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(14-02-2017, 01:30 PM)cyclone Wrote: Changes to Finance Company Regulations to Enhance their Ability to Finance SMEs
...
3. The limit on a finance company’s aggregate uncollateralised business loans will be raised to up to 25% of its capital funds, from the current 10%. The limit on uncollateralised business loans to a single borrower will also be raised to up to 0.5% of capital funds, from the current S$5,000. These changes will better enable finance companies to serve their SME customers, many of whom require unsecured credit for working capital needs.
4. Finance companies will be allowed to offer current account and chequing services to their business customers. They will also be allowed to join electronic payment networks, including Inter-bank GIRO, Fast and Secure Transfers (FAST) and Electronic Funds Transfer at Point of Sale (EFTPOS). These changes will enable finance companies to provide more comprehensive credit and deposit services to SMEs.
...
8. MAS will liberalise its existing policy of not allowing a foreign takeover of a finance company. This will accord finance companies greater flexibility to explore strategic partnerships and innovative business models that can strengthen their SME financing business.
9. Specifically, MAS is prepared to consider an application for a merger or acquisition if the prospective merger partner or acquirer commits to maintaining SME financing as a core business of the finance company. In addition, the merger partner or acquirer must be able to demonstrate expertise in SME financing and present proposals to enhance the finance company’s SME lending activities with new technologies, methodologies or business models.
More details in http://infopub.sgx.com/FileOpen/MAS-Chan...eID=439042
Amazing very good news. Garmen opening up finance SME to better adapt to new startup businesses. More importantly, they upgrading them from "strata cluster" to "strata" 
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14-02-2017, 04:51 PM
(This post was last modified: 15-02-2017, 03:06 PM by Retired@52.)
(14-02-2017, 02:26 PM)Scg8866t Wrote: (14-02-2017, 01:30 PM)cyclone Wrote: Changes to Finance Company Regulations to Enhance their Ability to Finance SMEs
...
3. The limit on a finance company’s aggregate uncollateralised business loans will be raised to up to 25% of its capital funds, from the current 10%. The limit on uncollateralised business loans to a single borrower will also be raised to up to 0.5% of capital funds, from the current S$5,000. These changes will better enable finance companies to serve their SME customers, many of whom require unsecured credit for working capital needs.
4. Finance companies will be allowed to offer current account and chequing services to their business customers. They will also be allowed to join electronic payment networks, including Inter-bank GIRO, Fast and Secure Transfers (FAST) and Electronic Funds Transfer at Point of Sale (EFTPOS). These changes will enable finance companies to provide more comprehensive credit and deposit services to SMEs.
...
8. MAS will liberalise its existing policy of not allowing a foreign takeover of a finance company. This will accord finance companies greater flexibility to explore strategic partnerships and innovative business models that can strengthen their SME financing business.
9. Specifically, MAS is prepared to consider an application for a merger or acquisition if the prospective merger partner or acquirer commits to maintaining SME financing as a core business of the finance company. In addition, the merger partner or acquirer must be able to demonstrate expertise in SME financing and present proposals to enhance the finance company’s SME lending activities with new technologies, methodologies or business models.
More details in http://infopub.sgx.com/FileOpen/MAS-Chan...eID=439042
Amazing very good news. Garmen opening up finance SME to better adapt to new startup businesses. More importantly, they upgrading them from "strata cluster" to "strata"
At an AGM a few years ago, I asked the management:
“What can be the biggest surprise we as shareholders can ever expect?”
The management gave 2 answers:
1) When MAS change the regulation, and allows Finance Companies more leeway to compete with the banks.
2) Hopping one of the Big Guy from China come and ask for a takeover.
Since then I’ve been holding on to this Company’s shares and waiting.
Today’s announcement fulfills the above. Particularly point 8 of the announcement.
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I was quite pleasantly shocked today. Too bad I don't didn't buy that much.
I understand HLF is tightly held, so I wouldn't think the M&A aspect is that likely?
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(14-02-2017, 07:04 PM)tanjm Wrote: I was quite pleasantly shocked today. Too bad I don't didn't buy that much.
I understand HLF is tightly held, so I wouldn't think the M&A aspect is that likely?
Yes I agree Spure Finance will have more potential for M&A in the future.
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What a coincidence. Just as HLF was getting renewed interest from VBers. 
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(14-02-2017, 04:51 PM)Retired@52 Wrote: (14-02-2017, 02:26 PM)Scg8866t Wrote: (14-02-2017, 01:30 PM)cyclone Wrote: Changes to Finance Company Regulations to Enhance their Ability to Finance SMEs
...
3. The limit on a finance company’s aggregate uncollateralised business loans will be raised to up to 25% of its capital funds, from the current 10%. The limit on uncollateralised business loans to a single borrower will also be raised to up to 0.5% of capital funds, from the current S$5,000. These changes will better enable finance companies to serve their SME customers, many of whom require unsecured credit for working capital needs.
4. Finance companies will be allowed to offer current account and chequing services to their business customers. They will also be allowed to join electronic payment networks, including Inter-bank GIRO, Fast and Secure Transfers (FAST) and Electronic Funds Transfer at Point of Sale (EFTPOS). These changes will enable finance companies to provide more comprehensive credit and deposit services to SMEs.
...
8. MAS will liberalise its existing policy of not allowing a foreign takeover of a finance company. This will accord finance companies greater flexibility to explore strategic partnerships and innovative business models that can strengthen their SME financing business.
9. Specifically, MAS is prepared to consider an application for a merger or acquisition if the prospective merger partner or acquirer commits to maintaining SME financing as a core business of the finance company. In addition, the merger partner or acquirer must be able to demonstrate expertise in SME financing and present proposals to enhance the finance company’s SME lending activities with new technologies, methodologies or business models.
More details in http://infopub.sgx.com/FileOpen/MAS-Chan...eID=439042
Amazing very good news. Garmen opening up finance SME to better adapt to new startup businesses. More importantly, they upgrading them from "strata cluster" to "strata"
At an AGM a few years ago, I asked the management:
“What can be the biggest surprise we as shareholders can ever expect?”
The management gave 2 answers:
1) When MAS change the regulation, and allows Finance Companies more leeway to compete with the banks.
2) Hopping one of the Big Guy from China come and ask for a takeover.
Since then I’ve been holding on to this Company’s shares and waiting.
Today’s announcement fulfills the above. Particularly point 8 of the announcement.
Point 3 increases risk slightly for finance companies, but probably still not as risky as their big 3 cousins who have stuff like credit card debt. The onus is still on proper evaluation of credit risk of the SME. The degree to which they increase their exposure is up to the finance company.
Point 4 is a bonus. Full service to SMEs.
Point 8 may not happen for HLF. But I do note that its NAV is $3.80. Price may rerate up somewhat if for no other reason than to take this possibility into account. Even a small possibility that a M&A could occur could rerate the price from pre announcement price of $2.2 somewhat closer to its NAV.
There's one possibility that occurs to me other than an acquisition. Could a merger be on the cards? i.e. merge with one of the other finance companies here ... This could create some scale.
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There are only 3 finance companies in Singapore. I'm thinking the changes is not just solely for the 3
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward
Think Asset-Business-Structure (ABS)
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15-02-2017, 09:24 AM
(This post was last modified: 15-02-2017, 09:27 AM by corydorus.)
Will all this means bad news for the 3 local banks or does it means sharing of the O&G burden of locals SMEs ?
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(15-02-2017, 09:24 AM)corydorus Wrote: Will all this means bad news for the 3 local banks or does it means sharing of the O&G burden of locals SMEs ?
Bad news about O&G is already baked in. If anything, the bad news would make potential extenders of new loans cautious.
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Hong Leong still hasn't recover from the lost decade. The share price barely move much
But it's paying 5.77% dividend.
Anyone vested?
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