The new credit limit management measure will cap the additional unsecured credit that a financial institution (FI) may extend to a borrower whose outstanding unsecured debts exceed six times his monthly income.

Under the new measure, where an individual’s outstanding unsecured debts exceed six times his monthly income, a financial institution will not be allowed to grant any increase in credit limit or any new unsecured credit facilities that will cause the individual’s total credit limit to exceed 12 times his monthly income.

The measure aims to help borrowers with between six and 12 months of monthly income of outstanding unsecured debts from becoming highly indebted (defined as more than 12 months of debts). There are an estimated 60,000 borrowers in this pool, or about 4 per cent of the total 1.5 million unsecured credit users here.

These borrowers will be affected only if they apply for new credit facilities or a credit limit increase that will cause their total credit limit to exceed 12 times their monthly income.

Borrowers can continue to draw on their existing unutilised unsecured credit facilities. The new measure will not require borrowers to reduce the credit limit of their existing credit facilities. Unsecured credit facilities include credit cards and personal loans and exclude credit facilities such as mortgages and car loans.

The Monetary Authority of Singapore (MAS) says that the measure aims to pre-emptively cap their total credit limit before they are affected by the industry-wide borrowing limit. The industry-wide borrowing limit prevents an individual from obtaining new unsecured credit and drawing down on his existing unsecured credit facilities once his aggregate interest-bearing unsecured debts exceed the prevailing borrowing limit for three consecutive months.

The borrowing limit is currently 18 times a borrower’s monthly income. It will be lowered to 12 times from June 1, 2019.

Loo Siew Yee, MAS’s assistant managing director (policy, risk & surveillance), said: “We are making steady progress in helping borrowers manage their unsecured debts. The industry-wide borrowing limit has reduced the overall number of highly indebted borrowers.

“Several assistance schemes and repayment plans, such as the Debt Consolidation Plan launched earlier this year by The Association of Banks in Singapore, are available to help these borrowers work down their existing debts.

The measure announced today is pre-emptive in nature – it will help borrowers manage their unsecured debts early and avoid becoming highly indebted.”The overall unsecured credit situation in Singapore remains healthy but some borrowers continue to increase their indebtedness.

The US decision, made by the department last week, would involve the imposition of anti-dumping measures and anti-subsidy rates on corrosion-resistant (CORE) and cold-rolled steel from Vietnam.

In 2016, US steelmakers succeeded in persuading the department to impose anti-dumping (AD) and countervail (CV) duties on Chinese steel, which meant cold-rolled steel from China would be subject to 265.79 per cent AD and 256.44 per cent CV duties when exported to the US.

AD and CV duties of 199.46 per cent and 39.05 per cent, respectively, were applied to corrosion-resistant steel from China.

The department argued that Chinese products are being dumped in third-party countries, such as Vietnam, to circumvent these duties, leading to last week’s decision.

Although the product was only processed in Vietnam, the commerce department agreed with the claims of American producers that as much as 90 per cent of the product’s value originated from China.

Following the case, VSA said it was working with the Department of Trade Defence under the Ministry of Industry and Trade to follow developments relating to the ruling and to take the necessary measures in defense of local steelmakers in accordance with World Trade Organisation (WTO) regulations.

According to the VSA, the process of making corrosion-resistant or cold-rolled steel by Vietnamese businesses is a crucial step in the closed-loop manufacturing of high-quality flat steel bars, with factories in Vietnam receiving investment to the tune of hundreds of millions of US dollars.

The cold-rolling process generates between 30 and 40 per cent added value to imported hot-rolled coil from China, VSA argues, dismissing the claim by US authorities that the vast majority of the value of Vietnamese steel originates in China.

In addition, VSA said, the US had yet to put a regulation in place |regarding the required added value content of exports from Vietnam, making it difficult for Vietnamese steelmakers affected by the decision to respond.

In a release on its website, the department said importers and exporters of Vietnamese merchandise that is produced from substrate originating in Vietnam or a third country have the option of seeking an exemption from cash deposits by certifying that the substrate originated outside of China.

The department’s statistics showed that shipments of CORE from Vietnam to the US increased from US$2 million to US$80 million after preliminary duties were imposed on Chinese products in 2015.

Likewise, shipments of cold-rolled steel from Vietnam to the US increased from US$9 million to US$215 million after the duties were imposed.

The department is scheduled to announce its final determinations in these inquiries on February 16, 2018.

The case was initiated in September when US steel producers, including ArcelorMittal USA, Nucor Corp, AK Steel Holdings Corp and Steel Corp, filed lawsuits in which they claimed Chinese steel producers shipped products via Vietnam to evade tariffs.

In November, the European Union’s anti-fraud office said it found Chinese steel was shipped through Vietnam to evade the bloc’s tariffs.

Oum Sotha, spokesman of Ministry Industry and Handicraft, said that this downstream initiative would help speed up the registration process as well as giving authorities the ability to quickly inspect business operations.

“The decentralisation initiative for SMEs will begin sometime next year,” he said. “We are doing this to help solve the challenges SMEs face and it can potentially lead to the establishment of new federations of businesses that operate in the same sector.”

“When you have individual business federations working together, it is easier for us to make sure that they are following the law and the criteria for quality standards,” he added.

He added that another reason for this initiative was because the ministry believed that many businesses were deliberately flying under the radar and avoiding registration.

“So far this year, there has been a slow amount of businesses registering and we believe that as many as 50 percent of new SMEs have not bothered to register,” he added.

Only 221 SMEs registered with the government by the end of November, bringing the total to 39,362. While Sotha could not provide data for a percentage growth of registration, he said the ministry believes there are approximately 100,000 SMEs operating in the Kingdom.

Indonesia’s state-owned telecommunications firm PT Telkom Indonesia, through its subsidiary, PT Sigma Cipta Caraka (Telkomsigma), has acquired PT Bosnet Distribution Indonesia in an effort to develop Telkom Group’s logistics business.

By seeking to develop its electronic-logistics business, the group sought to support its existing businesses in information, communication technology (ICT), e-commerce, payment gateways and big data analytics, said Telkomsigma president director Judi Achmadi after signing acquisition deal.

Judi said the acquisition would help TelkomGroup strengthen its position in the logistics business ecosystem.

He said Bosnet was a noted ICT solution provider for the distribution of fast moving consumer goods (FMCG) in Indonesia. – The Jakarta Post

Workshop on SME farm exports to China

Laos’ small and medium-sized enterprises (SMEs) looking to export agricultural products to China exchanged knowledge on production skills and trade at a training workshop in Vientiane.

The training aimed to enhance opportunities for Lao agriculture products to access the Chinese market.

The workshop was co-chaired by President of Lao Agro Processing Association Phouvong Korasack, Chief of Trade Facilitation and Policy for Business Section (CIT) Rajesh Aggarwal, Deputy Director General of the Trade and Product Promotion Department under the Ministry of Industry and Commerce Xaysomphet Norasing, and participants from the government and the SME sector.

During the training, Phouvong highlighted Laos’ many agricultural products which have been exported to China recently such as coffee, sugarcane, rice, rubber and cassava. – Vientiane Times

EPF eyes investments in US infra projects

Malaysia’s Employees Provident Fund (EPF) is looking at investment opportunities in infrastructure projects in the US.

“We already invested in the equities market, and now we are looking at infrastructure assets with good returns because as an institutional fund we are always looking at longterm investment opportunities.

“For instance, in Malaysia, we have invested in Tenaga Nasional Bhd and highway operator PLUS Malaysia Bhd,” said EPF chief executive officer Datuk Shahril Ridza Ridzuan told reporters at a briefing on Thursday.

He also pointed out that the EPF has invested in infrastructure assets in the European region.

He, however, noted that the potential investment in the US infrastructure projects would also depend on the tax structure. – The Star

Jasa Marga aims to collect 4 trillion rupiah (US$280 million) from the debt papers. Demand for them has reached about 15.7 trillion rupiah.

“I am happy to see that many global investors purchased the Komodo bonds,” said Jasa Marga president director Desi Arryani in London, adding that the three-year term bonds with a coupon interest rate of 7.5 per cent annually had attracted investors from Asia, Europe and North America.

Securities firm BCA Sekuritas economist David Sumual said the issuance of the bonds on the LSE would gain the attention of global investors because of the coupon interest rate.

“The intensive construction of infrastructure projects made the debt papers more attractive,” he said.

Ashmore Asset Management analyst Anil Kumar said the rate was not the only factor that made the bonds attractive as “investors also took note of the company’s default risk, debt papers and firm ratings as well as the economic conditions of the country.”

Meanwhile, Indonesia Stock Exchange (IDX) company assessment director Samsul Hidayat said the listing of the Komodo bonds on the LSE would have a positive impact on the country’s investment climate.

“It indicates that foreign investors trust Indonesia. They did not hesitate to invest in [Indonesian] bonds,” he said.

In a chat with reporters, PSE president Ramon Monzon said the local stock market would now have to live with a 10-basis point increase in the stock transaction tax from 0.5 per cent (or one half of 1 per cent) to 0.6 per cent.

This was among the “offsetting” measures included in the TRAIN as the government sought to lower individual income taxes and boost the net take home pay of the average Filipino.

“In absolute terms it seems to be a small insignificant increase, but really, that increase represents a 20-per cent increase from the present one,” Monzon said.

“What we have to understand is the PSE does not operate in the local market alone. We compete with other exchanges—whether Thailand, Malaysia, Indonesia and Vietnam—we compete for the money of the foreign investors. When you increase the stock transaction tax, you’re increasing the friction cost,” he said.

Monzon said the existing 0.5 per cent stock transaction tax in the Philippines was already the highest in the region.

In Malaysia, stock transactions at the Bursa Malaysia are charged with only 30 basis points of the transaction value in the form of stamp duty while in Hong Kong Exchanges, the charge is only 10 basis points of the transaction value in the form of stamp duty. In Vietnam, a capital gains tax equivalent to 10 basis points of gross sale proceeds is levied on transactions through the Ho Chi Minh Exchange.

Singapore, a key financial center in the region, does not impose any stock transaction tax. Thailand also exempts stock transactions from taxes if they involve registered securities where the Thailand securities depository is the registrar.