Halister News

(Bloomberg) -- A total of 16 firms slapped with fines of up to S$800,000 last year for money-laundering breaches, according to the Monetary Authority of Singapore’s latest annual report.

• MAS issued 19 warnings and reprimands to financial institutions last year
• MAS conducted 54 anti-money laundering inspections; controls generally in place: annual report
• Financial institutions need continue to boost transaction

monitoring systems; need to enhance monitoring activities in multiple accounts belonging to the same beneficial owner: MAS

• MAS took 368 regulatory and enforcement actions for

securities breaches from April 2015 to March 2016

• Commercial banks’ assets -0.2% to S$1.06t, first decline since 2002: MAS
• Singapore’s asset management industry +9% in 2015, with assets under management at S$2.6 trillion; ~80% of AUM from investors outside Singapore
• Net funds raised in domestic capital market fell 53% to S$45.6 billion from 2014: MAS
• Short position reporting on securities trading will be

introduced in 2017; collateralized trading in 2018

• Market participants will have adequate time to adjust to

changes: MAS

• MAS expects to complete mandatory trade reporting requirement

by 1H 2017

• MAS finalizing legislative amendments to enhance regulatory

safeguards for those investing in capital markets products

• MAS looking at ’’electronification’’ of foreign exchange trading

(Bloomberg) -- Majority of currencies in region decline, led by ringgit and yen ahead of central bank meetings in U.S. and Japan this week.

• Dollar Index little changed following 0.5% gain Friday; MSCI Asia Pacific Index rises and Brent crude extends losses
• Asian currencies drop as investors consider if Fed will sound more hawkish this week, Rabobank head of financial markets research Michael Every says
  • Weekend news of another attack in Europe and Donald Trump implying U.S. may pull out of WTO if he is elected also pressure Asian exporters and currencies given possible impact on globalization
• FOMC rate decision Wednesday 2pm EDT; BOJ statement July 29
• Yen extends declines on expectations of more BOJ easing at July 28-29 meeting
  • 78% of analysts surveyed by Bloomberg forecast BOJ will ease policy
  • Exports fall for ninth straight month in June, down 7.4% y/y vs -11.3% est.; imports drop 18.8% vs -20.0% est., down 17th month in a row; surplus 692.8b yen vs est. 474.4b yen
  • Japanese banks seen buying USD/JPY through Friday’s 106.40 high, according to an Asia-based FX trader
  • USD/JPY could rally toward 107.49, July 21 high, on expectations of BOJ easing: SMBC
  • Govt maintained economic assessment for July, saying economy is on moderate recovery though weakness seen recently, Cabinet Office says
• Yuan steady after PBOC weakens yuan daily reference rate most since July 6
  • China will keep improving FX rate system based on market supply and demand and with reference to basket of currencies, PBOC Governor Zhou says statement after weekend G-20 meeting in Chengdu
  • Deputy Governor Chen says China will work hard to stabilize yuan vs basket
  • PBOC injects 150b yuan with 7-day reverse repos
  • PBOC may be preparing for South Korean won’s inclusion in CFETS basket by adjusting RMB index higher last week following KRW’s recent strength, according to Commerzbank
• Malaysia’s ringgit falls for sixth day, heading for longest losing streak in nine months, with WTI crude oil futures near lowest since May 11
  • Malaysia foreign fund inflows show signs of receding, according to MIDF
• Aussie and Australian bonds rise
  • Australia 2Q CPI data due July 27; median est. +1.1% y/y vs +1.3% in 1Q
  • Australian total FX turnover rose 6% to $134.8b in April from $127.6b in Oct.
• New Zealand dollar falls as kiwi dealers target sell-stops amid broad dollar strength, Asia-based trader says
• South Korea’s won snaps 2-day advance
  • S. Korean & Chinese finance ministers held bilateral meeting at G-20; agree to show commitment to prevent trade protectionism
  • S. Korea 2Q preliminary GDP due tomorrow; median est. +3.0% y/y vs +2.8% in 1Q
• Singapore dollar falls for second day, approaching one-month low
  • USD/SGD buying led by global macro funds
  • Singapore June CPI due at 1pm local time; median est. is -1.1% y/y, which would be 20th month negative

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

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DOWNGRADES

• Godawari Power and Ispat
  • Long-term bank facilities cut to D from BBB+ at Care
  • Cites delays in debt servicing
• Leeway Logistics
  • LT rating cut to BB+ from BBB+ at Crisil
  • Cites deterioration in co.’s liquidity and rising working capital requirement
• Vortex Rubber Industries
  • LT rating cut to B from BB- at Crisil
  • Cites deterioration in liquidity profile with overutilization of bank credit lines

UPGRADES

• Apt Packaging
  • LT rating raised to B- from D at Crisil
  • Says co. met debt obligations in time over 15 mos. to May 31
• Ashoka Highways (Bhandara)
  • LT rating raised to A-(SO) from BBB+(SO) at Crisil
  • Cites improvement in co.’s debt protection metrics following refinancing of term loan at lower rates
• IL&FS Tamilnadu Power Co.
  • LT bank facilities raised to BBB+ from BBB at Care
  • Cites track record on projects
• MRF Ltd.
  • NCDs raised to AAA from AA+ at ICRA
  • Cites improvement in financial performance
• Tirupati Cotton
  • LT rating raised to BB from BB- at Crisil
  • Cites expectations of an improvement in firm’s financial risk profile capital infusion, rising cash accruals and controlled debt levels

(Bloomberg) -- USD/PHP may retest July 12 high of 47.500 near term if Philippines’ May trade deficit is worse than economists predict, Bloomberg strategist Andrew Robinson writes.

• Trade deficit widened to $1.33b in May from $2.28b in April, the 11th monthly deficit in a row, according to median est. in Bloomberg survey; ests. range from -$1.65b to +$6.55b
  • Deficit missed survey est. in April, data released June 24 showed; peso fell 0.9% to 46.950 that day
• Imports likely rose 28.4% y/y in May after 29.2% gain in April, other survey shows
  • Both sets of data due tomorrow at 9am local time
• Imports probably rose 25% y/y in May driven by demand for capital, raw-material and intermediate goods, Standard Chartered wrote in July 22 note
  • Given the divergence between domestic and external demand, trade deficit likely remained wide
• USD/PHP up 0.1% at 47.175 today, after climbing 0.6% last wk
  • MACD is rising, on verge of crossing above signal line and already above zero
• NOTE: Andrew Robinson is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

(Bloomberg) -- Onshore and offshore yuan diverge as PBOC weakens reference rate 0.29%, most since July 6, after meeting of G-20 finance ministers and central bank governors in Chengdu over weekend.

• CNH falls 0.06% to 6.6865 vs USD; CNY up 0.04% to 6.6775
  • PBOC sets CNY fixing at 6.6860, weakening for first time since last Tuesday
• China will keep improving its FX rate system based on market supply and demand and with reference to basket of currencies: PBOC governor Zhou in G-20 statement
  • Will work hard to stabilize yuan vs basket: PBOC deputy governor
• Zhou’s note at G-20 indicates yuan will depreciate gradually and in orderly manner long term, Citic Securities’ head of fixed income research Ming Ming writes in a note today; China is liberalizing FX regime while avoiding extreme volatility
  • Gradual depreciation will support exports; weaker yuan has stimulated domestic consumption; more investors will sell yuan-denominated assets, which could ease domestic asset bubble
  • But weaker yuan is leading to capital outflow and squeezing domestic liquidity; expects yield of 10-yr govt bond at 2.8% by yr-end
• 10-yr govt bond yield rises 2 bps to 2.81%
• CNY 7-day repo rate falls 9 bps, first decline in a week, to 2.2766%
• PBOC sells 150b yuan of 7-day reverse repo at 2.25%
• USD/CNH support at 6.6683, 6.6661, 6.6528
  • Resistance at 6.7007, 6.7131, 6.7195
• Yuan fails Fed haven currency test ahead of joining IMF reserve basket
• CASS says growth in China house prices may ease in coming months after rapid rise in 1H: China Securities Journal

(Bloomberg) -- Dai-ichi Life Insurance, Japan’s second-biggest life insurer, has bought Spanish and Italian bonds and added U.S. mortgage and corporate debt in quarter through June to seek better returns abroad and diversify risks.

• “We have to shift to the peripheral nations as government bonds in Europe’s core nations don’t offer much yield,” Kazuyuki Shigemoto, general manager of the global fixed- income investment department, said in interview on July 21.
  • “However, yields in Spain and Italy have gone down quite a lot and it raises questions whether their returns are worth risks involved.”
• Spain’s 10-year yield has dropped 52 bps since June 24 when U.K. released its referendum result, to 1.11% on July 22; Italy’s rate has fallen 32 bps to 1.23% on July 22; German equivalent rate stood at -0.030% July 22 vs -0.047% June 24
• In the U.S., Dai-ichi has purchased mortgage debt such as Ginnie Mae as well as Freddie Mac, Fanny Mae and corporate notes that offer a spread over Treasuries
  • Dai-ichi has assets of about JPY35t yen ($329b)
• Dai-ichi Life bought overseas bonds mostly with currency hedge since April, although it purchased partially unhedged bonds towards end-June when JPY strengthened to near 100 per USD
• “Unfortunately, Treasury yields are at a level where we can’t buy when considering the hedging costs and their returns,” Shigemoto said. “Given current foreign-exchange fluctuations and outlook, we need to hedge the positions.”
  • Expect USD/JPY to trade between 100-110 over the next few months, making it “difficult” to buy fixed-income securities without the hedge, Shigemoto said