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Asia Pacific Financial News from John Lothian News – October 27, 2017

Lead Stories

Selfies and ceremony as the Hong Kong stock exchange’s floor trading hall closes for good; About 1,400 traders join the city’s Chief Executive Carrie Lam to bid farewell to the hall and to mark the end of 126 years of floor trading history
Enoch Yiu – South China Morning Post
Stock traders past and present, many wearing the traditional red jacket, joined government leaders at the trading hall of the Hong Kong stock exchange on Friday for its official closing ceremony, bringing down the curtain on 126 years of floor trading in the city.
https://goo.gl/9JRU9N

Trump’s business envoy to Asia includes energy firms, but not tech or finance companies
Michael Martina, Reuters
Most of the 29 companies that have been approved to travel on a trade mission visiting China starting November 8 are US energy and commodity firms; Major tech and financial companies are not on the list; President Donald Trump is planning a 12-day tour in Asia to meet with regional leaders.
BEIJING (Reuters) – U.S. energy and commodities firms will make up a major part of a business delegation visiting Beijing at the same time as U.S. President Donald Trump goes to China in November, according to an initial list seen by Reuters.
https://goo.gl/U1gEya

A new ear of cooperation for Central Asia
By Takehiko Nakao | chinadaily.com.cn |
Central Asia is a dynamic and fast-changing region. Over the past couple of decades, it has shown that increased regional cooperation is indispensable to achieving development goals.
https://goo.gl/qwhZzb

Exchange News

Hong Kong’s Iconic Trading Floor Is Latest to Close for Good
By Benjamin Robertson , Alfred Liu , and Kana Nishizawa – Bloomberg
The Hong Kong exchange floor’s 31-year run will end on Friday; It’s yet another victim of electronic trading’s steady rise
Hong Kong Exchanges & Clearing Ltd. is about to become the newest member of a once unthinkable club: stock exchanges without a trading floor.
https://goo.gl/fJvKqR

Singapore Exchange Chief Hopes to Win World’s Biggest IPO
By Andrea Tan and Tracy Alloway – Bloomberg
Having more than one venue allows for wider investor base: Loh; Saudi bourse said it’s aiming for exclusive rights to IPO
Singapore Exchange Ltd.’s chief executive officer said his company is still in the running to win a listing of the shares of oil giant Aramco, in what could be the world’s biggest initial public offering.
https://goo.gl/5hHYNZ

FinTech News

China’s Cryptocurrency Barons Seek New Life Across Asia
By Lulu Yilun Chen and Yuji Nakamura – Bloomberg
A diaspora of crypto-dishards emerges after China’s crackdown; Exchanges and wallets are also exploring Singapore and Korea
China’s largest cryptocurrency operators are proving hard to keep down.
https://goo.gl/bw1Pt8

Singapore Starts to Attract AI Firms
Finews.asia
Swiss Artificial Intelligence firm Squirro has launched its presence in Singapore to target the financial services market in the region.
https://goo.gl/HTMgyx

Regulatory News

ASIC expands network of fintech cooperation agreements to Switzerland
ASIX
On 18 October 2017, the Australian Securities and Investments Commission (ASIC) and the Swiss Financial Markets Authority (FINMA) entered a new agreement to cooperate on innovation in the financial sector.
https://goo.gl/Zfd1oc

ASIC suspends AFS licence of M.J. Wren & Co
ASIC
ASIC has suspended the Australian financial services (AFS) licence of M.J. Wren & Co Pty Ltd (MJ Wren) until 16 October 2018.
https://goo.gl/encn4h

U.S. to recede from international regulation role, domestic oversight to lag, bankers hear
Randall Mikkelsen – Reuters
The United States may well pull back from a leadership role in international financial regulation and is unlikely to adapt the domestic regulatory structure to fast-paced industry innovation, a former policymaker in the Obama administration and Congress told bankers.
https://goo.gl/3Z8WqQ

Investing News

Alibaba-Affiliate Ant Financial Isn’t Itching to Go Public; The fintech titan is cashed up and planning more startup investments
By Chuin-Wei Yap – WSJ
Flush with cash, Chinese financial-technology giant Ant Financial Services Group is putting on hold plans for an initial public offering while it steps up investments in everything from startups to artificial intelligence, according to a senior company executive.
https://goo.gl/4NAQHK

China Says Sovereign Dollar Bond Demand 11 Times Deal Size
By Carrie Hong , Lianting Tu , and Narae Kim – Bloomberg
Sale of five-year and 10-year notes establishes new benchmark; Issue already helped reduce Chinese company borrowing costs
China saw strong appetite Thursday for its first sale of sovereign dollar bonds since 2004, with demand for the sovereign notes climbing to 11 times the offering size and pricing coming in under initial guidance.
https://goo.gl/xn3siZ

Japan

Regional banks set to provide a test of Abenomics; Sector consolidation has run into trouble and highlights difficulties of Abe reforms
Leo Lewis – FT
Buoyed with triumph at the previous day’s snap election and under mounting pressure from financial markets to answer to the question “what next for Abenomics?”, it is unlikely on Monday morning that Shinzo Abe gave much thought to the forbidden romance between a raccoon and a blue bear — the mascots of two regional banks blocked from merging.
https://goo.gl/y1SMRh

Subaru drawn into Japan quality management scandal; Carmaker allowed unauthorised technicians to inspect vehicles for domestic market
Robin Harding and Peter Wells in Tokyo – FT
Subaru said it allowed unauthorised technicians to inspect its vehicles for decades, as the carmaker became the latest Japanese company to reveal a problem with quality management.
https://goo.gl/sbytH5

French Bonds Have the Va-Va-Voom for Japan
By Marcus Ashworth – Bloomberg
Japanese life insurers have a problem. Rates at home are stuck near zero, and yields are rising abroad.
https://goo.gl/PDDnEC

Cities compete to become Japan’s Silicon Valley
Today Online
Every modern economy wants its own version of Silicon Valley and in Japan the urge to find or create one is just as strong. Although the country’s pedigree as an innovator is not in doubt, rapidly adapting to the digital age has proven challenging for its once-mighty consumer electronics companies.
https://goo.gl/DW34tQ

Small Japanese credit union outperforms mega-banks by lending to geisha and local startups
BY GARETH ALLAN AND TAKAKO TANIGUCHI – Bloomberg
Kikuno Kashima, a Tokyo geisha, couldn’t get a bank loan to open a club for her patrons and select guests until a tiny credit union agreed to lend her the money. Now she’s part of a lending model that’s doling out cash to startup companies and yielding surprisingly high profits in the process.
https://goo.gl/RkqGBC

Mainland China

China’s graft tsar draws remarkable political career to close; Wang Qishan sought to eliminate separation between the Communist party and the state
Tom Mitchell in Beijing – FT
Early in his tenure as the Chinese Communist party’s formidable new anti-graft tsar, Wang Qishan met a group of young cadres. “If you want to succeed in politics you cannot be obsessed with either money or women,” he said to his mostly male audience, according to a person who attended the meeting.
https://goo.gl/7o47LL

McDonald’s changes name in China; Know how customers there reacted
Financial Express
McDonald’s in China has left its customers in awe with a recent change in its official name in the country. The US-based company which was earlier known as Maidanglao in China has changed its name to Jingongmen.
https://goo.gl/YoWhRq

China Central Bank Sells 63-Day Reverse Repo for First Time
Bloomberg News
Injection will reassure lenders about year-end liquidity; Yield on 10-year debt posts biggest weekly rise since January
China’s central bank injected 63-day money into the financial system for the first time, reassuring lenders about year-end funding availability while also intensifying a deleveraging drive by increasing costs.
https://goo.gl/FZ9PN7

Schumer blasts ‘foot dragging’ on China trade probe
The Associated Press
The Senate’s top Democrat says he’ll block two of President Donald Trump’s key nominees unless the Commerce Department picks up the pace on its investigation of China’s trade practices involving the aluminum and steel industries.
https://goo.gl/VAaB73

China harnesses big data to buttress the power of the state; Beijing uses technology to try and solve the age-old problem of a centralised system
James Kynge – FT
The sinologist Simon Leys has described consuming China’s communist literature as akin to “munching rhinoceros sausages”. But amid the leathery verbiage generated by the 19th Communist party congress there were also some extraordinarily piquant morsels.
https://goo.gl/NRDxsP

China’s Push for Cleaner Skies Is Good News for Global Steelmakers
By Masumi Suga and Ichiro Suzuki – Bloomberg
Capacity cuts, pollution curbs in China have boosted prices; Nippon Steel joins Posco, Hesteel in seeing higher profits
China’s push for better air quality is proving a bonanza for global steelmakers.
https://goo.gl/LtoKFk

Hong Kong

Hong Kong, Macao possess unique advantages in national development: HK financial secretary
Xinhua
Being China’s special administrative regions, both Hong Kong and Macao possess unique advantages which enable them to play different but complementary roles in the country’s development, Financial Secretary of the Hong Kong Special Administrative Region government Chan Mo-po said here Friday.
https://goo.gl/qNh832

Hong Kong ex-finance chief John Tsang shrugs off accusations he failed to declare employment; Tsang says he was in touch with Hong Kong leader’s office last month regarding television series he worked on
Chris Lau – South China Morning Post
Former Hong Kong financial chief John Tsang Chun-wah on Thursday shrugged off suggestions that he had been uncooperative as he refuted accusations he had failed to declare his employment after leaving the government.
https://goo.gl/orNC39

Hong Kong needs to get its act together on FinTech
EJInight
FinTech started gaining traction a decade ago, with its evolution taking on a new dimension after the 2008 global financial crisis. It allows entrepreneurs to disrupt the traditional financial sector and solve many of the long-time issues.
https://goo.gl/L5zNpg

A Classy Compromise for Hong Kong
Nisha Gopalan – Bloomberg
Hong Kong’s markets are closing the week on a dramatic note. As the stock exchange shut its iconic trading floor Friday, it appeared the government was preparing to leave the past behind in a more significant way by abandoning the principle of one share, one vote.
https://goo.gl/Jav8aJ

China’s Bitcoin Barons Seek New Life in Japan, Hong Kong
Newsmax
China’s largest cryptocurrency operators are proving hard to keep down.
https://goo.gl/dtnqxs

Singapore

Subaru drawn into Japan quality management scandal; Carmaker allowed unauthorised technicians to inspect vehicles for domestic market
Robin Harding and Peter Wells in Tokyo – FT
Subaru said it allowed unauthorised technicians to inspect its vehicles for decades, as the carmaker became the latest Japanese company to reveal a problem with quality management.
https://goo.gl/sbytH5

The magnificent 7 tips of financial planning for Singapore expats
BY MILES GOOSEMAN – SBR
Retirement can be a bit like the Wild West so to be safe and comfortable in your golden years you will need to prepare and practice like the Gunslingers of old. Starting early and having a solid but flexible plan will be critical.
https://goo.gl/w4wXFU

Singapore mulls putting ICOs in regulatory sandbox; MAS may be among world’s first regulators to do so amid mania over initial coin offerings
JAMIE LEE – Business Times
SINGAPORE regulators are open to having initial coin offerings (ICOs) sold through a regulatory sandbox, said a senior officer from the Monetary Authority of Singapore (MAS) at a fintech event this week.
https://goo.gl/tB54Fa

Singaporeans Ready to Work Longer as 70 Becomes the New 60
By Michelle Jamrisko – Bloomberg
Men have far greater expectations to work full-time for longer; One-in-five women sees herself in permanent work past 70
Singaporeans on the verge of retiring are prepared to keep working for longer than those that came before them.
https://goo.gl/aqqTSt

Vietnam

Vietnam’s capital market increasingly attractive
Vietnamnet.vn
With its steady economic growth, political stability, a youthful population, and equitisation of State-owned enterprises, Viet Nam’s securities market is attractive to investors, the Gateway to Vietnam Conference heard in HCM City on October 25.
https://goo.gl/JTsZMm

Vietnam Switches Gears From Command State to Private-Sector Control
By ALEX FREW MCMILLAN – The Street
A Communist nation. A rate of growing that’s picking up after a lull. The desperate need for reform of the inefficient state-owned sector.
https://goo.gl/ErHVjG

Thailand

Thailand Bids a Lavish Farewell to Its Late King; In the heart of Bangkok, mourners say their final farewells to King Bhumibol Adulyadej, whose reign lasted seven decades.
By Natnicha Chuwiruch – Bloomberg
The elaborate, $90 million royal cremation ceremony for Thailand’s late King Bhumibol Adulyadej brought the nation to a standstill Thursday, as mourners bid a final farewell to a monarch who reigned for seven decades.
https://goo.gl/TRiky4

Taiwan

Governor Of Central Bank Of Taiwan: Anti-Money Laundering Regulation Should Cover Bitcoin
ETH News
Bitcoin should be subject to anti-money laundering law, said the governor of Taiwan’s central bank on Wednesday.
https://goo.gl/f9Cj8D

South Korea

On North Korea Border, Mattis Says Kim Threatening ‘Catastrophe’
By Kanga Kong and Kyungji Cho – Bloomberg
North Korea says it will repatriate crew of South Korean boat; Pyongyang has avoided provocations since Sept. 15 missile
In a visit to the Demilitarized Zone that separates the two Koreas, U.S. Secretary of Defense James Mattis on Friday accused North Korea of building a nuclear arsenal to “threaten others with catastrophe,” the Yonhap news agency reported.
https://goo.gl/FcWp26

Malaysia

Budget to drive Malaysian firms’ international presence; Local companies participation on international stage will be boosted by the 2018 Budget.
By NST Business
The Malaysia External Trade Development Corporation (Matrade) is optimistic that the 2018 Budget will provide the right impetus to increase the local companies’ participation in international trade.
https://goo.gl/o9qFT2

Malaysia Budget 2018: Winners and Losers as Najib Courts Votes
By Shamim Adam – Bloomberg
Malaysian Prime Minister Najib Razak on Friday announced a 280 billion ringgit ($66 billion) spending plan in the final budget before general elections take place in the next 10 months.
https://goo.gl/Wi9ckk

India

Digital transformation: Creating flux in the financial sector
Forbes
Exciting times lie ahead, thanks to Digital Transformation. Beyond e-Commerce, where the impact is explicit, financial services will see paradigm changes. A Boston Consulting Group study extrapolates that about 150 million people would have some digital experience in financial transactions by 2020. It also says that about 70 percentage of the urban population would be digitally influenced to use at least one financial product. Due to the immense cascading effects of the financial services industry, all other industries will be impacted indirectly and directly too, by the digital transformation wave.
https://goo.gl/Tnwqws

SIDBI launches technology incubator for financial inclusion
India Today
Lucknow, Oct 27 (PTI) The Small Industries Development Bank of India (SIDBI) today launched a Technology Business Incubator at IIM-Lucknow here for nurturing high impact technologies.
https://goo.gl/EnR1jm

Business stresses in PM Modi’s backyard spur India’s bank rescue
Rupam Jain and Devidutta Tripathy – Reuters
For three years, Prime Minister Narendra Modi had avoided the one step that everybody from central bank officials to credit rating agencies had implored him to take to fix the country’s banking woes – a massive injection of cash.
https://goo.gl/Jaq8GG

Indian Railways, Asia’s oldest network, opens door to private steel producers to procure rails
Financial Express
Indian Railways has floated a global tender to procure rails, a move that may end the monopoly of state-run supplier Steel Authority of India Ltd. as Asia’s oldest network seeks to plug a supply shortfall.
https://goo.gl/gdGB9b

Market Financial historian Russell Napier not a big fan public sector banks; will never invest unless this happens
Financial Express
Financial historian Russell Napier not a big fan public sector banks; will never invest unless this happens
Financial historian and strategist Russell Napier is not a big fan of public sector banks. He says that he never invested in PSBs, and will not invest in PSBs in future as well.
https://goo.gl/cTTFUC

Australia

Australian government in crisis as deputy PM disqualified; Single-seat majority lost after Barnaby Joyce ruled ineligible over joint NZ citizenship
Jamie Smyth in Sydney – FT
Australia has been thrown into political crisis after a decision by the country’s High Court to invalidate the deputy prime minister’s election lost the government its single-seat majority in parliament.
https://goo.gl/t7DupN

Australia’s NAB reaches agreement with regulator over rate rigging
Reuters Staff
National Australia Bank (NAB.AX), the country’s No.3 lender by market value, on Friday said it had reached an agreement worth A$50 million ($38 million) with the corporate watchdog to settle a case over alleged manipulation of a key interest rate.
https://goo.gl/3dDtqR

Australian and Swiss watchdogs ink fintech
Finextra
Australian Securities and Investments CommissionOn 18 October 2017, the Australian Securities and Investments Commission (ASIC) and the Swiss Financial Markets Authority (FINMA) entered a new agreement to cooperate on innovation in the financial sector.
https://goo.gl/1Dmwy8

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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.