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Asia Pacific Financial News from John Lothian News – October 17, 2017

Lead Stories

China’s Stocks, Bonds, Currency Drop in Unison Before Congress
By Richard Frost – Bloomberg
Twice-a-decade meeting due to get under way from Wednesday; History shows equities tend to fall during and after meeting
Caution is spreading through China’s financial markets before the start of a crucial Communist Party gathering.
https://goo.gl/SEvzTP

SGX launches SGX America with office opening in Chicago
SGX
Singapore Exchange (SGX) today announced that it has expanded its international footprint with the opening of SGX America in Chicago. Building on its existing international connectivity, SGX’s presence in the U.S. will enable it to better serve a growing client base in this region and meet the rising international investor appetite to access and risk manage Asian exposure.
https://goo.gl/BaZNQe

BNY Mellon and HSBC join forces with Algomi for bond liquidity; Partnership means dealers will be able to tap database of custodians on behalf of buy-side clients.
By Hayley McDowell – The Trade
BNY Mellon and HSBC have signed up to Algomi’s Honeycomb network in a bid to boost their respective clients’ access to fixed income liquidity.
https://goo.gl/iZhcve

Asia much more resilient to weather financial storms now: IMF official
HellenicShippingNews.com
Asia, the fastest-growing region in the world, has become much more resilient to weather financial storms with lessons learned from the Asian Financial Crisis 20 years ago, said a senior official at the International Monetary Fund (IMF).
https://goo.gl/AZYNWB

After reaching the brink, Asia is roaring back to life
HUGH YOUNG – Telegraph
Twenty years ago this month, the government of Indonesia signed the first of several agreements with the International Monetary Fund (IMF) that threw a financial lifeline to a country struggling to stay afloat amid the Asian crisis.
https://goo.gl/oh79Lw

Exchange News

Change of Official Website Address
JPX
In order to allow visitors to access our website more securely, Japan Exchange Group, Inc. (JPX) will be enabling Always-On SSL (AOSSL or HTTPS everywhere) as a means for responding to security risks such as falsification, wiretapping, and spoofing conducted by third parties.
https://goo.gl/nz6Tu9

TMX Group and Shenzhen Stock Exchange Sign Memorandum of Understanding
TMX
TMX Group Limited [TSX:X] (TMX Group) and the Shenzhen Stock Exchange (SZSE) are pleased to announce the execution of a non-binding Memorandum of Understanding (MoU) pursuant to which TMX Group and SZSE agree to explore opportunities for economic cooperation with a specific focus on the technology and innovation sectors, areas that are experiencing rapid growth in both Canada and China.
https://goo.gl/MRXife

FinTech News

Smart policy is driving the Asian fintech renaissance
Carlos M. Gutierrez, Jr. – Asia Times
The continued growth and development of financial technology (fintech) is deeply affecting how individuals and businesses consume financial services and how they expect to interact with financial-service providers.
https://goo.gl/cztL3R

Regulatory News

ASIC: Former banker James Shipton to replace Greg Medcraft as chairman
Peter Ryan – ABC.net.au
The Federal Government has scrambled to appoint former Goldman Sachs banker James Shipton to replace Greg Medcraft as chairman of the Australian Securities and Investments Commission (ASIC).
https://goo.gl/kJTNrf

Investing News

Asian investors pour record sums into London offices; More than 90% of commercial property deals in quarter involved overseas investors
Aime Williams in London – FT
Asian investors channelled record amounts of cash into London office deals in the third quarter of this year, as overseas cash flows rapidly into the market since the Brexit vote.
https://goo.gl/s8i7mr

Japan

Half of Japanese banks attacked by hackers: BOJ survey
Straits Times
Slightly over half of Japanese financial institutions have been exposed to cyberattack since 2015, according to a survey by the Bank of Japan (BOJ).
https://goo.gl/cyF9SG

Japan’s Mizuho combining US banking, trust banking units; Consolidation will let more staff work to expand capital markets operations
Nikkei
Mizuho Financial Group is poised to merge its American banking and trust banking units as soon as this year, consolidating duplicate functions and putting freed-up staff to work on sales.
https://goo.gl/6j7uah

Will Japan’s financial stability survive the snap election?
Katherine Denham – City AM
There seems to be no end to the tidal wave of elections at the moment.
https://goo.gl/6hD7i2

India signs pact to send interns to Japan for training
Financial Express
India today signed a memorandum of cooperation with Japan to send youngsters there as technical interns for on-the-job training for a period of three to five years.
https://goo.gl/yXVdNv

Donald Trump to meet Japanese Emperor Akihito in Tokyo; Visit will be part of Asia trip also taking in Beijing, Seoul, Manila and Vietnam – FT
Demetri Sevastopulo in Washington and Robin Harding in Tokyo
President Donald Trump will meet Japanese Emperor Akihito when he visits Japan in November as part of an Asia trip that will also take him to China, Vietnam, South Korea and the Philippines.
https://goo.gl/iy2pjT

Pence holds economic talks with Japan ahead of Trump visit
Ken Thomas – The Associated Press
Vice-President Mike Pence is meeting with Japan’s deputy prime minister on economic issues ahead of President Donald Trump’s trip to Asia next month.
https://goo.gl/xxbaMe

Mainland China

China’s party congress unlikely to unleash key economic reforms: Fitch
Reuters
China is likely to delay debt deleveraging and other reforms in the aftermath of its 19th Party Congress as policymakers focus on achievement of growth targets such as doubling 2010 GDP by 2020, Fitch Ratings said in a note on Tuesday (Oct 17).
https://goo.gl/fr9NFN

Millennials Are Helping Jack Ma’s Financing Firm Become a Debt Giant
Bloomberg News
Ant sells $23 billion of ABS backed by consumer loans in 2017; Consumer-loan backed debt needs questions addressed: Moody’s
They’ve made billions of dollars helping sell everything from iPhones to hairdryers on China’s burgeoning online shopping platforms. Now, tech giants led by Alibaba Group Holding Ltd.’s finance affiliate are making money off the loans consumers use to buy those products.
https://goo.gl/SzND4M

Exile Guo Wengui casts shadow over China’s party congress; Former insider offers glimpse into bare-knuckle politics and alleged Chinese corruption
Lucy Hornby in Beijing – FT
If anyone thought that what happens in the Chinese Communist party stays in the Chinese Communist party, a determined gadfly ensconced in New York has proven them wrong.
https://goo.gl/JWyyKX

How China’s Economic Shock Therapy is Shaking Up Commodities
Bloomberg News
The 19th Party Congress is set to start Oct. 18 in Beijing; Ongoing cuts to oversupply are likely to stay on track: Tian
China’s supply-side reforms are reverberating around commodity markets. From shutting outdated or illegal plants to tightening environmental controls, the industrial superpower is taking out capacity like never before, with implications for global supply balances and flows.
https://goo.gl/sWGFJJ

China: Some Details Revealed About New Financial Commission Ahead Of 19th Party Congress
Stratfor
Chinese Central Bank Governor Zhou Xiaochuan said the developing Financial Stability and Development Commission (FSDC) will focus on shadow banking, the asset management industry, internet financing financial holding companies, Caixin reported Oct. 17. The FSDC will be chaired by the vice premier of the People’s Republic of China in charge of the financial portfolio. The People’s Bank of China, China Banking Regulatory Commission, China Insurance Regulatory Commission and China Securities Regulatory Commission will each have one deputy head sit on the Commission. The 19th Chinese Communist Party Congress — significant in setting Chinese socio-economic policy and diplomatic course for the next several years — begins Oct. 18.
https://goo.gl/Kg6JXh

Don’t Panic: China’s Debt Crackdown May Actually Be Good for Bonds
Bloomberg News
Debt demand will rise as economy begins to feel pain: Collins; The central bank may loosen monetary policy to help growth
China’s deleveraging drive will benefit the nation’s bonds as it starts to weigh on the economy and prompts looser monetary policy, according to Fidelity International Ltd.
https://goo.gl/Y89DWd

China Has Only Taken Baby Steps to Cut Leverage, S&P Global Says
Bloomberg News
Banks reduced lending and wealth management products: S&P; Local government investment vehicles remain big borrowers
China has taken “baby steps” toward cutting leverage as lending from banks slows, but progress has been uneven as borrowing by households and the government has risen, according to S&P Global Ratings.
https://goo.gl/o7V4QY

China’s Stronger Without a Strongman; The country thrives when leaders are forced to seek consensus and new ideas.
By Michael Schuman – Bloomberg
Who will rise and fall at this week’s Communist Party congress in Beijing remains shrouded in the usual thick mist of Chinese politics. But the outcome of the twice-a-decade leadership conference is clear: President Xi Jinping will emerge with an even stronger grip on the nation. The congress will thus move China another step away from the management-by-committee that’s marked its reform period and towards something closer to one-man rule.
https://goo.gl/BhLKvc

Hong Kong

Hiding in plain sight; Why Hong Kong is a preferred spot for North Korea’s money launderers
By Joshua Berlinger, CNN
Hong Kong (CNN)Easey Commercial Building is an unassuming mid-rise office tower on Hennessy Road, an artery that runs through Hong Kong’s busy Wan Chai district. The structure sits among scenery that’s classic Hong Kong: bright lights, tall buildings, people rushing about.
https://goo.gl/p3xLfJ

Gym of Choice for Hong Kong Financial Elite Is Seeking a Buyer
By Vinicy Chan and Jonathan Browning – Bloomberg
Pure Group could be valued at up to $500 million in sale; Investors include Leonard Green, billionaire Fung brothers
Owners of Pure Group, the billionaire-backed gym chain catering to Hong Kong’s financial elite, are seeking a sale that could value the company at as much as $500 million, people with knowledge of the matter said.
https://goo.gl/2FRUak

Indonesia

Indonesia Faces Challenges in Infrastructure, Tax, Poverty
Financial Tribune
Indonesia is on track to become a trillion-dollar economy and should be the envy of Southeast Asia. Yet on some key measures, the region’s biggest economy is falling behind.
https://goo.gl/B4dBfR

Singapore

Strong family ties boon and bane to Singaporeans’ financial future: HSBC
WONG KAI YI – BusinessTimes.sg
THE majority of Singaporeans still provide their family with financial support at the expense of their own financial future, taking a toll on their finances, lifestyle and emotional well-being, says an HSBC survey on Singaporeans’ financial security.
https://goo.gl/AY7L8B

Thailand

How Thailand built Southeast Asia’s most sustainable stock exchange
Eco-Business.com
Sustainability reporting is not mandatory in Thailand—and yet Thai firms outnumber their Asean peers in the latest Dow Jones Sustainability Indices. Kesara Manchusree, head of the Thai stock exchange, tells Eco-Business how she’s pushing for sustainability to take root in one of the region’s most competitive capital markets.
https://goo.gl/CeFxLP

Thailand Denies Baht Manipulation Ahead of U.S. Currency Report
By Sunil Jagtiani – Bloomberg
Thai commerce minister says trade ties with U.S. are healthy; Country at risk of meeting U.S. criteria on unfair practices
Thailand rejected claims that it engages in unfair currency practices to gain a trade advantage, even as the nation appears close to meeting U.S. criteria on exchange-rate manipulation.
https://goo.gl/zrr9gR

Taiwan

Taiwan takes a stance on ICOs
The National Law Review
On 6 October 2017, Taiwan’s Financial Supervisory Commission chairman, Wellington Koo, attended a joint session of the Taiwanese parliament and cabinet in response to a request by legislator Jason Hsu to clarify Taiwan’s stance on cryptocurrency. During the session Koo pledged to adopt a friendlier stance to support the development of cryptocurrencies and blockchain and not follow neighbours China and South Korea who both recently banned initial coin offerings (ICOs).
https://goo.gl/gM1sGY

North Korean Hacker Group Linked to Taiwan Bank Cyberheist
By Darren Boey – Bloomberg
Attack bears “hallmarks” of Lazarus group, researchers say; About $60 million stolen from Far Eastern International Bank
Lazarus, a hacking group linked to North Korea, may have been behind this month’s theft of $60 million from Taiwan’s Far Eastern International Bank, according to BAE Systems Plc researchers.
https://goo.gl/gkgD9L

South Korea

U.S. Evacuation Drills in South Korea Heighten Fears of Military Action
By CHOE SANG-HUN – NY Times
The United States military said on Monday that it would practice evacuating noncombatant Americans out of South Korea in the event of war and other emergencies, as the two allies began a joint naval exercise amid heightened tensions with North Korea.
https://goo.gl/YvnMVV

Kim’s Nukes Are a ‘Recipe for Disaster,’ U.S. Admiral Says
By Keith Zhai and Brendan Scott – Bloomberg
China must do more to pressure Kim, U.S. commander says; Will continue to present military options on North Korea
The top U.S. military commander in the Pacific warned the situation in North Korea is a “recipe for disaster,” as the region prepares for Donald Trump’s first visit to the region as president.
https://goo.gl/ig3t6m

Philippines

IS Southeast Asia Chief Killed in Philippines
Financial Tribune
The head of the self-styled Islamic State terrorist group in Southeast Asia, who figures on the US “most wanted terrorist” list, was killed on Monday in the battle to reclaim a militant-held Philippines city, officials said.
https://goo.gl/9oYXSc

India

Indian furniture market huge opportunity for Asia: HKTDC
Economic Times
The Indian furniture market, which is expected to grow in worth to over $27 billion by 2022, represents a huge opportunity for furniture exporters across Asia, according to a report by the Hong Kong Trade Development Council (HKTDC).
https://goo.gl/LTJdzL

Google viewed as most authentic brand in India: Survey
Financial Express
Indian consumers regard Google as the most authentic brand, even though Amazon.com tops the list globally, reveal results of a new survey on Tuesday.
https://goo.gl/ShBZfo

Financial services can learn much from India’s outsourcing revolution
Alison McGregor – The Times
Think of Indian entrepreneurialism and few would blame you for seeking out Narendra Modi’s Startup India movement. With its 19-point action plan, stirring rhetoric and not inconsiderable government intervention, it is a good starting point for Scottish businesses seeking parallels and learnings.
https://goo.gl/iaUBDq

Australia

TNS Now Provides Managed Hosting in ASX’s Dynamic Australian Liquidity Centre
Business Wire
Firms seeking the fastest access to Australia’s buoyant cash equities, derivatives and commodities markets have had their options enhanced today with the announcement that Transaction Network Services (TNS) is now offering hosting and co-location services at the country’s main exchange-owned data centre.
https://goo.gl/gM8sSP

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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 MarketsWiki.com, MarketsReformWiki.com, MarketsWikiEducation.com, JohnLothianNews.com and three industry newsletters.