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visit http://www.ifre.comtheir families, when confirmed cases of Covid-19
outside Greater China were rare.
In a list of frequently asked questions published
last Tuesday, the SFC said that it would be
acceptable for licensed individuals to work
overseas temporarily to provide trading services,
or for a licensed individual who was unable
return to Hong Kong to conduct regulated
activities for Hong Kong clients.
However, if a whole Hong Kong trading desk
was shut because of the virus and trades needed
to be executed by an overseas affiliate, the
company would have to seek SFC approval.Mitsubishi UFJ Financial Group
One-time amortisation of goodwillMITSUBISHI UFJ FINANCIAL GROUP will book a one-
time amortisation of goodwill of ¥343.3bn
(US$3.19bn) in its full-year results following
the drop in the share prices of BANK DANAMON
INDONESIA and Thailand’s BANK OF AYUDHYA.
Japan’s largest bank by assets said in a
statement last Tuesday that it expects to book
a one-off charge of ¥130.5bn because of an
accounting rule that stipulates that if Bank of
Ayudhya’s shares fall below 50% of the price
MUFG paid for its stake, it is required to adjust
the value of the holding on its books.
MUFG announced a similar ¥212.8bn charge
related to Bank Danamon for the fiscal
year to March 31. MUFG had previously
recorded a ¥207.4bn charge related to Bank
Danamon during the third quarter, which led
to the Japanese megabank recording its first
quarterly loss in a decade, although it said the
amortisation amount would be adjusted at the
end of its financial year.
MUFG owns a 94.1% stake in Bank Danamon
and a 76.9% shareholding in Bank of Ayudhya.
MUFG is due to report its full-year results on
May 13.ASIC
New rules to aid capital raisingsThe Australian Securities and Investments
Commission has announced a temporary relief
measure to help listed companies to raise
capital quickly during the coronavirus pandemic.
It will allow companies to undertake certain
‘low doc’ offers, including placements, share
purchase plans and rights offers, even if they do
not meet all the normal requirements.
Normally, companies cannot raise capital
through ‘low doc’ deals if their shares have been
suspended for more than five days in the prior
12 months, unless they prepare and lodge a
prospectus or apply to ASIC for individual relief,
which can be costly and time-consuming.
This requirement is being eased to extend
the permissible suspension period to 10 days.
Specifically, the relief will apply if companies
have been suspended for up to 10 days in the
12 months before the offer, and they were not
suspended for more than five days in the period
commencing 12 months before the offer and
ending March 19 2020.
“We want to give companies more fundraising
flexibility in these circumstances. Many will need
to seek a trading suspension to understand how
Covid-19 will affect them and to put a capital
raising in place,” ASIC Commissioner John Price
said.Moody’s
Outlook lowered on 12 banking systemsMoody’s has lowered its outlook on the banking
sector in 12 jurisdictions in Asia Pacific to
negative from stable due to the coronavirus.
The 12 jurisdictions are Australia, China, India,
Indonesia, South Korea, Malaysia, New Zealand,
the Philippines, Singapore, Taiwan, Thailand
and Vietnam.Moody’s kept the outlook for both Hong Kong
and Japan as negative, although it said that the
coronavirus would add to existing pressures – in
Hong Kong’s case, trade tensions and previous
anti-government protests, and in Japan,
demographic trends and negative interest rates.
“The economic and market upheaval caused
by the outbreak will depress business activity
and increase banks’ asset risk, while credit
costs will rise. As a result, bank profitability will
decline, also depressed by lower policy rates.
Government support will remain forthcoming for
systemically-important banks in most systems,
but will be less certain for the smaller banks,”
Moody’s said.S&P
Aussie banks not at risk of downgradeMajor Australian banks can weather a
substantial rise in credit losses triggered by the
coronavirus outbreak, while credit ratings of
most banks in the country are not at risk of a
downgrade, ratings agency S&P said.
The rating agency, however, expects credit
losses at banks in 2020 to more than triple from
2019 levels as the pandemic disrupts business,
up from its earlier estimate that losses would
nearly double.
S&P said major banks would be able to
withstand credit losses surging to about six
times 2019 levels and that capital at most banks
would not fall significantly despite substantially
lower net earnings and dividend payouts.
“Our forecast that the Australian economy will
strongly rebound toward the end of the current
calendar year following a significant downturn
underpins our analysis,” S&P said.
The rating agency also lauded the Reserve Bank
of Australia’s actions of recent weeks to ensure
banks do not face an imminent funding or
liquidity crisis.International Financing Review Asia April 4 2020 19B 3 HRSOHDQG 0 DUNHWVLQGG