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Asia Pacific Financial News from John Lothian News – September 26, 2017

Lead Stories

China ‘strongman’ Xi to put stamp on communist charter; Wording will be watched as measure of power and for signs of growing cult of personality
Lucy Hornby in Beijing – FT
Since becoming Chinese president in 2012, Xi Jinping has been tightening his grip on civil society, the military and competing political cliques.
https://goo.gl/KcTVyY

Japan’s big banks plan digital currency launch; J Coin designed to wean Japanese off heavy dependency on cash
Martin Arnold and Leo Lewis in Tokyo – FT
Japanese banks plan to introduce a digital currency ready for the 2020 Tokyo Olympics as they respond to the threat from China’s Alibaba, which recently launched its mobile-phone payments service in the country.
https://goo.gl/wjhKNZ

WhatsApp blocked in China; here is why; Instant messaging service WhatsApp has been largely blocked in China, the media reported.
Financial Express
Instant messaging service WhatsApp has been largely blocked in China, the media reported. The Open Observatory of Network Interference (OONI), a global observation network for detecting censorship, surveillance and traffic manipulation, suggested on Monday night that Chinese internet service providers started blocking access to WhatsApp on September 23, reports CNN.
https://goo.gl/21qmA2

WhatsApp messaging service hit by full blockage in China; Disruption ahead of Communist party congress is a setback for app owner Facebook
Hannah Kuchler in San Francisco and Emily Feng in Beijing – FT
WhatsApp suffered a complete blockage in China this week, prompting suggestions the government was cracking down on the Facebook-owned messaging app ahead of the Communist party congress next month.
https://goo.gl/Xj3Aia

Tokyo Global Financial Center Under the Spotlight Again; What does Japan need to do to make Tokyo a true global financial center?
By Sayuri Shirai – The Diplomat
Japan has long endeavored to develop its capital, Tokyo, as one of the top global financial — given the status of the Japanese yen as the third international currency after the U.S. dollar and the euro; and large financial markets with abundant capital. To realize this vision, the Japanese government under Prime Minister Shinzo Abe’s “Abenomics” has taken various measures.
https://goo.gl/UryX6G

Li Ka-shing, Jack Ma Join Forces to Bring Digital Wallet to Hong Kong
By Prudence Ho – Bloomberg
Billionaire Li Ka-shing’s CK Hutchison Holdings Ltd. and Jack Ma’s Ant Financial unit will form a joint venture to offer a digital wallet service in Hong Kong.
https://goo.gl/LAVZfn

ADB raises growth forecasts for Asia on exports revival
Alice Woodhouse – FT
A rebound in global trade and improved prospects for China have provided a boost to Asian economies, prompting the Asian Development Bank to raise its growth forecast for the region.
https://goo.gl/Ku2U7N

China Says Entrepreneurs Must Put Patriotism Over Profit
By Ting Shi – Bloomberg
First-ever policy to ‘spur market vitality,’ state media says; Xi wants to buttress the state and build ‘national champions’
China said patriotism must be the highest priority in entrepreneurship, officially defining for the first time what the concept should mean for the world’s second-biggest economy.
https://goo.gl/GtEy2s

Luxembourg ‘offers financial gateway to Europe’ for China
By Ma Jingjing -Global Times
Global Times reporter Ma Jingjing (GT) interviewed Luxembourg for Finance CEO Nicolas Mackel (Mackel) about the country’s role in China’s financial presence in Europe, given that some European countries, including Luxembourg, are trying to attract UK-based financial enterprises after Brexit.
https://goo.gl/sAvPdB

SMEs and Insolvency: Towards a New Approach in Asia
Paul Omar – Lexology
Small business is undoubtedly the lifeblood of economies, more so where those economies are emerging and developing. The promotion and nurturing of entrepreneurship is a key factor in economic success, not just for those entrepreneurs, but for the wider society, which, as stakeholders, benefits from the generation and distribution of wealth through economic and social policy.
https://goo.gl/Wru88K

Exchange News

BlackRock pitches for shareholder protection as Asia bourses weigh dual-class listings
Elzio Barreto, Sumeet Chatterjee – Reuters
Hong Kong and Singapore bourses need to introduce shareholder protection measures if they allow companies with dual-classes of shares to list, BlackRock Inc’s (BLK.N) head of investment stewardship for Asia Pacific said on Tuesday.
https://goo.gl/ttN1cP

ASX ‘increasingly confident’ of blockchain-inspired tech’s potential; On track for December announcement
Rohan Pearce – ComputerWorld
ASX’s chairperson, Rick Holliday-Smith, says the company is “increasingly confident” of the potential for a system based on blockchain-inspired distributed ledger technology (DLT) to replace the Australian Securities Exchange CHESS system.
https://goo.gl/bTNxGS

SGX to report 1Q FY2018 results on 25 October
SGX
Singapore Exchange (SGX) is reporting its first-quarter (1Q) results for Financial Year 2018 (FY2018) after the market closes on 25 October 2017.
https://goo.gl/EYcmKB

SGX hits record volumes in FX futures
SGX
Singapore Exchange (SGX) announced a daily volume record for its SGX INR/USD futures contract, with a total of 108,417 contracts traded on 22 September 2017, translating to a notional value of USD 3.34 billion. SGX INR/USD is SGX’s most actively traded FX futures contract, and recent volume growth has extended SGX’s market share to more than 40%.
https://goo.gl/LN1bNY

TAIEX derivatives: Delisting of Daily Futures on TAIEX derivatives
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG took the following decision effective 15 November 2017:
https://goo.gl/2LyJXd

ASX AGM – Chairman and Managing Director and CEO’s addresses
ASX
https://goo.gl/by7MVW

FinTech News

China’s Ping An Technology aims to generate half its business from external customers
Daniel Ren – South China Morning Post
Ping An Technology, a subsidiary of China’s second-largest life insurer, is aiming to develop a multi-billion-yuan business in coming years by offering in-house technologies and services to external customers.
https://goo.gl/9p4Qg4

Southeast Asia’s fintechs: Target the underbanked
By Morgan Davis – Euromoney
The region’s affluent classes are well served by traditional banks. But fintech firms hope to gain a foothold in financial services through customers that have been left behind.
https://goo.gl/1kktnQ

Regulatory News

Japan’s Financial Authority to Begin Bitcoin Exchange Surveillance Next Month
Bitcoin.com Games
Japan’s Financial Services Agency (FSA) has revealed that it will start a full review of bitcoin exchanges operating in the country, which includes putting them under full surveillance starting in October. This step is to ensure they comply with the revised law which legalized bitcoin as a method of payment in April.
https://goo.gl/iwM9LY

Sebi to allow mutual funds, PMS to participate in commodity futures market
Sebi wants large institutional investors to participate in commodity platforms in India
Dilip Kumar Jha – Business Standard
Months after allowing Category-III hedge funds to trade in commodity futures, the Securities and Exchange Board of India (Sebi) is all set to grant mutual funds and portfolio management services (PMS) permission to participate in the commodity derivatives market.
https://goo.gl/9t3kTr

ASIC obtains orders to wind up investment and technology companies
ASIC
The Supreme Court of Queensland in Brisbane has appointed Mr Michael Hill and Mr William Harris, of McGrathNicol, as joint and several liquidators of Gognos Holdings Ltd (Gognos) and Dynamic Agri Tech Ltd (DAT) (companies). The court has ordered that the liquidators’ appointment be stayed until 10 am on Friday, 29 September 2017, in order that the companies’ rights of appeal be preserved.
https://goo.gl/23fGaR

Investing News

Equifax chief quits over data breach; Credit reporting group splits top roles and promises ‘total focus’ on cyber security
Alistair Gray and Pan Kwan Yuk in New York
Equifax’s chairman and chief executive Richard Smith is stepping down, bowing to public pressure in the wake of the massive data breach that compromised 143m Americans’ personal information. Paulino do Rego Barros, who most recently served as head of Equifax’s Asia-Pacific division will take on the job on an interim basis.
https://goo.gl/snXrn4

China’s HNA Group says will keep investing in the United States
Reuters Staff
HNA Group Co, one of the most acquisitive Chinese buyers of overseas assets, will keep investing in the United States, one of its key overseas markets, the conglomerate’s Chief Executive Officer Adam Tan said on Tuesday.
https://goo.gl/6YgDau

Japanese stocks ready for Snap! Crackle! Pop!; Markets behave in some predictable ways ahead of an election
Leo Lewis – FT
Whether courageous, cocky or calamitous, Prime Minister Shinzo Abe’s decision to dissolve parliament and call an early election is a gift to otherwise narrative-free Tokyo markets and proponents of the election-themed “Snap! Crackle! Pop!” trade.
https://goo.gl/pb2oqa

Ex-HSBC forex trader goes on trial in New York; What prosecutors say was front-running was ‘standard industry practice’, defence says
Alistair Gray in New York – FT
The British banker on trial in the US on charges he schemed to front-run a $3.5bn currency deal “threw his client under a bus to make more and more money”, prosecutors argued on Monday.
https://goo.gl/dBLgE7

Bitcoin and Copper in Lockstep Show Chinese Speculators’ Power
By Jack Farchy , Eddie Van Der Walt , and Mark Burton – Bloomberg
Cryptocurrency’s correlation with metals seen since June; Some in copper industry see potential for price falls
Copper and bitcoin don’t obviously have much in common.
https://goo.gl/bg6xbd

Japan

Japan PM Announces $17.8b Economic Stimulus Package
Financial Tribune
Japanese Prime Minister Shinzo Abe said he would seek to implement a 2 trillion yen ($17.8 billion) spending package to expand access to education and cut waiting times at child-care centers. He made the comments shortly before his coalition partner said an election would be held, likely on October 22.
https://goo.gl/EyWgMj

J.C Flowers seeking buyer for its stake in Japan lender Shinsei: FT
Reuters Staff
U.S. private equity firm J.C. Flowers & Co LLC is seeking a buyer for a 20 percent stake in mid-sized Japanese lender Shinsei Bank (8303.T), the Financial Times reported on Tuesday, citing people with direct knowledge of the matter.
https://goo.gl/oTghCH

Japan’s Fukushima cleanup plan delays spent fuel removal
The Associated Press
Japan’s government on Tuesday approved a revision to its 30-to-40-year plan to decommission the Fukushima nuclear plant, delaying by two more years the removal of radioactive fuel rods in two of the three reactors damaged in the 2011 disaster.
https://goo.gl/rR4gqy

Japanese YouTuber Sparks Outrage After Making $490,000 in Bitcoin on Exchange Platform in One Week
NextShark.com
A popular Japanese YouTuber has drawn fury after listing himself on a new financial exchange platform and cashing out $490,000 in bitcoin after a week.
https://goo.gl/dDe5cb

Japanese banks to launch digital currency; Some of Japan’s main banks have finalised a plan to launch their own digital currency, J Coin, to cut down the country’s cash dependence.
SBS.com.AU
Some of Japan’s main banks, led by the Mizuho Financial Group, have finalised a plan to launch their own digital currency, J Coin, to cut down on cash dependence.
https://goo.gl/4Sbzdj

Japan’s Financial Uncertainty Triggers Research Sector Woes
Joanna Hughes – MasterStudies.com
RIKEN, Japan’s leading scientific research institution, was once a bastion of scientific research thanks to generous government funding. However, the effects of the nation’s ongoing financial crisis are trickling down into the research sector. Here’s a closer look at the issue, along with what can be done to correct course, as recently reported by Nature.
https://goo.gl/U3rw6P

Mainland China

Chinese Bid for Stake in HERE Maps Denied by U.S. Security Panel
By Chris Reiter and David McLaughlin – Bloomberg
Chinese investors led by digital map provider NavInfo Co. called off plans to buy a stake in counterpart HERE Technologies after U.S. authorities withheld approval, becoming the latest China-linked deal to run afoul of a secretive American national security panel.
https://goo.gl/6Y6xKk

China postpones food import controls after global outcry
The Associated Press
China has delayed enforcing sweeping new controls on food imports following complaints by the United States, Europe and other trading partners that they would disrupt billions of dollars in trade.
https://goo.gl/pejdJx

China continues shadow banking crackdown with Guangzhou raid; An underground bank in the south China province of Guangzhou has been shut down following claims it was involved in $70m of illegal asset transfers last month
Barclay Ballard – WorldFinance.com
The Chinese Government has continued its assault on the country’s shadow banking sector following the shutdown of an illegal operation on September 26 in Guangzhou. The organisation, which was operating out of a food market in the city, stands accused of funnelling $70m out of the country in the last month alone.
https://goo.gl/gd7G8E

China’s state-owned business reform a step in the wrong direction; Latest step move by Beijing is all about asking private companies to provide subsidies
Henny Sender – FT
When a mix of Chinese privately owned and state-owned companies came together in August to buy shares in China Unicom’s $11.7bn offering, Beijing heralded it as another milestone for reform of country’s state-owned enterprises.
https://goo.gl/PR45hM

China-owned port in Sri Lanka could alter trade routes; China’s ambitions for sleepy Hambantota could shift world trade routes
beyondbrics
Peter Fuhrman, China First Capital – FT
Much has been said — but far less is understood — about the One Belt One Road (OBOR) initiative, the centrepiece of Xi Jinping’s expansive foreign policy. That Mr. Xi has ambitions to extend across Eurasia China’s commercial, political and military power is not in doubt.
https://goo.gl/hh1G6C

China’s Property Stock Plunge Isn’t Fazing These Investors
By Lianting Tu and Finbarr Flynn – Bloomberg
Investors in junk dollar debt sold by Chinese property companies aren’t losing their cool.
https://goo.gl/NFqXRC

Hong Kong

Cryptocurrency mania grips Hong Kong as it looks beyond banking
By Justina Lee – SF Gate
In the mid-1990s, Johnson Leung embarked on a career in shipping. In the early 2000s, he moved to finance. And now he runs a Hong Kong startup to try to improve how container ships are booked using blockchain technology.
https://goo.gl/59xDH

Dual class shares make progress in Hong Kong; Pragmatism looks to be outweighing principles in stock exchange debate
Jennifer Hughes in Hong Kong – FT
“Hong Kong is like a tropical plant,” mused a contemplative banker to the Financial Times 30 years ago. He went on to explain: “If you dig about at the roots too much, it will just wither and die.”
https://goo.gl/ixMHBL

Hong Kong audit regulation bill likely this year: FRC CEO
Sumeet Chatterjee, Umesh Desai – Reuters
A bill giving the Financial Reporting Council (FRC) full responsibility for auditors will be put to Hong Kong’s Legislative Council (LegCo) before the end of 2017, the regulator’s chief executive said on Tuesday.
https://goo.gl/4ety38

Pan-democrats warned not to block funding for Hong Kong finance body; Exco member says the advisory group needs more resources to promote the sector in the city, or risk falling behind other countries
Toney Cheung – South China Morning Post
A top adviser to the Hong Kong government has warned that opposition lawmakers threatened the prospects of the city’s financial services industry if they refused to approve funding for the Financial Services Development Council (FSDC).
https://goo.gl/Eamk6c

Singapore

Singapore Cryptocurrency Firms Facing Bank Account Closures
By Chanyaporn Chanjaroen – Bloomberg
One industry body says 10 member companies are affected
CoinHako said in blog that DBS had closed its bank account
Singapore banks have closed accounts of several companies which specialize in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.
https://goo.gl/bDB8ne

Singapore and Hungary keen to further economic cooperation: PM Lee
By Oliver Siong – Channel News Asia
Singapore and Hungary are keen to further economic cooperation both bilaterally and regionally, said Prime Minister Lee Hsien Loong on Tuesday (Sep 26).
https://goo.gl/vHDQam

Vietnam

World Bank Group Supports Vietnam to Tackle Non-Performing Loans, Improving Economic Prospects
The FINANCIAL
The World Bank Group is supporting Vietnam to make further progress in resolving non-performing loans, strengthening the banking sector to ensure efficient and effective allocation of capital for economic growth and job creation.
https://goo.gl/SNG4YZ

Bank Case Reveals Vietnam’s Continued Corruption Problems
Voice of America
The Vietnamese Ministry of Public Security recently began investigating three companies under the state-owned gas and oil group PetroVietnam. The companies may have tried to divert more than $5 million from a Vietnamese financial institution called OceanBank.
https://goo.gl/X6LMnq

Thailand

Thailand shares Experience on Sustainability for Developing Nations
PR NEWSWIRE ASIA
Thailand has been a pioneer in development theory for some time. Resulting from the contemplation of the relationship between man, the environment and the economy more than half a century ago, the work of the late King Bhumibol Adulyadej eventually became formalised as the Sufficiency Economy Philosophy — SEP, Ministry of Foreign Affairs, stated.
https://goo.gl/AztU6G

Philippines

Economic team to woo Chinese investors
By Chino S. Leyco – Manila Bulletin
A Cabinet-level delegation led by Finance Secretary Carlos G. Dominguez III and other members of the economic team will visit China to pitch the Philippines’ planned renminbi-dominated Panda bond offering and the prospects for investments under the country’s fast-growing economy.
https://goo.gl/tkvm6U

Philippine government tries to lure private Japanese investment
Peso movement in line with fundamentals: central bank governor
MASAYUKI YUDA, Nikkei
The Philippine government has called on cash-rich Japanese companies to invest more in the country, with senior officials and the central bank governor making the case for the fast-growing economy at a seminar in Tokyo.
https://goo.gl/b9tJxJ

Malaysia

Malaysia’s infrastructure finance market: a template for all
Euromoney
Malaysia’s infrastructure financing market is well ahead of many of its peers, proving time and again that it can support greenfield financing when many other countries are still focused on funding pure brownfield projects.
https://goo.gl/zS6YBJ

India

India, Indonesia Bonds: The Latest Emerging-Market Darlings; Investors hold steady as U.S. and European central banks prepare to wind down loose monetary policies
By Saumya Vaishampayan – WSJ
Investors are rushing into the bond markets of India and Indonesia, drawn by rich yields and the rosy growth prospects of countries that a few years ago were considered among the most vulnerable emerging markets.
https://goo.gl/H9w2zf

GE Warns India About Risks to Altering $2.5 Billion Rail Deal
By Rick Clough – Bloomberg
General Electric Co. warned Indian officials that walking away from a multibillion-dollar locomotive contract would harm job creation and have a chilling effect on investment.
https://goo.gl/WyKzHM

Citibank and Standard Chartered Bank become shareholders of SWIFT India
By Saloni Shukla, ET
SWIFT India, a part of the global network that enables trillions of dollars transfers each day, today announced that Citibank and Standard Chartered Bank have joined the Indian services as shareholders.
https://goo.gl/SG8ExD

Govt will not change financial year for now
Surojit Gupta | TNN
NEW DELHI: The government will not change the fiscal year for now but the issue remains under “examination” and the Budget for 2018-19 will be presented in early February, senior government sources have said.
https://goo.gl/7Fiu92

Australia

AFP, Chinese police sign deal over pursuit of financial fugitives
ROWAN CALLICK, PRIMROSE RIORDAN – The Australian
The Australian Federal Police has signed a new deal with Beijing’s public security agency governing how Chinese police can pursue its nationals accused of crimes who are living in Australia.
https://goo.gl/cd3Usm

Supply remains tight and there is risk of shortfall
by Mark Eggleton – AFR
Alinta Energy CEO Jeff Dimery suggests Australians should prepare themselves for a long, hot summer with intermittent blackouts as the nation’s east coast energy crisis is set to continue over the coming months.
https://goo.gl/6JZhgL

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About Author

Lothian is executive chairman of John J. Lothian & Co. and editor of the John Lothian Newsletter. He publishes MarketsWiki.com, MarketsReformWiki.com, MarketsWikiEducation.com, JohnLothianNews.com and several industry newsletters.