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Daily Dispatches – Singapore still 2 in global competitiveness

Singapore's rankings still tops

Singapore's rankings still tops

Singapore has retained its position as the world number two in global competitiveness rankings for the third year running, while Indonesia and the Philippines are improving quickly.

The latest Global Competitiveness Index of the Geneva-based  World Economic Forum,  reported by the Wall Street Journal, today, shows that Singapore retained its second spot-ranking for a third year in a row, behind Switzerland.

The Philippines continued to advance, securing the 59thspot, up from 65th last year. Indonesia made a strong comeback after three years of decline, up to 38, from 50.

Improved competitiveness will also help Indonesia and the Philippines, two of the 10 members of the Association of Southeast Asian Nations, or ASEAN, as the bloc moves to become an integrated market and production base in 2015.

With the exception of Cambodia, Laos and Myanmar, the others are all ranked in the upper half of the 148 countries listed in the WEF Global Competitiveness report.

China Merchants Bank set for world’s third largest IPO in 2013

Bloomberg reports that China Merchants Bank has raised US$4.5 billion in the Shanghai portion of a rights offer, paving the way for it to complete the world’s third-largest share sale this year.

Investors holding 96.4% of the Shanghai-traded shares subscribed to the offer.

New hires pushing up Asian banks’ compliance costs

Private banks in the Asia-Pacific region are finding it increasingly costly to comply with regulatory changes being imposed on the industry, according to the Straits Times.
Banks expect risk and regulatory compliance expenses to account for 10% per cent of their annual revenue in two years, up from 7%, according to a report by global consultancy PwC.
It also found that 94% of respondents from private banks in Singapore and Hong Kong believe there will be more cross-border banking regulations and a higher level of tax transparency required.
PwC partner Justin Ong said costs had  increased because private banks needed to hire more staff in their compliance and risk departments, among other things.

I-banking boom in Japan

Asian Banking & Finance says Dealogic has reported revealed that proceeds from investment banking in Japan jumped 22% from a year ago to US$2.3 billion, the highest in three years.

That was better than the US$2 billion made from China.

Investment banking’s strong performance has come about as companies turn to banks to help them issue shares and take advantage of rising investor interest. The Nikkei Stock Average has risen 29% so far this year.

These megabuck deals have helped equity capital market revenue more than double to US$903 million, while loan revenue also rose a robust 32%, although though merger and acquisition revenue slipped 16%.

Take prisoners, repay the wounded

Bloomberg says China could show the US a thing or two when it comes to dealing with rogue banks, citing the response by authorities on the mainland to the Everbright insider trading debacle.

China has held senior managers personally responsible for misconduct and imposed punishments on the company so punitive that it will literally be incapable of repeating its offences ever. 

The regulator has barred four senior executives from ever working in the securities industry again, banned the company from engaging in any future proprietary trades and imposed a fine equivalent to more than half of the company’s 2012 profits.

Investors are suing Everbright’s management for compensation, since they are the ones who will be stuck paying for most of these penalties.

By contrast, the US Justice Department has been extremely reluctant to go after culpable individuals in US banks, preferring instead to extract “relatively toothless£ settlements from shareholders.

“Wouldn’t it be something if the U.S. economy were held back by its unwillingness to embrace the Chinese approach to criminal justice?”

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