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

Lead Stories

String of Scandals Shreds Japan’s Once-Revered Reputation
By Nao Sano and Kevin Buckland – Bloomberg
Kobe Steel falsified data on aluminum used in cars and planes; The number of improper accounting cases hit a peak in 2016
Japan’s flagship companies were once held in awe as fierce competitors that revolutionized the world’s business practices with innovations like flexible manufacturing and managerial precepts such as kaizen, or continuous improvement.
https://goo.gl/f62Gur

This exchange wants diamonds to be a new safe-haven asset
Courtney Goldsmith – City AM
A Singapore exchange has launched a new investment-grade, standardised diamond product to rival gold as a safe-haven asset.
https://goo.gl/7SeKAL

Are diamonds the new gold for rich investors?
The Star
Diamonds can at last be an investor’s best friend, the Singapore Diamond Investment Exchange (SDIX) said on Tuesday, as it launched a new standardised form of the precious stones to rival gold ingots as a safe-haven alternative to cash.
https://goo.gl/YzQ8JX

Asia-Pacific faces more damaging disaster threat, UN warns
Financial Express
Natural disasters could become more destructive in Asia-Pacific, where a person is already five times more likely to be affected than in other regions, the United Nations warned on Tuesday, urging countries to invest in resilience plans.
https://goo.gl/vEFEfW

Think big: Lessons for Thailand from Asia’s smallest nations
Curtis S Chin – The Nation
The story of Asia today remains very much one driven by its largest nations and economies. An increasingly assertive China, a slow-growing Japan, a rising India and mounting tensions from the Korean peninsula dominate the headlines. Yet, all of “Asia rising” – Thailand included – can take a lesson from some of the region’s smallest countries.
https://goo.gl/vY2fhQ

Asia’s Longest-Serving Strongman Shows Power of China’s Cash
By Blake Schmidt – Bloomberg
Cambodian government moves to dissolve main opposition party; China has become biggest investor in Cambodia over past decade
Sitting last month in the Phnom Penh villa that houses Cambodia’s main opposition party, Mu Sochua searched for a way to fight back against one of the world’s longest-serving leaders.
https://goo.gl/vuCva2

New global financial architecture takes shape
Joseph Chinyong Liow – The Straits Times
The declining influence of Western-dominated institutions such as the IMF and World Bank has led to the rise of regional alternatives like the AIIB. They will likely complement each other to provide global ‘public goods’.
https://goo.gl/Sx7mcU

Exchange News

SGX proposes changes to rules on securities trading and market practices
SGX
Singapore Exchange (SGX) is seeking public feedback on a raft of proposed changes to SGX’s rules on securities trading and market practices.
https://goo.gl/H2mPxu

JPX Monthly Headlines -September 2017
JPX
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
https://goo.gl/jgNQzf

India’s NSE chief seeks to ditch exchange’s ‘arrogant’ approach; Vikram Limaye explains how he is dealing with challenges facing his exchange
Simon Mundy in Mumbai
Vikram Limaye took charge of India’s National Stock Exchange in July at an unusually turbulent time for the country’s biggest bourse.
https://goo.gl/fKrdsS

FinTech News

An Indian state wants to use blockchain to fight land ownership fraud; The government of India’s Andhra Pradesh state has partnered with Swedish start-up ChromaWay to build its blockchain-based solution; It is estimated that $700 million is being paid in bribes at land registrars across India; ChromaWay has already piloted a blockchain project in Sweden focused on the process of buying and selling real-estate
Ryan Browne – CNBC
India’s land ownership system is apparently fraught with fraud — so one state is exploring the application of blockchain technology to make it more transparent.
https://goo.gl/xkkNcY

The Singapore FinTech Festival
Gigabit.net
The second edition of the Singapore FinTech Festival will be held in Singapore from 13 to 17 November 2017. Organised by the Monetary Authority of Singapore, in partnership with The Association of Banks in Singapore and in collaboration with SingEx Holdings, the Festival will build on the success of the inaugural edition last November, which drew more than 13,000 participants from across 60 countries.
https://goo.gl/dRszSq

Regulatory News

ASIC crackdown drives need for regtech; Advice groups need to take advantage of technology to solve compliance gaps
Sarah Kendell – Financial Observer
Advice firms should embrace the use of regulatory technology (regtech) given the corporate regulator has flagged it will be using more sophisticated data analytics techniques to proactively target firms at risk of regulatory breaches, according to Red Marker.
https://goo.gl/LXoy6M

ASIC restricts iBosses from using reduced fundraising documents
ASIC
ASIC has made a determination that iBosses Corporation Limited (iBosses) cannot use exemptions for reduced disclosure in fundraising documents for 12 months.
https://goo.gl/EN5tsj

ASIC and RBA welcome the publication of ASX BBSW Trade and Trade Reporting guidelines
ASIC
ASIC and the Reserve Bank of Australia (RBA) today welcome the publication of the ASX BBSW Trade and Trade Reporting Guidelines (ASX BBSW Guidelines).
https://goo.gl/ipQ7X9

ASIC’s client money reporting rules finalised
ASIC
ASIC has released the finalised ASIC Client Money Reporting Rules 2017 (client money rules) which, from 4 April 2018, will impose record-keeping, reconciliation and reporting obligations on Australian financial services (AFS) licensees that hold ‘derivative retail client money’ within the meaning of the Corporations Act, unless the client money relates to a derivative that is traded on a fully licensed domestic market, such as ASX 24.
https://goo.gl/vxK8hk

Emerging Asian markets question one-size-fits-all bank rules
Narayanan Somasundaram – Risk.net
The noise generated by divisions between Europe and the US over the implementation of a global bank rule tends to deflect attention from Asia, a region that could ultimately benefit from a more customised approach.
https://goo.gl/VxFFM7

Japan

An unflinching look at Tokyo’s dark side; A bestselling book gives the Japanese capital the dunking it deserves
Leo Lewis – FT
After years splashing happily in accolades, liveability awards and an unstoppable flow of aspirational youngsters from around the country, Tokyo may have received the dunking it deserves.
https://goo.gl/zqeaNX

Japan: A giant piggy bank ready to be cracked; Global banks come calling as China and Saudi Arabia close cash spigots
JUN TAMAKI and SHOTARO TANI, Nikkei
It was late September when Toronto-Dominion Bank, one of Canada’s largest financial institutions, held a lavish party at a hotel overlooking Tokyo’s Imperial Palace. The event, which drew some 200 of the city’s financial insiders, celebrated the reopening of TD’s securities business in Japan.
https://goo.gl/HVri9d

Yuriko Koike leaves opposition without candidate for Japanese PM; Tokyo governor’s decision not to stand gives Shinzo Abe an easy path to re-election
Robin Harding in Tokyo – FT
Yuriko Koike, the Tokyo governor, will not stand in Japan’s general election after nominations closed on Tuesday, as her Party of Hope struggles in opinion polls.
https://goo.gl/Zjknic

Kobe Steel scandal hits Boeing, Toyota and Nissan; Big companies scramble to check falsely certified metal supplied by Japanese company
Peter Wells and Emiko Terazono in Tokyo – FT
Boeing, Toyota, Nissan and other big companies are scrambling to check the safety of their products after it emerged they had been supplied with falsely certified metal from Kobe Steel in a deepening scandal that has dealt a fresh blow to confidence in industrial quality controls in Japan.
https://goo.gl/NdF6LP

Mainland China

Chinese firms rush to hedge as yuan swings begin to sting
Reuters
Hobbled by the yuan’s unexpected surge this year, more Chinese companies are trading currency derivatives to hedge risks, although many mainland firms remain exposed to swings in China’s increasingly volatile currency.
https://goo.gl/GkKHi8

China central bank chief calls for open finance sectorChina central bank chief calls for open finance sector
Straits Times
People’s Bank of China (PBOC) governor Zhou Xiaochuan made a fresh call to open up the country’s financial sector, and warned that reform will become more difficult if the window of opportunity is missed.
https://goo.gl/i7eVLW

IMF raises China growth forecast for 2017 to 6.8%
ChannelNewsAsia
The International Monetary Fund raised its growth forecast for China on Tuesday (Oct 10) but again warned of risks stemming from the build-up of debt in the world’s second largest economy.
https://goo.gl/V22H9J

Chinese tech groups display closer ties with Communist party; Internal committees designed to show alignment with larger national goals
Emily Feng in Beijing – FT
China’s tech sector, once reluctant to display any political affiliations, is becoming more open about ties with the ruling Communist party, on the eve of a landmark meeting where the country’s next leaders will be chosen.
https://goo.gl/FD51mi

China Airbnb rival Tujia raises $300m
Alice Woodhouse – FT
Tujia, China’s answer to Airbnb has raised $300m in its latest funding round lead by Ctrip and All-Stars Investment.
https://goo.gl/2XbgKK

China Warns U.S. That Intellectual-Property Probe Risks Trade War
By Agnel Philip and Andrew Mayeda – Bloomberg
Chinese industry official cautions against unilateral action; Executives spoke at hearing for U.S. trade investigation
The Trump administration’s probe into China’s intellectual-property practices threatens to spark a trade war between the world’s two biggest economies, according to an official representing Chinese industry.
https://goo.gl/8UFz8U

Hong Kong

How Hong Kong can maintain a competitive edge in fintech development
South China Morning Post
Kenny Shui and Jonathan Ng say Hong Kong should learn from Singapore, Australia and elsewhere to create a more helpful regulatory environment for foreign and start-up financial technology developers
https://goo.gl/kBuxNX

Hong Kong Finance Chief Warns Again of Property Risk on Fed
By Fion Li – Bloomberg
Chan tells buyers to be ‘very careful’ taking on mortgages; Comments come after his June warning of ‘dangerous situation’
Hong Kong’s Financial Secretary Paul Chan warned potential buyers to be careful buying property in the world’s most expensive housing market, as moves by the Federal Reserve to unwind its balance sheet may shrink money supply.
https://goo.gl/xAEA4p

Indonesia

Indonesia Investigating Standard Chartered Over $1.4 Billion Transfer; Singapore and Guernsey review asset moves made just before official tax data sharing program began
By Margot Patrick – WSJ
Indonesia is investigating whether dozens of citizens with trust accounts at Standard Chartered STAN -0.27% PLC owe tax after transferring $1.4 billion from Guernsey to Singapore in 2015.
https://goo.gl/N4PPAv

No Indonesian public officials linked to illicit fund transfer: Jakarta
Wahyudi Soeriaatmadja – The Straits Times
No Indonesian public officials, either from the military or elsewhere in government, were among the 81 individuals linked to the illicit transfer of US$1.4 billion (S$1.9 billion) from the English Channel island of Guernsey to Singapore, said Indonesia’s Finance Ministry.
https://goo.gl/SFdmZH

Singapore

Financial firms go big on training for local staff
Rachael Boon – Straits Times
The three Singapore banks are doing well when it comes to training local staff – that is, both citizens and permanent residents (PRs) – to fill management and other key jobs.
https://goo.gl/bCafeF

Singapore CB Wary of Subdued Inflation, Weak Labor Market
financial Tribune
T he country’s economic data may have perked up of late but the Monetary Authority of Singapore is unlikely to make its next policy move—widely seen as a tightening—at the biannual review this week, said economists.
https://goo.gl/GTv97M

JPMorgan and Singapore’s wealth fund lead $100 million investment in Silicon Valley fintech
Anna Irrera, Reuters
JPMorgan Chase & Co and Temasek Holdings have led a $100 million investment in Bill.com, a Palo Alto, California-based company that helps business digitize their payments.
https://goo.gl/f7V4cA

Vietnam

Vietnam Airlines, Air France sign co-operation agreement
The Associated Press
Vietnam’s flag carrier and Air France signed an agreement Tuesday to deepen their co-operation to tap the growing travel market between Vietnam and Europe.
https://goo.gl/RLsxbw

Thailand

Central bank declares October 26 public holiday for financial institutions
Chalarntorn Yothasmutra – English News
The Bank of Thailand has announced that October 26 is a special public holiday for financial institutions.
https://goo.gl/ftcEqQ

Taiwan

This Taiwan ETF Is a Backdoor Bet on Apple’s iPhone Suppliers
By Carolina Wilson and Tom Lagerman – Bloomberg
IShares fund holds firms that get 18% of revenue from Apple; Higher concentration of suppliers than semiconductors ETFs
What’s the best way to bet on Apple Inc.’s suppliers? Try an exchange-traded fund tracking Taiwanese stocks.
https://goo.gl/AvvuXg

South Korea

North Korea hacked war blueprint, says Seoul lawmaker; Trove of classified military documents believed to have been stolen last year
Bryan Harris in Seoul -FT
A trove of classified military documents, including the joint South Korea-US wartime operational plans for conflict with Pyongyang, was stolen by North Korean hackers, a lawmaker in Seoul said.
https://goo.gl/9G9gyt

Prospects for China, South Korea central bank FX swap renewal look positive: source
Shin-hyung Lee, Cynthia Kim – Reuters
The central banks of China and South Korea appear to be on track to extend a $56 billion currency swap deal that expires on Tuesday, a senior South Korean source said, describing its prospects as “optimistic”.
https://goo.gl/NNfXDv

Philippines

Foreign direct investments in PH drop to one-year low in July
Chrisee Dela Paz
Despite the drop, the economic team of President Rodrigo Duterte says foreign investors remain confident to do business in the Philippines
https://goo.gl/gUa77z

Malaysia

BNM: Malaysia an ideal test bed for fintech growth
Adela Megan Willy – The Edge Markets
Malaysia, with its diverse population of 31 million and growing middle class, stands as an ideal “test bed” for developing and commercialising financial technology (fintech) solutions, says Bank Negara Malaysia (BNM).
https://goo.gl/ivnKgT

India

Modi’s pursuit of black money proves drag on India’s economy; Prime minister’s anti-corruption drive seems incompatible with growth ambitions
Amy Kazmin in New Delhi – FT
For many Indians the powerful appeal of Narendra Modi, the prime minister, stemmed from his vows to tackle two issues of fierce public concern: the sluggish economy and entrenched corruption.
https://goo.gl/azCRj6

Time to Reconsider India’s Hot Run
By Anjani Trivedi – WSJ
Whether investors want to believe it or not, India’s much-touted reformist agenda is increasingly looking unrealistic. For investors who piled into its stock and bond markets this year, it is time to reassess.
https://goo.gl/9FQdzK

Mastercard sets up Innovation Lab in India
By Priyanka Sangani, ET
Mastercard today announced the launch of its first Lab in India, which will work with partners in the fintech industry to identify and experiment with future technologies. Mastercard Labs, which has been set up in Pune, is the ninth such lab for the company globally, and the second in the Asia Pacific region.
https://goo.gl/7dnUy1

Everyone is upset about India’s banking mess except NBFCs. Here’s the reason why
Shilpy Sinha, ET
When Infrastructure Development and Finance Co (IDFC) was granted universal banking licence in 2014 from among 26 applicants, it was the envy of those who missed out on the coveted prize. Three and a half years later, both investors and the managements that were not lucky enough, are smiling.
https://goo.gl/Yj3JDL

Local heroes of India’s start-up world; Young Indians are using domestic capital to launch companies that are not just US clones
Henny Sender – FT
When surveying start-ups in India, US venture capital firm Sequoia Capital uses a taxonomy that spans “clones”, “mutants” and “new species”. The first refers to copycat models, the last is original businesses. The middle, as its positioning suggests, occupies the space in between.
https://goo.gl/vDYkZ4

Australia

Australia Businesses Fail to Lift Economy
Financial Tribune
A ustralian companies are experiencing very strong business conditions but their improving profits are not strengthening the broader economy, a new survey shows.
https://goo.gl/8YXpjM

Australia at back of pack for network innovation
by Mark Eggleton – Financial Review
Australia sits at the back of the pack globally when it comes to energy innovation spend, says Andrew Dillon, interim chief executive of Energy Networks Australia.
https://goo.gl/gzQvQc

Australian alternative finance market grew by 53% in 2016: Report
MARTIN KOVACS – Smart Company
The Australian alternative finance (alt-fi) market grew by 53% in 2016, despite declines in equity crowdfunding activity in the face of regulatory uncertainty, according to a study released in September.
https://goo.gl/vnBBrM

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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.