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Asia Pacific Financial News from John Lothian News – September 29, 2017

Lead Stories

Top U.S. Spymaster Warns American Firms About Deals With China
By Sara Forden and David McLaughlin – Bloomberg
Standards for foreign deal reviews need reform, Evanina says; Official cites risk to U.S. control over strategic technology
The top U.S. counterintelligence official said American firms need to be cognizant of the national security risks that could arise from selling to Chinese buyers or entering into joint ventures with them.

China’s bitcoin market alive and well as traders defy crackdown; Activity moves to peer-to-peer exchanges and messenger apps after Beijing’s order to close exchanges earlier this month
Reuters via SCMP
Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

Nomura, RBS lose bid to overturn $839 million mortgage bond award
Brendan Pierson – Reuters
Nomura Holdings Inc (8604.T) and Royal Bank of Scotland Group Plc (RBS.L) lost a U.S. court appeal on Thursday to overturn an order requiring them to pay $839 million for making false statements while selling mortgage-backed securities to Fannie Mae (FNMA.PK) and Freddie Mac(FMCC.PK).

The Wall Street Journal to Stop Publishing Europe, Asia Print Editions; Reduction of paper’s print presence comes amid broad reorganization of the Journal’s editorial structure
By Lukas I. Alpert – WSJ
The Wall Street Journal will cease publishing the European and Asian print editions of the newspaper over the next week, as the company shifts its focus to digital amid an increasingly challenged print advertising market.

Wall Street Journal stops publishing Asian and European print editions; Decision comes after the paper’s parent company News Corp reported a loss of $643m (£479m) for the most recent fiscal year
Benjamin Haas in Hong Kong – The Guardian
he Wall Street Journal will stop publishing its Asian and European editions, the paper has said, amid a wider editorial restructuring and falling revenue.

Climate financing in South Asia still not enough
by Haroon Janjua –
The South Asian region is one of the most vulnerable areas affected by climate change due to its geography coupled with high levels of poverty and population density. The most vulnerable areas are food insecurity, agriculture, fisheries, vector-borne diseases, coastal areas and many other environmental issues.

Exchange News

Australian Securities Exchange sees blockchain replacing current post-trade system
By Neil Hughes
The company overseeing Australia’s largest stock exchange believes that its future for resolving post-trade settlements lies in blockchain, based on technology created by U.S.-based fintech company Digital Asset Holdings.

JPX Report 2017
We are glad to inform you of the publication of the JPX Report 2017.
Prepared as part of our efforts toward integrated reporting, the report offers stakeholders and the general public a deeper insight into our corporate philosophy, social raison d’être, and our initiatives toward sustainable corporate development.

Report on Initial Public Offering Applications, Delisting and Suspensions (As at 29 September 2017)

NSE aims for listing in second half of 2018; NSE chief Vikram Limaye said a listing ; y March would be ‘very difficult’, and a more realistic time frame would be the second half of next year
Abhirup Roy Devidutta Tripathy & Rafael Nam – Business Standard
The new chief executive of the National Stock Exchange (NSE) told Reuters he does not expect the bourse’s eagerly awaited listing to take place until the second half of 2018.

FinTech News

Asian fintech IPOs get investors fired up; Japan’s Money Forward closes first day at nearly double the offer price
Money Forward’s listing ceremony at the Tokyo Stock Exchange on Sept. 29
TOKYO — A pair of Asian fintech startups made big splashes on the stock market this week, demonstrating the extent of investor excitement over the nascent field.

Regulatory News

ASIC remakes ‘sunsetting’ class order providing licensing relief for trustees of wholesale equity schemes
ASIC has remade Class Order [CO 07/74] Wholesale equity schemes: Licensing relief for trustees, which provides relief, in specified circumstances, to trustees of wholesale equity schemes from the requirement to obtain an Australian financial services (AFS) licence. The Class Order was due to expire (‘sunset’) on 1 October 2017.

Former Victorian financial adviser banned for forgery
The Australian Securities and Investment Commission (ASIC) has permanently banned financial adviser Koresh Daniel Houghton from providing financial services because he had engaged in misleading, deceptive and dishonest conduct and failed to act in his clients’ best interests when providing advice.

Investing News

Yuan Traders Get Whiplash as Currency Tumbles Fastest in Asia
Bloomberg News
It’s hard to be a bull or bear in China when it comes to the currency.

SoftBank Plots Deals to Build $300 Billion Asset-Management Arm
By Giles Turner , Caroline Hyde , and Peter Elstrom – Bloomberg
Unit aims to grow to that size over next four to five years; Firm already has $93 billion tech fund, plus Fortress assets
SoftBank Group Corp. founder Masayoshi Son has made a name for himself building a telecommunications and technology empire. He’s now planning an expansion in asset management.

China’s Uber-Rich Prompt Haitong to Build Hong Kong Private Bank
By Alfred Liu – Bloomberg
Securities firm targeting clients worth $10 million or more; China is home to more than 1 million millionaires: Capgemini
Haitong International Securities Group Ltd., a unit of China’s second-largest brokerage, plans to add about 100 jobs in Hong Kong as it seeks to draw more of the nation’s growing ranks of multi-millionaires to its wealth management business.


Bitcoin Exchange Giant BitFlyer Gets Key License in Japan; Digital-currency exchanges bolster cryptocurrency’s status in world’s third-largest economy
By Paul Vigna – WSJ
Japan’s Financial Services Agency on Friday handed out its first licenses for digital-currency exchanges, allowing them to operate legally in the country and further solidifying the upstart currency’s status in the world’s third-largest economy.

Japan Issues Licenses for 11 Bitcoin Exchanges
Rachel Rose O’Leary – Coindesk
apan’s Financial Services Agency (FSA) has issued operating licenses to 11 bitcoin exchanges.

Japan’s FSA gives official endorsement to 11 cryptocurrency exchanges
Takahiko Wada, Hideyuki Sano – Reuters
Japan’s Financial Services Agency said on Friday it has approved 11 companies as operators of cryptocurrency exchanges, in a move that sets the country apart from its neighbors which are tightening their grip on virtual money.

Cryptocurrency Exchanges Get Nod to Operate in First for Japan
By Gareth Allan and Yuki Hagiwara – Bloomberg
Total of 11 operators now registered with FSA, 17 more pending; FSA seeks to protect customers and prevent financial crimes
Japan’s financial regulator approved the registration of 11 cryptocurrency exchanges, making them the first to be allowed to operate under a law change regulating the industry.

Mainland China

Wang Qishan: China’s enforcer-in-chief; Anti-corruption czar may be persuaded to take economic post
BEIJING — With less than a month until the opening of China’s Communist Party congress, the hottest political question in Beijing concerns the fate of Wang Qishan, leader of the party’s ferocious anti-corruption campaign.

North Korean companies in China ordered to close; Chinese ministry gives businesses 120 days to shut as UN steps up sanctions
Charles Clover in Beijing, Bryan Harris in Seoul and Hudson Lockett in Hong Kong – FT
China has ordered North Korean companies operating within its borders to shut down as Beijing tightens the screws on Pyongyang amid the latest round of UN sanctions.

The perils of pyramid schemes: a dark corner of China’s economic miracle; Underground get-rich-quick scams that prey on wide swathe of population pose a risk too big for Beijing to ignore
He Huifeng – South China Morning Post
The swollen body of 23-year-old Li Wenxing, a casualty of China’s widespread, illegal pyramid sales schemes, was found in a pond on the outskirts of Tianjin on July 14, two months after he arrived in the city.

Chinese creditors find even state-backed credit protection has its limits
Shu Zhang, Matthew Miller – Reuters
Since the collapse more than two years ago of China’s second-biggest loan guarantor, the state-backed Hebei Financing Investment Guarantee Group, creditors including powerful financial institutions have been trying to get billions of dollars of their money back. They have failed.

China beefs up security on border with India; China has stepped up security on its border with India, North Korea and Myanmar ahead of the key Communist Party Congress next month.
Financial Express
China has stepped up security on its border with India, North Korea and Myanmar ahead of the key Communist Party Congress next month. The once-in-a-five-year meet is China’s most important political event. The authorities would not like to risk any event which disrupts the meeting where Chinese President Xi Jinping will get a second five-year term.

S&P Says China’s Debt Will Grow 77% by 2021, Bold Action Needed
Bloomberg News
Aid to state enterprises allows moral hazards to persist: S&P; Agency last week cut sovereign rating first time since 1999
China’s total debt could rise 77 percent to $46 trillion by 2021, and its push to rein in heavy corporate borrowing has had “only tentative results so far,” S&P Global Ratings said.

China says consumer loans can’t be used to ‘fuel property bubble’, launches probes
Reuters Staff
China has launched probes into consumer loans that are being misused for home purchases, warning they cannot be used to “fuel property bubbles”, a senior banking official said on Friday.

Hong Kong

Hong Kong Economy Most at Risk of Financial Crisis: Nomura Gauge
By Colin Simpson – Bloomberg
China is next most at-risk economy according to latest update; Emerging markets rated at higher risk than developed markets
Hong Kong is the economy most at risk of suffering a financial crisis, with China the second most vulnerable, according to the latest update of an early warning system devised by Nomura Holdings Inc.

Hong Kong regulator opens sandbox
The Securities and Futures Commission (SFC) today issued a circular announcing the launch of the SFC Regulatory Sandbox to provide a confined regulatory environment for qualified firms (Note 1) to conduct regulated activities utilising financial technologies (Fintech).

More Chinese fintech firms to eye Hong Kong IPOs, says JP Morgan; China’s fintech market could grow to US$69b in revenue by 2020, according to the bank’s projection
Laura He – South China Morning Post
More Chinese fintech firms vying to go public could choose Hong Kong as their listing venue, after the city’s first fintech IPO received a hot response from investors, and that Hong Kong has unique advantages compared with other global financial hubs, said JP Morgan’s head of global investment banking in China.

Hong Kong’s Kids Are Turning to Parents for Home Loans
By Sree Vidya Bhaktavatsalam – Bloomberg
Hong Kong’s de facto central bank is keeping a close eye on a trend that’s become increasingly apparent as home prices have soared in the world’s least affordable market: More young buyers are turning to their parents for funds.


Indonesia Stock Market May Halt Losing Streak
The Indonesia stock market has finished lower in four consecutive trading days, surrendering almost 70 points or 1.2 percent along the way. The Jakarta Composite Index now rests just above the 5,840-point plateau although it may stop the bleeding on Friday.


Ethnic women to access formal banking services
Viet Nam News
LienVietPostBank signed a memorandum of understanding (MoU) with CARE International in Việt Nam to launch a pilot programme aimed at helping ethnic minority women access formal banking services.

Vietnam court sentences to death PetroVietnam ex-chairman in mass trial
Kham Nguyen – Reuters
A Vietnam court sentenced to death a former chairman of state -run PetroVietnam on Friday after finding him guilty in the mass trial of 51 officials and bankers accused of graft and mismanagement that led to losses of $69 million.

Vietnam feels impact of 4.0 industrial revolution
VietNamNet Bridge
Three months ago, Oxford University released a report on robots taking over human jobs. One month ago, a factory in Binh Duong province laid off 90 percent of its workers because the majority of work can be undertaken by robots.

Vietnamese female entrepreneurs empowered
In Asian cultures with a strong patriarchal system, women are considered the weaker sex and caregivers, meaning that they must care for older parents, feed the family and educate children. Nowadays, many women replace their husbands as breadwinners instead of doing household chores.


Domestic migrant workers in Thailand, Malaysia ‘underpaid’
Most domestic workers, including Myanmar migrant workers, in Thailand and Malaysia are not getting even their basic salaries, Rory Mungoven, liaison officer of the International Labor Organization (ILO), said on Thursday.

Renewed Support Seen For Thai Stock Market
The Thai stock market on Thursday snapped the three-day winning streak in which it had picked up than 10 points or 0.6 percent. The Stock Exchange of Thailand now rests just above the 1,665-point plateau although it may bounce higher again on Friday.


Taiwan legislator to push for urgent ICO law after South Korean ban
Edward White – FT
A legislator in Taiwan wants regulations urgently put in place to control cryptocurrency flows after South Korea banned initial coin offerings or ICOs on Friday.

Maverick mayor shakes up Taiwan politics; Opponents fear wildly popular Ko Wen-je will use Taipei role as springboard for the presidency
Ben Bland in Taipei – FT
He has called protesting pensioners “bastards”, compared Taiwan and China to quarrelling lovers and said it is a “miracle” he has survived three years in office. But the blunt style of Ko Wen-je, the mayor of Taipei, has made him Taiwan’s most popular politician — and a possible presidential contender.

Taiwan’s private wealth per person ranked 5th highest globally
Taiwan ranked fifth in the world in 2016 in terms of net financial assets per capita, also known as private wealth per person, according to Allianz’s latest Global Wealth Report published Wednesday.

Citi shares best practices and impact of digitization to clients face digital challenges
The China Post
In order to give customers a better understanding of global corporate financial management trends and China’s financial reforms, Citi Taiwan’s Treasury and Trade Solutions held a customer seminar on Sept. 26. Swati Mitra, Global Sales Leader for Emerging Market Corporate Clients, Treasury and Trade Solutions at Citi, and Yigen Pei, Country Head of Citi Treasury and Trade Solutions in China, were invited to Taiwan to share their insights with clients. This event attracted a full house of close to 100 participants.

South Korea

South Korea Joins Cryptocurrency Crackdown; Regulator bans ‘initial coin offerings,’ will step up inspections of virtual-currency exchanges
By Gregor Stuart Hunter – WSJ
South Korea will step up inspections of virtual-currency exchanges and has banned so-called initial coin offerings, joining in a widespread cryptocurrency crackdown.

North Korea Accused of Hacking South Korean Exchanges
North Korea, a nation that has previously been accused of mining bitcoin in order to flout sanctions, is suspected to have hacked a number of bitcoin exchanges in South Korea. The country allegedly stole “100 million won ($88,100) in bitcoin from 2013 to 2015 as part of its efforts to increase the country’s hard currency,” according to reports.


Duterte’s Philippines, Still Corrupt And Less Competitive
Panos Mourdoukoutas – Forbes
Corruption is still a big problem in doing business in the Philippines. That’s according to the just published World Economic Forum Report (WEFR), which cited corruption, together with government bureaucracy and the lack of an efficient infrastructure system, as the most important problems in doing business in the Philippines.


Bursa Malaysia publicly reprimands Scanwolf Corp
New Straits Times
Bursa Malaysia Securities Bhd has reprimanded plastic extrusion manufacturer Scanwolf Corp Bhd for failing to report adjustments in its fourth quarterly report for the financial year ended June 30, 2016.


Indian Renewable Energy Development Agency (IREDA) chooses London to launch first Green Masala Bond
London Stock Exchange
Becomes first green Masala bond on London Stock Exchange’s new International Securities Market (ISM); IREDA Chairman and MD, Mr. Kuljit Singh Popli, opens London trading to celebrate the bond launch; Reinforces London’s status as most international financial centre and India’s partner of choice
London Stock Exchange today welcomes Indian Renewable Energy Development Agency’s (IREDA) first green Masala bond. The five year dated green Masala bond raised approximately $300 million (INR 19.5 billion) with a coupon of 7.125 per cent and becomes the first green Masala bond to be listed on London Stock Exchange’s International Securities Market (ISM). The green bond is certified by Climate Bonds Initiative, an international, investor-focused not-for-profit, which helps build robust and transparent assurance frameworks around green bond investment.

World’s Highest Office Yields Are in India, Knight Frank Says
By Pooja Thakur Mahrotri – Bloombrerg
Three Indian cities offer the highest yields for prime office space as a shortage of supply allows owners to push up rents, according to Knight Frank LLP.

Stampede in India’s financial capital kills at least 22; A rush hour stampede during a sudden monsoon downpour at a railway-station in India’s financial hub of Mumbai killed at least 22 people and wounded more than 30, an Indian state official said on Friday.
A rush hour stampede during a sudden monsoon downpour at a railway-station in India’s financial hub of Mumbai killed at least 22 people and wounded more than 30, an Indian state official said on Friday.

Indian markets lose sheen on economic travails, but investors keep faith
Rajesh Kumar Singh, Rafael Nam – Reuters
Rising concerns about India’s economy and the government’s fiscal discipline have sparked strong selling by foreign investors in Indian equities and sent the rupee tumbling, removing some, but not all, of the sheen from a hot emerging market play.

Morgan Stanley’s top stock picks in India consumer and financials on Sensex journey to 1 lakh
Financial Express
Morgan Stanley has been bullish on the Indian stock markets and now it expects domestic consumer and financial sector to perform well in the coming years. We take a look at 10 of Morgan Stanley’s stock picks in the two sectors.

India’s flagging economy draws dire warnings of recession
Financial Post
Prime Minister Narendra Modi came to power on a euphoric wave of promises to boost India’s economy, add millions of jobs and bring “good times” to the developing nation.

Prabhu calls for global financial architecture
Commerce and Industry Minister Suresh Prabhu has made a case for a global financial architecture to facilitate flow of funds among nations.


Australian regulators have finally made a move on initial coin offerings
The Australian Securities and Investment Commission (ASIC) has finally issued guidance to explain how “initial coin offerings” (ICOs) will be regulated.

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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.