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Asia Pacific News from John Lothian News – October 9, 2017

Lead Stories

A Japanese lesson for Wall Street; The humbling tale of the bankers who felt ashamed of the system’s failure
Gillian Tett – FT
During a trip to Tokyo last week, I made a little pilgrimage to the city’s Tama cemetery to pay my respects to an old acquaintance who died recently. Outside Japanese financial circles, the name Katsunobu Onogi is barely known. Among the Tokyo elite, however, “Onogi” evokes considerable emotion; he was the last president of Long-Term Credit Bank (LTCB), an institution which, until it collapsed ignominiously in 1998, symbolised the postwar might of Japan.

A2X, SA’s new stock exchange, opens with three secondary listings and four leading brokers
Andrea Ayemoba –
A2X Markets (A2X), South Africa’s newest stock exchange, has made its debut with three listings and four of the industry’s leading brokers on board.

Agency broker takes unusual step to comply with Mifid II rules; Japanese-owned Instinet plans to move servers across London to better supply customers
Philip Stafford – FT
Instinet, the agency broker owned by Japan’s Nomura, can precisely measure how far it is going to comply with incoming Mifid II trading rules that give customers fair access to its trading venue.

The Economy Is Humming. Bankers Are Cheering. What Could Go Wrong?
For decades, the global economy has been defined by dissonance. There has been the Japanese recession. The financial crises in the United States and Europe. And drama in emerging markets throughout.

Exchange News

SGX reports market statistics for September 2017
Securities – Total Securities market turnover value was S$21.8 billion, down 16% month-on-month (m-o-m) and up 5% year-on-year (y-o-y), over 20 trading days. There were 22 trading days in August 2017 and 21 in September 2016.
Derivatives – Total Derivatives volume was 16.0 million, up 1% month-on-month (m-o-m) and up 19% year-on-year (y-o-y)

SGX Index Edge and FactSet launch a series of thematic indices
Singapore Exchange (SGX) and FactSet today announced the launch of a series of co-branded thematic indices designed to provide investors with exposure to promising regional and global themes.

FinTech News

Accelerating fintech in China
Joshua Bateman – Techcrunch
Saturday night on a Shenzhen street corner, a young guitarist dressed in Johnny Cash black strums away, singing melodies. His open guitar case has a laminated QR reader, propped up, welcoming digital tips from passersby.

Investing News

Connected growth: Asean and South Asia in 2037
Anna Marrs – The Daily Star
Two decades ago Asia was in the grip of a broad economic crisis. Through the 1998 Asian financial crisis, regional stock markets lost more than 60 percent of their value. Already fragile government reserves ran dry. By May 1998, Indonesia’s sovereign rating had fallen to CCC+.

‘Billionaires on the rise in Asia’
A rise in private debt in the Asia Pacific region is a concern, but unlikely to trigger a financial crisis because the rate of increase in advanced economies is expected to be gradual, said Helman Sitohang, Credit Suisse’s chief executive officer for Asia Pacific and executive board member.

Big money managers target Chinese stocks
John Pearce has returned to Sydney from a week in Hong Kong beaming, with one clear message of where to invest his next dollar: the Chinese mainland.


Investors relaxed over Japan’s election uncertainty; Topix stays near 24-month high as challenge to PM Shinzo Abe appears to recede
Leo Lewis – FT
As well as infuriating nasal spray merchants and bees, Tokyo Governor Yuriko Koike’s manifesto declaration of a war on hay fever last week was unsettling for markets. How, exactly, do you trade a general election when the opposition leader is ready to take on pollen?

Mainland China

China Forex Reserves Climb to Highest Level in Nearly a Year; Country’s foreign-currency stockpile notch eighth straight month of gains
China’s foreign-exchange reserves rose last month to their highest level in nearly a year, giving Beijing a breather in its campaign to constrain capital outflows.

Chinese industrial policy up for grabs
Editorial Board, East Asia Forum
Forty years ago, China’s economic growth engine was its northeast. Liaoning province, a heavy-industrial centre bordering North Korea, was outranked in per capita income only by Shanghai, Beijing and Tianjin. Like the other northeastern provinces, neighbouring Jilin and Heilongjiang, its major industries were pillars of the command economy, benefiting from artificially cheap inputs and monopoly prices for their products.

Cash is already pretty much dead in China as the country lives the future with mobile pay
Evelyn Cheung – CNBC
Mobile pay is taking China by storm and changing daily commerce. The transformation of a society limited to bills denominated in 100 yuan ($15) or less into one where QR payment codes abound was by far the biggest change in mainland China since my last visit four years ago.

Chinese central bank official insists new cash reserves rule won’t affect resolve to cut financial risk
South China Morning Post
People’s Bank of China recent cut minimum ratios for lenders that cater for small businesses and agricultural sector

China urges India to abide by historic treaty on border
Financial Express
China today referred to the 1890 UK-China treaty which it claims demarcated the Sikkim sector of the Sino-Indian border as it urged New Delhi to abide by its provisions, a day after Defence Minister Nirmala Sitharaman made her maiden visit to the Nathu La post.

China’s Central Bank Could Adjust Policy Again, Goldman Sachs Says
Bloomberg News
‘Various sets of signals each offer a different perspective’; Policy reaction function may be adjusted after Party Congress
China’s central bank could adjust monetary policy again in the coming months, in response to changes in the economy or the shifting agendas of top political leaders following the 19th Party Congress, according to Goldman Sachs Group Inc.

Hong Kong

Hong Kong Pact on Listing Policy — WSJ
By Gregor Stuart Hunter – Fox Business
Hong Kong’s financial regulator and the city’s stock market will jointly establish an advisory panel on listings policy, where the exchange currently takes the lead.

India, Hong Kong top list of of targets for cyber attacks in Asia Pacific region: Survey
More than 60 per cent of small and medium-sized businesses (SMBs) in Hong Kong have experienced a cybersecurity breach in the last three years, making the city number two in Asia-Pacific when it comes to being on the receiving end of cyberattacks, according to a new survey.


Indonesia investigates StanChart over $1.4 billion transfer
Cindy Silviana, Hidayat Setiaji – Reuters
Indonesia is investigating reports that $1.4 billion held by Standard Chartered Plc (STAN.L) in Guernsey, mainly on behalf of Indonesian clients, was transferred to Singapore just before the island moved to new tax transparency rules, tax and regulatory officials said.

BlackGold tackles Indonesia’s growing power needs
Straits Times
Canadian-born and Indonesian-raised Phil Rickard straddles two worlds. Having lived in Jakarta from age 11, and enrolled in both Indonesian and American schools, the chief executive officer of SGX-listed BlackGold Natural Resources is passionate about South-east Asia’s largest economy.


It’s Denmark Versus Singapore for the Growth Crown; There’s no guarantee that democracy produces better results.
By Noah Smith – Bloomberg
Communism is officially dead. North Korea, the last holdout of the 20th-century Soviet-style central planning, is moving toward a hybrid economy. David Volodzko in a Bloomberg View op-ed reports:

Singapore venture capital firm raises $210 million to invest in regional start-ups; Vertex Ventures, which calls itself Singapore’s largest venture capital firm, has raised $210 million to invest in start-ups around Southeast Asia and India
Vertex Ventures, the venture capital arm of Singapore state investor Temasek Holdings, said it has raised a $210 million fund to invest in Southeast Asian and Indian startups, exceeding its original target size of $150 million.

Singapore regulator takes ‘serious view’ of StanChart probe
Laura Noonan, Martin Arnold – FT
Singapore’s financial regulator has said it takes a “serious view” of the issues Standard Chartered is under investigation for, and will “take firm action against any financial institution or individual” that breaches money laundering rules or facilitates terrorism financing.


Net foreign capital in securities market rises 80% y-o-y
The net foreign investment in Việt Nam’s securities market was estimated to increase by 80 per cent, year-on-year, to US$1.45 billion in the first nine months of 2017.


Goal is to become a ‘developed’ country within 20 yearsEconomy October 10, The Nation
IN THE NEXT 30 years, THE THAI economy is targeted to expand by 4-5 percent per annum over the next 30 years, according to National Economic and Social Development Board.

From tourism to coffee, young Thais blend profit with social good
A new generation of Thai business entrepreneurs believes running companies that invest in tackling social and environmental causes is a better way to help than relying on donors’ whims.


Report: Malware-Wielding Hackers Hit Taiwanese Bank; Using SWIFT, Attackers Routed $60 Million to Sri Lanka, Cambodia, United States
Mathew J. Schwartz
Police in Sri Lanka have arrested two men in connection with the theft of tens of million of dollars from a bank in Taiwan as part of a heist that reportedly involved malware being used to generate fraudulent SWIFT money-moving messages.

Taiwan’s regulator not to clamp down on crypto-related activities
Maria Nikolova – Finance Feeds
The development of DLT and blockchain is seen as a a huge opportunity for innovation and economic growth for Taiwan.

South Korea

Populist pledges add to heat on South Korea’s Moon; Critics question whether president’s welfare giveaway is affordable
Song Jung-a in Seoul – FT
It has been just five months since South Korea’s President Moon Jae-in took office promising to boost wages and reduce inequality, having campaigned on a populist platform designed to woo voters weary of falling living standards.


Philippines’ Duterte orders special bank for overseas Filipinos
Reuters Staff
Philippine President Rodrigo Duterte has ordered the creation of a bank catering to Filipinos overseas, the presidential office said on Monday, fulfilling a campaign promise to a sector which catapulted him to power.


Sources Claim Malaysia Aims to ban Bitcoin by Late December 2017
JP Buntinx – NewsBTC
One thing to take into considering is how Malaysia is a conservationist country when it comes to finance.
The concept of banning Bitcoin altogether makes no sense whatsoever. No government or other parties can prohibit people from using something that can’t be controlled or regulated. In Malaysia, that realization will hopefully set in soon enough. As of right now, the local central bank prepares to issue a nationwide Bitcoin ban before the year is over. Delaying the inevitable change is not in anyone’s best interest, though.


Back to the Onion Futures, India
By David Fickling – Bloomberg
Are speculators the villains of Indian farming, or its saviors?

Indian PM Modi targets more energy reforms after meeting oil chiefs
Reuters Staff
India’s prime minister sees scope for further reform of the country’s energy sector and has received “focused suggestions” from some of the world’s leading energy companies, the office of the premier said on Monday.

Financial stability in the age of crises; Asian countries, such as India, have leaders in the active use of macroprudential policies to correct asset price misalignments and limit systemic risks
Ramkishen S. Rajan – Livemint
When Raghuram Rajan was the governor of Reserve Bank of India (RBI), he highlighted the spillovers to emerging market economies (EMEs) like India from changes in US monetary policy stance and their impact on global financial markets. He has repeatedly suggested the possible need for some “rules of the game” in managing cross-border monetary spillovers.

RBI to soon launch financial literacy drive in 9 states
The Economic Times
The Reserve Bank will soon launch a financial literacy drive in 80 blocks in nine states on pilot basis to educate people on e-transactions, formal sector borrowings and insurance purchases.

MAS Financial IPO subscribed 4.81 times on Day 2
The Economic Times
The initial share sale offer of MAS Financial Services was oversubscribed 4.81 times on the second day of subscription today.

India Needs to Open Its Wallet; Spending more is the only way to get the economy moving again.
By Dhiraj Nayyar – Bloomberg
Economists would almost universally agree that fiscal discipline is a good thing. No government should aspire to live beyond its means. If it does, the consequences can be severe: higher inflation, higher interest rates, low private investment and lower growth.


Australia’s Biggest Bank Vows to Fight Class Action
Financial Tribune
C ommonwealth Bank of Australia is facing a class-action shareholder lawsuit over the decline in its stock price following allegations of compliance breaches that allowed its ATMs to be used to launder money.

Global Funds Eye Australia’s $1.8 Trillion Pension Pool
By Ruth Liew and Mariko Ishikawa – Bloomberg
Alternative managers linked to 41% of Aussie pension new deals; Debt house THL hired director, sees pension market opportunity
More global fund managers are setting up shop in Australia, drawn to the nation’s A$2.3 trillion ($1.8 trillion) pension savings pool and new local investment opportunities.

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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.