UK accelerator unveils 10 startups for inaugural S'pore programme

Four of those chosen by Startupbootcamp FinTech are based here; this is first fintech scheme in South-east Asia

By

Jacquelyn Cheokjaccheok@sph.com.sg@JacCheokBT

Dana Ritter (left) and Bert-Jan van Essen, co-founders of Dragon Wealth; the wealth management system is one of the four Singapore-based startups that were handpicked from some 300 applications globally for SBC's inaugural accelerator programme here. 

FILE PHOTO

14 Apr5:50 AM

Singapore

BRITISH accelerator Startupbootcamp FinTech (SBC), which specialises in nurturing financial technology (fintech) firms, on Monday unveiled the 10 startups selected for its inaugural Singapore accelerator programme.

These startups, hailing from across Asia-Pacific and Europe, and reflecting popular fintech trends such as blockchain technology, financial inclusion and wealth management, were hand-picked from some 300 applications globally.

Collectively, they have raised over S$2.5 million prior to the programme and 30 per cent of them are revenue-generating. The average age of the teams is 3.2 years, BT has learnt.

Of the 10 startups, four are Singapore-based: money transfer platform Cryptosigma; wealth management system Dragon Wealth; social mobile payment solution provider Kashmi; and blockchain enabler Otonomos.

From May, all 10 startups will undergo a three-month bootcamp that will help them refine their business models and identify market opportunities - mostly through mentorship from over 100 industry experts.

Each team will receive S$24,500 and four months of free office space at SBC's hub in Block 79 at JTC LaunchPad @ one-north.

Teams will also enjoy collaboration opportunities with SBC's partners - among them DBS, MasterCard, Route 66 Ventures, SBT Venture Capital and Infocomm Investments (IIPL) - which according to the accelerator, means "access to pilot customers, industry data, APIs and capital".

Said Otonomos founder Han Verstraete: "Applying for SBC was a no-brainer. There's the partners, the access, the coaching, the regulatory buy-in, and the geography. Who doesn't get a kick working on fintech from Asia, the banking industry's biggest growth engine?"

He added: "Kudos to SBC for bringing the franchise here to Singapore. Praise too for all the partners, with special credit to DBS for their foresightedness on new technologies such as the blockchain, and to the regulators here who keep such an open mind on fintech."

SBC's Singapore run marks the first fintech programme in South-east Asia, and also the first with such widespread support from industry partners, SBC's co-founder Markus Gnirck told BT. "Being at the core of this movement, Singapore will see knowledge and job creation, placing it in a strong position to foster innovation across the financial industries."

When asked why fintech is seeing rapid growth now, Mr Gnirck chalked it up to a mix of government support and funding available from venture capitalists and investors, as well as institutional infrastructure that is ready to work with and develop innovative solutions.

"Above all, Singapore has recognised that supporting startups fosters an innovative and prosperous economy, so the government drive has played a big role in creating the supportive ecosystem that allows fintech to thrive."

Said IIPL's chairman Steve Leonard: "This unique ability of our tech community coming together so fast to help grow the ecosystem is one reason we are confident Singapore is on its way to becoming a Smart Nation."

Last October, IIPL invested between US$1 million and US$5 million in SBC, marking IIPL's first entry into Europe, and its second investment in an accelerator. In March 2014, it made a strategic investment in homegrown accelerator Joyful Frog Digital Incubator (JFDI.Asia).

    
 

Sing dollar firms against greenback after MAS keeps monetary policy intact

Update: Sing dollar firms against greenback after MAS keeps monetary policy intact

By

Angela Tanangelat@sph.com.sg

14 Apr10:05 AM

The Singapore dollar firmed against the greenback on Tuesday after the Monetary Authority of Singapore (MAS kept its monetary policy unchanged.

The central bank kept the Singapore dollar on a "modest and gradual" appreciating path, with no change to the slope and width of the policy band and the level at which it is centred.

"The immediate reaction to this surprise was most evident in the USD/SGD weakening to 1.363 from 1.373,'' said Nicholas Teo, market analyst at CMC Markets Singapore.

Before the MAS announcement, the currency weakened to 1.3746, compared to the previous close of 1.3714.

DBS economist Irvin Seah noticed that the MAS policy announcement was accompanied by a more upbeat rhetoric.

"The MAS statement upgraded the assessment of the global economy to "improved slightly" from uneven and mixed in the 28 Jan statement. Even so, there was no change to the 2-4% growth forecast for 2015.''

Early Tuesday, the Ministry of Trade and Industry (MTI) also announced that the Singapore economy grew by 2.1 per cent on a year-on-year basis in the first quarter of 2015 based on advance estimates, the same rate of growth as that achieved in the previous quarter. On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded at a slower pace of 1.1 per cent compared to the 4.9 per cent in the preceding quarter.

Jonathan Cavenagh, senior FX strategist, Westpac, Singapore told Reuters that the MAS appears to be counting on a few things to drive an improvement in the outlook - better global growth, particularly from the G3 and a pick-up in oil prices in the second half of this year.

"This latter point will boost oil related services and inflation. At the same time, the labour market is expected to remain tight largely due to supply constraints. Hence if growth momentum does improve there is a risk inflation pressures turn higher.''

"These factors seem to be the main rationale for today's no change stance. I would generally see downside risks to this view, with core inflation pressures remaining muted and domestic demand quite soft, with pass through from the tight labour market remaining limited. This creates the risks of a easing at the next meeting in October or another inter-meeting move."

Sean Yokota, head of Asia strategy, SEB Singapore, said the move was a surprise: "They may want to reduce volatility by keeping policy stable since they set policy based on NEER. USD/SGD can still rise as long as other Asian currencies weaken. They'll have to act in October and loosen."

OCBC's economist, Selina Ling said:"We still look for full-year 2015 growth at 2.5 per cent, which is at the lower end of the official 2-3 per cent forecast, with headline and core inflation forecasts intact at 0 per cent and 1 per cent yoy respectively.''

Iinflation seems to be falling within the target range set out by the MAS, UOB's economist, Francis Tan, said.

"So as of now, I don't see anything in the dashboard. But coming up further, if oil prices were to go down substantially I will say then the MAS will be pressured to ease or to lower their inflation expectations or inflation forecast and then there will certainly be a lot more room for further easing.''

"Between now to October there is half a year and now it's very fluid in the market, especially with regards to deflation. And if core inflation, currently hovering just above 1 percent, goes down even towards 0.5 percent in the next few months, I think they may do the off-cycle policy again like what we saw in January. All eyes are on oil prices."

DBS' Mr Seah said:"In sum, outlook for the three key trading partners - China, Eurozone and Japan - is expected to remain dicey while the recovery in the US economy has been slow. Nothing in the external environment suggests an improvement in growth momentum in the near-term. Overall GDP growth forecast for 2015 remains at 3.2% but we see downside risks ahead.
"

Financial firms move closer to central clearing in repo market

14 Apr7:50 AM

[NEW YORK] Financial institutions in the almost US$2 trillion a day market for borrowing and lending debt are close to unveiling centralised trade clearing systems to minimise risk in the essential wholesale funding mechanism.

The Federal Reserve has been pushing firms to decrease the risk that a large dealer default, such as the collapse of Lehman Brothers Holdings, triggers broad dislocations in the repurchase-agreement market, where banks typically borrow cash for a short time from investors using securities as collateral. The movement of repo transactions to clearing houses, which pool capital, would help ensure losses at one firm don't harm all trading partners.

"A central clearing solution for repo is much more imminent now, with it likely just some quarters away," said Darrell Duffie, a finance professor at Stanford University, who with the Federal Reserve Bank of Chicago, organised an April 10 symposium on clearing in Chicago. "This would improve transparency, create minimum standards and improve loss distribution because there would be more market participants that would share in counterparty losses should they occur."

In 2008, the Fed was forced to create liquidity mechanisms to prevent the rapid dumping of debt, known as fire sales, and support its primary dealers. The inability to secure cash via the repo market was a catalyst for the demise of Bear Stearns and collapse of Lehman that sparked a near credit freeze.

The Depository Trust & Clearing said in October it was seeking regulatory approval to provide central clearing for government-related securities in the US$1.66 trillion tri-party market. The Fixed Income Clearing Corp, a DTCC subsidiary, would guarantee securities such as Treasuries and mortgage securities backed by Fannie Mae and Freddie Mac.

"We continue to work closely with the industry working groups and discuss the proposal with the regulators," Bari Trontz, a DTCC spokeswoman in New York said on April 10.

While the Fed has already succeeded through work with industry members to reduce the trillions in intraday credit that the tri-party market's two clearing banks had previously extended daily to dealers, the potential for fire sales leaves the market still vulnerable, central bank officials including New York Fed President William C Dudley have said.

JPMorgan Chase, which serves as one of the two tri- party repo clearing banks, is working with participants and infrastructure providers to create a central counterparty clearing house model that would provide benefits from both lenders and borrowers of cash, according to a person familiar with the work, who asked not to be identified because the system isn't complete or yet public.

After the 2008 crisis highlighted the threat posed by financial companies' exposure to swaps, regulators including the Commodity Futures Trading Commission moved to require that most trades be guaranteed at clearinghouses including those owned by LCH.Clearnet Group, and CME Group. Both are working on guaranteeing repo trades through their own clearing frameworks, according to two people familiar with each the development.

One of main concerns about setting up a central counterparty for repo is whether it is possible to ensure that clearinghouses would have sufficient resources to meet a sudden surge in demand for cash upon a member default, possibly crippling its own ability to function. The resilience of CCPs, as the clearing houses are known, to withstand such extreme stresses has been the focus of regulators scrutiny this year.

"Central clearing doesn't worsen the repo fire-sale risk, but so far there isn't full clarity on how liquidity would flow into a CCP in the event that a lot of collateral needed to be liquidated quickly," said Mr Duffie, who is also a Bloomberg View contributor. "The Fed has not indicated it would be a lender of last resort to that market - so you need private industry sources of liquidity. This is probably the biggest design problem to be overcome."

BLOOMBERG

    
 

US budget deficit rises to US$53 billion in March

The United States ended the month of March with a budget deficit of US$53 billion, up 43 per cent from the same period last year, the US Treasury Department said on Monday. 

PHOTO: AFP

14 Apr7:25 AM

[WASHINGTON] The United States ended the month of March with a budget deficit of US$53 billion, up 43 per cent from the same period last year, the US Treasury Department said on Monday.

Analysts polled by Reuters had forecast a US$43 billion deficit for last month. The deficit was $37 billion in March of 2014, according to Treasury's monthly budget statement.

The current fiscal year-to-date deficit stood at US$439 billion at the end of last month.

Differences in the monthly calendar affected March's budget results. If adjusted for timing-related transactions, the budget deficit would have been US$89 billion.

Receipts last month totaled US$234 billion, up 8 per cent from the year-ago period, while outlays were US$287 billion, up 14 per cent from the year-ago period, the Treasury said.

REUTERS

      

US sets final dumping duties on transport containers from China

The US Commerce Department on Monday said it set final dumping duties on imports of rail and road transport containers from China after finding the goods were sold below cost in the United States. 

PHOTO: HUTCHISON PORT HOLDINGS

14 Apr7:46 AM

[WASHINGTON] The US Commerce Department on Monday said it set final dumping duties on imports of rail and road transport containers from China after finding the goods were sold below cost in the United States.

Under the department's decision, 53-foot domestic dry containers will face anti-dumping duties of 107.1 per cent to 111.22 per cent. It found imports of such containers received countervailable subsidies ranging from 17.13 per cent to 28.00 per cent.

In 2013, about US$184 million worth of such containers were imported from China.

REUTERS

    
 

MAS keeps surprises by standing pat, Sing dollar jumps

14 Apr9:42 AM

[SINGAPORE] Singapore's central bank on Tuesday surprised markets by keeping monetary policy settings unchanged despite slowing growth and benign inflation, triggering a rally in the Singapore dollar.

"MAS will therefore maintain the policy of a modest and gradual appreciation of the S$NEER policy band. There will be no change to the slope and width of the policy band, and the level at which it is centred," the Monetary Authority of Singapore said in its half-yearly policy statement.

Commentary

Jonathan Cavenagh, Senior FX strategist, Westpac: "The MAS appears to be counting on a few things to drive an improvement in the outlook - better global growth, particularly from the G3 and a pick-up in oil prices in the second half of this year.

"This latter point will boost oil related services and inflation. At the same time, the labour market is expected to remain tight largely due to supply constraints. Hence if growth momentum does improve there is a risk inflation pressures turn higher.

"These factors seem to be the main rationale for today's no change stance. I would generally see downside risks to this view, with core inflation pressures remaining muted and domestic demand quite soft, with pass through from the tight labour market remaining limited. This creates the risks of a easing at the next meeting in October or another inter-meeting move."

Wai Ho Leong, Economist, Barclays: "It is a timely reminder to us in the market that according to their view, growth is not at risk of falling out of the official forecast range of 2 to 4 per cent. Inflation is clearly is still within (their) range.

"If indeed we do get a recovery trajectory as we are forecasting and as the government forecast is suggesting, you are then pencilling in an implicit recovery in the second half. If you see that happening, then it reduces the chance of an easing in October."

Sean Yokota, Head of Asia Strategy, SEB: "It was a surprise. They may want to reduce volatility by keeping policy stable since they set policy based on $NEER. USD/SGD can still rise as long as other Asian currencies weaken.

"They'll have to act in October and loosen."

Francis Tan, UOB: "Certainly there will be room depending on the upcoming inflation expectations. But now it seems like the inflation seems to be falling within the target range set out by the MAS.

"So as of now, I don't see anything in the dashboard. But coming up further, if oil prices were to go down substantially I will say then the MAS will be pressured to ease or to lower their inflation expectations or inflation forecast and then there will certainly be a lot more room for further easing.

"Between now to October there is half a year and now it's very fluid in the market, especially with regards to deflation. And if core inflation, currently hovering just above 1 percent, goes down even towards 0.5 percent in the next few months, I think they may do the off-cycle policy again like what we saw in January.

"All eyes are on oil prices."

Vaninder Singh, Economist, RBS: "I believe that we are in a slowdown. While we may not be close to the bottom, the window to ease is now starting to close given expectations of the US Fed report in September.

"There is a short-term risk, but I would say that it is a low risk. The MAS only did it once, and it was out of character. Unless the outlook for the economy deteriorates substantially, the MAS will not make any unexpected changes."

REUTERS

    
 

US has record number of applications for H-1B tech visas for foreigners

Applications for H-1B visas allowing US businesses to hire foreign workers in science, engineering and computer programming totaled a record 233,000 for fiscal 2016, according to government figures released on Monday. 

PHOTO: AFP

14 Apr9:40 AM

[WASHINGTON] Applications for H-1B visas allowing US businesses to hire foreign workers in science, engineering and computer programming totaled a record 233,000 for fiscal 2016, according to government figures released on Monday.

A maximum of 85,000 of the work visas, including 20,000 for holders of master's degrees, are available each year under limits set by Congress, despite years of heavy lobbying by tech companies to raise the cap.

US Citizenship and Immigration Services on Monday used a computer-generated lottery process to dole out the visas, and will start processing them by May 11, the agency said on its website.

"Year after year, the government falls back on a lottery system to determine which US employers will 'win' the ability to hire top world talent," Lynn Shotwell, executive director of the Council for Global Immigration, an industry lobby group, said in an email on Monday in response to the figures.

"This year, employers had a mere 36 per cent chance of being granted an H-1B visa. US economic growth should not be left up to this gamble," Shotwell said, adding US employers were frustrated.

The United States loses about 500,000 jobs a year because of those limits, according to estimates from Compete America, a coalition representing tech giants including Amazon, Facebook and Microsoft.

But some labor organisations have criticised the programme, saying it keeps down wages in the tech sector.

President Barack Obama's move last November to ease immigration rules using his executive authority largely disappointed tech industry leaders.

They made it easier for entrepreneurs to work in the United States and extended a program letting foreign students who graduate with advanced degrees from US universities to work here temporarily.

But major changes require congressional action, and there appears to be little promise for such legislation in the current political atmosphere.

REUTERS

    
 

Britain's Cameron pledges to extend Thatcher policy

British Prime Minister David Cameron is to pledge to extend the "right-to-buy" housing policy of 1980s predecessor Margaret Thatcher on Tuesday in a bid to seize victory in a close-fought election race. 

PHOTO: REUTERS

14 Apr8:28 AM

[LONDON] British Prime Minister David Cameron is to pledge to extend the "right-to-buy" housing policy of 1980s predecessor Margaret Thatcher on Tuesday in a bid to seize victory in a close-fought election race.

The policy allows social housing tenants to buy their homes from local authorities at a deep discount, and Cameron will say it shows his Conservatives are "the party of working people" at the Tuesday manifesto launch.

Mr Cameron is keen to take momentum from the rival centre-left Labour party, whose leader Ed Miliband has promised to increase the minimum wage and end "zero-hours contracts" which guarantee no minimum number of work hours.

Opinion polls show the two parties are neck-and-neck ahead of the election on May 7, which is expected to produce another coalition or a minority government.

"Conservatives have dreamed of building a property-owning democracy for generations, and today I can tell you what this generation of Conservatives is going to do," Mr Cameron will say at the manifesto launch in Wiltshire, south west England.

"The next Conservative Government will extend the Right to Buy to all housing association tenants in this country - 1.3 million extra families; a new generation given the security of a home of their own.

"So this generation of Conservatives can proudly say it: the dream of a property-owning democracy is alive - and we will fulfil it." Aimed at Britain's housing crisis, a hot political issue as house prices and private rents have soared amid a shortage of low-cost homes, the pledge will extend a policy first introduced by Thatcher in 1980.

It will extend home purchase discounts enjoyed by council tenants to 1.3 million tenants of housing associations - private non-profits that provide low-rent "social housing" that often receive public subsidy.

Council tenants can currently buy their homes with up to a 70 per cent discount, while housing association tenants can claim a much smaller discount.

The increase would be funded by forcing local councils to sell their most valuable properties on the private market as soon as they become vacant.

Mr Cameron promised additional funding to build 400,000 new homes.

The original "right-to-buy" policy has been accused of fuelling Britain's housing crisis by reducing the affordable housing available.

But Mr Cameron insisted this would not be the case this time as his plan would require each property sold to be replaced on a one-for-one basis.

AFP

    
 

Is Greece's Debt Odious?

Is Greece's Debt Odious?

By Marc Chandler of Marc to Market

Tuesday, March 31, 2015 10:06 AM EDT

There is a legal concept called "odious debts."   It can be traced back more than a century. The US helped create a precedent for it by denying Cuba's responsibility for the debt incurred under Spanish colonial rule. The concept took on added significance in the post-colonial era more broadly.  

The issue here is the continuity of legal obligations from one regime to another especially as it pertains to the debt acquired. The odious debt concept attempts to provide a moral and legal basis for rejecting in whole or part the debt incurred by the previous regime when the funds are sued in ways that are not beneficial, or actually harmful, to the interests of the population. Legal scholars also note that it is usually important to show whether or not the creditor knew or should have know of these circumstances at the time the credit was extended. 

The parallel on an individual level is coercion.  An obligation made under duress may not be enforceable. It is not a legitimate debt. Legal scholars cite several types of sovereign debt that can be odious. Two common ones are "hostile debts" which are incurred to suppress a secessionist movement or to conquer peoples, and "war debts" which are contracted by a sovereign to finance a war that it loses and the victor is not obligated to pay the debt.  

If Greece's debt is odious, it does not fit into these two categories. Yet the broad principles may still apply though the Syriza government has not explicitly called it such. Both Greece's Prime Minister Tsipras and Finance Minister Varoufakis have argued that the previous governments should not have borrowed the funds that could obviously not be paid back. Other reports have indicated that the IMF violated its own lending rules by extending so much credit to the Greece. DSK reportedly overruled staff and US objections. There have also been reports indicating that the EU was well aware before the crisis had erupted that Greek figures did not add up but closed a blind eye due to narrow political considerations.

The Syriza government can make the case that funds borrowed since the 2010 were odious and against the interests of the people.  The bulk of the new debt has been used to service past debt. Through the SMP program, ECB bought out many private foreign creditors and then claims that the debt is exempt from the debt restructuring (PSI).  A number of European officials have acknowledged that the new debt incurred by Greece was to keep its creditors whole. 

The Greek people have not been bailed out. Unemployment has increased three-fold while the economy has contracted by a quarter.  With deflation, nominal growth has collapsed and continues to contract, even though real growth was positive in the middle of 2014.  Minimum wages and pensions have been cut, and living standards have been reduced. 

Whether Greece's debt can be considered odious is a thorny legal issue and well beyond the competence of this currency strategist. The Syriza government has not claimed that it is odious. Nevertheless, its arguments are consistent with some of the precedent that has been established. Perhaps, if the official creditors continue to balk at extending Greece credit, this could be a course that it may consider. Tsipras has threatened not to service its debt if the creditors do not release new funds.  

There are two drains on the liquidity of Greek banks. First, deposits have plummeted by about 5%  (a month in the December-February period (for a total draw down of almost 24 bln euros) Although the flight appeared to slow earlier this month, an estimated 1.5 bln euro fled last week. Second, interbank funding has dried up. It fell by almost 29 bln euros in the same three month period, which is a 69% decline. The Greek central bank is offsetting this drying up of credit by providing 59.4 bln of liquidity through the ELA facility.

Tomorrow the EuroWorking Group will hold a teleconference to review the reform list submitted by the Greek government. Greek officials sounded optimistic when they submitted the first two lists of reforms that were rejected. European officials seem less optimistic; while progress has been made, more work is needed. The signals appear most likely new funds will not be released to Greece in time for the April 8 IMF payment of roughly 450 mln euros (really an SDR obligation). Greek officials have intimated that they have a back plan of 1) additional reforms if needed, and 2) a way to service the IMF debt.  

Dollar rises on euro ahead of US retail sales

The dollar on Monday again advanced against the euro ahead of key US data that could affect the outlook for Federal Reserve monetary policy.

PHOTO: AFP

14 Apr6:48 AM

[NEW YORK] The dollar on Monday again advanced against the euro ahead of key US data that could affect the outlook for Federal Reserve monetary policy.

Tuesday's government report on US retail sales for March will be closely watched as "a key litmus test of the US recovery thesis," said Boris Schlossberg, managing director of BK Asset Management.

A strong US retail sales report could bolster confidence the Fed will move more quickly to raise near-zero interest rates.

"But if the consumer does not come through - the dollar rally could run into the brick wall of reality," Mr Schlossberg said.

Monday marked the sixth advance in a row for the greenback against the shared currency. The euro fell to US$1.0571 around 2100 GMT from US$1.0599 late Friday.

Analysts will be watching US inflation data this week, in addition to retail sales, said Joe Manimbo, senior market analyst at Western Union Business Solutions.

"Positive outcomes that depict the US economy finding its footing after the frosty winter could soon see the greenback soar to fresh multiyear peaks," Manimbo said.

AFP