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Asia Pacific Financial News from John Lothian News – August 10, 2017

Lead Stories

Former HK commodities exchange chief charged with conspiracy to defraud regulator: court
Prominent businessman Barry Cheung, who founded the now-defunct Hong Kong Mercantile Exchange, appeared in a Hong Kong court on Thursday charged with conspiracy to defraud the securities regulator and fraud.

SEC pushes back on Chinese-led takeover of Chicago Stock Exchange; After initially supporting deal, regulator delays approval of politicised transaction
Don Weinland and Hudson Lockett in Hong Kong – FT
The US Securities and Exchange Commission has delayed approval of a Chinese-led takeover of the Chicago Stock Exchange, the latest setback for an acquisition that has attracted a lot of pushbacks from US lawmakers.

How the world’s financial markets were rewired after the global financial crisis
by Adam Toze – AFR
It is a decade since the first tremors of what would become the Great Financial Crisis began to convulse global markets. Across the world from China and South Korea, to Ukraine, Greece, Brexit Britain and Donald Trump’s America it has shaken our economy, our society and lately our politics. Indeed, it has thrown into question who “we” are. It has triggered both a remarkable wave of nationalism and a deep questioning of social and economic inequalities. Politicians promise their voters that they will “take back control.” But the basic framework of globalisation remains intact, so far at least. And to keep the show on the road, networks of financial and monetary co-operation have been pulled tighter than ever before

These 72 Companies Are in the Eye of the Nuclear Storm
Shawn Tully – Fortune
Terrified by the fireworks over North Korea? For global business, the real eye of the storm is Asia, where three of the region’s industrial giants are facing an attack that would decimate their populations and businesses, and start a global depression.

Bank Negara hits out at SGX and ICE
Bank Negara has hit out at the Singapore Stock Exchange (SGX) and the Intercontinental Exchange (ICE) in Singapore after the bourses introduced the trading of ringgit futures on their exchanges that went against the country’s policies.

South Korea, Japan Warn Kim Against Firing Missile at Guam
By Isabel Reynolds and Hooyeon Kim – Bloomberg
Plan for missiles to be fired over Japan by mid-August: KCNA
North Korea statement comes in response to Trump’s remarks
South Korea and Japan warned North Korea that it would face a strong response if it carried through with a threat to launch a missile toward the U.S. territory of Guam.

Exchange News

CHX statement on the SEC’s staff order re: Chicago Stock Exchange acquisition
The board and management of Chicago Stock Exchange (CHX) are delighted with the SEC staff’s order granting approval of the Exchange’s rule filing regarding the acquisition of CHX Holdings, Inc., by North America Casin Holdings, Inc.

Dalian Commodity Exchange: Live Hogs Industry Expects Futures To Help On The “Hog Cycle” Problem
Live hog is the agricultural product with the largest market size in China. In 2016, about 685 million hogs were slaughtered, and the market size exceeded RMB1 trillion long ago. The healthy and sustainable development of the live hog industry is of great importance for the social stability and people’s living standard.

World Federation Of Exchanges Publishes H1 2017 Market Highlights
The World Federation of Exchanges (“WFE”), which represents more than 200 market infrastructure providers including exchanges and CCPs, today published its H1 2017 Market Highlights report.

MCX gets Sebi nod to launch options contract in gold; Plan was delayed by discussions among market players and govt over tax rules, settlement procedures
Santanu Chakraborty & Swansy Afonso – Business Standard
The Multi Commodity Exchange of India (MCX) said it will start the country’s first gold options contract, about a year after the market regulator permitted options trading in commodities. The Securities & Exchange Board of India (Sebi) has approved the bourse’s plan to offer kilogram contracts and the bourse will release product details in about two weeks, MCX Spokesman Girish Dev said by phone on Wednesday.

NSE to verify suspected ‘shell companies’ after trade restrictions by Sebi; Sebi has asked NSE to seek documents from 48 cos and verify credentials of these firms
Business Standard
Stock exchange major National Stock Exchange of India (NSE) on Wednesday said that it has commenced the process to verify the credentials of firms on its platform, on whom trade restrictions were imposed by regulator Sebi.

FinTech News

Fintech players welcome open banking paper; Open banking reforms will create a more competitive playing field for fintech start-ups
By Penny Pryor – Financial Observer
The fintech community has welcomed the government’s release of an issues paper on its review into open banking.

Regulatory News

Former company director sentenced to 8 years, 9 months jail for deception
Following an investigation, Mr Michael Samra, a former mortgage broker, has today been sentenced in the Adelaide District Court to 8 years and 9 months imprisonment, with a minimum of 4 years and 6 months to be served before becoming eligible for parole.

MAS, CAD warn public of potential risks of digital tokens and related investment schemes
ANGELA TAN – Business Times
THE Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) on Thursday advised consumers to be mindful of potential risks of digital token and virtual currency-related investment schemes.

Investing News

Opinion – Smart beta not what it seems
By Chris Brycki – Financial Observer
Promoted as a new way to diversify and reduce risk, smart beta aims to combine elements of passive index investing and active fund management to deliver the best of both worlds – transparency, broad diversification and market-beating returns at a low cost.

Mainland China

China slammed for delayed alert on palm oil spill; A dozen Hong Kong beaches closed after lard-like clumps clog waterways
Nicolle Liu in Hong Kong – FT
Hong Kong authorities have closed more than a dozen beaches and launched a clean-up effort after a ship collision caused almost 1,000 tonnes of palm oil to spill into the sea.

China targets mobile payments oligopoly with clearing mandate; PBoC move could force Ant Financial and Tencent to share valuable user data with rivals
Gabriel Wildau in Shanghai – FT
China’s central bank has ordered online payment groups to operate through a centralised clearing house, a move likely to undercut the dominance of Ant Financial and Tencent by forcing them to share valuable transaction data with competitors.

This Bond Shows China Investors Don’t Put Premium on Accounting
By Carrie Hong and Narae Kim – Bloomberg
Chinese textile company bonds rebound despite ownership query; Buyers from China probably ’considered such risks’ already
Transparent accounting may be one of the topmost concerns of bond investors in developed markets. When it comes to China, well, things aren’t so straightforward.

In sign of financial stress, gossips cause a rare bank run in China; Police detain employees at a local agricultural firm for spreading rumours that the local branch of the lender in Shandong province was in financial trouble
Wendy Wu
A rare run on a bank has occurred in eastern China, with hundreds of depositors trying to withdraw their cash from a local branch, reflecting the fragility and risks in the nation’s financial system.

China’s steel prices are rising and that’s worrying Beijing
China’s steel prices are on the rise; In March, Beijing announced plans to slash steel capacity by 50 million metric tons this year in efforts to tackle pollution and curb excess supply; Higher prices translates to better profits for industry, but it also means increased costs for sectors like construction that use much of the alloy
China’s steel prices are rising, and the government is getting worried about striking the right balance on the markets.

China’s Yuan Becomes an Improbable High-Yield Haven
By Justina Lee – Bloomberg
China’s currency is best performer among major peers this week; Strong fixings suggest preference for yuan strength: analyst
As global investors turn increasingly risk averse amid tense relations between North Korea and the U.S., China’s currency is becoming an unlikely winner.

Hong Kong

Hong Kong’s Crowded Currency Trade Enters Perilous Territory
By Justina Lee – Bloomberg
Hong Kong dollar’s steady decline abruptly reversed Wednesday; Carry traders had been positioned for further weakness
One of the world’s most reliable currency bets is suddenly looking like less of a sure thing.


Singapore Fintech Hub Will Open India Office
By Klaus Wille – Bloomberg
In talks with 30 tenants; hub may eventually host 100 startups; Plans to open offices in London, New York, Middle East
Singapore fintech hub Lattice80 plans to open an office in India by the end of next month, the first step in a global expansion that will spread to London, New York and the Middle East.


Espenilla Holds Philippine Rate, Raises CPI Outlook in Debut
By Siegfrid Alegado , Ditas B Lopez , and Norman P Aquino – Bloomberg
All 17 economists surveyed forecast rate would be kept at 3%; Central bank raises inflation forecasts through 2019 on oil
Philippine central bank Governor Nestor Espenilla kept interest rates unchanged in his debut policy meeting as head of the bank, while slightly raising forecasts for inflation because of pressure from oil prices.


How Asian countries are buying India’s investment story
By Saikat Das – Economic Times
Record foreign direct investment (FDI) flows into India now have a distinctly regional flavor. Seemingly drawn by Prime Minister Narendra Modi’s initiatives toward boosting local manufacturing, Asia’s richer neighborhoods have begun rivaling Anglo-American investors in building factories in the continent’s third-largest economy.


ANZ pays a further $10.5m to OnePath clients;ANZ has paid an additional $10.5 million in compensation to 160,000 OnePath superannuation customers who were affected by compliance breaches.
Investor Daily
The new compensation bill for ANZ adds to previous payments of $4.5 million to 1.3 million OnePath customers, as well as “rectifications and remediation” of around $49 million.

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Lothian is executive chairman and CEO of John J. Lothian & Co. and editor of the John Lothian Newsletter. He publishes,,, and three industry newsletters.