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Asia Pacific Financial News from John Lothian News – October 25, 2017

Lead Stories

Trump’s Pearl Harbor; Could sanctions on North Korea prompt its leader to lash out militarily, as Japan did in 1941?
History might be on the verge of repeating itself — and, as is so often the case, not in a good way.

North Korea Calls US Naval Exercise Preparation for Nuclear War
North Korea’s ambassador called on the U.N. Security Council Wednesday to urgently discuss the recent U.S. joint naval exercise near the Korean peninsula, calling it preparation for a pre-emptive strike and nuclear war against his country.

Hong Kong and Singapore sign fintech deal, agree to work together on blockchain
Ryan Browne – CNBC
This photograph taken on March 4, 2016 shows the skyline of the Singapore financial business district at night.
Hong Kong and Singapore have agreed to cooperate on a cross-border trade project based on blockchain technology as part of a broader joint strategy on financial technology.

10 Fastest Growing Tourism Cities All in Asia
Financial Tribune
T he World Travel & Tourism Council has released city tourism impact data that show the world’s top 10 fastest growing tourism cities are all in Asia.

Indian state banks soar on $32bn recapitalisation plan; Shares surge after move to bolster balance sheets weakened by soured corporate loans
Simon Mundy in Mumbai – FT
Shares in some of India’s largest banks surged by more than a quarter on Wednesday in response to a $32bn government recapitalisation plan for large state-controlled lenders dogged by soured corporate loans.

How can digital finance better serve Asia’s poor?
What benefits do Asia’s poor and under-served communities stand to gain from digital finance inclusion? How can mobile money services be customised to make people’s lives better? ADB’s Shigehiro Shinozaki explores.

Banks Need to Fear Amazon’s Finance Ambitions, McKinsey Says
By Hugh Son – Bloomberg
E-commerce giants can emerge as banking rivals, report finds; Financial sector offers ‘large pool’ of revenue to upstarts
Banks around the world have spent the past few years preparing for competition from small, nimble technology startups. It turns out the real threat may be Jeff Bezos.

Exchange News

SGX reports 1Q FY2018 net profit of S$91 million
Singapore Exchange (SGX) today reported 1Q FY2018 net profit of S$90.7 million (S$83.1 million), on the back of revenues of S$204.5 million (S$190.8 million). Operating profit rose to S$106.0 million (S$97.2 million), while earnings per share increased to 8.5 cents (7.8 cents). The Board of Directors has declared an interim dividend of 5 cents (5 cents) per share,

Hong Kong’s storied stock trading hall shuts up shop
Donny Kwok – Reuters
The lights go out and screens turn blank in the trading hall of Hong Kong’s stock exchange this week, marking the end of an era for the red-carpeted, cavernous space that was home to more than a thousand floor traders in its heyday.

Colt provides connectivity between JPX and Chicago; New exchange-to-exchange service from JPX leverages Colt IQ Network for security and low latency
Automated Trader
Colt Technology Services has announced 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’.

Race for NCDEX top job hots up
The race for the top post at NCDEX, a leading agri-commodity trading bourse, is hotting up after its current MD Samir Shah said he may not continue in the role.

FinTech News

China leads Asia-Pacific peers in digital payment
China is leading its Asia-Pacific peers in digital payment, according to a report from US-based electronic payment platform PayPal.

Singapore And Hong Kong Bolster FinTech Ties With Cooperation Agreement
The Monetary Authority of Singapore (MAS) and the Hong Kong Monetary Authority (HKMA) signed an agreement to strengthen co-operation on FinTech between the two cities and foster FinTech development within the region. The Co-operation Agreement (“Agreement”) was exchanged on 25 October 2017, at the FinTech Day organised by the HKMA.

2017 Will Be Remembered As The Year Of Bitcoin
Iati Damti – Forbes
In January 2016, an anonymous user posted the following question on Quora: Does it still make any sense to buy Bitcoin in 2016? The price of Bitcoin then was below $400.

Regulatory News

China Jinmao’s Hong Kong office searched in corruption probe; Group says neither it nor its units ‘subject of investigation’ as CFO asked to assist
Don Weinland and Hudson Lockett in Hong Kong – FT
Hong Kong’s anti-corruption watchdog has searched the offices of China Jinmao Holdings, the property arm of chemicals group Sinochem, in a rare example of the local agency investigating a state Chinese group.

Investing News

China’s Stock Markets Are Calm, but Its Traders Are Restless; Many market participants see Beijing’s hand behind a long period of placid trading that has made the market more predictable, but often less profitable
The placid trading that has swept global markets this year has reached an unlikely destination: China.

Private equity-led group seals $5bn Asia renewables deal; China’s sovereign wealth fund among buyers of Singapore’s Equis Energy
Gabriel Wildau in Beijing and Don Weinland in Hong Kong – FT
A group of private equity investors led by New York-based Global Infrastructure Partners and China’s sovereign wealth fund has struck a deal to buy a portfolio of Asian wind and solar energy projects from Singapore-based Equis Pte Ltd for $3.7bn.

Asia wards off risks on rising trade linkage: ADB
Growing trade and investment linkages in Asia and the Pacific help improve the region’s economic resilience to uncertainties in the global economic and trade policy environment, according to a new Asian Development Bank (ADB) report.


Japan’s Abe Has Pulled Off a Landslide—But He’s Not as Popular as You Might Think
Prime Minister Shinzo Abe’s Liberal Democratic Party swept away the opposition in Japan’s Oct. 22 election, even as polls show a sizable chunk of the electorate doesn’t support him. His ruling coalition maintained its two-thirds majority, with the next-largest party taking only about 12 percent of the available seats.

The Kobe Steel scandal reveals Japan’s perfect storm; The country’s hermetically sealed industrial system is reaching its limits
John Gapper – FT
My passport holds a messy array of stamps, with different colours at different angles. Only one page is serenely ordered, the immigration sticker neatly aligned with the page’s edge, where a Japanese inspector carefully placed it.

Shoko Chukin falsified documents in latest Japan scandal; Probe uncovers 4,609 cases where bank fabricated data to make customers eligible for loans
Robin Harding in Tokyo – FT
A state-backed Japanese bank falsified thousands of documents in order to boost lending between 2007 and 2015, in the latest scandal to hit corporate Japan.

US and Japan meet for the second round of ‘Economic Dialogue’
Fresh Plaza
US Vice President Mike Pence and Japanese Deputy Prime Minister Taro Aso met last week for the second round of the United States-Japan Economic Dialogue.

Japan Stock Boom Seen Driven by Profits That Still Hinge on Yen
By Kurt Schussler and Keiko Ujikane – Bloomberg
Bumper crop of corporate profits expected on yen weakness; Forex boost could fade after latest results, Daiwa says
After a record-breaking surge in Japanese blue-chip stocks amid all-time high corporate profits, the question is how long can the momentum last.

Mainland China

Chinese investment banks face new headwinds; Slowing domestic bond markets have hit fee revenues for mainland groups
Laura Noonan and Don Weinland in Hong Kong and Gabriel Wildau in Shanghai – FT
Booming debt markets and extravagant trading fees made China’s investment banks the envy of many global rivals for the last few years.

Who’s who among Beijing’s new big 7
China’s ruling Communist Party on Wednesday unveiled its core decision-making body, the Politburo Standing Committee, headed by President Xi Jinping.

How Economists See China’s New Leadership Shifting the Economy
Bloomberg News
Capital Economics: Less state interference desperately needed; HSBC sees the PBOC gaining additional clout over regulation
Chinese President Xi Jinping demonstrated his grip on power Wednesday by unveiling a new leadership line-up that didn’t include a clear potential heir, after concluding a key twice-a-decade Party Congress.

Hong Kong

China Jinmao’s Hong Kong Office Searched in Corruption Probe
Bloomberg News
Company says that it isn’t the subject of the investigation; Jinmao is a state-owned builder under China’s Sinochem Group
Chinese state-backed developer China Jinmao Holdings Group Ltd. said its Hong Kong office was searched in a corruption probe.


Breaking: Indonesian Shares Close at Record High Beyond 6,000 Level
Indonesia Investments
Indonesia’s benchmark Jakarta Composite Index touched a new all-time record high on Wednesday (25/10). More importantly, the benchmark index passed beyond the psychological boundary of 6,000 points and closed 1.23 percent higher at 6,025.43 points. This great performance was driven by Indonesia’s energy and financial stocks.


Singapore: US effort to open markets may ‘come to grief’
Matthew Pennington – The Associated Press
Singapore’s prime minister has raised doubts over the Trump administration’s trade policy, saying a hasty push to get countries to open their markets may “come to grief.”

Investors Are Underestimating Global Risks, Singapore’s Central Bank Warns
By Andrea Tan and Chanyaporn Chanjaroen – Bloomberg
MAS MD comments on global growth, monetary policy in interview; Fed rate hikes have been gradual, well-absorbed by economies
Investors are underestimating risks to the global economy as they drive stock markets to record highs, Singapore’s central bank chief warned.

Singapore passport world’s ‘most powerful’, check out where India ranks
Financial Express
Singapore has the world’s “most powerful” passport, according to a global ranking topped for the first time by an Asian country with India figuring at 75th position, three notches better than its previous ranking.

Up to a dozen IPOs coming to Singapore Exchange by year-end; They may include a few Reits, preschool firm MindChamps on the mainboard, and F&B firms on Catalist
CAI HAOXIANG – Business Times
THE year 2017 might be about to end, but stock market professionals are keeping busy.


Vietnam attaches importance to capital market: Deputy PM
Deputy Prime Minister Truong Hoa Binh has stated that the Vietnamese government attaches considerable importance to developing the capital market as a way of boosting economic growth.


Five things to watch as Thailand prepares for royal funeral; Much-revered King Bhumibol will be cremated on Thursday, a year after his death
John Reed in Bangkok – FT
The late King Bhumibol Adulyadej, Thailand’s longest-serving monarch, will be cremated in Bangkok’s old quarter on Thursday, a year after his death, in a lavish ceremony laden with Hindu and Buddhist iconography and tradition.


French arms firms fined 227 mln euros in Taiwan dispute
Cyril Altmeyer and Tim Hepher – Reuters
Dassault Aviation and two other French aerospace companies said on Wednesday they had been fined a combined 227 million euros ($268 million) in Taiwan, settling what sources familiar with the case have described as a 25-year-old dispute over an arms sale.

South Korea

South Korea to Raise Minimum Wage by 55% Until 2020
Financial Tribune
South Korean workers don’t often have cause for cheer. They slog for more hours than their counterparts in any other member of the OECD, a club of mostly rich countries, apart from Mexico. Yet the worst-off, at least, will soon be far better rewarded for their toil.

The immediate threat from North Korea is in cyber space; Pyongyang has attacked bitcoin exchanges, an indication of its developing interests
Robert Hannigan – FT
In a world of instability, one reassuringly constant rule is that countries have tended to behave in cyber space much as they do in the real world. That Russia should try to undermine confidence in western democracy by its online disinformation campaign in the US and Europe, or extend its siege of Ukraine by attacking domestic power supplies and industrial control systems with cyber weapons, is entirely predictable. So too is Iran’s behaviour in destroying Saudi Aramco’s computers or attacking US banks.


Jack Ma champions ‘cashless’ Philippines; Alibaba affiliate and Ayala ramp up expansion with mobile payment service
Chinese billionaire and Alibaba Group Holding founder Jack Ma Yun called for a “cashless” Philippines on Wednesday, as affiliate Ant Financial Services Group launched a new mobile payment service.

Jack Ma tests internet in Philippines: Not good
By Ian Nicolas Cigaral –
Jack Ma participates at a United Nations climate change event. UN photo/CC
MANILA, Philippines — Chinese tech magnate Jack Ma tried to test the Philippines’ internet speed upon his arrival here, and he was not happy about the result.


Malaysia’s overseas investment in financial services is rising
By RUPA DAMODARAN – New Straits Times
KUALA LUMPUR: Malaysia recorded the highest growth in outward foreign direct investments (FDI) last year in Asia, with a marked shift into financial services sector from the primary sector (coal, oil and natural gas).


Online hiring in India registered 3% year-on-year growth in September according to data from the latest Naukri JobSpeak index.

Markets, Moody’s Applaud $32 Billion Bazooka for India Banks
By Anto Antony – Bloomberg
Government pledges record amount to banks to revive lending; State Bank of India shares jump 25%, Punjab National gains 40%
India’s government has won a resounding reception from investors and credit-rating firms for its unprecedented pledge of 2.11 trillion rupees ($32 billion) in capital for the country’s beleaguered state banks.


How Australia escaped the global financial crises of the last 25 years; AS CRISIS after crisis has rocked the world, Australia somehow escaped relatively unscathed. But that could be about to change. It’s “inevitable”.
Ben Graham –
THERE’S more to Australia than good weather and a famous laid-back lifestyle — we’ve now powered through 25 years without tasting economic recession.

Australia lax in fighting financial crime
BY KARREN VERGARA – Financial Standard
Australia’s passive response and disparate approach in combatting financial crime, particularly anti-money laundering, requires a more holistic approach according to a panel of compliance and security experts.

Teaching kids about maths using money can set them up for financial security; There are plenty of opportunities when you are out shopping to include your child in discussions about financial decisions.
Catherine Attard – Associate Professor, Mathematics Education, Western Sydney University
One of the most common complaints children have about learning maths is its lack of relevance to their lives outside school. When they fail to see the importance of maths to their current and future lives, they often lose interest.

‘Don’t be comfortable’: Treasury secretary John Fraser warns banks and homeowners
Eryk Bagshaw – The Sydney Morning Herald
Treasury secretary John Fraser has said Australian banks could face further restrictions and warned regulators should guard against excessive debt in the financial system.

Australia’s Got a Lock on Supply of the Metal Used for EV Batteries
By David Stringer – Bloomberg
Mining powerhouse to add 60% of new supply through 2022: CRU; Nation could add processing plants for higher-value exports
Ground zero in the global scramble for lithium is a small patch of northern Australia’s iron-ore rich outback, where work is accelerating to deliver the world’s next major mines to feed soaring demand from electric vehicle battery makers.

America’s Biggest Coal Miner Is Earning More in Australia
By Tim Loh – Bloomberg
Peabody’s overseas unit outperformed its larger U.S. division; “We like the internal competition”: CEO Glenn Kellow
While Peabody Energy Corp. will mine most of its coal in the U.S. this year, the St. Louis-based company’s Australian operations were the star of its third-quarter performance.

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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.