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Asia Pacific Financial News from John Lothian News – September 11, 2017

Lead Stories

Asia and the threat to global economic security
Editorial Board, East Asia Forum
The slow and uneven economic recovery from the global financial crisis has been a primary driver of the populist anti-globalisation backlash in the United States and parts of Europe. One consequence was the election of Donald Trump. Another was the divorce of the United Kingdom from the European Union. The election of President Trump has introduced huge global uncertainty into international economic policy at a time of major changes in the global balance of power, when stability and certainty are at a premium.

Fee model would boost Asian ETF market; Until people pay for advice, growth will remain sluggish
Leo Lewis in Tokyo – FT
While regulators in the US fret that the pace of growth in the exchange traded fund market may be too explosive, their counterparts in Asia along with asset managers and distributors sweat over what more can be done to raise investor interest.

APEC strives to improve enterprises’ access to finance in digital age
Some 100 delegates from Asia-Pacific Economic Cooperation (APEC) economies and experts from international financial and economic organizations gathered here on Monday to seek measures for financially assisting small and medium enterprises (SMEs).

Asia curbs digital coin offerings, but finds regulation hard; Explosive growth in fundraising raises concerns about investor protection
Alarmed at a sudden rise in the volume of investment in digital tokens being offered through initial coin offerings, Asian authorities are scrambling to set out regulatory frameworks for the sector.

Steve Bannon compares China to 1930s Germany and says US must confront Beijing; Former senior aide to Donald Trump prepares to visit Hong Kong and warns that China is at ‘economic war’ with America
Benjamin Haas in Hong Kong – The Guardian
Steve Bannon, Donald Trump’s former consigliere, has compared China to 1930s Germany, warning the country could go down the same dark path if the US fails to challenge its rise.

London wins top financial center title once again as gap with New York widens; London pulls further ahead of New York in latest ranking of top financial centers; Slide in major North American cities attributed to possible concerns over U.S. trade
Gemma Acton – CNBC
London has held onto top spot in the latest ranking of global financial centers as the gap with second placed New York City (NYC) widens, according to the most recent iteration of the semi-annual report released on Monday.

JFD Brokers plans EU, Africa and Asia expansion as it promotes Mohamed Hassan to head Bus Dev
CySEC regulated retail forex and CFDs broker JFD Brokers announced that it has promoted Mohamed Hassan to Chief Business Development Officer, in charge of expanding markets, as JFD reaches out to international audiences across the globe.

Regulatory News

ASIC releases market integrity report
ASIC has today released its latest report on market integrity for the period 1 January to 30 June 2017.

Sebi panel to mull stock market trading hours extension; The stock market in India currently opens at 9 am and closes at 3.30 pm
Business Standard
An advisory committee of market regulator Securities and Exchange Board of India (Sebi) is likely to discuss a proposal for extending stock market trading hours, even as several brokers feel any such move would increase cost and logistics burden for them.

Investing News

The Big Hong Kong Dollar Short Is Bruised, But Not Broken
By Justina Lee – Bloomberg
U.S. rates’ premium over Hong Kong widens to most since 2008; Hong Kong dollar has seen sharp rebounds twice this quarter
Hong Kong dollar bears are down, not out. So say Credit Agricole CIB and DBS Hong Kong Ltd. after the biggest jump by the pegged currency in 19 months.

China Is Striving to Contain Its Once-Diving, Now-Thriving Yuan; The currency’s recent surge has prompted Beijing to shift course after two-year effort to keep it from weakening too quickly
By Lingling Wei – WSJ
China is reversing a range of measures it had put in place to support its currency, a response to a recent surge in the value of the yuan that has hurt Chinese exporters and added to the country’s economic headwinds.

China’s Fossil-Fuel Phase-Out Fails to Alarm Big Oil Investors
By Aibing Guo – Bloomberg
In the first day of trading after China said it’s working on a deadline to end sales of fossil-fuel-powered vehicles, shares are holding ground in the oil companies that stand to lose out.


Tremors in Tokyo as ‘Japan premium’ looks set for comeback; U.S. monetary policy threatens banks’ growing need for dollar borrowings
“Japan premium” sounds rather like a superior brew of Japanese ale. But the term came into use more than 20 years ago to describe something rather less intoxicating — the punishingly high cost that Japan’s banks had to pay if they wanted to buy dollars in overseas markets.

Japan regional bank consolidation “inevitable”: adviser to regulator
Leika Kihara, Sumio Ito – Reuters
Further consolidation among Japan’s regional banks is inevitable given a rapidly ageing population and ultra-low interest rates, an adviser to the country’s financial regulator said.

Japan Post confirms $12.1bn share sale
Peter Wells, Edward White – FT
The Japanese government has launched the $12.1bn follow-on sale of a stake in Japan Post Holdings.

Cargill sells US steel fabrication centres to Japan’s Metal One
Gregory Meyer – FT
Cargill, the world’s biggest agricultural trading company, has agreed to sell its US steel fabrication centres as it continues to shuffle its sprawling portfolio in search of better returns.

Mainland China

China Is Said to Ban Bitcoin Exchanges While Allowing OTC
Bloomberg News
Order comes amid a broader clampdown on financial risk; China is home to nearly a quarter of world’s bitcoin trades
China plans to ban trading of bitcoin and other virtual currencies on domestic exchanges, dealing another blow to the $150 billion cryptocurrency market after the country outlawed initial coin offerings last week.

China to Shut Bitcoin Exchanges; Authorities to ban commercial trading of all virtual currencies
By Chao Deng – WSJ
Chinese authorities plan to shut down domestic bitcoin exchanges, delivering a final blow to a once-thriving industry of commercial trading for virtual currencies, which took off inside the mainland four years ago.

Short Sellers Take Fight Against Chinese Companies to the Big Screen; ‘The China Hustle’ documentary profiles U.S. investors trying to expose and profit from irregularities and alleged fraud at many Chinese companies
By Steven Russolillo in Hong Kong and Vipal Monga in Toronto – WSJ
Deep-pocketed U.S. investors trying to expose fraud they allege among companies in mainland China have found a new way to promote their cause: a feature film.

China central bank vice governor says financial risks on the rise
China will strictly fend off risks from money laundering and terrorism financing, a People’s Bank of China vice governor has said.

China’s biggest banks ban new North Korean accounts; Unprecedented move to clamp down on financial flows with Pyongyang regime
Yuan Yang and Xinning Liu in Beijing – FT
China’s biggest banks have banned North Koreans from opening new accounts in an unprecedented move to clamp down on financial flows with the country’s unruly neighbour.

China Set to Unveil Cap-And-Trade Auto Emission, Mileage Rules
Bloomberg News
Draft rules require companies to get minimum credit score; China plans to end sales of vehicles powered by fossil fuels
China will soon unveil a mandatory cap-and-trade credit program for electric cars, starting the countdown for carmakers to be in compliance with stricter rules on emissions and fuel economy, according to the country’s state-backed auto association.

Hong Kong

Pro-independence from China posters appearing on Hong Kong campuses stoke new tension
Pak Yiu, Christine Chan – Reuters
Thirteen Hong Kong universities and academic institutions accused the Chinese-ruled city’s leader of undermining freedom of expression amid a row over pro-independence banners appearing on campuses.


Loyal Energy to diversify to financial services; It will form a JV with Arctos Investments.
Loyz Energy Limited (Loyz Energy) inked a deal with Arctos Investments Pte Ltd (AIPL) to form a join venture called FIT Global Pte Ltd (FIT).

Fidor Bank In Singapore: Establishing Tomorrow’s Fintech Entrepreneurs
Madhvi Mavadiya – Forbes
Smart Nation Singapore continues to forge ahead in the financial technology industry, especially with the news announced last month that challenger bank Fidor has invested in five polytechnics so that students and lecturers are trained on developing fintech applications, using Fidor’s API sandbox and fidorOS digital banking platform. This is a significant step for Singapore’s financial sector and fintech alike as students will be able to develop digital banking services and will inevitably go on to apply these skills when working in traditional banking or other areas.

Equifax and AXA Singapore become the latest victims of cybercrime
Maria Terekhova – Business Insider
Much scrutiny has been devoted to the state of legacy banks’ data security recently, amid a series of high-profile breaches that endangered customers’ personal information.


Thai–Chinese venture raises $3bn to build “world’s largest exhibition and trade centre”
By GCR Staff
Thai logistics firm Best Group and Shenzhen property company Hydoo International have raised $3bn to finance a giant financial technology, trade and logistics centre on the Gulf of Thailand coast east of Bangkok.


Malaysia Warns on ICOs
Malaysia’s financial-market regulator cautioned investors about potential risks involved in the burgeoning public offerings of crypto currencies – the latest public warning following a string of similar in the main markets of Asia.


India’s Janalakshmi Financial raises $161 mln from TPG, others
By Reuters
Indian microlender Janalakshmi Financial Services, which is setting up a so-called small finance bank, has raised 10.30 billion rupees ($161.3 million) from existing and new investors in a fresh round of funding led by TPG.

For resident Indians, income from anywhere is taxed in India; Once you are a resident in India, your income earned or received anywhere in the world is taxable in India
Archit Gupta – Livemint
I was an NRI and working for a multinational company in Germany for 12 years. I have come back to India recently and am now a resident Indian. My German company cleared my arrears and reimbursements recently, and deposited Rs4 lakh in my India account. I am a salaried individual in India now and will file the tax return next year. How will this money, which I earned as an NRI, be treated for tax purposes? The amount was credited to my account about 5 months after I came back to India.

India’s Traffic Is So Bad It’s Changing the Cars People Buy
By P R Sanjai – Bloomberg
More Indians are buying pricier vehicles with automatic gears; New car models are expected to flood the Indian market
India’s snarling traffic jams can leave cars crawling at under 5 kilometers an hour — making it almost faster to walk than drive.

India Swaps Cheaper LNG for More Volume in 2nd Reworked Deal
By Debjit Chakraborty and Saket Sundria – Bloomberg
Deal similar to one renegotiated earlier with RasGas: Pradhan; Petronet considering taking about 1 million tons/year more
Petronet LNG Ltd. has reached an agreement to rework a liquefied natural gas supply agreement with Exxon Mobil Corp., the second such renegotiation by the Indian company for gas supplies after reaching a similar deal with Qatar, according to people with knowledge of the development.


Australian Banks Sitting on A$500 Billion of ‘Liar Loans,’ UBS Says
By Emily Cadman – Bloomberg
Here’s something else for policy makers to worry about as they attempt to engineer a soft landing in Australia’s property market.

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About Author

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