Global financial markets continue to digest the impact of Britain’s vote to leave the European Union, better known as Brexit, as well as the implications the move would have on monetary policy and fiscal stimulus.

A technical analyst said the ringgit would likely trade higher against the US dollar and pound sterling. “There’s a mild upside against the US dollar and stronger upside against the sterling,” he told StarBiz. However, he said there would be an element of caution in the markets because of the uncertainties.

Based on past performance, analysts believe the ringgit would continue to be influenced foremost by the direction of commodity prices, and in particular, global crude oil prices. Oil prices have hovered in the US$50-a-barrel level for some weeks now, and the ringgit has hovered at around four to the US dollar level, mirroring the crude oil price movement.

Gold and higher-rated sovereign bonds, including US treasuries, Japanese government bonds, bunds and the Swiss franc have been the assets of choice for investors looking for shelter from the uncertain trading landscape. Another element that further underscores the challenges ahead would be the US Federal Reserve’s decision on the benchmark interest rate.

At this point, analysts believe US policymakers would not vote to hike interest rates because of the slowdown in global economic growth and the impact this would have on the US economy, where job creation has fallen since March. Analysts said a rate hike could come only in 2018.

US data has come in quite mixed, given the improved readings on private consumption and lower inflation against the backdrop of a lower-than-expected first-quarter economic growth.

This could leave a little bit of breathing space for policymakers in Malaysia, where economic growth shows a downtrend, with weak exports and tepid growth in private consumption as well as private-sector investment. There have been speculation that central bank Bank Negara could cut the benchmark overnight policy rate to support growth, given that inflation, which peaked in the January-to-March period, has stabilised.

Citigroup Inc analysts said in a report dated July 6 that the improving outlook for the developed markets “continues to offer global markets a semblance of hope despite the despondent post-Brexit outlook”. They noted that US equity markets had put in an “impressive performance” on July 5 as sentiments rose following the better-than-expected data from the Institute of Supply Management showing an improvement in the services and manufacturing indices.

“It is worth noting that the aggregated G10 economic surprise index is already at its high for the year and within a whisker of its 2½-year high-water mark, even as the aggregated emerging market surprise index continues to fall,” they added. The G10 refers to France, Germany, Belgium, Italy, Japan, the Netherlands, Sweden, the United Kingdom, the US, Canada and Switzerland.

“This improving economic outlook in the developed world continues to offer global markets a semblance of hope despite the despondent post-Brexit outlook. This is also supported by expectations of more monetary easing and a steadfastly dovish Fed,” they said, noting that the release of the June Federal Open Market Committee meeting minutes helped reinforce the view that US policymakers might have paused the rate normalisation cycle.

In another report, Citigroup analysts said the global risk aversion macro index, a global measure of risk aversion across asset classes, decreased last week, signalling an improvement in risk appetite while the emerging market risk aversion index increased slightly, signalling a marginal decrease in emerging market-specific risk appetite.

All over the world, the focus on corporate sustainability – a company’s performance in the environmental, social and governance (ESG) aspects of its business – has never been higher, forcing regulators to step up ways to bring more transparency to this somewhat abstract aspect of corporate behaviour.

New requirements After a public consultation in January, the Singapore Exchange (SGX) launched its sustainability reporting requirements last month. Under the “comply or explain” rules, all listed companies must issue annual reports on their sustainability practices and performance.

The new rules strengthen the sustainability reporting guidelines available since 2011. Annual reports are expected to cover non-financial areas, ranging from the management of environmental risks and resources to employee satisfaction, supply chain partner practices and social responsibility initiatives, depending on the company’s business and reach.

SGX chief executive Loh Boon Chye said the new reporting framework “will enhance the visibility of Singapore-listed companies among investors who seek sustainable investment”.

The SGX announcement echoed similar initiatives taking shape elsewhere. The European Union is looking to put into law its requirements – on a “comply or explain” basis – for non-financial reporting by December. Hong Kong’s stock exchange in December upgraded its ESG Guide, also to “comply or explain” requirements. The guide will be implemented – in two phases – by the end of this year and next.This means companies can comply with the guidelines, or choose to explain why they do not wish to do so. Yeo Lian Sim, SGX special adviser and former chief regulatory officer, told The Straits Times: “We don’t see this as a competitive matter of where we stand compared with others. We’re doing this because it enables investors to have a more consolidated analysis of a company, and it also helps them reflect on the quality of management.

“This is what the investors want – both here and globally – so this is what we’re giving them, as part of the global marketplace.”

Yeo added that the bourse will now focus on implementing the requirements and helping companies figure out how to prepare the reports.

Reporting details

Part of the potential challenge for a listed company is to manage the scope and details of its report.

The SGX requirements suggest but do not dictate the reporting format. More importantly, to avoid being too intrusive and prescriptive, companies are given the flexibility to decide what environmental, social and governance factors are relevant enough to go into their reports.

Adrian Chan, a board member of five listed companies, sees an initial learning curve for smaller firms. “The tricky part for them will be trying to avoid boilerplates. They will have to do a bit of research on what their peers have done, and that may result in some herd mentality at the start,” he said.

Some of the companies that have been issuing sustainability reports are Keppel Corp, Singtel, Singapore Airlines and Singapore Press Holdings.

Another is CapitaLand, which released its 2015 sustainability report last month – its seventh since 2009. A quick glance at the 62-page document shows that CapitaLand has achieved a 22.6 per cent carbon emission reduction for its operational buildings, putting it well on course to hit its 2020 target of 23 per cent. Since 2009, it has saved over $93 million in utilities expenses. Investors will also learn that in 2015, the property giant’s employees suffered 57 work-related injuries, down from 2014’s 68, while the employee absentee rate fell from 4.3 days per person per year to 3.9.

CapitaLand chief corporate officer Tan Seng Chai said: “Every report is a year-long preparation, by a dedicated in-house team updated on the latest reporting guidelines.”

It is not a process CapitaLand measures by financial gains, Tan said, adding: “We find that by focusing on sustainability first, all other benefits fall into place naturally, from cost avoidance arising from reduced energy and water consumption, to greater employee satisfaction.”

A spokesman for Wilmar International, which issues its sustainability reports biennially, agreed: “Adopting sustainable practices enables operational cost-savings and higher productivity in the long run. For example, responsible and controlled chemical application… reduces our reliance on pesticide and herbicide, thereby reducing our cost.”

The agribusiness dedicated large sections of its 2013 report to addressing environmental concerns, showing that the total number of fires across its regional plantations fell to 46 in 2013 from 114 in 2012. Year-to-year breakdown of water, fertiliser and herbicide usage volume was also available. It will issue its 2015 report in the third quarter this year.

The difference sustainability can make

These efforts are welcomed by fund managers, who increasingly subscribe to the notion that sustainable businesses make the best investment.

“The ability to manage (environmental, social and governance) risks is central to a company’s ability to continue to operate,” said Aberdeen Asset Management Asia corporate governance head David Smith.

“These issues are often termed non-financial, but can have very real financial implications. For example, if a firm produces drinks, how does that company access the water required for production? Does it control its water supply?”

To answer these questions, Aberdeen will try to meet a company’s management at least twice a year. “Unless we’re totally happy on (these) issues, we don’t invest,” Smith added.

In line with that stance, Aberdeen does not invest in Alibaba, regional managing director Hugh Young previously told The Straits Times, due to discomfort over a perceived lack of governance disclosure.

The London- and Frankfurt-based Arabesque Asset Management has taken this principle even further and made sustainability the definitive feature of its portfolio as it believes it “shows you the DNA of a company and helps us pick the stocks that outperform the benchmark”, said Andreas Feiner, who heads Arabesque’s ESG research and advisory unit.

That selection process entails putting a company through a rigorous assessment based on more than 200 parameters under 12 categories. Arabesque will then assign a proprietary score to decide whether a company goes into its portfolio and how much capital should be allocated to it.

“Our methods have led us to rule out companies such as Volkswagen and Toshiba, which eventually turned out to be the right decision,” Feiner said.

Last year, Volkswagen was found to have cheated on emission tests in the United States while Toshiba was rocked by an accounting scandal.

At the other end of the spectrum, Arabesque has found plenty of jewels, including several in Singapore. It gave CapitaLand a score of 95 out of 100 for its efforts on environmental, social and governance while rating Singapore Exchange 89 and Keppel Corp 77.

The quantitative approach of building its portfolio around sustainability has in turn rewarded Arabesque, which manages assets of around US$50 million.

“We have found the difference in returns to be around 1 to 1.5 per cent per annum – significant enough for our clients to cover the fees, generate extra returns and, at the same time, align themselves with the world of sustainable investment,” Feiner added.

Paradigm shift

Yet even though the case for sustainability is strong, not everyone here is enthusiastic about the new reporting requirements.

Sustainability is clearly important but the reports are not likely to show anything other than boilerplate statements, said renowned Singapore-based investor Jim Rogers.

“Sure, I will not want to invest in a company that isn’t sustainable; it’s something that a savvy investor needs to know anyway. But if you don’t, I doubt you will ever hear any company report that it’s bribing officials in Africa or not treating its employees right.

“Maybe a company will do that, but I’m really sceptical. From what I know so far, it sounds to me more like window-dressing and an unnecessary burden to companies.”

This sentiment was echoed by some listed companies that have limited resources or are more concerned with keeping their noses above water.

A China-focused, Catalist-listed property firm, which declined to be named, sees sustainability reporting as a drag at this point as it is trying to steer its struggling business back to growth.

“We are already having difficulty trying to get basic stuff like occupancy data from the China side. Now, imagine how challenging it will be if we have to find out how the building materials are sourced. The amount of effort and time involved is no joke,” its chief executive said.

“The preparation will be a distraction to us. We’re already in survival mode, so sustainability reporting is my last priority now.”

Chan said the comply-or-explain requirement means that companies will at least have a choice: “If a company really doesn’t think the report is worth the time, it will just have to justify that decision.”

Feiner, however, stressed that the SGX is on the right track with its latest initiative.

“Hopefully, five years down the road, sustainability reporting will become a culture where investors are so used to seeing ESG issues addressed that companies can no longer selectively disclose such information.”

He added: “There is always a way to make something cooler, stronger, more effective. But to summit Mount Everest, you have to first reach the base camp. That’s what we are doing now.”

Just as importantly, sustainability reporting is in essence not unlike the other regulatory initiatives Singapore has pushed, such as last month’s commitment to the Organisation for Economic Cooperation and Development anti-tax-avoidance framework.

It confirms Singapore’s status as a developed market that is fully in sync with global standards and narratives. And if doing so can empower investors in the process, all the better.

Canh said the intervention to stabilise the gold market would be carried out under the Government’s decree on gold bar transactions.

“The reason for the hike in gold prices in recent days is the psychological impact following the Brexit vote,” Canh said.

The gold market calmed yesterday after the State Bank of Vietnam’s announcement.

Insiders said the fluctuation of gold prices in recent days had resulted in losses of millions of Vietnamese dong for buyers in one night but profited gold companies. In many gold shops, the price jumped nearly VND2 million (US$89) on Wednesday but immediately dropped by more than VND2 million yesterday.

Phu Quy and Bao Tin Minh Chau, listed the buying price from VND36.4 million to VND36.85 million per tael (100 gramme), and the selling price at between VND36.9 million to VND37.72 million.

A small survey by local reporters showed that the number of people coming to jewelry shops in Hanoi yesterday dropped 30 per cent compared with the days before.

To Linh Giang, a local resident from Bach Mai Street, said the increasing price of SJC gold in recent days made him dizzy.

“I bought gold on the day it was VND35 million per tael. I made a small profit but I do not know if I should sell now to make more profit or continue waiting. It is because there are many predictions that the gold price will continue going up,” said Giang.

Le Thi Ly from Truong Dinh Street said she heard that gold prices could increase to VND50-60 million per tael so that she would wait. “I bought gold on the day its price was VND37 million per tael, if I sell it now I will lose.”

According gold traders, many people who bought gold for speculation rather than savings failed to foresee the price trends. This was one reason the gold market was quiet yesterday.

On the global gold trading floor, gold was traded at US$1,358 per ounce (also at $1,629 per tael or 1.2 ounce).

On the same day, the central bank increased its reference rate per American dollar by eight dong, to VND21,869.

Wen said CRBC’s Myanmar office received a bid-winning notice for the Eindu-Kawkareik Road Improvement Project, Lot 1 and Lot 2, issued by the government of Myanmar last week.

The project, located in the Greater Mekong Subregion, is the first state project the new Myanmar government has publicly awarded to Chinese companies after coming to power, and also the first project funded by the Asian Development Bank that CRBC has won in the country in recent years.

The 65-kilometre-long Eindu-Kawkareik road project, located in Karen state in southern Myanmar, is a part of the subregion’s East-West Economic Corridor Belt.

As an important road in the economic belt, it would not only play a key role in connecting Myanmar and Thailand, but also be effective in promoting the economic development of eastern Myanmar.

“Most of the countries in the Association of Southeast Asian Nations depend on commodity, energy and agricultural products trade,” said Wen.

“However, the shortage of infrastructure facilities such as roads, bridges and bulk ports has affected government revenues and people’s living standards within the region.”

As it is still in the project’s early stage, no financial figures regarding the project have been released by Myanmar’s government yet.

Luo Renjian, a researcher at the Institute of Transport Research at the National Development and Reform Commission, said the cost of building such a road with four lanes would cost between $600 million and $700 million based on the current market prices in developing countries.

With more than 50 branches and offices in more than 50 countries and regions in Asia, Africa, Europe and the Americas, CRBC has established an efficient operation and development management network in global markets.

The company’s business mainly focuses on contracting for such projects as roads, bridges, ports, railways, airports, tunnels, water conservation projects, municipal works and dredging works.

Fang Qiuchen, president of the China International Contractors Association in Beijing, said continued foreign and domestic investment in infrastructure, including roads and town expansion, were key factors for sustained economic growth in countries and regions, especially Africa and Southeast Asia.

CRBC, which is also building the 472-kilometre Mombasa-Nairobi standard gauge railway, has signed deals worth $500 million with local Kenyan contractors, creating more than 38,000 jobs in the process, according to the Kenyan government.

The Marque can be thought of as a social network for successful people, with their profiles maintained and updated by a team of relationship managers, said founder Andrew Wessels.

The “success-based” recommendation-only network has attracted several hundred members globally since its launch in London and New York last year.

Wessels told The Straits Times in a recent interview that he hopes Hong Kong and Singapore will add at least 500 new members each. “There is the public profile which is available to the general public, and behind that sits the private network where only members can interact… The goal is to become the definitive source of online information for successful people on the Web,” he said.

It costs 1,000 pounds (US$1,296) a year to join the networking platform, dubbed by Forbes as “the LinkedIn for the world’s most successful people”.

Among its members are Su-Mei Thompson, chief executive of The Women’s Foundation, Dominic Murphy, head of Britain and Ireland at private equity firm KKR, Nadja Swarovski, executive board member at Swarovski, and Alexander Gilkes, co-founder of online auction house Paddle8.

Wessels said the firm does not share members’ contact details, nor does it sell any advertising on its platform.

About 40 per cent of its members are from the financial services sector, and 20 per cent to 30 per cent are women.

“What’s important for us is breadth and diversity on the platform… If you have achieved the pinnacle of success in your chosen career, then you are welcome to The Marque. It is not just a finance network.”

He said 25 verticals – or sectors – have been identified. They include sports, media, the arts, law, property and medicine.

The aim is to hit 1,000 members by the end of the year. Wessels plans to open an office in Hong Kong soon and maybe one in Singapore, as the network grows. How much and how fast it grows will be driven by its members.

“When we go into a city, we select between 30 and 50 individuals through our existing network whom we ask to become founding members of The Marque and they, in turn, will recommend people,” Wessels said. His team then evaluates the potential members’ credentials to maintain “quality” on the network.

A typical member would be a C-suite executive, managing partner, board member or an equity owner of a business.

Despite the strict induction process, Wessels said The Marque is not an exclusive club for the wealthy. “This is not about rich people. We are not interested in people who inherited $100 million and do nothing with their lives.”

Members will have access to private events aimed at building business relationships, as well as a deal board feature on the network where members can seek investments for deals they are personally invested in.

Wessels said there are many ideas, including a potential feature that lets members rent out their holiday homes to others on the network.

It is one of seven economies that the World Economic Forum (WEF) said is leading the race in the next industrial revolution, which is likely to be dominated by digital technologies and innovation.

Finland, Switzerland, Sweden, Israel, Singapore, the Netherlands and the United States are leading the world when it comes to generating economic impact from investments in information and communications technologies (ICT).

The WEF’s Global Information Technology Report 2016 found that the group of seven economies scored 33 per cent more than other advanced economies, led by efforts to be early adopters of new technologies. At the same time, the report noted that businesses in these countries had very high levels of ICT adoption.

“This technology-enabled innovation, in turn, unleashes new competitive pressures which call for yet more innovation by tech and non-tech firms alike,” said the report.

It added that governments need to start thinking about new policies to manage the impact from digital technology.

“Digital technologies are unleashing new economic and social dynamics, which will need to be managed if the digital transformation of industries and societies is to deliver long-term and broad-based gains. The new digital economy thus also calls for new types of leadership, governance and behaviours,” said the WEF.

The report ranked each economy based on 53 indicators, from political and regulatory environment, skills and affordability to individual and business usage of ICT.

In particular, Singapore was tops for providing the right environment for business and innovation.

The Republic also led the pack in the actual usage of such technologies, with government usage ranking the best among the 139 economies surveyed.

But when it came to affordability, Singapore was in 72nd place, largely because of the high-cost environment here.

“Overall, this ranking is to a large extent the result of strong government commitment to the digital agenda, including its Smart Nation programme,” noted the report.

The Smart Nation plan aims to harness the power of new technologies, data and networks to boost businesses and aid individuals .

Among other initiatives, it has been holding “hackathons” which aim to help develop technological solutions to challenges.

In a report, Capa said the Australia-Philippines market had doubled in five years, from 228,000 nonstop passengers in 2010 to 466,000 last year, and was now facing “overcapacity concerns”.

Last year alone, air passenger traffic between both countries jumped 39 per cent.

A big part of this growth came from budget carrier Cebu Pacific, which launched its Manila-Sydney route in 2014 and as of last year, had cornered 41 per cent of the market.

It was also planning to launch direct flights to Melbourne.

The Philippines-Australia route is also served by flag carrier Philippine Airlines, which had 31.5 per cent of the market, and Australia’s Qantas, which held 27.1 per cent last year.

PAL, which flies to Sydney, Melbourne, Brisbane, Cairns and Darwin, saw its Australia traffic grow 17 per cent last year.

“Additional capacity increases by Philippine competitors could start to impact Qantas.

“However, the bigger question marks are with Cebu Pacific and PAL – and specifically whether they will be able to maintain their Australia capacity,” Capa noted.

Still, there was potential growth here. Low fares could “stimulate new demand” in both inbound and outbound flights.

However, the market was highly seasonal, making it “hard to maintain high year-round load factors”.

The average load factor, a measure of capacity utilisation expressed as a percentage, for Australia-Philippines flights was a “dismal” 60 per cent for PAL and 64 per cent for Cebu Pacific.

Qantas, on the other hand, had a load factor of 91 per cent in 2015.

“The preference would be to grow the local market and stimulate more demand from Filipinos.

“But there is a limit to this growth and the low load factors at Cebu Pacific and PAL are an indication of the challenges that lie ahead,” it said.

Sustainable load factors could be achieved with “significant sixth-freedom traffic beyond Manila”.

Sixth freedom refers to the right of an airline to carry passengers or cargo between two foreign countries while making a stopover in its home country.

“However, given the intense competition in Australia’s international market and the fact PAL and Cebu Pacific are not well known brands outside the Filipino community, any sixth-freedom traffic would be low yielding and likely carried below cost,” it said.

“There is a plan to release a special economic package on e-commerce,” said Indonesian E-commerce Association chairman Daniel Tumiwa on the side-lines of an open house at Communications and Information Minister Rudiantara’s official residence in Jakarta on Wednesday.

“So, SMEs (small and medium-sized enterprises) that run their businesses online will be charged a small percentage of tax by the government.”

The association had recently met with the Taxation Directorate-General. The tax rate to be charged was “reasonable”, smaller than the rate currently charged on offline SMEs.

Back in 2013, the Finance Ministry issued a regulation that set 1 per cent in income tax on individual and institutional taxpayers with annual business turnovers of up to 4.8 billion rupiah (Bt12.8 million). However, the government has found it difficult to charge small online players, most of whom don’t have legal entities or taxpayer identification numbers.

With the upcoming regulation, people owning online shops, including on Instagram or Facebook, must report their incomes and pay taxes, he said.

It honours 40 philanthropists from 13 countries across Asia Pacific.

The list not only features philanthropists who have made the news with their donations in the past year, but also recognises people who have compiled a long record of supporting worthy causes.

Honourees include a mix of billionaires, businesspeople and captains of industries who are also making a mark with their generosity.

China’s Pony Ma, chairman and chief executive of Tencent Holdings, pledged 100 million shares of his Internet service provider – worth US$2.3 billion (Bt81 billion) – to the Tencent Foundation, which supports healthcare, environment protection and new technology.

In Malaysia, the husband and wife team Lee Oi Hian, chairman of Kuala Lumpur Kepong, and Sandra Lee, executive chairman of Daybreak, pursue separate causes. Named after his father, Lee’s Tan Sri Lee Loy Seng Foundation awards scholarships to 50-60 students a year, while his wife’s training centre rehabilitates physically and mentally challenged people.

In Singapore, several philanthropists are honouring their family’s legacy through the act of giving. Robert Ng, chairman of Sino Group, set up the Ng Teng Fong Foundation in 2010, named after his father. Its largest donation of $92 million went to rebuilding a hospital in Jurong.

Tan Kheng Lian, chairman of the Tan Chin Tuan Foundation, is the daughter of the late OCBC chairman and philanthropist, Tan Chin Tuan. She heads the family’s foundation, which has given tens of millions of dollars since its inception in 1976 to causes such as education, the arts and community development.

Geronimo B de los Reyers, Jr, chairman emeritus of Gateway Property Holdings of the Philippines, started his namesake foundation in 1995 to provide scholarships and support faculty development and research.

Also a big giver is Thailand’s Harald Link, chairman of B Grimm Group, which supports education, health care, wildlife conservation, the arts and equestrian sports in Thailand through his privately held conglomerate and family foundation.

From August 4, visitors will be required to wear trousers or skirts that extend below the knees and shirts that cover the shoulders, Apsara Authority spokesman Long Kosal told the Phnom Penh Post.

“We will not allow them to buy a temple pass if they wear revealing clothes,” the paper quoted him as saying.

“However, our officials will inform them what they should wear to be able to visit our ancient temples, so they can come back to buy a ticket later after they change their clothes.”

When visitors dress appropriately, it shows respect to Cambodia’s culture and the values of Cambodian women, he said.

Temple desecration

The Khmer temple complex of Angkor Wat is a World Heritage site. It is the most popular tourist attraction in Cambodia, with more than 2 million tourists visiting it a year.

The dress measure is part of a broader code of conduct implemented in response to foreigners snapping semi-nude photos at the ancient site and desecrating the temples, the Post said.

Local tour operators and travel agencies said they had no problem with the new regulation but urged the authority to give clear notice to visitors.

Covering 400 square kilometres, including a forested area, Angkor Archaeological Park contains the magnificent remains of the different capitals of the Khmer Empire from the 9th to the 15th century. They include the famous Temple of Angkor Wat and, at Angkor Thom, the Bayon Temple with its countless sculptural decorations.