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Asia Pacific Financial News from John Lothian New – November 27, 2017

Lead Stories

Time for ‘Asia-first’ thinking as the US and Europe question financial regulations
South China Morning Post
Andrew Sheng says that Asian economies should take a hint from ‘America first’, plus European doubts over Basel III, and tailor financial regulations to meet regional realities rather than believing that ‘West is best’
https://goo.gl/gzU4mF

Brussels rattled as China reaches out to eastern Europe; Concerns Beijing’s closer ties with EU’s poorer nations will influence bloc’s policies
James Kynge in London and Michael Peel in Brussels – FT
In Hungary it is hailed as the “Eastward Opening”. Serbian authorities see it as the glue in a “reliable friendship”, while the Polish government describes it as a “tremendous opportunity”. Yet the 16+1, a grouping of 16 central and eastern European countries led by China, receives more caustic reviews in leading EU capitals, with diplomats fearing it could be exploited by Beijing to undermine union rules and take advantage of growing east-west tensions in the pact itself.
https://goo.gl/CWJtqV

Pictet Set to Reap Asian Gains?
Finews.com
The move of Julius Baer CEO Boris Collardi to Pictet has taken the banking world by surprise. In Asia, the financial market is eager to see what the switch will mean for the regional business of his new employer.
https://goo.gl/jCgeHn

Energy Tycoon to Pour $4.6 Billion Into Southeast Asia Boom
By Anuchit Nguyen – Bloomberg
Sarath Ratanavadi’s Gulf Energy plans to add power plants; Gulf’s IPO is turning Sarath into newest Thai billionaire
Gulf Energy Development Pcl’s billionaire founder Sarath Ratanavadi plans 150 billion baht ($4.6 billion) of investment in power plants over the next four years after the company’s listing this month.
https://goo.gl/JNXyRY

Singapore Snubbed as China Rules Asian Dollar-Bond Market
By Lianting Tu and David Yong – Bloomberg
More Chinese issuers bypass city-state in investor roadshows; Chinese firms should consider building wider contacts: Nikko
It’s been a banner year for Asia’s dollar-bond market, with an unprecedented pace of sales and dozens of debut issuers. But in Singapore, one of the region’s main financial hubs, there’s a note of gloom among its fund managers.
https://goo.gl/iBacZv

Barclays plans to send private bankers back to Asia; Region offers bigger spoils than any other, but it is also fiercely competitive
Laura Noonan, in London – FT
Barclays’ private bank plans to get bankers back on the ground in Asia and the Middle East, less than two years after selling its regional wealth management business.
https://goo.gl/yC8KWf

Beijing is Making Its Most Serious Effort Yet to Tackle Its Financial-System Issues; New rules to crimp the country’s ballooning shadow banking system are a healthy step. The Chinese government must persist through any market fallout.
By Anjani Trivedi – WSJ
Beijing is coming to grips with its Wild West-like financial system—not a moment too soon, many would argue. The jittery market reaction shows just how delicate that operation is going to be.
https://goo.gl/s41hZs

Beijing Hinders Free Speech in America
By WANG DAN – NY Times
I spent nearly seven years in a Chinese prison for being a leader of the 1989 Tiananmen Square protests. I was freed in 1998, and the Chinese government let me leave the country. I chose to go to the United States, where I could freely speak my mind without fear of being thrown in prison.
https://goo.gl/2K5frN

Exchange News

Child labour fuels fear of reputational risk; MSCI compiled list of 62 companies facing allegations of employing underage workers
Chris Flood – FT
Controversy surrounding school-age interns working illegal overtime at Foxconn, a key supplier to Apple, the US iPhone maker, is fuelling concerns that many more companies could be exposed to reputational damage and legal challenges for using child labour.
https://goo.gl/hX6AJR

FinTech News

Hong Kong Fintech Unicorn WeLab Eyes Next Step – An IPO
Rebecca Fannin – Forbes
One of Hong Kong’s unicorn startups, online lending startup WeLab, fresh from raising $220 million in funding last month, is considering its next mega move.
https://goo.gl/4m6S9V

Regulatory News

China clamping down on vast shadow banking sector; Broad effort to regulate off-books products could choke weak banks’ funding
ISSAKU HARADA and YUSHO CHO, Nikkei
Chinese regulators are moving to tighten controls on the murky parallel finance sector that channels money into high-risk investments, but some speculate that the rules could be loosened again if they bite too hard.
https://goo.gl/1eP6Cw

Philippines To Allow Bitcoin & Co, Classified As Securities
Investvine
The Philippines’ Securities and Exchange Commission (SEC) announced that it is considering legalising the use of digital currencies in the country by classifying them as securities, and also increasing the number of exchanges. The move comes following the financial regulator’s issuance of regulations for the cryptocurrencies like Bitcoin earlier in 2017.
https://goo.gl/e6MVQg

China’s regulator to halt Hong Kong-bound funds over fear of an impending market correction
South China Morning Post
China Securities Regulatory Commission to temporarily delay approval of some mutual fund products that will invest more than 80pc in HK stock market
https://goo.gl/dR73Gm

Investing News

South Korean households up to their necks in debt; Government promises help for borrowers, but rate hikes may hurt more
KIM JAEWON, Nikkei
South Korea’s household debt continues to spiral upward, reaching 1,419.1 trillion won ($1.3 trillion) in September, up 2.2% from three months earlier. That is equal to about 86.7% of the country’s seasonally-adjusted nominal GDP, which reached 1,637.4 trillion won in 2016.
https://goo.gl/N4RqeN

Stocks Around the Globe Stage Most Widely Shared Rally in Years; Investors say stock rally is a culmination of improving corporate earnings, strengthening economies and supportive monetary policies
By Steven Russolillo – WSJ
The vast majority of global stock markets in 2017 have surged either to fresh records or multiyear highs, one of the broadest rallies in years that investors say is a result of the increasingly synchronized global economic recovery.
https://goo.gl/WqCG1t

How to Play Emerging Markets Now; America first? Not when it comes to world stocks.
Reshma Kapadia
In a year full of political and economic drama, emerging markets have outpaced an aging bull market in the U.S. over the last 12 months. Still, the prospect of Beijing wielding a heavier hand in Chinese companies and economic reforms in India potentially slowing near-term growth means that investors who take a closer look now will need to pick their spots carefully.
https://goo.gl/Azhma7

Japan

Malware Spreads in Japan
NHK World
A major Japanese internet provider says the number of devices infected by viruses is rising sharply. Internet Initiative Japan (IIJ) conducted a survey that found the number of infected Internet of Things devices linked to its service in Japan increased from about 100 to 12,000 over a period of one month.
https://goo.gl/rqwGog

Corporate Japan hit by severe labour shortages; Companies offer more permanent contracts to retain staff
Robin Harding in Tokyo – FT
Japanese companies are scouring the country for workers and offering more attractive permanent contracts as they struggle to overcome the worst labour shortages in 40 years.
https://goo.gl/4E2UDw

It’s time for Japan to reboot its financial reforms; 20 years after the demise of Yamaichi Securities, much work remains to be done
Nikkei
Nov. 24 marked 20 years since of the collapse of Yamaichi Securities, then one of Japan’s four largest securities companies. A string of other financial institutions went bankrupt around the same time, including Sanyo Securities and Hokkaido Takushoku Bank. Business activity froze, and financial markets became dysfunctional.
https://goo.gl/BrGXcq

Mainland China

Made in China – the world energy market of the future
Nick Butler – FT
What happens next in the global energy market depends to a disturbing degree on China. Disturbing not because the Chinese have done anything wrong – they haven’t. The country’s energy policy has been rational and largely predictable. But the situation is changing. The problem is that Beijing has become such a substantial force in the market that their actions or otherwise can send waves, often intentionally, through every part of the system. At the same time the predictability of the outcomes has eroded. The uncertainties over their future energy strategy, which I described in last week’s post, make them a very disruptive force in a market already struggling to keep up with multiple changes.
https://goo.gl/7Jfm2R

Maybe China shouldn’t open up; No excessively indebted country has ever outgrown its debt until a meaningful portion has been forcibly assigned to one economic sector or another
Michael Pettis – Livemint
China needs reform. This has long been the consensus advice from economists and multilateral institutions such as the World Bank, whose recent “China 2030” report argues that Chinese leaders should strengthen the role of markets and liberalize legal, financial and other institutions governing the economy. Their to-do list is virtually gospel by now: free up trade and investment, unshackle the exchange rate and ease capital controls.
https://goo.gl/YAADWM

Beijing Rage Over Child Abuse, Evictions Shows Pressure on Xi
Bloomberg News – Bloomberg
China’s government faces ire of middle class, migrant workers; ‘I blame the Communist Party,’ says vendor forced from home
Migrant workers in southern Beijing worry about where they’ll sleep after being evicted. In middle-class areas, abuse allegations have parents wondering if kindergartens are safe. They all blame the government.
https://goo.gl/DTKtYD

Hong Kong

Hong Kong’s House Prices Could Soar Another 10% Next Year
By Frederik Balfour and Pooja Thakur Mahrotri – Bloomberg
Prices seen rising 5%-10% next year after 11% growth this year; Tight supply, cheap money, Bank of Mom and Dad fueling prices
Hong Kong’s red-hot housing market shows no signs of cooling anytime soon.
https://goo.gl/JQ7H9V

Indonesia

Indonesian volcano forces mass evacuation, shuts Bali airport
The Associated Press
Indonesian authorities ordered a mass evacuation of people Monday from an expanded danger zone around an erupting volcano on Bali that has forced the island’s international airport to close, stranding tens of thousands of travellers.
https://goo.gl/Fpurwb

Singapore

UOB to upskill 900 staff in professional conversional programme
Straits Times
A new Professional Conversion Programme rolled out at United Overseas Bank (UOB) on Monday (Nov 27) is a good signal that the financial services sector is serious about upgrading staff skills in the face of change, Second Minister for Manpower Josephine Teo said on Monday.
https://goo.gl/HvniRb

Vietnam

Vietnam sentences activist to 7 years in prison
By THE ASSOCIATED PRESS
A court in central Vietnam on Monday sentenced an activist to seven years in prison for producing online videos and interviews related to an environmental disaster that instigated anti-government protests, in the authorities’ latest crackdown on dissent.
https://goo.gl/EfyVhs

15 VN banks listed among Asia Pacific’s strongest
Viet Nam News
Fifteen Vietnamese banks have recently been named in The Asian Bankers’ AB500 ranking and survey of Asia Pacific’s strongest banks.
https://goo.gl/aYjfEu

Thailand

Thailand’s Biggest IPO in 10 Years Is All About Power
By Keshia Hannam – Fortune
Sarath Ratanavadi, the founder of Gulf Energy Development Pcl, plans to invest $4.6 billion in power plants in Thailand and neighboring countries over the next four years.
https://goo.gl/xiqDKZ

Taiwan

The Best Way to See Taiwan’s Rugged Coast Is Slowly—and on a Bike
Bloomberg
Our writer tackled 150 miles in four days, with just two wheels and almost zero Mandarin.
https://goo.gl/aFuL7z

South Korea

Chip industry boom drives near-doubling of Korea Inc profits; Profits at listed units of 10 top groups hit record for first three quarters of year
Bryan Harris in Seoul – FT
Profits at listed units of South Korea’s 10 biggest conglomerates almost doubled in the first three quarters of the year, hitting a record high on the back of booming chip businesses at Samsung Electronics and SK Hynix.
https://goo.gl/VTuKzs

South Korea’s penniless pensioners face final years in crisis; Mass destitution among senior citizens points to challenge facing all ageing societies
Bryan Harris and Kang Buseong in Seoul – FT
For the past four years, Oh Soon-ja has pushed her rusty cart through the streets of Seoul, collecting boxes and cardboard.
https://goo.gl/QEBewf

South Korean finance minister vows to ‘firmly’ deal with won’s strength
Alice Woodhouse – FT
South Korea’s finance minister has said the government will respond “firmly” to the won’s strength against the US dollar, Yonhap reported, after the currency last week rose to a a two and a half year high against its US counterpart.
https://goo.gl/DZmuo9

Philippines

ADB approves support for Philippines’ financial sector reforms
Simone Rensch – Public Finance International
The Asian Development Bank has approved a $300m loan and a $500,000 technical assistance grant to support the Philippines’ financial sector reforms.
https://goo.gl/xVmQgU

Philippines’ PLDT says its digital unit may bring in a Chinese partner
Reuters Staff
PLDT Inc, one of only two wireless carriers in the Philippines, said on Monday its digital applications unit could bring in a Chinese partner and even PLDT itself is open to tying up with a mainland firm.
https://goo.gl/obmX2Q

Malaysia

Digital economy in the spotlight as Malaysia commits to tech expansion and education
Oxford Business Group
Malaysia has taken another step towards expanding its digital economy, with the newly tabled 2018 budget containing a series of initiatives designed to promote growth in tech companies and ICT skills development.
https://goo.gl/bB6EhQ

500,000 Malaysians have fallen prey to investment scams
By Seri Nor Nadiah Koris – NST
KUALA LUMPUR: More than 500,000 people have become victims to illegal investment scams in the country since 2015, said Finance Minister II Datuk Seri Johari Ghani.
https://goo.gl/tVdgRW

India

Morgan Stanley sees all growth drivers in place by FY-19 in India
Financial Express
Global firm Morgan Stanley has time and again reiterated its bullishness on the Indian economy, saying that the country is slated to see tremendous growth in the near future.
https://goo.gl/zrg9bM

Australia

VCs target Australian blockchain and cryptocurrency firms with $44m in funds
by Yolanda Redrup – AFR
Start-ups with designs on making it big in the fast-growing world of blockchain and cryptocurrencies will be targeted by two new funds focusing on the Australian market, with almost $44 million to spend.
https://goo.gl/rP4JDu

Malcolm Turnbull under pressure to allow bank probe
by Phillip Coorey – AFR
Malcolm Turnbull is under pressure to allow a commission of inquiry into the banks after rebel Nationals MPs secured the numbers in both houses of Parliament to establish their own inquiry.
https://goo.gl/qKiePj

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About Author

Lothian is executive chairman of John J. Lothian & Co. and editor of the John Lothian Newsletter. He publishes MarketsWiki.com, MarketsReformWiki.com, MarketsWikiEducation.com, JohnLothianNews.com and several industry newsletters.