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Asia Pacific Financial News from John Lothian News – November 30, 2017

Lead Stories

Australian Banks’ U-Turn on Misconduct Probe Is Bid to Cut Risk
By Emily Cadman – Bloomberg
Government sets up Royal Commission into alleged failings; Tight deadlines, strict terms may limit potential damage
If you can’t beat ’em, join ’em. That’s the calculation Australia’s biggest banks and the government have made in deciding to cave in to pressure for a public inquiry into alleged misconduct in the financial industry.
https://goo.gl/dqg9pn

Is China’s Central Bank Losing Its Monetary-Policy Mojo?; The gap between policy and market interest rates is widening, throwing up challenges for the PBOC
By Shen Hong – WSJ
A widening gap between official and market interest rates in China is making it harder for Beijing to use a key policy tool to manage the world’s second-largest economy.
https://goo.gl/Cu8Zex

Financial Risk Solutions opens Asian offices5 hours ago
Financial Risk Solutions via Finextra
Financial Risk Solutions (FRS), a Dublin-based provider of unit-linked investment administration and compliance oversight software, is pleased to announce the opening of two offices in Asia; Hong Kong and Malaysia. These are the first offices outside of Europe for the business.
https://goo.gl/wjdWDd

Platinum Asset Management: The Rise Of Asia
Seeking Alpha
Over these past 20 years, some Asian economies such as China and India have been growing physically by 6-7% a year. At that rate of growth, the nominal size of an economy doubles every 10 years, which makes these economies four times the size that they were in the days of the 1998 Asia financial crisis.
https://goo.gl/UHRqBm

Asian Development Bank signals bond market bumps
Gary Kleiman – Asia Times
The Asian Development Bank’s November local-bond monitor covering the third quarter in nine East Asian government and corporate markets showed “strong” 11.5% annualized growth to US$11.5 trillion in total, but also pointed to higher yields and foreign-capital outflows at the end of the period amid lingering qualitative and quantitative liquidity concerns.
https://goo.gl/tzn4G3

Indian banks 2nd only to Chinese counterparts in exposure to risks: Moody’s; This is due to large loans are given to businesses with poor repayment capacity, it said
Bhaswar Kumar – Business Standard
Indian banks’ exposure to risks has risen and is now second only to those in China in the Asia-Pacific (APAC) region due to large loans given to businesses having poor repayment capacity, ratings agency Moody’s Investors Services has reportedly said.
https://goo.gl/aTUWbK

U.S. Rebukes China, Saying It’s Backing Off Market Embrace
By Andrew Mayeda and Saleha Mohsin – Bloomberg
Treasury’s intl chief sees rising China state role in economy; Malpass invites market-oriented allies to help find solutions
The Trump administration rebuked China for not being tough enough over North Korea’s nuclear program and said the Asian country is backsliding on market-oriented reforms.
https://goo.gl/6kVntU

Obama Told Xi He Wants to Help Preserve Ties, State Media Says
Bloomberg News
Former U.S. president’s first meeting with Xi after retirement; Obama willing to help strengthen cooperation between countries
Former U.S. President Barack Obama offered in his first post-retirement meeting with Chinese leader Xi Jinping to help ensure strong ties between the world’s two largest economies, Chinese state media said.
https://goo.gl/rqBAMx

Exchange News

HKEX Publishes Paper on Investor ID Model for Stock Connect Northbound Trading
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today (Thursday) published an information paper on an investor identification (investor ID) model for northbound trading through its mutual stock market access programmes with the exchanges in Shanghai and Shenzhen (Stock Connect).
https://goo.gl/Qu28tB

Japan Exchange Group: Construction Of New Secondary Data Center
Mondovisione
Japan Exchange Group, Inc. (JPX) has advancing discussions on the construction of a new secondary data center (backup center) based on the “Second Report of the Technical Committee on Exchange Transactions” published by the BCP Forum on April 20, 2017. JPX hereby announces its decision to build the new secondary data center in a location that is at a greater distance from the main data center to prevent simultaneous disruption in the event of disaster.
https://goo.gl/berDsL

China’s Dalian Exchange launches 24 single futures price indexes -media
Reuters Staff
China’s Dalian Commodity Exchange launched 24 single futures price indexes on traded agricultural and industrial products, state-backed media cnstock.com reported on Wednesday, citing the bourse, a step to boost China’s commodity derivatives market and attract private capital to futures trading.
https://goo.gl/P5bTMd

FinTech News

Fintech may hurt Singapore, Hong Kong, South Korean banks most, MAS says
TODAY Online
Among banks in Asia’s biggest economies, those in Hong Kong, South Korea and Singapore stand to lose the most in the face of competition from financial technology companies, according to Singapore’s regulator.
https://goo.gl/w6d5Hh

Ant Financial and QCash scoop FT fintech awards; Alibaba spin-off wins for ‘impact’ and US finance lending platform for ‘innovation’
Patrick Jenkins and Martin Arnold – FT
A big Chinese group and a US not-for-profit have triumphed in the second annual Financial Times fintech awards, with Ant Financial taking the “impact” prize and QCash winning for “innovation”.
https://goo.gl/TbeWFL

Your opportunity to contribute and transform India’s Fintech industry
By Viny Velayudhan – VC Circle
Of late, technology is redefining the Financial Services industry globally. Fintech is no longer a buzzword, but a phenomenon knowingly or unknowingly rapidly seeping in everyone’s lives.
https://goo.gl/NGtEF6

Regulatory News

ASIC reports on cyber resilience assessments of financial markets firms
ASIC
An ASIC report on the cyber resilience of over 100 firms operating across Australia’s financial markets has shown a growing understanding of cyber risks, but there is still some progress to be made.
https://goo.gl/C4jtzv

ASIC overview of licensing and professional registration – July 2016 to June 2017
ASIC
ASIC has today reported on its approach to and assessment of licence applications and professional registrations for the period July 2016 to June 2017.
https://goo.gl/2zCSyV

Malaysian financial scandal inquiry urges probe into ex-PM Mahathir Mohamad
Rappler
The final report by the official Royal Commission of Inquiry into the scandal in the 1990s during Mahathir’s tenure also recommended Anwar Ibrahim – finance minister at the time and now a leading opposition figure languishing in jail – face a criminal probe
https://goo.gl/Xsz4rJ

Investing News

Global stocks rise with U.S. tax plan in sight; oil wobbles
Rodrigo Campos – Reuters
Sharp gains in the United States drove stocks higher despite a rout in emerging markets, while crude oil prices were volatile as OPEC met in Vienna to discuss an extension to its supply-cap deal.
https://goo.gl/rj5bdi

Threadneedle Backs Japan as Market for 2018
Morningstar
Asset manager Columbia Threadneedle has revealed that it is heavily invested in Japanese equities going into the New Year
https://goo.gl/2FSRXy

Japan’s Biggest IPO of 2017 May Deliver Almost 30% in a Year
By Keiko Ujikane and Nobuyuki Akama – Bloomberg
SG Holdings shares seen reaching 1,900-2,000 yen by end-2018; Stock is not overvalued based on indicative price: Shinkin
Shares of SG Holdings, the operator of Japan’s second-largest parcel delivery company by volume Sagawa Express, could rise as much as 27 percent by a year after its debut this month as investors bet on solid earnings helped by logistics services home and abroad.
https://goo.gl/LR2hCj

Fortunes Lost and Regained Show How Made-in-China Is Changing
Bloomberg News
Two friends seek to escape low-cost labor trap in textiles; China is seeking to push manufacturing sector up value chain
Wang Youjun and Li Chunlong — two friends who’d made their fortune trading cheap textiles in the years after China joined the World Trade Organization — each lost a bundle when a buyer went bust five years ago.
https://goo.gl/Dys1od

Chinese Pump Record Cash Into Hong Kong Stocks as Rally Teeters
By Emma Dai and Kana Nishizawa – Bloomberg
Net inflows top $10 billion in November to fuel Hang Seng; Funds may take profit toward end of year: First Shanghai
Chinese investors have driven Hong Kong’s stock surge in November, buying a record amount of equities in the city even as concern grows that the rally is starting to lose momentum.
https://goo.gl/pNzXYz

Asian Tech Stocks Have Burned $94 Billion in Value This Week
By Eric Lam – Bloomberg
After a searing rally this year, investors may be getting set to pull the ripcord on tech stocks as a global selloff accelerated this week.
https://goo.gl/xAi53p

Japan

Tokyo Financial Group Divorces Thai Hire Purchase Firm
Asia Sentinel
The troubled Tokyo-based financial services group J Trust Co. Ltd. announced today (Nov. 30) that it is parting company with the scandal-ridden Group Lease PCL hire purchase firm being investigated by Thai authorities for fraud. However, the divorce runs the risk of bankrupting its subsidiary J Trust Asia.
https://goo.gl/s99uaL

The economic lessons Japan can teach the West
By Szu Ping Chan – BBC
Shinzo Abe’s government is continuing efforts to boost the Japanese economy
It’s been almost five years since Shinzo Abe took power as Japan’s prime minister for the second time.
https://goo.gl/gYscps

Mainland China

China’s people moved by the markets rather than party diktats; A lucrative service sector has challenged central planners’ hopes of controlling labour
Lucy Hornby in Beijing – FT
Planned economies attempt to control not only the “commanding heights” of industry but also the movement of their people. The transformation of China’s economy into the powerhouse it is today came about only after Chinese were allowed to leave subsistence farms for factories and cities.
https://goo.gl/E79ont

Analyst bemoans China’s bond market rout to Jay Chou’s tunes, and strikes a chord with traders
Zheng Yangpeng – South China Morning Post
November had been the worst month in two years for Chinese bond traders, as a rout in the country’s market for sovereign debt and corporate notes caused transactions to shrink, reduced their fee income and even put jobs at risk.
https://goo.gl/LHiRcu

US-China economic dialogue programme has ‘stalled’; Treasury’s David Malpass says Beijing is not liberalising economy as hoped
Sam Fleming in New York and Shawn Donnan in Washington – FT
Donald Trump’s administration has put its main programme for bolstering economic relations with China on ice as it complains about the two countries’ swollen trade imbalance, and says Beijing’s efforts to liberalise its economy have gone into reverse.
https://goo.gl/mgZrfy

China’s Financial Channel Reports Huobi Violates Spirit of PBOC’s Document
Bitcoin.com
China’s Financial Channel (CCTV-2) aired a special bitcoin documentary this week to analyze reasons behind the recent price rally. The program invited Li Cangyu, financial columnist and Wan Zhe, chief economist at China National Gold Group Corp. as commentators who believe that Huobi has undoubtedly violated regulations on cryptocurrency services.
https://goo.gl/QoNc3z

US seeks to deny China market economy status in WTO; Trump administration’s filing increases trade pressure on Beijing
Shawn Donnan in Washington – FT
The Trump administration has opposed China’s bid for recognition as a “market economy” in the World Trade Organization, citing decades of legal precedent and what it sees as signs the country is moving in the opposite direction under Xi Jinping.
https://goo.gl/AHqNgA

Wal-Mart Already Has a Thriving Online Grocery Business—in China
Rachel Chang – Bloomberg
Amazon.com Inc. has sent a chill through the U.S. supermarket business. Its $13.7 billion purchase of Whole Foods Markets Inc. stirred fears that it may solve one of the great puzzles of American e-commerce: how to sell fresh foods to online shoppers with the same speed and predictability that the industry has for, say, books or computers. But grocers also had better keep an eye on the world’s largest brick-and-mortar retailer—Wal-Mart Stores Inc.—for some lessons on the future of online grocery shopping.
https://goo.gl/JbLHF6

China’s Lending Crackdown Is Notable for Three Reasons; The platforms have mushroomed from fewer than 10 to more than 2,000, but only a few hundred operate with government-issued permits.
By Junheng Li – Bloomberg
Policy makers from the People’s Bank of China and the China Banking Regulatory Commission convened in Beijing on Nov. 23 to discuss new measures to crackdown on online consumer loan platforms, including those for payday loans and peer-to-peer lending. On the same day, Alibaba Group affiliate Ant Financial said it will enforce a cap of 24 percent on interest rates charged by lenders on its website, or 12 percentage points lower than current rates. The lenders affected by the new cap include Qudian, which had recently listed on the New York Stock Exchange.
https://goo.gl/kWCjQT

Hong Kong

Hong Kong’s Bank of East Asia to sell $138 mln consumer finance businesses
Reuters Staff
Hong Kong-based Bank of East Asia Ltd said it would sell certain consumer finance businesses in China and Hong Kong to a money-lending arm of China Financial Services Holdings Ltd for an aggregate HK$1.08 billion ($138.30 million).
https://goo.gl/KfNNtb

Indonesia

SE Asia Stocks-Fall; Indonesia sees worst day in over a year
Nikhil Nainan – Reuters
Southeast Asian stock markets fell sharply on Thursday with Indonesia registering its biggest daily fall in over a year as financials and consumer staples slipped, while Singapore shares marked their lowest close in a week.
https://goo.gl/MwyoRg

indonesia, australia establish fintech network
Antaranews.com
The Indonesian delegation has met with Australia`s Financial Technology (Fintech) Association in Sydney and Melbourne, on Thursday to discuss a number of topics on financial inclusion and efforts to build a stronger fintech industry network.
https://goo.gl/5iNvtf

Indonesia at a Crossroads
By : Anthony Wonsono- Jakarta Globe
“Indonesia is at a crossroads,” was a cliché often heard in 2017. In a year filled with high-octane drama, from the trial of Jakarta’s former governor, Basuki “Ahok” Tjahaja Purnama, to the high-profile e-KTP corruption case involving House of Representatives Speaker Setya Novanto and other officials, the Indonesian people are left wondering what is in store for their country.
https://goo.gl/hRrNAq

Singapore

Singapore central bank highlights property market risks; MAS sanguine about corporate debt levels, banks
Nikkei
A scramble for land in Singapore has drawn a fresh warning from the central bank about a potential oversupply in the housing market and spillover risks to financial stability.
https://goo.gl/FsieLv

Vietnam

New cross-holding rule to hit banks
Vietnam News
A new law is set to ban bank owners in Vietnam from taking up senior positions at non-financial firms, a move aimed at overhauling the banking sector, which has been mired in cross-holding controversy.
https://goo.gl/h3p9eV

Vietnam’s stock market sees positive development: Bloomberg
Vietnam News
Vietnam’s stock exchange development is forecast to overtake the Philippines in 2017, stated an article carried by the US financial news agency Bloomberg.
https://goo.gl/c7j2kB

Thailand

Stock Exchange of Thailand trades domestic clouds for international providers
By Melissa Chua – Asia Cloud Forum
The Stock Exchange of Thailand (SET), Thailand’s center for securities trading, began using the cloud’s compute power four years ago, primarily to enhance the stability of its stock trading platform.
https://goo.gl/jJ4EVH

Taiwan

Renewed Consolidation Called For Taiwan Bourse
RTT News
The Taiwan stock market on Wednesday snapped the three-day losing streak in which it had given away more than 140 points or 1.3 percent. The Taiwan Stock Exchange now rests just above the 10,710-point plateau, although it figures to head south again on Thursday.
https://goo.gl/z7piMk

South Korea

South Korea Nears Mandating Regulations for Bitcoin Exchanges
Samburaj Das – Cryptocoinnews.com
South Korean authorities are reportedly close to putting the final touches on regulations for bitcoin and cryptocurrency exchanges.
https://goo.gl/x3XzAs

Bank of Korea raises interest rates for first time in 6 years; Decision heralds tightening cycle on back of export-driven economic recovery
Song Jung-a in Seoul – FT
The Bank of Korea has raised interest rates for the first time in more than six years, heralding a policy-tightening cycle on the back of the country’s export-driven economic recovery.
https://goo.gl/EcyjJn

Philippines

Banks favor gradual cut in reserve requirement
By Lawrence Agcaoili -The Philippine Star
Major players in the country’s banking industry said the plan to gradually lower the level of deposits that banks are required to maintain with the central bank would help sustain the strong economic expansion.
https://goo.gl/KFxpxJ

Two decades after the Asian financial crisis: Lessons, risks (Conclusion)
Bianca Cuaresma – Business Mirror
ASKED on the possibility of another financial crisis repeating in the region—especially in the face of global volatilities and political uncertainty across the world—Standard & Poor’s (S&P) Andrew Wood said member-countries of the Association of Southeast Asian Nations have learned their lesson and strengthened themselves to better handle such a situation.
https://goo.gl/JPLrQR

UK to hire over 5,000 nurses from India and Philippines
Financial Express
The UK’s state-run National Health Service (NHS) plans to hire over 5,000 nurses from India and the Philippines in a bid to plug acute staff shortages in the country.
https://goo.gl/hDLL63

Malaysia

Hong Leong Financial Group’s net profit rises nearly 18%; Commercial banking, insurance business help drive growth
Nikkei
Hong Leong Financial Group, the flagship financial services arm of Malaysian tycoon Quek Leng Chan, said Thursday its net profit grew 17.9% in the fiscal first-quarter from a year earlier buoyed by higher contributions from commercial banking and insurance businesses.
https://goo.gl/ZB8TmZ

Malaysia Financial Regulator Unveils Blockchain Pilot Project
By Diana Ngo – Coinjournal.net
The Securities Commission (SC) Malaysia is exploring the use of distributed ledger technology for the over-the-counter (OTC) market. The pilot project, run through SC’s Alliance for Fintech (aFINity) program, aims to examine how blockchain could facilitate unlisted market activity and improve transparency.
https://goo.gl/A2Lhm1

India

India cracks down on ‘promoter’ era of impunity; Swaggering behaviour of influential corporate figures highlights India’s bad loan crisis
Simon Mundy in Mumbai – FT
Billionaire tycoon Sajjan Jindal was in celebratory spirits last week, hitting Twitter with a string of posts extolling a new tightening of India’s corporate insolvency regime.
https://goo.gl/H2zhZY

The ongoing bitcoin boom is drawing Indian investors like never before
Nupur Anand – Quartz
Even conservative Indian investors can’t seem to resist the bitcoin price boom.
https://goo.gl/mdDDwz

India’s fiscal deficit reaches 96% of financial year target due to lower revenue, expenditure rise
Business Today
Lower revenue realisation and the rise in expenditure attributed India’s fiscal deficit of Rs 5.25 trillion for April-October, which is equal to 96.1 per cent of the budget estimate for the fiscal year.
https://goo.gl/uVREjd

India a case study in digital financial inclusion: Minister
Business Standard
With over billion mobiles, 325 million broadband connections and 306 million new bank accounts, India has become a case study in digital financial inclusion, said Communications Minister Manoj Sinha on Thursday.
https://goo.gl/sD7LkV

Pakistan seeks $70 mn from India as compensation
Financial Express
The Pakistan Cricket Board (PCB) today formally initiated a legal battle against the BCCI by filing a compensation claim of USD 70 million before the ICC for not honouring a bilateral cricket series agreement.
https://goo.gl/ngKX8P

Indian stock market overtakes Canada, becomes world’s eighth-biggest
Financial Express
India is now home to the world’s eighth-biggest stock market, overtaking Canada for the first time in almost a decade.
https://goo.gl/azNgey

US hopes India will do more against ‘global threat’ North Korea
Financial Express
Terming North Korea a “global threat”, the US said today that it expects India to do more to help America and its international allies exert pressure on Pyongyang to give up its missile and nuclear weapons programme.
https://goo.gl/TFhDND

Walmart Foundation grants $2million to support Indian small farmers
Financial Express
Walmart Foundation today announced nearly USD 2 million grant to non-profit consulting firm, Agribusiness Systems International (ASI) to help small farmers in India diversify markets for their produce.
https://goo.gl/jpUQqb

Want a loan? Make sure you’re tweeting the right things
Quartz India
The article that someone tweeted about, posts that they liked on Facebook, and a new phone just bought on an e-commerce site—all these events now play a crucial role in determining if an individual is eligible for a loan or not.
https://goo.gl/RqNWcT

Australia

Australia bows to years of pressure, announces inquiry into finance sector
Byron Kaye, Paulina Duran – Reuters
The Australian government said on Thursday it will hold a wide-ranging inquiry into a scandal-hit finance sector, arguing one was needed to restore public confidence as it reversed its long-held opposition amid mounting political pressure.
https://goo.gl/iNH4G5

Australia Financial Scandals Force Industry Probe; Royal-commission inquiry will examine conduct of banks, financial-services firms, insurers and pension funds
By Robb M. Stewart – WSJ
Australia’s banks face a sweeping investigation, as the government bows to pressure over a string of industry scandals.
https://goo.gl/q4iRZ9

Australia to launch inquiry into banking and financial services sector
Hudson Lockett, Jamie Smyth – FT
The government of Prime Minister Malcolm Turnbull has announced a public inquiry into Australia’s banks and financial system, caving to political pressure from lawmakers as the country’s four biggest lenders relented from a lobbying campaign against the idea and requested an inquiry into themselves.
https://goo.gl/r6XtvZ

Life insurance in the banking royal commission is ‘ludicrous’, says AIST
Alice Uribe – AFR
Union-backed superannuation funds have slammed the inclusion of life insurance in the royal commission into banking, superannuation and financial services industries calling it “ludicrous” and arguing it will uncover nothing new.
https://goo.gl/jMYgPE

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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.