Fixed income funds maintain blistering momentum in Australia 

After a bearish first quarter for Australia’s managed funds, local investors added AU$3.21bn to unlisted managed funds during Q2, the highest quarterly allocation since Q3 2023, according to global funds network Calastone. The change in sentiment stemmed Q1 outflows of AU$1.92bn, tipping the sector back into inflow territory with funds gaining AU$1.3bn in 1H 2024.

1H 2024 flows were a marked improvement on 2023, which saw managed funds shed AU$4.72bn in 1H before recouping AU$4.91bn in the second half, mostly reflecting the rising demand for fixed income funds.  

Fixed income fund flows continued their blistering pace as investors sought capital safety and strong yields, allocating a record AU$6.26bn in 1H 2024, almost three times more than their AU$2.21bn 1H 2023 inflows. During the June quarter, fixed income funds grew by AU$3.44bn, the highest quarterly net inflow observed by Calastone since Q3 2021. Inflows swelled to AU$1.41bn in May before halving to AU$750m in June as some central banks began to cut rates.

Equity funds endured their worst quarter on Calastone’s record, shedding AU$2.23bn in Q1 before recouping AU$720m in April as investors seized on market dips. May and June outflows diminished these gains, finishing 1H 2024 down AU$2.19bn for equity funds.

2024 has so far proven to be another difficult year for mixed asset funds, which have lost AU$1.74bn YTD, up from AU$1.6bn of outflows seen in 1H 2023.

“The ongoing flight to fixed income among Australian investors aligns with global patterns we’ve seen across our network, reflecting a widespread preference for stable, income-generating assets amid market volatility and economic uncertainties, likely magnified by higher local costs of living,” said Marsha Lee, Managing Director Australia and New Zealand at Calastone. “Away from fixed income, net flows have remained relatively muted as perceivably riskier assets stay sidelined until central banks signal a return to looser monetary policies.”

 

Visa launches money movement advisory practice in North America

Visa has announced the launch of its Money Movement Advisory Practice in the US and Canada. The service is offered by Visa Consulting & Analytics (VCA), the firm’s payments consulting advisory arm. It will focus on helping clients and partners navigate the increasingly sophisticated money movement industry and capture opportunities estimated at US$200 trillion globally.

Visa says the new practice is a strategic response to the increasing demand for frictionless payments and mobile experiences. ‘Money movement’, which encompasses multiple ways to facilitate the transfer of funds across various platforms and channels, has emerged as a frequent area of client inquiries. Visa’s Money Movement solutions, including the Visa Direct network, are designed to enhance real-time, secure transactions globally for both low and high-value payments. These solutions help clients reach up to 8.5 billion endpoints across more than 190 countries and territories in 160 currencies, fostering a more innovative financial ecosystem.

“Clients are actively seeking effective strategies to meet the increasing customer demand for quick, reliable payments,” said Kate Manfred, North America Head of Advisory Services at Visa. “Visa can be their strategic partner, offering innovative solutions for money movement that will drive new sources of growth and customer retention.”

Leveraging VCA's network of over 1,300 consultants, data scientists, technology developers, and product designers across 75 offices globally, the practice will focus on assisting clients with their top money movement priorities, such as strategy definition and user experience optimisation.

 

Commerzbank opens Baltic trade hub in Lithuania

Commerzbank is planning to open a new Representative Office in Lithuania, based in Vilnius, in December this year. As part of its international growth strategy, the bank says it recognises the great importance of the Baltic region.

“Germany is one of the most significant trade partners of the Baltic countries,” explained Michael Kotzbauer, member of Commerzbank’s board responsible for Corporate Clients. “This step will strengthen Commerzbank’s presence in this fast-growing region of Europe. By doing so, we also promote the diverse economic relations between the Baltic States and Germany. Through the Representative Office in Lithuania, our clients will benefit from Commerzbank‘s local expertise and its strong network on the ground.”

The new Representative Office in the Lithuanian capital, Vilnius, will serve as the hub for the three Baltic states of Estonia, Latvia, and Lithuania. Specifically, Commerzbank will focus on trade and project finance in the region. Additionally, the deepening of the cooperation with the public sector and local financial services industry is a key priority for the bank.

 

ADCB collaborates with PaySupp to support corporate suppliers

Abu Dhabi Commercial Bank – Egypt (ADCB Egypt) has entered into an agreement with PaySupp, a financial technology company, to support corporate supply chain vendors. This collaboration aims to offer financing solutions that help companies manage their working capital more effectively, ensuring business continuity amid economic challenges.

The platform’s early payment service provides flexible and integrated financial facilities, enabling suppliers to receive their deferred payments more quickly and on more favourable terms. Companies benefit from improved payment terms, which help reduce operating costs, enhance operational efficiency, improve cash flow, and foster stronger collaboration with suppliers.

“This partnership aids in fostering corporate growth and expansion plans, increasing funding options, and improving supply chain efficiency by controlling risks and boosting operational performance,” said Ihab El Sewerky, Managing Director and CEO of ADCB Egypt. “Additionally, it enhances liquidity and supports projects aimed at driving economic development and entrepreneurship in Egypt.” 

 

New security feature Australian businesses promises to save millions

In a move to help reduce scam losses and make Australia a harder place for scammers to operate, Westpac is extending its payee verification solution to institutional and government clients. The bank’s Verify solution will soon be available on its payables platform, PaymentsPlus.

The solution is designed to enable businesses to run a check on payee details before initiating payments, alerting them to potential account number and name mismatches. This can help businesses and government agencies better identify fake invoice or payment redirection scams. It could also help put a stop to mistaken payments. 

Westpac launched Verify for retail and small business customers in April this year which it claims has already saved over AU$50m in scams and mistaken payments.

Nell Hutton, Westpac’s Chief Executive, Institutional Bank, says the new feature will enhance the accuracy of payments for large businesses and government clients, with the potential to save them millions, as well as create operational efficiency when setting up or changing payee details in their accounts payable systems.

“International scammers target Australian businesses and government agencies that make large payments and often pay multiple invoices in batches,” she said. “When scammers manage to steal funds from these organisations, the damages are significant and can have knock-on impacts for their customers and suppliers.” 

 

ACI Worldwide and Mexipay look to boost instant payments adoption in Mexico

ACI Worldwide and Mexipay have announced the extension of their partnership to enhance Mexico’s real-time payments ecosystem, with the aim of driving instant payments adoption and boosting economic growth and financial inclusion for Mexico’s businesses and consumers.

Mexipay will use ACI’s Digital Central Infrastructure solution, part of its Enterprise Payments Platform, to address the need for enhanced real-time payment services. The platform will be built on the global ISO 20022 standard and will offer additional features such as Request to Pay and Alias management, providing participants with opportunities for new payments and revenue streams.

According to ACI’s latest ‘Prime Time for Real-Time’ report, 3.8 billion real-time payments were processed in Mexico in 2023, making it the tenth largest real-time payments market in the world. But despite its head start in the region, the country is one of the slowest-growing real-time markets in Latin America, with a projected CAGR of 7.8% between 2023 and 2028.

“Latin America is one of the most exciting growth regions for our company,” commented Alberto Olivares, head of Latin America, ACI Worldwide. “Partnering with fintechs and new market entrants is crucial to drive the advancement of real-time payment ecosystems. Mexico has a fantastic opportunity to maximize the use of its real-time rails and replicate the success of other countries in the region to drive economic growth and financial inclusion.”

 

CIMB Singapore launches SME sustainability-linked loan programme

CIMB Singapore has announced the launch of its SME Sustainability-Linked Loan/Financing Programme (SLL/SLF) Programme, which aims to provide SMEs easier access to sustainable financing and support to attain credible greenhouse gas emission reduction. 

Once sustainability performance targets (SPTs) have been agreed with CIMB, the bank’s clients will calculate their baseline carbon emissions through ESGpedia, a digital platform by STACS that automatically converts operational data like fuel to greenhouse gas emissions. Upon successful verification of the achieved SPTs by Bureau Veritas, the firms will be able to get a rebate on their interest/profit rates payable on their loan/financing. 

Both new and existing clients can receive a 0.20% rebate on their interest/profit rates for the first 12 months of enrolment, upon successful verification of baseline emissions. From the second year, this rebate can increase to 0.40%, depending on the SPTs achieved.

“Time is of the essence for businesses to embark on sustainable practices with the support of financing,” said Benjamin Tan, Head of Commercial & Transaction Banking, CIMB Singapore. “Recognising that SMEs may lack resources and are looking for simpler ways to access SLL/SLF opportunities, the CIMB SME SLL/SLF Programme is designed to be simple and self-directed, which means our client is always in control. The experience is also fully digital, complemented by our online business account opening process.”