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Asia Pacific Financial News from John Lothian News – October 19, 2017

Lead Stories

Nasdaq, SGX in pact to woo firms interested in listing on both boards
Elzio Barreto – Reuters
(Reuters) – Singapore Exchange Ltd (SGX) (SGXL.SI) and Nasdaq Inc (NDAQ.O) said on Wednesday they were teaming up to woo fast-growing Asian tech firms interested in listing on both their exchanges, as they look to better compete for mid-sized IPOs.

CME Group and JPX Enter into Agreement to Launch Japanese Yen-Denominated TOPIX Futures Contract on CME
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, and Japan Exchange Group (JPX), Asia’s leading comprehensive exchange group, today announced the launch of Japanese Yen-denominated Tokyo Stock Price Index (TOPIX) futures contracts to begin trading on CME Globex by Q1 2018, pending all relevant regulatory review periods.

Exchange News

Introduction of “JPX-Chicago Co-Location Direct” as a new arrownet-Global service.; About JPX-Chicago Co-Location Direct
Japan Exchange Group, Inc. (JPX) has announced the launch of Japanese Yen-denominated Tokyo Stock Price Index (TOPIX) futures to begin trading on Chicago Mercantile Exchange (CME) Globex by Q1(January – March) 2018.
In accordance with this, Tokyo Stock Exchange, Inc. (TSE) decided to provide “JPX-Chicago Co-Location Direct” which enables Users to have low-latency and efficient connections between financial markets in Chicago, where major derivatives exchanges like as CME are located, and JPX Co-Locations as arrownet-Global service with the cooperation of global network carriers (hereinafter ”Partner carriers”).

Nasdaq and SGX Establish Collaborative Listings Agreement
Nasdaq Inc. (Nasdaq:NDAQ) and Singapore Exchange (SGX) today announced the signing of a collaborative agreement in a move to leverage their strengths as two of the leading listings venues in the U.S. and Asia respectively. The new agreement seeks to enhance the channels available for companies to access capital market funding and enhance their corporate profile in both markets.

Colt to provide direct connectivity for Japan Exchange Group to Chicago
Technology Services is announcing that it will provide direct connectivity between trading venues in Tokyo and Chicago for the Japan Exchange Group’s new inter-exchange service dubbed “JPX-Chicago Co-Location Direct”.

FinTech News

Chinese and Western tech giants battle for Southeast Asia; From ecommerce to cloud services, the fight is on to dominate a market of 200m online
Louise Lucas in Hong Kong – FT
When Sea Limited launched its prospectus to list on the New York Stock Exchange last month, the South East Asian ecommerce and gaming group sparked a war of words — or rather numbers — with Lazada, which disputed its rival’s claims to be the region’s top dog.

Regulatory News

The FMA and ASIC confirm trans-Tasman collaborative approach to fintech
The Financial Markets Authority (FMA) and the Australian Securities and Investments Commission (ASIC) have re-affirmed their commitment to collaboration and cooperation on the expanding opportunities in fintech and innovation.

Toshiba probed by Japan securities watchdog over results filing: source
Takahiko Wada – Reuters
Japan’s securities watchdog is investigating Toshiba Corp’s (6502.T) accounting in its latest earnings statement to see if it properly handled losses incurred by its U.S. nuclear unit, a source with knowledge of the matter said on Thursday.

HSBC, Standard Chartered Face U.K. Probe Over Gupta Ties
By Franz Wild – Bloomberg
Treasury asks law enforcement agencies to decide on action; British lawmaker raises issue following corruption reports
U.K. regulators are looking into whether HSBC Holdings Plc and Standard Chartered Plc facilitated money-laundering as a result of possible ties to South Africa’s politically powerful Gupta family.

Investing News

Nikkei marks longest win streak in nearly 30 years
Japan Times
The benchmark Nikkei average rose for the 13th straight session Thursday on the Tokyo Stock Exchange, marking its longest string of gains since February 1988, backed by strong U.S. equities.

China’s Giant Ball of Money May Be Headed Back to Stocks
By Justina Lee – Bloomberg
Stock holdings to swell by up to $1.7 trillion by end-2019: MS; China has clamped down on many popular investment channels
Property, overseas investments and shadow-banking products have all been targeted by China’s campaign to curb financial risks over the past year. What’s left?


Japan trade surplus leaps on strong exports to rest of Asia
Elaine Kurtenbach The Associated Press
Japan’s trade surplus leaped nearly 38 per cent in September from a year earlier, on strong shipments of cars, car parts and machinery to China and the U.S., according to customs data released Thursday.

Japan Braces for a Monster Storm With Typhoon Lan Closing In
By Jim Efstathiou Jr and Brian K Sullivan – Bloomberg
Seems like no one can escape nature’s wrath these days. Typhoon Lan is forecast to grow into a monster storm south of Japan before it weakens on its approach to the island nation next week. It comes on the heels of Ophelia, which brought gale-force winds to southern Ireland Monday, Maria, which devastated Puerto Rico, and Irma, Harvey and Nate, which struck the U.S. Gulf Coast or Florida. That’s not to mention two hurricanes that recently struck Mexico.

Mainland China

Zhou Warns China Should Defend Against Threat of ‘Minsky Moment’
Bloomberg News
PBOC governor warns optimism in good times can fuel tensions; Money supply growth picked up as economy expanded as forecast
People’s Bank of China Governor Zhou Xiaochuan warned Thursday against excessive optimism that could spur a sudden collapse in asset prices, adding to the caution top leaders have expressed this year as they redouble efforts to keep rising debt from derailing growth.

China’s Plan to Buy Influence and Undermine Democracy; By lavishing infrastructure dollars on illiberal governments, Beijing is supplanting American soft power.
Along a major tributary of the Mekong River in northeastern Cambodia sits the newly opened Lower Sesan II Dam hydropower plant. The 400-megawatt dam will produce badly needed electricity for the country, but at the cost of potential major ecological damage and the eviction of some 5,000 families from the area. Such consequences are unlikely to sink the fortunes of Hun Sen, Cambodia’s strongman leader who, for 32 years, has relied on the largesse of foreign governments to fund infrastructure projects: For this latest venture, he has China to thank for footing the more than $800-million bill.

China explores new international financial governance path
By Song Guoyou – Global Times
At the just-concluded annual meetings of the World Bank and the International Monetary Fund (IMF), Steven Mnuchin, US Secretary of the Treasury, made a series of requests to the two institutions that aimed to interfere with their operations.

China Propels Global Economy Through Best Performance in Decade
Bloomberg News
Goldman Sachs raises 2018 growth forecast to 6.5 percent; Asia to power 63% of global growth this year, forecasts IMF
China’s robust expansion is boosting a global economy that’s already racking up its best performance in a decade.

Chinese property boom props up Xi’s hopes for the economy; Real estate development helped put the economy in a good place but is the demand sustainable?
Tom Hancock in Hainan and Gabriel Wildau in Shanghai – FT
Ocean Flower Island is a vision of luxury, Chinese-style. A man-made archipelago off the coast of the tropical island of Hainan in the South China Sea, it will boast thousands of apartments, 28 museums and 58 hotels including one which is “7-star level” and another shaped like a European castle.

China’s Top Bank Regulator Endorses Reform of Finance Industry
By Darren Boey – Bloomberg
Country to ease ownership restrictions for foreign banks; HSBC in June approved to own majority of China securities JV
China’s top banking regulator reiterated the country’s commitment to reforming its finance industry, including easing ownership and business restrictions for foreign banks.

The human cost of China’s economic reforms
By Robin Brant – BBC
Luo Yanli is worried about the bad smell from the electric car factory over the road and what the fumes might be doing to her baby and toddler.

Hong Kong Stocks Tumble the Most This Year
By Justina Lee and Jeanny Yu – Bloomberg
Hang Seng Index sinks as much as 2.2% in late trading; Traders cite concerns from Hibor jump to Chinese deleveraging
Hong Kong shares turned sharply lower in afternoon trading, led by some of the year’s best performers, as traders cited concerns ranging from the risks of Chinese deleveraging to a surge in the city’s interbank rates.

Xi Has Punished More Officials Than the Population of San Antonio
By Keith Zhai – Bloomberg
China’s anti-corruption drive was a key pillar of President Xi Jinping’s speech to his Communist Party comrades this week, and data out today shows why.

Hong Kong

Jim Rogers-backed fintech bank ITF unveils Hong Kong headquarters, biz plan
By: Helen Burggraf – International Investment
Jim Rogers, the Singapore-based American investor known, among other things, for having started the Quantum group of funds with George Soros more than 40 years ago, this week is helping to unveil a new fintech bank in Hong Kong, called ITF, which he has invested in.


Bank Indonesia draws up rules to monitor fintech; Central bank plans legal framework to prevent ‘shadow economy’ forming
Bank Indonesia is stepping up efforts to draw up a regulatory framework for emerging financial services in the wake of a surge in online payment services.

Declassified Files Lay Bare U.S. Knowledge Of Mass Murders In Indonesia
By the end of November 1965, U.S. officials were well aware that mass murders were underway. At this point, roughly two months into an Indonesian military campaign that would ultimately kill at least half a million people, U.S. Embassy staff privately expressed no shock in reporting that thousands had already been summarily executed.

Indonesia Takes First Steps Towards a Digital Fiat Currency Solution with eCurrency
eCurrency Mint Limited (eCurrency) announced today that it has partnered with PayPro Indonesia to provide eCurrency’s digital fiat currency (DFC) solution in Indonesia. This partnership is a major step for PayPro, leading Indonesia in delivering a high-security universal digital payment instrument. Through eCurrency’s solution, PayPro’s e-money product delivers a cryptographically protected, secure instrument that ensures no data manipulation, increasing security and trust for the consumers.


Military makeover for Thailand’s hidebound state enterprises; Premier Prayuth Chan-ocha’s regime has tabled reforms to overhaul the corruption-riddled and underperforming state sector. He wouldn’t be the first to try and fail
With elections looming next year and a reversion to business as usual after a year of national mourning, Prime Minister Prayuth Chan-ocha’s coup-installed government has limited time to overhaul the country’s massive and lumbering state enterprise system.

South Korea

South Korea to promote social economy as new economic engine
Pakistan Observer
The South Korean government said Wednesday that it would promote the “social economy” sector in a bid to expand its contribution to employment and build up a social safety net.

South Korea’s SparkLabs Launches $100M Fund To Power Blockchain Startups Worldwide
Elaine Ramirez – Forbes
With Asia’s cryptocurrency space taking on a life of its own, it’s no wonder that SparkLabs Group, which started as South Korea’s first startup accelerator, is today launching a $100 million fund dedicated to blockchain and cryptocurrency innovations — double the size of SparkLabs’ $50 million Korea-focused fund launched in August.


Malaysia’s illicit financial outflows
cial flows from Malaysia have been growing rapidly for over a decade. By encouraging Malaysian corporations to invest abroad, “legitimate outflows” have also been growing rapidly with financial liberalisation.

India and Japan push for change in LNG market; Growth in US exports and new technology leave buyers with greater clout
Emiko Terazono in London – FT
India and Japan are to push jointly for greater flexibility of contracts and transparency in the Asian liquefied natural gas market in a move likely to shift the balance of power further to importers from producers.


India’s tightened consumer goods standards could hurt China imports amid diplomatic tensions over Doklam issue
Financial Express
For India’s toy retailers, who import everything from toy cars to musical phones and even robots from China, the new requirements have meant supply disruptions just ahead of the Diwali festive season.

India’s Capital Chokes on Its Mistakes; The city’s deadly smog is the result of some classic failures of governance.
By Mihir Sharma – Bloomberg
A firecracker ban won’t solve the problem. Photographer: Anshuman Poyrekar/Hindustan Times/Getty Images
For most Indians, the festival of Diwali is well worth the wait. Houses are brightly lit, boxes of sweets are exchanged — and accounts for the year are closed. The Hindu festival of lights also heralds the beginning of winter, the few months when the baked northern plains of the subcontinent become marginally more liveable.


Australian car making to end soon with GM plant closing | Financial Post
Financial Post
The Australian auto manufacturing era is about to end after more than 90 years when General Motors Co.’s last Holden sedan rolls off the production line in the industrial city of Adelaide on Friday.

Shadow banks warn on new APRA powers
by James Frost – Financial Review
New powers granted to APRA over non-bank lenders may lead to a wholesale lessening of competition as niche lenders are forced to scale back their activities and others consider exiting the sector altogether.

Australia takes the lead on fintech
Hope William-Smith – Money Management
Australian institutions are moving faster than their international counterparts in implementing effective fintech strategies, developing capabilities and investing in technology businesses, according to KPMG.

Liberty Financial reveals lending surge, rejects calls for more regulation
by James Frost – Financial Review
Liberty Financial has defended its business model against claims the non-bank lender operates in a regulatory blind spot, describing the prospect of additional oversight as over the top.

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Lothian is executive chairman and CEO of John J. Lothian & Co. and editor of the John Lothian Newsletter. He publishes,,, and three industry newsletters.