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Asia Pacific Financial News from John Lothian News – October 26, 2017

Lead Stories

At 87, a Stogie-Toting Legend Mourns the End of Trading Floors; As the Hong Kong exchange prepares to close its storied trading floor, the ‘Cigar King’ looks back
By Steven Russolillo – WSJ
When David Tung Wai visited the trading floor of Hong Kong’s stock exchange recently, he did so with the reverent sadness one shows for an elderly friend in declining health.
https://goo.gl/XBYAJg

Asia Now Has More Billionaires Than the U.S.
By Katya Kazakina and Patrick Winters – Bloomberg
One billionaire is created every three weeks in China: UBS; U.S. still has greatest amount of billionaire wealth, UBS says
The world’s wealthiest individuals are on a roll with billionaires in Asia leading the pack.
https://goo.gl/965e4D

Inside China’s secret ‘magic weapon’ for worldwide influence; Xi is quietly ramping up a Communist party department to expand Beijing’s soft power
James Kynge in London, Lucy Hornby in Beijing and Jamil Anderlini in Hong Kong – FT
On the Google map of Beijing there is an empty quarter, an urban block next to the Communist party’s leadership compound in which few of the buildings are named. At street level, the aura of anonymity is confirmed. Uniformed guards stand by grand entrances checking official cars as they come and go. But there are no identifying signs; the sole information divulged is on brass plaques that bear the street name and building numbers.
https://goo.gl/KYkYCC

‘Extraordinary elevation’: Trump kowtows to kingpin Xi; US president fawns about Chinese counterpart’s newly exalted status but experts say it is unlikely to win him favours
Tom Phillips – The Guardian
Donald Trump has saluted the “extraordinary elevation” of President Xi Jinping and compared him to a “king” on the eve of his trip to meet an exalted and emboldened leader now considered China’s most powerful since Mao.
https://goo.gl/Z3Mw1o

On 20th anniversary of Asian ‘flu,’ markets still feeling the effects
Bob Pisani – CNBC
A crisis that climaxed 20 years ago this week changed global investing.
https://goo.gl/77Vi72

Some link Asian coal futures’ decline to firm’s dominance
By Henning Gloystein and Vera Eckert – Reuters
Financial trading of thermal coal has virtually ceased in Asia as a result of the woes at one major trading house and the growing dominance of another, despite the region being by far the world’s biggest consumer of the fuel.
https://goo.gl/RvFq1M

Exchange News

Bursa Malaysia Launches Real Estate Investment Trust Index – Latest Addition To Bursa Malaysia’s In-House Calculated Sectoral Index
Mondovisione
Bursa Malaysia Securities Berhad (“Bursa Malaysia” or “The Exchange”) today launched the Real Estate Investment Trust (“REIT”) Index, the Exchange’s 11th in-house calculated index. The REIT Index, which will track all listed REITs on Bursa Malaysia, is aimed at increasing the profile of these REITs and serves as a benchmark to gauge their overall performance.
https://goo.gl/3rYV14

Revisions to Trading Rules in Connection with Shortening of Stock Settlement Cycle
JPX
Tokyo Stock Exchange, Inc., Osaka Exchange, Inc., Nagoya Stock Exchange, Inc., Fukuoka Stock Exchange, Sapporo Securities Exchange, SBI Japannext Co., Ltd., and Chi-X Japan Limited have decided to shorten the stock trading settlement cycle from T+3 to T+2. This decision was made in recognition of the urgency and importance of realizing a secure and efficient securities settlement system for enhancing the international competitiveness of Japan’s securities market.
https://goo.gl/NXXhbi

SGX Catalist celebrates a decade of supporting business growth
SGX
Singapore Exchange (SGX) today celebrates the 10th anniversary of Catalist, its sponsor-supervised board for growth companies.
https://goo.gl/L2ZjWh

HKEX to Introduce its Iron Ore Futures on 13 November
HKEX
HKEX’s first ferrous metal product; Screen-traded on an exchange for maximum transparency, efficiency and convenience; 100 per cent Trading Fee waiver and Commission Levy exemption in first six months
Hong Kong Exchanges and Clearing Limited (HKEX) will introduce its cash-settled TSI Iron Ore Fines 62 per cent Fe CFR China Futures (Iron Ore Futures), its first ferrous metal product, on Monday, 13 November 2017.
https://goo.gl/LeR58Y

FinTech News

Multi-asset push in Asia driving fintech pace
Asian nvestor
As asset managers in Asia seek to enhance their multi-asset expertise, technological innovation on the area looks set to keep up with the growth.
https://goo.gl/kPDGvi

Asian Fintech Hub Looks West
Finews.asia
Not content with running the largest financial technology hub in Asia, the Singapore based operator is now eyeing the big apple.
https://goo.gl/CvtrB4

Japan’s incubate fund backs fintech startup Olly-credit
By Taslima Khan, ET
Japan’s Incubate Fund has invested an undisclosed amount in Delhi based startup Olly-Credit, a fintech startup that offers micro credit cards with a dynamic credit limit of upto Rs 20,000. This round of funding has also been contributed by Sandesh Kirkire, Former CEO of Kotak MahindraBSE 0.90 % Asset Management Company and Yogesh Chaudhary, Director, Jaipur Rugs.
https://goo.gl/hYxwNB

Regulatory News

ASIC’s 2016–17 Annual Report tabled
ASIC
ASIC’s Annual Report for the 2016–17 financial year has been tabled today, Thursday, 26 October 2017, in the Australian Parliament.
https://goo.gl/2o92U9

ASIC overhauls funds management guidance
ASIC
ASIC has released a suite of new and updated guidance for the funds management industry for consultation.
https://goo.gl/hKYx7C

Investing News

This Top Hedge Fund Is Betting Against Commodities, China Debt
Bloomberg News
Congrong’s Lu sees efforts to curb capacity slowing down; Fund is long on some stocks, including consumer supply chain
Accelerating Chinese inflation will derail a global rally in commodities and deepen a rout in the nation’s bonds, according to a top-performing macro fund manager.
https://goo.gl/v775Ly

China’s Bond Strategists Brace for 10-Year Yields Rising to 4%
Bloomberg News
Benchmark debt yield crosses 3.8% first time since 2014; Market very fragile, sensitive to bad news: China Merchants
China’s sovereign bonds may drop further as the nation extends its campaign against excessive borrowing, driving 10-year yields to 4 percent and beyond, according to analysts and economists.
https://goo.gl/rcpyia

Japan

Japan Maintains Recovery on Track
Financial Tribune
Japan’s government maintained its moderately optimistic view on economic growth in October, indicating that a recovery remains on track due to increased consumer spending and capital expenditure.
https://goo.gl/rb2pjx

Japan trade minister returns salary over shady loan scandal
The Associated Press
Japan’s trade minister says he is returning two months of his salary after a government-backed lender reported $2.3 billion in shady loans.
https://goo.gl/HrFXHf

Deutsche Bank to relaunch property lending in Japan
Junko Fujita – Reuters
Deutsche Bank AG is relaunching its real estate lending business in Japan, after scaling it down post the 2008 financial crisis, as it looks to tap into the nation’s tourism boom that could grow even bigger if casinos are built. The bank, which also underwrites, sells and trades stocks and bonds in Japan, was one of the most active arrangers for commercial mortgage-backed securities in Japan at the top of the property bubble before the global market crash nine years ago.
https://goo.gl/AT9GTw

Abe demands 3% pay rise to drive Japan’s economy; Election win emboldens PM to call for private sector wage deals to hit specific target
Robin Harding in Tokyo – FT
Shinzo Abe has demanded Japanese companies lift pay by three per cent next year as he uses his big victory in last week’s election to intensify his push to boost the country’s economy.
https://goo.gl/D8J9hV

Abandoned land in Japan will be the size of Austria by 2040
Isabella Steger – Quartz
Unclaimed land and “ghost homes” can be found all over Japan, thanks to the country’s dwindling population.
https://goo.gl/QTyjsU

Kobe Steel escapes recalls in cheating scandal — but 88 customers still have to report
YUKA OBAYASHI AND TAIGA URANAKA – Business Day
Kobe Steel said on Thursday that 88 of its customers had yet to confirm its products were safe in the light of widespread tampering of specifications, but it has not received any requests for recalls.
https://goo.gl/DVxbMY

Mainland China

China sells first dollar bond in more than a decade; Landmark sale comes in same week as Communist party congress
Gabriel Wildau in Shanghai – FT
China sold its first bond in dollars for more than a decade in a move the government hopes will lower borrowing costs for the country’s companies.
https://goo.gl/oYo52V

China says it is in talks with Tesla to build factory in Shanghai
Charles Clover, Sherry Fei Ju – FT
China’s Ministry of Commerce confirmed it was in talks with Tesla to build a factory in the Shanghai area. The US electric vehicle maker has previously said it was seeking to build a plant, and hoping to reach an agreement by the year-end.
https://goo.gl/5D2oJg

Chinese party official says Beijing will not set target to double GDP from 2021
Reuters
China will not set a target to double gross domestic product (GDP) from 2021, a senior Communist Party official said on Thursday, as top leaders look to high-quality growth in the long term.
https://goo.gl/oQ7PwY

Xi Jinping tightens his grip on China’s economic reins; Longtime adviser Liu He rises to prominence as Premier Li fades into background
ISSAKU HARADA, Nikkei
Chinese President Xi Jinping’s consolidation of power in his second term looks set to extend to the economy, with the elevation of a trusted economic adviser to the Politburo.
https://goo.gl/wSbDdS

China’s Global Ambitions Could Split the World Economy; Xi Jinping is quickly creating an international ecosystem of his own—and that may not be good for companies.
By Michael Schuman – Bloomberg
After the fall of the Berlin Wall, many economists and policymakers assumed the world would become one happy, prosperous economy. Aided by the spread of capitalism and technology, countries would be increasingly knit together by trade, finance, and the internet. There would, of course, be the occasional setback—such as the 2008 financial crisis. But ultimately the forces of globalization would prove irresistible and ever-tighter integration inevitable.
https://goo.gl/1VU9LK

Venezuelan reality puts China’s superpower dreams to the test; China’s President Xi Jinping is still extolling the country’s commitment to globalization, while some western powers are stepping back
Joe Chidley – Financial Post
I don’t know that a 203-minute speech is really anybody’s idea of a good time — it’s certainly not mine. Thankfully, for those of us who (unlike more than 2,000 audience members and hordes of Chinese schoolchildren) didn’t have to sit through Xi Jinping’s address to the 19th National Congress of the Communist Party of China, the takeaway is simple: Xi is in charge, and his vision of what China is and will become will hold sway at least until 2022, when the next Congress will be held.
https://goo.gl/jZGjFk

Asian Rich List Swells on Billionaire Boom in China
By Leng Cheng – Caixinglobal.com
The Chinese mainland added an average of two new billionaires to its super-rich list every week last year, according to new report, helping Asia replace the U.S. as the world’s most fertile cradle for individual wealth.
https://goo.gl/Q8NsAe

China Tells Global Companies to Start Taking Care of Workers
Bloomberg News
China to focus on rising living standards and cleaner skies; Starbucks insures parents of workers, Tesla eyes China plant
Chinese President Xi Jinping emerged from this week’s Communist Party Congress radiating more power than a supernova. He also may have shifted the corporate terrain by presenting a new economic vision in which rising living standards take primacy over high-speed growth.
https://goo.gl/51Zv1H

Investors Are Lapping Up China’s New Dollar Bonds
By Carrie Hong – Bloomberg
Ten-year bond priced 25 basis points over Treasuries; Helps set benchmark for foreign currency bonds from China
China sold its first sovereign dollar bonds since 2004 following a week when Chinese leaders in Beijing outlined a greater role for the nation on the world stage.
https://goo.gl/o2ACn1

Hong Kong

Meeting held to discuss financial cooperation between China’s Hong Kong, Guangdong province
Xinhua
The Expert Group on Hong Kong-Guangdong Financial Cooperation held its ninth meeting in Foshan city, South China’s Guangdong province on Wednesday, the Hong Kong Special Administrative Region government said.
https://goo.gl/p8u542

Hong Kong’s storied stock trading hall closes 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.
https://goo.gl/rZAF9v

Blockchain To Link Hong Kong, Singapore Trade
ByPYMNTS
Hong Kong and Singapore have reached an agreement to link their perspective trade finance platforms using blockchain technology, according to news from Reuters on Wednesday (Oct. 25).
https://goo.gl/PyPgjB

Indonesia

Indonesian fireworks factory explosion kills dozens
Yahoo News
An explosion and inferno at a fireworks factory near the Indonesian capital on Thursday killed at least 47 people, most of them female workers, and injured dozens, police said.
https://goo.gl/viX3vN

Singapore

AI firm Squirro lands in Singapore
Finextra
Squirro, the AI-driven context intelligence and data insights solution provider, is opening its first office in Asia, looking to use the new Singapore office as a base from which to target other countries in the Asia-Pacific (APAC) region.
https://goo.gl/7ewJon

Tough, but not impossible to retire happy in Singapore
Romesh Navaratnarajah – PropertyGuru.com
A 2016 survey found that 82 percent of Singaporeans are worried about growing old.
Most Singaporeans are worried about growing old and maintaining their standard of living once they stop working. But experts point out that starting early to save for retirement and investing wisely are key to building a nest egg.
https://goo.gl/73AkbV

This robo advisory platform aims to make investments easy and simple; Smartly has a series of articles, videos, and quizzes to boost financial literacy among its users.
SRB.com.sg
Singapore-based Estonian entrepreneurs Artur Luhaäär and Keir Veskiväli aimed to make investing easy with a digital solution that provides high quality financial advice and promises full transparency and low fees. Built to utilise AI-drive software and targeted for Gen Y users, Smartly is a robo-advisory platform that can optimise asset allocation, automate tax-loss harvesting, and offer real-time analytics at a much cheaper price than the average cost for financial advisors. Smartly helps users customise their portfolios through smart algorithms that make investing simple and accessible.
https://goo.gl/ZJhydz

Vietnam

Vietnam’s Biggest-Ever Initial Public Offering Prices at Top End
By Andrea Tan and Crystal Tse – Bloomberg
Vincom Retail’s investors to raise $709 million in share sale; Country’s benchmark stock index hits highest level since 2008
Vincom Retail JSC’s existing investors raised 16.1 trillion dong ($709 million) after pricing an initial public offering of the Vietnamese mall operator at the top end of a marketed range.
https://goo.gl/TUKdse

Taiwan

First Financial quiet on Ching Fu loan default
By Crystal Hsu, Huang Liang-chieh, Aaron Tu and Jonathan Chin – Taipei Times
State-run First Financial Holding Co (第一金控) yesterday refused to say whether chairman Joseph Tsai (蔡慶年) has offered to resign over a troubled syndicated loan, saying that losses could be minimized if the Ministry of National Defense presses ahead with a project to build minesweepers.
https://goo.gl/6aPbW9

Taiwan Says Bitcoin Should Be Added To AML Alert System
PYMNTS
Taiwan is the latest country to make comments about bitcoin regulation, according to news from Reuters.
Governor Perng Fai-nan of Taiwan’s Central Bank said on Wednesday (Oct. 25) that the cryptocurrency bitcoin should be added to the notification system in the country in order to prevent money laundering. He made the comments when answering questions from lawmakers, reported Reuters.
https://goo.gl/CPM4XZ

Indonesia arrests Taiwanese fugitive
By Jason Pan -Taipei Times
Officials yesterday said that Taiwanese fugitive Chen Hsian-ming (陳宣銘) has been detained in Jakarta, while efforts are under way to aid an investigation into a multibillion-dollar investment fraud case involving him.
https://goo.gl/ygYyuA

South Korea

Soaring household debt threatens South Korean recovery; Seoul clamps down on speculation in overheated real estate market
SOTARO SUZUKI, Nikkei
Though South Korea’s economy is growing beyond expectations on the back of a thriving chip industry, swelling household debt poses risks to the precarious recovery.
https://goo.gl/2M8QzB

South Korea economy posts fastest growth in seven years, brushes off geopolitical tensions
Cynthia Kim, Dahee Kim – Reuters
South Korea’s economy clocked its fastest growth in seven years last quarter, as global demand for the country’s electronics more than offset the impact of regional geopolitical strains on trade and boosted expectations for an imminent interest rate rise.
https://goo.gl/baWrqc

Philippines

Insurer, volunteer partner widen financial literacy program
By BusinessMirror
Manulife Philippines has partnered with volunteer organization Hands On Manila, (HOM) to launch a financial-literacy program for public school students dubbed as “Peso Smart.”
https://goo.gl/murqWZ

Malaysia

Ringgit doing well? Don’t be ridiculous, Pua tells Najib
FMT Reporters
DAP’s Tony Pua has criticised Prime Minister Najib Razak for trying to hoodwink the people into thinking that the performance of the ringgit, increasing in value by 5.9%, against the US dollar is worthy of praise.
https://goo.gl/pcqMcU

Malaysia one of the most innovative market in the Islamic finance, says Fitch Ratings
Surin Murugiah – TheEdgeMarkets
Malaysia is the most standardised market in the Islamic finance community and remains one of the most innovative, according to Fitch Ratings.
https://goo.gl/PhBKex

India

India, UAE compliment each other in areas of business growth
Financial Express
India and the UAE compliment each other in areas of business growth and the private sectors are ready to support the two governments, a top company executive has said here.
https://goo.gl/zFiECf

India emerges as biggest source for digital talent: Survey
Financial Express
India has highest proportion of digital talent with 76 per cent among the countries surveyed, compared to the global average of 56 per cent, according to a survey.
https://goo.gl/Bmw85c

India’s ailing banks need more than a bailout; India has long been faced with a slow-motion bank crisis.
By: Bloomberg
India has long been faced with a slow-motion bank crisis. In particular, the state-controlled institutions that dominate the sector have a bad-loan ratio that’s almost twice as bad as their private counterparts. At last count, non-performing assets made up more than 10 percent of banks’ advances, and were growing ever faster. Naturally, banks faced with this burden aren’t exactly eager to lend, so credit growth to the private sector has hit historic, multi-decade lows. Set against this, the central government’s plan to recapitalize the banks it owns has long been considered laughably small — just $1.5 billion was set aside in the last federal budget.
https://goo.gl/CVpbAp

BSE-Ebix to deploy an insurance distribution exchange platform
ET Online
India’s leading stock exchange BSE and the world’s largest insurance exchange Ebix Inc. (NASDAQ: EBIX) announced today that they have signed a memorandum of understanding (MoU) to set up a joint venture to develop an insurance distribution network in India.
https://goo.gl/z3qXb6

Why India Is Pumping $32 Billion Into State Banks
By Anirban Nag – Bloomberg
India’s struggling state-run banks are getting state aid. Call it a recapitalization, call it a bailout, call it what you like, the government is injecting 2.11 trillion rupees ($32 billion) over the next two years. The move is part of Prime Minister Narendra Modi’s goal to help lenders meet tighter capital-reserve requirements, as slower economic growth erodes borrowers’ ability to repay loans. Soured debt is now the highest since 2000, hampering credit expansion that’s needed to spur Asia’s third-largest economy.
https://goo.gl/Pjfmqy

Australia

It wasn’t just financial markets that moved on Australia’s weak inflation report
DAVID SCUTT – Business Insider Australia
Outside of higher electricity and gas prices, Australian inflationary pressures were nowhere to be seen in the September quarter.
https://goo.gl/aEcR2R

Young Rich List 2017: Australia’s Top 100 wealthiest self-made citizens; AUSTRALIA’S top 100 wealthiest self-made citizens aged 40 and under are worth a record $13.2 billion. Who made the rich list?
news.com.au
THE 2017 Young Rich List has revealed Australia’s top 100 wealthiest self-made citizens aged 40 and under are worth a record $13.2 billion and counting.
https://goo.gl/Kfux9R

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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.