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Asia Pacific Financial News from John Lothian New – November 17, 2017

Lead Stories

Asia’s Cities Could Save the Planet; New urbanites need greener buildings to live and work in
By The Editors – Bloomberg
The world’s cities will add 2.5 billion more residents by 2050, more than half of them in Asia. The effect of this great migration on climate change will depend in part on what kind of homes, factories and office buildings they live and work in.

China’s Central Bank Turns on the Taps, Stemming Slump in Bonds
Bloomberg News
Authorities may have judged selloff as too quick: StanChart; Sovereign debt yield, benchmark money rate both decline
China’s central bank boosted its supply of money to the financial system by the most since January, adding to speculation that policy makers are looking to ease concerns sparked by a bond market selloff.

China’s $38 Trillion Off-Balance Sheet Binge Poses Little Risk: UBS
Bloomberg News
Items pose little risk to financial system, UBS analyst says; Analyst Jason Bedford studied 282 bank filings for report
The Chinese finance sector’s 253 trillion yuan ($38 trillion) of off-balance sheet items pose little risk because more than two-thirds of them are relatively harmless components such as custodial funds and untapped credit-card limits, said UBS Group AG.

Japan: Land of the rising coin – a model for Hong Kong?
Japan is crypto-crazy. I confirmed this assumption during a recent two-month stay in Tokyo where I met an 85-year-old woman who told me that she owned several bitcoins and was considering investing in ether. Yes, you read that correctly, she was 85! Not only is Japan now the world’s largest domestic market for crypto-token* trading activity, it is also the only major advanced economy to have developed a bespoke licensing regime to regulate businesses offering financial services dealing with crypto-tokens.

China’s bitcoin crackdown has helped Japan embrace the cryptocurrency movement; Japan made bitcoin a legal currency, and now it’s more popular than ever
Akiko Fujita, Hollie Wong – CNBC
A year ago, China accounted for 90 percent of all bitcoin trade. But since Beijing banned initial coin offerings (ICOs) and regulators started to crackdown on bitcoin exchanges in September, another Asian powerhouse has swooped in to embrace the crypto movement.

Special Report: Twice burned – How Mt. Gox’s bitcoin customers could lose again
Alexandra Harney, Steve Stecklow – Reuters
When Mt. Gox, the world’s largest bitcoin trading exchange, collapsed in early 2014, more than 24,000 customers around the world lost access to hundreds of millions of dollars’ worth of cryptocurrency and cash.

Global Investors Need to See More From China Reforms; The nation is at the point where it can no longer rely on monetary stimulus and fiscal spending to support longer-term growth
By David Millhouse – Bloomberg
Next year will mark the 40th anniversary of China’s reform and opening-up initiated by Deng Xiaoping, and it’s as vital as ever that the government pushes harder and faster on structural changes. While recent announcements regarding the financial industry are encouraging, for the global investment community to more fully embrace China, progress is still needed on important areas as diverse as state-owned enterprises and healthcare.

China Is Feeding Asia’s High-Yield Hunger; The country’s companies are churning out risky debt deals to help meet investor demand
By Lianting Tu – Bloomberg
Funds are struggling to diversify as Chinese companies pump out risky debt, already claiming two-thirds of Asian high-yield bond issuance outside of Japan so far this year. Chinese investor demand for the debt is helping deals to get through, and borrowers from the nation are eager to sell dollar bonds as the domestic funding environment remains tight amid deleveraging efforts. “Heavy China supply is creating a headache for fund managers given the potential concentration risk,” said Raymond Chia, Singapore-based head of credit research for Asia ex-Japan at Schroder Investment Management Ltd.

Exchange News

SGX Bull Charge caps successful fundraising year with Charity Run; SGX’s flagship charity initiative raises more than $2.7 million in 2017 for five beneficiaries; Event highlight is Obstacle Challenge, Singapore’s first-ever charity inflatable obstacle run
Singapore Exchange’s (SGX) flagship charity initiative Bull Charge held its annual Charity Run today, rounding off another successful year of fundraising with more than $2.7 million in proceeds.

Keen to resolve NSE’s co-location issue as soon as possible: Sebi chairman; The case relates to some brokers allegedly getting preferential access to NSE servers through co-location facility during 2011-14. The exchange discontinued the facility since 2014
Business Standard
Following NSE’s submission of the latest forensic reports on the co-location issue, Sebi chairman Ajay Tyagi on Friday said the regulator is looking for a quick resolution of the matter.

FinTech News

Retail investors betting big on algorithmic trading; Stockbrokers such as 5Paisa, Zerodha, Master Trust, SMC Global Securities and Upstox have started offering algo trading software for retail investors
Anirudh Laskar – Livemint
Mumbai: Sanket Gajjar, 30, an engineer with Larsen and Toubro Ltd in Baroda, has been a stock market investor for the past seven years. However, over the past four months, he is using a trading technique, hitherto restricted to institutions and high net worth individuals—algorithmic trading.

Regulatory News

China’s own Dodd-Frank Act aims to tame wealth management sector as crackdown on risky financial activity gathers pace
Frank Tang – South China Morning Post
New set of restrictions could have wide-ranging impact by curbing the products financial institutions can offer and the clients they can serve
China’s financial regulators have unveiled a major new regulation – which has been described as Beijing’s Dodd-Frank Act – to rein in shadow banking activities in their latest response to President Xi Jinping’s call to reduce financial risks.

Japanese regulators raid Airbnb over suspected antitrust practices
Reuters Staff
Japanese fair trade regulators raided last month the offices of Airbnb Inc over suspected violations of antitrust laws, the home rental site said on Friday, denying any wrongdoing.

ASIC makes consolidated market integrity rules
ASIC has today made market integrity rules which consolidate 13 of the existing 14 rule books into four rule books to create a common set of rules for securities markets and a common set of rules for futures markets.

ASIC takes further action in Allianz Metro binary option trading investigation
ASIC has sought final orders in ongoing Federal Court proceedings against a number of international and Australian companies and associated individuals that it alleges are involved in operating binary trading websites ( and (the Websites) and offering of binary trading services to Australian customers.

HSBC Calls Banker’s $2.4 Million Bonus Suit a Waste of Time
By Kaye Wiggins and Kit Chellel – Bloomberg
Rajesh Parmar accuses bank of ‘capricious conduct’ over bonus; Bank says he can’t have bonus as he helped clients evade tax
A former HSBC Holdings Plc banker filed a lawsuit after being told he couldn’t have his bonus because he helped clients cheat on their taxes. The bank responded by counter-suing him for wasting its time.

Investing News

Hong Kong IPO surge challenges New York in battle for China listings
Jennifer Hughes, Julie Zhu – Reuters
It’s not often Hong Kong can boast hotter initial public offerings than New York, but some recent deals and a potential pipeline of big Chinese tech floats suggest a shift in the balance between the two fundraising rivals.

The Chinese Government Just Triggered a Selloff in the Country’s Shares
Bloomberg News
Shenzhen Composite Index slides 2.8 percent, most since July; Xinhua warns on Moutai stock gains; Shanghai Composite drops
Chinese stocks slumped, led by Shenzhen shares, as a warning by state media that one of the nation’s hottest stocks was climbing too fast triggered a selloff.

If India were a stock, I’d still buy it, says Thomas Friedman; Pulitzer Prize winner author and writer, Thomas Friedman, on the continuing benefits of globalization, Donald Trump’s foreign policy, and the rise of India and China
Arushi Kotecha
Thomas Friedman, Pulitzer prize-winning American journalist and author, is bullish on India and believes there are more gains to be reaped from globalization. In an interview on the sidelines of the Tata Literature Fest 2017 in Mumbai, Friedman said that in his new book called Thank You For Being Late, he praises everything old and slow. By old and slow, Friedman said he meant the things you can’t download—good teaching, good parenting, good religious leadership, good governance. All those values matter more because when the world moves rapidly, the small errors have huge consequences, he added. Edited excerpts:


Japan Chamber of Commerce chief calls for more foreign workers; Companies cite shortage of skilled labour to explain poor results
Leo Lewis in Tokyo – FT
The head of the Japan Chamber of Commerce and Industry has warned of a “worsening and intensifying” labour shortage and called on the government to consider changing immigration controls on foreign workers.

Mainland China

China sets sweeping new rules to regulate $15 trillion asset management products
Shu Zhang, Ryan Woo – Reuters
China’s central bank on Friday issued sweeping guidelines to tighten rules on asset management business, the latest step by Beijing to fend off systemic risks in the country’s rampantly growing shadow banking sector.

China Leads Asia in ‘Digital Disruption,’ Report Says
By Yang Ge –
Eight of the top 10 “digital disruptors” in Asia came from China according to a new list by a leading industry consultant, underscoring the country’s role in producing some the region’s leading and most cutting-edge high-tech firms.

China issues strongest supervision standard for financial products
By Chen Jia | Chinadaily
China’s top financial regulators issued guidance Friday for overseeing asset and wealth management products from all types of financial institutions, serving as the country’s first unified and strongest supervision standard on this area of business.

China tightens rules on asset management to rein in risky lending; Central bank leads charge to unify standards on runaway shadow banking sector
Tom Mitchell in Beijing – FT
China’s central bank outlined sweeping new regulations aimed at curbing financial risk in the asset management industry on Friday, in the latest signal of its determination to rein in the country’s runaway shadow banking sector.

The Chinese connection to the Zimbabwe ‘coup’
By Ben Westcott and Steve George, CNN
A visit by Zimbabwean army commander Constantino Chiwenga to China would not normally be seen as unusual, given Beijing’s status as Zimbabwe’s largest foreign investor and longtime ally.

China’s bike-sharing bubble bursts as Bluegogo fails; Group’s collapse follows pattern of rapid expansion fuelled by venture capital money
Yuan Yang in Beijing 2 comments
China’s third-largest bike-sharing start-up, which recently expanded its reach into San Francisco, has failed in what analysts say is the first sign the country’s bike-sharing bubble may be bursting.

China’s Soccer Push Puts a Storied Team Under Murky Ownership
When the Chinese businessman Li Yonghong bought A.C. Milan, the world-famous Italian soccer club, virtually nobody in Italy had heard of him.

Exclusive: Brokers in China Claim ‘Business as Usual’, Regulatory Concerns Rising; Retail FX & CFDs brokers swiftly restart operations after a brief temporary limitation to client access to their websites
Victor Golovtchenko – Finance Magnates
Rumors about brokers operating in China having difficulties with access to their websites have been picking up in recent weeks. Investigating the matter, Finance Magnates reached out to a number of brokers and consultancies operating on the ground for their perspective.

China’s nuclear spaceships will be ‘mining asteroids and flying astronauts to the moon’ as it aims to overtake US in space race
South China Morning Post
State media publishes Chinese scientists’ ambitious plans to revolutionise space travel and exploration in coming decades

Hong Kong

Over 20 Banks Join Singapore-Hong Kong Blockchain Trade Network
Sujha Sundararajan – Coindesk
Members of the central banks of Singapore and Hong Kong have revealed that a number of banks have now joined their recently announced blockchain-based trade network.

Carson Block Says Hong Kong Stock Manipulation Is Burning Shorts
By Benjamin Robertson – Bloomberg
Short seller speaks after Huishan discloses negative net worth; 2017 has been a difficult year for bears in Hong Kong
Carson Block, the short seller who rose to fame by making savvy bets against Chinese companies, says it’s getting tougher to target overvalued shares in Hong Kong because the market is rife with manipulation.


Indonesia Gears Up to Boost Financial Literacy
Leo Jegho –
Only 22 percent of Indonesia’s 262 million people is financially literate. And the number of people accessing fintech is even smaller.

Developing Indonesia as Islamic finance hub
Muhammad Shodiq – TheJakartaPost
The world’s financial landscape has changed fundamentally over the last few years. Islamic equity funds experienced strong growth during the second half of the 1990s. In 1996, there were 29 Islamic funds, valued at US$800 million.


Governor plugs for Tokyo as financial hub
Straits Times
A vision for sustainability and establishing Tokyo as an international financial hub took centre stage in Tokyo governor Yuriko Koike’s three-day visit to Singapore, which ends today.

Former UOB officer jailed for misappropriating more than $500,000 of client’s money
Straits Times
A former United Overseas Bank (UOB) officer was sentenced on Wednesday (Nov 15) to four years and nine months’ jail after misappropriating almost $525,000 belonging to one of the bank’s clients.


Thailand Could Be Joining Southeast Asia’s Economic Boom
By Suttinee Yuvejwattana – Bloomberg
Economists see 3.8% third-quarter GDP growth, best since 2013; Rising exports and tourism weathered surge in the currency
An economic boom that’s reverberated across Southeast Asia has finally crossed over to Thailand.

South Korea

HK and Korea sign MOU to promote trade
By Chong Vin Nee – EnterpriseInnovation
The Hong Kong Trade Development Council (HKTDC) has signed a Memorandum of Understanding (MOU) with its counterpart in Korea, the Korea Trade-Investment Promotion Agency (KOTRA), to promote economic cooperation and trade between Hong Kong and the Republic of Korea.


PH, Bank of China seal deal for $200-M ‘Panda bond’ offering
The Philippine government will be the issuer while the Bank of China will be the lead underwriter in a 1.2 billion RMB offering aimed at Chinese investors


Moody’s upgrades ratings of four Indian financial institutions
By Saloni Shukla, ET
Hours after Moody’s Investors Service upgraded India’s sovereign rating, it upgraded four financial ratings including India’s largest lender State Bank of IndiaBSE 1.18 % and country’s most valuable lender HDFC Bank

Financial sector gives ‘thumbs up’ to Moody’s ratings upgrade
The upgrade in Moody’s ratings has brought more reasons to cheer for the financial sector after the historic increase in World Bank’s ease of doing rankings and wide ranging reforms undertaken by the government. The global ratings agency upgraded India’s credit rating after a gap of almost 14 years.

What Investors Say India’s Rating Upgrade Means for Asset Prices
Bloomberg News
Moody’s Investors Service’s decision to boost India’s sovereign rating is a step forward for the developing nation, but the reaction in assets may be more “knee-jerk” than long-lived, according to investors.


Australia: Why Australian Financial Services Licensees absolutely MUST prioritise cyber-resilience
Fiona McCord and David Court – Monday
12-18 November is Fraud Awareness Week, and once again, cyber-resilience is a hot topic. As a licensee, do you wonder what you legally have to do? Before we tell you, let’s start, as Simon Sinek recommends, with Why…

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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,,, and three industry newsletters.