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Moody's: Asean Banks Well placed to Comply With Basel III Capital and Liquidity Ratios





Moody's Investors Service says that banks in the Association of Southeast Asian Nations (ASEAN) region -- namely those in Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines -- are well placed to comply with stricter capital and liquidity requirements under Basel III. "Moody's-rated banks in the ASEAN region are well capitalized and can meet the higher minimum capital requirements under Basel III," says Alka Anbarasu, a Moody's Vice President and Senior Analyst. "As for the 60% minimum liquidity coverage ratio under Basel III, in many cases, the banks are already 100% compliant, though national differences make it difficult to compare the reported ratios across different banking systems." "On the issue of additional banking regulations, we note that regulators in the region appear hesitant to embrace the wider bail-in and total loss absorbing capital (TLAC) guidelines as they await more clarity from the Financial Stability Board (FSB)," adds Anbarasu. Anbarasu also expects selective issuance of Basel III securities by banks across ASEAN; in particular, to replace legacy old-style securities which will be callable over 2015-2017. Moody's analysis is contained in its just-released presentation titled "ASEAN Banks Well Placed for Basel III Capital and Liquidity Ratio Compliance," and is authored by Anbarasu. Moody's points out that liquidity coverage ratios (LCRs) have already been implemented in Singapore and Malaysia. Given the predominance of retail funding as well as government bonds in the investment portfolio, Moody's expects most rated banks in the region will be able to comply with the 60% minimum requirement by end-2015; in many cases banks are already 100% compliant. However, national differences on the definition of high quality liquid assets and outflows, whether or not LCRs should be assessed based on a consolidated or standalone basis, and LCR requirements in different currencies could make it difficult to compare the reported ratios across different banking systems. Moody's adds that it expects regulators in the region will announce by the end of 2015, the list of domestic systemically important banks (D-SIB) in their respective banking systems. Moody's points out that seven banks in Singapore -- three local and four foreign -- have already been identified as systemically important.


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AT&T, DirecTv extend 'termination date' for second time





The No. 2 telecom company in the U.S., AT&T Inc., said it has extended the “termination date” of the merger agreement with DirecTV, the second time in 2 months. In a regulatory filing, the company said the extension is aimed at obtaining final regulatory approval for the merger. In May last year, AT&T offered to buy DirecTV to create the largest U.S. pay TV company.


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British pound strengthens as UK economy improves





The British pound accelerated on Tuesday as UK economy improves and the likelihood of an interest rate hike increases. Consumer confidence in the United Kingdom leaped to its highest level in more than 15 years in June, with monthly sentiment index bounced to +7 from +1 in May. Sterling surged to 70.85 British pence per euro from Monday's 69.89 British pence. Against the US dollar, the pound closed at $1.5726. The UK and the United States are the only two countries that seem to have “central banks that are teeing markets up for slightly less accommodative monetary policy,” said Gavin Friend, Strategist at National Australia Bank Ltd.


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US dollar ascends on upbeat ADP jobs data





The US dollar strengthens on Thursday as the market is preparing for a bunch of US data ahead of the July 4 Independence Day. Based on the ADP National Employment Report, private employers added 237,000 in June, the largest gain since December. The greenback finished at $1.1044 per euro. Against the Japanese yen, the dollar fetched ¥123.22. Additional improvement in the labor sector may bolster speculations for a rate hike this year. But it “risks a further delay in the Fed's normalization cycle,” said David Song, Currency Analyst at DailyFX.


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British pound recuperates amid upbeat UK construction data


The British pound regained from two-week troughs versus the US dollar Thursday following UK construction output increased in June. Markit reported the UK construction purchasing managers' index climbed to 58.1 from 55.9 in May. Against the US dollar, sterling stood at $1.5640. The pound finished at 71.04 pence per euro. We notice some moderate selling in the US dollar, with jobs figures “helping the euro and the pound,” said a London-based spot trader. Risks to the UK economy lurk in the likelihood of Greece's eurozone exit. But in the short run, ructions in the region could cultivate safe-haven inflows into the country.


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Usd/idr Sustain Firm Above 13350





Pair gaps up at open to 13340-360 and traded firm since
Pair traded 13350-370 range so far, last at 13350-360
NDFs shot higher to 13440-470; JKSE -0.47%


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Eur/usd Calm ahead of Eu Summit





Time running out as debt repayments loom and Greek banks strapped for cash Pair under pressure as market awaits the result of yet another EU summit EU leaders are urging Greek PM Tsipras to come up with firm proposal Greece likely to propose relief on their debt in exchange for austerity EU so far has resisted any proposals involving Greek debt relief If no sign of deal materializes it will likely weigh on EUR sentiment


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Japan May Current Account Surplus Y1.880 Trillion





Japan posted a current account surplus of 1.880 trillion yen in May, the ministry of Finance said on Wednesday - surging 266.7 percent on year. The headline figure topped expectations for a surplus of 1.570 trillion yen following the 1.326 trillion yen surplus in April. The trade balance reflected a deficit of 47.3 billion yen - also beating forecasts for a shortfall of 283.8 billion yen following the 146.2 billion yen shortfall in the previous month. Exports were down 0.1 percent on year to 5.707 trillion yen following the 4.1 percent jump in April. Imports tumbled an annual 10.3 percent to 5.754 trillion yen following the 5.9 percent decline a month earlier. The capital account had a deficit of 8.9billion yen, the ministry said, while the financial account saw a surplus of 3.629 trillion yen. The adjusted current account surplus was 1.636 trillion yen - which beat forecasts for 1.375 trillion yen following the 1.274 trillion yen surplus a month earlier. Also on Wednesday, the Bank of Japan said that overall bank lending in Japan was up 2.5 percent on year in June, coming in at 487.773 trillion yen. That was in line with expectations, and down from the 2.6 percent increase in May. Excluding trusts, bank lending advanced 2.6 percent to 424.212 trillion yen. That beat forecasts for an increase of 2.5 percent following the 2.7 percent gain in the previous month. Lending from trusts added an annual 1.9 percent to 63.561 trillion yen, while lending from foreign banks tumbled an annual 15.3 percent to 1.843 trillion yen.


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Japan M2 Money Stock Rises 3.8% In June





The M2 money stock in Japan advanced 3.8 percent on year in June, the Bank of Japan said on Thursday - worth 908.7 trillion yen. That missed expectations for an increase of 4.0 percent following the upwardly revised 4.1 percent gain in May (originally 4.0 percent). The M3 money stock gained an annual 3.1 percent to 1,224.3 trillion yen - also below forecasts for 3.3 percent, which would have been unchanged from the previous month. The L money stock gained 4.3 percent to 1,617.4 trillion yen following the 4.5 percent jump a month earlier.


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Japan Corporate Service Prices Dip 0.2% In June





An index monitoring corporate service prices in Japan was down 0.2 percent on month in June, the Bank of Korea said on Friday. That missed forecasts for an increase or 0.1 percent following the downwardly revised 0.2 percent increase in May (originally 0.3 percent). On a yearly basis, prices dipped 2.4 percent - also shy of expectations for a fall of 2.2 percent - which would have been unchanged from the previous month following a downward revision from -2.1 percent. Export prices were flat on month and down 4.2 percent on year, the bank said, while import prices added 1.2 percent on month but tumbled 17.6 percent on year.


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