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Southeast Asian Stocks Rise As Brexit Concerns Drop

Source: finance.yahoo.com

Stocks across Southeast Asia in four countries rose as possibility of Britain remaining in the European Union increased, reducing market risks.

  • Singapore stocks closed more than 1%, led by oil and gas stocks
  • Philippines closed 0.6% higher with consumer cyclical such as Bloomberry Resorts Corp leading the market
  • Vietnam was up more than 1%, as oil and gas stocks such as Petrovietnam Gas Joint Stock Corp rose
  • Indonesia ended higher, helped by energy shares

Britons will cast their votes on June 23 in a referendum on whether to leave the EU. The probability of Britain remaining in the union rose to 72%, up from 60% in the previous week.

“Perception is that the British public is likely to vote in favour of remaining in the EU. If that is the case, it would remove the overhang of risk in the markets,” said Nirgunan Tiruchelvam, an analyst with Religare Capital Markets in Singapore.

Southeast Asian optimism in the context of Brexit

Initially, panic was spreading across markets in fear of Britain exiting the European Union but now it serves as an important reminder to protect the global market.

Countries such as Philippines has expressed optimism about the new President-elect, Rodrigo Duterte, who is beginning his six-year term on June 30.  Duterte’s economic team will be committed to boosting infrastructure, fixing traffic congestion and improve investment frameworks. Not only will this serve to improve ecommerce infrastructure and transportation roadblocks, it will also improve Philippines’ economic growth as a whole.

A version of this appeared in Jakarta Globe on June 21. Read the full article here.

Firms in Vietnam Adopt IFRS

Source: dealstreetasia

As the demands from World Bank, IFC and foreign investors become unavoidable, firms in Vietnam are required to adopt International Financing Reporting Standards (IFRS) in 2020. The application of the international system will be required first by firms listed in HCM City and Hanoi’s stock exchanges.

Evidence showed that the switch to IFRS brought important economic results, with long-term benefits outweighing short-term costs and implementation challenges. The benefits include transparency, accounting quality, comparability and market liquidity among others, a finance ministry official has said. By 2018, Vietnam should have the required legal framework for applying international financial reporting standards.

Inefficient financial regulatory controls

In Vietnam, accounting standards are issued by the Ministry of Finance of Vietnam and are known as “Vietnam Accounting Standards”. The Department of Accounting and Auditing Policy of the Ministry of Finance has formed the Vietnamese Accounting Standards Board (VASB) to develop and approve the standards.

The Ministry of Finance states that it takes International Financial Reporting Standards (IFRS) into account in developing Vietnamese Accounting Standards . However, the IASB website states clearly that Vietnam has not yet adopted the IFRS or the IFRS for SMEs. Some Vietnamese companies prepare IFRS financial statements for the purpose of reporting to foreign investors. However, those IFRS financial statements are supplementary financial statements published in addition to – not instead of – financial statements prepared using VAS. 

The lack of the international reporting standard subject businesses in the country to additional work for their statutory reporting commitments and harm the domestic Vietnamese business by restricting their access to foreign capital.

This change in regulation hopes to attract more foreign investment in Vietnam.

A version of this appeared in AmCham Vietnam on June 17. Read the full article here.