending accounted for 13 per cent of total investments, the data showed.

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Blockbuster deals closed in Singapore in 2019 include US$90 million raised by credit risk analytics and lending startup FinAccel in November, US$90 million bagged by insurtech Singapore Life in July, and US$80 million raised by financial products marketplace GoBear in May.

Divyesh Vithlani, a managing director at Accenture and Asean financial services lead, said broad interest in the new digital banking licences and the strong growth in fintech investments last year bodes well for the future development of the Singapore fintech ecosystem.

"Theres been a lot of focus on payments startups and solutions the past years, but we may see a shift in investment trends going forward as some of the new digital banks come onboard and we see more and more companies targeting the commercial banking space with new products and solutions for SMEs (small and medium enterprises) that have been underserved by traditional banks," said Mr Vithlani.

"There are huge opportunities in South-east Asia for traditional players as well as fintech startups, particularly in the consumer space, where there are millions of unbanked and underbanked people, so we will probably continue to see many companies using Singapore as a launch pad into other fast-growing markets in the region."

The Accenture analysis noted that investments into challenger banks globally have more than tripled in 2019 to US$5.2 billion, from US$1.6 billion the year before.

The leap was led by the US$726 million raised by Italian digital bank and card processor Nexi, the US$Read More – Source

Finance

Thu, Feb 20, 2020 – 5:50 AM

Singapore

YOUNG leaders from six prominent business families in Singapore, which include Goldbell Group and Super Group founder's investment firm Apricot Capital, are behind a S$5 million fund to provide financing help for local enterprises hit by the impact from the virus outbreak.

The other four founding companies that set up the fund include Ho Lee Group, Paradise Group, Sing Lun Group and Soilbuild Group, in partnership with the Singapore Business Federation Young Business Leaders Network (SBF-YBLN).

The fund will be used to provide short-term working capital loans of up to 12 months for local small and medium-sized enterprises (SMEs) which have been impacted by Covid-19, with the monies expected to target more than 100 SMEs.

To administer the borrowing via this fund, known as the Helping Our Promising Enterprises (Hope) fund, the matching of borrowers to monies will go through Goldbell's private debt investment platform Goldbell Evolution Network. This platform is developed and owned by Goldbell's financial services arm.

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The fund will offer a fixed loan of S$50,000 per company, and will offer a lending rate starting at 0.5 per cent per month, but at no more than 0.75 per cent per month. Industry rates for working capital loans can vary widely, typically ranging between 7 to 18 per cent per annum.

Processing fees will cost S$80 to cover administrative charges, which BT understands to be the lowest in the market as most platforms charge one to 2 per cent.

To qualify, companies must be locally incorporated for more than 12 months, have at least 30 per cent Singaporean shareholding and a minimum paid-up capital of S$25,000.

The fund will be ready for applications on Feb 26.

Loan approvals and disbursement will also be expedited to support businesses especially during the upcoming critical months as they focus on recovery and operations.

Alex Chua, CEO of Goldbell Financial Services said that the fund is an additional source of financing for SMEs in their time of need, and could help segments that traditional banks may not serve due to a lack of track record.

Speed is also another factor that differentiates it from other sources of financing.

He added: "We understand the urgency of the situation and have constructed a credit-scoring model for this programme, allowing loans to be approved quickly and to be disbursed in 24 hours from loan approval, subject to the required documentation received."

This move to fund fellow SMEs comes amid challenges as well for the founding companies of the fund's backers, with some also hard-hit by the virus outbreak.

Food and beverage chain operator Paradise Group, for example, is facing business stress with revenue from Singapore down at least 30 per cent, and this is expected to slide further. Its China and Hong Kong markets – which make up 30 per cent of revenue – are the worst hit, with business diving by 95 per cent so far.

Still, its CEO Eldwin Chua maintained that he wants to do his part "no matter how little" to support other businesses and to encourage them in the current situation.

Mark Lee, CEO of Sing Lun and spokesperson for the six founding companies, pointed out that most of the people behind the fund are the second or third- generation of family brick-and-mortar businesses that have experienced first-hand the pain of working capital shortfall, either during the Great Financial Crisis of 2008, the Sars epidemic in 2003 or the Asian Financial Crisis of 1997.

"We want to help companies with good business models ride through this crisis, give them an opportunity to build a stronger business and at the same time, help preserve jobs for our community," he said.

Chong Ee-Rong, chair of the SBF-YBLN, said that he hopes this move will rally other companies to participate and support the fund.

"There is no doubt that Singapore will overcome this trying time, but how we help each other throRead More – Source