Breaking News

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

Lead Stories

Japan Stocks Are Back at 1996 High – And Still Playing Catch Up
By Sarah McDonald – Bloomberg
Japan’s Nikkei 225 Stock Average marked a milestone on Wednesday, vaulting past a 2015 peak to close at the highest level in more than two decades.
https://goo.gl/E5T1Dc

Your news about China depends on intrepid journalists whose names you’ll probably never know
Zheping Huang – Quartz
When the Dutch newspaper NRC Handelsblad announced after an inquiry that its longtime China-based correspondent had fabricated parts of his recent stories, many Chinese news assistants working for foreign correspondents saw it as a vindication.
https://goo.gl/3dAf5q

Hong Kong leader says Asian financial hub faces ‘grave’ challenges
REUTERS
In her maiden policy speech, Hong Kong’s Chief Executive Carrie Lam on Wednesday warned the city faced “grave” challenges and must develop a diversified and high value economy, unveiling a mix of housing and tax relief policies to raise competitiveness.
https://goo.gl/N9vcpg

Under Xi Jinping, China is turning back to dictatorship; For decades the debate in Beijing was about the pace of change, not the direction
Jamil Anderlini – FT
This year, a Chinese court sentenced a man to two years in prison for the apparently heinous crime of referring to President Xi Jinping as “steamed bun Xi” in private messages he sent to friends using online chat apps.
https://goo.gl/Nxm6Lc

Kobe Steel shares plunge as scandal widens; Japanese group adds steel and specialist metals to list of questionable products
Peter Wells and Emiko Terazono in Tokyo and Alice Woodhouse in Hong Kong – FT
Corporate Japan’s latest industrial scandal widened on Wednesday as Kobe Steel added two more products to the list of materials for which it may have falsified quality data.
https://goo.gl/pkC5yj

Asean banks need to raise the bar in sustainable finance
Eco-Business.com
Southeast Asia’s banks have only just started to think about their impact on society and the environment. A new report urges regulators to introduce firmer sustainable finance regulations for banks, or risk their countries’ defaulting on climate pledges.
https://goo.gl/B3EV61

Exchange News

NCDEX gets farmers’ body on board for derivative trade
Business Standard
More than 21,000 tonnes of commodities have been traded by FPOs on NCDEX platform till September this year
https://goo.gl/G61Xgw

SGX welcomes IREDA’s inaugural Green Masala bond listing
SGX
Singapore Exchange (SGX) welcomed the inaugural Green rupee-denominated or Masala bond listing of Indian Renewable Energy Development Agency Limited (IREDA), a Public Limited Government Company that provides financial support for renewable energy projects in India.
https://goo.gl/HGYaGk

Two NSE officials refute Sebi’s charges in unfair access case; Two of the 14 NSE officials who received a show cause notice from Sebi for their alleged involvement in providing unfair access to some brokers have refuted the charges
Anirudh Laskar &Jayshree P. Upadhyay – Livemint
Two of the 14 officials of the National Stock Exchange of India (NSE) who received a show cause notice from the capital markets regulator for their alleged involvement in providing unfair access to some brokers have refuted the charges.
https://goo.gl/f6Wm1i

IEX IPO subscribed 43% on Day 2; should you invest?
ETMarkets.com|
The initial public offering (IPO) of Indian Energy Exchange (IEX) got subscribed by 43 per cent on the second day of the bidding process on Tuesday.
https://goo.gl/PT1vDK

FinTech News

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

Japan Emerges as the World’s Foremost Hotbed of Bitcoin Trading
Bitcoin.com
Japan has emerged as the largest market for bitcoin trading by volume. This represents a shift from the market dominance controlled by China as a result of the Chinese government blanket banning exchange platforms. Japan, along with South Korea to some extent, now represent major hubs of crypto-finance across the globe.
https://goo.gl/i6S8RG

Morningstar Japan Starts Ratings Business for Cryptocurrencies and ICOs
Bitcoin.com
The Japanese subsidiary of Morningstar has launched a new business to provide ratings of digital currencies and initial coin offerings (ICOs). While there is no law in Japan specifically targeting ICOs, their tokens can be subject to various laws such as securities laws and consumer contract law.
https://goo.gl/TFTCiy

Regulatory News

Hong Kong regulator expands IPO probe to 15 banks and securities firms; Broader listings investigation by SFC regulator follows lawsuits against UBS and StanChart
Don Weinland in Hong Kong – FT
Hong Kong’s markets watchdog is investigating 15 banks and securities firms for “substandard work” on initial public offerings (IPOs), broadening a probe that has already shamed UBS and Standard Chartered for their role in a 2009 flotation.
https://goo.gl/vyRxxU

China appoints new top graft-busters at key financial regulators
REUTERS
China’s Communist Party has named new top officials to lead anti-corruption agencies at the country’s banking and insurance regulators as it makes final preparations for a twice-a-decade party congress later this month.
https://goo.gl/UBvXhE

Investing News

The Quick And Dirty Way To Understand Asia
Peter Pham – Forbes
A modern gold rush can be found in Asia. Investors from all over are flocking East in hopes of striking gold. But in the world’s most dynamic market, in order to sift through the rubble and find golden nuggets, you’ll first need the proper analysis tools. Models will do the trick as they can be used to spot opportunities. The right model can give you a bird’s-eye view in the land of Asian economics, making investing straightforward.
https://goo.gl/YtBC7o

Asia Dreams in Skyscrapers
By JASON M. BARR – NY Times
The skyscraper was born in the United States, but in recent years, it has grown and flourished in Asia. Countries there recognize that to be seen as a player on the global stage, it helps to have tall buildings.
https://goo.gl/NcXgY3

Japan

Why Japan Stocks Are Smashing Out New Highs Despite Scandals
By Min Jeong Lee and Eric Lam – Bloomberg
Nikkei 225 Stock Average rose to highest since 1996 Wednesday; Earnings forecast boosts and elections keeping market buoyant
Corporate scandals may be tainting Japan’s once-revered business reputation, but at least one market isn’t perturbed: equities.
https://goo.gl/3XUvsF

Kobe Steel Is Likely to See Onslaught of Lawsuits Over Fake Data
By Christie Smythe and Margaret Cronin Fisk – Bloomberg
Steel company could be sued in U.S. and Asian courts; Fallout may resemble repercussions over Takata, VW scandals
Kobe Steel Ltd.’s legal problems are just beginning in wake of the company’s disclosure that it falsified data for years about the durability of aluminum and copper used in airplanes, trains and vehicles.
https://goo.gl/ydEEt6

Mainland China

China’s Next Five Years—Squeezing the People to Feed the State; To support Communist Party rule and fend off a debt crisis, China needs to shore up state-owned companies’ weakened foundations
By Nathaniel Taplin – WSJ
China achieved its economic miracle by unleashing the entrepreneurial private sector. With President Xi Jinping poised to further consolidate power at the Communist Party’s twice-a-decade leadership shuffle kicking off Oct. 18, the narrative of the next five years is becoming clear.
https://goo.gl/A73Zy8

Is funding drying up for China’s internet finance on tighter scrutiny?
South China Morning Post
Fundraising for internet finance platforms is declining, with the amount raised in September representing a 44pc and 55pc drop from August and July respectively
https://goo.gl/WAH1fv

China’s secret aid empire uncovered
By Celia Hatton – BBC
China has a long list of state secrets – how many people it puts to death every year, and even the birthdays of its top leaders. But now, overseas researchers have uncovered another Chinese state secret: how much money Beijing gives in aid to other countries.
https://goo.gl/qF2bWY

IMF Says China Should Shift Focus to Tackling Debt, Reforms
Fran Wang – Caixinglobal.com
China must accelerate efforts to rein in credit growth and shift its focus away from short-term expansion targets toward reform in order to ensure sustainable economic development, the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) report.
https://goo.gl/jmRYGC

China to Flex Market Muscles in First Dollar Bond Since 2004
Carrie Hong and Christopher Anstey- Bloomberg
Government plans $2 billion of issuance, as soon this month; Benchmark sale is set to reduce borrowing costs for SOEs
China is moving forward with plans to issue its first sovereign bonds in dollars since 2004 in a deal that will put a symbolic seal of approval on the booming offshore Asian debt market.
https://goo.gl/tSmeud

China’s economic achievements since 18th CPC national congress
Xinhua
The National Bureau of Statistics released a series of data Tuesday on China’s economic and social development since the 18th National Congress of the Communist Party of China (CPC) held in 2012.
https://goo.gl/VU2qnz

Airbnb cancels Beijing bookings for Communist party congress; Authorities tighten grip on Chinese capital ahead of five-yearly gathering
Yuan Yang in Beijing – FT
Airbnb, the world’s biggest room-sharing platform, has cancelled its Beijing city centre bookings for the rest of October as authorities tighten their grip on the city ahead of next week’s Communist party congress.
https://goo.gl/2dZLku

UPS Steps Up Network Investment In Support Of China’s Globalization Push And Economic Modernization
The FINANCIAL
UPS on October 10 announced it has substantially upped its investment in the Chinese market by enhancing its services across 20 cities to better serve the manufacturers and exporters that will be powering the country’s growth.
https://goo.gl/anqRqr

Hong Kong

China to issue $2bn dollar-denominated sovereign bonds in Hong Kong
Hudson Lockett – FT
China’s government has announced plans to issue $2bn of dollar-denominated sovereign bonds in Hong Kong, the first such issuance in 13 years.
https://goo.gl/XrXy8Z

Hong Kong Regulator Probes Financial Firms for Shoddy IPOs; Hong Kong’s Securities and Futures Commission is also looking into suspected corporate fraud
By Julie Steinberg – WSJ
Hong Kong’s securities regulator is investigating 15 financial firms for what it called substandard work while arranging initial public offerings, a senior official said Wednesday.
https://goo.gl/U1FXy1

Singapore

Singapore’s finance, accounting professionals say they are not prepared for future job demands: Survey
Straits Times
Singapore’s finance and accounting professionals say they are not prepared for future job demands amid disruptions in the economy and lack workplace support to develop the necessary skills, according to a survey by Ernst & Young and CPA Australia.
https://goo.gl/DBNdVg

Singapore exploring use of blockchain to link National Trade Platform to trade platforms in other countries
Priyankar Bhunia – Open.gov
In a keynote address on October 9, 2017, at Global Blockchain Business Conference[1] in Vishakhapatnam (India), Mr. Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS) said that the “killer app” for DLT (Distributed Ledger Technology) is in cross-border transactions.
https://goo.gl/ZaDNtg

Here’s why Singapore financial firms are ditching offshore operations
Kiersnerr Gerwin Tacadena – IBTimes
Rising costs and worsening skills in offshore regions are increasingly pushing Singapore financial firms to bring their offshored operations back to the city-state.
https://goo.gl/PCJZ4Z

Vietnam

Vietnam’s domestic airline industry takes off; Investment in airport capacity is needed to fuel further growth
Andy Ho – FT
With a coastline as long as the US east coast, Vietnam has always presented challenges to travellers: the distance between the capital Hanoi and commercial centre Ho Chi Minh City is 1,150km, a trip that can take 38 hours by train and even longer by bus.
https://goo.gl/YhkX2N

UOB launches range of financial services for Vietnam’s small businesses
SMBWorld Asia Editors
United Overseas Bank (UOB) has launched a Business Banking service dedicated to help small businesses in Vietnam grow their business. This follows the State Bank of Vietnam’s approval for UOB’s foreign-owned subsidiary bank (FOSB) licence on 26 September 2017.
https://goo.gl/LG3jAQ

Thailand

Thailand’s Tisco bank growth meets market expecations
Reuters Staff
Thailand’s Tisco Financial Group reported a 25.8 percent jump in third-quarter earnings to 1.57 billion baht ($47.32 million), driven by the country’s expanding tourism and export sectors.
https://goo.gl/H4ysnG

Vacation in Thailand? Rules have changed, you could be jailed for doing this on beach
Financial Express
Thinking of vacationing in Thailand? Having dreams of the pristine beaches there and you having fun. Well, here is something you need o know first. Thailand government is all set to ban smoking at beaches.
https://goo.gl/sWMpNr

Taiwan

Taiwan hits Qualcomm with $773m antitrust fine
Pan Kwan Yuk – FT
Regulators in Taiwan have become the latest to slap US chipmaker Qualcomm with an antitrust fine.
https://goo.gl/beoQEW

South Korea

China and South Korea fail to extend $56bn currency swap; Diplomatic relations tense after instalment of controversial US missile shield
Song Jung-a in Seoul and Gabriel Wildau in Shanghai – FT
China and South Korea have failed to extend their $56bn currency swap deal amid diplomatic tension over Seoul’s instalment of a controversial US missile shield.
https://goo.gl/y5XKbM

Philippines

Expanding the bounty of OFW remittances
By Jeremiah M. Opiniano – Business MIrror
Chief Mate William Gaspay’s commercial ship and his nine-month contract dock annually. But his three-year-old venture, WilNor Seaweed Farm, hasn’t docked yet.
https://goo.gl/wWuMPa

Malaysia

Malaysia To Benefit From Global Economic Recovery
Malaysiandigest.com
Malaysia is well-positioned to benefit from the recovery in the global economic cycle, while the domestic market is backed by adequate monetary policy as well as a credible central bank to navigate changes faced by the market, said Wellington Management Singapore Pte Ltd vice president and investment director, Andrew Sharp-Paul.
https://goo.gl/YYTkub

India

India gains from soft power in South East Asia
By Dipanjan Roy Chaudhury, ET
China may have penetrated Southeast Asian markets on the strength of its financial muscle but India’s attempts to use its soft power to revive historical links with the region appear to be bearing fruit.
https://goo.gl/kDtMTk

India may delay implementation of Basel III norms: SBI report
Financial Express
India could slightly delay the implementation of global risk norms Basel III as the banking sector is already under stress due to demonetisation and the GST roll out, a SBI report said.
https://goo.gl/PjuJLK

We are in the throes of a structural change in financial sector: Uday Kotak, Kotak Mahindra Bank
Economic Times
Management planning for our customers involves a very high probability of a happy ending. But planning risks, in case the ending is not so good, is at the core of what we in the financial sector need to be at all points of time. I actually do believe that India is at a cusp, a cusp which has the ability of transforming us and our future to a completely different plane from what we have ever seen before.
https://goo.gl/TFZdKz

Australia

Australian financial services company to create 300 new jobs in Edinburgh with global technology centre
Elaine Ballantyne – City AM
Beginning life with some clever software on a computer in a kitchen table in the suburbs of Melbourne in the late 1970s, Computershare has since grown to employ 16,000 people and serve 125 million customers around the world.
https://goo.gl/CBUKnJ

Australia Doesn’t Have the Answers; Its pension system is the envy of the world. It shouldn’t be.
By Satyajit Das – Bloomberg
Australians make up barely 0.3 percent of the globe’s population and yet hold A$2.1 trillion ($1.63 trillion) in pension savings — the world’s fourth-largest such pool. Those assets are viewed as a measure of the country’s wealth and economic resilience, and seem to guarantee a high standard of living for Australians well into the future. Other developed nations, aging even faster than Australia and subject to fraying safety nets, have held up the system as a world-class model to fund retirement. In fact, its future looks nowhere near so bright.
https://goo.gl/v2UH1i

Bellamy’s Australia pays $66,000 fine to conclude ASIC claim
TREVOR CHAPPELL – The Mercury
LAUNCESTON-based infant milk formula supplier Bellamy’s Australia has paid a $66,000 fine after the corporate regulator alleged the company failed to properly inform the market of its financial performance in late-2016.
https://goo.gl/C1wrkM

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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.