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Asia Pacific Financial News from John Lothian News – November 21, 2017

Lead Stories

Wealthy Asian Buyers Scoop Up Trophy Properties in London; Private investors from China, Hong Kong often price out institutions, and cash-only bids keep U.K. lenders on the sidelines
By Olga Cotaga – WSJ
The ever-growing appetite among rich Asians for trophy assets in London is leaving some institutional investors on the sidelines

Asia’s Richest Banker Spots a Once-in-a-Lifetime Opportunity
By Anto Antony , George Smith Alexander , and Candice Zachariahs – Bloomberg
Sovereign wealth and pension funds also interested, Kotak says; Bankruptcy court process, deep discounts are key attractions
For India, it’s a $207 billion mess, a pile-up of bad loans years in the making that’s dragging on growth. For the nation’s wealthiest banker, it’s the kind of opportunity that very rarely presents itself.

Headhunter Adds to Asian Financial Services Team; Heidrick & Struggles announced a new partner in the financial services practice based in Hong Kong.
Primarily focusing on serving clients in private equity and alternative asset management sectors Anny Kwok joins Heidrick & Struggles (H&S) as partner in financial services and will is based in Hong Kong, the firm said in a press release.

Apple’s iPhone X assembled by illegal student labour; Interns say they were ‘forced’ to work at Foxconn plant in China in order to graduate
Yuan Yang in Zhengzhou – FT
Apple’s main supplier in Asia has been employing students illegally working overtime to assemble the iPhone X, as it struggles to catch up with demand after production delays.

Chinese netizens all praise for Indian women after Chhillar’s win
Financial Express
After conquering the globe, newly- crowned Miss World Manushi Chhillar is winning the hearts of Chinese netizens, who have praised the Indian beauty for giving a tough fight to other contestants at the pageant

Victoria’s Secret Meets China’s Security; A fashion show should’ve been an easy PR coup. Not in China.
By Christopher Balding – Bloomberg
At one point, it must’ve seemed like a good idea. Victoria’s Secret, the American lingerie brand, was making a major push to expand its business globally. China, marketing a “New Era” in international relations, wanted to project a confident, business-friendly image to the world. So holding the 2017 Victoria’s Secret Fashion Show in Shanghai made perfect sense. What could go wrong?

Where ‘Made in China’ Means Flying Cars and Automated Pharmacies; Guangzhou, a major manufacturing hub, is doling out subsidies and free land as it sets out to retool its economy.
By Dexter Roberts – Bloomberg
On a sunny afternoon in early November, several dozen software engineers and designers are anxiously preparing for a test flight of the EHang 184, a compact metal and glass pod outfitted with eight propellers. The self-steering, single-passenger craft could begin buzzing through the skies of Dubai as early as next year, says Hu Huazhi, the 40-year-old chain-smoking founder, chairman, and chief executive officer of EHang, a Guangzhou-based maker of drones. The rulers of the Arab city-state want one-quarter of all transport to be autonomous by 2030 and are in talks with EHang about supplying a fleet of air taxis.

Exchange News


HKEX is|sponsoring “Realising the China Opportunity” webinar on 28 Nov to explore ways to access China via ETFs.


Seventeen per cent1 increase in Equity Index Futures volume in the After-Hours Trading Session (the T+1 Session) after being extended to 1 am on 6 November; Investors actively use the T+1 Session to respond to news in the US time zone. Per-hour trading volume in the T+1 Session is 72 per cent higher in the period that overlaps with US trading hours
Trading of Hong Kong Exchanges and Clearing Limited’s (HKEX) four most active equity index futures increased 17 per cent to an average daily volume of over 32,000 contracts in the past two weeks since the enhancement to after-hours trading (AHT) was introduced on 6 November 2017.

Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to SOHO China Ltd (SOHO China) futures to account for SOHO China’s special interim dividend.

SGX welcomes Qantex Capital as Derivatives Trading Member
Singapore Exchange (SGX) today welcomed Hong Kong-based Qantex Capital Markets (Qantex Capital) to its derivatives market as a Trading Member.

FinTech News

Blockstream, Digital Garage Team Up to Foster Blockchain in Japan
Sujha Sundararajan – Coindesk
Bitcoin infrastructure company Blockstream has expanded its strategic partnership with Japanese IT firm Digital Garage.

Robo-help for companionship, brain teasers or financial advice
If you’re approaching retirement and looking for help, you might want to ask your robot.

Regulatory News

India’s SEBI asks for trading data as it probes WhatsApp messages: source
Abhirup Roy – Reuters
India’s market regulator has asked for trading data on companies mentioned in a Reuters story last week about prescient messages on company earnings in social media chatrooms, a person familiar with the matter told Reuters on Tuesday.

Japanese Regulator Unveils New Regulatory Framework on High-Frequency Trading, Seeking Public Comments
K&L Gates – via Lexology
On May 17, 2017, the Japanese Diet passed an amendment bill (the “2017 Amendment”) [1] to the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948) (the “FIEA”). The 2017 Amendment includes new regulation on high-speed trading (also known as high-frequency trading). The 2017 Amendment was promulgated on May 24 and would come into effect on a date designated by an ordinance but no later than May 24, 2018.

Investing News

Goldman Sachs Ordered to Pay $24 Million to Indonesia Tycoon
By Tassia Sipahutar – Bloomberg
Jakarta court rejects counterclaim against Benny Tjokrosaputro; U.S. firm ordered to pay damages for Hanson share transaction
An Indonesian court ordered Goldman Sachs Group Inc. to pay 320.8 billion rupiah ($24 million) in damages to the founder of PT Hanson International, for what was ruled to be an “illegal transaction” to buy shares in the property developer.

Hedge Funds Demand Chinese Buyers Pay More in M&A Deals
By Debra Mao – Bloomberg
Court ruled Shanda Games should pay more to Hong Kong fund; Prudential, T. Rowe Price follow Maso in valuation challenges
For years, Chinese executives pulled off multibillion-dollar buyouts of their public companies with little pushback from investors. Now, they are facing a backlash from hedge funds demanding better payouts.

China H Shares Jump to Two-Year High as Financial Firms Rally
Bloomberg News
Ping An, China Pacific surge more than 7% to lead insurers; Brokerages climb amid bets new asset curbs will boost shares
Chinese stocks glowed red hot in Hong Kong on Tuesday, with heavyweight Ping An Insurance Group Co. and China Pacific Insurance Group Co. surging more than 7 percent amid optimism over earnings growth.


6 myths about Japan that put its ‘demographic time bomb’ in perspective
Chris Weller – Business Insider
Japan is dealing with what economists call a “demographic time bomb.”

Japan on reverse cycle?; Everything that could go right is going right for Japan.
By Benjamin Ong – Financial Standard
Prime Minister Shinzo Abe won by landslide at the 22 October 2017 general elections, ensuring that sitting Bank of Japan (BOJ) governor Haruhiko Kuroda will be re-appointed when his term expires on 8 April 2018. All up, these means the continuity of Abenomics – the program of very loose monetary policy, fiscal largesse and structural reforms.

Yes Bank raises $400 million loans from Japan, Taiwan
Financial Express
Midsize private sector lender Yes Bank has raised $400 million in syndicated loans from lenders in Taiwan and Japan for on-lending to clients.

Japan’s biggest lender MUFG plans to slash workforce by some 15%
The Business Times
Japanese banking giant Mitsubishi UFJ Financial Group plans to shrink its domestic workforce by around 15 per cent, the firm said Tuesday, tightening payrolls as it looks to bolster profits squeezed by ultra-low interest rates.

Mainland China

China Is Stepping Up the Fight Against Its Mountain of Debt
Bloomberg News
Regulators are now focusing on asset-management products; They’re just one piece of China’s complex leverage burden
China’s drive to reduce its debt burden has shifted into a higher gear following the Communist Party’s twice-a-decade congress in October.

Risks in China’s Risk Curbs
By Shuli Ren – Bloomberg
In attempting to head off a Bernie Madoff moment, China has set the stage for an even deeper bond market rout.

Goldman ‘Pretty Optimistic’ for 2018 Despite China Debt Unknowns
By Enda Curran – Bloomberg
Beijing’s gradual credit clampdown seen as crucial for outlook; India’s economic growth could surprise to the upside next year
The global economy’s synchronized upswing should continue into 2018 but China’s plan to slow borrowing is a key uncertainty, according to Andrew Tilton, chief Asia-Pacific economist for Goldman Sachs Group Inc.

China’s Debt Surge May Increase Risk of Financial Crisis; China already in danger zone for financial crisis, says Bloomberg Economics
Bloomberg News
China’s debt is poised to soar over the next five years, severely reducing the chances the nation can avoid a financial crisis.

Editorial: Why Opening Up China’s Financial Markets Won’t Guarantee Growth
Hu Shuli –
China recently took a much-awaited step to widen foreign investors’ access to its financial industry.

U.S.-listed Chinese financial firms dive on regulatory action
Reuters Staff
U.S-listed shares of Chinese financial firms sank in early trade on Tuesday after Chinese regulators suspended regulatory approval for online small loan companies.

Clampdown on shadow banking in China hits the stock market
Chinese stocks rallied in late trade as markets took a closer look at the nation’s new plans to rein in shadow banks and some traders speculated that state funds would act to stem excessive losses.

Chinese market will entice UK financial services
Cecily Liu in London – China Daily
China’s move to further open up its financial industry will help major banks and fund managers in the United Kingdom find new markets after Brexit.

China to step up financial regulation in property market – state TV
Reuters Staff
China will step up financial regulation and crack down on speculation in the property market to fend off bubble risks, state television CCTV reported on Tuesday.

China says ex-top internet regulator under investigation
The Associated Press
China’s ruling Communist Party says Lu Wei, the country’s former top internet regulator and censor, is being investigated by its anti-corruption arm.

China’s Ping An Is No. 2 to Berkshire Hathaway and Rising
Bloomberg News
Ping An shares have more than doubled this year in HK trading; Company highlights technology prowess, says stock undervalued
A surge in Ping An Insurance (Group) Co.’s shares this year has made it the world’s second-largest insurer by market value behind only Berkshire Hathaway Inc. And the rally may not be done yet.

Demand for Gold in China Lifts Profit at World’s Top Jeweler
By Daniela Wei and Corinne Gretler – Bloomberg
Net income increases for a second straight six-month period; Sales at mainland China stores as well as online pick up
Chow Tai Fook Jewellery Group Ltd.’s profit increased for a second consecutive six-month period as demand for gold products lifted sales at the world’s leading jewelry retailer.

Hong Kong

HSBC Has Fine Over Lehman Products Reduced in Hong Kong
By Alfred Liu and Benjamin Robertson – Bloomberg
Private-banking unit fined HK$400 million by appeals tribunal; SFC originally imposed HK$605 million penalty on HSBC
HSBC Holdings Plc’s private-banking unit was fined HK$400 million ($51 million) over sales of structured products linked to Lehman Brothers Holdings Inc. in Hong Kong, a smaller penalty than the city’s securities regulator initially imposed.

Hong Kong finance chief seeks mainland tax break for city’s researchers
But Paul Chan says reaction to his suggestion in Beijing ‘has not been very enthusiastic’
Phila Siu – South China Morning Post
Hong Kong’s financial secretary said on Tuesday that he wanted researchers from the city who go to the mainland to develop new technology to be exempted from paying tax there.

Hong Kong-Zhuhai-Macau mega bridge project set to exceed budget by more than HK$11 billion; Government will ask Legco to agree to cover 50.2 per cent of overrun costs
Su Xinqi – South China Morning Post
Hongkongers are set to foot a ­bigger bill than expected for the Hong Kong-Zhuhai-Macau bridge after latest ­estimates showed the cost for the bridge had overrun by one-third, or HK$11.8 billion.

Hong Kong tribunal fines HSBC private bank $51 million for Lehman-linked products
Sumeet Chatterjee – Reuters
A Hong Kong tribunal on Tuesday imposed a record fine of HK$400 million ($51 million) on the private banking unit of HSBC (HSBA.L) in a case related to the sale of Lehman Brothers-linked structured financial products between 2003 and 2008.

A tax increase for Singapore would be sweet for Hong Kong
Today Online
Asia’s two rival financial centres are starting to look very different, and the gap is going to widen.

HSBC: Asia embracing digital banking faster thanks to Hong Kong fintech initiatives
Olivia Minnock –
According to Josh Bottomley, global head of digital at HSBC, the pace of change in Asia with regards to digital banking development is the fastest in the world.

Hong Kong salary guide 2018 released
The latest report from Robert Walters reveals that recruitment of sales and marketing professionals has been positive throughout 2017, with demand from all sectors, including financial services, technology, telecoms and consumer markets like retail, hospitality and tourism.


Hong Kong developer bets on rising Indonesian home market
Lin Wanda – Asia Times
In 2015 the Indonesian government allowed foreigners to buy and own property for a period of 30 years, with chances to extend; but foreign buyers seem to be waiting to see if the policy is changed


Singapore Cryptocoin Firm Banks With Japan as Local Account Shut
Chanyaporn Chanjaroen, Abhishek Vishnoi – Bloomberg Quint
Quoine Pte, a cryptocoin exchange operator founded in Singapore, said it’s now routing customers’ payments to Japan, where the firm banks with lenders including Mitsubishi UFJ Financial Group Inc. after an account in the city-state was closed.

Singapore Will Ensure Rich Pay More in Tax Regime, Minister Says
By Michelle Jamrisko – Bloomberg
Singapore sees solid economy as key tax principle, Rajah says; E-commerce duties are a new source being studied: Rajah
Singapore will ensure its tax system is based on “solid” economic performance and the principle that higher income earners pay more, a senior government official said, after the prime minister signaled that the nation needs to prepare for tax increases.


Fund to boost Vietnam tourism development
The Vietnam Tourism Development Fund (VTDF) will have an initial charter capital of VND300 billion (US$13.22 million) from the State budget, according to a draft decision on the establishment and operation of the fund.

Ailing banks allowed to go bankrupt, NA votes
Viet Nam News
The National Assembly voted on an amended version of the country’s Law on Credit Institutions on Monday.

FLC Group meets over 400 South Korean investors
Vietnam News
Property developer FLC Group on Monday held a meeting with more than 400 South Korean estate firms, investors, tourism agencies and investment funds during a large roadshow and seminar held in Seoul.

Vietnam Stocks Electrified as Deals Prompt ‘Re-Rating’ of Market
By Giang Nguyen – Bloomberg
Vietnamese stocks have taken off in November — with the benchmark VN Index rising almost 10 percent — as foreign investors rushed to expand their footprints in the fast-expanding Southeast Asian economy.


Thai Listed Firms’ 9-Month Earnings Up 3.74 Pct To THB 708 Billion
Net profits worth THB 708 billion, up 3.74 pct YoY in Jan-Sept]; Sales rose 10 pct to THB 7.98 trillion pushed up by higher oil prices
Companies listed on The Stock Exchange of Thailand (SET) reported a net profit of THB 707.78 billion (approx. USD 20.83 billion) in the first nine months of 2017, a 3.74 percent rise from the same period in 2016, due to the increased sales and profits in Petrochemicals & Chemicals, Commerce, and Property Development sectors, mainly boosted by oil price rise, while Thai economy has been gradually recovering.


Taiwan records net financial outflow for 29th consecutive quarter
Focus Taiwan
Taiwan recorded a net outflow of funds in the third quarter of the year, marking its 29th straight quarterly outflow and the longest run in its history, according to the central bank.

South Korea

South Korea marks unhappy anniversary of Asia’s financial crisis
When South Korea’s economy was facing ruin two decades ago, the government was rescued by the International Monetary Fund in a multi-billion dollar bailout.


Protection gap expanding each year in Philippines
By BusinessMirror
The country’s so-called protection gap is fairly large and has continued to grow, based on estimates made by Allianz SE based in Munich, Germany.


Lack of proper audit of 1MDB suggests cover-up, says Pua
FMT Reporters
PJ Utara MP Tony Pua says doubtful financial statements for 2013, 2014 and no audit since, shows state-owned firm trying to prevent truth from being discovered.


New Finance Instruments Will Help Fund India’s Green Infrastructure Targets
Joshua S Hill
Two new green finance instruments launched at the end of October by the India Innovation Lab for Green Finance are intended to help India meet its green infrastructure goals.

Ivanka Trump to promote female entrepreneurship in India
The Associated Press
Ivanka Trump says she looks forward to promoting female entrepreneurship at a conference in India next week.

The UK-India partnership thrives on London’s power to raise green finance
Manoj Ladwa – Business Gree
Manoj Ladwa argues that plans to make London a green finance capital will only strengthen trading bonds between the UK and the subcontinent
Vince Cable’s ambition to establish the global capital of green finance in London is just the kind of vision our Indian partners want to see from the UK’s political leaders.

80% of women entrepreneurs self-finance their biz in India
Press Trust of India
Notwithstanding the various government schemes that provide financial aid, 8 out of 10 women entrepreneurs across the country are self-financing their businesses, says a report.

Banking the unbanked: the Indian revolution; Due to lowering of bank transaction costs, hundreds of millions of people who lacked access to financial services are revealing a latent demand
Stephen G. Cecchetti – Livemint
Financial inclusion—providing universal access to financial services and encouraging their use—is an important means for promoting economic development. As of 2014, the World Bank estimated that there were still two billion adults without a bank account, and many others with only a tenuous connection to the financial system.

Insiders do more than trade in India’s bull market
Mihir Sharma – Economic Times
In India, you don’t really exist till you’re on the right WhatsApp groups. It’s on those private chat rooms that political campaigns are sharpest; where India’s sprawling extended families quarrel and make decisions; and, according to a recent Reuters investigation, where company quarterly results are predicted with surprising prescience. There’s no proof of insider trading yet, but officials from the Securities and Exchange Board of India, or Sebi — I ..

Moody’s rating upgrade has already benefitted India’s most valued company in just Financial Express
Moody’s India credit rating upgrade has already brought in a slew of tangible benefits to Indian companies within just two days, with Mukesh Ambani’s Reliance Industries saving on interest payments on its newly-issued dollar bonds at the tightest ever spread over US yield by an Indian company.


Amazon Australia looks like it’s about to launch
by Simon Thomsen – Financial Review
Amazon looks set to open in Australia this week.

Cost Cuts in Australia Hurting Workers, Economy
Financial Tribune
T he Reserve Bank of Australia says relentless cost cutting by businesses has kept wage growth at record lows and stifled the economy.

Top 100 Accounting Firms: Accounting firms turn into tech companies
Financial Review
Digital transformation has helped power double-digit growth across the major accounting firms, with the Top 100 generating almost $10 billion in revenue in the past financial year.

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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.