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Asia Pacific Financial News from John Lothian News – October 13, 2017

Lead Stories

Southeast Asian Stock Markets Quietly Kill Their Trading Link
By Andrea Tan – Bloomberg
A system that connected stock markets in Malaysia, Singapore and Thailand has closed down, five years after its high-profile debut.
https://goo.gl/XJS1Mm

Hong Kong Exchange Plans to Seek Trading Tax Cut, Source Says
By Benjamin Robertson – Bloomberg
Any change might boost algorithmic trading in equity market; New government seen as supportive to financial services
Hong Kong’s exchange operator is considering asking the government to remove or reduce a trading tax on stock transactions, as part of a review of the levy, according to a person familiar with the bourse’s thinking.
https://goo.gl/zPbYNK

FIA Japan Newsletter October 2017 Edition Released
FIA Japan
Futures Industry Association of Japan has released newsletter October 2017 edition. please access the following URL.
https://goo.gl/hwx9oN

Asia Will Hold Global Growth Crown for Next Decade at Least: Q&A
By Enda Curran and Ye Xie – Bloomberg
Region will remain biggest contributor to global GDP growth; Overall share of GDP growth may fall as other regions expand
Asia will remain the world economy’s powerhouse for the next decade even as other regions pick up speed, according to Changyong Rhee, the Asia-Pacific director at the International Monetary Fund.
https://goo.gl/N1eQMC

San Francisco’s Air Quality Matches Beijing’s
By Caroline Chen – Bloomberg
Air quality in San Francisco sank to the level of smog-choked Beijing this week, as soot from more than a dozen wildfires in California’s wine country blanketed the Bay Area.
https://goo.gl/vuqnzK

Goldman’s Call Turns Cathay Into Hong Kong’s Hottest Stock
By Richard Frost – Bloomberg
Cathay Pacific Airways Ltd. is winning back stock investors as the carrier seeks to slash costs after its worst loss in more than 20 years. Having a friend in Goldman Sachs Group Inc. doesn’t hurt, either.
https://goo.gl/SwqCHD

FinTech News

Fintech stars luring away Bank of Japan high-flyers; Central bank faces tougher fight for talent as competition intensifies
YUI NAKAMURA, Nikkei
Former Bank of Japan officials are in high demand throughout the country’s financial industry, including banks and brokerages, as well as academia. Their expertise and experience are big assets for their new employers.
https://goo.gl/7FJ3eF

Regulatory News

Meet the New Stock Market Regulators: Marx and Mao; The chief of China’s securities regulator urges his fellow regulators to revisit classic Communist texts
WSJ
Karl Marx and Mao Zedong aren’t normally top of the reading pile for stock market regulators. They are in China.
https://goo.gl/Xs5DZj

Queensland financial adviser banned for failing to act in clients’ best interests
ASIC
The Australian Securities and Investments Commission (ASIC) has banned financial adviser Drew Grosskreutz from providing financial services for three years.
https://goo.gl/9UwHBf

HK regulator drops lawsuit against StanChart, UBS over 2009 IPO – sources
Sumeet Chatterjee, Elzio Barreto – Reuters
Hong Kong’s securities regulator has dropped a lawsuit against Standard Chartered Plc (STAN.L) and UBS Group AG (UBSG.S) over their roles in the 2009 IPO of timber company China Forestry Holdings Co Ltd, two people with knowledge of the matter said.
https://goo.gl/FCjjjY

Investing News

Asia’s Worst-Performing Currency Last Month to Weaken Further, Says Mizuho
By Subhadip Sircar – Bloomberg
Indian currency’s ‘real-yield allure’ is intact, Varathan says; Bloomberg survey median puts rupee at 64.50/dollar at end-2017
India’s rupee, the worst-performing currency in Asia last month, is likely to weaken further as higher U.S. interest rates boost the dollar, according to Mizuho Bank Ltd.
https://goo.gl/4oGJa9

Japan

Japan Inc. Scandals Build a Case for Corporate Reform; Bureaucrats, of all people, are leading the way in shaking up the country’s hidebound companies.
By Noah Smith – Bloomberg
Another big scandal is rocking corporate Japan. This time it’s Kobe Steel Ltd., a major producer, which has confessed to faking data on the quality of its materials. Everything from bullet trains to cars to U.S.-made airliners could be affected. It’s doubtful that the scandal will wreak lasting damage on Japan’s reputation for top-notch manufacturing quality — after all, every country’s industrial giants suffer this sort of debacle from time to time. But Kobe Steel does show that Japanese companies need better corporate governance. Along with recent accounting scandals and another cover-up at Toyota Motor Corp., as well as falsified data at airbag maker Takata Corp., the incident shows that Japanese companies need to work harder to catch these problems earlier, instead of just apologizing after it’s too late.
https://goo.gl/Nb3PNT

Shoko Chukin probe finds fraud pervasive
Jiji Press
An in-house investigation into fraudulent lending by Japan’s Shoko Chukin Bank has found that almost all of the government-affiliated lender’s 92 branches across the country were involved in the malpractice, informed sources said Friday.
https://goo.gl/EKgPZ6

Osaka Is Japan’s New Tourist Hot Spot for Asian Visitors; Tourists from China and South Korea drive the boom
By Masahiro Hidaka – Bloomberg
More Asians are holidaying in Osaka as Japan’s second city benefits from a countrywide tourism boom. Asian visitors to the regional Kansai airport now outrank those at the Narita hub near Tokyo, thanks in part to increased flights by Chinese and South Korean low-cost airlines. Osaka is trying to appeal to even more tourists — it’s looking to host the country’s first casino resort, when they’re legalized in Japan.
https://goo.gl/ZivPFv

Mainland China

Why China’s Debt Risk Is Misunderstood; BNP Paribas’ Chi Lo says the rise in mortgage loans is not a new debt bomb.
By CHI LO – Barron’s
Further to my recent argument that the debate on China’s debt risk had been partial (by focusing predominately on the liability side of the economic balance sheet and missing the asset side that has positive growth implications from debt accumulation), here is another side of the debate that the market has missed – financial deepening. This refers to a process that increases the provision of financial services to economic agents in the system at any given level of GDP. It includes the development of financial markets and an increase in the number of financial institutions providing diversity in financial instruments.
https://goo.gl/y3JYeF

Great Firewall of China
By Bloomberg News
So much for the lofty goals of the internet, breaking down information barriers and fomenting the free flow of ideas across the globe. China’s online population of 731 million gets a highly restricted internet, one that doesn’t include access to Google, Facebook, YouTube or the New York Times. There’s little coverage of the 1989 student protests in Tiananmen Square. Even Winnie the Pooh got temporarily banned. China is able to control such a vast ocean of content through the largest system of censorship in the world, aptly known as the Great Firewall of China. It’s a joint effort between government censors and technology and telecommunications companies that are compelled to enforce the state’s rules. The stakes go beyond China, which is setting an example that other authoritarian countries can imitate.
https://goo.gl/P3q8qa

Qualcomm Seeks China iPhone Ban, Escalating Apple Legal Fight
By Ian King – Bloomberg
Chipmaker files patent suit against its customer in China; Suit will seek ban of sale, manufacturing of offending devices
Qualcomm Inc. filed lawsuits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple Inc. so far in a sprawling and bitter legal fight.
https://goo.gl/eqDJp1

Hong Kong

Hong Kong Slaps Banker With Ban for Mobile Phone, WeChat Use
By Carrie Hong – Bloomberg
Hong Kong’s securities watchdog banned a brokerage employee from the industry for four months for the manner in which he used his mobile phone and Tencent Holdings Ltd.’s WeChat to take orders from clients.
https://goo.gl/qvHwQd

‘Enigma Network’ Crash Spurs Hong Kong’s Largest Financial Raid
By Benjamin Robertson – Bloomberg
Multiple premises recently searched by 136 officers, SFC says; Raid follows June tumble in interlinked Hong Kong stocks
The largest ever raid by Hong Kong’s securities regulator was linked to the multi-billion dollar plunge in nearly three dozen small-cap stocks in June, according to a person familiar with the situation.
https://goo.gl/oEzZSX

Hong Kong unveils new bill for more resilient banking system
Xinhua|
The Hong Kong Special Administrative Region (SAR) government unveiled a new bill on Friday to strengthen the resilience of Hong Kong’s banking system in accordance with international regulatory standards.
https://goo.gl/xecGR9

Nine Hong Kong democracy activists found guilty of criminal contempt
Venus Wu – Reuters
A Hong Kong court on Friday found nine pro-democracy activists guilty of criminal contempt of court for refusing to leave a protest site during the 2014 “Occupy” demonstrations which brought major roads in the city to a halt.
https://goo.gl/aY3nrH

Indonesia

IPOs on Indonesia Stock Exchange: Malacca Trust Wuwungan lnsurance
Indonesia-Investments
On Wednesday (11/10) Malacca Trust Wuwungan lnsurance became the 26th company that listed on the Indonesia Stock Exchange in 2017. The company, subsidiary of Singapore-based Malacca Trust Limited and linked to the family of former president Bacharuddin Jusuf Habibie, is one of the oldest insurance companies in Indonesia (established in 1952).
https://goo.gl/cppAVq

Thailand

Thailand to celebrate Lantern Festival on November 3
Financial Express
Also called Lantern Festival or Festival of Floating Bowls, it is a traditional Thai cultural festival of lanterns, wishes and lights that will take place on November 3 this year
https://goo.gl/vbzkcd

South Korea

South Korea, China extend currency deal despite missile row
By YOUKYUNG LEE, AP
South Korea and China have agreed to extend their currency swap deal, Seoul said Friday, easing concerns the deal would fall through due to tensions over a U.S. missile defense system.
https://goo.gl/gnB7Y8

Malaysia

Securities Commission Malaysia: Malaysians Should Start Planning And Investing For The Future
Mondovisione
InvestSmart® Fest 2017, an initiative by Securities Commission Malaysia (SC), was officiated by Yang Berhormat Brig. Jeneral Khairy Jamaluddin Abu Bakar, Minister of Youth and Sports Malaysia at the Kuala Lumpur Convention Centre this morning.
https://goo.gl/WBp6YK

India

India should prioritise public banking sector reforms: IMF
Financial Express
India must prioritise implementation of public banking sector structural reforms, enhance the efficiency of labour and product markets, and modernise agriculture sector to accelerate its growth, the IMF said today.
https://goo.gl/4DiyCm

 

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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.