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The Edge Singapore11/15/2019 07:00 AM GMT+08  • 6 min read
SINGAPORE (Nov 18): “I think, from their perspectives, things only get serious when their kids can’t go to school, and they can’t get their lattes and go to yoga.” — Unnamed foreign executive, to the Financial Times, referring to the expatriate
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SINGAPORE (Nov 18): “I think, from their perspectives, things only get serious when their kids can’t go to school, and they can’t get their lattes and go to yoga.”Unnamed foreign executive, to the Financial Times, referring to the expatriate community’s view of the months-long protests in Hong Kong.

Singapore should revise water deal or risk crisis, Malaysia says

Malaysia renewed its call for Singapore to be more open to revising a water supply agreement inked in 1962 or suffer shortages as reserves shrink.

The water reserve margin in the southern state of Johor, which supplies raw water to Singapore, has dropped to 4% and will reach zero by 3Q2020 if nothing is done to mitigate the decline, Xavier Jayakumar, Malaysia’s minister for water, land and natural resources, said in response to questions in parliament on Nov 12.

Bringing that level up to the recommended minimum of 10% requires a large investment, Xavier said. In the event of a water crisis, Malaysia will put the needs of people in Johor over those in Singapore, he said.

In April, leaders of the two countries promised to reach a friendly resolution to the long-running water spat. Singapore relies on Malaysia for nearly half of its water needs through agreements that date back to as early as 1927. — Bloomberg LP

MAS announces US$2 bil programme to support green finance growth

The Monetary Authority of Singapore (MAS) is setting up a US$2 billion ($2.7 billion) green investments programme (GIP) to invest in public market investment strategies that have a strong green focus.

According to MAS, the project will help to support the Singapore financial centre in promoting environmentally sustainable projects and mitigating climate change risks in the country and region.

Under the GIP, MAS will place funds with asset managers who are committed to drive regional green efforts out of Singapore and contribute to the central bank’s other green finance initiatives.

Selected managers will have to demonstrate a firm commitment to deepening their green investment capabilities across functions such as research, policy and portfolio management, and stewardship.

Education Minister Ong Ye Kung, who is also a MAS board member, said GIP will also support MAS’ efforts to generate sustainable long-term returns on its investment portfolio.

“It complements our broader range of initiatives to accelerate the growth of Singapore’s green finance ecosystem,” Ong said in his keynote speech at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019 on Nov 11. — By Uma Devi

Singapore develops blockchain-based prototype for multi-currency payments

The Monetary Authority of Singapore (MAS), global investment bank JPMorgan and Temasek Holdings have jointly developed a blockchain-based prototype that enables payments to be carried out in multiple currencies on the same network.

MAS says the payments network has the potential to improve cost efficiencies for businesses and is currently undergoing industry testing to determine its ability to integrate with commercial blockchain applications.

It will also offer additional features to support use cases such as Delivery-versus-Payment settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.

The prototype marks the latest milestone for Project Ubin, a multi-phased initiative by MAS to explore the usage of blockchain technology for the clearing and settlement of payments and securities. Project Ubin is currently in the fifth phase.

“There is growing evidence that blockchain-based payments networks are able to enhance cost efficiencies and create new opportunities for businesses. We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts,” says Sopnendu Mohanty, chief fintech officer at MAS. — By Uma Devi

Singapore start-ups grab over half of fintech funding in Asean region

Financial technology firms in Singapore continue to grab the lion’s share of funding in the Asean region, according to a report by United Overseas Bank (UOB), PwC and the Singapore FinTech Association.

The report found that fintech companies here received 51% of funding for the region. Singapore is also the most preferred base, being home to 45% of all fintech firms in the regional bloc.

“Singapore’s favourable regulatory and business environment, strong investor interest and maturing fintech sector continue to make it an attractive base for firms that are looking to tap Asean’s growth potential. As such, more firms in the country have also graduated from pre-series to later-stage funding,” says Janet Young, head of group channels and digitalisation at UOB.

According to the report, fintech firms are also optimistic about their future, with almost half indicating that they are confident of raising more than US$10 million in their next funding round.

However, talent remains a challenge. Some 58% of respondents say shortage of the right talent was an inhibitor to their regional expansion plans. — By Benjamin Cher

Massage chair tycoon in talks over virtual banking licence with partners

Ron Sim, founder of one of Asia’s largest massage chair makers, is in discussions to partner with a unit of Temasek Holdings and other firms to bid for one of Singapore’s new virtual banking licences, according to people familiar with the matter.

V3 Group, Sim’s Singapore-based firm, is looking to partner Temasek’s Heliconia Capital Management as well as stored-value card company EZ-Link and property firm Far East Organisation in the new consortium, said the people, who asked not to be named because the talks remain private. The group plans to seek one of Singapore’s new retail digital banking licences, they said.

The city state has announced plans to award as many as five digital banking licences to non-bank firms as it seeks to shake up its financial services industry and create competition for traditional lenders. Thresholds are higher for the two retail licences available — they require $1.5 billion in paid-up capital as well as local control.

V3, which owns massage chair maker OSIM and tea brand TWG, recently created a financial technology unit. It announced on Nov 14 that it hired Gan Chee Yen, formerly CEO of Fullerton Financial Holdings, another Temasek unit, as a senior adviser for the fintech unit. — Bloomberg LP

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